2088675 Ontario Inc. o/a Zu Bar v. Ontario (Alcohol and Gaming Commission of Ontario)
CITATION: 2088675 Ontario Inc. o/a Zu Bar v. Ontario (Alcohol and Gaming Commission of Ontario), 2010 ONSC 5527
DIVISIONAL COURT FILE NO.: 145/10
DATE: 20101027
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
THEN R.S.J., MATLOW and SWINTON JJ.
BETWEEN:
2088675 ONTARIO INC. o/a ZU BAR Appellant
– and –
THE REGISTRAR OF THE ALCOHOL AND GAMING COMMISSION OF ONTARIO Respondent
George Tsimiklis, for the Appellant
Joyce A. Taylor, for the Respondent
HEARD: September 23, 2010 at Toronto
REASONS FOR JUDGMENT
MATLOW J.:
[1] Judgment is to issue allowing this appeal and setting aside the decision of the Board of the Alcohol and Gaming Commission of Ontario (the “Board”), made on February 9, 2010, that the appellant had permitted drunkenness on its premises contrary to section 45 (1) of Ontario Revised Regulation 719 (the “Regulation”) made pursuant to the Liquor Licence Act, R.S.O. 1990, c.L19 (the “Act”). I would not, in the circumstances of this case, order that a new hearing be held before the Board. Both counsel agreed that the costs of this appeal should be in the cause and fixed at $7,250, all-inclusive. Accordingly, the appellant is entitled to recover costs from the respondent, fixed at $7,250, all-inclusive, payable within 30 days.
[2] The Regulation reads as follows:
The licence holder shall not permit drunkenness, unlawful gambling or riotous quarrelsome, violent or disorderly conduct to occur on the premises or in the adjacent washrooms, liquor and food preparation areas and storage areas under the exclusive control of the licence holder.
[3] The factual background relevant to the determination of this appeal is as follows. The appellant operates an establishment at Burlington licenced under the Act to sell liquor. The premises are large and have a permitted capacity of 936 patrons. There is a substantial security team that checks patrons both as they enter at the front door and as they remain on the premises to ensure compliance with the Regulation.
[4] On September 26, 2008, at approximately 12:50 A.M. two liquor inspectors accompanied by two police officers entered the premises for the purpose of conducting a compliance inspection. Of those four persons, only one of the inspectors, Leah MacDougall, gave evidence on behalf of the respondent at the hearing before the Board.
[5] The essence of the evidence given by Inspector MacDougall was, as summarized in the Board’s “Decision on Findings”, as follows. She and the other investigators arrived at the premises on September 26, 2008, at12:50 A.M. She then went directly to the area of the dance floor and found a male seated in the “bottle service” area. Counsel for the respondent explained to us that this reference was to an area where it was permitted to serve liquor in full bottles rather than in glasses. According to the inspector, the male was slumped back with his eyes closed as if he were sleeping, His head was leaning backwards. As she got closer she noticed that the male was seated on top of a female but the inspector gave no more graphic description of how the two bodies were positioned. The noise in the bar area was very loud and it was hard to hear. She and one of the other inspectors approached the male to speak with him and had to touch him to wake him up. The male was very unsteady on his feet when he woke up and stumbled when he tried to walk. He was overly sweaty and his shirt was soaked completely through. She and the other inspector then escorted the male out of the front doors of the premises. Once outside, she noticed that the male had a strong odour of alcohol and glassy eyes and she concluded that he was intoxicated. However, once they were outside it appeared to her that the male seemed to be awakened by the cold.
[6] Two witnesses, Patrick McCleverty, an employee of the appellant, and Emil Paloma, the appellant’s security manager, gave evidence on behalf of the appellant. Both of them described the appellant’s security team, how it is trained and how it carries out its duties. The attention of these witnesses was drawn to the male only after the inspectors had confronted the male at the table where he was seated.
[7] The Board, at paragraph 123 of its Decision on Findings, correctly set out the two issues which it had to decide as follows:
There are two issues for the Board in this case. The first is whether a patron was in fact intoxicated on the premises and the second is whether the Licensee permitted drunkenness.
[8] On the first issue, the Board concluded, at paragraph 133, that the male was intoxicated. No issue was taken by the appellant with that finding on this appeal.
[9] On the second issue, the Board correctly stated, at paragraph 135, that in determining whether the appellant had permitted drunkenness;
The Board must consider whether the Licensee knew or ought to have known that a patron was drunk as per Sin City which also requires the Board to make that determination in “all of the circumstances and, in particular, in the context of the various obligations and duties placed on the licensee by the relevant legislation and regulations”.
[10] And, at paragraph 136, the Board added that;
These same considerations were repeated in both Horseshoe Valley and Place Bar and Grill.
[11] The reference made by the Board in paragraph 136 to Horseshoe Valley was a reference to an earlier decision of this Court, differently constituted, in Horseshoe Valley Resort Ltd. v. Ontario (Alcohol and Gaming Commission), 2005 81108 (ON SCDC), [2005] O.J. No. 5895, 264 D.L.R. (4th) 686. At paragraph 14, the Court stated as follows;
With respect to the Board’s second finding, we are persuaded that the Board’s reasons fall far short of demonstrating that it interpreted and applied the words, “permitted drunkenness”, as used in section 45 (1) of the Regulation correctly. Indeed, we are of the view that it is likely that the Board’s application of the law to the evidence was wrong. In order to properly find that that the appellant permitted drunkenness with respect to Julie Strachan as alleged, the Board had to be persuaded that the appellant, through its employees, knew or should have known that Julie Strachan was drunk and that it failed, within a reasonable period of time, to take reasonable steps to effect her safe departure from the bar. The evidence before the Board showed that the appellant’s employees recognized that Julie Strachan was drunk upon her entering the bar and that steps were taken quickly to make sure that she was not served alcohol and to make sure that she was safely removed and the Board’s reasons fail to demonstrate in what respects the appellant failed to carry out its statutory duty. A finding of a violation of section 45 (1) cannot be based on a draconian and unrealistic interpretation that would create a violation the very moment a drunk person entered the bar. Rather, it must be interpreted reasonably and in accordance with its plain language and the practicalities of the context in which it is applied.
[12] At paragraph 138, in determining the second issue in favour of the respondent, the Board stated,
Inspector MacDougall noticed the male as soon as she entered the premises. He was sleeping on top of another individual in a loud licensed establishment. She and Inspector Glenn checked on the male and found that he exhibited numerous signs of intoxication. The Board concludes that based on the male’s condition and that he was sound asleep in a loud area that he had been drunk for a considerable period of time. The Licensee’s staff, which included both static and roving security teams ought to have observed the male in the state he was in.
[13] At paragraph 139, the Board went on to state,
Considering all of the circumstances the Licensee knew or ought to have known that the male was intoxicated.
[14] An appeal lies to this Court only on a question of law (Alcohol and Gaming Regulation and Public Protection Act, 1996, S.O. 1996, c. 26, s. 11(2)). The standard of review respecting the interpretation and application of s. 45(1) is correctness (Shooters Sports Bar Inc. v. Ontario (Alcohol and Gaming Commission), [2008] O.J. No. 2112 (Div. Ct.) at para. 20; 1213963 Ontario Ltd. (c.o.b. Sin City Bar and Eatery) v. Ontario (Alcohol and Gaming Commission), [2009] O.J. No. 1553 (C.A.) at para. 4).
[15] Applying the reasoning of the court in Horseshoe, in order to prove a violation of the Regulation, the respondent was required to prove that
the appellant knew, or ought to have known, that the male was drunk, and that
the appellant permitted drunkenness by failing, within a reasonable period of time, to cause the male to be removed safely from the premises.
[16] It follows that, before the Board could be satisfied that the first component of the alleged violation had been proven, there had to be some evidence before the Board of how long the male had been in the position described by the inspector in the condition which she described. This was essential to the success of the respondent’s attempt to prove that the period of time was sufficient to meet the requirement of “a reasonable period of time” within which the appellant ought to have become aware that the male was in a state of drunkenness and then caused him to be removed safely from the premises. Without recognizing these time considerations and taking them into account in reaching its decision, the Board could not reasonably have drawn that inference and concluded that the appellant had “permitted drunkenness”.
[17] There is some indication in the Board’s decision that it may have appreciated the importance of determining the period of time referred to in paragraph 15 above. At paragraph 138, quoted above, the Board concluded that “based on the male’s condition and that he was sound asleep in a loud area that he had been drunk for a considerable period of time” (emphasis added).
[18] However, even if it were possible for the Board to draw any reasonable inference “based on the male’s condition and that he was asleep in a loud area”, it remains that a “considerable period of time” is not the same as a “reasonable period of time”. Accordingly, faced with the absence of any evidence on which it could perform the required analysis, it was not open to the Board to find that the alleged violation had been proven. It erred in law in doing so.
[19] The respondent relies on 473954 Ontario Limited v. Ontario (Registrar of Alcohol & Gaming Commission of Ontario), [2001] O.J. No. 5315 (Div. Ct.) to support the inference drawn by the Board that the appellant permitted drunkenness. The evidence in 473954 was as follows:
He was according to the evidence in an advanced statement state of intoxication, grossly staggering, with opened bottles of hard lemonade, one in each hand, one full, the other nearly so. In those circumstances the chairman of the Commission was entitled to draw the inference that the drunken condition had been present for quite some time, that he had acquired the bottles of hard lemonade while in that condition and that in all the circumstances he should have come to the attention of the employees long before the inspector noticed him.
[20] In my view, 473954 is readily distinguishable. In the instant case, the inference that the patron was in an advanced state of intoxication for quite some time can also be drawn. However, in the instant case, unlike that of 473954, there is no evidence as to how or if this drunken condition was manifested prior to the observations of the inspectors and over what period of time. Accordingly, it was not available to the Board to reasonably draw the inference that in all the circumstances the patron should have come to the attention of the appellant if the appellant was properly fulfilling its obligations to monitor the level of intoxication of its patrons.
[21] Accordingly, because the Board committed errors both in its interpretation of the Regulation and making findings without supporting evidence, it committed errors of law which now requires that this Court intervene. Therefore, the appeal is allowed.
MATLOW J.
THEN R.S.J.
SWINTON J.
RELEASED:
CITATION: 2088675 Ontario Inc. o/a Zu Bar v. Ontario (Alcohol and Gaming Commission of Ontario), 2010 ONSC 5527
DIVISIONAL COURT FILE NO.: 145/10
DATE: 20101027
ONTARIO
SUPERIOR COURT OF JUSTICE
THEN R.S.J., MATLOW and SWINTON JJ.
B E T W E E N :
2088675 ONTARIO INC. o/a ZU BAR Appellant
– and –
THE REGISTRAR OF THE ALCOHOL AND GAMING COMMISSION OF ONTARIO Respondent
REASONS FOR JUDGMENT
MATLOW J.
RELEASED: October 27, 2010