Registrar, Alcohol and Gaming Commission of Ontario v. 2149459 Ontario Inc. operating as Lot 332, 2010 CanLII 9835

ALCOHOL AND GAMING COMMISSION OF ONTARIO

IN THE MATTER OF The: ALCOHOL AND GAMING REGULATION AND PUBLIC PROTECTION ACT S.O. 1996, C.26, S.14.1, SCH

B E T W E E N:

Registrar, Alcohol and Gaming Commission of Ontario Registrar

-and-

2149459 Ontario Inc. operating as Lot 332 Licensee

DECISION on motion

Panel: S. Grace Kerr, Board Member Decision Date: January 14, 2010 Hearing Location: Toronto, Ontario

Alcohol and Gaming Commission of Ontario 90 Sheppard Avenue East, Suite 300 Toronto, Ontario M2N 0A4 Phone: (416) 326-0366 Fax: (416) 326-5566 Toll Free In Ontario: 1-800-522-2876 Website: www.agco.on.ca

Appearances

Registrar, Alcohol and Gaming Commission ) Joyce Taylor, Representative Lot 332, Licensee ) Adam Vassos, Representative

Authorities

1. Legislation:

Charter of Rights and Freedoms, Part I of the Constitution Act, 1982, being Schedule B to the Canada Act 1982 (U.K.), 1982, c.11

Liquor Licence Act, R.S.O. 1990, c.L.19

Provincial Offences Act, R.S.O. 1990, c.P.33

2. Cases:

Blencoe v. British Columbia (Human Rights Commission), 2000 SCC 44, 2000 SCJ 43 (SCC)

Gordon Capital v. OSC (1991), 1 Admin. L.R. (2d) 199

Shooters 222 Restaurant Ltd. v. Ontario (Alcohol and Gaming Commission), [2004] O.J. No. 5595 (Ont. Div. Ct.)

R. v. Heywood, 1994 CanLII 34 (SCC), [1994] 3 S.C.R. 761

R. v. Wigglesworth, 1987 CanLII 41 (SCC), [1987] 2 S.C.R. 541

Siemens v. Manitoba (Attorney General), 2003 SCC 3, [2003] 1 S.C.R. 6

Background

1A Pre-hearing Conference (PHC) was held in Toronto, on December 3, 2009 pursuant to Notice of Proposal (NOP) number 17524 dated September 16, 2009 to suspend liquor licence number 810901 issued to 2149459 Ontario Inc. (the Licensee), operating as LOT 332, 332 Richmond Street West, Toronto, Ontario, M5V 1X2 for allegations of a violation of section 43 and subsection 45(1) of Ontario Regulation 719/90 made pursuant to the Liquor Licence Act (the "LLA").

2At the PHC, the Registrar sought the "standard" disclosure order pursuant to the Alcohol and Gaming Commission of Ontario's (AGCO) Revised Rules of Practice (the "Rules"); the Licensee opposed this request. The Board member presiding heard argument from both representatives on this oral motion, and reserved its decision until this date.

Decision

3After considering all the submissions in respect of this oral motion, and for the reasons elaborated below, the Board DISMISSES the Licensee's motion and ORDERS as follows:

a. The Licensee, through its Representative, shall disclose to the Registrar's Representative pursuant to Rule 10 of AGCO Revised Rules of Practice and specifically pursuant to Rule 10.3, a list of its witnesses and a detailed summary of each witness' evidence, as well as disclosure pursuant to Rule 10.2, such disclosure to be made ten (10) days before the hearing date; and,

b. The Registrar's Representative will complete any further disclosure, also pursuant to Rule 10, ten (10) days before the hearing.

Licensee's Submissions

4The Licensee argues that the Board should not make an order for disclosure further to Rules 10 and 14.1(c) of the Rules for several reasons as follow:

a. The Registrar's case is not so complicated as to require "will say" statements from the Licensee's witnesses;

b. This matter is unlikely to settle therefore a disclosure order would not advance that potential benefit of a disclosure order;

c. The proceedings before the Board are quasi-criminal in nature, yet, there are no disclosure requirements in criminal proceedings or under the Provincial Offences Act (POA). Thus, forcing the Licensee to make disclosure constitutes a denial of natural justice;

d. Counsel for the Registrar are experts in getting evidence from witnesses for Licensees and in presenting the Registrar's evidence before Board panels;

e. To make such an order would breach the provisions of section 7 of the Canadian Charter of Rights and Freedoms (Part I of the Constitution Act, 1982, being Schedule B to the Canada Act 1982 (U.K.), 1982, c.11.) (the "Charter") which provide for a right to remain silent. Further, the ramifications of breaching this silence are serious and could spell the "death" of the Licensee's business; and,

f. The (administrative) costs associated with making disclosure are high (e.g. Licensee's counsel will have to meet with witnesses).

Registrar's Submissions

5In response, counsel for the Registrar argues that disclosure orders are properly made for reasons as follow:

a. The proceedings are not quasi-criminal in nature; rather, they are civil proceedings in which an administrative Board determines a Licensee's fitness to have a liquor licence. As such, such proceedings do not attract Charter protections (see R. v. Wigglesworth);

b. Section 7 of the Charter does not apply to economic rights (see Siemens v. Manitoba (Attorney General);

c. Board disclosure orders do not breach the rules of natural justice. The Divisional Court has upheld the Board's right to develop and implement rules governing procedure before it; and,

d. In civil cases, mutual disclosure is routinely required so that each side can fairly assess their own and the other's case in advance of the hearing: this promotes the possibility of settlement. Thus, there always can be a possibility of settlement but it may not be known until the disclosure has been completed.

Licensee's Reply

6In reply, counsel for the Licensee urged as follows:

a. The Registrar is held to a low burden of proof in these proceedings and also has the power and resources to make its case, therefore to require disclosure by Licensees puts them in a difficult position and prejudices them: this constitutes a denial of natural justice; and,

b. Often, proceedings against a Licensee before the Board lead to proceedings against them at the provincial court level where the Licensee is dealt with by a judge.

Analysis and Reasons, and Findings

7The Board has carefully considered all the submissions made.

8In essence, the Licensee's motion asks the Board to rule on the validity of its ability to make an order at a Pre-Hearing Conference pursuant to Rules 10 and 14.1(c) of the Rules.

Background

9The Board of the AGCO is empowered by the Alcohol and Gaming Regulation and Public Protection Act, 1996 to hear and decide matters under the Liquor Licence Act, amongst other legislation.

10Section 25.1 of the Statutory Powers Procedure Act ("SPPA") empowers the Board to make rules to govern its proceedings.

11The Board's most recent Rules, the AGCO Revised Rules of Practice (2008), came into force on October 31, 2008.

12Rules 1.1 and 1.2 provide that the Rules "apply to all proceedings" and shall be "liberally construed to secure a just, expeditious and cost-effective determination of every proceeding on its merits in accordance with fairness and natural justice".

13Rules 10.2, 10.3 and 14.1(c) read as follows:

"10.2 Unless the Board orders otherwise, at least 10 days before the pre-hearing conference, if any, or at least 10 days before the first day of the hearing, all parties shall:

(a) deliver a copy of every document the party will refer to in evidence at the hearing to all parties;

(b) disclose the existence of and make available for inspection all things, other than documents, the party will refer to in evidence at the hearing; and,

(c) deliver a list of witnesses whom the party intends to produce at the hearing."

"10.3 At a pre-hearing conference or any other stage in the proceeding, the Board may order:

(a) the oral or written examination of a party or person;

(b) the disclosure and delivery of further information or documents the Board considers necessary for a full and satisfactory understanding of the issues in the proceeding on any conditions the Board considers appropriate;

(c) the exchange of summaries of witness(es)' proposed evidence; and/or,

(d)any other action the Board considers just or appropriate in the circumstances."

"14.1 The Board, on its own initiative or in response to a party's written request, may direct the parties to participate in a pre-hearing conference to decide:

(c) disclosure and the exchange of documents, summaries of witness(es)'s proposed evidence, expert reports; oral or written examination of a witness or party;"

14Orders made pursuant to Rules 10.3 and 14.1(c) typically are referred to as "disclosure orders".

15As administrative tribunals, the exercise of public power by the Board of the AGCO is subject to judicial review; its decisions may either be upheld or set aside (quashed).

16The Licensee's main objections were to providing its witnesses' "will say" statements specifically and to the benefits of disclosure as a means of achieving settlement in this case more generally.

17The arguments for the Board to consider have been sub-divided into three sub-categories: Charter arguments, natural justice, and additional expense arguments.

Charter Arguments

18First, the Licensee argues that it has a right to remain silent and that a disclosure order would violate that right which is protected by sections 7 (and 11(c)) of the Charter.

19The Supreme Court of Canada in R. v. Heywood established that the right to silence is a principle of "fundamental justice", protected under section 7 and section 11(c) of the Charter. This right is protected however in criminal or penal proceedings only.

20There is a clear distinction between criminal/quasi-criminal offences and regulatory offences involving those licensed to carry on business (Shooters 222 Restaurant Ltd. v. Ontario (Alcohol and Gaming Commission (Div. Ct)), agreed with the reasoning in Gordon Capital v. OSC, which considered R. v. Wigglesworth).

21Further, in Siemens v. Manitoba (Attorney General), Justice Major, writing the unanimous decision of the Supreme Court of Canada (SCC or the Court), stated at paragraph 25,

"However, even if the [Gaming Control Local Option (VLT) Act ("VLT Act")] did create a provincial offence or impose a fine, that would not necessarily make it an attempt to legislate criminal law. Section 92(15) of the Constitution Act, 1867 allows the provincial legislatures to impose fines or other punishments as a means of enforcing valid provincial law, and the provinces have enacted countless punishable offences within their legislative spheres." (emphasis added)

The SCC concluded these powers did not make Manitoba's VLT Act an attempt to legislate criminal law and that this legislation was intra vires the provincial legislature.

22In this matter, the Licensee is not charged with a criminal offence. Further, there is no evidence that the proceedings against the Licensee before the Board will lead to proceedings against them at the provincial court level, as suggested by the Licensee. The NOP alleges that the Licensee has breached provisions of the LLA and its Regulations, which, if findings are made at the hearing, could subject the Licensee to a period of time during which its licence may be suspended. This legislation is intended to "maintain standards of conduct and regulate conduct" (Cunningham, J., in Shooters 222 Restaurant Ltd., at p. 1) for those who have applied for and then been granted liquor licences, such as the Licensee. Similar to the Siemens decision, these factors do not make this case criminal in nature; rather, the Board finds that the matter before it is a civil regulatory matter.

23As a result, the Licensee does not have a Charter-protected right to remain silent. The Board therefore rejects the Licensee's argument in this regard.

24Further, the Licensee argues that without the protection of the right to remain silent, that is, if it is required to make disclosure to the Registrar, it will suffer catastrophic economic consequences to its business.

25The Board has already found that the right to remain silent does not apply to disclosure orders made further to its Rules. It further relies upon the SCC's decision in the Siemens case to find that section 7 of the Charter does not apply to the Licensee's alleged economic rights, as argued. At paragraph 45 of that decision, the SCC holds that "(t)he right to life, liberty and security of the person encompasses fundamental life choices, not pure economic interests" (emphasis added).

26The Board recognizes that if the Registrar proves the allegations, an order suspending the Licensee's ability to sell alcohol under the terms of its licence will have an economic impact upon it. However, the SCC is clear that section 7 of the Charter does not protect such interests. By the same token, section 7 cannot be used as a shield to prevent the Licensee from providing disclosure in relation to the hearing that could impact those interests.

27Accordingly, the Board finds that the Licensee's argument in this regard also must fail.

Natural Justice Arguments

28The Licensee makes several arguments of a "natural justice" nature: the Registrar's case is not so complicated as to require "will say" statements from the Licensee's witnesses; the matter is unlikely to settle thus making disclosure unnecessary; the proceedings before the Board are quasi-criminal in nature, and there are no disclosure requirements in criminal proceedings or under the POA; and since the Registrar is held to a "low" burden of proof in these proceedings and also has the power and resources to make its case, to require disclosure by the Licensee puts it in a difficult position and prejudices it.

29The main case that addresses natural justice issues in administrative proceedings is Blencoe v. British Columbia (Human Rights Commission). The principles enunciated in this case guide administrative tribunals such as this Board. While at issue before the Court in Blencoe were concerns of "delay" and "abuse of process", the natural justice principles described by the Court have broad application.

30Generally speaking, the SCC in Blencoe found that:

• Natural justice remedies are justified if the administrative behaviour complained of is both "inordinate" and so "oppressive" as to taint the proceeding: in other words, natural justice remedies should be granted rarely and only in the clearest of cases;
• Principles of natural justice may be breached if the harm in proceeding exceeds the harm to the public interest in not proceeding or, if proceeding would be so unfair that it is contrary to the interests of justice; and,
• There must be proof of "significant prejudice" before a stay will be considered.

31Before applying the general principles enunciated in the Blencoe decision to this case, the Board must also briefly consider the purposes of "disclosure" in proceedings such as this, and in particular, the requirement under the Rules for the Licensee to provide "will say" statements to the Registrar. The early exchange of witness summaries, combined with early alternative dispute resolution (such as the AGCO's Letter of Incident process) and case management (such as the Board's Pre-Hearing Conferences) should help the parties to focus quickly and efficiently on key issues. In turn, this should help the parties to achieve the desirable goal of early and effective settlement. This also avoids (or lessens) the additional costs as well as the delay of having the matter proceed to a hearing.

32In this case, the Registrar has already provided a disclosure package to the Licensee. The Licensee, however, has not provided its disclosure (i.e. "will say" statements) to the Registrar, which is the main disclosure it is seeking from the Licensee at this time. The matters at issue is alleged "overcapacity" of the licensed premises and whether the Licensee "permitted drunkenness" to occur on its premises on a particular night in question.

33Applying the Blencoe general principles and the purpose of disclosure generally, as well as "will say" disclosure in particular, to this case, the Board finds that even if the Registrar's case is straightforward, as the Licensee alleges, the interests of administrative justice require that the Registrar, like the Licensee, is entitled to prepare for the hearing. As well, providing such disclosure could promote settlement by pointing out potential weaknesses in the Registrar's case.

34What's more, it is fair to expect that the requirement to provide "will say" statements will only act to bring forward in time such information which lies at the basis of the Licensee's case. Much of the required information will (or should) already be well in hand at least 10 days before the scheduled hearing. In advance of the hearing, the Licensee will (or should) have interviewed its own witnesses to assess the quality of the defence it can (or will) raise. The disclosure contemplated by the Rules is not accordingly expected to be disruptive or costly. Thus, the Board finds that it is neither "inordinate" nor "oppressive" (using the ordinary meaning of those words) to require the Licensee in this case to provide "will say" statements for the witnesses it intends to produce at the hearing.

35Further, the Board finds that the public interest in this case balance favours disclosure. The purpose of the LLA is to regulate the sale, service, and consumption of beverage alcohol to promote moderation and responsible use. The public interest includes the enforcement of the provisions of the LLA and related Regulations; Licensees have a responsibility to abide by their governing legislation. Thus, it is not contrary to the interests of justice and is, in fact, in the public's interest to require disclosure in a context such as this case.

36Also, the Board finds that disclosure requirements are not unduly prejudicial to the Licensee. As noted above, these proceedings are not quasi-criminal. The Registrar will be held to the civil burden of proof, that is, it will need to prove the case against the Licensee 'on the balance of probabilities'. Disclosure requirements under the Board's Rules are reciprocal. Specifically, the requirement to disclose the identity of the witnesses upon whom a party intends to rely at the hearing, together with a summary of the substance of that witness' evidence, is not a substantial departure from existing practice in other civil regulatory forums. In addition, even if this case is unlikely to settle, as the Licensee alleges, the provision of "will say" statements could actually make settlement more likely. In other words, the benefits of such disclosure could be considerable.

37For all of these reasons, the Licensee's arguments that natural justice will be breached if it is required to provide disclosure, and "will say" statements in particular, are not accepted.

Additional Expense Argument

38As noted in paragraph 34 above, the Board believes that an order requiring the Licensee to provide disclosure, including "will say" statements is not likely to be costly. Further, if there is additional cost, it is not expected to be significant in terms of the overall cost to the Licensee of defending these proceedings. In any event, such costs would fall within the gambit of usual or normal preparation expenses for the hearing.

39Accordingly, the Board does not find any merit in this argument by the Licensee.

Conclusions and Order

40For all of the foregoing reasons, the Board finds that the disclosure order sought by the Registrar accords with, and furthers the over-riding requirement under the Board's Rules for it to effect a just, expeditious and cost-effective determination of every proceeding on its merits in accordance with fairness and natural justice. As such, the Licensee's motion is DISMISSED.

41Further, the Board finds that the provisions of Rules 10 and 14.1 (c) allow it to make the disclosure order as sought by the Registrar. Accordingly, the Board makes an ORDER as set out in sub-paragraphs 3a. and 3b. above.