Licence Tribunal
Appeal d'appel en
Tribunal matière de permis
2014-06-26
FILE:
8695/LLA
CASE NAME:
8695 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 Refuse to Remove Conditions
Go Lounge Inc. o/a Seventeen Eighteen
Appellant
-and-
Registrar of Alcohol and Gaming
Respondent
-and-
City of Toronto and Julie Campagna
Added Parties
DECISION AND ORDER
ADJUDICATOR:
Mary Ann Spencer, Member
APPEARANCES:
For the Appellant:
Alisa Sadler and Samantha Barber, Agents
For the Respondent:
Tamara Brooks, Counsel and Rena Khan, Counsel
For the Added Parties:
City of Toronto: Ray Kallio, Counsel
Julie Campagna: Self-represented
Heard in Toronto:
June 17, 2014
BACKGROUND
The Registrar of Alcohol and Gaming (the “Registrar”) under the Liquor Licence Act, (the “Act”) issued a Notice of Proposal, number 20277, dated March 14, 2014, to refuse an application by Go Lounge Inc. o/a Seventeen Eighteen (the “Appellant” or “Seventeen Eighteen”) to remove conditions on its liquor licence on the basis that the Alcohol and Gaming Commission (the “AGCO”) received one or more written objections to the application.
Eleven conditions were imposed on the Appellant’s liquor licence pursuant to a Consent signed on October 24, 2012 by Alisa Sadler, the principal of Go Lounge Inc., and Ray Kallio, on behalf of the City of Toronto. The Appellant has applied to the AGCO for removal of the following two conditions:
There shall be no amplified sound from any part of the Premises causing audible noise to any residential building after 11 p.m.
The Licensee shall not require a cover charge to enter the Premises other than for special charity or corporate events.
The reasons cited in the proposal to refuse to remove the conditions are that there has been no change in circumstances to justify their removal and that their removal is not in the public interest. Therefore, the issues to be addressed in this hearing are whether there has been a change in circumstances that supports the removal of the conditions pursuant to section 14(2) of the Act and whether their removal is not in the public interest.
As a preliminary matter, Ms Brooks advised that the Registrar was not taking a position in this matter.
APPELLANT’S EVIDENCE
The Appellant’s evidence comprised the testimony of three witnesses, a book of documents (Exhibit 3) and photographs (Exhibit 6).
Alisa Sadler is one of the principals of the Appellant corporation. She submitted that there have been material changes in circumstances which support the removal of conditions on the liquor licence.
In the spring of 2012, Ms Sadler and her partner Samantha Barber signed the lease at 1718 Queen Street West and subsequently opened Go Lounge as a licensed board game cafe which operated both during the day and in the evenings. Ms Sadler testified that their business model had been proven elsewhere but was not successful at Go Lounge’s location. Unlike other board game cafes, Go Lounge did not charge a cover to play games, its clientele was older and there were few patrons during its day time hours. As a result, in the early fall of 2013, Ms Sadler and Ms Barber changed their business model. After looking at their costs, particularly day time salaries, they closed Go Lounge, undertook further renovations, and reopened as Seventeen Eighteen, a bar operating evenings only.
Seventeen Eighteen is a “low key” bar with a mature clientele. Ms Sadler described its atmosphere as “mellow”. Most nights, it plays a wide variety of music from commercial playlists using an amplified iPod. Occasionally, local artists provide live entertainment, which is generally acoustic music. However, because of the condition prohibiting a cover charge, these artists are forced to ‘pass the hat’. The establishment has also installed DJ equipment and occasionally hires a DJ.
Ms Sadler believes that the conditions on its liquor licence place Seventeen Eighteen at a competitive disadvantage. The Appellant needs the ability to institute a cover charge to compensate artists, who the establishment has difficulty attracting without a guaranteed payment. A payment of as little as $100 would be attractive to local artists. There are 71 establishments operating in the Appellant’s Parkdale neighbourhood, only 9 of which have liquor licence conditions. Seventeen Eighteen is the only bar operating with conditions, the others having been licensed before conditions were “imposed” by City of Toronto Councillor Gord Perks.
After the Appellant applied for its liquor licence, Ms Sadler and Ms Barber met with Councillor Perks to discuss potential liquor licence conditions. Ms Sadler testified that she understood that the proposed conditions had been discussed with residents and that if she signed there would be no objections to the licence application from either the City of Toronto or from individual residents. She and Ms Barber felt pressure from Councillor Perks’ office to agree to the conditions and “didn’t feel we had a choice not to sign”. They understood that if there were objections to the licence and a hearing before this Tribunal was required, the process could take six to eight months, a period of time during which they would have to pay rent. Ms Sadler repeated that she does not feel that the agreement was signed voluntarily and noted they did not have legal counsel at the time. After the agreement with the City of Toronto had been signed, she and Ms Barber were confused when three individuals did file objections. The three objections were subsequently withdrawn after Ms Sadler and Ms Barber contacted the three objectors and Ms Barber called Councillor Perks’ office.
With respect to a change in circumstances, Ms Sadler also referred the Tribunal to a March 25, 2014 City of Toronto Staff Report which notes that the AGCO will no longer approve conditions to be attached to liquor licences that do not directly relate to the administration of the Act (Exhibit 3, page 11).
Ms Sadler testified that the Appellant has proven itself to be a responsible operator. A number of measures have been undertaken to ensure the establishment is not noisy. Sound levels are maintained at levels she described as “significantly below” bar levels and speakers have been changed to a smaller size, have been lowered from the ceiling and are now hung from rubber as opposed to metal straps. Referring to Exhibit 3, Ms Sadler noted an e-mail from Municipal Standards Officer Cesar Jaramillo (page 24) which states he found no noise violations when he inspected on November 9, 2013 or on February 21, 2014 and to a letter from AGCO Manager Katharine Evans dated March 24, 2014 (page 10) which states that no further action would be taken with respect to breach of condition violations. In addition, Ms Sadler referred to four letters of support for the request to remove conditions (pages 16 to 21) and noted one of these is from individuals living adjacent to the establishment.
Ms Sadler and Ms Barber undertook sound measurements in the vicinity of Seventeen Eighteen (Exhibit 3, page 6) after purchasing a sound meter at an electronics store (Exhibit 3, page 6). Ms Sadler indicated that the ambient noise levels measured exceeded the levels in their bar. Asked about the volume of music played at the establishment, Ms Sadler stated it is dropped at 11 p.m. if they think it is too loud. They have not gone to the area above the establishment or to Ms Campagna’s apartment on the second floor to monitor the sound level. However, they went once at 11:30 p.m. upstairs to the other side of the building, to determine if they could hear the establishment’s music there.
The Appellant has received two noise complaints from Ms Campagna. On the first occasion, Ms Campagna asked that the music be turned down. Ms Sadler stated she could not do so because it was already so low it would mean turning it off. She has had discussions with Ms Campagna about noise but noted that Ms Campagna has also refused to talk on one occasion.
When the lease for 1718 Queen Street West was signed, the landlord told Ms Sadler and Ms Barber that no one lived above the premises. Ms Sadler testified that they subsequently called the City to inquire about zoning and were told that there had been a complaint filed about Ms Campagna’s apartment. Neither she nor Ms Barber filed that complaint.
Witness James Braund is a Detective Constable with Toronto Police Services. Part of his job involves conducting liquor licence inspections. He testified that he visited Seventeen Eighteen at 8:30 p.m. on April 1, 2014 and issued no violations. While he had been asked by the owners to meet with them to discuss noise issues, he did not notify them of his arrival in advance. He also reviews reports conducted by other officers and has not seen any with respect to violations at the establishment.
Witness Krista Ruest has worked as a bartender/server at Seventeen Eighteen since November, 2013. She described the atmosphere as “mellow and relaxing” and noted that it was the quietest establishment she had ever worked in. She generally works alone and therefore is in charge of the music level when there is no live entertainment. She determines the level by setting the control at a setting she believes to be quiet. She is aware of the licence conditions. She has never used the sound meter purchased by Ms Sadler and Ms Barber but has listened to the sound level from various locations inside and outside of the premises. She has never been given specific instructions from the owners with respect to sound other than to keep levels low. She has been there when the police have come in response to noise complaints from an upstairs neighbour. The police have generally been sympathetic and have never asked her to lower the music volume. She noted that when there is a DJ present sound levels are louder up to 11 p.m. than they are when the iPod is used.
OBJECTORS’ EVIDENCE
Witness Gord Perks has represented Ward 14 at Toronto City Council since 2006. Councillor Perks noted that there is a mix of commercial establishments, including drugstores and grocery stores, on Queen Street West between Roncesvalles Avenue and Dufferin Street. However, over the last five to ten years, local service uses are being replaced with bars and restaurants. The area has become a major source of complaints both to his office and to the City. Since 2007, he has reviewed every application for a liquor licence in his ward. He tries to bring members of the community and the applicants together to arrive at a consensual set of conditions or what he described as a “good neighbour” agreement. Typically, this process is collaborative although on occasion when an agreement cannot be reached, the application does proceed to a hearing. Councillor Perks stated that the Appellant’s application for a liquor licence was not treated differently although he noted that generally he hears from the City before he hears from residents. In the Appellant’s case, he heard from residents first.
In meetings with applicants, Councillor Perks discusses potential liquor licence conditions using a list of ‘typical’ conditions, makes them aware of the community atmosphere and tells them about the process. He informs them that it is the City’s position to uphold the broader public interest. Conditions are tailored to the applicants’ business model but he makes applicants aware that the conditions stay with the licence, even if the model changes or the business is sold.
Councillor Perks met with Ms Sadler and Ms Barber when the Appellant applied for a liquor licence. Asked if they mentioned feeling pressure to agree to conditions, he stated “not to my memory” and noted applicants have a “clear choice” to go to a hearing if they wish. The conditions on the Appellant’s licence were tailored to its business and his memory is that there was “back and forth” before they were settled. In each case, there is an opportunity for applicants to persuade the City. He further noted that while he cannot control every objector, he tries to facilitate an agreement with all objectors and was successful in this case.
Condition 5 on the Appellant’s licence, prohibiting a cover charge, was one Councillor Perks wanted. He noted he is not familiar with any restaurant with a cover charge but businesses may come forward as a restaurant and later want to change to another model. Nightclubs in particular cause conflict and concern generating the largest number of complaints about noise and disorderly behaviour. Ms Sadler and Ms Barber did not suggest that they would consider becoming a nightclub if their planned board game cafe did not work out. In fact, Councillor Perks noted they said they did not want to be a nightclub.
After parking, noise is the issue about which Councillor Perks receives the largest number of complaints with respect to the Queen Street area. He noted that on Monday mornings his office answering machine is often full and that there have been a number of difficult circumstances where individuals have had to move out because of noise. He has had noise complaints about the Appellant from people living above or adjacent to the establishment and testified that while he could not specify the exact number of complaints, they had come from four to five individuals.
Councillor Perks believes the conditions on the Appellant’s licence should not be removed. They are the product of a negotiation and he believes the faith the community has in the process will be destroyed if one of the participants can unilaterally apply to make changes. He noted that public interest matters are resolved through conditions and that making any changes would increase the pressure on the City to refuse all new applications. Finally, he noted that residents have the right to enjoy their homes.
Asked by Ms Barber if newly licensed establishments were not being put at a competitive disadvantage with conditions on their licences that older establishments do not have, Councillor Perks responded that rules in a City are always evolving and that it is not his responsibility to imagine how to run a successful business.
On cross-examination, Councillor Perks agreed when asked by Ms Brooks if conditions were intended to help control the impact of establishments in a neighbourhood. He also agreed that the conditions on the Appellant’s licence were to support both its business plan and his plan to avoid the social consequences of proliferation of establishments and thereby promote the long term health of the community.
Witness Julia Campagna has lived and worked in the apartment directly above Seventeen Eighteen for 22 years. She does not believe that the Appellant has paid any attention to the conditions on its licence with respect to noise. Further, she testified that the principals of the Appellant have acted aggressively towards her in response to her complaints.
Ms Campagna stated that noise was not a major issue until the late winter/spring of 2013 when the Appellant began to hold trivia nights. After the premises were renovated and became a bar, loud music began to become an issue. She personally saw that the speakers installed in the premises were larger than those installed in the board game cafe. DJ nights also began.
Ms Campagna has been disturbed by noise from Seventeen Eighteen for over a year: both from the renovations to convert to a bar which took place after the establishment closed for the night and, on an unpredictable basis, by loud music. She needed to run a fan to help mask the noise and to wear ear plugs in order to sleep. On August 16, 2013, she sent a letter to the owners in which she set out the issues she had been having and asked to meet to discuss a solution (Exhibit 4, Tab 3). However, in response, she received a phone call threatening to have her home business inspected.
In October, 2013, after discovering the condition with respect to noise on the Appellant’s licence and speaking to City of Toronto staff, Ms Campagna began to keep a noise incident log (Exhibit 4, Tab 1) and to call police to report problems. Referring to the log, she testified about a number of incidents. On November 3, 2013, when she met with Ms Barber, she was told that she should sleep somewhere else on DJ nights. On November 14, 2013, in a telephone conversation, Ms Barber told her the Appellant would fight to “the bitter end”, would continue to investigate Ms Campagna’s business and would hire bands to play every night to ensure Ms Campagna could not sleep. On December 11, 2013, music was ‘blaring’ during the day. When Ms Campagna complained, Ms Sadler told her that music could be played until 11 p.m. Ms Campagna believes that the music was deliberately played at a high volume because she had called the police to complain about noise on the previous day.
Ms Campagna noted that the music has not been as much of an issue since February, 2014 although she continues to need to run a fan. She believes the change is a direct result of the Appellant’s application for removal of the conditions on its licence. Not only is Ms Campagna opposed to the removal of conditions, she requested that the Appellant’s liquor licence be revoked.
Witness R.A. was one of the three objectors to the Appellant’s original application for a liquor licence. He testified that he met with Ms Sadler and Ms Barber and withdrew his objection after receiving their assurances that they would meet the conditions they had negotiated with the City of Toronto. After this meeting, he spoke to the other two objectors who subsequently also withdrew their objections. R.A. believes that the conditions should remain on the licence. While he does not live in the immediate vicinity of Seventeen Eighteen and cannot personally hear its music from his home, he owns tenanted property approximately one block from the establishment.
Witness L.M. lives on the third floor of 1718 Queen Street West. She testified that her quality of life changed when the establishment first opened because she could hear noise coming up through the floor and from patrons outside., On one occasion, at 4 a.m., her partner went outside to speak to noisy individuals but was met with an epithet. The type of music L.M. hears is not mellow but is loud and is played both before and after 11 p.m. She did not contact the owners directly with her concerns because Ms Campagna already had done so without success. Rather, she called police. L.M. testified that the situation is better now and she has not heard music for some months.
Witness D.O. testified that he has heard loud music from the establishment “dozens of times” when in Ms Campagna’s apartment. In fact, he has argued with her because she was hesitant to call police. D.O. indicated that he was with Ms Campagna when Ms Barber called on November 14, 2013 and could hear Ms Barber “yelling” that she would shut Ms Campagna’s business down and would hire people to play music loudly. D.O. has himself gone to the establishment and requested that music be turned down. He has noticed a difference since February, 2014 but stated that it is still necessary to run a fan in Ms Campagna’s apartment to create a “white noise” damper.
Witness M.T. has lived on the second floor at the address adjacent to Seventeen Eighteen for 11 years. Last winter, she heard music from the establishment after 11 p.m. although there was no pattern to which day it occurred. She wore ear plugs in order to sleep. She has personally not complained about the noise but acknowledged that Ms Barber did knock on her door in February, 2014 to ask if she could hear music which she could not at that time. Ms Barber then suggested that the loud music M.T. told her she had previously heard must be coming from another establishment. It was suggested that a proper sound test be done but this has not taken place.
ANALYSIS
The issues to be addressed in this hearing are whether there has been a change in circumstances that supports the removal of the conditions pursuant to section 14(2) of the Act and whether their removal is not in the public interest.
Ms Sadler submitted that there has been a material change in circumstances. The Appellant has significantly shifted its business model and the licence conditions are placing it at a competitive disadvantage. She noted that the conditions are on the Appellant’s licence on “an assumption of presumptive guilt”. However, the Appellant has had no violations. They do not have loud music but run a mellow bar. The noise condition “weighs on us every day”, creating a constant state of anxiety. Moreover, the AGCO has changed its enforcement focus and the conditions are inconsistent with this change.
Mr. Kallio submitted that the conditions on the Appellant’s licence should not be removed. The principals of the Appellant have proven themselves to be “uncaring, callous, indifferent, vengeful and spiteful” with respect to the neighbours and there is overwhelming evidence that condition 5 was violated. A pattern of disruptive noise dropped off only in February 2014, after the request for removal of the conditions was made. Moreover, the conditions on the licence were collaboratively negotiated by Councillor Perks and were accepted by the Appellant.
Ms Campagna submitted that noise from Seventeen Eighteen had been a “nightmare” with a reprieve only when the Appellant applied to have the conditions on its licence removed. Ms Campagna requested that the Appellant’s liquor licence be revoked.
Section 14(2) of the Act states:
The Tribunal may, on the application of a licensee, remove a condition of a licence, other than a prescribed condition or a condition attached pursuant to section 8.1, subsection 10 (4), 11 (5), 11.1 (4) or clause (1) (a), if there is a change in circumstances.
The onus is on the licensee to demonstrate to the Tribunal that there has been a change in circumstances that supports the removal of the conditions.
On October 24, 2012 an agreement was signed by the Appellant and the City of Toronto, whereby the City agreed to support the Appellant’s application for a liquor licence provided 11 conditions were attached to that licence. Councillor Perks testified that he negotiated the conditions with the principals of the Appellant, as he has done since 2007 with every application for a liquor licence in his ward, with the goal of creating what he described as a “good neighbour” agreement. Ms Sadler testified that she felt pressured to sign the agreement because the alternative was a potential 6 to 8 month wait for a hearing if either the City or individual residents filed objections with the AGCO. The Tribunal does not accept that Ms Sadler did not sign the agreement voluntarily; notwithstanding the fact that a delay in opening might have resulted, she had the option to choose to proceed to a hearing. In spite of the agreement, three individual residents did file objections. Witness R.A. testified that he was one of those individuals. These objections were withdrawn after he met with Ms Sadler and Ms Barber and received assurances that they would comply with the conditions.
The conditions on the Appellant’s licence are clearly the result of public interest considerations. While the application for a licence did not become the subject of a hearing to determine if the issuance of the licence was not in the public interest, the conditions on the licence were agreed to in order to avoid that result.
Ms Sadler argued that there are two changes in circumstance that justify the removal of Conditions 5 and 7: the first is the fact that the Appellant’s business model has substantially changed; the second is that the AGCO has changed its policy with respect to conditions that do not directly relate to the administration and enforcement of the Act.
Condition 5 on the Appellant’s licence prohibits amplified sound causing audible noise to any residential building after 11 p.m. Ms Sadler stated that this condition is causing conflict with Seventeen Eighteen’s neighbours and anxiety for the Appellant’s principals.
Much of the testimony at this hearing related to noise levels at Seventeen Eighteen. Ms Sadler testified that Seventeen Eighteen does not have loud music. Detective Constable Braund testified that when he visited the establishment, sound levels were not an issue. Ms Sadler referred to a March 24, 2014 letter from the AGCO which states that no further action would be taken with respect to incidents of breach of conditions and to a May 6, 2014 e-mail from a City of Toronto Municipal Standards Officer which stated there was no excessive music on two occasions he was at the establishment. She also presented a number of sound readings and testified they indicated that ambient noise was louder than the sound level in the establishment. The Tribunal notes that the authors of the AGCO letter and the City of Toronto e-mail did not testify at this hearing and therefore it cannot assign weight to their correspondence. Further, it notes that Ms Sadler was not qualified as an acoustical expert.
Although it was not stated directly, Ms Sadler’s position appears to be that because the establishment is not noisy, Condition 5 is not needed. However, the Tribunal heard evidence of a pattern of disturbances to the residences located proximate to Seventeen Eighteen, although Ms Campagna and two of her witnesses testified that this has been significantly reduced in recent months.
The Tribunal accepts the evidence that Seventeen Eighteen did cause noise disturbances which have recently been reduced. However, the fact that Seventeen Eighteen is currently in compliance does not negate the public interest reasons for establishing Condition 5. Councillor Perks testified that after parking, noise is the largest source of complaints to the City from the Queen Street area. And, the Tribunal notes that individual objections to the Appellant’s liquor licence were withdrawn only after assurances of compliance with the conditions was received. The residents living close to the establishment have the right to quiet enjoyment of their homes. No evidence was presented to indicate that the Appellant’s current operating model was less likely to be a potential source of noise than the original board game cafe might have been. In fact, Ms Campagna testified that loud music did not become an issue until after the business model changed.
With respect to Condition 7 on the Appellant’s licence which prohibits cover charges, Councillor Perks testified this helps prevent licensed restaurants, which in his experience never have cover charges, from becoming bars or nightclubs due to a change in business model or a sale of the business. The overall purpose of the condition is to help moderate the potential social consequences the proliferation of licensed establishments can have on the community. While Ms Sadler stated she does not believe she signed the agreement with the City of Toronto voluntarily, Councillor Perks testified that when the agreement was negotiated, there was “back and forth” and the Appellant’s principals assured him that they had no intention of becoming a nightclub.
Ms Sadler argued that Condition 7 places Seventeen Eighteen at a competitive disadvantage because, with the change in business model to a bar operating in the evenings only, Seventeen Eighteen needs to attract local musicians. A cover charge would allow it to guarantee them a minimum payment. She provided statistics which indicated Seventeen Eighteen is one of only 9 establishments in the Parkdale area with conditions on its licence. However, no information was provided as to whether Condition 7 is unique to the Appellant. The Tribunal cannot therefore determine that Seventeen Eighteen is at a competitive disadvantage as a result of the condition.
The evidence indicates that conditions on the Appellant’s licence were negotiated to establish parameters for the Appellant’s operations within its community environment. Ms Sadler’s arguments with respect to a change in circumstances did not relate to changes in that environment but rather to changes in the nature of the Appellant’s business operation. The Tribunal can find no relationship between the changes in the Appellant’s business model and the presumptive public interest reasons for the conditions on its licence that justify their removal.
The second argument Ms Sadler put forward with respect to a change in circumstances was that the AGCO has changed its policy with respect to conditions that do not directly relate to the administration and enforcement of the Act. As noted above, the conditions on the Appellant’s licence were negotiated for public interest reasons. As the licensing authority, the AGCO was requested to issue a licence attaching the negotiated conditions.
Ms Sadler did not present any detailed arguments to indicate how the AGCO policy change justifies the removal Conditions 5 and 7 but referred the Tribunal to a March 25, 2014 City of Toronto Staff Report (Exhibit 3). The Tribunal notes that this report specifically cites a condition identical to Condition 7 on the Appellant’s licence as being one which the City had been advised would no longer be accepted by the AGCO. However, Ms Brooks and Ms Khan advised the Tribunal that the Registrar was not taking a position with respect to the matter before it and made no submissions with respect to the appropriateness or enforceability of either of the two conditions at issue. In the absence of these submissions, the Tribunal cannot make the determination that an AGCO policy change provides reason to justify removing either of the two conditions.
The Tribunal finds that the Appellant has failed to demonstrate that circumstances have changed to support the removal of Conditions 5 and 7 from its liquor licence, and, that their removal is not in the public interest.
ORDER
The Tribunal directs the Registrar to carry out its proposal to refuse the application of Go Lounge Inc. operating as Seventeen Eighteen to remove conditions on licence 815699:
There shall be no amplified sound from any part of the Premises causing audible noise to any residential building after 11 p.m.
The Licensee shall not require a cover charge to enter the Premises other than for special charity or corporate events.
LICENCE APPEAL TRIBUNAL
Mary Ann Spencer
Member
Released: June 26, 2014