2376789 Ontario Inc. v. Registrar of Alcohol and Gaming, 2014 CanLII 53679

Licence Tribunal

Appeal d'appel en

Tribunal matière de permis

DATE:

2014-09-03

FILE:

8998/LLA

CASE NAME:

8998 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 Licence

2376789 Ontario Inc. operating or intending to operate as

Her Majesty’s Pleasure

Appellant

-and-

Registrar of Alcohol and Gaming

Respondent

-and-

City of Toronto

Added Party

REASONS FOR DECISION

ADJUDICATOR:

Patricia McQuaid, Vice Chair

APPEARANCES:

For the Appellant:

Jerry Levitan, Counsel

For the Respondent:

Tamara Brooks, Counsel

Rena Khan, Counsel

For the Added Party:

Jessica Braun, Counsel

Scott Nowoselski, Counsel

Heard in Toronto:

August 20, 2014

REASONS FOR DECISION

The Registrar of Alcohol and Gaming (the “Registrar”) under the Liquor Licence Act, (the “Act”) issued a Notice of Proposal, number 20469, dated July 22, 2014, to review an application for a licence by 2376789 Ontario Inc. operating or intending to operate as Her Majesty’s Pleasure (the “Appellant”).

A hearing was held in this matter on August 20, 2014. After considering the evidence and submissions, the Tribunal, on August 21, 2014, issued an order directing the Registrar to approve the application for liquor licence, with reasons to follow. These are the reasons for decision.

BACKGROUND

The Act recognizes the impact that a licensed establishment may have on the surrounding community. The law is well settled that the onus is on objectors to prove on a balance of probabilities that the issuance of 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. The Act also recognizes, through section 7.1(1) of Regulation 719/90 (the “OReg”) that a municipality may represent the public’s interest. That section reads as follows.

7.1 (1) In the absence of evidence to the contrary, the Registrar shall consider a resolution of the council of the municipality, in which are located the premises for which a person makes an application to sell liquor or holds a licence to sell liquor, as proof of the needs and wishes of the residents of the municipality for the purposes of clause 6 (2) (h) of the Act.

As noted above, the City was the sole objector to this application. The City’s position as stated in its resolution of April 2014 was that each liquor licence application was to be declared not in the public interest unless an applicant filed an enforceable undertaking to the effect that the applicant for liquor licence or its managers take the Centre for Addiction and Mental Health (CAMH) Safer Bars course within a specified period of time of issuance of the liquor licence, and that the applicant file a letter from the local MPP in support of the application.

Counsel for the Appellant, Mr. Levitan, referred to the City’s position as the “blanket objection”.

In the normal course of a public interest hearing such as this, the objector, who bears the burden of proof, presents its evidence first. Ms. Braun advised that the City would not call any evidence, and that she had advised the other counsel of that fact in advance of the hearing. She stated that the City had no objection specific to the Appellant and conceded, in her closing submissions to the Tribunal, that the City had not met its onus.

The Registrar took no position regarding this application. Mr. Levitan, despite the fact that the City chose to call no evidence, called one witness to give evidence, Jeffrey Armstrong, one of the two principals of the Appellant. Mr. Levitan submitted that the wording of section 7.1(1), specifically, ‘In the absence of evidence to the contrary…” required him to put forward such evidence in this matter.

EVIDENCE

Mr. Armstrong and his wife, Sara Kardan, are joint owners of the Appellant corporation. They developed what they hope to be a unique business plan for a beauty salon and spa which is “Her Majesty’s Pleasure.” A liquor licence is integral to their business model. They found a location and have since invested approximately $1.5 million in the development of the business. They applied for a liquor licence on May 16, 2014. As part of that application process, they were required to give public notice of the application. The time for the filing of objection to the application expired on July 6, 2014. No neighbouring residents filed objections. However, the City did file its objection with the AGCO on or about June 12, 2014. When advised of this objection, Mr. Armstrong and Ms. Kardan were extremely upset, but then focussed their energy on working with their local councillor and MPP to get their support for the application. In addition, they obtained a petition of support (Exhibit 5) which includes signatures from residents of the condominium adjacent to their premises and pre-ordered the materials for the CAMH course.

Though City staff and the local councillor were empathetic and provided what assistance they could, the City’s position did not change. Their MPP advised them that they were one of about 22 area businesses encountering the same obstacle in obtaining a liquor licence. Their MPP, Han Dong, did provide a letter (Exhibit 7) in which he wrote that he was not in a position to comment on their particular application; however, if they met the requirements of the Act, he did not see a reason why their liquor sales licence application should not proceed. Mr. Armstrong was advised by the City Clerk’s office on July 31, 2014, that the MPP’s letter would not be accepted.

Mr. Armstrong, in his evidence, characterized the process as a political one which has prevented them from moving forward with their business. They were anticipating that construction at their premises would be complete the last week of August. Application was made on July 29, 2014 for the municipal liquor licence clearance letters, an application requirement. Those clearance letters, which are required by the AGCO before issuance of a liquor licence in any event, had not yet been received at the time of the hearing.

ANALYSIS

As stated by Mr. Levitan in submissions, there is, in Ontario, a qualified right to a liquor licence. Section 6 of the Act provides the Registrar with guidance in that regard. A liquor licence may not issue if the licence is not in the public interest: section 6 (2)(h). The Tribunal in a public interest hearing must consider whether the objections raised are bona fide; that is, whether the concerns are supported on a valid objective basis.

Mr. Levitan and to a lesser extent, Ms. Brooks, submit that the City’s objection is a “blanket objection.” It is not an objection specific to this Appellant. Ms. Braun concedes that fact. Mr. Levitan cited the case of Sunset Grill (Re), [1998] O.A.G.C.D. No 148 for the proposition that a resolution of a municipal council is not necessarily, in and of itself, evidence of the needs and wishes of the residents of a municipality. Ironically in that case, the municipal resolution was supportive of the application; however, there was significant evidence from area residents who were not supportive. Mr. Levitan also referred the Tribunal to the Divisional Court decision in Alcohol and Gaming Commission of Ontario v. Arena Entertainment Inc. (CIRCA), 2008 CanLII 13359, and specifically, the following passage:

33With respect to the public interest issue, again the legislation articulates the test relating to this issue. The Board correctly set out the relevant principles, noting that the onus is on those objecting to prove, on a balance of probabilities, that it is not in the public interest to issue a licence. In my view the Board applied these principles in the present case. The Board gave reasons for not finding the objections persuasive and its ultimate conclusion that they were not bona fide. The Board found that the objections were not based on Circa’s operations, and instead the objectors had sought “a blanket prohibition of any new nightclubs in the area”. The Registrar took the same position. The Board found this “unreasonable” and provided reasons for that finding. The Board did not find the objections persuasive. The Board considered the evidence in support of the application, and it was proper for the Board to do so…

Based on the jurisprudence, the Tribunal agrees with the submission that it is not sufficient for an objector, whether a municipality or a group of residents, to simply raise an objection which is not grounded in evidence specific to a particular application. Such an objection is not persuasive. Ms. Braun quite candidly stated that despite calling no evidence, and recognizing that the City would not therefore meet its onus, her instructions were to maintain the City’s objection at the hearing. The City’s stance did have a negative impact on the Appellant, as stated by Mr. Armstrong in his evidence. However, the Tribunal need not determine that the “blanket objection” before it has nothing to do with the public interest as urged by Mr. Levitan. A municipal resolution such as this one may be the result of public policy positions, relating to licensed establishments, taken by the City and the Registrar. Their respective policy considerations may be aligned, or not. This Tribunal hearing is not the avenue for close scrutiny of the motivations of either of those parties. The net effect for the Appellant, and the issue for the Tribunal, is that the Registrar, pursuant to section 7.1(1) of the OReg, relied on the City resolution and issued the Notice of Proposal to review its application.

What the Tribunal is required to determine is whether there is persuasive evidence before it on which to conclude that approval of this liquor licence application is contrary to the public interest. There was no such evidence. In light of this, the City resolution carries little weight in and of itself. Conversely to the Board’s determination in Sunset Grill, the Tribunal finds that despite the opinion of City Council, the only evidence before it, compellingly given by Mr. Armstrong, supports the approval of this application.

The foregoing are therefore the reasons for decision in support of the Tribunal’s order of August 21, 2014, directing the Registrar to approve the application for liquor licence made by 2376789 Ontario Inc. operating or intending to operate as Her Majesty’s Pleasure.