Registrar, Alcohol and Gaming Commission of Ontario v. Sushi District Inc., 2010 CanLII 80999

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-

Sushi District Inc. operating as District Applicant

-and-

Martin Scott Objector

DECISION

Panel: Eleanor Meslin, Board Member Bruce S. Miller, Board Member

Decision Date: October 1, 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 ) Rena Khan, Representative Sushi District Inc., Applicant ) James Zibarras, On his own behalf ) and on behalf of the Applicant Martin Scott, Objector ) On his own behalf and on behalf of ) Justin Walsh and Gary Kaye

Application

1The Registrar of the Alcohol and Gaming Commission of Ontario (“AGCO”) issued Notice of Proposal number 18191(the “NOP”) dated July 9, 2010 to review the aspect of the application for an additional outdoor area on liquor licence number 813890 (the “application”) issued to Sushi District Inc. (the “Applicant”), operating as DISTRICT, 806 Queen Street East, Toronto, Ontario, M4M 1H7 (the “establishment” or the “premises”), on the basis that the AGCO has received one or more written objections to the application and to determine whether the Applicant is disentitled to a licence because the issuance of a licence is not in the public interest having regard to the needs and wishes of the residents of the municipality in which the premises are located. A hearing of the application was held on August 30, 2010 in the City of Toronto.

2The Licensee had applied to the AGCO to licence an indoor area (which is not part of the NOP) and outdoor area for additional capacities of 5 and 30 persons.

Decision

3After considering all the evidence and submissions the Board APPROVES the application. Reasons follow.

Preliminary Matters

4Ms Khan advised there was a request for party status for Mr. Scott to represent himself and the objectors. Mr. Zibarras objected as Mr. Scott did not represent all the objectors, as a number of them had changed their position and were no longer objecting. Mr. Scott submitted two emails from Mr. Gary Kaye and Mr. Justin Walsh authorizing Mr. Scott to represent them which the Board entered as Exhibit # 1. Mr. Zibarras stated Mr. Scott should only be granted party status to represent himself and Mr. Kaye and Mr. Walsh.

5The Board ORDERED party status be granted to Mr. Scott to represent himself as well as Mr. Kaye and Mr. Walsh.

6Ms Khan advised the Registrar would not be taking a position on the application.

7Ms Khan submitted a copy of the correspondence from the objectors which the Board filed as Exhibit # 2.

8Mr. Zibbaras stated he was a lawyer but did not practice in this area. He waived his right to counsel and stated he was ready to proceed.

Objectors’ Evidence

9Martin Scott first met one of the owners of District in 2008. He believes he spoke to Mr. Langschmidt who wanted to confirm that they had a right of way through Mr. Scott’s property to access their property. Mr. Scott believed he had purchased the lane that runs between their properties sometime in the 1970’s. The owner of District told Mr. Scott that he had a real estate licence and knew that he had a right of way. Mr. Scott was agitated and intimidated by the aggressive and rude tactics of the owner of District.

10Mr. Scott owns the building across the laneway from District. The garbage at Mr. Scott’s building began to increase exponentially after District opened. There were issues with grubs, maggots and raccoons because of the increased garbage. Mr. Scott has owned the building since 1971 and never had garbage related problems on this scale.

11A family of raccoons moved in because of the wanton disrespect shown by the Applicant. The Board should not reward such behavior by granting the application.

12The Applicant’s lawyer sent letters to the tenants of his building and this has caused them to withdraw their objections. The letters represent the same aggressive behavior shown by the owner of District.

13On cross-examination he agreed he was representing Mr. Kaye. He also agreed they both submitted letters of objection which were almost identical. He thinks Mr. Kaye’s letter was copied to all of the tenants in his building.

14He spoke to almost all of his tenants and not all of them objected to the application. He asked his tenants to express any of their concerns to the AGCO.

15He feels the owners are disrespectful. Part of this concern emanates from a voicemail he received in 2008.

16He owns a thirteen suite two story apartment building. There is a laneway between his building and District. His building is zoned as mixed commercial and residential. It was recently for sale but it did not sell.

17There is a fence around the patio at District. The laneway runs behind the fence. There used to be a gate on the fence. The gate was there when the current owners of District took over the property.

18Mr. Zibarras submitted the Applicant’s book of documents which the Board entered as Exhibit # 3.

19Mr. Zibarras showed Mr. Scott a photograph contained in Exhibit # 3 and asked Mr. Scott if that was a photograph of the patio at District. Mr. Scott replied he didn’t recognize the patio as he didn’t live in his building.

20He has never met the owners of District. He has communicated with them via four or five voicemails and he thinks he had one or two conversations with them.

21He owns the laneway between his property and District.

22The garbage which concerns him accumulated on the east side of the fence. He uses the weekly city garbage collection to remove the garbage from his building. He has hired contractors on occasion to remove garbage that people in the neighbourhood have dumped in his driveway.

23He called and complained to the owners of District as he believed they were dumping their garbage on his property. He can’t remember who he talked to. He also complained to the City and the Health Department. He doesn’t know how often District has its garbage removed. He never saw anyone from District dump garbage in the laneway but he has letters from his tenants who told him that they did. He submitted a copy of an email from one of his tenants which the Board entered as Exhibit # 4 where the tenant complained of garbage being left by the staff of District.

24He has never been to District. He does not know the hours of operation for District. He does not know if the staff of District has completed Smart Serve training. There was a fish and chips restaurant prior to District taking over the location.

25Mr. Zibarras showed him two photographs from Exhibit # 3 and asked Mr. Scott if they were photographs of the exterior and interior of District. Mr. Scott replied he didn’t know.

26His tenants have never complained to him of noise coming from District. He knows that one of these tenants, Mr. Kaye, complained of noise to the police on August 20, 2010. He does not know the result of the police investigation.

27There is at least one other licensed patio in the neighbourhood.

28He has never seen significant smoke or noise coming from District. He has never seen any signs of overcrowding or patrons being over served alcohol at District.

29He suggested to his tenants that they picket District if they had concerns. They did not do so. He did receive many letters of concern about District from his tenants.

30Mr. Scott was referred to his letter of objection to the AGCO where he raised a number of concerns including noise, smoke, risk of fire, lack of control of patrons and unruly behaviour. He stated all of these could occur but that to date the main issue was the garbage.

31Mr. Scott stated he wished to introduce an email that Mr. Zibarras sent to him. He was allowed to do so on consent and the Board entered it as Exhibit # 5. The email advised him that as he did not attend a meeting with the owner of District that Mr. Zibarras assumed that “you no longer wish to be involved in the process and we will advise the AGCO that you have withdrawn your complaint”. Mr. Scott stated this was indicative of the attitude of the owners of District.

32In response to a question from Ms Khan he replied that the garbage was the only issue that his tenants were complaining about.

33He doesn’t know if there are any loudspeakers on the patio of District. He is not aware of any security concerns. He does not know why Mr. Kaye did not attend the hearing.

34In response to a question from the Board he stated his concerns to date centre on garbage and what may occur if the application is allowed.

Applicant’s Evidence

35Mr. Zibarras questioned whether he needed to provide evidence as the only complaint centred on garbage. The Board advised that concerns had been raised as to what could occur and that it was up to him if he wished to call evidence.

36Ahren Langschmidt is the manager and a partner in District which is a thirty seat sushi restaurant that has been open for a year. Most of the clientele comes from the neighbourhood. They are open Tuesday through Sunday starting at 5:30 PM. The kitchen closes at 10:30 PM. They tried opening for lunch but it wasn’t successful. They are usually closed by 11:00 PM. He referred the Board to a document in Exhibit # 3 which showed the staff’s hours over a period of time.

37He was working on August 20, 2010 when the police attended for a noise complaint. The officer told him he couldn’t hear any noise and didn’t even advise him to keep the noise down. District has never had any warnings or charges laid against it by anyone including the AGCO and the Health Department.

38There was a fish and chips restaurant in the building prior to District. The restaurant was there for 75 years. The building was in terrible shape and they did extensive renovations. The patio was also upgraded and has been in operation for the past three months.

39They used to store their garbage on their patio prior to the renovations. They stored it in standard city refuse bins and took advantage of the weekly city pickup. They now have their garbage picked up three times a week by a contractor they hired.

40Mr. Kaye complained to him about the noise from some speakers they had installed while they were doing the renovations. They had their contactors insulate the speakers. Mr. Kaye said he was grateful. When Mr. Kaye objected to their application they tried to meet with him but he refused.

41They received one complaint about garbage from one of Mr. Scott’s tenants. Mr. Langschmidt met with the tenant. A racoon had gotten into their garbage and left a fish head in the tenant’s patio.

42There is a licensed patio three doors down from their premises.

43They have no plans to “flip” the property. They have spent over $200,000 on improvements. They know it will take several years to establish their business. They intend to continue to operate as a restaurant and have no intention of becoming a nightclub.

44He has never spoken to Mr. Scott. Their real estate agent did speak to Mr. Scott.

45He has no idea what Mr. Scott bases his allegations on with regards to the garbage. They would have to jump an eight foot fence to put garbage in Mr. Scott’s bins. He was very surprised when he learned of the concerns associated with the application. He went door to door to speak to the objectors and a number of them withdrew their objections. All of the tenants told him they were frightened by the letter they received from Mr. Kaye about the application. Mr. Kaye and Mr. Scott would not meet with him.

46On cross-examination he stated they have a standard hi-fi music system which plays soft background music.

47District is owned by James Zibarras and Jeff Boguski.

48They kept their garbage in one of Mr. Scott’s tenant’s parking spots during a three day period when they were doing renovations. They did this with the permission of the tenant. They only stored garbage there and didn’t put any renovation material in the bins.

49In response to a question from Ms Khan he stated James Zibarras and Jeff Boguski own the building which houses District. James Zibarras owns District.

50In response to questions from the Board he stated their licensed capacity is 30. They have no plans to play music on the patio. They currently store their garbage in the kitchen. It is picked up every second business day, which is three times a week as they are closed on Mondays. They wheel their garbage through the restaurant and out on to the street for pickup.

Objectors’ Submissions

51Mr. Scott pointed out how disingenuous the owners are. Mr. Laugschmidt said they used Mr. Scott’s property for three days to store garbage. They alleged in their correspondence that it was our superintendent who gave them permission and now they say it was a tenant.

52The following conditions should be imposed by the Board if the application is granted:

53The entire premises, inside and outside, should only be licensed until 11:00 PM.

1. No sound broadcasting on the patio.
2. No smoking on the patio.
3. There must be subdued lighting on the patio.
4. The patio must be soundproofed.

54The above conditions, if imposed by the Board, would address their “primary” concern of District becoming a nightclub.

Applicant’s Submission

55The Applicant submitted that they were always very surprised about the nature of the complaints and thought they were self-serving attempts to pursue private interests. The list of suggested conditions does not include any having to do with garbage. The Board heard evidence that illustrates the degree to which Mr. Scott has brought this process into disrepute.

56Mr. Scott is uninvolved in and unfamiliar with the premises. He can’t identify photographs of either the inside or outside of District nor of its patio. He has not spoken to the owner. He has no direct knowledge of the garbage.

57Mr. Scott states he has thirteen rental units for a building that is zoned as a sixplex and he only gets garbage pickup once a week for the thirteen units he is not supposed to have. He accuses District of creating a garbage problem when District has its garbage removed every second day.

58When Mr. Scott gave his submissions he read from a list of proposed conditions aimed only at protecting his property. The conditions don’t even relate to areas of concern. There is subdued lighting on the patio. There is no sound system. There is no need for soundproofing as there are no concerns re noise.

59Mr. Kaye’s letter to the tenants was misinformed and was an exercise in fear mongering.

60Mr. Scott pursued a “fool’s errand” without any due diligence. The only facts show that District has complied with all rules and regulations. It’s extremely unfortunate that unfounded opposition can derail a business for such a long period.

61The application should be granted without conditions as there is no basis for any of the concerns that were raised.

62The Applicant should be awarded costs from Mr. Scott as provided for within the Board’s Rules of Practice.

Objectors’ Reply

63There was no reply.

Analysis/Reasons/Findings

64The Board has carefully considered all the evidence and the submissions presented. The Board APPROVES the application.

65At issue is whether granting this application for a liquor licence is in the public interest having regard to the needs and wishes of the residents of the municipality in which the premises are located. The onus lies upon the Objectors to prove on the balance of probabilities that granting the licence is not in the public interest.

66In order to determine whether the needs and wishes of the residents are bona fide, the Board has considered all of the evidence and evaluated whether the subjective concerns and fears of the residents are supported on a valid and objective basis. There is no direct evidence that this is the case.

67Mr. Scott testified his concerns with District centred on garbage related issues. Mr. Scott owns a neighbouring apartment complex with thirteen rental units. Mr. Scott has never seen anyone from District leaving garbage on his property. Mr. Scott does not live in his building. He stated he relied on information from his tenants.

68Mr. Scott is not familiar with District. He was unable to identify a photograph of District. He was unable to identify a photograph of District’s patio which is separated from Mr. Scott’s building by a fence and laneway.

69Mr. Langschmidt testified in a forthright manner. Mr. Langschmidt works at his business daily and has a good understanding of the neighbourhood. The Board preferred the evidence of Mr. Langschmidt to that of Mr. Scott.

70Mr. Langschmidt is the manager of District. He admitted that on one occasion, while they were doing renovations, he stored garbage on Mr. Scott’s property for three days with the permission of a tenant. He also stated he received one complaint about garbage from a tenant who he met with to resolve the matter.

71He testified that following the renovations District retained a contractor to remove their garbage three times a week or after every two business days as they are only open six days a week. The garbage is removed from bins placed on the street in front of District.

72Mr. Scott may have issues with garbage at this building but there was no direct evidence that District is the source of his problems. The laneway in question is open to the public. Mr. Langschmidt correctly pointed out that anyone could have placed garbage in the laneway. It seems clear that District has taken steps to deal with their garbage. It was unchallenged that they hired a contractor to remove their garbage every two business days after they completed their renovations. There is no reason for District to use Mr. Scott’s property to dispose of their garbage.

73The test for the Board is whether granting this application for a liquor licence is in the public interest having regard to the needs and wishes of the residents of the municipality in which the premises are located.

74The objectors were limited to Mr. Scott or tenants from his thirteen unit building. There was unchallenged evidence that a number of the objectors had withdrawn their objections. In fact, Mr. Scott only had authority to represent two of his tenants, neither of whom appeared at the hearing.

75Mr. Scott testified that his primary concern revolved around refuse from District. The evidence showed that District is not the source of that problem. However, when Mr. Scott gave his submissions he stated his primary concern was that District would become a nightclub. There was no evidence in the hearing that this was likely to happen. Mr. Scott never questioned Mr. Langschmidt about this during cross-examination. The evidence was clear and unchallenged that District was trying to establish itself as a restaurant and had spent considerable resources to accomplish that.

76Mr. Scott recommended that the Board consider adding a number of conditions to District’s licence if the Board approved the application. The Board notes that none of the proposed conditions have anything to do with refuse which Mr. Scott initially testified was his primary concern.

77The proposed conditions addressed such issues as noise, smoking, lighting and hours of operation. None of these issues were raised during Mr. Scott’s testimony. In fact, Mr. Scott testified that noise and smoking were not an issue. Mr. Scott also testified that he did not know District’s hours of operation. The Board sees absolutely no basis for attaching any of Mr. Scott’s proposed conditions to the liquor licence.

78Finally Mr. Zibarras requested the Board award costs against Mr. Scott and referred to the Board’s Rules of Practice. Rule 26, in the AGCO Revised Rules of Practice, deals with awarding costs and has yet to come into force. The Board currently does not have the power to award costs.

Conclusion

79For the reasons noted above, the Board APPROVES the application for additional capacity of 30 persons to the outdoor area of liquor licence number 813890 issued to Sushi District Inc., operating as DISTRICT, 806 Queen Street East, Toronto, Ontario, M4M 1H7.

DATED AT TORONTO THIS 1st DAY OF October, 2010