Licence Tribunal

Appeal d'appel en Tribunal matière de permis

DATE: 2012-08-03

FILE: 7510/LLA

CASE NAME: 7510 v. Registrar of Alcohol and Gaming

Appeal from the Notice of Proposal of the Registrar of Alcohol and Gaming under the Liquor Licence Act, R.S.O. 1990, c. L. 19 - to Review an Application for a Licence

Muskoka Memories Inc. Operating or Intending to Operate as Muskoka Memories Steakhouse & Seafood Restaurant Applicant

-and-

Registrar of Alcohol and Gaming Respondent

-and-

James Hayes Added Party/ Objector

DECISION AND ORDER

ADJUDICATOR: D. Gregory Flude, Chair

APPEARANCES:

For the Applicants: Michael J. H. Woods, Counsel

For the Respondent: Kate Varva, Paralegal

For the Added Party/Objector: James Hayes, On his own behalf and on behalf of the other Objectors

Heard in Bracebridge: July 30, 2012

DECISION AND ORDER

BACKGROUND

The Registrar of Alcohol and Gaming (the “Registrar”) under the Liquor Licence Act, (the “Act”) issued a Notice of Proposal, number 19357 dated June 28, 2012 to review an application for a liquor licence by Muskoka Memories Inc operating or intending to operate as Muskoka Memories Steakhouse & Seafood Restaurant (the “Applicant”), on the basis that the Registrar has received one or more written objections to the application.

Ms Varva advised the Tribunal that the Registrar was taking no position at the hearing and her involvement was limited to submitting all of the letters received either objecting to the issuance of the licence or supporting it. All other exhibits to the proceeding were entered on the consent of the Parties at the outset of the proceeding.

There were four objectors to the proposal; three are permanent residents of the neighbourhood in which the Applicant is located and one who is planning to become a permanent resident in the very near future when he retires. The Objectors do not object to the issuance of a liquor licence for the Applicant’s patio. It would be fair to say that they are supportive of the Applicant and its plans. The Objectors have three concerns about the proposed operation of the patio: hours of operation, amplified music and contact information. The last concern was addressed at the hearing. Mr. Woods undertook to make a cell phone number available to the objectors in addition to the restaurant number for the objectors to call in the event they have complaints about noise levels. Accordingly, the Tribunal will focus on the first two issues in these reasons.

FACTS

The Tribunal heard evidence from four witnesses: two on behalf of the Applicant, and two Objectors. Given the general agreement about the licensing of the premises, the general factual matrix is not in dispute and was set out by several witnesses, notably Bryan Shier on behalf of the Applicant and KB, one of the Objectors.

The Applicant is located in Patterson-Kaye Lodge (“PK”). Bryan Shier is a former owner of PK and, during his tenure from 2005 to 2012, lived on the premises. PK was founded in 1936 and since that time has operated as a family focussed vacation resort. It was operated on what used to be called an American Plan basis, that is, meals were included, but the more modern term appears to be “all inclusive.” PK’s restaurant was limited to serving guests of the lodge but, occasionally, when there was space, it would offer reservations to non-guests. PK was never licensed but guests purchased their own alcoholic beverages and consumed them throughout the property. They would bring wine and beer to the dining room and consume it during dinner. Dinner was served in the restaurant between 5:30 p.m. and 7:00 p.m. and was announced by a bell that could be heard throughout the neighbourhood.

Among the services and amenities offered by PK was live entertainment. According to Mr. Shier, live entertainment was offered on the patio or in the dining room twice or three times each week. Children’s entertainment was offered on the beach once a week by a local children’s entertainment company called Jam Sandwich. The entertainers used amplifiers. It appears that Jam Sandwich, in particular, could be heard in the surrounding area, but their entertainment was confined to the early evening once per week for an hour and did not raise any concerns for the Objectors. With respect to the entertainer who performed on the patio, he played acoustic instruments with amplification consisting of a single speaker with the volume set such that the sound could pervade the patio but not much further.

PK hosted a number of functions throughout the summer season. The majority of these functions were weddings, approximately eight each year, but there were also other functions. PK applied for a special occasion permit to host each function and alcohol was served. There was generally live entertainment on the patio. Functions would run until 1:00 a.m. Over the years of his operation of the lodge, Mr. Shier never had a noise complaint. On two occasions he had to deal with rowdy patrons. Other than during functions, Mr. Shier testified that PK had a quiet hour policy of 11:00 p.m. in consideration of other guests and the surrounding community. Mr. Shier did admit that functions tended to cluster around the spring and fall when it was unlikely that locals were sitting outside enjoying a summer evening.

Pam Griffith is the manager of PK, a position she has held since the ownership of the resort changed in January, 2012. She testified concerning the present operation of the lodge and the success of the restaurant since its opening in June. She has heard only positive comments from guests in general, including supportive comments from local residents. It was her evidence that the restaurant currently caters to approximately 40 guests each night for dinner. Starting about July 20, guests were invited to sign a form letter in support of the patio licence application when it came time to pay. Twenty four people signed letters of support and these were entered as an exhibit. Under cross-examination, Ms Griffith agreed with Mr. Shier’s evidence that of the twenty four, only three supporters lived in the immediate area and the rest lived in Bracebridge or even further afield. She was also unaware if the Mayor of Bracebridge had consulted any of the neighbours or objectors before submitting a letter in support of the Applicant (Ex. 7).

Ms Griffith introduced a number of photographs (Ex 5) taken from the lodge looking up and down the Muskoka River to show the surrounding area. She was taken to task in cross-examination with the fact that the photographs did not show how close the surrounding cottages are to PK. She indicated that boathouses were visible in almost all views indicating the presence of cottages.

In this hearing the Applicant is seeking licence conditions that permit it to serve alcohol on the patio until 10:30 p.m. with signs of service being cleared by 11:00. It is also seeking to have “ambiance music” playing on the patio during service hours. Ms Griffith explained that the restaurant accepts dinner bookings until 9:00 p.m. The Applicant seeks to permit patrons to complete their meal on the patio over a two hour period and allow guests to linger to chat over a drink without the necessity for them to move inside mid-meal. She stated that the peak booking hour was around 7:00 p.m. and numbers dropped off later. She does not stay at the lodge until closing time so she could not comment on the feasibility of completely accommodating late diners inside. She was aware that the restaurant generally closed around 10:30 p.m. after the last patrons left.

The Applicant has engaged in a measure of community outreach with respect to its application. Ms Griffith delivered notices to one hundred or so residences in the local community and invited residents to an information night to be held on May 19, 2012 at PK. Ms Griffith estimates that 60 or so people attended the meeting. Attendees were given an information sheet about the proposed operation (Ex 6) and Mr. Woods spoke. Following the meeting, four of eight objectors withdrew their objections and one sent an email in support of the Applicant (Ex 8). Since that time, Ms Griffith is unaware of any fresh objections. No neighbours immediately abutting the property have objected to the patio licence.

Ms Griffith conducted an informal survey of other licensed premises in the Muskoka area. She spoke with 10 establishments. She found that most outdoor patios are licensed to remain open until at least 11:00 p.m. and some are permitted to stay open until 1:00 a.m. None must stop service at 9:30 p.m. Several establishments stated that they may choose to close at 9:30 because of lack of business not because of licensing restrictions. One, Turtle Jack’s in Port Carling that was also advanced by the Objectors as an example, is permitted to remain open until 11:30 p.m. Ms Griffith admitted that she is unaware of any of the surveyed establishments that are located in an area that is quite so densely residential. Turtle Jack’s, for example, is located in downtown Port Carling and is backed by retail businesses. There are approximately four cottages across the lake that may be impacted by noise from the patio. Notwithstanding the location, Turtle Jack’s is not permitted to have amplified or live music on the patio (Ex 12).

The photographs of the patio in Exhibit 5 show it unfenced. In the Notice of Appeal the Applicant states that the whole patio will be fenced in with cedar past and Plexiglas panels with planters on top as a means of restricting sound from emanating from the patio to the surrounding area. When the question of a fence was put to Ms Griffith, Mr. Woods answered without objection by the Objectors that it will be necessary to construct a fence around the patio as a requirement of the licence. The materials are on site but the idea of Plexiglas has been abandoned because of its tendency to weather to a yellowish colour. Currently the Applicant is assessing the best material to ensure compliance with licensing regulations and achieve soundproofing effects.

KB has lived in the Bracebridge area all of his life. Now retired, he has been a school teacher and principal. He lives about 750 metres from PK. KB attended the May 19 meeting at PK. He had some of his fears allayed but remains concerned about potential noise levels. He is attracted to the natural beauty and peace and quiet of Muskoka and wants that aspect of the neighbourhood protected while still accommodating full recreational use of the area.

The focus of his concern is the ease with which noise propagates over open water. He stated that he can hear his neighbour on the other side of the river when she talks on the phone. People around him may have evenings when noise of their revels floats across the water. He does not mind people enjoying their cottage weekends and considers it a normal adjunct to cottage life. He is more concerned with the regular noise arising from a commercial establishment.

Over the years KB has found PK to be an excellent neighbour. He does not know if the noise from the new restaurant patio will be any worse than the noise that has historically come from the lodge, but he is concerned that if Mr. Woods is not in attendance, there may be no control. He personally goes to bed around 9:30 to 10:00 p.m. and would prefer that a condition be put on the licence that provided for no amplified sound similar to the Turtle Jack’s condition. If the Tribunal is not disposed to impose such a condition, then he would like to see the patio fenced off to reduce sound. His concern is with the right conditions. He stated: “Conditions on licences make good neighbours.” He summed up his sense of the neighbourhood by stating that “Muskoka people need convincing.” They would like the opportunity to assess the new owners of PK before being comfortable with the conditions the owners are currently seeking for the patio.

KB took some photographs of the surrounding area (Ex 11). The purpose of the photographs was to show the proximity of cottages in the area to the patio at PK. He is unaware of any licensed premises in Muskoka, with the possible exception of Cleveland House, that is surrounded by such a densely residential neighbourhood. He believes that Cleveland House may have closed its patio.

James Hayes testified on behalf of himself and the other Objectors. He moved to the neighbourhood about 7 years ago. He was well aware that PK was about 250 metres from his property. The realtor specifically pointed it out to him. He had no problems with the manner in which PK operated under Mr. Shier. He concedes that some level of noise is normal, ranging from the sound of the cruise boat, Seguin, blowing its horn through conversations floating across the water from people conversing on their docks to occasional functions held at PK. He is concerned that there is a major difference between a number of functions on one night a week and nightly amplified music and conversations of possibly 66 persons on the patio. Notwithstanding his concerns, he has no objection to the issuance of a patio licence to the Applicant but he feels that terms must be imposed to protect the neighbourhood from persistent music and conversation. He did concede that when PK had live entertainment on its patio several nights a week that he never complained. He stated that he was not a complainer.

THE LAW

The law with respect to the issuance of a licence to sell liquor is set out in s. 6 of the Act:

Licence to sell

6. (1) A person may apply to the Registrar for a licence to sell liquor.

Requirements

(2) Subject to subsection (4) or (4.1), an applicant is entitled to be issued a licence to sell liquor except if,

(h) the licence is not in the public interest having regard to the needs and wishes of the residents of the municipality in which the premises are located.

Notice of proposal

21. (1) If the Registrar issues a proposal with respect to any of the following matters, the Registrar shall serve notice of the proposal together with written reasons on the applicant or licensee:

22. Review an application for a licence to sell liquor.

Notice requiring hearing

(4) A notice of a proposal shall inform the applicant, licensee, permit holder or owner that the person is entitled to a hearing by the Tribunal if the person mails or delivers to the Tribunal and the Registrar, within 15 days after the notice is served on the person, notice in writing requiring a hearing by the Tribunal, and the person may so require such a hearing.

Hearing

Notice

23. (5) The Tribunal shall fix a time and place for the hearing of the matter and shall at least ten days before the day fixed cause notice of the hearing to be served upon the person who has required the hearing.

Powers

(10) Following a hearing to consider a proposal to review an application for a licence to sell liquor, the Tribunal may direct the Registrar to issue the licence or to refuse to issue the licence.

Conditions

(12) Following a hearing, the Tribunal may attach to a licence or permit any condition that the Tribunal considers proper to give effect to the purposes of this Act.

ISSUE

The Objectors support the issuance of an outdoor liquor licence to the Applicant. The only issue between the parties is the terms which should attach to that licence. It is the position of the Applicant that it should be permitted to serve alcohol on the patio to 10:30 p.m. and provide entertainment, either live performers playing acoustic instruments with moderate amplification to enable them to be heard on the patio or background music played on small indoor\outdoor speakers, again at a volume to be heard on the patio. The Objectors oppose any music on the patio, live, amplified or otherwise. They propose that alcohol should be served until 9:30 p.m. with signs of service cleared away by 10:00 p.m.

APPLICATION OF LAW TO FACTS

The Applicant submits that the new operation does not represent a material change to the past operation of PK as an all inclusive lodge. Mr. Woods asks the Tribunal to consider that there are only four objectors out of a community of approximately 150 neighbours. He asks the Tribunal to review the evidence of the Objectors weighed against the fact that they have an onus to prove that the terms he suggests are not in the public interest and find that they have not met that onus. Specifically, he points to a number of evidentiary points.

Mr Woods notes that special functions at PK operated until 1:00 a.m. without concern or complaint either from any of the Objectors. He noted that amplified music by a local performer had been played on the patio for years, again without complaint or concern. The Tribunal notes that when Mr. Shier answered Mr. Hayes question about how often live music was played on the patio in the evening, Mr. Hayes appeared surprised at its frequency and the fact that it was amplified.

Mr. Woods is baffled by the selection of 9:30 p.m. by the Objectors as their proposed time for last orders. In his submission, common sense dictates that 9:30 is too early, especially in Muskoka. He concedes that it may be reasonable to turn the music off earlier, but that patrons should be permitted to purchase alcoholic beverages on the patio until 10:30 p.m. He submits that even 10:30 is not overly late. The restaurant is a fine dining establishment not a bar or a tavern. No other patio in Muskoka has such a restrictive term appended to its licence.

Finally Mr. Woods points to the support in the community for the Applicant. Following the May 19 meeting the number of objectors dropped from 8 to 4. Most people were impressed by the project. In addition, the Town of Bracebridge supports the project as evidenced by the letter from the Mayor. Patrons, the vast majority of whom live in the local municipality, voluntarily signed support letters.

On behalf of the Objectors, Mr. Hayes acknowledges that he has an onus to show that, on objective grounds, the terms proposed by the Applicant are not in the public interest. He advances a number of objective grounds:

1. The proposed patio is in a quiet Muskoka residential area prized for its peace and quiet and natural beauty;

2. the patio is closely surrounded by residences and cottages that are affected by its operations;

3. Ms Griffith was unable to identify any other patio in Muskoka as closely surrounded by residences;

4. investment in PK and the restaurant by its new owners is equally offset by the investment of local owners in their property;

5. when purchasers bought in the area they were aware of PK but not of the new business direction;

6. sound travels over water;

7. sound emanating from simple conversation will travel a considerable distance;

8. there are no similar establishments in the vicinity;

9. no comfort can be taken from the proposed sound buffering, especially given live amplified entertainment;

10. PK ran successfully for years without the need for a licensed patio;

11. the current owners have no previous history of operating a lodge and cannot piggyback on the excellent management of the lodge by the previous owners;

12. there is no track record to measure the Applicant’s assurance of goodwill;

13. the only comparable establishment is Turtle Jack’s and music is not permitted on its patio;

14. the Applicant’s position that there are only 4 objectors means that 98% of the community is supportive is false; and

15. before submitting a letter in support of the Applicant, the Mayor of Bracebridge took no steps to ascertain the wishes of the residents of the area.

Both parties agree that the Objectors carry the onus of establishing on a balance of probabilities that the terms proposed by the Applicant are not in the public interest and that the terms suggested by the Objectors satisfy the public interest. In weighing the various factors, the Tribunal has to consider the wishes of the residents in the municipality in which the premises are located. A number of cases have made it clear that, in interpreting the wishes of the residents of the municipality, the decision is not given simply on the basis of opinion polls, signatures on petitions or responses to ad hoc surveys. This position was set out by the Board of the Alcohol and Gaming Commission of Ontario (the “Board”) in Registrar, Alcohol and Gaming Commission of Ontario v. 1672251 Ontario Ltd., operating as or intending to operate as Rio 40 Degrees Restaurant & Bar, [2010 CanLII 81046 (ON AGC)](https://www.minicounsel.ca/agco/2010/81046) where, at paragraph 38 is stated: “As the Board stated at the hearing, it does not decide the case based on a “head” count of objectors versus supporters.” In Registrar, Alcohol and Gaming Commission of Ontario v. Black Cat Pub and Grill Inc. operating as Black Cat Pub and Grill (The), [2011 CanLII 45127 (ON AGC)](https://www.minicounsel.ca/agco/2011/45127), the Board stated in response to a petition submitted by the applicant:

But, as pointed out by Mr. Tovey, a large proportion of the signatures belong to people who live outside the neighbourhood, so their everyday lives will not be affected by this establishment. The Board does not make decisions based on the number of people supporting or opposing an application, but gives the greatest consideration to the concerns of the residents who live in the immediate area of the premises who will be most affected by activities at this establishment.

It is clear then, that in considering the public interest as expressed by the wishes of the residents of the municipality in which the establishment is located, greater weight is given to the concerns of those residents whose proximity will result in them bearing the greatest impact from the proposed licensed premises.

Notwithstanding that the concerns of the immediate neighbours carry great weight in the Tribunal’s deliberations, that weight does not amount to a veto. The Tribunal must carefully consider those concerns and eliminate those which are merely speculative or conjectural about the impact of the requested licence. The Tribunal agrees with the reasoning of the Board in Registrar, Alcohol and Gaming Commission of Ontario v. 2148855 Ontario Inc. operating as Margaret, 2009 CanLII 70937 (ON AGC) when it stated: “However, the Board cannot make a decision based on conjecture and speculation about the negative impact of a licensed patio.” It must consider all of the circumstances objectively.

In any new endeavour, the concerns of opponents must, by their very nature, contain elements of speculation or conjecture. As pointed out by KB and Mr. Hayes, the current owners have no track record against which to measure their reassurances of goodwill. KB captured this aspect when he said that: “Muskoka people need convincing.” Implicit in this comment is the idea that, after a year or so of experience and familiarity with the operation of the Applicant, the objectors may well agree to the terms proposed by the Applicant. In many applications, evidence of misbehaving patrons of other establishments causing damaging or carrying on in an inappropriate manner is held to be conjectural and speculative about the behaviour of patrons of the establishment whose licence is under review. The current matter differs from those in that there is a track record of patio use at the same premises that appears not to have impacted the local community to a great degree.

There are a number of objective facts both for and against the position advocated by the Objectors. First and foremost, the Tribunal notes that PK has been in operation for 76 years and, at least for the last 7 years has offered live music on an unprotected patio with some level of amplification. It is notable that this level of live music on the patio was not an irritant to the Objectors and no complaints were ever received. While Mr. Hayes asserts that the Applicant should not be able to bask in the good management of the earlier owners, this evidence convinces the Tribunal, not that this management will be above reproach, but that music played at a low level does not impact the enjoyment of their property by local residents.

Numerous functions have been held over the years with music on the patio, consumption of alcohol and presumably, ongoing conversation, again without complaint from the neighbours. The Tribunal accepts the Objectors position that these functions differ in nature from the activity proposed by the Applicant. It is one thing to have an occasional late night function but quite another to be subjected to sustained activity on a nightly basis. The Objectors are entitled to some measure of protection from ongoing background music.

The position of the Objectors regarding the impact of conversation on the surrounding environment is somewhat confused. On the one hand it was put to Ms Griffith that the numbers of late night diners was sufficiently low and would continue to be sufficiently low that they could be accommodated inside the restaurant. On the other hand, Mr. Hayes asserted that conversation from 66 person capacity of the patio after 10:00 p.m. would be sufficiently loud and disruptive to prevent his enjoyment of his property or to allow him to sleep. Mr. Hayes was concerned that the patio capacity could be increased as of right to in excess of 80 patrons, causing even more problems. Mr. Hayes does not seem to have been affected by the conversation of lodge guests over the years or the policy of quiet hour beginning at 11:00 p.m. The Tribunal accepts Ms Griffith’s evidence that the number of bookings peaks at 7:00 p.m. and diminishes thereafter such that it is unlikely that the patio will be at capacity late in the evening. Nevertheless, the Tribunal is of the view that any potential noise consequences can be addressed by the proper compliance with the Act and regulations and, in particular, s. 46 of Ontario Regulation (O/Reg) 719

ORDER

Pursuant to the authority vested in it under the provisions of the Act, the Tribunal directs the Registrar to issue a licence to sell liquor on a patio for a capacity of 66 persons by Muskoka Memories Inc. operating as or intending to operate as Muskoka Memories Steak and Seafood House, and on the Applicants patio subject to the following terms:

1. Service of alcoholic beverages shall cease on the patio at 10:30 p.m. each night and signs of service shall be cleared in accordance with the provisions of s. 29 of O/Reg 719;

2. The Applicant will ensure that no live or amplified music is played on the patio or is directed towards the patio or any other outdoor areas after 10:00 p.m.;

3. The Applicant shall not permit noise that arises directly or indirectly from entertainment on the patio or from the sale and service of liquor on the patio to disturb persons who reside near the premises;

4. The Applicant shall provide a telephone number for residents to register concerns or complaints. This line will normally be answered by a staff member during the Applicant's published hours of operation. The Applicant will also provide a cell phone number to residents for use outside of the Applicant’s published hours of operation.

LICENCE APPEAL TRIBUNAL

D. Gregory Flude, Chair

Released: August 03, 2012