Focusing on Food Part 2
On December 5, 2014 the British Columbia Supreme Court published the reasons for judgment in Brownco Holdings Ltd. v. British Columbia (Liquor Control and Licensing Branch) (“Brownco Holdings”).
Brownco Holdings was a judicial review of a decision of the Branch to issue a $7,500 fine to a licensee who failed to comply with the terms of its food primary licence. The Court upheld the Branch’s decision. The Court’s reasons should be reviewed in detail by licensees as a reminder of the consequences of a food primary establishment that permits its focus to shift during the end of the evening from food sales to liquor sales.
Brownco Holdings Ltd. does business as The Local Bar and Grill in Victoria (the “Local”). The Local holds a food primary liquor licence with a lounge endorsement allowing it to serve liquor in a lounge that forms part of the establishment with no requirement that food be offered for sale in the lounge. However, for the lounge to be open the kitchen must be open and be prepared to serve food in the restaurant portion of the business.
Just after midnight on December 22, 2012 two liquor inspectors entered the Local to conduct an investigation into their belief that the Local was in breach of its licence by permitting the primary focus of the establishment to be the service liquor and not food. When the liquor inspectors entered the restaurant they were greeted by a staff person, and seated in the restaurant area. A server asked the inspectors about ordering a drink, and when the inspectors inquired about food they were told by the server that the kitchen was closed. The inspectors walked through the premises and noticed the following:
- No other patrons were eating;
- There was so sign of plates or cutlery on tables;
- The kitchen appeared empty;
- The menu boards listed drink items, but no food items; and
- The lounge area was crowded.
The inspectors formed the conclusion that the Local that evening was focused primarily on the sale of liquor rather than food. A week after the investigation they issued a Contravention Notice to the Local, and followed up with a Notice of Enforcement Action, which led to a Branch Enforcement Hearing before an adjudicator.
The food primary terms and conditions set out in the Guide make it clear that in determining whether an establishment is operating as a restaurant or a bar, the adjudicator does not have to establish that the licensee failed to meet all of the requirements for operating as a restaurant. Failing to meet any operating requirement is sufficient for the adjudicator to conclude that a food primary licensee is operating the establishment as a bar. The adjudicator may also take into account any other relevant considerations on determining whether an establishment is operating as a restaurant or a bar.
Although the adjudicator concluded that the kitchen was in fact open until 1:00 a.m. (based on evidence from kitchen staff), and that the inspectors could have ordered food had the server properly advised them, the adjudicator nevertheless found that in all the circumstances the focus at the Local that evening was on the sale of liquor, and not food, and therefore the contravention of the licence was proven. The Supreme Court upheld the adjudicator’s decision, leaving the Local with a $7,500 fine.
If the circumstances of Brownco Holdings sound familiar, you should discuss the “late night” dining situation with your kitchen and floor manager immediately. The full decision can be read here.
*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.