Registrar, Alcohol and Gaming Commission of Ontario v. Arena Entertainment Inc., 2010 CanLII 25944

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-

Arena Entertainment Inc. operating as Circa (Licensee)

DECISION ON Sanction

Panel: David C. Gavsie, Chair, AGCO Beryl Ford, Board Member

Decision Date: February 25, 2010 Hearing Location: Toronto, Ontario

Alcohol and Gaming Commission of Ontario 90 Sheppard Avenue East, Suite 300 Toronto, Ontario 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: Phillip Morris, Representative Arena Entertainment Inc., Licensee: Peter Dotsikas, Representative

Authorities Arena Entertainment Inc. (c.o.b. Circa) (Re), [2009] O.A.G.C.D. No. 117 Arena Entertainment Inc. (c.o.b. Circa) (Re), [2009] O.A.G.C.D. No. 193 Arena Entertainment Inc. (c.o.b. Circa) (Re), [2009] O.A.G.C.D. No. 245 Armani's Nightclub (Re), [2006] O.A.G.C.D. No. 342 120775 Ontario Ltd. (c.o.b. Armani’s Nightclub) v. Ontario (Alcohol and Gaming Commission), [2007] O.J. No. 5317 Darchris Productions Inc. (c.o.b. Solid Gold Adult Entertainment) (Re), [2008] O.A.G.C.D. No. 89 Darchris Productions Inc. (c.o.b. Solid Gold Entertainment) (Re), [2005] O.A.G.C.D. No. 381

Allegations

1A hearing into a Notice of Proposal number 16834 dated November 18, 2008 to suspend liquor licence number 807407 (the “Licence”) issued to Arena Entertainment Inc., operating as CIRCA, 126 John Street, Toronto, Ontario, M5V 2E3 (the “establishment” or the “premises”), on the basis of an alleged violation of subsection 45(1) of Ontario Regulation 719/90 (the “O.Reg”) made pursuant to the Liquor Licence Act (the “LLA” or the “Act”) was held on April 24, May 7, July 21 and July 28, 2009 in the City of Toronto.

2In its decision rendered by the Board on November 26, 2009 the Board found the Licensee contravened subsection 45(1) of the O.Reg by permitting violent conduct on the licensed premises. Parties were directed to provide written submissions on an appropriate sanction. The Board has received and reviewed those submissions.

3The Board has carefully reviewed the submissions on sanction provided by the Licensee and the Registrar.

Registrar’s Submissions

4Mr. Morris submitted there are a number of aggravating circumstances that merit a high sanction. The conduct which started the incident was at the low end of the scale of difficulty in terms of patron problems that a licensee’s staff would have to deal with.

5There was no fight, just some minor pushing. Mr. Frankel was not drunk, nor was he a large person compared to the bouncers. He was compliant with the bouncers, he agreed that the bouncers had intervened appropriately and the incident was under control.

6Further, Mr. Frankel agreed that he did argue with the bouncers that he should not be thrown out of the premises and felt he was being treated unfairly. His conduct was clearly not provocative.

7The violent assault by the bouncers was unnecessary, excessive and quite violent.

8Three bouncers set upon Mr. Frenkel, he was punched numerous times in the face, and the bouncers then dumped him, injured, onto the street in February. They would not let him back into the stairwell to call an ambulance.

9The Board was presented with photographic evidence of the facial injuries sustained by Mr. Frankel; they were severe and obviously required medical attention.

10Mr. Morris submitted that when police arrived at the establishment, Licensee’s staff, including management, conspired to cover up the incident by warning the bouncer that Mr. Frankel was calling the police so that he could get out of the premises. They did not provide the name of the assailant, and the lineup of bouncers had no credibility, which was described as a “phony line-up”, ultimately concocting a lie that Mr. Frankel was injured on the dance floor.

11Mr. Morris submitted that, in addition, this is not the first time this Licensee has been before the Board of the AGCO. The Licensee was granted a liquor licence in October 2007. The first breach of the licence occurred on October 13, 2007 when it permitted three drunk patrons in the licensed premises (Circa, Board decision on Findings dated April 16, 2009) during that hearing, the manager testified that he did not know the name of any security staff who were working that evening, nor did he try to find out their identification. In that decision, the Board recognized that it was understandable that policies and procedures might need to be refined and changed, and based on practical experience, in the first few months of opening. In addition, the Licensee’s general manager was very forthright and remorseful. That particular violation resulted in a four day suspension.

12Two months later, on December 8, 1007 the Licensee breached subsections 34 (1), 45(1) and 41(1) of the O.Reg and subsection 30(4) of the LLA. The Board suspended the licence for seven days, once again, taking into account the Licensee’s need to refine procedures and train new staff, even though the previously promised action plan had not been effective (Decision on Sanction dated September 23, 2009, paragraph 20, 23).

13The breach we are dealing with in this decision occurred three months later. Mr. Morris submitted, “What possible further promises of action plans, policies and procedures, or of further staff training can mitigate the fact that the staff beat up Mr. Frankel and the management and staff then conspired to hide the assailant?” The Registrar further submitted that proper staff behaviour when dealing with patrons is at the core of a licensee’s functions. Forthrightness and remorse should have been shown when the police were trying to find the bouncer. Mr. Morris submitted that a 30 day suspension is required and justified as a matter of specific and general deterrence.

Licensee’s Submissions

14Submissions on disposition from the Licensee outlined the legal framework of penalty determination.

15The Licensee submitted that in deciding on the appropriate disciplinary action in a particular case, the Board must take into account a variety of factors and ensure the totality of the circumstances is considered. Specifically:

a. The number and seriousness of the findings and whether the events relate to a one time occurrence or are a part of a pattern of behaviour over time;

b. Mitigating and aggravating factors; and,

c. The steps the Licensee has taken to ensure future compliance with the LLA and regulations.

16The Licensee submitted that in a previous decision the Board noted that the establishment is a large licensed establishment with a capacity of nearly 3,000 patrons and occupies a space of approximately 55,000 square feet.

17In the Board decision of June l7, 2008, the Board found a single violation of subsection 45(1) of the O.Reg.

18The Licensee submitted that these breaches represent only the third violation of the LLA and its regulations by the Licensee.

19There has been no pattern of repeated conduct in respect of the present violation. The two previous violations relating to permitting intoxication (Board Decision on Findings, April 16, 2009) and permitting a minor to be present on licensed premises (Board Decision on Sanction, June 9, 2009).

20No other violent incidents at Circa, with the exception of the present case, have ever been before the AGCO.

21The Licensee submits that this incident does not constitute a “pattern of behaviour over time” but is an isolated incident that has not been repeated and highly unlikely to reoccur in the future. In referencing Darchris Productions (Solid Gold Adult Entertainment,) the Licensee noted that the venue had a pattern of physical assaults over a period of three years.

22This pattern has not manifested itself in Circa’s tenure of operation. “Only one violent incident to date has occurred, and this incident is clearly an aberration, rather than the norm.”

23Further the bouncer, C.S., identified by name and matching the description provided by Sergey Frenkel, is no longer employed by the Licensee. The Licensee submits that, considering his departure and the fact that no violent incidents have occurred since, the incident involving Mr. Frankel will remain an isolated chapter on the Licensee’s record.

24The Licensee submitted that a lengthy suspension will be felt not only by the Licensee’s owners, but also by the over one hundred and fifty employees of Circa and its numerous local suppliers and contractors.

25The Licensee submitted that, “No prevention mechanism is perfect, and violations can occur despite the most extensive preparations. It continues to be the policy of the Licensee to continuously improve its compliance with the LLA and regulations and to further refine its practices.

26The Licensee continues to seriously and diligently address its shortfalls through extensive remedial action. The Licensee continues to conduct consultations and implement changes in respect of its security staffing, policies and procedures as needed.

27The Licensee, in response to an earlier violation, it was noted in a Board decision that the Licensee testified to the following actions:

Met with representatives of the AGCO, OPP and a security firm following the incident. They were advised to hire one security officer for every 75 customers. This would equate to 40 security officers for their licensed capacity. The Licensee decided to hire 55 to 65 security officers.

28The establishment now has policies and procedure in place. They have roving security teams. They have incident reports which are filed whenever an AGCO inspector comes on the premises. They have since held a number of training sessions for staff and have instructed bartenders to cut people off. They have also hired off duty paramedics.

29Also, management know how to better position their security to identify areas of the establishment requiring additional supervision.

30The Licensee submitted that in the Darchris decision, the Board issued a sanction of 12 days for the first violent incident that occurred at the premises.

31The Licensee submits that a 12 day suspension would be an appropriate sanction against Circa in this case.

Registrar’s Reply Submissions

32The Registrar, in the reply submissions, indicated that in past decisions of the Board, significant weight had been given to prior breaches of different sections of the Act and regulations when determining the appropriate level of sanction. (Armani’s Nightclub, (2006) O.A.G.C.D. No 342 (Board decision on sanction), paragraphs 17 to 18; upheld at 1207745 Ont. Lt. (c.o.b. Armani’s Nightclub v AGCO [2007] O.J. No 5317 (Div.Ct.), paragraph 9).

33The fact C.S. is no longer employed at the establishment is irrelevant.

34The economic impact on third party employees, suppliers and contractors is irrelevant. The Registrar submitted the Licensee and its staff should have thought about that before they breached the Act.

35Solid Gold (2008) is distinguishable. There was no finding of a breach of subsection 45(1) of the O.Reg because the assault took place off site after the employee had been fired.

Reasons and Decision

36The Board has carefully reviewed the submissions on sanctions and notes the record of the previous breaches.

37In making a determination of a specific and general deterrence, the Board finds that a suspension of 18 days is appropriate.

38The Board does not support the Licensee’s submission of a 12 day suspension given there are two previous breaches. The severity of the violation of subsection 45(1) of the O.Reg when a young patron was seriously injured by an employee calls for a substantial penalty.

39Although previous breaches were not of a violent nature, none the less, they were violations of the LLA that indicated to the Board that the Licensee did not necessarily understand or respect his responsibility to comply with the LLA.

40In the previous breach, the Licensee expressed remorse at the time and indicated that there would be considerable remedial action. The action plan was not effective, resulting in a further breach and ultimately this breach.

41This case involved the injury of a patron by an employee, a cover up of the incident, delaying tactics by management allowing the culprit to leave the premises before he could be charged by police investigating the matter and attempts by management to suggest the patron was injured on the dance floor, despite evidence to the contrary.

42Evidence that a line up included the person responsible for the assault proved to be false.

43Refusing the injured patron re-admittance to the establishment to call an ambulance, showed a distinct lack of compassion on the part of staff. They ignored the serious nature of the injury of the patron.

44The Board has taken into consideration that since the incident, the Licensee and management has met with both the AGCO, OPP staff and a security firm. They have hired above the recommended quota of security staff for the establishment and have hired off-duty paramedics to work at the establishment.

45Policies and procedures are in place to ensure that future incidents are avoided by the implementation of these practices and the additional training of staff.

46The person identified as the perpetrator by the victim is no longer in the employ of the Licensee.

47The Board notes the Licensee’s submissions on sanction that this was an isolated incident of violence that does not constitute a pattern of behaviour and is highly unlikely to reoccur in the future.

48The Board understands the financial impact of a suspension on both the Licensee and employees. However, compliance is, at all times, the responsibility of the Licensee and financial ramifications are part of the deterrent effect of a suspension.

49In view of the above, an 18 day suspension is appropriate as a matter of specific and general deterrence.

Order

50Therefore, Board ORDERS that liquor licence number 807407, issued to Arena Entertainment Inc., operating as CIRCA, 126 John Street, Toronto, Ontario, M5V 2E3, be suspended for EIGHTEEN (18) consecutive days.

51The 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 this decision.

DATED AT TORONTO THIS 25th DAY OF February, 2010