Registrar, Alcohol and Gaming Commission of Ontario v. 2119420 Ontario Inc., 2009 CanLII 29723

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-

2119420 Ontario Inc. O/A Cindy’s Café & Restaurant Licensee

DECISION

Panel: Joan Lougheed, Board Member S. Grace Kerr, Board Member

Decision Date: May 19, 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 Toll Free In Ontario: 1-800-522-2876 Fax: (416) 326-5566 Website: www.agco.on.ca

Appearances

Registrar, Alcohol and Gaming Commission: Joyce Taylor / Richard Kulis, Representatives 2119420 Ontario Inc., Licensee: Jerry Herszkopf, Representative

Allegations

1. A hearing into Notice of Proposal (“NOOP”) number 16654, dated October 22, 2008, to suspend liquor license number 803935 (the “License”) issued to 2119420 Ontario Inc. (the “Licensee”) operating as CINDY’S CAFÉ & RESTAURANT, 2461 St. Clair Avenue West, Toronto, Ontario, M6N 1K9 (“the establishment”), on the basis of alleged violations of section 29 and subsection 45(1) of the Liquor Licence Act (LLA) and subsections 25(1) and 45(1) of Ontario Revised Regulation 719/90 (O.Reg) made pursuant to the LLA, was held on March 20 and April 23, 2009 in the City of Toronto.

Background Information and Preliminary Matters

2. Chengchao (Charlie) Liu, who attended the hearing, was a shareholder, officer and director of the Licensee jointly with his sister, Li Liu. Mr. Liu signed and submitted the Request for Hearing in this matter. Ms. Liu, who was also present for the hearing, is the remaining shareholder, officer and director of the corporate Licensee.

3. An order excluding witnesses was made on consent.

Registrar’s Evidence

4. Cst. Keith George, a three year member of the Toronto Police Service, was the Registrar’s first witness. On March 8, 2008, he was working in uniform and as a beat officer in the vicinity of the establishment. His partner that night was Cst. Scharnil Pais.

5. At approximately 2:30 a.m., as the officers walked westbound on St. Clair Avenue, near its intersection with Runnymede St., Cst. George looked into the front windows of the establishment. From that vantage point, he noticed several people sitting at a table inside the establishment, close to the bar. A female was carrying a tray with several bottles of beer on it. He observed the female place the beer onto the table and the patrons start to divvy the beer bottles up amongst themselves.

6. The officers then proceeded to enter the establishment and the bottles of beer were still on the table when someone at the table noticed the officers come in. The beer that had just been distributed was quickly picked up by the same female server who then turned quickly towards the rear of the establishment, trying to conceal the beer from the officers’ observation, and made her way along the bar to the back of the establishment.

7. Cst. George then noticed the same female server pass the beer off to a male who was standing behind the bar. The officer made his way down to where these two persons were located and observed the male empty the bottles into a sink located at the south end of the bar, near the back.

8. Cst. George made several demands for the man to stop pouring out the beer. Once he had stopped doing so, the officer’s notes indicate that there were 8 – 340 ml. bottles of beer in total: 4 Molson Canadian, 2 Budweiser and 2 Labatt Blue beers. Two of these bottles had been emptied by the male; the remaining bottles were full of beer. All of the bottles were open and were cold to touch; none of the bottles had started to sweat or perspire.

9. The officer noted that some empty beer bottles remained on the table where the patrons were sitting.

10. Cst. George felt that the man had not stopped pouring when he requested him to do so because of a language barrier. Trying to speak with both the man and the female server, Cst. George asked them for proper identification together with their Smart Serve certificates.

11. The female server was identified as Li Liu. She told Cst. George that she was the owner of the establishment. The male was identified as Bo Zhang; he is Ms. Liu’s husband. He did not find language a barrier in speaking with Ms. Liu.

12. A few of the patrons complained that the officers had come in and that they had not finished their beers. Cst. George noted the “obvious smell of alcohol” as he approached the table. He also saw small piles of beer bottles beside each patron. There were 5 patrons there in total: four males and one female.

13. In cross-examination, Cst. George agreed that in his notes regarding the incident he had indicated that Ms. Liu had said she was “just cleaning up the table”. He did not know who saw him and Cst. Pais enter the establishment; he felt though that the appearance of himself and his colleague triggered Ms. Liu to collect the bottles of beer and bring them to the back of the establishment.

14. Mr. Zhang was co-operative with the officers; his failure to stop pouring out the beer was due to a language issue.

15. In response to questions from the Board, Cst. George testified that Ms. Liu was handing out two beers to each patron (four patrons were at the one table; the fifth patron was standing closer to the entrance). All of the patrons were gone when he and Cst. Pais left the establishment.

16. Cst. Scharnil Pais testified next on behalf of the Registrar. He has worked with the Toronto Police Service for just over two years.

17. He was partnered Cst. George on March 8, 2008 when, at 2:30 a.m., they stopped and looked through the front window of the establishment. He saw a few patrons in it, drinking. A female, carrying approximately 3 – 4 beers in total, approached the table where the patrons were seated and placed the beer there. According to Cst. Pais, the customers started passing the beer amongst themselves.

18. He and Cst. George decided to go into the establishment and, upon entering, he saw the female gather and pull into her body what bottles she still had in front of her, concealing them. She began walking towards the back of the establishment, alongside the bar. When she reached the end of the bar, a gentleman was standing there and the female handed him a bottle.

19. Cst. Pais stated that the female server’s behaviour seemed to be in reaction to the officers’ arrival.

20. Cst. Pais saw the man empty the bottle and put it down in the sink. He also saw him put things into a box. Cst. Pais asked the man to stop what he was doing. When the officer checked the box, most of the bottles in it were full although some were empty.

21. Cst. Pais asked for a copy of the Licence; the female server provided it to him.

22. Cst. Pais then proceeded to attend to the patrons, telling them they had to leave, while Cst. George stayed with the male and the female server at the back.

23. One of the patrons (Patron No. 1) said to Cst. Pais, “I just got my beer. Cops came in here and they took it away.” Cst. Pais also observed that Patron No. 1’s speech was slurred; he was mumbling these words somewhat aggressively to no one in particular. The other patrons were trying to calm him down and get him out of there. As well, Patron No. 1 was unsteady on his feet; he used the table to stand up. Also unsteady as he grabbed his jacket, Patron No. 1 fumbled many times as he tried to get his arm into the sleeve of his jacket. Ultimately, he could not get it on without the help of another man who also helped Patron No. 1 out the door.

24. Cst. Pais also made observations with respect to a female patron (Patron No. 2) whom he believed was also intoxicated. Patron No. 2 had to be helped up from the table by a gentleman sitting to her left. He could smell the alcohol on her from several feet away. She was very unsteady on her feet and, like Patron No. 1, had difficulties putting on her jacket. Her movements were slow; her speech was slurred.

25. After the patrons had gone, Constables Pais and George spoke with the female server, cautioning her about hours of service and serving intoxicated parties. She kept pleading with the officers to help her out and not to charge her regarding the violations the officers had observed.

26. In cross-examination, Cst. Pais indicated that, after the officers entered the establishment and the female server had dropped off the first lot of beers she had picked up, she returned to the table (where the patrons were sitting) for a second pick up. The officers did not rush their entry; in fact, as they came in they said, “Hello. How are you?” to the patrons.

27. Cst. Pais acknowledged that, in the notes he made regarding this incident, he did not indicate that the female server asked the officers not to charge her.

Licensee’s Evidence

28. Ms. Linea Shao was affirmed to interpret the proceedings from English into Mandarin for the Licensee’s witness, Bo Zhang. Mr. Zhang, who started working in the establishment in mid-December, 2006 moved to Canada in early April, 2006. He cannot speak English. He is married to Ms. Li Liu.

29. Mr. Zhang is Smart Serve trained. He explained some of the signs to look for in determining when/whether a person is intoxicated.

30. On March 8, 2008, there were four people in the establishment – three men and one woman – at 2:00 a.m. All of these patrons were familiar to him although since he does not speak English he does not communicate with them. Neither does he know their names.

31. Mr. Zhang did not notice if the patrons were being served alcohol after 2:00 a.m. as he was cleaning the floor and washing the dishes then.

32. Two police officers came in. He recognized them as they came by often. He did not know what they were talking about with his wife. He does not know their names.

33. Mr. Zhang’s wife took bottles of beer from the table and passed them to him as he came out from the bar. She asked him to pour them out and he did as asked.

34. In cross-examination, Mr. Zhang said that the police officers were located closer to the patrons than he was.

35. He clarified that his wife gave him two full bottles of beer to pour out. He did not know why she had asked him to do so. If the police told him to stop pouring them out, he did not understand them.

36. Mr. Zhang said that the attitude of the police officers was very good.

37. Mr. Zhang thought that the police arrived at 2:20 a.m., but the establishment’s clock is “10 minutes fast”.

Agreement on the Evidence and Findings

38. When the hearing reconvened on Thursday, April 23, 2009, Mr. Kulis appeared as the Registrar’s representative instead of Ms. Taylor, as she was ill.

39. By way of a further preliminary matter being raised at the outset of the second day of the hearing, Mr. Herszkopf represented to the Board, on behalf of the Licensee, that the Licensee would not be calling any further evidence in the hearing and agreed that there was sufficient evidence before the Board for it to make findings with respect to all of the allegations made against the Licensee. The Registrar consented to the Board’s making of such findings.

40. Specifically, the Licensee, through counsel, went on record and admitted that:

a. Contrary to subsection 45(1) of the LLA, the licence holder withheld, destroyed, concealed or refused to provide relevant information or things required for the purpose of an inspection under the Act;

b. Contrary to subsection 45(1) of the LLA, the licence holder obstructed a person carrying out an inspection under the Act;

c. Contrary to subsection 25(1) of the O. Reg, liquor was sold and served in the licensed premises outside of prescribed hours;

d. Contrary to subsection 45(1) of the O. Reg, 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; and,

e. Contrary to section 29 of the LLA, liquor was permitted to be sold or supplied to a person who was or appeared to be intoxicated.

41. Therefore, the Board makes the following findings as to fact, as follows:

a. On March 8, 2008, at approximately 2:30 a.m., Toronto Police Officers George and Pais were on foot patrol in the area of the establishment. Through the front window of the establishment, the officers observed a female server carrying eight full bottles of beer to a table where patrons were seated. The officers entered the establishment and the female server turned around and went back to the table and retrieved all of the bottles she had just served. She then turned her back to the officers in an attempt to conceal what she was carrying and headed to the rear of the establishment where she handed the bottles to a male employee. The male employee then began to pour the contents of the bottles down the sink. By the time the officers were able to get to the rear of the establishment, the male employee had already emptied two of the bottles. As the officers noted, all of the bottles were beer and all were cold to the touch. The officers’ further investigation revealed that the server was in fact the owner of the establishment, Ms. Li Liu, and the male employee was her husband, Bo Zhang;

b. On that same night, and during that same investigation, Officer Pais spoke to several patrons and observed that two of them (Patrons No. 1 and No. 2) were intoxicated. The particular and detailed signs of intoxication noted by this officer with respect to Patrons No. 1 and No. 2 are set out in paragraphs 23 and 24, respectively, above; and,

c. Furthermore and clearly, in continuing to serve the drunken patrons (Patrons No. 1 and No. 2), drunkenness was also permitted by the Licensee in the establishment. There were only five patrons in the establishment at the time the officers arrived; two of them were clearly intoxicated according to observations by the officers. In this context, their significant state of inebriation would as easily have been noticed by the Ms. Liu but, instead, she continued to serve them beer.

42. Based on the Licensee’s admissions and the evidence before the Board, the Board FINDS the Licensee breached section 29 and subsection 45(1) of the LLA and subsections 25(1) and 45(1) of the O.Reg.

Submissions as to Sanction

43. On the consent of the parties, the Board then received evidence and heard submissions by both parties on sanction.

Registrar’s Submissions as to Sanction

44. Mr. Kulis submitted that a fourteen (14) day suspension should be imposed on the Licensee for several reasons. The police officers observed the beer being served after hours. Ms. Liu attempted to conceal the service and thereby obstructed the police officers. Drunken patrons were in the establishment, not through inadvertence; the Licensee was aware of the time (i.e. it was after-hours) as well as the conditions of the patrons. The problem was obvious and could easily have been avoided.

45. The establishment has been licensed since January 17, 2007. The violations occurred a year later and, until then, the establishment had no prior record. The Licensee is currently facing Provincial Offences Act (POA) charges involving the failure to display the fetal alcohol warning posters, a failure to post its hours of operation, for sale of liquor not purchased under its Licence, and for failure to provide its Licence number to a government store.

Licensee’s Submissions as to Sanction

46. Mr. Chengchao (Charlie) Liu came to Canada in 1996. He has a Master’s degree in Hotel and Hospitality Management from Texas Tech. He is married and has one child.

47. Mr. Liu’s sister, Ms. Li Liu, is a graduate of Harbin Teachers’ University in China. She attempted to immigrate to Canada via the government’s entrepreneur immigration program and assumed responsibility for operating the establishment. Ms. Liu currently has landed immigrant status, but also continues to operate a business in China. She has a 25-year old daughter who attends the University of Western Ontario.

48. Mr. and Ms. Liu realize they are not cut out for the life of running a restaurant/bar. They intend to enter guilty pleas with respect to the POA charges and not waste the court’s time. They also plan to sell the business; therefore specific deterrence is not a strong factor in this case.

49. Mr. and Ms. Liu had hoped to ‘marry’ this process with the POA matter and work out an “all-inclusive” sanction, but the timing did not work out.

50. A penalty in the 7 – 10 day range would be appropriate, in Mr. Herszkopf’s submission.

Analysis/Reasons/Decision on Sanction

51. The Board carefully considered the evidence and the submissions of both parties on the matter of sanction. It concluded that a ten (10) day suspension would be appropriate on the facts of this case.

52. The Board is satisfied that Mr. and Ms. Liu intend to sell the establishment and as such specific deterrence is not as strong a factor as it might be in other, similar cases. Also, this is in effect a ‘first offence’ case; while recognizing that there are prior POA charges that remain outstanding against the Licensee, the Licensee intends to plead guilty to them and, also, they relate to quite different matters than the ones before the Board. All of these things mitigate to an extent against ordering a 14-day suspension as set out in the NOP and requested by the Registrar.

53. However, the breaches by the Licensee were very serious as well as numerous. Also, Ms. Liu’s behaviour was quite deliberate in hiding, removing and attempting to dispose of the beer. As well, these actions show that the Ms. Liu knew she was serving alcohol after-hours, which is prohibited by law. Furthermore, drunkenness was also permitted by the Licensee in the establishment.

54. For all these reasons, the Board finds that a significant penalty is nevertheless warranted in the circumstances of this case, and that a ten (10) day suspension appropriately satisfies the guiding principles of general as well as specific deterrence when determining sanction.

Order

55. Therefore, the Board confirms its oral ORDER that the liquor licence issued to 2119420 Ontario Inc., operating as CINDY’S CAFÉ & RESTAURANT, 2461 St. Clair Avenue West, Toronto, Ontario, M6N 1K9, be SUSPENDED for TEN (10) consecutive days.

56. The 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 (7) 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 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 19th DAY OF MAY, 2009.

S. GRACE KERR, BOARD MEMBER JOAN LOUGHEED, BOARD MEMBER