LIQUOR LICENCE ACT, R.S.O. 1990

In the Matter of: ROYAL CANADIAN LEGION – BRANCH 360 326 Queen Street West Toronto, Ontario M5V 2A2

Licensee: Royal Canadian Legion Branch #360 Licence Number: 44536

Notice of Proposal: To SUSPEND a licence and to add a CONDITION to the licence Dated December 3, 2004

Supplementary Notice of Proposal: To REVOKE a licence Dated April 27, 2005

Supplementary Notice of Proposal: To REVOKE a licence Dated May 31, 2005

The Proposal alleges that:

(a) Contrary to subsection 25(1) of Ontario Regulation 719/90 under the Liquor Licence Act, liquor was sold and served in the licensed premises outside of prescribed hours.

(b) Contrary to section 29 of the Liquor Licence Act, liquor was permitted to be sold or supplied to a person who was or appeared to be intoxicated.

(c) Contrary to subsection 45(1) of Ontario Regulation 719/90 under the Liquor Licence Act, the licence holder permitted drunkenness or riotous, quarrelsome, violent or disorderly conduct to occur on the licensed premises or in the areas under the control of the licence holder.

(d) Contrary to subsection 44(1) of Ontario Regulation 719/90 under the Liquor Licence Act the licence holder failed to ensure that no person was allowed to enter behind the bar of the licensed premises while liquor was being sold or served.

(e) Contrary to subsection 35(1) of Ontario Regulation 719/90 under the Liquor Licence Act, the licence holder failed to ensure that light meals were available for sale to patrons on the licensed premises.

(f) Contrary to subsection 20(1) of Regulation 719/90 under the Liquor Licence Act, the licence holder engaged in or permitted practices which tended to encourage patrons’ immoderate consumption of liquor.

(g) Contrary to section 13 of Ontario Regulation 719/90 under the Liquor Licence Act, the licensed premises failed to have a partition of 0.9 metres distinguishing adjacent areas.

(h) Contrary to section 49 of Ontario Regulation 719/90 under the Liquor Licence Act, the boundaries of the premises to which the licence applies were altered by the applicant without the prior written consent of the Board.

(i) Contrary to section 53 of Ontario Regulation 719/90 under the Liquor Licence Act, the licence holder failed to make available lists describing:

(I). the varieties of liquor available for sale;

(II). the amount of liquor in each type of drink offered for sale;

(III). the varieties of non-alcoholic beverages available for sale;

(IV). the purchase price of the food, liquor and non-alcoholic beverages.

(j) Contrary to subsection 6(2)(h) of the Liquor Licence Act, the licence 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.

And to order that the sale and service of liquor cease at 10:00 p.m and that the signs of the sale and service of liquor be cleared by 10:45 p.m.

Notice of Proposal: To REFUSE to renew a liquor sales licence Dated February 8, 2006

The Proposal alleges that:

(a) pursuant to section 6(2)(d) of the Liquor Licence Act, the past/present conduct of the applicant (or if a corporation) or its officers or directors, or a shareholder who owns or controls 10% or more of its equity shares, or a person having beneficial interest in the business, or a person having responsibility for the management or operation of the business affords reasonable grounds for belief that its business will not be carried on in accordance with the law and with integrity and honesty; or

(b) Pursuant to section 6(2)(f) of the Liquor Licence Act, the applicant is carrying on activities that are in contravention of the Liquor Licence Act and the Regulations thereto.

Hearing: Alcohol and Gaming Commission of Ontario 90 Sheppard Avenue East, 3rd Floor Toronto, Ontario M2N 0A4

January 22, 2007

Presiding

Board Members: Kirsti Hunt, Vice–Chair Beryl Ford, Board Member

Counsel for the

Registrar: Joyce Taylor

Licensee’s Representative: Mr. Roman Kulyk and Mr. John Gregorovich

Exhibits: #1 – Photo of R.C. Legion Branch 360. #2 – Internet article for Globe and Mail of June 10, 2005. #3 – A photo of sign on establishment door. #3b – Photo of door on East side of establishment.

Attendance: Mr. Frederic Geisweiller, Registrar’s witness Mr. Michael Colera, Registrar’s witness Mr. Donald Harvey, Registrar’s witness Ms. Jade Leadbetter, AGCO Liquor Inspector

D E C I S I O N and O R D E R

The Board of the Alcohol and Gaming Commission of Ontario (“AGCO”) held a hearing on January 22, 2007 in the matter of the liquor licence number 44536 issued to Royal Canadian Legion Branch #360 (the “Licensee”) operating as Royal Canadian Legion - Branch 360 at 326 Queen Street West , Toronto, Ontario, M5V 2A2.

The Board dealt with a Notice of Proposal dated December 3, 2004 to suspend a licence and add a condition to the licence, Supplementary Notices of Proposal dated April 27, 2005 and May 31, 2005 to revoke the licence and a Notice of Proposal dated February 8, 2006 to refuse to renew the licence.

Ms. Joyce Taylor appeared as counsel for the Registrar. Mr. Roman Kulyk and Mr. John Gregorovich, Second Vice President and President respectively of Royal Canadian Legion Branch 360 (henceforth “Branch 360”) appeared on behalf of the Licensee and waived the Licensee’s right to legal counsel. Mr. Gregorovich was the spokesperson.

As the hearing progressed it became very clear to the Panel the Licensee’s representatives did not properly understand the respective responsibilities of the Registrar and the Board and were very mistrustful of the process. This lead to numerous objections and challenges to the Panel’s rulings. In an effort to assist the Licensee’s representatives to better comprehend what occurred at the hearing and the Panel’s decisions, including the decision to revoke the licence, these reasons include more detail and explanation than would ordinarily be provided in a case of this nature.

Preliminary Matters

Objection to the Notice of Proposal

Registrar’s counsel provided the Board with a copy of the Notice of Proposal to refuse to renew the licence which was omitted inadvertently from the Board’s hearing package. The representative of the Licensee objected to including this Notice in the hearing on the grounds that he did not have a copy of it. The objection was resolved when, after lengthy submissions and questions, it was established the Licensee’s representative did, in fact, have a copy of the Notice of Proposal to refuse to renew and had objected on the basis that he feared Registrar’s counsel had introduced an additional Notice of Proposal.

Bias Allegation

The Licensee submitted that the panel hearing the matter had a conflict since the AGCO showed malice toward the Licensee as a result of comments made to the press. Its argument can be summarized as follows: When Branch 360 closed an AGCO official indicated in the press that the Branch 360 was facing permanent loss of its liquor licence. In the Licensee’s view this statement showed bias on the part of the AGCO spokesman against the Licensee which taints the Board. The Registrar and the Board are part of the AGCO so they are tainted with the malice of the articles in the press. A reasonable person would conclude that. The statements by the spokesperson were published and there was no withdrawal of them. The articles damaged the Branch.

Registrar’s counsel objected to the allegation being raised at the hearing without proper notice or disclosure. Registrar’s counsel explained that the spokesperson in question reports to the Registrar not to the Board. She herself is counsel to the Registrar. The Registrar’s role is separate from the Board. Furthermore, it is a fact that Branch 360 is facing the possibility of a revocation of its licence. The spokesperson for the Registrar answered questions from the media at the time Branch 360 closed and confirmed nothing more than that fact: revocation was a possibility. The Board will decide whether that occurs. There is no evidence a reasonable person fully informed of all the circumstances would believe that there is some bias.

The Board ruled there is no reasonable apprehension of bias. In adjudicative matters, the Board is separate from the Registrar who is merely one party before it. It decides matters solely on the evidence brought before it in a hearing. It is not tainted by any comments made by the spokesperson for the Registrar at the time that Branch 360 closed. Furthermore, this Panel of the Board did not see the articles in question so it is in no way tainted by any prior knowledge of the matter and therefore able to hear this matter.

Order of Proceeding

Registrar’s counsel proposed, given the number of Notices of Proposal before the Board, to proceed with the Notice of Proposal the refuse to renew the licence. There was only a single determinative issue: whether the business had ceased to operate. If so, the licence should be revoked pursuant to section 56 of Ontario Regulation 719/90 (“OReg.”). If the licence was revoked on that basis there would be no reason to deal with the remaining allegations made in the other Notices of Proposal. If the Board founds against the Registrar on this point the panel could go on to consider the disciplinary Proposals.

Licensee’s representative submitted that it would be appropriate to proceed with the discipline matters first since the Licensee had its witnesses present.

The Board decided that the Notice of Proposal dated February 8, 2006 to refuse to renew the licence would be considered first as the most expeditious way to proceed. The Board agreed that if the business has ceased to operate that finding would make the other matters moot. If the Registrar does not establish that the business has ceased to operate, the Board would proceed with the other Notice of Proposal.

Evidence

Mr. Frederic Geisweiller operated a business next door to Branch 360 from 1997 to January 2006. He observed that the establishment had been closed in 2005 and was closed when he moved in early January 2006. Since January 2006 he has walked or driven past the establishment on many occasions and it has been closed.

Licensee’s representative attempted to cross-examine the witness about complaints he made to the City regarding Branch 360. After numerous unsuccessful requests that he limit his questions to the issue of whether the business ceased to operate and assurances he would have full opportunity to examine the witness on matters related to the other Notice of Proposal if it became necessary for the Board to decide those allegations, the Board directed the Licensee’s representative to confine his questioning to the closure issue and not raise matters related to the other Notices of Proposal. The Board notes that Mr. Gregorovich asked that the record show that, in view, he was prevented from cross-examining the witness.

Mr. Michael Colera testified that he operates a jewelry business and has a year-round booth (Exhibit # 1) on Queen Street in front of Branch 360. He indicated that Branch 360 has not been in operation since the summer of 2005.

Mr. Donald Harvey is a lawyer who acts for the owners of the building at 328 and 330 Queen Street West which is the location of Mr. Geisweiller’s former restaurant. He took photos of the east door of the establishment and the notice on it (Exhibits 3a and 3b) the day before the hearing. The notice indicates that the premises are closed as of June 7, 2005 and asks people to direct inquiries to the Provincial Command at the telephone number given. He had no knowledge of the establishment’s operation until he saw the notice on the Friday before the hearing. An article from the Globe and Mail of June 10, 2005 (Exhibit #2) indicates that the Branch has been closed and the building and resources seized by the Ontario Command of the Legion.

Ms. Jade Leadbetter, a liquor inspector with the AGCO testified that she visited 326 Queen Street at 8:10 p.m. on August 4, 2005 and found the establishment closed for business and the door locked. There were numerous fliers attached to the door and windows. She had visited the premises before that date and was able to enter and there were no papers covering the windows. Before there was also a patio area outside with a wrought iron fence around it. That fencing was gone on her visit in August. The establishment is in her area and she has not noticed that it has been open since.

She returned to the establishment on January 19, 2007 at 2:18 a.m. and observed that the establishment was in the same condition as on her earlier visit, closed and with fliers on the windows.

The Licensee called no witnesses.

Submissions

Registrar’s counsel submitted that s. 56 of the O. Reg. requires a licensee who ceases to operate a business to surrender its liquor licence. The unchallenged evidence is that the business has not operated since June 7, 2005, the Licensee’s assets have been seized and it has lost control of the premises. The Registrar asked the Board to make a finding that the Licensee is in breach of s. 56 of the OReg. and that the licence should be revoked.

Mr. Gregorovich submitted that s. 56 of the O. Reg. refers to a voluntary action of the licence holder and in this case the action was not a voluntary one but was caused by the seizure of the premises. That section therefore does not apply to the circumstances of the closing. Since the section does not apply, the Registrar’s request should be rejected.

Registrar’s counsel submitted in reply that the section refers to a licence holder who ceases to operate a business. There is no “voluntary” to modify “ceases” and there is nothing in the section indicating a specific reason why the licence holder ceases to operate. To say that the section does not apply is incorrect. The finding should be made and the licence revoked.

Decision

The Board considered the evidence and the submissions made. The evidence is clear and uncontested that the premises are closed, the business is not operating, and the Licensee does not have control of the premises.

Therefore, the Board finds that the Licensee has ceased operating and is in breach of s. 56 of the O.Reg. for failing to surrender the licence to the Registrar. The failure to surrender the licence amounts to a breach of ss. 6(2)(f) of the Act.

Based on the findings above and the submissions made, the Board hereby CONFIRMS its ORAL ORDER that licence number 44536 issued to Royal Canadian Legion Branch 360 operated as Royal Canadian Legion, Branch 360 at 326 Queen Street West, Toronto, Ontario, M5V 2A2 be REVOKED IMMEDIATELY.

Having received the Board’s oral ruling, Registrar’s counsel in essence withdrew the Notice of Proposal dated December 3, 2005, and the Supplementary Notices of Proposal dated April 27, 2005 and May 31, 2005. The Board accepts their withdrawal since the matters therein are moot once the licence is revoked.

DATED AT TORONTO THIS 14TH DAY OF FEBRUARY, 2007.

KIRSTI HUNT, VICE-CHAIR BERYL FORD, BOARD MEMBER

KH/sm