ALCOHOL AND GAMING COMMISSION OF ONTARIO
IN THE MATTER OF The: Liquor Licence Act, R.S.O. 1990, c. L.19, as amended
B E T W E E N:
Registrar, Alcohol and Gaming Commission of Ontario Registrar
-and-
1493372 Ontario Limited O/A Kumai Sushi Licensee
DECISION
Panel: Beryl Ford, Board Member Eleanor Meslin, Board Member
Decision Date: August 14, 2009 Hearing Location: Toronto, Ontario
Alcohol and Gaming Commission of Ontario 90 Sheppard Avenue East, Suite 300 Toronto ON M2N 0A4 Phone: (416) 326-0366 Fax: (416) 326-5566 Toll Free In Ontario: 1-800-522-2876 Website: www.agco.on.ca
Appearances
Registrar, Alcohol and Gaming Commission: Joyce Taylor, Representative 1493372 Ontario Limited, Licensee: Terry Ikeda, on behalf of the corporate licensee
Allegations
[1]. A hearing into a Notice of Proposal (“NOP”) number 17229 dated May 5, 2009 to revoke liquor licence number 809499 (the “Licence”) issued to 1493372 Ontario Limited (the “Licensee”) operating as KUMAI SUSHI, 35 Brunel Road, Unit 1, Mississauga, Ontario, L4Z 3E8 (the “premises” or “establishment”), on the basis that the Registrar has reason to believe that the Licensee would be disentitled to a licence under section 6 of the Liquor Licence Act (“LLA”), was held on July 30, 2009, in the City of Toronto.
Preliminary Matters
[2]. Mr. Kumai asked that Terry Ikeda, his friend and accountant, act on his behalf because of his difficulty with English. He waived his right to legal counsel. The Board agreed to allow Mr. Ikeda to speak for Mr. Kumai.
Registrar’s Evidence
[3]. Marilyn Blazevic is a field collector with the Ministry of Revenue (the “Ministry”). She indicated that the Licensee owes Retail Sales Tax (“RST”) of $285,638.43, as of the July 22, 2009 Statement of Account from the Ministry, entered as Exhibit 1. She pointed out from the statement that the first item showed an audit had been done of all the records on September 20, 2008 showing a balance of $251,370.84. She also testified that the Licensee had no Vendor’s Permit from 2002-2006. In addition, since applying for the permit, Mr. Kumai has been late or made no payments on his returns on a regular basis and made no substantial attempts to repay his debt.
[4]. Referring to page 2 of Exhibit 1, Ms Blazevic pointed out that on December 31, 2008 an estimate was done to assess the estimated balance that would be due on that date and the amount was $3,288.67.
[5]. Ms Blazevic stated that RST collected by the Licensee are funds held in trust until their due date and must be paid on or before that date. The Ministry is requesting that the Licence be revoked in order to stop the growth of this tax liability.
[6]. Mr. Ikeda had no questions for this witness.
Licensee’s Evidence
[7]. Terry Ikeda is Mr. Kumai’s accountant. He testified that Mr. Kumai is aware of his tax liability. It occurred because business has not been good, but Mr. Kumai wants to begin remitting and hopes to resolve the outstanding amount in the future by paying a little extra with each monthly payment.
[8]. To Ms Taylor’s question, Mr. Ikeda agreed that since the September 2008 audit, there has been no decrease in the amount owing, but has increased by $34,000 since that time.
[9]. Mr. Ikeda also admitted that Mr. Kumai did not remit either his December 2008 or April 2009 returns and in the months that he did file, the amount filed was not for the full amount of tax owing. Mr. Ikeda agreed that Mr. Kumai has not done anything to pay the amount owing or paid anything extra.
Registrar’s Submissions
[10]. The Licence should be revoked because the Licensee cannot be reasonably expected to carry on the business in accordance with the law, include the RST Act. By failing to comply with the RST Act, the Licensee is in violation of clause 6(2)(d) of the LLA. The Registrar’s position is based on the very large amount of RST owing to the Ministry of Revenue.
[11]. The Licensee operated without a Vendor’s Permit for approximately four years, was caught and audited. He still has not kept current with taxes owing that he currently collects or made any additional payments to reduce the outstanding amount. The Board needs more than his hope of being able to pay the amounts owing to allow him to continue operating with a liquor licence. The Licensee is using tax revenue to fund his business. To allow him to do so would be to give him a competitive advantage over other licensees who pay their taxes on time and in full.
[12]. The Licensee did not put forward any substantial proposal for paying off the outstanding tax and should not be allowed to continue to operate with a liquor licence. It should be revoked, forthwith.
Licensee’s Submissions
[13]. The Licensee has no argument with the Registrar regarding the facts. If the Licence is revoked, the Licensee would not be able to continue to operate. He hopes the Board will accept the Licensee’s commitment to pay the RST monthly plus an extra $2,000.00, until the debt is paid.
Reply
[14]. The time to negotiate a payment plan is long past, it should have been done 2 years ago. Even if accepted, the plan is not realistic given the Licensee’s history. If accepted it would take approximately 140 months before the current outstanding amount is paid. The current debt of $285,638.43 continues to accrue interest. It is too late now.
Decision
[15]. The Board issued the following decision and order at the hearing:
Based on the evidence provided by the Ministry of Revenue (admitted to by the Licensee) and a Statement of Account (Exhibit 1) of a balance owing of $285,638.43 against the Licensee for outstanding Retail Sales Tax (RST) and the fact that the Licensee operated without a Vendor’s Permit for 4 years and the Licensee made no attempt to reduce the outstanding amount owing to the Ministry of Revenue, the offer proposed by the Licensee today (July 30, 2009) to pay his monthly RST payment regularly, plus an additional $2,000.00 monthly until the debt is paid is unrealistic.
Negotiations should have been made with the Ministry of Revenue 2 years ago.
Therefore, the Licensee cannot be reasonably expected to be financially responsible (clause 6(2)(a), LLA) and affords reasonable grounds for the Board to believe that its business will not be carried on in accordance with the law and with honesty and integrity (clause 6(2)(d), LLA).
Conclusion
[16]. Therefore, the Board confirms its oral ORDER that liquor licence number 809499 issued to 1493372 Ontario Limited operating as KUMAI SUSHI, 35 Brunel Road, Unit 1, Mississauga, Ontario, L4Z 3E8, be REVOKED, immediately.
DATED AT TORONTO THIS 14th DAY OF AUGUST, 2009
BERYL FORD, BOARD MEMBER ELEANOR MESLIN, BOARD MEMBER