Registrar, Alcohol and Gaming Commission of Ontario v. 1057488 Ontario Inc., 2010 CanLII 81014

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-

1057488 Ontario Inc. Applicant

o/a Tumbleweeds Family Restaurant

DECISION

Panel: S. Grace Kerr, Board Member Bruce S. Miller, Board Member

Decision Date: December 6, 2010

Hearing Location: Barrie, 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 1057488 Ontario Inc. o/a Tumbleweeds ) Mansour Massoudi, Self-represented Family Restaurant )

The Application

1. The Registrar of the Alcohol and Gaming Commission of Ontario (“AGCO”) issued Notice of Proposal number 17925 dated March 10, 2010 to refuse an application to renew a liquor sales licence made by 1057488 Ontario Inc. (the “Applicant” or “Licensee”), operating as TUMBLEWEEDS FAMILY RESTAURANT, 107 Main Street West, Shelburne, Ontario L0N 1S0, (the “premises” or the “establishment”), liquor licence number 801386 (the “Licence”). A hearing of the application was held on September 27, 2010 in the City of Barrie.

Decision

2. After considering all the evidence and submissions, the Board REFUSES the application to renew the Licence. Reasons for these findings follow.

Preliminary Matters

3. Mr. Mansour Massoudi, a principal of the corporate Licensee, appeared on his own behalf and waived his right to legal representation.

4. After argument, the Registrar’s motion to strike the subpoenas issued to KT, CC and AM was granted.

Registrar’s Evidence

5. The Registrar submitted the following documents into evidence through Cst. Scott Williams, an Ontario Provincial Police officer based with the Orillia detachment, which were entered:

a. Transcript of the September 24, 2009 Reasons for Judgment of the Honourable Justice J.A. Morneau (Exhibit 1);

b. Transcript of the January 29, 2010 Reasons for Sentencing of the Honourable Justice J.A. Morneau (Exhibit 2);

c. AGCO Personal History Record, completed by Mr. Mansour Massoudi, received by the AGCO on December 3, 2009 (Exhibit 3); and,

d. Letter from Mr. Mansour Massoudi, sent by facsimile transmission on January 16, 2010 to the AGCO (Exhibit 4).

Licensee’s Evidence

6. Jeanette Mills was an employee of the Licensee for 3½ years.

7. According to Ms Mills, Mr. Massoudi never treated her or her family badly. Mr. Massoudi never tried to take advantage of her.

8. She presently works for a bank.

9. She described the establishment as a restaurant/bar, employing six staff. Its clientele are generally local people. As well, it draws weekend highway traffic as customers.

10. Tumbleweeds’ menu is similar to “Boonies”, another establishment owned and operated by Mr. Massoudi. Sometimes, staff are shared between the two places.

11. The wait staff are all 18 years or older; some younger people work in the kitchen.

12. Susan DeVogel testified that Mr. Massoudi took over the premises from her after paying just over $5,700 in PST arrears she owed.

13. Stephanie Kendall has known Mr. Massoudi for five to six years. She has worked for him for about three years, last working there about one year ago.

14. She also said that Mr. Massoudi had never treated her badly as an employee. He became friends with her father.

15. Ms Kendall thinks that Mr. Massoudi is a good person, is easy to get along with, is funny, and is always there to help someone.

16. She described the establishment as a “family restaurant” although on Friday evenings it is more like a restaurant/bar.

17. Cindy Fraser also testified on behalf of the Licensee. She worked for Mr. Massoudi for about six years, acting as a manager for two to three of those years.

18. Ms Fraser said that Mr. Massoudi never did anything bad to either her or her family.

19. She likes Mr. Massoudi’s wife, too. He and his family have always helped her.

20. Once there was a fire at Tumbleweeds and she and other staff members were given some shifts to work at Boonies, although the staff at Boonies did not like the staff from Tumbleweeds being there.

21. She typed the letter (Exhibit 4) on Mr. Massoudi’s behalf based on information given to her by Mr. Massoudi. She did not have any independent knowledge of the circumstances when she completed that letter.

22. Mr. Monsour (Tom) Massoudi testified that he is not the kind of man the Registrar is making him out to be. He is a good person and is asking to be fairly treated.

23. He tries to be a good person to his customers and, most important, to his employees.

24. He believes in life and that it is important to be honest and to do the right thing.

25. Mr. Massoudi did not appeal his convictions because he did not have the money.

26. He admitted that question 10 (Exhibit 3) was asking about ‘convictions’. He thought he could apply for a discharge (of his criminal convictions).

27. When he completed the Personal History Record he knew that he faced sentencing.

28. Mr. Massoudi said that he does not accept that he is a “criminal”. He denied that he was trying to mislead the AGCO.

29. He acknowledged that even his lawyer told him that he needed to identify his convictions in question 10 of Exhibit 3, but he told the lawyer he would not do so.

30. Mr. Massoudi testified that he knows the Judge (that is, Justice Morneau) ruled against him, but he could not accept it.

Registrar’s Submissions

31. The Registrar asks for a finding under clauses 6(2)(d) and 6(2)(e) of the LLA.

32. The reasons are as follows:

a. The Licensee clearly mislead the Registrar with respect to his criminal record;

b. Mr. Massoudi’s past conduct includes two incidents of sexual interference involving minors and one incident involving an assault upon an employee. The incidents were “disgusting” and also involved young girls.

33. The Licensee does not accept any responsibility for his behaviour and, instead, sees conspiracies against him.

34. The Licensee’s witnesses are substantially older than the victims of his criminal behaviour. Staff members are more vulnerable when underage. The fact that he has not bothered the older women is irrelevant when Mr. Massoudi has not accepted responsibility for his criminal acts and then lied about it (to the Registrar).

35. The foregoing matters raise concern when taken into context of the fact that Mr. Massoudi operates a family restaurant, with young staff members and young patrons.

36. The Board’s options are to refuse to renew the Licence, to renew it, or to renew it with conditions. The Registrar is asking that the Licence not be renewed and is not suggesting that any conditions be added to it.

Licensee’s Submissions

37. Mr. Massoudi denies that he is a dishonest person.

Reasons, Analysis and Decision

38. The Board has carefully considered the evidence as well as the submissions in this matter.

39. The relevant, and guiding, provisions of the applicable legislation in this case are found in clauses 6(2)(d) and 6(2)(e) and 6(3) of the LLA, which provide as follows:

6(2) Subject to subsection (4) or (4.1), an applicant is entitled to be issued a licence to sell liquor except if,

(d) the past or present conduct of the persons referred to in subsection (3) affords reasonable grounds for belief that the applicant will not carry on business in accordance with the law and with integrity and honesty;

(e) the applicant or an employee or agent of the applicant makes a false statement or provides false information in an application under this Act.

6(3) Clause 2(d) applies to the following persons:

1. The applicant,

2. An officer or director of the applicant,

3. A person who is interested in another person, as described in subsection 1(2),

4. A person having responsibility for the management or operation of the business of the applicant.

5. The legislation gives an applicant a qualified right to a licence, which includes renewals of licences.

6. Mr. Massoudi is an officer or director of the corporate applicant (ss. 6(3)(2.)). He is also responsible for managing or operating the business (ss. 6(3)(4.)). Therefore, his conduct is clearly subject to review under the provisions of clauses 6(2)(d) and (e).

7. With respect to clause 6(2)(d), the Board must decide if, based on Mr. Massoudi’s “past or present conduct”, it has “reasonable grounds” to believe that he “will not carry on business in accordance with the law” and “with integrity and honesty”.

8. With respect to clause 6(2)(e), it must also decide if Mr. Massoudi made a false statement or provided false information in his application to the AGCO to renew the Licence.

9. The Board has concluded that findings can be made under both clauses. The Board relied upon the following evidence in coming to its decision.

10. On September 24, 2009 Mr. Massoudi was convicted of one count of assault by picking his nose and placing it in the mouth of a 17-year old employee of his (Exhibit 1).

11. Justice Morneau concluded (page 24, lines 17-18, Exhibit 1): “This was not a joke. This was not done in jest. This is not appropriate workplace fun.”

12. On September 24, 2009 Mr. Massoudi was convicted of two counts of sexual interference in relation to another 17-year old employee of his (Exhibit 1). In particular, he was found guilty, on one occasion, of having kissed that employee on the neck and, on another occasion, of having kissed that employee on the lips.

13. Regarding the two sexual interference convictions, Justice Morneau concluded (page 28, lines 26-30, Exhibit 1): “The defendant (Mr. Massoudi) was in a position of trust. C.C. was 17-years-old at the time. C.C. had no sexual or romantic interest whatsoever in the defendant. C.C. quit her job shortly after the last incident.”

14. On January 29, 2010 Mr. Massoudi was sentenced as follows (Exhibit 2):

a. on the common assault – a suspended sentence and probation for 12 months;

b. on the first count of sexual interference – 14 days in custody (to be served intermittently), followed by probation; and,

c. on the second count of sexual interference – 14 days, concurrent, followed by the same probation order (as in b., above).

50. The probation order included a requirement that Mr. Massoudi have no contact, directly or indirectly, with the complainants, except through counsel (Exhibit 2).

51. Mr. Massoudi was also directed to comply with a 10-year sexual offender registry order, a DNA identification order, and a 5-year weapons prohibition order (Exhibit 2).

52. At his trial, Mr. Massoudi denied criminal responsibility for these convictions (page 23, lines 4-8 and page 28, lines 21-23 of Exhibit 1; page 5, lines 17-20 of Exhibit 2).

53. Again, in his letter to the AGCO (Exhibit 4) that was time stamped as received by the AGCO on January 16, 2010, Mr. Massoudi states: “I did not mention (my criminal convictions) because I am not guilty of the charges that were laid.”

54. He maintained the same position at the Board’s hearing.

55. Furthermore, in the Personal History Report (PHR) (paragraph 10a, Exhibit 3), dated December 1, 2009, he (falsely) indicated that he has never been convicted of any offences including absolute and conditional discharges. Mr. Massoudi acknowledges submitting this PHR to the AGCO in support of his application to renew the Licence. The AGCO received it on December 3, 2009.

56. Mr. Massoudi also admitted to making the false statement in the PHR despite his lawyer’s advice to the contrary.

57. Further, at the hearing Mr. Massoudi did not raise any English language issues in understanding and completing the PHR generally, or question 10(a) specifically. In addition, he did not raise concerns about language comprehension and expression vis-à-vis the hearing itself, which was conducted entirely in English, nor did he appear to the Board to have any problems in that regard.

58. The Board concludes that Mr. Massoudi did not have any language comprehension and/or expression problems that affected his ability to accurately complete the PHR.

59. Mr. Massoudi completed the PHR after he had been convicted of three criminal charges, but before he had been sentenced.

60. The PHR clearly allowed for Mr. Massoudi to identify his convictions as well as the fact that he was yet to be sentenced for them. However, Mr. Massoudi failed to provide this truthful information.

61. At the hearing, Mr. Massoudi’s excuse for providing this false answer was that he intended to appeal his convictions. However, he did not disclose this intention on the PHR either.

62. He told the Board that he has not appealed his convictions because he could not afford the legal fees involved. The Board does not accept this as a reason for him to mislead the AGCO in his licence renewal application on such a critical matter as whether or not he had ever been convicted.

63. Alternatively, he testified that he thought he could apply for a discharge. Once more, he did not state this intention on the PHR. Again, the Board does not accept this as a justification for misleading the AGCO in his licence renewal application.

64. The PHR states in bold lettering: “Failure to disclose any convictions or charges may result in refusal of the application” (emphasis added).

65. These words of warning in the PHR accord with the provisions of clause 6(2)(e) of the LLA.

66. This caution to an applicant in the PHR speaks to a very important point. Specifically, the “failure to disclose”, rather than the fact that an applicant has a history of criminal convictions per se, is what could disentitle an applicant to a licence, or to a licence renewal, as the case may be. That an applicant has a criminal record is one of many relevant factors the AGCO takes into consideration in deciding whether or not to grant or to renew a licence.

67. In this case, therefore, the evidence is unequivocal: Mr. Massoudi deliberately lied in his PHR about having no criminal convictions when, in fact, at the time he completed that report he had three. As such and for all of the above reasons, the Board makes a finding against Mr. Massoudi under clause 6(2)(e) of the LLA.

68. As well, the Board must assess whether it can be reasonably satisfied that Mr. Massoudi will carry on its business in accordance with the law and with integrity and honesty further to clause 6(2)(d) of the LLA. His past conduct is at issue and reviewable in this case.

69. First, that an applicant, such as Mr. Massoudi, would lie about such an important matter as his criminal record goes to the root of his integrity and honesty.

70. What’s more, as noted in paragraphs 28, 30, 52 and 53 above, Mr. Massoudi steadfastly refuses to accept any personal responsibility for his offences. In the Board’s view, this raises a real and serious apprehension and possibility that there could be a repeat of behaviours such as resulted in Mr. Massoudi’s three convictions. In the Board’s view, this real possibility relates directly to clause 6(2)(d) matters of “integrity” as well as this applicant’s ability (or not) to “carry on (his) business in accordance with the law”.

71. Of importance to the Board’s decision, nothing at the hearing gave the Board any consolation that Mr. Massoudi’s untoward behaviour towards young staff members could occur again.

72. First, Mr. Massoudi did not demonstrate to the Board, clearly and strongly, that he has developed any insight into, or a genuine understanding of the seriousness of the charges that lead to the three convictions against him. Additionally, there is no evidence that Mr. Massoudi has taken reasonable steps to ensure such behaviour is not repeated.

73. Importantly, there was no indication that he has implemented workplace policies or procedures to ensure that all of his staff persons remain safe in their working environment from the sorts of behaviours that led to Mr. Massoudi’s convictions.

74. Further, Mr. Massoudi did not have his probation officer testify, or alternatively, provide a report from him/her, so that the Board could review and take that evidence into consideration.

75. As well, nothing demonstrated that he has taken any programs, or undergone counseling, to learn about what constitutes appropriate workplace behaviour, harassment, and so on.

76. Evidence of this nature might have shown the Board that Mr. Massoudi genuinely appreciates that his offending behaviour runs counter to his responsibilities as a licensee, and that he has taken bona fide steps to address it.

77. The Board has additional, significant “integrity” concerns. First, the crimes involved vulnerable, youthful staff. Also very significant, Mr. Massoudi stood in a position of trust over those very employees.

78. Another key factor is that the establishment is small and, on the evidence before the Board, there is little supervision of staff and few controls over the work place environment, except by Mr. Massoudi himself.

79. These issues raise serious public safety as well as integrity concerns. Mr. Massoudi’s responsibility to act in accordance with the law and with honesty and integrity includes his staff members as well as members of the public more generally.

80. Again of consequence to the Board’s decision, the Board was also not provided with any evidence that might quell its public safety concerns. First, as has been more particularly addressed in paragraph 70 above, Mr. Massoudi lacks remorse and steadfastly fails to accept responsibility for his actions.

81. Both Mr. Massoudi and his two former staff witnesses say, in essence, that he is a good person. That is likely true, generally speaking. But it does not lessen the problematic fact that, according to the criminal laws, he did not demonstrate that persona to two of his former employees.

82. The Board has also considered that, but for these three convictions, Mr. Massoudi has no prior criminal record (Exhibit 2). The Board concludes that this is not, and should not be a mitigating factor in this case. The three convictions all relate to significant breaches of the law and serious lapses in behaviour (or in Mr. Massoudi’s integrity) towards his staff.

83. For all of these reasons, the Board also makes a finding under clause 6(2)(d) of the LLA that, based on Mr. Massoudi’s past conduct, it has reasonable grounds to believe that he will not operate the establishment in accordance with the law and with honesty and integrity.

84. As such, Mr. Massoudi’s application to renew the Licence should be refused, and the Board orders accordingly.

Order

80. For the reasons above, the Board REFUSES the application to renew a liquor sales licence made by 1057488 Ontario Inc., operating as the TUMBLEWEEDS FAMILY RESTAURANT, 107 Main Street West, Shelburne, Ontario L0N 1S0.

DATED AT TORONTO, THIS 6th day of December , 2010.

S. GRACE KERR, BOARD MEMBER BRUCE S. MILLER, BOARD MEMBER