Appeal from a Notice of Proposal to Suspend a Licence under the Liquor Licence Act,1996, R.S.O.1990, c. L.19, s. 15(1) and 21(1).
Between:
2486004 Ontario Inc. o/a SOHO KTV
Appellant
-and-
Registrar, Alcohol, Cannabis, and Gaming Regulation and Public Protection Act,1996
Respondent
DECISION and ORDER
ADJUDICATOR: Stephen Scharbach, Member
APPEARANCES:
For the Appellant: Noel Gerry, Counsel
For the Respondent: Faye Kidman, Counsel
Heard in Toronto: July 16, 2019
OVERVIEW
1This is an appeal of a proposal to suspend the Appellant’s liquor licence for 30 days.
2The Appellant - 2486004 Ontario Inc. o/a SOHO KTV - operates premises in Markham, Ontario that are licensed under the Liquor Licence Act, R.S.O., 1990 Chapter L.19 (“LLA”).
3Under the LLA, the Registrar, Alcohol, Cannabis, and Gaming Regulation and Public Protection Act,1996 (“Registrar”) may issue a proposal to suspend a liquor licence if the licence holder has contravened the LLA or its regulations or a condition of the licence.
4In this case, on June 12, 2019 the Registrar issued an amended notice of proposal to suspend the Appellant’s liquor licence for 30 days for contravening Regulation 719/90 (“Regulation”) by permitting drunkenness on the premises on one occasion (a contravention of s. 45(1) of the Regulation) and failing to clear the signs of alcohol consumption and service on two occasions (a contravention of s. 29 of the Regulation).
5The Appellant concedes that it contravened s. 29 on the two occasions alleged but disputes that it contravened s. 45(1) by permitting drunkenness on the premises.
ISSUE
6The main issue in this appeal is:
Did the Appellant contravene section 45(1) of Ontario Regulation 719/90 by permitting drunkenness on the premises?
What is the appropriate penalty for the contraventions that have been established?
DECISION
7I conclude that the Registrar has established on a balance of probabilities that the Appellant contravened section 45(1) of Ontario Regulation 719/90 by permitting drunkenness on the premises and I therefore direct the Registrar to carry out his amended proposal.
LAW
(i) The [LLA](https://www.canlii.org/en/on/laws/stat/rso-1990-c-l19/latest/rso-1990-c-l19.html)
8Under s.15 of the LLA, the Registrar may issue a proposal to suspend a liquor licence if the licence holder has contravened the Act, the regulations or a condition of the licence.
9The Act requires the Registrar to serve notice of the proposal on the licence holder (LLA, s. 21(2)). Once given notice, the licence holder may request a hearing before this Tribunal to consider the proposal and determine whether it should be carried out. If a hearing is not requested within 15 days, the Registrar may carry out the proposal (LLA, s 21(3)-(5)).
10If the licence holder requests a hearing, the Tribunal shall conduct a hearing to consider the proposal. At a hearing, the onus is on the Registrar to prove the alleged contraventions on a balance of probabilities.
11Following a hearing, the Tribunal:
“…may 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 …” (LLA, s. 23(11)).
12In this case the Registrar issued a notice of proposal to impose a 30-day suspension on the Appellant for contravening the following two provisions of the Regulation:
s.45(1) – “The licence holder shall not permit drunkenness, unlawful gambling or riotous, quarrelsome, violent or disorderly conduct to occur on the premises…”
s.29 – “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.”
(ii) The Test to Establish Permitting Drunkenness
13Since the s. 29 contraventions are conceded, the main issue is whether the Appellant contravened s. 45(1) of the Regulation by permitting drunkenness on the premises.
14Both the Ontario Divisional Court and the Court of Appeal have clarified what is required to prove that specific contravention.1 Decisions of both Courts are binding on this Tribunal. In summary, those Courts have stated that establishing a contravention of s. 45(1) requires proof that:
drunkenness occurred the premises, and
the licence holder permitted that drunkenness.
15The cases state that “permitting” drunkenness mean more than simply failing to prevent drunkenness. The Registrar must establish that the licensee, though its employees, knew or ought to have known of the drunkenness and failed, within a reasonable amount of time, to effect the safe departure of the drunken individual from the premises.
THE ALLEGED CONTRAVENTIONS
16The amended notice of proposal alleges that the Appellant contravened s.29 of the Regulation on two separate occasions by:
Failing to remove the evidence of service and consumption of alcohol in the premises by 3:02 am on December 15, 2018
Failing to remove the evidence of service and consumption of alcohol in the premises by 4:01 am on March 10, 2019
17I was informed that the Appellant concedes those contraventions, and I therefore find that the Appellants contravened s. 29 of the Regulation on the two occasions noted above.
Section 45(1) – Permitting Drunkenness
18Evidence with respect to this contravention was provided by Mr. Nick Vukovic, a Commission Compliance Officer.
19Mr. Vukovic testified that the Appellant’s licensed premises are located on Highway 7 in Markham, Ontario. The premises contain a main lounge with a bar with several karaoke rooms located around the perimeter of the premises. Servers supply alcohol to the patrons in the karaoke rooms.
20Mr. Vukovic testified that he arrived at the Appellant’s premises at approximately 11:47 am on August 11, 2018 to conduct an inspection. After identifying himself to the security guard, Mr. Vukovic began a walk-through of each of the karaoke rooms. At 11:49 pm he entered room # 6 which was occupied by two females and a male.
21According to Mr. Vukovic, one of the female patrons in the room was obviously and significantly intoxicated. His observations included:
the patron was sitting at a table, apparently sleeping, with her face resting on the table surface,
a half empty bottle of beer was on the table in front of the patron and there were numerous empty bottles of beer in the room,
upon being woken up by one of the other customers, the patron appeared disoriented and confused and began to sway,
her speech was slurred and at one point was incomprehensible,
she had difficulty locating and producing her identification although, according to Mr. Vukovic, her I.D was readily apparent in her wallet,
when asked if she was OK she replied “I’m drunk” but could not recall how much she drank,
her friends confirmed that she had too much to drink,
she leaned forward in her chair and began to vomit.
22Mr. Vukovic asked the patron how long she had been at the establishment. Her answer was incomprehensible but the other two patrons said they had been there for two hours.
23Mr. Vukovic testified that the manager of the premises entered the room and he told the manager that the patron was not supposed to be in the premises in that condition. The manager said that he would call a taxi.
24Mr. Vukovic asked the manager for the receipts for the room in order to determine how much alcohol was served to the intoxicated patron and her friends. The manager claimed that the receipts could not be provided since the establishment’s system was down.
25Mr. Vukovic continued to walk through the remaining karaoke rooms. Afterwards he spoke with the manager in the lounge area, reminded him of his obligation to ensure that staff monitor patrons for signs of intoxication, and told him that a report detailing an infraction would be submitted to Mr. Vukovic’s manager.
26Mr. Vukovic re-entered room # 6 at 12:08 am and observed the patron still sitting in the room with her head on the table. Mr. Vukovic again informed the manager that the patron could not be permitted to remain on the premises in that intoxicated state. The manager said that a taxi had been called.
27Mr. Vukovic testified that at 12:19 am he observed the intoxicated patron being helped out of the establishment and into what appeared to be a private vehicle. She was unsteady on her feet and vomited on her way out.
ANALYSIS and DECISION
28As noted, the Divisional Court and the Ontario Court of Appeal have set out what is required to find that a licence holder has contravened s. 45(1) of the Regulation.
29Firstly, I must conclude that drunkenness occurred on the premises. I find that drunkenness did occur on the Appellant’s premises based on the clear and unchallenged testimony of Mr. Vukovic as summarised above.
30Secondly, I must find that the licence holder permitted drunkenness in the sense that the licence holder, through its employees, knew or ought to have known of the drunkenness and failed to take steps within a reasonable amount of time to effect the departure of the intoxicated individual.
31I conclude that while there is no evidence that the Appellant’s staff actually knew of the patron’s drunkenness before Mr. Vukovic drew it to their attention, they ought to have known of the patron’s drunkenness and taken steps to address it. The Appellant thereby permitted drunkenness on the premises in contravention of s. 45(1) of the Regulation.
32With respect to actual knowledge, there is no evidence that the employees of the licence holder actually knew that the female patron in room # 6 was intoxicated until Mr. Vukovic made the manager aware of that fact shortly after 11:49 pm.
33At that point the manager stated he would call a taxi and a vehicle picked up the drunken patron at 12:19 am, approximately 30 minutes later.
34It appears that a ride was arranged for the patron and she departed within 30 minutes. During that time she was safely in the karaoke room with her friends. There is no evidence that she was loud or unruly or disturbing other patrons. The alternative to letting the patron wait quietly in the karaoke room for her ride would have been to eject her from the premises immediately. Given her advanced state of intoxication, letting her wait on the premises was probably safer and reasonable.
35I conclude that from the time the manager became actually aware of the intoxicated condition of the patron steps were taken to effect her departure from the premises within a reasonable amount of time.
36The question then boils down to whether the licence holder, through its staff, ought to have known of the patron’s drunkenness before Mr. Vukovic brought it to the manager’s attention and taken steps to steps to address it.
37The Appellant argues that alcohol affects people differently depending on a host of factors. In this case there is no direct evidence as to when the drunken patron began exhibiting signs drunkenness – she may have only began exhibiting signs of intoxication shortly before Mr. Vukovic encountered her. The Appellant argues that in the absence of evidence indicating that she was obviously intoxicated earlier it is not possible to conclude that the staff ought to have been aware of her condition.
38I disagree. The evidence is that within 2 minutes of entering the appellant’s establishment to do an inspection, Mr. Vukovic encountered a patron who was in a state of drunkenness so advanced that she vomited in his presence.
39In my view, given the advanced state of intoxication observed by Mr. Vukovic, it is more likely than not that the patron exhibited obvious signs of drunkenness for a significant period of time before Mr. Vukovic encountered her at 11:49 pm, and the Appellant’s staff ought to have recognised those signs and taken steps to address the situation.
40Servers are required to complete a “Smart Serve” program in which they are taught to monitor patrons’ alcohol consumption and recognize signs of intoxication. In my view, servers and staff members who served or dealt with the patron earlier ought to have noticed the patron’s intoxicated stated before they advanced to the stage observed by Mr. Vukovic.
41I therefore conclude that the Registrar has met the onus of proving on a balance of probabilities that the Appellant has breached s. 45(1) of Regulation 719/90 by permitting drunkenness on the premises.
ORDER
42The Registrar’s notice proposes a 30-day suspension in respect of all three alleged contraventions. I have found the two s. 29 contraventions have been admitted and the s. 45(1) contravention has been proved on a balance of probabilities.
43Detailed submissions with respect to the Registrar’s proposed 30-day suspension were not provided at the hearing and I request that the parties provide me with penalty submissions in writing. I have set out below a schedule for the receipt of those submissions. Once they have been received I will proceed to finalise my decision in regards to penalty.
44I order that:
(i) Registrar’s counsel shall submit to the Tribunal and to Appellant’s counsel submissions on penalty, together with any relevant case law, on or before August 8, 2019.
(ii) Appellant’s counsel shall submit to the Tribunal and to Registrar’s counsel submissions on penalty, together with any relevant case law, on or before August 15, 2019.
(iii) Registrar’s counsel shall submit to the Tribunal and to Appellant’s counsel Reply submissions, if any, on or before August 22, 2019
LICENCE APPEAL TRIBUNAL
Stephen Scharbach, Member
Released: July 31, 2019
Footnotes
- 1213963 Ontario Limited (Sin City Bar and Eatery) v. Ontario (Alcohol and Gaming Commission), 2009 ONCA 323; Horseshoe Valley Resort Ltd. v. Alcohol and Gaming Commission, 2005 CanLII 81108 (Ont. Div. Ct.).