Historia Cantina Inc. o/a Historia Cantina v. Registrar under the Alcohol and Gaming Commission of Ontario Act, 2019, 2024 CanLII 10572

Licence Appeal Tribunal File Number: 15335/LLCA

Application for the removal of a condition in a Licence under the Liquor Licence and Control Act, 2019, S.O. 2019, c. 15, Sch. 22, pursuant to s. 11(4).

Between:

Historia Cantina Inc. o/a Historia Cantina

Applicant

-and-

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

Respondent

AMENDED DECISION & ORDER

ADJUDICATOR:

Bruce Stanton

APPEARANCES:

For the Applicant:

Christine Blommers, co-owner (self-represented)

Jillian D’Amico, co-owner (self-represented)

For the Respondent:

Rena Khan, counsel

Heard by teleconference:

February 9, 2023

OVERVIEW

1Historia Cantina Inc. (the “applicant”) is the holder of Liquor Licence No. 1295968 under the Liquor Licence and Control Act, 2019 (the “Act”) for the establishment known as Historia Cantina. The applicant is also the licensee for the purposes of this proceeding and operates a licenced establishment located at 357 Main St. in Schomberg, Ontario (the “establishment”).

2The applicant acquired the establishment early in 2023 from 2189516 Ontario Inc. o/a Scruffy Duck Restaurant (“Scruffy Duck”). Scruffy Duck’s liquor licence was transferred to the applicant in the transaction. In 2013, Scruffy Duck sought to remove conditions in its liquor licence relating to its hours of operation and music (live and amplified) on the patio. The respondent issued a Notice of Proposal to Refuse to Remove Conditions in its licence and Scruffy Duck appealed the Notice, resulting in Tribunal decision 7442 v. Registrar of Alcohol and Gaming, 2013 CanLII 21164 (ON LAT), (“7442”). In that decision, the Tribunal ordered the replacement of two conditions relating to hours of operation and the maintaining of the two conditions that prohibited live and amplified music on the patio.

3On October 24, 2023, the applicant filed with the Tribunal an Application for Removal of Conditions from a Liquor Licence under subsection 11(4) of the Act. The applicant seeks an order from this Tribunal to remove the condition of “No amplified music on the patio,” on the basis that a change in circumstances justifies the removal of the condition.

4The respondent takes no position on whether the prohibition on amplified music on the establishment’s patio should be removed. It looks to the Tribunal to make that determination.

5Subsection 11(4) of the Act allows the Tribunal to remove a condition that the Tribunal has previously imposed if it is satisfied there is a change in circumstances justifying the removal of the condition. The applicant has the onus of demonstrating, on a balance of probabilities, that a change in circumstances justifies the removal of a condition.

6The Tribunal may consider and determine whether a change in circumstances justifies a removal of a condition, at a case conference event of the Tribunal.

7A case conference in this matter was held on December 20, 2023 but was adjourned to give the applicant additional time to engage with the nearby community and, in particular, opponents of the application by the previous owner of the establishment to remove conditions of its licence that is the subject of the Tribunal’s decision in 7442.

8This case conference is constituted under Rule 21 of the Licence Appeal Tribunal Rules, 2023 (the “Rules”) and all other Tribunal Rules apply except to the extent varied or negated by the provisions of Rule 21. At the case conference, both the applicant and respondent consented to me, as the case conference adjudicator, making the decision on whether there has been a change in circumstances and whether the condition should be removed. The parties’ submissions are therefore incorporated into the analysis of the issue in dispute.

ISSUE IN DISPUTE

9The issue in dispute is:

1. Is there a change in the licensee’s circumstances that justifies the removal of the condition in its liquor licence prohibiting amplified music on the patio?

RESULT

10I find that a change in circumstances of the licensee justifies the removal of the condition in its liquor licence that prohibits amplified music on the patio and order the condition removed.

ANALYSIS

Issue 1: Change in circumstances justifies the removal of the condition

11I find the applicant has met its burden to prove, on a balance of probabilities, that there is a change in its circumstances that justifies the removal of the prohibition on amplified music on the patio.

12The conditions of the applicant’s licence were ordered in 7442 based, in part, on the question of whether removing conditions on the previous licence holder’s licence was contrary to the public interest. In 7442, the Tribunal determined it was in the public interest to keep the prohibition on amplified and live music on the establishment’s patio in place.

13Although s. 11(4) compels me to only consider whether a change in circumstances justifies the removal of the condition, doing so requires me to consider the public interest. The very basis for deciding this question, a “change” in circumstances, necessarily begs an understanding of the starting point for any “change”. Put another way, if the Tribunal determined that the circumstances in 7442 necessitated keeping the prohibition in place out of a regard for the public interest, an analysis under s. 11(4) compels an understanding of the circumstances that underpinned keeping the prohibition in place, out of regard for the public interest.

14I find that if a change in circumstances justifies removing the condition, doing so must not be contrary to the public interest. Although a s. 11(4) application is a proceeding that is exclusive to the applicant and respondent, the Tribunal ordered the applicant to conduct community engagement with its neighbours to, in effect, gauge the level of public support for or opposition to removing the amplified music prohibition, and the respondent to provide the applicant a list of the objectors relevant to the hearing in 7442 to facilitate the applicant’s efforts.

Community support has significantly improved

15I find that the level of community support for removing the condition is a change in circumstance that is persuasive, and it serves to assuage any doubt of whether removing the condition would be contrary to the public interest.

16Following receipt of the list of objectors relevant to the hearing in 7442 from the respondent, the applicant contacted 34 of them, by hand-delivered letter and email.

17Of the 34 objectors contacted, just under 50% (16) responded. I consider this to be a high response rate for an engagement of this kind. Fourteen of the previous objectors now express support for the removal of the condition, one opposes, and one expressed concern. The applicant also engaged with neighbours along Main St. in Schomberg, in person, to present their proposal to remove the condition and receive comments. Persons from a further 21 addresses near the establishment expressed support for removing the condition, bringing the total to 35 supporters.

18A previous objector who lives across the street from the establishment, Krista Wall, noted in an email response that she appreciated the applicant’s commitment to their small community and remarked at how their operation was “vastly different from its predecessors”.

19One previous objector in 7442, Michelle Hubert, a neighbour living four doors down from the establishment, replied by email that she is concerned that if the condition was removed, then a subsequent owner might then have live music on the patio, which she opposes, and she saw that as contrary to municipal by-laws.

20The applicant submits that it only seeks to remove the prohibition on amplified music. The prohibition on live music on their patio would remain a condition of their licence. The applicant submits that speculating on what a subsequent owner/operator may do with a licence is not relevant to the issue before the Tribunal and refers me to 1593036 Ontario Inc. o/a Myth v. Registrar under the Alcohol, Cannabis and Gaming Regulation and Public Protection Act, 1996, 2021 CanLII 104682 (“Myth”), in which an opponent expressed a similar worry that a future owner might abuse the absence of a prohibition on amplified music. The Tribunal, in that case, found that it should consider only the circumstances of the current applicant and that “it is too speculative and uncertain” to consider a future or subsequent scenario with the licence.

21The sole objection to the applicant’s proposal is from Lee Anne Havens and Charles Emerson, a couple who live adjacent to the building, an historic feed mill, the establishment is located in. They submitted an email to the Tribunal in advance of today’s case conference that was shared with the parties. The couple opposes the applicant’s proposal because they allege the applicant has removed fencing and trees that previously shielded the patio from their property, and that the establishment causes noise that reduces the enjoyment of their property including from vehicle noise from the building’s parking lot, restaurant staff taking smoke breaks outside the building, and from the garbage container lid being slammed. The objector believes the applicant is seeking to remove both the amplified and live music prohibition.

22The applicant refutes the allegation that it removed fencing and trees from around the patio and submits that it no longer condones staff smoke breaks outside the building out of respect for its neighbours, and that garbage bin and parking lot noise relates to the building uses, including multiple offices, not just the establishment. As noted above, the applicant seeks only to remove the amplified music prohibition.

23The respondent submits that noise issues unrelated to the premises of the applicant are not within the purview of the Registrar and are more rightly within municipal jurisdiction. However, in respect to amplified music on the patio, the Registrar directs me to s. 45 of Ontario Regulation 746/21 under the Act (the “Regulation”) which states that holders of a licence shall not permit noise that arises directly or indirectly from entertainment on the premises to disturb persons who reside near the premises. The respondent submits s. 45 is its regulatory tool in relation to noise from licenced establishments, including amplified music on patios, and cannot be usurped by municipal noise by-laws.

24I give less weight to the Havens/Emerson objection and one concerned neighbour’s (Hubert) submissions because both were premised on the incorrect assumption that the applicant was seeking to remove the prohibition on live music, that the noise issues cited by Havens/Emerson are not relevant to the issue of amplified music on the patio, and worries about how a different, future owner of the establishment might use the licence are not only speculative, they would be alleviated by the obligations any licence holder would have under s. 45 of the Regulation.

25I find the overwhelmingly positive response the applicant received from its engagements in the neighbourhood is more persuasive and I conclude that the change in circumstances in respect to community support justifies the removal of the condition. I find it is reasonable to conclude, based on the broad shift in support for the condition’s removal, that removing the prohibition is not contrary to the public interest.

The nature of the establishment and competitive environment has changed

26I find that changes in the nature of the establishment and the competitive environment justify the removal of the prohibition on amplified music on the patio.

27The applicant submits that since taking ownership of the establishment that was Scruffy Duck, it has renovated the interior and upscaled the menu, meaning that the food and beverage offerings are of higher quality and the prices are higher. The establishment attracts a more discerning, mature clientele than the previous establishment, including more families.

28The applicant submits Historia Cantina is no longer a bar, the way Scruffy Duck was. The applicant did not submit its percentage of alcohol sales to gross revenue. Evidence in 7442 indicated that Scruffy Duck’s alcohol sales represented up to 50% of its gross revenues, which would support the contention that it had a significant reliance on beverage alcohol sales. The applicant’s submission is echoed in Krista Wall’s message of support above, that the applicant’s establishment is vastly different than its predecessor.

29The applicant submits that since COVID-19, there is more demand, generally, for patio dining to avoid enclosed spaces and reduce the risk of attracting airborne disease (flu, common cold, COVID, etc.).

30The applicant submits that the amplified music it seeks to have playing on the patio will be ambient music only, i.e., background music. It submits that background music helps to shelter the conversation of guests at their table, giving them more privacy and a better customer experience.

31The applicant submits that several new restaurants have opened on Main Street in Schomberg since the prohibition condition was ordered by the Tribunal, ten years ago, and most have a patio without any restriction on amplified music. The applicant submits it suffers an economic disadvantage from the condition in its licence because its competitors, within a few hundred metres along the same street, can offer patio dining with amplified music. It submits the condition is unfair and no longer justified.

32I find the changes to the establishment since its recent era as Scruffy Duck justify the removal of the prohibition on amplified music on the patio. The changes tilt away from the concerns expressed in 7442 including a more upscale menu, mature clientele, and positioning the establishment as more a dining establishment than a bar. In addition, the higher demand for patio dining since the COVID-19 pandemic and the increase in the number of nearby patio restaurant offerings with no such prohibition favour the removal of the condition.

33I find the changes in circumstance of the applicant in respect to the nature of the business and the competitive market it now operates in justify the removal of the prohibition on amplified music on the patio.

34I find a change in circumstances of the establishment, regarding community support and the nature of the business and competitive environment, justify the removal of the prohibition on amplified music on the patio.

ORDER

35I order the following:

1. That the condition on the applicant’s liquor licence that prohibits amplified music be removed.