Registrar, Alcohol and Gaming Commission of Ontario v. Antonio Francis Passero O/A Penalty Box Restaurant, 2010 CanLII 9874

ALCOHOL AND GAMING COMMISSION OF ONTARIO

IN THE MATTER OF The: Liquor Licence Act, R.S.O. 1990, c. L.19, as amended

BETWEEN:

Registrar, Alcohol and Gaming Commission of Ontario (Registrar)

-and-

Antonio Francis Passero O/A Penalty Box Restaurant (Licensee)

DECISION ON FINDINGS

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

Decision Date: February 2, 2010 Hearing Location: St. Catharines, 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 Antonio Francis Passero, Licensee: On his own behalf

Authorities

Big Ed's Tap and Grill (Re), [2007] O.A.G.C.D. No. 144 Golden Bell, Ontario Court of Justice (Divisional Court), Motion, March 13, 1992 (Unreported); LLBO Decision dated March 3, 1992 (Unreported) Papa's Pizzeria (Re), [2007] O.A.G.C.D. No. 283 1213963 Ontario Ltd. (c.o.b. Sin City Bar and Eatery) v. Ontario (Alcohol and Gaming Commission), [2009] O.J. No. 1553

Allegations

1A hearing into Notice of Proposal (“NOP”) number 16981 dated January 27, 2009, to revoke liquor licence number 25589 (the “licence”), issued to Antonio Francis Passero (the “Licensee”), operating as PENALTY BOX RESTAURANT, 225 Gilmore Road, Fort Erie, Ontario, L2A 2M2 (the “premises” or “establishment”) with respect to section 6 of the Liquor Licence Act (the “LLA”) and subsection 45(2) of Ontario Regulation 719/90 (the “O.Reg”) made pursuant to the LLA, was held on September 16, 2009 in the City of St. Catharines.

Decision

2After considering all the evidence and submissions the Board FINDS the Licensee violated section 6(2)(d) of the LLA and subsection 45(2) of the O.Reg. Reasons follow.

Preliminary Matters

3Mr. Antonio (Tony) Passero, the Licensee, asked for an adjournment so that he could get a lawyer. Registrar’s representative opposed the request because the previous adjournment was granted for the same reason and the present date was peremptory on the Licensee.

4The Board noted that Mr. Passero had asked for an adjournment on April 14, 2009 which was denied. He was directed to make his request at the hearing two days later. On April 16, 2009, the Board granted an adjournment to allow Mr. Passero to get a lawyer and made the next date peremptory for the Licensee.

5The Board pointed out that it is now September 16, 2009 and again Mr. Passero has no counsel which indicates that he is not trying hard enough.

6Mr. Passero explained that the cost of a lawyer is high and he is trying to get the best deal possible.

7The Board denied the request to adjourn the matter indicating that it does not take nine months to find a lawyer or other representative. Also the last adjournment was peremptory for the Licensee. As a result, the hearing was to proceed.

8However, the Board asked Mr. Passero to contact a lawyer or other representative and if that person could be present in 30 to 60 minutes, the Board was prepared to wait.

9Mr. Passero refused the offer and indicated he would proceed with the hearing.

10The Board excluded witness on the agreement of parties.

Evidence for the Registrar

11Detective Sergeant (“Det. Sgt.”) Stephen Tchang, of the Niagara Region Police Service (“NRPS”), was in the Crime Investigation Branch in Fort Erie in 2004. Det. Sgt. Tsang’s typed statement and two synopses were made Exhibit 2.

12The CPIC record (Exhibit 1) for G.P., the brother of the Licensee, shows the following convictions:

• 1983 - traffick in a narcotic
• 1989 - bookmaking
• 1996 - fraud
• 1997 - traffic in a narcotic
• 2004 - possession of a narcotic
• 2006 - possession of a narcotic
• 2007 - possession of property obtained from crime.

13In 2004, Det. Sgt. Tchang investigated alleged drug dealing, specifically cocaine, involving G.P. and the Penalty Box Restaurant. As a result, a search warrant was executed at the Penalty Box at 8:31 p.m. on May 7, 2004. G.P. was arrested for possession of cocaine after a ½ g. of cocaine in a plastic bag was found in his pocket.

14Taped to the wall behind the mirror in the bathroom, Det. Sgt. Tchang also found two plastic bags with ½ g. of white powder believed to be cocaine and two clear plastic bags with 4 g. of similar powder. The bags were tied with a green twist tie. From his knowledge of cocaine, the appearance and the packaging led him to believe that the powder was cocaine.

15Behind a video game machine, Det. Tchang found two clear plastic bags with powder in them. One bag had 20 g. of powder and the second bag had 6 g. The bags were seized and a conviction of possession of a controlled substance was obtained against G.P. on the basis that the powder in the bags was cocaine.

16On the floor under a pool table, he also found a clear plastic bag with a green twist tie with around ½ g. white powder which he believed was cocaine. The bag was seized but because of its location it was not used in the case against G.P.

17The Licensee arrived at 9:47 p.m. He said he was the owner and that he had no knowledge of cocaine in his bar. He told the officer that G.P. was not the owner or an employee but he works there “under the table.” The officer understood that to mean that G.P. was employed by Mr. Passero but not formally.

18The Licensee stated that he works from 10:30 a.m. to 6:00 p.m. every day and that G.P. takes over every night. From reports and talking to other officers, Det. Sgt. Tchang noted that G.P. had said that he was the owner of the bar.

19Both the Licensee and G.P. were placed under arrest for possession for the purpose of trafficking. All items were seized and handed to the exhibit officer, Det. Sgt. Marco Giannico.

20In a video recorded interview, G.P. stated that he was not an owner or an employee of the Penalty Box. He works in the bar on and off. He stated that Tony just works the day shift and does not know anything about the cocaine.

21In the video recorded interview, the Licensee said G.P. had been at the Penalty Box for 15 years and was “paid under the table” and that he works most evenings.

22The charges against Mr. Passero were withdrawn and G.P. was convicted of possession of cocaine.

October 29, 2008 Incident

23Det. Sgt. Marco Giannico, Det. Sgt. James Dunn, Det. Cst. Patrick Sandel and Cst. Chris Vassalo, who were with the NRSP at 5 Division in Fort Erie, gave evidence regarding a search warrant that was executed at the Penalty Box Restaurant on October 29, 2008. Their notes were made Exhibits 3, 4, 5, and 7 consecutively.

24Det. Sgt. Marco Giannico described the inside of the premises. On entering the main door, the washrooms and the arcade area, with two to three machines, is to the left. Going straight forward, there are tables and a long service bar on the west side of the building. Beyond it is a hall to the kitchen area. Opposite the bar are two coin operated pool tables. The premises holds about 75 people.

25Det. Sgt. Giannico was the exhibits officer on May 7, 2004. About 42 grams of cocaine was found in various areas of the bar.

26On October 29, 2008, Det. Sgt. Giannico and his partner Det. Sgt. Dunn entered by the back door at 6:24 p.m. Det. Cst. Patrick Sandel and Det. Linda Hughes went in first through the front door. Inside, he observed Det. Cst. Sandel speaking with G.P. in front of the service bar. G.P. is now 61 years old. There were six to eight patrons in the bar, most standing at the service bar or at the tables near the front entrance. There was no one in the washroom area or the pool table area.

27Det. Cst. Sandel served G.P. with a copy of the search warrant and searched him for weapons. During the search as the officer approached the belt area, G.P. said that he couldn’t go there and backed away. He appeared to be nervous. He was told to sit down on a stool at the bar. He kept on standing up and sitting down and asked to go to the washroom three times. Det. Sgt. Giannico explained to him that they would have to search the bar so he would have to hold off. In his experience, people hide drugs in their underwear so officers don’t let them go to the washroom.

28Once patrons were allowed to leave, the officers started the search. Det. Sgt. Giannico instructed Det. Sgt. Dunn to stay with G.P. Det. Sgt. Giannico then searched the washrooms area where drugs were found in 2004 and the arcade area and he found no drugs.

29He then searched the two coin operated pool tables. When a ball drops into a pocket of these tables, they go to the centre of the machine to the coin operated area. The machines were covered in dust and appeared not to have been used for an extended period of time. Each table had six holes and he searched each hole. He found no drugs.

30While searching the kitchen around 6:43 p.m. he heard a commotion and raised voices in the main area of the bar. When he got there, he observed Det. Cst. Sandel placing G.P. under arrest. G.P. was repeating that the baggie was not his.

31He learned that G.P. had moved to the pool table closest to the main entrance. Either Det. Sgt. Wayne Genders or Cst. Chris Vassalo had observed G.P. remove a plastic baggie, with powder believed to be cocaine, from his waist area and drop the baggie into the pocket in the northwest corner of the pool table. The baggie contained baggies which were tied with green ties in the same fashion as the baggies found in 2004.

32Det. Sgt. Giannico informed the other officers that earlier he had searched that area and had found no drugs there.

33A large amount of cash was found on G.P. when he was first searched. Det. Cst. Sandel dealt with that.

34At 7:35 p.m., Det. Sgt. Giannico and Det. Sgt. Genders counted a total of $399.45 in the cash register. It was recorded and passed on to the key holder.

35At 9:13 p.m. the officers completed the search and left.

36There were no questions on cross-examination.

37Det. Sgt. James Dunn testified that after the patrons were cleared from the bar, he observed Det. Cst. Sandel explaining to G.P. what police were doing there and ask him to sit down so police conduct a search. G.P. was very uneasy and nervous. He was pacing back and forth. He wanted to go behind the bar to put beer bottles away but was told to sit down. He sat down but got up again and started to walk around. At one point he put his hand in a pocket of the pool table. When asked what he was doing he explained that people keep stealing his cue balls. He was asked to sit down again and he did but stood up again and walked towards the service bar, grabbed some empties and put them in cases. Det. Genders asked him to sit down again. He was not being a problem but he kept moving around and seemed uneasy.

38G.P. put both of his hands in his pouch pocket and when he moved his hands, Det. Sgt. Dunn as well Cst. Vassalo heard rustling of plastic. Cst. Vassalo asked him what he had in his pocket. G.P. was defensive, got up and went to stand beside Cst. Vassalo at the pool table closest to the front door and leaned against the table.

39Det. Sgt. Dunn observed G.P. remove his hand from his pocket and he saw the hand go into the corner pocket of the pool table and quickly come out. The hand was clenched when it came out of his pocket but was an empty open hand when it came out of the pool table pocket. Det. Sgt. Genders confronted G.P. and asked him to step away from the pool table. Det. Sgt. Genders reached into the pocket where G.P. had put his hand and brought out a plastic bag containing around 40 individually wrapped small bags. The bags contained a white powder that the officer believed to be cocaine. G.P. said that the officer didn’t find that on him and that it was not his. G.P. was placed under arrest and transported from the premises.

40The Licensee asked no questions on cross-examination.

41In response to questions by the Board, Det. Sgt. Dunn said that he believed that G.P. was the only employee present. He did not see anyone else working in the premises.

42Det. Cst. Patrick Sandel’s evidence is that a result of information received from several informants that G.P. was very actively dealing cocaine daily in the Penalty Box, he prepared a Controlled Drugs and Substances Act (“CDSA”) search warrant which was granted to search 225 Gilmore Road on October 29, 2008. The object of the warrant was to search for cocaine. The officer had previous dealings with G.P. who was the bartender during the evening hours.

43Det. Cst. Sandel entered the Penalty Box through the front door with Det. Hughes at 6:23 p.m. He observed G.P. seated in the dining room with six to eight patrons watching television. He asked to speak to G.P. personally at the service bar and G.P. agreed. He showed G.P. the search warrant and explained what they were going to do.

44He searched G.P. for officer safety purposes. He found three individual bundles of Canadian currency in the front pocket of his jeans with a total value of $3,660. When he went to check the exterior belt line for possible weapons, G.P. became extra nervous and advised the officer, “You can’t go there.” The officer advised G.P. to stay seated until the officers had done their search.

45While searching the arcade area, he observed G.P. crossing the room with his right hand inside the front of his pants. He withdrew his hand when he saw the officer looking at him. Cst. Vassalo and Det. Sgt. Dunn continued observing G.P.

46At 6:42 p.m. he was informed by Cst. Vassalo that he had heard a crinkling noise coming from the shirt area of G.P. who had been standing beside him leaning up against the pool table. Cst. Vassalo saw G.P. put his right hand into the corner pocket of the pool table. The officer moved G.P. away from the pool table. Det. Sgt. Genders checked that corner pocket and located a baggy with several small packaged baggies of cocaine. Det. Sgt. Genders showed him the baggies.

47At 6:43 p.m., Det. Cst. Sandel placed G.P. under arrest for possession for the purpose of trafficking and possession of property obtained by crime. He believed that the currency found on G.P. was derived from the sale of drugs. At 6:46 p.m. G.P. was transported to the Welland station by Cst. Vassalo.

48He had transported the drugs to 5 Division and Det. Hughes was with him. There he checked the drugs and there were 44 pre-packaged baggies weighing a total of 25.3 grams. The street value of the cocaine would be $2,500 since it typically sells for $100 per gram. That quantity was indicative of trafficking and not personal use.

49Det. Hughes then took possession of the baggies. She sent two of them to Health Canada for analysis. The two Certificates of Analysis of Health Canada, which show that the baggies contained cocaine, was made Exhibit 6.

50The Licensee asked no questions on cross-examination.

51In reply to questions by the Board, Det. Cst. Sandel stated that G.P. was the only employee working in the bar. He believed that the Licensee was contacted that night but not by him. The Licensee was not present that night but he believed his wife showed up after the search.

52Cst. Chris Vassalo’s evidence is that upon his arrival, he observed G.P. speaking with Det. Cst. Sandel near the service bar area. He was wearing a hoody sweatshirt and jeans. The officer did not know G.P.’s specific role in the bar but knew that he was an employee.

53Cst. Vassalo moved to within four feet of G.P. to observe him. G.P. was nervous and agitated. He was not saying anything. G.P. was seated at a table between the service bar and the pool tables. Cst. Vassalo was positioned at a pool table. At one point, G.P. stood up and moved to the pool table to the officer’s left. G.P. put his hand near where the white ball comes out. He and other officers told him to get away from there and he did. G.P. sat for a moment but stood up again. He was nervous and kept walking around in front of the officer.

54Cst. Vassalo heard a distinct rustling plastic bag noise. At first he could not tell where the noise was coming from because it was intermittent. G.P.’s hands were in the hoody’s front pocket or in his jeans’ pocket but he could not recall which.

55G.P. came to a position immediately beside the officer’s right side so that their arms were touching as they leaned against the pool table. The officer found that odd. He continued to detect the rustling noise and it was coming from G.P. The officer, who was taller than G.P., leaned back and saw G.P.’s right hand stuffed into the corner pocket of the pool table. The officer moved G.P. back from the table to the centre of the bar. G.P. did not resist or say anything. Det. Sgt. Genders located a baggie with suspected cocaine in that corner pocket. G.P. was placed under arrest by Det. Cst. Sandel and Cst. Vassalo transported him to the police station.

56The Licensee asked no questions on cross-examination.

57On being questioned by the Board, Cst. Vassalo stated that after the patrons were allowed to leave, he only saw G.P. and police officers in the premises but no other employees. He was only in the main part of the bar and did not enter any other part of the premises.

58Sgt. Renee Serianni of the Ontario Provincial Police is an OPP sergeant working with the Alcohol and Gaming Commission of Ontario (“AGCO”) Regional Enforcement Unit in Niagara Falls. The notes of Sgt. Serianni were made Exhibit 8.

59She interviewed the Licensee on October 30, 2008 as a result of the search warrant being executed on October 29, 2008. The Licensee came to the AGCO regional office with his wife. AGCO Inspector Art Restin was also present. The purpose of the meeting was to inform the Licensee about the police investigation and to further enquire about the involvement of G.P. in the premises. She had been told by police officers that G.P. was really the operator of the premises.

60The Licensee informed her that he was aware of the charges against G.P. and that he had found out about them the night before. The Licensee indicated that he works Monday to Saturday from 10:00 a.m. to 6:00 p.m. and that G.P. takes over after 6:00 p.m. and stays until closing time which is around 8:30 to 9:00 p.m. Due to sickness, he needed G.P.’s help. G.P. works there “under the table.” G.P. has no other means of support. He did not know what G.P.’s salary was because his brother S.P. did the books. He indicated that he was not aware that G.P. was dealing drugs.

61When asked about the 2004 charges against him and his brother, G.P., the Licensee said that he had never been charged but merely questioned by police.

62On cross-examination, the officer agreed that it was Inspector Joe Passmore and not Inspector Restin who was present. The officer did not recall the Licensee saying that his brother was a professional gambler.

Evidence for the Licensee

63The Licensee told the Board that he was not going to call any evidence. The Board explained to him that this was his chance to respond to the allegations which were very serious. The Board asked that a copy of the NOP, which the Licensee did not have with him, be provided to him. The Board gave the Licensee time to review the NOP and the particulars in it before deciding how he was going to proceed.

64The Licensee indicated that he would not give evidence himself or call any evidence.

Submissions for the Registrar

65The Registrar is asking for a revocation of the licence and findings regarding two people. Subsection 45(2) of the O. Reg. applies to G.P. as the manager and operator of the premises and to the Licensee as his boss, brother and employer. The Licensee is responsible for the conduct of G.P. Based on the Sin City test, the Licensee knew or ought to have known what was going on in the premises.

66Based on the quantity of drugs found, the Registrar is asking for a finding that the drugs were held for sale.

67The Registrar is asking for a finding under subsection 6(2)(d) of the LLA with reference to both Tony Passero as the Licensee and G.P. as the person responsible for the management and operation of the premises.

68Based on the evidence of the police officers, which the Registrar’s representative reviewed, findings can be made for both.

69Looking at October 29, 2008 alone, a finding can be made that G.P. was holding a controlled drug in the licensed premises. In light of the format of the drugs and what was found in the premises four years earlier, a finding can be made that G.P. was not only holding the drugs but was holding them for the purpose of selling them in the premises. The Licensee permitted him to do that. He knew or ought to have known about it. The Licensee is liable and responsible for the actions of an employee.

70In 2004, the same fact situation occurred with drugs in the premises. After that time, the Licensee knew G.P. was drug trafficking and was convicted of possession of drugs in the premises. It was incumbent on him not to allow G.P. back into the premises unsupervised. Instead, he continued to let G.P. do at night exactly what he had been doing in 2004. It was reckless to allow G.P. to be in the premises alone.

71The Board made similar findings in the case of Golden Bell in which it was the daughter dealing drugs. The matter went to Divisional Court and the court held the Licensee responsible.

72In Papa’s Pizzeria there is a similar fact situation. The Board was concerned about the father, who was dealing drugs, being back in the premises and working there although he had been arrested previously for selling drugs in the premises. Board found that the Licensee knew or was willfully blind to the drug activities in the premises. Once the Licensee was seized of the knowledge of the father’s activities and allowed him into the premises, she was found to be responsible by the Board.

73In the case of Big Ed’s Tap and Grill the Board made a finding of a violation of subsection 45(2) of the O.Reg as a result of the drug dealing by a son. It also found that the Licensee not only had a responsibility to know but that he ought to have known what was occurring in the premises on a daily basis. In the present case, the Licensee knew of the brother’s drug trafficking in the premises but he still allowed him to operate the premises. There was no other employee present on the night in question.

74Subsection 6(2)(d) of the LLA refers not only to the Licensee but also to the brother who was the person in a position of authority on the night in question. A finding can be made on the basis of G.P.’s conduct based on a finding of subsection 45(2) of the O.Reg. A finding can be made in regard to the Licensee because he allowed G.P. to work in the establishment and operate the establishment or be a co-owner.

Submissions for the Licensee

75The Licensee submitted that Mr. Morris’ comments about revoking their licence and having his brother working in the premises all assume that his brother was doing what he did in 2004. He has not been found guilty yet in a court of law. How can he be found guilty here without a finding of guilt or no guilt in Court? Until his brother is found guilty, the Board has no say based on what we think he did.

76The first offence in 2004 involved his brother. It is not as easy to fire a brother as a person off the street. Blood is thicker than water. Because it was his brother, he felt that he deserved another chance. His hours were cut and he was working only two and one-half hours a day.

77He did not know what was going on and does not allow drug dealing. He has coached little league for four years and no one would mention drugs and Tony Passero at the same time. It will never happen.

78After the first incident, his name was plastered on the front page of the Niagara Falls newspaper but there was no finding against him.

79He owns and runs the establishment. He is there from 10:00 a.m. to 6:00 p.m. and after 6:00 p.m. G.P. is there. G.P. is there for two and one-half hours a day and since he, Tony, is not there, G.P. has to be in control. No snitches, police officers or undercover officers or anyone ever said that he, Tony Passero, knew what was going on. His name is nowhere in this matter. No police officers talked about him, just his brother.

80With regard to the $3,600 in G.P.’s pocket, he gave a statement to Sgt. Serianni that his brother is a professional gambler. There is no proof about where the money is from.

81Regarding the second offence, reasons have to be given why the owner was not called. He was not called. The police, who knew that he had nothing to do with this, made no phone calls to him or left messages for him. That was because G.P. was the one who was involved.

82With regard to G.P. being nervous, if you have 14 police officers in the premises anyone would be nervous. He himself would be terrified.

83He told Sgt. Serianni that he paid his brother “under the table” but there is no set amount. If he didn’t answer about his salary, it was because at the end of the day they sit down and if there is any money left over, G.P. gets it. If there isn’t, he gives G.P. nothing. There is no right or wrong. That is how it is in an Italian family.

84It is a one-man operation but he can’t be there for 10 to 11 hours. He has run the business for 28 years. Now things are not going well so he opens at 11:00 a.m. and closes at 6:00 p.m.

Reply Submissions

85Mr. Passero talked about revoking “our licence” when he is ostensibly the only licence holder.

86Using the term “snitches” shows more of a negative feeling toward law enforcement than drug trafficking.

87The Board has jurisdiction to make a finding in this case.

88There is no evidence that G.P. cut down on his hours. He worked evenings in 2004 and he worked evenings during this present incident.

89If the defence is that his brother made money as a professional gambler, being a professional gambler is not a positive.

90This is not a one-man operation. There was a second man, G.P., running the place.

91We do not know if G.P. is there to help Mr. Passero or if Mr. Passero helps G.P. It makes no sense to do something wrong by paying G.P. under the table. There is no clear evidence about what G.P.’s responsibilities are under the licence.

Analysis, Reasons and Findings

92The Board reviewed the evidence and the submissions.

93There are allegations against G.P. and the Licensee under subsection 45(2) of the O. Reg. which states that:

“The licence holder shall not permit a person to hold, offer for sale, sell, distribute or consume a controlled substance defined in the Controlled Drugs and Substances Act (Canada) on the premises or in the adjacent washrooms, liquor and food preparation areas and storage areas under the exclusive control of the licence holder.”

94Based on the credible and uncontested evidence of Det. Sgt. Dunn, Cst. Vassalo and Det. Cst. Sandel, the Board accepts the evidence that G.P. put a plastic bag from his person into the corner pocket of the pool table. Det. Sgt. Dunn and Cst. Vassalo both heard the crinkling of a plastic bag and saw G.P.’s hand go into the corner pocket of the pool table. Det. Genders then found a plastic baggie in that corner pocket. That bag contained 44 baggies with white powder. Two of those baggies were tested and came back positive for cocaine (Exhibit 6). Det. Sgt. Giannico had searched the pockets of the pool table earlier after all patrons had left and found nothing in them. Therefore, the Board finds, on a balance of probabilities, that G.P. was holding cocaine while in the licensed premises.

95Based on the number of baggies of cocaine and the way they were packaged, the Board agrees with the conclusion of Det. Cst. Sandel and finds, on a balance of probabilities, that the drugs were intended for sale and not for G.P.’s personal use. Given the quantity of drugs found, the drugs were on his person while he was in the premises, and the large amount of money found in G.P.’s pocket while in the premises, the Board finds, on a balance of probabilities, that G. P. was selling cocaine in the premises.

96The Licensee had given an explanation to Sgt. Serriani that his brother was a professional gambler to explain the large amount of cash found on him. However, no evidence was called to support that. Even if the Board were to believe that G.P. was a professional gambler, the fact that G.P. had the large amount of drugs and money on his person while in the premises still leads the Board to conclude that he was holding and selling cocaine in the premises.

97The next issue is whether the Licensee permitted the drug activities of G.P. in the premises. The Licensee admitted that he knew about G.P.’s conviction for possession of cocaine while he was working in the premises in 2004. Despite that knowledge, he permitted his brother to continue to work in and be in charge of the premises in the evenings.

98He submitted that it was not as easy to fire a brother as it was a stranger. Also because it was his brother, he gave him a second chance. For a brother that is admirable but as a Licensee, he has responsibilities under the LLA and its regulations which must take precedence over family considerations.

99The Board does not accept as a defence the Licensee’s submission that G.P. worked only for two and one-half hours each day. The length of time that G.P. worked is irrelevant. The Licensee, who knew about the 2004 incident, should have been very cautious about allowing him to be in the premises at all, much less alone and in charge of the premises every evening.

100The Licensee further argued that this matter of the drugs has nothing to do with him. It is G.P. who is involved. G.P. may have been the only person involved. However, a Licensee is responsible for what happens in his licensed premises and for the conduct of his employees. Given that the Licensee allowed G.P. to be in charge of the premises despite his knowledge of G.P.’s past history, he is accountable for what G.P. was doing. In the Board’s decisions in Papa’s Pizzeria and Big Ed’s Tap and Grill, the Board held the Licensee responsible for allowing a family member to work in the premises despite knowledge of their previous drug related activity.

101In the present case, the Licensee either knew or ought to have known G.P. was holding and selling drugs in the premises. He cannot be simply wilfully blind and abdicate his responsibilities, regardless whether it was a family member.

102Therefore, the Board finds that the Licensee permitted the activity of G.P. in the premises.

103Therefore, the Board makes a finding of a violation of subsection 45(2) of the O.Reg on October 29, 2009.

104The Registrar also asked for a finding regarding past conduct under subsection 6(2)(d) of the LLA for both the Licensee and G.P.

105This subsection applies to Tony Passero as the Licensee. It also applies to G.P. as he is a person who has responsibility for the management or operation of the business. As G.P. worked alone in the evenings, he clearly had the responsibility for the management and operation of the business.

106A finding under subsection 6(2)(d) of the LLA can be made for G.P. based on the Board’s finding under subsection 45(2) of the O. Reg.

Furthermore, G.P. was convicted for possessing drugs in the premises in 2004. He also has past convictions for trafficking in a narcotic, bookmaking, fraud and possession of a narcotic. Although some of those convictions are more than 10 years old and may merit little weight in and of themselves, the convictions show a long standing and on-going pattern of drug-related behaviour that is unacceptable for a person in charge of a licensed premises.

107Therefore, the Board makes a finding under subsection 6(2)(d) of the LLA, that the past or present conduct of G.P. affords reasonable grounds for belief that he will not carry on business in accordance with the law and with integrity and honesty.

108Based on the finding under subsection 45(2) of the O. Reg., a finding can be made regarding the past or present conduct of the Licensee.

109Instead of taking responsibility for what happened in the premises, the Licensee attempted to distance himself from drug activity in the past and the present incident. In his interview with Sgt. Serriani after the latest incident, the Licensee told the officer that when drugs were found in the premises in 2004, he had never been charged, just questioned by police. That is contrary to the straightforward and credible evidence of Det. Sgt. Tchang, whose evidence is more detailed, impartial and reliable, who stated that charges against the Licensee were withdrawn. If charges were withdrawn, there had to have been charges in the first place.

110The Licensee further argued at the hearing that this present matter with the drugs has nothing to do with him. It has to do with his brother. In arguing that it was his brother who was responsible, the Licensee is abdicating any responsibility for the actions of the brother, whom he allowed to be in charge of the premises for which he holds a liquor licence, and is therefore abdicating his responsibility as a Licensee.

111Another argument was that G.P. worked only for two and one-half hours each day. The length of time G.P. worked in the premises is immaterial. The Licensee is responsible for the premises at all times.

112Also of concern to the Board is the matter of who is the actual owner andoperator of this business. Mr. Tony Passero is the Licensee of record. He indicated that he is the owner. In his interview with Det. Sgt. Tchang in 2004, he stated that G.P. had been at the Penalty Box for 15 years, was “paid under the table” and worked most evenings. There is no explanation regarding why the Licensee would pay a person who had been working at the establishment for 15 years, “under the table” rather than in the normal manner of paying an employee.

113In his submissions, the Licensee stated that “at the end of the day, they sit down and if there is any money left over, G.P. gets it. If there isn’t, he gives G.P. nothing.” On the face of it and to a reasonable person, “any money left over” in relation to a business is the profit after all expenses are paid. If the profit is paid to G.P., that would make him an owner or a partner in the business since it makes no business sense to give profits to an employee.

114G.P.’s statement to Det. Sgt. Tchang that “Tony, he does not know anything, he just works the dayshift” makes Tony appear to be merely an employee and/or not the sole owner/Licensee. At the very least, Tony appears to not have control of the premises.

115Sgt. Serianni interviewed the Licensee after the latest incident to further investigate the involvement of G.P. in the premises. Sgt. Serianni had information from the police that G.P. was really the operator of the premises. The Licensee indicated to Sgt. Serianni that he worked at the premises Monday to Saturday until 6:00 p.m. and G.P. took over after 6:00 p.m. and stayed until closing between 8:30 to 9:00 p.m. Given the previous statement to Det. Sgt. Tchang that G.P. had been at the Penalty Box for 15 years, the Board does not find credible the Licensee’s explanation to Sgt. Serianni that he needed G.P.’s help because of sickness. That statement also contradicts the Licensee’s submission that because G.P. was his brother, he had given G.P. another chance after the 2004 incident.

116The revelation that the Licensee paid G.P. “under the table” does not cast him, as a Licensee, in a positive light with regard to the financial management of the business. The explanation of, “There is no right and wrong. That is how it is in Italian families” is not acceptable, particularly given the conviction of G.P. and the ambiguity of who is the owner of the business.

117The Licensee explained that he did not know the salary of G.P. because his other brother did the books. However his explanation of how payment is made to G.P. contradicts that since he, not the other brother, gives or doesn’t give G.P. the money left over. Even if another person was doing the books, a reasonable employer would know the salary of an employee.

118The contradictions in the Licensee’s evidence and submissions to that of the police officers, which is more detailed, impartial and credible, put in question the Licensee’s credibility. Those contradictions and the financial arrangement between the brothers lead the Board to conclude that G.P.’s involvement in the business far exceeds that of a normal employee, which results in the Licensee’s loss of control of the establishment.

119Furthermore, the Board rejects the Licensee’s submission that the Board has no say, based on what we think his brother did, because his brother has not been found guilty yet in a Court of Law. The Board is an administrative tribunal that has jurisdiction to make findings under the LLA based on the evidence before it. Although the subject scenario may be similar before both the Board and the Court, they are separate processes.

120Therefore, the Board makes a finding under subsection 6(2)(d) of the LLA, that the past or present conduct of the Licensee affords reasonable ground for belief that the Licensee will not carry on business in accordance with the law and with integrity and honesty.

121The Board invites written submissions on penalty from the respective parties. The Registrar’s representative shall serve and file written submissions within seven (7) days of the date of this decision. The Licensee’s representative shall have seven (7) days to serve and file a written response. Registrar’s Representative may serve and file any reply within three (3) days of receipt of the Licensee’s response. All submissions are to be filed with the Manager, Hearings Department, Alcohol and Gaming Commission at the address on the front page of this decision in accordance with the Board’s Rules of Practice.

DATED AT TORONTO THIS 2nd DAY OF February, 2010