Date: 2019-04-23

Appeal from Order of Monetary Penalty of the Registrar, Alcohol, Cannabis and Gaming Regulation and Public Protection Act, S.O. 1996, c. 26, Sched.

Between:

Bassline Music Bar Inc. o/a Bassline Music Bar

Appellant

and

Registrar of Alcohol, Gaming and Racing

Respondent

DECISION AND ORDER

Adjudicator: Avril A. Farlam, Vice-Chair

Appearances:

For the Appellant: Mike Hook, Counsel

For the Respondent: Faye Kidman, Counsel

Heard in Toronto on: February 7, 2019

REASONS FOR DECISION AND ORDER:

Overview

1The Registrar, Alcohol, Cannabis and Gaming Regulation and Public Protection Act, 1996, S.O. 1996, c. 26, Sched.¹ (“Registrar” and “Act” respectively) issued Order of Monetary Penalty #0000001423 dated July 5, 2016 (“OMP”) against Bassline Music Bar Inc. o/a Bassline Music Bar (“appellant”) located at 865 Bloor Street West, Toronto, Ontario (“premises”). The OMP imposed two monetary penalties of $1,500.00 each on the appellant as a result of two alleged contraventions of Ontario Regulation 719/90 (“Regulation”) made under the Liquor Licence Act, R.S.O. 1990, c. L.19 (“LLA”) on April 9, 2016.

2After settlement discussions broke down, the appellant appealed the OMP to the Tribunal pursuant to s. 14.1(5) of the Act on the basis that one of the alleged violations never occurred and the other was a mere oversight with an overly harsh penalty.

3At the outset of the hearing of this matter, the appellant brought a motion to stay the proceeding on the basis of the respondent’s conduct during settlement negotiations, and filed a Notice of Constitutional Question challenging the Tribunal’s jurisdiction with respect to an offer to settle.

4The respondent then brought a motion to stay the appellant’s motion on the basis that the Tribunal lacks jurisdiction to rule on the manner in which the Registrar administers the LLA.

5The respondent’s motion was heard first. While the Tribunal found that it could examine allegations of an abuse of process in the administrative process in appropriate circumstances, the Tribunal ultimately granted the respondent’s motion and decided not to hear the appellant’s abuse of process motion. The Tribunal ordered that the hearing on the merits should proceed on the question of whether or not the regulatory violations set out in the OMP occurred. The appellant then filed a request for reconsideration of the decision on the respondent’s motion.

6In her Reconsideration Decision dated August 1, 2018, the Executive Chair granted the appellant’s request for reconsideration and varied the Order made December 19, 2017 on the respondent’s motion. She ordered that there first be a hearing on the merits of whether the alleged regulatory violations set out in the OMP occurred. After that decision is released, if the Tribunal finds that the regulatory violations occurred, she further ordered that the parties be invited to make written submissions on the issues raised in the Notice within a timeline to be specified by the Tribunal.

7The August 1, 2018 Order of the Executive Chair provides that:

(a) An in-person hearing shall be held before a different member to address only the allegations set out in the OMP.

(b) If the Tribunal finds that the regulatory violations occurred, the parties shall then be invited to make written submissions on the issues raised in the Notice of Constitutional Question filed by the appellant within a timeline to be specified by the Tribunal.

(c) Upon considering the written submissions, the Tribunal will then release a final decision in the matter.

PRELIMINARY ISSUE – intended EVIDENCE OF SETTLEMENT

8At the outset of the hearing, appellant’s counsel indicated he wanted to introduce evidence about the settlement negotiations with the Registrar but was unable to as he interpreted the reconsideration decision of the Executive Chair as not requiring him to do so at start of the hearing and he was not ready to do so. He then asked to file this evidence after the hearing in the form of an affidavit.

9Respondent’s counsel did not oppose this request but did ask for an opportunity to respond to the appellant’s affidavit through either cross examination of the affiant or, if necessary, by bringing a motion with respect to admissibility.

10With the consent of counsel for both parties, an agreement was reached with respect to this matter and is set out below in the Order of this decision.

ISSUES

11The issues in this appeal are:

Issue 1: On April 9, 2016, contrary to section 25(1) of the Regulation, was liquor sold and served in the licensed premises outside of prescribed hours, and

Issue 2: On April 9, 2016, contrary to section 29 of the Regulation, did the licence holder fail to clear the signs of service and consumption in the licensed premises within 45 minutes after the end of the period during which liquor may be sold and served under the licence.

CONCLUSION

12For the reasons that follow, I find that the Registrar has proven on a balance of probabilities that, contrary to section 25(1) of the Regulation, the appellant sold and served liquor in the licensed premises outside of prescribed hours on April 9, 2016.

13I also find based on the appellant’s admission that, contrary to section 29 of the Regulation, the appellant failed to clear the signs of service and consumption in the licensed premises within 45 minutes after the end of the period during which liquor may be sold and served under the licence on April 9, 2016.

LAW

14Section 25(1) of the Regulation states that except for December 31, liquor may be sold and served only between 11 a.m. on any day and 2 a.m. on the following day.

15Section 29 of the Regulation states that the licence holder shall ensure that evidence of liquor that has been served and consumed on the premises is removed within forty-five minutes after the end of the period during which liquor may be sold and served under the licence.

16If the Regulation has been contravened, s. 14.1(1) of the Act allows the Registrar to impose monetary penalties set out in the schedule established by the Board of the Alcohol and Gaming Commission of Ontario (“AGCO”). The Schedule of Monetary Penalties: Liquor Licence Act and its Regulations sets a monetary penalty of up to $6,000.00 for contravention of section 25(1) of the Regulation and up to $4,000.00 for contravention of section 29.

17The onus lies with the Registrar to prove, on a balance of probabilities, that there has been a contravention of these sections of the Regulation.

EVIDENCE AND ANALYSIS

Issue 1: On April 9, 2016, contrary to section 25(1) of the Regulation, was liquor sold and served in the licensed premises outside of prescribed hours?

18Ashley Scott, a former AGCO inspector and currently a police constable, testified that she was an AGCO inspector for three years. On April 9, 2016, as an AGCO inspector, she inspected the appellant’s licenced premises.

19Inspector Scott testified that she had inspected the premises quite a few times before and that she had met Mr. Kovacs, one of the owners of the appellant business, on previous occasions. He had been cordial to her and she believed she had a rapport with him. Inspector Scott said Mr. Kovacs had several infractions in the past and she believed he understood what he should be doing. Inspector Scott testified that she had an independent recollection of the inspection but wished to use her notes to refresh her memory. Appellant’s counsel had no objection to Inspector Scott testifying with the aid of her notes.

20Inspector Scott said that the sale and service of alcohol must cease by 2 a.m. On April 9, 2016, she entered the premises at 3:03 a.m. Inspector Scott saw Mr. Kovacs behind the bar with a female bartender and a handful of patrons. She walked toward the bar area and noticed a small tumbler glass behind the bar containing a dark liquid and ice cubes which were not melted. The glass was directly behind the bar within Mr. Kovac’s reach. Inspector Scott asked Mr. Kovacs what was in the glass and he said he just poured a rye and coke. Inspector Scott testified that Mr. Kovacs had always been honest in the past and she believed this was an honest statement. Inspector Scott understood that “just poured” would indicate Mr. Kovacs had just done this. She testified that Mr. Kovacs was aware of what time alcohol service had to stop. They did not discuss the ice in the glass.

21Inspector Scott wrote in her notes “…Observed a single tumbler glass on the bar near Kovacs. Glass contained dark colour liquid w full ice cubes. When asked, Mr. Kovacs advised that he had just poured himself a rye and coke-was just having a drink as he closed up. Nervously asked if “this is going to be a problem”. Says he is trying his best. I advise Kovacs that sale/service must cease at 2:00 a.m. – evidence…removed by 2:45 a.m. Kovacs acknowledges current time as 3:05 a.m. and apologized several times…”

22Inspector Scott also saw a can of Strongbow cider close to a female patron. She pointed it out to Mr. Kovacs and he immediately had his bartender remove and dispose of it. Inspector Scott told Mr. Kovacs of the infractions and that a report would be submitted to a supervisor to determine the disposition. Inspector Scott said the two infractions she observed were failing to remove evidence of service and out of hours service. Inspector Scott testified that if Mr. Kovacs had refuted the infractions, she would have put that in her notes. She left the premises at 3:08 a.m.

23On cross examination, Inspector Scott admitted that although she put quotes in her notes around the statement that Mr. Kovacs asked if “this is going to be a problem” this is not a verbatim quote. She also admitted that when she wrote that Mr. Kovacs advised that he had “just” poured himself a rye and coke the word “just” was not an exact term. Inspector Scott said she did not ask Mr. Kovacs when or what time he poured the drink, did not ask the patrons and has no actual knowledge of when the drink was poured. She asked him about the drink but it was his personal drink so she did not smell or taste it. Based on the rapport she had with Mr. Kovacs, she relied on his statement. Inspector Scott said that if the drink had been poured before 2 a.m. this is something someone would say.

24Mr. Kovacs testified that he is one of the owners of the appellant business and one of the operators of the appellant’s premises. Mr. Kovacs testified that he poured the drink before 2 a.m. After that, he was closing up the premises which takes around an hour to do. At 3:03 a.m., when Inspector Scott arrived, the drink was poured and he had refreshed it with ice. Mr. Kovacs admitted that the rye and coke was proximate to where he was standing when Inspector Scott asked about it and that he told Inspector Scott that he was having a drink as he closed up.

25During the testimony of Inspector Scott, appellant’s counsel objected to the statement made by Inspector Scott that when she asked Mr. Kovacs what was in the glass, he said he just poured a rye and coke. Appellant’s counsel submitted that this statement is hearsay and should be given no or little weight. However, when Mr. Kovacs testified later in the hearing, he admitted he told Inspector Scott he had just poured the drink but what he really meant was that he had “just freshened it up with ice”. Based on this admission by Mr. Kovacs, I find as a fact that Mr. Kovacs told Inspector Scott he had just poured the drink, consistent with both Inspector Scott’s testimony and her notes.

26The remaining factual issues to be determined are whether Mr. Kovacs poured the drink before 2 a.m. and whether, when Mr. Kovacs told Inspector Scott at 3:03 a.m. he had just poured the drink, he meant he had just freshened it up with ice.

27Respondent’s counsel submits that Inspector Scott gave clear and concise evidence, was not impeached under cross examination and her testimony is supported by her detailed notes of her inspection. Inspector Scott also has no interest in the outcome, unlike Mr. Kovacs. There is no obligation on the respondent to have an inspector observe the pouring of a drink and to require this would make enforcement of the Regulation onerous.

28Respondent’s counsel also submitted that Mr. Kovacs made no mention at the time of inspection or in response to the OMP that he poured the drink before 2 a.m. and when he said he had just poured the drink, he meant he had just freshened it up with ice. Even if Mr. Kovacs poured the drink before 2 a.m., counsel for the respondent submits that this is still a breach of s. 25(1) of the Regulation which prohibits sale and service of liquor after 2 a.m. Ice added after 2 a.m. would still constitute service.

29Counsel for the respondent submitted that the intention of the Regulation is to ensure that no alcohol is served after 2 a.m. Respondent’s counsel relies on Saini’s Chicken Place & Sports Bar (Re), [2002] O.A.G.C.D. No. 7 in which the AGCO found that the admitted practice of storing beers after last call for later service would tend to support a reasonable conclusion that beer was served after 2 a.m.

30Counsel for the appellant submits that the respondent has not proven its case because there is no direct evidence from the inspector or otherwise that the drink was poured after 2 a.m. Further, appellant’s counsel submitted there is no obligation on the appellant to admit anything and that Mr. Kovacs was not under oath when he spoke to Inspector Scott on April 9, 2016. Appellant’s counsel submitted that Mr. Kovacs was worried about his livelihood when he spoke to Inspector Scott and was trying to do the right thing and cannot be expected to parse the legislation at 3 a.m.

31Appellant’s counsel relies on Registrar, Alcohol and Gaming Commission of Ontario v. 2164874 Ontario Inc. operating as U Lounge (Re), 2011 CanLII 10880 (ON AGC), in which the AGCO found that the Registrar had not proven that liquor was served after 2 a.m. The Commission disagreed with the inspector’s conclusion that alcohol had to have been sold after 2 a.m. because the bottles were cold and had moisture on them around 3:12 a.m. and he estimated when the bottles would have been served. That case is not helpful here because the appellant’s witness admitted that he told the inspector at 3:03 a.m. that he had just poured the drink.

32Another case relied upon by the appellant is 9550 v. Registrar of Alcohol and Gaming, 2015 CanLII 72283, in which this Tribunal found that the Registrar had not proven, on a balance of probabilities, that liquor was served after 2 a.m. That case is not helpful here because the Tribunal found the evidence of the inspectors was not reliable.

33In considering all of the evidence before me, I find Inspector Scott’s testimony more persuasive as it is more reliable and more credible than that of Mr. Kovacs. Inspector Scott’s testimony was clear and corroborated by her notes. She provided her evidence in a forthright and candid manner and her testimony stood up to cross examination. I accept Inspector Scott’s testimony that she observed Mr. Kovacs at 3:03 am with a glass containing a dark liquid and ice cubes directly behind the bar within Mr. Kovac’s reach and that when she asked him about it, Mr. Kovacs said he just poured a rye and coke.

34I find Mr. Kovacs’ testimony is not credible. While Mr. Kovacs testified that he poured the drink before 2 a.m., Inspector Scott said he did not tell her this during the inspection on April 9, 2016. Her notes do not contain such a statement. The appellant did not mention this alleged statement in its Notice of Appeal. Although there were others in the premises at the time of the inspection, no other witness was called to corroborate Mr. Kovacs’ testimony. Mr. Kovacs, as an owner and an operator of the appellant business has an interest in the outcome of the appeal. The statement that I have already found Mr. Kovacs made to Inspector Scott on April 9, 2016 was to the contrary – that he had just poured a rye and coke.

35I find it is not credible that when Mr. Kovacs told Inspector Scott he had just poured the drink, what he really meant was that he had “just freshened it up with ice”. “Just pouring a drink” and “just freshening it up with ice” are two very different statements. I find that at 3:03 a.m. on April 9, 2016, Mr. Kovacs had just poured a rye and coke as he told Inspector Scott during the inspection.

36I find that the Registrar has proven on a balance of probabilities that, contrary to section 25(1) of the Regulation, the appellant sold and served liquor in the licensed premises outside of prescribed hours on April 9, 2016.

37Issue 2: On April 9, 2016, contrary to section 29 of the Regulation, did the licence holder fail to clear the signs of service and consumption in the licensed premises within 45 minutes after the end of the period during which liquor may be sold and served under the licence?

38At the hearing, the appellant’s counsel admitted that the appellant failed to clear signs of service and consumption in the licensed premises within 45 minutes after the end of the period during which liquor may be sold and served. However, the appellant disputes the $1,500.00 penalty.

39I find, based on Mr. Kovacs’ admission, that the appellant contravened section 29 of the Regulation.

40Having found that regulatory violations occurred, I find that it is in the Tribunal’s jurisdiction to consider the appellant’s arguments as set out in its Notice of Constitutional Question.

ORDER

41I find that the Registrar has proven the allegations described in the OMP. Therefore, in accordance with the agreement of counsel referred to in paragraph 10 above, I order that:

A. Appellant’s counsel will provide evidence of settlement discussions by way of affidavit to the Tribunal and to respondent’s counsel within seven days from the release of this decision resulting from the February 7, 2019 hearing;

B. Respondent’s counsel will indicate in writing to appellant’s counsel and the Tribunal within seven days after receipt by respondent’s counsel of appellant counsel’s affidavit on settlement whether or not respondent’s counsel wishes to cross examine on the affidavit or whether respondent’s counsel wishes to bring a motion to deal with the admissibility of the affidavit evidence. If respondent’s counsel indicates a motion will be brought, motion materials shall be delivered within 30 days after respondent’s counsel has received the affidavit;

C. Appellant’s counsel shall have 20 days from receipt of any motion served by respondent’s counsel to serve and file any responding motion material;

D. Respondent’s counsel shall have 14 days from receipt of any responding motion material from appellant’s counsel to serve and file any reply motion material;

E. The respondent’s motion, if any, will be heard by the Tribunal before the hearing reconvenes for cross examination of the affiant, if any.

F. If respondent’s counsel wishes to cross examine on the affidavit, appellant’s counsel will produce the affiant in person and the hearing will be reconvened in person for that purpose. The affidavit will form the evidence in chief of the affiant and cross examination and re-examination, if any, will proceed in person at the reconvened hearing.

G. After the affidavit evidence on settlement has been dealt with in accordance with paragraph F. above, the parties shall then be invited to make written submissions on the issues raised in the Notice of Constitutional Question within a timeline to be specified by the Tribunal pursuant to the Reconsideration Decision of the Executive Chair dated August 1, 2018.

H. Upon considering the written submissions, the Tribunal will release a final decision in this matter.

Footnotes

1. 1At the time that the OMP was issued, the name of the Registrar was the Registrar of Alcohol, Gaming and Racing.