COURT FILE NO.: 506/06

DATE: 20080527

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

FERRIER, molloy, AND vAN mELLE JJ.

B E T W E E N:

SHOOTERS SPORTS BAR INC.

Appellant

• and -

THE REGISTRAR OF THE ALCOHOL AND GAMING COMMISSION

Respondent

Clive Preddie, owner of appellant corporation, on behalf of the Appellant (with leave of the Court)

Phillip Morris and Sujia Chan, for the Respondent

HEARD: March 18, 2008

MOLLOY J. :

REASONS FOR DECISION

A. INTRODUCTION

[1] Shooters Sports Bar (“Shooters”) is a small neighbourhood bar in Brampton, Ontario. It is owned by a corporation, of which Clive Preddie is the principal officer and shareholder. Shooters appeals to this Court from an Order of the Board of the Alcohol and Gaming Commission (“AGCO”) dated September 27, 2006 suspending Shooters’ liquor licence for 10 days for having permitted drunkenness on its premises. With leave of this Court, Mr. Preddie (who is not a lawyer) argued the appeal on behalf of Shooters.

[2] Shooters appeals from the Board’s finding that it permitted drunkenness, but does not quarrel with the sanction imposed if the finding of licence violation is upheld. The finding of violation was made in a written decision of the Board dated June 15, 2006, following a full hearing with viva voce evidence, during which Shooters was represented by a lawyer. The hearing arose after an undercover AGCO liquor inspector and two police officers spent a couple of hours at Shooters on the night of Tuesday, June 8, 2004. As a result of their observations, a Notice of Proposal was issued on September 15, 2004, which commenced the process. The first notice Shooters had of any allegation against it was 103 days after the alleged events of June 8, 2004.

B. THE DECISION OF THE BOARD

[3] There were three principal witnesses at the hearing before the Board: Inspector Amy Glenn (who was the AGCO’s undercover investigator and the sole witness called by the prosecution); Mr. Clive Preddie (the owner of the bar, who also happened to be the sole bartender and server on duty on the date in question); and Mr. David MacDonald (a customer of the bar who testified on behalf of Shooters).

[4] The Reasons of the Board dated June 15, 2006, are brief, covering a total of just under 8 pages, of which the first page and a half are merely the style of cause and lists of witnesses and exhibits. At the beginning of its reasons, the Board summarized (at pages 2-5) some of the evidence given by the witnesses in chief and in cross-examination. The next page and a half of the reasons summarized the submissions made by counsel for the parties. The final part of the reasons under the heading “Decision”, being approximately one page in length, sets out the Board’s findings.

[5] The Board’s summary of the evidence of Liquor Inspector Amy Glenn is reasonably accurate. Ms Glenn testified that she entered Shooters at about 9:30 pm on Tuesday, June 8, 2004 accompanied by Police Constable Randy Cowan. The Board stated that she was also accompanied by Detective Todd, which is an error, but nothing turns on that. Ms Glenn testified that they were joined a short time later by Police Constable Todd Custance. All three were undercover.

[6] Ms Glenn testified that she and the three officers left Shooters at 11:20 pm. She said that during the time she was at Shooters, she observed four patrons whom she considered to be intoxicated. For the most part, she and the officers were seated in the patio area of the bar while making observations of the bar patrons. She testified that it was a quiet evening and there were approximately eight people in the bar.

[7] The Board referred to Ms Glenn’s evidence as to the conduct of the four individuals that led her to believe they were intoxicated.

[8] With respect to the first man Ms Glenn encountered seated at the bar area, the Board stated that Ms Glenn said he was “holding a glass in each hand, consuming what appeared to be beer as he was attempting to drink from each glass simultaneously”. He was also observed to be very loud, unsteady on his feet, with impaired motor skills, difficulty balancing and slurred speech. He was inside the patio area with Ms Glenn and the officers for most of the time, but left at one point, staggered out to the parking lot and got into the driver’s seat of a car. A female patron went after him, got him out of the car and brought him back to the patio. He was observed to be staggering as he walked to and from his car. He was still at the bar when Ms Glenn left.

[9] The Board summarized Ms Glenn’s evidence of intoxication with respect to the second male individual, who was seated near her on the patio, as being slurred speech, unsteady on his feet, impaired motor skills and difficulty coordinating getting his beer bottle to his mouth as he was drinking.

[10] Her evidence with respect to the third male patron was summarized as being loud, with slurred speech and unsteady on his feet. He was said to have had a loud argument with a woman about her singing and showed clear signs of intoxication when he moved around.

[11] The fourth patron noted by Ms Glenn was a woman who was observed walking from the patio to the bar and seated at the bar. Ms Glenn described her as being loud, having slurred speech and unsteady on her feet.

[12] The Board, in its reasons next summarized some of the testimony of Mr. Preddie. He testified that he was the only staff person on duty that night and that nothing eventful happened. He had no recollection of anyone being intoxicated. He testified that it was difficult after such a lengthy interval to identify customers who had been present that evening and that the only way to do so was through credit card receipts, which was difficult because most people paid cash.

[13] The Board then summarized the evidence of David MacDonald. Because of the inaccuracies in the Board’s summary of Mr. MacDonald’s evidence, and the Board’s failure to refer to it at all in making its findings, it is useful to set out that portion of the Board’s reasons in full, at p. 5:

Mr. David MacDonald – Resident/Customer

Mr. MacDonald told the Board that he lives in the immediate vicinity of the establishment; it is a small bar in a local plaza. He estimated that he visits Shooters three to four times a week, usually after work. On the date in question, he played pool with another patron and had two beers before leaving.

He said that he did not see anyone intoxicated at the establishment and said he had not seen that type of behaviour at the bar at any time.

Cross-Examination

He described what he considered to be an intoxicated person as someone who is staggering and falling down. He acknowledged that Mr. Preddie had told him about the incident of June 8, 2004. He said that he had difficulty recalling the exact time he arrived or left or even the date as there was nothing unusual.

[14] The Board then summarized the submissions of counsel. Counsel for the AGCO essentially submitted that the evidence of Ms Glenn was reliable and should be accepted. According to the Board’s reasons (at p. 6), counsel for the AGCO also advised the Board that Mr. MacDonald “had no recollection of the time he was there and there was no evidence to suggest he was there during the time-frame of the investigation” and that “credit card slips for Mr. MacDonald showed he was there earlier in the evening.” (This is an accurate summary of counsel’s submissions, but not an accurate summary of the evidence, which is problematic for reasons developed below.) The Board’s summary of the submissions of counsel for Shooters demonstrates that the Board was aware of the argument being advanced as to the inability of Shooters to mount a defence due to the lack of timely notice.

[15] Finally, the Board set out its conclusions or findings, under the heading “Decision”. The Board first stated that it found a breach of s. 45(1) of Ontario Regulation 719/90 under the Liquor Licence Act. The Board then stated that this finding was made “based on the evidence presented” and “taking all the evidence into consideration”. Next the Board reiterated the evidence of Ms Glenn as to the signs of intoxication of the three male patrons she described and stated that she had ample time to observe them. With respect to the first person observed, the Board stated it was “clear to the Board that this person showed signs of intoxication when he was first observed at the bar singing to himself. Although the singing was not considered in determining intoxication, drinking beer from two glasses at a time is one sign of intoxication.” The Board also recounted Ms Glenn’s observations of this person staggering to his car and back and held that “it should have been obvious enough for the Licensee or his staff to conclude this patron was intoxicated.” With respect to the other two male patrons, the Board simply stated the signs of intoxication noted by Ms Glenn and said that she had ample time to observe them. With respect to the fourth patron described by Ms Glenn to be intoxicated, the Board merely stated, “The Board made no findings with regard to the female patron identified by Inspector Glenn.” The Board did not indicate why it did not accept Ms Glenn’s evidence on this point.

[16] The Board made no reference whatsoever in its findings to the testimony of Mr. Preddie or Mr. MacDonald and did not mention the argument raised by defence counsel that the delay in providing notice to Shooters unfairly impaired its ability to defend the charges against it.

C. POSITION OF THE PARTIES

[17] Shooters argues that the Board’s decision should be set aside for the following reasons:

• the Board improperly restrained cross-examination of the AGCO’s undercover inspector with respect to the content of the notes made by the two undercover police officers who accompanied her;

• Shooters was prejudiced by the AGCO’s failure to call the two police officers as witnesses at the hearing;

• the Board erred by failing to find that, or consider whether, the amount of alcohol consumed by the undercover investigator and police officers impaired their ability to observe and accurately recall the events;

• the Board erred in failing to consider inconsistencies and weaknesses in the evidence of the liquor inspector;

• the Board failed to provide adequate reasons, and in particular, failed to make any findings of credibility with respect to any of the witnesses who testified;

• the proceedings were an abuse of process because the AGCO deliberately delayed giving notice to Shooters of the allegations against it in order to impair its ability to make full answer and defence;

• the Board breached rules of procedural fairness and natural justice by failing to hold that the delay in giving Shooters notice of the allegations against it unfairly prejudiced its ability to make full answer and defence.

[18] Counsel for the AGCO submitted that the reasons of the Board were adequate and that it is not an error of law for the Board to believe one witness over another. He further argued that the Board acted properly in restricting cross-examination of the inspector on notes that were not hers and were not in evidence and that there was no obligation on the AGCO to call the officers as witnesses. Finally, he argued there can be no abuse of process in the absence of a limitation period or proof of an ulterior motive for delay. He submitted that delay alone cannot render a hearing unfair.

C. THE STANDARD OF REVIEW

[19] An appeal lies to the Divisional Court from any decision of the Board, but only on a question of law: s. 11(1) and (2) of the Alcohol, Gaming and Charity Funding Public Interest Act, 1996, S.O. 1996, c. 26.

[20] Counsel for the respondent submitted that the appropriate standard for the Board’s findings is one of correctness. Mr. Preddie, a non-lawyer, was unfamiliar with the applicable law on this point. Prior to the Supreme Court of Canada’s recent decision in Dunsmuir v. New Brunswick, 2008 SCC 9, [2008] S.C.J. No. 9, 2008 S.C.C. 9, there was a consistent body of case law holding this board to a standard of correctness: Registrar of Alcohol and Gaming v. Hosseini-Rad, [2004] O.J. 1273 (Div.Ct.); 1166134 Ontario Inc. v. Ontario (Alcohol and Gaming Commission), [2006] O.J. 2567 (Div.Ct.). Given that the appeal from the board is solely on a question of law, in my view, the correctness standard will not be affected by Dunsmuir.: There is no privative clause and the issues to be determined by the Board did not require any special expertise relative to that of the court. The nature of the question at issue was whether the evidence established that Shooters Bar on a specific date had permitted drunkenness on its premises and should therefore be subject to sanctions and possible cancellation of its liquor license. There is a right of appeal solely with respect to questions of law, in respect of which it is appropriate to require the Board to be correct. This is not a situation that brings into the play the rationale underlying the change in the law as to the standard of review established by the Supreme Court of Canada in Dunsmuir. There is no reason to depart from the established case law on this point. In any event, there are no issues of legal interpretation raised in this appeal and very limited questions of law at all. Rather, the main issues raised relate to abuse of process, the fairness of the hearing and the adequacy of the reasons, to which the standard of review does not apply.

[21] On issues of fairness and natural justice, the standards of review do not apply: London (City) v. Ayerswood Development Corp., [2002] O.J. No. 4859, 167 O.A.C. 120 (C.A.) at para 10. A tribunal is always required to act fairly, although what constitutes fair procedure will vary from case to case depending on the circumstances: Baker v. Canada (Minister of Citizenship and Immigration), [1999] 2 S.C.R. 817, 174 D.L.R. (4th) 193.

D. ANALYSIS

Police Officers, Police Officers’ Notes and Abuse of Process

[22] A number of the arguments raised by Mr. Preddie on behalf of Shooters can be dealt with briefly. There may well be situations where the failure of the prosecution to call important and relevant witnesses, such as police officers who made observations of the very matters at issue, may be unfairly prejudicial to the defence. However, this is not one of them. The defence had production of the officers’ notes and had some reasonable expectation of what the officers might say if called to testify. One of the officers was present on the first day of the hearing and available to testify, but defence counsel consented to his being released without testifying. The second officer was unavailable on the first day of the hearing. When it was apparent that the hearing could not finish on the first day as one of the Board members had to leave at 3:00 pm, counsel for AGCO requested an adjournment at about the lunch hour so that arrangements could be made to have the second officer testify on the next return date. However, counsel for Shooters objected to the adjournment and requested that the hearing proceed as long as possible that day, including calling some of the defence evidence. The Board acceded to his submission and proceeded. It still would have been open to the defence to call the police officers as its own witnesses on the return date, but it elected not to do so. In these circumstances, the defence cannot complain that the officers’ testimony was not before the Board.

[23] The police officers’ notes were not admissible through Ms Glenn. It was appropriate for defence counsel in cross-examination of Ms Glenn to put matters to her that were contained in the notes of the police officers. She could either agree or disagree with the contents. If she did agree, then this would be part of her testimony. If she did not accept what was put to her, it did not thereby become evidence. In order to get it into evidence, it would have been necessary to call the police officers. In my view, the Board did restrict the cross-examination on the police officers’ notes somewhat more than was necessary. However, since Ms Glenn persistently claimed to have no knowledge or memory of what was in the officers’ notes, and no memory of the amount of alcohol they bought or consumed, and indeed little memory of anything that was not in her own notes, I do not believe that a more fulsome cross-examination would have yielded any more helpful evidence for the defence. Without calling the police officers, the defence was simply not going to be able to prove what was in the officers’ notes, and the defence had already made the strategic decision not to have the officers testify. Accordingly, while the cross-examination was somewhat restricted, it caused no prejudice to the defence.

[24] There was no evidence that either the AGCO or the police officers involved had any kind of ulterior motive in delaying serving notice of the alleged infractions on Shooters. There was nothing in the record before the Board from which it could conclude that there was improper conduct by the police officers or the liquor inspector amounting to abuse of process. Therefore, this ground of appeal also fails.

Misapprehension of the Evidence

[25] There are two aspects of the evidence that appear to have been completely misapprehended by the Board. The first may be a matter of no consequence; but the second is of fundamental importance to the defence.

[26] The first example relates to the finding by the Board that one of the indicia of intoxication in respect of the first man the undercover AGCO encountered was that he was, in the words of the Board, (at p. 2) holding a glass of beer in each hand and “attempting to drink from each glass simultaneously”, and (at p. 7) “drinking beer from two glasses at the same time”.

[27] This was in fact what counsel for AGCO submitted to the Board was the evidence of Ms Glenn. However, this is not an accurate summary of her evidence. What she actually said, at p. 8 of the transcript, was:

A. I then proceeded to the outdoor patio area where the above male was observed holding and consuming from two glasses of what appeared to be draft beer.

THE CHAIR: Just to clarify, did you say he was holding and consuming ---

THE WITNESS: And consuming. He was holding one and consuming from the other.

[30] On cross-examination, this issue was dealt with as follows, at p. 54 of the transcript:

Q. This male comes out to the patio. He’s got two draft beers, right?

A. Yes.

Q. That in itself is not necessarily a problem is it? You can purchase two beers at the same time.

A. Nothing, no.

[28] That was the extent of the inspector’s evidence on the two beers issue. This is the same man who later went out to his car, was persuaded out of the car by a female patron of the bar and then returned to the bar with her. It would therefore appear he was not alone that night.

[29] In my opinion, to conclude from this evidence that this gentleman was trying to drink out of two glasses simultaneously is a misapprehension of the evidence. If that was the only evidence of impairment referred to by the Board, this would be a serious error. However, even without this aspect of the evidence, it seems clear that the Board would have been satisfied that this man was intoxicated. Therefore, I do not see this error as having any impact on the result.

[30] The second error, which is far more problematic, involves the evidence of David MacDonald. Mr. MacDonald was a crucial witness for the defence. Mr. Preddie testified that on September 18, 2004, when he first learned of the allegations about June 8, 2004, he checked the duty roster and learned that he himself had been working that night, replacing the regular Tuesday night bartender. Mr. Preddie stated that many of the bar’s patrons were regulars, but that since he did not usually work Tuesday nights, he did not know many of them. By September, Mr. Preddie had no particular reason to remember the night of June 8, 2004. He could not remember anyone who was there and therefore checked credit card receipts for that date to see if there was anyone he knew. There were only two receipts: one was for a person he did not know; the other was a regular customer named Juan (“Willy”) Valdenagro. Mr. Preddie contacted Mr. Valdenagro, who told him that he had spent time that evening with another customer David MacDonald. Mr. Preddie then contacted Mr. MacDonald, who did recall the evening, and Mr. MacDonald was called as a witness for the defence.

[31] David MacDonald testified that three or four times a week he drops into Shooters for about half an hour or so on his way home from work, between about 5:00 and 6:15 pm. He testified that when Mr. Preddie first asked him about June 8, he did not immediately recall it, until Mr. Preddie mentioned he might have been playing pool with Willy Valdenagro. Mr. MacDonald testified that he did remember playing pool with Willy on one occasion. He also remembered that he was there later than his usual after-work routine. He explained that he had walked to Shooters, rather than driving there, which was unusual for him as he typically stopped in as he was driving home. He recalled these details because he had an argument with his wife that evening and had left the house to go for a walk, ending up at Shooters. He recalled seeing Mr. Preddie at the bar, being surprised to see him, and making some comment to that effect. He then played some pool with Willy Valdenagro. He said he recalled this because he does not usually play pool and because at the same time he was giving Willy (who is from Chile) some English lessons. He had only ever played pool with Willy that one time. Mr. MacDonald said that he was drinking beer that evening and that he paid cash. On cross-examination, he was asked if he might have been there at about 6:30 or 7:00, to which he replied, “No. Absolutely not.” When asked what time he arrived, he testified, “It was –I don’t know. It may – say quarter to 9:00, 9:00, around there somewhere. Yeah.”: Transcript, p.127.

[32] The Board’s summary of Mr. MacDonald’s evidence on this point is set out above at paragraph 13, and the Board’s summary of counsel’s submission on the point is at paragraph 14 above. The Board’s summary of Mr. MacDonald’s evidence seems to suggest that he had gone there after work, which is not correct. The Board incorrectly stated that Mr. MacDonald “had difficulty remembering the exact time he arrived and left or even the date as there was nothing unusual.” In fact, Mr. MacDonald was clear that he was not there in the early evening, but had arrived at about 9:00. He did not say there was nothing unusual about that evening. On the contrary, there were a number of unusual things that caused him to believe it must have been June 8 that he was there: he had an argument with his wife and went to the bar later in the evening; he walked there rather than driving; he interacted with Willy Valdenagro, which he did not typically do; he played pool with Willy, which had only happened that one time; and, he recalled noticing that Mr. Preddie was at the bar instead of the usual Tuesday bartender. Mr. MacDonald testified that there were about 6 to 10 people there that evening, which is consistent with the evidence of Ms Glenn, and therefore somewhat corroborative of his testimony that he remembers the night in question.

[33] The Board also reproduced (without comment) the inaccurate submission of counsel for AGCO that Mr. MacDonald’s credit card slip showed he was there earlier in the evening, at approximately 6:08 pm. In fact, there was no credit card slip for Mr. MacDonald; it was Mr. Valdenagro’s credit card slip that was time stamped 6:18 pm. Further, the Board noted AGCO’s submission that Mr. MacDonald had “no recollection of the time he was there”, which is also not consistent with the evidence.

[34] Mr. MacDonald testified at the hearing that during the time he was at Shooters that night, he did not see anybody that he considered to be intoxicated. He also said that he has never seen drunkenness at Shooters. In his closing submissions, counsel for the AGCO referred to Mr. MacDonald’s testimony about there being nobody drunk when he was there and stated, “Even if that were true, his definition of drunkenness, you’ll recall, when he was cross-examined, was staggering or falling down.” The Board seems to have accepted the accuracy of that submission. In its summary of Mr. MacDonald’s evidence, the Board stated that on cross-examination, Mr. MacDonald “described what he considered to be an intoxicated person as someone who is staggering and falling down.” It appears from this that the Board was of the view that unless a person is staggering and falling down, Mr. MacDonald would not consider him to be intoxicated.

[35] From my review of the transcript, that does not appear to be a fair assessment of Mr. MacDonald’s evidence. Mr. MacDonald testified as follows, at p. 121 of the transcript:

Q. What would you call intoxicated?

A. That’s a tough one. I know it’s a judgment call but certainly, I don’t know, staggering, falling down, I think you could probably---probably anyone could make a judgment I think, if someone’s visibly intoxicated, sure.

[36] Later in his evidence, Mr. MacDonald was making a distinction between drinking and drinking excessively. He indicated (at p. 129) of the transcript that signs of excessive drinking would include “inability to walk properly and slurred speech” but that he had never seen people in that state at Shooters. It seems to me that although Mr. MacDonald was of the view that anyone who was staggering and falling down was certainly intoxicated, it is not a reasonable interpretation of his evidence to conclude that he believed that anything less than that was not intoxication. Indeed, his references to staggering, inability to walk properly and slurred speech are similar to criteria used by the AGCO inspector in her own assessment of intoxication.

[37] Thus, Mr. MacDonald gave a number of reasons why he believed he had been at the bar on June 8 starting from 9:00 pm and why that night stood out in his mind. He also specifically denied seeing anyone there who had been drinking excessively, and in particular did not see anyone who was staggering, unable to walk properly or slurring his speech. This is completely at odds with the summary of his evidence as set out by the Board. In the section of the decision setting out the Board’s findings, Mr. MacDonald’s evidence is not even mentioned. His testimony would appear to have been discounted in its entirety. It may be open to the Board to do that based on supportable findings of credibility or reliability. However, since it gave no reasons for discounting Mr. MacDonald’s evidence, it is not apparent that this is what happened. On the contrary, it appears from the way the reasons are structured that the Board completely misapprehended Mr. MacDonald’s testimony and that this caused the Board to make its decision based solely on the testimony of the prosecution’s one witness, without any regard at all for the defence evidence.

[38] There is no appeal from the Board’s decision on questions of fact. However, where a tribunal completely misapprehends the evidence or completely fails to take relevant and important evidence into account, this constitutes an error of law: Canada (Director of Investigation and Research, Competition Act) v. Southam Inc., [1997]1 S.C.R. 748, at para 41. In Cepeda-Gutierrez v. Canada (Minister of Citizenship and Immigration), [1998] F.C.J. No. 1425, the Federal Court stated the relevant principle as follows, at para. 17:

The more important the evidence that is not mentioned specifically and analyzed in the agency’s reasons, the more willing a court may be to infer from the silence that the agency made an erroneous finding of fact “without regard to the evidence:” Bains v. Canada (Minister of Employment and Immigration) (1993), 63 F.T.R. 312 (F.C.T.D.). In other words, the agency’s burden of explanation increases with the relevance of the evidence in question.

[39] Although Mr. MacDonald was a regular customer of Shooter’s, he would appear to be a neutral arms length witness, with no incentive to fabricate evidence. If his evidence is accepted, it constitutes a complete defence to the charges against Shooter’s Bar. Even if not fully accepted, it could undermine the confidence of the Board in making a decision based entirely on the uncorroborated evidence of one witness on a matter that is essentially a subjective opinion. At the very least, Mr. MacDonald’s evidence needed to be considered, assessed, and weighed in the balance as against the evidence of Ms Glenn and the other evidence at the hearing. This was crucial evidence for the defence and the Board’s failure to understand and/or consider it constitutes a palpable and overriding error. In these circumstances, the Board’s error constitutes an error of law reviewable by this Court. Further, it is an error that goes to the heart of the defence and warrants setting aside the decision on this basis alone.

The Duty of Fairness

[40] The duty of procedural fairness is flexible and will vary, based on the circumstances of the particular tribunal and particular issue involved. In determining the content of the duty of fairness it is relevant to consider: (1) the nature of the decision and the process followed in making it; (2) the nature of the legislative scheme and the decision maker; (3) the importance of the decision to the individual affected: (4) the legitimate expectations of the person challenging the decision; and (5) respect for the choice of procedure made by the tribunal itself: Knight v. Indian Head School Division No. 19., [1990] 1 S.C.R. 653; Baker v. Canada, [1999] 2 S.C.R. 817 at paras 18-28. The closer a tribunal is to exercising court-like functions, the greater will be the procedural protections required to accord fairness to the parties: Baker at para 23.

[41] Generally speaking, the more important a decision is to the person affected and the greater the impact on that person, the more stringent the procedural protections that will be mandated: Baker at para 25. In particular, decisions that affect the ability of a person to earn a livelihood have been held to the highest standard of procedural fairness and natural justice: Kane v. Board of Governors of the University of British Columbia, 1 S.C.R. 1105 at p. 1113. The Board in this case was dealing with whether to revoke or suspend the liquor licence for a bar, a matter of critical importance to the continuation of the business and the ability of the bar’s owner to earn his livelihood. Accordingly, the standard of fairness to which it is required to adhere is at the high end of the scale.

[42] In this case, as I will develop more fully below, the Board breached two important principles of fairness and natural justice: (1) the requirement to provide reasons for its decision; and, (2) the right of a person to have sufficient notice of the case he has to meet so that he has a meaningful opportunity to answer the case against him.

Adequacy of Reasons

[43] A tribunal’s duty of fairness includes the obligation to provide reasons for its decision. The Supreme Court of Canada held in Baker at para 43:

In my opinion, it is now appropriate to recognize that, in certain circumstances, the duty of procedural fairness will require the provision of a written explanation for a decision. The strong arguments demonstrating the advantages of written reasons suggest that, in cases such as this where the decision has important significance for the individual, when there is a statutory right of appeal, or in other circumstances, some form of reasons should be required. . . . It would be unfair for a person subject to a decision such as this one which is so critical to their future not to be told why the result was reached.

[44] It is not sufficient for the Board to summarize the evidence and then baldly state its conclusions. The parties are entitled to know the process by which the Board came to those conclusions. Reasons are required; not merely conclusions: Megens v. Ontario Racing Commission (2003), 64 O.R. (3d) 142, [2003] O.J. No. 1459 (Div. Ct.); Kalin v. Ontario College of Teachers, [2005] O.J. No. 2097, (2005) 75 O.R. (3d) 523 (Div.Ct.) at para. 59. The Court of Appeal in Gray v. Ontario (Disability Support Program, Director) (2002), 59 O.R. (3d) 364, [2002] O.J. No. 1531, 212 D.L.R. (4th) 353 (C.A.), at pp. 364-75 O.R., p. 364 D.L.R. described the extent of the obligation to provide reasons as follows:

The obligation to provide adequate reasons is not satisfied by merely reciting the submissions and evidence of the parties and stating a conclusion. Rather the decision maker must set out its findings of fact and the principal evidence upon which those findings were based. The reasons must address the major points in issue. The reasoning process followed by the decision maker must be set out and must reflect consideration of the main relevant factors.

[45] The suspension of a liquor licence is a matter of some significance for a bar such as Shooters. This has been recognized by the Legislature and the Board, which is why a full hearing is required, with procedural safeguards, before such a sanction can be imposed. In these circumstances, it was incumbent upon the Board to provide reasons to explain its findings.

[46] The Board’s reasons in this case consist solely of a recitation of Ms Glenn’s testimony and a statement that she had sufficient opportunity to observe. There is no reference to the evidence of Mr. Preddie, who was also present that evening and who testified that his unvarying normal practice is to not permit drunkenness in his bar and that, although he has no precise recollection of June 8, 2004, he is confident there was nothing out of the ordinary or he would have noted it. The Board’s reasons also fail to mention the evidence of David MacDonald who testified he was there at the relevant time and did not observe any drunken patrons.

[47] There were a number of challenges to the testimony of the liquor inspector, Amy Glenn. She had a very limited memory of the events beyond what was in her notes. She could not recall the bartender and did not even recognize Mr. Preddie when she saw him at the hearing before the Board. She did not recall that there was a mirrored wall the full length of the patio, which was mirrored on the patio side, but which was a window on the other side, enabling anyone in the bar to see into the patio, but not vice versa. She did not converse at all with any of the patrons she believed to be intoxicated and gave no evidence about seeing any of them being served alcohol after she arrived, much less how much alcohol they had consumed. She testified about a man who she said was very clearly drunk getting into the driver’s seat of a car. But for the intervention of another bar patron, he could simply have driven away, endangering himself and everyone else on the roads. Yet, the two police officers who were with Ms Glenn did absolutely nothing to intervene at that point. This man was still at the bar when they left and, again, they did nothing to ensure he did not attempt to drive again. This may suggest that the gentleman in question was not so inebriated that his ability to drive would be impaired. The bottom line is that there are degrees of intoxication, and what constitutes “drunkenness” is very much a subjective assessment.

[48] In this case, the Board appeared to simply accept the evidence of Ms Glenn without question. While it was open to the Board to accept her evidence, it was required to find that evidence to be credible and reliable before doing so and it was required to fairly consider the contrary evidence presented by the defence, including the testimony of Mr. MacDonald. It is impossible to tell from the Board’s reasons whether it went through that process. This is particularly problematic given the misstatement of some of the evidence in the earlier portion of the Board’s reasons.

[49] Further, the Board completely ignored the argument presented by the defence that because of the delay in providing notice to Shooters, it was unable to defend the charges. It is possible that the Board believed that this argument was not supportable on the facts. If so, it was required to state that in its reasons. It is possible the Board believed that this defence was not viable as a question of law. Likewise, if that was the case, the Board was required to say so. Otherwise, there can be no meaningful right of appeal. It is also possible that the Board simply overlooked the issue, which is also a reviewable error.

[50] Counsel for the respondent argues that the Board was entitled to take into account the defence’s unexplained failure to call Willy Valdenagro as a witness at the hearing. That may well be the case. However, there is no indication in the Board’s Reasons that this was a factor in its decision. In any event, given the other difficulties with the Board’s decision, even if an adverse inference had been drawn, it would not affect the result of this appeal.

[51] The reasons of the Board are inadequate and do not meet the standards of procedural fairness and natural justice. This ground, on its own, would be sufficient to set aside the Board’s decision.

Fairness and the Right to Make Full Answer and Defence

[52] Mr. Preddie argues that it was impossible for Shooters to have a fair trial in the circumstances because of the delay in giving notice of the alleged infraction.

[53] In this case, the Board was conducting a hearing akin to a civil, or quasi criminal trial. At stake was the right of Shooters to carry on business, a matter of considerable importance to the parties affected. These are factors that require a greater degree of procedural safeguards in order to achieve fairness. It was a legitimate expectation in these circumstances that sufficiently prompt notice would be given to Shooters to enable it to properly investigate the allegations and mount a defence, if appropriate.

[54] One of the central principles of fairness is the right to know the case one has to meet: Howe v. Institute of Chartered Accountants of Ontario (1994), 19 O.R. (3d) 483, (1994) 118 D.L.R. (4th) 129 (C.A.); Ontario Human Rights Commission v. House (1993), 67 O.A.C. 72 at paras 19-20. The purpose of requiring disclosure from administrative tribunals is to ensure that the person brought before the tribunal has the ability to make full answer and defence: Howe at para 37; Markandey v. Ontario (Board of Ophthalmic Dispensers), [1994] O.J. No. 484, 46 A.C.W.S. (3d) 775 (Ont.Ct.Gen.Div.). Fairness requires that the disclosure not only be fulsome, but timely: Markandey at para 43; Gage v. Ontario (Attorney General), [1992] O.J. No. 696, 90 D.L.R. (4th) 537 (Div.Ct.).

[55] In Waxman v. Ontario (Racing Commission), [2006] O.J. No. 4226, 53 Admin. L.R. (4th) 271 (Div.Ct.), Lane J. elaborated on the disclosure obligations in the context of an administrative proceeding where a person’s livelihood was at stake, as follows, at para 10:

In criminal cases, the accused is entitled to such disclosure as will enable him to make full answer and defence; sufficient to fairly apprise the accused of the case to be met in “sufficient time and substance to enable the accused to adequately prepare and defend that case.” While the standard for disclosure in administrative law cases generally may be somewhat lesser, in cases involving the loss of one's livelihood, disclosure cannot be much, if any, below the criminal standard: see Kane, supra. A person defending her licence to practice or defending his livelihood must have the opportunity to know the case and to prepare to defend it. The preparation of a defence necessarily requires knowledge of the essence of the evidence on which the accuser relies: trial by ambush is incompatible with a fair hearing. The provision of a summary of the anticipated evidence of each witness is an essential part of disclosure in a case such as this one. That some of the witnesses’ information is referred to in the investigator’s reports is not an answer to this need, unless it is made clear that the witness will say nothing beyond what is expressly set out in the report. [references omitted]

[56] The AGCO recognized its obligations to make disclosure in this case by providing relevant documents and copies of the notes of the inspector and both police officers prior to the hearing. The question is whether that was adequate to meet the requirements of fairness in this case.

[57] There is no limitation period requiring notice within a specific period of time. Counsel for the AGCO argues that in the absence of a limitation period and in the absence of the kind of improper motives that would give rise to a finding of abuse of process, there can be no breach of the requirements of fairness by virtue only of delay in giving notice. That may well be the case. However, it is a different matter where the delay causes prejudice to the person charged and interferes with his ability to defend the charges, particularly where there is no good reason for the delay.

[58] A simple example is illustrative. If a notice is served on a bar owner that ten years earlier there was an intoxicated person on the premises, without in any way identifying that person, one could easily see the unfairness, even in the absence of a limitation period. Nobody could be expected to defend himself on such a charge. On the other extreme, if notice is given to the bar owner immediately following the observations on a given evening and the intoxicated person is clearly identified, there is obviously no unfairness. The question is where between those extremes one should draw the line.

[59] In my opinion, there is no one point in time at which such a line can be drawn. Whether a delay in serving notice results in unfairness will depend on the particular circumstances of a given case. Generally speaking, the longer the delay, the greater the danger of unfairness. Conversely, the greater the particularity in the notice given, the less likely the delay will result in unfairness. These two factors will work in tandem. Likewise, it is reasonable to consider the actions of the bar owner to take reasonable steps to maintain records. For example, a bar owner who keeps no record of which employees worked on a given night would have difficulty maintaining he is prejudiced by delay due to an ability to recollect who was working on the night of an alleged offence.

[60] If there is no requirement of timely notification, the right to mount a defence becomes completely meaningless. In order to defend an accusation such as the one here, the bartender would want to recall the night in question and the persons alleged to have been intoxicated. The bar owner would likely want to contact others who were present at the time of the incident, including if possible the persons alleged to have been intoxicated or others who knew them. That would be the only way the bar owner could put forward evidence to rebut the specific allegations, by evidence, for example, of a mobility impairment that affected the individual’s gait, or a speech impediment that might make words sound slurred, or specific evidence of the amount of alcohol actually consumed, or evidence of others that the person in question was not intoxicated, or evidence as to the normal demeanour of the person whether drunk or not, to rebut the opinion of the inspector. At the very least, it would be important for the defence to tender some evidence from the bartender that in his or her opinion the person identified by the inspector was not intoxicated, in order to counter the opinion of the inspector to the contrary.

[61] In the case at bar, Shooters presented evidence of actual prejudice as a result of the delay and lack of particularity in the notification it was given of the allegations against it. The inspector’s observations were made on June 8, 2004 but Shooters knew nothing about it until the middle of September, a delay of 103 days. There was nothing in particular about the date on which the observations were made that would make it stand out in the memory of the bartender. It was not, for example, New Years Eve, or the night of a particular sporting event, or anything else particularly memorable. The inspector did not obtain the names of any of the persons she observed. The only descriptors she provided for the four individuals she said were intoxicated were: 1. a man in his late 50’s wearing a dark shirt and blue jeans; 2. a man in his mid 30’s wearing a Molson Canadian shirt; 3. a black man wearing a cocker shirt; and 4. a woman in her mid 40’s. No names were provided, not even first names that arguably might have been overheard after spending two hours in the bar observing these people. There is no description of who these people were with. The inspector and the two police officers apparently saw the first man getting into the driver’s seat of a car in the parking lot, but did not note the license plate number at that time, nor later when they left the bar and the car was still in the parking lot. All the bar owner really had to work with was a date over three months before and some descriptions of people that were so vague as to be useless.

[62] Mr. Preddie did have a record of employees on duty on particular nights and was therefore able to determine that he was the only staff person there that night. However, he testified that he had no recollection of anything unusual about that night. He was unable to demonstrate the volume of liquor sold that evening because he keeps records only by the week. If he had been given notice shortly after the event, he would have had that information. The daily figures are recorded, but then are combined into a weekly total and only the weekly totals are kept. If he had been given notice within a few days of the event, he would have been able to show what the total sales were for that particular night.

[63] Mr. Preddie still had credit card receipts from the day in question. However, it was a slow night and the few patrons that were there had, for the most part, paid in cash. There were only two credit card receipts that night, one of which was from a person he did not know at all. He was able to track down the other person who used a credit card (Willy Valdenagro), and through him was able to locate the only independent witness he called to testify, David MacDonald. Fortunately for Mr. Preddie, Mr. MacDonald actually had a reason for remembering being at the bar that night, due to a number of unusual factors, as I have indicated above. However, it is enlightening to examine the basis upon which the testimony of both Mr. Preddie and Mr. MacDonald was attacked on cross-examination and in submissions by counsel for the AGCO.

[64] Mr. Preddie testified that he could not, 103 days later, remember the specific people who were in the bar on June 8, nor what they had to drink. However, he said it was his invariable practice to not serve people who were intoxicated and that he absolutely did not allow persons who were drunk to remain on the premises. He was cross-examined on the basis that he had no particular recollection and could only speak to his customary policy, as opposed to what he actually did that night. In his final submissions to the Board, counsel for the AGCO was critical of Mr. Preddie because he didn’t recall anything. He also suggested that Mr. Preddie testified that he recalled there being eight patrons in the bar, and then challenged Mr. Preddie’s credibility on that point querying how Mr. Preddie could be so exact about that number given that he only received notice 103 days later. This was a mischaracterization of Mr. Preddie’s evidence. Mr. Preddie stated that he was able to ascertain that there were eight people in the bar by reading the disclosure provided by the prosecution. In other words, he accepted the number of patrons recorded by the inspector and police officers in their notes. Counsel also challenged Mr. Preddie’s credibility by arguing that Mr. Preddie had testified there was a regular clientele at the bar, and yet he was unable to call any witnesses for that night other than Mr. MacDonald. Again, that is not a fair characterization of Mr. Preddie’s evidence. He did testify that there was a regular clientele. However, he also testified that he was not the regular Tuesday night bartender and that he, therefore, did not know everybody. Secondly, just because the clientele is largely regulars does not mean that those individuals will be able to remember who was there and how much they drank more than three months earlier. Indeed, arguably, regular patrons would be even less likely to remember a particular night among many than would somebody who had only been to the bar on one or two occasions.

[65] Mr. MacDonald was vigorously cross-examined by counsel for the AGCO on the basis that he could not possibly remember that the Tuesday night he had been at Shooters was June 8 as opposed to, for example, June 15 or June 22. In his submissions to the Board, counsel for the AGCO submitted that the only reason Mr. MacDonald testified he was there on June 8 was because Mr. Preddie and Mr. Valdenagro told him so. Counsel stated, at p. 151 of the transcript, “And he said that he goes there three to four times a week, so how could he possibly remember, three or four months later, whether he would be there on a particular night.” Counsel for the AGCO also argued before the Board that Mr. MacDonald always went to the bar early in the evening, “so why he would be there later that night, no one knows.” This is a misstatement of the evidence. Mr. MacDonald gave clear evidence as to why he was there later than usual that evening, referring to an argument with his wife that caused him to go out for a walk.

[66] Thus, the AGCO delayed for 103 days before giving notice to Shooters of the alleged infractions, and then argued that because of that 103 day delay, the two key defence witnesses could not possibly remember that there had not been any drunkenness at the bar that night. The unfairness of that situation is, in my view, obvious.

[67] No explanation was offered in evidence as to why notice could not have been given to the bartender that night, or at least within a day or two thereafter. The only explanation offered by the inspector was that the timing of service was left up to the police. That does not explain why the notice of proposal was not even issued by the AGCO until September 15, 2004.

[68] In argument before the Board, and also in argument before this Court, counsel for the AGCO took the position that this was an issue of safety for the inspector. I accept that there can be situations that are volatile and which might militate against actually saying anything while at the licensed premises. However, on the night in question, the inspector was in the company of two police officers and there were only eight people in total in the bar. It is hard to see how it would have been “dangerous” to advise the bartender on the way out that he could expect to be charged with respect to specific patrons in the bar. Alternatively, he could be called on the phone once the officers were outside the establishment. In the further alternative, at the very least, the bar could be advised by letter of the allegations within a day or so that it would have some hope of gathering evidence in its own defence. In this case, the prosecution has not justified either the delay or the lack of particulars provided in the notification.

[69] In this case, all the cards were stacked against the bar. The inspector testified as to her opinion that four patrons were drunk. The bar owner was unable to identify who those individuals were and therefore unable to rebut the specific evidence of their behaviour or advance alternative explanations for their behaviour. The two witnesses who did testify as to not seeing any drunkenness that night were discounted (at least by counsel for the AGCO) on the basis that they could not possibly have remembered what happened three months later on that specific night in June. The Board did not even mention this evidence in its analysis and findings, so it is not clear why that evidence was disregarded. However, it is reasonable to believe that it was ignored for the very reasons urged by counsel for the AGCO. Given that situation, there was no possible basis for Shooters to defend itself on the charges. The sworn evidence of a liquor inspector is not sufficient, by itself, to ground a finding of violation. The licence holder is entitled to a hearing. Of what use is a hearing if there is no realistic basis for challenging the sworn testimony of the inspector? The hearing becomes little more than a formality.

[70] Finally, on this issue, although the point was raised in evidence and formed part of the submissions of counsel for Shooters, there is no mention of it in the reasons of the Board.

[71] This is not an issue that is new to the Board. As early as 1995, the issue was the subject of a decision of Liquor Licence Board Chair, A. Karakatsanis (as she then was): Re Cocamo, [1995] O.L.L.B.D. No. 70. In that case, liquor licence inspectors had attended the Cocamo bar in an undercover capacity on two separate nights in February and March, 1994. They observed evidence of drunkenness but did not obtain the names of the drunken patrons and did not identify themselves to the bar staff. Subsequently, a Notice of Proposal was issued, just as happened in the Shooters case. Also, as happened here, the first notice to the bar owners was three months after the fact, by which time the bar staff had no recollection of the night in question.

[72] Board Chair Karakatsanis noted that since the date of the two attendances in 1994, the Liquor Licence Board had revised its procedures to ensure that more timely notice was given to bar owners of alleged violations. She held, at para 4 of her Reasons:

As a matter of policy and good regulatory practice, the Board has revised its procedures to ensure that a licence holder is advised of an inspector's concern as soon as possible. The Board conducts undercover investigations as part of its compliance efforts. In some cases it may not be advisable for the inspectors to identify themselves at the time of their attendance. It is now the Board's practice to advise the licence holder of the particular concerns at the time of the visit or where it is not practicable to do so at the time, as soon as possible thereafter. Immediate disclosure of the full inspector's report may not be necessary, especially where it may jeopardize the investigation. The licence holder will, however, be given sufficient particulars to identify the conduct complained of within days of the occurrence. Although the Board has determined as a regulatory body that its new procedure is preferable the issue in this case is whether the previous practice invalidated the quasi judicial proceedings that resulted from the investigation.

[73] Board Chair Karakatsanis then went on to consider whether in the circumstances of this particular case the practice of the Board had “invalidated the quasi judicial proceedings that resulted from the investigation” and she found that it did. First, she held that a delay of three months was not, in and of itself, problematic. Next, she held that a failure to identify the intoxicated patrons by name was also not necessarily fatal. However, she then went on to hold that a failure to give timely notice can, in some circumstances, result in a breach of natural justice, and further ruled that a breach of natural justice had occurred in that case. She held at para 7 of her reasons:

There are, however, some circumstances in which the failure to advise the licence holder of an allegation in a timely manner can result in a breach of natural justice. Where there is no indication by the Liquor Licence Board of Ontario or police that there has been an occurrence out of the ordinary and there is nothing in the incident itself to draw the attention of the licensee, then the delay coupled with the failure to name the intoxicated patrons severely prejudices the licence holder’s ability to answer the allegations. In this case it is alleged that some patrons exhibited signs of drunkenness. Staff had no specific recollection of the evening. The particulars disclosed do not assist the licence holder in identifying the incident complained of and in such circumstances the delay in alerting the licence holder to the incident unduly prejudices the licence holder's right to respond to the allegations and make full answer and defence. The Board will therefore not proceed with respect to the allegation that the licence holder permitted drunkenness contrary to subsection 45(1) of the Revised Regulation 719/90 nor served liquor to intoxicated patrons contrary to section 29 of the Act.

[74] In my opinion, the situation of Shooter’s Bar in this case is on all fours with the case before the Board in Cocamo. The particulars disclosed do not assist the license holder in identifying the occurrence and Mr. Preddie has no specific recollection of the night in question. This is a classic illustration of a situation in which the delay and lack of particulars have unduly prejudiced Shooter’s right to respond to the allegations and to make full answer and defence. These were circumstances that caused the Board in Cocamo to stay the charges against the license holder. However, in Shooter’s case, the Board not only failed to stay or dismiss the charges, it failed to even address this very important issue in its reasons, although it had been raised by the defence both during the evidence and in closing submissions.

[75] The combination of the delay in notification and the failure to provide sufficient particulars to identify the allegedly drunken patrons created such unfairness to Shooters as to constitute a failure of natural justice. This hearing was not a meaningful opportunity for the Shooters to defend itself. This ground is also a sufficient basis on its own to warrant quashing the decision of the Board.

E. CONCLUSIONS

[76] The decision of the Board is fundamentally flawed and cannot stand. The Board so completely misapprehended the evidence of a key witness (Mr. MacDonald) on crucial points that this amounts to an error of law. Further, the Board breached its duty of fairness by failing to provide adequate reasons for its decision. The Board failed to provide any reasons at all for ignoring the testimony of Mr. MacDonald or for preferring the testimony of the inspector over both Mr. MacDonald and Mr. Preddie. The Board also failed to deal at all with the defence argument that it was prejudiced by the delay and lack of particularity in the notification it received of the charges against it. Finally, the ability of Shooters to defend itself was seriously prejudiced by the combination of the 103 day delay in advising Shooters of the case against it and the absence of meaningful particulars as to the people who were allegedly drunk at that time. This also constitutes a breach of procedural fairness and natural justice. Many of the errors by the Board would have been sufficient to warrant quashing its decision. The cumulative weight of the errors is overwhelming. Accordingly, the appeal is granted and the decision of the board is quashed.

[77] Further, because of the natural justice issue related to the delay in giving notice, it is no longer possible for Shooters to have a fair hearing on the charges against it. Remitting the matter to the Board for a new hearing is not an appropriate disposition. Accordingly, the decision itself is set aside and the Notice of Proposal giving rise to the hearing is permanently stayed.

[78] The appellant is entitled to costs, fixed at $2000.00 payable in 30 days.

MOLLOY J.

FERRIER J.

VAN MELLE J.

Released: May 27 2008

COURT FILE NO.: 506/06

DATE: 20080527

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

FERRIER, MOLLOY and VAN MELLE JJ.

B E T W E E N:

SHOOTERS SPORTS BAR INC.

Appellant

• and -

THE REGISTRAR OF THE ALCOHOL AND GAMING COMMISSION

Respondent

REASONS FOR JUDGMENT

MOLLOY J.

Released: May 27, 2008