Licence Tribunal / Tribunal d'appel en matière de permis
FILE: 9049/LLA
CASE NAME: 9049 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 Suspend a Licence
JI’s Holdings Inc. o/a J-Tapps Bar & Eatery Appellant
-and-
Registrar of Alcohol and Gaming Respondent
REASONS FOR DECISION AND ORDER
ADJUDICATOR: Alex McCauley, Member
APPEARANCES:
For the Appellant: Pradeep Chand, Counsel
For the Respondent: Joyce Taylor, Counsel
Heard in St. Catherine’s: September 9, 10, and 24th, 2015
DECISION AND ORDER
BACKGROUND
The Registrar of Alcohol and Gaming (the “Registrar”) under the Liquor Licence Act, (the “Act”) issued a Notice of Proposal, dated July 30, 2014, which proposed to suspend a licence for 30 days. JI’s Holdings Inc. o/a J-Tapps Bar & Eatery (the "Appellant") appealed this Notice of Proposal to the Licence Appeal Tribunal.
As a preliminary matter, at the commencement of the hearing on September 9, 2015, the Registrar made a motion for an adjournment. Ms Taylor stated that there was a parallel criminal matter ongoing and that proceeding with the hearing before the Tribunal may prejudice the criminal proceeding. The same request for adjournment had been made previously by the Registrar, which had been denied by the Tribunal on September 4, 2015.
It was noted that there had already been a plea of guilty in the criminal matter by one of the co-accused. It could not be argued that there was prejudice to the criminal proceedings that on balance would outweigh any prejudice to the Appellant in the matter before this Tribunal due to unreasonable delay. The motion for adjournment was denied and the hearing proceeded.
The Registrar alleges that contrary to subsection 45(2) of Regulation 719/90 under the Act, the licence holder permitted a person to hold, offer for sale, sell, distribute or consume a controlled drug or substance, as defined in the Controlled Drugs and Substances Act, in premises under the control of the licence holder.
The particulars of the allegation are that on March 28, 2014, a bartender,, KT, who had been left in charge of the establishment, was arrested for her involvement in trafficking powdered cocaine in the establishment on March 8, 2014 and March 14, 2014 with her boyfriend, AD.
EVIDENCE
Detective Sgt. Eric Bell stated that a drug trafficking investigation had been undertaken in the Appellant’s premises.
The project involved placing undercover officers inside the licensed premise in order to purchase narcotics within.
There were potential targets, one of whom was identified as AD, a boyfriend of the bartender, KT, who worked at the licensed premise.
AD pled guilty before the Ontario Court of Justice on November 17, 2014 to three counts of possession of a narcotic for the purpose of trafficking and a fourth count of simple possession.
Detective Sgt. Bell described the evolution of the project and the activities of the undercover officers on the dates in question as outlined in the Notice of Proposal.
The project was code named TAPPOUT and covered the period of time from February 28 to March 28, 2014.
In cross-examination, Detective Sgt. Bell was asked about the video equipment in the licensed premise and whether or not that may have been helpful to his investigation. He admitted that examination of the video on the premises would have been helpful. He did not make attempts to seize the video from the licensed premise or to get a warrant to seize it.
Detective Sgt. Bell also confirmed that he had never checked out Mr. Hijaijin Ji (“Jimmy”) the principal of the Appellant. He was never considered a target, or criminal suspect.
The bartender, KT, according to police records, had no criminal record at the time of her alleged offences.
Detective Sgt. Bell, was not aware if Jimmy had any knowledge of what was taking place in his bar.
On March 28, 2014, the date of the takedown and the arrest of the suspects, Jimmy was called down to the bar and his reaction was one of surprise.
There were two undercover officers who, during the course of the undercover project, made purchases of cocaine from persons within the licensed premise.
They were Detective Constable Lisa Hicks, an 8 year member of the Niagara Regional Police Service, and Constable Valerie Hall, a 10 year member of the Niagara Regional Police Service.
The two officers gave evidence regarding their involvement and observations inside J Tapps during the course of their undercover operation, specifically as it related to the dates in question, March 8, and March 14, 2014. The officers’ evidence was basically the same and corroborative of each other.
On March 8, 2014, Detective Constable Hicks and her partner Detective Constable Hall entered the licensed premise and were able to make an undercover purchase of cocaine from an individual identified as JB. This occurred at approximately 12:30 a.m. KT was the bartender in charge in the licensed premise.
Later that same date, at approximately 11:11 p.m., Detective Constable Hicks and her partner again attended the establishment. KT was again the bartender on duty. There were very few patrons in the establishment and when they asked the bartender about this she stated that all of the patrons had partied and left. When Detective Constable Hicks asked about JB, she was told by the bartender that he was not in. Detective Constable Hicks told KT that she wanted to purchase (or “Grab”- drug lingo for buy) some drugs. KT told the officer that she would speak to her boyfriend, AD, and see if he would sell them some cocaine. She then went over and spoke to AD who was in the bar. He then came over to the bar area and asked the two undercover officers how much they wanted. The undercover officers purchased a half a gram of cocaine and left the bar at approximately 11:59 p.m.
The cocaine purchased was analyzed and a certificate of analysis was returned certifying the substance rendered for analysis was cocaine.
On March 14, 2014, at approximately 11:02 p.m. the two undercover officers again attended the licensed premise. There were approximately a dozen patrons present. KT was again the bartender in charge. The officers spoke with her and she confided in them that she and her boyfriend AD had been fighting. He wasn’t present at the bar at that time, but the officers were advised that he would be attending shortly.
At approximately 11:30 p.m. AD attended at the bar. The officers spoke to him and asked if they could purchase a half gram of cocaine. AD advised that he had put the cocaine in KT’s purse. The purse was located behind the bar. He went over and spoke to KT and the two of them left with her purse and went into the kitchen. They returned shortly thereafter and AD produced a half gram of cocaine wrapped in a $10.00 bill and paper towel. The officers purchased the cocaine, and left the bar at approximately 11:39 p.m.
The cocaine purchased that night was sent for analysis to Health Canada. The results were that the substance rendered for analysis was cocaine.
At all material times when the two undercover police officers were in the bar, KT was the only person on duty and was in charge of the licenced premises.
In their evidence, both undercover officers testified that the transactions made by them in purchasing the narcotics were very open. There was never any great effort to conceal the transactions.
The officers testified that there appeared to be evidence of further trafficking of narcotics in the licensed premise. They witnessed, on several occasions, persons entering the handicapped washroom with either AD or JB, both known drug traffickers. It is believed transactions were taking place in the washroom. The officers further testified to having witnessed a white powder residue they saw on the back of a toilet in the women’s washroom. Although not analyzed, the officers believed in their professional opinion, that the residue was, in fact, cocaine.
Neither of the officers testified that they ever observed Jimmy Ji in the licensed premise. Detective Constable Hicks, in cross-examination, stated that she may have seen Jimmy in the bar once and that was during the day. He was not in the bar when any of the drug transactions took place.
Detective Constable Hicks was never given any information specific to the owner of the bar, and he was never one of their targets.
She did not recall seeing any video surveillance in the bar but stated that it would have been helpful to the investigation if in fact there was video surveillance in the licensed premise.
She had no evidence that Jimmy was aware of what was taking place in the licensed premise.
Detective Sgt. Bell stated he contacted Brian Sharpe, a liquor inspector with the AGCO on March 14, 2014. He had a brief discussion with Mr. Sharpe at that time. The reason that he involved the AGCO was because he felt that there may be potential infractions of the Act. Detective Sgt. Bell stated that the discussions centered on several bars and were not specific to J Tapps and were best described as vague in nature.
Brian Sharpe is a liquor inspector with the AGCO. He has been so employed for the past nine years. He is familiar with the licensed premise known as J. Tapps.
Inspector Sharpe attended at the licensed premise on March 28, 2014 when he was requested to do so by Detective Sgt. Bell. He was advised at that point that they were executing a warrant at the licensed premise. Prior to this, he had had no specific information or involvement with the project at the licensed premise.
He stated he had no information of any previous breaches of this nature prior to this date involving the licensed premise. He was not completely surprised by the accusations against the licensed premise because, in his opinion, the neighbourhood was reflective of that type of activity.
Upon his arrival at the bar on March 28, 2014, KT had been arrested and was in custody. Patrons had been removed from the bar. Jimmy Ji had been called to the bar and it had been explained to him what had taken place. He advised Mr. Ji that reports would be submitted regarding alleged breaches of the Act for permitting the sale of drugs in the premises.
He recalled the police asking Mr. Ji about the video surveillance, but he did not recall if Mr. Ji produced it or not. He himself did not request the video surveillance.
Inspector Sharpe has attended at the licensed premise approximately 35 times over the course of several years. During that period of time, with the exception of these events, there has been no serious breaches of the Act within the licensed premise.
Huaijin (Jimmy) Ji gave evidence with the assistance of an interpreter, Mr. Andy Yao. Mr. Yao translated in Mandarin. He was accepted by counsel and the Tribunal as a duly qualified interpreter.
Mr. Ji stated he is the owner of the licensed premises in question. He described his bar as a social bar for the neighbourhood; people come in for drinks and food. In the afternoons, he gets mostly workers and in the evening there are younger people. He employs a staff of 5 to 6 people and has no specific manager on duty. The employees are primarily responsible for serving drinks, preparing food and cleaning. The capacity of the bar is 85 people.
KT had been an employee at the bar for approximately one year prior to the events of March 2014. He described her as a hard worker and easy to get along with. Responsibilities were those of a bartender; she did not have any managerial responsibilities. He knew her boyfriend, AD, from having met him in the bar.
Mr. Ji stated he attended at the licensed premise every day at various times. He would typically be there from nine in the morning and leave between 12 and 1 p.m. He would return later at night to close up the bar. It was his evidence that none of the bartender’s or employees had a key to the bar; locking up and opening were his responsibilities.
He stated he has video surveillance inside the bar with four cameras in various positions. He had installed this video surveillance at the end of 2011. It was his evidence that in March 2014 the video surveillance was working. He uses the surveillance to monitor the events in the licensed establishment from his home when he is not in attendance.
He was very shocked when he was advised on March 28, 2014 about the events that had been taking place in his bar. He stated he had never seen any evidence of drug activity taking place in the bar. He had never been cautioned by the police or by the inspectors from the AGCO at any time previous to the events of March 28, 2014.
At no time was the video surveillance ever requested of him by the police or the liquor inspector. Had they requested the video surveillance, he would have turned it over to them immediately.
APPLICATION OF LAW TO FACTS
The Tribunal has carefully considered the evidence presented and the submissions by counsel as well as the authorities submitted.
The Notice of Proposal alleges that the licensee permitted the trafficking of powdered cocaine in the establishment on March 8, 2014 and March 14, 2014 and that on March 28, 2014 a bartender at the establishment who had been left in charge of the establishment, KT, was arrested for her involvement in the trafficking of powdered cocaine. These facts give rise to the allegation of a violation of subsection 45(2) of Ontario Regulation 719/90 under the Act.
The Tribunal is satisfied that powdered cocaine was trafficked in the licensed premise on March 8, 2014 and March 14, 2014. This is based on the Registrar’s evidence as presented by Detective Sgt. Eric Bell and Detective Constables Hicks and Hall, all members of the Niagara Regional Police Service. The documentary analysis shows the substances purchased by the undercover officers in the licensed premise and submitted for analysis, was indeed powdered cocaine,
The Tribunal is further satisfied that KT, a bartender at the licensed establishment was on duty at the time that the cocaine was trafficked and was knowledgeable as to what was going on. In fact, she appeared to be actively engaged in the trafficking of the cocaine.
Therefore, on a balance of probabilities, the Tribunal finds that the sale of drugs (cocaine) was occurring on the licensed premises. The Tribunal now has to determine the responsibility placed upon the Appellant. Did the Appellant ‘permit a person to hold, offer for sale, sell, distribute or consume a controlled substance…on the premises…’? The Appellant submits that the principal of the licensed establishment, Huaijin (Jimmy) Ji, had no knowledge of the drug trafficking occurring in the premises. Further, the Appellant submits that KT was simply a bartender, not a manager. Further, the Appellant was never named by the police as a potential drug trafficking target.
All of this may or may not be totally accurate, but regardless, it does not absolve the Appellant of responsibility. The Appellant is responsible for the control of the licensed premises as outlined in Act and its regulations. Mr. Ji effectively left KT as the person in charge of the licensed premise in his absence, though the ultimate responsibility for what occurs within the premises is his as licensee.
The Licensee does not have to be in the licensed premise when a breach of the Act takes place. As stated in the Elmdale Tavern [1996] O.L.L B.D. No. 17:,“Employers are vicariously liable for the acts and omissions of their employees…without vicarious liability, regulation of licensees would be impossible as owners would be quick to hide behind employees when liquor laws are not complied with”.
The Tribunal finds it difficult to believe Mr. Ji had no inkling of some unusual activity within his licensed premises. The impression left by Mr. Ji with the Tribunal was that he was not a person who had a lot of faith in his staff. For example, the premises were under surveillance which he monitored from home. He would not give anyone a key to the bar; he always locked up. He stated he did not delegate managerial duties to a specific person; he retained control. Further, he knew that AD frequented the bar; he had met him there. The evidence establishes that Mr. Ji made it his business to be very aware of what was happening in the licensed premises, whether he was on site or not.
What is more likely is that there was an element of willful blindness on the part of Mr. Ji. However, given the monitoring that he did of his premises through his surveillance from home, that he opened and closed the premises every day, the fact that the sale of drugs was not a single isolated incident and the evidence heard about the openness of the drug transactions, on the balance of probabilities, the Tribunal concludes that the Appellant knew or ought to have known of the sale of drugs on its premises. The fact of his absence from the premises at the material times does not, on the evidence before the Tribunal, absolve Mr. Ji of his obligations as licensee for compliance with the Act.
ORDER
For the above reasons, the Tribunal finds that the Appellant contravened subsection 45(2) of the Regulation by permitting a person to hold, offer for sale, sell, distribute or consume a controlled drug or substance, as defined in the Controlled Drugs and Substances Act, in premises under its control.
The Tribunal invites written submissions on penalty from the parties. The Registrar’s representative shall serve and file written submissions within seven (7) days of the date of this decision. The Appellant’s representative shall have five (7) days after receipt of the Registrar’s submissions to serve and file a written response. The Registrar’s representative may serve and file a reply within three (3) days of receipt of the Appellant’s response.
LICENCE APPEAL TRIBUNAL
Alex McCauley, Member
Released: November 23, 2015