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-
Fex Inc. O/A Park Hotel Licensee
DECISION
Panel: Brian J. Ford, Board Member Allan Higdon, Board Member
Decision Date: April 24, 2009 Hearing Location: Sudbury, 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 ) Richard Kulis, Representative Fex Inc., Licensee ) Stanley J. Thomas, Representative
Allegations
- A hearing into a Notice of Proposal (“NOP”) number 16530 dated July 30, 2008 to revoke liquor licence number 10659 (the “Licence”) issued to Fex Inc. operating as PARK HOTEL, 519 Notre Dame Avenue, Sudbury, Ontario, P3C 5L1 (“establishment” or “premises”), on the basis of an alleged violation of subsection 45(2) of Ontario Regulation 719/90 (“O.Reg”) made pursuant to the Liquor Licence Act (“LLA”) was held on January 22, 2009 in the City of Sudbury.
Decision
- After considering all the evidence and submissions the Board FINDS the Licensee violated subsection 45(2) of the O.Reg. Reasons follow.
Preliminary Matters
- The Board was advised that Joseph Conrad Fex is no longer an officer, director, or shareholder of the corporate licensee. The Licensee agreed to this fact.
Registrar’s Evidence
Steven Train is a police officer with the Sudbury Regional Police, and has held this position since 2002.
Cst. Train stated he attended at the Park Hotel on March 20, 2008 to execute a search warrant. The warrant was to search the licensed premises of the Park Hotel for controlled drugs.
Cst. Train stated that they found one hundred and eighty three oxycodone tablets. The tablets were in four strengths: 80 mgs, 40 mgs, 10 mgs and 5 mgs.
Cst. Train stated Joseph Fex was arrested at the time of the execution of the search warrant. Joseph Fex was taken into custody and held for bail.
Cst. Train testified that Joseph Fex was convicted of trafficking drugs and given a $2000.00 fine with sixty days to pay. He was also prohibited from owning a firearm for five years and all items seized were forfeited.
Cst. Train stated that the drugs were found in the basement above a walk-in freezer. He also stated that Joseph Fex pointed out where the drugs were to police.
Under cross-examination Cst. Train stated that Joseph Fex cooperated and pleaded guilty to the charges in court. He also stated that the firearms prohibition is an automatic prohibition with a drug conviction. He stated there were no firearms involved.
Cst. Train said that Conrad Fex, the father of Joseph Fex, was detained briefly but released without charge. He noted that the basement was locked at the time and that Conrad Fex got the key and opened the door.
Licensee’s Evidence
- The Licensee did not offer any evidence.
Registrar’s Submissions
Mr. Kulis submitted that the Licensee agreed to the evidence and facts. Cst. Train’s evidence was clear and convincing.
Mr. Kulis submitted that there is evidence for a finding of breach of subsection 45(2) of the O.Reg.
The Licensee agreed that there was a breach of subsection 45 (2) of the O.Reg.
Submission on Disposition
- The Board heard evidence from both the Registrar and the Licensee during submission on disposition.
Registrar’s Submissions on Disposition
Mr. Kulis called Cst. Train to give evidence as part of his submissions on disposition.
Cst. Train testified that the Park Hotel is a familiar establishment to the Sudbury Regional Police. There have been a number of police related incidents here over the past several years. There was a shooting at the hotel and a person was convicted of attempted murder and given a sentence of four years. There was a stabbing in August of 2007, as well as another stabbing incident whereby a female stabbed another female. This matter is still before the courts.
Cst. Train stated a search warrant for drugs was executed on Nelson Street in Sudbury, a premise owned by Joseph Fex. In this instance, a person was arrested in the presence of Joseph Fex at the hotel.
On October 9, 2008, Cst. Train had a conversation with Conrad George Fex at the hotel about a person of interest. Cst. Train stated Mr. Fex told him that this person was not welcome in his establishment and that he was attempting to bar him. However, Cst. Train stated that this individual gave him the phone number of the hotel and indicated he lived there.
On March 20, 2008 a search warrant was executed in one of the rooms in the hotel. Cst. Train stated that an undercover Police Officer had purchased a small amount of cocaine from a male living in the room. At the time the male was arrested a small amount of cocaine was seized.
The execution of the search warrant was difficult because the numbers on the room were incorrect or non-existent. Sudbury Police Officers also had discussions with the owner with respect to the type of clientele staying at the hotel.
Cst. Train testified he spoke with Conrad Fex on October 9, 2008, and Mr. Fex stated that he was attempting to clean up the hotel and put numbers on the doors of the rooms in the hotel.
At the hearing, Cst. Train stated that the numbers on the room had not yet been changed and that the individual of concern, as far as he knew, still resided there. Police still have concerns about the hotel.
Under cross-examination, Cst. Train agreed that the murder attempt took place before the current owners took over the hotel. With respect to the stabbing in August 2007, a male who was stabbed died two weeks later and a person was charged and convicted. He stated that this was a drug related incident.
Cst. Train stated the stabbing incident involving two women started as an altercation inside the hotel and the stabbing happened outside.
The witness testified that the area of town where the Hotel is located is no worse that any other area of town.
When asked how he knew who owned the premises on Nelson Street, Cst. Train stated that personal property on the premise indicated that Mr. Fex owned it.
Cst. Train stated the murder possibly happened in May of 2006.
Licensee’s Submissions
Susan Fex is the wife of Conrad Fex and the mother of Joseph Fex, and was called upon to give testimony as part of the Licensee’s submissions. She is not an owner, director or officer of the corporate licensee. Her son Joseph was a twenty-five percent owner of the Park Hotel, along with his father and two uncles who each had a twenty-five percent share.
Ms Fex stated that the murder happened prior to the Fexs taking ownership of the hotel.
Ms Fex does some work at the hotel and has her smart serve certificate. She stated that for the first six months she was at the hotel all day, five days a week.
Ms. Fex explained that Mr. John Fex, one of the partners, lives in Toronto and has very little to do with the Hotel. Roger Fex lives in Alberta and has nothing to do with the Hotel. Her son, Joseph Fex, has signed off and is no longer a partner and has nothing to do with the hotel. He is not involved and is not allowed on the premises.
Ms Fex stated her son was a good son. He went to college and came back to Sudbury when they bought the hotel. She was not previously aware he was involved with drugs and neither was her husband, Conrad.
Ms Fex stated the other three partners now own Joseph’s share. They have been trying to sell the hotel since June of 2008. They have an offer from a group in Toronto but it is not great and they are still trying to sell it.
The stabbing involving the females happened outside the hotel. With respect to the stabbing in August of 2007, Ms Fex stated that Roger Fex was involved with the bar at that time.
With respect to her son Joseph and the Nelson street address, Ms. Fex explained Joseph lives in one residence and rents the other one. At the time the search warrant was executed no one was living in the residence, and a person had been hired to do some renovations.
Ms. Fex testified with respect to the person of interest to police, and agreed that he did rent a room in the hotel nine months ago, but they got rid of him and he is not living there now. She is not aware of why he gave the hotel phone number. He is not welcome at the hotel.
Ms. Fex also testified that the room numbers have been put on all doors in the hotel.
When the Fexs bought the hotel it had a reputation for drugs and they tried to do things to curtail it. They do not perpetuate criminal activity.
Ms. Fex stated they try to do things for needy people in the community. Last year the hotel donated $2000.00 to the food bank, and they also donate articles left behind in the hotel to the Salvation Army and others. At Christmas time they open the establishment from 2:00 p.m. to 6:00 p.m. to give food to the needy.
The Park Hotel has been in business in Sudbury for sixty years.
Under cross-examination Ms. Fex stated that her husband has been left holding the bag as far as the hotel goes.
When it was suggested that the hotel was a drug den, she replied that it was not and that there are good clientele. In response to the suggestion that people who deal drugs come to the hotel, Ms Fex said that there are many elderly people who come to the establishment and many who think we are doing a good job.
Ms. Fex stated that her son, Joseph, worked up until the week before the hearing. They felt he could be trusted with the finances.
She was asked if her son was a nice guy before the charges. She replied “yes”, but also stated that she was not happy about his actions. She felt that he did not recognize the consequences of his actions.
When Mr. Kulis pointed out to Ms Fex that the documents indicated they contracted out from November of 2005, she replied they had the right to run the establishment before June of 2006, but did not.
Ms. Fex stated that for security they have people at the door checking customers’ I.D. She also stated that they have barred people who have been involved in unwanted activity.
In reply Ms Fex stated that they try to run as safe a facility as possible. There is another hotel close by, the National, and that patrons go back and forth between the two hotels.
With respect to the door numbering, she stated that it was completed three months ago. She also stated that the door leading from the licensed area now has door security to control access to the rooms in the hotel.
Ms. Fex stated that they had one suspension in 2007.
Registrar’s Submissions on Sanction
Registrar’s counsel submits that based on the evidence tendered that the Licence of the Park Hotel should be revoked.
Mr. Kulis submits that it was a bad business decision to get involved with the hotel and two others have all but backed out, leaving the family stuck with the business. The family is, in essence, left holding the bag.
While the issues of the ownership and bad business decisions have clouded the issue it is not, Mr. Kulis points out, a concern for disciplinary action. If they are taken into account the Board, in Mr. Kulis’ opinion, will have allowed the owners to escape responsibility.
The problem with the hotel was that it was not properly managed and trust was placed in a family member. Joseph Fex was a co-licensee and, therefore, responsible for activities on the premises.
Mr. Kulis submitted that the Licence should have been the subject of an interim suspension.
The establishment has poor management and control. They are trying to sell the hotel and liquor licence, but, Mr. Kulis notes, that liquor licenses are not for sale. If there is a buyer for the hotel the new buyer can apply for a liquor licence and can get one if qualified.
Mr. Kulis submits that a general deterrent will send a message that drug dealing is not tolerated particularly when an owner is involved. An owner involved in drug dealing is a very serious matter.
Mr. Kulis submits that the Licence should be revoked.
Licensee’s Submissions on Sanction
Mr. Thomas agrees that there is no doubt that the matter is a serious offence by an owner who has a twenty-five percent interest, however, he believes it is up to the discretion of the Board to deal with each case on its own merit and circumstances.
Mr. Thomas submits Conrad Fex, Joseph Fex’s father, was really the owner. Sometimes parents are blind and do not realize what their son is doing. They did not, in this case, realize that their son, Joseph, was a bad employee. Mr. Thomas noted that Joseph co-operated with the police.
If the Board revokes the Licence of the hotel it will not solve problems in the neighbourhood as clientele will just go up the street to the other hotel.
The owner is obligated to do something about a problem if they know about it. Mr. Thomas submits they are doing just that. When their lawyer told them that Joseph had to be out of the business they acted.
The business is still up for sale and the fact that there is a liquor licence will definitely help the possibility of a sale.
This hotel, Mr. Thomas notes, has been a community bar for sixty years.
He submits that a thirty day suspension will send a very strong message.
Registrar’s Reply
- Mr. Kulis, in reply, submits that the Licence should be revoked and the sale of the hotel is not an issue to be considered.
Reasons and Analysis
The Board notes that both the Registrar’s Counsel and Licensee’s Counsel agree that there was a breach of subsection 45(2) of the O.Reg. They also agree that the matter before the Board is a very serious violation.
The evidence before the Board is that a search warrant was executed and drugs were confiscated. The evidence also, is that a co-owner (25%) and employee, Joseph Conrad Fex, was arrested, charged and convicted of trafficking drugs. The Board also notes that none of principals of the corporate licensee were present at the hearing.
The evidence is there were other incidents at the hotel that involved drugs being dealt out of rooms in the hotel, and violence in and around the premises.
While the drug dealing in the rooms of the hotel were not in the licensed areas of the premises, they were on the parts of premises that were under the control of the Licensee.
The evidence is that the offending shareholder and employee of the Licensee was only removed from working at the licensed establishment when advised to do so by legal counsel one week before the hearing. He was allowed to work at the hotel up to that point.
Having considered the evidence, the submissions on sanction, and the need to send a strong message that the dealing and holding of drugs on a licensed premise is taken very seriously by the Board and a need for both general and specific deterrence, the Board feels that the revocation of the Licence is the appropriate sanction in the circumstances.
Order
- Therefore, the Board ORDERS that liquor licence number 10659 issued to Fex Inc. operating as PARK HOTEL, 519 Notre Dame Avenue, Sudbury, Ontario, P3C 5L1, is REVOKED, effective immediately.
DATED AT TORONTO THIS 24th DAY OF APRIL, 2009.
BRIAN J. FORD, BOARD MEMBER ALLAN HIGDON, BOARD MEMBER