Tribunal File Number: 12337/MVDA
Appeal from a Notice of Proposal pursuant to s.9 of the Motor Vehicle Dealers Act, 2002, Chapter 30, Schedule B and Regulations, as amended, (the “Act”) to refuse the registration of Amit Khosla as a Motor Vehicle Salesperson under the Act
Between:
Amit Khosla
Appellant
-and-
Registrar, Motor Vehicles Dealers Act, 2002
Respondent
DECISION AND ORDER
PANEL:
Harriet Lewis, Member
APPEARANCES:
For the Applicant:
Justin Jakubiak, Counsel
For the Respondent:
Jane Samler, Counsel
HEARD:
In-Person on: February 5, 6, 7, 2020
REASONS FOR DECISION AND ORDER
OVERVIEW
1Amit Khosla (“Khosla”) spent 22 years with an unblemished record as a motor vehicle salesperson. In October 2018 he attempted to help his aunt refinance a 2014 Mercedes (the “Mercedes transaction”) through his then employer, D’ Alessandro Investments Ltd. o/a Jaguar Land Rover Metro West (“Metro West”). The transaction led Metro West to terminate Khosla’s employment and that termination led to a cascade of events that ended with charges under the Provincial Offences Act for acting as a salesperson with PTC Automotive Ltd. o/a Grand Touring Automobiles (“Grand Touring”) while not registered.
2The Mercedes transaction and ensuing events also led the Registrar, Motor Vehicle Dealers Act, 2002 (the “Registrar”) to issue a Notice of Proposal (the “Proposal”) to refuse Khosla registration under s. 6 of the Motor Vehicle Dealers Act, 2002, Chapter 30, Schedule B (the “Act”). The Registrar alleges that Khosla’s past conduct provides reasonable grounds for belief that he will not carry on business with integrity and honesty and in accordance with the law. Khosla has appealed the Proposal.
3In considering Khosla’s appeal I reviewed his past conduct, including the Mercedes transaction, the events leading up to the charges of trading without registration, and Khosla’s history in the industry to determine if the appropriate action is refusal or registration or continued registration on terms and conditions.
PRELIMINARY ISSUES: MOTION TO ENFORCE A SETTLEMENT
4At the outset of the hearing the Appellant made a motion for an order that the Tribunal direct the Registrar to honour a settlement between the parties and an order directing the Registrar to register the Appellant as a salesperson in accordance with the settlement. It was submitted that a settlement was offered by counsel for the Registrar and accepted by counsel for the Appellant.
5In support of the motion, counsel for the Appellant filed and relied on a “without prejudice” letter from OMVIC’s counsel, dated June 6, 2019, which stated that if Mr. Khosla could “provide the name of a sponsoring dealer, and assuming there is no significant past conduct or other derogatory issues regarding that dealer, your client’s application can be processed to completion relatively quickly and probably within a few days.”
6After hearing the submissions of the parties and reviewing the materials filed, I found that there was no enforceable agreement between the parties. The June 6 letter from OMVIC’s counsel was “Without Prejudice” and therefore could not be relied upon as a commitment to a settlement. Further, the letter was at best a commitment to expeditiously process the Appellant’s application and nothing more. I therefore dismissed the motion and the parties proceeded to the hearing.
ISSUES
7The issues to be decided by the Tribunal are:
A. Does the past conduct of Mr. Khosla afford reasonable grounds to believe that he will not carry on business in accordance with law and with integrity and honesty?
B. Is refusal of registration the appropriate result in this case
C. If refusal is not appropriate, what if any conditions should be imposed on Khosla’s re-registration.
8Although the Proposal also asserts that the Appellant made false statements in applications for registration, no evidence was introduced, nor argument made on that ground and I conclude it has been abandoned.
RESULTS
9While Khosla has breached the Act, I find that he genuinely, if mistakenly, believed he was not in breach of his obligations as a registrant. Accordingly, I find that this is a case to impose conditions and not refusal of registration.
LAW
10Section 6(1) of the Act provides that subject to circumstances set out in s.6(1)(a), an applicant is entitled to a licence. Section 8 (1) of the Act allows the Registrar to refuse to register an applicant or suspend or revoke a registration or refuse to renew a registration if, in his or her opinion, the applicant or registrant is not entitled to registration under section 6. Section 6(1)(a)(ii) provides that one of the grounds the Registrar may rely upon to refuse a licence is if “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.”
11The Registrar’s Proposal in this case asserts that Khosla’s registration should be refused because his past conduct and the provision of false statements in applications for registration are inconsistent with the intention and objective of the Act and warrant disentitlement to registration.
12The jurisdiction and authority of this Tribunal comes from s.9 of the Act which provides that the Tribunal “may by order direct the registrar to carry out the registrar’s proposal or substitute its opinion for that of the registrar and the Tribunal may attach conditions to its order of registration.”
EVIDENCE
Falsifying and Furnishing False Information – The Mercedes Transaction
13There is little dispute between the parties as to the facts which form the basis of the Registrar’s position that while at Metro West, Khosla falsified a document and furnished false information. However, Khosla disputes that he acted with the intent to commit a fraud, and claims his actions were taken with the knowledge and approval of other members of the sales staff.
14As noted, Khosla was first licenced as a salesperson in May 1997. Since 2004 he has been employed as a Finance Manager/Finance and Insurance Manager/Financial Services Manager with more than one registered dealership. [note: the title used varied among witnesses and with dealerships].
15He was employed as a Finance Manager at Metro West on September 22, 2016. In that role he was responsible for arranging financing and selling ancillary products such as extended warranties and additional accessories and services to vehicle purchasers and arranging deliveries of their vehicles. He received a percentage commission in respect to each of his sales.
16Khosla’s aunt and cousin were repeat customers of Metro West and at the time of the Mercedes transaction, were purchasing a new Jaguar from the dealership.
17Khosla’s aunt had a Mercedes which she had financed through Mercedes-Benz Financial Services in October 2014. The financing agreement for the purchase was for 48 months with a balance owing of $31,153.50 (the “balloon payment”) in October 2018. Khosla testified that his aunt asked whether he could help her with the financing of the balloon payment by arranging a loan through Metro West, and he agreed to try to do so.
18Several witnesses, including Khosla, described the steps taken in the attempt to complete the Mercedes transaction. The facts that are agreed to are as follows:
i. On or about October 16, 2018, Khosla entered the particulars of the Mercedes into Metro West’s garage register and dealer management systems. This had the effect of giving the Mercedes a stock number and showing it as part of the inventory of the dealership as though it had been purchased by the dealer. Khosla did not intend that the dealership purchase the vehicle, but rather intended to have it appear that it was being purchased and re-sold in order to generate sales documentation that could be submitted to the Bank of Montreal for a loan to make the balloon payment.
ii. Khosla either created or reviewed a form of purchase agreement (“P.A.#1”) showing that the Mercedes was to be purchased from Metro West by his aunt for the sum of $31,154.70, plus $4,127 HST and other charges including an amount for HST. P.S.#1 was signed by Khosla as salesperson and Allen Huang as sales manager. This document was marked “Quote Copy” “No Tax to Be Added” which words were written on the document by Khosla. [Note: the purchase agreements were referred to by various parties as the Bills of Sale]
iii. Because his aunt had paid HST on the full amount of the vehicle at the time of the original purchase, Khosla did not believe tax would or should be payable again. Khosla created a second purchase agreement (“P.A.#2”) which did not include an amount for HST. That document was signed by his aunt and by Khosla who signed as both the financial services manager and the authorized representative of the dealership. The documentation was submitted to the Bank of Montreal for financing.
iv. P.A.#2 and a form of cheque requisition signed by Khosla were submitted to Metro West’s accounting office. The cheque requisition was for $31,154.79, payable by the dealership to Mercedes-Benz Financial Services. The requisition included the registration number and other particulars of the Mercedes and the words “Please payout this balloon payment to MCFS. Scan Amit a copy of the payout cheque. Courier it along with the payout statement.”
D’Alessandro testimony
19Lorenzo D’Alessandro, (“D’Alessandro”), the dealer principal of Metro West, testified that only he and a few members of his family, who are also his business partners, have authority to sign certain cheques. A clerk in the dealership’s accounting department brought Khosla’s cheque requisition to him for signature. When D’Alessandro checked into the particulars of the proposed transaction, he noticed the absence of a figure for HST and refused to issue the cheque. He noted that in order to arrange financing, there must be a true sale of a vehicle, and that was not the case in this instance.
20D’Alessandro stated that when Khosla was told by the accounting clerk that the cheque would not be approved, he telephoned D’Alessandro. Khosla insisted that the transaction could legitimately take place. He told D’Alessandro that he had spoken with a supervisor at the Bank of Montreal who had cleared the form of the transaction, and he provided D’Alessandro with her name and telephone number. When D’Alessandro followed up with a call to that individual, she told him that she did not remember the call, and that there was no record of it.
21Shortly after his call to the bank, D’Alessandro had a face-to-face discussion with Khosla, in the presence of other sales staff, later said to be Idris Malik (“Malik”) and Allen Huang (“Huang”), which became a group discussion as to whether this type of transaction could, in fact, be done and had been done before. Nonetheless, upon being told that the financing deal would not be allowed to go ahead, Khosla’s aunt made other financing arrangements, and Khosla removed the entry for the Mercedes from the garage register by putting a line through the entry.
22Khosla’s employment with Metro West was terminated on November 15, 2018. D’Alessandro said that he was part of the decision to terminate, that it was not an easy decision and that it was not just because of the Mercedes transaction. He no longer believed that Khosla could be trusted and does not want similar transactions to take place in the future. Although he was not present at the meeting where Khosla’s employment was terminated, he recalled that after the termination, Khosla apologized, asked for leniency and his job back.
23D’Alessandro said that he did not notify OMVIC of Khosla’s termination until early January 2019. He did not notify OMVIC of any details of the events leading up to the termination until March 26, 2019, when he telephoned and then wrote to OMVIC advising of Khosla’s actions with respect to the Mercedes transaction. On March 14, 2019, counsel for Khosla had issued a Statement of Claim for wrongful termination but D’Alessandro was not sure that he had received the claim at the time of his contact with OMVIC.
Huang testimony
24Allen Huang, (“Huang”), was a sales manager at Metro West from sometime in 2015 until early April 2019 when he moved to Grand Touring, a competitor of Metro West . He was responsible for the dealership’s sales of both Jaguar and Land Rover in Toronto. It was a busy dealership with 60 to 70 sales per month for which he was responsible. Huang knows and worked with Khosla at Metro West for two years and later briefly at Grand Touring. He testified about his recollections of the Mercedes transaction.
25Huang’s role at Metro West was to oversee new car sales and generally to control the sales floor by dealing with the customer data base. As a sales manager, he needed to approve all deals by formally accepting the financial terms of a customer’s offer, after which the customer was referred to the Finance Manager for financing, the sale of additional products, and scheduling of vehicle delivery. Once he approves the terms of a bill of sale, Huang’s role with a transaction was complete.
26Huang’s recollection is that Khosla told him that his aunt owned a Mercedes and that the dealership was going to buy out her lease on the vehicle and refinance it. He understood that it would involve a purchase by the dealership, followed by a new sales transaction to the aunt. Because he understood the transaction to be a lease buy-out and re-sale, he agreed to sign P.A.#1. He recalled noting that HST was included on the document but did not remember seeing the handwritten words “No tax to be added”. He does not recall a conversation with Khosla about taxes and says he had no other involvement in the transaction. He admitted that he didn’t closely question Khosla on the transaction because he trusted him. He said he would not have signed if he had known the financing was for a balloon payment and not a lease buy-out. He denied that he told Khosla to go ahead and create and sign a new bill of sale without taxes.
27Huang recalled a conversation with D’Alessandro, Khosla and Malik, in which the transaction was discussed. D’Alessandro told them that the transaction was not a lease buy-out and that he did not intend to sign for the financing of the balloon payment. He recalls the conversation was brief and that he left shortly after for vacation. When he returned in mid-November 2018, he learned that Khosla’s employment had been terminated.
Donato testimony
28Giacinto (Jack) Donato (“Donato”) has been the General Manager at Metro West for three years. For two years his employment overlapped with Khosla’s. He testified about the role of the Financial Services Manager at the dealership in general, and to his involvement with the Mercedes transaction and the termination of Khosla’s employment.
29Donato described D’Alessandro telling him about the Mercedes transaction. He reviewed the paperwork and discussed the matter with Huang at the time. He reviewed both the garage register and the electronic inventory system in respect to the Mercedes transaction and briefly explained how it worked. He noted that the inventory system keeps a note of all persons who access a transaction on a Quote Log. He noticed Khosla’s repeated engagement in the Quote Log for the Mercedes transaction on October 16 and 17, 2018. He also noted the involvement of others looking at the Mercedes transaction at that time, two of whom he identified as Huang and Dominic Caccia, (“Caccia’), another sales manager. He agreed that generally there are “multiple eyes” on every transaction.
30Based on the Mercedes transaction, he decided to terminate Khosla’s employment and drafted and signed a termination letter which was entered into evidence. He and the Human Resources (“H.R.”) Manager met with Khosla on November 15, 2019 to tell him that his employment was terminated. He recounted that at that meeting Khosla did not accept his termination and insisted that he had not committed fraud. He tried to justify his actions, placing some blame on Huang and Caccia. Donato said that Khosla “begged to keep his job”, asked that he be given a warning instead of termination, and wanted to meet with D’Alessandro to discuss it. Donato confirmed the accuracy of Termination Report created by the H.R. Manager and included in the Respondent’s documents which described the termination meeting.
31Donato agreed that on January 6, 2019 he submitted an Online Salesperson Cancellation notification to OMVIC on behalf of the dealership, in which he stated in error that the transaction involved a lease-buyout for the Mercedes rather than a balloon payment.
Khosla Testimony
32Khosla described his recollection of the events surrounding the Mercedes transaction. He said that he spoke to both Huang and Caccia in Caccia’s office and that they agreed that they could do an “in and out” transaction to help his aunt. Khosla acknowledged that none of them had previously done an “in and out’ transaction at Metro West.
33Khosla admitted that he “created a car” for sale, by listing it in the garage register, getting a stock number from the register, and then entering it in the system’s Quote Log. That entry allowed the creation of the documentation for the proposed transaction. Shortly after Khosla’s entry, Caccia also looked at the deal. and gave him the go-ahead. He maintains that he called the bank to discuss the financing of a balloon payment, and understood that when submitted, the request for financing would be processed. He testified that Huang signed P.A.#1, but when Khosla told him it shouldn’t show HST, Huang told him to redo the document and sign it himself.
34Khosla submitted several documents along with the cheque requisition. He prepared a requisition form which clearly showed that the money was for a balloon payment. When after a few days he did not get confirmation that the requisition was approved, he contacted the accounts clerk and was told that “the owner was not comfortable” because there was no tax shown as owing.
35Shortly after, Khosla saw D’Alessandro speaking with Huang, Malik and the accounts clerk, so he joined them and explained the transaction. He understood that D’Alessandro was uncomfortable about the deal, “and that was the end of it”. He crossed out the Garage Register entry. That discussion occurred on or about October 24, 2018. From then until the termination of his employment he did not discuss the aborted Mercedes transaction with anyone.
Acting as a Salesperson Without Registration
36Grand Touring is a luxury car dealer in Toronto. The Registrar called two witnesses from Grand Touring: Chrissy Weatherston, the Director of Human Resources (“Weatherston”) and Patricia Ang, the Controller (“Ang”). They testified about Grand Touring’s on-boarding procedures and how Khosla became involved in motor vehicle sales before he received notice that his registration had been transferred.
Weatherston testimony
37Weatherston recalled that Khosla started work on March 4, 2019. At the beginning of employment, he would have gone through the dealership’s on-boarding routine including submitting a salesperson’s change form to the payroll department on his first day of work. She identified the OMVIC Salesperson Change Application form filled out by Khosla to transfer to Grand Touring dated March 4, 2019 and contained in the Respondent’s documents.
38Weatherston did not ask to see Khosla’s OMVIC licence nor discuss his registration status with him. She confirmed that the payroll clerk would have submitted the change application to OMVIC. She testified that Grand Touring ended Khosla’s employment on April 25, 2019 after they learned that he did not have an OMVIC registration.
Ang testimony
39Ang confirmed that Khosla was hired at Grand Touring as a Finance and Insurance Manager. She knew that Khosla was not being paid a salary while employed at Grand Touring, but she identified the records contained in the Respondent’s documents which show that he was paid commission on transactions in March 2019, totalling $11,323.77.
Gengatharan testimony
40Thaya Gengatharan (Gengatharan), the Director of Registration for OMVIC, provided testimony about OMVIC’S dealings with Khosla concerning his application to transfer his registration to Grand Touring. Khosla made continued efforts to follow the progress of his application. Internal OMVIC notes show that he called numerous times, but was never given a clear answer about the delay.
41On March 29, OMVIC received a note from D’Alessandro, confirming details of the Mercedes transaction and expressing hope that “these facts are taken into consideration by OMVIC when considering Amit’s status as a registrant with OMVIC.”
Khosla testimony
42In his evidence Khosla recalled that after he left Metro West, he worked at Audi Queensway as Finance Manager. He had applied at Grand Touring, where he had worked previously, but it did not have an opening at the time. He applied for and immediately received the transfer of his licence to Audi Queensway. In February 2019 he received a call from Grand Touring advising of an open position and he decided to leave Audi Queensway and go to Grand Touring.
43He recalled filling out the required paperwork on March 4, 2019, including the application to transfer dealerships. He gave the documentation to the Grand Touring payroll clerk to be submitted on his behalf. He believed at the time that his underlying registration was “valid until October 13, 2019” as stated on his registration document and thought that date was what governed his ability to work. However, he admitted that he had attested to reading and understanding the information contained in the section marked “Consent and Undertaking”, which he understands is clear that registration with the new dealer is required before beginning work.
44Khosla believed that his application for transfer to Grand Touring would be dealt with immediately as had his application to Audi Queensway and he continued to expect it to be approved for the entire time he was with Grand Touring.
45Through May 2019, Khosla’s counsel continued to attempt to get an answer about Khosla’s application, and finally learned that a that “there were concerns regarding Khosla’s conduct at Jaguar Metro West”.
46Finally, on June 5, 2019, OMVIC advised him that “we will not be in a position to continue our review or make a decision regarding registration without an application and sponsoring dealer.”
47On June 6, 2019, a without prejudice email was sent by OMVIC senior legal counsel to Khosla’s counsel. It states: “If your client can provide the name of a sponsoring dealer, and assuming that there are no significant past conduct or other derogatory issues regarding that dealer, your client’s application can be processed to completion relatively quickly and probably within a few days.”
48After reading the June 6 communication Khosla “thought the issue was over”. He began looking for a sponsoring dealership, and on September 3, 2019 accepted a position as Financial Services Manager at Yorkdale Volkswagen. He was not yet aware that on August 29, 2019, Marlene Barkley (“Barkey”) an OMVIC investigator, had sworn an information and had issued a summons against him in Provincial Court for the Mercedes transaction and his engagement in sales transactions at Grand Touring.
OMVIC’S Additional Evidence and Submissions
49As the Director of Registration, Gengatharan gave evidence about OMVIC’s responsibilities within the regulatory framework of the Act and its regulations, emphasizing the overriding duty towards consumers.
50Gengatharan testified that on January 8, 2019, the date Khosla’s registration from Metro West to Queensway Audi was expeditiously approved, there was nothing “in the system” to indicate a problem with Khosla and any previous employer. Metro West’s online cancellation (the OC referred to in Sal’s first note), had been filed two days before on January 6, but the system “didn’t catch it” until later.
51Information about the online cancellation form from Metro West gave OMVIC concerns about Khosla’s honesty and integrity. Gengatharan believes that past conduct helps to determine future conduct. In her view the Mercedes transaction should not be seen as a mistake, but rather a chain of improperly taken actions. As a Finance and Insurance Manager, Khosla had a high level of responsibility and he used his position improperly. The result was a breach of trust vis a vis his employer. As a manager he should have set an example for others.
52In Gengatharan’s opinion, Khosla had been in the industry for many years and knew or should have known that he could not work without proper registration. The Regulation is clear that registration expires on the date when the registrant ceases to have a supporting dealer, or on the date shown on the registration documentation, whichever comes first.
53She referred to the fact that the registration clerk had included wording in his initial note to Khosla, warning him that he could not trade until properly registered. She said that employees in the registration area were unlikely to know any details of an ongoing investigation and were not authorised to provide any information about investigations.
54Gengatharan acknowledged that Khosla had a long history of registration with no consumer complaints and that the Mercedes transaction did not result in harm to any consumers. In her view and that of the Registrar, Khosla’s behaviour showed a disregard for the rules in a way which compromised his honesty and integrity. She does not see conditions or limitations on Khosla’s registration as appropriate in this case.
55The Registrar argues that Khosla knew or ought to have known that the Mercedes transaction was improper because it was structured as a sham purchase and sale.
56Detailed evidence of OMVIC’s investigation of Khosla’s actions at Metro West and Grand Touring was given by Barkey who was assigned to the investigation. On August 29, 2019, she swore the information charging Khosla with thirty-five counts of trading while unregistered, and two counts of falsifying information
57Barkey admitted that she had not interviewed Khosla due to time restrictions and did not know until sometime after the charges were laid that he had applied for a transfer of his registration. On or about September 9, 2019 Barkey met and served Khosla with his summons. If found guilty the fine for each of the counts is $3500.
ANALYSIS
Does the past conduct of Mr. Khosla afford reasonable grounds for belief that he will not carry on business and in accordance with the law and with integrity and honesty?
58The Act is a consumer protection legislation and it is through the registration process that OMVIC and the Registrar can best ensure that registrants abide by the Act and Regulations and co-operate with the regulator. Registration is denied to persons who by their dishonest conduct cause or are determined to be likely to cause harm to the public.
59As established in the case of Registrar, Alcohol and Gaming Commission of Ontario v. 751809 Ontario Inc. o/a Famous Flesh Gordons, 2013 ONCA 157, the Registrar has the onus to demonstrate a reasonable basis for its belief that a proposed registrant will not carry on business in accordance with the law or within integrity or honesty. It must be an objective belief based on compelling and credible evidence. As noted in a case cited by the Respondent in this matter, Justin Bradley Moore o/a Bluewave Auto Sales v. Registrar Motor Vehicle Dealers Act, 2002, ONLAT-MVDA 12094: “The Tribunal must make findings about the appellant’s past conduct on the balance of probabilities and then determine whether these facts afford the Registrar a reasonable basis for its contention.”
The Mercedes transaction
60There is substantial evidence that Khosla did not have intent to deceive his colleagues, his employer, the bank, or Canada’s taxation authorities when he attempted to obtaining refinancing for his aunt’s Mercedes. he was open with the management at Metro West about the exact nature of the Mercedes transaction. He did not furnish management with false information.
61The presence of a transaction on the garage register and quote log would have indicated to all who viewed them that the Mercedes had been listed as being taken into inventory. Both Caccia and Huang would have known from the outset that there was a re-financing transaction taking place because both viewed the quote log for the transaction shortly after the initial entry by Khosla. Khosla provided the accounting clerk and ultimately D’Alessandro with PA#2, signed only by himself and his aunt, showing no tax payable. He clearly wrote on the cheque requisition that the funds were intended for a balloon payment (and not a lease buy-back as Huang claimed). Khosla challenged D’Alessandro on his refusal to issue the cheque and continued to defend the transaction, believing that he was helping a Metro West customer; creating commission income for the dealership, his colleagues and himself and giving the bank a loan transaction that they may not otherwise have had. While Khosla ought to have known that his structuring of the transaction, in Gengatharans’s words, was a “chain of actions not properly done,” I cannot find on the facts as presented that he knew it was unprofessional, improper or illegal.
Trading without a licence
62Section 17 of Ontario Regulation 33/08 regulates the expiry of registration as follows:
Subject to this section, a registration as a motor vehicle dealer or as a salesperson expires on the date shown on the certificate of registration.
The registration of a salesperson expires when none of the registered motor vehicle dealers to whom the salesperson is registered employ the salesperson any longer.
63Khosla knew or ought to have known that he was not registered to trade in vehicles until his transfer from Queensway Audi to Grand Touring had been approved. Whether he read the conditions of his transfer or not, he signed the Consent and Undertaking section of the Salesperson Change Application which clearly indicated an understanding that he understood that he “may not trade on behalf of a motor vehicle dealer unless I am registered under the act as a salesperson to that dealer” and that “trade” includes “the positions commonly referred to as Sales Manager, Finance and Insurance Manager and Business Manager”. He also received a reminder of the restriction on trading in the first note he received from Sal.
64I find that there is clear and compelling evidence that he was engaged in trades as Finance and Insurance Manager at Grand Touring without being registered, and that he breached the undertaking represented by his signature on the Salesperson Change Application.
Is refusal of registration the appropriate result?
65Khosla was registered for approximately twenty-two years without a consumer complaint and without evidence of discipline by OMVIC. He was a successful employee for over two years at Metro West, (having achieved Platinum status) and was a desirable addition to the sales staff of its competitor Grand Touring when a position became available.
66The evidence from both Grand Touring and Khosla was that he completed his change application on March 4, 2019 and in accordance with the onboarding process, delivered it to the accounting clerk for submission to OMVIC. When the confirmation of change of dealership was not immediately forthcoming, Grand Touring would or should have known Khosla was not registered but allowed or required him to begin work without proper registration, likely anticipating, as did he, that the registration would go through expeditiously as it had in the past.
67Khosla made numerous attempts over the months of March and into May 2019 to clarify the reasons for the hold-up in his registration without any answers from OMVIC, but apparently expecting a positive result. This optimism continued and grew after the letter from OMVIC counsel suggesting that were Khosla to find a sponsoring dealer his application would be processed expeditiously.
68Khosla is forty-one years old and has spent his entire career in the motor sales industry. He started as a salesperson before the requirement to take an OMVIC course and has had no formal training in the Act or Regulations. He has learned on the job, progressing from salesperson to Financial Services Manager. He has a wife and children and owns his home. It was obvious from his deportment and testimony before the Tribunal that he is deeply remorseful both about his misguided actions at Metro West, and for trading in the hiatus of his registration while at Grand Touring.
69While there was a clear a breach of the registration requirements and his undertaking as noted, I do not find it reasonable to conclude that Khosla’s conduct was such that he will not carry on business in accordance with law and with integrity or honesty in the future.
70The consequences that Khosla has suffered as a result of his behaviour are substantial. He has lost one prestigious position that he begged to keep, and another similar one that he finally obtained. After he left Grand Touring, he had a long period of unemployment while he secured a commitment from Yorkdale Volkswagen, now withdrawn because of his unregistered status. Khosla is eager to re-enter the industry. He expressed confidence that were he to be re-registered, he would have a place at Yorkdale Volkswagen.
71I find that refusal of registration is not the appropriate result. Notwithstanding his long industry engagement, because he has not completed the OMVIC certification course, Khosla would benefit from an OMVIC course which would provide him with an overview of the statutory and ethical context expected of registrants, and with some oversight as he resumes his engagement in the industry. For that reason I am imposing conditions on his registration.
DECISION AND ORDER
72Pursuant to section 9(5) of the Act, the Tribunal orders the Registrar to not carry out its proposal to refuse registration. The Tribunal further orders that Amit Khosla be registered as a motor vehicle salesperson subject to the following conditions:
- Prior to registration taking effect, the Appellant will:
i. satisfactorily complete the MVDA Key Elements Course offered by OMVIC;
ii. fully complete the steps required by OMVIC for reinstatement and association with a new dealer.
Once registered, the Appellant shall not transfer his registration as a salesperson under this Act without prior written consent from the Registrar for six months.
For a period of one year, the Appellant will not be a final signatory on the bill of sale or sales contract or lease contract for any vehicle he will be selling or leasing, nor on the bill of sale for any vehicles purchased for resale.
For a period of four years the Appellant will not be a partner, shareholder, officer, director or controlling mind of a motor vehicle dealership.
LICENCE APPEAL TRIBUNAL
Harriet Lewis, Member
Released: March 09, 2020