ALCOHOL AND GAMING COMMISSION OF ONTARIO
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-
Adam’s Pizzeria (Prescott) Ltd. operating as Limit Exotic Lounge (The) Licensee
DECISION ON FINDINGS
Panel: David C. Gavsie, Chair, AGCO Joan Lougheed, Board Member
Decision Date: July 27, 2010 Hearing Location: Ottawa, 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 Adam’s Pizzeria (Prescott) Ltd., Licensee ) Lawrence Greenspon, Representative
Allegations
A hearing into Notice of Proposal number 18016 dated April 16, 2010 to revoke a licence and an Order dated April 16, 2010 to immediately suspend on an interim basis liquor licence number 201939 issued to Adams Pizzeria (Prescott) Ltd. (the “Licensee”), operating as THE LIMIT EXOTIC LOUNGE, 147 King Street West, Prescott, Ontario, K0E 1T0, with respect to section 6 of the Liquor Licence Act (the “LLA”) and alleged violations of section 52 and subsections 25(1), 31.1(1), 34(1), 45(1) and 45(2) of Ontario Regulation 719/90 (the “O.Reg”) made pursuant to the LLA, was held on May 31, 2010 in the City of Ottawa.
On June 3, 2010, the Board issued an Order (the “Order”) lifting the interim suspension imposing four conditions.
On June 18, 2010, the Registrar’s Representative filed a Notice of Motion alleging breaches of the conditions, seeking an order of the Board rescinding the Order and, in effect restoring the Registrar’s interim suspension.
The Registrar’s motion was heard on July 12, 2010, in the city of Ottawa.
Decision
- The Board FINDS that while the Licensee technically breached two conditions imposed in the Order, the restoration of the interim suspension is too harsh a penalty on the Licensee in the circumstances. Instead, the Board suggests the Licensee comply with the conditions in light of the comments expressed by the Board in this decision. Further, the Board confirms its Order dated June 3, 2010 will remain in effect, with the existing conditions, until the earlier of the time when the Board renders its final decision on the matters before it or the Board orders otherwise. Reasons follow.
Preliminary Matters
The Board ORDERED, on consent, the exclusion of all witnesses.
Chris Valaveris was present, representing the Licensee. Mr. Morris argued that he should not be in the hearing room in light of condition # 4 imposed by the Order. The Board disagreed with Mr. Morris and permitted Chris Valaveris to remain in the room to instruct the Licensee’s Representative.
Mr. Morris submitted the following which were entered into evidence as exhibits:
a. M1: Notice of Proposal to Revoke dated April 16, 2010. b. M2: Order on Interim Suspension dated April 16, 2010. c. M3: Continuation Order dated May 7, 2010. d. M4: Order of June 3, 2010 - conditional lifting order. e. M5: Notice of Motion dated June 18, 2010. f. M6A: Affidavit # 2 of Kelly Workman - typed notes of first affidavit. g. M7: Second Affidavit of Kelly Workman. h. M8: DVD/CD of recording at premises dated June 4, 2010 – evening. i. M9: Hand drawn diagram of entranceway.
Registrar’s Evidence
Kelly Workman, an inspector with the Alcohol and Gaming Commission of Ontario (“AGCO”) since 2001 gave evidence. She stated she was not the regular inspector for the area.
Ms Workman provided a description of the exterior of the building stating that there are two doors on the front face with windows on either side. The east opening or alcove is the main entrance. There are two doors, with a vestibule in-between, before entering the licensed premises.
Referring to Exhibit # M6A, the witness stated that the second door to the west leads to a set of stairs and the residential area above the business. This is where Chris Valaveris resides.
There is a door to the licensed premises and to the residential units through the ground level alcove. She stated that it was not known if the door to the residential area was locked or freely accessible.
The witness gave detailed description of the interior of the licensed premises, indicating the location of the bar, stage, kitchen, office and rear entrance to the patio.
On June 3, 2010, Ms Workman entered the premises at 8:25 p.m. with two Ontario Provincial Police (“OPP”) officers. She observed a toy house machine on the west side of the premises and saw a male at the service bar, consuming beer.
Ms Workman entered the kitchen with Police Constable (“PC”) Cobb and spoke to an employee, Ms O. She stated that she understood Ms O. was a girlfriend of Chris Valaveris.
She observed a round table with a video monitoring the service bar area and asked if the video was recording.
Mr. Rob MacGregor came into the room from the bar, and told her that he was a friend of Chris Valaveris. He was helping out and not officially employed.
Ms Workman stated Mr. MacGregor told her the camera was not recording, as they had to wait for a part to come in and that he had set up the system with one camera that showed the service bar area, only.
The Licensee, Mark Valaveris, entered the premises and was asked when they had started serving alcohol and said at 7:00 or 8:00 p.m. last night, but was not exactly sure.
Ms Workman asked if he understood that the cameras had to be working to serve alcohol. The Licensee said he knew this.
Ms. O started yelling that they had seven days and left the room. She came back in with a portable phone, telling Mark Valaveris that Chris wanted to speak with him.
The Licensee, Mark Valaveris, took a phone call from his son, Chris Valaveris, at approximately 8:40 p.m. After their conversation, the phone was handed to Ms Workman. She stated she discussed with Chris Valaveris the seven days of the condition to get the cameras up and running prior to serving. She told him she would be getting clarification through legal.
The phone call concluded. She retrieved the cash register receipt for a record of the date and time. As she left the premises, Chris approached her on the sidewalk, showing her a copy of the Board conditions on his laptop computer. He told her, that upon request the bartender would be able to burn a CD of the video tapings. If permitted on the premises, he would be able to do this, too, but Ms Workman told him she could not give this permission.
Ms Workman left at 9:10 p.m.
On Friday, June 4, 2010, Ms Workman called the OPP at 6:51 p.m. for assistance to attend the premises. She parked at the rear of the premises and was watching the outdoor patio, observing three or four patrons going in and out.
She stated she then left this area and as she drove by the front of the premises she observed a person with a blue arm sleeve entering the premises. She parked on the street at the front of the premises, about two car lengths from the door. This was about 8:00 p.m. At 8:02 p.m. she observed Chris Valaveris walk out of the premises, followed by a female.
At 8:40 p.m. she and the police entered the premises and spoke to Mr. MacGregor who confirmed that the video had been recording since noon. She requested a copy but there was some difficulty in copying / compressing the file. She asked to be contacted when the copy was completed and left at 9:20 p.m.
At 11:10 p.m. she returned with PC Hoggin and received a copy of the video from Ms O. The DVD was dated June 4, 2010.
She confirmed that at this hearing Mr. MacGregor operated the DVD while she watched. She stated that she could not find the 8:00 p.m. spot, and that the date and time on the screen were difficult to read, making it impossible to determine the exact time. She stated that faces were not clear to her, unless the person was very close to the camera. The video only shows the bar area.
In response to Registrar’s questions, the witness stated that she was on the premises on June 11, 2010 for a routine inspection and to request additional recordings. Ms. O. described to her the difficulty of copying the videos from the computer, with the large files requiring 35 CD’s for a week of recordings. She had no contact with Chris Valaveris on this date but had observed him on the street in front of the premises.
On questioning, Ms Workman stated that there are seating areas within the premises where there is service, but alcohol is not prepared in these areas. She confirmed that the DVD, Exhibit M8, only shows the service bar area and one cannot easily view the northerly end of the premises.
On July 1, 2010, she received an e-mail from PC Shaw advising her that he had requested a copy of the video recording on June 28, 2010.
On July 3, 2010, she and Inspector Lanois were parked in front of the main entrance of the establishment when she observed Mr. Chris Valaveris entering the first door leading to the vestibule of the business. He was observed exiting the main entrance door of the premises a very short time later, approximately 1 to 1 ½ minutes.
On cross-examination, Ms Workman confirmed that the toy machine was removed on June 4, 2010, and stated that she had received clarification from her superiors that the video only needed to be recording within seven days.
When shown Exhibit M9, she stated that the diagram at the back of Exhibit M6A, with her hand-drawn diagram, more accurately reflects the entranceway with an alcove, main entrance door, vestibule and then a door to the premises.
In response to questions she confirmed that on June 4, 2010, she observed Chris Valaveris exiting the exterior door of the premises and on June 11, 2010, she saw him on the sidewalk by the premises. On July 11, 2010, he was observed leaving the vestibule of the entrance, walking through the alcove and onto the sidewalk. She confirmed that he was not seen exiting the second interior vestibule door nor seen inside the licensed premises. He was only observed in the entranceway.
Ms Workman clarified for the panel, that the entrance is two steps up to a pad approximately three feet by three feet, which is big enough to swing a door open. She stated that you can see the first door when driving by in one direction. She never saw Mr. C. Valaveris exiting the second interior door, which leads to the interior of the business.
Ms Stacy Lanois, an inspector with the AGCO since 2001, is the local inspector for the Prescott area.
On July 3, 2010, at approximately 11:45 p.m., she and Inspector Workman, drove to the establishment and saw a male patron coming out of a doorway onto King Street. She stated she was not exactly sure which door it was, stating it could have been the door to the licensed establishment or the door to the residences above the establishment. As they drove by the establishment, she confirmed the identity of the male, as being Chris Valaveris and as they drove by, saw him go into the main doorway. As they drove by, the same male was seen exiting the main door. He was wearing a white t-shirt.
When asked how much time had elapsed, she replied by saying that they parked in front of a neighbouring furniture store and then she saw, from the side view mirror, Chris Valaveris leaving.
She stated that the vestibule of the premises is two to three feet square; you walk in, and turn left. This area could be a wind buffer. There is no camera in this area.
The witness confirmed that she saw Ms O. and Mr. MacGregor at the establishment. When she spoke to him, identifying herself, he stated he was acting as a bartender during the interim suspension. Mr. MacGregor told her he was only serving pop and there was no management present that night.
On questioning she stated that she had never seen Chris Valaveris going through the second door into the licensed premises and that she had only seen Mr. MacGregor one time.
Licensee’s Evidence
Mr. Robert MacGregor stated he was contacted by Chris Valaveris who said he needed surveillance equipment for the service area. The witness stated that the existing computer was old and would not work, so new equipment was ordered. He set up the system and presently maintains it.
Mr. MacGregor reviewed his educational qualifications which include a partial degree from DeVrie, an electronics technician’s course, and his work in the field for 22 years.
He stated that at the establishment, the system was motion sensitive, had a dozen cameras hooked up to it, and it did not work properly. He looked at it on June 3, 2010.
The witness stated he isolated one camera and used a second system to do a date and time stamp. This was not enough and he ordered another system on June 4, 2010, and additional parts on June 8, 2010, including infra red cameras for low light conditions.
On June 8, 2010, Mr. MacGregor trained staff with the new equipment and on June 9, 2010, they were able to record entirely to the hard drive without incident. An external hard drive was purchased to accommodate storage and this is being used with the computer in the hearing room today.
Mr. MacGregor stated that on June 11, 2010, at 7:00 or 8:00 p.m., Ms Workman came in with two police officers and requested a disc. He told her that this was the first time they would be attempting to burn a disc and then realized that they would have to compress the files to deliver on disc. He stated that they had to go to 90 per cent compression although it is recommended not to go below 20 per cent compression. The result is a low quality video.
In answer to questions, Mr. MacGregor stated that he asked Ms Workman what way she wanted the recordings and what format. She did not know and he discussed ways to deliver with the police officer.
Mr. MacGregor stated that he had brought his external hard drive to the hearing, and had to go wireless to uncompress the files for viewing. He confirmed that the DVD showed coverage from one camera and is for the service area. It does not cover the doorway.
On cross-examination, Mr. MacGregor stated that Chris Valaveris made it a policy to keep compressed files for a month. The witness indicated he trained people to operate the system and comes when called to deal with problems, education and ongoing issues.
The witness stated that he was called on June 3, 2010, to create a disc for the officers. Ms O had contacted him on June 29, 2010.
When asked if he has been dealing with Chris Valaveris since June 3, 2010, he said that Chris tells him what to instruct Ms O. or others to do. He said he works as a technician and Chris tells him what the company needs to maintain the system. Ms O. now does the compression of video to disc and he does the compression when it is requested.
He stated that the dates are accurate as the computer does it and is internally generated. He said that the video images seen today were printed on the old video system.
Mr. MacGregor stated that the video camera only covers the bar, fridges, taps and wait station. It does not cover table service. All sales occur at the bar, with most patrons coming to the bar.
Mr MacGregor, in response to questions, stated that he has known Chris Valaveris for 22 years. He was the DJ for the business before it became an exotic lounge, was a bartender and has worked on their sound system.
He stated he was not on payroll. He was never alone in the bar and since the licence was suspended. He was there to maintain peace and serve juice.
On re-direct, the witness replied that he worked on an hourly rate to install the system. He stated the video shown today is from the original camera and one cannot see anything.
In response to questions from the Panel, he stated that there was no discussion about the patio. This area has no wait staff and drinks are purchased from the bar.
Registrar’s Submissions
Referring to Exhibit M4, Mr. Morris asked that the Board re-impose the Interim Suspension as the conditions for rescinding the Registrar’s order, have been breached.
Under condition # 4, he stated that the clear intent was to bar the son of the Licensee from the business and from the premises.
He stated that the evidence of the inspectors was clear, in that they saw Chris Valaveris walking out of the premises on two occasions and it is likely he walked in. Referring to subsection 45(2) of the O.Reg, he stated that concerns relate to both the licensed and unlicensed areas of the premises, which are under the control of the licensee.
Mr. Chris Valaveris, has been charged with drug trafficking and the whole purpose was to keep him out of the premises. There was no reason for him to be in the vestibule and from the order, he should not have been there.
The function of the alcove and the vestibule is to provide access to the inside of the premises and is part of the premises. This is an area contemplated by subsections 45(1) and 45(2) of the O.Reg which references licensed and unlicensed areas of an establishment as being under the exclusive control of the licence holder, Although not inside the licensed premises, Mr. Chris Valaveris was seen in an area that is part of the premises and under Condition # 4, an area under the control of the Licensee and that he is barred from.
Mr. Morris stated that the conditions of the Order were intended to keep Chris Valaveris from being involved in the business. He pointed out that Chris Valaveris was present today, not the Licensee nor the Manager. The employee, Ms O. was not present, although her presence was noted outside the room.
In his submission, Mr. Morris stated that this alone was a breach of the Order, since Chris Valaveris is the one dealing with the video system that is supposed to protect the public, and he is the one working with Mr. MacGregor.
He stated that the camera under the old or new system does not comply with the Board Order. Condition # 1 has been breached because the Board expected more than one camera and the rest of the establishment, including the patio is not covered. The Registrar and the Board are concerned that drug dealing not take place and therefore the whole establishment should be covered by cameras.
He stated that before there were 16 cameras, and now there is one. This camera taping has bad quality, and one cannot see or identify people coming in or people at the bar. More cameras must be installed to respond to the conditions. The quality is bad and we have not seen uncompressed files.
He asked that the Board re-impose the suspension.
Licensee’s Submissions
Mr. Greenspon stated that Chris Valaveris followed the letter and spirit of the Order.
He argued that the kitchen and halls, etc. are not areas where alcohol is prepared and served as stated in the conditions of the Order. The point was to ensure no one was served outside proper hours. It was not to address drugs.
He stated that the point was to make sure Chris Valaveris was not on the premises and the conditions do not speak to tables where drinks are served and was not intended to cover other areas such as the vestibule and kitchen.
Mr. Greenspon submitted that there has been good faith through the hiring of Mr. MacGregor to set-up the system. The problems with copying have been explained.
Licensee’s counsel stated that Chris Valaveris should not be penalized because he paid someone to set up the system and stated we should not assume he is working in a management capacity. Mr. Valaveris gave instructions in order to comply with the Board Order.
The old system, of June 4,2010, was of poor quality, but there was no requirement to record on June 4, 2010, and there is no evidence that the new system does not comply as far as quality and where service and preparation take place. There is no suggestion that cameras cover all areas.
The purpose of the Order was to ensure Chris was not on the premises and that people were being served during proper hours. There is no evidence that Chris was on the licensed premises and he was only seen on two occasions, at the entranceway. He never stepped foot inside and did not violate the spirit of the Order.
Mr. Greenspon stated that the gaming machine was gone within 24 hours and is not an issue here.
Registrar’s Reply
Mr. Morris pointed out that the role of the Board is to prevent drug dealing, as described in subsection 45(2) of the O.Reg. The intent of the Order was not to just deal with after-hours service, but to also monitor drug dealing as well.
The intent was that cameras should be broader and the interior camera only covers the service bar, and not other areas of service.
It is not possible to state that Chris was never on the premises. On the video, you cannot see the time and date. But, we do know he was in the vestibule.
Mr. Morris pointed out that neither Chris Valaveris nor Ms O. was called as a witness. Therefore we cannot say what Chris Valaveris did or did not do. He was the General Manager, and is now barred from the premises. He should not be going back into the front door, giving instructions to the IT technician who is also his friend, nor should he be present today.
The Order states that he is barred from the business. The use of the word “otherwise” was not specific, but rather a general deterrent.
Reasons and Analysis
The Board has reviewed the evidence, and submissions of the parties. The Board found all the witnesses in this matter to have given their evidence in a fair and frank manner.
The Board listened carefully to the testimony, which was given under oath, and presumes it to be true.
The question before the Board, is whether the terms of conditions # 1 and # 4 have or have not been breached, and if so, what is the appropriate sanction.
Under condition # 1, the Order stated that the Licensee had seven days to comply. The inspectors gave evidence relating to June 3 and June 4, 2010. The Board notes that this was prior to the deadline for having fully functional cameras in place.
Ms Workman indicated that on June 3, 2010, she saw a patron at the bar consuming beer. She did not provide any further evidence indicating that she had approached the patron to confirm that the liquid being consumed was beer.
Mr. MacGregor gave evidence, under oath, that with the licence suspended, he was behind the bar on, June 3, 2010 but only serving pop or juice.
The Board accepts the evidence of Mr. MacGregor, that only non-alcoholic drinks were being served.
In matters relating to the use of one camera, the Board notes the capacity of the licensed areas to be 199 persons inside and 51 persons on the patio.
Mr. MacGregor stated in his evidence that were about a dozen cameras hooked up to the old system.
In evidence, Mr. MacGregor stated that most patrons come to the bar to be served. This suggests to the Board, that in a business with an indoor and outdoor capacity totalling 250 persons and a dozen cameras under the old system, some patrons, but not all, may come to the bar for service, or alternatively, they do not have to do so and table service may occur at any time.
The Board, in addressing the need for “cameras” on the premises, in condition # 1, anticipated that more than one area of this establishment would need a camera to provide adequate coverage and meet the intent of the condition.
The Board acknowledges that the Licensee may have, in the strictest sense, taken a literal interpretation of the wording and meaning of the conditions, but in doing so, notes that this interpretaton did not meet the spirit or intent of the conditions. The wording of condition # 1 was clear: “…locations of the cameras to include: service bar, wait staff station and any area where alcoholic drinks might be prepared and served…”.
There was no evidence, as to whether the camera was or was not properly recording during the July inspection, and the Board accepts the evidence of Mr. MacGregor that the system, for the one recording camera, has been improved.
Condition # 4, barring Chris Valaveris, reflects the Board’s responsibility under subsection 45(2) of the O.Reg to address public safety concerns and the public interest.
Although not observed to be inside the licensed premises, there was no dispute that Chris Valaveris was observed, on several occasions, to be on the premises under control of the Licensee, having been seen in the entranceway alcove and the vestibule of the business.
Chris Valaveris had a phone conversation with the inspector, when she was inside the premises on June 3, 2010, and he presented the conditions of the Order to the inspector, on his laptop outside the premises. The Board does note that these occurrences were within the transition time period.
The Board notes that the Licensee was absent for the hearing of this motion on July 12, 2010 and Chris Valaveris was present, representing the Licensee.
The Board accepted this representation during the proceeding, since it follows normal practice. However, the Board notes a concern that the person, in this case, is “barred from the premises as cook, manager, and patron or otherwise”.
Licensee’s counsel suggests that the Board was only banning Chris Valaveris from the licensed premises. The Board disagrees with this interpretation as the intent of the condition is to bar Chris Valaveris from the premise in general and from any involvement in the business, either as cook, manager, employee, patron or otherwise.
The Board notes subsections 45(1) and 45(2) of the O.Reg references both the licensed and unlicensed areas of an establishment under the exclusive control of the licence holder, although not inside the licensed premises, Mr. Chris Valaveris was seen in an area that is part of the premises and under subsections 45(1) and 45(2), an area under the control of the Licensee.
The combined evidence indicates to the Board that Chris Valaveris was on the premises and appears to be both generally and specifically involved in managing aspects of the business, contrary to condition # 4.
Conclusion
For the reasons given, the Board FINDS that the Licensee technically breached conditions of the Order of June 3, 2010, but finds a sanction to restore the Interim Suspension too harsh. The Board FINDS that while the Licensee technically breached two conditions imposed on the Order, the restoration of the interim suspension is too harsh a penalty on the Licensee in the circumstances. Instead, the Board suggests the Licensee comply with the conditions in light of the comments expressed by the Board in this decision. Further, the Board confirms its Order dated June 3, 2010 will remain in effect, with the existing conditions, until the earlier of the time when the Board renders its final decision on the matters before it or the Board orders otherwise.
The ORDER of June 3, 2010 remains in effect until the earlier of the time when the Board renders its final decision on the matters before it or the Board orders otherwise.
DATED AT TORONTO THIS 27th DAY OF July, 2010
DAVID C. GAVSIE, CHAIR, AGCO JOAN LOUGHEED, BOARD MEMBER