Appeal from the Notice of Proposed Order of the Registrar of Alcohol, Gaming and Racing under the Gaming Control Act, 1992, S.O. 1992, Ch. 24 to Refuse Registration
Between:
Kashibhai Group Inc. o/a Thornton General Store
Appellant
-and-
Registrar of Alcohol, Gaming and Racing
Respondent
DECISION AND ORDER
Adjudicators: Evelyn Spence, Member (presiding) Joanne E. Foot, Member
Appearances:
For the Appellant: Harneet Singh, Agent For the Respondent: Rena Khan, Counsel
Heard in Toronto: April 6, 2018
REASONS FOR DECISION AND ORDER:
A. OVERVIEW
In July 2017, B.P., in his capacity as director of Kashibhai Group Inc. o/a Thornton General Store (the “appellant”) applied for registration as a gaming supplier in the class of Seller under the Gaming Control Act, 1992 (the “Act”). In doing so, B.P. completed and submitted a Registration as Seller Form and a Personal Disclosure Form (together, the “application materials”) to the Alcohol and Gaming Commission of Ontario (the “AGCO”).
The AGCO’s Licensing and Registration department received the appellant’s application materials on July 19, 2017 and thereafter commenced its application review process. The review revealed discrepancies between the information provided by the appellant in its application materials and the information obtained by the AGCO in the course of its standard due diligence investigations.
The Registrar of Alcohol and Gaming (the “registrar”) issued a Notice of Proposed Order to Refuse Registration dated December 5, 2017 (the “Proposed Order”), proposing to refuse the appellant’s registration. The basis of the proposed refusal is that there are reasonable grounds to believe that the appellant (or its director) will not act as a Seller in accordance with the law, or with honesty and integrity, having regard to B.P.’s past conduct and his failure to disclose to the AGCO all relevant details of his past conduct as required by the application materials.
The appellant appealed the Proposed Order to the Licence Appeal Tribunal by Notice of Appeal dated December 22, 2017. It submits that B.P.’s past conduct does not accurately predict his future behaviour and ability to responsibly operate the business. The appellant further submits that B.P. did not intentionally attempt to deceive the registrar when he submitted the application materials.
On March 7, 2018, the registrar issued an amended Notice of Proposed Order to Refuse Registration (the “Amended Proposed Order”), containing additional particulars of matters that the appellant allegedly failed to disclose to the registrar.
B. CONCLUSION
The Tribunal has weighed the evidence relating to the appellant’s director’s past conduct and conduct relating to its application, and considered his likely future conduct in light of that past conduct. The past conduct in question includes B.P.’s multiple suspensions and convictions under the Highway Traffic Act (“HTA”) and charges and convictions under the Criminal Code, including a charge for assault and convictions for repeated non-compliances with court orders, probation orders, and police undertakings. This conduct continued over a period of many years, with B.P.’s most recent HTA suspension, for drinking and driving, occurring less than two years ago.
The Tribunal heard evidence that B.P. has made significant lifestyle changes in the recent past and believes that he is making genuine efforts to prove himself as a responsible business person. Notwithstanding, B.P.’s past actions demonstrated a consistent and ongoing pattern of general disregard for the law, regulatory authority and public safety. Taking into consideration both the nature and extent of his past misconduct and his more recent conduct in relation to the application for registration under the Act, the Tribunal is not convinced that B.P. has, at this point, demonstrated he has fully overcome his past such that he would be a trustworthy registrant, capable of meeting the standards set by the Act. We therefore order the registrar to carry out the refusal in accordance with its Amended Proposed Order.
C. LAW:
- To ensure public confidence and maintain the integrity of gaming operations, the provision of gaming services in Ontario requires that lottery retailers, referred to as “suppliers” under the Act, meet very high standards of honesty and integrity. Subsection 10(b)(ii) of the Act sets out that the registrar shall refuse to register 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,
(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.
- As the case law makes clear, in determining whether the past conduct of an applicant affords reasonable grounds for belief that the applicant will not carry on business in accordance with law and with integrity and honesty, it is necessary for the Tribunal to consider the whole of the applicant’s conduct, including its conduct since the past conduct occurred: Ontario Alcohol and Gaming Commission v. Famous Flesh Gordon (2013) O.J. No. 1139 (“Famous Flesh Gordon”); Brenner v. Ontario (Registrar of Motor Vehicle Dealers and Salesmen)1983 O.J. 1017 (Div. Ct.).
D. ISSUE
The only issue to be determined in this appeal is whether the appellant’s registration as a supplier should be refused because there are reasonable grounds to believe that it (or its director) will not act as a Seller in accordance with the law or with honesty, integrity and in the public interest.
A criminal record and/or HTA-related offences do not automatically disqualify an applicant from registration. Instead, the Tribunal must assess the totality of the evidence about past and present conduct to gauge whether there are reasonable grounds for belief that an applicant will not operate its business in accordance with the standards set out in the Act. In Famous Flesh Gordon, at para. 18, the Ontario Court of Appeal confirmed that the standard of proof of “reasonable grounds for belief” is a lower standard than that of “balance of probabilities”.
E. EVIDENCE AND ANALYSIS:
B.P.’s Past Conduct
Mr. Frank Cuda, Manager of Gaming Authority and Deputy Registrar under the Act, testified that the registrar considers the nature of any charges and convictions as well as the pattern of convictions when reviewing applications. The Act is consumer protection legislation and all applicants are required to maintain the confidence of the public that gaming operations are being operated fairly.
Between 2006 and 2016, B.P. was convicted of 11 offences under the HTA and had his driver’s licence suspended nine times. More specifically, B.P. was convicted seven times for speeding and once for driving while his licence was suspended. His licence was suspended four times for drinking and driving and once for street racing. The other suspensions were administrative suspensions for non-payment of fines or related matters.
The HTA is important public safety legislation. It sets out the responsibilities and privileges for all road users. B.P.’s record of HTA infractions indicates an alarming pattern of disregard, on numerous occasions and over many years, for the law and for public safety.
In addition to the HTA violations, B.P. was charged with assault in October 2009; a charge which was withdrawn the following year after he entered into a peace bond. Following that, B.P. was convicted of four offences under the Criminal Code in the period from October 2010 to February 2011, all related to non-compliance with the police undertaking and the various court orders stemming from the original assault.
B.P. described the incident giving rise to the assault as having resulted after he pushed off a family friend (V.P.), who had been clinging to him, when a fight broke out at a campus pub. Following the assault, B.P. was released from custody on an undertaking given to police that he promise to appear in court on a set date, and under two conditions; that he abstain from communicating with V.P., and abstain from the consumption of alcohol. Less than two months later, on December 4, 2009, B.P. was found to have breached both conditions of his release. In addition, he failed to appear for his court date and a bench warrant was issued.
Following his breach of the police undertakings, a Justice of the Peace ordered a recognizance with the same two conditions placed on B.P., being abstinence from alcohol and abstaining from contact with V.P. A probation order was issued at the time the assault charges were dealt with and the peace bond was entered into, with conditions relating to abstention from alcohol and contact with V.P. An Information filed with the court about 6 months later refers to, among other things, breaches of these conditions. B.P. did not provide an explanation for his further offences of failing to comply with the recognizance and failing to comply with the probation order.
B.P. argued that he has turned his life around and that things have changed. In respect of the HTA offences and the related suspensions, he explained that they were the result of being young and spending time with “bad people.” In 2010, he stated that one of his best friends was murdered. This was a friend he had grown up with, and the loss set him on a destructive path.
These explanations are neither sufficient nor satisfactory. B.P.’s most recent HTA offence, for failing to surrender permit for motor vehicle, occurred on February 14, 2016. His most recent suspension was on June 16, 2016, for drinking and driving. These offences occurred just over one year before B.P. made his application to the AGCO; a point in time when B.P. was purporting to be able to operate his business with honesty and integrity and in accordance with the law. Further, the criminal non-compliance offences demonstrate a pattern of general indifference to the law and regulatory authority and provide insight into B.P.’s attitudes towards compliance with authority.
B.P.’s Present Conduct
- In considering B.P.’s present conduct, the Tribunal considered the following three categories of conduct:
a) The information B.P. provided to the AGCO in the application materials;
b) The information B.P. provided in an interview with the Ontario Provincial Police (“OPP”) relating to his application materials; and
c) B.P.’s evidence at the hearing.
a) The Application
Mr. Cuda testified that the registrar regards the correct completion of the application materials to be a tool that he uses to assess honesty. The responses provided on an initial application are the AGCO’s first introduction to the individual(s) seeking registration, and is the first opportunity for an applicant to display the statutory requirement of honesty.
Mr. Cuda described the AGCO’s risk-based assessment process, explaining that new applications are assigned to a Gaming Registration Officer for review. The Gaming Registration Officer conducts certain standard investigations, including a Canadian Police Information Centre (“CPIC”) check, and obtains HTA abstracts and an Equifax report. The information yielded by these reports is used to confirm the information contained in the application materials.
In this case, discrepancies were noted between the application materials and the CPIC and HTA abstracts. Specifically, question 6(a) of the Personal Disclosure Form asks:
“Have you ever been charged, convicted or found guilty of any offence in Canada or elsewhere? This includes all federal and provincial offences.”
B.P. answered “yes” and circled “speeding” in the provincial offences category but failed to disclose the details of the speeding offences and dispositions required by the application. Further, B.P. did not check the box indicating any “Criminal or other federal offences (this includes convictions and findings of guilt where a conditional discharge has been granted)”, which contradicted information in the CPIC report.
- Moreover, B.P. answered “no” to question 8(c) of the Personal Disclosure Form, which asks:
“Have you ever surrendered or had any type of licence, permit, certificate or registration suspended, revoked, or had a fine, monetary penalty or similar disciplinary action imposed in Canada or elsewhere?”
Again, this contradicted the information contained in the HTA abstract relating to B.P.’s multiple driver’s licence suspensions.
- As a result of these discrepancies, the appellant’s application was flagged to go through the second stage of the AGCO’s risk-based assessment process, involving an interview with an OPP investigator; in this case, Detective Constable Samuel Kewaquado (“Officer Kewaquado”).
b) The Interview
Officer Kewaquado conducted the interview of B.P. by telephone on August 28, 2017. The specific purpose of the interview was to obtain additional information from B.P. and to clarify why he omitted information required by the Personal Disclosure Form.
During the interview, Officer Kewaquado found that B.P. had very good recall and was forthright and honest in describing his HTA suspensions and convictions. However, he believed that B.P. minimized the circumstances giving rise to the criminal offences and provided information that was “not entirely truthful.” Specifically, Officer Kewaquado testified that when he spoke to B.P., he had no idea that the Criminal Code convictions all stemmed from an assault. When Officer Kewaquado asked B.P. about the criminal charges, B.P. revealed that they were the result of a “pub brawl.” Officer Kewaquado stated that he only learned about the assault at some point after the interview, when he called the Hamilton Court and requested copies of the criminal informations filed with the Court. These informations revealed the full details of the criminal charges, including the assault, and their dispositions.
The interview with Officer Kewaquado provided B.P. with a second opportunity to be up-front and honest in his dealings with the regulator. While Officer Kewaquado confirmed that B.P. did accurately and truthfully answer his questions related to the HTA suspensions and convictions, he found that B.P. “chose not to tell him the criminal stuff.”
c) B.P.’s Evidence at the Hearing
The appellant called three character witnesses; R.S., W.B. and D.G., each of whom testified that they have seen B.P. mature significantly over the past few years, and they believe him to be an honest and responsible individual. While helpful, their testimony was of a general nature and not sufficient to tip the balance in light of B.P.’s long pattern of disregard for the law and repeated dishonesty regarding his convictions.
B.P. also gave evidence. He acknowledged that he has made a lot of mistakes in the past, but stated that since purchasing the Thornton General Store (the “store”) in August of 2017, he has changed. He moved to Cookstown, where he lives a quieter life with his parents. He described his parents as “semi-injured” and stated that, while they help out at the store, he supports them financially and is shouldering a lot of responsibility. Being registered as a Seller in the gaming industry would increase his overall revenue and is an important component of the success of his business.
In October of 2016, B.P. attended a two-day seminar called “Back on Track”, put on by the Ministry of Transportation. He stated that he hasn’t been drinking since then, and that he had an ignition interlock installed in his vehicle from October, 2016 until March, 2017. Now, B.P. spends more time with his parents, less time with the individuals who were negative influences on him, and he devotes his energy to running the store.
The Tribunal notes with approval B.P.’s attendance at the Back on Track seminar, his stated abstinence from alcohol, and his newfound focus on the store. These are all positive steps in the right direction. Unfortunately however, the Tribunal is not persuaded, at this point, that they are enough. Particularly, the Tribunal finds B.P.’s reluctance to take responsibility and be accountable for his past misconduct and present actions to be troubling.
As evidenced by his failure to report the assault in the Personal Disclosure Form or in his discussion with Officer Kewaquado, and as demonstrated through his oral testimony, B.P. has had difficulty accepting responsibility for the offence, clearly having diminished the act in his own mind. B.P. appears to have attributed much of the fault concerning the assault to both V.P. and the university constable who facilitated his arrest.
B.P. also minimized to the Tribunal his responsibility in the events giving rise to his second criminal offence, failing to comply with an undertaking, stating that he had not been in contact with V.P. on the night in question, but that she knew where he would be because he had indicated, on Facebook, his intention to attend an event at the campus pub. B.P. testified that the university constable, who was “always on him” and “did not like him,” was patrolling the pub and took him to the police. He reluctantly admitted, in cross examination, that while at the pub, he was drinking in breach of the condition in his undertaking to the police.
As explanation for the omissions and the provision of false information on the application materials, B.P. testified that he was rushed when completing the forms. He had been away at a cricket tournament and when he came home, his father advised him that the deadline for submitting a number of related applications was approaching; one with the AGCO, one with the Liquor Control Board of Ontario, and one with the Ontario Lottery and Gaming Corporation. He said he relied on assistance provided by the previous store owner, a paralegal who assisted him with the most recent HTA suspension, the lawyer who helped him to purchase the store, and his father, in correctly completing the application materials.
B.P. held that, until speaking with Officer Kewaquado, he didn’t know that “all of the HTA offences had come back as convictions.” He explained that he assumed that because he had paid the tickets and had procured the services of lawyers and paralegals to assist him throughout the years, the HTA suspensions and convictions would have resolved themselves. He further testified that had he known that the HTA offences were registered as convictions on his record, he would have disclosed them in the application materials.
In respect of the omissions in the application material, B.P. stated that most of the HTA infractions were obtained because he had been speeding, which is why he circled “speeding” on the Personal Disclosure Form and nothing more. He appears to have reasoned that the charges related to drinking and driving, which ensued in four instances, did not need to be disclosed because “he was speeding first.”
B.P. explained that he believed his “record was clean,” in respect of the criminal charges, because a lawyer he had hired advised him that assault charge had been withdrawn. Further, his father told him that if the charge was withdrawn, then he didn’t need to disclose it on the Personal Disclosure Form.
The Divisional Court in the case of Registrar, Motor Vehicle Dealers Act v. Vernon, 2016 ONSC 304 considered the factors that may be used to determine if an applicant, in that case under the Motor Vehicle Dealers Act, has made a false statement to his regulator in an application. At paragraph 8, the Court said:
The task of the Tribunal, in applying s. 6(a)(iii), was to determine whether the respondent made a false statement to the Registrar and whether he knowingly did so (Racco v. Ontario (Registrar, Real Estate and Business Brokers Act, 2002), 205 ONSC 6233 (Div. Ct.) at para. 28). In my view, the Tribunal focused on whether the respondent deliberately tried to mislead the Registrar. The Act does not speak to intent or motive; rather the concern is whether the applicant knowingly made false statements in his application – in this case, about his past criminal activity.
The Court in Vernon went on to draw a distinction between making a statement knowing it to be false and making an honest mistake about the truth of a statement. The question for this Tribunal, therefore, is whether B.P. made an honest mistake, or whether he knew, or should have known, that the statements he was providing to the AGCO were false.
B.P. has three years of university education, having studied political science and economics at McMaster University. He presented himself as a well-spoken and intelligent man. As such, his explanations for the omissions and provision of false information in the application materials do not withstand scrutiny. The Tribunal finds that B.P. knew, or ought reasonably to have known, that he was not disclosing all the information requested by the registrar and that the information he provided in both his application materials and in his interview with Officer Kewaquado, were false. In fact, when asked during cross-examination why he lied to Officer Kewaquado, specifically about the assault, B.P. stated that “he made a mistake and should have told him the honest truth.”
The parties did not make arguments regarding what would constitute a reasonable period of time to ascertain good conduct in the future and compliance with regulations. Nonetheless, the Tribunal is of the view that B.P.’s present failure to take responsibility for his past actions, including his attempt to deflect responsibility for his criminal conduct, as well as to attribute his provision of false statements and omissions in the application materials to the lawyers, paralegals, former store owner and even his father, indicate that he has not yet learned the lessons required to be a trustworthy registrant.
As detailed above, the appellant has a long history of serious HTA offences, being offences relating to public safety, including drinking and driving and speeding. We have also detailed the appellant’s history of disregarding conditions imposed upon him by the police and the courts. In the application process for registration as a supplier under the Act, B.P. failed to disclose material facts in both the written materials and the subsequent interview. In this hearing, B.P. has been less than fully forthcoming and candid. We are of the view that, taken together, these circumstances constitute reasonable grounds for believing that B.P., as director and principal of the appellant, will not act as a supplier under the Act in accordance with law, with integrity, honesty, and in the public interest.
The Tribunal considered whether imposing terms and conditions on the appellant’s registration would address some of the registrar’s concerns. However, it finds that B.P.’s past conduct and particularly his four Criminal Code convictions for failing to comply with court and police orders indicates a pattern of behaviour that suggests a general unwillingness to comply with authority. Such conduct does not lend itself to the conclusion that the appellant should be registered under the Act with conditions.
F. ORDER:
- By its authority under section 13(8) of the Act, the Tribunal hereby orders the registrar to carry out the Amended Proposed Order to refuse registration of the appellant as a supplier under the Act.
LICENCE APPEAL TRIBUNAL
Evelyn Spence, Member
Joanne E. Foot, Member
Released: May 30, 2018