The Liquor Control Board of Ontario (the “LCBO”) appealed the decision of the Ontario Divisional Court overturning the decision of an Administrative Tribunal refusing to issue a witness summons requested by a liquor licensee, Lifford Wine Agencies (“Lifford”), on a motion to stay a hearing before the Tribunal in which the possible revocation of Lifford’s licence was at issue. Lifford asserted that its right to a fair hearing was irreparably compromised by interference with witnesses it proposed to call to give evidence in support of its defence to allegations that it violated provisions of the Ontario Liquor Licence Act and applied for a motion to stay the hearing. During an adjournment in the stay motion, the LCBO engaged the services of a private investigator. The investigator interviewed most of the witnesses summoned by Lifford. Lifford sought the issuance of a summons to require the investigator to provide evidence before the Tribunal on the stay motion and to produce transcripts or other recordings of the interviews. The Tribunal declined to issue a summons on the basis that the investigator’s proposed evidence was irrelevant to the subject matter of the stay motion. On judicial review, the Divisional Court overturned the ruling and this decision was upheld by the Court of Appeal.

Administrative law – Decisions of administrative tribunals – Liquor Licensing Board – Permits & licences – Stay of proceedings – Appeals – Hearings – Judicial review application – Judicial review – Procedural requirements and fairness – Witness tampering – Natural justice – Evidence – Privilege

Ontario (Liquor Control Board) v. Lifford Wine Agencies, [2005] O.J. No. 3042, Ontario Court of Appeal, July 18, 2005, J.C. MacPherson, E.A. Cronk JJ.A. and W.L. Whalen J. (ad hoc)

The appeal of the LCBO arose from the refusal by an Administrative Tribunal to issue a Witness Summons requested by Lifford, on a Motion to Stay a hearing before the Tribunal in which the possible revocation of Lifford’s licence was at issue. The stay motion was based on Lifford’s assertion that its right to a fair hearing was irreparably compromised by interference with witnesses whom it proposed to call to give evidence in support of its defence to allegations that it violated provisions of the Liquor Licence Act, R.S.O. 1990, c. L.19.

In preparation for the start of the hearing into the allegations made against it, Lifford summoned approximately twelve LCBO employees to give evidence before the Tribunal. When the witness tampering allegation arose before the hearing commenced, Lifford moved to stay the hearing. The Tribunal heard one day of evidence on the stay motion and then adjourned a Motion to Permit certain of the witnesses to consult and retain legal counsel. During the adjournment, the employer of the witnesses summoned by Lifford (the LCBO) retained counsel who, in turn, engaged the services of a private investigator to investigate the witness tampering allegation.

The investigator interviewed most of the witnesses summoned by Lifford, questioning on the witness tampering allegation and, in some instances, on issues relating to the main licence hearing.

When Lifford learned of this investigation and the interviews, it sought the issuance of a summons to require the investigator to provide evidence before the Tribunal on the stay motion and to produce the transcripts or other recordings of his interviews. The Tribunal declined to issue the requested Summons on the ground that the investigator’s proposed evidence was irrelevant to the subject matter of the stay motion.

On judicial review by Lifford, the Divisional Court overturned the Tribunal’s ruling and directed it to issue a Summons to the investigator, requiring him to attend to give evidence on the stay motion and to produce the transcripts or other recordings of the interviews of the witnesses summoned by Lifford.

The LCBO appealed the Divisional Court’s decision to the Court of Appeal.

The Court of Appeal concluded that while the Divisional Court did not expressly address the applicable standard of review, it was justified in exercising its review power and ordering the issuance of the Summons to the investigator based on either a correctness or a reasonableness standard. Accordingly, the Divisional Court’s decision was not assailable on the ground that it failed to determine and apply the appropriate standard of review.

With respect to the issue of prematurity and relevance, the Court noted that the general rule was that review applications should be avoided until completion of the Tribunal’s hearing, when a full record would be available to the reviewing Court. However, the Court held that this was not an absolute rule and should not be applied rigidly if there was a prospect of real unfairness through, for example, the denial of natural justice. The Divisional Court implicitly recognized that that exception was engaged in this case by finding that the denial of the investigator’s Summons was a breach of natural justice. The Divisional Court’s conclusion that the investigator’s evidence was material to Lifford’s stay motion and that the denial of the investigator’s Summons constituted a breach of natural justice in the circumstances were sustainable. The purpose of Lifford’s request to summon the investigator was to determine what was said to and by the LCBO witnesses during their interviews with him in order to test the veracity and reliability of their testimony before the Board. The Divisional Court was correct in concluding that the evidence to be elicited from the investigator regarding his interviews of the LCBO witnesses was material to the subject matter of Lifford’s stay motion. Thus, the Court concluded that the refusal by the Board to issue the investigator’s summons occasioned a breach of natural justice by precluding Lifford from introducing evidence sought to be relied upon by it to establish the foundation for the requested stay of the hearing.

The Court further held that the results of the investigator’s investigations and interviews were not privileged pursuant to either solicitor/client privilege or litigation privilege.

The Appeal was therefore dismissed.

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