Licence Tribunal

Appeal d'appel en

Tribunal matière de permis

DATE:

2012-05-16

FILE:

7357/LLA

CASE NAME:

7357 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 Revoke a Licence.

165100 Ontario Limited, o/a Lyric Karaoke and Lounge

Applicant

-and-

Registrar of Alcohol and Gaming

Respondent

DECISION AND ORDER

ADJUDICATOR:

Elizabeth Sproule, Vice-Chair

APPEARANCES:

For the Applicant:

Tuan Dang, Agent

For the Respondent:

Phillip Morris, Rena Khan, Co- Counsel

Heard in Toronto :

May 3, 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 April 5, 2012, which proposed to revoke the liquor licence ("the licence") of 1652100 Ontario Limited operating as Lyric Karaoke and Lounge (the "Applicant"). The Applicant appealed this Proposal to the Licence Appeal Tribunal.

The Registrar also issued an Order on the same date immediately suspending the licence of the Applicant pending the hearing of the Notice of Proposal. The hearing commenced on May 3, 2012, and the decision of the Tribunal was reserved. The Registrar requested that the time of expiration of the interim order of suspension be extended until the Tribunal's decision is issued and the matter concluded. This request was granted and an order extending the expiration of the interim order of suspension was issued on May 4, 2012.

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

FACTS

The facts in this matter are not in dispute. The Registrar submitted the evidence of four inspectors, who provided details of numerous inspections of the licensed premises and their findings. This evidence went unchallenged.

The Applicant was licensed on August 9, 2005. On July 28, 2006, a Notice of Proposal was issued to suspend the licence of the Applicant. At the time of the Proposal the business of the Applicant was being managed by Tuan Minh Dang.

On November 29, 2006, the Applicant's licence was suspended for 10 days for various violations of the Liquor Licence Act and regulations. At the time of the suspension, the control of the Applicant had changed from an individual named CHD to Tuan Minh Dang. The transfer of the liquor licence from the Applicant as controlled by CHD to the Applicant as controlled by Tuan Minh Dang was approved.

On January 27, 2010, the Registrar of Alcohol and Gaming issued an Order of Monetary Penalty to Tuan Dang for breaches of the Act and Regulation, in particular sections 25(1) and 29 of Ontario Regulation 719/90 (the "OReg") under the Act.

On August 1, 2010, Mr. Dang sold the business to an individual DTP, whose corporation applied for a transfer of the Licence. The new establishment was to be managed by the sons of DTP, namely MTP and QVP.

On June 17, 2011, the Deputy Registrar of Alcohol and Gaming (the "Deputy Registrar") suspended the Licence for 9 days. At this time both Mr. Dang and the Transfer Applicant DTP signed an agreement admitting violations of sections 29, 43, 52 and subsection 25(1) of the OReg.

On December 16, 2011, the Deputy Registrar suspended the Licence for 7 days. This suspension related to violations of sections 29 and 43 of the OReg. Although an agreement was allegedly signed by Mr. Dang acknowledging these violations, Mr. Dang testified that his signature was forged. The Tribunal accepted this evidence of Mr. Dang.

An inspection was carried out on the premises on January 6, 2012, and it was found that the Licence was not posted contrary to section 52 of the OReg. On February 18, 2012, it was found that there were 37 people in the premises licensed for 30, contrary to section 43 of the OReg, and that they were consuming cold beer at 3:02 a.m. contrary to subsection 25(1).

On March 3, 2012, the inspectors found that the doors were locked upon their approach, a breach of section 45 of the Act. The inspectors then accessed the premises through a rear door and found that there were 53 persons in the premises licensed for 30, contrary to section 43. At that time the individual MTP, who was one of the Transfer Applicant's sons and one of the individuals that was to be managing the business, was in the premises as a patron and indicated to Inspector Donald Anderson that they had 'turned over the business'.

Finally, on March 25, 2012 an inspection of the premises was carried out at approximately 3:46 a.m., and it was found that patrons were still consuming alcohol contrary to s.29 of the OReg and that those individuals appearing to be in charge were not connected with the Transfer Applicant.

The Transfer Applicant DTP withdrew her transfer application on April 3, 2012.

Mr. Dang testified that he has been kept in the dark with respect to what has been going on with the business, and the licence, and that he did not know that the transfer had not gone through. He had trusted the individuals that he was dealing with. He acknowledged that he was paid for the business in August of 2010, but that the agreement of purchase and sale had been contingent upon the transfer of the licence and if the licence is revoked he is concerned he will have to pay back the money. He testified that there may be continued liability with respect to the leased premises; although he evidence was unclear as to whether this was the Applicant's liability or a personal liability.

Mr. Dang had noted that a new sign, changing the name of the business, went up about six months after he sold the business and it was his evidence that this led him to believe that the licence had been transferred. He testified that he never received any notifications of violations, other than those relating to some tickets for which he had to attend court. He was not clear as to the date of this. He stated that he did not know of the true state of affairs until the Proposal currently under appeal came about. He stated that it has been a learning experience and that he will be more attentive and he will make sure any new owner will obey the rules.

In cross-examination Mr. Dang testified that after selling the business he attended the premises three days a week over a period of approximately 4 months. He testified that after January 2011 he was never there, although he went on to say that he did 'visit' it. He subsequently added that he did attend for 2 days a week for a couple of months further to the pervious period when he attended 3 days a week. The Tribunal found Mr. Dang's evidence of his monitoring of the buisness to be unclear and evolutionary. Mr. Dang acknowledged the licence on the wall of the premises would still have been 'his' but it was his evidence that he did not look at it when he was there. He also acknowledged that he signed the agreement dated June 17, 2011, relating to a suspension of the licence but did not read it: he thought it had something to do with completing the transfer.

Mr. Dang acknowledged that he was approached by the Transfer Applicant to sign documents on behalf of a proposed purchaser sometime in February of 2012 and that he was upset at that point that things had been "botched up."

THE LAW

The Liquor Licence Act provides:

6. (1) A person may apply to the Registrar for a licence to sell liquor.

(2) Subject to subsection (4) or (4.1) an applicant is entitled to be issued a licence to 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;

15. (1) The Registrar may issue a proposal to revoke or suspend a licence to sell liquor or refuse to renew such a licence for any ground under subsection 6 (2), (4) or (4.1) that would disentitle the licensee to a licence if the licensee were an applicant or if the licensee has contravened this Act, the Regulations or a condition of the licence.

APPLICATION OF LAW TO FACTS

The issue before the Tribunal is whether the past or present conduct of the Mr. Dang, the sole officer director and operating mind of the Applicant, affords reasonable grounds to conclude that the Applicant will not carry on business in accordance with the law and with integrity and honesty.

There have been a numerous instances when the Act and Regulation have been violated by the Applicant. First while Mr. Dang was managing the business of the Applicant and later while Mr. Dang was the sole officer and director of the Applicant. Mr. Dang has argued that since the business was sold in August of 2010 he has been kept in the dark regarding the licence, that he was not made aware of what was happening, that the Transfer Applicant has acted improperly and therefore he should not be held responsible. Based on the facts, the Tribunal finds that Mr. Dang knew, or ought to have known, in June of 2011 that the licence had not been transferred, that it was still that of the Applicant and that the Applicant remained responsible for compliance with the Act and its Regulation. Mr. Dang acknowledged that he had attended court relating to 'tickets' for provincial offences involving the Transfer Applicant. He signed a document acknowledging those violations in June of 2011. It was a two page document with clear indications on both pages that it related to a Notice of Proposal. Mr. Dang did not suggest he had any issues with comprehension of the English language.. It is difficult for the Tribunal to accept that he did not know what he was signing. If he did not, it was wilful blindness.

Mr. Dang was approached in February of 2012, about consenting to the transfer of the licence to yet another party; obviously at this point it would be clear to him that the original transfer was never completed. Notwithstanding this, Mr. Dang took no steps to clarify the status of the licence or if there had been any previous violations. If he was caught off guard by the Proposal, it was a result of his indifference as to what was happening.

It has been suggested that Mr. Dang will, if the licence is not revoked, ensure that any future transfer applicant complies with the Act and Regulations. The Tribunal has no confidence that this will be the case given his past conduct. Mr. Dang did not ensure compliance when he managed the business, when he took control of the Applicant, or when he allowed a purchaser to operate under the licence. The Tribunal finds that this conduct provides reasonable grounds to conclude that the Applicant will not carry on business in accordance with the law and with integrity and honesty.

ORDER

Having considered the evidence submitted in support of the Proposal to Revoke and pursuant to the authority vested in it under s. 15(7) the Act, the Tribunal directs the Registrar to carry out the Proposal and revoke the Applicants licence No. 203749 under the Act.

LICENCE APPEAL TRIBUNAL

Elizabeth Sproule, Vice-Chair

Released: May 16, 2012