J.A.K.K. Tuesdays Sports Pub Inc. v. Registrar, Alcohol, Cannabis and Gaming Regulation and Public Protection Act, 1996, 2021 CanLII 114055

DECISION AND REASONS

ADJUDICATOR: Stephen Scharbach, Member

APPEARANCES:

For the Appellant: Jane Scharf, Paralegal Kelly Hale, Officer & Director

For the Respondent: Aviva Harari, Counsel Victoria Chan, Counsel

Date of Hearing: October 26, 2021

A. Overview

1J.A.K.K. Tuesdays Sports Pub Inc. (“appellant”) holds a liquor licence under the Liquor Licence Act (“LLA”) and operates a sports pub in Kingston, Ontario. Mr. Kelly Hale is the appellant’s sole officer, director, and shareholder.

2On September 29, 2021, the Registrar, Alcohol, Cannabis and Gaming Regulation and Public Protection Act, 1996 (“Registrar”) issued an order to immediately suspend the appellant’s liquor licence (Suspension Order”) and a notice of proposal to revoke the licence (“NoP”).

3Both the Suspension Order and the NoP were issued pursuant to the LLA and were based on the appellant’s alleged failure (and/or that of its officer and director) to comply with the Reopening Ontario (A Flexible Response to Covid-19) Act, 2020¹ (“ROA”), and Ontario Regulation 364/20, a regulation made under the ROA (“Regulation”).

4According to the Registrar, the appellant’s non-compliance with the ROA and the Regulation affords reasonable grounds for belief that the appellant will not carry on business in accordance with law and with integrity and honesty, which is a ground for revocation of a liquor licence under the LLA.

5The appellant appeals the Registrar’s Suspension Order and NoP to this Tribunal.

6For the reasons set out below I conclude that the appellant has not operated its licenced premises in compliance with the ROA and the Regulation. In addition, Mr. Hale has made it clear that he disagrees with the requirements in the ROA and Regulation and he does not intend to comply with them in the future.

7In my view the past conduct of the appellant and Mr. Hale affords reasonable grounds for the belief that the appellant will not carry on business in accordance with the law, specifically the ROA and the Regulation, and I have directed the Registrar to carry out the proposal to revoke the appellant’s liquor licence.

B. The Law

(a) The Liquor Licence Act

8Under the LLA, no person shall sell or offer to sell liquor except under the authority of a licence. Applicants are entitled to be issued a liquor licence except in the circumstances specified in the LLA. One of those circumstances is where:

the past or present conduct of [the applicant, or an officer or director of the applicant] affords reasonable grounds for belief that the applicant will not carry on business in accordance with the law and with integrity and honesty.²

9The Registrar may revoke or suspend an existing licence for any ground that would disentitle the licensee to a licence if the licensee were an applicant.

10In other words, the Registrar may revoke an existing liquor licence where the past or present conduct of a licensee or its officer and director “affords reasonable grounds for belief” that the licensee will not carry on business in accordance with the law and with integrity and honesty.

11If the Registrar intends to revoke a liquor licence, the Registrar must first give the licensee written notice of the proposed revocation containing reasons and notification that the licensee is entitled to a hearing before this Tribunal.

12If the Registrar issues a notice of proposal to revoke, the Registrar may also issue an order to immediately suspend the liquor licence if the Registrar “considers it to be necessary in the public interest”.³

13If the licensee requests a hearing, the suspension order expires 15 days after the request is made unless a hearing is commenced in which case the Tribunal may extend the order until the hearing is concluded.

14At a hearing, the onus is on the Registrar to establish the facts that support the proposed revocation. Following 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”⁴, or to impose conditions on the licence.⁵

(b) Reopening Ontario (A Flexible Response to Covid-19) Act, 2020 and Ontario Regulation 364/20

15The ROA and Regulation are a legislative response to the current COVID 19 pandemic. They are intended to provide a framework that allows for the imposition of public protection measures such as social distancing, the use of face masks, contact tracing, capacity limits and proof of vaccination. They contemplate and facilitate the phased lifting of restrictions as vaccine thresholds are met and public health indicators improve.

16In July 2021, all of Ontario moved into phase 3 of the Province’s re-opening plan. The Regulation was already in force and contained COVID 19-related public health and workplace requirements that apply in phase 3.

17Effective September 22, 2021 the Regulation was amended to include an additional requirement that certain businesses (including bars and restaurants) ensure that all patrons provide proof of vaccination.

18Thus, as of September 22, 2021, the Regulation required businesses, such as the appellant, to meet several COVID 19 requirements including:

• Face masks – employees and patrons - the operator shall ensure that any person in the indoor area of the premises wears a face mask or face covering unless (among other exceptions), they need to temporarily remove their mask/covering to consume food or drink⁶
• Proof of vaccination - the operator shall require that each patron who enters the premises (including the indoor area of restaurants and bars) provide, at the point of entry, proof of full vaccination and identification.⁷
• Contact Tracing – the operator shall record the name and contact information of every patron that enters, maintain the records for one month, and disclose them only to a medical officer of health or inspector.⁸

C. Extension of the Immediate Suspension Order

19In this case, the Registrar issued both a notice of proposal to revoke the appellant’s liquor licence and an order immediately suspending the licence.

20The appellant requested a hearing and at the outset the Registrar requested that the Tribunal extend the Suspension Order until the Tribunal issues a final decision on the NoP and the hearing is concluded. The appellant opposed the extension of the Suspension Order.

21On October 27, 2021, I issued an Order (with reasons to follow) which extended the Suspension Order until the conclusion of the hearing.

22My reasons for doing so overlap with my reasons for confirming the NoP and are described more fully below. However, in summary, I extended the Suspension Order because I considered it to be necessary in the public interest. The evidence indicated that from the beginning of September 2021 until the present, the appellant has operated its premises⁹ in contravention of the ROA and Regulation.

23The ROA is a health protection statute enacted by the Provincial legislature to allow for the flexible imposition of public health measures intended to protect the public by reducing the spread of COVID-19.

24Mr. Hale testified at the hearing that he disagrees with those measures for various reasons (discussed below) and he has not and will not adhere to them. He stated frankly that if the Suspension Order was not extended and expired, the appellant would resume serving liquor and would continue to refuse to comply with the ROA and Regulation requirements.

25It was my view that in these circumstances the immediate Suspension Order should stay in place until the conclusion of the hearing. The evidence made it clear that the appellant was operating - and intended to continue to operate - in contravention of a law designed to protect public health by requiring businesses to take steps to reduce the spread of COVID-19.

26I concluded that the appellant’s refusal to comply with the ROA and Regulation placed the public at risk and it was and remains in the public interest to extend the order. I therefore extended the Suspension Order until the conclusion of this hearing.

D. Appellant’s Compliance with the ROA

27There is no dispute that since at least September 22, 2021 the appellant has not operated its licenced premises in compliance with the face mask, proof of vaccination, and contact tracing requirements contained in the Regulation.

28Mr. Hale made it clear in his testimony during the hearing that he disagrees with those requirements and refuses to comply with them. In his opinion they are illegal and conflict with other federal and provincial laws and legal principles.

29Mr. Hale has maintained that position consistently. On September 10, 2021, an AGCO compliance officer attended at the appellant’s premises to respond to a complaint that the appellant had a sign posted on its front door indicating that it would not enforce the “vaccine passport” requirement that were soon to come into force.

30Mr. Hale confirmed to the compliance officer that in his view the ROA requirements were illegal and unjust and that he would never comply with them. When the compliance officer pointed out that continued non-compliance may jeopardise the appellant’s liquor licence, Mr Hale responded “whatever happens, happens, I’ll go down swinging”.

31Mr. Hale has maintained that position up to the present time despite being charged on September 24, 2021 by the City of Kingston By-law enforcement unit under the Provincial Offences Act with the offence of failing to comply with the ROA¹⁰, and the suspension of the appellant’s liquor licence by the Registrar for non-compliance with the ROA and Regulation on September 29, 2021.

E. Reasons for Not Complying with the ROA and Regulation

32Based on the testimony of Mr. Hale and submissions made by his representative, the appellant has not and will not comply with the ROA requirements for two main reasons:

(a) the ROA requirements are voluntary and not mandatory, and

(b) the ROA requirements are illegal because they conflict with other Canadian laws and legal principles.

(a) Requirements are Voluntary

33Mr. Hale testified that in his view the ROA requirements are voluntary, and he chooses not to follow them.

34I note here that the language used in the Regulation to set out the relevant requirements clearly indicate that the requirements are not voluntary. In most cases, the relevant sections of the Regulation states that business owners “shall ensure” that the requirements are met.

35However, in support of his belief that the requirements are voluntary, Mr. Hale testified that the local public health authority - Kingston, Frontenac and Lennox & Addington Public Health (“KFLA Public Health”), has taken no enforcement action despite the fact that the appellant has not required patrons and staff to wear masks since approximately April 2020. According to Mr. Hale, KFLA Public Health apparently prefers to provide education and encourage voluntary compliance and in effect has treated the ROA requirements as voluntary.

36Whether that is true or not, the evidence indicates that on October 19, 2021 KFLA Public Health conducted an inspection of the appellant’s premises and a public health inspector followed up with a letter to Mr. Hale dated October 22, 2021.

37The health inspector noted that the appellant was not complying with requirements regarding proof of vaccination, contact tracing, physical distancing, hand hygiene and mask and face covering. The letter ended with:

Please ensure all concerns above are addressed immediately. Continued non- compliance with these requirements can result in further enforcement actions.

38In my view, there is nothing in that letter that suggest that the ROA requirements are voluntary. Any misunderstanding about the mandatory nature of the ROA requirements should have been dispelled by the concluding warning that further non-compliance can result in enforcement action.

39In addition, Provincial Offences Act charges were laid against the appellant, and Mr. Hale personally, on September 24, 2021 for failure to comply with the ROA, and on September 10, 2021 an AGCO compliance officer warned Mr. Hale that continued non-compliance may jeopardise his liquor licence.

40With that context in mind, I find it difficult to accept Mr. Hale’s assertion that adherence to the requirements were voluntary or that he had a genuine belief that they were. I conclude that the appellant’s non-compliance is conscious and deliberate and is in fact based on Mr. Hale’s second reason for non-compliance – his stated belief that the public health requirements contained in the ROA and Regulation amount to an unnecessary interference with his and his patron’s rights under federal and provincial law and legal principles.

(b) The ROA Requirements Conflict with Canadian Law and Legal Principles

41Mr. Hale testified that he believes that the ROA and Regulation requirements are in conflict with rights protected under the Canadian Charter of Rights, the Canadian Bill of Rights, the Criminal Code, federal and provincial freedom of information and protection of privacy legislation, the Occupational Health and Safety Act, the Declaration of Helsinki, and the Nuremburg Code.

42Although the appellant made that broad assertion, I was provided with no legal authority supporting a conclusion that the ROA is unconstitutional or that its requirements significantly conflict with any other law in a way that would render the ROA requirements invalid.

43The appellant submitted a September 2018 decision of a labour arbitrator who upheld a grievance by the Ontario Nurses Association and concluded that a hospital “vaccine or mask policy” was unreasonable and inconsistent with the collective agreement.¹¹

44In my view that decision has little application to the issues in the present case. Firstly, it is a decision by a labour arbitrator not a Court. Secondly, it was made before the current pandemic started and was primarily concerned whether a hospital vaccination policy violated a collective agreement. Most significantly, at the time this decision was made, the ROA had not yet been enacted and the arbitrator made no findings or conclusions with respect to the ROA.

45Most of the appellant’s submissions in support of its assertion that the ROA conflicts with other law was focused on the Canadian Bill of Rights. According to the appellant, the Bill of Rights recognizes and declares certain rights and fundamental freedoms including freedom of speech, freedom of assembly and association, equality before the law, and the right to life, liberty, and security of the person. According to the appellant, right to life, liberty, and security of the person includes the right to privacy and the right to freely consent to a medical procedure including vaccination.

46The appellant argued that the ROA requirements conflict with the rights recognised by the Bill of Rights in the following ways:

• The ROA requirement that patrons show proof of vaccination interferes with his patrons’ privacy rights by requiring them to reveal their vaccination status.
• The ROA requirement that the appellant confirm the vaccination status of patrons requires patrons to undergo a medical procedure (vaccination) to enter the premises and interferes with their right to freely consent to medical treatment.
• That requirement also requires the appellant to refuse service to those who are not vaccinated. The appellant is thus required to discriminate against people who are not vaccinated which interferes with their right to be treated equally.
• The face mask covering requirement requires the appellant to refuse service to those who do not wear masks and conflicts with the patrons’ freedom of choice to wear a mask or not.

47I note that the Canadian Bill of Rights “recognises and declares” certain rights and freedoms and requires that every law of Canada (i.e. federally enacted laws) shall be construed and applied so as not to abridge or infringe those rights and freedoms.

48However, the Canadian Bill of Rights only extends to matters within the legislative authority of the Parliament of Canada and does not extend to matters within the legislative authority of the Provincial legislatures¹². Both the ROA and the LLA are statutes enacted by the Ontario legislature and in this context the Canadian Bill of Rights has no application to them.

49As stated, I was provided with no convincing legal authority that would support a conclusion that the ROA is unconstitutional or that its requirements significantly conflict with any other law in a way that would render the ROA requirements invalid.

50In my view, the ROA and Regulation must be regarded as part of the general law in Ontario with which all those who operate licenced premises in Ontario must comply.

F. Decision and Analysis

51The central issue in this case is whether the past or present conduct of the appellant and/or its sole officer and director “affords reasonable grounds for belief that the appellant will not carry on business in accordance with the law and with integrity and honesty”.

52In my view, the past and present conduct of the appellant and Mr. Hale in not complying with the ROA and Regulation affords reasonable grounds for belief that the appellant will not carry on business in accordance with the law, specifically the ROA and Regulation.

53In coming to this conclusion, I note the Court of Appeal’s statement about the purpose of the reasonable grounds for belief test and what it entails:

The test entails an examination of the past and present conduct of the person seeking to acquire or maintain the privilege of carrying on an activity authorised by the state, namely a licenced establishment. The purpose of the examination is to see if there are reasonable grounds for the belief that the person will, in future, carry on the activity in a way that is not contrary to the public interest.¹³

54There are three aspects of this test that are useful to point out. Firstly, the Registrar is entitled to rely on any past or present conduct, whether in the operation of a licenced establishment or not, that affords reasonable grounds for belief that the licensee will not carry on business as required.¹⁴

55In this case the past conduct in issue does not involve a breach of the LLA. However, it is related directly to the appellant’s operation of its licenced premises. It involves non-compliance with ROA requirements designed to promote public health by requiring operators of bars and restaurants to take measures to reduce the spread of COVID-19. Although the appellant apparently operated its premises in compliance with the LLA, it did not and will not operate its licenced premises in compliance with the ROA and Regulation.

56Secondly, the consideration of whether the appellant will operate “in accordance with the law” is not confined to considering whether the appellant will comply with the LLA. The requirement is that licensees operate in accordance with the law in general. In this case, there is no evidence that the appellant has a history of breaching the LLA in the operation of its business. However, as pointed out by the Court of Appeal:

Moreover, the requirement that he carry on business in future in accordance with the law and with integrity and honesty is not limited to complying with the regulatory laws applicable to licenced establishments. It is too narrow to look merely to his future compliance with regulatory laws. Compliance with the law generally and acting with integrity and honesty are not so limited¹⁵.

57Thirdly, aside from Mr. Hale’s refusal to comply with the ROA, there is no suggestion that he lacks integrity or honesty. Mr. Hale has operated the appellant’s licenced premises for 16 years without any LLA contravention. He currently refuses to comply with the ROA but has been open and transparent about his beliefs and intentions. His stance in opposition to the ROA carries with it no financial advantage and appears to be based solely on his sincerely held personal beliefs.

58However, the LLA is designed to ensure that licenced establishments will be operated by those who can be counted on to properly serve the public interest. It thus requires licensees to operate in accordance with the law, as well as with honesty and integrity. It is not open to a licensee under the LLA to refuse to comply with a valid law that applies to the operation of licenced premises because the licensee disagrees with it. The LLA and the public interest requires that licensees operate in accordance with the law in general. This is particularly relevant in this case where the law in question is meant to safeguard public health in the context of a pandemic.

G. Is Revocation Appropriate?

59Having determined that the appellant’s past conduct affords reasonable grounds to believe that the appellant will not carry on business in accordance with the law, I turn to the question of whether revocation is the appropriate disposition.

60The Tribunal may consider alternatives - the LLA allows the Tribunal to impose a time-limited suspension or attach to a licence any condition that the Tribunal considers proper to give effect to the purposes of the Act.

61However, in this case I do not consider either a time limited suspension or conditions to be appropriate.

62Any potential condition would need to effectively address the appellant’s refusal to comply with the ROA. However, Mr. Hale has made it clear that he will not operate his licenced business in accordance with that law. In these circumstances there is no condition of which I am aware, or to which I was referred, that would likely result in compliance.

63A time-limited suspension may encourage future compliance by demonstrating that lack of compliance will attract a penalty. However, where a licensee unequivocally refuses to operate in accordance with the law despite a suspension currently in place, a time limited suspension would also likely not result in compliance and would not serve the public interest.

64In summary, in all of these circumstances, I conclude that revocation is the only disposition available to the Tribunal that appropriately addresses the public interest.

H. ORDER

65Pursuant to s.23(11) of the Liquor Licence Act, I direct the Registrar to carry out the NoP dated September 29, 2021 to revoke the appellant’s liquor licence.

LICENCE APPEAL TRIBUNAL

Stephen Scharbach, Member

Footnotes

1. 1S.O. 2020 c. 17
2. 2Liquor Licence Act, s. 6(2)(d), 6(3)
3. 3Liquor Licence Act, s. 15(6)
4. 4Liquor Licence Act, s. 23(11)
5. 5Liquor Licence Act, s. 23(12)
6. 6Ontario Regulation 364/20, Schedule 1, s. 2(3.1), 2(4)(i)(iii)
7. 7Ontario Regulation 364/20, Schedule 1, s. 2.1(1)
8. 8Ontario Regulation 364/20, Schedule 2, s. 1(1)5
9. 9The appellant’s premises were operated as a restaurant and bar until suspension of the liquor licence on September 29, 2021 and then afterward as a restaurant.
10. 10Charges were laid against both Mr. Hale and the appellant by City of Kingston by-law officials. The defendants pled not guilty and the charges are still before the Court.
11. 11St. Michael’s Hospital v. Ontario Nurses’ Association, 2018 CanLII 82519 (ON LAT).
12. 12Section 5(3) of The Canadian Bill of Rights states “The provisions of Part 1 shall be construed as extending only to matters coming within the legislative authority of the Parliament of Canada.”
13. 13Ontario (Alcohol and Gaming Commission, Registrar), v. 751809 Ontario Inc., 2013 ONCA 157, paragraph 26.
14. 14Ontario (Alcohol and Gaming Commission, Registrar), v. 751809 Ontario Inc., 2013 ONCA 157, paragraph 29.
15. 15Ontario (Alcohol and Gaming Commission, Registrar), v. 751809 Ontario Inc, 2013 ONCA 157, paragraph 32.