Kamali-Mafroujaki o/a Top Quality Auto Sales v. Registrar, Motor Vehicle Dealers Act, 2002

[Indexed as: Kamali-Mafroujaki v. Ontario (Registrar, Motor Vehicle Dealers Act, 2002)]

Ontario Reports

Ontario Superior Court of Justice, Divisional Court, Rady, Corbett and Lederer JJ.

June 19, 2015

126 O.R. (3d) 603 | 2015 ONSC 3989

Case Summary

Administrative law — Boards and tribunals — Ontario Licence Appeals Tribunal — Licence Appeals Tribunal directing registrar to revoke appellant's registration as dealer under Motor Vehicle Dealers Act after he falsely stated in two applications to renew his car dealer licence that there were no charges pending against him when in fact he [page604] was facing charge of sexual assault (of which he was subsequently convicted) — Tribunal finding that false statements and conviction alone would not necessarily preclude appellant's continued registration — Tribunal erring in law in taking into account appellant's continuing assertion that he was not guilty of sexual assault and criminal trial judge's negative credibility findings against appellant — Tribunal's reliance on those factors undermining appellant's right to assert his innocence, to make full answer and defence at criminal trial and to appeal conviction — Motor Vehicle Dealers Act, 2002, S.O. 2002, c. 30, Sch. B.

The appellant carried on business as a car dealer. He was required to renew his licence annually. In 2012 and 2013, he filed renewal applications in which he stated that there were no charges pending against him. In fact, he was facing a sexual assault charge, of which he was subsequently convicted. The Licence Appeals Tribunal directed the Registrar, Motor Vehicle Dealers Act to revoke the appellant's registration as a dealer. The tribunal found that the appellant's false statements and conviction alone would not necessarily preclude his continued registration, but that the balance was tipped by two factors: his continuing assertion that he was innocent of sexual assault and the criminal trial judge's negative credibility findings against him. The appellant appealed.

Held, the appeal should be allowed.

The tribunal erred in law in taking into account the appellant's continuing assertion of his innocence and the negative credibility findings in the criminal proceedings. The tribunal's reliance on those two factors undermined the appellant's right to assert his innocence, to make full answer and defence at his criminal trial, and to pursue an appeal from his conviction. But for the improper reliance, the result might not have been the same. The decision should be set aside and the matter remitted to a differently constituted tribunal for a fresh hearing.

Cases referred to

Abbott v. Ontario (Motor Vehicle Dealers Act, Registrar), [2006] O.J. No. 4324, 216 O.A.C. 244, 39 M.V.R. (5th) 237, 2006 36491, 152 A.C.W.S. (3d) 757 (Div. Ct.); First Ontario Realty Corp. v. Deng, [2011] O.J. No. 260, 2011 ONCA 54, 274 O.A.C. 338, 330 D.L.R. (4th) 461, 1 R.P.R. (5th) 1, 199 A.C.W.S. (3d) 1315; Gonte Construction Ltd. v. 90 Eastdale Avenue (Tenants of), [2012] O.J. No. 5784, 2012 ONSC 6733, 2012 CarswellOnt 15346 (Div. Ct.); Kamali-Mafroujaki (c.o.b. Top Quality Auto Sales) (Re), [2014] O.L.A.T.D. No. 151; Ontario (Motor Vehicles Act, Registrar) v. Jacobs (2004), 2004 9450 (ON SCDC), 69 O.R. (3d) 462, [2004] O.J. No. 189, 50 M.V.R. (4th) 206, 128 A.C.W.S. (3d) 812 (Div. Ct.); Toronto (City) v. Canadian Union of Public Employees (C.U.P.E.), Local 79, [2003] 3 S.C.R. 77, [2003] S.C.J. No. 64, 2003 SCC 63, 232 D.L.R. (4th) 385, 311 N.R. 201, J.E. 2003-2108, 179 O.A.C. 291, [2003] CLLC Â220-071, 17 C.R. (6th) 276, REJB 2003-49439, 120 L.A.C. (4th) 225, 59 W.C.B. (2d) 334

Statutes referred to

Licence Appeal Tribunal Act, 1999, S.O. 1999, c. 12, Sch. G, s. 11(1) [as am.], (3)

Motor Vehicle Dealers Act, 2002, S.O. 2002, c. 30, Sch. B [as am.], s. 6(1) [as am.]

APPEAL from a decision of the Licence Appeals Tribunal directing the Director, Motor Vehicle Dealers Act to revoke the appellant's registration. [page605]

N. Tourigis, for appellant.

Michael Rusek and Elizabeth Maishish, for respondent.

The judgment of the court was delivered by

[1] CORBETT J.: — The appellant appeals the decision of the Licence Appeals Tribunal directing the Registrar, Motor Vehicle Dealers Act, 2002, S.O. 2002, c. 30, Sch. B (the "Act") to revoke the registration of the appellant as a dealer under the Act [[2014] O.L.A.T.D. No. 151].

[2] For the reasons that follow the appeal is allowed, the decision of the tribunal is set aside, and the matter is remitted back to a differently constituted tribunal, to hear the matter anew.

Background

[3] The appellant has been registered as a dealer under the Act since 2001. Aside from the events in issue in this proceeding, the appellant has no criminal record and no violations of the Act.

[4] The appellant carries on business as a wholesale dealer of cars. This is his sole source of income. The appellant is married and he and his spouse have two children. The appellant's income is not the sole source of support for his spouse and children, but it is an important part of family finances.

Criminal Proceedings Against the Appellant

[5] The appellant pleaded not guilty to the charge of sexual assault. He testified at trial and gave a version of events different than those testified to by the complainant. On July 2, 2013, the appellant was convicted by Armstrong J. in the Ontario Court of Justice of sexual assault . In his reasons, Armstrong J. largely accepted the evidence of the complainant and largely rejected the evidence of the appellant. Armstrong J. gave extensive reasons for his adverse findings of credibility against the appellant.

[6] The appellant was not given a custodial sentence. Instead, he was sentenced by Armstrong J. to two years' probation on terms and listed on the sex offenders' registry.

[7] The appellant has appealed his conviction. That appeal has not yet been heard. We are advised that the appeal is scheduled to be heard during the summer of 2015.

Appellant Files False Applications for Renewal

[8] The appellant is required to renew his licence as a dealer on an annual basis. To do so, he must complete and file a renewal [page606] application. It is an offence to knowingly provide false information on a renewal application.

[9] The annual renewal application requires the appellant to disclose whether he has been convicted of or has outstanding charges against him. In April 2012 and April 2013, the appellant filed renewal applications in which he stated that there were no charges pending against him. These statements were false. The charges of sexual assault were pending. They had been laid on July 31, 2011, and the appellant had made court appearances in connection with them prior to filing his renewal applications. The appellant testified that he did not believe that he had to report these charges on his renewal application because he had not been found guilty and believed himself to be innocent.

[10] After the appellant was convicted of sexual assault, the registrar learned that the appellant had previously filed false renewal applications. The appellant was then charged with a provincial offence for filing these false applications.

[11] On January 31, 2014, the appellant pleaded guilty before a provincial offences judge of knowingly filing false renewal applications. The provincial offences court imposed a $5,000 fine for these offences on the basis of a joint submission from counsel. The appellant has paid this fine.

[12] On February 11, 2014, the registrar gave notice of his proposal to revoke the appellant's registration as a dealer. The appellant challenged this proposal, and the matter was brought before the tribunal.

[13] The tribunal decided to order the registrar to revoke the appellant's licence as a dealer. It is this decision that is challenged before us.

Jurisdiction of this Court

[14] An appeal from a decision of the tribunal lies to the Divisional Court, but only on a question of law.[^1]

Standard of Review

[15] Where the tribunal is applying statutory provisions that relate to its core functions, the standard of review is reasonableness.[^2] Where the appeal concerns a pure question of law, [page607] particularly one that does not engage the special expertise of the tribunal, the standard of review is correctness.[^3]

The Tribunal's Decision

[16] Subsection 6(1) of the Act provides:

6(1) An applicant that meets the prescribed requirements is entitled to registration or renewal of registration by the registrar unless,

(a) the applicant is not a corporation and,

(ii) 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, or

(iii) the applicant . . . makes a false statement or provides a false statement in an application . . . for renewal of registration[^4]

[17] The tribunal found [at para. 20]:

Taken by itself, the provision of false information to the Registrar would not necessarily have been grounds for revocation.[^5]

[18] The tribunal found that the sexual assault was of great concern, both in and of itself, and because it occurred during the course of the appellant's business: the victim was an employee of another registrant. However, the tribunal also concluded that these factors did not necessarily preclude continued registration of the appellant [at para. 16]:

If Mr Kamali-Mafroujaki were making sincere efforts to understand what motivated him to assault the victim and how to avoid acting on such impulses in future, it might well have been possible to consider a registration, perhaps on terms and conditions.[^6]

[19] On the basis of these findings, the tribunal concluded that the false applications, even taken with the conviction for this sexual assault, would not necessarily preclude continued registration of the applicant. This conclusion was open to the tribunal on the evidence; certainly there is no error of law in it. [page608]

[20] The tribunal considered that two additional factors tipped the balance against registration, even on terms and conditions:

(a) the appellant's denials of wrongdoing, which reflect a failure to take responsibility for and show insight into the sexual assault; and

(b) Armstrong J.'s strong adverse findings of credibility against the appellant, which cast doubt on the appellant's honesty and integrity, and is a further basis for concluding that the appellant is in a state of denial over his conduct and thus at greater risk of reoffending.

[21] The tribunal's reliance on these two factors were, in both cases, serious errors of law. They undermined the appellant's right to assert his innocence, his right to pursue an appeal from his conviction, and his right to make full answer and defence at his criminal trial.

Appellant Entitled to Assert His Innocence at Trial

[22] Prior to and at the trial before Armstrong J., the appellant was presumed innocent. He was entitled to assert his innocence. He remained under the protection of the presumption of innocence throughout the trial and up to the point that the evidence and argument were completed and the court was satisfied that the appellant had been proved guilty beyond a reasonable doubt.

[23] The appellant's assertion of his innocence at the trial itself cannot be held against him. To do otherwise would derogate from the presumption of innocence and the right to make full answer and defence to a serious criminal charge.

Appellant Entitled to Testify on His Own Behalf at Trial

[24] The appellant was entitled to make full answer and defence to the charge of sexual assault at his criminal trial. This included the right to remain silent, and the right to give evidence on his own behalf. The appellant chose to give evidence. Had he not done so, this could not have been held against him, either at the criminal trial or subsequently at the hearing before the tribunal.

[25] The appellant testified. His evidence was not accepted by the trial judge. As is required, the trial judge gave reasons for not accepting the appellant's evidence, and for his conclusion that the appellant's evidence did not raise a reasonable doubt of the appellant's guilt. These conclusions were based, in large part, on the trial judge's negative findings respecting the [page609] appellant's credibility. Those findings were in respect to the contested issues in the trial before Armstrong J., on the evidence before Armstrong J., and were not findings of the appellant's general integrity or truthfulness.

[26] Armstrong J.'s adverse findings of credibility are not evidence on which the tribunal can rely for assessing the appellant's integrity. The tribunal was required to make its own assessment of the appellant's integrity based on the evidence before the tribunal.

Appellant Entitled to Appeal His Conviction

[27] The tribunal relied upon the appellant's refusal to acknowledge his own guilt in the face of the strong findings of credibility made by Armstrong J.

[28] In effect, the tribunal has concluded that because the appellant has continued to assert his innocence and pursue his appeal, this is a factor that should lead the tribunal to conclude that the appellant is not likely to conduct himself in accordance with the law and with integrity. This reliance on the appellant's pursuit of his appeal rights is a serious derogation of the appellant's substantive right to pursue an appeal.

Overall Nature of the Errors Below

[29] The errors of the tribunal reflect a fundamental mis-handling by the tribunal of the criminal proceedings in a manner that strikes at the heart of the values of our system of criminal justice. They strike at the presumption of innocence, the right to full answer and defence, and the right to appeal from a trial decision.

[30] The tribunal was entitled to rely upon the fact of the conviction for sexual assault. It was entitled to rely upon the circumstances of the sexual assault, as found by the trial judge. The appellant was not entitled to contest the correctness of the conviction before the tribunal. The sexual assault allegations were not to be retried before the tribunal or subjected to a collateral attack.[^7]

[31] However, the appellant was entitled to explain his conduct in the aftermath of the charges and the trial. He was entitled to explain why he had not undertaken remedial steps, such as counselling. His explanation was that he still maintains [page610] his innocence and is appealing the trial decision. Thus, there is an absence of contrition and ameliorative conduct since the conviction. This is an absence of a mitigating factor. It is not an aggravating or negative circumstance.

[32] The tribunal was clear that the fact of the sexual assault itself and the false renewal applications were not, standing alone, or in combination with each other, necessarily sufficient to refuse registration. The strength of the case against the appellant is not increased by the absence of mitigating factors. It is apparent that the tribunal treated these neutral or irrelevant factors as aggravating factors in its assessment of the appellant's suitability for registration. And so, the tribunal's decision cannot stand.

[33] It is clear from the tribunal's reasons, and is fairly conceded by the tribunal's counsel, that the improper reliance on these two factors was essential to the tribunal's reasoning and conclusions that the appellant's "past conduct" afforded reasonable grounds to believe that he would not "carry on business in accordance with law and integrity and honesty". But for this improper reliance, the result might not have been the same. We cannot be certain what conclusions the tribunal might have reached in the absence of its improper reliance on these two factors.

[34] We consider that the errors of the tribunal concern basic principles of criminal law, which are not within the core competence of the tribunal. We also consider that they strike at core guarantees of our criminal justice system. Therefore, we consider that the standard of review that applies is one of correctness. However, in any event, treating the absence of a mitigating factor as an aggravating or substantive factor weighing against the appellant is unreasonable. And for these reasons the decision must be set aside and the matter remitted back to a differently constituted tribunal for a fresh hearing.

[35] Costs from the respondent payable to the appellant fixed at $4,000, inclusive, payable within 30 days.

[36] Counsel pointed out that the record filed before this court was not in accordance with the publication ban ordered by Armstrong J. at the criminal trial. Counsel shall redact the record before this court, in consultation with the registrar of this court, to bring the record into compliance with the order of Armstrong J. Any issues that arise in connection with this task that cannot be determined by the registrar may be directed to any single member of this panel in Chambers for directions.

Appeal allowed.

Notes

[^1]: Licence Appeal Tribunal Act, 1999, S.O. 1999, c. 12, Sch. G, s. 11(1), (3).

[^2]: First Ontario Realty Corp. v. Deng, 2011 ONCA 54, para. 21; Gonte Construction Ltd. v. Eastdale Avenue (Tenants of), 2012 ONSC 6733, [2012] O.J. No. 5784, 2012 CarswellOnt 15346 (Div. Ct.).

[^3]: Abbott v. Ontario (Motor Vehicle Dealers Act, Registrar), 2006 36491 (Div. Ct.).

[^4]: Motor Vehicle Dealers Act, supra, s. 6(1).

[^5]: Tribunal reasons, p. 6.

[^6]: Tribunal reasons, p. 5.

[^7]: Toronto (City) v. Canadian Union of Public Employees (C.U.P.E.), Local 79, 2003 SCC 63, [2003] 3 S.C.R. 77, [2003] S.C.J. No. 64, para. 58; Ontario (Motor Vehicles Dealers Act, Registrar) v. Jacobs (2004), 2004 9450 (ON SCDC), 69 O.R. (3d) 462, [2004] O.J. No. 189 (Div. Ct.), para. 69.