Registrar, Alcohol and Gaming Commission Ontario v. Mac’s North End Pub Inc., 2011 CanLII 64087

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 Ontario Registrar

-and-

Mac’s North End Pub Inc. o/a Mac’s North End Pub Licensee

DECISION ON SANCTION

Panel: S. Grace Kerr, Board Member; Patricia McQuaid, Vice-Chair Decision Date: August 25, 2011 Hearing Location: Hamilton, Ontario

Alcohol and Gaming Commission of Ontario 90 Sheppard Avenue East, Suite 300 Toronto ON 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: Aviva Harari, Representative Mac’s North End Pub Inc., Licensee: A. Douglas Burns, Representative

Allegations

1A hearing into Notice of Proposal number 18331 dated October 6, 2010 to revoke liquor licence number 91325 (the “Licence”) issued to Mac’s North End Pub Inc. (the “Licensee”), operating as MAC’S NORTH END PUB (“the establishment” or “the premises”), 468 James Street North, Hamilton, Ontario, L8L 1J1, on the basis of alleged violations of section 6 of the Liquor Licence Act (the “LLA”) was held on March 31, 2011 in Hamilton, Ontario.

Decision

2The Board found the Licensee breached subsection 6(2)(a) of the LLA and dismissed the allegation that the Licensee violated subsection 6(2)(d) of the LLA. Parties were directed to provide written submissions on appropriate sanction. The Board has received and reviewed those submissions and ORDERS the licence be REVOKED. Reasons follow.

Submissions

3The Registrar asks for the Licence to be revoked on grounds that:

• Pursuant to section 15 of the LLA, the Registrar may issue a proposal to revoke a licence for failure by a licensee to act with financial responsibility in the conduct of the business;
• In its Decision on Findings, the Board did not accept any of the Licensee’s explanations for its financially irresponsible conduct;
• There is no reasonable expectation that the business will be operated in a financially responsible manner;
• All taxes collected by a vendor pursuant to the Retail Sales Tax Act (“RSTA”) are held in trust on behalf of the Ministry of Revenue; and,
• The misappropriation of trust monies must not be excused or condoned.

4The Licensee candidly acknowledges that the penalty the Registrar seeks is reasonable and appropriate.

Analysis/Reasons/Decision on Sanction

5The Board has carefully considered the Registrar’s and the Licensee’s submissions. It agrees that a revocation of the establishment’s liquor licence is the appropriate sanction in this case.

6Section 15(1) of the LLA entitles the Registrar to issue a proposal to revoke or suspend a licence to sell liquor for any ground under subsection 6(2) that would disentitle the Licensee to a licence if the licensee were an applicant.

7Here, the Registrar seeks a revocation rather than a suspension of the Licence: the Licensee agrees with the sanction proposed.

8The Board found that the Licensee breached subsection 6(2)(a) of the Act. In other words, it concluded that having regard to the Licensee’s financial position, the Licensee could not reasonably be expected to be financially responsible in the conduct of its business.

9The Board also made the following pertinent findings in its Decision on Findings, dated June 14, 2011 (its Decision on Findings) which are all relevant to its decision on sanction as well:

a. The basic requirements upon a vendor, such as the Licensee, under the RSTA, are fairly simply and commonsensical and, while the Licensee either knew, or ought to have known, about these straightforward and mandatory obligations, it failed utterly to comply with them; b. The Licensee collected Retail Sales Tax (RST) from patrons; yet, the Licensee did not file any RST returns between March 1, 2008 and March 31, 2011, as required by law; c. Neither did the Licensee remit any of the RST monies collected to the Minister of Revenue; d. At March 31, 2011, the Licensee owed an estimated $21,700 in RST monies collected, but not remitted, to the Ministry of Revenue; RST collected is money held in trust by a Licensee on behalf of the Ministry of Revenue (that is, on behalf of Ontario taxpayers), making its remittance an obligation or requirement of the highest order; and, e. The only monies ($3,000) ‘paid’ on account of RST owing were seized by court order.

10Given that no RST monies collected were ever remitted, the Licensee has not shown even a minimal degree of financial responsibility.

11Further, there is no likelihood that the Licensee would or could achieve a state of financial responsibility for, as the Board also found in its Decision on Findings, the Licensee’s finances were never under control throughout the operation of the Licensed business. Rather, the business was “in a pervasive state of operational mess and functional disarray, despite the Licensee’s basic honesty and integrity as a Licensee”, as the Board also found in its Decision on Findings.

12As well, the fact that the Licensee did not remit any monies that it had collected in trust for the taxpayers of Ontario is of particular concern to the Board in deciding to revoke the Licence. Only a meagre amount, collected by court order, made its way into the public coffers.

13Generally, a licence should be revoked only against a backdrop of serious findings of fact that go to the heart, or essence, of being a responsible Licensee. The findings listed above meet this characterization.

14Holding a licence is a privilege granted by the Act; it is not a right. The legislation requires licensees to be financially responsible - an imperative responsibility amongst many other legislated responsibilities - which this Licensee was not.

15The Board also concludes that revoking the Licence appropriately satisfies the guiding principles of specific and general deterrence, given the particulars of this case.

Order

16The Board ORDERS that liquor licence number 91325 issued to Mac’s North End Pub Inc., operating as MAC’S NORTH END PUB, 468 James Street North, Hamilton, Ontario, L8L 1J1, be REVOKED, effective immediately.