Appeal from the Notice of Proposal of the Registrar under the Liquor Licence Act, R.S.O. 1990, c. L.19, to Review Application for Licence
Between:
Kewti Café Inc.
Appellant
and
Registrar under the Alcohol, Cannabis and Gaming Regulation and Public Protection Act, 1996
Respondent
and
Michelle Belisle
Added Party
DECISION AND ORDER
ADJUDICATOR: Stephen Scharbach, Member
APPEARANCES:
For the Appellant: Jerry Levitan, Counsel
For the Registrar: Tamara Brooks, Counsel Elisabeth Maishlish, Counsel Valreen Sealie, Counsel
For the Added Party: Chester Wydrzynski, Counsel
HEARD in person in Toronto: August 15, 2019
OVERVIEW
1On June 14, 2018, Kewti Café Inc., (“appellant”), applied to the Alcohol and Gaming Commission of Ontario (“AGCO”) for a liquor sales licence under the Liquor Licence Act, R.S.O. 1990, c. L.19 (“Act”) in respect of its premises located on Danforth Ave. in Toronto.
2The Registrar under the Alcohol, Cannabis and Gaming Regulation and Public Protection Act (“Registrar”) received written objections to the application and issued a notice of proposal dated December 17, 2018, to review the application.
3The appellant requested a hearing by the Licence Appeal Tribunal (“Tribunal”) to address the Registrar’s notice of proposal.
4Ms. Michelle Belisle opposes the appellant’s application and, at an earlier case conference, she was added as a party to the appeal. Ms. Belisle objects to the appellant’s application on the basis that granting 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 are located.
5After considering all of the evidence presented, I have concluded that the appellant’s application for a liquor sales licence should be granted without conditions.
THE LAW
6Section 6(2) of the Act provides that an applicant is entitled to be issued a licence to sell liquor except in certain circumstances.
7The Act specifies several such circumstances but the only one relevant to this case is contained in s. 6(2)(h) of the Act which provides that an otherwise qualified applicant is not entitled to a licence if:
8(h) 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 are located.
9The Act requires the Registrar to give notice of a liquor licence application to the residents of the municipality in which the premises are located (s. 7(1)). The notice shall request written submissions from residents as to whether issuing the licence is in the public interest having regard to their needs and wishes (s. 7(1), 7(3)).
10If the Registrar receives one or more written objections, the Registrar may issue a proposal to review the application (s. 8(4)).
11The Registrar must serve the applicant with the notice of proposal. The applicant may then request a hearing by this Tribunal to determine whether or not the licence should be issued and whether conditions should be attached (s. 21(1), 21(4)).
12In this type of hearing, the onus is on those objecting to the application to prove on a balance of probabilities that issuance of a liquor licence is not in the public interest.
13The Act provides that the Tribunal may, after holding a hearing, direct the Registrar to issue the licence (with or without conditions) or to refuse to issue the licence (s. 23(10), 23(12)).
THE ISSUE
14Since an otherwise qualified applicant is entitled to be issued a licence unless those objecting to it establish that issuing the licence is not the public interest, the specific issues to be decided in this case are:
(a) Has the Ms. Belisle established on a balance of probabilities that granting the appellant’s application for a liquor licence is not in the public interest having regard to the needs and wishes of the residents of the municipality in which the premises are located?
(b) If a licence is granted should conditions be attached?
DECISION
15Based on the evidence presented, I conclude Ms. Belisle has failed to establish that the granting of the licence is not in the public interest. I direct the Registrar to issue a liquor licence to the appellant without conditions.
BACKGROUND
16According to its liquor licence application, the appellant is a federal corporation incorporated on March 21, 2017 and its sole director and officer is Eskender Yelma.
17Mr. Yelma testified at the hearing through an Ethiopian interpreter. He stated that the appellant’s premises are located at 1380 Danforth Ave. in Toronto, near the corner of Monarch Park Ave. and Danforth Ave. They occupy the street level of a two-storey building. The landlord of the premises and two other residents occupy the second floor.
18The appellant’s application seeks a licenced area of 74 square meters with an estimated capacity of 30 patrons.
19The appellant’s premises are next door to ”Sauce”, a licenced establishment owned and operated since 2012 by Ms. Belisle, the Added Party. Ms. Belisle, who testified at the hearing, described Sauce as a cocktail lounge which serves as a local pub to nearby residents.
20The appellant leased its premises as of October 1, 2017. It obtained a business licence from the City of Toronto and began operating as a restaurant without a liquor licence, serving non-alcoholic drinks and food to its primarily Ethiopian clientele. The appellant applied for a liquor licence on June 14, 2018.
21The business was closed in May 2019 after the landlord served a notice of distress, took possession of the appellant’s goods and chattels, and changed the locks due to unpaid rent. According to Mr. Yelma, the business was not profitable without a liquor licence and by May 2019 it fell behind in paying rent.
22After the landlord served his notice of distress, Mr. Yelma paid the rent arrears. He still has possession of the premises although the appellant has not operated a restaurant business at the premises since May 2019.
23The premises are located on a stretch of Danforth Ave. that contain several restaurants and licenced establishments catering to the Ethiopian community. According to. Mr. Yelma, while it was operating as a restaurant, the appellant generally opened at about 4 p.m. People came in mainly to socialize and consume non-alcoholic drinks – other nearby Ethiopian restaurants were open and not much food was sold.
24However, the appellant stayed open after other bars and restaurants closed at 2:00 a.m. and would serve more food then. Its late-night clientele included people coming from other licenced establishments after they closed, and taxi drivers finishing their shifts in the early morning hours.
THE ADDED PARTY’S OBJECTION
25Ms. Belisle’s objection is based on observations and experiences with the appellant during its operation as a restaurant from approximately October 2017 to May 2019.
26Ms. Belisle owns and operates Sauce, next door to the appellant. At the hearing it was noted that Ms. Belisle does not reside at her business’ premises and the appellant suggested that Ms. Belisle’s objection may be more related to her commercial interest as a next-door business owner rather than her interest as a resident.
27However, Ms. Belisle testified that while she does not reside at her business’ premises on Danforth Ave, she is a resident of the City of Toronto, the municipality in which the premises are located. In my view, as a City of Toronto resident, Ms. Belisle and has a right to object to the appellant’s application and express her views on whether the liquor licence applied for is not in the public interest.
28Ms. Belisle testified that she is a member of the local business improvement association and welcomes additional responsible businesses because they attract more people to the area which increases foot traffic and potentially stimulates existing businesses.
29She also testified that several Ethiopian restaurants and licenced establishment have opened in the immediate area in the past few years and she has never objected to any of them until now.
30Distilled to its essentials, Ms. Belisle’s objection to granting a licence is that it is not in the public interest to grant a liquor licence to the appellant. In her view, over Kewti’s approximately 18 months in operation as an unlicensed restaurant, it has been operated irresponsibly, in violation of the law, and has been the focal point of disturbing incidents which make Ms. Belisle, as well as some of her staff and customers feel unsafe.
31Ms. Belisle points to the following in support of her objection.
(a) Safety Concerns
32Ms. Belisle states that the appellant operates late at night. Sauce closes at 2 a.m. and staff leave at 3 or 4 a.m. Ms. Belisle noted that a lot of the appellant’s customers are just arriving at 3:00 – 4:00 a.m. and there is a lot of activity at the appellant’s premises just as Sauce is locking up at night. Most of the appellant’s customers at those early hours are male and some of them stand around in the street in front of the premises. It is unknown whether they have been drinking but Ms. Belisle and Sauce’s female staff are uncomfortable leaving the premises at that time of night under those conditions.
33Ms. Belisle also pointed to incidents at the appellant’s premises that have contributed to that feeling of lack of safety:
(b) December 26, 2018 Brawl on Danforth
34At approximately 3:00 a.m. on December 26, 2018 a fight broke out in front of an Ethiopian restaurant/bar across the street from Sauce. Some of Sauce’s customers who wanted to leave were afraid to depart while the disturbance was in progress. Ms. Belisle witnessed what occurred from the windows of Sauce. She testified that a crowd of people were in the street and some of them were fighting. She described it as a “brawl”. Ms. Belisle witnessed a group of approximately 6 men leave the fight area, cross Danforth Ave and enter the appellant’s premises.
35She testified that 2 of those men carried or assisted a female into the appellant’s premises who looked very intoxicated. She was having difficulty walking and Ms. Belisle testified that the woman’s coat and shirt were open, and she was exposed as she was assisted across the street and into the appellant’s premises. The fight was partially documented on two short cell phone video clips taken by a resident in a nearby apartment. Those clips were introduced into evidence without objection and were viewed during the hearing.
36The clips depict a tense crowd of people on the street, some fighting, some yelling and arguing. The clips do not depict the men and the apparently intoxicated woman crossing the street and entering the appellant’s premises.
37However, I accept Ms. Belisle’s evidence on that point. It was uncontradicted and confirmed in most respects by Megan Patton, a nearby resident who also opposed granting the appellant a liquor licence. Ms. Patton is a patron of Sauce who was present at Sauce that evening and who also witnessed the incident and testified at the hearing.
(c) January 21, 2019 Fight on Kewti’s Premises
38Basil Dertilis testified with respect to a fight that occurred early in the morning on January 29, 2019. Mr. Dertilis is the owner and operator of a coffee shop 4 doors west of the appellant’s premises on Danforth Ave. He is also a nearby resident – he resides above his business premises.
39Like Ms. Belisle, Mr. Dertilis supports new businesses in the immediate area and believes that to the extent that they increase activity and foot traffic in the area they are good for his business. He has operated his business for the past 7 years and during that time several licenced places have opened in the immediate area, some of them catering to Ethiopian clientele, and he has never before opposed the granting of a liquor licence.
40However, Mr. Dertilis opposes the granting of a licence to this appellant. He feels that Kewti has been operated irresponsibly. On Monday, January 21, 2019, he arrived at his business between 7 and 8 a.m. and learned that his employees did not come to work because the street was apparently not safe. The front door of Kewti had been broken, there was broken glass on the street and the police were on the scene. Mr. Dertilis learned from the police that there had been a fight on the appellant’s premises.
41According to Mr. Dertilis, two of Kewti’s patrons came into his coffee shop that morning. According to Mr. Dertilis they were very high or very drunk. They became belligerent and confrontational and Mr. Dertilis had to ask them to leave. They left behind a Ziploc bag containing cash and an unspecified substance.
(d) November 2018 - Woman in the Laneway
42Mr. Dertilis also testified with respect to incident that took place in November 2018 around 5:00 a.m. Mr. Dertilis testified that he was in the laneway that runs parallel to, and north of Danforth Ave. immediately behind his shop. That laneway provides access to the back of the businesses that have frontage on Danforth Ave., including both Mr. Dertilis’ coffee shop and Kewti.
43Mr. Dertilis testified that he observed someone assisting a passed-out female from the back of Kewti’s premises into the back seat of a car parked in the laneway. Mr. Dertilis is smart serve certified and has been trained to recognize the signs of intoxication. His impression was that the woman was intoxicated although he acknowledged that he was unaware of her circumstances and did not know if she was actually ill.
(e) Illegal Activity
44Ms. Belisle also points to illegal activity that has taken place on the appellant’s premises. She argues that the appellant’s management has allowed, or failed to prevent such activity, and it is not in the public interest to grant a liquor sales licence to an applicant that cannot be trusted to operate lawfully.
45That activity includes apparently serving or permitting the consumption of alcohol on the premises without a licence as indicated by the apparently intoxicated woman being brought out of the premises at 5:00 a.m. in November 2018, and the drunk or high Kewti patrons in Mr. Dertilis’ coffee shop on the morning of the fight on January 21, 2019.
46Ms. Belisle also points to the fact that the appellant was convicted twice for permitting the smoking of shisha on the premises. Mr. Yelma testified that shisha is a legal, non-intoxicating smoke which is consumed in Ethiopian and other Arabic cultures.
47Although it is not illegal, like tobacco it may not be smoked inside municipally licenced premises. The evidence indicates that the appellant’s premises were inspected by City of Toronto officials on November 3, 2018 who observed shisha being smoked in violation of municipal by-laws and the appellant was served with an offence notice which resulted in a fine.
48The appellant was caught allowing smoking a second time although the precise date was not provided in evidence.
49According to Ms. Belisle, these two infractions together with the behaviors and incidents described above, provide grounds to believe that if granted a liquor licence Kewti will not act in accordance with the law and it is therefore not in the public interest to grant a liquor licence.
ANALYSIS AND FINDINGS
50As the objector, Ms. Belisle has the onus of establishing that granting the application is not in the public interest having regard to the needs and wishes of the residents of the municipality.
51After carefully considering all of the evidence presented, I cannot conclude on a balance of probabilities that granting the appellant’s application is not in the public interest for the following reasons.
52I note that while there is opposition among residents to granting the licence, there are also those in favour as indicated by the testimony of the appellant’s witness and 8 letters of support from people of the Ethiopian community, all of whom (with one exception) live on Danforth Ave. close to the appellant’s premises.
53I understand Ms. Belisle’s objection and acknowledge that the incidents that she and others witnessed are disturbing. However, when those incidents are examined more closely as they were at the hearing, I am unable to conclude on a balance of probabilities that they establish that granting the licence is not in the public interest.
54With respect to the December 26, 2018 disturbance on Danforth Ave, I accept the evidence of Ms. Belisle and Ms. Patton that several people left the commotion, crossed the street and entered the appellant’s premises. I also accept their sworn testimony that an apparently intoxicated, partially exposed woman, assisted by two men, was led into the appellant’s premises.
55While the picture that conjures is troubling, there is simply no context from which I can draw a negative inference regarding the appellant’s operation. The fight occurred across Danforth Ave. and was apparently connected to another establishment across the street. It is unknown whether the individuals who crossed the street and entered Kewti were involved in the disturbance. They may have been leaving the establishment and entered Kewti to avoid the disturbance, or they may have been Kewti customers who left to watch the disturbance and then returned.
56There is no available information about the woman that was brought into Kewti. She may have been intoxicated or she may have been ill. If she was intoxicated there is no evidence that she was served alcohol at Kewti. She was led into the appellant’s premises but there is no information from which I can conclude that she was led there for some nefarious purpose or was being led to safety.
57The other two incidents similarly lack context from which I can draw any reliable conclusion with respect to the appellant’s operation. With respect to the fight that occurred on the morning of January 21, 2019, I can only conclude that a fight occurred on Kewti’s premises early in the morning. There was no evidence that the appellant served the participants alcohol or condoned or allowed the fight.
58Although the police were called, there is no information that suggests that the appellant, or anyone associated with it, was charged by the police in connection with the fight. No police witnesses were called, and no police reports were entered into evidence which may have shed light on what occurred and especially whether the appellant played any role in the fight.
59Mr. Dertilis testified that two individuals showed up that morning in his coffee shop drunk or high, became belligerent, were asked to leave and left behind a Ziploc bag with cash and an unspecified substance. The evidence was unclear as to whether those individuals had been in Kewti earlier that morning and were involved in the fight, whether they consumed or been served alcohol illegally by staff at Kewti, or whether the substance in the Ziploc bag was an illegal drug.
60Mr. Dertilis also testified that that at 5:00 a.m. one morning in November 2018 he witnessed an apparently intoxicated woman being led from the back of Kewti’s premises into car parked in the laneway. Again, while that image is troubling, I have no context from which I can draw a reliable inference about Kewti’s operation. The woman may have been intoxicated or she may have been ill. If she was intoxicated she may have consumed alcohol or other substances in circumstances unconnected with the appellant’s operation. I simply do not have any facts from which I can draw a reliable inference concerning the appellant’s operation, or its likely operation in the future.
61With respect to the two municipal by-law infractions for smoking shisha on the premises, Mr. Yelma testified that he was unaware that smoking on the premises was prohibited until he was charged with an infraction. The message apparently got through when he was charged a second time and, according to Mr. Yelma, smoking of the substance on the premises stopped completely after the second infraction. I consider those infractions to be relatively minor and, in any event, according to the only available evidence, it has stopped.
62Finally, I note that Kewti has had a municipal business licence for some time and is subject to municipal by-law inspections and enforcement. No witnesses from the City of Toronto by-law enforcement staff were not called to testify that the appellant has been in significant non-compliance. The City of Toronto could have opposed granting the licence but did not.
63The Registrar took no position on whether the licence should be granted. However, I was informed by counsel for the Registrar that it does background checks, including criminal record checks, of liquor licence applicants. In the case of corporate applicants, it runs background checks on the corporation’s principals. If, after conducting those checks, it has concerns about an applicants’ suitability to hold a licence, the Registrar may issue a notice of proposal to refuse. No such notice was issued in this case.
CONDITIONS
64Ms. Belisle suggested that if the Tribunal is inclined to direct the Registrar to grant a licence to the appellant that conditions be imposed which would require the appellant to install a security camera near the front entrance and maintain at least one security person on the premises on Friday and Saturday nights.
65I decline to impose such conditions. I consider them to be unwarranted in the circumstances. The appellant’s application is for a modest capacity of 30 persons. Although I understand the objector’s concerns, the evidence does not clearly disclose issues such as repeated disturbances, violence, drug dealing, etc., that would warrant the suggested conditions.
SUMMARY
66In summary I acknowledge the concerns of Ms. Belisle and the other residents who object to the granting of a licence. I understand that their concerns have been made more acute given the tragic events that have occurred in recent years on the Danforth close to their neighborhood. However, based on the information presented in this case, I am unable to conclude that granting the applicant’s application for a liquor licence in this case would not be in the public interest having regard the need and wishes of the residents of the municipality.
DECISION
67Pursuant to s. 23(10) and 23(12) of the Act, I direct the Registrar to issue a liquor licence to the appellant without conditions.
LICENCE APPEAL TRIBUNAL
Stephen Scharbach, Member
Released: August 29, 2019