Licence Tribunal
Appeal d'appel en
Tribunal matière de permis
DATE:
2016-10-18
FILE:
10174/GCA and 10324/GCA
CASE NAME:
10174 and 10324 v. Registrar of Alcohol and Gaming
Appeals from Notices of Proposal of the Registrar of Alcohol and Gaming under the Gaming Control Act, 1992, S.O. 1992 c. 24 to Refuse and Revoke Registrations
Sunny Convenience Ltd. o/a Sunny Convenience and Qingqiu Jiang o/a Sunny Convenience
Appellants
-and-
Registrar of Alcohol and Gaming
Respondent
REASONS FOR DECISION AND ORDER
ADJUDICATOR:
Richard Macklin, Vice-Chair
APPEARANCES:
For the Appellants:
George Thelwell, Paralegal
For the Respondent:
Rena Khan, Counsel
Heard in Toronto:
September 7, 2016
REASONS FOR DECISION AND ORDER
The Registrar of the Gaming Control Act, 1992 (the "Registrar") has issued two Notices of Proposed Order in these related matters.
The first is a Notice of Proposed Order, dated April 4, 2016, to refuse the registration of Sunny Convenience Ltd. o/a Sunny Convenience as a gaming supplier under the Gaming Control Act, 1992, S.O. 1992 c. 24 (the "Act"). The second is a Notice of Proposed Order, dated July 6, 2016, to revoke the gaming supplier registration of Qingqiu Jiang o/a Sunny Convenience. The recipients of these Notices appealed to the Tribunal. The parties agreed that the appeals should be heard together.
EVIDENCE
Ms. Jiang
Qingqiu Jiang operates the convenience store named Sunny Convenience, in the Dufferin and Glengrove area of Toronto. She has been registered as a gaming supplier since April 27, 2011. She is the Appellant in LAT File No. 10324/GCA. Her husband is Jainwei Sun. Mr. Sun is the principal of Sunny Convenience Ltd. His company is the Appellant in LAT File No. 10174/GCA.
On September 12, 2013, Ms. Jiang agreed to additional conditions on her registration. They were imposed on the grounds that Ms. Jiang had sold illegal DVDs in her store. The additional conditions included a three-day suspension of her registration as a gaming supplier.
In June of 2013, Ms. Jiang agreed to further terms of registration, including Clause 3(a) which stated:
3 The entity shall inform the Deputy Registrar in writing within five days of becoming aware of the following:
(a) Any charges, convictions or findings of guilt or other disposition against Sunny Convenience or herself;
In July of 2015, Ms. Jiang submitted a renewal application for her gaming supplier registration. Ms. Jiang signed the renewal application and confirmed that she had read it, understood it and solemnly believed the contents to be true. Questions 6(a) and (b) of the renewal application asked the following questions:
6(a) Have you ever been charged, convicted or found guilty of any offence in Canada or elsewhere? This includes all federal and provincial offences.
6(b) Do you currently have any outstanding charges, including appearance notices and/or summons(es) against you in Canada or elsewhere? This includes ALL federal and provincial offences.
Ms. Jiang answered no to both questions.
Ms. Jiang failed to disclose that on January 13, 2015, she had been charged with one count of possessing unmarked cigarettes, and one count of possessing unmarked cigarettes for the purpose of sale, contrary to ss. 29(1) and 29(2) of Tobacco Tax Act, R.S.O. 1990 c.T.10.
In addition, as noted above, Clause 3(a) of her further Terms of Registration required Ms. Jiang to inform the Registrar, within five days, of "any charges, convictions or findings of guilt or other dispositions against Sunny Convenience or herself". By failing to disclose the Tobacco Tax Act charges, Ms. Jiang incorrectly answered questions 6(a) and (b) and was in breach of Clause 3(a) of her terms of registration.
AGCO Investigator Frank Ryder interviewed Ms. Jiang in June 2016. He testified that he asked Ms. Jiang why she failed to disclose the Tobacco Tax Act charges. Ms. Jiang stated that she "forgot".
Ms. Jiang also told Mr. Ryder that, to the extent she had possessed unmarked cigarettes, (which is illegal), she had held them for a friend of her husband's.
Sunny Convenience Ltd.
Mr. Sun, through Sunny Convenience Ltd., applied for registration as a gaming supplier by way of change of ownership application dated June 4, 2015.
As part of the application process, Mr. Sun was asked Questions 6(a) and (b) – noted above- and answered no to both questions.
The "no" answers were false on the following grounds:
Mr. Sun failed to disclose that he was charged and convicted of driving while his ability was impaired, contrary to section 253(1)(a) of the Criminal Code;
Mr. Sun failed to disclose that he was charged (jointly with Ms. Jiang) with possession of unmarked cigarettes and with possession of unmarked cigarettes for the purpose of sale, contrary to section 29(1) and (2) of the Tobacco Tax Act; and
Mr. Sun was also interviewed on two occasions by Frank Ryder in July of 2015. In those interviews, Mr. Sun feigned ignorance regarding the various charges he had accumulated and attributed any Tobacco Tax Act charges to his helping out a friend.
Mr. Sun pled guilty to the possession charges under the Tobacco Tax Act, on December 11, 2015, and received a $4,000 fine. The other charges against Ms. Jiang and him were withdrawn on that date.
Registrar's Concerns Regarding Unmarked Cigarettes
Michelle Johnson, an Investigations Manager with the Ontario Ministry of Finance testified in regard to the Tobacco Tax Act charges against Mr. Sun and Ms. Jiang. She described their conduct as far more elaborate than the holding of some cigarettes for "a friend". Specifically, Ms. Jiang and Mr. Sun were observed working in tandem to sell bags of unmarked cigarettes out of their home and storing vast quantities of unmarked cigarettes in an off-site storage locker.
The Tribunal accepts that Ms. Jiang and Mr. Sun's unmarked cigarette business involved more than holding cigarettes for a friend. Although not the largest such scheme in Canada, it was conducted on a commercial scale. The Tribunal also accepts the Registrar's argument that the illegal sale of unmarked cigarettes undermines areas of important government policy in the health and revenue collection field, amongst others.
The Law
The pertinent sections of the Act are s. 10, in regard to the refusal of Sunny Convenience Ltd.'s application, and s. 12, in regard to the proposal to revoke Ms. Jiang's registration:
- The Registrar shall refuse to register an applicant as a supplier or to renew the registration of an applicant as a supplier if, …
(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, …
- 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.
Analysis
The Registrar must establish that having regard to the past conduct of the appellants – or persons interested in them, including Mr. Sun – there are reasonable grounds to believe that the appellants will not act as a supplier in accordance with "law, integrity, honesty or in the public interest" (see generally Registrar A.G.C.O. v. 751809 Ontario Inc. o/a Famous Flesh, 2013 ONCA 157, at paragraphs 18-19). In applying this test, the Tribunal finds that the Registrar has established that the past conduct of Ms. Jiang and Mr. Sun provides reasonable grounds for a belief that none of Ms. Jiang, Mr. Sun or Sunny Convenience Ltd. will operate in accordance with law, or with integrity, honesty, or in the public interest.
Specifically, Ms. Jiang has been regulated for five years and, in that relatively short period of time, has been involved in at least two improper schemes (DVDs and tobacco) and a multi-layered failure to disclose her misdeeds.
The providing of gaming supplies is largely a cash business, and creates many opportunities for cheating. Ms. Jiang has failed, for nearly the entirety of her 5-year registration, to instill confidence in the regulator. The Registrar has met his onus in Ms. Jiang's case.
Sunny Convenience Ltd.'s appeal also fails. Mr. Sun underreported his past criminal activities and charges in his application for registration. The registration process is the Registrar's first opportunity to assess the honesty, integrity and lawfulness of an applicant. Registrars rightly place great stock in the importance of an accurately completed application. As set out above, Mr. Sun failed this first test in a material way. In addition, the underlying illegal activities that comprise the failure to disclose are also compelling grounds in support of the Registrar's belief. The last five years have seen Mr. Sun breach the Criminal Code of Canada and Ontario's Tobacco Tax Act.
Ms. Jiang and Mr. Sun called no evidence as part of their appeals and argue that they are unsophisticated parties who did not have a firm grasp of the English language. This, it is argued, explains their inability to accurately complete their applications and their getting caught up in illegal activities. In addition, they state they were co-operative with the investigations they faced and are thus not ungovernable.
The Tribunal rejects these arguments. Gaming suppliers deal in money and contracts as part of their business. Registrants and applicants are expected, at a minimum, to be sufficiently sophisticated to answer straight-forward questions regarding their past and not stray into criminal or provincial offence activities. The degree of co-operation provided by the Appellants is to be encouraged but does not sufficiently mitigate the serious concerns held by the Registrar.
ORDER
Pursuant to the authority vested in it under the provisions of the Act, the Tribunal directs the Registrar to carry out the Notices of Proposed Order, dated April 4 and July 6, 2016.
LICENCE APPEAL TRIBUNAL
Richard Macklin, Vice-Chair
Released: October 18, 2016