Tavern Liability - Section 39 of the Liquor Licence Act

Dickerson v. 1610396 Ontario Inc. (Carey’s Pub and Grill), 2010 O.N.C.A. 894 (CanLII)

Section 39 of the Liquor License Act creates civil liability for commercial establishments selling liquor. Section 39 reads as follows:

39. The following rules apply if a person or an agent or employee of a person sells liquor to or for a person whose condition is such that the consumption of liquor would apparently intoxicate the person or increase the person’s intoxication such that he or she would be in danger of causing injury to himself or herself or injury or damage to another person or the property of another person.

In Dickerson, the Court of Appeal had occasion to comment on the standard of care set out in section 39. The Court disagreed with the plaintiff’s assertion that the standard is breached by simply overserving a patron to the point of intoxication. The Court held that section 39 requires a risk assessment by the commercial establishment. The plain and ordinary meaning of the section describes the level of overservice that attracts liability because of the risk it creates. The overservice must produce the patron’s intoxication or increase it sufficiently that the patron will be in danger of injuring another person. Section 39 requires only that the risk of injury be reasonably foreseeable, not that the type or kind of injury actually suffered be reasonably foreseeable. In addition, this section requires only that there be a reasonably foreseeable risk of injury to another person, not that the person injured be within the category of persons foreseeably at risk.

Those involved in tavern liability cases before juries may want to review this decision as a useful precedent for the charge to a jury in a tavern case, as well as the appropriate questions to be put to the jury.

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Here are a couple more comments on the standard of care of a tavern/bar to monitor alcohol consumption of its patrons:

"I recognize that it is not often possible for an establishment to assess whether a patron is intoxicated and, in many cases where there is not heavy consumption of alcohol in the establishment nor symptoms of intoxication, it would be unreasonable to expect an establishment to make that determination. On the other hand, service to a patron of the equivalent of between 16 1/4 and 19 1/2 fluid ounces of rye for his own consumption over a two-hour period carries obvious risks, and I am of the opinion that organization of service of alcoholic beverages, in the circumstances of this case, in a fashion which eliminated the opportunity to monitor the plaintiff's consumption constituted contributory negligence on the part of the hotel to the extent of five percent. Hotels are in the business of serving alcohol for a profit and it is not unreasonable for it to bear a portion of the risk caused by gross over-consumption." Goudge v. Three Top Investment Holdings Inc., [1994] O.J. No. 751 (Gen. Div.) at para. 52.

And here is comment from another case:

"I feel that they are liable both under the Liquor License Act and at common law. There is a high standard of care imposed on a tavern and its staff. The Squire Tavern people were oblivious to their duty. They knew these people were driving. They knew or should have known that they were intoxicated. They added to the level of intoxication by serving them more. I think that the standard maintained by the Squire was too low. Drinks would only be refused if the person was "too loud, starting arguments, knocking over drinks or falling down". Sambell v. Hudago Enterprises Ltd., [1990] O.J. No. 2494 (Gen. Div.).

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Establishments that serve alcohol have a positive duty to intervene to limit alcohol consumption or risk liability.

Here is the classic formulation:

"I agree that establishments which serve alcohol must either intervene in appropriate circumstances or risk liability, and that this liability cannot be avoided where the establishment has intentionally structured the environment in such a way as to make it impossible to know whether intervention is necessary. Such was the situation in Canada Trust Co. v. Porter where the alcohol was served from behind a bar and it was impossible for the establishment either to monitor the amount consumed or to determine whether intervention was necessary. A similar situation arose in Gouge v. Three Top Investment Holdings Inc., [1994] O.J. No. 751 (Ont. Ct. (Gen. Div.), where the plaintiff attended a company Christmas party which had a "cash bar", over-indulged, and then was involved in an accident. In such circumstances, it would not be open to the establishment to claim that they could not foresee the risk created when the inability to foresee the risk was the direct result of the way the serving environment was structured."

Stewart v. Pettie, [1995] 1 S.C.R. 131 at para. 56.

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More on liability for alcohol providers. This blog contribution authored by Tara Pollitt.

An alcohol provider owes a duty of care to patrons and may be required to prevent an intoxicated patron from driving where it is apparent he intends to drive. The Supreme Court held that the duty of care that is owed to patrons is also owed to third parties:

It is a logical step to move from finding that a duty of care is owed to patrons of the bar to finding that a duty is also owed to third parties who might reasonably be expected to come into contact with the patron, and to whom the patron may pose some risk. It is clear that a bar owes a duty of care to patrons, and as a result, may be required to prevent an intoxicated patron from driving where it is apparent that he intends to drive. Equally such a duty is owed, in that situation, to third parties who may be using the highways. In fact, it is the same problem which creates the risk to the third parties as creates the risk to the patron. If the patron drives while intoxicated and is involved in an accident, it is only chance which results in the patron being injured rather than a third party. The risk to third parties from the patron's intoxicated driving is real and foreseeable. Stewart v. Pettie, [1995] 1 S.C.R. 131 at para. 28.


Commercial providers of alcohol are expected to monitor consumption of alcohol as part of the commercial transaction and are expected to possess special knowledge of intoxication. The Supreme Court has held that not only is that expected, but also relatively easy for the commercial host:

First, commercial hosts enjoy an important advantage over social hosts in their capacity to monitor alcohol consumption. As a result, not only is monitoring relatively easy for a commercial host, but it is also expected by the host, patrons and members of the public. In fact, commercial hosts have a special incentive to monitor consumption because they are being paid for service. Patrons expect that the number of drinks they consume will be monitored, if only to ensure that they are asked to pay for them. Furthermore, regulators can require that servers undertake training to ensure that they understand the risks of over-service and the signs of intoxication (see, e.g., R.R.O. 1990, Reg. 719). This means that not only is monitoring inherently part of the commercial transaction, but that servers can generally be expected to possess special knowledge about intoxication. Childs v. Desmoreaux, [2006] 1 S.C.R. 643 at para. 18.

Liability for servers of alcohol has been expanded to include establishments that serve patrons already inebriated on arrival. In Schmidt v. Sharpe, the tavern was held liable even though it did not have actual knowledge of the patrons’ intoxication. Schmidt v. Sharpe, [1983] O.J. No. 418 (Ont. H.C.)

The appropriate standard by which to assess providers of alcohol is the Smart Serve Program, or its predecessor, the Server Intervention Program (“SIP”). SIP requires the following actions of servers of alcohol: “Stop trouble at the door”, “Interview and assess”, and “Provide low risk options”. SIP provides reasonable and prudent steps to be taken by alcohol providers:
· stop trouble at the door;
· check for underage patrons;
· interview and assess for prior drinking;
· provide low risk options, serve and monitor service;
· check for driving; and
· arrange for safe transportation.

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Further to my past post on the liability that can be imposed on taverns (bars, restaurants, etc.), he is the relevant statute and regulations.

The Liquor Licence Act, R.S.O. 1990, c. L.19, states:

29. 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.

39. The following rules apply if a person or an agent or employee of a person sells liquor to or for a person whose condition is such that the consumption of liquor would apparently intoxicate the person or increase the person’s intoxication so that he or she would be in danger of causing injury to himself or herself or injury or damage to another person or the property of another person:
1. If the person to or for whom the liquor is sold commits suicide or meets death by accident while so intoxicated, an action under Part V of the Family Law Act lies against the person who or whose employee or agent sold the liquor.
2. If the person to or for whom the liquor is sold causes injury or damage to another person or the property of another person while so intoxicated, the other person is entitled to recover an amount as compensation for the injury or damage from the person who or whose employee or agent sold the liquor.

The regulations under this statute include:

A licence holder must not engage in or permit practices which may tend to encourage patrons’ immoderate alcohol consumption.

A licence holder must inspect an item of identification before serving liquor to a person apparently under the age of nineteen years.

A licence holder must not permit drunkenness, or riotous, quarrelsome, violent or disorderly conduct to occur on the licenced premises or in the adjacent washrooms, liquor and food preparation areas and storage areas.

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In Childs v. Desmoreaux, [2006] 1 S.C.R. 643 at para. 19-20, McLachlin C.J. noted that the strict regulation of the sale and consumption of alcohol by the government imposes special responsibilities on those who profit from its sale and duties to reduce the risk associated with its sale:

"Second, the sale and consumption of alcohol is strictly regulated by legislatures, and the rules applying to commercial establishments suggest that they operate in a very different context than private-party hosts. This regulation is driven by public expectations and attitudes towards intoxicants, but also serves, in turn, to shape those expectations and attitudes. In Ontario, where these facts occurred, the production, sale and use of alcohol is regulated principally by the regimes established by the Liquor Control Act, R.S.O. 1990, c. L.18, and the Liquor Licence Act, R.S.O. 1990, c. L.19. The latter Act is wide-ranging and regulates how, where, by and to whom alcohol can be sold or supplied, where and by whom it can be consumed and where intoxication is permitted and where it is not.

These regulations impose special responsibilities on those who would profit from the supply of alcohol. This is clear by the very existence of a licensing scheme, but also by special rules governing the service of alcohol and, as noted above, special training that may be required. Clearly, the sale of alcohol to the general public is understood as including attendant responsibilities to reduce the risk associated with that trade."

McLachlin C.J. emphasized the expectations of the public and the means that commercial hosts have to meet those expectations through monitoring of alcohol consumption:

"…The public expects that in addition to adherence to regulatory standards, those who sell alcohol to the general public take additional steps to reduce the associated risks. Furthermore, patrons are aware that these special responsibilities have very real and visible manifestations. The imposition of a "cut-off" at the bar is understood, and expected, as part of the institutionalization of these responsibilities. Similarly, in many establishments, "bouncers" both enforce admission and assist other members of the staff who might have to deal with patrons who may have become intoxicated. These features have no equivalent in the non-commercial context. A party host has neither an institutionalized method of monitoring alcohol consumption and enforcing limits, nor a set of expectations that would permit him or her to easily do so."

Commercial hosts have an incentive to over-serve: it is more profitable than encouraging responsible consumption. The costs of over-consumption are borne by drinkers, taxpayers and third parties, while tavern keepers enjoy large profits:

"Third, the contractual nature of the relationship between a tavern keeper serving alcohol and a patron consuming it is fundamentally different from the range of different social relationships that can characterize private parties in the non-commercial context. The appellants argue that there is "nothing inherently special" about profit making in the law of negligence. In the case of alcohol sales, however, it is clear that profit making is relevant. Unlike the host of a private party, commercial alcohol servers have an incentive not only to serve many drinks, but to serve too many. Over-consumption is more profitable than responsible consumption. The costs of over-consumption are borne by the drinker him or herself, taxpayers who collectively pay for the added strain on related public services and, sometimes tragically, third parties who may come into contact with intoxicated patrons on the roads. Yet the benefits of over-consumption go to the tavern keeper alone, who enjoys large profit margins from customers whose judgment becomes more impaired the more they consume. This perverse incentive supports the imposition of a duty to monitor alcohol consumption in the interests of the general public."

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Commercial establishments serving alcohol to patrons have duties under statute and common law to patrons and third parties who may be injured by intoxicated patrons. The duty is to take positive steps to prevent patrons from becoming impaired. Alcohol providers may be liable even though the patron was intoxicated upon arriving at the establishment and despite the patron not showing obvious signs of intoxication. It is the provider’s responsibility to ensure an appropriate system of service and ongoing monitoring is in place to prevent injuries as a result of intoxication. The Liquor Licence Act prohibits service of alcohol to one who is or appears to be intoxicated. The Court of Appeal for Ontario recently held that a plaintiff may call evidence of over-service of patrons of the hotel before, during and after the incident and is not restricted to evidence from the night of the incident giving rise to the lawsuit. Taverns may be held responsible for a portion of the plaintiff’s contributory negligence if the Plaintiff failed to take care for her own safety due to impairment which is the fault of the tavern under the Liquor Licence Act. Liability under s. 39 of the Liquor Licence Act is a statutory liability arises once the factual pre-conditions provided for therein have been found to exist.

This post contribution authored by Tara Pollitt, a lawyer in our office at McCall Dawson Osterberg Handler LLP.