Licence Tribunal
Appeal d'appel en
Tribunal matière de permis
FILE: 10405/GCA
CASE NAME: 10405 v. Registrar of Alcohol, Gaming and Racing
Appeal from the Notice of Proposed Order to Revoke Registration of the Registrar under the Gaming Control Act, 1992
Delio Ribeiro o/a Ribeiro’s Market Appellant
-and-
Registrar of Alcohol, Gaming and Racing Respondent
DECISION AND ORDER
ADJUDICATOR: Luisa Ritacca, Member
APPEARANCES:
For the Appellant: Harald Mattson, Counsel
For the Respondent: Danielle Bastarache, Counsel
Heard in Toronto: March 7, 2017
DECISION AND ORDER
OVERVIEW
The Deputy Registrar of Alcohol, Gaming and Racing (the “Registrar”) under the Gaming Control Act, 1992, (the “Act”) issued a Notice of Proposed Order, dated August 3, 2016, which proposed to revoke the registration of Delio Ribeiro o/a Ribeiro’s Market (“Ribeiro’s Market”) as a gaming supplier in the class of Seller under the Act.
The Appellant appealed this Notice of Proposed Order to the Licence Appeal Tribunal.
The reason given by the Deputy Registrar in the Notice of Proposed Order was that there were reasonable grounds to believe that the Appellant will not act as a gaming supplier, specifically a Seller, in accordance with law, or with integrity, honesty or in the public interest based on the Appellant’s conduct. In particular, the Deputy Registrar relied on the fact that the Appellant had been caught selling wine from its retail location, contrary to sections 5(1) and 33.1 of the Liquor Licence Act (“LLA”).
The Deputy Registrar’s position is that as members of a highly regulated cash-intensive industry, gaming suppliers must act with the utmost honesty and integrity in order to maintain the protection of the public, public confidence in the regulation of the industry and the overall integrity of gaming operations.
ISSUE
- The issue that this Tribunal must decide is whether there are reasonable grounds to believe that the Appellant will not act as a gaming supplier in accordance with law, or with integrity, honesty, or in the public interest, having regard to the contraventions under the LLA.
EVIDENCE
(A) Evidence not in Dispute
- Much of the evidence called by the parties was not in dispute. The following facts were not contested:
a. The Appellant has held a licence as a gaming supplier in the class of Seller since 2007. Before that, he was licensed with the Ontario Lottery Corporation since at least 1993.
b. On June 2, 2016, John Meissner, an Inspector with the Alcohol and Gaming Commission of Ontario, together with police officers from the Waterloo Regional Police Service (“Waterloo Police”) conducted surveillance on Ribeiro’s Market (the “Premises”).
c. The Premises is a convenience store located on the first floor of a converted residential home. There is a cash register and OLG lottery terminal located at the front of the store. There are beverages, groceries and other snack items for sale. There is also a counter top toward the back of the store and a narrow hallway leading to the basement.
d. During the surveillance, the Waterloo Police observed a customer, later identified as A.L., leaving the Premises with a 2 litre plastic pop bottle, in a reusable grocery bag. Upon being approached by two police officers, Mr. L. confirmed that there was wine in the pop bottle, which he had just purchased at the Premises for $10.00. The police officers confirmed that Mr. L. had described the wine as “cooking wine”.
e. Mr. Meissner, together with the police officers entered Ribeiro’s Market and following a brief discussion with N.R., the Appellant’s daughter, they conducted a search of the Premises, during which they discovered fourteen 5-gallon pails of wine and sixty 2-litre plastic pop bottles, all of which containing what appeared to be red and white wine.
f. Mr. Meissner and the police officers also found multiple garbage bags, which contained empty 2-litre plastic pop bottles and a bucket, which contained caps for the plastic pop bottles.
g. Mr. Ribeiro cooperated during the investigation. He assisted Mr. Meissner and the police officers as they removed the seized items from the Premises.
h. Prior to removing the items from the Premises, Mr. Meissner took samples from two separate 5-gallon pails and from two separate 2-litre plastic pop bottles. He also took a sample from the 2-litre plastic pop bottle seized from Mr. L.
i. On June 9, 2016 and June 23, 2016, LCBO lab analysis confirmed that the samples taken from the items seized from the Premises contained alcohol and that the salt content was not consistent with denatured cooking wine.
(A) On behalf of the Deputy Registrar
Counsel for the Respondent called five witnesses, including three members of the Waterloo Police, Inspector John Meissner, and Frank Cuda, Deputy Registrar of Gaming.
Officer Jeff Boese has been with the Waterloo Police for seven years. He is a member of a community based policing program run by the Waterloo Police, wherein he is able to meet and interact with citizens in and around the downtown area of Cambridge.
Officer Boese testified that as a result of his involvement in the community, he became aware of an increasing problem with the consumption of homemade wine among the city’s homeless and in particular in the city’s homeless shelter. He received information that the wine was being purchased in one or more convenience stores in the neighbourhood.
As a result of the information he received, Officer Boese arranged for surveillance on Ribeiro’s Market and one other store in the neighbourhood. On cross-examination, Officer Boese acknowledged that there are several other stores within walking distance from the shelter, but that he chose to conduct surveillance on only two of them, based on information he was able to gather.
Officer Boese arranged for the surveillance to be assisted by Inspector Meissner and two other Waterloo Police officers. On June 2, 2016, Officer Boese and the others set up surveillance on Ribeiro’s Market. As described above, Officer Boese and the others ultimately seized a number of 5-gallon plastic containers and 2-litre plastic pop bottles from the Premises, which it was later confirmed, contained wine.
On cross-examination, Officer Boese acknowledged that the information he received with respect to the two potential locations at which individuals were purchasing homemade wine was not correct, as they did not find any wine or other kind of alcohol at the second location. Further, he acknowledged that Mr. Ribeiro was cooperative during the search and seizure of the items from the Premises.
Inspector John Meissner has been an Inspector with the Alcohol and Gaming Commission of Ontario since 2008. He was asked to become involved in this matter by Officer Boese and was present for the surveillance and search conducted on June 2, 2016.
Inspector Meissner confirmed much of Officer Boese’s testimony regarding the events that took place on June 2, 2016. Upon entering the Premises and commencing their search, Officer Boese described finding the 5-gallon plastic containers and 2-litre plastic pop bottles toward the back of the store, under the countertop. He explained that at least some of the containers and bottles appeared to be concealed underneath sheets of cardboard.
Inspector Meissner explained that he smelled the liquid in the bottles, which led him to believe that they contained alcohol. He also explained that the bottles had their original labels on them and that he had no recollection of finding any homemade or new labels.
Prior to removing the plastic containers and pop bottles from the Premises, Inspector Meissner took five samples. He took two samples of what appeared to be white wine from one 5-gallon container and one 2-litre plastic pop bottle and two samples of what appeared to be red wine from one 5-gallon container and one 2-litre plastic pop bottle. He took a fifth sample from the bottle seized from Mr. L.
Inspector Meissner reviewed the LCBO Certificates of Analysis filed as Exhibits 3 and 4, which confirmed that each of the samples taken from the Premises contained between 10.1 and 11.5% alcohol by volume and that none of the samples contained detectable salt. The Appellant did not contest the sample results, the chain of custody or the Certificates of Analysis.
Inspector Meissner explained that in order for wine to be sold as cooking wine, which does not require a licence, it had to contain a certain level of salt. Based on the lab results, Inspector Meissner concluded that the wine being sold by the Appellant was not cooking wine.
On cross-examination, Inspector Meissner acknowledged that during the search of the Premises on June 2, 2016, Mr. Ribeiro had explained to him and the police officers that the 5-gallon containers contained juice, which overtime became cooking wine.
Officers Gaiser and Foster are both members of the Waterloo Police. They testified as to their involvement in the surveillance and search of the Premises on June 2, 2016. At approximately 11:15 a.m., the Officers observed Mr. L. leaving the Premises, with what appeared to be a 2-litre plastic pop bottle. They approached Mr. L. who confirmed that he bought the wine from Ribeiro’s Market for $10.00 and that he had purchased it as cooking wine.
Following their interaction with Mr. L., Officers Gaiser and Foster attended the Premises to assist Inspector Meissner and Officer Boese. Officer Foster testified that he obtained the receipts found in the cash register on the Premises. The receipts, which were marked as Exhibit 6, do not specify what items have been sold and so there is no way to confirm what grocery item each amount relates to.
In cross-examination, both Officers Gaiser and Foster confirmed that Mr. Ribeiro was cooperative during their interaction with him and that the plastic containers and bottles seized were located in plain view at the back of the store.
Finally, the Respondent called Frank Cuda, Deputy Registrar of Gaming. Mr. Cuda provided the Tribunal with background information with respect to the Act as consumer protection legislation. He explained that given the fact that gaming is a cash intensive industry, participants must act with the highest level of honesty and integrity.
Mr. Cuda explained that the principal reason for the decision to issue the Notice of Proposal to Revoke the Appellant’s registration was the Appellant’s contravention of the LLA. The Appellant was caught selling wine without a licence. He was doing so in the very Premises where he was also engaged as a gaming supplier.
Mr. Cuda testified that having contravened the law, he was satisfied that the Appellant has not acted with integrity and honesty, as required under the Act. Mr. Cuda explained that ignorance of the law or a technical breach of the law does not excuse the Appellant’s conduct.
In cross-examination, Mr. Cuda conceded that he based his decision to issue the Notice of Proposal to Revoke on the information he received from his inspector. He did not engage in any discussion with Mr. Ribeiro or ask that he provide an explanation for the wine. He also acknowledged that he was unable to find any complaints against Mr. Ribeiro since he was licensed in 2007. Further, he had no information about any complaints prior to that time.
(B) On behalf of the Appellant
The Appellant called four witnesses: N.R., Delio Ribeiro, T.H. and Joao (John) Santos.
N.R., Mr. Ribeiro’s daughter, was present at the Premises on June 2, 2016. She explained that she would help out at her father’s store from time to time, as needed, but that she did not have specific set hours. She testified that on June 2nd, 2016, prior to her interaction with the police officers, she sold a bottle of cooking wine to Mr. L., whom she recognized from the neighbourhood and as a family friend.
Ms. N.R. explained that she would sell the 2-litre plastic pop bottles of wine to limited customers at the Premises on occasion. She understood that she was selling cooking wine, which was being used for the purposes of marinating meat. She never saw anyone consume the wine as a beverage and she herself did not use the wine at all.
Ms. N.R. also confirmed that she was familiar with T.H., another customer who purchased cooking wine from the Premises and with John Santos, who was involved with the Portuguese Club in Cambridge.
On cross-examination, Ms. N.R. conceded that she never tested the wine to determine whether it was in fact cooking wine and that she was basing her evidence on what she was told by her father.
T.H. lived and worked in Cambridge for several years. He frequented Ribeiro’s Market and became friends with Mr. Ribeiro. Mr. T.H. testified that about four or five months before June 2016, he started purchasing cooking wine from Mr. Ribeiro for personal use and for use at the David Durward Centre, where he worked part-time as a cook. Mr. T.H. testified that he liked to use the wine purchased at Mr. Ribeiro’s store because he could tell by tasting it that it had less preservatives and sodium than what is found in regular wine. He said he used both the red and white for marinating meat and that he did not consume or serve it as a beverage.
On cross-examination, Mr. H. confirmed that he never had the wine tested and that he could not say for certain what was in the wine and whether it was in fact “cooking” wine.
John Santos is a member of the Portuguese-Canadian community in Cambridge, Ontario. Presently, he is the President of the Picosense Club and is actively involved in organizing social events for the Portuguese Club (an umbrella organization comprised of several other Portuguese community groups) throughout the year. In June 2016, Mr. Santos was not the President of the Picosense Club, but was involved in assisting with the various events.
Mr. Santos testified that in June 2016, the Portuguese Club was gearing up for its annual Father’s Day festivities, which includes a large scale meal, prepared by club volunteers. Mr. Santos explained that the Club purchased about 5000lbs of meat, which was marinated in wine and various Portuguese-style spices. He said that the plan in June 2016 was for Mr. Ribeiro to donate the cooking wine for the meat.
On cross-examination, Mr. Santos did not know what wine was used following the seizure of Mr. Ribeiro’s wine and further he was unable to estimate how much wine was needed to marinate 5000lbs of meat.
Finally, Mr. Ribeiro testified. He provided the Tribunal with background information regarding his business. He has been operating his store for over 30-years. He has been registered to sell lottery tickets since 1993. He has never had any difficulty with the Ontario Lottery Corporation or the Alcohol and Gaming Commission of Ontario, until this matter.
Mr. Ribeiro further testified that he has never been charged or found guilty of a criminal offence. On cross-examination, it was revealed that the Appellant had in fact been charged with an offence under the Excise Act in or about 1991. On re-examination, Mr. Ribeiro made clear that he did not understand that earlier charge to be a “criminal offence” and had in fact forgotten about it at the hearing and at the time of his application to the Alcohol and Gaming Commission of Ontario in 2007.
Mr. Ribeiro testified that he started selling what he believed was cooking wine out of his Premises approximately four or five months before June 2, 2016. He explained that he purchased 5-gallon containers of juice, which would ferment into wine over the course of six to eight weeks. He sold the wine in 2-litre plastic pop bottles for $10.00. He ran these transactions through the market’s cash register.
Mr. Ribeiro believed he was selling cooking wine, which contained no preservatives and no salt. He explained that members of his Portuguese community liked to use his cooking wine so that they could add the salt themselves, as required. He planned to donate the cooking wine for a Father’s Day festival being organized by the Portuguese Club.
Mr. Ribeiro testified that he never sold the cooking wine to customers as a beverage and that he never sold any other kind of alcohol. He explained that he would not have sold the wine if he knew it was illegal to do so.
Under cross examination, Mr. Ribeiro acknowledged that he took no steps to confirm whether he was in fact selling cooking wine. Further, he made no effort to contact anyone at the Alcohol and Gaming Commission of Ontario or the LCBO to ask about the legality of selling the wine.
THE LAW
Section 10 of the Act sets out the grounds upon which the Registrar may refuse to registrar an applicant as a gaming supplier. In part, it provides as follows:
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,
(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
Section 12 of the Act provides that the Registrar may propose to suspend or to revoke a registration for any reasons that would disentitle the registrant to registration or renewal of registration under section 10 or 11 if the registrant were an applicant.
Section 5(1) of the Liquor Licence Act provides that no person shall keep for sale, offer for sale or sell liquor except under the authority of a licence or permit to sell liquor or under the authority of a manufacturer’s licence.
Section 9(3) of Regulation 718, R.R.O, 1990 under the Liquor Licence Act provides that the LLA does not apply with respect to denatured cooking wine that contains 20 per cent or less alcohol by volume and 1.5 per cent or more salt by volume.
APPLICATION OF LAW TO FACTS
(A) Parties’ Submissions
Counsel for the Respondent argued that ignorance of the law is no excuse for the Appellant’s unlawful conduct. While Mr. Ribeiro may have believed that he was selling cooking wine, the lab analysis confirmed otherwise. He was making beverage wine available to the general public, absent a licence to do so.
Counsel for the Respondent argued that it is a privilege to take part in a regulated industry. Participants must act with the highest level of honesty and integrity. Counsel submitted that the evidence of Inspector Meissner and the police officers confirmed that the Appellant was not acting honestly and with the highest level of integrity. He concealed the wine he was selling in plastic pop bottles. He did not re-label the bottles and he did not display them prominently in his store. The evidence also confirmed that the Appellant only made the wine available to a limited number of his customers, for which Counsel inferred a clear attempt by Mr. Ribeiro to sell the wine surreptitiously. Counsel also argued that the fact that the wine being sold was not rung in as “wine” at the cash register made the whole operation highly suspect.
Counsel for the Respondent also noted that Mr. Ribeiro admitted to fermenting the wine at his Premises. This is also contrary to the LLA and, Counsel argued, conduct the Appellant knew or ought to have known required a licence.
Counsel for the Respondent further argued that while Mr. Ribeiro’s prior violation under the Excise Act did not form a basis for the Registrar’s decision to issue a Notice, the fact that Mr. Ribeiro failed to acknowledge that prior finding in his application and at the hearing should be considered against him when weighing his overall credibility.
Finally, Counsel for the Respondent reminded the Tribunal that gaming is a cash-intensive business. Registrants must comport themselves within the law and with the highest degree of honesty and integrity. To allow otherwise would put the public and public confidence at risk.
Counsel for the Appellant submitted that if the Tribunal was satisfied that the Mr. Ribeiro had the intention to sell “bootleg” wine to customers for drinking purposes, then the Tribunal ought to confirm the proposed order to revoke the Appellant’s registration. Counsel argued, however, that the evidence presented did not support such a finding. While Counsel conceded that Mr. Ribeiro had been selling wine – rather than cooking wine – to his customers, he argued that this technical violation of the LLA should not lead the Tribunal to conclude that the Appellant would not act within the law, or with honesty and integrity as a gaming supplier.
Counsel for the Appellant argued that the evidence was consistent with Mr. Ribeiro offering cooking wine to his customers. Mr. H. and Mr. Santos both testified to that fact, as well as Mr. Ribeiro’s daughter. All of the witnesses confirmed that they believed the wine was cooking wine and that it was not to be used for drinking. The police officers also confirmed that during their search of the Premises, Mr. Ribeiro and his daughter both indicated that they were selling cooking wine. Finally, the police officers acknowledged that Mr. L., who was approached by them outside of the Premises, indicated that he had purchased the wine to use as cooking wine to marinate his meat.
Counsel for the Appellant argued that there was no evidence that the Appellant intended to sell wine as a beverage. There was no evidence of any prior complaint relating to his registration as a gaming supplier and there was no evidence of any complaints by the public. In the circumstances, Counsel submitted that the proposed order ought to be set aside.
(B) Tribunal Decision
The Tribunal accepts that the registrants involved in the gaming industry in Ontario must comport themselves with the highest level of honesty and integrity. Further, they must act in accordance with the law. The public cannot reasonably have confidence in the industry if registrants are not held to a high standard. The question before the Tribunal is: Can the Appellant maintain this high standard having regard to his contravention of the LLA?
Mr. Ribeiro appeared before this Tribunal in a forthright manner. He did not appear to be attempting to mislead or minimize his prior conduct. He freely admitted to the police officers on June 2nd, 2016 and to this Tribunal that he was selling wine to his customers. He believed he was selling cooking wine, which did not require a licence. He also believed that he was not violating any law by doing so. Mr. Ribeiro’s evidence was supported by his friends and daughter, all of whom testified to their belief that the wine being sold and purchased was cooking wine and that in any event, the wine was only being used for cooking purposes.
Mr. Ribeiro could and should have taken steps to confirm the legality of his wine sales. His decision not to do so put him offside of the LLA and put his gaming supplier registration at risk. At a minimum, he should have contacted the LCBO to inquire as to the licence exemption and should have had his wine tested, before offering it up for sale.
While ignorance of the law is not a defence, the fact that Mr. Ribeiro was not fully aware of the unlawful nature of his conduct is a significant factor to weigh when determining whether the Appellant’s registration should be revoked. The Tribunal accepts that Mr. Ribeiro contravened the law in offering wine for sale, however it is not convinced that revocation is appropriate. The Tribunal is satisfied that Mr. Ribeiro did not intend to contravene the law and that he believed he was selling cooking wine, which is permitted pursuant to the Regulations under the LLA. The Tribunal is not convinced that Mr. Ribeiro acted surreptitiously or in a manner meant to conceal his true actions.
The Tribunal has considered the totality of the evidence before it. There is no evidence of prior unlawful conduct. Mr. Ribeiro has had a lengthy and problem-free registration with the Ontario Lottery Corporation and the Commission. Mr. Ribeiro cooperated with the police and freely admitted his unlawful conduct.
Having regard to Mr. Ribeiro’s past conduct in total, there are not reasonable grounds to believe that the Appellant will not, going forward, act as a gaming supplier in accordance with law or with integrity, honesty or in the public interest. The Tribunal is hopeful that the Appellant will not engage in the conduct that led to this matter again.
Pursuant to the authority vested in it under the provisions of the Act, the Tribunal directs the Registrar to not carry out its proposal to revoke the Appellant’s registration as is set out in the Notice of Proposal, dated August 3, 2016.
LICENCE APPEAL TRIBUNAL
Luisa Ritacca, Member
Released: April 4, 2017