Appeal from Notices of Proposal of the Registrar of Alcohol, Gaming and Racing under section 15 of the Liquor Licence Act - to Revoke a Liquor Licence and to impose an interim suspension
Between:
Manmeet Foods Inc. o/a All Stars Bar and Grill
Appellant
and
Registrar of Alcohol, Gaming and Racing
Respondent
DECISION AND ORDER
Adjudicator: Laurie Sanford, Vice-Chair
Appearances:
For the Appellant: Noel Gerry, Counsel
For the Respondent: Aviva Harari, Counsel
Nicolle Pace, Paralegal
Place and date of hearing: Toronto, Ontario
October 20, 2017
REASONS FOR DECISION AND ORDER
OVERVIEW
1Ms. Mahender Makkar is the director of Manmeet Foods Inc., which operates as All Stars Bar and Grill. In the spring of 2017, Ms. Makkar agreed to conditions being placed on All Stars’ liquor licence. Specifically, she agreed that Mr. Matthew Franklin should not be permitted in All Stars’ premises and should have nothing to do with the business.
2Ms. Makkar agrees that Mr. Franklin was seen inside All Stars in August and again in September, 2017. She concedes that this is a breach of the licence conditions and that she failed to control the premises of All Stars as is required under the Liquor Licence Act. However, she does not agree that the liquor licence of All Stars ought to be revoked as a consequence. She also disputes the allegation that her conduct in this matter gives reasonable grounds to believe that she cannot conduct her business in accordance with the law and with honesty and integrity.
3On the facts found and for the reasons set out below, the Tribunal directs the Registrar of Alcohol, Gaming and Racing to revoke the liquor licence of All Stars. Ms. Makkar was given an opportunity to retain her liquor licence on certain conditions. She has failed to comply with one of these conditions on two occasions in a manner that calls into question her ability to comply with the conditions in the future. In light of this finding, it is not necessary to address the question of whether the Registrar has established that Ms. Makkar’s past conduct affords reasonable grounds for belief that she will not carry on business in accordance with the law and with integrity and honesty.
EVIDENCE
4The parties submitted an agreed statement of facts which addresses most of the events relevant to this matter. This statement of facts may be summarised as follows.
5Manmeet Foods Inc. o/a All Stars Bar and Grill (“All Stars”) has been licensed under the Liquor Licence Act (the “Act”) since 2014 and Ms. Makkar is the sole officer and director of the company. In November, 2016, Ms. Makkar agreed to sell All Stars to Mr. Matthew Franklin and the Registrar of Alcohol, Gaming and Racing (the “Registrar”) granted a “contract out authorization” to Ms. Makkar and Mr. Franklin. The contract out authorization permitted Mr. Franklin to operate All Stars during the transfer of the liquor licence and the sale of the business. However, the Registrar continued to hold All Stars, and by extension, Ms. Makkar, jointly responsible with Mr. Franklin for operating the business in compliance with the Act.
6On December 15, 2016, during a police search of All Stars, crack cocaine, cocaine and a digital scale were found and the next day Mr. Franklin was charged with a number of drug related criminal offences.
7On January 20, 2017, the Registrar proposed to refuse the proposed transfer of the liquor licence to Mr. Franklin and there was no appeal from that proposal. The Registrar also proposed to revoke All Stars’ licence and All Stars appealed the revocation proposal to this Tribunal.
8On January 25, 2017, inspectors from the Alcohol and Gaming Commission of Ontario (“AGCO”) went to All Stars where they were told by an unnamed source that Mr. Franklin continued to manage All Stars. The next day, an Order of Interim Suspension was issued against All Stars. The practical effect of the interim suspension was that All Stars could not serve liquor from the date of the interim suspension until it expired.
9In March, 2017, the Registrar and All Stars agreed to resolve the issues of the appeal. The liquor licence of All Stars was suspended for 10 days and certain conditions were attached to the licence. Mr. Franklin was not allowed to be on the premises of All Stars and was not to be involved in the business. All Stars was to submit a “Compliance Plan” to set out how the bar would meet the conditions. All Stars was permitted to retain its licence, subject to these conditions.
10On the night of August 23/24, a police officer saw Mr. Franklin going in and out of All Stars a number of times. The police officer spoke with Mr. Franklin and after their conversation, Mr. Franklin went back into All Stars.
11While the parties agree on the above facts, they disagree about some details of what happened on September 16, 2017. Two AGCO inspectors testified for the Registrar. Their evidence was that they went to All Stars for a random inspection at around 9:00 p.m. on September 16, 2017. When they entered the bar, they both saw Mr. Franklin, whom they knew, standing at or near the bar with a beer in his hand. The inspectors disagreed on where Mr. Franklin was in relation to the manager of All Stars, a woman who will be referred to as Ms. M.T. One inspector said that Ms. M.T. must have known that Mr. Franklin was there, given that he was within her line of sight. The other inspector said that Mr. Franklin was about six to eight metres from the bar and he did not see Ms. M.T. when he was talking to Mr. Franklin. The officers approached Mr. Franklin and asked him if he was allowed in the premises. He indicated that there was no problem with him being there and he left very shortly after. According to the inspectors, Ms. M.T. told them that she knew Mr. Franklin but was not aware that he was not allowed in the bar.
12Ms. Makkar testified that she was not in the bar on either August 23/24 or September 16, 2017. She spoke with Ms. M.T. after the September 16, 2017 inspection. According to Ms. Makkar, Ms. M.T. confirmed that she was aware of the conditions on the licence but that she did not see Mr. Franklin in the bar that night.
13Ms. Makkar testified that she “didn’t know how she could keep” Ms. M.T. Her counsel submitted that this testimony should be interpreted as meaning that Ms. Makkar planned to dismiss Ms. M.T. for her failure to keep Mr. Franklin out of the bar. However, Ms. Makkar also said that Ms. M.T. continued to work as manager and had agreed to buy All Stars.
14Ms. Makkar said that she had submitted a compliance plan to the AGCO spelling out how she intended to comply with the licence conditions in March 2017. The plan was rejected by the AGCO as being insufficient. The plan simply names her brother-in-law as manager in her absence and states that all employees will be made aware of the conditions on the licence and told to contact the police if they see Mr. Franklin on the premises. Failure to do this would be grounds for dismissal, according to the plan.
15The day before this hearing, Ms. Makkar submitted a more detailed compliance plan to the AGCO. Also, on October 17, 2017, Ms. Makkar signed a contract for security services on her busy nights and for special events. The Registrar submits that these actions are a case of “too little, too late”.
16Ms. Makkar said that she was unaware that Mr. Franklin had been in the bar on August 23/24. She testified that she had not expected him to return after the conditions were imposed on All Stars’ licence.
A. ISSUES AND ANALYSIS
A.1 What consequences flow from the breach of All Stars’ licence condition?
17By Notice of Proposal dated October 6, 2017 and amended October 20, 2017, the Registrar proposes to revoke the registration of All Stars as a consequence of Ms. Makkar’s inability to keep Mr. Franklin out of the bar. Under subsection 15(1) of the Act, the Registrar may propose a revocation of a license for breach of a condition. The Registrar also relies on section 45.2 of Ontario Regulation 719/90 to the Act. Under that regulatory section, a license holder is required to maintain control over the premises. The Registrar asserts that by failing to prohibit Mr. Franklin from entering All Stars, Ms. Makkar breached this requirement. The Registrar also issued an interim suspension order on October 6, 2017 under subsection 15(6) of the Act. All Stars appealed the revocation proposal to the Tribunal. At the conclusion of this hearing, I extended the interim suspension under subsection 15(7) of the Act until this decision is released.
18Ms. Makkar concedes that she has breached the condition of the licence that Mr. Franklin not be permitted in the premises. She agrees that she is responsible for compliance with the conditions. Ms. Makkar also concedes that in breaching this condition, she has failed to maintain control over the premises, as is required by section 45.2 of Ontario Regulation 719/90 to the Act. However, she believes that the breaches are minor in nature and that she is taking steps to ensure future compliance. She submits that a suspension would be a sufficient remedy in this case.
19Ms. Makkar was made aware of how seriously the Registrar took the question of Mr. Franklin’s having any involvement with All Stars when the Registrar not only proposed to revoke All Stars’ liquor licence in January 2017 but also issued an interim suspension order on being advised that Mr. Franklin was still managing the bar. She was given a second chance to keep the liquor licence when, under an agreement with the Registrar, conditions were imposed on the licence, including the condition that Mr. Franklin not be permitted on the premises.
20Counsel for Ms. Makkar submitted that no one knew what had happened inside the bar on the night of August 23/24 when a police officer saw Mr. Franklin enter All Stars repeatedly. I find that the fact that Ms. Makkar was not aware that Mr. Franklin was present on August 23/24 is strong evidence of the ineffectiveness of whatever plans she had in place to comply with the conditions.
21For the purposes of this decision, it does not matter whether Ms. MT was not aware of the condition prohibiting Mr. Franklin from being on the property, as she told the police, or did not see Mr. Franklin, as she told Ms. Makkar. The fact that Mr. Franklin was allowed into the bar again on September 16, 2017 is persuasive evidence that Ms. Makkar has failed to put into place any effective plan to comply with the condition prohibiting his presence.
22The presence of Mr. Franklin is not a minor matter. While he is, of course, entitled to the presumption of innocence, the Registrar is also entitled to regulate licensed establishments to ensure public safety. The Registrar decided in this case to permit All Stars to continue to operate only on certain conditions, one of which was that Mr. Franklin be excluded from the premises. This is not an unreasonable condition. Ms. Makkar agreed to it.
23Counsel for All Stars argued that Ms. Makkar’s submission of a detailed compliance plan should persuade me that Ms. Makkar may be relied upon to comply with the licence conditions in the future. However, this argument is not persuasive. The time to submit a comprehensive compliance plan was after the Registrar rejected Ms. Makkar’s first submission as insufficient. Submitting such a plan one day before the hearing in this matter does not persuade me that Ms. Makkar is capable of enforcing the conditions she accepted. There is no evidence that any compliance plan has ever been implemented by Ms. Makkar or executed by the staff of All Stars.
24Ms. Makkar has a number of management responsibilities that come with running a licensed establishment. One of these is to maintain control over the premises, including over who is permitted to enter. Ms. Makkar has failed to meet this basic responsibility.
25I conclude that the most appropriate outcome in this case is the revocation of the liquor licence of All Stars. I considered whether either a suspension or further terms and conditions might be a viable option. However, All Stars has already had an interim suspension order served against it in January 2017 and served a 10-day suspension in April 2017 as a result of Mr. Franklin’s involvement with the business and his alleged activities on the premises. Conditions have already been imposed and have been breached. I do not have confidence that the results would be different if Ms. Makkar is given yet another chance.
A.2 The Effect of Ms. Makkar’s past performance
26Subsection 6(2)(d) of the Act permits the revocation of a liquor licence of a corporation where the past or present conduct of the owner “affords reasonable grounds for belief that its business will not be carried on in accordance with the law and with integrity and honesty”. The provisions of this section are one of the grounds the Registrar cites for his proposal to revoke All Stars’ licence. In view of my decision to revoke All Stars’ licence for breach of a condition and for failure to maintain control of the premises, it is not necessary to decide whether subsection 6(2)(d) applies.
27The interim suspension which, at the close of the hearing, I extended until the release of its decision, is no longer required.
ORDER:
28I direct the Registrar to carry out his proposal dated October 12, 2017, to revoke the liquor licence of All Stars.
LICENCE APPEAL TRIBUNAL
Laurie Sanford, Vice-Chair
Released: November 6, 2017