COURT FILE NO.: 392/07
DATE: 20070824
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
B E T W E E N:
REGISTRAR, ALCOHOL & GAMING COMMISSION OF ONTARIO
Applicant
- and -
ARENA ENTERTAINMENT INC., operating as CIRCA
Respondent
- and -
WAYNE SCOTT and DON RODBARD
Resident Objectors
Richard E. Kulis, for the Applicant
Thomas G. Heintzman, for the Respondent
HEARD: August, 21, 2007
CHAPNIK J.
[1] On July 27, 2007, following a six-day hearing with 15 witnesses, the Board of the Alcohol & Gaming Commission of Ontario (the Board) granted a liquor license to the respondent, Arena Entertainment Inc., operating as Circa (the Respondent/Circa). Circa has been described as a spectacular nightclub, cultural and arts facility with a 3,000 person capacity.
[2] The Registrar of the Alcohol & Gaming Commission of Ontario (the Applicant) seeks an order staying the Board’s decision pending appeal. Section 10(7) of the Alcohol and Gaming Regulation Public Protection Act, 1996, S.O. 1996, c. 26, as amended (the Act), provides as follows:
An order of the board takes effect immediately unless the order provides otherwise but if an appeal is made to the Divisional Court, that court may grant a stay of the order until the appeal has been disposed of.
[3] The test for granting a stay involves a consideration as to whether there is a serious issue to be tried; whether the Applicant has demonstrated irreparable harm if the interim relief is not granted; and an assessment of where the balance of convenience lies, taking into account the public interest. RJR-Macdonald Inc. v. Canada (A.G.), [1994] 1 S.C.R. 311 at para. 35.
[4] The burden of proof rests upon the party seeking the stay.
[5] The Applicant contends that the Board erred in law and exceeded its jurisdiction in several respects: that it erred in its interpretation of clauses 6(2)(d) (“past conduct”) and (h) (“public interest”) of the Liquor License Act and by applying the wrong tests for each; that it applied factors irrelevant and extraneous to a determination of the “public interest” and “past conduct”; that it improperly required the Registrar to provide evidence to support the view that the Respondent would not conduct business with honesty and integrity while ignoring uncontested relevant evidence concerning the Respondent’s past conduct; and that its reasons are inadequate. Finally, the Board failed to consider “the impacts of this large capacity nightclub on the area outside of the proposed licensed premises” in a broad or comprehensive manner.
[6] The threshold to meet the first part of the test for a stay is a low one. Ontario v. Shehrazad Non-Profit Housing Inc. (2007), 2007 ONCA 267, 85 O.R. (3d) 81 at 85 (C.A.).
[7] I am satisfied that the Applicant has demonstrated there is a serious issue to be tried in this matter.
[8] As regards the matter of irreparable harm, it is the contention of the Applicant that if a stay is not granted, the safety of the public will be jeopardized by the influx of 3,000 more people into the already overcrowded entertainment district in Toronto. The Applicant cites a number of public safety issues, including regular “acts of violence including assaults, brawls, stabbings and shootings” in the entertainment district, and the exacerbation of existing problems such as “patrons routinely vomiting, urinating and defecating onto streets, sidewalks and alleyways of the neighbourhood”. According to the Applicant, the City does not have the resources or personnel to effectively police the area for the safety of the public.
[9] There is no evidence, however, that irreparable harm to public safety would be occasioned by the granting of a liquor license to Circa or more specifically, by the dismissal of this motion for a stay. Circa is not yet in operation and therefore the allegations of harm to the public are purely speculative in nature. It may or may not be noteworthy as well that the residents in the area have not joined in seeking a stay of the Board’s decision to issue the license.
[10] More importantly, Circa is subject to various regulatory and contractual regimes that can be utilized should its operations engage public safety concerns. For example, the Board has the power to inspect the premises and follow up on any complaints. Pursuant to the terms of its lease, Circa’s landlord will not tolerate illegal activities or breaches of the peace that disturb the neighbourhood. In addition, the City of Toronto Municipal Code empowers the City to regulate matters such as fire safety, zoning and security requirements, and noise control.
[11] The relevant jurisprudence requires evidence of irreparable harm to be clear and not speculative in nature. See, e.g., Kanda Tsushin Kogyo Co. v. Coveley (1997), 96 O.A.C. 324 at para. 14; and Jaballah v. Canada (Minister of Citizenship and Immigration), 2006 FCA 179, [2006] F.C.J. No. 747 at para. 4 (F.C.A.).
[12] In this case the evidence of irreparable harm does not approach the required standard. The Applicant has not satisfied its onus to establish irreparable harm on a balance of probabilities.
[13] Finally, in my view, the balance of convenience overwhelmingly favours the Respondent. The potential harm to the Respondent if the stay is granted can be taken into account in making this assessment. Metropolitan Stores (MTS) Ltd. v. Manitoba Food & Commercial Workers, Local 832 (1987), 38 D.L.R. (4th) 321 at para. 334 (S.C.C.).
[14] According to Peter Gatien, President and part owner of Circa, the cost of the project to date has been about $5 million with over $2 million paid in rent. Circa expects to employ about 125 people, is in the process of booking several major events for 2008 and it is anticipated that the enterprise will open in September 2007.
[15] Further, the Respondent contends that if the stay is granted, there is a considerable risk that Circa will be forced to seek bankruptcy protection, will not be able to commence operations and will lose its investment. At the very least, Circa argues, and this is not disputed by the Applicant, the substantial financial investment made by principals, investors and clients to date will be severely jeopardized.
[16] As for public safety concerns, it is noted again that any infraction, illegal activity or breaches of the peace may be dealt with independently, as they arise, through the various mechanisms that protect the interests of the community.
[17] In the circumstances, I am of the view that the balance of convenience favours the Respondent in this matter.
[18] The Applicant has not met its onus on this application. Accordingly, the Applicant’s motion for a stay of the Board’s July 27, 2007 order granting the Respondent a liquor license, is denied.
[19] The Respondent submitted Bills of Costs claiming costs on either a partial or substantial indemnity basis. Despite its arguments on delay and so on, I see no reason to award the Respondent substantial indemnity costs at this stage. Taking into account the factors outlined in Rule 57.01 of the Rules of Civil Procedure and the reasonable expectation of the parties with regard to this particular application, costs are awarded to the Respondent fixed in the all-inclusive sum of $10,000.00, including GST and disbursements.
CHAPNIK J.
Released: August 24, 2007
COURT FILE NO.: 392/07
DATE: 20070824
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
B E T W E E N:
REGISTRAR, ALCOHOL & GAMING COMMISSION OF ONTARIO
Applicant
- and -
ARENA ENTERTAINMENT INC., operating as CIRCA
Respondent
REASONS FOR DECISION
(Motion to Stay)
CHAPNIK J..
Released: August 24, 2007