The Public Interest and Liquor Licences

December 12, 2021

By Brian Babcock

Prohibition may be a distant memory, but it is not forgotten, with its history in Thunder Bay a fond memory of the rumours that the Bronfman family, of Seagram’s fame, allegedly built tunnels from the Marina Inn (on the location of the current government building) under the train tracks to the docks to smuggle booze to the U.S.. We don’t know if any of this is true, but it makes a great story.

The same conflicts that surrounded prohibition persist, and may be reflected in debates over the public interest when it comes to liquor licences in Ontario.

Less entertaining than tales of smugglers are disputes between neighbourhoods and people who want to open or expand licensed establishments such as bars, restaurants and night clubs.

Licencing is regulated by the registrar of Alcohol, Gaming and Racing, with an appeal possible to the Licence Appeal Tribunal (the “LAT”). Both of these steps are part of what is called administrative law.

Unlike many administrative decisions, there is a right to appeal LAT decisions about liquor licences to Divisional Court.  However, relatively few cases actual do go to appeal. So it caught our attention when the Divisional Court released Powerhouse Corporation v. Registrar of Alcohol, Gaming and Racing. The result suggests that the standard applied on the appeal was a lot like the deferential test of reasonableness applied on a judicial review, despite the court saying that it was applying a standard of “correctness”.

This case involved a venue with a long history of conflict with its neighbours, mostly over noise. As a result, the licence contained restrictive conditions. There had been prior appeals that had resulted in the Divisional Court focusing the debate on “contrary to the public interest” rather than “the needs and wishes of the residents…”.

An application to relax the restrictions would place the onus on the owners to show why the new terms were in the public interest. The owners attempted to sidestep some of these issues by having a new corporation apply for a new licence. On a new licence application, the objectors would need to show why restrictions were necessary in the public interest.

The LAT imposed restrictions similar to those that previously existed.

The court had no problem with the legal manoeuvring involved in using a new corporation to trigger a test more favourable to the owner. It also had no problem with the LAT achieving a result that the LAT considered to be in the public interest.

The Divisional Court agreed with the LAT that the reference in the law to “needs and wishes” had to be given weight. Noise disturbance is a correct factor to consider. The LAT had extensively considered these concerns. The court agreed that the LAT’s approach was correct.

The restrictions were upheld.

Licencing is an area where many businesses choose not to seek legal advice. This case is an example of why it is often advisable to seek that help. At Weilers Law, we have the legal knowledge, plus the local knowledge about Thunder Bay and area communities that may allow us to avoid your licencing issues right away, or at least to resolve them more quickly and at less cost than if you proceed without legal advice. The cost of having one of our lawyers advise you is a sound investment. If you are faced by a hearing, the cost of having us represent you is balanced by our expertise, which may achieve a better result – and isn’t that worth it?