Shawn Imeson operating as Chainsaw v. Registrar under the Alcohol and Gaming Commission of Ontario Act, 2019, 2022 CanLII 114460

Decision and Order

Date: 2022-12-01

Appeal from a Notice of Proposal to Review an Application for a Liquor Licence under the Liquor Licence Control Act, 2019, S.O. 2019, c. 15, Sched. 22

Between:

Shawn Imeson operating as Chainsaw (to be known as: Karaoke Bar/ Restaurant & 14315308 Canada Inc. operating as or intending to operate as Chainsaw (to be known as: Karaoke Bar/Restaurant)

Applicants

-and-

Registrar under the Alcohol and Gaming Commission of Ontario Act, 2019

Respondent

-and-

Stephanie Ramsahai

Added Party

ADJUDICATOR: Colin Osterberg, Member

APPEARANCES:

For the Appellant: Jerry Levitan and Benjamin Tinholt, Counsel

For the Respondent: Rena Khan, Counsel

For Added Party: Stephanie Ramsahai, Self-represented

Heard by Videoconference: October 28 and November 4, 2022

OVERVIEW

1Shawn Imeson (“Imeson”) is the sole officer, director, and shareholder of 14315308 Canada Inc. (“143 Canada Inc.”). Imeson applied for a licence to sell alcoholic beverages pursuant to the Liquor Licence and Control Act, 2019, S.O. 2019, c. 15, Sched. 22 (the “Act”) for a bar/restaurant he intended to operate at 28 King St. North, in Waterloo, Ontario (the “premises”).

2The Registrar under the Alcohol and Gaming Commission of Ontario Act, 2019 (the “Registrar”) gave notice of the application to residents of the municipality in which the premises are located. The Registrar received objections from four people, including Stephanie Ramsahai (the “added party”). As a result, the Registrar issued a Notice of Proposal to Review an Application for Licence (“NOP”), pursuant to s. 25(1)1. of the Act. Pursuant to s. 26, of the Act, Imeson appealed the NOP to the Tribunal and a hearing before the Tribunal took place October 28 and November 4, 2022.

3At the hearing, after most of the evidence had been presented, Imeson said he recently incorporated 143 Canada Inc. and intended to operate the premises through that entity and not as a sole proprietorship. On November 2, 2022, after the first day of the hearing, 143 Canada Inc. filed its application for a licence. The Registrar then issued an amended Notice of Proposal to Review an Application for Licence (“Amended NOP”) adding 143 Canada Inc. as an applicant.

4All the parties consented to continuing the hearing under the Amended NOP on the basis that, if the Tribunal decides to order that a licence be issued, that licence would be issued to 143 Canada Inc. and not to Imeson. A new appeal was filed with the Tribunal under file number 14396/LLCA.

5With the consent of all parties, and pursuant to ss. 9.1(1)(a) and (b) of the Statutory Powers Procedure Act, R.S.O. 1990, c. S.22 (“SPPA”), I ordered that:

1. The appeals in Tribunal file numbers 14147/LLCA and 14396/LLCA are combined and will be heard together;

2. The Tribunal will treat evidence admitted in each appeal as if it were also admitted in the other appeal;

3. The issue for the Tribunal to determine is whether it should direct the Registrar to issue a licence or to refuse to issue a licence to 143 Canada Inc.; and

4. The objectors are deemed to be the same for both matters.

6The objectors, including the added party, oppose Imeson’s and 143 Canada Inc.’s applications because they are concerned that the sale of alcohol at the premises will result in harms to the community including increasing intoxication, underage drinking, and violence, and they do not believe that the appellant will serve alcohol in accordance with the law, regulation, and responsible practices.

7After considering all the evidence presented, I have concluded that 143 Canada Inc.’s application should be granted with conditions listed below and, pursuant to ss. 26(3) and (5) of the Act, direct the Registrar accordingly.

THE LAW

8Section 8(1) of the Act provides that the Registrar shall issue a licence to an applicant if the applicant, among other things, complies with the Act, the regulations and the standards and requirements established by the Registrar, and is not ineligible to be issued a licence.

9Section 3(6) of the Act states that:

The Registrar shall not issue a licence to operate a liquor consumption premises or a licence of another prescribed category or prescribed class within a category if issuing 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 to be licensed are located.

10The 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)). If the Registrar receives written objections, it may issue a proposal to review the application (s. 7(7)) and the applicant may then request a hearing by the Tribunal to determine whether the licence should be issued (s. 26(1)). After the hearing, the Tribunal may direct the Registrar to issue the licence or to refuse to issue the licence (s. 26(3)). If the Tribunal directs that a licence be issued, it may impose any condition on the licence that it considers proper to give effect to the purposes of the Act (s. 26(5)).

11The onus is on the added party to prove on a balance of probabilities that it 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, to grant a licence to the appellant¹.

12The good faith concerns of the residents in the immediate area of the premises at issue who are the most affected by the proposed licence will be given greatest consideration as compared to those who are less directly affected². In determining whether the needs and wishes of the residents are presented on a good faith basis, the Tribunal will look at the totality of the evidence to determine if the subjective concerns and fears of the residents are supported on a valid, objective basis.

13In making its decision, the Tribunal is required to balance the appellant’s qualified right to a licence against the needs and wishes of the residents of the municipality.

ISSUES

14The first issue to be determined is whether the added party has established, on a balance of probabilities, that the issuance of a licence to operate a liquor consumption premises to 143 Canada Inc. 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.

15If the licence is granted, then the second issue is whether, in the circumstances of this case, conditions should be attached to the licence.

EVIDENCE AND ANALYSIS

The premises and recent history

16The premises is in downtown Waterloo. The evidence at the hearing is that it is in one of the busiest and most vibrant areas of the city. There are many bars, restaurants, and nightclubs in the area, frequented by students of the two local universities as well as members of the Waterloo community. The parties all agree that drunkenness is common in the area, as are loud music, loud people, and general boisterousness.

17In the summer of 2021, 2826028 Ontario Inc. (“282 Ontario Inc.”) opened a nightclub at the premises under the name “Streetlights.” Imeson testified that he was a minority shareholder in 282 Ontario Inc. and did not participate in the day-to-day operation of Streetlights and that his involvement was as a “silent partner” in the business. Imeson signed the lease for the premises as an indemnifier and not as the tenant. He stated that the directing mind of 282 Ontario Inc., and person in charge of the day-to-day operation of Streetlights, was Giuseppe Barranca (“Barranca”).

18All the objectors live in an apartment building on King Street North, which is separated from the premises by a narrow side-street. They asserted that when Streetlights opened, there was a significant deterioration in the neighbourhood. Each of the objectors acknowledged that their apartment building is in an area where loud music, large crowds, and the presence of intoxicated people are common, but they alleged that Streetlights’ operation was beyond the reasonable expectations of the community.

19The added party described the scene outside Streetlights as “chaos”. She stated that extremely intoxicated customers regularly exited Streetlights to smoke or consume drugs. She also stated that there were frequent fights, often involving 10-20 people, spilling out from Streetlights into the street, and that city police regularly waited outside the premises for trouble to erupt given the regularity with which that would occur.

20The added party testifeid that, although the area is active even without the presence of Streetlights, it was significantly worse when Streetlights was in operation. She stated there were significantly fewer problems before Streetlights opened and since it stopped operating.

21Another objector, Robert Schwartz, described the presence of Streetlights as a “nightmare.” He mentioned that it had a commonly used nickname - “Streetfights” -because of the regular brawls which occurred inside the premises, and which often continued out into the street. Mr. Schwartz testified that he often had to step over intoxicated patrons of Streetlights to get into his apartment building and had to physically prevent people whom he believed became intoxicated at Streetlights from entering his apartment building on a regular basis.

22Objector Michael Duerrstein testified that, after Streetlights opened in 2021, the area experienced a “staggering degree of violence and drunkenness,” which had never been present before in the area. He stated that, although there was some drunkenness and violence before Streetlights was operating, it was nothing like what it became after it opened. He stated that the area became vicious and violent. He called 911 many times due to the violence which was occurring and never had to do that at times when Streetlights was not in operation.

23Mr. Duerrstein said he felt very unsafe walking outside his apartment building even when he was taking out the garbage. He noted that the police presence in the area increased and he witnessed the use of drugs by patrons of Streetlights regularly both on the Streetlights property and in the parking lot of his apartment building.

24Written statements given by other residents in the apartment building where the objectors live offered similar descriptions of the effect on the neighbourhood that the presence of Streetlights had. Although none of those residents testified at the hearing, I admitted those written statements into evidence.

25Imeson does not dispute that Streetlights was run improperly or that it had the effects on the neighbourhood described by the objectors. He stated it was a “disaster” and was treated as a party-zone by Barranca. Imeson described it as an embarrassment. He said he was so upset by how the business was being run that he commenced a civil action against 282 Ontario Inc. and Barranca for the return of his investment.

26In December 2021, the liquor licence for Streetlights was revoked and Streetlights was closed for business.

The current application

27As noted above, Imeson stated he had no control over the day-to-day operations of Streetlights. His involvement was limited to his purchase of shares in 282 Ontario Inc. and acting as an indemnifier on the lease for the premises. Within a few weeks of Streelights’ opening in the summer of 2021, Imeson saw that it was being improperly run by Barranca and commenced a civil action to try to recover his investment and sever his involvement in 282 Ontario Inc. That litigation is ongoing.

28Imeson has entered into an agreement in which he has taken over the lease for the premises and he wants to open a restaurant and nightclub there. He says that he intends to operate the premises entirely differently from the manner in which Barranca ran Streetlights. He says the new operation will continue to be a nightclub but will offer a larger food menu and will be more upscale than is typical in the area.

29Imeson stated that Barranca has no interest in the new restaurant and will not be involved in its operation in any way. Corporate documents for 143 Canada Inc. were submitted in evidence and they show Imeson as the sole officer, director, and shareholder. Imeson’s evidence in this regard was uncontradicted by the objectors.

30As evidence that his restaurant will differ from Streetlights, Imeson testified that he has invested a significant amount of money in renovations to the premises, including the purchase of new kitchen equipment, furniture for the eating and patio areas, and some cosmetic changes to the interior. He has hired a manager for the club and a chef, and he has plans to hire a security company, possibly one which employs off-duty police officers, to provide security.

31At the time of the hearing, the premises were still under construction, but photographs and other documents presented at the hearing which show that a new hood vent costing $17,000 and able to handle the additional cooking that Imeson intends to do has been installed in the kitchen. Photographs showing other renovations underway at the premises were also submitted in evidence. Imeson is currently expecting approvals from the building and fire inspections that have been done recently, and he intends to complete the renovations once those are received and the liquor licence is approved.

32Imeson hired Alicia Lewis to be the manager of the restaurant once it is in operation. Ms. Lewis testified at the hearing. She has worked in the hospitality industry for 15 years and has been the manager of a cocktail lounge in Hamilton for the past three years. Ms. Lewis has had lengthy discussions with Imeson about managing the new establishment if it gets a liquor licence. It is her understanding that the new business is to be an “entertainment restaurant” and she is looking forward to managing the business. She has had no communications with Barranca and does not believe anyone other than Imeson is involved in the ownership or operation of the restaurant.

33Kim Dela Pena testified at the hearing. Mr. Dela Pena has been working as a chef for the past 14 years. He has entered a contract with Imeson to work as a chef in the new restaurant. It is Mr. Dela Pena’s understanding that the business is going to be primarily a restaurant although it will have entertainment in the evenings. Although the business has not opened yet, Imeson hired Mr. Dela Pena and is currently paying his salary because he does not want to lose him as a chef. He has had no communications with Barranca and does not believe anyone other than Imeson is involved in the ownership or operation of the restaurant.

34The objectors do not trust Imeson. They point to his involvement in Streetlights as an investor and his signature on the lease as evidence that the “new” restaurant is going to be operated in the same way that Streetlights was and that the same problems are likely to occur. The added party saw Barranca at the premises recently and submitted a photograph of him there. She says that is evidence that Barranca was still involved in the business. Imeson stated that, since Barranca is currently still on the lease, he attends the premises from time to time to inspect and to ensure that the premises are being properly maintained. Imeson testified that the landlord will remove Barranca from the lease once the new operation is open. Other than the one occasion when the photograph was taken, there was no evidence that Barranca has been on the premises and I accept Imeson’s explanation as to why he was there.

35Imeson says he has made efforts to assure the objectors that Barranca and the former partners in Streetlights are no longer involved in the business, but they do not believe him.

Discussion

36I found Imeson to be a credible witness. He acknowledged the objectors’ concerns with the previous operation and has made efforts to address those concerns by communicating with the objectors about his plans, changing some of the interior décor the objectors found problematic, and bringing them to the premises during renovations to give them some comfort regarding his intentions.

37Imeson has made a significant investment in the renovation of the premises, has hired people, whom he is currently paying, to run the restaurant and who appear to be competent and responsible, and has made assurances that the people running Streetlights will not be involved.

38Imeson says he understands that, if there are similar problems to those which were experienced by the operation of Streetlights, he is unlikely to be able to keep his liquor licence for long, and his investment will be lost. I find it unlikely that Imeson intends to take such a risk.

39The objectors allege that Imeson was responsible for the way Streetlights was run, that Barranca is still involved in the business, and that Imeson will operate the premises in the same way that Streetlights was operated. For the above reasons, I am not satisfied that the evidence presented at the hearing supports these allegations.

40The onus is on the objectors to demonstrate that their subjective concerns and fears are supported on a valid, objective basis. I am not satisfied that the objectors have met that onus. Specifically, the evidence presented at the hearing satisfies me that Imeson was not responsible for the Streetlights operation; that Barranca will not be involved in the operation of the new business at the premises; and that Imeson intends to operate the premises responsibly and in accordance with his obligations under the Act.

41I am not satisfied that the added party has shown that the the issuance of a licence to operate a liquor consumption premises to 143 Canada Inc. 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. I find that a licence ought to be issued.

Conditions

42As noted above, if the Tribunal directs that a licence be issued, it may impose any condition on the licence that it considers proper to give effect to the purposes of the Act. I am satisfied that the concerns of the objectors with respect to the operation of Streelights by Barranca are reasonable and supported by the evidence at the hearing. The appellants did not seriously dispute that those concerns were serious ones, and it appears that the way Streetlights operated under Barranca resulted in it losing its liquor licence in December 2021.

43The added party says that her concerns will be lessened if she were satisfied that Barranca will not be involved in the new business. The Registrar says that a condition prohibiting Barranca’s involvement is acceptable and enforceable and the Registrar does not object to such a condition being attached to the licence. 143 Canada Inc. did not consent or object to such a condition being placed on the licence.

44I find that it is appropriate in the circumstances to impose the following conditions to the licence to be issued in this case:

1. Giuseppe Barranca shall not be employed in any capacity by the licenced business;

2. Giuseppe Barranca shall have no involvement in the operation of the licenced business, including as an officer, director, shareholder, investor, or owner; and

3. Giuseppe Barranca shall have no beneficial or financial interest in the licenced business, or ongoing operations of the licensee.

ORDER

45Having considered the evidence and submissions of the parties, pursuant to ss. 26(3) and (5) of the Act, I direct the Registrar to issue a licence to 143 Canada Inc. for the premises with the above stated conditions.

Footnotes

1. 1Ontario v. Arena Entertainment Inc. (CIRCA), 2008 CanLII 13359 at para. 33 (Div. Ct.)
2. 210427 v. Registrar of Alcohol, Gaming and Racing, 2016 CanLII 102500 (ON LAT)