Appeal from a Notice of Proposal of the Registrar under the Motor Vehicle Dealers Act to Refuse Registration
Between:
P.F.
Appellant (Moving Party)
and
Registrar, Motor Vehicle Dealers Act, 2002
Respondent (Responding Party)
INTERIM MOTION DECISION AND ORDER
Adjudicator: Asad Ali Moten, Member
Appearances:
For the Appellant (Moving Party): Justin M. Jakubiak, Counsel
For the Respondent: Bryant Greenbaum, Counsel
Heard in Toronto: January 28, 2019
REASONS FOR DECISION AND ORDER
OVERVIEW
1This motion, brought by the appellant, seeks an Order for directions with respect to the admissibility of evidence from two witnesses. The witnesses, to be called by the respondent, are current or former employees of Quick Credit, an automotive financing company. Quick Credit and its related entities entered into a settlement agreement with the appellant in 2016, which included a Full and Final Mutual Release (the Release) with a confidentiality provision.
2This Tribunal heard the motion at the outset of the hearing. The facts are uncontested. The issue to be decided on this motion is whether or not the two Quick Credit witnesses are to be excluded from giving evidence during the hearing. In other words, is their testimony inadmissible.
3The appellant is of the position that, based on the language of the Release, and the inherent unfairness of requiring the appellant to recall ten year old evidence that was subject to a settlement, the witnesses should be excluded from providing evidence. The Registrar is of the position that there is no privilege attached to the evidence of the witnesses, and the Release contains an exception to confidentiality where required by law. In addition, the respondent argues that the Release does not prohibit testimony as a witness, which is of all the more importance in a consumer protection proceeding. Therefore, according to the respondent, the witnesses should be permitted to give evidence.
4For the reasons below, I find that the Quick Credit witnesses are permitted to testify, subject to limitations, about Quick Credit’s interactions with the appellant. A reasonable interpretation of the Release does not prohibit testimony of this nature.
ISSUES
5In essence, the Tribunal must consider and decide the following issues:
A. Does the Release prohibit the witnesses from testifying as to the interactions between Quick Credit and the appellant?
B. Is there any other reason to disallow the witnesses from testifying?
FACTS
6The facts on this motion are not contested. Between 2003 and 2008 the appellant was licensed as a motor vehicle salesperson and was the dealer principal of two dealerships. From time to time during that period, he would seek financing from Quick Credit in order to operate his dealerships. For the purposes of this motion, Quick Credit includes all related entities.
7At some point prior to 2009, a dispute arose between the appellant and Quick Credit. An action was commenced by Quick Credit, with the appellant as defendant. This civil suit proceeded to trial, and addressed issues not dealt with by the appellant’s bankruptcy proceedings. In 2016 before a trial was completed but after it was underway, the parties agreed to a settlement.
8On April 8, 2016 the parties entered into a settlement agreement that included the Release. The Release does not form part of the record for this motion, however, both parties and the Tribunal examined a sealed copy of the Release together during the motion. Excerpts from or references to language in the Release will be made as necessary within these reasons, while preserving the confidentiality of the Release.
9The Registrar was not party to the civil litigation or the settlement. Prior to the settlement, the Registrar had been in contact with Quick Credit, and had received some business records from Quick Credit about the company’s interactions with the appellant. The Registrar now wishes to rely on these documents, and the testimony of the Quick Credit witnesses as part of the Registrar’s case against the appellant. Both parties agree that a significant part of the testimony from the Quick Credit witnesses would be about Quick Credit’s interactions with the appellant – the same interactions that led to the civil suit.
10The signatory to the Release on behalf of Quick Credit is one of the witnesses the Registrar intends to call. It should be noted that the Quick Credit witnesses are not the only witnesses being called by the Registrar. There are also witnesses from another automotive financing company who are expected to testify about a parallel set of events as the Quick Credit witnesses.
11The Release, broadly and without disclosing more than necessary, appears to be a fairly standard release, containing language that releases both parties from any liability to the other, and enjoining them from pursuing any claim against the other. It is worthwhile, at this stage, to reproduce the confidentiality provision from the Release, which is also contained in the Notice of Motion:
IT IS FURTHER AGREED AND UNDERSTOOD that, unless otherwise required by law, the parties will not discuss with third parties, and keep confidential, the terms of this Release and the settlement which underlies it, and not disclose them to any third party without the prior written consent of the other party. If asked about this matter, the parties each agree to state that they have no comment and to say nothing further.
The above prohibition shall not prevent either party from making such disclosure as may be required to any tax, legal or financial advisor for the purpose of obtaining tax, legal or financial advice. [capitals in original]
LAW AND ANALYSIS
12According to the appellant, the spirit and intent of the settlement with Quick Credit was to prevent the revisiting in the future of any claims or allegations contained in the litigation. In his mind, he has put all of the civil proceedings behind him, and to recall evidence from a ten year old action would not be fair. Further, the appellant argues that the language of the Full and Final Release, and specifically of the confidentiality provision is clear in prohibiting instances such as this from occurring. To do otherwise, in the appellant’s opinion, would be to go behind a contract agreed to by two sophisticated parties.
13The Registrar argues that the age of the evidence to be provided by the witnesses, or that would need to be recalled by the appellant is an issue that goes to reliability, not its admissibility. Further, according to the Registrar, there is no reason to exclude the evidence. It is not privileged, nor is privilege being pleaded; and the Release contains an exception to confidentiality where it is required by law such as the Motor Vehicle Dealers Act and the Statutory Powers Procedure Act. Most importantly, according to the Registrar, the proceeding before this Tribunal is pursuant to consumer protection legislation, and is of the utmost importance to the public interest. Parties should not be permitted to contract out of participating in consumer protection legislation.
14The Registrar submits that, in the absence of a test provided by the appellant, the appropriate test should be whether the probative value of calling the Quick Credit witnesses outweighs the prejudicial effect.
Does the Release prohibit the witnesses from testifying?
15In my opinion, the Release does not prohibit the witnesses from testifying in this proceeding as to Quick Credit’s interactions with the appellant. This is because the language of the release is clear on its face with respect to what it means. The appellant did not lead any evidence as to what ambiguity might exist as to the meaning of the provision as at the time of its execution. Even if there was an ambiguity, applying contractual interpretation principles, specifically examining the context of the Release, would not yield a different conclusion.
16The confidentiality provision of the Release has essentially several parts. It has a ‘what not to do,’ and the ‘object’ of the provision. The ‘what not to do’ is “…do not discuss…keep confidential...do not disclose”. These statements are clear in their meaning. The parties intended to keep information to themselves. This goes above and beyond the language releasing each other from any liability to the other.
17The ‘objects’ of the provision, in other words, the subject matter about which the parties agreed to maintain confidentiality are “the terms of this Release and the settlement which underlies it”. Both of these are clear as well. The parties are not to discuss what is in the Release, or to discuss the settlement that led to the Release. The settlement may include the process towards the end result, including negotiations, prior offers, participants, etc. Neither term in this instance can reasonably be read to include all of the interactions between the parties prior to the litigation. At most the term ‘settlement which underlies it’ might include interactions prior to and during litigation for the sole purpose of resolving any dispute between the parties.
18The next clause of the provision is the ‘what to do’ clause. It instructs the parties that “if [they are] asked about this matter, the parties each agree to state that they have no comment and to say nothing further.” The appellant argues that the broad language of ‘this matter’ and ‘say nothing further’ make this provision a catch all, implying that the parties are to maintain confidentiality with respect to anything not covered elsewhere in the provision. In essence, the appellant argues that ‘this matter’ means everything from which the parties have agreed to release each other.
19The appellant pointed the Tribunal towards two cases in support of his argument with respect to how to treat the language of the Release, and the settlement broadly. The appellant argued that these cases were analogous in trying to introduce evidence from matters that had previously been settled. With respect, these cases are distinguishable from the one before me.
20In Ontario Public Service Employees Union (Ranger) v. The Crown in Right of Ontario, 2005 CanLII 55165 (ON GSB), the Board ruled that evidence from previously settled grievances involving the same grievor were not admissible in part because the parties were entitled to rely on the negotiated settlement. The language used in the Minutes of Settlement are stark, clear, and significantly different from the language in the current instance. The Minutes of Settlement state that “the underlying facts [will never] be referred to in any other administrative, quasi-judicial or legal proceeding”. There is no such wording in the Release. While there is specific reference to proceedings before OMVIC, the Release states that neither party shall “commence, advance or continue any claim or complaint”; it does not make mention of referring to underlying facts, or prohibiting testimony, as is the case in Ranger.
21In addition, the parties in Ranger were the same as the settled grievances, and to permit the prior grievance evidence even in a limited fashion would essentially be permitting the grievor to re-litigate a settled dispute. That is not the case in the current instance, where the parties differ and the witnesses are in no position to benefit from their testimony.
22For some of the same reasons, in Paul Simon and Ingrid Joseph v. The Crown in Right of Ontario, 2006 CanLII 42781 (ON PSGB), the Board did not permit the grievors to introduce evidence of a prior settled grievance with another employee. The parties to both the settled grievance and the one before the Board were the same – the union and the government. The Board ruled that there was no exceptional circumstance in this case to allow evidence on matters that have already been settled. Again, in the current instance, the parties are not the same as those executing the Release.
23Even if I am incorrect in concluding that the language of the Release is unambiguous, the context surrounding the Release does not move the needle towards an alternate conclusion as to the meaning of the confidentiality provision. The appellant submitted an affidavit in support of the motion. He was not cross-examined on this affidavit and provided no oral evidence. The respondent presented no evidence. Therefore, the contents of the affidavit form the entirety of the evidence as to the context for the Release and what the language might mean.
24The appellant states that his intent in settling was to do so on a full and final basis, without admission of liability, and with no ability for Quick Credit to pursue a claim or complaint before OMVIC. The appellant was in the midst of a trial arising from a seven year old civil action. He wanted, in essence, to walk away and never have to fight against Quick Credit again. I cannot deduce from this evidence that he also intended, via settlement, to never have to deal with OMVIC again on these allegations, though that may be what he wished. There is no evidence that the current proceeding is the direct result of any complaint or claim made by Quick Credit to OMVIC.
25As such, applying the context of the Release, the only reasonable interpretation of the word ‘matter’ in the confidentiality provision would be its common legal use – the proceeding or civil action that led to the settlement.
Is there any other reason to disallow the witnesses from testifying?
26The Tribunal finds that while there may be valid issues about the weight to be ascribed to the witnesses’ evidence, there is no inherent reason to disallow their testimony. The appellant argues that requiring him to recall evidence from events that are more than ten years old, especially after he settled them in good faith and expected to walk away is unfair.
27In support of this argument, the appellant points to the same two cases discussed above, as well as Hotel-Dieu Grace Hospital v. Ontario Nurses’ Association, 1997 Carswell Ont 6200. In Ranger the Board found that it would be unfair to require the employer to preserve and recall events that occurred nine years before the proceeding in question, especially when the matter was settled. Similarly, in Simon, the Board ruled that to allow the grievors to introduce evidence of other similar grievances going back in time without limit was unfair to the employer. This was because the grievors had not specifically pointed to either any grievances they might wish to introduce, or how far back they might go. That type of vagueness was unacceptable and impossible to defend.
28In Hotel-Dieu, the issue was not only evidence six years older than the time of the grievance, it was evidence from six years before until the date of the grievance. The arbitrator found that this would be voluminous and involve unrelated grievances in an attempt to show a pattern of discrimination. This would add to an already lengthy and complicated arbitration in an unnecessary manner.
29The primary difference in the current instance is that while the evidence of Quick Credit and the appellant’s interactions is ten years old at this point, it was as recently as three years ago crystallized through preparation for a trial, and top of mind for the appellant. He is not recalling something he has not thought about in ten years, rather he is recalling something he has not thought about in three years. In addition, the evidence from all of the above cases would have arisen prior to the ubiquity of digital records, and paper documents or notes may have been lost or destroyed. The appellant’s interactions took place in the digital age, and at least would have been preserved digitally in preparation for the trial.
30In addition, the Tribunal is sensitive to the fact that the passage of time may have eroded some of the appellant’s ability to recall events from 2008. On the other hand, it may have similarly affected the ability of the Quick Credit witnesses. Any issues with recollection, or inconsistencies as a result of the passage of time go to weight and ultimately to reliability of the evidence. They do not, without anything further, point to an inadmissibility.
31As such, I find that there is no other reason to prohibit the Quick Credit witnesses from testifying.
CONCLUSION AND ORDER
32Based on the reasons above, I order that the Quick Credit witnesses may testify with respect to Quick Credit’s interactions with the appellant up until the commencement of the civil action. The witnesses may not testify to any resolution discussions that Quick Credit had with the appellant at any point, including before the civil action was filed.
LICENCE APPEAL TRIBUNAL
Asad Ali Moten, Member
Released: March 1, 2019