Registrar, Alcohol and Gaming Commission of Ontario v. Lukezic Group Ltd., 2010 CanLII 26007

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-

Lukezic Group Ltd. intending to operate as Walker Hall Winery Licensee

Amended DECISION

Panel: David C. Gavsie, Chair, AGCO Patricia McQuaid, Vice-Chair, AGCO

Decision Date: April 9, 2010 Hearing Location: Toronto, Ontario

Alcohol and Gaming Commission of Ontario 90 Sheppard Avenue East, Suite 300 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: Phillip Morris, Representative Lukezic Group Ltd., Licensee: James Lukezic, On his own behalf and on behalf of the Corporate Licensee

Authorities

Ontario (Registrar of Alcohol and Gaming) v. Hosseini-Rad, [2004] O.J. No. 1273

Application

1The Registrar of the Alcohol and Gaming Commission of Ontario (“AGCO”) issued Notice of Proposal number 17603 (the “NOP”) dated October 8, 2009 to refuse the application for a liquor licence made by Lukezic Group Ltd. (the “Applicant”), operating or intending to operate as WALKER HALL WINERY, 4925 Thirty Road, Beamsville, Ontario, L0R 1B3, (the “establishment”), establishment number 813719, pursuant to sections 6(2)(d) and 6(2)(e) of the Liquor Licence Act (the “LLA” or the “Act”). A hearing was held on December 3, 2009 in the City of Toronto.

Decision

2After considering all the evidence and submissions, the Board REFUSES the application for a liquor sales licence for the indoor and outdoor areas of the premises with capacities of 50 and 29 persons. Reasons for these findings follow.

Preliminary Matters

3Mr. James Lukezic, the principal of the corporate applicant, appeared on behalf of the corporation and without legal representation, having waived that right.

4By way of introduction to the Registrar’s position on this matter, Mr. Morris explained that Mr. Lukezic is seeking to operate a restaurant, offering food and wine to the public, tied to the manufacturing site, pursuant to sections 2(1) and 2(2) of Ontario Regulation 719/90. The Registrar is opposed to the granting of a licence because of certain criminal convictions of Mr. Lukezic between 2006 and 2009 which in turn raise concerns about Mr. Lukezic’s ability to deal with the public in the context of operating a licensed establishment, invoking section 6(2)(d) of the LLA.

5Secondly, in completing the application for licence, the Registrar alleges that Mr. Lukezic has made false statements and/or failed to disclose information contrary to section 6(2)(e) of the LLA.

6In terms of chronology, Mr. Lukezic applied for a winery licence in September 2005. That licence was issued on February 3, 2009 to Lukezic Group Ltd. At the time of issuance, the Registrar was not aware of certain charges against Mr. Lukezic. Specifically, in January 2008, Mr. Lukezic was charged with weapons offences. These were ultimately withdrawn. Further, in August 2008, Mr. Lukezic was charged with criminal harassment and assault. The application for a “tied house” was made on March 10, 2009. This required completion of a Personal History Report. Mr. Lukezic did not disclose the outstanding charges, which were not resolved until May 25, 2009 at which time Mr. Lukezic plead guilty to criminal harassment and simple assault. Additionally, Mr. Lukezic did not disclose a 1999 conviction for driving with more than 80 mgs of alcohol in his blood.

7The Registrar’s position is that Mr. Lukezic’s conduct raises concerns regarding his health and mental stability and his ultimate ability to deal with the public such that his application should be refused, or at a minimum, the application should not be processed until a psychiatric assessment takes place pursuant to an Order of the Court on May 25, 2009.

8In his opening statement, Mr. Lukezic advised that he was not so naïve to think that the AGCO was not aware of his charges and/or convictions. He stated that he submitted his application twice to Hema Ravi, the licensing officer, which he signed rather quickly as it was a busy time of year for him. Regarding the 1999 conviction, it was a fine, for which he later received a pardon. The criminal harassment charge was not, in his view, given the factual circumstances, a true harassment charge.

9In response to the concern about him selling alcohol to the public, he stated that he already runs a wine shop on site which has been a success. He has demonstrated business acumen in this enterprise, backed by substantial corporate finance experience in New York.

10With the close of opening statements, Mr. Morris stated that he wished to submit the transcript of the proceedings of the guilty plea dated May 25, 2009, and would be relying on the facts set out therein. This was accepted as Exhibit 3.

Registrar’s Evidence

11Lisa Isherwood is a Detective Constable (“D.C.”) with the Niagara Regional Police. In that role, she reviews all police reports filed by the uniform officers. She reviewed report # 3541, being a report resulting from a call from Mr. Lukezic regarding an alleged break and enter at his residence on January 11, 2008. Police Constable (“P.C.”) James Taylor responded to the call and concluded it was “unfounded.” The 9-1-1 call made by Mr. Lukezic on that date was recorded (Exhibit 4b), and transcribed (Exhibit 4a).

12D.C. Isherwood, upon running a computer check on Mr. Lukezic, discovered that between 2006 and 2008, he had made several reports to Niagara Regional Police, the majority of which related to alleged break and enters resulting in damage to property. All reports reviewed were deemed, by police, to be unfounded. D.C. Isherwood was concerned by a number of matters that came to her attention: a report by a real estate agent in 2007 that she had gone to look at the property and observed someone with a shotgun, the tape itself wherein Mr. Lukezic stated that he had two loaded shotguns and would “shoot things… move in the night. That is how I am going to take care of business now.” As a result, she obtained a Criminal Code search warrant because she believed that Mr. Lukezic was in unauthorized possession of a firearm. There was no record of a firearms licence.

13That search warrant was executed on January 14, 2008. She, with others present, entered the front of Mr. Lukezic’s residence. Mr. Lukezic was very cooperative. A shotgun was found leaning up against the wall in a back porch area of the residence. It was not properly stored. In addition, ammunition was found in the garage. Mr. Lukezic was placed under arrest for firearm offences. While in the police cruiser, D.C. Isherwood explained to Mr. Lukezic that she was concerned by what she had heard on the tape of the 9-1-1 call, by the previous police reports, and in particular about his mental health and resulting public safety concerns. He was quite shocked when she expressed her concerns about his mental health. Mr. Lukezic was held in jail pending his bail hearing. He spent several days in custody before being released. She believes that a psychiatric assessment was suggested; she did not know whether one was done.

14In conclusion, D.C. Isherwood explained that the police concern, given what had transpired as recorded in the 9-1-1 call, is how Mr. Lukezic would respond in the event of a conflict with the public should he be given a licence.

15On cross-examination, D.C. Isherwood explained that she reviewed several reports filed as a result of calls to police by Mr. Lukezic. All were determined by the officers involved to be unfounded at the time. She herself did not re-investigate. She reiterated that Mr. Lukezic was cooperative with her. Mr. Lukezic asked D.C. Isherwood if she remembered asking him when he was in the police cruiser, if he knew that land in Canada was not owned by individuals but by the government. She responded that she never asked him that. Her concern was, and continues to be public safety insofar as Mr. Lukezic is concerned.

16Daniel Nadeau is a Detective Sergeant (“D.S.”) with the Niagara Regional Police Service (“NRPS”), with 20 years experience. The NRPS has filed a letter of objection regarding this application (Exhibit 6). He explained that when an application for licence is filed, a copy goes to the Chief of Police and ultimately lands on the desk of a detective sergeant in the district in which the establishment would be located. As such, he reviewed the application. He ran a CPIC check and a local records check. He discovered that Mr. Lukezic had no criminal record, but that there were outstanding charges and that Mr. Lukezic had made several calls to the police regarding alleged break and enters at his property. He did not investigate those reports but did review them. In addition, he spoke to P.C. Taylor and D.C. Isherwood and listened to the tape of the 9-1-1 call.

17From these, he concluded that Mr. Lukezic was not friendly to uniformed officers. He seemed to have an attitude and an “anti-police” perspective. This was of concern because a licensee must abide by many regulations and if there is an issue, a uniformed officer is the first to respond. It is incumbent upon a licensee to be cooperative at all times with police.

18D.S. Nadeau also reviewed the transcript of the court proceedings and Mr. Lukezic’s actions as summarized also concern him, especially the “spray incident” when Mr. Lukezic sprayed a vehicle and the driver with an anti-fungal spray from his tractor. This seemed unprovoked.

19As a result, D.S. Nadeau in his report concluded that the community would be at risk if Mr. Lukezic were granted a licence, expressing doubt that Mr. Lukezic would follow the extensive rules and regulations required of a licensee. In particular, D.S. Nadeau cited three factors in his evidence: the outstanding (at the time) weapons charges, reports from his family members regarding harassment by him and the various unfounded break and enter reports.

20In cross-examination, D.S. Nadeau conceded that at the time of his arrest, Mr. Lukezic was cooperative, but that in his view, the reports suggested anti-police attitudes. He did not mean though that Mr. Lukezic was a “bad” person or would act violently.

21Renee Serianni is an Ontario Provincial Police (“OPP”) officer seconded to the AGCO and working in the Niagara Region. She stated that a probationary officer had been assigned to Mr. Lukezic, following the May 2009 court proceeding, but did not believe that a psychiatric assessment had been completed. She does not know where that assessment is in the process, but understands that the referral has yet to be made. Mr. Lukezic’s personal physician would make the referral, however, she has had difficulty getting in touch with his doctor.

Applicant’s Evidence

22James Joseph Lukezic gave evidence on his own behalf addressing points raised by the police officers in their evidence.

23Regarding the police reports, he stated that they only lightly touched on what had occurred. He was experiencing constant break and enters, and vandalism on his property. He acknowledged that he was agitated on the taped call.

24Mr. Lukezic stated that his 10 years of corporate experience likely gave him a U.S. style of bravado, which may not always have seemed professional, but he does have respect for authorities. He said he had been educated at Cornell, Princeton and Harvard. He worked in New York City at Merrill Lynch and CitiBank as well as operating a wine import business there, importing fine wines, 36 labels, from around the world.

25He attributed the harassment charges to his business competitors with whom he originally had an excellent relationship when he took over the vineyard from his father. But as he attempted to develop the winery business, the relationship soured and he alluded to a threatening comment made to him. His emails cited in the court transcript are a little embarrassing, but are, in his view, taken out of context.

26Regarding the spray incident, it was a situation where he was “blindsided”. These people were on his property; he had never met them. His recollection of discussions with the police officers at the time, was that there was an understanding that there was no intention to harm, but the accidental spraying of passing vehicles by those working in a vineyard is not uncommon. He had offered to pay for damage to the vehicle and thought nothing more of the incident until he was charged.

27He described himself as a passionate grape grower who wanted to realize his father’s dream and escalate the business to professional wine making.

28On cross-examination, Mr. Lukezic agreed that through his professional experience he was aware of the importance of being honest in filling out documents in a regulated industry. He was aware of the outstanding charges against him when he filled out his personal history report. He recalled receiving an email from Hema Ravi requesting an updated signature from him on the report. She sent him the form with the boxes already checked off. He signed it and returned it to her. He stated that he likely did not read it closely enough as he was more concerned at the time with some corporate paperwork. It was a busy time for him.

29Regarding Question 10 on the form (Exhibit 1) wherein it is checked “no” to the query about outstanding charges, Mr. Lukezic stated that he did not lie but told Ms Ravi about these in a phone conversation before he returned the form, to which she responded that he was not to worry about it if it was not a conviction. He was aware that he would have to submit any criminal record. He did acknowledge that he fully completed a personal history report for his September 2005 application (Exhibit 7) but repeated that regarding the report in issue, he merely signed it.

30Through cross-examination, Mr. Morris introduced a letter dated November 2, 2009 from Mr. Lukezic to the AGCO (Exhibit 8). In that letter, he suggested that D.C. Isherwood was retaliating against him for a letter of complaint written by him regarding her unprofessional conduct. He stated that the charges against him were less serious than they appear, alluding to family litigation about his father’s estate and suggesting that the spray incident was the result of a windy day.

31Mr. Lukezic stated that he was through the period in question under much strain from his father’s death in 2004, efforts to develop the winery, a divorce in 2006 and estate litigation between family members.

Reply Evidence from the Registrar

32Mr. Morris sought permission, which was granted, to call Hema Ravi in response to evidence given by Mr. Lukezic. Ms Ravi has been a liquor licence officer since 2003, having begun work at the AGCO’s predecessor, the Liquor Licensing Board of Ontario in 1997. At the time of Mr. Lukezic’s application she was seconded to the manufacturing and special licensing unit. It was her job to ensure that an applicant has provided all required documents, that the application is complete with all corporate documents and a Personal History Report. Over the years, she has reviewed hundreds of personal history reports and is therefore very familiar with Question 10(a) on the report.

33She stated that she does not advise an applicant on what to include and would not advise that only convictions (versus charges) need be disclosed. It is her practice to provide an applicant with the web link to the required forms and advises that the forms can be completed on line. She would never fill in boxes on the form for an applicant. In this instance, she believes that she emailed Mr. Lukezic the link to the form or perhaps sent a “PDF” of the document.

Reasons/Analysis

34The Registrar requests that the Board refuse this application, relying upon sections 6(2)(d) and (e) of the LLA. We will deal first with the allegation made of a violation of section 6(2)(e).

35Mr. Morris submits that Mr. Lukezic is a sophisticated, well educated and articulate person, with prior work experience in a highly regulated industry. As such, he was aware of the importance of full disclosure on application forms. The Board heard from Mr. Lukezic regarding his Ivy League education and his 10 years on Wall Street. There is no debate concerning his education and business sophistication. Mr. Lukezic is unquestionably a person with skills and intelligence to understand and complete a form. The response to Question 10(a) on the Personal History Report (Exhibit 1) is, however, erroneous. Question 10(a) asks:

“Have you ever been convicted of any offences including absolute and conditional discharges and are there any outstanding charges against you in any jurisdiction? Failure to disclose any convictions or charges may result in refusal of the application.”

36There are two boxes to mark – “no” or “yes”. The “no” box is marked with a checkmark. The form is signed by Mr. Lukezic and dated March 10, 2009. At that time, Mr. Lukezic was facing several serious Criminal Code charges of harassment, utter threat to cause death, assault, and administering a noxious thing with intent.

37Mr. Lukezic had several explanations for this response. He states that he simply signed the form sent to him, already completed by Hema Ravi, being too busy to give it much consideration. Further he stated that he asked Ms Ravi in a telephone conversation whether he had to disclose the charges to which, he says, she responded no, only convictions. In his submissions, Mr. Lukezic suggested that this incorrect information has been “blown up into a major issue”, rationalizing that the OPP knew of the charges at that point in any event. Further, in his view, Ms Ravi knew he was very busy and was merely trying to help him out by forwarding the completed form for his signature.

38The Board heard from Ms Ravi, an experienced licence officer who clearly stated that she does not give an applicant advice as to how to complete the form nor would she complete a form for the applicant’s signature. The Board accepts her evidence and finds Mr. Lukezic’s evidence inconsistent on this point. While he says on the one hand that he did not read the form, merely signing it, he also asserts that he asked her about the need to disclose charges, suggesting that he read the form. The language of the question is clear, “are there any outstanding charges against you…?” The Board does not accept that given that clear language, Mr. Lukezic, a highly educated man, who had in 2005 completed the same form, would require clarification from Ms Ravi.

39Mr. Lukezic agrees in submissions that the wrong box is marked. However he seeks to shift responsibility to Ms Ravi for the incorrect information or impute, nevertheless, knowledge of the charges to the OPP, and hence the AGCO, thereby absolving himself of responsibility for full disclosure. Neither exculpates him.

40The Board therefore finds a violation of section 6(2)(e) of the LLA. Based on the wording of the LLA and jurisprudence regarding the impact of such a finding (see Ontario (Registrar of Alcohol and Gaming) v. Hosseini-Rad, [2004] O.J. No. 1273) once the Board makes a finding under section 6(2)(e) of the Act, that the Applicant made a false statement on the application, there is no discretion in the Board to grant a licence, with or without conditions. Therefore the Board REFUSES the application.

41As stated above, the Registrar also relies upon section 6(2)(d) of the Act to refuse this application. Having made the determination regarding section 6(2)(e) of the LLA, such a finding is not essential to the Board’s decision to refuse this application. However, for completeness, the Board will address this ground.

42Mr. Morris points to the criminal convictions of Mr. Lukezic: for criminal harassment and for assault in May 2009, these relating to events that occurred between July 2006 and August 2008 and his lack of remorse or assumption of responsibility in respect thereto. Further, Mr. Morris submits that Mr. Lukezic’s state of mind in this period as evidenced by the actions leading to those convictions, his interaction with police as revealed through various “unfounded” calls to police and the transcript of the 9-1-1 call, suggest a person with erratic behaviour who cannot be relied upon to operate the business in accordance with the law and to act with honesty and integrity. Mr. Morris points to the court transcript where Mr. Lukezic’s erratic behaviour was recited in detail, in the context of an agreed set of facts. The Court, in it reasons, referred to Mr. Lukezic’s paranoid attitude, actions which went beyond the permissible to the obnoxious and threatening. As part of the sentencing, the Court ordered attendance before a physician for a referral for a psychiatric assessment.

43Mr. Lukezic submits, in response, that he has shown remorse, for example by offering to pay for the damage to the vehicle sprayed by him, and that his emails which were part of the harassment incident were, he agrees, “embarrassing” but the result of a personal relationship gone bad. Further, he has operated his winery, to date, in accordance with the laws required without incident. He is not, he suggests, a menace to society, nor anti-police.

44The very recent criminal convictions do concern the Board. These do not suggest that Mr. Lukezic is a “menace to society” nor is that part of the test pursuant to section 6(2)(d). The conduct described in the court transcript was indeed erratic and clearly crossed a line of reasonable behaviour. Mr. Lukezic’s response at the hearing was to minimize his conduct, at times attempting to explain it away, despite the fact that this was an agreed set of facts put before the Court. Exhibit 9 shows, as well, such an attempt. This Board can only accept as fact the Court reasons and decision and cannot go behind it. Mr. Lukezic’s present response to what transpired at the Court hearing in May 2009 is troubling as an indication of a continued lack of assumption of responsibility.

45There is, as Mr. Lukezic submits, no evidence of non-compliance with the law under his existing winery licence. The Board also agrees that it might be an overstatement by D.S. Nadeau to describe Mr. Lukezic as “anti-police”. What the Board does see on the evidence is a bright articulate individual, in the midst of some trying personal issues, frustrated by what he perceives as a lack of responsiveness by police to his claims. As evidenced by the transcript of the 9-1-1 call, that sense of frustration manifested itself in anger and as Mr. Lukezic himself described, perhaps overly “macho” behaviour.

46In contrast to that, the Board is asked by Mr. Lukezic to accept that he is respectful and respected for his efforts in the winery business, that he is successful in his business ventures and his actions in 2006 and 2008 were out of character. Unfortunately the Board has heard none other than Mr. Lukezic in support of those assertions. Having rejected Mr. Lukezic’s evidence regarding the facts surrounding the section 6(2)(e) allegation, the Board has some difficulty in the circumstances, in reasonably accepting as true, all his statements in its consideration of the evidence in respect of the section 6(2)(d) allegation.

47Therefore, the Board in considering all of the evidence, and in particular the facts surrounding the recent criminal convictions and Mr. Lukezic’s statements which suggest a resiling from responsibility, does conclude that the past/present conduct of Mr. Lukezic affords reasonable grounds for belief that the business will not be carried on in accordance with the law and with integrity and honesty. Having made that finding, pursuant, to section 6(2)(d), the Board would, on this ground as well, refuse this application.

Order

48Therefore, the Board REFUSES the application for a liquor licence made by Lukezic Group Ltd., operating or intending to operate as WALKER HALL WINERY, 4925 Thirty Road, Beamsville, Ontario, L0R 1B3.