Licence Appeal Tribunal
Appeal d'appel en matière de permis
FILE: 7043/MVDA
CASE NAME: 7043 v. Registrar, Motor Vehicle Dealers Act 2002
An Appeal from a Notice of Proposal by the Registrar, Motor Vehicle Dealers Act, 2002, S.O. 2002, c. 30, Sch. B – to Revoke Registration
Dale J. Allen Applicant
-and-
Registrar, Motor Vehicle Dealers Act 2002 Respondent
REASONS FOR DECISION AND ORDER
ADJUDICATOR: Patricia McQuaid, Vice-Chair
APPEARANCES:
For the Applicant: Anthony Bak, Counsel
For the Respondent: Yovanka McBean, Paralegal
Heard in Toronto: November 19, 2012
REASONS FOR DECISION AND ORDER
Allegations
This is a hearing before the Licence Appeal Tribunal (the “Tribunal”) arising out of a Notice of Proposal issued by the Registrar, Motor Vehicle Dealers Act 2002 (the “Registrar” and the “Act” respectively.) The Notice of Proposal dated November 2, 2011 (the “NOP”) proposed to revoke the registration of Dale J. Allen (the “Applicant”), as a salesperson under the Act.
The Registrar alleges that Mr Allen’s past conduct, namely his illegal activity related to production of a controlled substance in violation of the Controlled Drugs and Substances Act, and his subsequent conviction for that offence, is inconsistent with the intention and objective of the Act, being the protection of the public interest. The Registrar submits that this is conduct that affords reasonable grounds for the belief that Mr Allen will not carry on business in accordance with the law and with honesty and integrity, thereby invoking the disqualification from registration pursuant to section 6 (1)(a)(ii) of the Act. It is this issue that the Tribunal must decide.
Decision
After carefully considering the evidence and submissions, the Tribunal directs the Registrar not to carry out the Notice of Proposal. Reasons follow.
Preliminary Matters
By way of preliminary matters, Ms McBean advised that the Registrar wished to withdraw paragraph 10 of the NOP, the allegation regarding a failure to disclose information requested by the Registrar.
Evidence
Certain key facts are not in dispute. Mr Allen has been licensed as a salesperson under the Act since 1996. In September 2010, he filed a renewal application and a Salesperson Change Notice with the Ontario Motor Vehicle Industry Council (“OMVIC”). On that application, he disclosed charges pending against him; he had been charged on June 3, 2010 with production of a Schedule II substance, specifically growing marijuana plants in the basement of an outbuilding at his residence. Mr Allen also filed notice in the fall of 2010 that he wished to be concurrently registered with two dealerships: Active Auto Sales and Bisko Auto Sales.
There are no issues regarding disclosure on the various application forms nor that the principals of the dealerships were unaware of the charges (and ultimately, the convictions).
Mr Allen entered a guilty plea to one count of unlawful production of a controlled substance. The reasons for judgment were produced in the Applicant’s Book of Documents (Exhibit 2). A positive pre-sentence report was filed with the Court. In his reasons, released on September 11, 2012, the judge determined that a conditional sentence of two years less a day would be appropriate in the circumstances though noted that a conditional sentence in the context of the particular offence was rare. Extensive terms were imposed. The terms do allow Mr Allen to work though he is subject to a curfew.
The Registrar’s concern, as articulated by Laura Halbert, Director of Compliance with OMVIC, is that Mr Allen was engaged in criminal conduct, indeed a very sophisticated “grow op,” while he was registered as a salesperson. She testified that Mr Allen knew he was working in a regulated industry in which consumer confidence in the marketplace is of paramount concern. She went on to state that while a criminal conviction is not an automatic bar to retaining registration, there is no “recent past conduct” on which the Registrar might conclude that Mr Allen will carry on business in accordance with the law and with honesty and integrity.
Ms Halbert did acknowledge that this was not an industry specific offence and that there is no evidence to suggest that the conduct intersected with his employment in any way. The Registrar is not aware of any consumer complaints against Mr Allen or any financial concerns such as unsatisfied judgments against him. The Registrar needs to ensure that consumers have confidence in the people with whom they are dealing, salespersons and dealerships. Mr Allen’s conduct while a salesperson in the industry, conduct that was both serious and sophisticated, may negatively impact that confidence.
Three witnesses testified in support of Mr Allen. Two of them, Rob Culig and Zeljko Bisko, have each known Mr Allen for almost 20 years. Both run small dealerships (Active Auto Sales and Bisko Auto Sales respectively) and spoke about Mr Allen being an asset to their businesses as a key person in their operations. He continues to work for them. Neither wants to lose him as an employee as their businesses would be detrimentally affected. They described him as a trusted employee and have no concern about him re-offending. Mr Culig stated that “the public does not need protecting” from Mr Allen.
Mr Culig and Mr Bisko both wrote letters of support for the court. They expressed shock at the events of June 2010 as they had no idea that he was engaging in illegal activities.
The third witness to testify was Diane LaVallee, Mr Allen’s spouse. She described the stress that these events – the charges and conviction – have brought upon them, including a significant financial impact. They have lost their home. She, too, had no idea that he was engaging in this activity; however, in her view, there is no likelihood that he will re-offend, nor does he pose any kind of threat. He has complied with the terms and conditions of his sentence.
Mr Allen testified. He knows made a mistake. He got caught and he has faced up to the consequences. He described the financial impact, which has been significant, in some detail. He acknowledged that he had intended to profit from the operation and it was very clearly activity outside the law. He has continued to work within the parameters of his conditional sentence, and to volunteer for Habitat for Humanity with the knowledge that breach of his terms and conditions would bring a serious consequence, jail time for the balance of his conditional sentence.
Mr Allen confirmed that he was aware that by choosing to work in a regulated industry, his eligibility for registration comes under scrutiny given that the Registrar is obliged to protect the public interest. Compliance with the law, he agreed, is integral to registration.
ANALYSIS/REASONS
Ms. McBean, in her submissions, rightly pointed out that the fact that Mr. Allen and Ms. Lavallee have suffered loss as a result of Mr. Allen’s conviction and that Mr. Culig and Mr. Bisko believe that Mr. Allen will be a significant loss to their respective businesses is largely irrelevant to the Tribunal’s determination. There can be severe consequences from conduct such as Mr. Allen’s. There is no question that Mr. Allen and Ms. Lavallee are living those consequences.
It is trite to say that each case must be decided on its own facts, but the facts must be scrutinized to determine whether there are indeed reasonable grounds for the belief that Mr Allen “will not carry on business in accordance with the law and with honesty and integrity” thereby disentitling him from registration under section 6 (1)(a)(ii) of the Act. The Registrar bears the onus on a balance of probabilities.
The fact is that Mr. Allen has been registered as a salesperson under the Act for 16 years. Until 2010, there was no blemish on his record. The conviction is undeniably serious. From the evidence, it is clear that the conduct that led to the conviction was very much out of character. No one saw it coming. Is there a basis then on which the Registrar can reasonably conclude that, going forward, Mr. Allen will not carry on business in accordance with the law and with honesty and integrity? Certainly his employers do not think so. They continue to entrust their businesses to him on a daily basis. While it may be argued that it is in their interest to have Mr. Allen there minding the shop while they are on the road, it would not be in their interest, financial or otherwise, if his presence was detrimental to their customers’ confidence in their dealerships. In some of the cases cited to the Tribunal, for example, in Koo v. Registrar, Motor Vehicle Dealers Act 2002, 2012 CanLII 52462, there are no character witnesses called on behalf of an Applicant so that the Tribunal, left with no direct evidence, is asked to infer that the Applicant has reformed and can carry on business with integrity and honesty. That is not the situation here.
Furthermore, the Court, even weighing the need for general deterrence in sentencing, gave Mr. Allen an exceptionally light sentence given the charge, noting that a conditional sentence is rare.
The Tribunal was impressed too by the support of Ms. Lavallee who despite her anger, and perhaps a sense of betrayal, continues to believe in him.
A statement was made that Ms. Lavallee would not want to have this happen to anyone. The Tribunal notes though, as Ms. McBean pointed out, that Mr. Allen was not a passive player in the events. Things did not just happen to him, he made certain clear choices. That being said, Mr. Allen has not been involved in a pattern of conduct that poses a risk to the public such as fraud, as was found in the case of Malik v. Registrar, Motor Vehicle Dealers Act 2002, 2012 CanLII 31497. Nor is this a situation where the conduct is industry related, often a factor for the Tribunal’s consideration. Furthermore, unlike the circumstances in Martin v. Registrar, Motor Vehicle Dealers Act 2002, 2012 CanLII 12254, Mr. Allen has unequivocally expressed remorse and accepted responsibility.
The Tribunal has considered all of the above in concluding that this is not a situation which calls for revocation in light of s. 6 of the Act. However, one further issue raised by the Registrar must be addressed as it does indeed appear as a relevant consideration through the Tribunal’s jurisprudence. The Registrar submits that a criminal conviction is not a bar to registration; however, the Registrar looks for a period of good conduct after sentence and probation, when the risk of breach may be of far greater consequence, such as here, where a period of incarceration could result. Cases in which registration will be granted while an applicant is on probation for a serious offence have been the exception.
This is not a situation where the Applicant has a lengthy criminal past or a prison term imposed for the offence(s). Yet the conduct is undeniably recent (the spring of 2010) and the conviction even more so. That may be seen to be an obstacle to registration. However, there can be no set time frame of “good behavior” prescribed. At its core though, the evidence must establish a high degree of trustworthiness so that it may be possible to repose public trust in the Applicant with the granting of registration. The unique circumstances, as outlined above, satisfy the Tribunal that the bar has been met. This is not a situation where the evidence suggests that public and consumer protection calls for revocation and further time to elapse, or that in this instance, considerations of general deterrence are required to maintain the integrity of the industry.
The Tribunal was impressed with Mr. Allen’s remorse, acceptance of responsibility for his actions and his conduct subsequent to June 2010 as gleaned through the evidence. The Tribunal therefore is prepared to give him another chance. However, the Tribunal imposes one condition responsive to these particular circumstances, to ensure that should there be any future conduct that leads to Mr. Allen appearing before the courts, this will be immediately brought to the attention of the Registrar.
ORDER
Pursuant to the authority vested in it under the provisions of the Act, the Tribunal directs that the Registrar not carry out the Proposal but that the registration shall be subject to the following conditions.
The Applicant shall advise the Registrar and his sponsoring dealers in writing, within five business days, of any charges (and including breach of the terms of his conditional sentence) that he faces under any Federal legislation or any Provincial legislation where the charge would fall under Part III of the Provincial Offences Act, R.S.O. 1990, c. P.33 and such advice shall disclose the full extent of those charges; and
That the Applicant fully and promptly co-operate with any inquiry made by the Registrar, in respect of any charges, findings or convictions related to the Applicant regarding any charge of the nature described in paragraph 1 above.
LICENCE APPEAL TRIBUNAL
Patricia McQuaid Vice-Chair
Released: December 06, 2012