CITATION: Registrar, Motor Vehicle Dealers Act v. 2631273 Ontario Inc., 2026 ONSC 2734

DIVISIONAL COURT FILE NO.: 635/24 DATE: 20260515

ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT

D.L. Corbett, Faieta and Doi JJ.

BETWEEN:

Registrar, Motor Vehicle Dealers Act Appellant

• and -

2631273 Ontario Inc., Charles Cadman and Robert Wilkinson Respondents

COUNSEL:

Rishi Nashegar and Vlad Bosis, for the Appellant J. Gross, for the Respondents Sabrina Fiacco, for the License Appeal Tribunal

HEARD at Toronto: May 21, 2025

ENDORSEMENT

D.L. Corbett J.:

[1] The Registrar appeals from the decision of Adjudicator Hines of the License Appeal Tribunal dated May 28, 2024 (“LAT”) (2024 ONLAT 49054), and the reconsideration decision of Adjudicator Hines dated September 18, 2024 (2024 ONLAT 88891), in which the LAT decided not to revoke the registration of the Respondents under the Motor Vehicle Dealers Act, 2002, S.O. 2002, c. 30, Schedule B (the “MVDA”). The Respondents argue that the LAT’s decision discloses no error of law, no palpable and overriding error of fact, and is within the range of reasonable possible results in respect to the LAT’s exercise of discretion as to remedy, and therefore that the appeal should be dismissed.

[2] On the facts as found, the LAT erred in principle in failing to ascribe appropriate regulatory responsibility to the Respondents for the repeated misconduct of their corporation for which they were responsible. The LAT further erred by failing to consider and make findings about the overall context in which the Respondents’ misconduct took place, with a view to determining the Respondents’ degree of culpability. The business was rife with misconduct of the very type which grounds the Appellant’s concerns. The individual Respondents were responsible for that misconduct, and their failure to supervise their employees and oversee their business to such an extent as to allow the misconduct to flourish, as it did, would justify the revocation proposed by the Registrar. Only if the Respondents could establish contextual circumstances that explained and gave a basis to excuse their default would a remedy short of revocation be appropriate: the LAT failed to direct itself to these contextual factors, failed to make relevant findings about those factors, and as a result this court does not have the requisite factual findings available to decide remedy. Therefore, for the reasons that follow, I would allow the appeal and remit the issue of remedy back to the LAT for a fresh hearing before a different Adjudicator.

Jurisdiction and Standard of Review

[3] This court has jurisdiction over this appeal pursuant to s. 11 of the Licence Appeal Tribunal Act, 1999, S.O. 1999, c 12, Sched. G. An appellate standard of review applies to this appeal: correctness on questions of law, and palpable and overriding error on questions of fact. For questions of mixed fact and law, the deferential standard of review applies except in respect to “extricable questions of law” for which the correctness standard applies: Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65; Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235, at paras. 8, 10, 36.

[4] Significant deference is owed in this court to a discretionary decision on remedy. Generally, this court will interfere with such a decision only if the remedy reflects an error in law, an error in principle, or if the penalty is “clearly unfit” (Cabot v. College of Nurses, 2023 ONSC 2977, para. 23 (Div. Ct.); Gould v. College of Teachers, 2026 ONSC 1095, para. 7 (Div. Ct.); Budarick v. Brudenell, Lyndoch and Raglan (Townships) (Integrity Commissioner), 2022 ONSC 640, para. 40 (Div. Ct.)). A penalty will be clearly unfit where the decision does not fall within “a range of possible, acceptable outcomes which are defensible in respect of the facts and law”: College of Physicians and Surgeons of Ontario v. Peirovy, 2018 ONCA 420, para. 38, citing Dunsmuir v. New Brunswick, 2008 SCC 9, para. 47. As stated by Penny J. in 1855456 Ontario Inc. v. Registrar, Motor Vehicle Dealers Act, 2002, 2021 ONSC 2905, paras. 12-13 (Div. Ct.):

On the question of penalty, it is well established that in order to overturn a penalty imposed by a regulatory tribunal, it must be shown that the decision-maker made an error in principle or that the penalty was “clearly unfit”: Mitelman v. College of Veterinarians of Ontario, 2020 ONSC 3039 at para. 18.

Courts in the criminal context have used a variety of expressions to describe a sentence that reaches this threshold, including “demonstrably unfit”, “clearly unreasonable”, “clearly or manifestly excessive”, “clearly excessive or inadequate” or representing a “substantial and marked departure” from penalties in similar cases. This high threshold applies equally in the administrative law context. To be clearly unfit, the penalty must be disproportionate or fall outside the range of penalties for similar offences in similar circumstances. A fit penalty is guided by an assessment of the facts of the particular case and the penalties imposed in other cases involving similar infractions and circumstances, College of Physicians and Surgeons of Ontario v. Peirovy, 2018 ONCA 420 at para. 56.

Regulatory Regime

[5] Section 4(1)(b) of the MVDA requires every motor vehicle salesperson in Ontario to be registered under the Act.

[6] Under ss. 8 and 9 of the MVDA, the Registrar may issue a notice of proposal (“NOP”) to refuse, suspend or revoke a registration if, in the Registrar’s opinion, an applicant is not entitled to registration. Under MVDA, s. 6(1)(a)(ii), a person is not entitled to registration if their past conduct affords “reasonable grounds for belief that the applicant will not carry on business in accordance with law and with integrity and honesty.” Section 6(1)(d)(iii) of the MDVA imposes the same restriction on corporations respecting the conduct of their officers or directors.

[7] Those subject to an NOP may request a hearing before the LAT (MDVA, s. 9(5)). Following a hearing, the LAT may direct the Registrar to carry out its proposed action or substitute its opinion for that of the Registrar. The LAT may also attach conditions to its order or to a registration.

Background

[8] The Respondents, Charles Cadman and Robert (Bobby) Wilkinson, are motor vehicle salesman and former principals of a car dealership, 2631273 Ontario Inc. (“2nd Chance”). 2nd Chance, though a named respondent, did not appear and did not contest the revocation remedy imposed upon it.

[9] On July 6, 2023 and March 3, 2024, the Registrar issued notices under s. 9 of the MVDA stating its intention to revoke the Respondents’ registration as motor vehicle salespersons pursuant to ss. 6(1)(a)(ii) and 6(1)(d)(iii) of the MVDA. The Registrar sought revocation on the grounds that the past conduct of the Respondents, in their capacity as officers and managers of 2nd Chance, afforded reasonable grounds to believe that they would not carry on business in accordance with the law and with integrity and honesty. The Respondents appealed the NOP to the LAT pursuant to s. 9(5) of the MVDA.

LAT Hearing Decision

[10] Following a hearing, the LAT found that the Registrar had established that the Respondents’ past conduct provided reasonable grounds for the belief that they would not carry on business in accordance with the law and act with honesty and integrity. The Tribunal found that the Respondents failed to supervise their employees to prevent dishonest conduct including:

(i) falsifying insurance documents, including bills of sale, (ii) creating a fake statement of claim to intimidate a customer into removing a negative Google review, (iii) tricking consumers into purchasing additional products, (iv) failing to comply with odometer disclosure obligations, and (v) failing to disclose structural damages on a vehicle.

[11] The LAT found that the Respondents did not personally engage in the dishonest conduct. The Respondents argued that they should not be held personally responsible because all the dishonest conduct was carried out by “rogue employees.” The LAT disagreed:

The [Respondents] argue that they were not directly involved in any of the above transactions and should not be held accountable. I find this unsupported by the Act. As already highlighted above, s. 23 of the Act supports that a motor vehicle dealer shall ensure that every salesperson employed by them is carrying out his or her duties in compliance with the Act. The corporate [respondent] was bound by this duty, and, in its past conduct in respect of these transactions, failed in this duty. The individual [Respondents] are the owners and business managers of the corporate appellant. As a result, I find their employees’ conduct is attributable to the [Respondents] for the purpose of this analysis. Further, the transactions involved four different employees, not just one bad apple which was the major theme of the [Respondents’] case throughout this hearing. [Decision, para. 60]

[12] After concluding that the Respondents had not acted with integrity or in compliance with the law under MDVA, s. 6, the LAT considered its statutory discretion under s. 9(5) to determine whether the public interest required revocation or whether imposing conditions on registration would be adequate [Decision, para. 71]. The Registrar argued that terms and conditions were not appropriate given the respondents’ “pattern” of deceptive practices and the fact that it was carried out by four separate employees.

[13] The Respondents argued that revocation was only called for in extreme circumstances and not applicable in the present case given their 20-year “unblemished history” as salespeople in the industry [Decision, para. 75]. They also highlighted that in two instances involving consumers “H” and “L”, they rescinded the fraudulent contracts and took other appropriate steps to mitigate once they became aware of the false insurance letters used in the transaction [Decision, para. 76]. Finally, the respondents also took issue with the investigation conducted by the Ontario Motor Vehicle Industry Council (“OMVIC”), which preceded and ultimately led to the Registrar’s issuance of the NOP. Since OMVIC had only interviewed ex-employees implicated in the misconduct, and not the respondents themselves, they argued that the investigation was inadequate and neither fair nor balanced [Decision, para. 77].

[14] The Tribunal accepted these arguments and, pursuant to s. 9(5), directed the Registrar not to revoke the Respondents’ registrations. The Tribunal found, instead, that the public interest could be adequately protected by attaching terms and conditions to the Respondents’ registrations:

I find that revocation of the appellants’ registrations is not the appropriate remedy in this case for the following reasons:

i) First, I find that once the appellants became aware of the false insurance letters, they took the appropriate steps based on the information they had at the time. I find their response to that matter demonstrates a willingness to act in compliance with the law and act with integrity and honesty. Moreover, they mitigated consumer harm in two of the transactions which demonstrates that they have accepted responsibility for their employees’ misconduct. Finally, they accepted responsibility by closing the dealership.

ii) Second, I agree with the appellants that OMVIC did not conduct a balanced investigation into this matter because the appellants, salespeople and manager involved in the transactions were never interviewed. I agree that this was unfair. Further, I find that the appellants were not given timely notice or disclosure of some of the complaints and that some of the evidence provided by the appellants to OMVIC was ignored. In my view, had the appellants been made aware of the complaints in a timely manner they could have prevented and mitigated any future non-compliance.

iii) Finally, I have given some weight to the fact that both appellants have a 20-year unblemished history as motor vehicle salespeople. Although I agree with the respondent that the appellants are responsible for the conduct of their employees and failed to maintain control over them, they were not directly involved in any of the transactions. For this reason, I find that this case is distinguishable from Toronto Quality Motors relied on by the respondent because the owner of the registrant in that case was directly responsible for the non-compliance with the law and misconduct on numerous transactions. [Decision, para. 78]

[15] For these reasons, the LAT found that revocation was unnecessary and that the public interest would be adequately protected by the less drastic order to impose terms and conditions. It ordered that their registrations were conditional on (i) completion of OMVIC certification course; and (ii) hiring a compliance manager with OMVIC certification to ensure compliance and sign off on all future transactions. [Decision, paras. 78-81]

LAT Reconsideration Decision

[16] The Registrar sought reconsideration of the LAT’s Decision under Rule 18.2 of the Licence Appeal Tribunal Rules. Most of its arguments are raised again on this appeal.

[17] First, the Registrar argued that the LAT acted outside its jurisdiction by scrutinizing the quality and fairness of OMVIC’s investigation. It argued this investigation had no bearing on the relevant questions before the Tribunal, which were whether there were reasonable grounds for the belief that the appellants would not carry on business with honesty and integrity and whether conditions were an appropriate alternative to revocation. As such, they argued the investigation was not a proper rationale for refusing revocation. It also noted that OMVIC was not statutorily required to interview the Respondents at the investigation stage as the Respondents would have the opportunity to respond during the hearing, which they did [Reconsideration Decision, paras. 8-9].

[18] The LAT rejected this argument, finding it was within its jurisdiction to make findings of fact based on evidence contained, or not contained, in the OMVIC investigative report. Although the quality of the investigation had not been an issue at the hearing, the LAT noted that the investigation had laid the foundation for the allegations in the NOP, which the Registrar bore the onus of proving. The Decision clearly highlighted the conflicting information presented by OMVIC’s investigation and the lack of proof required to make out the Registrar’s claims. Thus, the LAT concluded that the OMVIC investigation findings were directly relevant to the issues the LAT had to decide [Reconsideration Decision, paras. 12-13].

[19] Second, the Registrar argued that the LAT erred in finding that the Respondents accepted responsibility by closing their dealership, arguing that this was clearly due to financial and business reasons concerning scalability. The LAT rejected this argument, finding that the Respondents’ testimony indicated that they decided to close the dealership because expansion created too much difficulty in ensuring adequate compliance with the MVDA: their concerns about scalability were tied to concerns about compliance [Reconsideration Decision, paras. 24-25].

[20] Third, the Registrar argued that the Respondents had previously been subject to a separate Notice of Proposal to suspend their registration (2631273 Ontario Inc. o/a 2nd Chance Auto Sales & Bobby Wilkinson & Charles Cadman v. Registrar, Motor Vehicle Dealers Act, 2023 ONLAT 23600), and it was therefore an error to find they had an “unblemished history”. The LAT disagreed, holding that the prior NOP had been resolved by consent order and did not proceed to a hearing, meaning there was no additional evidence to substantiate or contextualize the allegations which led to the consent order. The LAT found that “although describing the appellants’ history as unblemished was not an accurate description, this would not impact my decision to impose terms and conditions” [Reconsideration Decision, paras. 26-27].

[21] Finally, the Registrar argued that the Respondents’ lack of “direct involvement” in the dishonest misconduct was not an appropriate basis to refrain from revocation. It argued this was inconsistent with prior LAT decisions in which owners were found responsible for conduct of their employees. The LAT disagreed and held that this was an appropriate consideration to determine whether conditional registration was appropriate [Reconsideration Decision, paras. 28-30].

[22] In light of these findings, the grounds for reconsideration under 18.2 were not satisfied, and the LAT denied the Registrar’s request.

Issues on Appeal

[23] The Registrar raises the following issues on appeal:

(1) Did the LAT err by imposing conditions that do not protect the public interest? (2) Did the LAT misapply s. 6 of the MVDA by importing a requirement that the respondents be “directly” involved in the misconduct? (3) Did the LAT err in scrutinizing OMVIC’s investigation when determining the respondents’ entitlement to registration? (4) Did the LAT err in finding that the respondents had an “unblemished history” to support its decision not to revoke their registration? (5) Did the LAT err in finding that the respondents took accountability and by deciding to refrain from revoking registration on this basis? (6) Is this an appropriate case to overturn the outcome reached by the LAT?

[24] I would give effect to the Registrar’s first argument. The Respondents’ business was rife with dishonesty. While the Respondents did not participate in or condone the repeated dishonest conduct of their employees, neither did they manage their business to detect and prevent dishonesty. The LAT was required to consider the context in which the Respondents’ misconduct took place, including the size of the business, the nature and frequency of employee dishonesty, the roles of the Respondents in the business, the extent to which the Respondents established that they reasonably discharged their responsibilities, and any other contextual factors that bore on assessing the culpability of the Respondents for the management failures that took place. I would comment only briefly on appeal grounds 2-5, since the LAT’s errors in respect to ground 1 are sufficient to quash the impugned decision.

[25] It is clear that the LAT had sympathy for the Respondents, finding, in essence, that the Respondents were honest and should not be made accountable for regulatory misconduct for their dishonest employees. I would not decide remedy in this court, in the circumstances, but would remit the case back to the LAT for a fresh hearing on remedy, so that remedy is decided on proper principles with the benefit of hearing and seeing the Respondents give their evidence.

Appeal Grounds 2-5

Argument (2) Indirect Involvement in Dishonesty

[26] I do not accept the Registrar’s argument that the LAT “required” direct dishonest involvement of the Respondents to ground revocation. As quoted at length above, the LAT found that the Respondents were responsible, in law, for the dishonest misconduct of employees in the business. It was on this basis that the LAT found the Respondents in breach of the MVDA and turned to the issue of remedy.

[27] When deciding remedy, the LAT may take account of the fact that misconduct was by a “rogue employee”. However, this principle applies to isolated incidents, where the Registrar (or the LAT) is satisfied that the business is properly managed to prevent and detect misconduct, and to then deal with any misconduct appropriately. See: Registrar, Alcohol and Gaming Commission v. Arena Entertainment Inc. o/a Circa, 2009 ONAGC 69697. Where there are multiple incidents of fraud, committed by multiple employees, an inference arises that the registrants are not capable of managing an honest, compliant business, and revocation will be in order: Allright Automotive Repair Inc. v. Ontario (Motor Vehicle Dealers Act, Registrar), 2008 OJ No. 1557, paras. 6-9 (Div. Ct.); Prestige Toys Ltd. v. Registrar, Motor Vehicle Dealers Act, 2009 ONSC 43657, para. 20 (Div. Ct.); Pilon, Easywheels Inc. v. Registrar, Motor Vehicle Dealers Act, 2023 ONLAT 1464, para. 48 (ON LAT); Spirou v. College of Physiotherapists of Ontario, 2024 ONSC 964, para. 14 (Div. Ct.).

[28] Accordingly, the LAT did not err in considering the extent of the knowledge and participation of the Respondents in the misconduct. Where the LAT did err is in failing to continue its analysis to consider the nature and frequency of the dishonest conduct, the role of the Respondents in the business, and other contextual factors relevant to the Respondents’ managerial responsibility.

Argument (3) The OMVIC Investigation

[29] The LAT did err in considering and placing weight on what it considered to be shortcomings in the OMVIC investigation. The LAT should refrain from entertaining such questions when they have no bearing on the question(s) to be decided (in this instance, the appropriate remedy in light of the liability findings against the Respondents). The OMVIC was not required to interview the Respondents or to give notice to the Respondents of information learned during the investigation prior to the decision to take administrative action against the Respondents. OMVIC was investigating fraud, not providing advice and guidance to the Respondents on how to run their business. With respect, the criticism of OMVIC’s conduct of the investigation misconstrues OMVIC’s role and was misguided.

[30] If the task of the LAT had been to review the Registrar’s decision, then a review of the sufficiency of the investigation (upon which the Registrar’s NOP was based) could be appropriate. However, the hearing before the LAT was not a review of the Registrar’s decision. It was a de novo hearing. Once the LAT had determined that the Respondents had breached the MVDA, the LAT’s task was to decide remedy. The apprehended problems with the investigation had no bearing on the question of remedy.

[31] There are some cases where investigative or prosecutorial misconduct may be taken into account to ameliorate remedy when fashioning a remedy under the Canadian Charter of Rights and Freedoms: R. v. Tran, 2010 ONCA 471; R. v. SC, 2025 ONSC 1887. Those cases have no application to this case. The task of the Tribunal was to decide an appropriate remedy in light of the findings of misconduct. Even if there was merit to the Tribunal’s criticisms of the OMVIC investigation (which there was not), those criticisms would not have been a proper consideration on remedy. In particular, the notion that OMVIC’s decision not to disclose dishonest misconduct earlier prevented the Respondents from acting to forestall subsequent misconduct, is entirely misconceived. OMVIC was entitled to defer charges, and disclosure until it was satisfied of the nature and extent of the problems at the Respondents’ business. Indeed, in this case, where the OMVIC had good reason to believe that misconduct was widespread in the operation of 2nd Chance, it was entitled to withhold information from the Respondents until it had completed its investigation and decided to seek regulatory consequences for the misconduct.

Argument (4) The Respondents’ History Was Not “Unblemished”

[32] The nature and extent of a registrant’s prior regulatory history is a relevant factor that may be considered in respect to remedy. In the original decision, the Tribunal found that the Respondents had a twenty-year “unblemished” history. That finding was not correct: 2631273 Ontario Inc. o/a 2nd Chance Auto Sales & Bobby Wilkinson & Charles Cadman v. Registrar, Motor Vehicle Dealers Act, 2023 ONLAT 23600.

[33] In the Reconsideration Decision, the Tribunal acknowledged that its original finding had been incorrect. It concluded that an accurate characterization of the Respondents’ regulatory history would not have changed the Tribunal’s decision because the prior proceedings had been resolved on consent and no factual findings were made by the LAT in the prior proceedings. This analysis was not correct. The LAT could have, and should have, reviewed the consent order made in the prior proceedings. It contained (among other things) the following terms:

COMPLIANCE

6. Wilkinson and Cadman shall, jointly and severally, be responsible for ensuring that 2nd Chance complies with the conditions of its registration, including the Terms and Conditions contained herein.

7. Wilkinson, Cadman, or another individual on behalf of 2nd Chance, may request the Registrar’s consent to a change of the person(s) responsible for ensuring its compliance with its conditions of registration. This request shall be made to the Registrar in writing, for which the Registrar’s consent will not be unreasonably withheld.

GENERAL

8. In carrying on business under the MVDA, the Appellants will not engage in any act or omission that, having regard to all of the circumstances and their obligations pursuant to the MVDA and regulations made thereto, would reasonably be regarded as disgraceful, dishonorable, unprofessional or unbecoming of a registrant.

9. In carrying on business under the MVDA, the Appellants will act with honesty, integrity and fairness and will use their best efforts to prevent errors, misrepresentations, fraud, or any unethical practice in respect of a trade in a motor vehicle.

10. The Appellants agree to provide conscientious service to their customers in the course of a trade in a motor vehicle and to demonstrate reasonable knowledge, skill, judgment, and competence in providing these services.

[34] This consent order was made on March 22, 2023. There are no findings or admissions of fact memorialised in the decision. The Tribunal was correct in finding that it could not characterize the conduct that led to the consent order. The consent order was made after all the incidents that form the subject-matter of the case at bar – so it does not form a basis to conclude that the Respondents failed to comply with the consent order, or that problems continued after the proceedings that led to the consent order.

[35] Given the emphasis that was placed on the Respondents’ previously “unblemished” record, the LAT could have addressed the consent order in more detail than it did, especially when it had overstated the Respondents’ regulatory history in prosaic terms (“unblemished”). However, had the LAT conducted a proper analysis of this point, I am satisfied it would have come to the conclusion that it did: the Respondents did not have an “unblemished” history but their regulatory history discloses no regulatory action against them prior to the events giving rise to these proceedings, and the consent order does not disclose a factual basis that would bear on these proceedings.

Argument (5) Did the Respondents “Take Accountability”?

[36] The LAT found that the Respondents mitigated harm arising from dishonest behaviour in respect to complaints from two customers. The LAT also found that the Respondents’ decision to close their business reflected their conclusion that they could not continue in business at a viable scale and discharge their managerial responsibilities. The LAT’s resulting finding, that the Respondents had shown “accountability” for the misconduct of their business, was available and does not disclose a palpable and overriding error.

[37] However, in my view, this point did not rise to much more than a restatement of argument #2: the Respondents did not personally commit the dishonest misconduct, and the evidence is that they were contrite about it and ultimately closed their business as a result of all the complaints and the findings of dishonest behaviour. They have suffered consequences from the misconduct, and their wrongdoing was a failure of oversight and management. I see no error in the LAT taking this factor into account.

Summary Respecting Arguments (2) to (5)

[38] I conclude that the LAT did not err in respect to arguments (2) and (5). The LAT did err in respect to arguments (3) and (4). In light of my conclusions respecting argument (1), I do not need to decide whether the errors respecting arguments (3) and (4), individually or taken together, would justify quashing the decision. They do reinforce my conclusion that the decision must be quashed

Argument (1): Inadequate Analysis of the Respondents’ Responsibility for the Misconduct

[39] The MVDA is consumer protection legislation. When a registrant is found to have committed regulatory misconduct, the paramount principle in determining remedy is protection of the public.

[40] Misconduct need not always involve dishonesty. But when it does, the usual remedy is revocation. Minor, isolated defalcation may not lead to revocation. Where a business is victimized by a “rogue employee” it may be that only that employee’s registration is revoked. Where, as here, the business is ‘rife with rogues’, and a large menu of dishonest conduct takes place, the balance shifts.

[41] As stated by this court in Prestige Toys Ltd. v. Registrar, Motor Vehicles Act, 2009 ONSC 43657, para. 39 (per Karakatsanis J., as she then was):

There is no presumption that corporate wrongdoing is automatically attributable to the individual officer and director. The officer and director’s conduct is a matter of evidence. However, Lioubimova’s conduct as an officer and director should be assessed in the context of the operational circumstances, the conduct of the corporation, and her legal responsibilities as an officer and director.

[42] Failure to supervise an employee resulting in misconduct reflects both on the corporate dealership and the supervisor personally: Allright Automotive Repair Inc. v. Ontario (Motor Vehicle Dealers Act, Registrar), [2008] OJ No. 1557 (Div. Ct.) at paras. 6-9.

[43] The LAT found that the Respondents did not commit the dishonest acts themselves. This finding was available on the evidence. However, the LAT failed to assess the “operational circumstances, the conduct of the corporation, and [the Respondents’] responsibilities as officers and directors.” This was a necessary analysis before the LAT could conclude that the Respondents’ registration should not be revoked.

[44] The operational circumstances included the fact that the Respondents were the two controlling minds of the corporation and were active in the business. They were responsible personally for overseeing their employees. The misconduct, as found by the LAT, involved four employees, multiple distinct incidents of misconduct, and a laundry list of misconduct, as listed above. In the absence of compelling evidence that the Respondents had exercised reasonable diligence in the discharge of the managerial responsibilities, these circumstances would warrant revocation.

Argument (6): Remedy

[45] The Registrar urges this court to impose an appropriate regulatory remedy. I would not do that in the circumstances of this case. While there are compelling reasons to believe that revocation is the only appropriate remedy, the Respondents are entitled to have their arguments to the contrary assessed at first instance, applying the proper principles.

Other Issues

[46] The Registrar argued that the terms ordered by the LAT were not available, not enforceable, inadequate, without precedent, and failed to meet the statutory test of protecting the public. I would not find it necessary to address these issues, in light of my conclusion that the LAT erred in its analysis and the matter must be returned for a new hearing. I would note, however, the LAT has a broad discretion to fashion terms and conditions of registration under the MDVA.

[47] Although not raised by the parties, I would note that one aspect of an analysis of remedy should be principles of general deterrence. A compliant industry, not just a compliant registrant, is the goal of the regulatory regime. General deterrence is but one of many factors to be considered when the LAT determines remedy. But in a case where the failure is one of management and oversight, rather than personal honesty, and where the failure of oversight may have been chronic and led to multiple acts of dishonesty by multiple employees, general deterrence should enter into the LAT’s assessment of the appropriate penalty.

Summary and Disposition

[48] I would allow the appeal, quash the LAT’s Decision and Reconsideration Decision, and remit the case back to the LAT for a fresh hearing respecting remedy before a different Adjudicator. The Registrar shall have costs from the Respondents of $5,000.00, inclusive, payable within thirty days.

“D.L. Corbett J.”

I agree: “Faieta J.”

I agree: “Doi J.”

Released: May 15, 2026

CITATION: Registrar, Motor Vehicle Dealers Act v. 2631273 Ontario Inc., 2026 ONSC 2734

DIVISIONAL COURT FILE NO.: 635/24 DATE: 20260515

ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT

D.L. Corbett, Faieta and Doi JJ.

BETWEEN:

REGISTRAR, MOTOR VEHICLE DEALERS ACT Appellant

– and –

2631273 ONTARIO INC., CHARLES CADMAN and ROBERT WILKINSON Respondents

REASONS FOR DECISION

D.L. Corbett J.

Released: May 15, 2026