Court File and Parties

COURT FILE NO.: 29/03

DATE: 2004-03-26

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

RE: Registrar of Alcohol and Gaming v. Hosseini-rad

BEFORE: FERRIER, SWINTON and LINHARES de SOUSA JJ.

COUNSEL: Joyce A. Taylor for the appellant David M. Rovan for the respondent

HEARD: March 23, 2004

Endorsement

[1] The Registrar appeals the decision of the Board of Alcohol and Gaming Commission of Ontario, dated December 20, 2002. In that decision the Board approved the respondent’s application for a liquor delivery service licence, a licence which permits the respondent to deliver liquor to a person’s home.

[2] The Registrar proposed to refuse the respondent’s application because the respondent failed to disclose recent criminal convictions on his application form. The criminal convictions all arose out of a highly emotional matrimonial dispute with the respondent’s wife. The convictions included assault, breach of undertaking, assault with a weapon, the weapon being his vehicle which he used to ram another vehicle occupied by his wife and another individual, failure to comply with probation based on his continued insistence to communicate with his wife when judicially prohibited from doing so, and criminal harassment. He received periods of incarceration and was released on conditions.

[3] In considering these convictions and the respondent’s explanations as to why he did not disclose them on his application when required to do so, the Board found with respect to his conduct and credibility that the respondent had repeatedly disregarded authority, obeying the law only when it agreed with him, and that his evidence before the Board was totally lacking in credibility.

[4] The Board’s decisions are appealable to the Divisional Court on a question of law: Alcohol and Gaming Regulation and Public Protection Act, 1996, S.O. 1996, c.26, as amended, s.11(2).

[5] In this case the issues are whether the Board considered irrelevant matters and used the wrong test in applying s.6(2)(d) and (e) of the Liquor Licence Act, R.S.O. (1990) c.L.19.

[6] Given that this is an appeal on a question of law involving issues of statutory interpretation in which the Board has no greater expertise than this court concerning the matters in issue and there is no privative clause, we are of the view that the standard of review is correctness. See Starson v. Swayze (2003), 2003 SCC 32, S.C.J. 33, June 6, 2003 (S.C.C.) paras.112, 113.

[7] Prior to July 3, 2001, existing businesses that delivered liquor for a fee were required to have a letter of authorization from the Liquor Control Board of Ontario. There were no regulations respecting the letters of authorization and therefore no enforcement mechanism. The respondent had operated pursuant to such a letter of authorization for approximately six years. On July 3, 2001 a regulatory scheme was introduced which requires all persons who wish to deliver liquor for a fee to residential customers to hold a licence issued by the Commission: s.10 of the Liquor Licence Act. The regulation imposes standards of conduct and responsibility upon the licensees.

[8] Preexisting businesses holding a letter of authorization were permitted to continue delivering liquor for a fee if they applied for a licence from the Commission. There was no distinction between these businesses and new applicants in the application process. Both preexisting businesses and new applicants had to meet the same application requirements. Preexisting businesses were not “grandfathered”.

[9] Pursuant to s.10(2) of the Liquor Licence Act, an applicant is entitled to a licence to deliver liquor unless the applicant is disentitled for any ground under cl.6(2)(a) to (g). The Registrar may approve the application if the applicant is not so disentitled.

[10] Pursuant to s.6(2)(e), an applicant is entitled to be issued a licence except if the applicant makes a false statement or provides false information in an application under the Act.

[11] As well, pursuant to s-s.(d) of the same section, an applicant is entitled to be issued a licence except if the past or present conduct of the applicant affords reasonable grounds for a belief that the applicant will not carry on business in accordance with the law and with integrity and honesty.

[12] The Board declined to make a finding on s.6(2)(d), but specifically made a finding under s.6(2)(e) that the respondent Hosseini-Rad made a false statement on his application. Notwithstanding the latter determination, the Board decided to grant the licence with conditions for the reasons given, particularly at pages 5 and 6 of its decision.

[13] We are of the view that once the Board has made a finding under s.6(2)(e) that the respondent made a false statement on his application, there is no discretion in the Board to grant a licence, with or without conditions. Nowhere in the statutory or regulatory framework is such a discretion conferred. On the contrary, s.10(2) makes the determination absolute. Such an applicant is disentitled to a licence.

[14] The respondent urged that ss.21(1), and 23(10) and (11) give the Board a discretion to grant a licence notwithstanding s.6(2)(e), and that the specific prohibition in s.24 implies that there is no specific prohibition under s.6(2)(e). We disagree. Section 24 does not relate to the issuance of a licence to deliver liquor. The other sections argued by the respondent do not provide for such a discretion.

[15] Accordingly, we find that the Board erred in law in purporting to grant a licence after having found that the respondent made a false statement on his application.

[16] On this ground alone, the decision and order of the Board is set aside. We order that the Registrar carry out the notice of proposal to refuse to issue a licence to deliver liquor to the respondent Farshad Hosseini-Rad.

[17] Furthermore, the Board has further erred in law in the following respects. After having reviewed several instances of dishonesty, deception and lying by the respondent, the Board found “the applicant’s evidence totally lacking in credibility, and chooses to place no reliance upon it.” Despite having made that finding, the Board, in its decision, referred extensively to evidence adduced by the respondent concerning his marriage difficulties and took those circumstances into account in deciding whether or not to grant the licence. Having rejected his evidence, it could not reasonably be suggested that the Board could then take his evidence as true and consider his evidence as establishing facts which the Board could take into account in determining whether or not a licence should be granted. This is an unreasonable conclusion.

[18] Furthermore, even if the Board had determined that the respondent was credible in his evidence concerning his marital separation and the circumstances surrounding his criminal convictions, these facts were irrelevant to the application once the Board determined that the respondent made a false statement on his application.

[19] In addition, the Board, in considering ss.6(2)(d) and (e), took into account further irrelevant considerations, concerning whether or not the refusal of a licence is, in effect, revoking the respondent’s existing letter of authorization, and whether or not that would be a punitive result unintended by the regulations. Furthermore, the Board considered whether or not the respondent would lose his investment in time and capital or borrowed capital if the licence were disallowed, and also considered the fact that such a disallowance “could cause upheaval in his life as well as the lives of his family and loved ones. It could trigger the payment of loans. Life savings could be lost. Child support could go unpaid. A person’s health could be impacted. Employees could lose their jobs and face a similar impact on their own lives, none of which is in the public interest.” We find, on the basis of a correct interpretation of these provisions of the statute, that these considerations play no part in a determination as to whether or not an applicant should be granted a licence.

[20] For these reasons, the appeal is allowed and an order shall issue as above indicated.

[21] The respondent shall pay the appellant’s costs fixed in the sum of $2,000.

Ferrier J.

Swinton J.

Linhares de Sousa J.

DATE: March 26, 2004

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