Registrar, Alcohol and Gaming Commission of Ontario v. East Chinatown Off-Track Wagering Station Inc., 2010 CanLII 35628

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-

East Chinatown Off-Track Wagering Station Inc. operating as East Chinatown Off-Track Wagering Station

Applicant

DECISION

Panel: Patricia McQuaid, Vice-Chair, AGCO Bruce S. Miller, Board Member

Decision Date: June 9, 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

East Chinatown Off-Track Wagering Station Inc., Licensee ) Alison Craig, Representative

Authorities

896807 Ontario Ltd. (c.o.b. Club 147)(Re) [2009] O.A.G.C.D. No. 191

“Q’ Restaurant (Re)[1999] O.A.G.C.D. No. 71

Safari Bar and Grill Inc. (c.o.b. Safari Bar and Grill)(Re) [2008] O.A.G.C.D. No. 289

Troubadour Bar Inc. (c.o.b. Troubadour Bar) (Re) [2208] O.A.G.C.D. No. 295

Application

1. The Registrar of the Alcohol and Gaming Commission of Ontario (“AGCO”) issued Notice of Proposal number 17760 dated December 17, 2009 to refuse to remove a condition on liquor licence number 44434 issued to East Chinatown Off-Track Wagering Station Inc. (the “Licensee/Applicant”), operating as East Chinatown Off-Track Wagering Station, 729 Gerrard Street East, Toronto, Ontario, M4M 1Y5 (the “establishment” or the “premises”), on the basis that there has been no change in circumstances to justify the removal of the condition. A hearing of the application was held on June 3, 2010 in the City of Toronto.

2. The Licensee had applied to the AGCO to remove a condition on the licence which states:

“The Licensee shall ensure that a licenced Security Officer is on duty at all times when the establishment is open and the Security Officer’s principal responsibility shall include checking customers on entry for illegal drugs and monitoring suspicious activity and illegal drugs in the premises.”

Decision

3. After considering all the evidence and submissions the Board APPROVES the application to remove a condition and ORDERS the addition of conditions to be attached to the licence. Reasons follow.

Preliminary Matters

4. Mr. Morris advised the Board that the condition in question was imposed by the Board following a hearing. In its decision dated August 6, 2009 the Board made no findings, but imposed the condition in issue. The Registrar takes no position on the application and will not be making submissions.

5. Ms Craig submitted the Applicant’s book of materials which the Board entered as Exhibit # 1.

Licensee’s Evidence

6. Sam Wong owns the East Chinatown Off-Track Wagering Station with his brother Tommy Wong. Mr. Wong is 73 years of age. He has no criminal record. Prior to retiring, he worked as a senior draftsman for Beaver Lumber.

7. Ms Craig submitted a letter that was addressed to Ms Craig and copied to Mr. Sam Wong from the Decision Preparation Coordinator at the AGCO Hearings Department dated August 31, 2009 which the Board entered as Exhibit # 2. This letter was in response to a letter from Ms Craig requesting removal of the condition and states: “The panel has reviewed your correspondence. While it was not the intention of the Panel to impose a condition on the licence that would have the effect of putting the Licensee out of business, the Panel does not have jurisdiction to remove or amend a condition after a decision has been issued. It is, however, open to the Licensee to file an application to have the condition amended or removed.”

8. Mr. Wong has owned the East Chinatown Off-Track Wagering Station with his brother for 14 years. His business is centered on off-track wagering on horse races. The business includes a licensed restaurant. He has been licensed by the AGCO since 1996 and had no problems prior to the incidents in May 2008 that led to the Board decision dated August 6, 2009.

9. He has been president of the East Chinatown business Association for the past eight years. He tries to ensure that the community is safe in his role as president. He meets with the police to try and achieve this goal. He was given an award by Mayor Lastman for his work in the community.

10. He and his brother run a not-for-profit-seniors centre on the second floor of their business. They hold a Canada Day celebration for approximately 800 people every year. They also are very involved in supporting the yearly Dragonfest in their community. They would not be able to continue to fund these events if they are forced to close their business.

11. Since the events of May 2008, he met with the police and has signed an agreement with the police which authorizes them to enter his establishment without a warrant.

12. The business has a security camera for the area outside of the premises. He regularly shares the video footage with police upon request. Two years ago he was able to assist the police with a homicide investigation.

13. He agreed that there was substantial evidence of drug trafficking at the Board hearing that was held in 2009. He now knows what to look for so he and his staff can prevent drug trafficking. They watch their customers very closely and give their staff training in how to spot suspicious activity and how to prevent illegal drug activity.

14. He works daily from 11:30 a.m. to 4:00 p.m. when he is relieved by his brother.

15. They have a camera security system which is monitored in his office which is upstairs. There are 24 security cameras, four of which are new additions since the hearing. The new cameras cover problem areas for potential illegal drug activity that were identified in the hearing, namely the main door, the back door, the washroom area and the area around the betting station.

16. Woodbine Entertainment renewed their contract to provide pari-mutuel services following the AGCO hearing.

17. Staff from Woodbine Entertainment inspects the premises two to three times a week. There have been no problems identified by them. Woodbine Entertainment provides funding for a security guard for the last four hours of operation every day. They have done this since September, 2009. Woodbine Entertainment also installed a security camera behind the tellers and installed one by the main door. Woodbine Entertainment monitors these cameras.

18. Ms Craig then reviewed some of the financial material contained in the Applicant’s book of materials. Mr. Wong stated they used to have net monthly revenues of $2,000 per month prior to the Board imposing the condition to have a security guard. They now pay $5,000 a month for security. Woodbine Entertainment reimburses them approximately $2,500 a month for four hours of security each evening. The end result is that the Wongs are now losing $500 a month. They have almost exhausted a $30,000 line of credit and were forced to take out a $100,000 loan. They will have to close their business if the condition requiring a security guard is not removed.

19. In response to questions from the Board, Mr. Wong stated that Woodbine Entertainment has always inspected their business. He stated their business is open from 11:30 a.m. until 11:30 p.m. Wagering commences at 12:30 p.m. and ceases around 11:15 p.m. The security guard is on duty from 12:30 p.m. until 11:30 p.m.

20. Brian Brett is the Director of the 28 off-track facilities in the Greater Toronto area for Woodbine Entertainment where he has worked for 44 years.

21. Woodbine Entertainment has had a business relationship with the East Chinatown Off-Track Wagering Station since 1996. They have had no concerns with the operation of the East Chinatown Off-Track Wagering Station. Woodbine Entertainment leases space in the premises and provides pari-mutuel machines and staff to operate them. They are regulated by the Ontario Racing Commission (ORC) and the Canadian Pari-Mutuel Association.

22. Woodbine Entertainment used to have managers inspect the East Chinatown Off-Track Wagering Station one to two times a week but they have increased the inspections to three to four times per week since the hearing. There is also an internal security officer who inspects the premises two to three times per month and the number of visits has not changed since the hearing.

23. The East Chinatown Off-Track Wagering Station has complied with all requests made by Woodbine Entertainment since the hearing. They have a security guard and have improved their security video system.

24. Woodbine Entertainment put security guards in all of their off-track locations in the evenings as of September, 2009 in response to armed robberies that had occurred at some locations. Their experience is that having a security guard present is a deterrent to criminal activity. In addition, the door to the premises is locked while the security guard is present. The guard opens the door to permit entry.

25. In response to a question from the Board, Mr. Brett stated the increased inspections were as a result of the AGCO hearing. He also stated that the ORC would likely not licence East Chinatown if it did not have a liquor licence as that is a requirement for an off-track facility.

26. Nizar Baboo is retired. He has no criminal record. He has gone to the East Chinatown Off-Track Wagering Station almost every day for the past three years. He is there from 11:30 a.m. until 6:30 p.m. He knows the owners.

27. The clientele has changed since the hearing. It is now very secure and clean. The “bad guys” have moved out of the premises.

28. The owners work very hard and are very hands on and have always been so.

29. The staff is now very highly skilled and trained. They ask people to leave if they look like they are doing anything inappropriate.

30. In response to a question from the Board, he stated the “bad guys” used to frequent the premises in the evening.

31. At the conclusion of the evidence, Ms Craig submitted letters of reference for the Wongs that were provided at the previous hearing. The Board entered them as Exhibit # 3.

Licensee’s Submissions

32. The East Chinatown Off-Track Wagering Station has operated since 1996 with an unblemished record. There has been no record of any concerns with its operation from the community.

33. In its decision dated August 6, 2009, the Board noted in paragraph 87 that the majority of patrons were not involved in drug activity. The Board noted in paragraph 329 that the establishment, per se, was not under investigation. Finally it should be noted that the issue of the cost of a security guard was not addressed and was not subject to submissions.

34. The East Chinatown Off-Track Wagering Station is not a profitable business. The financial status of the operation is a change in circumstances. The business used to make a monthly profit of $2,000, which the Wongs used to finance community events. The business is now losing money and may be forced to close. The community needs the Wongs as evidenced by the letters of reference. It is in the public interest to remove the condition.

35. There are a number of other changes in circumstances. The staff of the East Chinatown Off-Track Wagering Station has now been trained and know what to look for in order to prevent illegal drug activity. Security cameras are now monitored constantly and can be monitored by the staff at the service bar. Prior to the hearing they could only be monitored by the Wongs in their office. Four new security cameras have been installed since the hearing. These changes are coupled with increased inspections by Woodbine Entertainment. Woodbine Entertainment also funds a security guard for the last four hours of operation each evening. The majority of the drug activity took place in the evening. Woodbine Entertainment has also installed two cameras since the hearing and monitors them as well at its security offices which are staffed 24 hours a day.

36. Ms Craig referred to the Safari Bar and Grill Inc. decision wherein the Board removed an onerous condition that threatened the continued existence of the business.

37. She also cited the “Q” Restaurant decision where the Board noted in paragraph 24 that a change in circumstances “need not be significant; however it must be meaningful, such that the original conditions might not have been imposed or consented to, had the current circumstances existed at the time”.

38. In Club 147 the Board removed a condition for security personnel (and attached new conditions) as the premises was losing money.

39. Finally in Troubadour Bar Inc. the Board noted in paragraph 26 that a “change in circumstances need not be dramatic or of severe consequence”. The Board removed a condition in that case and noted in the same paragraph that the Applicant did not anticipate the financial impact of a condition at the time they agreed to it.

40. The Board should consent to the removal of the condition.

41. The Board asked Ms Craig how the public interest could be protected if the condition was removed and the Applicant subsequently downgraded the security system. Ms Craig replied that the Board could impose a condition requiring the Applicant to notify the Registrar if there was any change in the security camera system or in the status of the security guard provided by Woodbine Entertainment. Ms Craig also advised the Board could impose a condition requiring new staff to be given training in preventing illegal drug activity.

42. Mr. Morris did advise that informing the Registrar of any changes would have little meaning as the Registrar would have to issue a Notice of Proposal to impose a condition.

Analysis/Reasons/Findings

43. The Board has carefully considered all the evidence and the submissions presented.

44. The original condition was imposed by the Board following a hearing to revoke the liquor licence of the East Chinatown Off-Track Wagering Station. In its decision dated August 6, 2009, after six days of hearing, the Board made no finding but imposed the condition. The Board noted in paragraph 364 there was insufficient evidence that the Licensee permitted drug transactions but “it was undisputed that drugs were held, offered for sale and/or sold in the licensed premises or areas under the exclusive control of the Licensee on 12 dates. While the Board acknowledges that the Licensee already implemented remedial measures to minimize the likelihood of drug activity occurring in the premises in the future, the Board believes that additional measures should be taken to deter and detect potential drug activity”.

45. Subsection 14(2) of the LLA deals with the removal of a condition and states as follows:

A member of the Board may, on the application of a licensee, remove a condition of a licence…if there is a change in circumstances.

46. In considering the application the Board must be satisfied that there is a change in circumstances.

47. The Board heard significant evidence that the owners and Mr. Sam Wong in particular, are very active in the community. They use the proceeds of their business to finance many positive activities in the community. The Board applauds this work. However this is not a change in circumstances.

48. At the time of the prior hearing, the Licensee had implemented a number of new policies to ensure there is no drug activity in the establishment, including prohibiting bags in the washrooms, allowing only one person in the washroom at a time via key access, removing the pay phone, meeting with police officers from 55 Division and signing an Authorization pursuant to the Trespass to Property Act.

49. This Panel heard evidence that subsequent to the prior hearing that Woodbine Entertainment began providing funding for a security guard for the last four hours of operation every evening. Woodbine Entertainment has also increased the number of inspections and has installed two security cameras which Woodbine Entertainment constantly monitors.

50. In addition to the above, the Applicant has installed four additional security cameras to cover off any blind spots, augmenting the security system that had been in place. These cameras are constantly monitored by the Wongs and since the hearing, monitors have been installed so the staff can observe them as well.

51. Mr. Sam Wong testified that as a result of the police investigation and the hearing, he realized there was a problem with illegal drug activity in the premises. He and his brother now know what to look for and have implemented training for staff to prevent illegal drug activity.

52. In the Board’s view, all of the above constitute a change in circumstances and appear to have had a positive effect. There was no evidence of any further incidents. Mr. Brett testified that Woodbine Entertainment is unaware of any issues and has no concerns surrounding the Applicant’s business. Mr. Baboo, a frequent patron, testified that things have changed for the better and noted the “bad guys” have moved on.

53. The Board FINDS there has been a change in circumstances and as a result APPROVES the request to remove the condition.

54. The addition of the cameras, changes to how the cameras are monitored and training have had a positive impact. The Board acknowledges that the presence of a licensed security guard may be no longer needed during the entire day. The Board also notes the significant financial burden upon the Licensee of maintaining security through all hours of operation though that in and of itself would not constitute the change in circumstances required by subsection 14(2) of the LLA. There was evidence that most of the previous problems occurred in the evening. The Board believes that a security presence is still needed in the evening hours. The Board also believes that it is in the public interest to ensure that the current training and security camera systems are kept in place and maintained.

Order

55. For the reasons noted above, the Board APPROVES the application to remove the condition on liquor licence number 44434 issued to East Chinatown Off-Track Wagering Station Inc., operating as East Chinatown Off-Track Wagering Station, 729 Gerrard Street East, Toronto, Ontario, M4M 1Y5.

Further the Board ORDERS that the following conditions be attached to the licence:

1. There shall be a licenced Security Guard on duty each evening of operation from 7:30 p.m. until closing.

2. All new staff members are to be given training in detecting and preventing illegal drug activity.

3. The Licensee shall maintain a fully operational security surveillance camera system as exists in June 2010 and shall ensure the cameras are constantly monitored during hours of business.

4. The Licensee shall notify the Registrar of the removal of any of the security surveillance cameras operated by the Licensee or operated by Woodbine Entertainment within seven days of any such removal.

DATED AT TORONTO THIS 9th DAY OF JUNE , 2010

PATRICIA MCQUAID, VICE CHAIR BRUCE S. MILLER, BOARD MEMBER