Cooper v. British Columbia: Court of Appeal rebukes Liquor Control and Licensing Branch
British Columbia’s Court of Appeal ended 2017 with a stinging rebuke of the Liquor Control and Licensing Branch’s October, 2016 decision to cancel the liquor licences of Dell Lanes, a family-operated bowling alley in Surrey, B.C. Madam Justice Newbury, after being left with a “sense of unease” concerning the decision-making process followed by the Branch ordered that the bowling alley’s licences be renewed, albeit with some additional conditions.
The decision, Cooper v. British Columbia (Liquor Control and Licensing Branch), which can be read here in full, engages with various issues of significance to liquor licensees in British Columbia such as limits on what the Branch can consider when making a “fit and proper” analysis, and the standard to which reviewing courts in British Columbia should hold Liquor Control and Licensing Branch decision makers.
The facts in Cooper were serious. Mr. Cooper owns 25% of the shares of the corporate licensee Dell Lanes Ltd., which owns and operates a bowling alley and associated lounge and restaurant known as Dell Lanes.
The Cooper family has owned Dell Lanes for 15 years, and members of the family are employed in the business. Dell Lanes holds a food primary and a liquor primary licence, and until the matter at issue arose, had never been found to have violated the Liquor Control and Licensing Act or the terms and conditions of its licences.
In 2013 Mr. Cooper was charged, and pleaded guilty, to touching the body of a child under the age of 16. The victim, a 16 year old girl, was employed by Dell Lanes and was a friend of Mr. Cooper’s daughter.
Mr. Cooper was sentenced in 2014. The Provincial Court Judge handling the sentencing ordered a pre-sentence and psychiatric report on Mr. Cooper. The psych report confirmed that Mr. Cooper was “very low risk to reoffend.” Ultimately Mr. Cooper was sentenced to 90 days in jail (to be served intermittently), two years of probation, and a host of other requirements and restrictions related to attending counselling sessions and restrictions on being in the presence of minors. Lastly, and as mandated by statute, he was registered as a sex offender.
When Dell Lanes sought to renew its liquor licences later in 2014 it disclosed that Mr. Cooper had been convicted of a criminal offence. That disclosure prompted the Branch to request more information from Mr. Cooper relating to the nature of his offence. The Branch advised that based on this disclosure it may deem him not fit and proper to hold a liquor licence.
Correspondence on this issue was exchanged between Mr. Cooper and the deputy general manager of the Branch for the balance of 2014, through until 2016. During this time the individual acting as the deputy general manager of the Branch changed from Ms. Caldwell to Ms. Bell. Ultimately Ms. Bell was the decision-maker who, on behalf of the Liquor Control and Licensing Branch, elected to cancel Dell Lanes’ liquor licences effective October 6, 2016.
Both Mr. Cooper and Dell sought a judicial review of the Branch’s decision. The judicial review was heard June 6, 2017 and the court issued reasons on June 20, 2017.
The chambers judge hearing the judicial review observed that Ms. Bell’s decision made it clear that “the reason she wanted to cancel the licences had nothing to do with the regulation of the sale and consumption of alcohol.” Instead, the court found that her decision was grounded in two factors: Dell Lanes encouraged youth to attend its premises, and her concern that Mr. Cooper might re-offend while on the premises.
The chambers judge observed that the Branch’s decision was the product of factual and procedural errors, namely:
- The Branch advised Mr. Cooper that it had not relied on an “investigative report” in making its decision when in fact it had, and it did not provide Mr. Cooper with a copy of the same before making its decision;
- The “investigative report” advised that Mr. Cooper “demonstrates a real and present danger to the safety of the public” – contrary to the findings of the Provincial Court Judge who sentenced Mr. Cooper;
- The Branch mischaracterized Mr. Cooper as Dell Lanes’ “sole shareholder” – when in fact he was a minority shareholder; and
- The Branch interpreted Mr. Cooper’s status as a registered sex offender as an indication of his likelihood to reoffend, when in fact the sentencing judge had no discretion on this issue as Mr. Cooper’s registration was required by statute following his conviction.
The chambers judge, while expressly disagreeing with Ms. Bell’s conclusion, held that these errors were not “fatal” and that the decision was reasonable and within the Branch’s jurisdiction. Accordingly he and dismissed the petition for judicial review. Mr. Cooper and Dell appealed that decision.
Court of Appeal’s Decision
For licensees in British Columbia the Court of Appeal’s decision contains various useful comments and observations on liquor licensing issues that rarely receive judicial consideration. For example, the court confirmed that the “fit and proper” test is not a “roving commission into the moral character of licensees” and does not confer responsibilities or powers on the Branch like those conferred on police officers or the courts under the Criminal Code.
The court then went on to highlight the following errors in the Branch’s decision making:
- The Branch incorrectly stated that Mr. Cooper was the sole shareholder of the licensee, a fact that led the decision maker Ms. Bell to effectively equate Mr. Cooper with the Dell Lanes. This error, observed the court, may have led the Branch to fail to consider the possibility of imposing terms and conditions on Dell Lanes licences rather than cancelling them entirely;
- Cancelling the licences would almost certainly mean the closure of Dell Lanes which would have significant impact on the other members of Mr. Cooper’s family who work at or own Dell Lanes, as well as other employees and the community generally. These “contextual factors” were not mentioned by the Branch in its decision, but are relevant;
- Ms. Bell “strayed outside her area of expertise” in reaching the conclusion that Mr. Cooper was likely to reoffend; and
- The Branch declined to provide a copy of its investigative report to Mr. Cooper or his counsel.
Taken as a whole, the court concluded that Ms. Bell’s decision was unreasonable; it failed to strike a balance between its adverse impact on Mr. Cooper and others directly affected (Dell Lanes’ other owners and employees), weighed against the public purpose sought to be advanced.
Madam Justice Newbury described the Branch’s decision as “a heavy weight resting on the too slender reed of the slight risk of recidivism” – a risk that could have been addressed satisfactorily in terms of the public interest by a more nuanced approach that took all relevant factors into account.
For these reasons the court allowed the appeal and ordered the Dell Lanes licences renewed, on the condition that no female person under the age of 19 be employed in or about the licensed premises or business as long Mr. Cooper remains employed.
Cooper is an important decision for liquor licensees in British Columbia, and other actors in regulated industries. The Court of Appeal has reiterated the importance that administrative decision makers not only proceed fairly (disclosing evidence) and accurately (properly identifying corporate structures) but also that their decisions are proportionate and take relevant circumstances into account like community impact and employee interests.
Nothing in the Cooper decision should be read as the court making light of the seriousness of Mr. Cooper’s criminal conduct. Rather, on this issue, the court has clarified that it is not the role of the Liquor Control and Licensing Branch to second-guess issues of criminality that have previously been resolved by a court of competent jurisdiction.
If your establishment is facing enforcement action by the liquor control and licensing branch, or you have questions or concerns about administrative law principles, 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.