Category Archives for Judicial Review

Liquor Law Appeals Part 2 – The Cambie Malone’s Corporation

On April 13, 2016 the British Columbia Court of Appeal released its reasons in The Cambie Malone’s Corporation v. British Columbia (Liquor Control and Licensing Branch).

The Cambie Malone’s decision related to two appeals by the Cambie Malone’s corporation of two separate judicial review decisions made in March and April 2015. Both appeals were dismissed. British Columbia’s highest court does not often get the opportunity to weigh-in on liquor law disputes, so when it does stakeholders in the industry should take notice.

In Part 1 of Liquor Law Appeals Alcohol & Advocacy reviewed the basic principles of judicial review. Here in Part 2 Alcohol & Advocacy highlights how the courts apply those principles.

Decision 1

On April 8, 2013 the Branch issued a Notice of Enforcement Action against the Victoria location of Cambie Malone’s for permitting an intoxicated patron to remain on its premises. At a pre-hearing conference in June, 2013 counsel for Cambie Malone’s advised the Branch it was in possession of a video surveillance tape from the time of the alleged contravention – which it said proved there was not an intoxicated person in the premises at the material time. The Branch requested that Cambie Malone’s turn over the tape as soon as possible, and that failure to do so could result in the tape being inadmissible at the hearing. The Branch initially set February, 2014 as the deadline for disclosure of the evidence, but as a result of an adjournment request by Cambie Malone’s, the Branch set a new disclosure date of April, 2014.

On May 5, 2014, the day before the hearing was scheduled to commence, Cambie Malone’s sought consent from the Branch’s advocate to introduce into evidence the still undisclosed video. The Branch’s advocate refused to consent to the late disclosure of evidence, and the hearing adjudicator refused to allow it.

The adjudicator found that Cambie Malone’s failure to comply with the pre-hearing requirement for production of documents must be taken seriously, that such behaviour amounted to ignoring the rules, and that admission of late evidence would ultimately make the hearing unfair for the Branch.

The hearing continued without the video evidence. The adjudicator found that the contravention had been established, and imposed a four-day licence suspension.

Cambie Malone’s sought a judicial review of the decision on the basis that it was procedurally unfair that it was not permitted to adduce the video into evidence. The judge hearing the judicial review dismissed the application finding that the decision to not admit the video was an exercise of discretion, and no grounds had been shown warranting interference with that decision.

On this issue the Court of Appeal held that Cambie Malone’s cannot complain of procedural unfairness when it ignored the rules governing disclosure of evidence before the hearing – the very rules designed to promote fairness at the hearing itself. The Court of Appeal also observed that Cambie Malone’s on the appeal was arguing issues that were not raised before the judge hearing the judicial review, and so those arguments were not considered.

Decision 2

On April 2, 2013 the Branch issued a Contravention Notice against Cambie Malone’s Nanaimo location for permitting an intoxicated person to remain on the premises. Alcohol & Advocacy has already discussed the facts of this judicial review in detail here. In brief, the facts were as follows: after serving the Nanaimo location of Cambie Malone’s with a Contravention Notice the Branch followed-up demanding the production of certain records – namely Serving it Rights certifications, staff training manuals, and the establishment’s incident book. Cambie Malone’s refused to provide the requested materials in a timely fashion, and at the hearing various contraventions (including failing to provide requested records to the Branch) were proven.

Before the tribunal Cambie Malone’s argued that the Branch should not have sent demands for documents to its official mailing address on file with the Branch, but rather correspondence should have been sent directly to the Cambie Malone’s owner, who at some prior date had provided the relevant liquor inspector with his business card. The adjudicator rejected this submission, and awarded a monetary penalty against Cambie Malone’s for failing to provide the requested records. The Court on judicial review did not disturb the decision.

Before the Court of Appeal Cambie Malone’s attempted to revisit the finding of contravention in relation to permitting an intoxicated person to remain in the premises (an issue abandoned on the hearing of the judicial review) as well as challenging on the harshness of the penalty (even though at the judicial review it previously conceded that the penalty was appropriate if the contravention was proven) and lastly it raised new arguments about natural justice and bias that had not been previously raised. The Court of Appeal determined that each of these arguments were inappropriate and merit-less.

Conclusion

The Court of Appeal, after dismissing both appeals, took the unusual step of commenting that neither appeal had any substantial merit and that although the Liquor Control and Licensing Branch did not seek an award of costs against Cambie Malone’s, and so the Court did not make such an award, the Court does have authority to sanction parties who bring merit-less appeals. The Court warned that “litigants in Cambie’s situation should govern themselves in the future with this in mind.”

Licensees considering their options after receiving a fine or suspension from the Branch should do so carefully, and consult with a lawyer familiar with British Columbia’s liquor laws.

A successful appearance before the Branch, or the Court on judicial review, takes considerable planning and work on behalf of the licensee and counsel. Though it may be tempting for a licensee to represent themselves before the Branch, or retain the services of a consultant rather than a lawyer to assist them with gathering evidence and preparing submissions, a failure to properly present the necessary evidence and arguments at the outset of a dispute with the Branch will likely prevent a licensee from revisiting the issues later before the court.

Licensees should take away the following reminders from the Court of Appeal decision:

  • At the first sign of a dispute with the Branch or a liquor inspector understand what is required from you, review the related correspondence closely, and then respond promptly.
  • Gather evidence and identify relevant facts and witnesses early. Don’t wait until the hearing date has been set before you begin organizing your defence.
  • When served with a Contravention Notice, or a Notice of Enforcement Action, isolate the facts that you agree with, and those that are genuinely in dispute.
  • Put your best foot forward at the initial hearing, you cannot hold back arguments to raise them at judicial review.
  • Speak with a lawyer early to ensure you understand the tribunal process.
  • Seriously consider the merits of pursuing a judicial review of an adverse decision.

*Alcohol & Advocacy publishes articles for information purposes only. They are not a substitute for legal advice, and persons requiring such advice should consult legal counsel.

Liquor Law Appeals Part 1 – Judicial Review

British Columbia’s liquor licensing regime is administered by the general manager – an individual appointed under the Public Service Act by the cabinet minister responsible for the Liquor Distribution Branch, which is currently part of the Ministry of Small Business portfolio. The general manager, and the staff he or she delegates powers and responsibilities to, have significant impact on the way liquor laws are developed and applied in British Columbia.

Every day the Liquor Control and Licensing Branch makes decisions that affect the way liquor is manufactured, sold and served throughout the province. Alcohol & Advocacy has previously discussed the administrative regime here.

Many of the day-to-day decisions the general manager makes are not controversial – like issuing a liquor licence to a new restaurant, or amending the terms of a liquor primary licence to increase the establishment’s hours of service. Other times, the general manager’s decisions will be controversial, like refusing to issue a liquor licence or suspending a licence for a significant period of time. These latter decisions have a significant and negative impact on the affected business, and owners are managers are often left wondering what to do next?

Most licensees in British Columbia will be surprised to learn that the Liquor Control and Licensing Act does not provide licensees with the right to appeal decisions of the general manager. Prior to 2002, there was a Liquor Appeal Board that heard appeals of the general manager’s decisions, but in the early part of 2002 the Act was amended, and the Liquor Appeal Board was eliminated.

Licensees may regain the ability to appeal decisions of the Branch when the new Liquor Control and Licensing Act comes into force. Recommendation #15 of the 2014 Yap Report recommends:

Applicants and licensees seeking a review of LCLB decisions should have access to a new and separate decision-making body outside the licensing branch. The Ministry of Justice should review current processes and determine how best to provide independent decision-making for those seeking appeal.

According to the Branch’s website this recommendation is in “progress” and at this time the Branch has not released any further information.

Under the current liquor law regime in British Columbia a licensee who believes it has been unfairly treated by the Liquor Control and Licensing Branch or the Liquor Distribution Branch must apply to the B.C. Supreme Court for a judicial review of the decision to obtain relief. That means hiring a lawyer familiar with not only British Columbia’s liquor laws, but also the practice of administrative law.

If your business has received a negative decision from the Branch, contact a lawyer who practices in the area of liquor law immediately to better understand your rights. Your failure to act promptly may result in an inability to later challenge the decision.

What is a Judicial Review?

Many business owners, and even lawyers who do not regularly practice administrative law, don’t fully appreciate what a judicial review is. A judicial review is not a rehearing of the adverse decision, nor is it an opportunity for a “do over” from the initial hearing or application where new evidence or arguments can be raised. Put another way, the judge hearing the judicial review is not concerned about whether he or she would have decided the issue differently. Instead the judge is limited to deciding whether the Branch had the authority to make the decision at issue,  and whether the tribunal exercised that authority properly.

If the judge hearing the case agrees with the licensee, and finds that there was a procedural or substantive error, the remedy provide by the court is normally limited to sending the matter back to the Branch for a re-hearing or reconsideration rather than the court itself making a final determination of the issue. This means that even if a licensee “wins” the judicial review, they may face the same outcome when the issue is presented to the general manager again – albeit with some instruction coming from the court.

The government of British Columbia delegated authority over the licensing and regulation of liquor in British Columbia to the Liquor Control and Licensing Branch, and in doing so authorized the Branch to interpret and enforce those liquor laws. A judge hearing an application for a judicial review of a decision of the Branch is required to recognize that the Branch is a specialized decision maker with expertise in interpreting and applying British Columbia’s liquor laws under the Act. Because of that expertise, and the government’s express delegation of authority, the courts will not lightly interfere with the Branch’s decision making.

For a judge to interfere with a decision of the Branch, a licensee must prove that the general manager acted without authority, acted unreasonably, or did not treat the licensee fairly. These are high thresholds to meet. A mere technical error by the general manager, or a decision that is harsh – but not unreasonable, will not be sufficient for a judge to set-aside the Branch’s decision and order a new hearing.

How to approach Judicial Review?

Administrative tribunals, like the one established under the Liquor Control and Licensing Act to hear and decide enforcement issues, are intended to be less formal than traditional court proceedings. This is a good thing: it allows hearings to be conducted more swiftly than trials, and makes the process more accessible for licenses who wish to represent themselves before the Branch. However just because the enforcement hearing process is less formal than the court process does not mean a licensee can afford to approach the hearing casually.

It is of paramount importance that a licensee put its best foot forward at an enforcement hearing. This means hiring knowledgeable counsel early in the process.

In Liquor Law Appeals Part 2 Alcohol & Advocacy will examine a recent decision of the Court of Appeal in The Cambie Malone’s Corporation v. British Columbia (Liquor Control and Licensing Branch), and consider how the Court of Appeal applied the concepts of judicial review to enforcement action taken by the Branch against pubs in Victoria and Nanaimo.

*Alcohol & Advocacy publishes articles for information purposes only. They are not a substitute for legal advice, and persons requiring such advice should consult legal counsel.

Gangsters and Strippers and Liquor Law: The Story of Famous Flesh Gordon’s

Alcohol & Advocacy has previously considered what it means to be a fit and proper person for the purpose of holding a liquor licence in British Columbia: the criteria are broad and the discretion is great. Many of the criteria relate to an assessment of what the licence applicant has actually done, such as having a criminal record or committing violations of the Liquor Control and Licensing Act. But what about the less objective criteria – such as being “of good reputation and character” or being “associated” with people involved in criminal activities? How do regulators interpret those requirements?

After a lengthy court process, including a failed attempt at leave to the Supreme Court of Canada, on November 26, 2014 the Ontario Court of Justice released its reasons in Famous Flesh Gordon’s v. Alcohol and Gaming Commission. The Flesh Gordon’s decision, albeit under Ontario’s Liquor Licence Act, addressed the question of whether a liquor licensee who has no criminal record, can have their licence revoked on the basis of bad character.

Famous Flesh Gordon’s was a strip club in London, Ontario. The licensee, Robert Barletta, was a long-time member, and former local president, of the Hells Angels. After a separate court ruling found the Hells Angels to be a criminal organization (a defined term in the Criminal Code) , Ontario’s Registrar of the Alcohol and Gaming Commission applied to revoke Mr. Barletta’s liquor licence on the basis of his affiliation with the Hells Angels.

Initially the Board of the Alcohol and Gaming Commission refused the Registrar’s revocation request. The Registrar appealed that decision, and lost, and it was forced to appeal again to Ontario’s highest appellate court to get an order that that Board re-hear the revocation application. On the Registrar’s second attempt at revocation it was successful, only to have Mr. Barletta appeal that decision. Clearly this was a hotly contested and legally complex dispute.

So why all the appeals? What makes the Flesh Gordon’s case interesting is that Mr. Barletta did not have a criminal record or history of liquor licence infractions – not a single one. Moreover no evidence of any illegal activity at Famous Flesh Gordon’s was presented by the Registrar at either hearing held during the revocation process.

Though the Registrar could not point to any actual evidence of criminal wrongdoing, or failure by Mr. Barletta to carry on his business with “integrity and honesty”, as is required by the Liquor Licence Act, the uncontested evidence was that Mr. Barletta had been a “full patch” member of the Hells Angels since 2002. The Registrar’s evidence was that the Hells Angels are a criminal organization dedicated to the facilitation or commission of serious criminal offences, and that as a full patch member Mr. Barletta was required to be devoted to those causes and maintain a network of criminal contacts.

In Famous Flesh Gordon’s the Superior Court of Justice, Divisional Court dismissed Mr. Barletta’s appeal, and confirmed the revocation of his licence. The Court found that the relevant section of the Liquor Licence Act required more than simply owning an establishment where no criminal activity takes place: it requires that the licensee be someone who can reasonably be expected to carry on the business in accordance with the law, integrity and honesty. As a member of the Hells Angels, Mr. Barletta did not meet this description. Mr. Barletta’s submissions that “conditions” such as installing video cameras in the premises, and a prohibition against “gang colours” would mitigate the Board’s concerns, but the Court was not swayed.

Ontario’s director of legal services for the Alcohol and Gaming Commission has called the Flesh Gordon’s decision precedent setting for other provincial regulators. Licensees in British Columbia should take notice of the Flesh Gordon’s decision as it confirms that regulators are entitled to take a broad view of what it means to be a fit and proper person, and are not restricted to actual evidence of infractions or illegality to revoke a liquor licence.

If you have questions or concerns about the status of your liquor licence contact Dan Coles at Owen Bird.

*Alcohol & Advocacy publishes articles for information purposes only. They are not a substitute for legal advice, and persons requiring such advice should consult legal counsel.

Liquor Law 101: The Administrative Regime

Alcohol & Advocacy routinely provides readers with an “insiders” look at how the liquor laws in British Columbia are written, interpreted, and applied. At A&A we often write about the Liquor Control and Licensing Branch making “decisions” and issuing licences as well as fines – this is what lawyers call “administrative law”. But what is admin law?

The purpose of this article is to explain the concept in greater detail so the reader will be better equipped in their next discussion with the Branch or their local MLA. Administrative law concepts also make for great cocktail party conversation.

Administrative law is everywhere. From the Canadian Radio-television and Telecommunications Commission (CRTC) that regulates the content of your cable TV subscription, to the BC Chicken Marketing Board that sets the quotas for chicken producers in the province, every day your life and your business is affected by the world of administrative law.

You can think of administrative law as the processes and mechanisms of the welfare and regulatory state. Administrative law principles are engaged when a piece of legislation is relied on to affect someone’s rights or interests, but the decision or action is not being made by a legislature or a judge. In these instances the authority to interpret and apply that legislation has been delegated to a board or tribunal, or even the hands of an individual officer or inspector. The board or tribunal charged with interpreting and applying the relevant legislation will typically be compromised of individuals with expertise or training in that specific industry. In theory this operates to produce better decisions and better policy.

The reality is that few individuals or businesses will ever come in direct conflict with the judicial system, or lobby an elected politician for legislative change. They will however encounter dozens of administrative decision makers throughout their life – from the Passport Office, to the Canada Revenue Agency – and each time they will expect the decision maker to apply the appropriate statute correctly and fairly.

British Columbia’s Liquor Control and Licensing Branch is another example of an administrative decision maker. As a regulatory body the Branch operates in accordance with the  Liquor Control and Licensing Act and the Regulation as well as with its own set of established policies.

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Re the Cambie: The Supreme Court & Liquor Branch Requests

On April 23, 2015 the Supreme Court of British Columbia released its reasons in The Cambie Malone’s Corporation v. British Columbia (Liquor Control and Licensing Branch).

Re the Cambie was an application for judicial review (appeal) of a May 8, 2014 decision of the Liquor Control and Licensing Branch where the adjudicator found the Cambie in Nanaimo to be in contravention of both Section 43(2)(b) of the Liquor Control and Licensing Act for permitting an intoxicated person to remain in the establishment, as well as and Section 73(2)(a) of the Act for failing to promptly provide documents requested by a liquor inspector.

The Supreme Court upheld the Branch’s decision, and in doing so reinforced the Branch’s message to the Cambie, as well as other licensees – when the Branch writes, respond quickly and thoroughly. Whether you operate a bar or a brewery, communications with the Branch are not something to be treated lightly, or dealt with only when it is convenient. The fine the Branch imposed on the Cambie for failing to promptly provide documents was $7,500. With the proper systems in the place the fine could have been avoided.

Section 73 of the Act provides that in order to obtain information respecting the administration or enforcement of the Act or the Regulations, a liquor inspector or some other person designated by the general manager of the Branch may require a licensee to produce any prescribed document, record or sample, and do so promptly when requested.

On April 2, 2013, the Cambie was issued a contravention notice by the Branch for allegedly permitting an intoxicated person to remain in the establishment. In order to further investigate the contravention, on April 3, 2013 the Branch wrote to the Cambie by registered mail seeking the following information to assist in the Branch’s investigation*:

  1. A list of all personnel working at the establishment on March 30, 2013 along with a copy of each employee’s Serving it Right certificate;
  2. Any staff training manual or document that provides guidance in respect of intoxicated patrons;
  3. A record of the actual operating hours of the bar; and
  4. The incident book of the establishment.

(*If the licensed establishment you own or manage could not promptly provide a liquor inspector with these records you ought to reconsider whether you are doing enough to comply with the terms of your licence)

The correspondence was sent to the Cambie’s premises in Nanaimo, which was the contact address the Branch had on file for the liquor licence. An employee of the Cambie received the correspondence on April 4, 2013. The Branch required the Cambie respond with the requested documents on or before April 12, 2013.

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