Licence Tribunal
Appeal d'appel en Tribunal matière de permis
2013-07-17
FILE:
7448/MVDA
CASE NAME:
7448 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 Refuse and Revoke Registration
Hicham Lebada
Applicant
-and-
Registrar, Motor Vehicle Dealers Act 2002
Respondent
ORDER
ADJUDICATOR:
Elizabeth Sproule, Vice-Chair
APPEARANCES:
For the Applicant:
Stuart R. MacKay and Sean Flaherty, Counsel
For the Respondent:
Brian Osler, Counsel
Heard in London:
June 26, 2013
ORDER
The Applicant brought a motion for stay, dated June 7, 2013. In summary, the Notice of Motion requested an order staying the hearing before the Licence Appeal Tribunal (LAT) pending the final determination of the proceedings in the Superior Court of Justice initiated by the Applicant. In the alternative, the Applicant sought an order staying the LAT proceedings pending the Registrar’s compliance with the disclosure undertaking given at the pre-hearing referred to in the LAT Order dated March 18, 2013, and an Order permitting the cross-examination of the Deputy Registrar Mary Jane South on her Affidavit.
An Order was issued, dated June 24, 2013, providing for the cross-examination of the Deputy Registrar to take place June 26, 2013. The cross-examination took place on that date and on June 27, 2013, the Tribunal issued its decision that the disclosure undertaking had been complied with and the request for further disclosure made at the end of the cross-examination, as it related to documents for which the Registrar was claiming privilege, was denied.
The motion resumed on June 28, 2013, to address the request for a stay pending the final determination of the proceedings in the Superior Court of Justice.
The Applicant’s claim in Superior Court of Justice is against the Registrar and Deputy Registrar of the Motor Vehicle Dealers Act, 2002, personally, as well as the Ontario Motor Vehicle Industry Council (“OMVIC”). The Applicant is claiming damages for breach of administrative duties and interference with economic rights in the amount of five hundred thousand dollars. The Applicant is also seeking an order quashing the Notice of Proposal to revoke the Applicant’s registration, an order staying the LAT proceeding pending the outcome of the Superior Court case or in the alternative an order estopping the Registrar from relying upon any allegations relating to misleading advertising by 5 Stars Dealers Inc., 1231525 Ontario Inc. o/a Oxford Motors, Marins Auto Ltd. and Canadian Auto Group Inc.
The Statement of Claim in the above action was issued May 30, 2013, however, as of the date of this motion, neither Counsel for the Applicant nor Counsel for the Registrar could confirm whether the Statement of Claim had been served upon the Defendants.
In support of this motion, the Applicant has put forward the argument that his Superior Court action will determine whether a hearing before the LAT is necessary, specifically, if that action is successful and it is found that the Notice of Proposal was advanced in bad faith and upon unmeritorious grounds in order to advance ulterior motives, the issues in front of the LAT will be moot.1
The Applicant also argues that should he be forced to attend the LAT hearing he would incur legal costs for which the LAT cannot provide compensation. Further, there is the risk of adverse findings of fact in the context of a hearing, which may be rendered moot by the outcome of the action in Superior Court, and, more seriously, which may be inconsistent with the findings of fact made by the Superior Court. Thus the Applicant would suffer non-compensable and non-remedial prejudice should the hearing not be stayed pending the final determination of the Superior Court action.2 Applicant’s Counsel argued that any inconsistent findings would bring the administration of justice into disrepute which would be contrary to public interest.
The test in determining whether or not a stay of proceedings is to be granted, is set out in paragraph 43 of RJR-MacDonald Inc. v. Canada (Attorney General), 1994 CanLII 117 (SCC), [1994] S.C.J. No. 17 (Q.L.). The three prongs of the test are summarized as follows:
a) Is there a serious issue to be tried?
b) Will the party seeking a stay suffer irreparable harm if the stay is refused?
c) Does the balance of inconvenience favour a stay?
Whether there is a serious issue to be tried is a low bar to be met. Here there have been allegations that the Registrar has been acting with an ulterior motive. The Registrar has the task of ensuring that registrants are honest, have integrity and will operate in accordance with the law and has the power to remove individuals from the industry if this is not the case. It is not clear from the allegations that the motive behind the action taken against the Applicant is something other than the fulfillment of this mandate. Whether the basis for the Proposal is reasonable is a matter for the Tribunal to determine. However, the Tribunal will assume that the first prong of the test can be met and that the action of the Applicant is not frivolous or vexatious.
With respect to the second prong of the test, the Applicant argued that he will be prejudiced in having to proceed with the LAT hearing in that he will incur legal costs for which there is no recovery. The Tribunal is not satisfied that this amounts to irreparable harm. However, if the Tribunal is in error on this point, it is the Tribunal’s opinion that the Applicant’s motion must ultimately fail on the issue of the balance of inconvenience.
Is determining the balance of inconvenience there must be an assessment of which party will suffer the greater harm from the granting or refusal of the relief. In making such an assessment, the public interest must be considered. The Act which regulates the motor vehicle industry is consumer protection legislation and the Registrar has the duty to ensure that the public is protected from registrants who act contrary to the public interest. Staying the LAT process will bring this regulatory oversight to a halt for an underdetermined length of time. It is not at all clear when the court proceeding will be resolved. It may not proceed at a reasonable pace or may not be carried through to completion at all. It was acknowledged by Counsel for the Applicant that it was not possible to predict the completion date of the court proceeding, although he surmised it might be at least six months before the exchange of documents and the discovery process would be completed.
This must be weighed against the risk that the administration of justice will be brought into disrepute by inconsistent findings. The issues to be addressed by the Tribunal and in the civil lawsuit launched by the Applicant are different. The Tribunal will be required to assess the evidence of the alleged conduct of the Applicant, to determine whether there are reasonable grounds to believe that he will not carry on business with honesty and integrity and in accordance with the law. The Court will be assessing the conduct of the Registrar, Deputy Registrar and OMVIC to determine whether administrative duties have been breached, whether the Applicant’s economic rights interfered with, and if so, damages to which Mr. Lebada may be entitled. Although there is a possibility that there may be inconsistent findings, it is by no means a certainty: the risk of inconsistency is low in the Tribunal’s opinion.
As stated above, the appeals heard by the LAT arise out of consumer protection legislation and the Tribunal has a duty to hold a hearing. There is a public interest in ensuring that serious issues such as those set out in the Notice of Proposal are proceeded with efficiently and fairly. The risk of inconsistent findings does not, in the Tribunal’s opinion, outweigh the greater harm to the public interest should the Tribunal not fulfill its duty in these circumstance to hold a hearing in a proper and timely manner. The balance of inconvenience does not favour a stay in this instance. The stay of proceeding is therefore denied. Counsel will be contacted by the Tribunal to arrange dates for the hearing of this matter.
LICENCE APPEAL TRIBUNAL
_________________________
Elizabeth Sproule, Vice Chair
Released: July 17, 2013