COURT FILE NO.: 253/04

DATE: 20040607

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

macfarland, jennings and howden jj.

B E T W E E N:

LIFFORD WINE AGENCIES LTD.

Applicant

• and -

THE ALCOHOL AND GAMING COMMISSION

Respondent

Douglas C. Hunt, Q.C. and Alistair Crawley, for the Applicant

Richard E. Kulis, for the Registrar of the Alcohol and Gaming Commission of Ontario

Brian Gover and Diana Iannetta, for the Respondent, the Liquor Control Board of Ontario

HEARD: June 7, 2004

MACFARLAND J.: (Orally)

1In on-going proceedings before the Alcohol and Gaming Commission of Ontario, Lifford brought a motion to stay those proceedings on the basis that witnesses it sought to call on its defence had been interfered with, such that it was no longer possible for it to obtain a fair hearing.

2When the hearing before the Board commenced in September, 2003, one of the witnesses called by Lifford, Ms. Koonings gave evidence to the effect that her supervisor, Mr. French had attempted to influence her evidence and to intimidate her in relation to the nature of her evidence and that to her knowledge he had similarly tried to influence and intimidate other LCBO employees summoned by Lifford. Mr. French denied these allegations.

3At this point the hearing adjourned to enable the witnesses to retain counsel. In addition, to preserve the integrity of the order excluding witnesses, the Board detailed to whom the transcript of the proceedings to that point was to be made available. During the adjournment the LCBO retained independent counsel who retained an investigator, Mr. Hobbs, to conduct an investigation into the allegations made by Ms. Koonings and to interview those employees Lifford had summoned.

4On the resumption of the hearing a number of the LCBO witnesses called by Lifford complained about the Hobbs investigation. There were suggestions of "aggressive questioning" and intimidation. Lifford sought to compel the attendance of Mr. Hobbs and the production by the in-house counsel for the LCBO of the witness statements either in written or taped form. A summons was issued to compel the attendance of Ms. Fitzpatrick and Lifford requested a summons be issued for Hobbs. The LCBO moved to quash the summons to Ms. Fitzpatrick and resisted the summons to Hobbs.

5LCBO takes the position that any evidence the witnesses Lifford has summoned is irrelevant and therefore whether it was influenced or not does not matter. The argument obviously goes to the merit of the main defence, officially induced error. It is the position of the LCBO that none of the employees summoned by Lifford are "officials" such that they would qualify in law of the stature necessary to make out the defence of officially induced error.

6The issue before the Board at the time this judicial review was launched however, was Lifford's motion to stay. Lifford wished to have the statements, in particular taken by Mr. Hobbs to test the evidence of the employees called in relation to the witness tampering and influencing which founded the motion to stay.

7It is clear from Mr. Aiello's comments on the record that Lifford intended to call the LCBO employees to support its effort to make out the defence of officially induced error in response to the Alcohol and Gaming Commission's Notice of Proposal to revoke its licences. In the course of calling that evidence allegations were made of efforts on the part of senior supervisory staff to influence that evidence which may have been furthered by the Hobbs investigation.

8The Alcohol and Gaming Commission determined to quash the summons on Ms. Fitzpatrick and refused to issue one for Hobbs on the basis that the evidence was irrelevant. In our view, in so doing, the Board precluded Lifford's ability to lead material evidence in support of the basis for its stay motion. This, in our view, was a breach of natural justice.

9The statements taken by Hobbs may support Lifford's position in relation to witness tampering and it should, in our view, have the ability to explore that evidence. Although the Board did not decide on the basis of either solicitor and client privilege, or litigation privilege, these issues were raised before us.

10In our view the Hobbs report is not subject to solicitor and client privilege for the reasons set out by the Court of Appeal in General Accident Co. v. Chrusz, (1999) 45 O.R. (3d) at 321, where at p.15 of the quicklaw version, the Court said:

"However, I would have not accord communications between Bourret and Eryou with the protection of solicitor-client privilege. Bourret was retained to perform the functions of investigating and reporting. He was expected to be honest in doing his job, and no special legal protection was necessary to ensure a candid report. I agree with the reasoning of Doherty J.A. on this subject."

11Nor do we accept that litigation privilege applies The LCBO was an intervenor in these proceedings for only a very short period of time before its involvement was terminated by earlier order of this Court.

12For these reasons the application is allowed, an order will issue directing the Commission to issue a summons to Hobbs requiring his attendance and to bring with him transcripts and/or recordings of interviews he made with the LCBO employees who were summoned by Lifford. As Mr. Hunt indicated in argument, in the event the Court ordered the attendance of Mr. Hobbs and required that he bring the witness statements, it would not be necessary for Ms. Fitzpatrick's attendance and accordingly we make no order with respect to her attendance.

13The application record will read: "Application allowed for oral reasons given this day. If counsel cannot agree on costs brief written submissions may be made by the applicants by June 21, and the respondents by June 28, 2004."

MACFARLAND J.

JENNINGS J.

HOWDEN J.

Date of Reasons for Judgment: June 7, 2004

Date of Release: June 21, 2004

COURT FILE NO.: 253/05

DATE: 20040607

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

macfarland, jennings and howden jj.