CITATION: Registrar, AGCO v. Kyron, 2019 ONSC 5039
DIVISIONAL COURT FILE NO.: 750/18
DATE: 20190828
ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT
KITELEY, D.L. CORBETT, and MYERS JJ.
BETWEEN:
Registrar (Alcohol and Gaming
Commission of Ontario)
Faye Kidman, for the Appellant
Appellant
– and –
Thomas Kyron
Respondent
Licence Appeal Tribunal
Valerie Crystal, for the Intervenor
Intervenor
HEARD at Toronto: August 20, 2019
endorsement
Kiteley J.
[1] This is an appeal by the Registrar from the decision of the License Appeal Tribunal dated October 29, 2018 in which the Tribunal ordered that the Registrar’s Notice of Proposed Order (“NOPO”) to Revoke Mr. Kyron’s licence as “Owner-Standardbred” and the Order of Immediate Suspension (“OIS”) be set aside. For the reasons that follow, the appeal is dismissed.
[2] Mr. Kyron attended the hearing of the appeal but did not participate in the appeal.
[3] In an order dated July 29, 2019, Thorburn J. (as she then was) granted leave to the Tribunal to intervene on the appropriate standard of review, with reference to the expertise of the Tribunal on the matters at issue and on the statutory context in which the matter arises.
Background
[4] Mr. Kyron is a race horse owner who has been licensed pursuant to the Horse Racing Licence Act (“HRLA”) since 1990. Mr. Kyron also owned shares in a chemical production company.
[5] The circumstances leading up to the Registrar’s Notice of Proposal are as follows. On various occasions between December 2015 and August 2016 Mr. Kyron and his son sold to an undercover police officer a variety of chemicals that could be used to produce methamphetamine. On November 9, 2016, Mr. Kyron and his son were charged with offences under the Controlled Drugs and Substances Act (“CDSA”) and the Criminal Code. Mr. Kyron was released on bail on stringent conditions. On August 25, 2017 Mr. Kyron pleaded guilty to one count pursuant to s. 7.1(1) of the CDSA and to breaching the regulation under the CDSA.
[6] On October 3, 2017 the court accepted the joint submission and sentenced Mr. Kyron to an 18 month conditional sentence with significant supervision as well as a fine and a victim surcharge.
[7] On January 12, 2018 Mr. Kyron completed the annual application to renew his licence to own standardbred horses. In response to the question whether he had been found guilty or convicted of an offence, he checked “yes” and described the offence as “selling a regulated chemical without a proper licence” and he inserted “monetary settlement” in the section for disposition.
[8] A member of the Registrar’s licensing department conducted a series of background checks and learned of the offences. On March 7, 2018 the Deputy Registrar issued the NOPO and OIS pursuant to s. 21(1) of the HRLA.
[9] On March 14, 2018, Mr. Kyron filed an appeal from that decision.
[10] The hearing was conducted on May 29, 2018. The evidence included a 45 page agreed statement of facts that detailed the events that had given rise to the criminal charges and the basis upon which Mr. Kyron had pleaded guilty. The Tribunal also received the transcript of the sentencing hearing and oral evidence including from the Manager of Horse Racing Eligibility at the Alcohol and Gaming Commission of Ontario (“AGCO”) and from Mr. Kyron.
Decision of the Tribunal
[11] The following sections of the HRLA are relevant:
- The Registrar shall refuse to issue a licence to an applicant or to renew the licence of an applicant if,
(a) there are reasonable grounds to believe that, when acting as a licensee, the applicant will not act in accordance with the law, or with integrity, honesty, or in the public interest, having regard to the past conduct of the applicant; . . .
- The Registrar may propose to suspend or to revoke a licence for any reason that would disentitle the applicant to the issuance or the renewal of the licence.
20.(1) If the Registrar refuses to issue or renew a licence, proposes to suspend or revoke a licence, or to add conditions to a licence to which the licensee has not consented, the Registrar shall serve notice of a proposed order, together with written reasons, on the applicant or licensee.
(2) The notice of the proposed order shall inform the applicant or licensee that the person is entitled to a hearing before the Tribunal.
(6) After holding a hearing, the Tribunal may by order,
(a) confirm or set aside the proposed order;
(b) direct the Registrar to take the action that the Tribunal considers the Registrar ought to take to give effect to the purposes of this Act.
[12] The Tribunal was required to assess the following elements of s. 14(a): reasonable grounds to believe; acting as a licensee; will not act with integrity, honesty, or in the public interest; and having regard to the past conduct of the applicant.
[13] In the decision dated October 29, 2018[^1], the Tribunal made the following findings:
The Ontario Court of Appeal found [in Famous Flesh Gordon’s 2013 ONCA 157] that as a standard of proof, ‘reasonable grounds for belief’ is lower than ‘balance of probabilities’. It requires “something more than mere suspicion” and an “objective basis for the belief which is based on compelling and credible information”. It does not require the Registrar to show that a licensee’s conduct will “make it more likely than not that he will not carry on business as required.” (paragraph 34)
This examination of past conduct, in the context of the statutory test in section 14 of the Act, remains directed at the licensee’s future actions “when acting as a licensee.” (paragraph 36)
I find that Mr. Kyron did knowingly give false answers on his 2018 licence renewal application. This does not, however, automatically give rise to a reasonable belief that, when acting as a licensee, the applicant will not act in accordance with the law, or with integrity, honesty, or in the public interest. (paragraph 37)
Mr. Kyron’s circumstance, however, also displays a number of mitigating factors that make the question of whether he might not act as a licensee with integrity and honesty much less clear cut. To look at only his criminal conviction would be, in my opinion, unnecessarily myopic. (paragraph 53)
I find that, considering the evidence as a whole, the Registrar had not satisfied its onus. (paragraph 72)
Weighing this evidence in its entirety, I find it unlikely that Mr. Kyron will fail to comply with the law in the future, nor am I satisfied that there are reasonable grounds to believe that Mr. Kyron will otherwise, when acting as a licensee, not act in according with the law, or with integrity, honesty, or in the public interest. (paragraph 81)
As I have found that the Registrar did not meet the statutory test required to issue the Orders, there is no reason to decide whether revocation of Mr. Kyron’s licence is the appropriate result. However, in the event that I am wrong or if I had found that the Registrar had discharged its onus, it would be open to me to decide the appropriate result. (paragraph 82)
The Court of Appeal in Famous Flesh Gordon’s clearly stated that revocation is not the only reasonable conclusion I could reach were I to make a finding under section 14 of the Act. The lengthy suspension that Mr. Kyron has served, combined with his genuine remorse would have the requisite effect of deterring any future misconduct that could jeopardize his horse racing licence. (paragraph 84)
Even if I found that the statutory test had been met, I would, under s.20(6)(b) of the Act, direct the Registrar to impose the suspension already served, which is the “action that the Tribunal considers the Registrar ought to take to give effect to the purposes of the Act”. (paragraph 85)
Jurisdiction
[14] The Licence Appeal Tribunal is an administrative tribunal created pursuant to the Licence Appeal Tribunal Act, 1999, S.O. 1999, c. 12, Sched. G. (the “LAT Act”). The LAT holds hearings under 34 statutes regarding licensing and consumer compensation matters, including the HRLA. This appeal is pursuant to s. 11 which states as follows:
(1) Subject to subsections (2) to (5), a party to a proceeding before the Tribunal relating to a matter under any of the following Acts may appeal from its decision or order to the Divisional Court in accordance with the rules of court:
Horse Racing Licence Act, 2015
(3) An appeal may be made on a question of law only.
Standard of Review
[15] The Appellant and the Intervenor agree that the standard of review is reasonableness. The issues framed by the appellant are outlined below. To the extent that each involves a legal analysis, this court must review it from the perspective as to whether the legal finding was reasonable.
[16] The Appellant further argues that while the standard of review is reasonableness, the range of reasonable outcomes should be more limited because the Tribunal lacks specific expertise and “field sensitivity” in the industry of horseracing, given the relatively recent inception of its jurisdiction in April 2016 to hear appeals arising from the HRLA. This is only the second decision of the LAT pursuant to the HRLA that has reached the Divisional Court.
[17] The Intervenor takes the position the Tribunal’s decision is entitled to deference because it raises substantively-related licensing issues in which the Tribunal has specialized expertise.
[18] In Helmer v. Belairdirect Insurance Co.[^2] the Divisional Court dealt with a related submission in the context of the Statutory Accident Benefits Schedule (“SABS”). As the court pointed out, the LAT might not have a claim to specialized knowledge or expertise in SABS. However, the legislative intention was to constitute the LAT as the only body with the adjudicative function and to give the LAT the mandate to develop systems of streamlined adjudication. We agree with the view expressed in that case that the standard of review, even while the jurisprudence is developing, remains reasonableness and therefore, deference is required.
Analysis
A. Was the Tribunal’s interpretation and application of the “reasonable grounds to believe” standard an error of law?
[19] The Appellant accepts that the Tribunal properly instructed itself on the legal definition of “reasonable grounds to believe”. The Appellant asserts that “the conclusion it reached shows that it required a higher standard of proof”. Furthermore, the Appellant takes the position that the Tribunal “misapprehended the Registrar’s basis” for “reasonable grounds to believe” and the Tribunal “failed to appreciate the seriousness of the Respondent’s past conduct”.
[20] As framed in the factum, the Appellant does not challenge the Tribunal’s identification of the standard of proof; the Appellant challenges the Tribunal’s interpretation and application of the standard. Interpretation and application of law constitute questions of mixed fact and law. This ground of appeal is rejected on the basis that it cannot be the subject of an appeal. In any event, I am satisfied that the Tribunal arrived at its reasonable conclusion because the Registrar had failed to provide evidence of an “objective basis for the belief based on compelling and credible information”. As the decision demonstrates, the Tribunal weighed the evidence and found it wanting.
B. Was the Tribunal’s application of “when acting as a licensee” an error of law?
[21] The Appellant argues that the Tribunal erred in law in its interpretation of “when acting as a licensee” in a manner that required the Registrar to establish a “nexus between the Respondent’s conduct and the horse racing industry” and that that was a restrictive and incorrect understanding of the scope of the phrase. The Appellant takes the position that the Tribunal erred by limiting its assessment of Mr. Kyron’s conduct while “acting as a licensee” to his role as a licensed owner of race horses. The Appellant asserts that the Tribunal ought to have included the Mr. Kyron’s involvement in the chemical manufacturing business and that his actions should be taken in the context of his status as a licensee both in the horse racing industry and in the sale of regulated chemicals.
[22] At paragraph 50, the Tribunal summarized the evidence of the Manager of Horse Racing Eligibility at the AGCO as follows:
The Registrar’s primary concerns were the serious nature of the charges, because drug manufacturing, particularly of methamphetamines, is a major concern and very much contrary to the public interest. Drugs, both as a form of cheating, and as a basis for substance abuse, are a significant concern in the racing industry, and pose a threat to human and equine safety.
[23] This ground of appeal is rejected on the basis that it is a finding of mixed fact and law and cannot be the subject of an appeal. In any event, as the decision demonstrates, the Tribunal was well aware of the submission in respect of “while acting as a licensee” and the Tribunal disagreed. The Tribunal arrived at that reasonable conclusion because, after weighing all of the evidence, the Registrar had failed to provide the evidence that would, on a balance of probabilities, allow the Tribunal to conclude that Mr. Kyron would, when acting as a licensee, contravene s. 14
C. Was the Tribunal’s interpretation of “law, integrity, honesty and the public interest” an error of law?
[24] In this ground of appeal, the Appellant focuses on “the public interest”. The Appellant argues that the Tribunal erred in considering the conduct “as part of the broader context of past conduct” and that the Registrar’s reasonable grounds to believe are “forward looking”. The Appellant asserts that the context of “exemplary” past conduct is not relevant. The Registrar also took the position that the Tribunal misapprehended the evidence and that that error in law was exacerbated where the Tribunal ascribed lesser importance to lying on the application form because the HRLA does not have a standalone statutory provision that makes that conduct a ground for disentitlement to a licence. Furthermore, the Appellant asserted that the Tribunal fell into error by applying the standard applicable to s. 6(2)(d) of the Liquor Licence Act, although it does not authorize or require an assessment of “the public interest” and is in a different industry.
[25] It is important to note that when the Registrar issued the NOPO, it was on the basis of the background checks that disclosed the charges and the sentence, including the fact that, at the time of his application for renewal, Mr. Kyron was subject to house arrest as a condition of his sentence. At the hearing on May 29, 2108, the Tribunal heard evidence including the 45 page agreed statement of facts, the transcript of the sentencing hearing where the court had accepted a joint submission, the evidence of the Manager of Horse Racing Eligibility, and Mr. Kyron. The Tribunal had a significantly more developed record. The responsibility of the Tribunal is to weigh all of the evidence. It may be that the issuance of the NOPO was reasonable on March 7, 2018 based on the information known to the Registrar that raised a “public interest” concern. It was no longer reasonable based on the evidence before the Tribunal. This ground of appeal is rejected on the basis that it is a decision of mixed fact and law and cannot be the basis of the appeal. In any event, I am satisfied that, after weighing all of the evidence, both positive and negative as it was required to do, the Tribunal was not persuaded that the Registrar had proved that Mr. Kyron would act in a manner contrary to the public interest.
D. Was the decision unreasonable and outside the range of reasonable outcomes?
[26] The issues raised by the Appellant are all questions of mixed fact and law, and so are not appealable. I also conclude that those issues were decided reasonably by the Tribunal, based on a review of the evidence before the Tribunal. The reasons are thorough and intelligible and the decision falls within the range of reasonable outcomes.
ORDER TO GO AS FOLLOWS:
[27] The appeal is dismissed without costs.
Kiteley J.
I agree
D.L. Corbett J.
I agree
Myers J.
Date: August 28, 2019
CITATION: Registrar, AGCO v. Kyron, 2019 ONSC 5039
DIVISIONAL COURT FILE NO.: 750/18 DATE: 20190828
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
Kiteley, D.L. Corbett and Myers JJ.
BETWEEN:
Registrar (Alcohol and Gaming
Commission of Ontario)
Appellant
- and –
Thomas Kyron
Respondent
ENDORSEMENT
Kiteley J.
Date of Release: August 28, 2019
[^1]: 2018 ONLAT HRLA 11248
[^2]: 2018 ONSC 2888 at para. 5