BOOM CHAKALAKA: Ignoring COVID Orders in BC can cost you your liquor licence
Recent decisions published by the Supreme Court of British Columbia and the Liquor & Cannabis Regulation Branch indicate that across British Columbia liquor inspectors and environmental health officers (“EHOs“) have been busy monitoring food and beverage establishments for compliance with COVID related public health orders.
Establishments that refuse to comply risk losing their business and liquor licences in addition to stiff financial penalties.
Chakalaka Bar & Grill
Ms. Panayiota Giannikos ran the Chakalaka Bar and Grill in Ladysmith, BC. The Chakalaka operated as a restaurant pursuant to a food primary liquor licence, and as described below also appeared to illegally operate a trailer park on its premises. For what it’s worth, its reviews on TripAdvisor.com were generally favourable, earning 3.5/5 stars. Not bad.
But for the onset of the COVID pandemic, the Chakalaka might still be in operation serving up its Greek/Canadian fusion cuisine and offering its long-term recreational vehicle driving guests access to its DIY drinking water and sewage systems. Unfortunately for Ms. Giannikos (and the entire world) COVID-19 did arrive in 2020, and despite her personal views on medical science and the authority of the provincial government, certain rules do need to be followed when it comes to the licensed sale of food & beverage, the handling of drinking water, the disposal of sewage, and preventing the spread of COVID-19.
Throughout 2020 and 2021 Ms. Giannikos, and her restaurant, engaged in a campaign of overt defiance of these health and safety measures. The particulars of the offending conduct are lengthy and are set out in some detail in two decisions: a decision of the Supreme Court of British Columbia which can be read in full here, and a later decision of the General Manager of the Liquor and Cannabis Regulation branch that can be read here. Alcohol & Advocacy encourages all readers with in an interest in the intersection of COVID Orders and the provincial liquor licensing regime to read them closely.
The facts and procedural history of this torrid affair were as follows.
The Chakalaka began operations in 2017 when Ms. Giannikos applied to the Vancouver Island Health Authority (VIHA) for a drinking water supply permit to allow up to two connections to the drinking water system on the property. At the same time she obtained from VIHA a permit to operate a food service establishment. Ms. Giannikos did not apply then, and VIHA says has never applied, for an authorisation to operate a sewage disposal system.
In March, 2020 the Minister of Public Safety declared a state of emergency in BC in response to the COVID-19 pandemic, and in turn BC’s Public Health Officer Dr. Bonnie Henry issued a series of orders under the Public Health Act related to public gatherings, workplace safety and food and beverage service (COVID Orders).
In September, 2020 EHOs designated by VIHA pursuant to the Public Health Act attended the Chakalaka and “discovered approximately 12 recreational vehicles, set up in the fashion of an RV park” that were connected to the drinking water system on the property and tied into property’s sewage disposal system. The EHOs directed Ms. Giannikos to disconnect the vehicles from the drinking water and sewage systems, she refused, and the EHOs later issues Contravention Orders against Ms. Giannikos pursuant to the relevant legislation.
The EHOs returned to the property at various junctures in fall 2020, and winter 2021, and despite their direction and issuance of the Contravention Orders, the unlawful trailer park remained in operation. In March, 2021 the EHOs observed “active unauthorized construction” at the property. Apparently Ms. Giannikos was digging trenches and installing hard PVC piping to expand the drinking water and sewage disposal systems on the property. By April, 2021 the number of recreational vehicles parked on the property had increased.
Also in winter 2021 the EHOs, in response to complaints about the Chakalaka’s operations, attended the restaurant to observe compliance with the COVID Orders. The officers documented numerous and flagrant violations of the COVID Orders.
In February, 2021 the EHOs issued a Contravention Order to Ms .Giannikos under the PHA concerning the COVID Order violations. One aspect of the Contravention Order required that the restaurant submit a written COVID Safety Plan. Ms. Giannikos refused to do so. On February 17, 2021 an EHO issued to the Chakalaka a Closure Order pursuant to the PHA. In defiance of the Closure Order the restaurant continued to operate – now with signage indicating (falsely) that “COVID Restrictions in Canada are over” and that “masks are no longer mandatory”.
The matter first landed in court on April 23, 2021 when VIHA obtained an interim injunction enjoining Ms. Giannikos from providing drinking water to RVs on the property, permitting the discharge of sewage from RVs into the property’s sewage disposal system and from operating the Chakalaka restaurant itself.
However, on April 27 when the EHOs returned to the Chakalaka they observed that the restaurant continued to operate and 20 RVs were conntected to the makeshift water and sewage system.
On May 10, 2021 VIHA brought the matter back to court to obtain not only an order that Ms. Giannikos was in contempt of the earlier April injunction, but also obtain statutory injunctions and findings related to breaches of the COVID Orders.
The (second) VIHA Injunction Application
Ms. Gianniko’s response to the foregoing, and her position and conduct before the court, was unusual – but perhaps not surprising. For example, Ms. Gianniko’s chose to be “represented” at the hearing by her son, Peter Mouck, who is not a lawyer (and by way of an earlier and unrelated order of the court is specifically prevented from acting as such).
Madam Justice Baker observed that Ms. Gianniko’s written correspondence to VIHA and certain EHOs was “difficult to understand” and used “unconventional language”. In the author’s opinion Ms. Giannikos was very much relying on Freeman on the Land tropes and vernacular. For example Ms. Giannikos wrote that the EHO had “no jurisdiction” over her business or the property, that the VIHA would be “liable for trespass” if its representatives attended the property again in the amounts of $25,000 (for a first trespass) and $100,000 for any further trespass, and that COVID has not been “proven scientifically to exist or to be a threat to public health.” Ms. Giannikos argued that until the authorities prove to her satisfaction that COVID “is real” any steps taken under the PHA or COVID Orders are “fraudulent and criminal.”
Madam Justice Baker dismissed Ms. Giannikos position respectfully but succinctly, stating that there is no obligation at law for the Provincial Health Officer (Dr. Bonnie Henry) to engage in a scientific debate with the population of the province before she issues her orders.
The court readily found that Ms. Giannikos was in breach of the Drinking Water Protection Act, Sewerage Regulation and the COVID Orders and that injunctive relief was necessary to prevent the Chakalaka from operating as a restaurant, and an illegal trailer park. Further, the court found Ms. Giannikos in contempt of court for breaching the earlier interim order.
Liquor & Cannabis Regulation Branch
This brings us to May, 2021.
That same month the Branch issued the Chakalaka with a Notice of Enforcement Action for “selling or serving liquor while the licence was suspended”. This is a serious contravention of the Liquor Control and Licensing Act which carries a minimum penalty for a first contraction of $15,000-25,000 and/or a 15-90 day licence suspension.
The facts underling the Branch’s investigation of the Chakalaka relate back to the EHO’s Closure Order of February, 2021. The Branch, the day after the Closure Order was issued, suspended the Chakalaka’s liquor licence on the basis that the Chakalaka no longer had the requisite permitting to operate a restaurant – a requirement under s. 49(4) of the Act.
When a liquor inspector attended the restaurant to serve Ms. Giannikos personally with the suspension notice – the restaurant was, as mentioned above, still operating despite the Closure Order. When the liquor inspector returned a week later, in early March, 2021 to post the requisite suspension signage, Ms. Giannikos invited the inspector to remove his mask and declared that he could not post signage in the restaurant on the basis that (you guessed it) the Branch had “no authority”. She even went as far as acknowledging, in what the writer imagines was a heated exchange, that she was obstructing the inspector in the course of his duties.
A different plainclothes liquor inspector returned to the premises later in the month and was not only served a beer, but also observed signage stating that “As of March 1, 2021 all COVID restrictions have been lifted in the Province of BC”.
On May 6, 2021 the Branch cancelled the Chakalaka’s liquor licence.
On August 31, 2021 the Branch referred the matter to a Delegate of the General Manager, by way of written submissions, for a hearing to determine if the alleged contravention occurred, and if so a determination of the appropriate penalty. The Chakalaka, now a former licensee, did not make any submissions.
In the circumstances the General Manager’s Delegate readily found the alleged contravention proven, and in her written reasons stated that imposing a penalty was necessary in order to “send a message” to other licensees and future licensees of the importance of compliance with branch rules and Regulations. A $15,000 monetary penalty, the minimum, was ordered against the licensee.
Although not discussed in the Delegates’s reasons, pursuant to s.51(6) of the Act, Ms . Giannikos is personally liable for the fine as the president of the licensee company.
Since the release of the court’s reasons in VIHA v. Giannikos, similar reasons were issued by Mr. Justice Mayer in Fraser Health Authority v. Rolly’s Restaurant, wherein the Fraser Health Authority sought and obtained an injunction against a Hope, BC restaurant that refused to check patrons for proof of vaccination.
The message from these, and what Alcohol & Advocacy expects will be other sets of reasons handed down by the court and the General Manager in the coming weeks and months, is that provincial liquor and health inspectors take compliance with COVID Orders seriously and that licensees who intend to flaunt the the rules do so at the risk of losing their licence along with the prospect of significant fines.
Questions about liquor law in British Columbia? Or responding to a contravention notice or notice of enforcement action? Contact Dan Coles at Owen Bird.
*Alcohol & Advocacy publishes articles for information purposes only. They are not a substitute for legal advice, and persons requiring such advice should consult legal counsel