Appeal From a Proposal of The Registrar Under The Liquor Licence Act, R.S.O. 2002, 1990, c. L 19 to Revoke Licences.
Binhthanh Restaurant and 2474058 Ontario Inc. o/a Olympic Restaurant and Tavern Appellants
-and-
Registrar of Alcohol, Gaming and Racing Respondent
DECISION and ORDER on SANCTION
ADJUDICATOR:
Laurie Sanford, Vice Chair
Stephen Scharbach, Member
APPEARANCES:
For the Appellants:
Sanjay Sookram, Student-at-Law
For the Respondent:
Faye Kidman, Counsel
Danielle Bastarache, Counsel
Heard in Toronto:
July 6, 7, October 23, 30, November 2, 2017
OVERVIEW
1In a decision dated January 18, 2018 in this matter, we concluded that one of the conditions attached to each of the two liquor licenses held by Ms. Binh Lontin was breached. The parties requested an opportunity to make separate submissions as to the appropriate sanction.
2The parties provided written submissions (Registrar’s submissions dated January 29, 2018, and the Licensee’s submissions dated February 5, 2018) and we have carefully considered them in making our decision with respect to sanction as set out below.
3In the case of the Binhthanh Restaurant (“BT restaurant”) liquor licence (813605), one of the conditions attached to that licence required that, “Thanh La shall inform the Registrar of any further charges, criminal or provincial, within five (5) days of being served with those charges”. We found that condition was breached when Mr. La failed to report that he was charged with Criminal Code offences in early 2014.
4In the case of the Olympic Restaurant and Tavern (“Olympic”) liquor licence (21096), one of the conditions attached to that licence required that “Thanh La shall not have any involvement in the management of the licenced business and shall have no ownership in any part of the licenced business”. We found that condition was breached when Mr. La conducted certain management functions including dealing with payroll issues, paying cash wages to the staff, signing cheques on Olympic’s business account, and dealing with suppliers.
5The Registrar takes the position that the appropriate sanction is revocation of both liquor licences. According to the Registrar, Ms. Lontin has not complied with the conditions that she agreed to be placed on her licences and provided no evidence that she will comply in the future. In the Registrar’s view, that indicates a lack of respect for regulatory authority and suggests that she will not operate her premises with integrity and honesty or in accordance with the Liquor Licence Act. In the Registrar’s opinion, revocation is therefore the appropriate sanction.
6Ms. Lontin’s position is that the appropriate sanction is a three-day suspension imposed on each of the liquor licences. According to Ms. Lontin, that penalty is proportionate to the gravity of the breaches and takes into account the fact that there are no previous contraventions, there was no actual harm to the public, and no malice or deceit involved. Ms. Lontin points out that revocation is a sanction appropriate for the worst cases and is excessively harsh in the present circumstances.
ISSUE
7What is the appropriate sanction to be imposed for the contravention of one of the conditions on the BT restaurant liquor licence, and one of the conditions on the Olympic restaurant liquor licence?
RESULT
8For the reasons set out below, pursuant to s. 23 of the Act, we direct the Registrar to:
- suspend the BT restaurant liquor licence (813605) for a period of 5 days.
- suspend the Olympic restaurant liquor licence (21096) for a period of 10 days.
- attach conditions to the liquor licences of both businesses requiring that Thanh La shall not be permitted to enter or be at the licenced premises, shall not be employed in any capacity by the licenced business, shall have no involvement in the business operation, and shall have no beneficial or financial interest in the business or ongoing operations of the licence.
LAW
9Under s. 23 of the Liquor Licence Act (“Act”), following a hearing the Tribunal may direct the Registrar to carry out the proposal, in whole or in part, and with any changes that the Tribunal considers appropriate, including attaching to the licence any condition that the Tribunal considers appropriate to give effect to the purposes of the Act.
EVIDENCE and ANALYSIS
A. BT Restaurant
10In the case of the BT restaurant, we note that at the time the original liquor licence was granted, the AGCO insisted on a condition requiring that Mr. La report any charges because, given Mr. La’s past conduct, it was understandably concerned about his involvement in the restaurant operation. That condition was one of several that were agreed to by Ms. Lontin and was intended to narrowly restrict Mr. La’s involvement in the operation of the restaurant and make the AGCO aware of any of his conduct that might be relevant to the continuation of the BT liquor licence.
11We also note that this condition was breached twice. As detailed in our January 18, 2018 decision, in 2012, the first breach occurred. An AGCO inspector found that Mr. La had been charged with 5 Highway Traffic Act violations and none had been reported to the Registrar as required by the condition. Ms. Lontin was asked for an explanation and she did not respond. The AGCO nevertheless sent a warning letter stating that another violation may result in further action.
12Shortly afterward, Ms. Lontin applied to remove the condition. According to her, Mr. La was no longer associated with the restaurant and compliance had become difficult. However, she made the application to the Alcohol and Gaming Commission of Ontario (“AGCO”). At that point, the AGCO no longer dealt with such applications and Ms. Lontin was advised to submit the application to the Licence Appeal Tribunal. She was provided with contact information. Ms. Lontin took no further steps to remove the condition and the condition remained in place. We found that it was breached again in 2014 when Mr. La failed to report new criminal charges.
13Although this was the second contravention of that condition, the contravention itself caused little actual or potential harm to the public. The condition was meant to ensure that the AGCO obtained information about Mr. La’s criminal or provincial charges presumably so it could look into the circumstances and, if necessary, further limit or exclude Mr. La from the BT restaurant operation. In reality, Mr. La’s involvement in the BT restaurant ended shortly after the conditions were imposed in 2010.
14We also take into account that compliance with the condition was complicated by the fact that it required Mr. La, and not Ms. Lontin, to report Mr. La’s charges. The condition was agreed to on the assumption that Mr. La would continue to be an employee of the BT restaurant. However, once he stopped working at BT restaurant, compliance with the condition by Ms. Lontin became problematic because it required that Mr. La truthfully and promptly report any charges to the AGCO and he proved to be unreliable in that regard. Of course, Ms. Lontin was required to apply to change the condition if it was no longer workable. She failed to do so and as a result the condition was breached.
15In our view, in all of the circumstances, the appropriate sanction in respect of that contravention is a 5-day suspension of the BT liquor licence.
B. Olympic Restaurant
16With respect to the contravention of the Olympic liquor licence condition, we conclude that a 10-day suspension is appropriate. Again, that condition was one of several that were agreed to by Ms. Lontin and were intended to limit Mr. La’s involvement in the operation of the restaurant to working in the kitchen only and not to be involved in management. That condition was clearly breached when Ms. Lontin permitted, or did not stop, Mr. La from engaging in management functions such as paying wages to the staff, dealing with suppliers, and signing cheques on behalf of the business.
17That contravention is significant. The AGCO had good reason to be wary of Mr. La’s involvement in the Olympic restaurant. It agreed to the granting of a liquor licence with conditions that were meant to reinforce the understanding between Ms. Lontin and the AGCO that Mr. La would have a narrow role in the Olympic operation. Ms. Lontin’s breach of the condition undermined that understanding. As a result, the AGCO essentially states that it has lost trust in Ms. Lontin and feels that she will not carry on business with integrity, honesty and in accordance with law.
18However, as we stated in our decision, after listening to Ms. Lontin testify in detail we have the distinct impression that her failure to comply with the condition had more to do with her inability or unwillingness to control her son than a lack of integrity or honesty. The contravention did not involve fraud, theft, criminal conduct, or dishonest business practices. We also note that there is no evidence that the other conditions restricting Mr. La’s involvement were contravened and there was no evidence of any actual harm to the public.
19Taking into account all of the circumstances, we are of the view that a significant suspension should result and we consider a 10-day suspension to be appropriate.
C. Conditions Imposed on Both Liquor Licences
20We have also decided to impose a condition that will have the effect of prohibiting Mr. La from being on the premises of either of the two licenced establishments or having any involvement with the operation of the businesses.
21The Registrar states that the appropriate sanction is revocation of both liquor licences because Ms. Lontin’s conduct “…has given the Registrar reasonable grounds to believe that she will not operate the licenced establishments with honesty and integrity and in accordance with the Liquor Licence Act.”
22One of the allegations included in the Registrar’s Notice of Proposal was that the licences should be revoked because Ms. Lontin’s past conduct affords reasonable grounds for belief that she will not carry on business in accordance with law and with integrity and honesty. In our decision January 18 2018, decision, we specifically rejected that allegation. We stated that while Ms. Lontin may have lacked the willingness or ability to fully comply with the conditions insofar as her son was concerned, her past conduct in that regard does not reflect a lack of honesty or a defect in integrity. Therefore, we do not find that the Registrar’s submissions support the sanction of revocation.
23The conditions that the AGCO and Ms. Lontin agreed upon were intended to limit the involvement of her son in the operation of both restaurants. Ms. Lontin’s compliance with those conditions depended on her resolve and ability to adhere to them but also, to some extent, on Mr. La’s cooperation. That proved to be unworkable. We consider it appropriate to impose new conditions that very clearly forbid Mr. La’s involvement in either restaurant.
24In our view, such a condition will be relatively easy to monitor because it will not require a determination of functional roles within the businesses and will also provide a clear, unambiguous requirement that both Ms. Lontin and Mr. La should have no difficulty in understanding.
25For all of the reasons set out above we make the following order:
(a) The liquor licence of the Binhthanh restaurant (813605) shall be suspended for a period of 5 days.
(b) The liquor licence of the Olympic Restaurant and Tavern (21096) shall be suspended for a period of 10 days.
(c) The liquor licences of the Binhthanh Restaurant (813605) and the Olympic Restaurant and Tavern (21096) shall both be subject to the following conditions:
(i) Thanh La shall not be permitted to enter, or be at the licenced premises.
(ii) Thanh La shall not be employed in any capacity by the licenced business.
(iii) Thanh La shall have no involvement in the operation of the licenced business, including as an officer, director, shareholder, or owner.
(iv) Thanh La and shall have no beneficial or financial interest in the licenced business, or ongoing operations of the licence.
LICENCE APPEAL TRIBUNAL
__________________________
Laurie Sanford, Vice Chair
_________________________
Stephen Scharbach, Member
Released: March 26, 2018