Registrar, Alcohol and Gaming Commission of Ontario v. 1765669 Ontario Inc., 2010 CanLII 81025

In the Matter of the: Liquor Licence Act, R.S.O. 1990, c. L.19, as amended

Between:

Registrar, Alcohol and Gaming Commission of Ontario (Registrar)

-and-

1765669 Ontario Inc. operating as Sogo Bar & Lounge (Licensee)

Panel: Patricia McQuaid, Vice-Chair, AGCO Brian J. Ford, Board Member

Decision Date: July 14, 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: Richard Kulis, Representative 1765669 Ontario Inc., Licensee: Randall Barrs, Representative

Allegations

1A hearing into Notice of Proposal (“NOP”) number 17954 dated March 18, 2010 to revoke a liquor licence and an Order dated March 18, 2010 to immediately suspend a liquor licence on an interim basis placed on liquor licence number 805767 (the “licence”), issued to 1765669 Ontario Inc., operating as SOGO BAR & LOUNGE, 4002 Sheppard Avenue East, Unit 101, Scarborough, Ontario, M1S 1X6, (the “premises”), on the basis of alleged violations of clauses 6(2)(d) and 6(2)(e) and subsection 16(1) of the Liquor Licence Act (the “LLA” or the “Act”) and subsections 15(1) and 45(2) of Ontario Regulation 719/90 (the “O.Reg”) made pursuant to the LLA, was held on March 25, 2010 in the City of Toronto.

2On March 18, 2010 the Registrar ordered that an Interim Suspension be placed on the licence in the interest of public safety subject to an Order by the Board of the Alcohol and Gaming Commission of Ontario (“AGCO”). In its Order dated March 26, 2010, the Board rescinded the Interim Suspension subject to conditions.

3In its decision dated May 19, 2010 the Board found the Licensee contravened subsection 16(1) of the LLA and subsection 45(2) of the O.Reg and dismissed the allegation of a violation of clause 6(2)(d) of the LLA. The Board also accepted the withdrawal of the allegations of violations of clause 6(2)(e) of the LLA and subsection 15(1) of the O.Reg. Parties were directed to provide written submissions on an appropriate sanction. The Board has received and reviewed those submissions.

Registrar’s Submissions

4Mr. Kulis submitted that the Licensee, for all intents and purposes, abandoned its responsibility for the management and supervision of the business. Mr. Kulis stated there was little substantive evidence that would indicate that there was any policy or procedure in place that would guide the manager and employees regarding how the people responsible for the safety and well being of the patrons wanted the business to be operated.

5The Licensee, he noted, met on occasion with the manager but there was no evidence, in his opinion, that the Licensee actively exerted any control or guidance. Even now with Mr. Tan, he noted, there is no plan, other than perhaps an obscure intention to have a daily meeting, on how the bar will be managed and operated.

6Mr. Kulis submitted that a strong message must be delivered as a specific deterrent to this Licensee. A thirty (30) day suspension should be imposed which should also act as a general deterrent to other licensees. The conditions imposed by the Board should be retained and in particular that Mr. Pan files his personal history report. A transfer application is also required.

Licensee’s Submissions

7Mr. Barrs stated because Mr. Tang had good credentials and recommendations from clubs that he had managed and because Sogo had received no "tickets" (Provincial) or complaints from the AGCO, the licence holder trusted him.

8Mr. Barrs noted Mr. Tang's drug activities were surreptitious and that no owner could have known that he was misbehaving. It should be noted there is still no analysis on the "drugs".

9Sogo's licence, Mr. Barrs noted, was already suspended for seven days on the "interim" suspension. With no warning or planning, this small Licensee suffered huge losses including two UFC fights. It took months to recover. This penalty should be sufficient and it’s really Mr. Tang who should have to suffer any additional penalty. The Licensee did advise of the change in the corporate structure and is now doing a Transfer Application as recently requested. Mr. Pan filed his Personal History Report and the Licensee has had no problems since this incident.

Decision on Sanction

10The Board notes the police officers conducting the search of the premises found a considerable amount of illegal drugs hidden in the office and just outside the office. A large amount of cash was hidden in the office as well.

11There is no evidence that the Licensee was aware or involved in the matter involving the drugs and money.

12Evidence before the Board also showed that Mr. Tang had a very lengthy criminal record over a number of years which included robbery, violence and drug trafficking.

13The evidence before the Board also revealed that the Licensee had little contact with Mr. Tang who managed the bar and the Board agrees with Mr. Kulis that there is no evidence to suggest the Licensee actively exerted any control or guidance over the running of the establishment. A licensee is obligated under the LLA and its regulations to know what activities are occurring within the premises and to ensure that no such activities contravene the law.

14The Board also notes there is no evidence before the Board that the Licensee made any attempt to check the background of Mr. Tang.

15The Board recognizes the need for a specific and general deterrence when imposing a penalty. The incidence of illegal drug activity on a licensed premises is a very serious matter particularly when it involves the person who is in charge of the establishment.

16Even though the Licensee was not directly involved in the matter, it is the Board’s belief that had the Licensee been more actively involved in the day to day operation of the business the Licensee would have become aware of the problem and taken action or certainly by its active presence would have deterred such activity. The Licensee’s failure to meet its obligations resulted in serious breaches of the Act.

Order

17Therefore, the Board ORDERS that liquor licence number 805767, issued to 1765669 Ontario Inc., operating as SOGO BAR & LOUNGE, 4002 Sheppard Avenue East, Unit 101, Scarborough, Ontario, M1S 1X6 be suspended for TWENTY-ONE (21) days inclusive of the SEVEN (7) days already served during the interim suspension.

18The suspension dates for the 14 remaining days, to be served consecutively, are to be submitted in writing to the Manager of Hearings section of the Alcohol and Gaming Commission of Ontario 90 Sheppard Avenue East 3rd floor, Toronto, Ontario M2N 0A4, facsimile 416-326-5566 within seven (7) days of today’s date, failing which the Board shall set the dates for suspension without further notice to the licence holder. The suspension shall not commence for at least 20 days after the date of this decision, shall be completed within 90 days of the date of this decision, and shall be completed on days that the establishment is normally operating.

DATED AT TORONTO THIS 14th DAY OF July, 2010

PATRICIA MCQUAID, VICE-CHAIR BRIAN J. FORD, BOARD MEMBER