Licence Tribunal

Appeal d'appel en

Tribunal matière de permis

DATE:

2012-04-13

6889/LLA

6889 v. Registrar of Alcohol and Gaming

Appeal from the Notice of Proposal of the Registrar of Alcohol and Gaming under the Liquor Licence Act, R.S.O. 1990, c. L.19 - to Refuse to Transfer Licence

George Chrisanthopoulos o/a Jax Bar and Grill

Applicant

-and-

Registrar of Alcohol and Gaming

Respondent

Geneviève Blais, Member

For the Applicant:

A. Douglas Burns, Counsel

For the Respondent:

Phillip Morris, Counsel

Heard in Toronto:

March 12,13 and 14, 2012

DECISION AND ORDER

BACKGROUND

The Registrar of Alcohol and Gaming (the “Registrar”) under the Liquor Licence Act (the “Act”), issued a Notice of Proposal, dated August 12, 2011, number 18815, and an amended Notice of Proposal, number 19032 dated January 10, 2012, to refuse the application for transfer of licence. George Chrisanthopoulos operating or intending to operate as Jax Bar and Grill (the “Applicant”), appealed this Notice of Proposal to the Licence Appeal Tribunal.

FACTS

The Registrar’s notice of proposal to refuse the application for transfer of licence is pursuant to:

(a) Subsection 6(2)(d) of the Act: the present/past conduct of the applicant, or of a person having beneficial interest in the business of the applicant, or of a person having responsibility for the management or operation of the business of the applicant affords reasonable grounds for belief that its business will not be carried on in accordance with the law and with integrity and honesty; or

(b) Subsection 6(2) (e) of the Act, the applicant or an employee or agent of the applicant has made a false statement in the application.

The particulars in support of the Registrar’s notice of proposal state the following:

George Chrisanthopoulos is the applicant. He was charged with a criminal offence in 2009. He then failed to attend court, for which he was charged with a second criminal offence. He failed to respond to police inquiries and had to be tracked down. He was arrested at the licensed premises. He failed to disclose his outstanding charges in his personal history report. He has since received diversion.

George Chrisanthopoulos has failed to provide information necessary to process the application despite repeated requests made by Commission staff. He has failed to cooperate with the AGCO investigator in attempts to obtain information or to meet for an interview. He is not running the establishment, and local police officers and AGCO investigators have neither seen him there nor been able to reach him there by telephone.

IC is George Chrisanthopoulos’ father. He has a lengthy, violent and serious criminal record, including a serious criminal offence arising from an incident at the licensed premises. He also was arrested in the licensed premises for breach of a recognizance condition prohibiting him from working at the licensed premises. He has been identified to police as the owner, has dealt with police as an owner, and has been observed in the establishment and behind the bar. His common law spouse is the licensee PL.

CC is George Chrisanthopoulos’ uncle. He has a serious criminal record. AA is the mother of IC and CC. PC is the wife of CC. AA and PC are the principals of the company that owns the building in which the licensed premise are located but have no written lease with the licensee or the applicant.

The Registrar is concerned that, in light of his past and present conduct, George Chrisanthopoulos, IC and CC, will not operate the business with honesty and integrity and in accordance with the law.

The evidence of the Registrar consisted of documentation and oral testimony of Constable Mario Rizzo, Constable Michael Logue, Constable Leslie Lee, Inspector Brian Sharpe and Constable Christine Bourrie.

The evidence of the Applicant consisted of documentation and his oral testimony.

Constable Mario Rizzo

Mario Rizzo has been a police officer with the Hamilton Police Service since 2006. He is a member of the high enforcement action team responsible for the enforcement of the Act and other provincial statutes in the community. On October 25, 2009 he attended to an incident at Jax Bar and Grill. The witness referred to his notes to refresh his memory, on consent.

He and his partner investigated an incident of assault involving IC and another male person. Three men had been assaulted with a metal rod and Emergency Medical Services (“EMS”) was on route. The victims had suffered blows to the head and welts on arms and legs. Constable Rizzo was told by a witness to the assault that IC had re-entered and left Jax Bar and Grill. IC and the other male were attempting to leave the scene and failed to respond to police commands. Police resorted to the use of pepper spray to detain IC in front of the premises. The weapon, a four to six foot metal curtain rod, was seized from behind the service bar, an area, which under the Act, is restricted to employees. IC was arrested and later convicted of assault with a weapon.

Constable Rizzo testified that on the morning of May 27, 2010, police were called to Jax Bar and Grill to investigate a call that IC was in breach of his recognizance because he was inside the premises. Upon entering, they located IC working behind the service bar. There were no other staff members at the premises. IC was advised of the violations of conditions of his recognizance and prior to his arrest, he was given an opportunity to arrange for another employee to attend the premises to assume the operation. He was not successful in locating another staff member with a key to lock up. The police advised patrons to leave the establishment. The police contacted the owner/licensee PL to respond. The occurrence report (Exhibit #5) stated that she was aware IC was operating the bar alone even though he had conditions not to attend. She asked police who had “ratted” out on him. IC was charged and later convicted for failure to comply with a recognizance.

On cross-examination, Constable Rizzo stated that he used pepper spray to subdue IC on October 25, 2009 as he stood in a defensive manner and felt threatened by his actions. On the first occurrence in October 2009, Constable Rizzo was unable to state if PL, the licensee, was at the establishment. With respect to the incident in May 2010, she was not there and IC was the only staff person on-site and with a key to lock up.

Constable Michael Logue

Michael Logue has been a police officer with the Hamilton Police Service since 2009. He is assigned to uniform patrol and is responsible for enforcement of the Criminal Code and the Act. The witness referred to his notes to refresh his memory, on consent. On June 25, 2011, he investigated a potential assault on two people who may have met at Jax Bar and Grill. To assist in his investigation, Constable Logue attended the establishment. No one from management was available to provide the video pertaining to his investigation. He was unable to state who was manager on that day.

On July 8, 2011, Constable Logue testified that he and several officers were dispatched in response to a 911 call for a large disturbance at Jax Bar and Grill. Upon arrival he witnessed a large crowd gathered near the patio and he was told that a few patrons were fighting and had since fled the area. Constable Logue observed a great deal of broken glass on the ground and overturned patio furniture. He saw IC, who he knew from previous contacts, outside the bar and cleaning up the debris. IC was the staff person actively involved. He was speaking to police and asking patrons to leave the establishment. At that time, he asked IC about the video footage related to the June 25, 2011, investigation. IC told him there was no footage.

Constable Logue stated that he has always been under the impression that IC is the owner of the bar. In his dealings with the establishment he did not see the Applicant or the licensee, PL, at the bar.

On cross-examination, Constable Logue confirmed that he has not often been called for incidents at Jax Bar and Grill. He restated that, on the evening of July 8, 2009, IC acted as manager and took a leadership role.

Constable Leslie Lee

Leslie Lee has been a police officer with the Hamilton Police Service for twenty eight years. She is presently a uniform constable responsible for enforcement of the Criminal Code and the Act. Previously, she was a Detective Constable with the vice and drug unit.

Constable Lee testified that in March 2009, the Applicant was charged with an offence of mischief. In June 2009, he failed to attend court for this offence.

In February 2011, the Hamilton police were contacted by the Alcohol and Gaming Commission of Ontario (“AGCO”) and Ontario Provincial Police (“OPP”) as a result of the Applicant’s request for a license transfer. A warrant for the Applicant for his failure to attend court was outstanding. The police attended to the address noted on the application. They spoke to his mother who was unsure of his whereabouts. The police attended Jax Bar and Grill, where they met the Applicant who was arrested without problems. Both charges were subsequently withdrawn with the Applicant attending the adult diversion program.

Constable Lee reviewed the criminal record of the Applicant’s uncle CC. Two convictions are noted, one in 1993 and the other in 2008 (Exhibit #7).

Constable Lee gave extensive evidence on the criminal record of the Applicant’s father IC. She testified that IC has numerous contacts with police and several convictions for violent offences from 1979 to 2010 (Exhibits #8 and #18).

On March 3, 2011, Constable Lee prepared a report for the AGCO concerning the Applicant’s request for a transfer of a liquor licence. The Hamilton Police objected to the transfer of the liquor licence from the current licensee PL. The reasons are detailed in Exhibit #9.

Constable Lee summarized the reasons and testified that the Applicant’s immediate and extended family members have various business connections. The Applicant’s grandmother and aunt are the principals of the company that own the building in which the licensed premises are located. The Applicant does not own any property in the City of Hamilton. The address stated in the Personal History Report attached to the application for transfer of licence is false. The Applicant did not reside there and his mother did not know his whereabouts when police attended the residence. The Applicant’s father IC has a lengthy criminal record. The licensee PL knew IC was working at Jax Bar and Grill while under bail conditions that prohibited him from doing so. The Applicant’s father shares a long term relationship with the licensee and the Applicant has a personal and business relationship with the licensee.

Constable Lee stated that, while assigned to the drug and vice unit in November 2011, she conducted static surveillance of Jax Bar and Grill. During this surveillance, she witnessed the Applicant’s father exiting and re-entering the premises on several occasions. She reported seeing the Applicant’s father behind the service bar, an area, according to the Act, restricted to employees. She testified that during several days of surveillance, she did not witness the Applicant working at the bar or on the premises. She reports seeing the licensee in the parking lot once.

Constable Lee stated that the Applicant’s family dynamics are well established. Family members are deeply and closely connected. The Hamilton Police believe these dynamics create issues as the Applicant’s father will still run the business regardless of whether the Applicant’s name is on the licence. For these reasons, the Hamilton Police object to the transfer of licence.

On cross-examination, Constable Lee stated Jax Bar and Grill is in a high crime area of the city. The police concerns are with who operates the bar and not with the clientele. Their main concerns are with the Applicant’s father, his criminal record and his influence on the daily operations of the licensed premises. These concerns are based on police knowledge that the Applicant and the licensee have not been seen on the premises and the police are satisfied that the bar is run almost solely by the Applicant’s father. Given the family dynamics, this situation is not likely to change with a transfer of licence to the Applicant.

Inspector Brian Sharpe

Brian Sharpe is an inspector with the AGCO. He has held this position for approximately five years. On August 19, 2011, Inspector Sharpe attended Jax Bar and Grill with OPP Constable Christine Bourrie of the Investigation and Enforcement Bureau of the AGCO. Constable Bourrie was conducting an investigation on the current licensee PL. The witness referred to his notes to refresh his memory, on consent.

They arrived at the establishment at 5:38 pm and asked a female bartender to speak to the owner of the premises. They were told that IC was the owner and he was not in. The bartender telephoned IC from the bar and IC spoke to Constable Bourrie. Inspector Sharpe made general observations of the patrons and the bar; all was in order.

On cross-examination, Inspector Sharpe confirmed that his attendance at Jax Bar and Grill was at the request of Constable Bourrie, who was investigating ownership issues. He noted that the bartender was Smart Serve certified. He stated that while working as an AGCO inspector for the area, he did not have ongoing contact with the establishment. He has never met the Applicant, his father, or the licensee. He has not investigated any liquor licence violations at the establishment.

Constable Christine Bourrie

Christine Bourrie has been a police officer with the OPP since April 1998. She has been attached to the Investigations and Enforcement Branch of the AGCO for the past five years. She conducts investigations on liquor licence applications. The request for an investigation is triggered by missing, false or irregular information on an application for a licence. The investigation focuses on the present and past conduct, financial responsibility and the honesty and integrity of an applicant. She reviews documents and conducts an interview with an applicant to enable an exchange of information. Constable Bourrie has conducted approximately twenty investigations in the past two years. The process can be short or lengthy, depending on the cooperation of an applicant.

Constable Bourrie referred to the “will-say statement” she prepared for the hearing and filed as Exhibit #11. On March 8, 2011, she was asked by the AGCO to conduct an investigation into the liquor licence transfer application dated February 3, 2011, from the licensee of Jax Bar and Grill, to the Applicant.

The AGCO raised concerns over some irregularities in the information provided by the Applicant and a report from the Hamilton Police indicating concerns with two family members known to the police for violent offences and their role in the business.

Constable Bourrie’s investigation focused on the irregularities in the information provided by the Applicant in the Personal History Report and the transfer application (Exhibit #13). He listed a different address on the Personal History Report to the one on the licence transfer application. The Personal History Report stated that his association with the business was as owner, whereas the transfer application stated that he was sole proprietor, where the business is owned by one person, not an incorporated business. He described his role in the day to day operations of the business as owner/manager, whereas a handwritten attachment to the application stated he had been managing and bartending/cooking for the last year and a half. He answered “no” to having outstanding charges against him in any jurisdiction, whereas a CPIC check indicated an outstanding warrant for an offence of fail to appear. He answered “no” to any outside party operating any aspect of the liquor business. He answered “self” to the question “Who will manage the licensed premises?”

On March 11, 2011, Constable Bourrie made her first attempt to contact the Applicant by telephone and email. After four days of effort, she spoke to the Applicant and explained the reason for her investigation. On his request, she emailed him the Request for Documents (RFD) and pertinent details (Exhibit #14). Subsequent to this initial contact, Constable Bourrie made several more attempts by telephone calls and emails to the Applicant and to his lawyer, Mr. Burns, to pursue the investigation. She subsequently received three faxes from his lawyer with various time frames and promises to provide the required documents. Despite the efforts by Constable Bourrie, the Applicant failed to submit the documents and the financial institution authorization form. After two months of effort and no receipt of the documents, Constable Bourrie completed her report and advised the AGCO that her investigation was incomplete as the Applicant failed to provide the requested documentation. On August 12, 2011, the AGCO issued a Notice of Proposal to refuse licence transfer.

Constable Bourrie further testified that on August 17, 2011, she received a new request from the AGCO to conduct an investigation on the premises of Jax Bar and Grill to determine the true ownership of the establishment. She attended the premises accompanied by Inspector Sharpe. The bartender indicated that the owner IC was not on the premises and he was located by telephone. In the telephone conversation with IC, he advised Constable Bourrie that the licensee PL was the owner. Constable Bourrie stated that she did not observe the Applicant at the premises nor was his name mentioned when she asked a staff person to speak to the owner/manager of the premises.

From September 6, 2011 to January 9, 2012, Constable Bourrie continued with the second investigation regarding ownership of Jax Bar and Grill and at the same time received correspondence from the Applicant’s lawyer pertinent to his request for licence transfer.

A letter dated September 3, 2011, clarified some issues concerning the Applicant’s business relationships with members of his family and stated that the Applicant would soon provide all of the information requested in the Request for Documentation. A letter dated October 31, 2011, advised that other documents related to the Applicant were provided by the licensee. On November 4, 2011, a fax letter referred to a proposed lease between the two family numbered companies. All these letters are filed as Exhibit #16.

While pursuing the investigation of the licensee, Constable Bourrie telephoned Jax Bar and Grill on several occasions to speak to the licensee. She was never able to reach PL at the establishment and she always left a message for her to return the call. PL returned all the calls and was cooperative with the investigation and provided the pertinent documents.

On the morning of November 3, 2011, Constable Bourrie attempted to contact the Applicant by telephone at Jax Bar and Grill to set up a personal interview to review the documents and information received to date. The Applicant was not at the establishment and she left a message for him to return her call. At the same time, she sent the Applicant a message at his two email addresses, with a copy to his lawyer.

Later that afternoon, the Applicant returned her call and expressed surprise at the request for an interview and implied that it may be difficult to arrange as he had just started a full time job out of town. Constable Bourrie accommodated the Applicant with a time, date and location and they agreed to November 9, 2011, subject to her securing an interview room at the local detachment of the OPP. Unfortunately the interview room was not available and on November 7, 2011, two days prior to the date for interview, Constable Bourrie sent an email to the Applicant and his lawyer cancelling the appointment. She sent a second reminder of the cancellation after receiving correspondence from his lawyer referring to the scheduled interview. She telephoned the Applicant’s contact number/cell phone and was unable to reach him. She did not leave a message as his phones did not accept messages.

Later, in the early evening of November 9, 2011, Constable Bourrie was contacted on her cell phone by the licensee PL, who advised her that the Applicant was at the OPP detachment for his interview. Constable Bourrie advised PL of the emails and telephone messages cancelling the interview and asked PL to have the Applicant or his lawyer contact her as soon as possible to reschedule the interview. Between November 9 and November 22, 2011, Constable Bourrie attempted again through emails and telephone to contact the Applicant or his lawyer, including asking the licensee, in a telephone conversation, to have the Applicant call her. All her efforts were to no avail.

As of January 9, 2012, the Applicant had not contacted Constable Bourrie. The financial authorization form and banking information have not been provided. The interview with the Applicant has never occurred and the investigation has not been completed. She met the Applicant for the first time at the Tribunal hearing.

On cross-examination, Counsel for the Applicant suggested to Constable Bourrie that her tone of voice or use of words were perhaps intimidating to the Applicant. In response, she stated this remark has never previously occurred in any of her investigations. She believes that she went beyond the call to contact the Applicant. Applicants are generally anxious to get a licence. They most often cooperate with the investigation and present themselves for an interview. This was not the case with the Applicant.

Counsel further suggested that, from the onset, the Applicant’s request for licence transfer was not a popular application. Constable Bourrie reiterated that the investigations result from false and missing information and irregularities in the application She had no previous knowledge of Jax Bar and Grill and the Applicant’s family were not known to her. The Hamilton police report regarding the request for transfer was an independent report and based on their assessment. She refuted Counsel’s notion of collusion between the police. The purpose of her investigation was to obtain additional information to explain the irregularities in an independent report to the AGCO.

Constable Bourrie confirmed that the second investigation into the ownership of Jax Bar and Grill is ongoing and related to the Applicant’s request for licence transfer. She confirmed receipt of some documents from the licensee, but no documents from the Applicant. As she was unable to interview or speak to the Applicant, she was unable to determine what information sent to her by the licensee was also applicable to the investigation of the Applicant. She cannot understand his lack of involvement in the process and his apparent indifference.

Counsel suggested that an air of confusion existed around the date for the scheduled interview with the Applicant. Constable Bourrie stated that she did more than required to contact him and Counsel with respect to the cancellation. She cannot account for the Applicant’s inability to check his emails, answer his phone and/or provide for a message answering system. She added that the Applicant resides with the licensee and even messages left with her were not returned. Constable Bourrie restated that an interview with the Applicant is required. Details of his bank accounts and a financial authorization form have not been provided. If the Registrar so directs, further investigation may result once these issues are resolved.

Counsel focused on Constable Bourrie’s interview of November 2, 2011, with the licensee. The licensee advised her that the Applicant’s father has no involvement with the premises and he is not on the list of employees. She identified four regular employees and two new hires. The Applicant and the licensee are not on the payroll. Constable Bourrie stated that in 2010, IC was convicted of the charge of assault with a weapon and he received a term of probation. The former bail condition restricting him from attending Jax Bar and Grill is not a condition of the probation order.

The Applicant

George Chrisanthopoulos was the only witness. He testified that he is twenty six years old and has lived in the Hamilton area for most of those years. He lives with his father IC, the licensee PL and her daughter. He has one sister. He entered the work force shortly after completing high school. He worked as a labourer for a construction company and began a tower crane apprenticeship which he did not complete.

The Applicant testified that members of his extended family have operated the bar and grill over the past fifteen years. Three years ago, his stepmother PL, the licensee, took over the operation of Jax Bar and Grill. It is a single bar and has a capacity of fifty five persons. He described it as a “sports bar”. The bar has not experienced a large number of problem patrons, which he finds rather surprising, as the area is described by police as a high crime area. The property and building are owned by his grandmother AA and his aunt PC, not by his uncle CC. He acknowledged his mistake on his application form when he referred to CC as the landlord.

The Applicant stated that approximately one year ago, he decided to “take over” the business and operations of the bar. The family had always planned for him to run the business. Earlier on, he was not interested and preferred to work in construction. In October 2010, he quit working in construction and decided to engage in the business full time. He described a typical day. At 9 am, he attends the bar, sometimes with his father or alone, and does preparation work for the bar to open at 11am. He checks the schedule and orders and helps the staff with a variety of chores, essentially what an owner would do. He generally does not serve customers. The bar is open to the public until 2 am. His father performs many of the same duties. His grandmother AA, aunt PC and uncle CC are not actively involved in the operation of the premises.

When asked about his request for licence transfer and his lack of cooperation with Constable Bourrie in her investigation, the Applicant stated “the whole thing has been confusing”. He maintained that employees at the bar know where to locate him, but conceded that many people can’t get him on the phone. He stated that he has an answering machine and voice mail, but it may not have always been working. He did not see the urgency of Constable Bourrie’s calls and messages. He admitted that at one point he did not try to reach her as he believed the investigation was cancelled or suspended. As for the request for documents, he did not recall seeing the financial authorization form and added he would have been happy to complete it. He was under the impression that the licensee PL had provided the financial records for the bar and assumed it was not necessary to repeat the process. He explained that he does not check his emails daily and therefore had not read the message notifying him of the interview cancellation.

He had one incident in 2009 when he was charged with mischief and he regrets his behaviour. When he attended court for the matter, he believed that it had been disposed of with the adult diversion program, which he completed. He stated that he was not aware of a second court date and was surprised later to hear that there was a warrant outstanding in 2011 for a failure to appear. When told by his mother of the police inquiry for him at her house, he immediately called the police and was cooperative. He did not refer to both matters on his application as he was unaware of the warrant and believed the charge was finished and not part of his record.

The Applicant stated that he is aware of his father’s extensive criminal record and the criminal record of his uncle CC. The Registrar’s assumption that he will be negatively influenced by them while he runs the business is false. He stressed that his request for licence transfer is genuine and he is capable of standing alone to build a successful and positive business.

On cross-examination, Counsel for the Registrar questioned the Applicant on his weekly hours of work while employed in the construction industry from January 2009 to October 2010. The Applicant stated he worked forty hours a week and he spent two hours daily on travel as his work was out of town. He stated he worked part time at Jax Bar and Grill mostly in the evenings and on weekends. He changed his previous testimony of quitting his job in construction to that of being laid off. When questioned as to when he actually worked at the bar, he maintained that as of December 2010, he was working full time. He then changed this statement and stated that he worked more hours, but not full shifts. He would open in the morning and close at night. On closer examination, he stated that he worked about fourteen (14) hours a week, mostly two hours a day. The establishment is open a total of 119 hours a week. When asked about the health of the licensee PL, the Applicant stated that she is not well, has always been on a disability plan and does not work much at the bar.

Counsel for the Registrar suggested to the Applicant that the vast majority of times, the premises are run by his father IC. The Applicant disagreed and changed his previous testimony to state that it is a collective effort, and indeed the licensee is there most of the time, but not doing shift work. Only one of the three of them is required to be present. The Applicant could not state how many hours his father worked. Counsel suggested that the Applicant relies a great deal on his father as he is the one running the business. The Applicant refuted this suggestion and stated that if that is the case, it takes away the effort that he personally has put into the business. In further questioning, the Applicant agreed that as a manager/owner he would be loath to hire someone who presented with a criminal record like his father’s. However, he trusts his father and he does a good job.

The Applicant insisted that his father has never assumed the manager’s position of the premises. He could not explain why the employees referred to his father as the owner/manager. However, he accepted that his father, when present, is the “take charge guy”, but he is not a manager or owner. The Applicant insisted that he and the licensee are the managers. He acknowledged that he would rely on his father to take charge in his absence because his father has done a great job and can be trusted. His father cooks, cleans, opens and closes the premises, and performs security type functions. He has a right to be there if he chooses to do so. He insisted that he wants the business to succeed and if granted the transfer licence, he will manage the premises alone, and, if necessary, will only use the help of the licensee PL.

In response to further questions, the Applicant stated he did not know the meaning of the term sole proprietorship. In November 2010, he registered his name as an officer on 2203099 Ontario Ltd. o/a Jax Bar and Grill. He did not immediately apply for a transfer licence as he had lost his wallet and did not have proper identification. He could not provide information on the purchase amount for the business. He refuted Counsel’s suggestion that he has not invested any money into the business and insisted that his investment came from his savings while working in construction. There is no purchase agreement and no proof of the money flow. He does not know what is a business plan, however, he will develop one after he gets the licence.

The Applicant stated he did not recall the request from Constable Bourrie for personal financial banking information. He could not provide an explanation as to why he failed to respond to emails or telephone messages. Although he insisted that the application for transfer of licence is important to him, he conceded that perhaps he underestimated the whole situation, and the urgency and importance of contacting Constable Bourrie. He accepted that he did not read the Registrar’s Notice of Proposal issued in August 2011, which stated that the investigation could not be completed. The Applicant assumed that the investigation was closed and made no effort to take charge of his application to resolve the outstanding issues impeding his request.

In reply evidence, the Applicant stated that when he received the Registrar’s Notice of Proposal, he concluded that he would not get the transfer licence. He therefore saw no further need to forward documents or contact Constable Bourrie. It was nothing personal and in hindsight he should have acted differently.

In further questioning by the Tribunal, the Applicant stated that in 2011, he was not on the establishment’s payroll. He was in receipt of Employment Insurance benefits and received extra money from the business. He saw nothing wrong with working under the table as he thought it was a fair exchange for the sacrifices he made while working at the bar. He insisted that as a licensee he would not consider this appropriate. Since January 2012, he is on the payroll and he cuts himself a pay cheque.

He stated that the transfer application was made in collaboration with his family. He wants the licence in order to have the authority to make decisions. He is Smart Serve certified. He acknowledged that he has not read the legislation governing a liquor licence but is aware of the concepts of over service, serving minors, Smart Serve and food handler training. He has no formal business training, but assists with the payroll and signs cheques. He will rely on the experience of the licensee to manage the business. His father will continue to do what he does now as he does a good job. He concluded in stating “it helps to have him around as it takes a team effort to manage the long hours of operation”.

THE LAW

Sections 16 and 17 of the Act state:

Change of ownership of business or change of licensee

Except as permitted by the regulations, if there is a prescribed change of ownership of a business carried on under a licence or a change of licensee, no person shall carry on the business under the authority of the licence unless the licence is transferred by the Registrar in accordance with this Act and the regulations.

Transfer of licence

(1) A person may apply to the Registrar for the transfer of a licence to sell liquor, a licence to deliver liquor, a licence to represent a manufacturer or a licence to operate a ferment on premise facility unless a proposal to revoke or suspend the licence has been issued.

(2) An applicant for the transfer of a licence to sell liquor is entitled to the transfer except if,

(a) the applicant would not be entitled to the issuance of a licence for any ground under clauses 6 (2) (a) to (g.1) or subsection 6 (4) or (4.1); or

(b) the Registrar has issued a notice of proposal in respect of the holder of the licence or the premises.

Licence to sell, Requirements

(2) Subject to subsection (4) or (4.1), an applicant is entitled to be issued a licence to sell liquor except if,

(d) the past or present conduct of the persons referred to in subsection (3) affords reasonable grounds for belief that the applicant will not carry on business in accordance with the law and with integrity and honesty;

(e) the applicant or an employee or agent of the applicant makes a false statement or provides false information in an application under this Act;

Prohibition

(4) A licence to sell liquor shall not be issued,

(a) to a manufacturer; or

(b) to a person who by reason of an agreement, arrangement or understanding with any person is likely to promote the sale of liquor or to sell the liquor of a manufacturer exclusive of any other manufacturer.

(4.1) Subject to subsection (4.2), a licence to sell liquor shall not be issued,

(a) to a person who is under agreement with any person to sell the liquor of any manufacturer;

(b) to a person who is associated or connected with a manufacturer or financially interested in a manufacturer as to be likely to promote the sale of liquor of that manufacturer;

(c) to a person who by reason of an agreement, arrangement or understanding with any person is likely to promote the sale of liquor of any manufacturer;

(d) to a person for premises in which a manufacturer has an interest, whether freehold or leasehold, or by way of mortgage or charge or other encumbrance, or by way of mortgage, lien or charge upon any personal property in the premises and whether the interest is direct or indirect or contingent or by way of suretyship or guarantee; or

(e) to a person in respect of a business in which a manufacturer has an interest by way of a franchise agreement.

ISSUES

The first issue in this case is whether or not the present/past conduct of the Applicant, or of a person having beneficial interest in the business of the Applicant, or of a person having responsibility for the management or operation of the business affords reasonable grounds for the belief that its business will not be carried on in accordance with the law and with integrity and honesty.

The second issue is whether or not the false statement made by the Applicant on his application is sufficient to disentitle him to the licence transfer.

APPLICATION OF LAW TO FACTS

The onus falls upon the Registrar to prove his case on a balance of probabilities. The Applicant is entitled to a transfer unless one of the grounds in section 6 of the Act applies. The Tribunal must make an independent assessment as to whether or not those grounds have been proven.

The Tribunal has carefully reviewed the testimony, exhibits and submissions.

Providing accurate and complete information to the Registrar is a crucial matter in assessing the honesty of an applicant since the Registrar relies on this information to determine eligibility for a transfer licence. If any information is intentionally concealed, or if false information is given, the Registrar has good reason to have serious concerns that an applicant will withhold information or provide false information in the future in his dealings with the Registrar or with others.

Witnesses for the Registrar gave credible and thorough evidence. There were no inconsistencies in their testimony. Constable Bourrie’s evidence was very compelling. From the start of her investigation and for a period of ten months, she found the Applicant uncooperative and elusive. Despite numerous phone calls, emails to him and his lawyer, messages left with his stepmother, the licensee, the Applicant was either non responsive or untimely in his efforts to provide all of the required documents to complete the investigation. Furthermore, he has never attended for an interview. He testified that he saw no urgency in responding to Constable Bourrie’s requests. Constable Bourrie described this response as most unusual. Most applicants are anxious to obtain their licence and most of them cooperate with the process.

Counsel for the Registrar suggested that the Applicant’s behavior can only be explained by one reason. The request for a transfer licence is a sham. It is a front for his father who would otherwise never qualify for a licence. Counsel for the Applicant suggested that the Applicant had a lack of understanding of the process. Constable Bourrie’s approach to the investigation may have been intimidating. The Applicant is not a sophisticated person and he was confused with the paperwork. The application is genuine and not a sham.

If indeed the Applicant was serious about the transfer licence, there is no valid explanation as to why he failed to cooperate with the investigation and failed to submit the required documents. The evidence clearly indicates that the Applicant took no ownership of the request. He made no effort to engage in the process, showed no initiative to better understand the steps and made assumptions on the status of his application. The lack of disclosure of banking information and financial authorization leads the Tribunal to believe that he was either being deceitful or he was not taking the legislative requirements seriously. Either way, the Tribunal finds that the Applicant's lack of cooperation and disclosure are problematic in light of the requirements for a licence under the Act.

The Tribunal does not accept that the Applicant was intimidated by the investigation and did not understand the process. If uncertain, he should have availed himself of resources available to him, from either his lawyer or the licensee, his stepmother, who two years earlier made the same application.

The Tribunal notes several inconsistencies in the evidence of the Applicant. The first inconsistency is his explanation of his employment history. From January 2009 to October 2010, he testified to working in construction full time, namely sixty hours a week considering work and travel time. The handwritten attachment to his application mentions no construction work and states that from 2009 to present February 3, 2011, he is managing and bartending/cooking at Jax Bar and Grill. He describes himself as owner on the Personal History Report. When questioned by Counsel for the Registrar he conceded that he worked at the bar about fourteen hours a week, mostly evenings and weekends. The local police, the AGCO Inspector and Constable Bourrie all testified that the Applicant was never seen at the establishment and Constable Bourrie was never able to reach him there by telephone. The significant person at the establishment has always been his father.

The second inconsistency is the Applicant’s testimony regarding the family members’ involvement in the business operations. He initially stated, in a candid response, that the licensee was not well and did not work much at the bar. When challenged by Counsel for the Registrar he became nervous and changed his story and stated that she is there most of the time and helps him look after the operations. She does not serve or do shift work, but she is on the premises. He refused to accept that his father manages the establishment as this notion would negate his own work and efforts. Nonetheless he conceded that in his absence, his father, when on site, is the “take charge guy” and he relies on him. Evidence from the police and the AGCO Inspector about various attendances at the premises all indicate that the Applicant’s father was always in the premises and acted as manager. The employees of the establishment referred to the father as the manager/owner. The Applicant accepted that he wrongly identified the owner on his application. He insisted that he used his savings to invest in the business. He has no proof and cannot indicate the purchase amount. He has verbal agreements in place and these will be formalized once he gets the licence.

The Tribunal has only the Applicant’s evidence to support his position that he will be the manager and run the business alone with the help of the present licensee. Key parts of his testimony are unreliable. There is conflicting evidence on the future role of the father in the business and the Tribunal can only conclude that the family dynamics are unlikely to change. Although the licensee and the Applicant’s father attended the hearing, they were not called as witnesses, leaving the Tribunal unable to clarify or confirm the Applicant’s evidence.

The Applicant wants the opportunity to have a licence so that he can have the authority to make decisions and build the business. From the evidence, it is clear that the transfer Applicant is not prepared for this business venture and has not even taken ownership of his application. The Tribunal is deeply concerned with his lack of cooperation with the investigation and his inability to provide the necessary documentation despite having had ample time and opportunity to do so. The Tribunal is further concerned with the inconsistencies in his testimony as to the present and future management of the premises and the likelihood that his father will continue to play a dominant role in the operations.

Conflicting and misinformation have been provided throughout the Applicant’s testimony through vagueness and/or omissions thereby calling into question the nature of the Applicant’s honesty and integrity, the very principles under which a liquor licence is granted.

The Tribunal is satisfied that the present/past conduct of the Applicant or of a person having responsibility of the operation of the business of the Applicant affords reasonable grounds for belief that the business will not be carried on in accordance with the law and with integrity and honesty.

The second issue to be considered is whether or not the false statement made by the Applicant on his application is sufficient to disentitle him to the licence transfer.

The Applicant stated it was unfortunate that he failed to disclose his previous offence when he completed the application. He remembered the incident as being traumatic as this was his first encounter with the law. He thought that in completing the diversion program, the charge would not go on his record and therefore he did not include the information on the application. He was unaware of the warrant for a fail to appear. The Tribunal notes that the question on the application is clear, is in bold lettering and refers to both convictions and charges. What is troubling for the Tribunal is that the Applicant provided false and incomplete information on his application. Although it may not have been his intention to deceive, if a successful transfer was important to him, he ought to have submitted full and accurate information to the Registrar.

The Tribunal is satisfied that the offence in itself was not that serious and it was disposed of by way of diversion. It would not likely have been of major concern to the Registrar in the Applicant’s transfer request. The Tribunal is satisfied that the false statement made by the Applicant on his application is not sufficient to disentitle him to the licence transfer.

Counsel for the Applicant urged the Tribunal to consider the transfer with certain terms and conditions on that transfer, one of which would be a formal restriction on the Applicant’s father participating in a managerial role of the licensed premises.

The Registrar opposed the transfer with conditions arguing that such a condition could not be enforced. Given the father’s history of not complying with a similar condition, such a condition is likely to have little meaningful impact and the Tribunal dismisses the submission.

ORDER

Pursuant to the authority vested in it under the provisions of the Act, the Tribunal directs the Registrar to carry out the Proposal to refuse to transfer licence to the Applicant.

LICENCE APPEAL TRIBUNAL

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