Registrar, Alcohol and Gaming Commission of Ontario v. Restaurant Innovations Inc., 2010 CanLII 81007

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-

Restaurant Innovations Inc., operating as Moose Winooski’s

Licensee

DECISION ON Motion

Panel: David C. Gavsie, Chair, AGCO Kirsti Hunt, Vice-Chair, AGCO

Decision Date: November 23, 2010

Hearing Location: Kitchener, 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

Restaurant Innovations Inc., Licensee ) Carolyn Brandow, Representative

Authorities

1229322 Ontario Ltd. (c.o.b. Mighty Mike's) v. Ontario (Alcohol and Gaming Commission), [2003] O.J. No. 3788

2747-3174 Quebec Inc. v. Quebec (Régie des permis d’alcool), 1996 CanLII 153 (SCC), [1996] S.C.J. No. 112

Bailey v. Saskatchewan Registered Nurses’ Association, [1996] S.J. No. 312

Committee for Justice and Liberty v. Canada (National Energy Board), 1976 CanLII 2 (SCC), [1978] 1 S.C.R. 369

Hoechst Marion Roussel Canada Inc. v. Canada (Attorney General), 2005 FC 1552, [2005] F.C.J. No. 1928

Ocean Port Hotel Ltd. v. B.C. (General Manager, Liquor Control and Licensing Branch, 2001 SCC 52, [2001] 2 S.C.R. 781

Ruffo v. Conseil de la magistrature, 1995 CanLII 49 (SCC), [1995] 4 S.C.R. 267

Sam Lévy & Associés Inc. v. Canada (Superintendent of Bankruptcy), 2005 FC 702, [2005] F.C.J. No. 882

Hearing and Motion

1. A hearing into Notice of Proposal (“NOP”) number 16156 dated April 2, 2008 to suspend liquor licence number 24499 (the “licence”) issued to Restaurant Innovations Inc. (the “Licensee”), operating as MOOSE WINOOSKI’S, 20 Heldman Road (formerly 100 Sportsworld Drive), Kitchener, Ontario, N2P 0A6, on the basis of alleged violations of sub-sections 20(1) and 45(1) of Ontario Regulation 719/90 (the “O.Reg”) made pursuant to the Liquor Licence Act (the “LLA”), was held on August 19 and 20, 2009 and November 17, 2009 in the City of Kitchener.

2. During the course of the hearing a motion was brought by the Licensee, which was heard by the Panel on September 20, 21 and 23, 2010.

3. In the motion, the Licensee asks for a permanent stay of the proceedings on the grounds that there is a reasonable apprehension of bias due to a lack of administrative independence and lack of institutional impartiality, resulting from the organizational structure of the Alcohol and Gaming Commission of Ontario (the “AGCO”), the overlapping functions of the Chair and Board members, the administrative set-up of the AGCO in terms of the same physical offices including both the personnel for regulatory matters and adjudicative functions.

4. On April 2, 2008, the Deputy Registrar of the AGCO issued NOP number 16156 to suspend for 45 days liquor licence number 24499 issued to Restaurant Innovations Inc. operating as Moose Winooski’s at 20 Heldmann Road, Kitchener, Ontario alleging that on November 23, 2007, two patrons were served four pitchers of beer between 8:41 p.m. and 10:48 p.m. These patrons departed the establishment in their personal vehicle and were involved in an accident. The passenger died instantly. The blood alcohol concentration of the driver was over the legal limit.

5. The Licensee made a request for a hearing on April 3, 2008. The hearing commenced on August 19, 2009 and continued on August 20, 2009, on which date the Registrar finished calling evidence. The hearing was scheduled to continue on November 17, 18 and 19, 2009 for the Licensee to call their evidence. On November 17, 2009, the third day of the hearing, the Licensee’s representative at the hearing, Mr. Lerner, raised the question of the jurisdiction of the Board to hear this matter on the basis of a reasonable apprehension of bias. He asked for an adjournment of the proceedings in order to obtain documents that he had requested under the Freedom of Information and Protection of Privacy Act (“FIPPA”). In its Order of November 18, 2009, the Panel adjourned the hearing sine die. The dates of September 20, 21 and 23, 2010 were scheduled to hear the Licensee’s motion regarding bias. The parties were asked, in the event that the Licensee’s motion regarding bias was not successful, to be prepared to use the remainder of these scheduled dates to resume the hearing.

6. On July 23, 2010, prior to this motion regarding bias being heard, the Licensee brought another motion to adjourn this scheduled motion regarding bias to allow the Licensee to get further documents under FIPPA, due to the possible unavailability of the Licensee’s representative at the scheduled motion, and as well, asked the Panel to order further disclosure by the Registrar. In its Decision of August 6, 2010, the Panel dismissed the Licensee’s July 23, 2010 motion.

7. The bias motion was heard on September 20, 21 and 23, 2010. The Panel reserved its decision on the motion, and the hearing did not resume.

Preliminary matters

8. Mr. Morris asked that during this motion Mr. Lerner be directed not to sit at the counsel table because he is a witness through his affidavits in the Licensee’s Motion Record and Supplementary Motion Record and because Ms Brandow is counsel on this motion. Mr. Morris also asked that Mr. Lerner’s name be struck from the factum which he has signed because of his affidavits. Mr. Lerner can’t argue a motion when he is also a witness. Further, Mr. Morris asked that any reference in the affidavits of Mr. Lerner and Mr. Arnone, where they comment on what is or isn’t a reasonable apprehension of bias, be struck. Parts of Mr. Arnone’s affidavit are descriptive of his concerns but a bit argumentative while other parts are pure argument. Counsel can’t bolster submissions of facts that give rise to a reasonable apprehension of bias by swearing an affidavit setting out their personal views. In Ontario a lawyer can’t swear an affidavit on domestic law, particularly the issue before the tribunal.

9. Ms Brandow replied that she is the only counsel for the Licensee on this motion. There is no prohibition to her speaking with a witness. She agreed, however, to remove Mr. Lerner’s name from the front of the motion materials. Regarding the affidavits where there are facts mixed with conclusions or argument, the Panel has to look at what informs them. The affidavits of Mr. Lerner and Mr. Arnone contain the outside perceptions of two individuals who have informed themselves of events. In the Registrar’s affidavits, there are also conclusions. Going through the affidavits to analyze what is fact or opinion would be time consuming and would not be a useful activity. Concluding comments are just that. The Panel should not give any weight to them if they are not useful.

Decision on Preliminary Matters

10. The Panel ruled that the counsel table is reserved for counsel on the motion. Based on Ms Brandow’s statements that she is sole counsel for the Licensee on this motion, the Panel asked Mr. Lerner not to sit at the counsel table during this motion.

11. As Ms Brandow confirmed that she is the sole counsel on the motion, Mr. Lerner’s name should be removed from all motion material indicating that he is co-counsel for the motion, including on the signature page of the Licensee’s factum.

12. Mr. Morris asked that Mr. Lerner’s and Mr. Arnone’s opinions in the affidavits regarding bias be struck. Ms Brandow said that the Panel should look at all the affidavits in the motion materials, give appropriate weight to the facts, the opinions, and mixed facts and opinions and then the Panel should make its own decision. To go through the affidavits would unnecessarily delay the motion. After hearing the submissions of parties on the motion, the Panel will review the motion materials and submissions and give appropriate weight to what is contained in the motion materials.

Decision and Reasons

13. The Panel carefully reviewed all the motion material and submissions of the parties. The Licensee’s motion is DISMISSED. Reasons for the Panel’s decision follow.

Agreed to Matters

14. Ms Brandow stated that the motion is not about actual bias but one of a reasonable apprehension of bias.

15. The Panel agrees with the parties that the test for a reasonable apprehension of bias must be an objective one, as set out in Committee for Justice and Liberty v. Canada (National Energy Board), pages 18 and 19.

“The proper test to be applied in a matter of this type was correctly expressed by the Court of Appeal. As already seen by the quotation above, the apprehension of bias must be a reasonable one held by reasonable and right minded persons applying themselves to the question and obtaining therein the required information. In the words of the Court of Appeal, that test is “What would an informed person, viewing the matter realistically and practically – and having thought the matter through – conclude … ”

I can see no real difference between the expressions found in the decided cases, be they ‘reasonable apprehension of bias’, ‘reasonable suspicion of bias’ or ‘real likelihood of bias’. The grounds for this apprehension must, however, be substantial and I entirely agree with the Federal Court of Appeal which refused to accept the suggestion that the test be related to the “very sensitive or scrupulous conscience”.”

16. Both parties agreed that in assessing whether there is a reasonable apprehension of bias, one must look at not only the statutes but the operational realities of the AGCO. Both parties referred to Sam Lévy & Associés Inc. v. Canada (Superintendent of Bankruptcy).

Conflicting Evidence and Submissions

17. Evidence for this motion was submitted by affidavits. There was no cross-examination by either party regarding any of the affidavits submitted by the other party. Where there is conflicting information between affidavits submitted by the Licensee and the Respondent, the Panel prefers the information submitted by the Respondent as the affiants are long-time career civil servants, senior police officials, or officers of the court who have direct, detailed and current knowledge of the facts, and who have no interest in the outcome of these proceedings. This is in contrast to the Licensee’s affiants who have no direct knowledge or only incomplete knowledge of the facts, or where their information is dated, and/or have an interest in the outcome of these proceedings.

18. In view of the Panel’s findings regarding the conflicting evidence, the Panel will refer in these reasons to the submissions by the Respondent, with which the Panel agrees.

The Statutes

19. Based on Ms Brandow’s reply submissions, the Licensee is not disputing the statutorily authorized structure of the AGCO or the specific roles and functions of the Chair, Board and the Registrar that are set out in statute. Ms Brandow also acknowledged that there is a statutory prohibition under subsection 10(3) of the Alcohol and Gaming Regulation and Public Protection Act, 1996 against prior consideration of matters by the AGCO Board in its adjudicative role.

20. The Panel therefore accepts the evidence of Mr. Kulis, Deputy Director of the Legal Services Branch of the AGCO and of Don Bourgeois, General Counsel at the AGCO regarding the statutory framework and roles set out by statute and the submissions of Mr. Morris regarding statutory framework and roles, including those set out below.

21. As submitted by Mr. Morris the tripartite structure of the AGCO was created by the following statutes:

1. Alcohol and Gaming Regulation and Public Protection Act, 1996 (“AGRPPA”);

2. Liquor Licence Act; and

3. Statutory Powers and Procedures Act (“SPPA”) and the AGCO Board Rules of Practice.

The role of the Board is clearly set out in a statutory regime. Paragraph 3 of the 1229322 Ontario Ltd. (c.o.b. Mighty Mike's) v. Ontario (Alcohol and Gaming Commission) decision by the Ontario Divisional Court, reads:

“3. In our view, there was on the totality of what happened at the hearing and what was and was not placed before the Board, evidence upon which the Board was entitled to come to the conclusion that the facts supported the offences. There was no absence of evidence. The conclusions of fact of the Board are of course entitled to deference from the Court. They have expertise in carrying out their duties to maintain standards of behaviour and to regulate the conduct of those who are licensed to carry on the business of serving liquor to the public.”

The AGCO Board has powers clearly defined by statute, and has authority to regulate.

The role of the Registrar is set out in the following provisions of AGRPPA:

1. s. 6(1) – the position of the Registrar is established;

2. s. 10(4) – the Registrar is a party to a hearing before the Board;

3. s. 11(3) – the Registrar is a party to an appeal from a decision of the Board;

4. s. 14.1(2) – the Registrar may impose monetary penalties.

The Registrar has a statutory position different from that of a chief executive officer, and does not report to the Chair. This difference is clear from the statutes.

The LLA specifically states:

1. s. 6(1) – applications for liquor licences are made to the Registrar;

2. s. 12 – the Registrar approves and issues licences;

3. s. 6.1 – the Registrar performs due diligence on applicants for licences.

The investigative power rests with the Registrar. Section 15 of AGRPPA gives the Board the right to require information but the Board does not have investigative powers.

The LLA states:

1. s. 8(1) – the Registrar considers applications for licences;

2. s. 8.1(3) – the Board establishes criteria and conditions but it is the Registrar who designates and imposes conditions to be put on licences. This is known as risk-based licensing or RBL;

3. s. 8(2) – this power to consider an application for a licence is that of the Registrar. Prior, it was an employee or member of the Board pre-1990. The LLA was changed in 1990;

4. s. 15(1) – the Registrar has the power to issue a notice of proposal (“NOP”) to revoke or suspend a licence;

5. s. 21(1) further instances when the Registrar may issue an NOP;

6. s. 43(1) – the Registrar designates inspectors.

The statutes authorize investigations and the issue of notices of proposal by the Registrar. The statutes authorize the Board to hold hearings. Thus there is a clear division of powers within the statutes. Investigation and prosecution, versus adjudication. They are clearly separated.

Under subsection 10(3) of AGRPPA, a Board member holding a hearing must not have taken part in any prior consideration of the issues at the hearing. A wall was established by the Legislature, a wall between the adjudicator, and the prosecutorial/investigative function. There are two statutory exceptions to this wall. The first is contained in section 9 of the LLA, specifically, subsection 9(5) where if the matter is not settled after a public meeting, the Board can direct the Registrar to issue an NOP to review the application. The other is contained in subsections 14(2) and 14(3) of the LLA regarding removal of conditions. If the Board member says “no”, the member directs the Registrar to issue an NOP.

22. In the Board’s (2005) Rules of Practice, Rules 11.6 and 12.9 each codify subsection 10(3) of AGRPPA.

Specific Matters Raised by the Licensee, Responses by the Registrar and the Panel’s Findings

23. Ms Brandow submitted that the reasonable apprehension of bias is raised not by the statutory framework but by the roles and functions of individuals outside the statutory framework as set out in the Memorandum of Understanding (MOU), the materials about the AGCO that are available to the public and what happens in the practices of the organization.

24. The first issue raised by Ms Brandow regarding the structure of the organization related to the affidavit of Michael Lerner, counsel for the Licensee in this hearing. He states that based on the organizational charts of the AGCO in Exhibit “A” of his affidavit everyone reports to the Chair including the CEO/Registrar.

25. In his affidavit, Jean Major, Chief Executive Officer (“CEO”) of the AGCO and Registrar of Alcohol and Gaming, states that he reports to the Chair as the CEO and does not report to the Chair as Registrar. As Registrar, he has instructed counsel to appeal Board decisions to the Divisional Court on a number of occasions.

26. In his affidavit, Don Bourgeois, General Counsel of the AGCO and Director of Legal Services, Acting CEO and Acting Registrar in the absence of the CEO/Registrar, states that the only person who reports to the Chair is Jean Major as CEO, not “everyone”. The Registrar’s duties and obligations are set out in statute. Mr. Major as Registrar does not report to the Chair.

27. The Panel accepts the evidence of Mr. Major and Mr. Bourgeois. They were not cross-examined on their affidavits and accordingly, the affidavit evidence stands. Therefore the Panel accepts their statements as being factual.

28. The Panel is of the view that a conclusion about the reporting relationships of a multi-functional organization cannot be drawn solely from organizational charts, which are a one-dimensional depiction and merely give an overview of an organization. To understand the organization one must look at the operational realities. The Panel will consider operational realities and practices of the AGCO. The Panel will also look at the roles and responsibilities under the MOU. It will also look at the relationship between the Board and AGCO staff as it relates to the physical location, interaction outside the hearings, a shared history from the time of the former Liquor Licence Board of Ontario, other written materials and finally the operational realities of the organization.

Roles and Responsibilities under the Memorandum of Understanding

29. Ms Brandow submitted that the Memorandum of Understanding (“MOU”) sets up certain roles and responsibilities that are not based in a statute. Regarding these roles, the issue is for someone to know what the actual practices are and what protections are in place to prevent the appearance of bias. She submitted that based on the MOU, the Board and Chair evaluate the person who presents cases to them in their adjudicative role and acts on one side when a licensee disputes a Notice of Proposal by the Registrar. The MOU between the Minister of Government Services and the Alcohol and Gaming Commission of Ontario is signed by the Minister, the Acting Deputy Minister, the Chair of the AGCO and the CEO of the AGCO. Under the MOU, the Chair is responsible for evaluating the performance of the CEO whose duties also include acting as the Registrar, who investigates. The Board is involved because it is responsible for establishing performance criteria for evaluating performance of the CEO. Therefore, the Chair and Board are involved in the evaluation of the Registrar who issues NOPs and appears as a party at hearings of the Board.

30. The evidence of Jean Major in response is that he has an annual performance review by the Board managed by the Chair and the Chair of the Corporate Governance Committee. His performance expectations are outlined in the annual Corporate Plan. The plan is made available to staff and quarterly reports are made to AGCO staff on the progress of its implementation. He provides monthly progress reports on the Plan by senior management at Board meetings. At the end of the year, the Board through the Chair, assesses his performance and provides feedback in writing and through a personal meeting. At no time is there any discussion about any specific case, licensee or registrant.

31. The Panel finds that based on the evidence, including the statutes, the MOU, the affidavits submitted by the Respondent and the operational realities, although Jean Major is both AGCO CEO, as well as the Registrar of Alcohol and Gaming, these two roles are clear, distinct and authorized by the MOU.

32. Ms Brandow also made the following submissions. The MOU creates a requirement for communication. There is nothing in the MOU or policies of a written nature that prevent the Registrar or CEO from communicating about pressing issues that hit the media that relate to a specific case before the Board in a hearing. The CEO is responsible for supporting the Chair and the Board in meeting their responsibilities and keeping the Chair and the Board informed of issues which may prove to be contentious or of public concern. It is also a requirement for the CEO to communicate issues of public concern and matters that come to media attention to the Board and Chair and for the Chair to communicate those to the Minister. Also there is nothing to separate, by written policy, the communication of media issues to the Ministry from the view of the Board or Chair. The issue is not whether inappropriate information was passed along. It is not a question of the individual. It is a question of the structure that requires the Registrar to communicate pressing issues that relate to specific ongoing hearings to the people who are adjudicating those hearings. The Registrar’s affidavits speak to actual practices, what is done by individuals who hold various roles. Instructions are given and they typically do or don’t do certain things but there are no written policies created such as in the Hoechst Marion Roussel Canada Inc. v. Canada (Attorney General) case that mitigate against or create structural barriers to communication that would create a reasonable apprehension of bias.

33. Mr. Lerner’s affidavit evidence is that the role of the Chair and other Board members is not just to preside over hearings and render decisions, but also to provide oversight of the Registrar/CEO and oversight of the day to day operations of the AGCO, not excluding its investigations and enforcement activities. Specifically with respect to this oversight role, the Chair meets regularly with the Registrar and senior management monthly to review management reports on operations of the AGCO and the status of issues. The information provided by the Registrar is “usually statistical in nature” as indicated in a letter of January 7, 2010 from the Chair to the Ontario Restaurant and Bar Association. The concern is that the information is not always statistical.

34. The Panel finds that notwithstanding the Chair’s letter dated January 7, 2010, it is the AGCO CEO, and not the Registrar who meets with the Chair. While they are the same person, their roles are distinct. The Chair’s letter dated January 7, 2010 was in response to a specific question about the Registrar and is not a sworn document. Conflicting information is provided by Jean Major by way of a sworn affidavit, which is supported by other documentary evidence, including the MOU. The Panel prefers the sworn evidence of Jean Major which provides greater detail and clarity on this matter.

35. Evidence regarding investigations and enforcement by the AGCO was given by Don Bourgeois who stated that no member of the Board, the Chair, or anyone acting for them in the Hearings Office has ever provided direction to an investigator, lawyer, or other person employed by the AGCO or the OPP Investigations and Enforcement Bureau at the AGCO on whom to investigate or not investigate, when to do so, how to investigate or what conclusion to reach. Such direction would be treated as interference and ignored. The Liquor Licence Act and Gaming Control Act, 1992 set out who is authorized to conduct investigations and when. The Ontario Provincial Police (“OPP”) has developed procedures for conducting and reporting on investigations. The Deputy Registrar provides, with legal advice, instructions with respect to eligibility or due diligence investigations. The Chair and Board provide no oversight of investigations and enforcement. This is done by the OPP and internal management processes. The Chair does not meet with Mr. Bourgeois monthly or otherwise. Mr. Bourgeois does not attend, nor does any AGCO staff lawyer attend, Board meetings without an invitation for a specific purpose.

36. The evidence of Fred Bertucca is that he is a Police Superintendent with the OPP who is deployed with the OPP Investigation and Enforcement Bureau at the AGCO. He was the Director of Liquor Enforcement from 2006 until 2010 when he became Superintendent – Strategic Management for the Investigation and Enforcement Bureau. The AGCO Inspectors and OPP Constables conduct inspections and submit liquor inspection reports to the OPP Supervisor, who reviews all reports and determine if any further action is required. When further action is necessary, the OPP Supervisor has a Deputy Registrar Review Submission (“DRRS”) prepared summarizing the non-compliance information including past history. The Supervisor forwards the DRRS to the OPP Regional Manager in Toronto. The OPP Regional Manager then submits the DRRS to the AGCO Legal Services Branch for counsel review and preparation of a recommendation for disciplinary action which is then sent by legal counsel to the Deputy Registrar. The document flow is described in Exhibit A to his affidavit. Mr. Bertucca stated that he would be in contravention of the Police Services Act and OPP Code of Conduct in addition to s. 10(3) of AGRPPA if he provided investigative/inspection information to the Board members prior to a hearing. He has not discussed investigative or inspection cases with the AGCO Chair or any Board member. He has never received any such information from the AGCO Chair or any Board member. If such request for information was received, he would consider it improper and would notify the OPP Bureau Commander of the Investigations and Enforcement Bureau. He does not receive instruction from or direction from the AGCO Chair or the Board in respect to the conduct of investigations.

37. The Panel finds that the affidavits of Don Bourgeois and Fred Bertucca support the Panel’s finding that the Board and Chair have no involvement with investigative or prosecutorial matters at the AGCO.

38. The evidence of Richard Kulis, Deputy Director of the AGCO Legal Services Branch, is that his client is the Registrar of Alcohol and Gaming. He takes instruction only from the Registrar or his designate, the Deputy Registrar who is the Director of Licensing and Registration. He takes no instruction from the Board members unless ordered to do something during the course of a public hearing. All lawyers reporting to the Registrar are instructed not to associate with the Board members or their staff except in public hearings or motions or in matters relating to the scheduling of these publicly held events. To that effect, he is scheduling counsel for the Registrar. He responds, as does counsel for the licensee or applicant, to inquiries from the scheduling clerk for the Hearings Office. During his career, he has been the lead drafter of NOPs at the LLBO and the AGCO. He described the new process of negotiation of alleged violations instituted over the past four years by the Registrar called the “Letter of Incident” (“LOI”) process. Information from this process is presented to the Registrar or Deputy Registrar who determines what action, if any, should be undertaken. Should a NOP be issued as a final resort to resolve a disciplinary matter, the LOI counsel prepares and issues the NOP. Mr. Kulis provides advice to the LOI counsel if requested and he reviews the NOPs for which a hearing is requested by the licensee. The Board members have no involvement in these files or any of these processes.

39. Regarding monthly meetings, the evidence of Jean Major in response is that he attends monthly Board meetings and the two monthly Board committee meetings. He does not meet with Board members individually, unless required by the Board or a Board committee for a specific task. He meets with the Chair once a week to discuss issues of the AGCO. At no time do they discuss individual licensee cases. His meetings with Board members deal only with policy or governance issues, never individual cases. He also reports to the Chair and Board on the performance of the AGCO. His reporting obligations are often statistical and always general, and do not include a discussion of specific cases before the Board. Discussions on performance of management are always at a condensed, general level, not on a licensee/registrant level. He has not, does not and would not discuss individual cases with the Chair or Board, and in particular cases which are pending or before the Board.

40. The Panel accepts the evidence for the Respondent as factual. The affiants were not cross-examined on their affidavits. In its oversight role the Board is not involved in day to day operations and particularly not in Investigations and Enforcement or the subsequent LOI, DRRS or NOP process which results from alleged infractions that are reported. The information provided by senior management at monthly meetings is general or statistical in nature and not related to specific cases before the Board. In particular, Jean Major does not discuss specific cases with the Chair.

41. Ms Brandow submitted that there is nothing in the MOU to prevent the Registrar or CEO from communicating pressing issues that hit the media that relate to a specific matter which is before the Board in a hearing.

42. The affidavit of Jean Major states that he told the AGCO Chair that he had met with K.B. and started to advise the Chair of the issue discussed with her. Out of an abundance of caution, the Chair refused to discuss the issue because of her relationship to the Moose Winooski’s case. In his affidavit, Mr. Major described his meetings with K. B. and indicated that K.B. may have mentioned the Moose Winooski’s case since she had lost two sons to drunk drivers. At no time did they discuss evidence or testimony, the details of which he has no knowledge to this day since the Moose Winooski’s matter was dealt with by the Deputy Registrar. The primary issue discussed during the meetings was K.B.’s desire to have the law changed to have mandatory reporting of drunk driving to the AGCO from various police forces. The reason he reported to the Chair on one occasion that he had met K.B. was with respect to the issue of mandatory or at least more effective inter-police reporting of drunk driving charges related to bars. He did so as this was an issue of general public policy and administration affecting the alcohol industry. As mentioned above, out of an abundance of caution, the Chair refused to discuss the issue of mandatory inter-police reporting with him because of K.B.'s relationship to the Moose Winooski’s case.

43. Based on the credible evidence of Mr. Major, the Panel finds that there is no evidence that Mr. Major discussed the particulars of a specific case with the Chair in his capacity as CEO, and certainly not in his capacity as Registrar.

44. Ms Brandow submitted also that there is no written policy preventing communications by AGCO staff of specific cases with the media or others coming to the attention of the Board or Chair. In Mr. Lerner’s affidavit he refers to an issues note, Exhibit “M”, to the Minister from AGCO staff regarding this motion. The note states that decisions are made impartially and objectively without referring to this being the position of the Registrar.

45. The evidence from Jasmina Milanovich, Director of the Corporate Policy and Communications Branch of the AGCO is that AGCO staff member Harry Gousopoulos writes draft Issue Notes with her supervision. These draft Issue Notes are provided to the Ministry Policy Staff who then review and revise them as they see fit and provide them to the Minister’s political staff. The draft Issue Note does not represent the position of the Chair and Board members or the AGCO in respect to the motion before the Board. The CEO does not inform the Chair or Board members of Issue Notes that involve cases that are before the Board.

46. The Panel accepts the evidence of Ms Milanovich that the communication in question is a draft Issue Note to the Ministry policy staff and does not represent the position of the Board or the Registrar. The Panel also accepts her evidence that the CEO does not inform the Chair about any communications with the Ministry involving cases before the Board.

47. Mr. Lerner, as part of his affidavit submitted a document, Exhibit “H”, which he described as a document also prepared by Mr. Gousopoulos to be provided to the public and which was reviewed by a lawyer who acts for the Registrar in this hearing. The description states that “the Board may take administrative action against establishments which are non-compliant with the law, usually by sanctions including warnings, suspensions of the licence or revocation of the liquor licence. There is no authority in the Liquor Licence Act for the Board to issue an administrative action or a “warning” at a hearing. The only method through which the Board would participate in the issuance of warnings would be in other than adjudication or a notice of proposal hearing.

48. The evidence of Ms Milanovich is that the Corporate Policy and Communications Branch supports the AGCO’s governance and accountability function. The Branch monitors AGCO requirements under the MOU, handles issues management, develops policy and acts as the primary governmental liaison. Where policy is developed in conjunction with the Board, the Board is not provided with specific information related to hearings ongoing before the Board. Mr. Gousopoulos, under her supervision, is responsible for responding to inquiries from the Ministry, other governmental bodies, or members of the Legislature. This email was not prepared for the public but for the Ministry to respond to an inquiry from a member of the Legislature. The Chair and the Board members did not have access to this string of emails.

49. The Panel accepts Ms Milanovich’s evidence for the Respondent. The exhibit in question is not a document provided to the public as Mr. Lerner alleges. It is a communication to the Ministry and Board members do not have access to such emails.

50. Mr. Kulis’ affidavit states that Mr. Lerner is incorrect about the Board’s ability to issue warnings through the hearing process. Section 23(11) of the LLA does allow the Board to issue warnings following a hearing if the hearing panel believes that a warning is appropriate. Indeed the Board panels have issued warnings following hearings on numerous occasions. The Board does not issue warnings outside of hearings.

51. Based on the LLA and Mr. Kulis’ affidavit, the Panel finds that Mr. Lerner’s allegation regarding warnings is wrong.

52. Regarding media communications and outside persons coming to the attention of the Board, Mr. Lerner alleged that a senior manager for corporate communications at the AGCO communicated with the media, about steps taken in the investigation of the issues raised in the Notice of Proposal which is the subject of this hearing, in the emails marked as Exhibits “I” and “J”, and took direction in this matter from the Registrar/CEO as seen in Exhibit “K”.

53. Ms Brandow referred the Panel to Lisa Murray’s emails of March 3, 2009 at 11:20 a.m. and 11:33 a.m. in Exhibit “I” which stated that, “Upon learning of the accident, the AGCO initiated contact with the local police (OPP) immediately to find out if any licensed premises were allegedly to have been involved in the service of alcohol to the individuals in the car.” To a further inquiry, she responded, “We would have contacted the police as soon as we heard about the accident so it would have been that day or the next day.”

54. Ms Milanovich’s evidence in response is that the AGCO Corporate Policy and Communications Branch provides strategic communication advice and services to the AGCO by recommending and executing programs to manage media relations, handle stakeholder publications and the AGCO website, communications with staff to build understanding and acceptance of organizational objectives and policy and program priorities. She supervises Lisa Murray who acts as the AGCO’s media spokesperson. She routinely reviews draft media lines to ensure that the information to be released is accurate and does not contravene the Freedom of Information and Protection of Privacy Act (“FIPPA”). Where there is doubt about what information can be released, she or the Senior Manager will consult with the AGCO’s Legal Services Branch for clarification. If contacted by the media, the AGCO will answer questions on a specific case or other issues of interest. However, it will only release information which is in the public domain and which does not breach the requirements of the FIPPA. The AGCO will not provide any information on the specific allegations outlined in the Notice of Proposal. Ms Murray provided only information which is in the public domain and on several occasions in the email strings, Ms Murray declined to provide any information on the particulars of the Moose Winooski’s investigation and the NOP, as that information was not in the public domain. The Chair and Board members do not have access to these emails.

55. Mr. Morris submitted that the emails say nothing that raises a concern. The emails do not talk about the steps of the investigation. The Panel agrees with Mr. Morris’ submission. It finds that the communications to the press do not provide information about the specific steps taken in the investigation of the issues raised in the NOP related to Moose Winooski’s. The Panel accepts that the only information released to the media is that which is in the public domain.

56. Mr. Lerner further stated in his affidavit that in Exhibit “L”, the mother of the individual who died appears to have corresponded many times with the CEO/Registrar, investigations staff, and Registrar’s counsel regarding the proceedings and the events, including to provide information about who placed a telephone call.

57. Richard Kulis stated that the NOP referred to by Mr. Lerner related to Mr. Lerner’s present client and was initiated due to allegations of the Licensee’s staff serving liquor in excess to two patrons. It is alleged that both patrons became drunk from this service of alcohol, drove away from the licensed premises and became involved in a single vehicle accident resulting in the death of K.B.’s son. The NOP was issued based on the evidence provided by police officers, the driver and in particular, the Licensee’s staff, all of which was disclosed to the Licensee in a timely fashion. Subsequently the grief stricken mother enquired about the progress of the hearing in a manner similar to the way she would enquire regarding the status of the prosecution of charges against the driver and the civil case regarding damages. K.B. has no evidence to give regarding the allegations in the NOP, and indeed, the Registrar’s case-in-chief is completed. K.B. was not called as a witness. In his experience of 22 years with the LLBO and AGCO, it is common for parents of the deceased to follow closely the progress of these cases.

58. The evidence of Jean Major is that the Board’s involvement in the development of liquor policy in Ontario outside of the hearing process is at an issues level. The Board’s oversight of his role as CEO is at a general and organizational level. Neither role results in the involvement in the day-to-day operations of the AGCO. Neither role involves the Chair or the Board obtaining extraneous information or information about specific cases outside of the hearing role. The AGCO structure and operations reflect the statutory imperative that the Board members not have prior knowledge of cases before them. He has never discussed the Moose Winooski’s case with the Chair or any member of the Board, nor has he provided them with any information or received any information from them. The overwhelming number of cases is handled by his appointed Deputy Registrar without his direct involvement. The Moose Winooski’s case was handled by a Deputy Registrar. He did not participate in or contribute to the NOP. As is usual, although he had a general knowledge of the Moose Winooski’s case, he has not reviewed the specific evidence which led to the NOP.

59. The Panel accepts the evidence of Mr. Kulis that K.B. communicated with him as grieving parents often do because they wish to know how a matter is proceeding. The NOP issued in the Moose Winooski’s case was with no input from K.B., and K.B. was not called as a witness by the Registrar who has now finished his case-in-chief. The Panel also accepts the evidence of Mr. Major that he has general knowledge about the Moose Winooski’s matter but not the specific details of the NOP and that he has never spoken to the Chair or Board members about the matter.

60. Regarding how the MOU fits into the structure of the AGCO, Don Bourgeois, in his affidavit, states that the AGCO’s overall governance structure is consistent with those in place for other regulatory bodies in Ontario and other jurisdictions, and consists of:

1. An enabling statute defining the structure and mandate of the organization;

2. Management Board Directives, Ministry of Finance Directives, and other directives as provided for in other generally applicable statutes;

3. A Memorandum of Understanding between the Minister and the AGCO setting out in more detail who is responsible for what;

4. A Business Plan by the CEO and approved by the Board which provides overall policy direction for the AGCO and is approved by the Minister pursuant to Management Board Directive;

5. A Budget prepared by the CEO and approved by the Board. The budget is subject to an allocation through the Ministry’s estimates which must be voted by the Legislature;

6. A Monthly Report on the status of the Business Plan, Operational Matters, and Budget. In the Monthly Report, the senior management team provides statistical information to the Board so the Board can satisfy itself that performance targets and other AGCO objectives are being achieved; and,

7. An Annual Report prepared by the CEO and approved by the Board which is forwarded to the Minister and tabled in the Legislature.

Mr. Bourgeois stated that this governance structure is consistent with the norm in democratic government to ensure there is governance and accountability.

61. Mr. Morris made the following submissions. The MOU is an operational reality of the AGCO. The MOU clearly distinguish the two functions of the AGCO, the adjudicative role whereby the Board conducts hearings, and an investigative role whereby the Registrar investigates. The responsibilities of the CEO include reporting to the Chair and Board on operational performance or issues that may prove contentious or of public concern, all of which are subject to the prohibition in subsection 10(3) of AGRPPA. There is no requirement in the MOU for the Registrar to report to the Chair and Board. A reasonable and informed person knowing the statute would not interpret it differently. The MOU does not and cannot have the CEO communicating with the Board in violation of the statute nor can the Chair or Board require information from the Registrar because of the prohibition in the statute. A reasonable informed person knowing about the statutes, case law, the MOU and Mr. Bourgeois’ comments regarding standards, would reasonably come to the conclusion that there is no reasonable apprehension of bias. A licensee facing disciplinary action may feel otherwise, but that is not the test.

62. The Panel finds that the roles and responsibilities set up by the MOU do not raise a reasonable apprehension of bias. The evidence presented by the Licensee is rebutted by the evidence of the affiants for the Respondent. Under the MOU, the CEO is also responsible for acting as the Registrar of Alcohol and Gaming. However, the Registrar’s responsibilities are set out in statute. The evidence of Mr. Bourgeois is that the structure of the AGCO as described in the MOU is similar to other agencies. The MOU is an operational document and is subject to statutory prohibition under subsection 10(3) of AGRPPA. The MOU cannot override statute.

63. The Panel accepts the evidence of Mr. Major which shows that he is, at the operational level, very cognizant of the statutory prohibition and does not discuss specific cases, licensees or registrants with the Chair or Board. The evidence shows that the Chair is acutely aware of the statutory prohibition and refused to even discuss a policy matter of inter-police reporting because K.B. had a connection to a matter that would be before the Board. Regarding the emails, the Board finds that staff of the AGCO are also aware of the statutory prohibition and their practices reflect that. No specific information, about matters that are or may be before Board, is made available to the Chair or Board members. Exhibit “M” to Mr. Lerner’s affidavit is a draft Issue Note to the Minister which was not made available to the Chair or Board, and does not represent the position of the Chair or Board members based on the unrefuted evidence of Ms Milanovich.

64. Exhibit “H” to Mr. Lerner’s affidavit is a document that gives a general description of the process. The Panel accepts the evidence of Ms Milanovich that it is a response to the Ministry to an inquiry by a member of the Legislature, not a communication to the public and was not made available to the Chair or Board. Exhibits “I” and “J” are emails to and from the media and do not contain any specific information about the steps in the investigation that resulted in an NOP in the Moose Winooski’s matter. The Panel accepts the evidence of Ms Milanovich that only information in the public domain is released to the media. Exhibit “K” is an inquiry about how to proceed regarding a request to meet with Mr. Major. That email was not made available to the Chair or Board nor was Exhibit “L” which contains emails from K.B. to Richard Kulis.

65. Ms Brandow submitted that what individuals do are individual practices that can change; they are not formal written policies that will ensure that no information about specific cases goes to the Chair and Board members. The Panel disagrees that the practices are individual practices. They are based in the statutory prohibition which Mr. Morris referred to as the “wall.”

66. The Panel finds that the structure of the AGCO and the roles of the Chair, Board and the Registrar are set out in statute. There is a statutory prohibition that a member of the Board holding a hearing must not have taken part in any prior consideration of the specific issues to be determined at the hearing, other than an examination of any material that the parties are required to file with the Board and a pre-hearing conference related to those issues. The responsibilities and reporting requirements of the Chair, Board and CEO of the AGCO are enumerated in the MOU. Although the CEO is also responsible for acting as the Registrar, there is no reporting requirement for the Registrar under the MOU. The MOU is clear, under “Mandate” section that the Board adjudicates and the Registrar investigates and under the “Accountability Relationship” section, the CEO is responsible for managing the day to day operations of the Commission. There is no reporting requirement for the Registrar under the MOU. The MOU is not inconsistent with the roles and responsibilities set out in the statute. That statutory prohibition applies to the MOU and the evidence for the Respondent is clear that on an operational level, the statutory prohibition is adhered to. The Panel finds that a reasonable person knowing and having considered all the evidence and submissions about the structure of the AGCO, the roles and responsibilities under the MOU, and the evidence in reply to the allegations of the Licensee set out in the exhibits provided above cannot conclude that there is a reasonable apprehension of bias.

Relationships

67. Ms Brandow submitted that when there is a plurality of functions in an organization, an excessively close relationship can create a reasonable apprehension of bias as stated in 2747-3174 Quebec Inc. v. Quebec (Régie des permis d’alcool), at paragraph 48:

“Although an overlapping of functions is not always a grounds for concern, it must nevertheless not result in excessively close relations among employees involved in different stages of the process.”

68. She commented on some of the cases in the Registrar’s Book of Authorities. The Court in Hoechst Marion Roussel Canada Inc. v Canada (Attorney General), speaks about the clear demarcation of roles and the need to put in structural protections such as written policies to protect against a reasonable apprehension of bias. In Sam Lévy & Associés Inc. v. Canada (Superintendent of Bankruptcy), the Court documents the process that provided a clear demarcation and protection in the organization against reasonable apprehension of bias. It is important to look at what occurs in operations and to what extent this informs to the structure and the protections in place.

69. The Licensee’s concern is an excessively close relationship that develops from the proximity of location, social interactions and the possible institutional loyalty of people who were with the former LLBO and are still with the AGCO. Because of these close relationships, extraneous information can get to an adjudicator outside of a hearing. Regarding location, evidence for the Licensee can be found in the affidavits of Robert Aldous, Vaughn Minor and Michael Lerner. The evidence of Robert Aldous, Director of Inspections and Director of Licensing at the Liquor Licence Board of Ontario (the “LLBO”), is that the LLBO offices were at 55 Lakeshore Boulevard in Toronto. The offices of the Chair/CEO and the Executive Director were only separated by one office along a corridor of offices without any physical or other separation between the two aspects of the Board. The evidence of Vaughn Minor, a former AGCO Board member, is that at the AGCO offices formerly located at the Atrium on Bay on Dundas Street in Toronto, there was unrestricted access between the offices of the Commission and the offices of the CEO and Registrar. The evidence of Mr. Lerner is that based on Exhibit “E” to his affidavit dated August 17, 2010, all of the offices for the members of the AGCO staff and Board, including the Registrar/CEO, Chair and other Board members as well as enforcement staff, hearings office staff and policy staff are presently located on two floors of the same building at 90 Sheppard Avenue East. The Registrar, Jean Major and his immediate staff of approximately eight people are on the same side of the building and same floor as the Board members’ offices, including the Chair. The physical offices of the Chair and the Registrar are separated by a locked door. It is unknown (as further information was refused) as to whether the Board members’ physical offices are separated by a locked door or other means from the Registrar’s offices and his staff’s offices.

70. The evidence of Richard Kulis for the Respondent is that the AGCO has offices in several cities throughout Ontario. The only offices for the Board members, their legal counsel and Board staff is in a portion of the third floor of 90 Sheppard Avenue East. Their office space includes the hearing rooms. A portion of the CEO’s staff and the Ontario Provincial Police offices are on the entire second floor and seventh floor of 90 and 100 Sheppard Avenue East, respectively. Mr. Lerner asked for a floor plan of individual offices but Mr. Kulis advised him that he could not provide them for security reasons. Mr. Lerner then clarified that he wanted to know where the Board offices were in relation to the Registrar, Deputy Registrar and counsel. That correspondence is in Exhibits “F”, “G”, and “H” of Mr. Lerner’s affidavit. In a letter, Exhibit “E” to Mr. Lerner’s affidavit, Mr. Kulis confirmed that the Chair and Registrar are separated by a locked door. If Mr. Lerner was unclear whether the response applied to Board members, he never voiced it until his affidavit. There was certainly no refusal of this information. Contrary to Mr. Lerner’s supposition, there is a physical separation (walls and locked doors) between the offices of the Chair, Board members and hearing staff on the one hand, and the CEO and small contingent of AGCO staff who are also on the third floor. The evidence of Fred Bertucca is that Investigation and Enforcement Bureau offices, located on the second floor are controlled by card access and the Chair and members of the Board do not have card access permission.

71. The Panel finds that there is no reasonable apprehension of bias raised by the physical location of the offices of the Chair, Board members and Hearing staff in relation to the offices of the CEO/Registrar and his staff on the third floor of 90 Sheppard Avenue East, considering the walls and locked doors, and the rest of the CEO’s staff offices spread out on different floors in two buildings in Toronto and also throughout Ontario. The separation is a physical one which prevents interaction between the offices of the CEO/Registrar and his staff, including the Investigations and Enforcement Bureau, and the Chair, Board members and Hearing staff. The Panel finds that the evidence of Mr. Aldous regarding the former LLBO offices, has no relevance to present day since the LLBO operated under a different statutory structure regime than the AGCO. The evidence of Mr. Minor regarding offices also raises no concern. He indicated that the Board and Commission were in the same building and that there was unrestricted access between the offices of the Commission and the offices of the CEO and Registrar. It is unclear when Mr. Minor refers to the “offices of the Commission”, whether he is referring to the Board or other AGCO staff. In any event, even if he meant to say that there was unrestricted access between the offices of the Board and the offices of the CEO and Registrar, the Panel notes that his information is outdated as he left the AGCO in 2004. The AGCO relocated to a different physical location, and the offices of the Chair, Board members and Board staff are physically separated by walls and locked doors from the offices of the CEO and Registrar. The Panel notes that Ms Brandow submitted that the fact that offices are on the same floor in the same building is not enough by itself to establish an appearance of bias. The Panel agrees.

72. Ms Brandow suggested that the Panel must look at the accumulative effect of the structure, functions that overlap which lead to an extremely close relationship. The accumulative effect leads to a degree of familiarity which was commented on in the decision 2747-3174 Quebec Inc. v. Quebec (Régie des permis d’alcool), as stated above, and in Bailey v. Saskatchewan Registered Nurses’ Association. This is not a situation of one smoking gun, one abstract piece of information. It is the entire picture that must be looked at. In terms of the whole picture and the history of how an agency operated, this informs an individual as to how things have operated which is relevant to the issue of the reasonable appearance of bias.

73. The government put in place the structure of the AGCO and could have changed it but didn’t. Two individuals from the LLBO and one from the AGCO describe their concerns about how the structure flowed into specific instances of involvement outside the adjudicative role and information obtained in one function going to another function.

74. Robert Aldous held positions at the LLBO which were somewhat like the Registrar during 1987 to 1991. At that time, there was a review committee which directed whether to issue an NOP. The Chair was also the CEO and attended those committee meetings. Efforts were made not to have him preside at hearing of those NOPs. The offices of the Chair/CEO and the Executive Director, who were the heads of the adjudicative and prosecutorial arms respectively, were on same corridor with no physical separation. Mr. Aldous was concerned about the lack of separation and the risk of fairness because of overlapping functions.

75. Douglas Drinkwalter was the Chair of the LLBO for one year, during 1986 to 1987. He requested that an individual be appointed as Executive Director with whom he could work to re-organize the structure and operations which was a concern to him on his appointment. He was kept informed of some investigations but was concerned about conflicts.

76. In his affidavit, Mr. Kulis responded that he was senior counsel at the LLBO from 1994 to February 1998, and is now with the AGCO. He worked with Mr. Aldous on a committee revising the LLA and does not recall Mr. Aldous ever voicing any concerns about the structure of the LLBO. When the new LLA was proclaimed it added a provision which codified the current practice that a sitting Board member could not have taken part in any prior consideration of the matter. The codified practice was later continued by the AGCO as subsection 10(3) of AGRPPA. During his 22 years at the LLBO and AGCO, no one ever apprised him that a Board member violated that provision, or that a member of the Legal Services Branch or any other staff member induced a Board member to breach that provision. From 1988 to 1994 he was the lead litigator for the LLBO and took instruction from the Review Committee and in particular the Executive Director of the LLBO. Subsequently, he sat on the Review Committee and during his time on it, no member of the Board ever sat in a meeting of that Committee, nor did the Committee members ever receive instruction from any Board member to initiate any disciplinary proceedings. During his career at the LLBO and AGCO he has been the lead drafter of NOPs. At the AGCO he drafted NOPs on instructions from the Review Committee and they were signed by the Executive Director on delegated authority of the Board. At the AGCO his client is the Registrar of Alcohol and Gaming. He takes instructions only from the Registrar, and the Deputy Registrar who is the Director of Licensing and Registration. He does not take instructions from Board members unless ordered to do something during the course of a public interest hearing. All lawyers reporting to the Registrar are instructed not to associate with Board members or their staff except in public hearings, motions or in matters relating to the scheduling of these publicly held events. To that effect, he is scheduling counsel for the Registrar. He responds, as does counsel for the licensee or applicant, to inquiries from the scheduling clerk for the Hearings office. He was not at the LLBO during Mr. Drinkwalter’s time. He was aware that during Mr. Drinkwater’s term a fact finding committee was established to review the LLA. He was, however, on the subsequent working committee that developed recommendations advanced by the fact finding committee. There was no mention in the fact finding report of any concern regarding bias, in particular, no such comment from Mr. Drinkwalter.

77. Katherine Klas, Director of the AGCO Sector Liaison Branch, in her affidavit gave evidence that she was with the LLBO from 1980 and is now with the AGCO. In response to Mr. Aldous’ affidavit evidence, she stated that before 1990, Board members considered all licence applications at a public meeting. After 1990, public meetings were no longer required for all applications. The Board member who gave instructions to issue the NOP did not preside over the hearing relating to that file. On disciplinary matters, the Board delegated signing authority to the Executive Director sometime after 1988. She sat on the Review Committee from 1996 to 2002 and during that time, no Board member, including the Chair, participated in the proceedings or gave input or direction to the Review Committee.

78. In his affidavit, Jean Major stated that he was the Executive Director and CEO of the Ontario Racing Commission (“ORC”). He succeeded Robert Aldous. He does not recall Mr. Aldous having raised an issue about structural bias at the ORC or the LLBO at that time. He has met Mr. Aldous from time to time since 1995. Mr. Aldous has never raised concerns about the structure of the AGCO.

79. Mr. Morris submitted that the concerns in the affidavits of Mr. Aldous and Mr. Drinkwalter are old history and totally irrelevant to the present motion. The Panel agrees.

80. In his affidavit, Vaughn Minor gave evidence that he was a member of the AGCO Board for six years from almost the beginning of the AGCO in 1998. He indicated that there are three members of the present Board who were on the Board at that previous time. Members of the Board and people from the Registrar’s office often would have lunch together. He attended meetings with the Registrar and other Board members where investigations and complaints involving specific licensees were discussed. In one meeting, the Registrar attempted to influence the Board and he did not believe it was an isolated case. He expressed concerns about the impartiality of matters coming before the Board and once he left the Board, he voiced his concerns to a member of the Legislature. He was concerned about interpersonal relationships, communications between the executive and administrative branches and the competency of Board members.

81. In his affidavit Mr. Kulis responds that he was counsel for the Registrar in the hearing referred to by Mr. Minor. He had no witnesses to call as the sole issue before the Board was whether or not a new licence should be issued in light of opposition from the residents in the area of the applicant’s location. In addition to Mr. Minor, the hearing panel consisted of Dr. M.P. who chaired the panel. Following introductions of the panel and before any evidence was called, Mr. Minor stated to the assembly words to the effect, “Let me understand this, you people are opposing a 47 capacity restaurant?” At the time Mr. Kulis believed that Mr. Minor’s tone of voice and question expressed a predetermination of the issue to be heard. He brought forward a motion to disqualify Mr. Minor due to a reasonable apprehension of bias. The lawyer for the City of Toronto made submissions in support of his motion and the lawyer for the applicant for the licence opposed the motion. After hearing arguments, the panel retired for approximately 10 minutes. Upon their return Dr. M.P. ruled that Mr. Minor did exhibit bias and disqualified him from the panel. Dr. M.P. then adjourned the hearing to a future date before another panel. Before the hearing was held the applicant, with no contact with Mr. Kulis withdrew his application. Mr. Kulis added that he is unaware of Registrar’s staff having Friday afternoon drinks with Board members although he has had meals and drinks at national conferences where Board members were also present. He was never advised by Mr. Minor, nor anyone else, that Mr. Minor had any concerns about alleged discussions of cases between Board members and Registrar’s staff, nor that these discussions ever occurred. He was also never aware of Mr. Minor’s concern about the structure of the Commission or his perception of the lack of competence of his fellow Board members, in particular, the ones who did not agree with him.

82. The affidavit evidence of Don Bourgeois in response to Mr. Minor’s affidavit is that subsequent to his appointment as Director of the AGCO Legal Services Branch, he reiterated to staff that contact with the Board and the Hearings Office is to be only for business purposes. In particular, there has never been regular or any other communication between Board members and the Registrar’s staff including legal counsel about pending matters before the Board involving discipline of licensees unless counsel for all parties are involved, other than the administrative aspects of scheduling. He does not discuss, nor does anyone in his office discuss, current files with anyone in the hearings office, Board members, or the Chair, other than procedural matters such as scheduling.

83. Mr. Morris submitted that Mr. Minor provides no details including whether he was present. In any event, the Courts have held that there is not bias in socializing. The Supreme Court of Canada in Ruffo v. Conseil de la magistrature looked at this factor with disdain. Given the evidence of Mr. Kulis regarding the hearing cited, Mr. Minor’s statement that the Registrar attempted to influence the decision is misleading and false. Mr. Minor has made vague and unsupported allegations and the Panel should not give credence to them.

84. The Panel finds that Mr. Minor provides no supporting evidence or detail regarding the vague statements that he made. The Panel notes that Mr. Minor does not allege that he or other Board members were receiving information about hearings in breach of their statutory obligation. The Panel finds that based on the evidence of Mr. Kulis regarding the hearing mentioned, Mr. Minor’s statement that the Registrar had attempted to influence the decision of the Board is misleading and false. Bringing a motion during a hearing does not constitute “influencing” a decision of the Board. The Panel notes that Mr. Minor has not been on the Board for six years. The Panel accepts the evidence of Mr. Bourgeois that since that time he has issued a direction to staff regarding no contact with the Board and Hearings Office except for business purposes. The current practices of the AGCO which have been in effect for several years, are not those that Mr. Minor described. Therefore, the Panel gives little weight to Mr. Minor’s affidavit.

85. The Panel finds that based on the evidence of Mr. Kulis and Ms Klas, a separation existed between the Chair and Board members who sat on hearings from the Executive Branch and the individuals who made decisions about issuing NOPs at the former LLBO. The same separation between the Chair and Board members and the Registrar and his staff exists at the AGCO. Mr. Kulis and Ms Klas worked at the former LLBO and are now with the AGCO, and presumably there are other individuals as well. The evidence of Mr. Minor is that there are three present Board members who were on the Board during his tenure on the Board of the AGCO before 2004. However, there is no evidence to conclude as Ms Brandow submitted that any individuals given longevity of tenure are swayed by institutional loyalty to breach the statutory prohibition in AGRPPA. In fact, what has continued is the separation between those who issue the NOPs and the Board who conduct hearings of the NOPs.

86. Ms Brandow submitted that there are further examples of a close relationship in the affidavits of Robert Dehu, Gino Arnone and Abbas Mahmoud.

87. In his affidavit, Robert Dehu, the owner of Jack’s in London, gave evidence that at the conclusion of a hearing, while the parties and the members of the Tribunal who presided over the hearing were all still in the room, a member of the Board asked Registrar’s counsel if he would be returning to Toronto. In response, Registrar’s counsel indicated that he would not be returning to Toronto at that time. It was Mr. Dehu’s clear and distinct impression that the Board member was asking the question of the Registrar’s counsel as the Board member had planned or hoped to return to Toronto with Registrar’s counsel in his car. He advised his lawyer immediately but did not pursue the matter because the matter subsequently concluded on terms that acceptable to him.

88. The evidence in response from Richard Kulis is that he had assigned B.A., who lives in London, to be Registrar’s counsel on the Jack’s matter. Mr. Lerner was counsel to Mr. Dehu. Mr. Kulis was consulting counsel assisting B.A. B.A never brought up for discussion with him any issue of bias at the hearing. The issue was not raised by Mr. Lerner in his submissions for the hearing, in submissions on sanction or the Notice of Appeal filed subsequently. The Board’s decisions and the Notice of Appeal were submitted as Exhibits “D”, “E”, and “F” to his affidavit. That issue has not been raised until Mr. Dehu’s affidavit two years later. It is speculation as to what the Board member’s comment was meant to convey.

89. The evidence of Don Bourgeois is that there is an outstanding Notice of Proposal to suspend Mr. Dehu’s licence for 30 days which was issued on December 16, 2009, which is on hold as a result of this motion in support of which he now purports to give evidence.

90. Ms Brandow submitted that Mr. Kulis was not present and could not judge the comment in the context it was made.

91. Mr. Morris submitted that drawing the conclusion that Mr. Dehu did, is that of a suspicious person who has a stake in the outcome of this matter. Mr. Dehu’s conclusion is petty and purely speculative. He had no idea what the Board member meant. Mr. Dehu mentioned his concern to his lawyer who was Mr. Lerner, but Mr. Lerner did not mention this in either of his affidavits, yet stated that he had a long-standing concern about the relationship between the Board and the Registrar.

92. The Panel agrees that Mr. Dehu’s conclusion is speculative at best. Furthermore, Mr. Dehu’s evidence is not credible. He indicated that he did not pursue his concern because the matter subsequently concluded on terms that were acceptable to him. Obviously they were not acceptable to him since he filed a Notice of Appeal in the matter. In view of the evidence of Mr. Bourgeois, it is clear that Mr. Dehu is also partisan in this matter because he has an outstanding NOP pending this motion. Therefore, the Panel gives no weight to the concern raised by Mr. Dehu.

93. Ms Brandow pointed out that despite the direction of Mr. Bourgeois, interaction with Registrar’s counsel continues to occur, as seen in the affidavits raised by Mr. Dehu, Gino Arnone and Abbas Mahmoud.

94. In his affidavit, Gino Arnone, a senior partner in the law firm of Erickson and Partners, gave evidence that a few years ago in the course of a hearing requested by one of his clients, he recalled a conversation between a Board member on the panel hearing the matter and either the Registrar’s counsel or the liquor inspector, which raised a concern about the impartiality of Board members. The conversation related to arrangements being made for the Board member to go fishing with either the liquor inspector or Registrar’s counsel.

95. The evidence of Richard Kulis in his affidavit is that sometime in 1996 or 1997, he was in Thunder Bay as Board counsel for a hearing of the former LLBO. The Board member in question was C.B., an eminent criminal defence counsel who had been appointed to the Board. The local inspector was A.R. who had started a hunting and fishing guide business. On the date in question, the hearing had been cancelled. A.R. invited him to go fishing before flying back to Toronto. The Board member overheard the conversation and asked if he could join them. They went fishing. They discussed life generally and the Inspector’s hunting and fishing interests in particular. There was no discussion of cases. Mr. Kulis was surprised about Mr. Arnone’s concern because he has not raised it for 13 to 14 years despite numerous candid discussions which resulted in both contested and settled hearings where Mr. Arnone was never afraid to point out his concerns. Since the inception of the AGCO and particularly in the last six years, there have been instructions to restrict dealings with Board members to business purposes.

96. Mr. Morris submitted that the event described by Mr. Arnone occurred 14 years ago. He is uncertain about a number of things and has not raised this concern to Mr. Kulis from the time it occurred to the present. The Panel should not give Mr. Arnone’s concern much credibility. In any event this event occurred during a different statutory regime and a long time ago.

97. The Panel finds that the affidavit of Mr. Arnone raises no reasonable apprehension of bias in the AGCO as it exists today. The Panel accepts Mr. Kulis’ evidence as factual; he was not cross-examined on this second affidavit. He also forthrightly described the incident in question. The incident which Mr. Arnone stated happened a few years ago actually took place 13 to 14 years ago during the time of the former LLBO and has no relevance to the present motion.

98. The affidavit of Abbas Mahmoud, the owner of the Tila Tequila Nightclub in Ottawa, states that approximately a year and a half ago he attended a hearing into a NOP issued by the Registrar against his establishment. On a lunch break, he saw the two “judges” sitting together with the lawyer for the Registrar and having lunch with him. They were discussing openly that they had traveled together in the same car to and from the airport and on the same plane to Ottawa. The Registrar’s counsel openly discussed with the “judges” trying to coordinate the end of the hearing to coincide with good traffic for their trip together to the airport.

99. In response to Mr. Mahmoud’s affidavit, Joyce Taylor, presently a Deputy Director in the Licensing and Registration Branch of the AGCO, stated that she was counsel for the Registrar in two hearings involving Mr. Mahmoud’s establishment. Mr. Mahmoud gave evidence during the course of both hearings. She was the sole lawyer acting for the Registrar during a five day hearing in 2008. The Licensee was represented first by two lawyers and then by a third. At no time did she have lunch with the Board members during the course of the hearing, nor was there a male lawyer for the Registrar in Ottawa who could have done so. She did not ride from the airport with any of the Board members. Subsequently, the Licensee appealed the Board’s decision to the Divisional Court and retained new counsel. At no time during the hearing or at the appeal has the Licensee raised the issue of institutional or actual bias, nor have five experienced lawyers representing the Licensee done so. She was also Registrar’s counsel in a three day hearing regarding Tila Tequila in 2009. The Board dismissed the allegations in that case. She did not have lunch with the Board members on any of the hearing dates, nor did she ever ride with them from the airport. During this hearing, the Licensee was represented by Jerry Levitan who did not raise an allegation of actual or perceived bias.

100. The Panel finds that the affidavit of Mr. Mahmoud raises no reasonable apprehension of bias. The Panel prefers the evidence of Ms Taylor who disputes what Mr. Mahmoud said. Neither was cross-examined on their affidavits. The Panel finds that Mr. Mahmoud is not as credible as Ms Taylor because, in addition to the Panel’s general credibility findings regarding the affiants for the two parties noted earlier in this decision, it is unreasonable for Mr. Mahmoud to refer to Registrar’s counsel as “him” instead of “her” after attending two multi-day hearings with Ms Taylor as Registrar’s counsel. The Panel does not accept the submission of Ms Brandow that it was a typographical error given Mr. Mahmoud’s experience as a licensee who has appeared before the Board on previous disciplinary motions. He would surely have read the affidavit before signing it considering the importance of this matter to him. Also, Mr. Mahmoud is not a totally impartial person since he has appealed the Board decision from the first hearing to the Divisional Court. Ms Taylor, on the other hand, is an officer of the Court and has no reason to give anything but factual evidence. The Panel rejects Ms Brandow’s submission that the affiants for the Respondent also have a stake in the outcome of this motion because if the motion is successful, the AGCO and their positions will change. The Panel finds that to be speculative; there is no evidence to support that submission.

101. In looking at the evidence about relationships, the Panel finds that there is no evidence that any social interactions that took place in the past results in excessively close relationships today that lead to a breach of the statutory prohibition against prior consideration. There is no evidence that the present location of offices results in close relationships that result in a breach of the statutory prohibition against prior consideration. On the contrary, the evidence shows that the current practices ensure a separation between the Chair and Board in their adjudicative function from any prior knowledge of specific matters that may come before them at a hearing.

102. Ms Brandow argued that the concern is not prior consideration of matters, but extraneous information getting to the Board about specific matters. The Panel finds that the above evidence shows that the current practices in place are based on an awareness of the statutory provision that ensures no inappropriate information gets to the Board in its adjudicative function.

Other Written Materials

103. In his affidavit, Mr. Lerner submitted the Beatty Rowley Report as Exhibit “N”. Mr. Lerner states that the Beatty Rowley comment that the Board’s policy role often only comprises approval of management proposals, many of which would be from the CEO/Registrar, the same person who plays the enforcement/ prosecutor role at hearings.

104. In response, the affidavit evidence of Katherine Klas, Director of the Sector Liaison Branch, states that the Branch deals with aspects of policy development including interactions with stakeholders excluding policy development requiring Ministerial approval by the Ministry to which the AGCO reports, at which time the Corporate Policy and Communications Branch becomes involved. She has dealt with the Chair and Board in respect to policy development. For example, the special occasion permit review involves Ministry initiated policy development, Board approval of the Smart Serve program involves Board initiated policy development, the charitable gaming review involves CEO and senior management initiated policy development that has been coordinated by the Branch. The Board’s involvement in policy review varies on who initiates the policy review and on the issues in question. At no time does policy review involve providing the Chair or Board with information related to specific cases and in particular ongoing or pending hearings.

105. The Panel agrees with the submission of Mr. Morris that the focus of the Beatty Rowley Report is from a management perspective and not a legal perspective. The Report concludes that the Board has an adjudicative “bias” in that it spends too much time on its adjudicative function which hampers its effectiveness in its governance function, and therefore recommends separating its oversight and adjudicative roles. The Panel finds that Report has no relevance to the question of reasonable apprehension of bias.

106. The report by the Honourable Coulter A. Osborne on the Ontario Securities Commission, Exhibit “O” to Mr. Lerner’s August 17, 2010 affidavit, looks at a different organization with different statutes and factual bases. It too is from a management perspective and not a legal one. The Panel also finds that it is not relevant to the issue before this Panel.

107. In his second affidavit, Mr. Lerner submits emails from the AGCO Chair which for him raise a concern about the complaints process and the Chair’s involvement in them. He indicates that the information on the AGCO website, Exhibit “A”, states that the AGCO investigates all complaints about licensees and all complaints about the AGCO, without providing any details of the process. It does not explain whether Board members are or are not involved in the handling of complaints made to the AGCO. He states that Mr. Bertucca’s first affidavit states that Board members do not have a role in the complaints process. Mr. Bourgeois stated in his affidavit that the Chair has never provided direction to an investigator. These statements appear to be incorrect based on the email dated December 31, 2010, Exhibit “B”, from the Chair to a complainant in which the Chair advises that he spoke to the people investigating a complaint and made it known to them to stop the investigation. In the second email dated January 12, 2010, the Chair advised as to the status and decisions made with respect to the investigation into a complaint. Mr. Lerner and other individuals who read the emails are left with the impression that that Chair was aware of the investigative steps and likely participated in the steps even if he was not ultimately the individual who “ultimately oversees” the issue.

108. Fred Bertucca, in his second affidavit, states that the email involves an investigation of a complaint by T.A about an AGCO inspector and a third party. The initial complaint was sent to the Chair and as per standard policy, referred to his Branch for investigation. Later, T.A. decided to withdraw the complaint. T.A. chose to contact the Chair rather than Mr. Bertucca’s Branch. Despite the language of the Chair’s email to T.A. on December 31, 2009, Mr. Bertucca did not receive any direction from the Chair to cease the investigation. The AGCO complainant investigator received the Chair’s email of December 31, 2009 to T.A. on January 4, 2010 and sought Mr. Bertucca’s instructions. Mr. Bertucca advised him that the Chair had no role in deciding whether a complaint should be investigated. Upon reviewing the matter, Mr. Bertucca decided to continue the investigation of the complaint and did so. The Chair and the Board members do not initiate or direct investigations, or direct the cessation of investigations. In particular, the December 31, 2009 email aside, neither the Chair nor the Board has ever done so in the past or since. If such direction was ever given, Mr. Bertucca would ignore it and proceed as he saw fit. The complaints process provided by Mr. Lerner is from the internal Intranet site for AGCO employees. The AGCO public website advises the public how to make complaints and Exhibit “B” to his first affidavit is how the complaint process is to be completed.

109. The Panel accepts the evidence of Mr. Bertucca that the Chair and Board members do not initiate or direct investigations, or direct the cessation of investigations of complaints. From Mr. Bertucca’s evidence, it appears that despite the wording of the email sent to T.A., the Chair’s involvement was limited to forwarding to an investigator a request from the complainant to stop an investigation which came to him rather than going directly to the investigator. As per AGCO policy, Mr. Bertucca ignored the email and continued the investigation. The Chair’s second email of January 12, 2010, is a follow-up to his first email and informs T.A. of the legal requirements that necessitated the continuation of the investigation of his complaint. There is nothing in the email that indicates that the Chair was involved in the steps of the investigation.

110. Mr. Lerner stated in his affidavit that in “Licence Line”, an AGCO publication delivered to licensees, the Chair in recent years has commented upon the ongoing investigation, enforcement and policy efforts and directions of the AGCO. The statements of previous Chairs in past publications appeared to only relate to Board member appointments, recent additions to the management staff and legislative changes, not enforcement or policy. He provided various copies of the publication Exhibit “G”.

111. Ms Brandow directed the Panel to Volume 9, Issue 1, 2009, an article titled “Fairness in Hearings” which states, “One of the central questions that inevitably crop up is whether licensees, who appear before the Board, receive a fair hearing. The brief answer is, ‘Yes, absolutely.’” She then submitted that the Chair is expressing an opinion that hearings before the Board are fair, the very issue of this motion. To the Licensee it appears that a conclusion about fairness and impartiality has already been made. The communication is coming from the person making the decision on the motion. This is the type of thing that happens when there are no written policies.

112. Mr. Bourgeois in his affidavit responded that Mr. Lerner’s characterization of the current AGCO Chair’s comments in Licence Line is selective and inaccurate. The Chair does not comment anywhere on “ongoing investigations or enforcement.” In the 2010-10:1 edition of Mr. Lerner’s Exhibit “G”, the Chair comments on the existence of risk-based licensing and educational materials. In the 2009-9:1 edition, the Chair commented on the adoption of monetary penalties and described the Board’s adjudication procedures as its focus on fairness at a time when fairness of these procedures was not under attack. In the 2009-9:2 edition, the Chair advised of the availability of educational materials and noted some regulatory changes. In the 2002-2:1 edition, Mr. Lerner selected an edition when Mr. Randy Barber had just been appointed AGCO Chair. Mr. Bourgeois stated in Exhibit “A” to his affidavit, that there are further issues of Licence Line containing messages of previous Chairs which give a more balanced view of the role of the Chair in Licence Line. Mr. Barber commented on fire code safety, double-cohort, and rape drug issues, reminded licensees of their obligation to keep the AGCO apprised of changes to their licence. Chair Ian McPhail commented on the issue of underage drinking and how to prevent it, on enforcement and customer service. Chair Clare Lewis discussed hearing procedures generally, indicated his intention to participate in a cross-province tour to explain the new AGCO organization structure to licensees and hear their concerns, and discussed the impact of large night clubs and a recent Court of Appeal decision. The current AGCO Chair has followed a tradition established by previous Chairs to comment generally in Licence Line on problems facing the industry and the role of the Commission in addressing them.

113. After reviewing the articles in Licence Line, the Panel accepts the evidence of Mr. Bourgeois. The current AGCO Chair is following a tradition established by previous Chairs. The edition with the article about Fairness in Hearings was issued in March, 2009, long before this motion was introduced and prejudges nothing.

Other Statements in Mr. Lerner’s Affidavit

114. Mr. Morris submitted that Mr. Lerner is wrong when he states at paragraph 9 of his affidavit that the budget is prepared by the Registrar/CEO, who is also the investigator and prosecutor. The budget is prepared by the CEO. The Panel accepts that submission, as the MOU, Section IV, paragraph 4(e), confirms that the AGCO Board directs the CEO to prepare the budget, and as well the affidavit of Don Bourgeois confirms the procedure regarding preparation of the budget.

115. Mr. Morris submitted that Mr. Lerner’s comments are wrong in law. While there may be some similarities, the nature of the AGCO hearings are regulatory and about licensing, not criminal or quasi-criminal in nature. The rules are different. Paragraph 33 of the Ocean Port Hotel Ltd. v. B.C. (General Manager, Liquor Control and Licensing Branch decision states:

“However, I can find no basis upon which to extend the constitutional guarantee of judicial independence that animated the Provincial Court Judges Reference to the Liquor Appeal Board. The Board is not a court, nor does it approach the constitutional role of the courts. It is first and foremost a licensing body. The suspension complained of was an incident of the Board’s licensing function. Licences are granted on condition of compliance with the Act, and can be suspended for non-compliance. The exercise of power here at issue falls squarely within the executive power of the provincial government.”

116. Mr. Morris said Mr. Lerner is also wrong when he states in paragraph 11 of his affidavit that the Chair and Board do not have independent legal advice during hearings. In Exhibit “E” to Mr. Lerner’s affidavit, the second paragraph mentions the Board’s legal counsel, as well as Hearings staff, and their close physical location to the Board. Accordingly, the Panel finds that the AGCO Board does have independent legal advice available to it during hearings

117. Regarding paragraph 37 of Mr. Lerner’s affidavit, Mr. Morris said that Mr. Lerner’s views are irrelevant in light of the test laid down by the courts. Mr. Lerner is counsel to the Licensee. He does not meet the objective test. There is no evidence of anything he alleges in paragraph 37. All has been “mushed together” to get to a reasonable apprehension of bias in Mr. Lerner’s view.

118. The Panel accepts the submissions of Mr. Morris. Each statement of Mr. Lerner’s affidavit is rebutted by the Respondent’s evidence.

Operational Realities

119. Mr. Morris submitted that one can examine not only the statutory regime but also operational realities. Mr. Morris referred to paragraph 131 of the Sam Lévy decision, supra, which read as follows:

“131. That said, according to the majority opinion of the judges who participated in Canadian Pacific Ltd. v. Matsqui Indian Band, supra, it is not advisable to formulate final conclusions on the functioning of an institution based only on the general wording of legislative provisions. On the contrary, knowledge of the operational aspects of these missing points can offer a much more ample background in which it is possible to make an objective assessment of the institution in question and the relations pertaining to someone who assesses the situation of an administrative tribunal not only based on the law and regulations governing it, but also on the practices of the tribunal that its impartiality and independence become apparent and may be fully assessed.”

Mr. Morris further submitted that clearly one can look at the operational realities, and the MOU is an example. The AGCO’s operational realities go farther than the statutory requirements and do not give rise to a reasonable apprehension of bias. The AGCO is organized to carry out its responsibilities and statutory duties. There is no obligation for them to be set out in writing. They are statutory. One cannot assume that statements in the Respondent’s affidavits are not backed up in writing. In some cases policies are in writing. In Superintendent Bertucca’s affidavit, he refers to a complaints process. There are documents at exhibits “A” and “B” to his affidavit. The test for a reasonable apprehension of bias, is not that of the Licensee, nor the lawyer for the Licensee. Rather it is the reasonable person properly informed. Don Bourgeois in his affidavit at paragraph 16 says neither he nor anyone in his office discuss files with the Chair. Richard Kulis says the same thing in his affidavit. It is not required that there be an e-mail message ordering this. The test is not that of a suspicious licensee. A reasonable and informed person would look at subsection 10(3) of AGRPPA. Both Messrs. Bourgeois and Kulis in their affidavits state there has been a direction over the past six years not to deal directly with the Board except at hearings. Mr. Morris said this does not have to be in writing. Ms Brandow could have cross-examined them about this, but she did not. The form of the direction is irrelevant – the practice is relevant. Ms Brandow failed to examine Registrar’s affidavits, and their statements in their affidavits stand. Ms Brandow referred to “individualized policies”, but any policy can be reversed. There are operational realities now. Mr. Morris continued that the CEO reports to the Chair, but the Registrar does not. The Registrar has appealed decisions of the Board, even of the Chair. Mr. Lerner has suspicions about this expressed in his affidavit at paragraph 4. Mr. Lerner points to Exhibit “A” which is a line drawing and says that the Registrar reports to the Board. Mr. Morris said the first page of Exhibit “A” shows the “CEO and Registrar” reporting to the Board, but the next page shows only the CEO reporting to the Board. The CEO is the Registrar, the same person, but the statute is clear in that the Registrar reports to no one. The MOU is also clear in this regard. A suspicious person might see otherwise. A fully informed person, not one acting subjectively, reading all the documents and the affidavit of Jean Major would conclude that the Registrar does not report to the Chair. In all of Exhibit “A” to Mr. Lerner’s affidavit, no one else is shown as reporting to the Board or Chair. All other staff report to the CEO. Jean Major’s affidavit indicates his role with the Chair. He shows his knowledge and understanding of subsection 10(3) of AGRPPA in paragraphs 6, 7, 8, 9, 10, 11 and 21. These are statements of fact as to how the organization works. Mr. Major was not cross-examined. Therefore the Board is entitled to make a finding based on what he said. There is no need for written polices on these things. There is statute law.

120. Mr. Morris also submitted that regarding paragraph 22 of Mr. Lerner’s affidavit, K.B. was not a witness. She had no evidence to give as Mr. Kulis states in his affidavit. Mr. Lerner was wrong in paragraph 20 of his affidavit. The emails of K.B. were from the transcripts of the criminal trial. Regarding paragraph 20 of Mr. Lerner’s affidavit, there is nothing in any act that K.B. cannot be a grieving mother and an agent for change. The Chair did not get involved in the policy discussion. There is no evidence to support Mr. Lerner’s position, nor can he make implications that don’t exist. Jean Major in his affidavit swore he does not provide information regarding hearing files. He referred to Exhibit “F” attached to Mr. Lerner’s affidavit (the AGCO Annual Report for 2006-2007) and said there is nothing in that document that a reasonable and informed person could draw the conclusion that the Registrar, Chair or the Board were breaching their statutory obligations. Mr. Kulis’ affidavit at paragraph 39 is the operational reality. Ms Brandow cannot draw inferences that if there is no writing, it does not exist. Not one iota of evidence contradicted what Mr. Kulis swore to in his affidavit. This is the operational reality. Regarding paragraph 40 of Mr. Kulis’ affidavit, there is a statutory requirement. It is an organizational reality. One does not need an email to do that. The statute says that. Mr. Kulis was not cross-examined on his affidavit. Paragraph 26 is very clear who Mr. Kulis works for and who he reports to. Both the statute and the practice provide a clear distinction between the adjudicative and prosecutorial function.

121. Mr. Morris went on to state that the facts in 2747-3174 Quebec Inc. v. Quebec (Régie des permis d’alcool), supra, were completely different from this case as shown on page 45, paragraph 53 of the decision. The format of La Régie was like that of the old LLBO. Its legal department acted as prosecutor and drafted opinions. The Court referred to the “silence of the act”. In theory, in La Régie, the lawyer could be both. Its annual report was also silent. There are no materials before the Board in this case that AGCO lawyers play a dual role. The lawyers at the AGCO act for the Registrar. Mr. Kulis’ affidavit states that. The facts in La Régie do not apply here. A reasonable and informed person would understand that. The Board here is not involved in investigations or prosecutions, a clear distinction from La Régie case.

122. Mr. Morris also cited Hoechst Marion Rousell Canada Inc. v. Canada (Attorney General), paragraphs 92 and 93, reads as follows:

“92. In my opinion, this issue is closely related to the question of predetermination of key issues, discussed above. As noted above, the Chairperson, when reviewing the Staff Report and VCU, was acting in his administrative capacity as chief executive officer, for the limited purpose of deciding whether or not to issue a Notice of Hearing. I agree with the submissions of the Respondent and the Intervener that no independent analysis was conducted by the Chairperson as to whether the results of the investigation are, or may be, established.

93. Finally, the Act does not ban the Chairperson from sitting as a member of a Board Panel, notwithstanding his role in the issuance of a Notice of Hearing. Having regard to the fact that the Board is an expert tribunal, that the Chairperson is presumably highly knowledgeable in this field, and that the Chairperson, to date, has had no role in determining the well-foundedness of the allegation contained in the Staff Report, I see no basis upon which an informed person, viewing the matter realistically and practically, and having thought the matter through, would conclude that there is a reasonable apprehension of bias arising from the Chairperson’s participation in the panel. This view is reinforced by my opinion as to the degree of flexibility to be afforded to the Board in satisfying the duty of fairness.”

Mr. Morris submitted that even under the old LLBO structure, there was no problem if a Board member issued a NOP and then acted on a panel if the statute permitted the member to sit. Why? Because the Board members would decide the case on the evidence. In this Motion, there is the extra protection of the statute defining the relationship between the Registrar and the Board, as well as subsection 10(3) of AGRPPA. Inspector Bertucca in his affidavit discusses how complaints about inspectors are handled at paragraphs 19, 20 and 21. The investigation of complaints against employees is a management issue.

123. Mr. Morris continued that in the Licensee’s Supplementary Motion Record, there is a further affidavit of Mr. Lerner with exhibits, including Exhibit “B” where the Chair says to stop an investigation. From that, Mr. Lerner states in paragraph 6 of his affidavit that he gets the impression that the Chair participated in steps of the complaint investigation. Mr. Morris said what really happened was that a licensee wrote a letter to the Chair withdrawing a previous complaint he had made to the Chair. The Chair responded by trying to halt the investigation. Inspector Bertucca in his second affidavit at paragraphs 3 and 4 – makes clear how complaints are dealt with. Mr. Morris referred to Exhibit “C” of Mr. Lerner’s affidavit in Licensee’s Supplementary Motion Record. He said the only involvement of the Chair was caused by Mr. Abaza’s emails to the Chair. Mr. Morris said this was much a-do about nothing. After 10 months, that’s all the Licensee has got.

124. The Panel agrees with the submissions of Mr. Morris regarding the operational realities of the AGCO. The evidence of the affiants for the Respondent supports the fact that at an operational level there is a separation, by statutory prohibition regarding prior consideration, between the Board’s adjudicative function from the Registrar who investigates and prosecutes. The roles under the MOU are subject to the same statutory prohibition. At the operational level, there is an awareness throughout the organization about that prohibition and it is followed so no information about specific cases before the Board or that may be before the Board is made available to the Board. The structure and roles of the AGCO are set out in statute. The roles and responsibilities under the MOU are operational ones and are not inconsistent with the statutes. The allegations of the Licensee individually or collectively do not show that there is a reasonable apprehension of bias with respect to the structure of the AGCO be it because of overlapping responsibilities, relationships between the Board and AGCO staff, location or the materials presented by the Licensee. The Panel finds that all the various allegations by the Licensee have been refuted by the Respondent.

125. The arguments for the Licensee were based on the principles as stated in the Régie decision. The Panel agrees with the submissions of Mr. Morris that that decision has since been superseded by other cases, the leading one being the decision in Ocean Port Hotel Ltd. v. B.C. (General Manager, Liquor Control and Licensing Branch), which states that if overlapping functions are authorized by statute, the doctrine of reasonable apprehension of bias will generally not apply.

126. As noted earlier in this decision, the test for establishing whether there is a reasonable apprehension of bias is set out in Committee for Justice and Liberty v. Canada (National Energy Board), supra. The Panel finds that the views expressed in the Licensee’s affidavits asserting a reasonable apprehension of bias do not meet the test.

Decision

127. The Panel having reviewed the evidence and submissions finds that the Licensee has not met the onus on it to show that there is a reasonable apprehension of bias.

128. Therefore the Panel DISMISSES the Licensee’s motion asking for a permanent stay of the proceedings.

DATED AT TORONTO THIS 23^rd DAY OF November , 2010

DAVID C. GAVSIE, CHAIR, AGCO KIRSTI HUNT, VICE-CHAIR, AGCO