Registrar, Alcohol and Gaming Commission of Ontario v. 2104887 Ontario Inc., 2009 CanLII 20303

IN THE MATTER OF The : Liquor Licence Act, R.S.O. 1990, c. L.19, as amended

Registrar, Alcohol and Gaming Commission of Ontario Registrar

-and-

2104887 Ontario Inc. O/A Wicked Club Licensee

DECISION ON SANCTION

Panel: Beryl Ford, Board Member Eleanor Meslin, Board Member

Decision Date: March 4, 2009

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 2104887 Ontario Inc., Licensee ) Ron Marzel, Representative

Allegations

A hearing into a Notice of Proposal number 16534 dated July 30, 2008 to suspend liquor licence number 44395 (the “Licence”) issued to 2104887 Ontario Inc. operating as WICKED CLUB, 1032 Queen Street West, Toronto, Ontario, M6J 1H7 (the “premises” or “establishment”) on the basis of an alleged violation of subsection 45(1) of the Liquor Licence Act (“LLA”) was held on November 4, 2008 in the City of Toronto.
In its decision dated December 18, 2008 the Board found the Licensee violated subsection 45(1) of the LLA. Parties were directed to provide written submissions on an appropriate sanction. The Board has received and reviewed those submissions.

Registrar’s Submissions

During an inspection of the premises known as Wicked Club, an Alcohol and Gaming Commission of Ontario (AGCO) inspector observed two persons exiting an area on the second floor that appeared to be a large walk-in closet. On closer inspection, the inspector observed a doorway leading up another flight of stairs to a third level. A sign was posted adjacent to the doorway stating “No Alcohol Beyond This Point”; there was a curtain across the doorway to the stairs but no physical door.
The inspector was about to go up the stairs when the Licensee, Mr. Ben Zion, stated to her “you can’t go up there” Although he did not physically touch the inspector, he extended his arm in front of her, blocking her access to the stairs. The Licensee told the inspector that the 3rd floor was a private dwelling place. During this discussion which continued away from the stairs, other inspectors and law enforcement officers proceeded to inspect the 3rd floor. There was nothing to indicate the area was a private dwelling. Another officer participating in the inspection stated during the hearing that Mrs. Ben Zion stood between his group and the stairway and made it clear she did not want them to attend the 3rd floor as it was an area that club members used for sexual purposes.
It is the Registrar’s submission that the Licensee obstructed a lawful inspection in two ways. First, the Licensee physically blocked and prevented the inspector from attending the 3rd floor. Second, the Licensee knowingly attempted to deceive the inspector as to the nature and use of the 3rd floor in order to prevent an inspection.
The Registrar submitted that this was not a simple case of the Licensee not knowing his obligations under the LLA, but a deliberate approach to avoiding an inspection as it would upset his clientele, therefore his decision was ultimately for business reasons.
The Registrar submitted that the circumstances surrounding the violations of this incident are such that the licence holder failed to exercise the required level of responsibility, accountability and co-operation. The events represent a disdain for authority on the part of the Licensee.
The Registrar submitted that there are no mitigating factors, in this situation. The Licensee offered neither explanation nor reasoning behind his actions, other than to assert that he did not understand his obligations under the LLA.
There were no measures taken before, during or after the violations that could work to mitigate any administrative sanctions imposed by the Board.
The Registrar requested a suspension in the range of eight to ten days.

Licensee’s Submissions

The Licensee is extremely remorseful for obstructing the inspection and more importantly for neglecting to fully appreciate his role and responsibilities under the LLA.
The Licensee accepts that he failed to meet the standard of diligence expected of him under the LLA and is remorseful that he failed to meet this standard.
The Licensee submitted that contrary to the many obstruction allegations contained in the Registrar’s submissions, the Board found only that “the Licensee did prevent an inspector entry to an unlicensed area by verbally stating that he did not want her to go the third floor”.
The Licensee further submitted that the Board also found that the obstruction did not occur intentionally, but rather because the Licensee was under the assumption that only licensed areas of the premises were mandatory for LLA inspections.
There was no evidence to suggest that any liquor licence violations had taken place or were taking place on the third floor during the time of the inspections.
The Licensee submitted he is not remiss in asserting the position that poor diligence is substantially more mitigating a circumstance than deliberate, patent and unabashed disregard and disdain for a licensee’s obligations under the LLA. As a fundamental principle of penalty, the former should attract the least intrusive penalty while the latter should attract the most severe.
The Licensee has no prior history of misconduct or violations before the AGCO. And is requesting the Board impose no more than a three day suspension to be served by the Licensee between Monday to Wednesday in February or March, 2009.

Registrar’s Reply Submissions

The Registrar stated that counsel for the Licensee asserts that because the obstruction was verbal and not physical in nature this is a mitigating factor. Liquor inspectors rely on the responsibility and cooperation of the licensees both in enforcing the LLA and for their own safety and protection.
The principles of general and specific deterrence require a strong response to any form of obstruction on the part of the licensee.
The Registrar recognizes that the Board accepted the Licensee’s evidence as to his mistaken assumption about what areas of the club could be inspected. The Licensee did initially inform the inspectors that the unlicensed area was a private dwelling when, at that time, he clearly knew it was also being used for other purposes. This response by the Licensee does exacerbate the nature of the obstruction.
The Registrar reiterated that a suspension in the range of eight to ten days is appropriate in these circumstances.

Decision on Sanction

The Board carefully considered the submissions of the Registrar and the Licensee on sanction.
In determining the appropriate sanction, the Board took into consideration that the Licensee has no prior history of misconduct or violation before the AGCO.
The Board, acting in the public interest must seek to ensure both general and specific deterrence in imposing sanctions. Regarding the principles of specific deterrence, there was a clear lack of cooperation and honesty exhibited by the Licensee in these circumstances.
The Board accepted the Licensee’s evidence that he was under the assumption that only licensed areas of the premises were mandatory under the LLA. However, that does not take away from the fact the Licensee did attempt to prevent an inspection of the third floor of the premises.
Whether the attempt to obstruct was verbal or physical, or both, is immaterial. Both the Licensee and his Manager were forthright in their evidence that they did not want the inspectors to visit the 3rd floor for an inspection.
In submissions, the Licensee stated that he is extremely remorseful for his actions by failing to comply with the LLA. He admitted that he was negligent in fully understanding his role and responsibilities under the LLA.
It is vitally important and incumbent on the Licensee that he clearly understands his role and responsibilities under the LLA and acts in accordance with his responsibilities. In this instance the Licensee failed to comply with the LLA or act with due diligence.
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 LLA and its Regulations. The 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.
The Board did not hear that any provisions had been made by the Licensee to ensure that a similar occurrence would not happen should an Inspector visit the premises for a routine inspection at some other time.
The Board expects the Licensee to fully review his responsibilities as the holder of a Liquor Licence under the LLA and ensure that staff is apprised of their responsibilities under the Act to ensure future compliance.
In considering all of the evidence and submissions, the Board FINDS an eight (8) day suspension is appropriate in the circumstances.

Order

The Board ORDERS that liquor licence number 44395 issued to 2104887 Ontario Inc. operating as WICKED CLUB, 1032 Queen Street West, Toronto, Ontario, M6J 1H7, be suspended for a period of EIGHT (8) consecutive days.
The Licensee shall submit proposed suspension dates in writing to the Manager of Hearings, Hearings Department, Alcohol and Gaming Commission of Ontario at the address on the front of this decision within seven (7) days of the date of this decision. The Board will set suspension dates without further notice to the Licensee if 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 twenty (20) days from the date of this decision and must be completed within ninety (90) days of the date of this decision.

DATED AT TORONTO THIS 4th DAY OF MARCH, 2009.

BERYL FORD, BOARD MEMBER ELEANOR MESLIN, BOARD MEMBER