CITATION: 2193145 Ontario Inc. o/a Boston Pizza v. Registrar, Alcohol and Gaming, 2016 ONSC 3552

DIVISIONAL COURT FILE NO.: 433/15 DATE: 20160527

ONTARIO SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

M. DAMBROT, R.J. SMITH and C. HORKINS, JJ

BETWEEN:

2193145 Ontario Inc. o/a Boston Pizza

Appellant

– and –

The Registrar, Alcohol and Gaming

Respondent

Barry Fox, for the Appellant

Aviva R. Harari, for the Respondent

HEARD at Toronto: May 27, 2016

C. hORKINS J. (ORALLY)

Introduction

[1] This is an appeal under s. 11 of the Licence Appeals Tribunal Act 1999, S.O. 1999, c. 12, Schedule G.

[2] On August 12, 2014 the Registrar, Alcohol and Gaming issued a Notice of Proposal to Suspend the Liquor Licence of 2193145 Ontario Inc. o/a Boston Pizza. The grounds for the Notice of Proposal included allegations that the licensee permitted alcohol to be supplied to a person who was or appeared to be intoxicated, that the licensee permitted drunkenness to occur on the licensed premises and that the licensee engaged in practices that encouraged patrons' immoderate consumption of liquor.

[3] As a result of the licensee's failure to comply with its obligations pursuant to the Liquor Licence Act, a patron was overserved and became intoxicated. Within minutes of leaving Boston Pizza, the intoxicated patron was struck by a vehicle while crossing against a traffic light and suffered serious injuries. The patron later died in hospital.

[4] On August 25, 2014, the appellant filed a Notice of Appeal to the Licence Appeal Tribunal for a hearing to dispute the allegations in the Notice of Proposal.

[5] A hearing was held and the tribunal found that the appellant breached s. 29 of the Liquor Licence Act, R.S.O. 1990, c. L.19 by selling liquor to a person who was or appeared to be intoxicated, and s. 45(1) of Ontario Regulation 719/90 by allowing drunkenness on its premises. The tribunal found that the appellant did not breach s. 20(1) of the Regulation (prohibition of practices that encourage patrons’ immediate consumption of liquor).

[6] The appellant asks this Court to deny the Notice of Proposal from August 2014 and set aside the Tribunal’s Orders of May 2015 and July 2015, or in the alternative to reduce the length of suspension of the liquor licence.

factual background

[7] The factual background leading to the death is reviewed in detail in the tribunal’s reasons.

[8] The deceased spent the evening of November 20, 2013 drinking at the appellant’s establishment. He left the establishment around 12:30 a.m. on the morning of November 21 and was struck and killed by a car outside the restaurant, as he crossed a busy road against the traffic light. An investigation found that he had a high blood alcohol concentration.

[9] The deceased was a regular patron at the appellant’s establishment. He was known by the appellant’s staff as a patron who would usually order four or five double mixed drinks over three hours or so and visited the bar several times each week.

[10] On the night in question, the deceased came to the bar without much money, which was uncharacteristic. He spent the evening with the appellant’s employees who were off duty, as well as new acquaintances. Several in the group purchased drinks for him.

[11] Alicia Bruneau was the sole bartender that evening. The computerized system that the appellant used allowed the servers to keep track of consumption by seat number. However, because others were purchasing drinks for the deceased, Ms. Bruneau was unable to monitor his individual alcohol consumption. Ms. Bruneau testified that the deceased’s drinking pattern on the evening of November 20, 2013 was normal for him.

[12] Other witnesses, who were employees of the appellant, and familiar with the deceased, also testified that his condition that evening was normal.

[13] Andrew Chalmers, who was not an employee of the appellant or familiar with the deceased, spent the evening with the deceased and the rest of the group. By the end of the evening, he observed that the deceased was drunk. He was having difficulty standing, was slurring his speech and was repetitive in conversation. Mr. Chalmers testified that it was around this time that Ms. Bruneau stopped the group from buying any more drinks for the deceased and someone ordered him a taxi.

[14] The Tribunal also heard evidence from an expert in toxicology, Dr. Marie Elliot. Dr. Elliot concluded from the deceased’s blood samples that he would have consumed between 9¼ and 13½ standard drinks (a drink that contains 5% alcohol). In cross-examination, Dr. Elliot agreed that, despite a high blood alcohol concentration, a drinker may not show signs of intoxication. The Tribunal found that the deceased’s consumption was likely to be on the higher end of the consumption range, because the 3.5 hours of video surveillance suggested that he consumed 21 standard drinks. The video footage also showed that he became increasingly animated over the course of the evening.

[15] The deceased remained at the bar until approximately midnight when he left the bar and went across the street to the McDonald's Restaurant.

[16] Around midnight, Mr Kellar, an employee of McDonald's Restaurant was outside of the restaurant, taking a break to smoke a cigarette. While outside on break he observed the deceased approaching. Mr. Kellar made the following observations of the deceased around 12:15 am. He was stumbling and staggering as he approached the restaurant. He asked Mr. Kellar for a cigarette and was slurring his words as he spoke. Mr. Kellar also noticed the smell of alcohol on his breath. He observed that the deceased could not light his cigarette so Mr. Kellar lit it for him. They stood together and made conversation while smoking their cigarettes. Mr. Kellar testified that the deceased appeared drunk and said that it was obvious he was intoxicated. When they had finished their cigarettes Mr. Kellar saw the deceased walk away. Mr. Kellar went back into the McDonald's restaurant. Shortly after Mr. Kellar’s observations, the deceased was struck by a motor vehicle. Police arrived on the scene at 12:34 a.m.

[17] Officer Payne interviewed Olivia Tierney, a witness to the accident. She observed the deceased before he was struck. She said that he was jaywalking, and crossing against the traffic light. She described him as looking "out of it", having his head down, walking slowly and he looked unstable. Ms. Tierney did not see the deceased using a cell phone.

[18] As part of the investigation Constable Brown interviewed the server, Alicia Bruneau. She gave a statement to the officer in which she indicated that she had served the deceased two mini pitchers of beer, a mixed drink and at least five shots. She also said that the deceased was intoxicated. She advised that at no time did she stop the service of alcohol to the deceased. She further stated that she had called a cab for him.

[19] Tara Brownlee was a staff person and patron at Boston Pizza on November 20, 2013. She sat with the deceased and others, however she was not certain if she left the bar before the deceased. She did not know how much the deceased had to drink.

[20] Sukhjot Khaira, supervisor at Boston Pizza testified that the deceased usually kept his consumption of alcohol under control.

[21] Dustin Lafreniere, the manager of Boston Pizza, had three interactions with the deceased, each lasting no longer than one minute. He was not monitoring the deceased’s consumption of alcohol. Mr. Lefreniere also testified that the deceased did not drink excessively. However, Ms. Bruneau and Ms. Brownlee testified that the deceased was a heavy drinker.

[22] The tribunal watched about 3.5 hours of video depicting the bar area. This covered the time frame from just before the deceased entered Boston Pizza, to a point in time after he left the bar. This video revealed that the deceased became more animated as the night progressed and he went from being tipsy to being drunk. At the end of the evening, when the deceased requested a cab, he is seen standing at the bar. The video depicts that the deceased was unsteady on his feet and slow and deliberate in his actions. When he left the bar area to go the washroom he stumbled as he turned.

[23] The video also depicted the actions of Ms. Bruneau, the sole server at the bar. The tribunal observed from the video that she worked diligently without breaks. She made a number of visits to the tables to talk to patrons. The Tribunal found that the server had a blind spot for the group of patrons. It was noted that there was a high level of alcohol service in quick succession. At least twice during the evening, Ms. Bruneau served alcoholic drinks to the group in quick succession, approximately five minutes apart.

This COurts jurisdiction and standard of review

[24] Section 11 of the Licence Appeal Tribunal Act provides for an appeal to this Court from a decision or order of the Tribunal. Such appeals are restricted to questions of law.

[25] The appellant argues in its factum that the standard of review is correctness. The respondent says that it is reasonableness. During argument, the appellant conceded that reasonableness is the correct standard. It is important in our view to explain why reasonableness is the correct standard, since there has been some uncertainty in the authorities.

[26] The diverging authority on this issue was reviewed by Sachs J. in 751809 Ontario Inc. (c.o.b. Famous Flesh Gordon's v Ontario, Registrar, Alcohol and Gaming Commission), 2014 ONSC 6707 at paras. 25-30. In that case the appellant relied on 2130845 Ontario Inc. o/a Heart & Crown v. Ontario (Alcohol and Gaming Commission, Registrar), 2014 ONSC 3595 ("Heart & Crown"), as it does on this appeal.

[27] The Licence Appeal Tribunal is a specialized tribunal and the appropriate standard of review is reasonableness. I accept and adopt the basis for this standard of review that Sachs J. articulated in 2130845 Ontario Inc. o/a Heart & Crown v. Ontario (Alcohol and Gaming Commission, Registrar) as follows:

24 In making this submission, the appellant relied on the recent decision of this court in 2130845 Ontario Inc. o/a Heart & Crown v. Ontario (Alcohol and Gaming Commission, Registrar), 2014 ONSC 3595 ("Heart & Crown").

25 The Heart & Crown panel held that the LAT does not have a "specialized expertise in a particular domain of the law", because it hears disputes arising under 21 different statutes. As a generalist tribunal, the LAT "bears more resemblance to a court of law". It follows that the sufficiency of its reasons should be reviewed on a correctness standard. (Heart & Crown, at paras. 18-24).

26 In reaching this conclusion, the Heart & Crown panel acknowledged that there was divergent authority on this issue in the Divisional Court. Specifically, in Prestige Toys Ltd. v. Ontario (Motor Vehicle Dealers Act, Registrar), 2009 43657 (ON SCDC), [2009] O.J. No. 3437, Karakatsanis J. held for a unanimous panel that the LAT sat at the top of a "specialized adjudicative regime" (at para. 15). She concluded that the courts should defer to the LAT's application of a provision in the Motor Vehicle Dealers Act that is identical to s. 6(2)(d) of the Act (i.e. it allowed revocation where there were "reasonable grounds for belief that the applicant will not carry on business in accordance with law and with integrity and honesty"), and review it for reasonableness (ibid.).

27 In Ontario (Motor Vehicle Dealers Act, 2002, Registrar) v. Zabian, [2013] O.J. No. 4869, another panel of this Court directly addressed the standard of review applicable to the sufficiency of the LAT's reasons. It found that Newfoundland and Labrador Nurses Union applied (at paras 14 and 24-25).

28 In Heart & Crown, the panel rejected the approach taken in Prestige Toys. It did so partly because that case (like Zabian) dealt with a different statute, and partly because another panel of the Divisional Court had applied a standard of correctness to questions of law arising under the Liquor Licence Act and Regulations (Shooters Sports Bar Inc. v. Ontario (Alcohol and Gaming Commission), [2008] O.J. No. 2112).

29 With respect, it makes no sense to reason that the Legislature would have intended one standard of review to apply to the Licence Appeal Tribunal's decisions under one of the 21 statutes specified in the LATA (the Motor Vehicle Dealers Act) and a different standard to apply to its decisions under a separate but identically-worded provision (the Liquor Licence Act).

30 While it is true that, as the Heart & Crown panel observed, the Licence Appeal Tribunal reviews decisions arising under twenty-one different statutes, it does not follow that it lacks expertise relating to licensing issues in this province. The twenty-one statutes specified in LATA are similar in substance and structure. For example, ten of them contain provisions similar to s. 6(2)(d) of the Act. Thus, unlike the courts, the LAT is an adjudicative body that has developed specialized expertise in substantively-related licensing issues across the various regulatory schemes implemented by the Legislature.

[28] In summary, if we had been asked to determine the standard of review, it is clear from the reasoning provided by Sachs J. that the proper standard of review is reasonableness.

The appellant’s position

[29] The appellant raises the following grounds of appeal. First it argues that the Licence Appeal Tribunal did not apply the correct legal test to find a breach of s. 29 of the Licence Appeals Tribunal Act and s. 45(1) of O. Reg. 719/90. Second the appellant states that the Licence Appeal Tribunal erred because it considered or gave undue weight to irrelevant evidence. Lastly, the appellant argues that the tribunal erred in law when it imposed a 55 day suspension of the appellant’s Liquor Licence. Before this Court, the appellant’s counsel restricted his oral submissions to the penalty issue and relied on his factum for the other grounds of appeal.

analysis

[30] The tribunal correctly stated the governing tests that are set out in the Liquor Licence Act and related regulation. It carefully considered and weighed all of the evidence before it reached a decision. I find that the tribunal’s decision was reasonable as explained below.

[31] The tribunal identified the applicable tests. Section 29 of the Liquor Licence Act states as follows:

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

[Emphasis added]

[32] Section 45(1) of O/Reg 719/90 of the Liquor Licence Act states:

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.

[Emphasis added]

[33] I will deal with s. 29 first. The appellant argues that the tribunal erred in law because it did not read s. 29 purposively. The gist of the appellant’s position is as follows.

[34] The s. 29 prohibition should be read to require at least the appearance of intoxication in the patron. Section 29 prohibits selling liquor to a person who "is or appears to be intoxicated”. The applicant argues that a licensee could be liable for violating the section if it serves alcohol to a person who is, objectively, intoxicated, but who shows no signs of intoxication.

[35] Read purposively, the appellant states that the intent of this section is to require licensees to behave responsibly in serving alcohol to patrons. In order to behave responsibly, a licensee must have the opportunity to be aware of circumstances that might contravene the Liquor Licence Act. Since a licensee cannot reasonably be expected to establish the objective intoxication of each of its patrons, the "is" portion of s. 29 should be construed as implying "is and appears to be" intoxicated.

[36] In effect the applicant is saying that the tribunal’s decision was unreasonable because it did not re-write the statute. The tribunal is a creature of statute. Its powers and obligations flow from the wording of the statute. It must follow the wording of the statute and apply the legal test as presented. Replacing the word “or” with “and” is not an option. If the legislature had intended to use the word “and” it would have done so. The tribunal identified the legal test in s. 29 and applied it as it was required to do.

[37] The tribunal’s application of s. 29 is consistent with the direction of the Supreme Court of Canada in Rizzo & Rizzo Shoes Ltd., Re, 1998 837 (SCC), [1998] 1 S.C.R. 27, p. 41 where the court stated that the “words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament.”

[38] The tribunal fairly reviewed and considered the evidence of intoxication. It recognized that that there was a “sharp divide” between those witnesses who worked at Boston Pizza and those who did not.

[39] As the tribunal noted, most of the evidence addressed the second part of s. 29; selling or supplying liquor to a person who “appears to be intoxicated”. The tribunal found that the staff at Boston Pizza had an “awareness of his true condition”. They knew that he regularly drank to excess and they liked to see that he got home safe. On the night in question, no one monitored the deceased to make sure that he got into a cab and they did not monitor him to make sure that he did not leave the bar unattended.

[40] The tribunal had ample evidence to support the finding that the deceased was served liquor when he appeared to be intoxicated. The evidence of patrons and witnesses outside the bar was consistent with the signs of impairment depicted on the video.

[41] The appellant submits that it was unreasonable for the tribunal to rely on the evidence of Mr. Kellar and Ms. Tierney, who did not attend Boston Pizza that night. They observed the deceased outside Boston Pizza and observed signs of intoxication. The appellant argues that the evidence of these witnesses was irrelevant to the central issue – whether or not the deceased exhibited signs of intoxication to the Boston Pizza staff. The appellant states that the tribunal gave this evidence undue weight.

[42] I reject this argument. The tribunal’s consideration of this evidence was reasonable. It was relevant to whether the deceased appeared to be intoxicated. The observations of these witnesses occurred within minutes of the deceased leaving the bar. The tribunal did not consider such evidence on its own as determinative of the issue under s. 29. Rather the tribunal considered this evidence, along with the rest of the testimony. It found that the deceased appeared to be intoxicated and made the determination that the appellant breached s. 29.

[43] In addition, the appellant states that it was unreasonable to rely on the evidence of Ms. Tierney because she did not testify at the hearing and her evidence was hearsay. It was, in our view, reasonable for the tribunal to consider this evidence because it is permitted to do so under s. 15 of the Statutory Powers Procedure Act, R.S.O. 1990, c. S-22 as follows:

15. (1) Subject to subsections (2) and (3), a tribunal may admit as evidence at a hearing, whether or not given or proven under oath or affirmation or admissible as evidence in a court,

(a) any oral testimony; and

(b) any document or other thing,

[44] Turning to s. 45(1) of the regulation, the tribunal found on all of the evidence that the appellant permitted drunkenness in its premises. The concept of permitting drunkenness was considered in 1213963 Ontario Ltd. (c.o.b. Sin City Bar and Eatery) v. Ontario (Alcohol and Gaming Commission), 2009 ONCA 323. The Court of Appeal stated as follows:

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 11 (SCC), [1978] 2 S.C.R. 1299; The Queen v. Royal Canadian Legion, 1971 372 (ON CA), [1971] 3 O.R. 552 at 559 (C.A.).

[45] There was ample evidence as reviewed above, to support the tribunal’s finding that the appellant breached this regulation.

[46] The tribunal found that the quantity of service is an objective standard by which a licensee may conclude that a patron is drunk or intoxicated. In this case, the server was not monitoring the quantity of alcohol served to the deceased.

[47] In addition to the quantity served, the evidence supported a finding that the deceased was drunk and exhibited signs of intoxication or drunkenness. The tribunal further found that the signs of intoxication should have been evident to the server. She ought to have known that the deceased was intoxicated. The evidence in fact reveals that Ms. Bruneau knew the deceased was intoxicated. In her statement to the police she was asked if the deceased was intoxicated and she answered “yeah”.

[48] Finally, the appellant argues that the tribunal erred in law in imposing a 55 day suspension at the appellant’s Liquor Licence.

[49] The error of law as described by the appellant’s counsel in argument is as follows. The Tribunal imposed a suspension penalty that was longer than the suspension penalties in other more serious cases.

[50] We struggle to understand why this is an error of law. The argument was not dealt with in the appellant’s factum.

[51] The registrar has provided nine penalty decisions from the Licence Appeal Tribunal involving situations where the person was served alcohol and a death resulted. The penalties in these cases range from a low of a 28 day suspension to a high of a full revocation of the Liquor Licence. In fact, five of the nine cases resulted in a complete revocation of the licence.

[52] Given the facts of this case, we fail to see how a 55 day suspension of the licence could amount to an error of law. In any event, we are satisfied that the penalty is reasonable.

[53] For the reasons we have given, this appeal is dismissed.

DAMBROT J.

COSTS

[54] I have endorsed the Appeal Book “Costs to the Registrar fixed in the amount of $7,000 all inclusive”.

___________________________ C. Horkins J.

M. Dambrot J.

R.J. Smith J.

Date of Reasons for Judgment: May 27, 2016

Date of Release: June 16, 2016

2193145 Ontario Inc. o/a Boston Pizza v. The Registrar, Alcohol and Gaming, 2016 ONSC 3552

DIVISIONAL COURT FILE NO.: 433/15 DATE: May 27, 2016

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

M. DAMBROT, R.J. SMITH and C. HORKINS, JJ

BETWEEN:

2193145 Ontario Inc. o/a Boston Pizza

Appellant

– and –

The Registrar, Alcohol and Gaming

Respondent

REASONS FOR JUDGMENT

C. Horkins J.

Date of Reasons for Judgment: May 27, 2016

Date of Release: June 16, 2016