Licence Appeal Tribunal
Appeal from a Proposal of the Registrar under the Motor Vehicle Dealers Act, R.S.O. 2002, c. 30, Sch. B, to Refuse Registration
Between:
Motorhead Classic Cars Ltd o/a Motorhead Classics and Kevin Robert Klein and Robert Kelly McGlogan
Appellants
and
Registrar, Motor Vehicle Dealers Act, 2002
Respondent
CONSENT ORDER
Background
The appellants requested a hearing before the Licence Appeal Tribunal (the "Tribunal") to appeal the respondent's proposal to refuse their registration.
The parties have advised the Tribunal that they have resolved the issues in dispute and have requested the Tribunal issue an order on consent disposing of this proceeding. I am satisfied that the resolution reached by the parties is fair and appropriate and addresses the concerns raised by the respondent in his Proposal.
Pursuant to s. 4.1 of the Statutory Powers Procedure Act, R.S.O. 1990, Chapter.S.22 and s. 41(8) of the Act, and on the consent of the parties, this matter is disposed of without a hearing, on the terms set out in the terms and conditions of the settlement set out below.
Order
In particular, pursuant to s 6(2) of the Motor Vehicle Dealers Act, 2002 (MVDA),
a) the Tribunal directs the Registrar to carry out the Registrar's proposal to refuse Mr. Robert Kelly McGlogan's registration as a salesperson under the Act; and
b) the Tribunal orders that the registration of Motorhead Classics as a motor vehicle dealer and Kevin Robert Klein as a motor vehicle salesperson under the MVDA shall be subject to the terms and conditions set out below.
Terms and Conditions
On consent of the parties, and pursuant to Section 4.1 of the Statutory Powers Procedure Act, and subsection 6(2) of the Motor Vehicle Dealers Act, 2002 (hereinafter the "MVDA") the parties to the proceeding, Motorhead Classic Cars Ltd. o/a Motorhead Classics ("Motorhead"), Kevin Robert Klein ("Mr. Klein"), Robert Kelly McGlogan ("Mr. McGlogan") and the Registrar, Motor Vehicle Dealers Act (the "Registrar") waive the requirement of a hearing and hereby consent to:
a) an Order of the Licence Appeal Tribunal (the "Order") directing the Registrar to carry out the Registrar's proposal to refuse Mr. McGlogan's registration as a salesperson under the Act; and
b) an Order of the Licence Appeal Tribunal (the "Consent Order") based on the following terms and conditions to the registration of Motorhead as a motor vehicle dealer and Klein as a motor vehicle salesperson under the MVDA:
Motorhead's registration as a motor vehicle dealer and Mr. Klein's registration as a salesperson (collectively the "Registrants") shall be subject to the following terms and conditions for a period of three (3) years from the date of this Order:
The Registrants shall comply with all requirements of the MVDA, and Ontario Regulations 333/08, the Code of Ethics in Ontario Regulation 332/08, the Ontario Motor Vehicle Industry Council ("OMVIC") Standards of Business Practice, 2010 and OMVIC Guidelines, as may be amended from time to time. The Registrants further agree to read all correspondence and bulletins from OMVIC as released.
The Registrants shall provide the Registrar with notice in writing, within five days, of any substantive changes to their business plan or information provided in obtaining their registration, pursuant to section 31 of Ontario Regulation 333/08.
The Registrants shall provide the Registrar with notice in writing, within five days, of any change in the officers or directors of the corporation, pursuant to section 24 of the MVDA. The Registrants further agrees to notify the Registrar of any change in partners or owner, person(s) in charge, and signing authority for the dealership. The Registrants further agree not to effect such changes without first obtaining the Registrar's prior approval, in writing, which shall not be unreasonably withheld.
The Registrants acknowledge that "trade" refers to buying, selling, leasing, advertising or exchanging an interest in a motor vehicle or negotiating or inducing or attempting to induce the buying, selling, leasing or exchanging of an interest in a motor vehicle as defined in the MVDA and pursuant to section 36 through to and including section 51 of Ontario Regulation 333/08; and is not limited to the signing of contracts. The Registrants further acknowledge that this includes attendance at auction on behalf of the Registrants and positions commonly referred to as Sales Manager, Finance and Insurance Manager, Branch Manager, Business Manager, General Manager or any individual who has supervisory authority over salespersons.
The Registrants shall ensure that the registration will not be used to trade in motor vehicles where the Registrants know, or ought to know, that trading motor vehicles will facilitate an illegal or unethical practice.
The Registrants shall ensure that all personnel, agents, assignees or anyone acting on behalf of the Registrants are informed of the terms and conditions contained in this document to the extent necessary to ensure compliance with these terms and conditions.
The Registrants shall ensure that all personnel, agents, assignees or anyone acting on behalf of the Registrants to trade in motor vehicles will be registered as a salesperson to the Registrar.
The Registrants shall not conduct business with any person acting as a motor vehicle dealer and trading in motor vehicles without first confirming that the person is registered as a motor vehicle dealer in accordance with the MVDA.
Interested Person/Real Controlling Mind
The Registrants shall not permit the involvement of Mr. McGlogan directly or indirectly in the operation or financing of the dealership. This includes, but is not limited to, any position as a Director, Officer, Partner, and/or Shareholder of the dealership. Further Mr. McGlogan will not be interested or associated person, per section 6(4) of the MVDA, with respect to the Registrants. This includes, but is not limited to, any involvement in any administrative, supervisory, management or customer service capacity. Further, the Registrants shall not permit the involvement of Mr. McGlogan in the capacity of any repair or services of motor vehicles.
The Registrants shall not permit any involvement of Mr. McGlogan in the operation or financing of the dealership without first obtaining the prior written consent of the Registrar.
The Registrants confirm that Mr. McGlogan will not be financing the dealership, either directly or indirectly. The Registrants shall make reasonable efforts to determine the source of any financing received to ensure compliance with these terms and conditions.
The Registrants shall not trade in motor vehicles with Mr. McGlogan without confirming with the Registrar that Mr. McGlogan is registered as a salesperson under the MVDA and is authorized to act on behalf of a dealer who is registered under the MVDA.
Premises
The Registrants shall operate exclusively from the location approved by the Registrar and will not invite the public to trade at a place other than the approved location, pursuant to section 28 of Ontario Regulation 333/08.
The Registrants agree not to change the location approved by the Registrar without first obtaining the Registrar's approval, in writing, pursuant to section 31 of Ontario Regulation 333/08. The Registrants shall the provide the Registrar with notice in writing, within five days, of any such change in the location.
Advertising
- The Registrants shall ensure that all advertisements placed by or on behalf of the Registrants comply with section 36 of Ontario Regulation 333/08. This includes, but it is not limited to, ensuring any advertisements correctly identify the registered name and telephone number as approved by the Registrar, pursuant to section 36(2) of Ontario Regulation 333/08. In particular, the Registrants shall ensure any of its online publications are accurate and any false or misleading representation related to Motorhead and/or Klein are omitted.
Book and Records
The Registrants shall maintain all books and records at the Registrants' registered premises in accordance with the MVDA and pursuant to section 52 through to and including section 60 of Ontario Regulation 333/08.
The Registrants shall maintain books and records, which accurately record the true nature of the transaction involving the trade of motor vehicles. The Registrants shall not be involved in the creation of books and records, which are false or misleading as to the true nature of a transaction involving the trade of a motor vehicle.
The Registrants shall provide free access to books and records of the Registrants to an authorized representative of the Registrar in accordance with section 15 of the MVDA.
The Registrants shall not purchase a vehicle without first ensuring that the vehicle is registered to the seller, in the records of the Ontario Ministry of Transportation (MTO).
The Registrants shall ensure that all vehicles purchased will be registered within 6 days in accordance with section 11 of the Highway Traffic Act ("HTA").
The Registrants shall undertake to ensure that all vehicles sold will be registered in the name of the purchaser, in the records of the MTO before releasing the vehicle to the purchaser.
The Registrants shall undertake that in the event their books and records are lost, stolen or destroyed in whole o in part, the Registrar will be advised, in writing, within 5 days of the event pursuant to section 55 of Ontario Regulation 333/08, and will include all relevant documentation. The documentation will include, but is not limited to, police reports, insurance claims and affidavits. The Registrants further agree to make all reasonable efforts to reconstitute the lost, stolen or damaged records.
The Registrants shall obtain a receipt prior to the removal of any records by a government or professional agency, or any other person or entity, from the registered premises. Such receipt will include the recipient's name, address, telephone number, description of records taken, the time of return and signature of recipient. The Registrants undertakes to provide the receipt to OMVIC when requested by the Registrar.
Disclosure
The Registrants shall ensure that all trades in motor vehicles are completed in accordance with section 30 of the MVDA and pursuant to section 39, 40, 41, 42 and 43 of Ontario Regulation 333/08 and section 4 of Ontario Regulation 332/08, where applicable.
The Registrants shall disclose all material facts about motor vehicles for purchase or lease to their customers. The Registrants further agree to disclose all material facts on the Bill of Sale, in writing. The Registrants shall ensure compliance with the disclosure obligation notwithstanding whether or not the vehicle has been branded through MTO. For greater certainty, a material fact is one that if disclosed could affect the decision of a reasonable person to purchase or lease the vehicle or affect the purchase price. In the case of damaged vehicles, the Registrants further agree to disclose as much detail as possible regarding the nature and severity of the damage. The Registrants undertakes to research the history of all motor vehicles under trade to ensure all material facts are disclosed.
The Registrants shall not represent any charges or fees on a Bill of Sale as being required by law where the charges or fees are not required by law. For greater clarity, this includes charges or fees such as tax, registration fee or certification.
Subject to any legal defences, the Registrants shall accept full responsibility for the quality of any repairs or alterations to a motor vehicle completed by the Registrants' personnel, agents, assignees, affiliated repair facilities or anyone acting on behalf of the Registrants.
Financial Responsibility
The Registrants shall not receive any new private source of financing without the prior approval of the Registrar. This does not apply where the Registrants have applied on their own account and have obtained financing from a corporation registered under the Loan and Trust Corporation Act, The Bank Act or from a credit union or league to which the Credit Unions and Caisses Popularies Act, as may be amended from time to time.
The Registrants shall comply with all federal, provincial and municipal tax obligations. The Registrants shall ensure all required filings are current and submitted with required payments. All taxes collected are deemed to be trust funds and will not be used for any other purpose other than remittances to the federal, provincial and municipal government.
The Registrants shall maintain bank accounts that are compliant with section 59 of Ontario Regulation 333/08.
The Registrants shall maintain a trust account, in respect of any deposit made in excess of $10,000.00 or any funds in relation to motor vehicles sold on consignment on the behalf of a consumer, pursuant to section 58 of Ontario Regulations 333/08. The Registrants shall provide written confirmation to the Registrar, within five days, that a trust account has been established in the Registrants' business name at their financial/banking institution.
The Registrants shall ensure that bank account transactions relate exclusively to the operation or financing of the business. The Registrants shall notify the Registrar of any change in any business banking accounts.
The Registrants shall ensure that any consumer claim made to the Motor Vehicle Dealers Compensation Fund (the "Fund") in relation to the Registrants, and the Fund determines entitlement to compensation under section 82 of Ontario Regulation 333/08, that the Registrants shall reimburse the Fund for any money paid in relation to the claim.
The Registrants shall ensure any motor vehicle it acquires as a trade-in for which there is any amount outstanding on a loan, shall pay that amount to the lender within three days after the related transaction (e.g. purchase or lease of another motor vehicle) has been financed or otherwise paid for by the consumer. Further, the Registrants shall take reasonable steps to ensure the lien on a trade-in is removed within three days after the amount outstanding on the loan has been paid, In this respect, the Registrants agree to comply with OMVIC's Code of Ethics, the Consumer Protection Act and the Sale of Goods Act as required.
The Registrants shall take reasonable steps to ensure any motor vehicle it sells or leases to a consumer, is free of any encumbrances, such as outstanding loan and/or lien.
OMVIC Transaction Fee
The Registrants understand that the transaction fee is payable on any sales or leases to non-dealer registrants, including sales or leases in exports, fleet transactions and consignment.
The Registrants undertake to provide OMVIC with documentation, when required by the Registrar, to establish that a particular transaction is exempt from the transaction fee. The Registrants further understand that if requested documentation is not provided to OMVIC, the Registrant shall be required to remit the transaction fee on the transaction.
ACKNOWLEDGEMENT AND UNDERTAKING
The Registrar is relying on the accuracy and completeness of all documents, statements or information provided by the Registrants in support of the Registrants' applications for registration.
The documents, information or statements provided to the Registrar are true to the best of the Registrants' knowledge, and belief, and that full answer to all questions, inquires and requests made by the Registrar in connection with the Registrants' applications have been given.
The Registrar may take further administrative action, including a proposal to suspend or revoke registration, arising from any matters that have occurred or may occurred related to honesty and integrity, financial responsibility or compliance with these terms and conditions.
Independent legal advice has been obtained or the Registrants have had the opportunity to obtain independent legal advice respecting consent to Terms and Conditions contained in this document.
LICENCE APPEAL TRIBUNAL
John Kromkamp, Member
RELEASED: November 5, 2020