Appeal from a Notice of Proposal of the Registrar of Alcohol, Gaming and Racing to Suspend a Licence for thirty days.
Between:
1930495 Ontario Inc. o/a Early Mercy
Appellant
and
Registrar of Alcohol, Gaming and Racing
Respondent
DECISION AND ORDER
ADJUDICATOR: Sandeep Johal, Member
APPEARANCES:
For the Appellant: Philip Morris, Counsel
For the Respondent: Danielle Bastarache, Counsel
HEARD in Toronto on: July 11, 12, 2018
REASONS FOR DECISION AND ORDER
Overview
1The Registrar of Alcohol, Gaming and Racing, under the Alcohol and Gaming Regulation and Public Protection Act, 1996, S.O. 1996, c. 26, Sched.1 (“Registrar”) issued a Notice of Proposal dated September 22, 2017 (“NOP”) of the appellant’s liquor licence. The NOP proposed a 30 day suspension because of the alleged contravention of section 43 of Licences to Sell Liquor, R.R.O. 1990, Reg. 719 under the Liquor Licence Act (“Regulation”). The Registrar alleges the appellant exceeded the maximum capacity on its licence on May 28, 2017 by having approximately 171 persons in an area licensed for 94 persons.
2The appellant appealed the Registrar’s NOP by filing a Notice of Appeal dated October 4, 2017 to request a hearing by the Licence Appeal Tribunal (“Tribunal”).
ISSUE
3The issue in this appeal is whether the appellant, on May 28, 2017 exceeded the maximum capacity on its liquor licence contrary to s.43 of the Regulation and if so, is a 30 day suspension of its liquor licence an appropriate sanction?
RESULT
4For the reasons that follow, I find that the appellant exceeded the maximum capacity on its liquor licence on May 28, 2017 and that the appropriate sanction would be a suspension of the appellant’s liquor licence for 15 days and not 30 days as stated in the NOP.
LAW
5Section 15(1) of the Liquor Licence Act, R.S.O. 1990, c. L. 19 (the “Act”) states the Registrar may issue a proposal to revoke or suspend a licence to sell liquor if the licensee has contravened this Act, the regulations or a condition of the licence.
6Section 43 of the Regulation states that the licence holder shall 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 establishment as stated on its licence. If the appellant had more than 94 people in the premises on May 28, 2017 when the inspectors attended, the Regulation was contravened.
7Section 23(11) of Act authorizes the Tribunal to direct the Registrar not to carry out the proposal or to carry out the proposal, in whole or in part, and with any changes that the Tribunal considers appropriate.
EVIDENCE AND ANALYSIS
(a) Was the maximum capacity exceeded?
8It is my finding that the appellant was in contravention of the Regulation and permitted the number of persons in the licenced establishment to exceed the maximum capacity as stated on its licence of 94 people for the following reasons.
9The respondent’s first witness was Jade Leadbetter who has worked for the Alcohol and Gaming Commission of Ontario (“AGCO”) since 2004 and attended at the appellant’s establishment on May 28, 2017 with her co-worker Neline Fernando as a result of a spot inspection and not as a result of any complaint.
10Ms. Leadbetter testified that her and Ms. Fernando who work together during the night shifts arrived at the establishment and noticed the south patio to be extremely busy with a large group of people standing outside the patio awaiting entry. She identified herself to the security inspector at the entry door by showing her AGCO ID and gained entry into the establishment.
11Once inside she noticed two large garage style roll-up doors that were leading to the outside area and she observed one security officer near the garage door who was speaking to patrons. She did not notice any attempt to control the flow of people.
12Ms. Leadbetter took out her AGCO mechanical counter and calibrated it to zero and tested it a couple of times to make sure it was in working order. She then proceeded with her count of people in the establishment. She did so in a manner to avoid counting people twice. At times during her count she became stuck and unable to move due to the high volume of persons in the establishment and found it difficult to move through the crowd. At the end of her count she recorded 172 people whereas the capacity is for 94 people.
13Neline Fernando has been an AGCO inspector since 2007 and attended at the establishment with Jane Leadbetter on May 28, 2017 and proceeded to conduct a count in a similar fashion to Ms. Leadbetter. She had her counter and calibrated it to zero and tested it to make sure it was in working order. She then started in one area of the establishment which was the furthest west side and proceeded east. She counted in a manner so as to avoid double counting.
14Ms. Fernando did not notice any staff monitoring the roll-up garage doors as there was a free flow of people. She found the establishment very busy as people were standing shoulder to shoulder and she had to push her way through. Once she was done her count she looked at her counter and it showed a reading of 171 persons whereas the capacity for the establishment is 94.
15Both Ms. Leadbetter and Ms. Fernando determined the establishment was overcapacity and they communicated that information to the manager and owner.
16George Kioulimetis, the owner of the establishment testified and acknowledged that the establishment on the night of May 28, 2017 had exceeded maximum capacity but not to the tune of 171 persons as counted by the AGCO inspectors. His opinion was that there were only 120 or 130 persons and he did not think it was a safety concern.
17Mr. Kioulimetis sent an email to Ms. Fernando on August 11, 2017 explaining that the establishment was over capacity on May 28, 2017 and that he is not disputing the numbers or how the inspectors conducted their inspections. However, he wanted the AGCO to take note of the measures the establishment has put in place to avoid a capacity issue in the future.2
18The issue is not whether the appellant has taken steps to comply or what steps the establishment has taken to prevent an overcapacity situation in the future, but whether in fact, on May 28, 2017 when the inspectors were at the establishment, was the appellant over his maximum capacity on his liquor licence.
19By the appellant’s own admission the establishment was overcapacity that night. For the purposes of determining whether the Regulation was breached, It does not matter whether the number was 171 or 120 as suggested by Mr. Kioulimetis; it is still over the maximum capacity of 94 as per the establishment’s licence conditions. I find that the appellant was in contravention of the Regulation and I must now turn to the sanction that should be imposed for contravening the Regulation and breaching the conditions of the establishment’s liquor licence.
(b) Is a 30-day suspension the appropriate sanction?
20The appellant submits that the sanction should be 4 days and not more than 7 days on the basis that this violation should have been dealt with as part of two prior violations3 of the Regulation. The appellant submits that the appropriate sanction should be 4 or 5 days added to the previously agreed suspension.
21The appellant further submits that the respondent must act fairly and not arbitrarily when negotiating and he failed to do so. Immediately after the 10-day suspension agreement was signed with respect to the other two violations from June and September 2016, the respondent issued a new incident letter 3 days later for the May 28, 2017 overcapacity infraction seeking a 30 day suspension. The respondent did not inform the appellant during its negotiations that it was investigating the appellant on another violation. The appellant submits this is a basic fairness and disclosure issue and both were not adhered to by the respondent.
22The respondent submits that the appellant knew there would be an investigation because the inspectors notified the establishment on the night of the violation that a report would be filed with the AGCO and this hearing is not about whether the May 28, 2017 overcapacity violation should have been included as part of the previous settlement.
23The respondent further submits that the penalty of 30 days is reasonable because of aggravating factors of the appellant including, previous similar infractions and this penalty is based on a progressive discipline of increasing sanctions as a way of deterring this behaviour.
24During the hearing the parties spent a considerable amount of time providing submissions and evidence on the previous two overcrowding infractions from June 19, 2016 and September 10, 2016 and whether the overcrowding infraction from May 28, 2017 should have been included as part of a settlement agreement on the sanctions imposed.
25The previous infractions from June 19, 2016 and September 10, 2016 are not issues before me, the only issue before me is with respect to the overcapacity on May 28, 2017 and whether a 30-day licence suspension is reasonable as a result.
26It would not be appropriate for the Tribunal to comment on the business practices of the AGCO or of the appellant’s counsel with respect to how the settlement discussions should have taken place and what should have been included in those discussions.
27However, as discussed below, I find the sanction of 30 days to be too harsh considering the mitigating circumstances of the appellant which I will now discuss.
(c) Are there any mitigating circumstances?
28The respondent submits that this infraction is an aggravating factor because it was the appellant’s fourth overcapacity violation and it has not learned from its past infringing conduct.
29The appellant submits that the May 28, 2017 overcapacity infraction predated the suspension and as a result it was not provided with opportunity to learn from its past breaches. However, even though a formal sanction was not implemented by the date of this infraction, the appellant submits it has taken steps to mitigate past infractions and has implemented measures to avoid an overcapacity situation in the future. This has been done by stationing guards at each garage door and exit door of the patio, it has prevented access to the patio from inside the establishment and it has adopted a bracelet system where only 94 bracelets are given out to coincide with the capacity of the patio.
30I do not agree with the respondent that this violation is aggravating in the circumstances. The appellant was not provided with an opportunity to reform its behaviour as the penalty for the previous violations did not take effect at the time of the May 28, 2017 infraction.
31In my opinion, the appropriate penalty would be a 15-day suspension and I arrive at that figure based on the following.
(d) What is the appropriate sanction?
32There are several factors I must weigh in arriving at a sanction: the seriousness of the infraction, the seriousness of the consequences, whether any change or remedial steps have been taken between the instances giving rise to the infraction and the principles of specific and general deterrence.4
33On May 28, 2017, the appellant was overcapacity on its patio and this situation is a serious matter and cannot be simply explained away. Capacity limits are imposed under fire regulations and to ensure patrons of an establishment can exit the premises safely in the event of an emergency. Furthermore, the overcapacity situation by the appellant put the patrons and staff at the establishment at risk should an emergency situation have occurred.
34There was no evidence presented of the serious consequences that resulted from the overcrowding and in my opinion that would be a mitigating circumstance.
35The appellant has also taken remedial steps since the previous infraction and according to the respondent’s witness, Ms. Leadbetter who testified that she spoke to the owner about strategies to employ to control capacity on the patio. The appellant also testified that the establishment has implemented measures such as stationing guards at the garage doors leading to the patio and by providing bracelets to 94 people (the current capacity limit) who would be the only ones to have access to the patio.
36General deterrence is the impact of the penalty on other licence holders and the hope that the penalty deters similar conduct.
37Specific deterrence is the impact of the penalty on the appellant with the hope they will not commit future violations.
38A penalty in the range of 4-7 days as submitted by the appellant, in my opinion would not satisfy the general and specific deterrence requirements and also taking into account the seriousness of an overcapacity situation. I also do not agree with the appellant’s testimony and submissions that there was no risk to public safety despite having exceeded the maximum capacity. The Regulation makes it clear, it is not whether exceeding the maximum capacity puts public safety at risk, it is whether or not the capacity of the establishment was exceeded; if so, a sanction is warranted.
39The respondent submits that overcrowding cannot be the cost of doing business and a message needs to be sent to the licence holder as well as others who may contemplate allowing an overcapacity situation to occur and a progressive sanction of increasing penalties is required to deter similar conduct.
40This would be the appellant’s third imposed sanction: the first was for a monetary sanction, the 2nd was for a 10-day suspension (relating to two separate matters) and now this would be the third imposition of a sanction.
41The previous two infractions resulted in a sanction of 5 days suspension for each infraction, however a higher sanction is justified for the current infraction because strategies that were implemented to control an overcapacity situation as mentioned by the appellant, did not work and the appellant is solely responsible. In my opinion a 30-day sanction is too harsh considering that remedial attempts were made by the appellant, there were no serious consequences of the infraction and the previous 10-day sanction had yet to be imposed.
42Taking into account the factors as discussed above, in my opinion a 15-day suspension is appropriate. Further, a 15-day suspension satisfies the requirements of general and specific deterrence and the respondent’s submission of a progressive sanction. Furthermore, a 15-day suspension will offer the appellant an opportunity to reform its behaviour with respect to its business practices.
43The appellant must be made aware that for a repeat offender a progressive sanction is a factor in sanctioning and continued breaches of the appellant’s liquor licence will lead to more severe sanctions and a potential loss of its liquor licence.
ORDER
44For the reasons set out above, pursuant to subsection 23(11) of the Act, the Registrar is directed to suspend the liquor licence of the appellant for a period of 15 days.
Sandeep Johal, Adjudicator
Released: February 8, 2019
Footnotes
- Subsequent to this hearing, the name of the legislation has changed, however nothing in this decision turns on the name change.
- Respondent materials, Exhibit 14.
- Applicant materials, Exhibit 8, the two violations from June 19, 2016 and September 10, 2016 were resolved between the parties.
- 168774 Ontario Inc. o/a Swazzees Restaurant and Bar v Registrar of Alcohol and Gaming, 2017 ONSC 3579.