Licence Appeal Tribunal

Safety, Licensing Appeals and Standards Tribunals Ontario

Tribunal d’appel en matière de permis Tribunaux de la sécurité, des appels en matière de permis et des normes Ontario

Date: 2018-01-08

Appeal under section 14.1 of the Alcohol and Gaming Regulation and Public Protection Act, S.O. 1996, c. C. 26 from Order of Monetary Penalty of the Registrar of Alcohol, Gaming and Racing

Between:

Mixtwo KTV Inc. o/a Mix2 KTV & Billiards Appellant

and

Registrar of Alcohol, Gaming and Racing Respondent

DECISION AND ORDER

Adjudicator: Alex McCauley, Member

Appearances: For the Appellant: Simrat K. Dhamrait-Sohi, Counsel for the Appellant For the Respondent: Faye Kidman, Counsel for the Respondent

Place and date of hearing: Toronto, Ontario, June 28, 2017

REASONS FOR DECISION AND ORDER

A. Overview

1. The Deputy Registrar issued an Order of Monetary Penalty under the Alcohol and Gaming Regulation and Public Protection Act, 1996, S.O. 1996, c. 26, Sch (“AGRPPA”) in the amount of $3000.00. The Order alleged that the appellant breached s. 20(1) of the regulation Licences to Sell Liquor, R.R.O. 1990, Reg. 719 (the “Regulation”) under the Liquor Licence Act, R.S.O. 1990, c. L.19 (the “LLA”) by engaging in or permitted practices which tended to encourage patrons’ immoderate consumption of liquor. The Order further alleged that contrary to s. 45.2 of the Regulation, the appellant failed to ensure that the licence holder or a manager appointed by the licence holder maintained control over the premises, including exercising control over who was permitted to enter the premises or remain on the premises and the activities that were permitted to occur on the premises.
2. The Registrar alleges that those regulatory provisions were breached by allowing drinking games to be played on the premises. In the first allegation, the Registrar alleges that on January 31, 2016, fourteen patrons were playing a drinking game. The Registrar further alleges in response to the second allegation that on February 7, 2016, two patrons were playing a drinking game on the premises despite posted signage prohibiting such activity. The licence holder failed to maintain control over the premises including exercising control over the activities that were permitted to occur on the premises.
3. At the conclusion of the hearing, due to time constraints, the Tribunal ordered written submissions from the parties. These were received by the Tribunal August 14, 2017.

B. Issue:

4. There are two issues to be decided:
   1. Did the Appellant on January 31, 2016 engage in or permit practices which tended to encourage patrons’ immoderate consumption of alcohol? And
   2. Further on February 7, 2016, did the licence holder fail to maintain control over the premises or the activities permitted therein?
5. The Tribunal finds that the Registrar has not proven that the appellant engaged in practices which tended to encourage immoderate consumption of liquor, nor did the appellant fail to ensure control over the licenced premises.
6. Accordingly the Registrar is directed not to carry out the order of monetary penalty.

C. Evidence:

7. AGCO Inspectors Raman Sharma and Keshia Kalloo attended the licenced premises on January 31, 2016 at approximately 12:02 a.m. to conduct a compliance inspection.
8. Inspector Sharma testified to the layout of the licenced premises. He stated that on the right side of the premises there were karaoke rooms that were rented out by patrons, and on the left side was a service bar and a kitchenette. He described the karaoke rooms as generally small. Typical seating were chairs and couches. Each room had a door and the door had a window.
9. Inspector Sharma did a walk through looking into the karaoke rooms.
10. Inspector Sharma entered room #9 initially. There were 6 patrons in the room all playing a dice game. He spoke to one patron in that room to establish level of intoxication. The patron was not intoxicated.
11. In room #9 he observed an employee removing dice games and associated paraphernalia. The employee advised the Inspector he had been instructed to do so by Nelson the Manager.
12. Inspector Sharma next attended at room #23 where he observed approximately 8 patrons playing a dice game and consuming what he believed to be alcohol.
13. He spoke to a male patron about the game. The patron replied that when the dice were tossed the person with the lowest total takes a drink. The patron indicated a female patron whom he said was currently losing. He watched a couple of rounds being played.
14. Inspector Sharma stated initially that he was unable to state what type of alcohol was being consumed but in questions arising in redirect he stated that beer was being consumed.
15. Inspector Sharma stated he spoke with the manager of the licenced premise Chun Ying (Nelson) Kwok outside room # 23. The Manager was aware a dice game was being played.
16. The Manager advised the Inspector that the establishment provided the game, and that the games were culturally inspired, that culture being Chinese. Many of the patrons are Chinese as are the establishment owners and managers. They were not intended to promote drinking.
17. Inspector Sharma was of the opinion that the dice games being played encouraged or promoted excessive consumption of alcohol. Inspector Sharma did not find any intoxicated patrons at any time during his inspection.
18. Inspector Sharma’s notes did not indicate whether signage dealing with dice games and consumption of alcohol were present in the establishment.
19. Inspector Sharma advised he was not aware of the significance of dice games in Chinese culture.
20. Inspector Sharma concluded his inspection and left the premises at 12:31 a.m..
21. Inspector Keshia Kalloo stated she was with Inspector Sharma when they attended in rooms #9 and #23. She corroborated the evidence of Inspector Sharma as to the occupancy and layouts of the karaoke rooms in question.
22. In addition Inspector Kalloo observed signage posted in several areas of the licenced premise advising against money betting or promotion of alcohol consumption on the licenced premise.
23. Inspector Kalloo advised she observed bottled beer in room #23.
24. Inspector Josee McFadden stated she attended at the licensed establishment December 6, 2015 to conduct a routine compliance inspection. At that time she observed some patrons playing dice games with alcohol.
25. She spoke to the manager and he explained the game was called “liar”. The establishment provided the dice.
26. Inspector McFadden concluded that this was a drinking game and it was permitted by the licensee.
27. It appeared at that time that the Manager did not have a clear understanding of the law. He was educated on the law at that time by Inspector McFadden.
28. The licensee general manager Sherry Li was briefed by Nelson.
29. On February 7, 2016 Inspectors Josee McFadden and Stephanie Williams attended the licenced premises to conduct a compliance inspection.
30. In the opinion of Inspector McFadden there was adequate staff on duty on that night. There were not that many patrons.
31. Inspector McFadden observed two tables where patrons were drinking and playing dice games.
32. In the one instance two patrons were at a booth consuming from a bottle of Grey Goose Vodka. She said they would roll the dice, one would applaud the score while the other took a drink.
33. She further observed three patrons at a table consuming beer and playing dice. After a roll the suspected loser took a drink of his beer.
34. There was no evidence of intoxication with any of the patrons.
35. There was no discussion with any of the patrons as to what game was being played or what the expected outcomes were.
36. Inspector McFadden stated that no one from the establishment appeared to be monitoring this activity and no one from the establishment went to check on the activities of the patrons.
37. Manager Nelson Kwok was standing with the Inspectors but did not intercede at the tables. He was asked about the monitoring requirement and he replied that staff were required to monitor patrons in these situations every 15 minutes.
38. While on premise Inspector McFadden did not see anyone from the establishment check on the activities of the patrons.
39. The licensee was not monitoring patrons to ensure they were complying with the rules posted within the establishment dealing with drinking games.
40. On her two visits to the establishment one in December 2015 and this visit February 7, 2016 Inspector McFadden did not observe evidence of immoderate consumption on the part of patrons in the licenced establishment.
41. Sherry Li, is the general manager at Mix2 KTV. She described the establishment as one that caters to a cross section of patrons from children to older persons.
42. The licenced premise offers games such as snooker, and darts. It has several private karaoke rooms.
43. The establishment’s patrons are 95% Chinese. Dice games are very popular in Chinese culture. The dice games are family oriented and not designed or intended to be supplemented by consumption of alcohol. These games are no different than playing cards or pool.
44. Ms. Li had no direct interaction with the Inspectors on their visits. This was handled by Nelson.
45. Ms. Li advised that monitoring the activities of the establishment is not difficult. The premises are set up in such a way that it is easy to observe the open booths. The karaoke rooms are observed through the doors and when patron request service.
46. Ms. Li was of the opinion that the dice games are necessary to promote their culture and are every bit as important as the other games within the establishment.
47. Ms. Li has never observed drinking games being played with dice. If she had she would have interceded and taken the dice away.
48. Nelson Kwok is the manager at the licenced premise. He has been employed there for 6 years and became the manager in 2015.
49. The establishment in question has 18 pool tables a dart machine and 19 karaoke rooms. The establishment is open 7 days a week.
50. Nelson stated categorically that the establishment had no promotions nor did they promote the use of dice in conjunction with the consumption of alcohol. He had attempted to explain to the AGCO Inspectors the cultural aspect of the dice games. He was not sure if they fully understood him because English is not his first language.
51. It is noted that the Inspectors on the times in question when visiting the establishment found no difficulty in understanding Nelson, nor did they perceive he had a problem communicating with them.
52. He stated on January 31, 2016 he had directed a staff member to clear several rooms of dice games. He was doing this when the Inspectors arrived. It is Nelson’s contention that it had come to his attention that some patrons may be playing dice games for alcohol. This was just part of their ongoing monitoring practices.

D. Law

53. The Registrar alleges a breach of s. 20(1) of the Regulation. This section prohibits a licensee from engaging in or permitting practices that may tend to encourage patrons’ immoderate consumption of liquor.
54. The Registrar further alleged a breach of section 45.2 of the Regulation. It states:

The licence holder shall ensure that the licence holder or a manager appointed by the licence holder maintains control over the premises, including exercising control over who is permitted to enter the premises or remain on the premises and the activities that are permitted to occur on the premises.

55. Subsection 14.1(2) of AGRPPA allows the Registrar to impose monetary penalties set out in the schedule established by the Board of the AGCO. That schedule allows the Registrar to impose a monetary penalty of up to $6,000 for breach of s. 20 of the Regulation and up to $10,000 for breach of s. 45.2 of the Regulation.
56. Pursuant to subsection 14.1(7) of AGRPPA, the Tribunal may confirm the monetary penalty or set it aside. The Tribunal may not vary the amount of the monetary penalty.
57. In submissions the Registrar relying on s. 64 of the Legislation Act, 2006, submitted that the LLA should be interpreted as remedial and the tribunal must give the LLA fair, large and liberal interpretation to best ensure the attainment of its objectives.

Analysis:

Whether the licensee engaged in or permitted practices that may tend to encourage patron’s immoderate consumption of liquor.

58. The Tribunal will first consider the allegation of the violation of s. 20(1) of the Regulation that the licensee engaged in or permitted practices that may tend to encourage patrons’ immoderate consumption of liquor. I find that the Registrar failed to establish that the licensee engaged in or permitted practices that encouraged patrons to consume liquor.
59. The Registrar contends based on three visits by Inspectors that there was drinking allegedly in conjunction with dice games taking place in the karaoke rooms. However during the visits, the Inspectors did not observe any Patrons to be intoxicated. They observed patrons playing a dice game called “Liar”. The appellant’s manager explained to the Inspectors that in the Chinese culture dice game were culturally significant and not intended to promote drinking. Moreover there was signage placed throughout the licensed premises advising patrons against money betting or the promotion of alcohol consumption on the licenced premises.
60. It may well be a fact that some patrons do not follow the rules and do in fact add a drink to the outcome. This may be but it is the opinion of the Tribunal that the evidence does not support this. Based on the evidence these instances appear to be sporadic, and not the norm, and not supported or condoned by the licensee.
61. In the Tribunal’s opinion there was a lack of in-depth investigation by the Inspectors as to the activities taking place January 31, 2016 and February 7, 2016. Inspector Sharma could not provide clear evidence on what was being consumed, finally recalling a beer bottle in room 23. He spoke with one patron who explained the game in progress. But no evidence was presented as to what the licensee had intended when the dice were provided to the patrons.
62. It is important to note that on all three visits by Inspectors which tended to be late at night or early in the morning there was no evidence of excessive consumption amongst any of the patrons. This is hardly in keeping with a licenced establishment which is promoting immoderate consumption.
63. The law submitted for consideration is 2130845 Ontario Inc. o/a Heart and Crown v. Ontario (Alcohol and Gaming Commission, Registrar), 2014 ONSC 3595 (Div. Ct.). In this decision the court considered the broad implication of s. 20(1)-(3). The court indicated that the onus is on the Registrar to prove the appellant engaged in or permitted a practice that encourages immoderate consumption. There is no proof in our case that the appellant engaged in a practice to encourage immoderate consumption. Unlike in Heart and Crown, in the present case there is a practice taking place, beyond simply serving drinks: playing dice games. However there is no evidence that this practice encourages immoderate consumption.
64. The court went on to say that the onus is on the Registrar to prove the appellant engaged in or permitted a practice that encouraged immoderate consumption. There is no evidence that the appellant in our case engaged in a practice to encourage immoderate consumption.
65. In 2396919 Ontario Inc. o/a Brixton Social v. Registrar of Alcohol and Gaming, D. Gregory Flude, Vice-Chair stated at paragraph 21 of the decision:

Having accepted the evidence concerning the service of the nine drinks on December 7, 2014, the Tribunal does not find any evidence that the Appellant encouraged immoderate consumption of alcohol. To encourage immoderate consumption, the Appellant must do something more than simply serve drinks in response to orders from patrons which after all is its business. It must have a practice or program that encourages immoderate consumption. The Registrar argues that the required practice is serving large numbers of drinks at last call. To accept that submission the Tribunal needs evidence that this behavior occurred regularly, as a matter of policy or special promotion. There is no such evidence. The evidence of one event in 2014 together with a reasonable explanation of why the Inspectors perception was incorrect persuades the tribunal that the Appellant was not promoting immoderate consumption of alcohol.

66. In our case there was no evidence that there was a policy or special promotion to use these dice games to encourage the immoderate consumption of alcohol. In fact to the contrary the licensee attempted to dissuade through signage and strict action on violations, patrons from converting dice games into drinking games.
67. The courts and Tribunal decisions stress that there must be more than a casual event. In the cases that were reviewed there was rampant intoxication amongst patrons, yet the establishments in question never reached the legal interpretation of promoting immoderate consumption of alcohol. In our case there was no evidence that the practice of playing the dice games encouraged intoxication or immoderate consumption.
68. As stated it is the view of the Tribunal that the dice games in question were present for cultural reasons, not to encourage or promote immoderate consumption. At no point was never evidence presented that supported a policy by the licensee of permitting the use of the dice game to promote the consumption of alcohol.
69. The second allegation is that the licensee breached section 45.2 of the Regulation that the licensee failed to maintain control over the premises specifically that on February 7, 2016 it was alleged that two patrons were playing a drinking game on the premises with dice and management present took no action.
70. (70) I find that the Registrar failed to show that the licensee was not able to maintain control over the premises. In particular, the Inspectors testified that there were two managers present and a sufficient number of staff on duty who were monitoring the events of the evening. It was their evidence that there were not many patrons that night. (71) Although the Inspectors observed Patrons playing dice games, they did not present evidence that the game was a drinking game. The managers noted that the game played was called “Liar” and this is not a drinking game.
71. The Tribunal is satisfied that there was sufficient staff on duty to monitor events in the licenced establishment and with lack of evidence to the contrary accepts that the patrons were playing a game called “Liar”, not a drinking game as suggested.

Conclusion:

72. The Tribunal is satisfied that the actions of the appellant were not in violation of subsections 20(1) and 45.2 of the Regulation and directs the Registrar not to carry out its Order of Monetary penalty.

LICENCE APPEAL TRIBUNAL

Alex McCauley, Member

Released: January 8, 2018