Registrar, Alcohol and Gaming Commission of Ontario v. 1412407 Ontario Inc., 2008 CanLII 52554

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 of Ontario

Registrar

-and-

1412407 Ontario Inc. O/A Cottage Restaurant & Lounge

Licensee

DECISION on SANCTION

Panel: Eleanor Meslin, Board Member, Chair of the Panel Jacqueline Castel, Board Member

Decision Date: September 2, 2008

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 Toll Free In Ontario: 1-800-522-2876 Website: www.agco.on.ca

Appearances

Registrar, Alcohol and Gaming Commission ) Daniel Alakas, Representative

1412407 Ontario Inc., Licensee ) John Chernet, Representative

Allegations

1A hearing into a Notice of Proposal number 16121 dated March 13, 2008, to suspend liquor licence number 802256, issued to 1412407 Ontario Inc., (the “Licensee”), operating as COTTAGE RESTAURANT & LOUNGE, 1220 Danforth Avenue, Toronto, Ontario, M4J 1M6, (the “premises” or the “establishment”), on the basis of alleged violations of subsection 45(1) of the Liquor Licence Act (“LLA”) and section 29 and subsections 34(1) and 45(1) of Ontario Regulation 719/90 (“O.Reg”), prescribed under the LLA, was held on July 28, 2008 in the City of Toronto.

2In its decision dated August 13, 2008, the Board found the Licensee contravened subsection 45(1) of the LLA and section 29 and subsections 34(1) and 45(1) of the O.Reg. Parties were directed to provide written submissions on an appropriate sanction. The Board has received and reviewed those submissions.

Registrar’s Submissions

3The sale and service of beverage alcohol is a highly regulated industry in the Province of Ontario. This level of regulation is necessary to protect the public interest and the public safety. It is for these reasons that licence holders are expected to act with a high level of responsibility, in accordance with the Act and Regulations. The Registrar submits that this level of responsibility and cooperation is fundamentally linked to a licensee’s positive duty not to obstruct a lawful inspection under the LLA. The Licensee, in this case, failed completely to exercise the required level of responsibility and due diligence.

4The violations were blatant. There were no other bars open. There was no other source of alcohol close by. The fact that two males were observed with beer bottles outside the bar, and three more were observed exiting with beer bottles is evidence not only of removal of alcohol from the premises and failing to clear signs of sale and service, but also demonstrates a complete lack of regard by the Licensee for its responsibilities under the Act. Mr. Chernet, and persons acting on his behalf, also took active steps to prevent the violations from being investigated.

5No measures were taken before, during or after the violations that could work to mitigate any administrative sanctions imposed by the Board. Mr. Chernet and any staff who were involved exacerbated the problems rather than addressing them, by attempting to hide the violations.

6The Board must seek to achieve both general and specific deterrence in imposing sanctions. Regarding the principles of specific deterrence, there was a clear lack of cooperation and due diligence exhibited in these circumstances and a flagrant flouting of authority. The Licensee is responsible for the actions of his employees, and it is the Registrar’s respectful submission that Mr. Chernet’s actions, and those of his staff, fell well short of any acceptable level of compliance, cooperation and due diligence. A lack of judgment was exhibited by Mr. Chernet in not only obstructing the investigation, but in actually preventing patrons from leaving the bar in order to further ensure against the inspection. The public safety implications of such an act are startling and require a strong response in terms of administrative sanction. The Licensee clearly put the avoidance of liability and the protection of business concerns before compliance with its responsibilities and obligations under the LLA.

7In terms of general deterrence, the Board has consistently taken the position that attempting to obstruct or interfere with an inspection will not be tolerated. Lawful inspections are the cornerstone of ensuring public safety through monitoring compliance with the Act and Regulations. Cooperation of the licence holder is an integral part of this principle; without it, public perception regarding the safety and integrity of licensed establishments is damaged.

8Based on the above factors, the Registrar respectfully submits that a fourteen (14) day suspension of the liquor licence is appropriate.

Licensee’s Submissions

9The Licensee’s right to counsel of choice and to make fair answers and defence under the Charter of Rights and Freedoms were not respected. The hearing was convened at the Board’s convenience, ignoring dates when the Licensee’s counsel was available to give proper representation.

10Since the incident, the Licensee has extra security and better trained staff. However, there are three other bars around the premises, and their reputation is questionable on a lot of fronts, as are their clientele. The Licensee’s security staff regularly removes bottles of beer and alcohol containers abandoned by the clients of the other bars. They have sidewalk patios, so removing bottles is easy.

11The Licensee has banned canned drinks to stop people taking mixed drinks in such a neutral container outside. All clients that go to the washroom areas and outside to smoke are checked to make sure they are not carrying alcohol. The Licensee stops admittance at 2:00 a.m. and after that, only smokers are allowed in and out, and smokers are security scanned as they re-enter. Live music ends at 3:00 a.m. and drinks with alcohol are removed by 2:45 a.m. The Licensee has a strict policy of not serving people that have had too much to drink. When they do, they are escorted out, and repeat offenders are banned.

12It is physically impossible to search customers if they are hiding alcohol. Metal detectors are only successful in keeping weapons out of the premises. The beer bottles found outside the premises can only be alleged to have been brought out by clients, even though it might happen because of customer ignorance. Clients from other bars usually hang around the exit of the premises to bum smokes. The Licensee cannot be responsible for people on the street when the establishment is closed and taxis are scarce. Some people have alcohol in their cars, and the Licensee cannot control that.

13On visits after this case, D/Sgt. Higgins has been harassing and threatening. Sometimes the Licensee gets the feeling that being an African venue (Ethiopian) unduly increases suspicions of non-compliance to laws and regulations and automatically makes it a suspect of entertaining illegal activities.

14Given that the Licensee has no prior criminal record or record with the AGCO, that D/Sgt. Higgins was abusive to Mr. Chernet, his staff and customers, and that Mr. Chernet is trying to make his business a success and struggling to make a living, the Licensee requests that its liquor licence be suspended for seven (7) days.

Reply

15Mr. Chernet, in his submissions, has again raised the issue of the scheduling of the hearing, asserting he was not afforded the opportunity to have his lawyer of choice present. The Board addressed this issue at length in its decision of August 13, 2008. The Licensee cannot intentionally disregard the directions and policies of the Board and then claim the result is hardship or a mitigating factor in the imposition of sanctions.

16The Licensee’s attempt to blame the staff or patrons from other establishments in the area has no basis in fact. Furthermore, it is not impossible to have diligent door staff on hand to make all reasonable efforts to ensure the patrons do not remove alcohol from the premises. In fact, the LLA requires such action. Clearly, there was no such policy in place on August 4, 2007.

17No evidence concerning D/Sgt. Higgins’ conduct was brought forth at the hearing, nor is it relevant to the specific violations found by the Board. It is extremely irresponsible to make submissions that D/Sgt. Higgins’ investigation was, in any way, racially motivated. There was no evidence to support this allegation, and clear evidence was given by D/Sgt. Higgins on the circumstances which resulted in findings of contravention. Mr. Chernet’s unsupported allegations of D/Sgt. Higgins’ motivations and conduct are not, in any way, relevant to the imposition of an administrative sanction.

Reasons and Decision on Sanction

18The Board has carefully considered the submissions of the Registrar and Licensee on sanction.

19The contraventions of the LLA and O.Reg in this case were very serious in nature. Not only did the Licensee fail to clear the signs of service, permit customers to exit the premises with beverage alcohol and permit drunkenness, each of which is a serious contravention in and of itself, but the Licensee also obstructed a police officer carrying out an inspection under the Act. Furthermore, in preventing the police officer from entering the establishment, the Licensee also compromised public safety, by keeping customers locked in the establishment until the police officer was believed to have departed from the area. The actions of the Licensee in obstructing the police officer represented a disregard for authority and are suggestive of a Licensee which is out of control.

20The Board considered that these were the Licensee’s first offences under the LLA when determining the appropriate sanction, but gave more weight to the fact that there were four contraventions on the date in question, one of which involved obstructing a police officer conducting an inspection under the Act, thereby attempting to conceal the other contraventions. The Board considers the obstruction to be particularly egregious in the circumstances.

21The Board addressed the reasons for denying the request for a second adjournment of the hearing in detail in paragraph 6 of its decision of August 13, 2008 and will not restate those reasons here. The Board does not, however, consider the denial of the second adjournment to be a mitigating factor in the determination of an appropriate sanction.

22The Licensee did not present evidence of mitigating circumstances for any of the actual contraventions in question.

23The Licensee has failed to present any credible or convincing evidence that it has implemented remedial measures to prevent or minimise the likelihood of contraventions of this nature occurring in the future. The Licensee indicated that since this incident it has more security and better trained staff, but gave no particulars on the staffing increases, on how the additional security staff have been deployed to prevent LLA contraventions, or on the nature, content or duration of the alleged training. For the most part, the Licensee simply restated some of its legal obligations without presenting evidence of corrective procedures it has implemented to ensure compliance with the Act and Regulations in the future. For instance, the Licensee stated that it has a policy of not serving people who have had too much to drink, but does not say what procedures, if any, it has in place to ensure that service of beverage alcohol is closely monitored and regulated so customers do not become intoxicated. These procedures, among others, were clearly lacking on the date in question. In fact, rather than giving evidence that it has turned its efforts and attention to promoting compliance with the Act and Regulations, the Licensee explains at considerable length, in its submissions, why compliance with the law is sometimes difficult if not impossible. This gives the Board little confidence that the Licensee will be more compliant in the future.

24It is also of serious concern to the Board that the Licensee has failed to take full responsibility for its conduct on August 4, 2007. The Licensee has attempted to blame the clientele of other establishments and the ignorance of its own customers for the infractions. The Licensee has also suggested that D/Sgt. Higgins’ inspection may have been racially motivated. There is no evidence that the clientele of other establishments were in any way responsible for the infractions in question. All of the other establishments in the vicinity were closed. There is also no evidence that the inspection was in any way racially motivated. To the contrary, there is very clear and convincing evidence of contraventions of subsection 45(1) of the LLA and section 29 and subsections 45(1) and 34(1) of the O.Reg. The failure on the part of the Licensee to accept responsibility for the contraventions gives the Board little, if any, reassurance that the Licensee has learned from its mistakes and will act more responsibly in the future.

25Given the number and seriousness of the infractions, the failure of the Licensee to accept full responsibility for the infractions, and the failure of the Licensee to outline what effective corrective measures, if any, it has implemented to minimise the likelihood of infractions of this nature occurring in the future, the Board FINDS a fourteen (14) day suspension is warranted to achieve specific and general deterrence.

Order

26The Board ORDERS that liquor licence number 802256, issued to 1412407 Ontario Inc., operating as Cottage Restaurant & Lounge, 1220 Danforth Avenue, Toronto, Ontario, M4J 1M6, be suspended for a period of fourteen (14) consecutive days.

27The Licensee shall submit proposed suspension dates in writing to the Manager, Hearings Department, Alcohol and Gaming Commission of Ontario at the address on the front of this decision within seven days of the date of this decision. The Board will set suspension dates without further notice to the Licensee if the proposed dates are not provided within that time. The suspension must be served on days the establishment normally operates. The suspension may not start earlier than 20 days from the date of this decision and must be completed within 90 days of the date of this decision.

DATED AT TORONTO THIS 2^nd^ DAY OF September, 2008