Owner of closed nightclub asks liquor board for leniency

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This article was published 06/03/2024 (626 days ago), so information in it may no longer be current.

A Winnipeg nightclub owner, whose liquor licence was cancelled for repeated breaches in a 13-month period, begged an appeal panel for another chance Wednesday in a bid to save his business.

Leon Yang asked that the rare penalty to Obsidian Ultra Lounge be reduced to an eight-week licence suspension and strict operating conditions at a hearing held by the Liquor, Gaming and Cannabis Authority of Manitoba Wednesday.

“I lost something I have been fighting for in the last five years,” Yang, 26, said of the Pembina Highway club, which has been closed since the latest breach of provincial regulations early Feb. 4.

A panel of three LGCA board members reserved its decision, after hearing submissions from Yang, LGCA executive director and CEO Kristianne Dechant, lawyers and witnesses.

Dechant urged the panel to uphold her decision to cancel the licence.

“Exceeding a capacity in a licensed premises poses a risk to life safety,” she said. “We cannot tolerate Obsidian Ultra Lounge’s blatant disregard for liquor laws in Manitoba.

“The licensee is not suitable to hold a liquor service licence in Manitoba.”

Dechant said it’s the first time the LGCA has cancelled a licence due to “ungovernability.”

Since New Year’s Eve in 2022, the regulator has issued seven compliance orders to Obsidian for being over-capacity or over-serving alcohol to customers during drop-in inspections.

The LGCA argued the bar continued to break the rules, despite being given chances to comply via earlier penalties such as escalating fines or licence suspensions, education sessions for Yang and his employees, and mandated safety plans.

The bar has had 14 strikes, when all compliance orders and breaches are tallied, since opening in 2019, said Coral Lang, counsel for the LGCA executive.

The licence cancellation would put Yang out of business, but the decision was not taken lightly, said Lang.

Obsidian’s three most recent breaches were for exceeding a 150-person capacity which was set by a city-issued building occupancy permit.

When two inspectors went by at about 1 a.m. Feb. 4, they counted as many as 245 people in the basement bar, the panel heard.

The breach occurred about two hours after inspectors visited and warned Yang the club was nearing capacity, while about 100 people were in line outside.

Obsidian’s age-restricted liquor service licence was revoked. It is only the second Manitoba nightclub to have its licence cancelled by the LGCA since the regulator was set up in 2014.

Yang claimed an event promoter, who was pocketing a $10-per-person cover charge, persuaded him to let more people inside.

The promoter offered to pay any fines levied by the LGCA, he said.

Being over-capacity would presumably lead to more revenue for the club through drink sales, the LGCA told the panel.

Yang told the panel he began planning renovations and safety improvements after the second compliance order, issued in January 2023, to expand the bar’s capacity.

A new permit from the city, which increased the capacity to 250, was issued Feb. 9, five days after Obsidian was forced to close.

Yang said he put his own savings into renovations last summer — between the fourth and fifth compliance orders — but the project went over budget and resulted in debt.

At a Nov. 22 meeting with the LGCA — following a sixth compliance order — he cited financial reasons for the repeated breaches, and was warned his licence could be cancelled if there were further violations, the panel heard.

Yang told the hearing he owed thousands to contractors, which put his business in a “very desperate situation.”

In his appeal, he asked the panel to reduce the licence cancellation to an eight-week suspension and six months of strict conditions.

Yang also proposed bringing in two people to act as co-directors to help him run the business and comply with liquor laws.

The LGCA asked the panel to send a message to Manitoba’s hospitality industry that repeated breaches are unacceptable and will not be tolerated.

If the cancellation is upheld, Yang will not be permitted to open another licensed business, the panel was told.

chris.kitching@freepress.mb.ca