Registrar, Motor Vehicle Dealers Act v. Unity-A-Automotive Inc. et al. [Indexed as: Registrar, Motor Vehicle Dealers Act v. Unity-A-Automotive Inc.]
98 O.R. (3d) 468
Ontario Superior Court of Justice,
Divisional Court,
Whalen, Dambrot and Swinton JJ.
December 3, 2009
Administrative law -- Boards and tribunals -- Licence Appeal Tribunal finding that respondent should not be denied licence under Motor Vehicle Dealers Act as his past conduct was explained by his lack of legal knowledge and his language and literacy problems -- Tribunal failing to consider implications of respondent's past conduct for future conduct of his business -- Tribunal's decision not reasonable -- Motor Vehicle Dealers Act, R.S.O. 1990, c. M.42. [page469]
The Licence Appeal Tribunal found that the respondent should not be denied a licence under the Motor Vehicle Dealers Act based on his failure to disclose criminal convictions because his conduct was explained by his lack of knowledge of the law and his literacy and language problems. The Registrar appealed.
Held, the appeal should be allowed.
The Tribunal's task was to determine whether the past conduct of the respondent afforded reasonable grounds for belief that he would not carry on business in accordance with law and with integrity and honesty (Motor Vehicle Dealers Act, s. 5(1)(b) and (c)). While it found that the respondent's past conduct was excusable, the Tribunal failed to ask if the past conduct provided reasonable grounds to believe that the respondent would act in accordance with the law and with honesty and integrity in the future. As a result of its failure to consider the implications of the respondent's past conduct for the future conduct of his business, the Tribunal's decision was not reasonable.
APPEAL from a decision of the Licence Appeal Tribunal.
Cases referred to Dunsmuir v. New Brunswick, [2008] 1 S.C.R. 190, [2008] S.C.J. No. 9, 2008 SCC 9, 329 N.B.R. (2d) 1, 64 C.C.E.L. (3d) 1, 164 A.C.W.S. (3d) 727, EYB 2008-130674, J.E. 2008-547, [2008] CLLC Â220-020, 170 L.A.C. (4th) 1, 372 N.R. 1, 69 Imm. L.R. (3d) 1, 291 D.L.R. (4th) 577, 69 Admin. L.R. (4th) 1, 95 L.C.R. 65; Prestige Toys Ltd. v. Ontario (Motor Vehicle Dealers Act, Registrar), [2009] O.J. No. 3437, 2009 43657 (Div. Ct.) Statutes referred to Motor Vehicle Dealers Act, R.S.O. 1990, c. M.42, ss. 5(1)(b), (c), 7 Highway Traffic Act, R.S.O. 1990, c. H.8
Christopher L. Ezrin, for respondent (appellant on appeal). Justin M. Jakubiak, for applicants (respondents on appeal).
The judgment of the court was delivered by
SWINTON J.: -- Overview
Overview
1The Registrar of the Ontario Motor Vehicle Industry Council ("OMVIC") appeals from the decision of the Licence Appeal Tribunal (the "Tribunal") dated January 9, 2009, which directed the Registrar to register Unity-A-Automotive Inc. (the "company") as a dealer and Ramanathan Thangarajah as a salesperson under the Motor Vehicle Dealers Act, R.S.O. 1990, c. M.42 (the "MVDA"). The Background
The Background
2Mr. Thangarajah (the "respondent") immigrated to Canada from Sri Lanka in 1991. He trained as a mechanic at Centennial College between 1994 and 1999. [page470]
3On June 30, 1999, the company was incorporated. It employs seven people and does mechanical and body work. On three occasions, it was convicted of being an unregistered dealer under the MVDA ("curbsiding") -- ten counts in February 2002, four counts in May 2003 and 12 counts in April 2005.
4On December 19, 2005, the company informed OMVIC in writing that it had sold three cars that year without a licence.
5In December 2006, the respondent completed the Automotive Certification course required by the Registrar of all OMVIC applicants. The course is geared to people with grade-eight level skills. One of the instruction topics in the course was dealer requirements under the MVDA.
6The respondent studied for the course at home. Because of his problems with English, his son helped him. He failed the course twice, but passed the third time, and he was certified on December 13, 2006.
7On November 22, 2007, the company, in its operations as a motor vehicle inspection station, was convicted of two counts of not filing required documentation on time and one count of issuing a false safety certificate under the Highway Traffic Act, R.S.O. 1990, c. H.8 (the "HTA"). The employee who had given the false safety certificate was fired in February 2007, prior to the conviction.
8On January 15, 2008, the company applied to become registered as a dealer and the respondent applied to become registered as a salesperson under the MVDA. The application was filled out by the respondent's wife, who copied it from earlier versions of applications that the respondent had not pursued. On the applications, the reply was "no" to the question whether the company had been found guilty of an offence under law, or whether there were any charges pending.
9On May 13, 2008, the Registrar issued a notice of proposal to refuse registration pursuant to s. 7 of the MVDA, because the applicants' past conduct was inconsistent with the intention and objective of the MVDA that registrants carry on business in accordance with law and with integrity and honesty. The Tribunal Decision
The Tribunal Decision
10The Tribunal ruled that the Registrar should not be allowed to make use of supplementary disclosure sent to the respondents' counsel 13 days before the start of the hearing. To allow the Registrar to rely on this material and additional grounds based on the material would be contrary to the rules of natural justice. On appeal to this court, the Registrar did not take issue with this ruling. [page471]
11The Tribunal made the following findings [at para. 47]: the respondent "did not understand the legal world he was operating in"; his English language and literacy skills are limited; and he misunderstood the meaning of question four, the question asking whether the company has been found guilty of an offence under any law. The respondent believed that the question referred to serious criminal convictions.
12The Tribunal commented [at para. 54] that the sale of three cars in 2005, while the respondent was unlicensed, was troubling, but this did not constitute a "fatal flaw" in the respondent's case.
13The Tribunal concluded [at para. 55]:
Due to the foregoing, the Tribunal is not persuaded that the Applicant should be denied his licence. However, the Tribunal expects that Applicant to obtain legal advice on his responsibilities and obligations under the Act and regulations. Omissions caused by a dealer or salesperson failing to understand the requirements, when they are aware requirements exist, cannot be condoned. The Issues on Appeal
The Issues on Appeal
14The Tribunal's task was to determine whether "the past conduct of the applicant affords reasonable grounds for belief that the applicant will not carry on business in accordance with law and with integrity and honesty" (MVDA, s. 5(1)(b) and (c)).
15The Registrar submits that the Tribunal erred in directing the Registrar not to carry out the proposal, as it improperly treated the respondent's ignorance of the law as a defence, and it ignored relevant evidence.
16The determination by the Tribunal was one of mixed fact and law. The standard of review with respect to decisions of the Tribunal applying s. 5(1)(b) has generally been held to be reasonableness (Prestige Toys Ltd. v. Ontario (Motor Vehicle Dealers Act, Registrar), [2009] O.J. No. 3437, 2009 43657 (Div. Ct.), at para. 12). Analysis
Analysis
17In determining whether a decision is reasonable, a court considers the "existence of justification, transparency and intelligibility within the decision-making process" and "whether the decision falls within a range of possible, acceptable outcomes which are defensible in respect of the facts and law" (Dunsmuir v. New Brunswick, [2008] 1 S.C.R. 190, [2008] S.C.J. No. 9, 2008 SCC 9, at para. 47).
18The Tribunal was required to determine whether the past conduct of the applicants for registration afforded reasonable [page472] grounds for belief that they would not carry on business, in the future, in accordance with law and with honesty and integrity.
19In this case, the Tribunal found that the respondent's past conduct was explained by his lack of knowledge of the law and his literacy and language problems.
20In accordance with the legislation, the Tribunal was then required to ask if the past conduct of the respondent provides reasonable grounds to believe that he will act in accordance with the law and with honesty and integrity in the future. In my view, the Tribunal never really addressed that question in light of the evidence before it and the findings made with respect to the past conduct.
21The Tribunal appears to have excused the respondent's omission to reveal the prior convictions on the basis of his unfamiliarity with the law and his literacy problems. The member seems to take the position that ignorance of the law is an excuse, when he says [at para. 55],
Omissions caused by a dealer or salesperson failing to understand the requirements, when they are aware requirements exist, cannot be condoned. (Emphasis added)
22However, the legislation does not create a subjective test to determine whether the applicant for registration knowingly acts outside the law. The legislation asks whether the conduct of the applicant affords reason to believe he or she will not act within the law and with honesty and integrity in the future. As this court observed [at para. 34] in Prestige Toys, above"Conduct does not require evidence of deceit or even of wilful blindness."
23It is the Tribunal's task to weigh the evidence, and not the task of this court. In this case, the Tribunal was required to consider all of the respondent's past conduct to assess whether that conduct affords reasonable grounds to believe that the business will not be carried on in accordance with law, integrity and honesty in the future. However, the reasons of the Tribunal lead me to conclude that it failed to consider the evidence in light of the statute's requirements. There is no analysis of the respondent's likely future conduct in light of his past conduct, even though the Tribunal stated [at para. 51]"By his own testimony, he was not fluent enough in the language to fully understand both complex legal language and general business matters" (at p. 7 of the reasons). There is only an expectation expressed by the Tribunal that the respondent will consult a lawyer on his legal responsibilities.
24In some cases, past misconduct may be excused, where the evidence shows that there are reasonable grounds to believe [page473] that the business will be conducted in accordance with the law and with honesty and integrity. Here, there was no examination of the evidence in order to determine whether that is the likely case.
25There were 26 prior convictions under the MVDA and three under the HTA that the respondent did not disclose in his application for registration. While the respondent submitted he did not know he had to disclose such convictions, he had recently completed a certification course that included instruction on disclosure obligations. He had also submitted earlier applications, which he had not pursued, and disclosure of convictions had been made in the course of submitting those earlier applications (although not in response to question four of the application form).
26The respondent had also allowed his wife to fill out the application form without making any effort to determine the accuracy of what was included.
27The MVDA is consumer protection legislation and, therefore, it is important for an applicant for registration to know his obligations under the governing legislation. However, the respondent testified that he did not understand the legal side of the business. The Tribunal's reasons fail to address the public policy implications of granting registration to a person who does not understand the statutory requirements and who will have serious difficulty in doing so.
28The Tribunal did refer to the fact that the respondent sold three cars in 2005 after being convicted of curbsiding that year. The Tribunal said this was "troubling", but not fatal to the applications. However, the Tribunal also said shortly thereafter that failure to observe legal requirements, once those requirements are known, cannot be condoned. Given this last statement, it is difficult to see why the Tribunal called the deliberate non-compliance in 2005, following the convictions that year, only "troubling".
29Finally, the Tribunal appears to have misconceived the evidence as to how OMVIC perceived the previous convictions. The member mentions that OMVIC was prepared to grant the respondent a licence in December 2005. In fact, OMVIC was prepared to grant a licence at that time only if the respondent met a set of detailed conditions, which included a restriction limiting him to wholesale transactions.
30While the Tribunal expressed the expectation that the respondent would get legal advice on his responsibilities under the Act and regulations, it fails to deal with the central issue before it -- does the lack of knowledge of legal responsibilities, [page474] coupled with the past convictions, the lack of disclosure of those convictions, the selling of three cars after a conviction for curbsiding in 2005, as well as the respondent's continuing problems with understanding and reading English give reasonable grounds to believe that the respondent will not carry on his business in accordance with law, integrity and honesty in the future? That question was not addressed in the reasons.
31While the reasonableness standard is a deferential one, the decision of the Tribunal here is not a reasonable one, given the failure of the Tribunal to consider the implications of the respondent's past conduct for the future conduct of his business. Conclusion
Conclusion
32Therefore, the appeal is allowed, and the decision of the Tribunal is set aside. The matter is referred to the Tribunal for a new hearing before another member.
33Costs to the appellant Registrar are fixed at $4,000, inclusive of disbursements and GST.
Appeal allowed.