Licence Appeal Tribunal
Appeal from a Notice of Proposal of the Registrar under the Liquor Licence Act to Review an Application for an Additional Licensed Area
Between:
1978547 Ontario Inc. o/a Lagos Lounge Appellant
and
Registrar of Alcohol, Gaming and Racing Respondent
and
Metropolitan Toronto Condominium Corporation No. 774 Added Party
and
Helen Voong Added Party
DECISION AND ORDER
Adjudicator: Asad Ali Moten, Member
Appearances:
For the Appellant: Grace Baiye, Principal For the Respondent: Rena Khan, Counsel For MTCC 774: Nick Efthymiadis For Helen Voong: Noel Gerry, Counsel
Heard in Toronto on: October 30, 2018
REASONS FOR DECISION AND ORDER
OVERVIEW
1This appeal arises from a Notice of Proposal to Review an application for an additional licensed area. The appellant, 1978547 Ontario Inc. operating as Lagos Lounge, is a licensed establishment located in the North York area of Toronto. It applied in August 2017 to expand its liquor licensed area indoors by adding additional capacity for 170 persons, on top of the 22 persons for which it is currently licensed. The Registrar posted the application for public comment. Two objector letters were submitted to the Registrar in response to the application, and those objectors are added parties to this proceeding. As a result of the objections, the Registrar issued a Notice of Proposal to Review in April 2018 pursuant to the Liquor Licence Act, R.S.O. 1990, c. L.19.
2The objectors are the industrial/commercial condominium corporation where Lagos Lounge is located, and Ms. Helen Voong, who owns the commercial unit directly beside Lagos Lounge. The condominium corporation, Metropolitan Toronto Condominium Corporation No. 774 (MTCC 774) objects to the application on the basis that Lagos Lounge has not complied with the by-laws of the corporation for additional indoor space. Ms. Voong objects to the application alleging that Lagos Lounge already creates large crowds of drunken people, noise, and litter. This, according to Ms. Voong, affects her tenant’s massage parlour business.
3Lagos Lounge is of the position that the objectors, Ms. Voong in particular, have made these objections due to personal dislike for the proprietors and patrons of Lagos Lounge. In other words, according to Lagos Lounge, the objections are not the result of genuine concerns for the needs and wishes of the residents of the municipality. The Registrar takes no position with respect to the application but is of the position that any conditions that the Tribunal imposes must be within the powers of the Registrar to enforce.
4Based on the evidence before me, and for the reasons below, I find that the objector parties have not met their onus in establishing that issuing the additional capacity licence is not in the public interest. The Tribunal directs the Registrar to approve the application for an additional licenced area made by Lagos Lounge subject to conditions.
ISSUES
5There are two issues in this proceeding that the Tribunal must consider:
A. Have the objectors established that issuing the licence is not in the public interest?
B. Are there conditions that the Tribunal may impose in order give effect to the purposes of the Act?
LAW, EVIDENCE, AND ANALYSIS
A) Have the objectors established that issuing the licence is not in the public interest?
6The objectors have not discharged their onus to prove that issuing Lagos Lounge the licence for an additional area would not be in the public interest.
7This is not a hearing to disentitle Lagos Lounge from its existing licence. The objector parties re-iterated their position that they do not want Lagos Lounge in their neighbourhood. Lagos Lounge, however, already possesses a valid licence, and even were I to find that the objectors had discharged their onus, that original licence would persist and Lagos Lounge would be entitled to continue to operate.
8Under section 6(2)(h) of the Liquor Licence Act, an applicant is entitled to a licence to sell liquor except if the licence is not in the public interest having regard to the needs and wishes of the residents of the municipality in which the premises is located. Members of the public can express their objections to an application for a liquor licence. Where the Registrar sees fit, upon receiving objections, the Registrar may issue a proposal to review the application, and an applicant can appeal to the Licence Appeal Tribunal.
9There is well established jurisprudence that, in an appeal of this kind, the onus lies with the objectors to prove that a licence is not in the public interest. The standard of proof that must be met is a balance of probabilities. In other words, the objectors have to prove that it is more likely than not, that granting the licence would not be in the public interest.
10It is not simply an exercise in counting how many objections are lodged with the Registrar. The Tribunal must consider the nature of the objectors’ concerns. As this Tribunal stated in The Scoop & Cup Inc. v. Registrar of Alcohol and Gaming 2015 CanLII 72224 (ON LAT) (The Scoop & Cup):
11In determining whether the needs and wishes of the residents are bona fide, the Tribunal will look to the totality of the evidence to determine if the subjective concerns, and fears, of the residents are supported on a valid objective basis.
12The Tribunal must also examine who the objections purport to represent. The legislature chose to limit this question to the “residents of the municipality”. However, in Toronto, a city of more than 2.5 million people spread out over 630 square kilometers, not all of the concerns of all residents are to be given equal weight. To do so would create an absurd result, permitting an objector in one corner of the city to block the licence of an applicant in another, distant corner.
13Instead, “the concerns of those who will bear the burden of living in close proximity to licensed premises are given more weight than those who live further away” (see: Sagra v. Registrar of Alcohol and Gaming [2014] OLATD No. 63; and The Scoop & Cup, supra). Therefore, the Tribunal considers in turn who each objector is, and the concerns that they put forward.
MTCC 774 and Nick Efthymiadis
14MTCC 774 is a commercial condominium corporation. There are no residential units in the condominium, only commercial and industrial businesses. MTCC 774 was represented at the hearing by its property manager, Mr. Nick Efthymiadis. MTCC 774’s office is located at 1270 Finch Avenue West, Unit 25 in Toronto. This is the same commercial plaza as Lagos Lounge. Corporations are considered persons under the law. While the question of whether a corporation is a resident under the Act remains open, it can be assumed for the purposes of this analysis that MTCC 774 is a resident of the municipality in which Lagos Lounge is located. It is also, by virtue of its proximity to Lagos Lounge, likely to be impacted by Lagos Lounge’s liquor licence.
15In addition to his representations on behalf of MTCC 774, Mr. Efthymiadis testified as to his personal concerns about Lagos Lounge. Mr. Efthymiadis, however, is not a resident of Toronto. Therefore, the Tribunal affords his personal concerns no weight.
16The concerns of MTCC 774 do not give rise to a reasonable basis to conclude that granting the licence would not be in the public interest. The objection letter submitted to the Registrar by MTCC 774 in October 2017 outlines the corporation’s concerns. It alleges that Lagos Lounge did not seek approval under the condominium by-laws or through the City’s permitting process to build and expand its available indoor space to accommodate more patrons; and that Lagos Lounge has not complied with condominium by-laws with respect to ventilation. This was echoed in Mr. Efthymiadis’ testimony during the hearing. He also testified that Crystal Café, the former occupant of Lagos Lounge’s unit, had a fire. This fire had created significant problems and cost for MTCC 774, and Lagos Lounge and/or Crystal Café had not repaid the condominium corporation for the cost of repairs.
17Compliance with condominium by-laws, while important, is not relevant to the “needs and wishes of the residents of the municipality”, because it pertains to a contractual relationship between the condominium corporation and the unit owner. There are no other parties to this relationship. There was no evidence or argument presented as to how this dispute has any bearing on whether Lagos Lounge should be disentitled to a liquor licence. The purpose of the Act is to regulate the sale and possession of alcohol, not to adjudicate condominium disputes. A party aggrieved by what it perceives to be a violation of those by-laws has other, more appropriate forums within which to raise such concerns.
Helen Voong
18Ms. Helen Voong owns the commercial unit beside Lagos Lounge, and has done so since 2007. She has a tenant in the unit, Ambassador Spa, a massage parlour. According to Ms. Voong’s own evidence, she is just an investor in the property and does not participate in running Ambassador Spa. As a result, she is infrequently in the area. Ms. Voong lives in Toronto, roughly a half hour’s drive from Ambassador Spa and Lagos Lounge. Ms. Voong objects to the application on a personal basis and on behalf of her tenant, Ambassador Spa.
19In her objection letter from November 2017, Ms. Voong stated that Lagos Lounge is a “horrible business” with loud music from inside Lagos Lounge penetrating the walls of her unit and creating noise for her tenant. She also stated that patrons of Lagos Lounge mill about in the parking lot and harass Ambassador Spa’s customers. In addition, the letter states that when she drives by she sees litter and beer bottles in the parking lot, and that “we don’t want this business in our plaza.” These concerns were re-iterated by Ms. Voong during her testimony at the hearing.
20While Ms. Voong is a resident of Toronto, I do not give her personal concerns significant weight for the following reasons. First, she lives a half hour drive away, and is not in any way involved with the day to day operation of Ambassador Spa. In fact, she could not even tell the Tribunal what time Ambassador Spa closed each night. The extent of her interaction with Lagos Lounge or Ambassador Spa is the occasional drive over to inspect or manage her property. Counsel for Ms. Voong argued that the Tribunal should draw an analogy between ‘property owner’ and ‘resident’ when considering needs and wishes. To do so would run contrary to the ordinary meaning of the statute. Given Ms. Voong’s level of interaction with Lagos Lounge or Ambassador Spa, it can hardly be said that Ms. Voong’s needs and wishes give rise to a concern that would disentitle Lagos Lounge to its licence.
21Second, I do not find Ms. Voong’s evidence credible or reliable. During cross-examination she was purposely opaque in her answers, reciting over and over the line ‘I’m just an investor’ in order to avoid answering the appellant’s questions. Further, while she stated that she has personally seen bottles, litter and crowds in the parking lot, she did not provide any evidence as to when she observed this or how many people she observed. Even if she were a proximate resident of the area, her subjective concerns are not supported by a valid, objective base of evidence.
Ambassador Spa
22While I have already addressed Ms. Voong’s personal concerns, it is important to consider whether Ms. Voong, as representative of the employees and patrons of Ambassador Spa, has provided an objective basis for subjective concerns. Ms. Voong did put forward a witness to support her position.
23Mr. T.R. is the manager of Ambassador Spa. He lives in Toronto. His residence is approximately twenty minutes’ drive from Ambassador Spa. He also spends at least five nights a week, eleven hours a night at the Ambassador Spa, running the business. Even though his residence is not proximate to Lagos Lounge, Mr. R, as a resident of the municipality, spends a significant portion of his time proximate to Lagos Lounge. Therefore Mr. R is impacted by Lagos Lounge’s licence.
24Besides Mr. R, there is no evidence to suggest that any of the employees or patrons of Ambassador Spa are residents of Toronto. Therefore, I do not give weight to any aggregated concerns, but rather focus on the evidence of Mr. R.
25Mr. R testified about what he experiences on a regular basis. He stated that typically on the weekends patrons from Lagos Lounge flood the parking lot, carry liquor bottles, and act rowdy. Mr. R felt that the large crowds intimidate his customers, and as a result his customers do not want to come to Ambassador Spa. He also believed that patrons of Lagos Lounge harass his employees. To support his claims, Mr. R provided seven videos which were shown during the hearing.
26Some of these videos indeed show large, rowdy crowds milling about outside Lagos Lounge. In some videos, individuals have bottles of liquor in their hands. One video showed a fight between two large groups of people. Most of the videos were taken, by Mr. R’s account, on either September 16, 2018 or September 26, 2018, after 11:30 p.m. The one exception was a video from inside Ambassador Spa, meant to show how loud the music from Lagos Lounge was and how it could be heard in the massage parlour at 5:30 p.m.
27Mr. R was emphatic in his assertion that the crowds in the videos were Lagos Lounge patrons, and not his clientele from the massage parlour. He stated that he has seen individuals go in and out of Lagos Lounge towards the end of a night and be part of the crowd outside Lagos Lounge. He did admit that his employees frequently go to Lagos Lounge for a drink in the evenings.
28Ms. Grace Baiye, the owner of Lagos Lounge, testified that many of the patrons in the video could not be from her establishment because patrons are Afro-Canadian, whereas those in the video were not. According to her, some of the people in the video are customers of Ambassador Spa because they are standing with employees from the massage parlour. I do not subscribe to this argument. Of the videos, the most troubling was the one where two groups of people engaged in a fight. Ms. Baiye admitted that both groups emerged from Lagos Lounge, and that she had to kick them out to prevent them from fighting indoors. She also stated that while some of the crowds might be hers, they gather in the parking lot after she closes.
29As for the size of the crowds, Ms. Baiye stated that while her liquor licence permits 22 occupants, she often gets special permits from the fire department and the Registrar for special events that individuals want to hold at Lagos Lounge where larger numbers of people attend. According to her, Lagos Lounge is approved for 120 persons by the fire department. She also testified that there are regularly more than 22 people in Lagos Lounge, and that the additional space would permit her seating for 50 people. According to Ms. Baiye, September 16, 2018, one of the nights videos were taken, was a special permit night. There is no evidence for how many people were permitted that night, nor did Ms. Baiye produce a special permit for the occasion.
30Neither Mr. R nor Ms. Baiye are perfect witnesses. Both have an inherent interest in the outcome of the hearing, and their testimonies contained contradictions and left the Tribunal with more questions than they answered. However, Mr. R’s videos are clear. While there was no evidence of serving to minors, serving after hours, overcrowding inside Lagos Lounge, or intoxication, the videos did show disorderly conduct outside Lagos Lounge, with at least some of the individuals coming from Lagos Lounge.
31This provides some objective basis for Mr. R’s subjective concern that granting Lagos Lounge the additional licence might, through disorderly crowds outside the establishment, intimidate his customers and affect his business. It should be noted, however, that there was no evidence of disorderly conduct during regular business hours or even into the early evening. The only evidence presented was about disorderly conduct late at night. At that time, according to Mr. R and Ms. Baiye, the only businesses open in the plaza are Lagos Lounge and Ambassador Spa.
32While the videos shown were only with respect to two nights in September 2018, there is a question of what might occur if the licence permitted an increased capacity. Would it lead to more frequent crowds outside and thus more disorderly conduct? On the one hand, increased capacity indoors would mean fewer people gathered outside during business hours or the early evening. Lagos Lounge could allow more people in, decreasing any disruption to its neighbours. On the other hand, it appears the most significant challenge comes at the end of the night, when Ms. Baiye and her staff have to close and Lagos Lounge’s patrons are forced outside into the parking lot. Greater capacity indoors in those situations would mean more people filing out of the establishment and into the parking lot after it closes. The latter, in my opinion, is the more likely possibility, given the video evidence of crowds and Ms. Baiye’s own testimony.
Conclusion
33No other objections were filed from any of the other businesses in the plaza, or other residents of the municipality in what is a densely populated section of the city. This, despite ample opportunity to do so.
34After discounting the objections of MTCC 774 on the basis that they are not relevant to whether an establishment should be disentitled to its licence, and of Ms. Voong on the basis of her limited personal interaction with the surrounding area, I am left to determine whether Mr. R’s evidence is sufficient to disentitle Lagos Lounge to its applied for licence. I find that it is not.
35The evidence only really shows that on occasional late nights, one business in the plaza, with only one confirmed person at the business who is a resident of the municipality, may be affected by a period of disorderly conduct outside of Lagos Lounge. That being said, there is the possibility of Mr. R’s evidence being the tip of the iceberg with respect to future disorderly conduct by patrons of Lagos Lounge. Increasing its capacity may enable that. But appropriate conditions can help mitigate against it.
36In sum, I find that while certainly ongoing disorderly conduct is a concern, the evidence does not, on a balance of probabilities, prove to that it is not in the public interest to grant Lagos Lounge a licence for an additional licenced area, having regard to the needs and wishes of the residents of the municipality.
B) Are there conditions that the Tribunal may impose in order give effect to the purposes of the Act?
37While the objectors have not made out their onus to prove that Lagos Lounge is disentitled from its licence, there is valid objective evidence of some disorderly conduct. Whether the objections were made due to personal dislike as Lagos Lounge claims, or because of legitimate business concerns, as suggested by Ambassador Spa, appropriate conditions can help mitigate against future disorderly conduct, and allow the Registrar to monitor and enforce the requirements of licensure.
38Neither the appellant nor the objectors took any position with respect to conditions that may be placed on Lagos Lounge. It did not appear that either party had turned their mind to what conditions they might be able to live with. Counsel for Ms. Voong took the position that one of the causes of the disorderly conduct outside Lagos Lounge was the lack of security. The Registrar took the position that any conditions placed on the appellant must be enforceable by the Alcohol and Gaming Commission of Ontario. To order conditions that cannot be monitored or enforced by the AGCO could not properly give effect to the purposes of the Act. While the Registrar did not point to any specific conditions that might be imposed in this instance, counsel for the Registrar did provide case law on what kinds of conditions have been placed on licences.
39The primary concern in this instance is the possibility of future disorderly conduct, both inside the establishment and spilling out into the parking lot. The potential for this may be exacerbated by an increased capacity indoors, allowing for more people to spill into the parking lot. This concern can be mitigated by measures meant to control crowds, such as signage and security, and by limiting the capacity to a number that can effectively be controlled by establishment management and security.
40In particular, with respect to capacity, an application for an additional 170 persons would bring the total capacity to 192 persons. By Ms. Baiye’s own account she has seating for an additional 50 persons. The additional 120 individuals may find themselves, without a seat, venturing outside and creating an unmanageable crowd in the parking lot. Restricting capacity to a number more manageable for Ms. Baiye and for any help she employs would reduce the frequency of disturbances to the neighbourhood.
41As such, I consider it proper to order that the following conditions be attached to Lagos Lounge’s liquor licence:
The Licensee shall prominently post a sign by each exit from the premises advising departing patrons to respect the neighbours by keeping noise to a minimum and by not lingering or loitering.
The Licensee shall provide a telephone number to the objectors, and post that telephone number on any exterior signs for any person to register concerns or complaints. The telephone line will normally be answered by a staff member during the Licensee’s published hours of operation. The line will have a message taking or answering service for times outside of the Licensee’s hours of operation or when there is no answer from the Licensee’s staff.
The Licensee shall ensure that a designated employee or doorman is on duty at the Premises at all times to make the best possible efforts to ensure that patrons and any other people in the areas surrounding any entrance/exit of the premises are not causing a disturbance that will affect nearby residents, until one hour after the closing time of the premises.
The additional capacity of the premises shall be limited to no more than 75 persons.
ORDER
42Pursuant to sections 23(10) and (12) of the Act, I direct the Registrar to approve the application for an additional licensed area made by Lagos Lounge subject to the following conditions:
The Licensee shall prominently post a sign by each exit from the premises advising departing patrons to respect the neighbours by keeping noise to a minimum and by not lingering or loitering.
The Licensee shall provide a telephone number to the objectors, and post that telephone number on any exterior signs for any person to register concerns or complaints. The telephone line will normally be answered by a staff member during the Licensee’s published hours of operation. The line will have a message taking or answering service for times outside of the Licensee’s hours of operation or when there is no answer from the Licensee’s staff.
The Licensee shall ensure that a designated employee or doorman is on duty at the Premises at all times to make the best possible efforts to ensure that patrons and any other people in the areas surrounding any entrance/exit of the premises are not causing a disturbance that will affect nearby residents, until one hour after the closing time of the premises.
The additional capacity of the premises shall be limited to no more than 75 persons.
LICENCE APPEAL TRIBUNAL
Asad Ali Moten, Member
Released: February 15, 2019