1213963 Ontario Limited v. Alcohol and Gaming Commission of Ontario, 2009 ONCA 323

CITATION: 1213963 Ontario Limited v. Alcohol and Gaming Commission of Ontario, 2009 ONCA 323

DATE: 20090420

DOCKET: C49574

COURT OF APPEAL FOR ONTARIO

Doherty, Cronk and Rouleau JJ.A.

BETWEEN

1213963 Ontario Limited o/a Sin City Bar and Eatery

Respondent

and

Registrar, Alcohol and Gaming Commission of Ontario

Appellant

COUNSEL:

Joyce A. Taylor and Sujin Chan, for the appellant, Registrar, Alcohol and Gaming Commission of Ontario

Harry G. Black, Q.C., for the respondent, 1213963 Ontario Limited

HEARD and orally released: April 14, 2009

On appeal from the judgment of the Divisional Court (Pardu, Lederman and Kiteley JJ.) dated May 2, 2008.

ENDORSEMENT

[1] Section 45(1) of the relevant regulation provides in part that:

The licence holder shall not permit drunkenness … to occur on the premises.

[2] The prohibition in the regulation has two components. They are:

• drunkenness on the premises; and
• permitting that drunkenness.

[3] In our view, permitting drunkenness on the premises requires proof that the licensee knew or ought to have known of the drunkenness on the premises. That determination, of course, must be made in all the circumstances and, in particular, in the context of the various obligations and duties placed on the licensee by the relevant legislation and regulations: see The Queen v. Sault Ste. Marie, 1978 CanLII 11 (SCC), [1978] 2 S.C.R. 1299; The Queen v. Royal Canadian Legion, 1971 CanLII 372 (ON CA), [1971] 3 O.R. 552 at 559 (C.A.).

[4] While there are cases from the Board that suggest that “permit” means simply failing to prevent and is established once drunkenness on the premises is shown to have occurred, there are also cases from the Board that are consistent with the interpretation that we hold is the correct one: e.g. see 1577107 Ontario Inc. (c.o.b. Place Bar & Grill) (Re), [2008] O.A.G.C.D. No. 405. See also Horseshoe Valley Resort Ltd. v. Alcohol and Gaming Commission, 2005 CanLII 81108 (ON SCDC), [2005] O.J. No. 5895 (Ont. Div. Ct.).

[5] The Divisional Court held that the Board erred in law by failing to make a finding on the question of whether the licensee permitted drunkenness on the premises (see para. 15). We have reviewed the Board’s reasons. We are satisfied that the Board applied the wrong interpretation of the word “permits” in making its finding against the licensee. In our view, the Board did not consider whether the licensee knew or ought to have known of the drunkenness on the premises. We say so for three reasons:

• In its very brief reasons on this issue, the Board makes no reference to the meaning of the word “permit”.
• The Board clearly regarded the licensee’s evidence as to the steps it took to supervise and control its premises and patrons as irrelevant to whether the licensee permitted the drunkenness on the premises. The Board regarded this evidence as relevant only on the question of the appropriate sanction. That evidence was in fact also relevant to whether the licensee ought to have known of the drunkenness on its premises and should have been considered in determining whether the licensee permitted the drunkenness.
• There was a dispute before the Board as to the proper meaning of the word “permit”. This is not a case where we can assume that the Board acted on a shared and correct understanding of the meaning of the word “permit”.

[6] Consequently, we agree with the Divisional Court that the Board erred in law. We would, however, describe that error as a misinterpretation of the word “permits” in the relevant regulation.

[7] The Divisional Court went on to hold at para. 14:

We do not agree with counsel for the respondent that it was open to the Board to conclude on that evidence that the licensee “permitted” the patrons to be on the premises.

[8] We cannot agree with this assessment of the evidence, assuming, given its limited appellate jurisdiction, that the Divisional Court was entitled to make that assessment. On the totality of the evidence before the Board, we think that this is a case that could have gone either way on an application of the proper meaning of the word “permit” in the regulation.

[9] Normally, having concluded that the evidence could support a finding against or in favour of the licensee, we would order a new hearing. However, for the reasons set out by the Divisional Court (para. 17), we are satisfied that a new hearing would not be appropriate in the circumstances. Consequently, the appeal is dismissed.

“Doherty J.A.”

“E.A. Cronk J.A.”

“Paul Rouleau J.A.”