8679002 Canada Ltd. O/A Area One v. Registrar of Alcohol and Gaming, 2016 CanLII 88932

Appeal d'appel en

Tribunal matière de permis

DATE:

2016-08-11

10021/LLA

10021 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

8679002 Canada Ltd. O/A Area One

Appellant

-and-

Registrar of Alcohol, Gaming and Racing

Respondent

Alex McCauley, Presiding Member

Bryant Greenbaum, Member

For the Appellant:

Michael Ostroff, Paralegal

For the Respondent:

Rena Khan, Counsel

Heard in Toronto:

July 19, 2016

BACKGROUND

The Registrar of Alcohol, Gaming and Racing (the “Registrar”) under the Liquor Licence Act (the “Act”) issued a Notice of Proposal, dated November 19, 2015, which proposed to suspend a liquor licence for 14 days, as stated on Proposal #21085. 8679002 Canada Ltd. (the “Appellant”) appealed this Notice of Proposal to the Licence Appeal Tribunal (the “Tribunal”).

The Registrar in a Notice of Proposal dated November 19, 2015 alleges that the licensee breached the following sections of the Liquor Licence Act (the “Act”) and its regulations:

Contrary to subsection 30(4) of the Liquor Licence Act, the licensee or the licensee’s employee or agent permitted a person who appeared to be under the age of 19 to have or consume liquor in the licensed premises.
Contrary to subsection 17(2) of Ontario Regulation 719/90 under the Act, the licence holder failed to ensure that the sale and service of liquor was supervised by an authorized employee.
Contrary to subsection 20(1) of Ontario Regulation 719/90, the licence holder engaged in or permitted practices which tended to encourage patrons’ immoderate consumption of liquor.
Contrary to subsection 41(1) of Ontario Regulation 719/90, the licence holder failed to inspect a piece of identification of a person apparently under the age of 19 years prior to selling or serving liquor to that person.
Contrary to section 43 of Ontario Regulation 719/90, the licence holder failed to ensure that the number of persons on the premises to which the licence applies, including employees of the licence holder, does not exceed the capacity of the licensed premises as stated on the licence.
Contrary to subsection 45(1) of Ontario Regulation 719/90, the licence holder permitted drunkenness or riotous, quarrelsome, violent or disorderly conduct to occur on the licensed premises or in the areas under the control of the licence holder.
Contrary to subsection 50(c) of Ontario Regulation 719/90, the licence holder has failed to ensure that the premises comply with the Fire Protection and Prevention Act respecting the use of the premises.

FACTS

At the outset of the hearing, the Appellant’s Paralegal introduced an agreed statement of facts which was signed by the licensee’s representative as well as the Registrar’s representative. The agreed statement of facts admitted to certain parts of the Notice of Proposal. Items 1, 2 and 3 of the Proposal were agreed to be correct.

The Appellant admitted to the allegation within item 5(e) of the Proposal dealing with the issues of overcrowding.

The Appellant further admitted to the allegation within item 5(g) of the Proposal dealing with failing to comply under the Fire Protection and Prevention Act.

The agreed statement of facts submitted to the Tribunal was accepted and became Exhibit 3 in these proceedings. On this basis, the Tribunal therefore made findings that the licensee breached section 43 of Ontario Regulation 719/90 regarding overcrowding, and section 50(c) regarding failing to ensure compliance with the Fire Protection and Prevention Act.

The Tribunal heard evidence regarding the other allegations. On May 30, 2015, it is alleged there was a drunken person in the licensed premises. Further, the licence holder failed to inspect the identification of a person apparently under the age of 19 years and permitted a person apparently under the age of 19 years to have or consume liquor in the licensed premises. The manager responsible for supervising the establishment was not present or available during most of the inspection, and no employee present was in charge during the manager’s absence.

On June 21, 2015, it is alleged there was a drunken person in the licensed premises. There were approximately 14 persons in an area licensed for eight persons.

On July 4, 2015, it is alleged there were approximately 20 persons in an area licensed for eight persons, approximately 14 persons in an area licensed for eight persons, and approximately nine persons in an area licensed for eight persons. The licensee provided cups and dice to patrons to play a dice game where the loser of a dice toss would have to consume liquor.

The Tribunal heard evidence from Andrew Hubbard, an Inspector with the Alcohol and Gaming Commission of Ontario (“AGCO”). He stated that he attended the premises known as Area One on two occasions – May 30, 2015 and June 21, 2015. On May 30, 2015, he arrived at 12:33 a.m. to conduct a routine inspection. At the time, he was accompanied by members of the York Regional Police and another liquor inspector. Upon arrival, he approached a male person behind the bar who was later identified as Rui Mu. Mr. Mu stated he was not in charge, he worked in the kitchen. He walked out from the bar area. He advised the Inspector that no one was in charge.

The Inspector entered room #1. He observed a male sleeping on a couch. He exited the room and spoke to a server Liu Yu. She advised that she was the only server working that night. She advised that there was no manager on duty. At 1:00 a.m., the manager Shi Bo arrived. He was advised of the possible infractions.

Clint McLellan is an AGCO Inspector and attended at the premises on May 30, 2015. He was accompanied by Inspector Hubbard. He entered Karaoke room #1 and observed a male person asleep on the couch with his head on a female’s lap. There was no staff in the room, and only one staff behind the bar. The sleeping male had cake on his lap and there was cake on the floor. The Inspector asked the occupants of the room if the sleeping patron was OK. Someone shouted it’s his birthday.

The male was woken up. According to Inspector McLellan, this person appeared young. When asked to produce identification, the patron produced an Ontario driver’s licence in the name of Y.Z., which indicated his date of birth as October 12, 1995, which would have put him at 20 years of age. Inspector McLellan was suspicious as the photo was not a true likeness, and also, his date of birth in October was inconsistent with celebrating his birthday in May.

After questioning the patron, he admitted the identification was not his. He stated his name was Y.Q., born in 1997, putting his true age that day at 18. This patron showed signs of intoxication – he had glassy eyes, and was very unsteady on his feet, at one point falling into the Inspector. He stated he was very drunk. He admitted to consuming four to five cups of vodka and orange juice. His girlfriend had assisted him in translating for him during his discussions with the inspectors and police.

In cross-examination, the Inspector indicated the lighting in the premises was adequate. He stated the room was a mess, and there was cake spread on the floor. There was a jug of orange juice and vodka on the table, some of which had spilled. He admitted in cross-examination that the false identification was not seized from the patron.

The Tribunal heard from York Police Constable Niko Dimitrakopoulos. He attended the establishment on May 30, 2015 with Inspector McLellan and Inspector Hubbard. He attended in Karaoke room #1 with Inspector McLellan. He corroborated the evidence of Inspector McLellan with regard to the state of the room and also with regard to the condition of the patron, Y.Q., concurring that the patron was intoxicated. He had interacted with this patron and noted the irregularities in the identification and was present when the patron gave his correct name and birth date.

On June 21, 2015, Inspector Hubbard along with Inspector McCracken attended the premises at 2:11a.m. for a routine inspection. They identified themselves to the manager on duty, Rui Mu. They conducted a walk through. Upon entering room #2, they observed a male person sleeping on a couch. His girlfriend advised it was his birthday and he was drunk.

He was woken up and displayed signs of intoxication. His eyes were red and bloodshot, his speech was slurred and he could barely keep his eyes open. He had an odour of an alcoholic beverage on his breath. The patron admitted to consuming five shots of liquor and had no idea how many beers he had consumed.

The server, Ms. Wang, was just leaving room # 2 when the Inspectors entered. Ms. Wang stated that she and another server had served the room all night. A headcount in the room indicated 14 patrons in a room licensed for 8. Manager Mu, when advised of the infractions, stated it was his fault. The Inspectors left the premises at 2:50 a.m. In cross-examination, it was admitted that there were no other intoxicated patrons in the premises that night.

Yi Yong Lu gave evidence on behalf of the Appellant corporation, using a Mandarin interpreter at the hearing. He stated he is the largest shareholder, holding 70% of the shares. He stated that Rui Mu, a previous manager, was not on duty on May 30, 2015. He stated that a manager by the name of Ye was on duty. He could not recall any other details about this manager.

He stated that the corporation employs a security agency (Mr. Lu couldn’t recall the company name) and a security officer is on duty between 10 p.m. and 3:00 a.m. nightly. This security officer is responsible for checking identifications of patrons. Mr. Lu stated those entering before 10:00 p.m. are checked by the manager on duty.

Mr. Lu indicated that there was a manager on duty every night, and he stated that the person identified as Ye was one of his managers. This alleged manager was never disclosed to the Registrar and there had not been any reference to this person in evidence until this point. Furthermore, this flies in the face of employee statements entered into evidence by the Inspectors that there was no one in charge on the principal dates. The Appellant did not challenge in cross–examination of the Inspectors. The Registrar objected to this reference to this alleged manager at this point because the Appellant had not provided any opportunity to the Registrar’s witnesses to address this possible inconsistency earlier. The Tribunal sustained this objection and ruled that it would not refer to this alleged manager.

Mr. Lu described verbally the company policy for dealing with patrons who over-consume. The policy is basically that management will arrange safe transport home for the intoxicated patron, either by supplying a taxi or making arrangements with friends of the intoxicated patron to get them home safely.

Mr. Lu stated he was not on the premises on May 30, 2015 or July 21, 2015. He was not sure about July 4, 2015. When asked, Mr. Lu stated that managers – not servers – check identification of patrons, and this is not done continually.

APPLICATION OF LAW TO FACTS

The Tribunal heard no evidence with regard to the events of July 4, 2015, and there will be no finding of a breach of subsection 20(1) of Ontario Regulation 719/90, encouraging patrons’ immoderate consumption of liquor.

Based on the evidence heard, the Tribunal is satisfied that there were breaches of the following provisions:

section 17(2) of Ontario Regulation 719/90 – ensure that liquor is offered for sale, sold and served only under the supervision of an employee authorized by the licence holder for the purpose
section 30(4) of the Act – shall not permit a person who appears to be under nineteen years of age to have or consume liquor in the licensee’s licensed premises; and section 41(1) of the Regulation – ensure that, before liquor is sold or served to a person apparently under the age of nineteen years, an item of identification of the person is inspected
section 45(1) of Ontario Regulation 719/90 – shall not permit drunkenness on the premises

It appears from all of the evidence that there was very little staff on duty on either May 30 or June 21, 2015. On May 30, 2015, when the police and inspectors visited the licensed premise, there was no one in charge and no manager was present. This is supported by the statements of the staff who advised that no one was in charge. It appears there was no consistent monitoring of the consumption of the patrons within the establishment. There was little credible evidence of qualified management personnel being on duty. Even the managers who were identified did not present qualifications – for example, Mr. Mu was presented as a manager on June 21, 2015, but he had represented himself as a kitchen worker on May 30, 2015. The Tribunal is very skeptical of his qualifications to be a manager in charge of a licensed premise.

Furthermore, Mr. Lu’s assertion at the hearing about the presence of a Mr. Ye as the manager was not believable, and it also was not presented in any way that permitted the Registrar a fair chance to challenge it with their witnesses’ evidence. Based on the evidence, the Tribunal is satisfied that the Appellant breached subsection 17(2) of Ontario Regulation 719/90, in that the licence holder failed to ensure that the sale and service of liquor was supervised by an authorized employee.

The Tribunal is also satisfied that the licensee permitted a person under 19 years old to have or consume alcohol, and failed to inspect his identification. In the inspection on May 30, 2015, the Tribunal finds that there was an 18-year-old patron, who had an Ontario driver’s licence which did not belong to him. The liquor inspector and police officer gave independent and credible evidence that the picture on the driver’s licence did not match that of the patron who was offering it as identification.

There was no evidence from the Appellant that this patron’s identification was ever screened by its security or staff. The police officer and inspector also testified that he appeared to be young.

The Tribunal is satisfied that the licensee breached subsection 30(4) of the Act by permitting a person who appeared to be under the age of 19 to have and consume liquor in the licensed premise. As well, they breached section 41(1) of Ontario Regulation 719/90 by failing to examine a piece of identification.

The Tribunal is further satisfied, based on the evidence of the liquor inspectors and the police officer, that this patron in Karaoke room #1 on the premises on May 30, 2015 was intoxicated. This patron showed clear signs of intoxication. He was extremely unsteady on his feet, had glassy eyes, and had an odour of alcoholic beverage on his breath. The patron admitted to being drunk, stating he had consumed four to five cups of vodka and orange juice.

The Tribunal is also satisfied that the patron in Karaoke room #2 on the premises on June 21, 2015, was intoxicated. This patron was asleep on the couch, and he displayed clear signs of intoxication when he was woken up by the liquor inspectors. He was extremely disoriented, had slurred speech, and was seemingly very confused. He had an odour of some alcoholic beverage on his breath, and his eyes were red and bloodshot. His girlfriend advised the inspectors that this patron was drunk. The patron admitted to consuming five shots of liquor and an undetermined amount of beer.

The Ontario Court of Appeal in its decision 1213963 Ontario Limited (Sin City Bar and Eatery) v. Ontario (Alcohol and Gaming Commission), 2009 ONCA 323 generally set out the test to establish whether a breach of section 45(1) of the Regulation has taken place.

This involves a two-part test – the first part is that drunkenness on the premises was occurring, and the second part of the test is that the licensee permitted that drunkenness. The Court stated, at para. 3, that “permitting drunkenness on the premises requires proof that the licensee knew or ought to have known of the drunkenness on the premises. That determination, of course, must be made in all the circumstances and, in particular, in the context of the various obligations and duties placed on the licensee by the relevant legislation and regulations”.

The Tribunal has determined from the evidence that there were drunken patrons on the premises on May 30 and June 21, 2015. The Tribunal now has to satisfy itself that the licensee permitted that drunkenness because it knew or ought to have known of that drunkenness.

On May 30, 2015, there was no manager on duty and only one server, Ms. Yu. She would have been the only person to serve the patrons that night. There was never any evidence presented that indicated she was concerned about immoderate or excessive consumption. The fact that the establishment had no managers on duty and an inadequate staffing level is indicative of an abdication of its responsibility to ensure that immoderate consumption does not take place. Ms. Yu was aware or ought to have been aware that a patron was asleep in Karaoke room #1, and the described disorder or mess in the room would have led someone to conclude that excessive drinking was taking place. She took no action to intervene. The Tribunal is satisfied based on the evidence that the licensee permitted drunkenness on the premises.

On June 21, 2015, inspectors again reported an intoxicated person. On that occasion, the server admitted that she and another female server had served the patrons in that room all night. There was no evidence that the servers took any action to intervene with the intoxicated patron. It is clear from the evidence that the servers had to have been aware that there was an intoxicated male person in that room. They took no action to address this matter either amongst themselves or with the manager. For both of these occasions, the Tribunal is satisfied that the licensee permitted drunkenness to occur on the premises.

ORDER

Based on the evidence and the statement of agreed facts, the Tribunal finds that the Appellant breached the following provisions:

section 17(2) of Ontario Regulation 719/90 – ensure that liquor is offered for sale, sold and served only under the supervision of an employee authorized by the licence holder for the purpose
section 30(4) of the Act – shall not permit a person who appears to be under nineteen years of age to have or consume liquor in the licensee’s licensed premises; and section 41(1) of the Regulation – ensure that, before liquor is sold or served to a person apparently under the age of nineteen years, an item of identification of the person is inspected
section 45(1) of Ontario Regulation 719/90 – shall not permit drunkenness on the premises
section 43 of Ontario Regulation 719/90 – ensure that the number of persons does not exceed the capacity of the licensed premises as stated on the licence
section 50(c) of Ontario Regulation 719/90 – ensure that the premises comply with the Fire Protection and Prevention Act, 1997.

The Registrar shall make written submissions as to sanction no later than 7 days after the release of this decision. The Appellant shall make its submissions no later than 14 days after the release of this decision. The Registrar will have 5 days after receipt of the Appellant’s submissions to file a reply, if any.

LICENCE APPEAL TRIBUNAL

Alex McCauley, Presiding Member

Bryant Greenbaum, Member

Released: August 11, 2016