MotorHaven Inc. v. Registrar, Motor Vehicle Dealers Act, 2002, 2021 CanLII 40799

Licence Appeal Tribunal

Date: 2021-05-10

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:

MotorHaven Inc. and Abdelrahman Mahmoud Appellants

and

Registrar, Motor Vehicle Dealers Act, 2002 Respondent

CONSENT ORDER

Order Made by: Ian Maedel, Vice Chair Date of Order: May 10, 2021

BACKGROUND

1This is an appeal from a Notice of Proposal issued by the Registrar pursuant to s. 9 of the Motor Vehicle Dealers Act, 2002 (“the Act”) to refuse the registration of Motorhaven Inc. as a motor vehicle dealer and to refuse the registration of Abdelrahman Mahmoud as a motor vehicle sales person under the Act.

2The parties have advised the Tribunal that they were able to agree upon a settlement of all outstanding issues in this matter and have requested that the terms of settlement be incorporated into a Consent Order disposing of this proceeding.

3The parties apply under s. 4.1 of the Statutory Powers Procedure Act, R.S.O. 1990, c. S.22 for an order of the Tribunal to dispose of this matter without a hearing.

ORDER AND DIRECTION

4Accordingly, on the consent of the parties and upon having reviewed the agreement signed by the Appellant and the Registrar, the Tribunal, pursuant to the Motor Vehicles Dealers Act, 2002 directs and orders that the Appellants shall be bound by the terms of the consent agreement signed and executed by all of the parties.

5The signed agreement is appended as Schedule “A” to this Order.

6This Tribunal file shall be closed.

LICENCE APPEAL TRIBUNAL

Ian Maedel, Vice Chair

Released: May 10, 2021

Schedule "A"

TO: Licence Appeal Tribunal Tribunals Ontario Safety, Licensing Appeals and Standards Division PO Box 250 Toronto, ON M7A 1N3

FROM: The Registrar, Motor Vehicle Dealers Act, 2002 Ontario Motor Vehicle Industry Council 65 Overlea Blvd., Suite 300 Toronto, ON M4H 1P1

AND FROM: MotorHaven Inc. 110 Bentley Avenue, Unit 4 Ottawa, ON K2E 6T9

AND FROM: Abdelrahman Mahmoud

Pursuant to subsection 6(2) of the Motor Vehicle Dealers Act, 2002 (the “MVDA”), MotorHaven Inc. (“MotorHaven”), Abdelrahman Mahmoud (“Mahmoud”) (collectively, the “Registrants”) and the Registrar, Motor Vehicle Dealers Act, 2002, (“the Registrar”), in accordance with section 4.1 of the Statutory Powers Procedure Act, do hereby waive the requirements of a hearing and consent to an Order of the Licence Appeal Tribunal based upon the following terms and conditions:

REGISTRATION

1. The Registrants shall comply with all requirements of the MVDA and Ontario Regulation 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.

2. MotorHaven will 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.

3. MotorHaven will 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. MotorHaven further agrees to notify the Registrar of any change in partners or owner, person(s) in charge, and signing authority for the dealership. MotorHaven further agrees not to effect such changes without first obtaining the Registrar’s prior approval, in writing.

4. MotorHaven will ensure that the registration will not be used to trade in motor vehicles where MotorHaven knows, or ought to know, that trading motor vehicles will facilitate an illegal or unethical practice. MotorHaven acknowledges 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.

5. MotorHaven will ensure that all personnel, agents, assignees or anyone acting on behalf of MotorHaven are informed of the Terms and Conditions contained in this document to the extent necessary to ensure compliance with these Terms and Conditions.

6. MotorHaven will ensure that all personnel, agents, assignees or anyone acting on behalf of MotorHaven to trade motor vehicles will be registered as a salesperson to MotorHaven.

7. MotorHaven will 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.

8. MotorHaven agrees to comply with any outstanding and all future requests from the Registrar for information, pursuant to s. 14(3) of the Motor Vehicle Dealers Act, 2002, in a timely manner.

INTERESTED PERSONS

9. MotorHaven will not permit the involvement of ONION AUTO HOLDING COMPANY LTD o/a ONION AUTO SERVICE, RAYMOND KWAN, KWOK KWAN and PUI KWAN directly or indirectly in the operation of the dealership. This includes but is not limited to any involvement in any administrative, supervisory, management, financing or customer service capacity. Further, MotorHaven will not permit the involvement of ONION AUTO HOLDING COMPANY LTD o/a ONION AUTO SERVICE, RAYMOND KWAN, KWOK KWAN and PUI KWAN in the capacity of repair or service of motor vehicles.

10. MotorHaven confirms that ONION AUTO HOLDING COMPANY LTD o/a ONION AUTO SERVICE, RAYMOND KWAN, KWOK KWAN and PUI KWAN will not be financing the dealership, either directly or indirectly. MotorHaven will make reasonable efforts to determine the source of financing received to ensure compliance with these Terms and Conditions.

11. MotorHaven will not trade in motor vehicles with RAYMOND KWAN, KWOK KWAN and PUI KWAN without confirming with the Registrar that RAYMOND KWAN, KWOK KWAN and PUI KWAN are registered as salespersons under the MVDA and is authorized to act on behalf of a dealer who is registered under the MVDA.

PREMISES

12. MotorHaven will operate exclusively from the location approved by the Registrar and will not invite the public to trade at a place other that the approved location, pursuant to section 28 of Ontario Regulation 333/08.

13. MotorHaven will operate exclusively from the location approved by the Registrar and will not invite the public to trade at an unapproved location.

14. MotorHaven agrees not to change the location approved by the Registrar without first obtaining the Registrar’s approval, in writing, pursuant to section 24 of the MVDA. MotorHaven will then provide the Registrar with notice in writing within five days of any such change of the location.

BOOKS AND RECORDS

15. MotorHaven shall maintain books and records in accordance with the MVDA and pursuant to section 52 through to and including section 60 of Ontario Regulation 333/08. It shall maintain these books and records solely at its registered premises.

16. MotorHaven shall ensure that its books and records accurately record the true nature of transactions involving its trade of a motor vehicle. MotorHaven 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 its trade of a motor vehicle.

17. MotorHaven shall provide free access to its books and records to the Registrar or to an authorized representative of the Registrar in accordance with section 15 of the MVDA.

18. MotorHaven shall maintain a garage register in accordance with section 60(1) of the Highway Traffic Act (“HTA”) and pursuant to section 57 of Ontario Regulation 333/08.

19. MotorHaven shall not purchase a motor vehicle without first ensuring that the vehicle is registered to the seller in the records of the Ontario Ministry of Transportation (“MTO”).

20. MotorHaven shall ensure that all vehicles that it purchases are registered within 6 days of their purchase in accordance with section 11 of the HTA.

21. MotorHaven shall undertake to ensure that all vehicles that it sells or leases shall be registered in the name of the purchaser in the records of the MTO before releasing the vehicle to the purchaser.

22. MotorHaven shall undertake that in the event their books and records are lost, stolen or destroyed in whole or in part, the Registrar shall be advised, in writing, within 5 days of the event pursuant to section 55 of Ontario Regulation 333/08. This notification shall include all relevant documentation. The documentation shall include, but is not limited to, police reports, insurance claims and affidavits. MotorHaven further agrees to make all reasonable efforts to reconstitute the lost, stolen or damaged records.

23. MotorHaven 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 premise. Such receipt shall include the recipient's name, address, telephone number, description of records taken, the time of return and signature of recipient. MotorHaven undertakes to provide the receipt to OMVIC when requested by the Registrar.

DISCLOSURE

24. MotorHaven shall ensure that all trades in motor vehicles are completed in accordance with section 30 of the MVDA and pursuant to sections 39, 40, 41, 42 and 43 of Ontario Regulation 333/08 and section 4 of Ontario Regulation 332/08, where applicable.

25. MotorHaven shall disclose all material facts about the motor vehicles for sale or lease to its customers. MotorHaven further agrees that notwithstanding whether or not it considers a fact to be material, MotorHaven shall comply with the disclosure obligation. It further agrees to disclose all material facts on the Bill of Sale, in writing. MotorHaven 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, MotorHaven further agrees to disclose as much detail as possible regarding the nature and severity of the damage. MotorHaven undertakes to research the history of all the motor vehicles under trade to ensure all material facts are disclosed.

26. MotorHaven agrees not to represent any charges or fees on a Bill 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 registration fee or certification.

27. MotorHaven shall comply with all requests for information made by the Registrar in relation to any failure to comply with its disclosure obligations. Further, if, in the opinion of the Registrar, and subject to any legal defence, MotorHaven failed to properly disclose to its customers a material fact about a motor vehicle it sells, MotorHaven shall provide reasonable compensation to the purchaser if the purchaser suffered quantifiable damages in relation to the non-disclosure.

FINANCIAL RESPONSIBILITY

28. MotorHaven agrees not to receive any new private sources of financing without the prior approval of the Registrar. This does not apply where MotorHaven has applied on his own account and has obtained financing from a corporation registered under the Loan and Trust Corporations 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.

29. MotorHaven will maintain bank accounts that are compliant with section 59 of Ontario Regulation 333/08.

30. MotorHaven will maintain a trust account, in respect of any deposits 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 Regulation 333/08. MotorHaven agrees to provide written confirmation to the Registrar, within five days, that a trust account has been established in MotorHaven’s business name at its financial/banking institution.

31. MotorHaven will ensure that bank account transactions relate exclusively to the operation or financing of the business. MotorHaven agrees to notify the Registrar of any change in any business banking accounts.

32. MotorHaven will ensure that any consumer claim made to the Motor Vehicle Dealers Compensation Fund (the “Fund”) in relation to MotorHaven, and the Fund determines entitlement to compensation of the claim pursuant to section 42 of Ontario Regulation 338/08; that MotorHaven will reimburse the Fund for any monies paid in relation to the claim.

33. MotorHaven will comply with all federal, provincial and municipal tax obligations. MotorHaven will 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.

34. MotorHaven agrees to provide the Registrar with written proof of the discharge from bankruptcy, within five (5) days of having been discharged. If MotorHaven's bankruptcy is not discharged within the time parameters specified MotorHaven agrees to provide the Registrar with written notification and an explanation of why MotorHaven has not been discharged.

OMVIC TRANSACTION FEE

35. MotorHaven understands that the transaction fee is payable on any sales or leases to non-dealer registrants, including sales or leases in exports, fleet transactions and consignments.

36. MotorHaven agrees to provide documentation when requested by the Registrar, to establish that a particular transaction is exempt from the transaction fee. MotorHaven will be required to remit the transaction fee on the transaction if the requested documentation is not submitted.

GENERAL

37. The Registrants acknowledge that the Registrar may take further administrative action, including a proposal to suspend or revoke registration, arising from any matters that have occurred or may occur related to honesty and integrity, financial responsibility or compliance with these terms and conditions.

38. The Conditions contained in this document shall be in force for a period of three (3) years from the date of the Order of the Licence Appeal Tribunal.

MotorHaven Inc.