Citation: R. v. Sijan Plaza Restaurant Ltd., 2012 ONCJ 100

ONTARIO COURT OF JUSTICE (Central West Region)

HER MAJESTY THE QUEEN -and- SIJAN PLAZA RESTAURANT AND CAO HUI YING

REASONS FOR JUDGMENT ON PRE-TRIAL MOTIONS

STATEMENT OF FACTS

1. The Corporation, Sijan Plaza Restaurant Ltd. (“Sijan Plaza”) and its president , Cao Hui Ying are individually facing two charges under the Liquor License Act( “LLA”). On November 22, 2010, Officer G Devereaux, a peace officer with the Region of Peel, swore two separate informations , alleging that “Sijan Plaza” permitted disorderly conduct on a licensed premise contrary to Section 45 (1) of the Liquor Licence Act (“LLA”), Ontario Regulation 719/90. The second count alleges that “Sijan Plaza” permitted drunkenness on the premises contrary to Section 45 (1) of the LLA/ Ontario Regulation 719/90. A second information set out identical allegations against an individual named Cao Hui Ying.

2. Both “Sijan Plaza” and Cao Hui Ying were served with a summons on December 10, 2010 with a first attendance date of January 27, 2011 in the Ontario Court of Justice. Mr. Rothman, counsel for both “Sijan Plaza” and Cao Hui Ying attended court on January 27, 2011 and set a trial for August 29, 2011.

3. Between January 27, 2011 and August 29, 2011, the holder of the liquor license, Sijan Plaza, was issued a Notice of Proposal by the Registrar of the Alcohol and Gaming Commission (“AGCO”). The purpose of the Notice was to determine if the liquor license issued to Sijan Plaza ought to be suspended. Sijan Plaza requested an administrative hearing as is their right as a liquor license holder.

4. A hearing to suspend Sijan Plaza’s liquor license was held on May 12, 2011 before two Board members of the License Appeal Tribunal. The Registrar of the Alcohol and Gaming Commission of Ontario (“AGCO”) alleged that Sijan Plaza violated sections 29 and 45(1) of the Liquor Licence Act on September 23, 2010. The allegations before the License Appeal Tribunal were identical in substance and form to the allegations in the Information against Sijan Plaza. Cao Hui Ying was not a named party in the administrative proceedings to suspend Sijan Plaza’s license.

5. On August 25, 2011, the License Appeal Tribunal of the AGCO found, on a balance of probabilities (emphasis is mine), that Sijan Plaza contravened section 45(1) of the Liquor License Act and dismissed the allegations involving section 29 of the LLA.

6. On August 29, 2011, Mr. Rothman attended the Ontario Court of Justice at 5 Ray Lawson Boulevard, Brampton and argued that this Court does not have jurisdiction on the principles of autrefois convict, autrefois acquit, double jeopardy and res judicata; in essence, Mr. Rothman argued that the Court had no jurisdiction as the Alcohol and Gaining Commission of Ontario had made a decision on the exact same matters and the AGCO has already assumed jurisdiction and acted on the matter.

7. Ms. Sarah Stackhouse, student-at-law from the Peel Crown Attorney’s Office disagreed with Mr. Rothman’s position. Both Mr. Rothman and Ms. Stackhouse were asked to provide the Court with written submissions. The Court received Mr. Rothman’s submissions electronically on October 28, 2011; the Crown’s submissions on November 30, 2011 and Mr. Rothman’s reply on December 8, 2011. The Court sent an email on Thursday, January 28, 2012 informing the parties that the pre-trial applications would be dismissed with reasons to follow.

8. On the first trial date of August 29, 2011, Mr. Rothman made reference to the AGCO’s decision without providing the Court with a copy of the decision. This Court reassured Mr. Rothman and reaffirms its position that any findings of fact by the AGCO are not in any way binding on this Court. This Court completely disregards any findings of fact made by the tribunal on August 25, 2011. None of the defendants have been arraigned and no evidence has been tendered.

STATUTORY FRAMEWORK OF LIQUOR LICENCE & ALCOHOL GAMING COMMISSION OF ONTARIO

9. The sale of alcohol is a regulated activity in the province of Ontario – the Liquor Licence Act sets out the rules for the ale and service of beverage alcohol in Ontario. The administration and enforcement of the LLA are the responsibility of the Alcohol and Gaming Commission of Ontario (AGCO). Anyone who wishes to sell liquor and allow for the consumption of alcohol on the premises must apply for a license and abide by a regulatory regime. The AGCO maintains compliance with licensees through various regulatory mechanisms including inspections. Where it is believed that a term of the licence has been breached, the Registrar of the AGCO may revoke, suspend or attach conditions to the license. Section 15 of the LLA sets out the powers of the Registrar in the regulation and enforcement of liquor sales.

10. When the AGCO suspects that a party has violated one of the terms of the LLA or one of the statutory conditions, the Registrar of the AGCO issues a Notice of Proposal to the licensee. The licensee may either admit the violations and settle the matter or choose to have a hearing. If a hearing is held, the License Appeal Tribunal holds a hearing. At this administrative hearing, the onus is on a balance of probabilities. If the tribunal finds a party has violated the terms of the license, the administrative tribunal may revoke, suspend or place conditions on the licensee.

11. The police have the authority to inspect licensed establishments and ensure compliance with the Liquor Licence Act. The offences and penalty provisions of LLA are set out in Section 61 of the LLA. The penalty provisions include a maximum fine of $250,000 for a corporation and a fine of up to $100,000 or a maximum term of imprisonment of one year or both.

ISSUE #1 – PARTIES TO PROCEEDINGS

12. Sijan Plaza was subject to the regulatory process and the AGCO’s decision of August 25, 2011. Cai Hui-Ying was not a party to the proceedings before the ACGO. As such, the parties before the AGCO are not the same parties facing quasi-criminal charges in the Ontario Court of Justice.

ISSUE#2: - NATURE OF PROCEEDINGS

13. Sijan Plaza was subject to jurisdiction of a two member administrative tribunal whose purpose was to promote order and welfare within a public sphere of activity, namely to regulate the alcohol and gaming sectors. As noted in the Alcohol and Gaming Commission of Ontario website (printed November 28, 2011), the mandate of the AGCO is to regulate the alcohol and gaming sectors in accordance with the principles of honesty and integrity, and in the public interest.

14. The Ontario Court of Justice – Provincial Court has jurisdiction to hear any Provincial laid in its territory ( Provincial Offences Act, section 29). The prosecution of this matter is governed the Provincial Offences Act. Subsection 2(1) states that the purpose of the Act is to provide a procedural framework for the prosecution of provincial offences reflecting the distinction between “criminal “and “quasi –criminal” or “regulatory offences”. Subsection 2(2) provides an interpretation on how matters are dealt by way of the Provincial Offences Act. Where recourse is made to judicial interpretation and practices under the Criminal Code provisions, any minor change in wording is not meant to reflect a substantive change in meaning. Sections 2 and 29 of the Provincial Offences Act are attached to Appendix “A” of the reasons.

ISSUE #3: EVIDENTIARY ISSUES AND POTENTIAL PREJUDICE

15. As this matter is a quasi-criminal proceeding the following evidentiary issues arise. First, the burden of proof lies with prosecution; the prosecution must prove its case beyond a reasonable doubt. The burden of proof in the regulatory process was on a balance of probabilities. Secondly, hearsay evidence is presumptively inadmissible and subject to the rules of evidence including exceptions to the hearsay rule. Mr. Rothman in his oral submissions on August 29, 2011 conceded that hearsay evidence was admissible before the AGCO. Finally, if convicted Cao Hui-Ying as an individual could potentially be subject to imprisonment of up to one year, a fine of up to $100,000 or both. Reference can be made to s. 61(3) (b) of the Liquor Licence Act. The corporation obviously cannot be imprisoned. Cao Hui-Ying was not a party to the disciplinary process before the ACJO and was not subject to any possible penal consequences in the regulatory proceeding.

RES JUDICATA AND DOUBLE JEOPARDY: THE LAW

16. Mr. Rothman, counsel on behalf of the defendants raises the defence of res judicata and the doctrine of double jeopardy in asking this court to stay the proceedings.

17. Justice Martin of the Ontario Court of Appeal in R v. Allison and Direl (1983) 38 C.R. (3d) 333 defined res judicata as:

An act which underlies an offence or an act which forms part of a series of connected acts which make up the factual basis of an offence resulting in a conviction cannot be used to constitute the factual basis of a conviction for a conviction for another offence.

18. The defence of res judicata has been codified in s. 12 of the Criminal Code of Canada. Res judicata means “something that has been clearly decided”. The defense of res judicata prevents convictions arising out of the same factual transactions. Res judicata and double jeopardy are different principles concerned with a fundamental rule of fairness; namely, after an accused is tried for an offence and finally acquitted or convicted, that person may not be placed in jeopardy a second time.

19. In applying the doctrine of double jeopardy, Justice Wilson of the Supreme Court of Canada in

wrote:

There is a fundamental distinction between proceedings undertaken to promote public order and welfare within a public sphere of activity and proceedings undertaken to determine fitness or to obtain or maintain a licence. Where disqualifications are imposed as part of a scheme for regulating an activity in order to protect the public, disqualification proceedings are not the sort of “offence” proceedings to which s. 11 is applicable. Proceedings of an administrative nature instituted for the protection of the public in accordance with the police of a statute are also not the sort of “offence” proceedings to which s. 11 is applicable.

20. In R. v. Canada Tavern Inc., [1998] O.J. 2899, Justice Nosanchuk addressed an appeal from Justice of the Peace Murphy’s decision, dated February 28, 1997 staying information’s against Canada Tavern Inc and other named parties. The Justice of the Peace stayed the charges on the basis that the defendant company had been tried by another tribunal of competent jurisdiction citing the doctrine of res judicata.

21. In Canada Tavern Inc., supra, the defendants and a corporation were facing offences under the 30 (4) of the LLA. A Notice of Proposal, similar to a Notice of Proposal was issued dealing with suspension of the liquor licence. A hearing was held and the licensee was found to have contravened s. 30(4) of the LLA; the administrative penalty was a license suspension for 21 days. The defendants raised the defence of res judicata and the Justice of the Peace stayed the charges.

22. On appeal, Justice Nosanchuk, in the Ontario Court of Justice (Provincial Division) overturned the stay, by concluding that the principle of res judicata did not apply for three reasons; Canada Tavern Inc, supra at paragraphs 14, 18 and 19. First, the hearing before the Liquor Licence Board did not involve the charging of an offence but was simply a determination on a balance of probabilities as to whether the license should be suspended. Second, the “Proposal” before the Liquor Licence Board did not involve a prosecution for an offence that could lead to a conviction for a criminal or quasi criminal offence. Finally, the potential penalty that could be imposed by the Tribunal did not involve true “penal” consequences such as a fine or imprisonment but rather was undertaken to determine the fitness of Canada Tavern to maintain a liquor licence and the question of what conditions should attach to the license.

23. In addition, Justice Nosanchuk cited the Supreme Court of Canada decision in Wigglesworth, supra at para.23 . Justice Wilson of the Supreme Court of Canada clearly stated that there is a fundamental difference between proceedings undertaken to promote welfare with a sphere of activity and activities undertaken to determine fitness to obtain and maintain a license. Disqualification imposed as part of regulating a public activity was not covered by the double jeopardy provisions in Section 11(h) of the Charter.

24. Justice Nosanchuk’s decision is binding on this Court for three reasons. First, the decision has not been distinguished or overturned by any subsequent cases that were provided to this court. While the disciplinary offences facing the parties in Canadian Tavern were different from the case before the court, the applicable principles and analysis provide the applicable guidance to the three issues framed at paragraphs 12 to 15 of this judgment.

25. In Park v. Ontario (AGC), [2002] O.J. No 4017 (S.C.J.), Justice Campbell dealt with a similar issue. In Park, supra, unlike the facts before e this court, the converse took place. A licensee was acquitted in the Provincial Court and raised the issue of res judicata and double jeopardy before the licensing tribunal, the AGCO. Justice Campbell of the Superior Court of Justice speaking on behalf of the Divisional Court dismissed the motion concluding at paragraphs 3-4 that :

As for res judicata, double jeopardy, and abuse of process, a prosecution is different from a regulatory hearing with different parties and different potential remedies. The quasi criminal Provincial court acquittal does not affect the regulatory jurisdiction of the Board. ... As for the Charter, no notice has been given to the Attorney General and in any event section 11(h) does not apply to regulatory proceedings like this.

26. The judgment of the Divisional Court in Park, supra, was not overturned or distinguished in any subsequent case. Park was decided about four and a half years after Canada Tavern, supra. As such, the Court’s reasoning is binding on this court.

27. Mr. Rothman relies on a number of authorities to support his position for a stay. In R v. Crowe 1995 Carswell Ont 98, 20 C.E.L.R (N.S.) 235, Justice Sedgwick of the Ontario Court of Justice (General Division) stayed proceedings against an individual and two corporations. Charges were laid against the accused under the Water Resources Act and the Ontario Environmental Protection Act in 1988. The matters were disposed of by way of convictions.

28. In 1994, new charges were laid against the same persons alleging nuisance contrary to s. 165 of the Criminal Code. Justice Sedgwick at paragraph 26 concluded the same conduct was being alleged in the 1994 criminal information relating to nuisance as was alleged in the Water Resources and E.P.A charges. Since the accused had previously been charged, tried, convicted and punished in the Ontario Court of Justice, the trial judge stayed the proceedings.

29. The facts in the case before the Court are factually distinguishable; there has never been adjudication on the merits of the case in the Ontario Court of Justice. The Crowe decision is neither binding nor persuasive.

30. Similarly, R. v. Leier, 1970 1161 (AB SCTD), 1970 Carswell Alta 100, 74 W.W.R. 339 is a 42 year old case from the Alberta Supreme Court. In Leier, charges were laid under the Securities Act, a provincial statute and a charge of fraud was laid under the Criminal Code. The Court concluded at paragraphs 24 and 28 the charges were different and the double jeopardy provisions did not apply. The Leier decision is not binding on this Court as it is a 42 year old decision from Alberta and does not deal with the relevant issues identified by Justice Nosanchuk in Canada Tavern Inc, supra.

PROCEDURAL ISSUE IN APPLICANT’S REPLY SUBMISSIONS

31. In his reply submissions, Mr. Rothman argues that since this Court has received the AGCO’s decision, the Court “ in advance is now aware of the sworn testimony of witnesses , it therefore would be improper to proceed with the trial. Remarkably, in the very next paragraph of his submissions, Mr. Rothman states, “ However, the Court’s being possession of the Decision of Findings has served a useful and time saving purpose to show there should not be a trial. The findings of fact establish the accused did nothing wrong.” Fortunately, submissions are not evidence. The Court repeats for emphasis what was stated in paragraph 8 of its Reasons for Judgment. This Court completely disregards any findings of fact made by the tribunal on August 25, 2011. None of the defendants have been arraigned and no evidence has been tendered.

32. In his reply submissions, Mr. Rothman noted “ that if the reasoning on behalf of the defendants regarding lack of jurisdiction, does not convince the Court that there should not be a trial, then as an alternative solution, it is submitted that because of the Court being in possession of the said Decision of Findings, there should a stay of proceedings. “

33. The test for granting a stay of proceedings establishes a high threshold; the applicant has failed to meet that high threshold. The request for a stay is denied as are the pre-trial applications based on res judicata and double jeopardy.

Dated the 30th day of January, 2012

_________________________

H. W. Mangesh Duggal

APPENDIX A - Legislation, AGCO Decision & Cases Considered

Liquor Licence Act R.S.O. 1990, CHAPTER L.19

Revocation, suspension or refusal to renew licence

15. (1) The Registrar may issue a proposal to revoke or suspend a licence to sell liquor or refuse to renew such a licence for any ground under subsection 6 (2), (4) or (4.1) that would disentitle the licensee to a licence if the licensee were an applicant or if the licensee has contravened this Act, the regulations or a condition of the licence. 2002, c.18, Sched. E, s. 7 (13).

Offences

Offences

61. (1) A person is guilty of an offence if the person,

(a) knowingly furnishes false information in any application under this Act or in any statement or return required to be furnished under this Act;

(b) knowingly fails to comply with an order under subsection 38 (2); or

(c) contravenes any provision of this Act or the regulations. R.S.O. 1990, c. L.19, s. 61 (1).

Provincial Offences Act R.S.O. 1990, CHAPTER P.33

Purpose of Act

2. (1) The purpose of this Act is to replace the summary conviction procedure for the prosecution of provincial offences, including the provisions adopted by reference to the Criminal Code (Canada), with a procedure that reflects the distinction between provincial offences and criminal offences.

Interpretation

(2) Where, as an aid to the interpretation of provisions of this Act, recourse is had to the judicial interpretation of and practices under corresponding provisions of the Criminal Code (Canada), any variation in wording without change in substance shall not, in itself, be construed to intend a change of meaning. R.S.O. 1990, c. P.33, s. 2.

Territorial jurisdiction

29. (1) Subject to subsection (2), a proceeding in respect of an offence shall be heard and determined by the Ontario Court of Justice sitting in the county or district in which the offence occurred or in the area specified in the transfer agreement made under Part X. 2009, c. 33, Sched. 4, s. 1 (35).

Consultation Document, Internet Printout of August 28, 2011 – Consultation Document: Liquor License Act Reform – 5 pages

Alcohol and Gaming Commission of Ontario Decision of Findings, August 25, 2011, Board Members Beryl Ford, Joan Lougheed, Registrar, Alcohol and Gaming Commission of Ontario (Registrar) -and- Sijan Plaza Restaurant Ltd, operating as Sijan Plaza Restaurant, Licensee

R. v. Allison and Direl (1983) 38 C.R. (3d) 333

R. v. Wigglesworth 2 S.C.R 542 at paragraph 23

R. v. Canada Tavern Inc., [1998] O.J. 2899

Park v. Ontario (AGC), [2002] O.J. No 4017 (S.C.J.)

R. v. Crowe 1995 Carswell Ont 98, 20 C.E.L.R (N.S.) 235

R. v. Gayle Air Ltd. 1974 2654 (MB PC), 1974 Carswell Man. 1, 28 C.R.N.S. 114

Canada (Attorney General) v. Ukrainetz 1994 4771 (SK QB), 1994 Carswell Sask. 106, 117 Sask. R. 261, Saskatchewan Court of Queen’s Bench, January 5, 1994