Editor’s Note : Corrigendum released August 15, 2007. Original judgment has been corrected accordingly.

ALCOHOL AND GAMING COMMISSION OF ONTARIO

IN THE MATTER OF The :

Liquor Licence Act, R.S.O. 1990, c. L.19, as amended

B E T W E E N:

Registrar, Alcohol and Gaming Commission Ontario

Registrar

-and-

Arena Entertainment Inc. O/A Circa

Applicant

-and –

Wayne Scott and Don Rodbard Resident Objectors

DECISION

Panel: Allan Higdon, Member

Bruce Monteith, Member

Decision Date: , 2007

Hearing Location: Toronto, Ontario

Alcohol and Gaming Commission of Ontario

90 Sheppard Avenue East, Suite 300

Toronto ON M2N 0A4

Phone (416) 326- 0366 Fax (416) 326-5566

Website:agco.gov.on.ca

Appearances

Registrar, Alcohol and Gaming Commission ) Richard Kulis, Representative

Arena Entertainment Inc., Applicant ) Jerry Levitan, Representative

Wayne Scott and Don Rodbard ) Wayne Scott and Don Rodbard,

on their own behalf and

) on behalf of the Resident

) Objectors

Authorities

Elm Flameburger, decision of the Commercial Registration Tribunal (unreported)

Bloor Street Station, decision of the Liquor Licence Board of Ontario (February 23, 1989 unreported); upheld by Commercial Registration Tribunal (unreported)

Luxor [1996] O.L.L.B.D. No. 230 (QL)

Big Easy [1996] O.L.L.B.D. No. 89 (QL)

Exodus [1997] O.L.L.B.D. No. 41

Major Mack Hotel v. Liquor Licence Board (1994), 76 O.A.C. 326 (Div. Ct.); upheld (1999), CanLII 955 ON C.A.

Aftermath Café (2006), O.A.G.C.D. No. 298 (QL)

Brenner v. Ontario (Registrar of Motor Vehicles) [1983] O.J. No. 1017 (Q.L.) (Div.Ct.)

Ontario (Registrar of Real Estate Brokers) v. Faccenda [1994] O.J. No.954 (QL) (Div.Ct.)

Ontario (Registrar of Motor Vehicles) v. Jacobs; 2004 CanLII 9450 (ON SCDC), [2004] O.J. No. 189 (QL) (Div. Ct.)

Ontario (Registrar of Motor Vehicles) v. J.G.C., [2006] O.J. No. 1881 (QL) (Div. Ct.)

Registrar of Alcohol and Gaming v. Hosseini-Rad (2004) CanLII 34450 ON S.C.D.C

Toronto v. CUPE Local 79, (2003) 2003 SCC 63, 9 Admin. L.R. (4^th) 161 (SCC)

Gillen v. College of Physicians and Surgeons, (1989) 1989 CanLII 4363 (ON HCJ), 68 O.R. (2^nd) 278 (HCJ)

Brian’s Beer and Wine Factory[2001] O.A.G.C.D. No. 299 (QL)

Jade Garden [1999] O.A.G.C.D. No. 99 (QL)

Stardust [1999] O.A.G.C.D. No. 48 (QL)

Ohno – Another Diner & Ice Cream Parlor [2000] O.A.G.C.D. No. 199 (QL)

The Application

1. The Registrar of the Alcohol and Gaming Commission of Ontario issued a Notice of Proposal dated April 30, 2007 to review an Application for a liquor licence from Arena Entertainment Inc., the “Applicant”, for indoor capacity at Circa, 126 John Street, Toronto, Ontario, the “Premises”. The Proposal alleges violations of subsections 6(2)(h), 6(2)(d) and 6(2)(e) of the Liquor Licence Act (LLA). A hearing of the Application was held on May 22 and 23 and June 8, 11, 18 and 21, 2007 in the City of Toronto.

Decision

2. After considering all the evidence and submissions, the Board APPROVES the Application made by Arena Entertainment Inc., for indoor capacity at Circa, 126 John Street, Toronto, Ontario, on the conditions set out below. Reasons for these findings follow.

Preliminary Matters

3. Mr. Kulis stated the Registrar would be taking a position in opposition to the Application for a Licence.

4. Mr. Wayne Scott and Mr. Don Rodbard are residents of the municipality and object to the Application for licence. They appeared before the Board on their own behalf and as the representatives of local residents objecting to the Application. On consent of all parties, the Board ordered the named objectors be made parties to the proceedings.

Witnesses for the Objectors

5. Don Rodbard lives on Widmer Street in the Richmond and John Street area directly behind the proposed establishment. He has been a resident of the area since 1990 and is representing the residents of the King and Spadina Street area.

6. Mr. Rodbard stated the King/Spadina Residents Association was created in April, 2004 by placing an ad in a local paper. Several dozen residents responded and by the end of the summer of 2004 working groups had been established. Since its creation, the group has made representation at two dozen Applications for licensed establishments before the AGCO. The group is open to anyone and now has ties with many other community associations as the impact of bar patrons spreads far beyond any one association’s boundaries.

7. The witness testified his Association represents one of only two districts in Toronto that permit business and residential use together. There are about 80 nightclubs in his area. Although his neighbourhood is very pleasant in the daytime it has drifted towards a “mean and nasty environment” at night with the growth of clubs. The increased levels of violence, dirt, and hooliganism are a big concern. The group wants the concentration of nightclubs reduced or controlled in the area.

8. The witness stated the King/Spadina Residents Association objected to the issuance of a liquor licence by the Applicant. The community would be overwhelmed by the massive influx of patrons. Already there are 80 nightclubs in the area with a capacity of 55,000 patrons and 140 restaurants with a capacity of 30,000 patrons for a total capacity of 85,000 patrons. The community is oversupplied with licensed premises.

9. The witness presented media clippings documenting numerous episodes of violence in the area reported between 2005 and 2007. An article by John Barber of the Globe and Mail dated May 5, 2007 outlined that incidents occur between midnight and 4:00 am, principally on Thursday, Friday and Saturday nights with an increasing tendency to Sunday as well. The streets are so full of people that ambulances cannot get through. Ordinary people turn violent and the level of property damage is staggering.

10. The witness presented further exhibits, some of them media clippings. Exhibit #7 provides some notes on Risk Based Enforcement Criteria for licensed establishments.

11. On cross-examination, Mr. Levitan asked the witness if he wanted the AGCO to cease granting any new licence Applications in the area. The witness replied in the affirmative. The witness stated he had not gone into any of the nightclubs in the area; in fact he had never been in an operating nightclub. However, members of his Association had been in nightclubs.

12. The witness stated he had not met with Mr. Levitan or any of the principals although he was aware the Applicants had been requesting a meeting since September 28, 2006. The witness acknowledged he had received repeated e-mails from Mr. Levitan requesting a meeting.

13. The witness stated he had visited the proposed establishment 7 – 10 days prior to the hearing and had walked through the facility in the daytime while the site was under construction. It looked big and expensive.

14. The witness stated he realized he had chosen to live in a very busy commercial area. He acknowledged he had made “an assumption” about the operation of the proposed club. He expected the place to be packed with people and run with a high client turnover.

15. On re-direct from Mr. Scott, the witness stated that the Applicants had not forwarded operational information concerning the proposed club to him. Furthermore, the Applicant’s counsel had not inquired about their concerns regarding the club’s operation.

16. Adam Vaughan is the area Councillor for the City of Toronto, first elected in November 2006. The witness stated he lived on Richmond Street for ten years and has lived and worked in the area since 1980.

17. The witness stated the area has undergone adaptive re-use of an old industrial space in an attempt to diversify its economic base. A very broad zoning regime was instituted by the City to generate growth. There are 15 streets in the area with row houses and 12,000 new condominium units. An “anything goes” climate has been created due to the growth of nightclubs that are banned virtually anywhere else in the city. The entertainment district is the only place that permits such activity and a dangerous situation has been created. A City of Toronto Interim Control By-Law that limited new clubs was in effect for two years but it has now lapsed.

18. The Councillor stated he is opposed to the granting of any new licences until communities are given the power to set parameters around the operation of clubs. The proposed premises would add 3,000 new clients to an area already stressed and unable to cope with its current challenges. The AGCO should shrink licensed capacity in the entertainment district, not expand it. The current nightclub capacity of 55,000 to 60,000 patrons is too much.

19. In cross-examination the witness stated he wants an opportunity to “get a handle” on the problem. It is time for a pause in granting any new licences in the area. The community cannot absorb another club and the additional negative impact.

20. The witness stated he visited the proposed premises one week prior to the hearing. It looked like a very high-end product that represented a substantial investment. He has no problem with the proposed clientele; the problem is increased capacity. That is why he wants no more nightclub liquor licences granted.

21. Hugh Ferguson is an Inspector with the Toronto Police Services and unit commander of 52 Division. He is responsible for the deployment of all police personnel in the entertainment district.

22. The witness stated the area has a normal police presence during the week but on Friday and Saturday nights, forces are significantly augmented. There are AGCO inspectors, Toronto by-law enforcement officers, paramedics, and ambulance drivers on the scene. On Friday nights there are approximately 40-50 police officers assigned to the area, and on Saturday 50-60. On Thursday and Sunday nights there are up to 20 police officers present.

23. The numbers are a significant increase in the past few years. In 1997, a Sergeant and 6-8 police officers policed the area. This area includes the Rogers Centre and the Air Canada Centre. It is now not uncommon to arrest 20-30 people every Saturday night. The cost of policing has risen from $1.15 million in 2005 to $1.47 million in 2006 with further increases expected in 2007. Violent crime in the area is by far the highest in the city. In 2005, there were 55 assaults per 1,000 residents.

24. The witness stated, “The sponge is full.” in regard to the prospect of further licensed capacity. The area lacks mass transit and there is gridlock traffic congestion. The area cannot absorb any more customers from a policing perspective. Conditions right now are extremely difficult.

25. On cross-examination, the witness stated the busiest time is weekends from 2:00 a.m. to 4:00 a.m., due to alcohol and drug abuse. He acknowledged the proposed arrangement in the club of indoor line-ups would be helpful in getting people off the street. However, this would leave contraband drugs or weapons beyond the review of police on the street.

26. The witness knew that a former police officer had been engaged by the club to prepare a security plan. He stated a security plan is not a “be all-end all” – its success really depends on the professionalism of the security team on site. A good plan and good security personnel would certainly be helpful. He concluded, “The proof will be in the pudding.”

27. Responding to Mr. Scott, the witness stated the large crowds for the Pope’s visit and Gay Pride Parade were different in that violence was very rare.

28. In response to Mr. Kulis, the witness stated he had not seen the club’s proposed security plan and he had not had any liaison with its author. No plan had been shown to him although the Application has been pending for almost a year.

Witnesses for the Registrar

29. Robert Gagne is a Special Agent with the United States Drug Enforcement Administration where he has been employed for the past 16 years. He is currently assigned to the Long Island district office where he became responsible for the Drug Prevention Program in New York State in 2000.

30. The witness stated he dealt with a wide variety of illegal drugs such as heroin, cocaine, amphetamines, ecstasy (MDMA) and others. His team was involved in undercover investigations of the “Limelight” and “The Tunnel” nightclubs owned by Lansdowne Entertainment Inc., the principal of which was Peter Gatien.

31. The witness stated investigation of the clubs started in December 1995 and continued until May 1996. A telephone was wiretapped which permitted the agent’s team to identify people both in the clubs and outside who were selling ecstasy. The witness identified Peter Gatien as the owner of the clubs. Gatien was seen frequenting the premises by the witness in his capacity as an undercover agent.

32. In May 1996, the police arrested 25 people for selling drugs in the clubs. A number of those arrested were managers or dealers who worked for the managers. Those designated as “house dealers” were given approval by Gatien or his managers to sell narcotics. Two of the arrested managers, Michael Caruso and Michael Alig, made statements to the effect that they worked for Mr. Gatien and were involved in narcotics trafficking in the clubs. Mr. Gatien went to trial and was acquitted of all charges by a jury.

33. At this point an extended procedural discussion took place. Mr. Levitan stated the issue at hand is an Application for a liquor licence in Ontario and not a hearing to re-try his client on drug charges. Mr. Kulis responded that the issue is past conduct of the Applicant. Mr. Levitan replied it would be a gross miscarriage of justice to continue in this vein as his client was completely acquitted of all charges related to drug sale or distribution. Mr. Kulis stated the dismissal was based on findings “beyond a reasonable doubt” whereas the test in administrative law is on “the balance of probability.” Mr. Levitan responded that to re-try his client under the test standard of administrative law would offer the potential for severe and extreme prejudice against his client. In addition, there had been no notice of disclosure. A recess was called for 15 minutes.

34. The panel heard further arguments and considered case law presented. The discussion concluded when all parties agreed to review the evidence presented at the trial provided it was clearly understood that the verdict of “Not Guilty” was respected and not called into question under the test of administrative law.

35. Mr. Kulis continued his examination-in-chief with Exhibit #16, the May 2001 decision of Paul Heyman, an Administrative Law Judge with the State of New York Alcohol Beverage Control Hearing Bureau. The witness stated that “Limelight” and “The Tunnel” were nightclubs owned by the Applicant and his wife. Undercover investigations focused on drug trafficking were carried out in both premises. Illegal activity was found to have taken place and Mr. Gatien was charged with being a member of a criminal conspiracy to distribute and sell large quantities of ecstasy (MDMA). Eighty people were arrested as a result of the investigation.

36. The witness stated he posed as a drug purchaser at “Limelight” and purchased ecstasy on site from one of the club promoters employed by the club. Two of the most prominent people associated with the clubs were Michael Alig, a manager at both “The Tunnel” and “Limelight”, and Michael Caruso, a manager at “Limelight”. Both were charged with conspiracy to distribute the illegal drugs ecstasy and cocaine. The witness testified that Peter Getien signed off on money for drug purchases. The witness also stated that Peter Gatien was responsible for the issuance of thousands of promotional fliers containing drug references for his nightclubs.

37. The witness stated the last sentence of Judge Heyman’s decision offers a concise summary of the situation at Gatien’s clubs: “For years, specifically during the time period charged in these proceedings, Limelight and The Tunnel were focal points for drug promotion, use and distribution.”

38. Although the investigation led to some sixty drug related convictions, Peter Getien was found not guilty of any offence.

39. Terry Bender has been a Detective Constable with the O.P.P. for 32 years and has been seconded to the Toronto Liquor Enforcement Unit at the AGCO. He conducts investigations into Applicants and enforces the LLA. He was assigned to conduct an investigation into the club “Lucid,” to be known as “Circa,” located at 126 John Street, Toronto in December 2005. The witness completed two reports on the club, the first dated February 5, 2007 and the second April 2, 2007 (Exhibits 23 and 24). The investigation is still open and a final report has yet to be issued. The investigation is focused on the character, financial history, and competence of the club principals, particularly Peter Gatien. Mr. Gatien had completed his Personal History Report and all appeared in order. The witness stated no conclusions have been reached and he is still gathering information. The usual sources of information such as credit check agencies and Canadian police records have been accessed but he is still awaiting information from the United States. The witness stated he had reached no conclusions or recommendations yet in his work.

40. The witness testified that the Personal History Report of Orin Bristol was incomplete in that he had responded “No” in answer to the question if he had any convictions or outstanding charges (Exhibit #26). In fact, he had outstanding charges by the Toronto Police Services. Mr. Bristol corrected his answer in an email to the Registrar some days later.

41. On cross-examination the witness stated the investigation had been on-going for over a year.

Witnesses for the Applicant

42. Barnaby Marshall is employed in cultural production, particularly in the area of video and T.V. He was involved in the renovation of the Drake Hotel, a multi-purpose, multi-use art focused institution.

43. The witness stated he is not involved in the proposed premises in a paid capacity. He believes the proposal offers a fantastic vision, “way ahead of the curve”. With a recording studio and other amenities it will add to the stature of the city. It is clearly something novel and new. The owner has a great track record in creating new spaces. The witness is not aware of any club like this in the entertainment district.

44. The witness stated that the granting of a licence for this premises would be in the public interest. It would add impetus to the cultural renaissance of Toronto.

45. On cross-examination the witness stated he lives a 10 minute drive from the district. He visited “The Tunnel” and “Limelight” in New York City, two of the owner’s previous clubs. He was unaware of any difficulty the owner might have had with licence revocations or trouble with taxes. He did know the principal had been deported from the United States.

46. Raynor Burke is a resident of the entertainment district and a Vice-President at National Bank Financial. He has been with the bank for eight years and is a Chartered Financial Analyst who lives one block from the Applicant premises. The witness has been in most of the clubs in the entertainment district. Friday, Saturday, and Sunday nights are very busy in the area with many young patrons. He has visited the proposed premises three times, the last about a month ago. He stated the club is unique to the district in that it is very artistic with different room functions, such as a film screening room. He supports the granting of a licence and believes the club would be an asset to the community.

47. On cross-examination the witness stated he was asked to check out the club by Ari Kulidjian, a friend of his and one of the principals of the Application. He confirmed to the panel that he does no financial business with the Applicant.

48. Benjamin Brafman is an attorney from New York State and has received many awards and distinctions from the American legal community. The witness was first engaged by Peter Gatien in 1996 and he has acted in his interest ever since. The witness now considers himself a personal friend of the Applicant. He knows Mr. Gatien does not have money to pay him but he invoices him in the expectation that one day he might get paid.

49. The witness described the legal problems of the Applicant in the U.S. Mr. Gatien was charged with operating a criminal enterprise responsible for selling drugs at his nightclubs. Although 35 people were indicted as co-defendants and offered substantial reductions in sentence time if they agreed to testify against Mr. Gatien, none of them did testify. Mr. Gatien was acquitted of all charges after a six week trial in front of a jury. Despite this verdict the City of New York continued to make every effort to close down Gatien’s clubs.

50. The witness called into question the testimony of Special Agent Gagne before the Board and stated some of his remarks were “flat-out perjury” and that he had attempted to “purposely mislead” the Board as to the facts involving Mr. Gatien’s drug arrest.

51. The witness stated that at the time of Mr. Gatien’s arrest “ecstasy” was not illegal as a controlled substance in New York State. Local police were not enforcing the use of this drug. It was, however, a federal offence.

52. The witness stated there was zero tolerance for drugs in Gatien’s clubs. In nine years of operation with nine million patrons, there were maybe four or five undercover drug arrests. It is clear that Gatien’s clubs were held to a standard applied to none of the other clubs. Gatien was targeted for annihilation by powerful people and he eventually went bankrupt due to the cost of his legal expenses.

53. On cross-examination the witness stated he had no direct evidence political figures were out to ruin Gatien. The proposed club is different than the New York club “The Tunnel” in that one can see everything due to its open concept. Gatien has learned from experience to be a business man, not a party person.

54. Jerry Cukier has been a Chartered Accountant in Ontario for 27 years and is currently employed with Soberman LLP for whom Arena Entertainment Inc is a client. The witness stated his company is engaged to do all tax returns for Arena, including the remission of P.S.T. and G.S.T. They also prepare financial statements and keep track of cash flow.

55. In cross-examination the witness stated his firm was retained three weeks before the hearing on a daily contract basis. In future they may be retained on a full-time basis. All financial operations are controlled by Applicant’s employees, not Soberman personnel.

56. Douglas Hutton is a retired Staff Sergeant with the Toronto Police Services and has been with AFI International, a security consultant company, since 2006.

57. The witness was hired to prepare a security report for the proposed premises. He has met with police and people at the AGCO. In addition to creating a security plan AFI will train the security personnel for the proposed establishment.

58. The witness has been in the premises several times. His initial recommendation was for 35 security personnel but that number has now risen to 40. Two security manuals were introduced as exhibits. The witness reviewed the location of security cameras and stated all movement would be digitally recorded. He noted the integrity of the security plan depended upon the leadership and commitment of the proposed premises.

59. In cross-examination by Mr. Kulis, the witness stated his company was retained in May 2007 and he began work on May 14, 2007. This contract represents the first major security plan for AFI. Once the policy manuals are completed his assignment will be over. His company will provide advice but will not be hiring the security personnel. The witness stated he has not been on the site of the premises at night and has not met with local residents to discuss the security plans.

60. In response to Mr. Scott the witness said the establishment would ensure any lineups outside the premises are contained within ropes. A unique feature of this club is a lineup area inside the building that should do much to prevent lineups outside on the street.

61. Jay Levine has been a Director of Production for Fashion Television and CITY TV for 21 years. He works in the Queen Street Richmond Street area in the heart of the entertainment district.

62. The witness testified that he does not frequent existing clubs in the district because they all seem the same. He has visited them on occasion though. He finds the design of the proposed establishment very interesting, he is impressed by the artistic detail and the fact the club has a full-time art department. He finds the creativity inspirational and fascinating. The Creative Director of the club has excellent credentials. The witness has never seen a club like this with different rooms containing different worlds. It certainly adds something to the current club scene that is now sorely lacking. Even the washrooms are fantastic. It will set a new standard and be a unique facility that will stand out internationally. He would certainly attend the club if it were to get a licence.

63. On cross-examination the witness stated he did not live in the entertainment district. He has not been in the neighbourhood between 2:00 am and 4:00 am when the clubs empty out. He noted this facility would attract new people – even the opera crowd would find it interesting.

64. Moshe Batalion is the Ontario Director of Leasing for Rio Can Real Estate, the company that owns the premises in which the proposed establishment would be located. The club is currently leasing the site and chose the Gatien group as a tenant because Rio Can wanted a lasting lease arrangement.

65. The witness stated the entertainment district lacks real entertainment. The area just has nightclubs. The proposed facility would be very different and innovative with features such as a “kid robot” room and art throughout the interior waiting line area. This club would attract a more sophisticated demographic than currently populates the night scene. It would appeal to higher income people.

66. The witness stated he believes the granting of a liquor licence would be in the public interest.

67. On cross-examination the witness stated Gatien knows what he is doing in the field of entertainment. The witness did not know the age or capacity of the site building. He testified he frequents the entertainment district but not the nightclubs.

68. Jeff Rogers is an entertainment entrepreneur who has worked in the field with people such as Richard Branson of Virgin Airlines. He also worked at the Drake Hotel, which quickly became an entertainment destination. The Applicant currently employs the witness full-time. He stated the proposed club would attract a very artistic, creative crowd. There would be lots of arts events and programming would be reminiscent of the Power Ball at the Power Plant and events at the AGO and ROM. If the premises had been granted a licence earlier, the 2006 AIDS fundraiser could have been there. In fact, there are many arts groups interested in programming some of the space in the club.

69. The witness has been in some of the area nightclubs and said the proposed club is more an entertainment facility than a nightclub. In fact, he has traveled the world and this facility is unique.

70. The witness spoke to Exhibit #42, a media package promoting the club. The package outlined many of the different rooms and their themes as well as commenting on the art displays and light tunnel. The witness noted the target audience was a mixed demographic. The area needs an entertainment facility like the proposed premises, not just another club. This facility would raise the whole tone of the area much like the Drake Hotel revival did in its district.

71. Ari Kulidjian is a Toronto resident, married, and a lawyer who has been in private practice for the past eight years. He practices civil and business litigation. The witness met Peter Gatien three years ago as a client and since July 2006 has been involved with his Application for a liquor licence. Previous to this, the witness was part owner of Roxy Blue, a licensed premise, which he sold. Near the end of his two year involvement, in March 2005 the club was found to have permitted overcrowding and was issued a seven day suspension. An eighteen-day suspension was issued in May 2005 for overcrowding and cocaine sold on premises. The witness was in the process of selling the place and the matter was disclosed to the purchaser.

72. Regarding the current Application, the witness met David Baxter in August 2006 accompanied by Mr. and Mrs. Gatien, Terry Bender, and Mr. Levitan in order to clarify potential issues. The meeting had a very positive tone – there was candid disclosure of Mr. Gatien’s record in the United States with Mr. Baxter saying that Gatien’s conduct would not have resulted in criminal sanctions in Ontario. Mr. Baxter gave a timeframe of 4 – 6 weeks for the licence Application to be investigated. There was no indication that Mr. Gatien’s conviction in the United States would cause any concern.

73. The witness stated he is Chairman of the Board of the Applicant corporation, Arena Entertainment, as well as an officer and Director. He has personally invested $1.1 million in the enterprise. The witness deals with all legal and financing matters and in this capacity hired AFI Security and Soberman accounting. He also oversees the inventory control system. The club renovation began in July 2006 and is now complete. Artwork is being installed. The rent paid to date is $2 million, the renovation cost $2.5 million, these combined with payroll to date add up to a $5 million investment. Investors were expecting a timely issuance of a liquor licence and the delay has made it very difficult to find additional investors. The witness confirmed his strong belief in the Application, as he believes it is an incredible project.

74. The witness stated patron capacity in the area is not a pressing issue due to several recent developments including the closure of nearby clubs such as Joker and Fez Boutique with considerable capacity, as well as the installation of cameras at intersections and new lighting on the streets, both of which have cut down misbehaviour considerably. The new club would not necessarily bring in a lot of new patrons to the area – it is more likely the club will attract people from existing clubs due to its superior facilities.

75. The club principals have made considerable efforts to contact the community and residents in the area to get their input. There was very little reciprocal contact. The local Councillor toured the site for 45 minutes and was positive about the features of the club. A second meeting was scheduled with the Councillor but he did not show.

76. The witness noted that City Council passed resolutions opposing the development. However, on neither of these occasions were the Applicants notified and given the opportunity to present their case either to full council or individual Councillors.

77. In response to cross-examination, the witness stated he and Mr. Gatien were equal investors each owning about 23-24% of the company with 10 other investors owning the rest.

78. Peter Gatien was born in Cornwall 55 years ago and is married with four children. He began his club career in Cornwall in 1974 and left Canada in 1976. He owned clubs successively in Florida, Georgia, and New York City where he bought an abandoned church and opened it as Limelight in 1983, followed by The Tunnel in 1991. He stated that between 1983 and 2001 when he left New York he grossed an estimated $200 million from his four clubs that were the best run in New York. On May 15, 1996 he was arrested for permitting drug use in his clubs. It was front-page news in the papers. He was cleared of all charges but legal fees of $4 million bankrupted him.

79. The witness stated his sales tax conviction was the result of his paying security personnel cash without deducting the state tax. He did not keep money for himself. The I.R.S. did an audit of his affairs that resulted in a zero assessment. After his conviction on the tax charge he was given a Certificate of Relief for Civic Disabilities that allowed him to continue operating his clubs. Gatien was subsequently deported under the provisions of the Patriot Act and has been back in Canada for 2.5 years.

80. The witness stated he has learned from his experiences in America. Everything in his proposed club will be done straight - that is why he has hired a security planning company and a reputable accounting firm. He has become very cautious due to his experiences and intends to put every ounce of effort into making his club a success.

81. In cross-examination the witness was questioned about the role of “promoters” in his clubs. He stated he would not employ such people for his new club. His hired staff will do all promotion. He is aware of the problems such people caused in New York. All employees will be checked for criminal records and none with a record will be employed.

82. The witness stated he currently has 15 – 18 people on staff with 9 in the office. The company employed to calculate and oversee sales tax submissions is one of the top five in that field in the country. Every exit, side door, and bar is covered by a camera. Capacity signs will be posted in every room.

Submissions

Submission by the Objectors

83. The Objectors’ closing submission (Exhibit #50) notes that the entertainment district is well above capacity to absorb more patrons and there are not sufficient resources to deal with the problems. They note additional resources to police the area have been committed by the province. The submission adds the district does not need another nightclub, and that is what the proposed establishment would be. In addition to excessive patron volumes, nightclubs involve drug use, as candidly stated by the Applicant’s counsel.

84. Today there are approximately 80 nightclubs in the area with a capacity in excess of 50,000 patrons as well as 140 licensed restaurants, bistros and bars. Residents have lost the chance to enjoy a peaceful evening. This density has its price – excessive policing costs and the dubious distinction of being the most violent prone are in the city – by far.

85. Closed circuit TV’s have been installed in the area. Superintendent Ferguson stated clearly that he supported any licensed establishment that had a good security system and worked closely with police but he opposed this Application as it will add to an already overwhelmed area.

86. Local City Councillor Adam Vaughn opposes the Application because the current concentration of nightclubs is unhealthy for the neighbourhood.

87. The security plan presented does not provide for enough standing room in the line-up. In addition, the security specialist testified there is little or nothing that can be done by the club to moderate the behaviour of patrons once they have left the premises.

88. Mr. Kulidjian is a partner in this venture but he will be working at the club only part-time. His previous experience in a club resulted in two licence suspensions.

89. Most of the supporters who testified do not live near the premises or frequent the area at night. Some of the supporters have business connections with the club so their support is not surprising.

90. In conclusion, the new club will bring more people into an already stressed area. It is debatable as to how many more people might be attracted to the area due to this club but it is clear there will be “lots of people and lots of booze.”

91. The residents oppose the granting of a licence due to the needs and wishes of the community. There are many nightclubs in the area; there is no “need” for yet another. It is clear the residents have no wish for more club-driven violence, vandalism, and other public nuisances. The Board was requested to refuse this Application for a liquor licence.

Submission by the Registrar

92. Mr. Kulis submitted Exhibits #51 and 52, case books related to both Public Interest and Past Conduct components.

93. The Registrar is opposed to the Application for a Licence on the grounds of public interest and on the basis of past conduct. Finding for either one constitutes sufficient grounds to refuse the Application.

94. Mr. Kulis stated case law shows a long tradition of licence refusal based on the concentration of licensed premises and their saturation in a community. If these are deemed to be at unacceptable levels, a licence need not be issued, no matter how well intentioned the Applicant.

95. He noted specifically:

• Elm Flameburger, CRAT found in part that numerous licensed facilities were available in the immediate area and that existing problems might be exacerbated by granting another licence – Application denied;
• Bloor Street Station, LLBO ruled that another establishment would add to problems. Board must not disregard the legitimate concerns of the community – Application denied;
• Bloor Street Station appeal to CRAT denied.
• Luxor, LLBO received over 600 cards of objection and had numerous objectors as witnesses. The Board ruled the objections valid and denied the Application for a licence;
• Big Easy, LLBO ruled an equitable balance has to be struck between the needs and wishes of the residents and the rights of the Applicant. The Board ruled that any increase in the capacity of clubs in the area could result in unbearable and dangerous conduct. Board doubted the Applicant could control resulting behaviour – Application denied.
• Exodus, LLBO - numerous objectors attended to oppose a club proposed near a residential area catering to cross-border patrons. Strong and continued opposition to a nightclub for 646 patrons was deemed sufficient cause to refuse the Application;
• Major Mack, Divisional Court upheld LLBO ruling burden of proof against a licensee is greater in the case of an existing license premises. An existing licence was revoked because there was no reasonable alternative short of revocation;
• Major Mack, Ontario Court of Appeal ruled in part that behaviour of patrons beyond the boundaries of the premises could be considered in assessing the suitability of a licence Application or revocation;
• Aftermath Café, AGCO ruled it was clear the neighbourhood did not support the Application and there was no “need” for another premises given the close proximity to other establishments – Application denied.

96. Mr. Kulis stated the current Application reflects many of the cases in the case book in that the entertainment district is dealing with the problem of saturation and community opposition. The evidence presented by police indicates a problem out of control. The province has allocated an additional $5 million to police the area. This is the wrong time to add 3,000 people into an already troubled area. The AGCO has the authority to say, “Enough is enough.” The authorities are attempting to get the area under control but they have not yet succeeded. Granting a licence will undermine all the initiatives taken to date to make the area safe and congenial for residents.

97. On the issue of past conduct the key question to be answered is, “Will the licensee operate in accordance with the law and with integrity and honesty?”

98. Mr. Kulis referred to case book Exhibit # 52.

• Brenner v. Ontario (Registrar of Motor Vehicles) Divisional Court ruled the test for past conduct should be if there are reasonable grounds to find that the Applicant will not carry on business in accordance with the law and with integrity and honesty;
• Ontario (Registrar of Real Estate Brokers) v. Faccenda, Divisional Court ruled the Tribunal did not make the correct test in assessing the past conduct;
• Ontario (Registrar of Motor Vehicles) v. Jacobs Divisional Court ruled the Tribunal was incorrect in finding that a criminal conviction resulted from bad business practice and not from intentional fraud;
• Ontario (Registrar of Motor Vehicles) v. J.G.C., Divisional Court ruled a Tribunal ignored uncontested evidence concerning the respondent’s past misconduct and his refusal to acknowledge same;
• Registrar of Alcohol and Gaming v. Hosseini-Rad Divisional Court ruled that consideration of financial hardship suffered by an Applicant or dependents should play no part in consideration of a licence Application;
• Toronto v. CUPE Local 79 Supreme Court of Canada ruled in part that an arbitrator was required as a matter of law to give full effect to a criminal conviction. A conviction must stand, with all its consequent legal effects;
• Gillen v. College of Physicians and Surgeons Divisional Court ruled the standards of criminal court do not apply at a disciplinary hearing where the standard of proof required for a conviction is significantly lower.

99. Mr. Kulis stated that a “not guilty” finding in a criminal court does not necessarily prove a criminal charge was unfounded. He referred to the decision of Justice Paula Omansky of the Supreme Court of the State of New York (Exhibit # 19) in which she stated there was illegal selling and buying of drugs on the premises of The Tunnel, one of Mr. Gatien’s clubs, and police arrested people there. In Exhibit # 16, Judge Paul Heyman of the State of New York Division of Alcohol Beverage Control notes (page 6) that “some sixty convictions” were registered against patrons of The Tunnel and Limelight, forty of the convictions were for selling drugs or conspiracy to sell drugs in those establishments. These are not minor infractions. There cannot be any excuse for drug use. Judge Heyman concludes his judgment by stating

For years, specifically during the time period charged in these proceedings, Limelight and The Tunnel were focal points for drug promotion, use and distribution.

100. Mr. Kulis noted that the Application for a licence for the proposed club was filed in mid 2006. An investigation into the Applicant is underway but not yet concluded. The accounting and security systems are not yet ready so there is no rush to open. Mr. Gatien’s principal partner does not have enough experience to run a club and the proposed manager provided false information on his disclosure form.

101. It is clear from the evidence that a liquor licence should not be issued in light of both public interest and past conduct considerations.

Submission by the Applicant

102. Mr. Levitan stated his client applied for a liquor licence on August 3, 2006 and a Notice of Proposal was issued April 30, 2007 only after repeated requests by the Applicant for a resolution.

103. The Notice of Proposal opposes the Application based on the needs and wishes of the community (subsection 6(2)(h) of the LLA), that the past/present conduct of the Applicant affords reasonable grounds for belief that its business will not be carried on in accordance with the law or with integrity and honesty (subsection 6(2)(d) of the LLA) and the Applicant or an employee made a false statement on the Application (subsection 6(2)(e) of the LLA).

104. Counsel stated the Board is being asked to legislate policy and impose a freeze on the entertainment district, something the City of Toronto and the province have failed to do. The AGCO does not have the jurisdiction to freeze a district; to suggest such is preposterous.

105. Regarding public interest, one resident came to testify in opposition, Mr. Rodbar. This is a man who chose to make his residence smack in the middle of the entertainment district. The fact is the licence for this establishment is not a neighbourhood issue – if it were the hearing room would be full of objectors. Hardly anyone lives in the entertainment district. The proposed club is unique and distinguished. It would raise the standard for the entire area.

106. Counsel noted the City was not a party to the proceedings although the resolution passed by City Council requested the AGCO to provide an opportunity for the City to participate in the hearing. The City Solicitor was also authorized to attend all proceedings but the office was never in attendance.

107. Mr. Levitan stated no discussions took place between the Applicant and the Residents Association despite repeated requests by the Applicant for a meeting. The Association refused to propose any conditions even after expressly requested to do so by counsel.

108. Applicant’s representative stated Councillor Adam Vaughn spoke very favourably of the physical layout of the proposed club. He did not have a negative word to say about Mr. Gatien.

109. Inspector Ferguson of the Toronto Police Services testified the problems in the entertainment district were not caused by the proposed club. The City created the entertainment district and is responsible for it. Exhibit #37, a June 7, 2007 article from the Globe and Mail, quotes Inspector Ferguson as stating the average weekend arrest rate in the district has declined from 20-25 over a weekend to 8-12 with the installation of stadium light towers in key intersections of the area, closed circuit TV and more police dressed in reflective safety vests. Exhibit #38, a report from the National Post dated June 11, 2007, notes the Ontario government has provided $5 million to create a rapid response team that would tackle violence in the entertainment district. Approximately 20 officers will be in the unit. These new measures have made a big difference to public safety in the area.

110. Several parties spoke in favour of the proposed club. Raynor Burke, a local resident who lives nearby, testified he supported the Application. Other witnesses such as Moishe Batalian of Rio Can, entertainment entrepreneur Jeff Rogers, Jay Levine, Director of Fashion TV, and Barnaby Marshall, a cultural and music commentator, all stated the club would be unique, set a new standard, and be a real asset to the city’s cultural life. They support the Application.

111. Mr. Levine referred to the cases presented by Mr. Kulis in the case book regarding public interest (Exhibit #51). He noted most of the cases cited shared the characteristics of either strong community opposition, location in or immediately adjacent to a residential neighbourhood, or excessive concentration of comparable facilities. None of these characteristics apply to this Application. The proposed club has been described by credible experienced professionals as unique – one that will raise the standard of clubs in the area.

112. Counsel concluded that the opponents of the Application have not discharged their onus. Their principal complaint is lack of regulation by the City and the province, not the particular aspects of this Application by this particular Applicant. The Applicant has a qualified right to a licence and the onus by the objectors has not been discharged.

113. With regard to the past/present conduct provision of the LLA, Mr. Levitan confirmed the facts presented in the Notice of Proposal dated April 30, 2007:

• On March 19, 1999, Peter Gatien was convicted of a criminal offence in New York State;
• On May 8, 2001 the liquor licences of The Tunnel and Limelight were revoked by the New York State Licence Authority;
• Ari Kulidijian, was an officer, shareholder, and director of Roxy Blue when the licence was suspended for contravention of the LLA, once for seven days, and again for eighteen days;
• The proposed manager of the club did not disclose an assault charge that was then pending.

114. Mr. Levitan stated no evidence was put by the Registrar to outline the similarities and differences between the law in New York State and Ontario.

115. Counsel reviewed the court decisions related to Mr. Gatien. The June 1999 decision of Judge Paula Omansky (Exhibit # 19) states,

In my opinion it seems clear that The Tunnel was what it held itself out to be, namely a nightclub for dancing…There was illegal activity, I’m going to have to mention that time and again, because there were drugs there…There is, however, nothing in the record to suggest that management condoned or participated in any illegal drug activities. (page 20).

116. She continues,

Now, none of the above would be determinative or really account for anything if the defendants were turning a blind eye to the drug problem. However, that was clearly not the case” (page 23). The judge further noted that two years of undercover surveillance between November 1997 and January 1999 at The Tunnel resulted in no arrests (page 30).

117. The June 15, 2000 decision of Judge Akiva Tessler (Exhibit # 20) exonerated Mr. Gatien of any charges of misrepresentation, failure to adequately supervise, and permitting disorderly conduct in The Tunnel, one of his nightclubs.

118. The May 8, 2001 decision of Judge Paul Heyman in which he found that Lansdown Entertainment permitted drug use and operated disorderly premises is inconsistent with the conclusion reached in the other acquittals. It would be an error to accept this decision.

119. Mr. Gatien accepted responsibility for the sales tax conviction and has engaged a very reputable accounting firm to deal with such matters in Ontario. A Certificate of Relief from Disabilities (Exhibit # 31) was issued which allowed Mr. Gatien’s nightclubs to remain open. The sales tax conviction did not disentitle Mr. Gatien to a liquor licence in New York State.

120. The Personal History Report of Peter Gatien (Exhibit # 25) Schedule A notes the convictions of Mr. Gatien for Grand Larceny and false filing of income tax would not result in criminal sanctions in Ontario.

DECISION

121. A great deal of evidence was presented at the hearing, some of it considered by the Board to be marginally relevant to the allegations made in the Notice of Proposal dated April 30, 2007 or highly prejudicial hearsay unsupported by any direct evidence. The Board gave no weight to any such comments and confined its deliberations to consideration of the credible evidence bearing on the allegations and the sanctions sought by the Registrar.

122. The Registrar sought to deny an Application for a liquor licence on two main provisions of the LLA:

123. That the Applicant corporation is disentitled to a licence because it is not in the public interest having regard to the needs and wishes of the residents of the municipality in which the premises are located (subsection 6(2)(h)).

124. The past conduct of the Applicants or shareholders controlling more than 10% of the corporation affords reasonable belief that the business will not be carried on in accordance with the law and with integrity and honesty.

125. The Board first considered the public interest component. In its deliberations on public interest the Board followed the following principles laid out in Elm Flameburger:

• The public must be aware that under the LLA, a person is entitled to a licence unless he becomes disentitled under any of the clauses (a) to (g) inclusive of subsection 6(1) of the LLA now subsection 6(2);
• Since a person is entitled to a licence, the onus is on the objector to prove, on the balance of probability that, in this case, it is not in the public interest to issue it;
• The public interest must be determined in light of two aspects: (a) needs and (b) wishes;
• The issues of needs and wishes will not be decided solely on the basis of a heads count;
• The concerns of the objectors must be bona fide; and
• The needs and wishes of the immediate residents will be given more weight than those of the transient trade.

124. Local residents were represented by Wayne Scott and Don Rodbard, members of the King/Spadina Residents Association. Both were made parties to the proceedings.

125. Mr. Rodbard testified on behalf of the Association and objected to the licence Application due to the current concentration of nightclubs in the area and the density of patrons, particularly on the weekends. The neighbourhood clubs have a capacity of 55,000 patrons. He stated the area was oversupplied with licensed premises. The witness testified the granting of a licence would contribute to overwhelming the community with an even greater influx of patrons than experienced currently. Exhibits were presented that outlined the history of violence in the area, particularly at night and generally ascribed to fights among club patrons.

126. The Board notes that Exhibit #10 documents a number of occasions when Licensee’s counsel attempted to meet with the King/Spadina Residents’ Association to discuss outstanding issues regarding the Application and was repeatedly rebuffed. No public meeting to consider this Application with the Applicant present was ever convened by the Residents’ Association. Despite requests from representatives of the Applicant, no conditions to the licence were ever proposed by the Association.

127. Mr. Rodbard stated he wanted the Board to cease granting any new liquor licences in the entertainment district. The witness admitted he had never been in an operating nightclub and that his views represented “an assumption” about the operation of the proposed club.

128. The Board finds the Residents’ Association did not give sufficient consideration to this particular Application for its objections to be considered bona fide. It did not negotiate or even meet with the Applicant and made no attempt to review the operational plans of the club and to propose conditions. Instead, it seeks a blanket prohibition of any new nightclubs in the area. The Board considers this unreasonable and places any Applicant in an untenable position with no recourse to a possible resolution. Furthermore, no other resident witnesses, letters of objection, or petitions were presented to the Board opposing this proposal, leaving strong doubt as to the extent of bona fide community objection to the particular proposal made by this Applicant.

129. The Board notes that a resolution of Toronto City Council was submitted by the Registrar stating that the approval of the Application would not be in the public interest, having regard to the needs and wishes of the residents. Subsection 7.1(1) of Ontario Regulation 719/90 notes that in the absence of receiving submissions to the contrary, such a resolution shall be deemed as proof of the needs and wishes of the residents.

130. The Board did receive many submissions to the contrary. Raynor Burke, a local resident, testified he supported the Application. Moishe Batalian of Rio Can, entertainment entrepreneur Jeff Rogers, and Jay Levine, Director of Fashion TV, all stated the club would be unique and be a real asset to the city’s cultural life. Barnaby Marshall participated in the renovation of the Drake Hotel, a multi-purpose, multi-use art focused institution. He testified the plans for the proposed nightclub represent a fantastic vision, one that would add to the stature of Toronto. He is not aware of any club like this in the entertainment district. He stated the club would be a great impetus to the cultural renaissance of Toronto. The Board is aware some of these people are employed by the Applicant and weighed their testimony accordingly. However Exhibit # 44, which details the interior plans for the premises, confirms their statements that this is a unique facility. Exhibit # 49 is a compilation of letters from cultural institutions and groups such as the Royal Ontario Museum, Museum of Contemporary Canadian Art, NOW magazine, SPIN Gallery, and many cultural leaders of Toronto. They all support the Application.

131. Councillor Adam Vaughan of the City of Toronto supported the testimony of Mr. Rodbard in describing the number of establishments and patrons that frequent clubs in the entertainment district and their impact. The area had originally been given very broad zoning parameters in order to encourage adaptive re-use of an old industrial area. He said this has created an “anything goes format.” The Councillor noted that an Interim Control By-Law had been in effect for the past two years limiting nightclub expansion but it had now expired. The Councillor did visit the proposed premises the week prior to the hearing and found the club to be a “very high end product” that represented a substantial investment.

132. The Councillor opposes the Application, stating the community could not absorb another nightclub. He stated the problem was not the clientele of the club but the additional capacity it brought to an already overloaded district. The same opinion was expressed by Inspector Hugh Ferguson of the Toronto Police Services who registered his concern about increased pressure on policing and the additional expense of it. Yet Exhibits # 37 and # 38 presented information that showed recent initiatives by police have cut episodes of violence in the area by 50%. Additional significant police resources were recently allocated to the area and promise to deliver further reductions.

133. The Board is sympathetic to the concerns of the both Councillor Vaughn and Inspector Ferguson, however it does not consider the imposition of a disguised version of an Interim Control By-Law to be within its jurisdiction. That is the role of municipal government.

134. Each Application must be considered on its own merits – the Board cannot fetter its jurisdiction with respect to applicants appearing before it and the City cannot impose that general outcome. The proposed nightclub is a legally conforming use for the current existing zoning of the site. The Board rejects consideration or imposition of a blanket use restriction amounting to a virtual expropriation of land value. Any application for a licence must be assessed on its own independent and particular merits in a manner transparent to both residents and the Applicant.

135. For the reasons cited above the Board FINDS the objectors to the Application HAVE NOT met the onus required to deny the Application for a liquor licence based on the bona fide needs and wishes of the community.

136. Regarding the issue of past and present conduct of the Applicants, the report of Detective Constable Terry Bender (Exhibit # 23) outlines the history of the principal Applicant, Peter Gatien, in a concise manner. Gatien was charged with conspiracy to traffic drugs in 1998 and found not guilty. In 1999 he was charged and convicted of state sales tax evasion, fined $1.9 million and served sixty days of a ninety day sentence. In 2001, the liquor licences for two establishments of which he was an officer, director and shareholder were revoked by the State of New York. In August 2003 he was deported to Canada and took up residence in Toronto. Previous to his New York experience, Gatien ran a club in Florida from 1976 to 1980 and later one in Georgia. No adverse records were on file for either location (Exhibit # 24).

137. The Board does not consider previous administrative sanctions or a criminal conviction as prima facie proof that a business would not be operated in accordance with the law and with integrity. Mitigating factors can be considered. In Brian’s Beer and Wine Factory (Exhibit #56b) an Applicant with a list of convictions over almost thirty years was permitted a Brew-on Premises licence despite showing little sign of remorse and a relatively recent conviction. In Jade Garden (Exhibit #56a) the Applicant was granted a licence although convicted of theft with a fake gun. Consideration was given to his age (19) and his forthright and candid disclosure. In Stardust Restaurant (Exhibit #56d) the Applicant had been in trouble with the law for fourteen years, including convictions for false pretence and fraud. The Board noted he had not been in any trouble with the law for five and one half years and he was granted a licence. In Ohno (Exhibit #56e) the Board found that an Applicant with a criminal conviction had been clean for seven years and built a new life for himself. His Application for a liquor licence was approved.

138. Detective Terry Bender of the Ontario Provincial Police prepared two extensive reports investigating Peter Gatien over the space of one year. Some of his inquiries specifically asked for material that would assist in denying the Application for a liquor licence (Exhibits #32 and 33). Despite the thorough nature of his investigation and the specific nature of his requests, the officer testified that he had reached no conclusions regarding Mr. Gatien’s suitability for a liquor licence and was not prepared to recommend that he be denied a licence. The Board considers this highly significant.

139. Peter Gatien was forthright, contrite and candid before the Board about his past conduct. He confirmed that liquor licences for two of his clubs were revoked in 2001. He was convicted of a non-violent offence eight years ago for which he served a sentence of sixty days and paid a fine. No evidence was presented to indicate he has been in any trouble with the law since his conviction. He stated this licence Application represents his last opportunity to resurrect his reputation. He is clearly a knowledgeable operator, well known for his business acumen, and a person who appears determined to make a new beginning. The Board considers him highly motivated and committed to running a business in accordance with the law and with honesty and integrity.

140. Similarly, the Board does not consider the two administrative sanctions applied in 2005 to Roxy Blue of which Ari Kulidjian was an officer, director and shareholder as sufficient reason to deny a licence Application under subsection 6(2)(d) of the LLA. He testified he was involved with the club for two years as a part owner and was in the process of selling the premises when the infractions occurred. The suspensions were disclosed to the new owner. Mr. Kulidjian testified he has engaged a security firm to develop a security plan for the new club and hired an accounting firm to handle all sales tax transactions. He has made a considerable investment in the new business and understands the need for an excellent security team. The Board also considers him highly

motivated and committed to running a business in accordance with the law and with integrity and honesty.

141. Orin Bristol, the proposed manager of the establishment, did not disclose a conviction on his Personal History Report. The evidence presented was that this was unintentional and immediately corrected. This does not constitute sufficient reason to deny the Applicant his right to a liquor licence. The Board will address this issue in an appropriate condition.

142. Given the evidence presented and for the reasons cited above, the Board APPROVES the Application for a liquor sales licence at Circa, 126 John Street, Toronto subject to the following conditions which are to be attached to the licence:

143. There shall be no licensed outdoor patio in conjunction with the subject premises;

144. There shall be no music played or transmitted outside the licensed premises;

145. All managers, sellers and servers of liquor and security staff must hold certificates of a Board-approved server training program course completion within 120 days hereof, or within 90 days of commencement of employment. A copy of each certificate of course completion must be forwarded either by mail or by facsimile ((416) 326-0330) to the Manager of Liquor Enforcement Section, Alcohol and Gaming Commission of Ontario, 90 Sheppard Avenue East, Suite 200, Toronto, Ontario, M2N 0A4;

146. All employees and prospective employees must agree to a police check as a condition of employment;

147. All electronic surveillance equipment and exterior cameras must be maintained in good working order. All surveillance tapes must be stored and available for review immediately upon request for a period of 30 days;

148. Security staffing shall be maintained at a minimum ratio of one (1) security staff to 75 patrons during hours of operation. This includes patrons in the interior line-up area. All security staff shall be dressed in a clearly identifiable manner.

The Licensee will advise the Registrar if the conviction against Mr. Orin Bristol is upheld on appeal. If upheld, the Board orders a further condition on the licence that Mr. Bristol is excluded from the premises and is to have no involvement in either the operation or management of the premises.

DATED AT TORONTO THIS 27^th DAY OF JULY 2007.

ALAN HIGDON, MEMBER BRUCE MONTEITH, MEMBER

AH/mw