Appeal of a Notice of Proposed Order by the Registrar under the Alcohol, Cannabis and Gaming Regulation and Public Protection Act, 1996, pursuant to the Gaming Control Act, R.S.O. 1992, c.24 – to Refuse Registration as a Seller
Between:
1965504 Ontario Inc. o/a Best Convenience
Appellant
And
Registrar, Alcohol, Cannabis and Gaming Regulation and Public Protection Act, 1996
Respondent
DECISION AND ORDER
Adjudicator: Avvy Go, Member
APPEARANCES:
For the Appellant: Ibrahim Tageddine, Principal of the Appellant Charlotte Swanson, Paralegal (at the hearing) Charn Aha (Bill) Kim, Counsel (subsequent to the hearing)
For the Respondent: Aviva Harari, Counsel
Heard by Videoconference: October 2, 2020 and October 5, 2020
REASONS FOR DECISION AND ORDER
OVERVIEW:
1Ibrahim Tageddine is the director/officer of 1965504 Ontario Inc. o/a Best Convenience, a convenience store located in Windsor Ontario.
2Mr. Tageddine completed an application on behalf of the appellant for registration as a supplier under the Gaming Control Act 1992 (the "Act"). He also submitted the required personal disclosure form.
3In the Notice of Proposed Order (the "NOPO") dated June 1, 2020 the Registrar proposes to refuse the appellant's registration as a supplier. The Registrar alleges that the appellant will not act as a registered supplier, in accordance with law, or with integrity, honesty or in the public interest and/or with financial responsibility, based on the past conduct of Ibrahim Tageddine. The Registrar alleges that Mr. Tageddine failed to make full disclosure on the application for registration of previous charges and convictions as well as infractions of the Ontario Lottery Gaming Corporation ("OLG") Lottery Retailer Manual ("Manual"). In support of its proposal, the Registrar also relies on a breach of terms and conditions of a previous registration under the Act, as well as conduct that resulted in the revocation of a previous registration under the Act.
ISSUE:
4The issue to be decided on this appeal is as follow:
Are there reasonable grounds to believe that the appellant will not act in accordance with law, or with integrity, honesty in the public interest, and/or with financial responsibility, having regard to the appellant's past conduct?
RESULT:
5For the reasons set out below, I find that there are reasonable grounds to believe that the appellant will not act with honesty, integrity, within the law or in the public interest and/or with financial responsibility, having regard to the past conduct of the appellant's corporate officer/director. Therefore, I direct the Registrar to carry out the NOPO to refuse the registration of the appellant.
LAW AND ANALYSIS:
Onus and Standard of Proof
6Section 10 of the Act provides that the Registrar shall refuse to register an applicant as a supplier if 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 the applicant.
7Section 13 of the Act gives an applicant a right to a hearing before the Tribunal, and subsections (8), (9) and (10) allow the Tribunal to confirm or set aside a proposed order, substitute its opinion for that of the Registrar or attach terms to an order for registration.
8The onus rests with the Registrar to demonstrate 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 past conduct.
9In the case of a corporate applicant, the corporate veil is pierced to examine the conduct of its officers and directors.
10The Court of Appeal for Ontario confirmed in Famous Flesh Gordon's1 that the standard of proof of "reasonable grounds for belief" is a lower standard than that of "balance of probabilities". The Court of Appeal also confirmed that any and all past and present conduct is to be considered, and there should be a nexus between the overall conduct and the business.
11The Court's decision in Famous Flesh Gordon's was followed by the Tribunal in He2 in which the Tribunal stated the following:
[T]he test applicable to eligibility of registrants in the gaming industry in Ontario relates to conduct. Said another way, it is the behaviour of registrants that is required to meet the standard of acting in accordance with honesty, integrity and in the public interest. It is an applicant's past behaviour that is examined to predict future behaviour.
12Applying the law to this case, I will begin first by reviewing the relevant past conduct of Mr. Tageddine, the officer/director of the appellant, after which I will determine whether having regard to the past conduct of Mr. Tageddine, there are reasonable grounds to believe that the appellant will not act as a supplier in accordance with law, or with integrity, honesty or in the public interest.
Evidence of Past Conduct of Mr. Tageddine
13The Registrar called several witnesses to testify about Mr. Tageddine's past conduct. The evidence touched on the following areas:
i. His past infractions under the Manual. ii. His past infractions under the Smoke Free Ontario Act; and iii. His past criminal charges.
OLG Infractions
14The Registrar called OLG Investigator Jeff Blanchard to testify to a number of investigations he undertook involving Mr. Tageddine, while the latter was working at a business called Rivard Convenience. Mr. Tageddine was the President of Rivard Convenience, which was flagged for investigation after an anomaly was discovered by an OLG forensic team due to a high volume of lottery tickets being sold right before the draw. Investigator Blanchard was sent to conduct live surveillance right outside Rivard Convenience on several occasions. After confirming that tickets were being sold within the store, Investigator Blanchard then immediately attended at the store. Each time, Mr. Taggedine was the only person at the store and there was no customer present. Mr. Taggedine told Investigator Blanchard that he was helping customers living in a nearby apartment building with mobility issues to buy lottery tickets on their behalf. Subsequent investigations conducted at the apartment building did not corroborate Mr. Tageddine's explanation.
15The Manual prohibited retailers from printing tickets with no customer present. Investigator Blanchard issued a suspension to Rivard Convenience for breaching the OLG Manual. Mr. Taggedine was given an opportunity to educate himself about the Manual. Notwithstanding the opportunity, he continued to engage in non-compliant behaviour.
16Altogether, between May 2016 and September 2017, Investigator Blanchard ticketed Rivard Convenience for four breaches due to Mr. Tageddine selling tickets with no customer present. These breaches resulted in 3 suspensions for 7 days each, and a fourth suspension for 30 days.
Convictions under the Smoke Free Ontario Act
17Another witness called by the Registrar was Officer Nicole Trajkovski, a provincial offences officer with the Windsor-Essex health unit. Her areas of responsibility include ensuring compliance with the Smoke Free Ontario Act and enforcement of rules related to the sale of tobacco.
18Based on tips received, Officer Trajkovski attended at Rivard Convenience to investigate the sale of tobacco to persons under 19 years of age and the improper display of tobacco products. Between April 10, 2014 and March 4, 2015, Rivard Convenience store was convicted on four occasions for these breaches. As a result of these convictions, an automatic prohibition order was issued by the Ministry of Health prohibiting the sale of cigarettes and tobacco by Rivard Convenience. The automatic prohibition ran from August 24, 2016 to May 29, 2017.
19During the prohibition period, Officer Trajkovski attended at Rivard Convenience several times to ensure compliance with the prohibition order. At each attendance, Mr. Tageddine was in the store. Officer Trajkovski would ask him if there were tobacco products in the store, and each time Mr. Tageddine would reply "no". This was untrue. Officer Trajkovski conducted searches each time and found tobacco products concealed in different parts of the store, including in garbage bags under the front counter, inside a power wall and in a chocolate bar tower.
Criminal Charges
20The Registrar led evidence that Mr. Tageddine has been the subject of criminal complaints to the Windsor Police Service. None of these complaints resulted in convictions, and one did not even result in charges.
The Applicant's Evidence Concerning Past Conduct
21Throughout the hearing, Mr. Tageddine was represented by a legal representative but did not challenge any of the evidence regarding his prior convictions or suspensions. For the most part, Mr. Tageddine did not ask the Registrar's witnesses any questions.
22Mr. Tageddine did not testify, call any witness or offer any documentary evidence to dispute any of the allegations made by the Registrar. Nor did he provide any evidence about his character or conduct.
Are there reasonable grounds to believe that the appellant will not act as a supplier in accordance with the law, or with integrity, honesty or in the public interest, having regard to its past conduct?
Registrar's Consideration of Past Conduct
23The Registrar called Frank Cuda, manager of Gaming eligibility and deputy register, to explain how the Registrar came to a decision to refuse the appellant's registration. Mr. Cuda testified that the integrity of gaming in Ontario must be maintained to ensure public confidence in the industry. Registrants must be able to conduct business with honesty, integrity and according with the law. Mr. Cuda also explained the process of review. An individual or corporation submits an application through a database system and is required to respond to a series of questions. There is an expectation that the applicant will respond with honesty. If an applicant has a previous history, it is something that will factor in the application process. The Registrar considers past conduct as a good indicator of future conduct.
24The application also requires the applicant to disclose past contraventions truthfully. In this case, Mr. Cuda is concerned about Mr. Tageddine's failure to disclose on the application the convictions related to Smoke Free Ontario Act and the numerous OLG suspensions. Mr. Cuda also expressed concern that Mr. Tageddine lied to Officer Trajkovski. Mr. Cuda testified that the Registrar is of the view that Mr. Tageddine's past conduct demonstrates his disrespect for authority and is concerned that he will not be acting with honesty, and integrity, and as such cannot be given registration.
Analysis
25I have reviewed all the evidence, including the testimonies of the Registrar's witnesses. I find that the Registrar has discharged its burden of demonstrating that there are reasonable grounds to believe that the appellant 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 its officer/director, Mr. Tageddine.
26Mr. Tageddine retained new counsel after the hearing and made written submission with regard to the applicant's appeal. The submission largely points to Mr. Tageddine's limited command of English as a contributing factor to his failure to comply with the registration requirement. The problems with this submission are two-fold. First, Mr. Tageddine did not give any evidence at the hearing nor provide any explanation for his past conduct, including his lack of English proficiency. Second, as a participant in a highly regulated industry, Mr. Tageddine is expected to know and follow the rules with regard to the gaming industry, including rules that require him to fill out application forms accurately and honestly.
27Mr. Tageddine had the opportunity to present evidence to defend his past conduct but chose not to do so. He cannot rely on written submission that is not grounded on any evidentiary record.
28Mr. Tageddine's past conduct involves convictions under the Smoke Free Ontario Act. While his contraventions under that legislation are not strictly related to gaming, which is the subject of this appeal, I find they are highly probative given that the sale of both gaming and tobacco products are highly-regulated activities. His past conduct also involves multiple infractions under the OLG Manual, and discloses a pattern of non-compliance, which raises serious concerns about his governability and his compliance with the Act.
29For instance, when Investigator Blanchard first caught Mr. Tageddine issuing lottery tickets when no customer was present, he advised the latter of the OLG Manual that no transaction would be permitted for customers who are not present, nor for himself. While Mr. Tageddine acknowledged that he was aware of the Manual, he continued to repeat the same conduct, not just once, but three more times.
30Similarly, after being issued with an automatic prohibition against the selling of tobacco products by Officer Trajkovski, Mr. Tageddine continued to have tobacco products available at the store. The concealment of the tobacco products suggests that rather than complying with the prohibition order, Mr. Tageddine simply attempted to evade detection by concealing his non-compliance from the authorities.
31I agree with the Registrar's submission that Mr. Tageddine's past conduct as described above can be categorized as being "industry specific" and occurred at a time when he was working in a convenience store that held a registration under the Act. I also agree that industry specific conduct should be given considerable weight.
32With respect to the criminal charges, the Registrar suggested at the hearing that just because the charges were dismissed, it does not mean Mr. Tageddine did not actually engage in the conduct leading to the charges. With respect, one of the foundational principles of Canada's criminal justice system is the presumption of innocence until proven guilty. It is also a right guaranteed under the Canadian Charter of Rights and Freedoms. In my view, it is not appropriate for the Registrar to consider past criminal charges that were dismissed, or past interactions with police that did not result in any charges as part of the "past conduct" of an applicant, without providing any proof of such conduct – other than the fact that charges had been laid.
33Where an applicant has been charged but not convicted on the stringent criminal standard of beyond a reasonable doubt, it is open to a regulator to subsequently establish that the applicant engaged in the conduct on the lower civil standard of a balance of probabilities. However, evidence that the individual was charged alone falls far short of establishing that the individual committed the offence, even on the lower civil standard.
34However, I appreciate that the application form does require an applicant to disclose past criminal charges, including those that have been stayed or dismissed. An applicant is expected to be truthful when they complete the application form. An applicant's failure to disclose past criminal charges may raise question about integrity and honesty of the applicant.
35Mr. Tageddine submitted through counsel that he has "learned his lessons" and accepted his responsibility for his conduct. Yet he continues to attribute his past errors to carelessness, as in the case of failure to disclose information on his application, and to his limited command of English. Mr. Tageddine had a chance to testify to assert his remorse, or to explain the steps he has taken or plans to take in order to avoid future non-compliance. He chose not to do so. I find his assertion hollow when he tries to blame his past contraventions on being careless or lacking in English proficiency. It also contradicts his own claim that he has been operating retail stores for many years including in Ontario between 2010 to 2016 without any violations.
36I agree with the Registrar that there is no evidence to support a finding that Mr. Tageddine was not aware that he had an obligation to provide information, nor is there any evidence to suggest that he did not understand the questions in the application form. I note that Mr. Tageddine had completed similar forms in the past and should be familiar with the application questions.
37Counsel's submission that Mr. Tageddine has been "honest and forthright with the OLG investigator after each violation" also does not accord with the evidence, which shows Mr. Tageddine repeatedly engaged in infractions and provided explanations for his conduct (of selling tickets with no customer present) that were not supported by evidence.
38Counsel for Mr. Tageddine also submitted information about Mr. Tageddine's background and immigration history after the hearing had concluded. None of this information was put in evidence, and as such I decline to consider it in my deliberation of this appeal. In any event, the information would not have affected the outcome of the case. In my view, Mr. Tageddine's immigration history could not be used to explain, for instance, why he had repeatedly failed to comply with the OLG Manual and the Smoke Free Ontario Act, after having been found to have contravened them initially.
39Lastly, counsel submitted that Mr. Tageddine has effectively served a three-year suspension or "sentence" since the Registrar issued a Notice of Proposed Order in September 2017 to revoke the applicant's supplier registration when he was operating Rivard Convenience. The proposal was subsequently carried out with Mr. Tageddine's registration being revoked on October 1, 2017. Counsel submitted that Mr. Tageddine has learned a very costly lesson for his past transgressions and is willing to abide by any terms and conditions that the Tribunal may impose. Once again, his willingness to comply with the Tribunal's imposed terms and conditions was not put in evidence during the hearing.
40I would further point out that the revocation dated October 1, 2017, came about as a result of Mr. Tageddine's repeated violations of the OLG policy and the Notice of Proposed Order was not appealed at the time and the registration was revoked.
41Having said that, I am not unsympathetic to Mr. Tageddine's predicament. He has no doubt invested a significant amount of money to relocate his business and acquire new licences to operate a profitable convenience store, in addition to obtaining approval to sell tobacco products as well as approval from the Ontario Lottery and Gaming Corporation at his current convenience store location.
42However, Mr. Tageddine has clearly demonstrated a pattern of repeated failure to comply with industry specific rules and requirements, under the OLG Manual and the Smoke Free Ontario Act. His business registration has been revoked previously after he failed to comply with the terms and conditions of registration.
43While this time he has chosen to exercise his right to appeal the Proposed Order to refuse registration, he has also chosen not to offer any evidence that may explain his past conduct or provide any evidence of steps he would take to prevent future violations.
44Taking into account the totality of the past conduct of Mr. Tageddine and the industry specific infractions that the latter was found to be involved with, and in the absence of any evidence to the contrary and any explanation for these repeated infractions, I find that there are reasonable grounds to believe that the appellant will not act with honesty, integrity, within the law or in the public interest having regards to the past conduct of Mr. Tageddine.
ORDER:
45I confirm the Registrar's proposal to refuse 1965504 Ontario Inc. o/a Best Convenience for registration as a Gaming Supplier in the class of Seller.
LICENCE APPEAL TRIBUNAL
Avvy Go, Member
Released: December 30, 2020
Footnotes
- Alcohol and Gaming Commission of Ontario v. 751809 Ontario Inc. 2013 ONCA 157, at para.18
- See for instance, Wen Hui He v. Registrar of Alcohol, Gaming and Racing, 2018 ONLAT GCA 11411 (He)