Ontario Superior Court of Justice Divisional Court

Court File No. 73739-04

Date: 2005-09-16

Before: Lane, Meehan and Matlow JJ.

Counsel: Gregory M. Sidlofsky, for appellant, Horseshoe Valley Resort Ltd. Richard E. Kulis, for respondent, Registrar of the Alcohol & Gaming Commission of Ontario.

ENDORSEMENT

[1] By the Court:—The appeal is allowed and the decision of the Board is set aside. Having regard to the circumstances surrounding this case including the evident weaknesses in the prosecution evidence and the relatively minor nature of the violations alleged, we exercise our discretion by not referring it back for another hearing. Both counsel may make submissions regarding costs in writing by exchanging them and delivering them to the Local Registrar within 30 days.

[2] If we had upheld the Board's decisions with respect to its findings, we would have dismissed the appeal from the Board's suspension of the appellant's liquor licence for seven days.

[3] Section 11 of the Alcohol and Gaming Regulation and Public Protection Act, 1996, S.O. 1996, c. 26, Sch., confines appeals to this Court to questions of law.

[4] By the decisions in appeal, the Board found that the appellant had violated section 29 of the Liquor Licence Act, R.S.O. 1990, c. L.19, as well as subsection 45(1) of the Licences to Sell Liquor Regulation, R.R.O. 1990, Reg. 719, under the Act.

[5] Section 29 of the Act provides that;

29. No person shall sell or supply liquor or permit liquor to be sold or supplied to any person who appears to be intoxicated.

[6] Subsection 45(1) of the Regulation provides, in part, that;

45(1) The licence holder shall not permit drunkenness, unlawful gambling or riotous, quarrelsome, violent or disorderly conduct to occur on the premises or in the adjacent washrooms, liquor and food preparation areas and storage areas under the exclusive control of the licence holder.

[7] The events which gave rise to the proceedings before the Board related to a reception held at the appellant's resort by William Carley and his wife to celebrate their marriage which had taken place a few months earlier. Among their guests was Julie Strachan who became the principal subject of the decisions in appeal.

[8] Following the reception which was held in a banquet hall at the resort, the hosts and some of their guests continued the celebration in a bar which was also part of the resort. What occurred there was witnessed by the prosecution's main witness, Police Constable Thomas Edgar, whose evidence included the following observations that he said he had made;

1. Everyone in the group at the bar was intoxicated.

2. Julie Strachan was part of the group sitting at the bar and she consumed a "shooter" type drink while she was intoxicated.

[9] William Carley and three of the appellant's employees who were working in the bar gave evidence for the appellant. Carley's evidence was that it was he who ordered a tray of shooters upon entering the bar. The essence of the employees' evidence was that Julie Strachan had been "red lighted" upon her entering into the bar so that no-one would serve her any alcohol, that no-one from the bar served any alcohol to Julie Strachan and that the bartender served Julie Strachan a glass of only ginger ale. One of the employees, Vicky Holwell, stated that either she or P.C. Edgar suggested to Julie Strachan's friends that they should get her out of the bar. When Julie Strachan's condition began to deteriorate about ten or fifteen minutes after she arrived to the bar, Vicky Holwell asked her to leave. There was no material evidence given by any of the employees regarding the serving of the shooters.

[10] On the evidence before it, the Board found, as stated at page 6 of its decision;

While Ms. Borsa testified that other staff, would not have served her, the evidence in its totality suggests, on a balance of probabilities, that Mrs. Strachan, while intoxicated, was given the opportunity and was supplied with a shooter from the tray ordered by Mr. Carley at the licenced premises.

THEREFORE, the Board FINDS a breach under section 29 of the Liquor Licence Act.

The evidence is sufficient to establish, on a balance of probabilities, that the licence-holder permitted drunkenness on the premises. Therefore, the Board FINDS a breach of section 45 (1) of Ontario Regulation 719/90 under the Liquor Licence Act.

[11] We are persuaded that the Board made the following errors of law and that, as a result, we are required to interfere with its decisions. For the reasons set out by this Court, differently constituted, in paragraph 6 of the judgment in Ontario (Registrar of Alcohol and Gaming) v. Hosseini-Rad, [2004] O.J. No. 1273 (QL), 129 A.C.W.S. (3d) 1043, we are also of the view that the standard of review is correctness.

[12] With respect to the Board's first finding, we are persuaded that, despite section 15(1) of the Statutory Powers Procedure Act, R.S.O. 1990, c. S.22, there was no evidence that the shooter consumed by Julie Strachan contained liquor. That alone is fatal to the Board's finding.

[13] As well, the uncontradicted evidence was that the shooters were ordered by William Carley and supplied to him by the appellant's employees and the only reasonable inference that could be made was that Julie Strachan had obtained the shooter that she consumed from him. It was, therefore, William Carley, if anyone, who supplied the shooter to Julie Strachan. There was no evidence that the appellant's employees did or that any of them knew or should have known that one of the shooters on the tray brought to William Carley would be given to her. It follows that there was no evidence on which the Board could properly have found that Julie Strachan "was given the opportunity and was supplied with a shooter from the tray ordered by Mr. Carley" as found by the Board.

[14] With respect to the Board's second finding, we are persuaded that the Board's reasons fall far short of demonstrating that it interpreted and applied the words, "permitted drunkenness", as used in section 45(1) of the Regulation correctly. Indeed, we are of the view that it is likely that the Board's application of the law to the evidence was wrong. In order to properly find that the appellant permitted drunkenness with respect to Julie Strachan as alleged, the Board had to be persuaded that the appellant, through its employees, knew or should have known that Julie Strachan was drunk and that it failed, within a reasonable period of time, to take reasonable steps to effect her safe departure from the bar. The evidence before the Board showed that the appellant's employees recognized that Julie Strachan was drunk upon her entering the bar and that steps were taken quickly to make sure that she was not served alcohol and to make sure that she was safely removed and the Board's reasons fail to demonstrate in what respects the appellant failed to carry out its statutory duty. A finding of a violation of section 45(1) cannot be based on a draconian and unrealistic interpretation of its language that would create a violation the very moment a drunk patron entered the bar. Rather, it must be interpreted reasonably in accordance with its plain language and the practicalities of the context in which it is applied.

[15] The law now requires courts and tribunals to provide clear reasons for their decisions including explanations for their findings of fact including why they prefer certain rather than other evidence. A failure to meet the required standards deprives the persons affected of being adequately informed about the reasons for the outcome and deprives appellate courts of the opportunity of properly carrying out their statutory duties. Both failures tarnish the appearance of justice which we all strive to create and maintain.

[16] In our respectful view, the reasons given by the Board do not meet the minimum standard now required. Apart from what we have stated above, there was much conflicting evidence before the Board and the Board did not give adequate reasons why, for example, it accepted the evidence of the police in preference to the evidence of those who gave evidence on behalf of the appellant. The requirement to give reasons was particularly important in this case because of the Board's consideration of the altercation that occurred between P.C. Edgar and William Carley which might well have influenced the Board to focus on matters which were outside the scope of the findings which it made against the appellant. We observe that, in its second finding, the Board made no finding that the appellant did anything more than permit the drunkenness of Julie Strachan even though section 45(1) of the Regulation and the charging document also include other prohibitions which the Board addressed but did not explicitly accept as proven.

[17] Application granted.