Licence Tribunal

Appeal d'appel en

Tribunal matière de permis

DATE:

2013-03-15

FILE:

7670/GCA

CASE NAME:

7670 v. Registrar of Alcohol and Gaming

Appeal from a Decision of the Registrar under the Gaming Control Act, 1992, S.O. 1992 c. 24 - to Revoke a Licence, as stated on Notice of Proposed Order.

2092554 Ontario Inc. o/a Food Galore Grocery

Applicant

-and-

Registrar of Alcohol and Gaming

Respondent

REASONS FOR DECISION AND ORDER

ADJUDICATOR:

Terrance A. Sweeney, Vice-Chair

APPEARANCES:

For the Applicants:

Raj Sharda, Counsel

For the Respondent:

Joyce Taylor, Counsel

Heard in Toronto:

March 4 and 5, 2013

DECISION AND ORDER

BACKGROUND

This is a hearing before the Licence Appeal Tribunal arising out of a Notice of Proposed Order issued by the Deputy Registrar of the Alcohol and Gaming Commission of Ontario (“AGCO”) pursuant to the Gaming Control Act, 1992, (the “Act”). The Notice of Proposed Order is dated September 24, 2012, and proposes to revoke the registration of the Applicant as a gaming supplier in the class of Seller (Lottery Retailer) under the Act.

The Notice of Proposed Order alleged the following in support of the intention of the Deputy Registrar to revoke the registration of the Applicant.

FACTS

1. 2092554 Ontario Inc. o/a Food Galore Grocery is registered with the AGCO as a Seller (Lottery Retailer). This registration expired on June 26, 2012, but is deemed to continue as 2092554 Ontario Inc. o/a Food Galore Grocery applied to renew the registration before the expiration date.

2. The Applicant has been the sole officer and director of 2092554 Ontario Inc. since December 31, 2007. Prior to that date, Sudan Patel was the sole officer and director of 2092554 Ontario Inc. Bena Patel is married to Sudan Patel, a.k.a. Madhusudan Patel, a.k.a. Mike Sudan.

Breaches of Terms of Registration

3. On or about February 14, 2008, Bena Patel, on behalf of 2092554 Ontario Inc. o/a Food Galore Grocery consented to the following Terms of Registration as a condition of the Registrar’s approval of her application for registration as a gaming supplier in the class of Lottery Retailer:

2 a) Mr. Sudan Patel a.k.a. Madhusudan Patel, will have no involvement in the management, conduct, sale and redemption of OLG (Ontario Lottery Gaming) products.

3 a) Ms. Bena Patel o/a Food Galore Grocery shall advise the Deputy Registrar in writing within ten (10) days of any changes in management who oversee or coordinate lottery product sales

4. Ms. Bena Patel confirmed these same terms of registration, amongst others, on or about June 6, 2009. All subsequent renewals of her registration have been subject to these terms.

5. On or about May 18, 2012, it came to the Registrar’s attention that Ms. Patel and 2092554 Ontario Inc. o/a Food Galore Grocery may not be in compliance with the above-mentioned Terms of Registration and an investigation was commenced.

6. The investigation revealed numerous instances throughout 2012 when Ms. Patel breached the terms of registration of 2092554 Ontario Inc. o/a Food Galore Grocery. More particularly:

(a) On or about January 25, 2012, Bena Patel faxed a form to the OLG giving OLG permission to release all information about 2092554 Ontario Inc. o/a Food Galore Grocery’s lottery account to Sudan Patel.

(b) On or about May 25, 2012, a Gaming Registration Officer (GRO) with the AGCO requested that Ms. Patel confirm the role that Sudan Patel has in her business. On or about June 6, 2012, Ms. Patel responded that “Sudan Patel is not active with this location, only in case of BEN may he can (sic.) ask lottery financial information for deposit.”

(c) On or about June 1, 2012 an OLG mystery shopper, under the ID25 Mystery Shop Program, purchased lottery products without being asked for identification, from a clerk identified as Mike Sudan. Mike Sudan is another name used by Sudan Patel a.k.a. Madhusudan Patel. Mr. Patel refused to sign the ID25 Non-Compliant Letter presented by OLG.

(d) On or about June 20, 2012 the OLG called 2092554 Ontario Inc. o/a Food Galore Grocery Inc. because the fund transfer from 2092554 Ontario Inc. to the OLG was NSF. The OLG representative spoke with Sudan Patel respecting this NSF violation. Mr. Patel indicated that it was probably a bank error and that he would have the bank forward a letter to the OLG for both this and the previous NSF violation.

(e) On or about June 29, 2012, Sudan Patel contacted the OLG to request a copy of an invoice for 2092554 Ontario Inc. o/a Food Galore Grocery. This invoice was faxed to Mr. Patel.

(f) On or about August 7 2012, an AGCO investigator visited the premises of 2092554 Ontario Inc. o/a Food Galore Grocery, unannounced, at approximately 4:29 p.m. Sudan Patel was the only employee in the store. One customer was holding an instant scratch OLG lottery ticket in his hand, directly across the counter from Mr. Patel. The investigator asked for Bena Patel. Sudan Patel advised the investigator that Bena Patel was gone for the day and would not be returning until 8:00 a.m. the following day.

(g) The investigator subsequently requested a list of lottery activity for 2092554 Ontario Inc. o/a Food Galore Grocery from the OLG for the time immediately before and after his visit to the premises on August 7, 2012. The OLG report for the premises indicated that Mr. Patel had conducted numerous lottery transactions immediately before and after the investigator’s visit.

7. Based on these incidents, the Registrar is of the belief that Bena Patel has permitted Sudan Patel to be involved in the management of the lottery account, and in the sale and redemption of lottery products at the premises of 2092554 Ontario Inc. o/a Food Galore Grocery, in breach of the terms of registration to which she consented.

8. On or about July 8, 2012, Ms. Patel sent a fax to a GRO at the AGCO requesting that Sudan Patel be allowed to provide information in her absence for banking and invoice information so that she does not get charged with being NSF on her bank payments to OLG. She stated that Mr. Patel was requesting a pardon for his criminal convictions and that she was physically tired and needs help to run the business. This permission has not been granted by the Registrar.

9. On August 20, 2012, the investigator contacted Bena Patel and visited the store for 2092554 Ontario Inc. o/a Food Galore Grocery. Both Bena Patel and Sudan Patel were behind the counter. Sudan Patel was conducting what appeared to be a financial reconciliation, counting money and referring to cash register tapes.

10. Bena Patel admitted that Sudan Patel “was helping with the paperwork”. She admitted that she had authorized OLG to provide all lottery account information to Sudan Patel in January 2012. She admitted that he had spoken with OLG respecting the June 20, 2012 NSF, that he had requested an invoice from the OLG on June 29, 2012 and that he was selling lottery products from the premises on August 7, 2012. Ms. Patel said that she was sorry, asked that she be pardoned and asked to “please, please to have my husband help me. I am all alone and I have big health problems.”

11. As of May 23, 2012, the following employees of 2092554 Ontario Inc. o/a Food Galore Grocery, in addition to Bena Patel, were identified with OLG as being involved in the sale and redemption of lottery products:

• Dhaval Patel

• Krunal Patel

• Mitul Patel

• Romak Patel

DECISION

The Tribunal has carefully considered all the evidence and the submissions of Counsel. The Tribunal orders the Deputy Registrar to carry out the Notice of Proposed Order and revoke the registration of the Applicant for the reasons which follow.

EVIDENCE

For the Registrar

Frank Ryder is a retired Ontario Provincial Policeman with 30 years’ service, who contracts his services to the AGCO as an investigator.

He was assigned to investigate the Applicant to determine if it was breaching the terms of its registration and allowing Mr. Patel to be involved in the management, conduct, sale and redemption of Ontario Lottery Gaming ["OLG"] products.

He attended at the premises of the Applicant, unannounced, on August 7, 2012 at about 4:30 p.m. Mr. Patel, who was known to him, was behind the counter. Mr. Patel told him that Mrs. Patel would not be back until 8 a.m. the next morning. He left the store and watched customers coming and going. He then obtained a list of lottery transactions of the Applicant for the part of the day before he arrived and after he left. The list [exhibit 3 tab 16] showed a number of transactions which could only have been processed by Mr. Patel.

He reattended at the Applicant's store on August 20, 2012 at 12:35 p.m. Both Mr. and Mrs. Patel were in the store. Mr. Patel was behind the counter and appeared to be trying to balance some books of accounts. He interviewed Mrs. Patel. She agreed with the terms of registration [Ex 3, tabs 4 and 5]. Mr. Ryder showed her ID25 Non Compliant Letter of OLG dated June 1, 2012. [Ex 3 tab 10] This showed that Mr. Patel sold a ticket to an underaged mystery shopper. She denied that he worked there.

Mr. Ryder then showed her another OLG form "PERMISSION TO RELEASE INFORMATION” signed by her. In this form [Ex 3 Tab 7], she authorized OLG to release information to Mr. Patel. She said “I just asked for permission. I am sorry."

Mr. Ryder challenged her with the fact that Mr. Patel was dealing directly with OLG about an NSF matter [Ex 3 tabs 12 and 13] and asked if that was not a direct breach of her terms of registration. She said "Sorry, I thought it was Ok.... he was helping me...".

Mr. Ryder asked her why she did not include Mr. Patel on the list of those who are able to operate the lottery terminal [Ex # Tab 8, May 23, 2012]. She said that the people on the list "do not work here anymore”. She closed the interview with the words, “can they pardon me?... help me ... I have health problems..".

Mr. Ryder completed his testimony by saying that Mrs. Patel never gave him any reason to think that she did not understand the terms of the registration of the Applicant.

He also said in cross-examination that it was odd that Mrs. Patel would give permission to the OLG to release information to the one person, Mr. Patel, who was not to be involved in the business.

Frank Cuda is Manager of Eligibility and has the delegated authority as Deputy Registrar of AGCO. He explained that OLG is in the business of making money. AGCO is the regulator of OLG retailers.

He received Mr. Ryder's report and recommended the Notice of Proposed Order to revoke the registration of the Applicant. The AGCO cannot expose the public to risk and registrants must be beyond reproach. He received no inquiry from Mrs. Patel as to her terms of registration. She knew the terms of her registration and breached them. He has no confidence that she can operate the Applicant in the public interest.

For the Applicant

Mrs. Patel was the only witness called for the Applicant. She is the director, officer and sole shareholder of the Applicant. Her testimony may be summarized as follows:

She received the renewed Certificate of Registration dated July 4, 2011 [Ex 3 tab 2]. She denied receiving the cover letter dated the same date [Ex 3 tab 6] reminding her that the Certificate continued to be subject to the same terms of registration. Accordingly, she thought the terms no longer applied. She did not seek confirmation from the AGCO of this belief. She said that she was asking for permission to have Mr. Patel help her when she signed the PERMISSION TO RELEASE INFORMATION referred to above, not withstanding that the form cannot be read that way. She only found out that the terms of registration continued to apply when Mr. Ryder interviewed her in August 2012.

She admitted that Mr. Patel was working at the store on June 1, 2012 when an underaged mystery shopper purchased a lottery ticket from him.

She also admitted that Mr. Patel worked the system at the store for two days in May 2012.

She conceded that she never received anything from AGCO to the effect that Mr. Patel could be involved.

She also admitted to Mr. Ryder that Mr. Patel sometimes helped out when other employees failed to turn up.

She did not tell Mr. Ryder in August about her misunderstanding as to the applicability of the terms of registration.

THE LAW

Name of registered supplier

(4) No registered supplier shall provide goods or services under a name other than the name under which the supplier is registered. 1992, c. 24, s. 4 (4); 1993, c. 25, s. 31 (4).

4. (1) Except as provided in this Act and the regulations, no person shall provide goods or services with respect to the playing of a lottery scheme for which a licence is required or hold himself, herself or itself out as providing those goods or services, unless,

(a) the person is registered as a supplier; and

(b) the person is providing those goods or services to a licensee or a registered supplier. 1992, c. 24, s. 4 (1); 1993, c. 25, s. 31 (1).

(1.01) Repealed: 1999, c. 12, Sched. L, s.19 (7).

Registration of suppliers

10. The Registrar shall refuse to register an applicant as a supplier or to renew the registration of an applicant as a supplier if,

(a) there are reasonable grounds to believe that the applicant will not be financially responsible in the conduct of the business, having regard to the financial history of,

(i) the applicant or persons interested in the applicant, or

(ii) the officers, directors or partners of the applicant, or persons interested in those officers, directors or partners, in the case of an applicant that is a corporation or partnership;

(b) there are reasonable grounds to believe that the applicant will not act as a supplier in accordance with law, or with integrity, honesty, or in the public interest, having regard to the past conduct of,

(i) the applicant or persons interested in the applicant,

(ii) the officers, directors or partners of the applicant, or persons interested in those officers, directors or partners, in the case of an applicant that is a corporation or partnership, or

(iii) officers, officials or agents of the applicant, or such other persons as are prescribed by the regulations, in the case of an applicant that is a trade union within the meaning of the Labour Relations Act, 1995; or

(c) the applicant is carrying on activities that are, or will be, if the applicant is registered, in contravention of this Act, the regulations, the standards and requirements established by the Registrar under section 3.8 or the terms of the registration. 1992, c. 24, s. 10; 1993, c. 25, s. 33; 1996, c. 26, s. 4 (11); 2011, c. 9, Sched. 17, s. 9.

Proposal to suspend or revoke a registration

12. The Registrar may propose to suspend or to revoke a registration for any reason that would disentitle the registrant to registration or renewal of registration under section 10 or 11 if the registrant were an applicant. 1992, c. 24, s. 12.

Registrar’s proposed order

Order of Tribunal

13. (8) After holding a hearing, the Tribunal may by order,

(a) confirm or set aside the proposed order;

(b) direct the Registrar to take such action as the Tribunal considers the Registrar ought to take to give effect to the purposes of this Act. 1992, c. 24, s. 13 (8); 2002, c. 18, Sched. E, s. 4 (7); 2011, c. 1, Sched. 1, s. 3 (7, 8).

APPLICATION OF LAW TO FACTS

The Registrar has established on a balance of probabilities that numerous breaches of the terms of registration occurred. Mrs. Patel defends on the grounds that she, mistakenly, thought that the terms of registration did not apply after July 4, 2011.

Ms. Taylor in her cross-examination and argument suggested that Mrs. Patel simply "made up a story" to save the Applicant's registration.

The credibility of Mrs. Patel has thus been brought into play

“...the real test of the truth of the story of the witness ...must be its harmony with the preponderance of probabilities which a practical and informed person would readily recognize as reasonable in that place and in those conditions..." Farnya v Chorny, 1951 CanLII 252 (BC CA), [1951] B.C.J. No.152, p.3, para.11

Another useful test: Did her evidence make sense? Was it reasonable? Was it probable?

The Tribunal has carefully considered her evidence, but in applying the tests enunciated, regrettably, must find against her.

The Tribunal accepts the evidence of Messrs. Ryder and Cuda and rejects that of Mrs. Patel. The Applicant has breached its terms of registration. The Tribunal is not satisfied, based on all of the evidence, that the Applicant will conduct itself as a Supplier of OLG products, in accordance with law or with integrity, honesty, or in the public interest. It follows, therefore, that the Deputy Registrar must succeed.

ORDER

The Tribunal directs the Deputy Registrar to carry out the Proposal and revoke the registration of the Applicant.

LICENCE APPEAL TRIBUNAL

Terrance A. Sweeney, Vice-Chair

Released: March 15, 2013