2013 ONSC 2002, 2013 ONSC 2002

CITATION : Service v. Service, 2013 ONSC 2002 COURT FILE NO.: 29247/07 DATE: 20130405 SUPERIOR COURT OF JUSTICE - ONTARIO RE: FRANCES BERNADETTE SERVICE – and – WILLIAM JAMES McCALL SERVICE BEFORE: Lemon J. COUNSEL: Michael J. Stangarone, for the Applicant Ronald Van Der Steen, for the Respondent HEARD: March 13, 2013 E N D O R S E M E N T The Issues [ 1 ] Mrs. Service moves for an order compelling Mr. Service to transfer the liquor licence for the Niblick Pub (“the Pub”) to her. In return , Mr. Service seeks an order compelling Mrs. Service to provide the information required by Mr.

Service so that he can renew the liquor licence in accordance with the Liquor Licence Act , R.S.O. 1990 c. L.19. His other request, for Mrs. Service to provide a copy of the Pub’s lease, was withdrawn prior to the motion. [ 2 ] There are a variety of other requests in the notice of motion; however, those have been adjourned to be dealt with as follows: The parties agree to the following terms, which shall be incorporated into an interim Order: 1. The Respondent shall produce a Disclosure Chart setting out what he alleges has been produced in this action under the court orders by April 5, 2013. 2.

The parties shall request that the court appointed valuator, Vivian Alterman of ap Valuations, shall produce an updated income analysis and valuation report of the Respondent’s income and business interests, and shall cooperate fully with ap Valuations. The costs shall be paid by the Niblick Pub. 3. The balance of the parties’ motion shall be heard before Justice Lemon on June 10, 2013, at 10:00 a.m. for one day. 4. The Respondent’s motion materials shall be served on April 19, 2013. 5. The Applicant’s responding motion materials and further motion materials shall be served on or before May 10, 2013.

6. Any reply material shall be served on or before May 17, 2013. 7. Facta shall be served and filed by June 7, 2013. 8. The parties will exchange Affidavits Listing Documents pursuant to Rule 19(1) of the Family Law Rules on or before August 9, 2013. 9. Questioning of the parties shall take place on August 15 and 16, 2013. 10. The parties shall arrange a Settlement Conference on a mutually available date through the Milton Trial Coordinator’s office. 11. The Respondent shall forthwith request the sale documents pertaining to the sale of the Ford Escape from Ford and produce the documents received. 12.

The Respondent shall forthwith produce the lease agreement pertaining to the Ford Flex. 13. The Respondent’s agent shall return the Ford Flex to the Niblick Pub and provide the keys with a member of the Pub staff on or before March 15, 2013. [ 3 ] The issue, then, was whether the license should be transferred to Mrs. Service or left with Mr. Service to renew with Mrs. Service’s co-operation. [ 4 ] After hearing submissions from both counsel, I ordered Mr. Service to sign the transfer documents. That was carried out before anyone left the courthouse. At that time, I said that written reasons would follow.

These are those reasons. Background [ 5 ] The parties were married July 14, 1973 and separated January 1, 2007. They have two adult children. [ 6 ] One of the significant assets to be valued in the equalization calculation is the Pub that was operated by Mr. Service. [ 7 ] There have been a number of orders against Mr. Service to provide a variety of documents relating to the valuation of the Pub. Justices Hourigan, Gray and Price all ordered Mr. Service to provide relevant documents. [ 8 ] This matter came before me August 5, 2011 when Mrs. Service sought an order to strike Mr.

Service’s pleadings for his failure to produce the ordered material. I have been seized of the matter since that time. My endorsements of August 23, 2011 and February 21, 2012 are included in the court file. They set out a detailed history of Mr. Service’s failure to comply with court ordered productions. [ 9 ] The matter came before me once again on May 24, 2012. At that time a consent order was granted. One of the terms of that order was that: 1.

The Respondent, William James McCall Service (“the Respondent”)’s 100% interest in 1521141 Ontario Limited a/o The Niblick Pub (“The Niblick Pub”) shall be transferred to the Applicant, Frances Bernadette Service (“the Applicant”) and vested in the Applicant solely pursuant to

section 12(

b) of the Family Law Act. [ 10 ] The affidavits in support of Mrs. Service’s motion set out that since that time, Mrs. Service and the children have continued to operate the Pub. Mr. Service has not had an opportunity to respond in detail to that history but in any event, he has not been involved in the running of the business. The quality of Mrs. Service’s operation of the Pub and the degree to which Mr. Service may or may not have been getting in the way of that operation are to be determined on another day. Urgency [ 11 ] Mrs.

Service deposed that at the end of January 2013, she discovered that she was required to renew the Pub’s liquor licence by April 5, 2013. She consulted with the Alcohol and Gaming Commission of Ontario (AGCO) and was told that Mr. Service would have to transfer the liquor licence to her as the AGCO requires that the name of the current owner responsible for running the Pub be on the

licence. Otherwise, Mrs. Service would need to apply for a new liquor licence. While that process was underway, the AGCO would be required to revoke the Pub’s current liquor licence . If Mr. Service does not sign the forms from the AGCO, the Pub will likely be shut down for 8 to 14 weeks. Therefore, she submits, having Mr. Service sign the transfer forms is an urgent issue as the licence will otherwise expire April 5, 2013. [ 12 ] On February 25, 2013, Mrs. Service’s counsel wrote to Mr. Service’s counsel and requested that Mr. Service sign the necessary documents for the transfer of the Pub’s liquor licence.

The documents that must be signed, a Transfer Application and an Agreement to Contract Out, were attached to the letter. [ 13 ] Mr. Service has failed to execute the transfer forms for the liquor licence. [ 14 ] Mrs. Service says that there is absolutely no reason or justification for Mr. Service’s unwillingness to sign the transfer forms. Pursuant to the consent order, Mr. Service was required to transfer the Pub to Mrs. Service and she is now responsible for its management and upkeep. Therefore, Mrs. Service requests an order that Mr.

Service be compelled to execute the liquor licence transfer forms forthwith. [ 15 ] In response, Mr. Service deposed that 1521141 Ontario Limited holds the Pub’s liquor licence, and that he is the sole director, officer and shareholder of that corporation. He agreed that Mrs. Service’s lawyer demanded that he transfer the liquor licence to Mrs. Service in a letter of February 25, 2013.

He says that he too contacted the AGCO on or about February 27, 2013; he was informed that the Pub’s liquor licence will expire on April 5, 2013. [ 16 ] On or about February 28, 2013, he completed the forms to renew the Pub’s liquor licence. He submitted that as the individual who controls the liquor licence holder, he is required to provide the AGCO’s registrar with information regarding key personnel. Therefore, on February 28, 2013, his lawyer sent a letter to the Mrs. Service’s counsel requesting information necessary to submit the renewal form to the AGCO. He was not given this information from Mrs.

Service. [ 17 ] Finally, he is informed by the AGCO that the renewal process is relatively simple and will not impede the sale of alcohol during the renewal process. He believes that it is in the best interests of both parties that the Pub’s licence be renewed as soon as possible.

Analysis [ 18 ] Paragraph 16 of the Liquor Licence Act reads as follows: Except as permitted by the regulations, if there is a prescribed change of ownership of a business carried on under a licence or a change of licensee, no person shall carry on the business under the authority of the licence unless the licence is transferred by the Registrar in accordance with this Act and the regulations. 2010, c. 16 , Sched. 5, s. 3 (3). [Emphasis mine] [ 19 ] Further, paragraphs 94(1),(2) of the Liquor Licence Act , R.R.O. 1990, Regulation 719 , read in part:

(1) The following are prescribed changes for the purposes of

section 16 of the Act: 1. An individual becomes or ceases to be an officer or director of a licence holder that is a corporation or a corporation that effectively controls the business. 2. A person becomes or ceases to be a partner of a licence holder that is a partnership. 3. A person or partnership acquires a beneficial interest in the business of the licence holder, including holding or controlling shares of a licence holder that is a corporation or in a corporation that effectively controls the business. 4.

A person or partnership other than the licence holder becomes entitled to any of the profits from the sale of liquor or liable for any obligations incurred from the sale of liquor at the premises to which the licence applies . O. Reg. 354/07, s. 17.

(2) For the purposes of paragraph 3 of subsection (1), if a person or partnership acquires shares in a licence holder that is a corporation or in a corporation that effectively controls the business of the licence holder, an acquisition that results in the person or partnership holding or controlling 10 per cent or more of the outstanding shares, or of a class of shares, of the corporation is a prescribed chang e. O. Reg. 354/07, s. 17. [ 20 ] Mr. Service submits that he continues to be the shareholder and that my order of May 24, 2012, has not yet been carried out. Accordingly, he submits that Mrs. Service should sign the renewal of the licence.

[ 21 ]

Section 12(

b) of the Family Law Act also states: 12. In an application under

section 7 or 10, if the court considers it necessary for the protection of the other spouse’s interests under this Part, the court may make an interim or final order, (

a) restraining the depletion of a spouse’s property; and (

b) for the possession, delivering up, safekeeping and preservation of the property. R.S.O. 1990, c. F.3, s. 12 . [ 22 ] Mr. Service further submitted that my May 24, 2012 Order was merely a preservation order and nothing more. [ 23 ] In my view, this flies in the face of the clear wording of that Order, which reads that “Mr. Service’s 100% interest in 1521141 Ontario Limited a/o The Niblick Pub shall be transferred to Mrs. Service and vested in her solely pursuant to

section 12(

b) of the Family Law Act .” [ 24 ] Pursuant to the legislation, Mrs. Service, therefore, has possession of the Pub, controls the business, has acquired a beneficial interest in it, is entitled to profits from the sale of liquor and is liable for any obligations incurred from those sales. [ 25 ] While the May 24, 2012 Order may be interim in nature, it is still an Order that needs to be acted upon until a further or final Order. Accordingly, Mr. Service should have signed the transfer at the first request. Costs [ 26 ] Mrs. Service’s counsel seeks costs in the amount of $5,000.00. In response, Mr.

Service’s counsel submits that costs should be in the range of $1,500.00 to $2,000.00, plus disbursements and GST. [ 27 ] A Bill of Costs was prepared for all of the work done as of March 12, 2013 for Mrs. Service. That Bill of Costs showed costs from a low of $7,003.91 on a partial indemnity rate, to $10,788.96 for full indemnity. Mr. Stangarone was clear that much of this cost relates to issues that have been adjourned. [ 28 ] A letter requesting Mr. Service’s signature on the appropriate form preceded this motion.

However, as discussed above, that cooperation was not forthcoming, notwithstanding the prior consent Order. Mrs. Service has been successful on this motion, and costs should follow in the circumstances. [ 29 ] A number of costs orders have already been made against Mr. Service. He is well aware of the rules relating to costs and the effect of losing a motion. Substantial material needed to be filed on this motion. It was necessary to bring it on an emergency basis. [ 30 ] There was some dispute between counsel as to whether an offer to settle had been made or not.

The issue was an all-or-nothing proposition, and there was no middle ground to be found. I do not see that an offer to settle would make much of a difference in this case. [ 31 ] I am satisfied that costs in the amount of $5,000.00 are appropriate. Mr. Service is ordered to pay $5,000.00, inclusive of taxes and disbursements within 30 days. ___________________________ Lemon J. DATE: April 5, 2013 CITATION : Service v. Service, 2013 ONSC 2002 COURT FILE NO.: 29247/07 DATE: 20130405

SUPERIOR COURT OF JUSTICE - ONTARIO RE: FRANCES BERNADETTE SERVICE – and – WILLIAM JAMES McCALL SERVICE BEFORE: LEMON J. COUNSEL: Michael J. Stangarone, for the Applicant Ronald Van Der Steen, for the Respondent ENDORSEMENT Lemon J. DATE: April 5, 2013