Licence Appeal Tribunal
FILE: 7549/LLA
CASE NAME: 7549 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 Revoke a Licence
1336603 Ontario Limited o/a Burleigh Island Lodge Applicant
-and-
Registrar of Alcohol and Gaming Respondent
DECISION AND ORDER
ADJUDICATOR: Simon Dann, Member
APPEARANCES:
For the Applicant: Ian Petraitis, Agent
For the Respondent: Bryna Kaplan, Counsel
Heard in Toronto: November 6, 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 19336 dated June 21, 2012, to revoke the liquor sales licence of 1336603 Ontario Limited, operating as Burleigh Island Lodge (the “Applicant”), on the basis that the licensee failed to surrender its licence immediately after ceasing to operate the business.
Preliminary Matters
Counsel for the Registrar, Bryna Kaplan, advised there were no facts in dispute as the business has been closed for two years. The parties confirmed they would each have one witness only.
Witness for the Registrar
James Owen is an inspector with the AGCO. He has held this position since 1999. He is familiar with the licensee’s establishment as he works in the Burleigh Island region.
Mr. Owen has been to the establishment only once in the past year. He described it as a seasonal resort which was also open for winter events. He first noticed it was closed on June 1, 2010 when he went to conduct a regular inspection and saw a “For Sale” sign.
On that date, Mr. Owen said he spoke with a gardener who told him the establishment was out of business and up for sale. After the gardener told him he did not think it would be open that year, Mr. Owen asked the gardener to tell the establishment’s owner that he (Mr. Owen) had been there for an inspection.
Mr. Owen reported to the AGCO that the establishment was closed. He advised that the licensee should surrender the liquor sales licence and the AGCO should issue the appropriate notice.
In June 2010, Mr. Owen received a call from a person claiming to represent the licensee. Mr. Owen said he asked about the surrender of the licence, but did not learn anything and never heard from the licensee.
Mr. Owen again went by the establishment in May 2011 and found it in what he termed to be a state of “disrepair”. He spoke to someone in the adjacent store and was told the establishment was closed and would not be open. He also called the telephone number he had on record and listened to a recorded message saying that if the caller was interested in purchasing the establishment, they should leave a message.
Mr. Owen then sent another report to the AGCO regarding his findings. On his most recent visit, May 22, 2012, he found the adjacent store still open and the establishment closed. He also learned the licensee had still not surrendered the liquor sales licence.
Witness for the Applicant
Ian Petraitis, the principal of the licensee, agreed he had never called Mr. Owen. He also stated he never received messages about Mr. Owen’s inquiries or visits.
Mr. Petraitis explained his absence from the business in 2010 as a result of medical treatment he had been receiving for a health condition.
The Burleigh Island Lodge (“Lodge”) is comprised of a motel, marina and general store. Mr. Petraitis said the marina was open from mid-May to September and the general store, with gas pumps, has always been open.
Mr. Petraitis said he was in renewed negotiations to sell the establishment and hoping to have the sale confirmed over the next week. He said these negotiations were with the same party involved in a previous sale effort, a year earlier, and he was now waiting for confirmation that the potential purchaser was able to secure their financing.
The potential purchaser is a former resort owner who currently lives in Peterborough.
In cross-examination, Mr. Petraitis confirmed the marina and general store never utilized the liquor licence and it was only the motel which had used the licence. Mr. Petraitis confirmed the prospective purchaser wants to reopen the full establishment.
Mr. Petraitis said the reopening would involve a fire inspection as well as some maintenance and clean-up work. The bar in the Lodge is ready to be opened even though it has been approximately three years since liquor was last served.
Mr. Petraitis said he was not aware of the need to immediately surrender the liquor licence on closing the business. He only became aware of that at the pre-hearing, on September 20, 2012.
He said the AGCO notices and contacts were through Michele Seabrook, his accountant and it was Ms. Seabrook who appealed the Notice of Proposal to revoke the licence.
Closing Submissions
In summary, the Registrar’s Counsel submitted that the evidence that the establishment has been closed for almost three years is clear and not in dispute.
Ms. Kaplan stated the Registrar recognizes that seasonal businesses have periods during which they are not in operation but there is always the intention to reopen.
Regarding the potential new purchaser, Ms. Kaplan submitted that if there is a sale within a short time of an establishment’s closing, there is the possibility of taking advantage of a simple process for transferring a liquor licence.
In this instance, if the potential purchaser is the same one which was unable to obtain financing a year earlier then this brings uncertainty about what the outcome may be.
Ms. Kaplan asked for the revocation to be confirmed.
Mr. Petraitis confirmed there was no dispute of the facts and while he was prepared to accept the revocation he hoped that would not be the outcome.
Application of Law to Facts
Section 56 of Ontario Regulation 719/90 under the Act requires that a licence holder who ceases to operate the business shall immediately surrender the licence.
This is an uncomplicated matter in which the Applicant confirms that there is no dispute that the licensed establishment has been closed since 2010 and that it has not served liquor for over two years.
While the Applicant advised the business may soon be sold, he also acknowledged the purchaser has so far not been able to secure his financing.
This, as Ms. Kaplan has submitted, makes the future outcome uncertain as it is the same potential purchaser from a year earlier.
Therefore, and specifically in consideration of the undisputed fact the establishment has been closed for more than two years, the Tribunal finds the licensee to be in breach of section 56 of Ontario Regulation 719/90.
ORDER
For the reasons stated above and pursuant to the authority vested in it under the Liquor Licence Act, the Tribunal directs the Registrar to carry out the Proposal and revoke the liquor licence of 1336603 Ontario Limited o/a Burleigh Island Lodge, bearing licence number 808818.
LICENCE APPEAL TRIBUNAL
Simon Dann, Member
Released: December 10, 2012