1196927 Ontario Limited o/a Scudder Beach Bar & Grill v. Registrar of Alcohol and Gaming, 2014 CanLII 79513

Licence Appeal Tribunal

DATE: 2014-12-24

FILE: 9011/LLA

CASE NAME: 9011 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 on a Liquor Licence

1196927 Ontario Limited o/a Scudder Beach Bar & Grill Appellant

-and-

Registrar of Alcohol and Gaming Respondent

-and-

Sharon Burge Added Party

DECISION AND ORDER

ADJUDICATOR: D. Gregory Flude, Chair

APPEARANCES:

For the Appellant: Richard G. Hamm, Agent

For the Respondent: Tamara Brooks, Counsel Katherine Brickman, Student-at-Law

For the Added Party: Anthony G. Debly, Counsel

Heard in Leamington: November 25, 2014

REASONS FOR DECISION AND ORDER

1The Appellant appeals the Notice of Proposal to Refuse to Remove Conditions issued by the Deputy-Registrar on June 9, 2014 (the “Notice”). The Appellant asks that some conditions be removed and others be amended. Currently, the conditions state:

1. There shall be no sale or service of alcoholic beverages on the patio after 10:00 p.m.;
2. There shall be no dance floor in the licensed premises and on the patio;
3. There shall be no live music on the patio;
4. There shall be no amplified music on the patio.

2The Appellant seeks to modify the conditions. They seek to delete the first condition and change the third and fourth conditions. The second condition is to remain unchanged. With respect to the third and fourth conditions, the Appellant wants to have live amplified music on the patio until 10:00 p.m.

3Addressing the first condition in the Notice of Appeal, the Appellant stated that it did not want to serve alcohol on the patio after 10:00 p.m. but it did want to permit its patrons to take their drinks out onto the patio until closing time. The original reason for the removal was to permit smoking patrons to take their drinks outside, but with recent proposed changes to Provincial law, the requested change is to permit service on the patio until closing time so that diners need not be ushered off the patio at 10:45 to finish their drinks inside.

4Conditions 3 and 4 relate to music on the patio. The Appellant wants to have a solo musician playing to guests on the patio. In the past, they have had an ensemble, usually a quartet, playing inside the bar. Due to a change to a more mature clientele, the Appellant has decided to focus on solo artists with small amplifiers rather than loud popular music.

5The Notice cites two grounds for the refusal to remove the conditions.

1. There has been no change of circumstances to justify the removal of the conditions.
2. It is not in the public interest to remove the conditions.

6The Registrar notified the Tribunal that he was not taking a position on the application unless the Tribunal decided to modify any of the conditions, in which event the Registrar would have submissions.

7The Tribunal heard evidence from three witnesses on behalf of the Appellant and three witnesses, including the Added Party, who objected to the removal of the conditions. Having reviewed the evidence and the applicable statutory provisions, the Tribunal has concluded that there has not been a change of circumstances. Since a change of circumstances is a pre-requisite for the removal of conditions under the Liquor Licence Act, R.S.O. 1990, c. L. 19 (the “Act”), the appeal must fail.

THE LAW

8The law with respect to the removal of conditions on a licence is set out in s. 14 of the Act as follows:

14. (1) The Registrar may at any time review a licence and may,

(a) attach to the licence any further conditions consented to by the licensee; or

(b) issue a proposal to attach to the licence any further conditions that the Registrar considers proper to give effect to the purposes of this Act.

Removal of conditions

(2) 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.

Same

(3) If the Tribunal, on considering an application for the removal of a condition, decides not to remove the condition, the Tribunal shall direct that a proposal be issued to refuse to remove the condition.

9Pursuant to s. 14 (3) the Tribunal directed the Registrar to issue the Notice and the Appellant has appealed the Notice pursuant to the provisions of s. 23 of the Act:

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

(11) Following a hearing to consider any other proposal referred to in subsection 21 (1), (2) or (3), the Tribunal may direct the Registrar not to carry out the proposal or to carry out the proposal, in whole or in part, and with any changes that the Tribunal considers appropriate, and the Tribunal may direct the Registrar to approve an application to which the proposal relates.

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.

S. 21 (1) provides for a right of appeal to the Tribunal in the event of a refusal to remove a condition.

FACTS

10The Appellant has been operating a bar called Scudder Beach Bar & Grill on Pelee Island for over a decade. Pelee Island is located in Lake Erie and is generally accessible only by ferry. In winter, there is an air service. There is a small year-round population of less than 200 people. The number of residents swells to over 1000 in the summer with an influx of cottagers. There are a number of licensed premises on the island, several of which are open year-round. The Appellant operates seasonally.

11Scudder Beach is on the north side of the island. The bar occupies a pie shaped lot running down from the shore road towards the water. All of the surrounding lots are rectangular. The result of this geometry is that the bar property may be cut off from the beach, depending on the water level in Lake Erie from time to time. Several lots to the east of the bar property is a jetty, and beside the jetty is a marina. At the end of the road leading to the jetty is a Co-op Store with a gas station and an ice cream shop. According to the Appellant, the store has recently expanded to serve the needs of boaters and it advances this fact as proof of a change in the nature of the neighbourhood.

12In recent years, the township has increased the number of itinerant slips available at the marina. The Appellant caters to this clientele in addition to local cottagers and residents. It has found that this clientele tends to be older and more mature and is not attracted by loud music. Hence, the Appellant has refocused its business plan over the last couple of years to attract boaters. It wants to provide quieter music with solo artists. The clientele has asked to sit on the patio later at night, so to cater to its needs, the Appellant wants to provide music until 10:00 p.m. and drink service until closing time.

13The objectors are the residents immediately west and east of the bar. To the east, they constitute an extended family that has had property on the island for many years. They have now changed from full-time residents to seasonal. To the west, the objector who testified is a summer cottager. They assert that there has been no change in the character of the neighbourhood. The Co-op store has simply expanded the range of products but there has always been a store present. Otherwise, the area is residential with no new commercial establishments since the bar was originally licensed.

14According to the Appellant, it began to switch to the new music style over the last two years. One witness, a cottager who has been spending summers on the island for all of his life, testified that he now takes his parents and friends to the bar, whereas before, he did not like the music and the crowd. A former manager of the bar, now a school teacher with an M. Ed., testified that the bar has changed in character over the last several years.

15This evidence stands in contrast to that of the neighbours who describe being unable to sleep until the small hours of the morning because of music emanating from the premises, particularly in the base registers which vibrates throughout the house and keeps them awake. The neighbour immediately to the west testified that, as a result, she has stopped going to the island although her husband still goes. The objectors described sound from patrons talking and carousing on the patio adding to their discomfort. They are of the view that the Appellant ignores the current restrictions about drink service on the patio after 10:00 p.m. and matters will only deteriorate if the patio has live music and drink service until 2:00 a.m.

ANALYSIS

16An applicant for a liquor licence must submit to a lengthy process wherein the Registrar, the local municipality and local residents are given the right to raise concerns about the operation of the premises. For local residents to successfully resist the grant of a licence, they must prove that the operation of the licensed premises will not be in the public interest. In many cases, the application process results in the imposition of conditions on the licence. The conditions may be imposed on consent following negotiation between the interested parties or by order of this Tribunal after a hearing. During this phase of the licensing process, the public interest is a live issue. The resulting licence conditions may then be characterized as an appropriate balance between the right of a licensee to operate and the right of neighbours to enjoyment of their property.

17The provisions regarding removing conditions make no mention of the term “public interest.” There is a shift in onus. The onus is now on the licensee to prove there has been a change of circumstances to justify a change in the conditions put on the licence to protect the public interest. It flows then, that changes in circumstance must still address the public interest the original conditions addressed. It is impossible to list all changes that might trigger the removal of conditions but examples do spring to mind. A substantial change in the neighbourhood from predominantly residential to predominantly commercial might be one such example. A licensed premises with a long history of operation in such a manner that neighbours are not disturbed might be another. In the latter case, former objectors may withdraw their objections and appear in support of the change. The Tribunal must consider the grounds advanced as changed circumstances and determine if they are changes that ought to result in the removal of conditions.

18The Appellant advances two grounds in support the changed circumstances. The first ground is that there has been a fundamental change in the neighbourhood such that it is now commercial rather than residential. The Appellant points to the expansion of the marina and the Co-op store. The Tribunal is of the view that these changes are minor incremental changes to pre-existing commercial activity in the area. They do not represent a fundamental change to the neighbourhood. The facilities were there at the time of the original licence application, i.e. the neighbourhood was largely residential with some limited retail. It still has that character albeit that it is possible to buy groceries where once only housewares were sold.

19The second ground advanced by the Appellant is that the business model has changed. The Tribunal is of the view that, as a general proposition, a change in business model is insufficient to found a removal of conditions. The conditions imposed at the outset contemplated possible uses of the licensed premises. To remove conditions based on the Appellant’s intention to play quieter more soothing music ignores the fact that, if the new business model does not provide the expected returns, the Appellant can resume its current practises without the restriction that were initially found to be in the public interest. The Tribunal does not find that the proposed change in business model meets the intention of s. 14 that there be a change of circumstances.

ORDER

20Pursuant to the authority set out in s. 23 (11) of the Act, the Tribunal orders the Registrar to carry the proposal to refuse to remove the conditions on Appellant’s licence.