Licence Appeal Tribunal File Number: 16938/LLCA

An appeal from a Notice of Proposal to Refuse Application under the Liquor Licence and Control Act, 2019, S.O. 2019, c. 15, Sched. 22 (the “Act”)

Between:

Savannah Lounge Corp.

Appellant

and

Registrar, Liquor Licence & Control Act, 2019

Respondent

DECISION

ADJUDICATOR:

Rebecca Hines, Member

APPEARANCES:

For the Appellant:

Bhalibi Meles, Owner and Director of the Appellant

For the Respondent:

Interpreter:

Aviva Harari, Counsel

Angesom Fitsumbherhan, Tisgrinya Language

Heard by videoconference:

September 8-9, 2025

BACKGROUND

1Savannah Lounge Corp. (the “appellant”) applied for a liquor sales licence, and on March 21, 2025, the Registrar, Liquor Licence and Control Act, 2019, (the “respondent”) issued a Notice of Proposal to Refuse Application (the “NOP”) under the Act.

2This matter arises from the transfer of a liquor licence from the previous owner of Savannah Lounge to Bhalibi Meles (“Meles”) which was approved by the respondent on July 21, 2023. Meles operated the establishment with a valid transfer liquor licence until July 24, 2024, when the licence expired.

3On August 1, 2024, the appellant submitted a new application for a liquor licence to the respondent which listed Savannah Lounge Corp. as the appellant. Meles and Awet Beyene (“Beyene”) are registered as the sole owners and directors of the appellant. Beyene was the Manager of the appellant. From August 1, 2024 to December 27, 2024, the appellant obtained various special occasion permits (“SOPs”) while waiting for the licence to be approved. Following an incident on December 27, 2024, an inspector recommended that the respondent review the liquor eligibility requirements of the application because of several incidents of non-compliance with the Act and regulations. Consequently, the respondent issued the above NOP refusing registration.

4The parties were unable to resolve the issues at a case conference, so the matter proceeded to a two-day videoconference hearing. On behalf of the respondent, I heard the testimony of the following individuals employed with the Alcohol Gaming Commission of Ontario (“AGCO”): Stephanie Balaban, Manager, Liquor Eligibility and four Inspectors: Dave Thielking (“Thielking”); Kendra Giles (“Giles”); Nathan Hofstetter (“Hofstetter”); and Christopher van Mourik (“van Mourik”). Meles and Beyene testified on behalf of the appellant, as did Melakebrhan Tesfa (“Tesfa”) and Stephanie Donivan Smith (“Donivan-Smith”), lay witnesses.

ISSES IN DISPUTE

5The issues to be decided in the hearing are whether:

1. There are reasonable grounds for the belief that the appellant will not carry on business in accordance with the law and with integrity and honesty?

2. The appellant is carrying on activities that are, or if the appellant were licensed would be, in contravention of the Act or the regulations?

RESULT

6The respondent has proven that having regard to the past or present conduct of the appellant, there are reasonable grounds for belief that the appellant will not carry on business in accordance with the law and with integrity and honesty. I also find that the appellant has carried on activities in contravention of the Act and regulations. In consideration of the public interest imperatives of the Act, I direct the respondent to carry out the NOP.

PROCEDURAL ISSUE

Interpreter

7The respondent opposed Meles’ request to use Angesom Fitsumbherhan (“Fitsumbherhan”), as an interpreter at the hearing because he is not neutral or independent. It maintains that Fitsumbherhan previously appeared before the Tribunal in a liquor licence appeal which resulted in the revocation of a licence. In addition, Meles advised that Fitsumbherhan would also be helping him with his appeal. Therefore, it is not appropriate for him to act as an interpreter because he is not a neutral third party if he is assisting Meles.

8I declined the respondent’s request to exclude FIstumbherhan from providing interpretation. Rule 4.2 of the Licence Appeal Tribunal Rules does not provide any requirements that an interpreter provided by a party be certified or have special qualifications. I confirmed with Fitsumbherhan that he is not providing legal assistance to Meles and that his sole role at the hearing would be to interpret the oaths, questions, answers, and submissions throughout the hearing. Further, I find that there would be more prejudice to the appellant if I declined his request for interpretation because it would limit his fair participation in the process. To address the respondent’s concern regarding neutrality, I administered the oath for interpretation to Fitsunmbherhan to ensure he understood his obligations regarding fair interpretation. I also provided instructions and guidance throughout the hearing.

I find that the past conduct of the appellant affords reasonable grounds for belief that business will not be conducted in accordance with the law and with integrity and honesty.

ANALYSIS

The Law

9Section 3(4)(b) of the Act establishes that when the past or present conduct of a licensee, applicant, or its officers or directors, affords reasonable grounds for belief that they will not carry on business in accordance with the law and with integrity and honesty, they are ineligible for a licence.

10The standard of “reasonable grounds for belief” was set out by the Court of Appeal in Ontario Alcohol and Gaming Commission of Ontario v. 751809 Ontario Inc. (Famous Flesh Gordon’s), 2013 ONCA 157. The respondent does not have to show that the appellant’s past conduct makes it more likely than not that the business will not be carried out as required, but only that its belief to that effect is based on more than mere suspicion and on compelling and credible information. Further, the respondent must also show that there is a nexus between the past conduct and the appellants’ ability to conduct business under the Act serving the interests of the public.

11The respondent argues that it has proven that there are reasonable grounds for belief that the appellant will not carry on business in accordance with the law and with integrity and honesty. It submits that Meles and Beyene, the owners and directors of the appellant repeatedly breached the Act and regulations over the one-year period the appellant had a valid licence to sell alcohol. Further, despite receiving education and guidance from the AGCO Inspectors on multiple occasions they continued to disregard the law. It submits that their past conduct has shown a pattern of non-compliance with the law and because of this pattern the respondent does not have any confidence that they will comply in the future.

12Meles submits that although he has made mistakes in the past, he is willing to correct things and comply with the law in the future if he is given a second chance.

13I find the respondent has proven that the past conduct of Meles and Beyene on behalf of the appellant establishes that there are reasonable grounds for belief that the appellant will not carry on business in accordance with the law and with integrity and honesty for the following reasons.

14First, I find that both Meles and Beyane have displayed a pattern of disregard for the law despite having multiple opportunities to correct their behaviour. During the first year the appellant held the valid transfer licence AGCO Inspectors attended the premises on five occasions where both Meles and Beyene were found to be in repeated non-compliance with the Act and regulations. The following is a summary of those infractions:

i) An inspection report dated December 9, 2023 notes that Thielking attended the premises and found patrons consuming alcohol in a billiards room, which is an unlicenced area. Section 39(1) of O. Reg 746/21 (the “regulation”) states that a licensee shall not permit a patron to remove liquor from the licenced premises (in this case by allowing alcohol into the unlicenced billiards room) unless it is for takeout. Meles responded by placing blame on patrons for bringing alcohol into the unlicenced area. Thielking educated him on the importance with complying with the law in the future.

ii) An inspection report dated December 15, 2023 supports that Thielking and Giles attended the premises again and found evidence of alcohol service in the billiards room. Once again, the inspectors educated Beyene about complying with the law.

iii) An inspection report dated February 25, 2024 establishes that Thielking and Giles attended the premises between 2:30 and 2:55 a.m. and found signs of alcohol service in the billiards room. Further, a capacity count showed that 36 patrons were inside the premises when they have a legal capacity limit of 30. The inspectors also found signs of service on the patron’s tables past the cut-off time. Section 24(6) of the Act states that every licensee and permit holder shall comply with the standards and requirements under subsection (1). Section 6.1 of the AGCO’s Interim Standards provides that a licensee shall not exceed its lawful capacity. Section 31 of the regulation provides a deadline of 2:00 a.m. to sell alcohol, and s. 37 supports that signs of service shall be removed within 45 minutes of that time. Beyene and Meles were again educated about their obligation to comply with the law.

iv) An inspection report dated April 21, 2024, documents that Thielking and Giles attended the premises between 2:38 and 3:02 a.m. and found the same infractions noted from the previous visit: there was evidence of alcohol service (an empty beer bottle) in the billiards room, they were overcapacity (38 patrons on the premises), and they had failed to remove evidence of alcohol service by 2:45. The inspectors once again educated Meles and Beyene about their obligations to comply with the law.

v) An inspection report dated May 19, 2024, establishes that Thielking and Hofstetter attended the premises again between 2:57 and 3:20 a.m. and found that the premises was again over capacity, and they had failed to remove evidence of alcohol service by 2:45 a.m. Three samples were taken from alcohol left on the tables and alcohol was confirmed to be in two of the samples. They were again reminded of their obligation to comply with the law.

15Second, Inspectors Thileking, Giles and Hostetter testified about what occurred during the above-noted inspections, which was corroborated by pictures, investigation notes and alcohol test results. The testimony and evidence of these inspectors about what transpired during their inspections remained unshaken during cross-examination.

16Beyene testified that the Inspector’s capacity count on February 25, 2024, was not accurate and that when the inspectors came in through the back door, they let in patrons who were not there previously which increased the head count. I do not accept Beyene’s testimony regarding this incident because it is inconsistent with the fact that Meles signed a monetary penalty agreement with the respondent where he conceded that the premises was over capacity on both January 28 and February 25, 2024, and agreed to pay a fine.

17Third, during each of the above inspections, the reports note that the Inspectors attempted to train and educate both Meles and Beyene on their obligations as a licensee to ensure compliance with the Act. The investigation reports support that both Meles and Beyene would sometimes agree and accept responsibility. However, they would often blame patrons for taking alcohol into the unlicenced area or deny the infractions. I find the fact that they did not accept accountability for their actions supports that there are reasonable grounds for belief that they have not carried on business in the past with honesty and integrity and in accordance with the law.

18Fourth, I find Meles’ testimony unhelpful as far as providing any justification for the above-noted incidents, nor did he explain why he continued to disregard the law despite receiving repeated education and training. I find the evidence is clear that both Meles and Beyene continued to repeat the same mistakes despite being given multiple chances to comply with the law. I find this supports the respondent’s position that there are reasonable grounds for belief that the appellant will not carry on business in accordance with the law and with integrity and honesty.

19Fifth, upon the expiry of the appellant’s licence in July 2024, Meles and Beyene continued to disregard the law in their operation of the business. On October 19, 2024, inspectors attended the premises where it was noted that the appellant had a fully stocked bar and was serving alcohol when they did not have a valid licence or an approved SOP. Meles was ordered to remove all alcohol from the premises. SOPs were issued for events on August 23 to 24, 2024 and August 31 to September 1, 2024, and the respondent submits no alcohol was purchased on the permits for these events. Meles did not produce any receipts from these events to refute these allegations.

20Finally, an SOP was issued for an event on December 27, 2024, which was applied for by Tesfa, Meles’ and Beyene’s uncle. Tesfa was the responsible person for this event and was legally required to be in attendance, the event was legally required to be by invitation only (confirmed by a guest list) and alcohol had to be purchased on permit. Thielking and van Mourik attended the premises on this date and Tesfa was not present, patrons were there who were not on the guest list and there was open sign in the window of the bar. There was also evidence of alcohol that was not purchased on permit. Meles and Beyene told inspectors that Tesfa was not there because he was picking up water for the event.

21Tesfa testified that he had been at the premises throughout the day, however, he had to leave because he had a sick child at home. Upon being notified that the inspectors were in attendance he returned to the premises and confirmed that there were patrons there that were not on the guest list. He also advised the inspectors that he was unable to stay because he had a sick child at home. The inspectors revoked the SOP and referred the matter to the liquor eligibility department. Of note, Meles produced two receipts from the beer store and LCBO which support that he did purchase some alcohol on permit.

22Although I find that some of the alcohol was purchased on permit, I find the appellant did not comply with the SOP requirements because Tesfa was not in attendance when the inspectors arrived, and he confirmed he could not stay for the event. Further, Tesfa acknowledged to the inspectors on that date that there were people there that were not on the guest list. In addition, I find the explanation provided by Meles and Beyene that Tesfa was not present because he was picking up water (when he was at home with a sick child) lead me to believe that they did not act with integrity and honesty. I find the events surrounding the event of December 27, 2024, establish that Meles and Beyene failed to comply with the rules of the SOP and the law.

23Donavan-Smith testified that she had applied for the permit on behalf of the appellant and that Meles called her when the inspectors arrived on December 27, 2024. She submits that on this date, the inspectors were aggressive and communicated with both Meles and her in a disrespectful tone. She also testified that Meles and Beyene felt that they were being racially profiled because of the repeated harassment and visits by the inspectors. I give little weight to Donavan-Smith’s allegation that the Meles and Beyene were being racially profiled as neither testified or provided any evidence in support of same. Overall, I find that throughout the process inspectors exhibited patience when dealing with Meles and Beyene because they gave them several chances to comply with the law despite repeated non-compliance. Ultimately, I find Donavan-Smith’s testimony unhelpful in clarifying any misunderstandings involving the SOP on December 27, 2024 or to explain why Meles and Beyene did not comply with the rules in carrying out this event.

24For all the above-reasons, I find that the respondent has proven that there are reasonable grounds for belief that the appellant (through the conduct of Meles and Beyene) has not carried on business in accordance with the law or with honesty and integrity. In addition, the past conduct of Meles and Beyene has shown a pattern of non-compliance with the Act and regulation. Further, I find there is a nexus between the appellant’s past conduct and the licence being sought and am not satisfied with their ability to conduct business under the Act.

I find that terms and conditions attached to the appellant’s licence will not protect the public interest.

25Having found that the respondent has met its burden of proof, I will consider whether carrying out the NOP is a suitable remedy to give effect to the purpose of the Act and in the public interest.

26Under s. 26(5) of the Act, the Tribunal can impose any condition on a licence or permit that the Tribunal considers proper to give effect to the purposes of the Act, which, as discussed above, is protection of the public interest.

27The appellant did not provide any submissions outlining alternatives to the refusal of the licence. Nonetheless, I will address whether this is an appropriate remedy.

28Meles argues that the NOP should not be carried out and that he will comply with the Act and regulations in the future. He submits that in the past he has struggled because he is a newcomer to Canada and carrying out business in his home country was quite different because he was not subject to the same laws. Further, he has struggled with communication because of the language barrier and has had to cope with the stresses of running a business and looking after his family.

29The respondent submits that Meles has provided no insight into his past non-compliance with the Act and regulations and has ignored the education and guidance provided by inspectors. Further, Meles has not provided any evidence regarding any plan he has in place to show that he will ensure compliance with the Act and regulations in the future should he be given another chance to comply. It submits that terms and conditions are not appropriate.

30Under the circumstances, I find that terms and conditions are not appropriate in this case because there is nothing in the uncontroverted evidence of the respondent that would lead me to believe that the imposition of conditions on the appellant’s licence would be effective as the appellant has not demonstrated a pattern of changed behaviour. I am not satisfied that Meles has any plan on how he will ensure compliance with the Act and regulations in the future. Consequently, I am not satisfied that the public interest can be protected with terms and conditions.

ORDER

31For the above-noted reasons, I direct the respondent to carry out the NOP to refuse registration.