Appeal from a Proposal of the Registrar under the Liquor Licence Act, R.S.O. 2002, 1990, c. L 19 to Revoke Licences
Between:
Binhthanh Restaurant and 2474058 Ontario Inc. o/a Olympic Restaurant and Tavern
Appellants
and
Registrar of Alcohol, Gaming and Racing
Respondent
RECONSIDERATION DECISION
Before: D. Stephen Jovanovic, Associate Chair
Written Submissions By:
For the Appellant: Sanjay Sookram, Student-at-Law
For the Respondent: Faye Kidman, Counsel
OVERVIEW
1This decision deals with a request for reconsideration made by the respondent of decisions released by the Tribunal on January 18 and March 26, 2018. Those decisions dealt with a Notice of Proposal #21544 issued by the respondent proposing to revoke liquor licence 813605 (Binhthanh) and liquor licence 21096 (Olympic) on the basis that the respondent has reasonable grounds for the belief that the licence holder will not carry on business in accordance with the law and with integrity and honesty.
2The licences are held by Ms. Binh Longtin and are subject to conditions meant to narrowly restrict the involvement of Thanh La, her 33-year-old son from the restaurant operations. In its first decision, the Tribunal found that Ms. Longtin had breached one condition attached to each licence but decided that the breaches “do not afford reasonable grounds for belief that Ms. Longtin will not carry on business in accordance with the law and with integrity and honesty.” The Tribunal then gave the parties the opportunity to make additional submissions as to the sanctions to be imposed for the breaches.
3After receiving those submissions, the Tribunal, in its second decision, rather than directing the respondent to carry out the proposal, made the following order:
(a) The liquor licence of the Bin Thanh 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 Binh Thanh 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 licensed premises.
(ii) Thanh La shall not be employed in any capacity by the licensed business.
(iii) Thanh La shall have no involvement in the operation of the licensed business, including as an officer, director, shareholder, or owner.
(iv) Thanh La shall have no beneficial or financial interest in the licensed business, or ongoing operations of the licence.
4For the reasons that follow, the decisions of the Tribunal are confirmed.
BACKGROUND
5The licensed premises are two small restaurants in Woodstock owned and operated by Ms. Longtin. The conditions attached to the liquor licences prohibited Mr. La from having an ownership interest, participating in management, being involved in the sale or service of liquor, or serving patrons. One condition of the Binhthanh licence required Mr. La to inform the respondent of any criminal charges within 5 days of being served with the charges.
6The respondent’s proposal to revoke the licences alleged the following:
Mr. La has been involved in the management of one of the restaurants and has failed to report a criminal charge, thereby breaching one condition attached to each licence.
Ms. Longtin provided false or misleading information in a licence and renewal application by stating that she would manage the licensed premises.
Ms. Longtin’s past conduct in providing false information and failing to adhere to the conditions affords reasonable grounds for belief that the businesses will not be carried on in accordance with the law and with integrity and honesty.
7The Tribunal framed the issues in the appeal as follows:
Did Mr. La become involved on the management of the Olympic restaurant thereby causing a breach of the conditions attached to the Olympic liquor licence?
Did Ms. Longtin provide a false statement or false information in a transfer application and/or a renewal application relating to the Olympic liquor licence?
Was a condition of the BT restaurant [licence] breached as a result of Mr. La’s failure to notify the Registrar of charges laid against him?
Do the facts found in connection with the above afford reasonable grounds for belief that Ms. Longtin will not carry on business in accordance with the law and with integrity and honesty?
Given the findings in connection with the above, what sanction is required to protect the public interest?
8The Tribunal stated the following regarding the first four issues.
We find that the evidence establishes that Mr. La was involved in the management of the Olympic restaurant and condition # 3 attached to the Olympic liquor licence was thereby breached.
We find that Ms. Longtin did not provide a false statement or false information on either her transfer application, or on her renewal application.
In early 2014, Mr. La was charged with Criminal Code offences which were withdrawn in 2015. Those charges were not reported to the Registrar and we therefore conclude that the above condition was breached.
These circumstances suggest that Ms. Longtin lacked the willingness, or ability, to fully comply with the conditions on her licence. However, keeping in mind the standard set out in Flesh Gordon, we conclude that Ms. Longtin’s past conduct in that regard does not afford reasonable grounds for belief that the business will not be carried on in accordance with the law and with integrity and honesty for the following reasons:
Although one condition on the BT and Olympic liquor licences was breached, it appears that all of the other conditions restricting Mr. La’s involvement were met.
The BT restaurant has been in operation since 2010 and the Olympic restaurant since 2015. No other infractions of the Act or regulations were brought to our attention.
There is no evidence that Ms. Longtin engaged in fraud, theft, dishonest business practices, or any activity that would suggest a lack of integrity [or] honesty. Although Det. Leblanc mentioned that a police report stated that her name, along with another, was on a lease of premises that her son was thought to be using as a grow-operation, we accept Ms. Longtin’s testimony that she had no knowledge of that lease.
REQUEST FOR RECONSIDERATION
9The respondent bases the request for reconsideration on rule 18.2(b) of the Tribunal’s Rules of Practice, Version 1 (April 1, 2016) submitting that the Tribunal made significant errors of law and fact such that the Tribunal would likely have reached a different decision, had those errors not been made.
ANALYSIS
10The respondent’s principal submission appears to be that the Tribunal misapprehended the meaning of reasonable grounds for belief in section 6(2)(d).
11The abbreviated version of this section is as follows:
6(2) Subject to subsection (4) or (4.1), an applicant is entitled to be issued a licence to sell liquor except if..
(d) The past or present conduct of the persons referred to in subsection (3) affords reasonable grounds for belief that the applicant will not carry on business in accordance with the law and with integrity and honesty. [Emphasis added.]
12The respondent cites the decision in Ontario v. Famous Flesh Gordon’s, 2013 ONCA 157 as explaining how the test in section 6(2)(d) is to be applied. In that case the court was dealing with an appeal by the Registrar from an order of the Divisional Court which affirmed a decision of the Board of the Alcohol and Gaming Commission of Ontario allowing a member (Mr. Barletta) of the Hell’s Angels to keep his liquor licence. At paragraph 19 the Court of Appeal wrote the following:
As applied to this case, s. 6(2)(d) of the Act requires the Registrar simply to show that Mr. Barletta’s past or present conduct provides reasonable grounds for belief that he will not carry on business in accordance with the law and integrity and honour. The Registrar does not have to go as far as to show that Mr. Barletta’s past or present conduct make it more likely than not that he will not carry on business as required.
13The respondent submits that the Tribunal made a significant error of law by “requiring the Registrar to establish a history of infractions or non-compliance with the LLA as a precondition for ‘reasonable grounds to believe’.” Further, the respondent submits that the Tribunal also made a significant error of law by requiring evidence of “fraud, theft, dishonest business practices” as the basis for the Registrar’s reasonable grounds for belief.
14The Tribunal at paragraph 88 of its first decision did write that there was no evidence of the above infractions or dishonesty, but in my view, it was simply stating what the evidence did or did not disclose. The Tribunal was required to consider the past and present conduct of Ms. Longtin and in making these comments, it was doing just that. It did not state that evidence of such infractions was a requirement for meeting the “reasonable grounds for belief” test. I see no significant errors of law. This is not the same situation as in Flesh Gordon’s where the court faulted the Board for requiring the Registrar to “substantiate the (alleged) criminal activity undertaken by the licensee in order to invoke ‘past conduct’ provisions.”
15The respondent next submits that the Tribunal made a significant error of law in failing to apply the facts to the legal test. The Tribunal wrote the following.
With respect to the Olympic breach, Ms. Longtin agreed to licence conditions restricting her son’s involvement to working in the kitchen only. The facts established that Ms. Longtin permitted, or perhaps did not stop, her son from becoming involved in management.
These circumstances suggest that Ms. Longtin lacked the willingness, or ability, to fully comply with the conditions on her licence
16The respondent submits that despite the finding of breaches of the conditions in the licences by the Tribunal and the inability or unwillingness of Ms. Longtin to control her son, the Tribunal nevertheless found that Ms. Longtin did not “engage in any activity that would suggest a lack of integrity or honesty.”
17What the Tribunal in fact found was that notwithstanding the breaches of the conditions, Ms. Longtin’s past conduct “in that regard does not afford reasonable grounds for belief that the business will not be carried on in accordance with the law and with integrity and honesty…” The reasons for that conclusion are set out above at paragraph 7(4). While a differently constituted panel of the Tribunal might have concluded otherwise, the Tribunal provided a rationale for its decision and I see no significant error of law that likely would have led to a different decision.
18The respondent next submits that the Tribunal made a significant error of law in failing to consider inconsistencies and discrepancies “in the appellant’s interview with the racing investigator and her attempts to obfuscate the degree of her son’s involvement in the licensed establishment in contravention of the conditions on the liquor licence.” None of these alleged inconsistencies or discrepancies are detailed in the respondent’s submissions. The Tribunal did refer to the evidence of the racing investigator and found that Ms. Longtin breached the conditions of the licences by allowing her son to be involved in the management of the licensed premises. The Tribunal heard the evidence and made its conclusions on that evidence, including any discrepancies or inconsistencies. The respondent has not satisfied me that in doing so the Tribunal made a significant error of law.
19According to the respondent, the Tribunal made a significant error of fact by failing to consider the evidence on Risk-Based Licensing and the obligations of licensees to operate in the public interest as opposed to their own private interests. This is the respondent’s entire submission on this point with no reference to what evidence was proffered. The appellants submit that the respondent failed to articulate in any meaningful way what the public interest encapsulates or how they fell short of the obligation to serve the public interest.
20In my view, once the Tribunal decided that the appellants’ past conduct does not afford reasonable grounds for belief that the business will not be carried on in accordance with the law and with integrity and honesty, the question of the public interest was at least implicitly addressed.
21The respondent submits that the Tribunal made a significant error of law in failing to consider the evidence of his witness, Rebecca Castillo, who testified that the liquor licences were granted pursuant to consent conditions. At paragraphs 76 and 77 of its first decision, the Tribunal noted that the conditions were consensual and not unconscionable. Accordingly, I see no significant legal error as the Tribunal was aware of the fact that the conditions were attached to the licences with the consent of Ms. Longtin.
22The respondent submits that the Tribunal made a significant error of law in deciding that he could not call evidence of similar fact. However, the respondent provides no further details or authorities in support of that submission. The appellants explain in their submissions that the evidence was rejected by the Tribunal because of its late disclosure and unreliability as it was hearsay. The respondent, in the reply submissions, indicates that the late disclosure issue was resolved by an adjournment but effectively confirms that the proposed evidence was hearsay i.e. what an employee of one of the restaurants said to an inspector.
23Without more detail, I am not satisfied that the Tribunal made any error in rejecting the proposed similar fact evidence. The Tribunal has some latitude in what evidence it may admit or reject. Without more information as to the details of the proposed similar fact evidence, why it was an error on the part of the Tribunal to exclude the proposed evidence or how it would have likely affected the result, I am not satisfied that the Tribunal made a significant error of law in not allowing the evidence.
24The respondent further submits that the Tribunal failed to deal with the “totality of the circumstances” when deciding if there were reasonable grounds for belief as to whether Ms. Longtin would not conduct business in accordance with the law and with integrity and honesty. The respondent submits that there was no evidence before the Tribunal to suggest that Ms. Longtin would conduct her business any differently in the future and that the imposition of further conditions on the licences was a significant error of law when it was established that Ms. Longtin could not comply with conditions.
25I agree with the submission that it would be reasonable for a Tribunal to consider the “totality of the circumstances” in deciding whether there are reasonable grounds for belief that an applicant will not conduct business in accordance with the law and with integrity and honesty. I am of the view that the Tribunal did so. The Tribunal reviewed the evidence and gave reasons for its conclusion on what appears to me to have been the “totality of the circumstances” before it. I am not satisfied that the respondent has established any significant error of law made by the Tribunal.
26The Tribunal received submissions from the parties as to what sanctions it should apply having found the breaches of the conditions of the licences. The respondent submitted that revocation of the licences was the appropriate sanction as Ms. Longtin provided no evidence that she would comply with conditions in the future.
27The Tribunal wrote while Ms. Longtin “may have lacked the willingness or ability to fully comply with the conditions in so far as her son was concerned, her past conduct in that regard does not reflect a lack of honesty or a defect in integrity.” The Tribunal then decided to impose new conditions that would “very clearly forbid Mr. La’s involvement in either restaurant.”
28The Tribunal imposed brief suspensions of the liquor licences for both restaurants. It also imposed the following conditions on both licences:
(i) Thanh La shall not be permitted to enter, or be at the licenced premises.
(ii) Thanh 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 shall have no beneficial or financial interest in the licenced business or ongoing operations of the licence.
29The conditions may appear somewhat draconian from a mother/son perspective. Indeed, the appellants in their response to the reconsideration request seek an order setting these conditions aside. In my view, in all of the circumstances and in particular the past breaches of the conditions as found by the Tribunal, prohibiting Mr. La from even entering both restaurants was entirely reasonable.
ORDER
30Pursuant to rule 18.4(b) of the Tribunal’s rules, I confirm the decisions of the Tribunal dated January 18 and March 26, 2018.
D. Stephen Jovanovic
Associate Chair
Tribunals Ontario – Safety, Licensing Appeals and Standards Division
Released: May 1, 2019