Court File and Parties
COURT FILE NO.: DC-07-00000158-0000 DATE: 20070509
ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT
B E T W E E N:
1607310 ONTARIO INC. Applicant
- and -
REGISTRAR OF ALCOHOL AND GAMING COMMISSION OF ONTARIO and ERIC MURPHY Respondents
Counsel: P. Rosenthal and M. Leitold, Counsel for the Applicant J. Taylor, counsel for the Respondent E. Murphy, self-represented
HEARD at Toronto: April 20, 2007
GREER J.: (Orally)
REASONS
[1] The Motion before me is for an order staying, until 15 days after the rendering of Judgment, the Order of the Board of Alcohol and Gaming Commission, dated March 27, 2007, revoking the liquor licence number 21291 granted to 1607310 Ontario Inc., the Appellant in this matter.
[2] In its decision the Board found that the licensee allowed drugs to be sold on the premises, permitted drunkenness, and failed to maintain records, all in breach of the regulations under the Ontario Liquor Licence Act, R.R.O., 1990, Regulation 719.
[3] The premises in question are known as the “Cabbagetown Bar” on the corner of Parliament and Spruce Streets in the area of Toronto, known as Cabbagetown.
[4] It is the position of the Appellant licensee, that the area is of mixed income and widely divergent groups of people with different interests, which have come into conflict in the area. The licensee was before the Board on January the 5th and 6th, 2007 and the Board was in the midst of hearing evidence being led on behalf of the licensee by a paralegal, Mr. Dibello, when, counsel who are here today on this Motion, took over the matter.
[5] Counsel wanted to introduce new evidence of five witnesses who are involved in various aspects of the neighbourhood – a worker with a Central Neighbourhood House, a community worker, a professor and urban planner, a community nurse, and a social worker. The Board denied the Motion to introduce this fresh evidence, as set out on page five of its decision dated February the 19th, 2007. The licensee is appealing that decision.
[6] The licensee has operated the business for three years in the location in the building which the registered owner is said to be the ex-wife of the son of the owner of the business. The owner of the business and the owner of the numbered company is said to be Mr. Zhang, however, the manager is his son, Mr. Jiang and he is said to live on the premises with his son who is there at times on access visits. It is Mr. Zhang’s position, or that of his son, that the business will go bankrupt in the intervening period if the stay is not lifted. The licensee had apparently closed the premises for the first three weeks in March to go on vacation, and on March 28th, 2007 the decision of the Board was acted upon and the licence was revoked.
[7] It is the position of the Registrar that the Board’s decision is correct and that the stay should remain. Counsel for the Registrar says that the Board was correct on the Motion to introduce fresh evidence when it held that the licensee had been adequately represented by Mr. Dibello, and when the Board found that Mr. Dibello knew what such a hearing required. She also says that the Board was correct in finding it was unclear that the proposed evidence was directly relevant to the issues. The Board’s counsel says it must make its decision, in what it labelled as “a hybrid disciplinary/public interest hearing”. In counsel’s view, the Board provided a fair hearing.
[8] The residents of the community gave evidence at the hearing before the Board, and Eric Murphy, one of the residents, was given the status as an intervenor at the hearing. He lives forty yards from the southeast corner of the premises in question and he opposes the licensee’s Motion today. Mr. Murphy presented 3 pictures as evidence at the hearing before the Board, and today, he personally took of the drug deals and use of drugs in the alleyway adjoining the premises. A city councillor also gave evidence at the hearing about numerous meetings with residents, provincial authorities and police regarding the problems in this neighbourhood bar and area. The owner/operator of the No Frills store gave evidence, about problems created by the drunken patrons who operate in the back alley which backs onto his store. Sergeant Hallman of 51 Division gave evidence about the drug activity around the bar and the arrests made in 2005. Officer Patel gave evidence about the charges laid against the licensee. All of this evidence was considered by the Board.
[9] The building and business are now presently for sale for $800,000, having been purchased in March of 2004 for $540,000 [or perhaps $560,000], as found by the Board. There is no evidence as to what the registered owner of the building did to prevent the problems and no evidence as to whether she was, in any way, dealing at arm’s length with the owner of the business and her former husband in allowing the problems to continue in the building.
[10] The three part test to be proven for granting a stay of a decision is set out in the RJR – Macdonald Inc. v. Canada (Attorney General), 1994 117 (SCC), [1994] 1 S.C.R. 311. This test is as follows:
a) The licensee must show there is a serious question to be tried on this appeal;
b) The licensee must show it will suffer irreparable harm if there is no stay; and
c) The balance of convenience must favour the stay.
The burden of proof is on the party seeking the stay. In my view the burden of proof has not been met by the licensee who is seeking the stay.
[11] While the test on whether a serious question of law to be tried is not a high one, the Registrar takes the position that there is no serious question of law to be tried. The decision to permit fresh evidence is a discretionary decision of the trier of fact and should not be lightly interfered with. The Registrar relies on the decision on the Supreme Court of Canada in 671122 Ontario Ltd. v. Sagaz, 2001 SCC 59, [2001] 2 S.C.R. 983. There the Supreme Court of Canada set out a two-part test, which is:
a) The evidence proposed to be adduced would probably change the result of the proceeding; and
b) The evidence could not have been obtained by reasonable diligence before the hearing.
The discretion to re-open must be exercised sparingly, said the Court, and to re-open the case, the test must be clearly met.
[12] In my view, if the first part of the RJR - Macdonald, supra, test has not been met, given the complaints about the bar in the community and the evidence of the residents who support the revocation of the licence. Even if the first part of the test has been met, I find that the Appellant has not met the tests as set out in the other two parts.
[13] Each party disagrees on whether there have been meaningful plans to change the operation of the bar in the interval, however, I am of the view, based on the records before me, that the licensee’s recent plans to improve security would do little good. His earlier attempts at trying to ban drug dealers and install cameras, did not work.
[14] The second part of the test is whether there will be irreparable harm if the stay is not granted. The licensee is of the view that the business will go bankrupt and presented some evidence without backup documentation, that since the licence has been revoked the sales are down in number. The residents’ evidence is that since the licence was revoked the number of drug deals in the bar area has also dissipated considerably, and there is no longer open drunkenness in the premises.
[15] In 1166134 Ontario Inc. (c.o.b. Nashville North), v. Registrar of the Alcohol and Gaming et al., Court File M33946, on Motion before the Court of Appeal, Mr. Justice Rosenberg noted in his reasons that the moving party had not established irreparable harm as required in the test. He stated:
Given the pending sale, it is now speculative that the moving party would go bankrupt or otherwise suffer such harm. The moving party has not provided any details of the terms of the sale or the licensing process.
Therefore he found that the balance of convenience had shifted in favour of refusing a stay.
[16] While it is the position of the licensee before me that the facts in this case are different from the facts in Nashville North, supra, in that the licence was only recently revoked and the proceedings are nowhere as far in the judicial system as in the Nashville North case, supra, the principle in my view remains the same because once the issue of irreparable harm has been determined, it goes really hand in hand with the test for the balance of convenience, that is, does the balance of convenience favour the stay or not.
[17] In the recently released reasons of Mr. Justice Cumming, sitting in this Court, on Jupiter Café v. Sports Bar Inc. v. The Registrar of Alcohol and Gaming Commission of Ontario, Court File 549/06 heard March 7, 2007, he found that the Board had found various breaches by the bar, in that instance, which are similar to those, which have been found in this case. He noted:
This included the uncontested evidence of police officers that drug dealing in crack cocaine was openly conducted in the premises, the admission by the licensee that she knew drugs were being sold, and that few, if any, serious attempts were made to seek the assistance of the police or to retain effective security. There was also evidence of serving patrons who were intoxicated. The Board found that the licensee “was very aware of what was happening and was content to let it continue”.
[18] In my view, these facts are similar to the ones in the case before me. While there was no admission by Mr. Jiang, the manager, that he knew that drugs were being sold or consumed on the premises, the licensee had an obligation to do something about it, when he knew the police were there because of such allegations. The neighbours and residents and business association in the area had to hire off duty police officers to patrol the area because of their serious concerns of what was taking place and the licensee’s lack of cooperation. It is not sufficient for the licensee to now say that he has meaningful plans to change what is happening in the interval. While the Jupiter Bar had been closed for six months before his decision, Mr. Justice Cumming held, in paragraph 9, that there was no effective remedial action taken and no sufficient plan in place to protect the public. I adopt his reasoning.
[19] In my view, in the matter before me, there was no efficient remedial action taken by the licensee, after he attempted the ban and put in cameras. Another monitor was not going to rectify the situation. It was clear, however, that no one was watching the monitor to see what was going on, nor were the very things that Mr. Murphy showed in his pictures ever reported by the manager to the licensee. They were seemingly ignored by someone in the bar area. In my view the plans which have now come to the surface by the licensee are not sufficient to protect the public from what was taking place and such behaviour would therefore continue to take place.
[20] In my view the irreparable harm favours the Respondent not the licensee. The balance of convenience, in my view, favours the Respondent for the reasons herein and for the reasons set out in the Jupiter Café, supra, decision, which I have adopted. The motion is therefore dismissed.
[21] The Costs of the Respondent are fixed at $2,000 inclusive of disbursements and GST, payable within 60 days hereof by the licensee.
Greer J.
Released: May 9, 2007
COURT FILE NO.: DC-07-00000158-0000
DATE: 20070509
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
B E T W E E N:
1607310 ONTARIO INC.
- and –
REGISTRAR OF ALCOHOL AND GAMING COMMISSION OF ONTARIO and ERIC MURPHY
REASONS FOR JUDGMENT
Greer J.
Date of Release: May 9, 2007