2474878 Ontario Inc. o/a Caribbean Coast Restaurant & Lounge v. Registrar of Alcohol, Gaming and Racing, 2019 CanLII 25804

Licence Appeal Tribunal

Date: 2019-01-16

Appeal from an Order of the Registrar, Alcohol, Gaming and Racing under the Alcohol and Gaming Regulation and Public Protection Act, S.O. 1996, 1990, c. 26 to Impose Monetary Penalties.

Between:

2474878 Ontario Inc. o/a Caribbean Coast Restaurant & Lounge Appellant

-and-

Registrar of Alcohol, Gaming and Racing Respondent

DECISION and ORDER

ADJUDICATOR: Stephen Scharbach, Member

APPEARANCES:

For the Appellant: BibI Yhap, Owner For the Respondent: Nicolle Pace, Paralegal

Heard in Toronto: December 12, 2018

OVERVIEW

12474878 Ontario Inc. o/a Caribbean Coast Restaurant & Lounge (“appellant”) operates premises licenced under the Liquor Licence Act, R.S.O., 1990 Chapter L.19 (“LLA”).

2Under the Alcohol and Gaming Regulation and Public Protection Act, S.O., 1996 c.26, “(AGRPPA”)¹, the Registrar, Alcohol, Gaming and Racing (“Registrar”) may impose monetary penalties on licence holders who contravene Ontario Regulation 719/90 (“Regulation”).

3In this case, the Registrar concluded that the appellant breached s.19(1) and s. 34(1) of the Regulation by:

• keeping for sale adulterated liquor, and
• permitting patrons to remove liquor from the appellant’s licenced premises

4The Registrar consequently ordered that two monetary penalties be imposed on the appellant – $2,000 for keeping adulterated liquor for sale, and $500 for permitting patrons to remove liquor from the premises.

5The appellant appeals those penalties to this Tribunal on the basis that it was unaware that some liquor kept for sale was adulterated, and it did not permit patrons to remove liquor from the premises. The appellant requests that the Tribunal set aside the Registrar’s order imposing the penalties.

6Based on all of the facts presented I conclude that the Registrar proved both contraventions on a balance of probabilities and I therefore confirm the Registrar’s two monetary penalties.

ISSUE

7Did the appellant breach sections 19(1) and 34(1) of Ontario Regulation 719/90 by:

• keeping for sale adulterated liquor, and/or
• permitting patrons to remove liquor from the appellant’s licenced premises

DECISION

8I conclude, on a balance of probabilities, that the appellant breached sections 19(1) and 34(1) of the Regulation. I therefore confirm the two monetary penalties imposed on the appellant by the Registrar.

LAW

9Under s. 14.1(1) of the AGRPPA, the Board of the Alcohol and Gaming Commission of Ontario (“Commission”) may establish a schedule of monetary penalties that may be imposed with respect to contraventions of those Acts and regulations administered by the Commission that are prescribed by regulation.

10One of those prescribed regulations is Ontario Regulation 719/90, made under the LLA. That Regulation contains two provisions relevant in this case:

• s.19(1) – “The holder of a licence to sell liquor shall not adulterate liquor by adding any substance to it or keep for sale or sell adulterated liquor.”
• s.34(1) – “The licence holder shall not permit a patron to remove liquor from the premises to which the licence applies”

11According to the schedule of monetary penalties established by the Commission, a monetary penalty of up to $10,000 may be imposed for a contravention of s.19(1), and up to $4,000 for a contravention of s. 34(1).

12Under section 14.1(2) of AGRPPA, monetary penalties are imposed by the Registrar. A person on whom a monetary penalty is imposed may appeal the penalty to this Tribunal (s.14.1(5)).

13At an appeal, the onus is on the Registrar to prove the contravention on a balance of probabilities.

14After holding a hearing, the Tribunal may either confirm the monetary penalty or set it aside (s. 14.1(7)).

15The Tribunal does not have the authority to vary the amount of the penalty.

THE ALLEGED CONTRAVENTIONS

(A) s.19(1) - Keeping for Sale Adulterated Liquor

16Evidence of this contravention was mainly provided through the sworn testimony of Nicole McGhee, a Commission inspector.

17According to Ms. McGhee, in late April, 2017, the Commission received an anonymous complaint from a member of the public who claimed to have consumed liquor (specifically Bacardi Superior White Rum) at the appellant’s premises that, according to the complainant, was watered down.

18As a result, Ms. McGhee and a senior inspector attended at the appellant’s premises on May 3, 2017, and took a sample of liquor for testing from of a bottle of Bacardi Superior White Rum that was at the bar.

19The sample was placed in a sealed container and later delivered to the LCBO’s Quality Assurance Laboratory in Toronto where it was tested for alcohol content.

20The Laboratory’s Certificate of Analysis and Continuity was made an exhibit at the hearing. According to the Certificate, the alcohol content should have been 39.9%. However, the alcohol content of the tested sample was 31.7% indicating that one bottle of Bacardi rum kept for sale in the appellant’s premises had been adulterated.

(a) Appellant’s Position

21The appellant’s owner, Ms. Bibi Yhap, testified on behalf of the appellant. She did not take issue with the laboratory’s test results. However, she stated that she did not tamper with the liquor, did not intend to keep adulterated liquor for sale, and was unaware that any liquor had been adulterated.

22Ms. Yhap stated that she is not present on the premises during all business hours and it is possible that someone tampered with the liquor without her knowledge.

23She testified that around May, 2017 she had two staff members who she later found to be dishonest in unspecified ways. They no longer work for the appellant. Ms. Yhap speculated that they have tampered with the liquor.

(b) Analysis

24Section 19(1) of the Regulation prohibits the holder of a licence to keep for sale or sell adulterated liquor.

25Based on Ms. McGhee’s testimony and the laboratory’s Certificate of Analysis and Continuity, both of which were uncontradicted, I find that the appellant did keep adulterated liquor for sale and thereby contravened s.19(1).

26The appellant asserts that it did not know that the liquor was adulterated and had no intention to keep adulterated liquor for sale.

27However, this case involves a contravention of a regulatory requirement designed to regulate conduct within a limited private sphere of activity. Unlike in criminal or quasi-criminal prosecutions where proof of intent or knowledge is usually required, proving a contravention of s.19(1) in the present proceedings does not require proof of intent or knowledge, and the appellant’s lack of knowledge or intent is not a defence²

(c) Conclusion

28I conclude that the Registrar has met the onus of proving on a balance of probabilities that the appellant breached s. 19(1) of Regulation 719/90 by keeping adulterated liquor for sale.

(B) s.34(1) – Permitting Patrons to Remove Liquor From the Licensed Premises

29The Registrar concluded that the appellant breached s. 34(1) of the Regulation by permitting patrons to remove liquor from the appellant’s licenced premises.

30Evidence of that contravention was also provided through the sworn testimony of Ms. McGhee. In summary, Ms. McGhee testified that she attended at the appellant’s premises on September 22, 2017 in order to take additional samples of liquor for testing. She parked behind the appellant’s premises and walked to the front of the building to enter through the main entrance.

31As she approached the entrance to the premises two males were exiting and Ms. McGhee passed them at the doorway in close proximity. Ms. McGhee noted as they passed that they were carrying plastic cups containing beer. One of the males took a sip of the beer as he passed Ms. McGhee and said to her “cheers”. Ms. McGhee testified that she was sure that the cups carried by the males outside of the appellant’s premises contained beer both by its appearance and by its smell.

32Ms. McGhee stated that she entered the premises and observed the appellant’s manager, Mr. Sasenerain Panday, pouring beer into two plastic cups for two patrons inside the premises. Ms. McGhee pointed out to Mr. Panday that two patrons had removed liquor from the premises. Mr. Panday simply denied it.

33Ms. McGhee stated that soon afterwards, Ms. Yhap entered the premises. Ms. McGhee told her that she was there to take samples of liquor. Ms. Yhap informed Ms. McGhee that there was a bus waiting outside to take the appellant’s patrons on a boat cruise as a customer appreciation event and stated that they were in a hurry. Ms. McGhee took the samples which were later tested and found not to be adulterated.

(a) Appellant’s Position

34The appellant denies that it permitted patrons to remove liquor from its licensed premises.

35Both Ms. Yhap and Mr. Panday testified on behalf of the appellant. In summary they testified that the appellant had arranged a boat cruise for its patrons and a bus was to take patrons from the appellant’s premises to the boat. When Ms. McGhee arrived to take additional samples, patrons were either on the bus or just about to board.

36According to Mr. Panday, the bus arrived late and, while waiting, some of the patrons going on the cruise entered the premises and were served water, soft drinks and beer. The bus arrived and most patrons boarded but a few customers were still in the premises finishing their drinks. According to Mr. Panday, when Ms. McGhee arrived, the premises were almost empty. He was clearing the tables of cups and trying to hurry the two remaining customers so that the premises could be closed and the bus could depart for the cruise.

37Mr. Panday stated that when Ms. McGhee entered the premises she mentioned to him that two patrons had left the premises with plastic cups containing beer but Mr. Panday testified that he did not see that.

38Ms. Yhap testified that when Ms. McGhee arrived she was in the bus checking the names of those going on the cruise. She was told that Ms. McGhee had arrived and she got off the bus to speak with her. When Ms. Yhap entered the premises, she saw Mr. Panday with two customers that were apparently reluctant to leave. She spoke with Ms. McGhee while Ms. McGhee took the samples. Soon afterwards Ms. Yhap left for the cruise.

39Ms. Yhap testified that she would not allow customers to remove liquor from the premises and did not see anyone leave the premises with cups of beer. She testified that alcohol was not allowed on the bus and she did not see anyone enter the bus with beer. She also testified the appellant does not serve beer in plastic cups as described by Ms. McGhee.

(b) Analysis

40Section 34(1) of the Regulation prohibits the holder of a licence from permitting a patron to remove liquor from the premises to which the licence applies.

41Based on Ms. McGhee’s testimony, I find that the appellant did permit patrons to remove liquor from the premises and thereby contravened s.34(1).

42The Ontario Court of Appeal has held that a contravention of s. 45(1) of the Regulation which prohibits a licence holder from permitting drunkenness on the premises requires more than just proof of failing to prevent drunkenness. It requires proof that the licensee knew or ought to have known of drunkenness on the premises. ³

43In my view, a contravention of s. 34(1) - which prohibits a licence holder from permitting a patron from removing liquor from the premises - similarly requires proof that the licence holder knew or ought to have known that a patron removed liquor from the premises.

44In other words, in order to conclude that that the appellant contravened s. 34(1), the Registrar must prove on a balance of probabilities the appellant, through its staff, knew or ought to have known that patrons removed liquor from the premises.

45I accept Ms. McGhee’s sworn testimony that she passed two males in the doorway of the appellant’s premises and saw them leaving the premises with a cup of beer each. I also accept her testimony that she was close enough to the patrons to see and smell the contents of the cups and conclude that it was beer.

46Ms. Yhap testified that she did not see patrons leave the premises with beer. However, by her own account when the patrons left the premises she was on the bus checking the names of the cruise participants and was apparently focused on organising the cruise rather than watching the front door of the premises.

47Mr. Panday testified that he did not see any patrons leave the premises with cups of beer. However, he also testified that the bus was late and some patrons were served drinks while waiting. Once the bus arrived, he hurried the remaining patrons in the premises to finish their drinks so that the premises could be closed and the bus could leave. After considering all of the evidence, I think it more likely than not that once the bus arrived, Mr. Panday made it clear to the patrons still drinking that they must finish their drinks and leave and that two patrons left with their remaining beer in hand.

48As mentioned above, this contravention requires proof that the licence holder knew or ought to have known that patrons removed liquor from the premises. I conclude on a balance of probabilities that Mr. Panday either knew or ought to have known that the two patrons removed liquor from the premises.

49According to Mr. Panday, when Ms. McGhee entered the premises there were only two remaining customers. Mr. Panday would have little difficulty in monitoring the door to ensure that the two patrons that Ms. McGhee encountered in the doorway did not leave the premises with alcohol.

50In other words, I conclude that it is more likely than not that Mr. Panday knew, or ought to have known, that two patrons walked out the front door with cups of beer. He took no steps to intervene, and thereby permitted it.

(c) Conclusion

51I conclude that the Registrar has met the onus of proving on a balance of probabilities that the appellant breached s.34(1) of Regulation 719/90 by permitting patrons to remove liquor from the premises.

ORDER

52Pursuant to s. 14.1(7) of the Alcohol Gaming Regulation and Public Protection Act, I confirm the Order of Monetary Penalty # ASL852565 dated July 15, 2018 issued by the Registrar of Alcohol Gaming and Racing against 2474878 Ontario Inc. o/a Caribbean Coast Restaurant & Lounge.

Footnotes

1. 1On October 17, 2018, after the Registrar imposed the penalties under appeal, the name of the Act was changed to the Alcohol, Cannabis and Gaming Regulation and Public Protection Act.
2. 2Gordon Capital Corp. v Ontario (Securities Commission) [1991] O.J. No 934.
3. 31213963 Ontario Ltd. (c.o.b. Sin City Bar and Eatery) v Ontario (Alcohol and Gaming Commission [2009] O.J. No. 1553