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-
2141575 Ontario Limited o/a XS Licensee
ORDER AND DECISION ON FINDINGS
Panel: Brian J. Ford, Board Member S. Grace Kerr, Board Member
Decision Date: September 7, 2011 Hearing Location: Toronto, Ontario
Alcohol and Gaming Commission of Ontario 90 Sheppard Avenue East, Suite 300 Toronto ON 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 2141575 Ontario Limited, Licensee ) Randall J. Barrs, Representative
Allegations and Background
A hearing into Notice of Proposal number 18580 (“the NOP”), dated March 11, 2011, to suspend for 45 days a liquor licence, and an Order dated March 11, 2011, to immediately suspend a liquor licence on an interim basis to liquor licence number 810853 (the “Licence”), issued to 2141575 Ontario Limited (the “Licensee”), operating as XS, 261 Richmond Street West, Toronto, Ontario, M5V 3M6, on the basis of alleged violations of subsection 45(1) of Ontario Regulation 719/90 (“the O. Reg”) made under the Liquor Licence Act (the “LLA”) and breaches of a condition on the Licence which states “the holder of the licence shall comply with the Compliance Plan approved by the Registrar of Alcohol and Gaming” was heard on March 23, 2011 in the City of Toronto.
On March 11, 2011, the Registrar ordered the interim suspension of the Licensee’s licence in the interest of public safety and subject to an Order by the Board of the Alcohol and Gaming Commission of Ontario (the “Interim Suspension Order”). The hearings office received the Licensee’s request for a hearing in respect of the Interim Suspension Order on or about March 14, 2011.
Interim Suspension Order Lifted
- At the hearing in this matter, the Board orally granted the motion to lift or rescind the interim suspension order at the hearing, with conditions, and advised that a written order, confirming its oral order, would follow.
Decision on Findings
Additionally, the Board heard evidence at the hearing relating to the allegations in the NOP, and makes its findings in respect of this evidence in this Decision.
The Board FINDS the Licensee breached a condition on the Licence, which states “the holder of the licence shall comply with the Compliance Plan approved by the Registrar of Alcohol and Gaming”. Specifically, the Board finds that, contrary to the Compliance Plan, the Licensee failed to:
post signage to let people attending the establishment know about the video surveillance of the premises;
ensure that all (video- or surveillance) cameras were maintained in good working order at all times; and,
ensure that all persons entering or re-entering the premises were checked by a metal detector.
The Board does not find, however, that the Licensee failed to follow the requirements of the Compliance Plan in the event of an altercation.
- Also, the Board DISMISSES the allegation that, contrary to subsection 45(1) of the O. Reg, the Licensee permitted drunkenness or riotous, quarrelsome, violent or disorderly conduct to occur on the licensed premises or in the areas under the control of the licence holder. Reasons follow.
Agreed Facts
The facts, essentially as set out in paragraphs 8 – 17, below, were entered into evidence on consent.
The hearing related to an incident at the establishment in the early morning hours of March 11, 2011. On the night in question there was an event taking place in the City of Toronto called “Canadian Music Week” (“the event”). Before the Licensee opened up the premises to patrons, the band members of a band and their friends, performing at the establishment as part of the event, brought in their equipment, set it up, and conducted sound checks.
The establishment then opened to the public at 9.00 p.m. (on March 10, 2011) for the event. The establishment’s metal detecting device was operational and a staff person was doing pat-down searches of all patrons who entered.
Near the end of the event, in the early morning hours (or, at about 1.30 a.m. (Exhibit 2)) on the date in question, two groups of patrons/men became involved in a verbal altercation. There may also have been some shoving between the two groups. The establishment’s security personnel intervened and separated the men before the altercation escalated. One group offered to leave voluntarily and headed towards the front door. Two security personnel were following them, close behind. They did not have physical control of the patrons.
As the group neared the front door, one man (“the shooter”) pulled out a gun and fired about seven shots into the ceiling. He fired the shots as he was leaving the establishment but before he reached the door. The shooter and his friends then walked out of the establishment.
It is believed that the shooter went to a parking garage, located beneath the establishment, got into a car and drove away. Some of his companions got into another car that was parked across the street from the establishment, and also drove away.
When the police investigated the shooting incident, staff of the licensed premises co-operated with them in giving descriptions of the shooter. They also described the vehicles in which the shooter and the others in his group drove away, together with the licence plate numbers. As well, they told police about a security camera in the parking garage that might be useful to the police in their investigation.
While there is a security camera system in the establishment, it had not been turned on the night in question, so there was no recording to give to police.
The establishment has filed a Compliance Plan with the AGCO (Exhibit 3). A condition on the Licence requires the establishment to adhere to the Compliance Plan.
Relevant excerpts from the lengthy and detailed Compliance Plan, which is approved by the Registrar of Alcohol and Gaming, are as follows:
a. “The primary job of the doormen out front is to control the clientele’s entry. They check ID, check for appropriate dress code, keep a look out for suspicious behavior and maintain a clean and orderly sidewalk…..
b. Altercations - In the event of an altercation security will not initiate a response until there is a safe amount of security personnel to enter the situation. There are to be no strikes thrown at all, security are trained in restraint procedures and safe removal. The two parties will be separated and removed at staggered times or through different doors so that the altercation does not re-ensue outside….
c. Security Cameras – XS nightclub has 32 cameras installed within the facility capturing almost every possible amount of floor space possible. This is inclusive of 4 cameras monitoring the exterior entrances and 2 cameras monitoring the interior entrance lobbies. Signs noting for patrons that the premises are under digital video surveillance are posted at each entrance way so that people are aware that their actions may be captured on film. In the event of an incident the camera increment time will be noted. Once per week the cameras are recorded onto hard copy DVD for future reference. Should the police at any time need a copy of the video for investigation one will be provided for them as soon as possible. Our cameras are a safeguard for the integrity of our safety procedures and a deterrent for those with mal intent. Once per week the cameras must be recorded onto a hard copy DVD, and maintained for a period of at least 6 months, for future reference. Should (the) AGCO request copies of the DVD copies will be made as soon as possible. All cameras must be maintained in good working order at all times. . . . A nightly check and log of operational cameras must be made and maintained in good working order at all times.
d. Entering and Exiting the Venue - . . . Customers proceed through metal detection system. The metal detectors show via LED lighting which areas of the patron might be of interest in a search procedure. They are also a deterrent for people of mal intent as there is a follow up hand search following the metal detection. . . . Hand search is conducted. The purpose of the hand search is to look for narcotics or weapons that might have gone undetected by the metal detection system. If any such items are found security management are notified immediately, police are to be contacted and an incident report is to be made.
e. Entering and Exiting - . . . 1. All persons entering or re-entering the premises shall be checked by a metal detector.”
- At the time of the hearing, there was no signage to let people know about the video surveillance.
Registrar’s Evidence
- The Registrar did not call any evidence, other than what has been summarized above.
Licensee’s Evidence
Pasquale (Pat) Cerundolo testified on behalf of the Licensee.
Mr. Cerundolo is employed as a security guard for the establishment, on a part-time basis. He was working on the night in question, arriving about 9:00 p.m. (March 10, 2011).
In giving his evidence-in-chief, in all material respects his evidence corroborated the details about the fight between the two groups of men, set out in paragraphs 10 – 12 above.
On cross-examination, he stated that there were approximately 150 people in attendance that night.
Mr. Cerundolo testified that it is the manager’s job, not his, to check the video surveillance equipment.
When he came on duty that night, band members were already in the establishment. They had not been required to leave and re-enter through the security portal when it opened.
Arthur Geringas also testified on behalf of the Licensee.
He has been the general manager of the establishment since 2007; in that capacity, he has complete control over the management of the establishment’s operation(s).
Prior to the night in question, the video system was working. It has been in place for years. When Mr. Geringas came into work on March 10th, 2011, he believed that the video surveillance system was operating.
There has never been a problem with that system in the past.
Mr. Geringas will ensure that signs, indicating that the establishment is under surveillance, will be put in place before it re-opens.
Throughout the day (that is, before the establishment opened for business), the performers were allowed in with their equipment to allow them to conduct sound checks, etc. About 15-20 people had come in and out for this reason.
They were not searched, nor did they come through the metal detectors.
The performers later went for dinner and, upon their return, everybody was searched. Mr. Geringas initially thought it possible that not everybody left, but when he did a further investigation following the incident, he was told that everybody had left for dinner, and then was searched.
All of the performers equipment, cases, etc. were left inside, however; things had been set up for the performance.
The security personnel working at the front door searched everybody that came in, once the establishment opened. Mr. Geringas believes, therefore, that the only way the gun made it into the establishment would have been prior to the staff checks.
Mr. Geringas did not see the shooter as he was in his office at the time of the incident.
He believes that the shooter went down to the underground parking lot underneath the establishment as a BMW came rushing out from there as the staff chased after the shooter.
He instructed his staff members to speak to the police; he personally called the police to attend.
Mr. Geringas described the “damages” suffered by the establishment as a result of the Interim Suspension Order: 60-65 staff members were sent home; a promoter who worked for the establishment quit and signed a one-year contract with a competitor business; and, 6 nights of business were lost. He estimated the financial damage to the establishment in the range of $250,000.
At the time of the hearing, the Licence had been suspended for 13 days.
On cross-examination, Mr. Geringas acknowledged that no one tested the video surveillance equipment the evening of March 10th, 2011. Generally, Mr. Geringas conducts a visual inspection “every so often”, and it has always been working (until then).
The establishment’s capacity is 1,200 people. 8 security personnel were working on the night in question; there were 157 patrons in the room where the incident took place.
In answer to a question from the panel, Mr. Geringas advised that there is only one point of entry/egress for the establishment.
Registrar’s Submissions
The issue in this matter is the public’s safety. The Registrar consents to placing conditions (as detailed in paragraph 71 below) on the Licence on a temporary basis in order to lift the Interim Suspension Order.
In this case, there are 3 alleged violations with respect to the condition that the Licensee adhere to the Compliance Plan.
Specifically, the Licensee did not comply with the following requirements:
in addition to the use of an airport metal detection system, there is to be a pat-down of all persons entering the establishment;
when there is an altercation, the two parties are to be separated; and,
the video surveillance cameras were not operational.
The Registrar submits that the Licensee’s security staff did not take control of the people as they were being removed. By becoming lax, and not paying close enough attention to the people as they were leaving, the patron was allowed to drop out and use the gun he was concealing.
While the gun may have been brought into the establishment before it opened for business at 9.00 p.m., it seems odd that someone would bring it in and leave it there, hoping it would be there for that person later on. Typically, such a person would just continue to carry the gun.
The Registrar is asking that the Board find that the Licensee breached the condition that attaches to its Licence, to wit, that it must (but did not) adhere to the Compliance Plan.
The Registrar is not pursuing the allegation that, contrary to subsection 45(1) of the O. Reg, the Licensee permitted drunkenness or riotous, quarrelsome, violent or disorderly conduct to occur on the licensed premises or in the areas under the control of the licence holder.
Licensee’s Submissions
The Licensee agrees to the additional conditions (see paragraph 71 below) that would allow the Interim Suspension Order to be lifted.
The Licensee undertakes that everyone entering the establishment shall be searched, except for staff.
The Licensee is very upset that the video recording system was shut down on the night in question. It is a mystery why it was not; however, the Licensee undertakes to check it every night and once during the evening.
The Licensee will put the necessary signage in place regarding the video surveillance.
There was no intention for the video surveillance system not to be operating. There was no negligence on the Licensee’s part.
It was the Licensee that called the police when the incident occurred. Unlike other establishments, no effort was made to cover it up. The staff members made valiant and tremendous efforts to apprehend the suspect; their co-operation was limitless and through their efforts, an individual was arrested.
The establishment did not permit the disturbance that occurred on the night in question. It was a music night, and most of the patrons were from that industry. For an unknown reason, a couple of groups got into a disagreement. The dispute was diffused immediately.
There was no need to take control of anybody as the people involved were going to be escorted out. During the time the security personnel were coming, the shooter escorted himself out, with 2 security following, and he did something that nobody could anticipate – he pulled out a weapon and shot at the ceiling.
The Licensee agrees that the fact that the shooter was not shooting at anyone is not the issue: the damage had been done to the Licensee and the public safety issue was there.
The fact that someone appeared to be in the process of leaving does not breach the Compliance Plan.
There is no issue that the metal detection and pat down was done; it is supposed to involve all people who enter or re-enter the establishment. The start time for this procedure is 9.00 p.m. The individual in question probably was in the establishment before then, left it, and then came back.
The only ‘breach’ of the condition on the Licence was that the video surveillance cameras were not working on the night in question.
Reasons and Order – Lifting the Interim Suspension
The interim suspension order in this matter resulted from an incident that occurred on March 10, 2011 involving a patron shooting off a gun 6-7 times in the establishment. In the interim order, the Registrar alleges that this situation raised significant public safety concerns. The Board agrees and finds that the shooting that occurred in the establishment compromised the public’s safety.
At the time of the hearing, the licensed premises had been closed for approximately 12 days pursuant to the Interim Suspension Order. The Board found that the prejudice to the Licensee of keeping the establishment closed on an interim basis should be assessed against the public safety concern, also taking into account the time it would take to reach a final decision in this matter as findings on the allegations in the NOP had not been made at that time.
The Licensee estimated that as a result of the Interim Suspension Order the financial “damage” it sustained was about $250,000 (gross). The Licensee was closed for 2 Fridays – Fridays being one of the establishment’s busier days – and 2 Saturdays. It was also closed for St. Patrick’s Day, generally known to be a busy day in licensed establishments.
A couple of lucrative private functions had to be cancelled as well during the interim licence suspension. Also, the Licensee lost its Friday-nights promoter to competition for at least one year. Finally, about 60-65 staff persons did not have work for the duration of the interim suspension.
It is very unfortunate that one person – the shooter – caused so much hardship to an establishment and its employees in such a dangerous and reckless moment; it is most fortunate however that only property and monetary damage resulted.
In their submissions following the close of evidence, counsel for the Registrar and counsel for the Licensee jointly requested that the interim suspension immediately be lifted, but subject to conditions.
Having considered the evidence heard at the hearing and the submissions of Mr. Kulis and Mr. Barrs regarding the lifting of the interim order, the Board was of the view that the public safety would no longer be compromised if the interim suspension order were lifted, subject to conditions.
The specific conditions that were proposed are particularized in paragraph 71 below.
Order
Accordingly, the Board hereby confirms its oral ORDER that the Interim Suspension Order dated March 11, 2011 placed on licence number 810853 issued to 2141575 Ontario Limited operating as XS, 261 Richmond Street West, Toronto, Ontario, M5V 3M6, be RESCINDED, on conditions as set out in paragraph 71 below.
The following conditions shall attach to the Licence:
a) Anyone entering the licensed premises, together with all of their equipment, shall be searched through a metal detector as well as by a pat-down, whether the establishment is operating or not. Only the establishment’s staff shall be exempted from this condition;
b) The establishment’s video-recording equipment shall be checked every night, at the opening of the establishment and once more during the course of its opening hours, to ensure that it is on and that it is continuing to operate; and,
c) The establishment shall post notice to its patrons that they are being monitored by security cameras or video-recording equipment.
Decision on Findings
In this case, the Board must decide whether the Licensee breached a condition on the Licence, which states “The holder of the licence shall comply with the Compliance Plan approved by the Registrar of Alcohol and Gaming”.
Relevant excerpts from the comprehensive Compliance Plan, which is approved by the Registrar of Alcohol and Gaming, are set out in paragraph 16 above.
i. Video Surveillance
One term of the Compliance Plan is that signs noting for patrons that the premises are under digital video surveillance must be posted at each entrance way so that people are aware that their actions may be captured on film.
The Licensee admits that, at the time of the incident, there was no signage to let people know about the video surveillance. As such, the Board finds that the Licensee was not in compliance with the Compliance Plan, and as such, has breached a condition of the Licence.
The Compliance Plan also requires all (video- or surveillance) cameras to be maintained in good working order at all times.
The Licensee also admits that on the night in question the establishment’s video surveillance cameras were not operating; it is the manager’s, Mr. Geringas’s, job to check that this system is functioning, but he failed to do so.
The Licensee argued that there was no practical effect to the video-equipment’s failure, since ultimately the vehicle licence plate was identified and the shooter was arrested. However, the fact remains that the purpose of the “Security Cameras” (emphasis added) section in the Compliance Plan is to generate videotaped recordings to bolster the establishment’s – and thus, its clientele’s – security. Implied in this concept is that the system will be both turned on and operational at all times: on the night in question, it wasn’t.
Accordingly and based on the Licensee’s further admission, the Board finds that the Licensee was not in compliance with another, or an additional aspect of the Compliance Plan, and as such, is in breach of a condition of the Licence.
Before moving on, the Board notes that it also accepts Mr. Geringas’s testimony that the non-operation of the video surveillance cameras was contrary to the usual situation, which is that the multiple cameras, located throughout the establishment to capture different angles of the interior space, are continuously recording on a 17-day re-write basis.
No evidence was lead to establish that the establishment’s video surveillance system was not recording for mechanical reasons. Rather, as Mr. Geringas testified, when he came into work that day he assumed it was working and did not, himself, stop (the security cameras system). According to him, the video system has been in place for years and was not operational that night for unknown reasons.
ii. Metal Detection and Pat Downs
The Compliance Plan requires “customers” entering the establishment to be searched in two ways: by passing through a metal detection system, supplemented by a hand search. It also justifies the two searches as follows. First, the airport metal detection system shows “areas of the patron that might be of interest in a search procedure”. This is intended to deter “people of mal intent” as there is a follow up hand search to “look for narcotics or weapons that might have gone undetected by the metal detection system”.
Another requirement of the Compliance Plan is that “All persons entering or re-entering the premises shall be checked by a metal detector”.
Mr. Cerundolo testified that all persons who entered the establishment when or after it opened at 9.00 p.m. on March 10, 2011 were subjected to the metal detection and pat down searches. Both Mr. Cerundolo and Mr. Geringas confirmed in their evidence, however, that neither the band members nor their equipment was required to leave or re-enter through the security (i.e. metal detection and hand search) portal.
Indeed, the Licensee conceded that the members of the band and their friends were not checked by either metal detection or pat downs, either upon entering or re-entering the establishment. Thus, the Board finds that on the night in question the Licensee breached the provisions of the Compliance Plan in this regard.
Although the Licensee has promised to rectify this deficiency in the future, as a result of a serious failure on its part to comply with the required metal detection and hand search procedures on the night in question, someone was able to bring a gun into the establishment, concealed it, and later used it to fire 6-7 shots into the ceiling as he was leaving. The other patrons’ safety and security was seriously compromised as a result.
iii. Separating patrons in the event of an altercation
The Compliance Plan requires that, in the event of an altercation, “the two parties will be separated and removed at staggered times or through different doors so that the altercation does not re-ensure outside”.
The Licensee argues that its security staff members followed procedures that complied with the Compliance Plan in dealing with the two groups entered into the altercation. The Board agrees.
The Board accepts Mr. Cerundolo’s testimony that described how a couple of groups of men entered into some sort of disagreement; they were arguing and there was a bit of pushing. The men seemed to know each other.
Mr. Cerundolo further told the Board that he and two fellow security personnel responded to the situation immediately, separated the parties involved, and proceeded to stand between them. The Board believes that in doing so, Mr. Cerundolo and his colleagues had succeeded in diffusing the altercation.
Given the number of men involved, protocol required more security personnel. Mr. Cerundolo radioed for that assistance. The plan was to eject both sides once the additional staff arrived on the scene.
Before that happened, however, one of the men involved in the altercation said words to the effect of, “It’s okay. It’s okay.” He then voluntarily proceeded towards the front door (i.e. the exit). Just before he reached it, he turned to face the crowd, unexpectedly pulled out a gun, and shot up into the air about 6-7 times.
At the same time, Mr. Cerundolo and another security staff person had removed themselves from the balance of the group and were walking behind the shooter, who appeared to be, and in fact was, on his way out.
In these circumstances, it was both unnecessary and unrealistic for security staff to have physically taken control of the shooter as he exited the premises. It was not reasonable for them to have assumed or anticipated that he was carrying a gun or that he would pull it out and shoot it into the air.
Unfortunately, it was other, earlier breaches of the Compliance Plan (that is, the failure to metal detect and hand search everyone who entered or re-entered the establishment), and not how the security personnel was dealing with the altercation, that lead to this unexpected, but very serious risk to the public’s safety.
As such, the Board finds that the Licensee complied with the Compliance Plan, both in spirit and in fact, in how its security personnel dealt with the altercation.
iv. Breach of subsection 45(1) of the O. Reg
In submissions, the Registrar’s counsel advised that he was not asking for a findings under subsection 45(1) of the O. Reg. To that end, he submitted that the altercation between the two groups was minor in nature, that the security personnel noticed it and intervened quickly, and that there was insufficient evidence to prove, on the balance of probabilities, that the Licensee permitted the violent conduct.
The Board agrees with the Registrar’s submissions on this point. As such, it dismisses the allegation that the Licensee has breached subsection 45(1) of the O. Reg.
Conclusion
- The Board FINDS the evidence is sufficient, on the balance of probabilities, that the Licensee breached a condition on the Licence, which states “the holder of the licence shall comply with the Compliance Plan approved by the Registrar of Alcohol and Gaming”. Specifically, the Board finds that, contrary to the Compliance Plan, the Licensee failed to:
post signage to let people attending the establishment know about the video surveillance of the premises;
ensure that all (video- or surveillance) cameras were maintained in good working order at all times; and,
ensure that all persons entering or re-entering the premises were checked by a metal detector.
The Board DISMISSES the allegation that, contrary to subsection 45(1) of the O. Reg, the Licensee permitted drunkenness or riotous, quarrelsome, violent or disorderly conduct to occur on the licensed premises or in the areas under the control of the licence holder.
The Board invites written submissions on penalty from the respective parties. The Registrar’s representative shall serve and file written submissions within seven (7) days of the date of this decision. The Licensee’s representative shall have seven (7) days to serve and file a written response. The Registrar’s representative may serve and file a reply within three (3) days of the receipt of the Licensee’s response. All submissions are to be filed with the Manager, Hearings Department, Alcohol and Gaming Commission, at the address on the front page of this decision in accordance with the Board’s Rules of Practice.
DATED AT TORONTO, THIS 7th DAY OF SEPTEMBER, 2011.
BRIAN J. FORD, BOARD MEMBER S. GRACE KERR, BOARD MEMBER