Date: 2022-09-29

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:

7-Eleven Canada Inc. o/a 7 Eleven 622 Upper Wellington Street, Hamilton, Ontario

Appellant

and

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

Respondent

and

City of Hamilton and John-Paul Danko

Added Parties

Decision and Order

ADJUDICATOR: Geoff Pollock, Vice Chair

APPEARANCES:

For the Appellant: Lauren Cook, and Jane Mayfield, Counsel

For the Respondent: Rena Khan, Counsel

For Added Parties: Kaush Parameswaran and Eric de Man, Counsel for the City of Hamilton,

John-Paul Danko, Self Represented

Heard by Videoconference: June 14-17, 2022

OVERVIEW

17-Eleven Canada Inc. o/a 7 Eleven 622 Upper Wellington Street, Hamilton (the “Appellant”) applied for a licence to sell alcoholic beverages pursuant to s. 6 of the Liquor Licence Act, R.S.O. 1990, c. L.19 (the “LLA”) at its 7-Eleven store located at 622 Upper Wellington Street, Hamilton, 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 52 individuals, as well as an objection from the City of Hamilton. As a result, the Registrar issued a Notice of Proposal to Review an Application for Licence (“NoP”) under s. 21 of the LLA. With the repeal of the LLA and enactment of the Liquor Licence and Control Act, 2019, S.O. 2019, c. 15, Sched. 22 (“LLC Act”), effective November 29, 2021, an application initiated under the LLA continues under the LLC Act. The Appellant appealed the NoP to the Tribunal. A hearing before the Tribunal took place on the June 14-17, 2022, via video conference.

3Despite receiving 52 individual objections, only the City of Hamilton and John-Paul Danko, attended the hearing and they were added as parties.

4The Added Parties opposed the granting of a licence on public policy grounds and due to concerns specific to this location. The City of Hamilton argued that conditions should be attached to a licence if one is issued.

5After considering the parties’ evidence and submissions, I have concluded that the licence should be issued without conditions.

PRELIMINARY PROCEDURAL MATTERS

Appellant’s Adjournment Request and City of Hamilton’s Late Evidence

6Prior to the hearing commencing, Counsel for the Appellant requested an adjournment. The Respondent and the Added Parties consented to the adjournment request. The request was made in response to late filing of some material by the City of Hamilton.

7The material that was filed after the deadline consisted of several letters opposing the granting of the licence to the Appellant.

8The Appellant relied upon Rule 16.2 of the Licence Appeal Tribunal, Animal Care Review Board and Fire Safety Commission Common Rules of Practice and Procedure, Version 1(October 2, 2017) (the “Rules”) which states that adjournment requests may be made orally in “exceptional circumstances.”

9The evidence of the Appellant failed to demonstrate exceptional circumstances and I was not satisfied that the circumstances of the case require an adjournment, therefore the request for an adjournment was denied.

10The Added Party, the City of Hamilton, requested permission to allow for the consideration of the letters of opposition. The Appellant opposed the admissibility of the letters. The added party John-Paul Danko supported their admission, while the Respondent took no position. The City of Hamilton failed to comply with Rule 9.4 for the filing of this material. It failed to demonstrate any exceptional circumstance that made them unable to meet its disclosure requirements. Therefore, its request for the Tribunal to use its discretion to dispense with disclosure requirements was denied.

Request for consolidation of appeals

11Counsel for the Appellant requested that this matter be heard at the same time as the appeal commenced by 7-Eleven Canada Inc. o/a 7 Eleven 415 Melvin Avenue, Hamilton, Ontario (“415 Melvin Avenue”), identified as Tribunal file number 13344/LLA. All parties to both appeals consented.

12According to s. 9.1 of the Statutory Powers Procedure Act, R.S.O. 1990, c. S.22, the Tribunal may combine proceedings or hear proceedings at the same time, if they involve the same or similar questions of fact, law or policy, and all parties consent.

13The Appellant argued that much of the evidence, as well as many of the witnesses, would be the same in both proceedings. The proceedings involve similar questions of law and policy. By hearing the matters together, efficiencies could be gained, thereby saving costs for all parties, as well as conserving Tribunal resources.

14I am satisfied that the appeals involve similar questions of fact, law and policy and that hearing them at the same time will result procedural efficiencies and the saving of time and costs. With the consent of all parties, I order that the appeals be heard at the same time.

15Although the two appeals were heard at the same time, since they involve different premises, as well as different parties, a separate decision will be issued for each appeal.

THE LAW

16The LLC Act provides that the Registrar shall issue a licence to an applicant if the applicant, among other things, complies with the LLC Act, and is not ineligible to be issued a licence. Section 3(6) states that:

The Registrar shall not issue a licence to operate a liquor consumption premises … 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.

17The burden of proof rests upon the Added Parties to prove on a balance of probabilities that granting a licence for the Premises is not in the public interest.

18I agree with the following recent statement by the Tribunal:

The 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 affected. 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.¹

19In making my determination, I am required to balance the Appellant’s qualified right to a licence against the needs and wishes of the residents of the community, with a particular sensitivity to those of the immediate area, for it is these members of the community who will likely be most impacted by the decision to grant or withhold a licence.

ISSUES

20The first issue that needs to be determined is whether the Added Parties have established, on a balance of probabilities, that the issuance of a licence to operate a liquor consumption premises to the Appellant 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.

21Should the Tribunal direct the Registrar to issue the licence, then the second issue that needs to be determined is whether any conditions should be attached to the licence.

EVIDENCE

The Premises

22The Premises are currently being operated as a convenience store. It carries products typical of convenience stores including snacks, drinks, groceries, and age restricted items such as lottery tickets, cigarettes, and vaping products. It also offers a limited variety of meal items such as hot dogs, prepared sandwiches, cookies, coffee, donuts and taquitos. In addition, it serves uncooked items such as fresh fruits. In the future, the Appellant intends to offer an increased menu of fresh meal items, all of which can be described as fast foods.

23Although the precise layout of the Premises has not been finalized, the Appellant intends to designate an area of the store as a restaurant which would be separated from the grocery area by a “pony wall”. The restaurant area would consist of seating for ten, with a mix of low and high tables. Food will be prepared behind a counter located along the front of the store. Customers will place their order at the counter and carry their food to their seats. Alcohol will be kept in a cooler or cabinet behind the counter which will only be accessible by staff. All alcohol will be served at the table by staff. In addition to the store itself, this location also has a gas bar.

24According to the evidence presented by the Appellant, the staff at the Premises will be able to view the restaurant area from their position behind the counter. No alcohol will be permitted outside the licensed food-service area. The Premises have large windows which allow staff to monitor the parking lot, as well as the gas bar. The windows also allow persons outside the store to see inside the Premises. According to the evidence of the Appellant, this enhances the safety of those inside. The store is well-lit and monitored by multiple security cameras.

25The Premises is located at in busy intersection at the corner of Upper Wellington St. and Bruce Ave. E. Businesses are located in all other corners of the intersection. Much of the surrounding area is residential. Two elementary schools, as well as a park, are nearby.

The Objectors

26Councillor John-Paul Danko gave evidence at the hearing for the City of Hamilton. Councillor Danko is the Councillor for Ward 8, which is the Ward in which the Premises is located. Councillor Danko, his wife, his two children, live some 800 m away from the Premises.

Councillor John-Paul Danko

27Councillor Danko was called to give evidence by the City of Hamilton, as well in his personal capacity as an added party. Councillor Danko described his concerns with granting the Appellant a licence to serve and sell alcohol. He is concerned that the sale of alcohol at the Premises will be a drain upon scarce city resources for enforcing community standards and will further burden the already “over extended” by-law enforcement officers. However, during cross examination, he acknowledged that the Appellant has not had a single by-law infraction, nor has a complaint been registered against it during the lengthy period it has served age-restricted products.

28Councillor Danko testified that there was “lots of opposition” to the granting of a licence by his constituents. However, he did not provide any quantifiable, objective evidence of this opposition, nor was any evidence given that the opposition came from the immediate neighbours, who would be most directly affected by the granting of a licence.

29Councillor Danko is also concerned about the dangers of alcohol use in the wider community. He is concerned about the risks of drinking and driving and of underage drinking. He does not approve of the sale of alcohol in convenience stores where unaccompanied minors are often present. He also pointed out the relative proximity of the Premises to the park and the two elementary schools.

30Councillor Danko summarized his testimony by saying that his “major concern is that convenience stores not [be allowed to] sell alcohol as a matter of policy.”

The Appellant’s Practices and Policies

31The Appellant’s witness, Victor Vrsnik, Senior Manager, Corporate Affairs & Business Development testified about its policies and procedures, both in general and how they deal with age-restricted products. The Appellant’s age verification program is called ID Zone and requires photo ID to purchase alcohol from anyone who appears to be under 30 years old. Mr. Vrsnik noted that this was a more robust requirement than the LCBO, who obtains photo ID from anyone who appears under the age of 25.

32The Appellant’s employees will all be required to take the ID Zone training in addition to the provincially mandated “Smart Serve” program.

33In addition, the Appellant confirms that customers’ driver’s licences presented as proof of age are not fake by using a device that scans the licence and is able to determine whether it is valid. Mr. Vrsnik testified that not once in its history has the Appellant been convicted of an age restriction violation. This evidence was not challenged.

34Mr. Vrsnik gave evidence that the Appellant has a national toll-free number that goes directly to an Area Leader for any complaints regarding a specific location.

The Registrar

35The Registrar took no position on whether the Appellant should be issued a licence. The Registrar argued that the focus ought to be upon the impact of the licence on the local residents. The Registrar also took no position upon any of the requested conditions on the licence as long as they are within the scope and mandate of the Registrar and are enforceable. Counsel for the Registrar submitted wording it recommended regarding the potential condition that the Appellant have video surveillance. That wording is similar to that which it requires from licensed cannabis retailers.

ANALYSIS

36No evidence was given about the needs and wishes of the local residents most directly affected by the granting of a licence, other than the anecdotal testimony of Councillor Danko that there was “lots of opposition” from his constituents. Nor was any evidence given of opposition to the licence by those most directly affected.

37Much of the objectors’ evidence was aimed at establishing the social harms that alcohol sales generate in the general sense: much emphasis was given to the harms and risks of underage drinking, as well as the dangers of drinking and driving.

38I agree with the following recent statement made by the Tribunal:

it is not for this Tribunal to examine the wisdom of the government’s policy choices… Instead, the Tribunal’s task is to examine the specific application before it and determine whether any objector has established that the liquor licence is not in the public interest having regard to needs and wishes of local residents.²

39The Tribunal recently made the following statement, with which I agree, regarding the focus on residents whose interests may be most impacted in a proceeding such as this:

The Tribunal has consistently held that the public interest provision in the LLAct, now s. 3(6) of the LLCAct, should be read such that the Tribunal’s enquiry is to be focussed on the public interest as it relates to the impact of the licence on the residents of the local municipality, with the concerns of the residents in the immediate area of the premises at issue who are the most affected by the proposed licence given greatest consideration as compared to those who are less directly affected. As the Tribunal stated in Powerhouse Corporation v. Registrar of Alcohol, Gaming and Racing:

The use of the words “public interest” in this subsection does not give us a mandate to embark on a far-reaching consideration of the public interest as a general concept.

This approach was upheld by the Divisional Court which stated at paragraph 52 of its decision:

It is evident that the full definition of “public interest” in s. 6(2)(h) of the Act represents a legislative intent to narrow the interpretation of those words in that provision…The legislature must be presumed to have made a deliberate choice to circumscribe the latitude of “public interest” in s. 6(2)(h) by adding the wording that immediately focuses attention on the “needs and wishes of the residents of the municipality in which the premises are located.”³

40I note that ss. 40 and 41 of Regulation 746/21 specifically contemplate that licensed premises may include, or be located in, a convenience store. Thus, notwithstanding the submissions made by Councillor Danko, it is not for the Tribunal to order the Registrar to refuse to issue a licence on the sole basis that an Appellant is a convenience store. Instead, it is to determine if selling alcohol at this convenience store is not in the public interest, having regard to the needs and wishes of the community residents.

41I was impressed by the Appellant’s evidence regarding its robust, structured and detailed plan to ensure safe alcohol sales. I was particularly impressed that notwithstanding that the Appellant operates a number of locations in Ontario that sell age-restricted products, it had never been convicted of an age-restricted product-related offence. I am satisfied that the Appellant’s plan contains appropriate safeguards to protect the public and ensure safe alcohol sales.

42Ultimately, I am not satisfied that the objectors discharged their burden of establishing that this licence is not in the public interest, having regard to the needs and wishes of the residents of the municipality in which the premises is located. The evidence did not persuade me that the granting of a licence to the Appellant is not in the public interest, particularly given that I have found that the Appellant’s proposal contains appropriate safeguards for ensuring safe alcohol sales.

43Balancing the needs and wishes of the local residents against the Appellant’s qualified right to a licence, I am not satisfied on the evidence before me that the licence is not in the public interest.

CONDITIONS

44In the event that this Tribunal grants a licence to the Appellant, the City of Hamilton requested that five conditions be attached. The conditions are limits upon the hours during which the Appellant can serve alcohol, a physical barrier that separates the licensed from unlicensed areas of the store, signage requirements, the operation of a phone number that could be used to register complaints, and a video security system covering the exterior of the store.

45As noted, the Registrar’s position was that each of the proposed conditions are enforceable; however, the Registrar took no position on whether the conditions ought to be imposed.

46The Added Parties all supported the imposition of conditions should the licence be granted.

47The Appellant opposed the condition of a “Good Neighbour” sign near the exit of the premises, reminding patrons to be respectful of the neighbourhood. It was noted by Counsel for the Appellant that this would increase their regulatory burden and deprive them of a commercial opportunity to utilize this space for general advertising, or a specific promotion. The objectors failed to lead any evidence of the effectiveness of such signage, nor that it would in any way alleviate any of the concerns that the City of Hamilton raised. Given this, I do not find such a condition to be appropriate in the circumstances.

48The City of Hamilton requested that the Appellant be restricted to the sale of alcohol from 4pm-11pm. The position of the City was that the Appellant’s business operates as the “neighbourhood candy store”, and that unaccompanied minors would be in the store. The condition is tied to the objection of convenience stores selling alcohol. As previously mentioned, the matter of public policy is a matter for the legislature, not this Tribunal. Further, no evidence was led that somehow at 4pm unaccompanied minors would stop coming into the store. Further, the Appellant has already demonstrated that it has a vigorous program in place to prevent underage purchases. Requiring the Appellant to only begin serving alcohol at 4pm would prevent it from selling and serving alcohol during the lunch hours. This would put it at a significant competitive disadvantage, whilst at the same time not providing any meaningful mitigation of the risks that the city wanted to address.

49The request for a condition to construct a physical barrier separating the licenced and unlicensed areas of the store is purportedly to prevent the “passing off” of alcohol to minors. However, irrespective of a physical barrier, minors are still most welcome in the dining area. Thus, the proposed condition would not do anything to achieve the purposed objective.

50The City of Hamilton also requested that the Appellant be required to post a prominent sign, visible on the outside of the premises containing a phone number for residents to register concerns or complaints. No evidence was given that this would address any of the concerns raised by the City of Hamilton.

51The final condition is for a security camera system to monitor all areas of the property. The Registrar provided suggested wording that would be enforceable, mirroring the requirements imposed upon cannabis retailers. However, the Appellant already has security cameras. Further, no evidence was led that this would provide any mitigation of the risks raised by the city.

CONCLUSION

52I have considered the concerns expressed by the objectors. I find that they failed to satisfy their burden. I am not satisfied that granting a licence in this case is not in the public interest having regard to the needs and wishes of the residents of the municipality and the local community in which the Premises are located.

53Pursuant to s. 26(3) of the LLCAct, I direct the Registrar to issue the licence without conditions.

ORDER

54Having considered the evidence and submissions of the parties, I direct the Registrar to issue a licence to the Appellant, 7-Eleven Canada Inc. o/a 7-Eleven 622 Upper Wellington Street, Hamilton, for the Premises without conditions.

Footnotes

1. 17-Eleven Canada Inc. o/a 7 Eleven 72 Wharncliffe Road North, London v. Registrar, Liquor Licence and Control Act, 2019, 2022 CanLII 20142 at para 10 (ON LAT).
2. 27-Eleven Canada Inc. o/a 7 Eleven 1730 Bloor St. W., v. Registrar under the Alcohol and Gaming Commission of Ontario Act, 2019, 2022 CanLII 55026 at para. 31 (ON LAT)
3. 37-Eleven Canada Inc. o/a 7 Eleven 72 Wharncliffe Road North, London v. Registrar, Liquor Licence and Control Act, 2019, 2022 CanLII 20142 at paras. 31-32 (ON LAT) citing Powerhouse Corporation v. Registrar of Alcohol, Gaming and Racing, 2021 ONSC 4116 (Div. Ct.)