Executive Summary: Key Legal and Evidentiary Issues

• The General Manager of the Liquor and Cannabis Regulation Branch cancelled the petitioner's liquor licence for the Gallery Show Lounge nightclub, finding the licensee and its affiliate not "fit and proper" to hold a licence under the Liquor Control and Licensing Act.

• Criminal charges against two high-ranking employees for drug trafficking and weapons offences were heavily relied upon in the cancellation decision, yet those charges had been stayed by the Public Prosecution Service of Canada before the decision was rendered.

• Repeated breaches of licence conditions occurred, including non-operational security cameras, failure to report incidents within 24 hours, and refusal to provide surveillance footage to police.

• An extensive history of violent incidents at the establishment — including a fatal stabbing, shootings, assaults, and gang-related activity — was documented by the Vancouver Police Department over several years.

• Procedural fairness concerns were raised by the petitioner, including allegations of bias stemming from cooperation between the Branch and VPD, and the General Manager's failure to consider new evidence regarding the stayed criminal charges.

• Although the Court found the petitioner met the thresholds for a serious question to be tried and irreparable harm, the application for a stay was dismissed because public safety concerns outweighed the financial harm to the petitioner.

Background and parties involved

0956156 B.C. Ltd. (the "petitioner") operated the Gallery Show Lounge (the "Gallery"), a nightclub located on Southwest Marine Drive in Vancouver, British Columbia. The Gallery held a liquor licence issued under the Liquor Control and Licensing Act, S.B.C. 2015, c. 19 ("LCLA"), permitting it to sell and serve liquor. Slobodan (Mike) Pajic was the sole shareholder and sole director of 0970665 BC Ltd., which held 50% of the shares of the petitioner company. Andonis Anthony Pomonis served as the "representative" of the company that operated the Gallery. The respondent, the General Manager of the Liquor and Cannabis Regulation Branch (the "Branch"), was responsible for administering the LCLA and its regulations.

A history of violence and enforcement

The Branch began actively investigating and enforcing compliance at the Gallery in November 2023, prompted by a letter from the Vancouver Police Department ("VPD") expressing "significant public safety concerns stemming from violence perpetrated by patrons" of the nightclub. By April 2024, the VPD provided a synopsis revealing that since November 2021, there had been over 94 calls for police service related to the Gallery, some involving violent incidents including a homicide, a stabbing, and a shooting in which two people were shot. The VPD further reported that six staff members were believed to be involved in trafficking cocaine inside the venue, and that search warrants had been executed on March 6, 2024. A more complete report documented 213 service calls between 2021 and July 31, 2024, including 21 calls for assault or sexual assault, 31 calls for disturbance, 8 calls for weapons, and 15 calls for other Criminal Code violations.

Licence suspensions and compliance failures

On April 19, 2024, the General Manager imposed a 14-day suspension of the Gallery's liquor licence, citing a pattern of violent and criminal behaviour, including the execution of a search warrant related to drug trafficking, disturbances outside the venue, intoxicated persons leaving in vehicles, individuals linked to organized crime frequenting the establishment, a fatal stabbing in May 2022, and a gang-related stabbing in November 2023. Several new licence conditions were simultaneously imposed, requiring video surveillance in all areas, patron screening with metal detectors, and incident reporting to the Branch within 24 hours. That suspension was lifted on April 26, 2024, subject to those conditions. Shortly after, on May 2, 2024, a stabbing incident occurred in the Gallery's parking lot, leading to a second 14-day suspension. The Branch noted that staff were unable to provide surveillance footage to police, the video equipment was found not to be working, the incident was not reported within 24 hours, and the Gallery reopened the next evening without operational video surveillance.

The fit and proper investigation

On May 7, 2024, the Branch commenced an investigation under s. 13 of the LCLA into whether Mike Pajic was suitable to hold a liquor licence. The petitioner was directed to provide specified documents and information. The petitioner provided some but not all of the requested material, and the deadline was extended multiple times. In March 2025, when the Branch learned via social media that the Gallery planned to reopen without having provided the requested documents, it issued a third licence suspension. The suspension was also prompted by news that Anthony Pomonis had been charged with trafficking in a controlled substance and another employee had been charged with trafficking and weapons offences. The Gallery eventually provided the outstanding documentation, and the suspension was lifted on April 19, 2025. Upon reopening in approximately April or May 2025, the petitioner retained a third-party management company, Intercom Lux Management Inc., and changed its business model from a venue open to the general public to one that contracted with third parties to host events.

Continued incidents and the cancellation decision

By letter dated July 30, 2025, the General Manager advised that cancellation of the licence was being considered due to five main areas of concern: criminal charges against high-ranking employees, a pattern of violent incidents, an investigation into alleged money laundering, significant outstanding tax obligations, and misstatements in the petitioner's financial information. The petitioner was given an opportunity to respond and submitted its submissions on September 22, 2025. Despite these submissions, incidents continued at the Gallery between December 2025 and February 2026, including a patron allegedly assaulted by bouncers, an inspection revealing 16 of 32 security cameras were non-operational, multiple altercations between patron groups, and further compliance failures.

The February 13, 2026 decision and its aftermath

On February 13, 2026, the General Manager issued a decision finding the petitioner and Mike Pajic were not "fit and proper" to hold a liquor licence and cancelled the licence effective February 27, 2026. The decision rested on four main grounds: high-ranking employees had been charged with drug trafficking and related offences; there was an established pattern of violent incidents endangering public safety; there was an investigation into alleged violations of Canadian anti-money laundering legislation, including the execution of search warrants by both the RCMP and VPD in November 2024; and there were significant inaccuracies and discrepancies in the petitioner's financial records. The General Manager rejected the petitioner's proposed alternatives — including continued operation under additional conditions, administrative supervision, or a licence transfer — concluding that none would adequately address the public safety concerns. The General Manager specifically noted that the Gallery had, in the opinion of the VPD, become a place where dangerous individuals, including gang members and members of criminal organizations, choose to congregate, and that even a licence transfer to a different operator would be unlikely to mitigate the risks given the entrenched clientele. A "Confirmation of Cancellation" letter followed on February 27, 2026, though the Court noted that letter misstated the contents of the February 13 decision.

The petition for judicial review and stay application

The petitioner filed a petition on February 27, 2026, and obtained a temporary interim stay from Justice Sukstorf. The petitioner raised multiple grounds for judicial review, including that the fit and proper investigation violated its privacy rights, that the General Manager relied heavily on criminal charges that had in fact been stayed by the Public Prosecution Service of Canada before the decision was made, that the decisions lacked a factual basis for allegations of gang associations and money laundering, that the cooperation between the Branch and VPD gave rise to a reasonable apprehension of bias, and that the decisions were procedurally unfair on several bases.

The Court's analysis and ruling

Justice Giaschi applied the three-part test from RJR-MacDonald Inc. v. Canada (Attorney General) for granting a stay pending judicial review. On the first element, the Court found the petitioner had met the low threshold for a "serious question to be tried," noting in particular that the General Manager had relied heavily on criminal charges that had been stayed by the time of the decision. On the second element, the Court had "little hesitation" in finding irreparable harm, accepting that over 95% of the Gallery's revenue came from liquor sales and that cancellation would effectively force the permanent closure of the business. On the third element, the balance of convenience, the Court sided with the respondent. Justice Giaschi found that the staying of the criminal charges was a neutral factor, that the earlier violent incidents from 2022–2024 remained relevant, that the numerous incidents in January and February 2026 demonstrated the petitioner's business model changes had been ineffective, and that the six incidents of assaults or altercations over slightly less than one month could not be dismissed as commonplace. Ultimately, the Court concluded that staying the cancellation decision "would present a clear danger to the patrons of the Gallery and to the public in general," and that this danger outweighed the harm to the petitioner. The application for a stay was dismissed on April 9, 2026, with no order as to costs. No specific monetary amount was awarded or ordered, as the ruling concerned the denial of the petitioner's stay application rather than a damages claim.