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-
1590677Ontario Inc. operating as Island Jerk Restaurant
Licensee
DECISION ON SANCTION
Panel: Patricia McQuaid, Vice-Chair, AGCO S. Grace Kerr, Board Member
Decision Date: October 27, 2011
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 ) Richard Kulis, Representative 1590677 Ontario Inc., Licensee ) Dr. Séverin Ndéma-Moussa, Representative
Authorities
Registrar of Alcohol and Gaming v. Darchris Productions inc, cob Solid Gold Adult Entertainment, [2007]
Allegations
A hearing into an Amended Notice of Proposal number 18337 dated October 8, 2010 (“the NOP”), to revoke a liquor licence, and an Order dated September 25, 2010, to immediately suspend a liquor licence on an interim basis to liquor licence number 806671 (the “Licence”), issued to 1590677 Ontario Inc. (the “Licensee”), operating as ISLAND JERK RESTAURANT, 1800 Bank Street, Unit 18, Ottawa, Ontario, K1V 0W3, on the basis of alleged violations of section 6(2)(d) and subsections 45(1) and 45(2) of the Liquor Licence Act (the “LLA”) and sections 66, 45.1 and 45.2 and subsections 45(1), 60(2) and 63.1(1) of Ontario Regulation 719/90 (the “O.Reg”), made pursuant to the LLA, was commenced by teleconference on October 20, 2010 in the City of Toronto and continued on November 23 and 25, December 6 and 9, 2010 and March 7, 8 and 9, 2011 in the City of Ottawa.
On June 21, 2011, the Board rendered its Decision on Findings (“the Board’s Decision”) relating to the allegations in the NOP, and found that the Licensee contravened section 45.2 of the O.Reg on September 25, 2010, subsection 63.1(1) of the O.Reg on April 3, 17/18, May 7 and July 1, 2010 and section 66 of the O.Reg on July 9, 2010.
The Board dismissed the allegations of violations of subsection 45(1) of the O.Reg on April 3 and September 25, 2010, section 45.1 of the O.Reg on April 18, 2010, subsection 45(1) and (2) of the LLA on September 25, 2010 and section 6(2)(d) of the LLA.
Parties were directed to provide written submissions on an appropriate sanction.
Decision on Sanction
Background
The Board has reviewed the submissions on sanction provided by counsel. Submissions on penalty are the opportunity for counsel, on behalf of their clients to propose an appropriate penalty having regard to the issues of general and specific deterrence given the findings made by the Board.
Overall, the sanction imposed by the Board should serve several purposes: it should act to safeguard the public, preserve the reputations of the industry as well as the regulator, and aid the Licensee’s rehabilitation.
In this case, the Registrar asks that the Licence be revoked. In the alternative, he proposes that conditions be attached to the Licence.
The Licensee does not believe that revocation is an appropriate sanction, but acknowledges that it may be appropriate to attach some conditions to the Licence.
To sum up its findings, in this case the Board found that the Licensee contravened section 45.2 of the O.Reg on September 25, 2010, subsection 63.1(1) of the O.Reg (the “notice requirement”) on four occasions, and section 66 of the O.Reg on one occasion.
By way of further background, the Board notes that an interim suspension order was placed on the Licence on September 25, 2010 and was lifted by order of the Board on December 1, 2010 (“the Board’s order”).
Hence, on an interim basis, the Licensee was without her liquor licence for approximately 66 days.
The Board’s order, lifting the interim suspension, placed conditions on the licence as follows:
Use of the caterer’s endorsement is suspended;
The Licensee shall not host or offer any special or promoted events at the licensed premises;
The sale and service of alcohol at the licensed premises is only permitted as follows: Monday through Wednesday between the hours of 11 a.m. to 10 p.m. and Thursday through Sunday between 11 a.m. and 11 p.m., with signs of sale and service to be cleared within 45 minutes of the close of alcohol service.
- The Board has considered the following relevant factors in determining the appropriate penalty, given the particular findings in the Board’s decision.
Should the Licence be Revoked?
There is a qualified right to a liquor licence; it carries responsibilities to ensure compliance with the LLA and regulations. When violations are found, the Board in assessing sanction, considers the dual purposes of sanctioning, and will always cautiously, and with close attention to its findings, weigh whether revocation, which involves the deprivation of a livelihood, is a suitable sanction.
Revocation of a licence is the most significant sanction a Board can order. It must be reserved for the most egregious of cases: to make such an order, the Board requires strong evidence of serious misconduct by a licensee.
In the Board’s Decision, it did not find the Licensee to be unmanageable overall. Except for matters relating to the use of the caterer’s endorsement, where the Board found that the Licensee had shown herself to be somewhat irresponsible, and perhaps, willfully ignorant of her administrative responsibilities, there was no evidence to allow the Board to conclude differently.
Also, if the Licensee has a disciplinary history that would suggest otherwise, that information has not been put before the Board in this matter.
Regarding the September 25th incident, in relation to which the Board made a section 45.2 finding, the relevant facts are set out in paragraphs 63-71 of the Board’s decision.
Summarily stated, there was evidence of a patron being stabbed (by a knife), of bottles being thrown (though no specific injury attributed to that), and of a belt found in a garbage can (though no evidence of anyone being “whipped with belts”, as alleged by Registrar’s counsel).
Also, although a fight occurred in the banquet hall premises on April 3, 2010, the Board did not, on the evidence before it, make a finding against the Licensee in respect of that situation. Finally, while someone was beaten outside the banquet hall, after closing, on April 18, 2010, again, the Board did not make a finding of a violation by the Licensee, based on the evidence.
The Board does not minimize or condone the violence that occurred in or around the banquet hall on any one of those dates, but it would be improper for the Board to factor in the violent circumstances of the other two incidents in sanctioning.
In other words, in its decision on sanction the Board has taken into account the September 25th incident, but not the April 3rd or April 18th incidents.
Mr. Kulis, in submissions, notes the comment made by the Board that the Licensee cannot “wipe her hands clean” of responsibility by delegation to a third party.
It is correct that by this comment the Board was refuting the Licensee’s assertion that by employing security on September 25th, 2010 (and noting that she herself was present on that date), she had thereby fulfilled her obligation, to, among other things, maintain control over the area.
That concern alone, however, is insufficient to warrant a revocation of the Licence on the facts of this case. For, while that statement is fair regarding the evidence in relation to the September 25th incident, the Board did not find that the Licensee had on numerous occasions – or, more generally or more pervasively - taken that type of approach to her obligations as a Licensee.
The Board repeated this cautionary comment as a preamble to its consideration of whether the Licensee violated subsection 45(1) of the O.Reg on September 25, 2011.
Nonetheless, the Board did not find that the Licensee had breached this subsection because, indeed, more security was present on the night in question than the Licensee had requested (i.e. almost double the amount). As well, the evidence supported a finding that the disorderly and violent conduct that occurred that night occurred quickly and that the Licensee and her son, although at the event, were not on site at the material time.
In other words, the Licensee had not permitted the disorderly and violent conduct that occurred that night.
Furthermore, in his submissions Mr. Kulis also cited the five-line endorsement of the Divisional Court in Registrar of Alcohol and Gaming v. Darchris Productions Inc, c.o.b. Solid Gold Adult Entertainment, (2007), which is a brief consideration of section 6(2)(d) of the LLA, and specifically, the wording “…an applicant is entitled to be issued a licence to sell liquor except if:
(d) the past or present conduct of the persons…affords reasonable grounds for belief that the applicant will not carry on business in accordance with the law and with integrity and honesty;” (emphasis added)”
The Divisional Court stated that failure to operate under one or the other, or both, is a violation of clause 6(2)(d), therefore suggesting, perhaps, that the section may be read disjunctively.
The various and important qualifying pre-requisites for receiving a liquor licence, enunciated in subsection 6(2) of the LLA, are intended to ensure that, in Ontario, the sale and service of alcohol is in the public interest and in accordance with the law as well as with honesty, integrity, and social responsibility.
In this case, in paragraph 117 of the Board’s Decision it found that the Licensee had displayed, especially in the important administrative aspects of the caterer’s endorsement, a certain amount of irresponsibility, perhaps even willful ignorance. From this the Board concluded that there might be reasonable grounds for belief that the business will not be carried out in accordance with the law.
However, the Board went on to find that the same irresponsibility has not manifested itself in the operation of the business of the Island Jerk Restaurant, itself, which holds the liquor licence, and therefore dismissed the allegation of a breach of subsection 6(2)(d) of the LLA.
Thus and again, given that the Board did not make a finding in relation to this serious allegation, it would not be proper for it, in sanctioning the Licensee, to generally take that subsection into account, except to the extent that it applies to the Licensee’s caterer’s endorsement more specifically.
For all of these reasons, the Board finds that it would be too harsh in all of the circumstances of this case, and especially so where there are no allegations relating to the operation of Island Jerk Restaurant, to revoke the Licence, as suggested by the Registrar.
Nevertheless, the Licensee’s pervasive neglect to comply, at times not at all or sometimes incompletely, without reasonable excuse with the notice requirements under subsection 63.1(1) of the O.Reg and section 66 of the O.Reg (which prohibits the licence holder from promoting an event at which he/she is offering liquor for sale or invited persons to attend) has also been taken into account by the Board in deciding to revoke the caterer’s endorsement on the Licence.
Again, and importantly, the Board notes that all of these violations occurred in relation to that endorsement and not in relation to the Island Jerk Restaurant.
These failures by the Licensee to fulfill her administrative obligations are serious. The intention of the “notice requirements” is to allow various municipal officials (e.g. fire, police, health department, etc.), in addition to the AGCO, know about special or promoted and licensed events that are pending so that they are not only aware, but are available, to address any public safety issues that may present.
In conclusion, the Board finds that the 66-day suspension already served - a significant period of suspension of a licence - together with a revocation of the caterers’ endorsement and the addition of several conditions to the Licence, amply meets the dual objectives of general and specific deterrence given the Board’s findings.
The Board now turns to the issue of which conditions should be placed on the Licence to address the specific risks exposed by the evidence in this matter.
Which Conditions are Necessary, and Why?
Generally speaking, conditions imposed on licenses are intended both to minimize risk to public safety and to promote compliance by licensees with their statutory obligations. This is in keeping with the risk-based regulatory scheme in effect in the Province of Ontario.
The need for the suspension of the caterer’s endorsement and the addition of conditions on the Licence, required for lifting the interim suspension order and imposed on an interim basis, was borne out in the Board findings, dated June 21, 2011.
As noted above, the evidence at the hearing showed clearly that the Licensee’s issues with the Licence did not arise in relation to Island Jerk Restaurant; rather, they centered on the operation of the Sunrise Banquet Hall, where the caterer’s endorsement is used and when special and promoted events occur.
Dr. Ndéma-Moussa, in submissions on behalf of the Licensee, states that the Sunrise Banquet Hall has a separate business licence. This may be the case, however, that fact was not in evidence.
In any event, the Sunrise Banquet Hall does not have a separate liquor licence, which is, in part, at the root of the Licensee’s issues before the Board.
Dr. Ndéma-Moussa also states that the banquet hall, if and when re-opened, would not operate the same type of activities as it has in the past, some of which gave rise to the matters before the Board.
However, while the Licensee contested responsibility for the violence that resulted in serious personal injuries on 3 separate occasions, either relating to or following special or promoted events at the Sunrise Banquet Hall, the fact that this high risk behaviour occurred on those occasions was not challenged.
Accordingly, the Board finds that there is a real and substantial risk to the safety of the public if special or promoted events are hosted under this Licence, which must and can be addressed by adding a condition to the Licence, that is, to prohibit them.
Additionally, the Licensee’s counsel submits that the Island Jerk Restaurant is, and remains, the Licensee’s main focus.
The Board agrees that the Island Jerk Restaurant should be the Licensee’s main focus. Importantly, the Licensee has proven herself generally able to meet her obligations as a Licensee as they relate to the management and operation of this establishment, which is smaller than the Sunrise Banquet Hall facility.
Also, the problems giving rise to the NOP seemed to happen when she attempted to shift responsibility for the oversight of a catered event that was entrusted to third parties (e.g. using a promoter).
These reasons are why the Board is revoking the caterer’s endorsement on the Licence and also is requiring that either Ms Nedrick, the principal of the corporate Licensee, or someone who has been approved by the Registrar of the AGCO, only, shall manage the establishment.
In other words, to manage the risk to the safety of the public that the hearing identified, the responsibility and authority for management of the Island Jerk Restaurant may not be delegated, absent the Registrar’s approval.
The Board wrestled with whether it should prohibit the Licensee from allowing DJ performances at the licensed premises. It has decided that it should not be allowed.
Some of the violent behaviour at issue resulted from the Licensee’s failure to maintain control over a DJ-related event. The clientele drawn to the DJ’s performance were very problematic and proved uncontrollable, and as such, posed a serious risk to the public’s safety.
While the Island Jerk Restaurant itself has licensed capacity for only 40-persons, the Board has concluded that a risk, similar to that was associated with promoted events that took place under the Licensee’s caterer’s endorsement, could also present in the licensed premises if DJ music were allowed.
Finally, in submissions, the Licensee’s counsel offered to limit the hours during which the sale and service of alcohol may take place at the establishment to Mondays through Wednesdays from 11.00 a.m. – 11.00 p.m. and Thursdays through Sundays from 11.00 a.m. – 2.00 a.m., to which the Board agrees.
For all of these reasons, the Board has concluded that conditions on the Licence are appropriate. Specifically, the following conditions will replace those placed on the Licence by Board order of December 1, 2010. They are as follows:
No special or promoted events shall take place in the licensed premises;
The licensed premises shall be managed by Ms Nedrick or a person who has submitted a Personal History Report to the Registrar of Alcohol and Gaming and been approved by the Registrar;
There shall be no DJ performance at the licensed premises; and,
The sale and service of alcohol at the establishment is limited to these hours:
i. Mondays through Wednesdays, between 11.00 a.m. – 11.00 p.m.; and,
ii. Thursdays through Sundays, between 11.00 a.m. – 2.00 a.m.
Closing Remarks
In closing, the Board reminds the Licensee that her obligations to comply with the liquor laws apply both administratively as well as operationally.
The Board’s decision as to sanction should not be thought in any way to minimize its concern regarding the fact that, on four separate occasions, the Licensee was found not to have provided the required notice to the authorities in relation to various catered events.
However, revoking the caterer’s endorsement addresses that issue, and that, together with having served a 66-day suspension of the Licence, constitutes a sufficient sanction in relation to that issue or finding as well.
Overall, in the context of this case, given the nature of the contraventions and the surrounding circumstances, offset by the Licensee’s lack of a prior record and the 66-day interim suspension already served, the Board finds that the revocation of the caterer’s endorsement and the imposition of conditions on the Licence is appropriate, keeping in mind the guiding principles for sanctioning in matters such as this one.
Order
The Board ORDERS that liquor licence number 806671 issued to 1590677 Ontario Inc., operating as ISLAND JERK RESTAURANT, 1800 Bank Street, Unit 18, Ottawa, Ontario, K1V 0W3, shall not be subject to any additional period of suspension in respect of NOP number 18337, having found that the 66-day suspension, comprising the period of the Interim Suspension Order dated October 20, 2010 was in effect, already served constitutes a sufficient penalty for the breaches found by the Board in its decision dated June 21, 2011, except as provided further in paragraphs 63 and 64 below.
The Board REVOKES the caterer’s endorsement on the Licence.
Further, the Board ORDERS that the following conditions be attached to the Licence:
A. No special or promoted events shall take place in the licensed premises;
B. The licensed premises shall be managed by Ms Cheryl Nedrick or a person who has submitted a Personal History Report to the Registrar of Alcohol and Gaming and been approved by the Registrar;
C. There shall be no DJ performance at the licensed premises; and,
D. The sale and service of alcohol at the establishment is limited to these hours:
i. Mondays through Wednesdays, between 11.00 a.m. – 11.00 p.m.; and,
ii. Thursdays through Sundays, between 11.00 a.m. – 2.00 a.m.
DATED AT TORONTO THIS 27th DAY OF October , 2011
PATRICIA MCQUAID, VICE-CHAIR S. GRACE KERR, BOARD MEMBER