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-
Carol Ann Gauley operating as The Party Answer (LDS)
Applicant
DECISION
Panel:, Allan Higdon, Board Member
Joan Lougheed, Board Member
Decision Date: May 12, 2010
Hearing Location: Sudbury, 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 ) Joyce Taylor, Representative
Carol Ann Gauley, Applicant ) James Ross, Representative
Application
- The Registrar of the Alcohol and Gaming Commission of Ontario (“AGCO”) issued Notice of Proposal (“NOP”) number 16275 dated June 23, 2008 to refuse to renew a liquor delivery service licence made by Carol Ann Gauley, (the “Applicant”), operating as THE PARTY ANSWER (LDS), 1870 Millwood Crescent, Sudbury, Ontario, P3E 2T1, licence number 45817, in order to determine whether the Licensee is disentitled to a licence pursuant to clause 6(2)(d) and 6(2)(e) of the Liquor Licence Act (the “LLA”). The NOP alleges violations of subsections 30(2), 45(1), 45(2) of the LLA and paragraphs 15.2, 15.3, 15.4, 15.5 and 15.6 and subsections 14(2.1), 16(3), 17(1) and 18(1) of Ontario Regulation 718/90 (the “O.Reg”). A hearing of the application was held on October 6, 2009 and January 19, 2010 in the City of Sudbury.
Decision
- After considering all the evidence and submissions the Board FINDS the Licensee in breach of clause 6(2)(d) and subsections 30(2), 45(1), 45(2) of the LLA and paragraphs 15.2, 15.3, 15.4, 15.5 and 15.6 and subsections 14(2.1), 16(3), 17(1) and 18(1) of the O.Reg. The Board DISMISSES the allegations of a breach of paragraph 15.2 and section 6(2)(e) of the LLA. Reasons for these findings follow.
Preliminary Matters
Registrar's Counsel asked for an order to exclude witnesses which was granted on consent.
The Panel asked if the Licensee admitted to any of the allegations contained in the Notice of Proposal. The Licensee responded in the negative.
Registrar’s Evidence
D.B. is 17 years of age. On the night of November 29, 2007, he was 16 years of age.
D.B. was with a group of friends who called The Party Answer to get alcohol. One of his friends, another minor, placed a call to the liquor service. He was 15 years of age.
The friend ordered vodka, a mickey and a larger bottle. The agreed delivery location was to the corner of Haig and Byng Streets.
D.B. stated the delivery man arrived and asked if they had ordered “sauce”. They stated yes. They were asked for identification (“I.D.”). They stated they did not have any. The witness noted that they were under age. They were given the liquor anyway.
D.B. stated they paid for the liquor. They did not sign anything or give their name to the delivery man.
The group went to a friend’s house, drank the liquor and ordered pizza. They all got drunk that night.
On cross-examination, D.B. stated he did not call the service, one of his friends did.
D.B. stated it was “Party Answer” that was called, not another service. The delivery vehicle was a small white car. The delivery man was tall, thin and wore a hat.
D.B. stated the man sold them liquor even after they had told him they were under age.
A.A. was 15 years of age on the night of November 29, 2007. He is now 17.
A.A. stated the alcohol he and his friends drank was raspberry vodka. The group got the alcohol from The Party Answer delivery service.
One of the group, G., ordered the liquor. It was delivered a couple of houses down the street at the former house of a friend. They waited outside for the delivery.
When the boys ordered the liquor, they said they were of age. The delivery man asked for I.D. but they said they forgot any. The man sold them the liquor and told them not to call again.
On cross-examination, A.A. said the delivery man asked for I.D. but they said they forgot any. He must have known they were too young. The man was bald, wore a toque, was tall and of medium build. He drove a small white car.
When questioned by the panel, A.A. stated nobody signed anything upon delivery. The boys drank the liquor at the house of the witness.
Terry Bellerose has been a client of The Party Answer.
Exhibit #1, a series of liquor delivery receipts, was presented for her comments.
One receipt had the date of October 26, 2007. She stated the signature was hers. The signature on the December 8 receipt was questionable.
The signature on the November 2, 2007 receipt was definitely not hers. She does not sign her name that way and would not order the type of liquor noted. She is not familiar with the delivery address noted on the receipt. She has never lived there and knows of no one who does.
Ms Bellerose stated the delivery man sometimes forgot his signature book when he made deliveries to her.
Ms Bellerose stated she no longer uses The Party Answer delivery service.
Questioned by the panel, the witness stated the October 26 and December 8 deliveries had her correct address on the receipt.
Nicole Brosseau is the Guest Services manager at the Cardinal Motor Inn in Sudbury.
Ms Brosseau stated that unit 204 of the Inn noted on a liquor delivery receipt was not occupied on December 22, 2007, the date of the receipt. (Exhibit #2)
On cross-examination, the witness stated she had worked at the Inn for nine years. Unit 204 was not occupied on December 22, 2007.
Greg Bergeron has been an inspector at the AGCO since July 31, 2001.
On December 10, 2007, Mr. Bergeron stated he received a complaint related to The Party Answer. He was told four teenagers had called the service on November 20, 2007 and had been sold a 40 ounce bottle and a mickey of vodka. The youths had received delivery on the street and had not been asked for I.D. All were under age.
In response to these allegations, the Inspector began an investigation.
The Inspector attempted to order alcohol from a non-residential address on December 4, 2007. There was no answer at the service.
On January 11, 2008, the witness called again from a park and attempted to order liquor. A male voice denied delivery stating a delivery would be illegal as the patron had no residential address.
On January 23, 2008, the witness visited the registered business address of The Party Answer, at 345 Lloyd Street, Unit 6, Sudbury. The witness was advised the business had not been at that address since August 2007.
The current tenant of the registered address had no connection to the business, The Party Answer. The Licensee had failed to notify the AGCO of its change of address as required by law.
The Inspector had had previous dealings with Kent Gauley, son of the liquor delivery Licensee Carol-Ann Gauley. Mr. Gauley’s home address was located.
On January 24, 2008, Mr. Bergeron visited the residential address of Kent Gauley. A male voice answered and, after asking who it was and the presentation of identification, stated the visit was an invasion of privacy and he did not have time to speak to the Inspector.
Mr. Bergeron stated he advised the man to facilitate an inspection and served him with a request for documentation. He appeared very upset.
Mr. Bergeron requested all day-to-day operating records of The Party Answer by February 1, 2008. This included all bills, bank account statements, cancelled cheques, and payroll information. Also requested were liquor delivery receipts for October, November, and December 2007.
Mr. Bergeron did not receive the requested material by February 1, 2008.
Mr. Bergeron contacted the Licensee, Carol-Ann Gauley, on February 5, 2008 and maintained her as his contact thereafter.
Ms Gauley told the Inspector her son had been under a lot of pressure lately with personal problems. He needed extra time to gather the documentation.
Ms Gauley was given an additional week to submit, which she stated was more than fair.
On February 14, 2008, Mr. Bergeron was contacted by Ms Gauley asking for more time. A new deadline of February 26 was agreed to. The documentation was not delivered by that date either but Ms Gauley asked for a meeting on February 28.
On February 28 Mr. Bergeron met with Ms Gauley. She brought liquor receipts only. She stated she had no other operating records. She said Kent Gauley was her son and he was an employee of The Party Answer.
Ms Gauley provided a letter confirming that statement.
On March 3, Mr. Bergeron began reviewing the records submitted. He found the records were incomplete with only first names on some order sheets and incomplete addresses on others. One receipt was unsigned (December 21, 2007).
Exhibit #3 was introduced. It contained 19 pages of delivery sheets dating from November to December 2007. Numerous delivery sheets had only first names on them.
The Inspector contacted some of the addresses listed on the delivery sheets.
One sheet, citing an address on Union Street in Coppercliff, noted two deliveries to a Lorna Miller on December 20, 2007 and December, 21, 2007. It was a single home. A young man answered the door and stated he had never heard of such a person. No liquor had been delivered to that address on the night in question.
Mr. Bergeron checked a delivery sheet for an apartment address on Atlee Street. A delivery was noted to have been made on December 12 to a J.P. There was no answer when the Inspector called at the address.
The Inspector knocked at a nearby apartment and was answered by J.P. He showed her a liquor delivery receipt from The Party Answer dated December 21, 2007 with her signature. She stated that was not her signature and she does not drink the brand of beer noted on the delivery form (Exhibit #5).
The Inspector showed J.P. a delivery slip for December 12, 2007 signed with her name. She was adamant that she had not signed the delivery forms.
On March 4, 2008, Mr. Bergeron called a Mr. R.R. to discuss liquor allegedly delivered to him at an apartment address on Bancroft Drive in Sudbury (Exhibit #6). R.R. told the witness he had never lived at the Bancroft address.
The following day Mr. Bergeron went to the apartment complex on Bancroft Drive and went to the apartment cited on the liquor delivery sheets. He spoke to the resident of the apartment, J.L., and inquired about the receipts in the exhibit.
J.L. stated he had no idea about the liquor supposedly delivered to his home on October 27, November 6, December 9, and December 21, 2007. He denied alcohol delivery of any kind and provided a statement to that effect.
Mr. Bergeron contacted E.L., the occupant of an address on La Salle Boulevard used on a liquor delivery slip. He stated he did not drink and did not have liquor delivered to his residence.
Mr. Bergeron referred to Exhibit #8, a liquor delivery slip dated December 22, 2007, and to an address at 1500 Regent Street, unit #204. The address is that of the Cardinal Motor Inn. The list contains five items including vodka and wine.
Mr. Bergeron was told that unit #204 was not occupied on the night of December 22, 2007. A letter was submitted verifying that information (Exhibit #2).
Mr. Bergeron referred to an advertisement in the Sudbury Yellow Pages (Exhibit #9). The ad for The Party Answer lists the name of the company as “AAAAY The Party Answer”.
Mr. Bergeron stated the investigation into The Party Answer began with a complaint to Crimestoppers. On March 20, 2008, he met with the parents of the youths who had purchased liquor from The Party Answer liquor delivery service on the night of November 29, 2007.
The youths involved made statements in the presence of their parents.
The Inspector stated that investigations into liquor delivery businesses are mostly complaint generated because it is very difficult to monitor.
The proper maintenance of records is very important because liquor delivery is mobile and dispersed throughout the city.
On cross-examination, Mr. Bergeron stated the names of customers on the majority of liquor delivery slips are either first name only or illegible.
Mr. Bergeron acknowledged there has been an improvement in the quality of more recent records. Documentation has also been submitted in a more timely fashion.
Mr. Bergeron acknowledged it was often customary for businesses to put the letter “A” before their name in order to get a preferential position in the phone book.
The Inspector stated he did confirm with the resident of 22 Union Street that no liquor delivery took place at that address although it is listed on a liquor delivery slip.
In regard to the liquor delivery to under aged youths, the Inspector stated he has had no contact with Kent Gauley, son of the Licensee, since the investigation began.
The Inspector stated the majority of liquor delivery takes place after work and on weekends.
Mr. Bergeron noted that the business address of The Party Answer was on Lloyd Street at the start of the investigation. The business is now located on Millwood Crescent, Sudbury which is the home address of Carol-Ann Gauley, the Licensee.
Steven Ross is a Sergeant (“Sgt.”) with the Greater Sudbury Police Service. Sgt. Ross was asked to investigate The Party Answer as the business had applied for renewal and submitted an application for a license transfer.
Sgt. Ross was concerned that the licensee of record, Carol-Ann Gauley, was not the actual operator. It appeared her son Kent Gauley actually ran the business.
On April 22, 2008, Sgt. Ross attended the Gauley residence on Millwood Street accompanied by Inspector Bergeron.
At the meeting Ms Gauley stated she did not have any records for her business.
The following day, April 23, the witness received a phone call from Ms Gauley.
In the conversation she:
(i) expressed concern at the request for documentation;
(ii) apologized for not having receipts available;
(iii) stated she applied for a liquor delivery licence so her son, Kent Gauley, could use the business as his income;
(iv) did not believe Kent Gauley could get a licence on his own, given his record;
(v) indicated she was not involved in the day-to-day business, received no monetary benefit from it,
(vi) and that Kent Gauley was operating the business.
Sgt. Ross confirmed that Ms Gauley told him she had no involvement with the day-to-day operation of The Party Answer.
Ms Gauley also confirmed that she received no income from the business. There was only one employee, her son Kent Gauley.
On April 24, Sgt. Ross spoke to Ms Gauley on the phone again. He stated that Mr. Gauley was in control of the business and Ms Gauley agreed.
When asked why the business was not in Mr. Gauley’s name, she said the business was Mr. Gauley’s sole source of income and that he would not have received a licence due to his background.
Sgt. Ross told Ms Gauley that he intended to file a report stating that Mr. Gauley was solely responsible for the business.
Sgt. Ross stated Ms Gauley pled guilty in Provincial Court on July 25, 2008 for failure to keep liquor licence records.
Documentation was requested, including the usual request for driver’s license, birth certificate, and passport – 26 items in all.
A background check on Mr. Gauley revealed three Criminal Code convictions – impaired driving (1996), possession of a narcotic (1997), and uttering threats (2005).
There were also seven Highway Traffic Act convictions from 1996 to 2008. In addition, Mr. Gauley had driver’s licence suspensions, the latest one from November 15, 2007 until December 5, 2008.
The investigation started October 6, 2008. Sgt. Ross attempted to contact Mr. Gauley. There was no response. On October 20, 2008, a notice was hand delivered to his residence.
On December 1, 2008. Sgt. Ross received a phone message requesting more time to complete the documentation. Attempts to contact the Mr. Gauley on December 1, 3, 8, and 10, 2008 proved futile.
On December 12, 2008, Sgt. Ross received four pages of documents.
On December 29, 2008, Sgt. Ross contacted Ms Gauley as he was still waiting for documentation. She stated Mr. Gauley had moved, she did not know where he was, and she thought he was living with friends.
Ms. Gauley stated Mr. Gauley continued to operate the business but gave all the money to her. She pays all the bills. She has difficulty contacting Mr. Gauley.
Sgt. Ross told Ms Gauley he had received incomplete information for her son’s application and it would be returned. Ms Gauley stated Mr. Gauley no longer had a bank account. He had been in arrears and closed them all.
Mr. Gauley had applied for a liquor delivery licence on August 29, 2008.
Ms Gauley told Sgt. Ross that Mr. Gauley’s application for a liquor delivery licence had been withdrawn.
On cross-examination, Sgt. Ross stated that if Mr. Gauley’s application was approved she would surrender her licence.
On a question from the panel, Ms Gauley stated she might not have been aware that her son’s driver’s license was under suspension when liquor deliveries were made on December 8, 2007.
Ms Gauley stated she understood that it was the responsibility of the Licensee to keep all documentation up-to-date.
The hearing adjourned and resumed on January 19, 2010.
As a preliminary issue, Ms Taylor asked for permission to recall Inspector Greg Bergeron regarding evidence from a minor. Mr. Ross stated his concurrence.
Greg Bergeron is an inspector with the AGCO. Inspector Bergeron stated he had located two more of the minors who had been sold liquor by a delivery service on November 29, 2007.
One will give testimony. The other youth, G.G., provided a written statement in which he identified the name of the liquor delivery service as The Party Answer (Exhibit #13).
The youth G.G., also stated they looked up the name of a delivery service in the phone book. The delivery was made from a car trunk on the sidewalk. At the time of the delivery the youth was 15 years of age.
The statement was written by Inspector Bergeron and signed by the youth.
There was no cross-examination.
D.M. is 18 years of age but on the night of November 29, 2007 was 16 years of age.
The minor testified he used a liquor delivery service with friends. He does not recall the name.
He forgets who called the service but he was present when delivery was made. It took place in front of a house on the sidewalk.
The group was sitting on the sidewalk when the delivery car pulled up. The driver asked if they had ordered “juice”.
They asked if it was alcohol and the man said yes. One of the youths, D.B., paid and the man handed over the liquor.
The man did not ask for proof of age or identification. The group went to the home of one of them, drank the liquor and played videos. D.B. got really sick.
On cross-examination, the youth stated he does not remember the phone number they called or the name of the delivery service.
Applicant’s Evidence
Carol Ann Gauley has been involved with The Party Answer since 2004. It began as a joint venture with a partner.
Ms Gauley has some bookkeeping and managerial experience. The partner lost interest so she bought him out, leaving her the sole owner.
The Party Answer provided a net income for her of $400 - $1,000 a month. She grossed about $20 – 29K on an annual basis.
The business provides a living for her son, Kent Gauley.
There have been other employees to drive during periods when Mr. Gauley’s licence was under suspension.
The delivery car for the business is registered in her name and insured.
In 2008, Inspector Bergeron approached her to say there were problems with record keeping by the business.
Ms Gauley stated business records were in good shape now and all people who appear younger are asked for identification. If none is presented or they are underage delivery is denied.
At the time the delivery in question took place her son had severe personal problems. He was depressed and unwell and for a time it looked like the business might be unable to continue.
Mr. Gauley has turned his life around. The records for 2008, 2009 have been inspected and approved. Records are now kept in the witness’ house and are regularly updated.
The witness paid the fine of $750 for poor record keeping.
The yellow pages ad now lists the correct registered name of the business.
The witness is in touch with her son every day.
The Party Answer is now a well run business committed to proper practices in all areas.
Although her son is not capable of filing statements or doing income tax, all records are up-to-date.
On cross-examination, the witness agreed that Mr. Gauley’s attempt to transfer the licence was refused by the Registrar.
The witness acknowledged she runs the business due to concerns her son is otherwise unemployable.
Ms Gauley confirmed there was no bank account for the business in January 2008.
Ms Gauley agreed the hearing is being conducted due to her son’s negligent behaviour in the operation of the business.
Specifically, the witness acknowledged Mr. Gauley:
(i) prepared unverifiable delivery slips;
(ii) failed to provide completed delivery slips;
(iii) did not have receipts signed with correct names;
(iv) placed an incorrect ad in the Yellow Pages;
(v) is not employable by anyone else; and
(vi) is not present at the hearing to take any responsibility for his actions.
Ms Gauley stated her income from the business is $600 to $1,000 a month. Mr. Gauley makes about $300 to $400 a week.
Ms Gauley acknowledged she was remiss in her duties as an owner and that it was her responsibility as the licence holder to run the business properly.
Ms Gauley stated that she now provides adequate oversight to ensure compliance with all regulations and procedures.
Questioned by the panel, Ms Gauley stated that Mr. Gauley’s driver’s licence has been under suspension since November 2009. He backed into a building and broke a tail light.
Ms Gauley said she opened a bank account for the business in July 2008.
Ms Gauley stated the business is now cash only. She receives the cash and deposits the money. Kent gets the orders on his cell. He is not currently doing deliveries due to his driver’s licence suspension.
Ms Gauley is the sole proprietor of the business. Mr. Gauley has never been on the liquor delivery licence.
Registrar’s Submissions
The Licensee, Ms Gauley, has applied to the AGCO to renew a liquor delivery licence.
Her son, Kent Gauley, applied for a transfer of his mother’s licence in 2008. That transfer was refused. Ms Gauley now seeks to continue to hold the licence as her son cannot secure it in his own right.
The principal employee of her business was not called to give evidence at the hearing.
Mr. Gauley has a criminal record for impaired driving (1996), possession of a narcotic (1977), and uttering threats (2005). He also has numerous convictions and suspensions related to his driver’s licence – the latest suspension expiring in April 2008.
Testimony was given by minors that they were sold liquor by The Party Answer on the night of November 29, 2007. The evidence was clear and consistent.
The youths, all underage, were not asked for identification, were not at a residence at the time of delivery, were not asked their names, and were not asked to sign a receipt – all breaches of the LLA and its regulations.
In addition, no order form or receipt of any kind was kept for this transaction.
Evidence was given that Inspector Bergeron was unable to locate the business as it was not at its registered address.
Ms Gauley was the registered licensee of the business but she did not receive any income from it, was not involved in any supervision of the business and was even unaware that it was operating under a different name, that of “AAAAY The Party Answer”.
Inspector Bergeron did eventually locate Mr. Gauley on January 24, 2008. He requested delivery receipts for October, November, and December 2007. The receipts were not received from Ms Gauley until over a month later. Many of the receipts were both incomplete and false.
Evidence was given that a delivery to the Cardinal Hotel was false, and others were assigned to people who had never received deliveries.
In total, Inspector Bergeron confirmed that 12 receipts were false and numerous other receipts were incomplete.
Ms Gauley appears to be an honest person who is simply trying to secure a means of employment for her son.
Ms Gauley has taken steps to put the business in compliance with its obligations but this cannot change the fact that she continues to employ her son who has committed very serious infractions in the operation of the business.
Ms Gauley is placing a lot of trust in her employee who has repeatedly failed to comply with some of the very basic requirements of a liquor delivery business.
Liquor delivery services demand a particularly high level of trust. It is a very mobile business. This makes meticulous record keeping particularly important.
Given this requirement, the Registrar must consider if the business being operated by Mr. Gauley and Ms Gauley is capable of operating to this exacting standard and with honesty and integrity.
Given the evidence, on the balance of probabilities, the answer is no.
Applicant’s Submissions
The Party Answer has been charged with a variety of infractions related to the LLA.
The Licensee has adequately remedied the concerns of the AGCO. The liquor delivery licence of The Party Answer should be renewed to reflect the Board’s faith in Ms Gauley.
Ms Gauley intends to run the business as a family run affair with her son, Kent Gauley, as the principal employee. Ms Gauley will do managerial work such as book and record keeping. Her son will perform deliveries.
We deny any suggestion that Ms Gauley does not profit from the ownership of the business.
We dispute the allegation that Ms Gauley holds only legal title to the business.
Ms Gauley has admitted liability for the misdeeds of the business. She has taken responsibility for her improper oversight and has taken steps to ensure future compliance.
The criminal charges and driving record infractions of Mr. Gauley are admitted.
The criminal convictions of impaired driving and possession of a narcotic are over a decade old and are of questionable relevance in the issue before the Board. The conviction of uttering threats bears no relevance to the safe delivery of liquor. None of these charges indicate a predisposition to fraud as implied by Ms Taylor.
The driving record of Mr. Gauley is of relevance. However, there is no indication any of the infractions took place while Mr. Gauley was delivering liquor. In particular, Ms Gauley testified that her son has never driven a company vehicle while under suspension.
Ms Gauley is free to employ anyone she chooses in her business as long as all laws are complied with.
In regard to the allegations of breaches to the LLA regarding obstruction and failure to facilitate, it was stated clearly in testimony that Ms Gauley was at all times courteous and cooperative.
It is acknowledged Ms Gauley did not have the records of the business at her address as required by the LLA. However, she obtained them as soon as she was able to.
Since the time of the investigation, Ms Gauley has made the business records available and accessible at her residence without any delay.
The allegation is made that the Licensee carried on business under a name other than the name set out on the licence. The evidence for this is the listing in the Yellow Pages of “AAAAY The Party Answer”. This is a common practice to obtain a preferential listing in the phone book. There is no intent to mislead the public as to the true nature or name of the business.
It should be noted that as soon as this was brought to her attention, Ms Gauley had the listing changed.
On the issue of failure to inform of a change of address, Ms Gauley admits the AGCO should have been informed more promptly of the change. It is evident the business will be run from her home address as long as she remains the owner/operator.
In regard to improperly maintained and prepared records, there is no dispute that the business did not live up to the requirements of the LLA. However, the practices of the past have been completely corrected. The records have been twice inspected in the interim and found to be in compliance.
Ms Gauley has taken responsibility for The Party Answer’s failure to maintain proper records. She paid a fine of $750 and pleaded guilty to two counts of failure to maintain proper records.
Ms Gauley now reviews all records on a weekly basis and investigates all irregularities. She ensures records are complete and up-to-date.
We deny any inference that an employee of The Party Answer knowingly fabricated records in an attempt to mislead AGCO officials. We admit records were incomplete and some proved to be inaccurate but this was human error, not done with any attempt to mislead.
The employee had over a month from the date of request for documents until their submission. This would have allowed an employee more than sufficient time to fabricate each receipt if that had been his intention.
The twelve receipts with incorrect or incomplete information are not evidence of a concerted attempt to mislead the AGCO but merely evidence of a flawed business model. The records were submitted as they existed.
Errors were made in the maintenance of records but new safeguards have resulted in two record inspections with all found to be in order. The system put in place by Ms Gauley has been effective in achieving compliance.
Service to minors: we do not dispute the statements and testimony of the four youths and do not contest their version of the events of the night of November 29, 2007. This is an isolated, though serious, incident.
Ms Gauley has taken action to ensure no repeat of this episode. She is in contact on a daily basis with her employee and reviews the receipts and proceeds of the business with him on a weekly basis.
Ms Gauley is personally aware of the detrimental effects of substance abuse as two of her children have recovered from this problem. She is very sensitive about the necessity of protecting people from alcohol abuse.
It has been suggested that Ms Gauley put the love of her son before her concern for the safety of the community. That is not true. She has never been before a Board or tribunal before and is a respected, law abiding member of the community.
The investigation revealed to Ms Gauley that her employee needed more guidance and supervision. She has acted and the business has been in compliance since she became aware of the problem. The Board can be confident that the safe delivery of liquor will be carried out in future by The Party Answer.
Registrar’s Reply Submissions
The key question is whether Ms Gauley is capable of controlling her son, Kent Gauley, her sole employee, when she is not prepared to terminate his employment.
Ms Gauley testified the only reason she became involved in the industry was that her son could have a job. She owns the business for her son’s benefit. Any other responsible employer would have dismissed Mr. Gauley as a result of his actions.
The fact that Mr. Gauley did not keep any receipt for the delivery of liquor to underage boys on November 29, 2007 is not inconsistent with his subsequent falsification of receipts when Inspector Bergeron demanded them in January 2008. Mr. Gauley made up receipts in order to satisfy the inspector. He would not make up a receipt for minors when it took place on the street and not a residence.
On the allegation of obstruction, Mr. Gauley created false receipts and concealed his delivery to minors on November 29, 2007 by failing to provide all the information requested for the months of October, November, and December 2007.
The Board must consider that Ms Gauley will never fire Mr. Gauley, no matter what he does to her business. The Board must consider this application to renew in light of that fact.
It is the position of the Registrar that the allegations contained in the NOP have been proven to have taken place on the balance of probabilities and that the application to renew should be denied.
Reasons and Analysis
The Board will first deal with the allegations contained in the NOP which have been admitted to or were not contested by the Licensee.
The Registrar alleged the licence holder sold or supplied liquor to a person who appeared to be under 19 years of age. The licence holder in the same transaction failed to inspect a piece of identification before delivering liquor to a person who appears to be under the age of 19 years.
The testimony and evidence submitted by the Registrar on these allegations were not contested and were admitted to in the submissions of Mr. Ross.
The Board therefore FINDS the Licensee in breach of subsection 30(2) of the LLA and subsection 17(1) of the O.Reg.
The Registrar alleged the licence holder failed to inform the Registrar of a change in business address.
This was admitted to by Ms Gauley and confirmed in the submissions of Mr. Ross.
The Board therefore FINDS the licensee in breach of subsection 14(2.1) of the O.Reg.
Several allegations are subsumed under the admission made by the Licensee and her representative that she failed to keep proper comprehensive records. In his submissions, Mr. Ross stated, “Dealing with improperly maintained and prepared records, there is no dispute that in the past the business practices of The Party Answer did not live up to the requirements of the Liquor Licence Act.”
In her testimony Ms. Gauley acknowledged that Mr. Gauley, acting for the Licensee:
(i) prepared unverifiable delivery slips;
(ii) failed to provide completed delivery slips; and
(iii) did not have receipts signed with correct names.
Numerous exhibits were presented and referred to in testimony from Inspector Greg Bergeron and Sgt. Steven Ross.
Inspector Bergeron testified he attended the home address of Mr. Gauley on January 24, 2008 and requested all bills, bank accounts, payroll information and liquor delivery receipts for the months of October, November, and December 2007 by February 1, 2008.
The material did not arrive. Additional time was granted. After further delay, some information was submitted on February 28, 2008. The records were incomplete with only first names on some order sheets and incomplete addresses on others.
The Inspector set out to confirm the information submitted and found residents who had no knowledge of any alleged liquor delivery. The Inspector testified that J.P., J.L., R.R. and E.L. all denied the receipt of liquor as indicated on liquor delivery slips.
Mr. Ross acknowledged that on July 25, 2008, his client was found guilty in Provincial Court on two counts of failure to keep adequate liquor licence records and had received a fine of $750.
Based on the documentation submitted as exhibits, the testimony of Inspector Greg Bergeron, Sgt. Steven Ross, the Licensee, Ms Gauley and, in addition, the admission of the representative for the Licensee, the Board concludes:
The licence holder failed to record on an order form:
(i) the name and address of the licence holder;
(ii) the name and address of the person on whose behalf the purchase is made;
(iii) the kinds and quantities of liquor to be purchased; and
(iv) the residential address where the liquor is to be delivered.
The Board therefore FINDS the licensee in breach of paragraph 15.3 of the O.Reg.
The licence holder failed to deliver the liquor to a person at the residential address listed in the purchase order.
The Board therefore FINDS the licensee in breach of paragraph 15.4 of the O.Reg.
The licence holder failed to obtain a receipt at the time of delivery, signed by the person on whose behalf liquor was purchased or by another person who resides at the place of delivery and who is at least 19 years of age, which states:
(i) the name and address of the person for whom the purchase was made;
(ii) the date of delivery;
(iii) the kind and quantities of liquor delivered;
(iv) the price paid for liquor purchased;
(v) the delivery fee; and
(vi) the name of the person making the delivery.
The Board therefore FINDS the Licensee in breach of paragraph 15.5 of the O.Reg.
The licence holder completed the delivery of liquor without obtaining a signed receipt. The Board therefore FINDS the Licensee in breach of paragraph 15.6 of the O.Reg.
The licence holder failed to retain for one year copies of order forms and receipts. The Board therefore FINDS the licensee in breach of subsection 16(3) of the O.Reg.
Three additional allegations relate to inspections.
It is alleged the licence holder withheld, destroyed, concealed or refused to provide relevant information or things required for the purposes of an inspection under the LLA.
It is clear Inspector Bergeron had documentation withheld from him. He requested operating records on January 24, 2008 and gave the Licensee until February 1 to produce them.
The documents were delayed several times. Ms Gauley finally presented liquor receipts only on February 28, 2008. The documentation offered by the Licensee fell far short of the disclosure requested by the Inspector. Complete and accurate operating records should be current and available within 24 hours.
Inspector Bergeron was never presented with complete records for the months of October, November, and December 2007 as requested.
The Licensee did not contest the testimony of the Inspector in this regard.
The Board agrees that Ms Gauley was cooperative and courteous in her dealings. However, that does not mitigate the fact that complete and relevant information was not available for authorities when requested.
The Board therefore FINDS the Licensee in breach of subsection 45(1) of the LLA.
It is alleged the license holder obstructed a person carrying out an inspection under the LLA.
The evidence presented was conclusive in that liquor deliveries were ascribed to non-existent customers. Inspector Bergeron showed great diligence in contacting a number of supposed clients according to liquor delivery slips.
As noted previously, at least four people denied having had business with The Party Answer as noted on delivery slips. In addition, a delivery supposedly made to a unit in the Cardinal Motor Inn on December 22, 2007 was found to be fraudulent as the room was not occupied that night.
There was also no record of a liquor delivery made to under age youths on the street the night of November 27, 2007. Witnesses testified such a delivery took place. This was not contested by the Licensee. The Licensee clearly provided in some cases, false information, and in other cases did not provide the information at all. The Board therefore FINDS the Licensee in breach of subsection 45(1) of the LLA.
The same evidence applies to the allegation that the licence holder failed to facilitate an inspection relevant to the licence. Clearly incorrect information appeared on many delivery slips provided to the inspector. The Board therefore FINDS the Licensee in breach of subsection 45(2) of the LLA.
It is alleged the licence holder failed to receive an order from a person who is legally entitled to purchase liquor before purchasing liquor from government stores operated by the Liquor Control Board of Ontario or Brewers Retail Inc. The Board received no direct evidence on this issue and therefore DISMISSES the allegation of a violation of paragraph 15.2 of the O.Reg.
It is alleged the licence holder carried on business as a liquor delivery service under a name other than the name set out on the licence or a name authorized by the Registrar.
The Board acknowledges the Licensee’s argument that putting a series of “A”s in the Yellow Pages before the same business name submitted to the Registrar is a common practice (as evidenced in Exhibit #9). There is no suggestion that there was any deliberate intent to mislead the Registrar or evade regulatory oversight.
However, subsection 18(1) makes no mention of permitted exceptions due to common practice or intention. The Licensee conceded the Yellow Pages ad was incorrect. The Board therefore FINDS the Licensee in breach of subsection 18 (1) of the O. Reg.
The Licensee and her representative, in admitting many of the allegations, make the case that the infractions were the result of inadequate practices and oversight that prevailed in the past but are no longer current.
Mr. Ross maintains the new regime of closer scrutiny and supervision now results in a model business that is run in strict accordance with all rules and regulations under the LLA. The AGCO can be assured the business is properly run and there is no need for apprehension about the integrity and honesty of future operations.
The Board concedes that no evidence was presented to refute the contention of Mr. Ross that two recent inspections found no fault with current records.
It is alleged the past/present conduct of the Applicant, or a person having beneficial interest in the business, or a person having responsibility for the management or operation of the business affords reasonable grounds for the belief that its business will not be carried on in accordance with the law or with integrity and honesty.
In this regard, the Board does have grave reservations about the future operation of the business, in particular the history of the business’s principal employee, Kent Gauley.
Ms Gauley testified her son was depressed and unwell at the time he sold liquor to under age youth (November 2007) and for a time it looked like the business would be unable to continue.
Inspector Bergeron visited Mr. Gauley on January 24, 2008. The Inspector testified he was told he was invading Mr. Gauley’s privacy. Only after insistence was he admitted. Mr. Gauley was upset.
Mr. Gauley was given a February 1, 2008 deadline to submit documentation. He missed the deadline and was given an extension. Four weeks later Ms Gauley presented grossly incomplete documentation.
Mr. Gauley has shown little sense of responsibility in the way he conducted business and has demonstrated a clear lack of cooperation with authorities. He has been less than forthcoming. Compliance appears to have been initiated solely by the efforts of his mother, Ms Gauley.
Ms Gauley stated the purpose of the business is to provide employment for her son. The Board agrees with the statement made by the Registrar’s Representative in her Reply submissions, “While Ms Gauley may be free to hire anyone she pleases, the Board must take into account the reality of this situation: Ms Gauley will never fire Kent, no matter what he may do to her business.”
Ms Gauley stated she is 72 years of age. The mobile nature of the liquor delivery business demands a very high level of scrutiny and oversight. The Board considers it unreasonable to expect Ms Gauley to be able to continue the high level of vigilance required over her employee for any appreciable period of time in the future.
Mr. Gauley has three Criminal Code convictions and numerous Highway Traffic Act convictions, several involving driving suspensions. Clearly, Mr. Gauley requires a very exacting level of supervision and scrutiny.
Ms Gauley testified that her son has “turned his life around.” The Board may have found reassurance if Mr. Gauley had testified at the hearing, addressed the issue of his past conduct, and spoken of his plans for the future of the business. If this had happened, the Board may have been able to gain some estimation of the current status of his mental and physical health and verified Ms Gauley’s assessment of his improved condition. However, Mr. Gauley did not appear before the Board to testify.
The Board therefore has no option but to confine itself to the testimony of others in considering the prospect of his being able to conduct business with honesty and integrity.
Given its findings the Board considers the risk to public safety too great to permit the business to continue with Mr. Gauley being the principal employee responsible for the delivery and sale of alcohol.
The Board has taken into consideration of the Licensee’s efforts to supervise her son, and the positive results of the recent inspections. However, a liquor delivery service offers numerous temptations for illegal conduct. Mr. Gauley has clearly demonstrated by his conduct over many years that he lacks the character to resist temptation to break the law.
Ms Gauley has stated that she would not operate the business without her son as an employee. The Board considers the business at significant risk of further infractions if he were to remain an employee.
The Board therefore FINDS the Applicant in breach of clause 6(2)(d) of the LLA in that there are reasonable grounds for belief that the business will not be carried on in accordance with the law and with integrity and honesty.
The final issue is the allegation that the Applicant, or an employee or agent of the Applicant has made a false statement in the application in violation of clause 6(2)(e) of the LLA.
The Board received no direct evidence on this allegation and therefore the allegation is DISMISSED.
Conclusion
- The Board therefore FINDS the Licensee in breach of clause 6(2)(d) and subsections 30(2), 45(1), 45(2) of the LLA and paragraphs 15.2, 15.3, 15.4, 15.5 and 15.6 and subsections 14(2.1), 16(3), 17(1) and 18(1) of the O.Reg. The Board DISMISSES the allegations of a breach of paragraph 15.2 and section 6(2)(e) of the LLA.
Order
- Based on the evidence and findings cited above, the Board REFUSES to renew the liquor delivery service licence of Carol Ann Gauley, operating as THE PARTY ANSWER (LDS), 1870 Millwood Crescent, Sudbury, Ontario, P3E 2T1, licence number 45817.
DATED AT TORONTO, THIS 12th day of May , 2010.
ALLAN HIGDON, BOARD MEMBER JOAN LOUGHEED, BOARD MEMBER