Registrar, Alcohol and Gaming Commission Ontario v. Joseph Mark Novic and Beverly Ann Benatar, 2010 CanLII 25946

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 Ontario

Registrar

-and-

Joseph Mark Novic and Beverly Ann Benatar

operating as Cape Wine & Spirits Merchants

Applicant

DECISION

Panel: Kirsti Hunt, Vice-Chair, AGCO Allan Higdon, Board Member

Decision Date: February 25, 2010

Hearing Location: Toronto, Ontario

Alcohol and Gaming Commission of Ontario 90 Sheppard Avenue East, Suite 200 Toronto, Ontario 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 ) Richard Kulis, Representative

Joseph Mark Novic and Beverley ) Joseph Novice, On his own behalf and Ann Benatar, Applicant ) on behalf of Beverly Benatar

Allegations

1. The Board of the Alcohol and Gaming Commission of Ontario (“AGCO”) held a hearing on January 11, 2010 in the City of Toronto in a matter of an application by Joseph Mark Novic and Beverly Ann Benatar for a licence to represent a manufacturer and to operate as CAPE WINE & SPIRITS MERCHANTS, 139 McMorran Crescent, Thornhill, Ontario, L4J 2T4, organization number 59343. The Registrar has issued a Notice of Proposal (“NOP”) number 17629 dated October 26, 2009 to refuse to issue a licence to represent a manufacturer on the basis of allegations under subsection 6(2)(a) and 6(2)(d) of the Liquor Licence Act (“LLA”).

Decision

2. After considering all the evidence and submissions the Board DENIES the Application made by Joseph Mark Novic and Beverly Ann Benatar for a licence to represent a manufacturer. Reasons for these findings follow.

Preliminary Matters

3. The applicant, Joseph Mark Novic, appeared on his own behalf and on behalf of Beverly Ann Benatar and waived his right to a legal representative.

4. Mr. Kulis, the Registrar’s representative, asked to amend the NOP by withdrawing subsection 6(2)(a) of the LLA because the NOP was issued under subsection 15(3) of the LLA which does not cite that section. The Board accepted the withdrawal of subsection 6(2)(a) of the LLA.

Evidence for the Registrar

5. Det. Sgt. Michael Pierzchalski of the Ontario Provincial Police (“OPP”), who is with the AGCO, was assigned to investigate Cape Wine & Spirits Merchants and specifically to detail the background history of Joseph Novic. His investigation report was made Exhibit #1. The personal history report of Joseph Novic was made Exhibit #2. A CPIC search of Joseph Novic was made Exhibit #3.

6. Det. Pierzchalski detailed a series of convictions.

7. December 22, 1992 - Driving While Ability Impaired, a fine and a one year driving prohibition. A report with the details was no longer available.

8. August 26, 2004 – 1) Criminal Harassment, 30 days intermittent, two years probation and a fire arms prohibition that expires August 25, 2014; 2) Break and Enter, 30 days intermittent and consecutive and two years on probation concurrent. Mr. Novic’s explanation to police at the time was that he wanted to catch his ex-girlfriend with his ex-best friend and broke in to get visual proof of the relationship. Police considered this a domestic situation.

9. August 11, 2005 – Criminal Harassment and Fail to Comply with Probation order, three months and probation for three years, each charge concurrent and a fire arms prohibition that expires August 10, 2010.

10. This conviction resulted from an incident on March 20, 2005 when Mr. Novic was observed peeking in the window of his ex-girlfriend’s residence. At the time, Mr. Novic was on probation with one condition of not being within 100 meters of the residence. A paper was found on Mr. Novic titled “stalking instructions” which indicated he wanted to stalk his ex-girlfriend. At one point, a note had been left on her car’s windshield stating, “May you die with a stake through your heart like you have done to me.” Police described this as a domestic situation.

11. Mr. Novic advised that his lawyer was in the process of filing an appeal of the August 11, 2005 convictions.

12. On May 28, 2005, while in custody, Mr. Novic was involved in a physical altercation with another inmate. Both admitted to the fight and were issued an internal discipline misconduct.

13. On December 1, 2005, Mr. Novic received a 12-hour driving suspension after a roadside screening registered a “Warn.”

14. Since 1981, Mr. Novic has had 22 Highway Traffic Act convictions. His driver’s licence has been suspended on seven occasions. His licence was suspended once for medical reasons and on numerous occasions for unpaid fines and reinstated when the fines were paid. Presently, Mr. Novic’s licence is not under suspension.

15. An Equifax check of Mr. Novic’s financial background showed that in June 2004 a civil action was taken against Mr. Novic for failure to make payments on a mortgage. On September 15, 2009, Mr. Novic explained that the matter should have been removed from the report because the matter has been dealt with. He sold the property and paid the outstanding balance.

16. Regarding a credit check, Mr. Novic has a favourable rating on one account and an unfavourable rating on another. He has a history of late payment on his MasterCard and arrears of $3,493.00 have been assigned to collections. A bankruptcy search showed no derogatory information.

17. There are four collections against Mr. Novic:

1. an outstanding water bill from September 2005,

2. an unpaid credit card from December 2007,

3. a bounced cheque balance from December 2008, and

4. unpaid cell phone bill from June 2009.

18. Mr. Novic confirmed the collections and said that they remain unpaid. He explained that he has had several years of financial troubles but will make an attempt to pay off his debts.

19. Mr. Novic cooperated with the investigation and admitted his financial difficulties and confirmed his criminal convictions.

20. On cross-examination, in response to a question about whether a licence is suspended for reasons other than a motor vehicle infraction, the officer indicated that he only knew of that happening if a person did not pay child support but other situations may be possible.

21. The information in the synopses in his report (Exhibit 1) came from police reports.

Evidence for the Applicant

22. Mr. Joseph Mark Novic is one of two applicants in this matter. He confirmed that he admitted to the allegations in the Notice of Proposal. He stated that some of the details in the investigation report were inaccurate and that he wanted to give an explanation.

23. The August 8, 2004 incident happened at his ex-friend’s residence not his ex-girlfriend’s residence (Exhibit 1, pages 2 to 3).

24. In court, the judge discounted the reference to the paper with the stalking instructions (Exhibit 1, page 3). Mr. Novic said that there was no such document or such title and he is taking legal advice to remedy this.

25. Regarding the licence suspensions, he pled guilty to the impaired driving charge in 1992. At the time, he was going through a messy divorce and made the error of drinking and driving.

26. In 1993, he had an accident with the car when he had a seizure. His licence was suspended until a doctor confirmed that he could drive.

27. In 1995, he was on the GO Train without his pass or wallet so he got a ticket. His licence was suspended for one day.

28. Regarding the suspension from April 27, 1998 to March 18, 2003, he leased a motor vehicle in 1999 and had no indication that his licence was suspended and can’t understand why it was suspended.

29. With the other suspensions, he paid the fines and his licence was reinstated.

30. Regarding his mortgage, the company took action after he missed one payment. When he sold the house in 2004, that debt should have been paid and should not be on his record.

31. Regarding his credit cards, he ran into financial difficulties in 2005 and is in the process of rebuilding his credit.

32. Regarding the collections (Exhibit 1, page 6):

1. The water bill should have been cleared when the house was sold. He is still waiting to hear why that bill was not paid. If it has not been paid, he will pay it.

2. He needs to discuss with the bank how to resolve the outstanding credit card balance.

3. He has no recollection of the NSF cheque. He has contacted the collection officer for details to find out where that came from.

4. The cell phone bill was not paid off because he has two children in university and they were his first priority during a financial crunch.

33. On cross-examination, Mr. Novic explained what he was going to do with a manufacturer’s licence. He is going into partnership with Ms Benatar, who is a South African national and his fiancée. When he visited South Africa, he found that their wines were good and they were underrepresented in Ontario. With Ms Benatar’s background and contacts, they are planning to bring South African wines to Ontario and the other provinces.

34. Currently, they are licensed in Quebec. They have approval from the SAQ in Quebec for two wineries and a third one is in process.

35. The financing is coming from Ms Benatar’s resources and he is working two jobs.

36. The appeal of his criminal conviction of August 2005, is in hiatus because he is not able to pursue it at this time due to the cost.

37. Regarding the licence suspensions because of unpaid fines, he explained that he did not have the tickets and when he was notified of the suspension, he paid the fine. On one occasion, his roommate borrowed his car and got a ticket. His roommate did not tell him about it and forged his signature on documents. He learned about it when he was in an accident where he was broad-sided and the officer told him about the licence suspension. Subsequently, he got an acquittal based on the forged documents.

38. He has no recollection of the reason for the one lengthy suspension. However, he had a leased car during that time and he would not have been able to lease the car if his licence was suspended.

39. The officer said that he had 22 traffic tickets but it is difficult to remember them. His last speeding ticket that he recollects was in 1985. One ticket was for an expired licence sticker. In 2005 or early 2006, he got a ticket because he did not have his insurance document with him. He admitted that 22 traffic convictions were a large number but they were over a 29 year period.

40. In responding to a question about why, given his history, the Registrar or the Board should give him a licence, Mr. Novic explained that people have difficulties in life like a divorce or being laid off. During his difficulties, he was never involved in fraudulent behaviour. With regard to running into future difficulties, he is only going to be a manufacturer’s representative in the LCBO’s controlled setting. Regarding his honesty and integrity, the officer said that he was cooperative and did not hide anything. He wants to move forward with this opportunity and not look back. From his past job he has IT training. He and Ms Benatar enjoy wine and want to have her country represented in Ontario.

41. If they were involved in a private enterprise, they would be in direct contact with distributors or vendors. He will be a manufacturer’s representative with the LCBO which controls everything. They are just going to provide a forum for South African wines. He is Smart Serve trained from working at the Legion and its president is willing to give a letter of reference if requested. Ms Benatar is aware of his criminal convictions.

42. In response to the statement that his past conduct is not relevant because the LCBO controls everything, Mr. Novic explained that they will be dealing with the LCBO only as a buying agent. They have contacted wineries in South Africa and so far 13 of them have agreed to retain them as representatives even before they have a licence.

43. This application was in May 2009 and is still on hold. In Quebec their application was processed in two weeks.

44. There are no financial problems with the family court. He has made his payments and one child is graduating university this year and the other is in second year. That shows some indication of intent. He is not a “neer-do-well”.

45. Regarding the structure of the company, he will be the contact with the LCBO because he is a Canadian resident. Ms Benatar will deal with the wineries since she speaks Afrikaans. She is not Smart Serve trained, but she will not be involved with anything like tastings. Either he will do that or they will hire someone who is Smart Serve trained.

46. In response to questions by the Board, Mr. Novic further explained that the criminal charges for harassment result from his actions because he felt betrayed by his ex-girlfriend and his best ex-friend. The impaired charge occurred while his marriage was disintegrating. He got therapy for his emotional issues as part of his probation after the 2005 conviction.

47. He visited South Africa in 2008 to meet Ms Benatar’s family. He did not know about the outstanding collections at the time. His family and Ms Benatar paid for the trip.

48. He lived in Oakville in the same residence for five and a half years from 1999 to 2004 and provided a stable environment for his son during his high school years. He was incarcerated in 2005. Since the beginning of 2006 he has shared a house with a friend.

Submissions for the Registrar

49. Licences are issued to manufacturer’s representatives in a regulated industry. All must meet the requirements under the LLA to assure that operations are conducted with honesty and integrity. The Registrar has a concern that Mr. Novic seems to believe that an applicant is not subject to past conduct concerns and can’t understand why he should not get a licence.

50. The Registrar has a concern about the applicant’s lack of concern regarding the law. He has quite an extensive record over a long period of time. The main concerns are the convictions under the Criminal Code and the Highway Traffic Act violations, as well as his failure to meet financial obligations. Based on the past record, the Registrar has a concern whether the applicant will in future operate within the law and with honesty and integrity. The applicant has shown a disregard for the law especially in his personal life.

51. The applicant has no action plan regarding the operation of the business. The Registrar’s position is that, based on the way the application is set up now, the licence should not be issued.

Submissions for the Applicant

52. Mr. Novic submitted that his explanation of the past is not a question of disregarding it. He made an error in judgment which resulted in the Criminal Code convictions that related to one individual and he accepts responsibility.

53. He is looking to turn a page and move forward in a productive way. Both he and Ms Benatar understand that she is the one with the experience in this matter. If he was an employee, he would not need a licence. He is trying to be up front and cooperate.

54. He made errors in the past but his financial decisions were made so that he would not jeopardize his children’s situation.

55. They are looking to work in a regulated industry in Ontario. Ms Benatar would not want to be involved in any illicit operation that would reflect badly on her or on her family. They are looking to do the best for their families and the province of Ontario.

Analysis, Reasons and Decision

56. The Board carefully reviewed the evidence, exhibits and submissions made. The Registrar has issued an NOP to refuse to issue a licence as a manufacturer’s representative based on the past conduct of the co-applicant, Joseph Novic. No issues were raised about the other applicant, Ms Benatar.

57. Section 6(2)(d) of the LLA states that an applicant is entitled to be issued a licence except if the past and present conduct of the of the applicant affords reasonable grounds for belief that the applicant will not carry on business in accordance with the law and with integrity and honesty.

58. The evidence is clear that Joseph Novic has a lengthy past history which includes two instances of Criminal Code convictions, 22 Highway Traffic Act violations which include seven driver’s licence suspensions, and multiple outstanding financial debts which are in collections. His past appears to have been turbulent with regard to his personal life, his finances and the law. The Criminal Code convictions relate to an ex-girlfriend and appear to be in the past considering that Mr. Novic is in a new personal relationship with his partner in this application. However, those convictions are not in the distant past, but in 2004 and 2005. Mr. Novic is still under firearms prohibitions which remain in place until August 10, 2010 and August 25, 2014.

59. The traffic violations are so numerous that Mr. Novic could not remember them all. Also of concern for the Board are the number of driver’s licence suspensions for unpaid fines. The Board is not satisfied with the explanation that he paid the fines as soon as he received a suspension notice. The instance with his roommate aside, Mr. Novic did not take a ticket seriously and did not pay until he was notified of his licence suspension.

60. Mr. Novic gave an explanation of the outstanding debts, but they remain outstanding. He has taken no concrete steps to even start paying them. The Board agrees that sometimes people run into financial difficulties in their lives. Mr. Novic forthrightly admitted his financial troubles and indicated that when it came to paying bills or providing for his children and their education, he chose his children. That is admirable in a father and the Board lauds him for that. However, his personal finances are in disarray and if he has not been able to get them under control before starting this new business, the Board is concerned about how he will deal with its resulting larger financial responsibilities. Mr. Novic does not seem to have a clear business plan.

61. Of most concern is that Mr. Novic does not seem to think that his past conduct is a problem because he will be operating in a controlled LCBO environment in which they do everything. He either dismisses or does not understand the responsibilities of a manufacturer’s representative under the LLA.

62. Mr. Novic seems very sincere in wanting to make a new start by going forward and not looking back. He admitted the allegations on his Hearing Request Form and at the hearing and gave an explanation for some of the conduct. However, his long pattern of seriously negative past conduct, the recency of some of it, the court ordered prohibitions that are still in effect and the personal debts that remain outstanding raise a reasonable doubt about Mr. Novic’s ability to operate a business as a manufacturer’s representative in a manner required under strict regulations in a highly regulated industry.

63. Therefore, the Board hereby DENIES the application by Joseph Mark Novic and Beverly Ann Benatar for a licence to represent a manufacturer, to operate as CAPE WINE & SPIRITS Merchants, 139 McMorran Crescent, Thornhill, Ontario, L4J 2T4, organization number 59343.

DATED AT TORONTO THIS DAY OF 2010.

KIRSTI HUNT, VICE-CHAIR, AGCO ALLAN HIGDON, BOARD MEMBER