Morjarrab v. Ontario (Registrar, Motor Vehicle Dealers), 2003 CanLII 46518 (ON SCDC)

Court File and Parties

COURT FILE NO.: 549/02

DATE: 20030606

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

LANE, MEEHAN AND LINHARES DE SOUSA JJ.

B E T W E E N:

MOHEBALI MORJARRAB operating as UPTOWN USED CARS Appellant

• and -

REGISTRAR, MOTOR VEHICLE DEALERS ACT Respondent

Counsel: Paul Rausch, for the Appellant Aviva R. Harari, for the Respondent

HEARD: June 6, 2003

Oral Reasons for Judgment

LANE J.: (Orally)

[1]

Introduction

This is an appeal from the decision of the Vice-Chair of the Licence Appeal Tribunal dated August 16, 2002. The Tribunal directed the Registrar to carry out the proposal to revoke the registration of Mr. Morjarrab as a motor vehicle dealer under the Motor Vehicle Dealers Act.

2The appellant seeks an order setting aside the Tribunal's decision and ordering that the Registrar's proposal be denied.

[3]

Background

The appellant was registered in 1999. Due to a previous association with another dealer, his registration was on terms and conditions. There are two conditions that are of importance in this hearing:

a) "The Dealer acknowledges and understands that it will not retain the services of a salesperson unless the salesperson is registered as a salesperson to the dealer" and,

k) "The Dealer agrees that he is under a positive obligation to disclose all material facts about the vehicles he sells to his customers. The Dealer agrees to make reasonable efforts to research the history of all his vehicles prior to sale to ensure all material fact are disclosed. The Dealer agrees that should any information come to light, which the Registrar deems to be a material fact, concerning a vehicle the Dealer has sold, the Dealer will comply with all reasonable requests made by the Registrar to provide compensation to the purchaser."

4The Registrar issued a proposal to revoke the appellant's registration on the grounds that he had failed to disclose on his application for renewal a criminal record which he had, and that he had sold a certain Acura motor vehicle without properly disclosing the correct odometer readings. Later, the Registrar issued a further notice giving particulars of further allegations; that the registrant, the appellant, did not disclose an outstanding judgment against him in the Small Claims Court of some $4,000; and alleging that he had breached the terms and conditions upon which he was registered.

5The Tribunal found that there were reasonable grounds to believe that the past conduct of the registrant gave reason to believe that he would not carry on business in an appropriate fashion and therefore directed the Registrar to carry out the proposal. From that decision the appellant appeals to this Court.

[6]

Submissions of the Appellant

Before us the appellant submitted that the failure to disclose the criminal record in the renewal application was understandable. The registrant had been charged with assault resulting from a domestic incident and he did not regard these as "criminal". He had been convicted on a plea of guilty and had been placed on probation and it was submitted that the criminal charges were not business related and ought not to be seen as adversely affecting the public interest. There was no element of fraud, deceit or theft.

7As to the sale of the 1992 Acura, it was submitted that the evidence, properly understood, showed that full disclosure of the odometer problem had been made. Both Mr. Mojarrab and the salesperson who had acted in the matter gave some testimony about some disclosure. The Tribunal did not accept their evidence and directed the Registrar to carry out the proposal.

[8]

The Facts

To understand the matter it is necessary to have a look at the timetable of events: On September 12th, 2000, the registrant purchased at auction the Acura vehicle in question. At that time its odometer showed a reading of just over 210,000 km. In evidence is a certificate from the vendor that the speedometer was working at the time of the sale. Two days after the sale the appellant took the vehicle to a mechanic and had a different odometer installed; this odometer read 145,000 km. It was said that the original odometer was not working. Then came the sale to the complainant which took place on January 4, 2001. There is in evidence as Exhibit "5" a copy of a bill of sale dated January 4, 2001 relating to this transaction. It contains on the left hand side a handwritten note which reads as follows:

"Customer knows the odometer has been changed on January 19, 2001. Customer knows and agrees".

9That relates to the fact that the customer had brought the vehicle back saying that the speedometer did not work and on January 12th, another mechanic invoiced the registrant for another speedometer. Everybody who gave evidence about it agreed that this note was placed on the bill of sale as a result of that particular transaction.

10At the hearing another version of the bill of sale was put in evidence, Exhibit "6". The Tribunal observes in its reasons that this copy of the bill of sale was not produced when the investigation was undertaken and was only produced when counsel for the registrant handed it up during the hearing before the Tribunal. This version of the bill of sale contains the first notation that I have already mentioned but also contains a second notation. It reads:

"Customer has been informed the car has 201,000 km. and has been changed because it has been defective".

11The Tribunal in its reasons rejected the evidence of the registrant and his salesmen as to disclosure of the true mileage travelled by the Acura. The Tribunal specifically found that the second note on Exhibit "6" was filled in by the applicant on the left hand side without the knowledge or acquiescence of the complainant and it points out the failure of the registrant to produce a copy of Exhibit 6 during the course of the investigation.

[12]

Analysis

The Tribunal clearly made a finding, although they did not say so in so many words, that the document was not legitimate. The appellant has submitted to us that there must be clear and cogent evidence to revoke the registration of a dealer, and we agree. In our view, which was the view of the Tribunal, there was clear and cogent evidence that the Dealer failed to abide by the terms to which he had agreed. He allowed a salesman not registered to him to sell the car in question to the complainant. Second, he did not abide by his undertaking to make full disclosure of odometer readings. There was clear and cogent evidence that somebody on his behalf placed the second note on the second version of the bill of sale, clearly in an effort to deceive the Tribunal.

13This Court, has in the past, emphasized the importance of the integrity of odometer readings. In Re Herman Motor Sales and The Registrar, 29 O.R. (2nd) 431, this Court in 1980 through Cory J. said the following:

"It was next argued that the penalty (which was revocation) which it imposed was inappropriate under the circumstances. Reliance was placed upon the past good behaviour and the evidence given as to the very fair deals and exemplary business conduct of the appellants. However, the Act and Regulations stress the importance of odometer readings. There can be no doubt that the readings form the basis for the assessment in value of most vehicles. To tamper or interfere with the odometer readings must be considered seriously and must constitute a grave breach of the duty of the dealer."

14It was submitted that the penalty of revocation was wholly inappropriate to the offences which have been established. We do not agree. The offence is a serious one; it is a deliberate one and it is accompanied by a fraudulent act by somebody in connection with the invoice. We are not prepared to interfere with the Tribunal's decision. The appeal is therefore dismissed.

[15]

Disposition

The appeal book has been endorsed: "The appeal is dismissed for reasons given orally. Costs to the respondent fixed at $2,500."