Licence Appeal Tribunal
An appeal from a Notice of Proposal by the Registrar, Motor Vehicle Dealers Act, 2002, SO c 30 Sch B to revoke registrations
Parties
B E T W E E N :
Fine Autos for Less Inc. and Huma Lewal
Appellants
-and-
Registrar, Motor Vehicle Dealers Act, 2002
Respondent
DECISION AND ORDER
Adjudicator: Matthew M. Létourneau, Member
Appearances:
For the Appellant: Huma Lewal, self-represented at the hearing / Michael Burokas, counsel in closing submissions
For the Respondent: Diana Mojica, counsel
Heard by videoconference: March 2, 3, 4 & 5, 2021
OVERVIEW
1The Appellant, Ms. Lewal, is a registered motor vehicle salesperson under the Motor Vehicle Dealers Act, 2002, (“Act”) and owner of the Appellant company, Fine Autos For Less Inc. (“Fine Autos”) which is registered as a motor vehicle dealer under the Act.
2The Registrar under the Act issued a Notice of Proposal (“NOP”) dated November 14, 2019, proposing to revoke the registrations of both Ms. Lewal and Fine Autos. Further to the NOP, the Registrar set out in great detail the conduct that it sees as justifying the revocation of registrations under the Act, providing it in Notices of Further and Other Particulars dated March 31, 2020, February 3, 2021 and February 16, 2021.
3The Appellants appealed the Registrar’s decision by stating that it erred in concluding that there were sufficient grounds to revoke the Appellants’ registrations based on past conduct.
ISSUE
4The issue in dispute in this hearing is:
a. Are there reasonable grounds for belief that Ms. Lewal and Fine Autos will not carry on business in accordance with the law and with integrity and honesty as set out in s. 6(1)(a)(ii) and 6(1)(d)(iii) of the Act.
Position of the Parties
5The Registrar submits that the past conduct of the appellants affords reasonable grounds for belief that they will not carry on business in accordance with law and with integrity and honesty. The Registrar submits that there is a high level of scrutiny for registrants given the consumer protection focus of the legislation. The Registrar’s review of the appellants’ past actions, criminal acts, pattern of conduct and harm caused to consumers led it to propose the revocation of the registration of Fine Autos as a motor vehicle dealer and the registration of Ms. Lewal as a motor vehicle salesperson. The Registrar argued that Ms. Lewal and Fine Autos deployed tactics that caused harm to vulnerable clients and called witnesses who dealt with the Appellants in purchasing used vehicles to demonstrate the Appellants’ behaviour. The Registrar submitted that there was a pattern of behaviour that caused harm to various consumers of used vehicles on the part of Ms. Lewal and Fine Autos. The Registrar submitted that regarding the consumers who testified, Ms. Lewal showed a pattern of failing to return deposits, failing to disclose damage or material facts, not signing bills of sale, falsifying documents, failing to provide bills of sale and furnishing false bills of sale and documentation.
6The Appellant, Ms. Lewal, established at the hearing to be the owner and operator of Fine Autos, rejects these allegations. The Appellants contend that their registrations ought not be revoked. They also contend that the Registrar’s review must be done “exclusively” with a view to the pattern of conduct outlined in the NOP and not cast a wider net.
7In Famous Flesh Gordon’s1, at paragraph 18, the Court of Appeal for Ontario states that, “The standard of proof provided by s. 6(2)(d) of the Act is that of ‘reasonable grounds for belief’. There is no doubt that this is a lower standard of proof than ‘balance of probabilities.’” In that decision, the Court also directs that I must consider the whole of the Appellants’ past conduct, not just the industry specific allegations in the Notice of Proposal or the Notices of Further and Other Particulars.
8I have reviewed the Registrar’s evidence. Ms. Lewal had an opportunity to test this evidence in cross-examination and to provide submissions in writing with the help of counsel after the hearing.
9I find that there are reasonable grounds for belief that Ms. Lewal and Fine Autos will not carry on business in accordance with the law and with integrity and honesty. I find that a pattern of harm was caused to consumers, based on the evidence heard and the testimony of the witnesses.
Mr. Patso
10Mr. Patso testified that in August, 2020, he purchased a 2016 Cadillac ATS. He stated he initially contacted Ms. Lewal via Facebook. He found her dealership Fine Autos and reached out, knowing in advance that he had poor credit. He explained his credit situation and was told that he could get approved with a down payment. He was approved and signed paperwork. He was shown a Mercedes and a 2016 Cadillac ATS, and chose to place a $500.00 down payment on the latter. He paid the remainder of the price for the car on his second visit. He stated that there was no bill of sale provided and he felt misled by Ms. Lewal and Fine Autos. He testified that he asked if the car was in an accident from the outset and this information was not provided.
11In trying to justify this, a bill of sale was produced at the hearing by Ms. Lewal. However, it did not have Ms. Lewal’s name on it as salesperson. The bill of sale was dated August 13, 2020, appears to be signed by the consumer, and was accompanied by pictures, a damage estimate and Carproof report disclosing accident damage. Mr. Patso stated he does not remember signing this bill of sale nor seeing the phrase “this vehicle has been declared as a total loss”. He only signed a financing document on August 13, 2020.
12He learned the vehicle was in an accident several weeks after the purchase. He realized then that the vehicle did not have the value he believed. Mr. Patso returned to Fine Autos, was reimbursed and returned the vehicle. For two months after the return, he waited for Fine Autos to assist with a lifting a lien on the vehicle. Ms. Lewal acknowledged that she was late in paying off the lien on the vehicle at the hearing. Mr. Patso testified that these actions lowered the trust he has in the industry and caused much stress for him and his family during this time.
Mr. Hassan
13Mr. Ahmed Hassan testified that in October 2019, he purchased a vehicle from Fine Autos as a 17-year old person. The Registrar submitted that he was a vulnerable young person at the time, was studying and working two jobs. He stated he was seeking to better his life by purchasing a vehicle, but was an inexperienced consumer. He sought to buy a 2015 Kia Optima Hybrid. He found the appellant online on Facebook under a pseudonym and discussed purchasing a car with her in Facebook Messenger. She did not identify herself or Fine Autos as being registered dealers and carried on the discussion under the pseudonym. She invited him to meet in an unrelated parking lot, as opposed to her Dealership, which is contrary to the Act. She did not identify herself by name at the meeting to show Mr. Hassan the Kia. Mr. Hassan noticed chips, cracks and paint missing from the bumper and asked if the car was in an accident. She denied that it was. She then stated she worked at a dealership, without providing documentation, and could be trusted. He testified that he believed her and she stated a safety certificate could be provided. He followed her in his vehicle to a garage that was not identified as Fine Autos, but as her belonging to her “partner”. She provided the VIN number for the Kia, the safety certificate and showed a dealership card. Mr. Hassan said he could hear a rubber noise in the vehicle while it ran, but was assured that the tires were new and this was a good car that she used for her personal use as well.
14They then proceeded to the Ministry of Transportation (MTO). She drove the Kia while Mr. Hassan sat in the vehicle. She told him this counted as a “test drive”. She also told Mr. Hassan at this time she would pay taxes and for detailing. Once at MTO, Ms. Lewal went right to the front of the line and said she was a dealer. This impressed Mr. Hassan. MTO processed a New Car Package, but Mr. Hassan received no explanation of any documents by Ms. Lewal and does not recall what he signed regarding the ownership. In the end, he paid $11,000.00 in cash to her from money he had saved up from working two part-time jobs he held since the age of 15 years old. He thought this was a good deal for a car with 110,000 kilometers. He was hoping to go to college to be an automotive technician. Ms. Lewal counted the money, provided no bill of sale and said she was proud of Mr. Hassan.
15After taking the car, Mr. Hassan heard noises from the car that sounded like rubber shifting. With his automotive technician training, he testified he suspected a crack in the belt, which would make the car unsafe. To ensure that it was safe, he took it to a mechanic. The mechanic was concerned and asked when the car was purchased. Mr Hassan said it was only yesterday. The mechanic identified the front windshield was popped in one place, there were cracks in the bumper and stated it appeared to be “salvaged”. Mr. Hassan immediately called OMVIC and messaged Ms. Lewal under her pseudonym name on Facebook, as this was the only contact information he had. She did not respond to him and did not give money back. He sold the car for approximately half the amount he paid for it.
16At the hearing, he testified that he did not receive a document called Carfax, did not get a Bill of Sale nor information regarding an accident from Ms. Lewal. He stated he was led to believe this was typical to not receive anything. He subsequently purchased a Carfax and found out that the vehicle was in an accident causing approximately $19,000.00 of damage and a lien.
17Ms. Lewal denied this information. Text messages were produced at the hearing and showed many follow-ups over two days with Ms. Lewal and OMVIC.
18Mr. Hassan testified he lost much trust in the industry as a young consumer, caused a significant loss of his personal savings and created stress for him during this time.
Mr. Pham
19Mr. Son Minh Pham testified that he sought to purchase a 2012 Honda Accord from Fine Autos for Less. He spoke little English. He testified that Ms. Lewal presented herself under a false name: “Helen”. He also stated that he was told there was no accident history on the vehicle and did not receive a Carfax. He assessed the car himself and test drove for one block. He found the wheel to be stiff to turn, the wiper and exhaust needed to be fixed. He asked if this could be fixed and negotiated the price. He also asked if the vehicle was in an accident. There was no answer. He stated he was asked to sign a Bill of Sale, the first of which was blank and the second was not accurate. He returned to collect the car and the previous Bills of Sale were thrown away. He was given a new one that did not provide information regarding the damage. He signed and initialed the document. At the hearing, the Bill of Sale provided included a line saying “vehicle has been declared a total loss by the insurer. Repair estimated at $14,000.00”. He testified that he initialed when it was blank and this was added afterwards.
20Later, he found out that the car had an accident history. He stated he felt very harmed and cheated because he does not have the money to replace the car and would not have bought it had he known the truth. He contacted OMVIC and a lawyer. The car was not returned, however, and Mr. Pham still drives this vehicle as he cannot afford to replace it. At the hearing, Ms. Lewal acknowledged that she missed writing the salvage brand of the vehicle on the bill of sale provided to OMVIC. Ms. Lewal admits the Bill of Sale did not show “salvage” as it was required to do under the regulations.
21The appellant submits that the issues with the car raised at the hearing such as windshield wipers, exhaust pipe and steering wheel were not part of the notice of proposal and should not be relied on. While I do not make any finding regarding the level of damage of the car, I do find that the appellant was not provided with information regarding the status of the car, whether it be a Carfax, detailed Bill of Sale or otherwise.
22Ms. Lewal submits this lack of information was a mistake. I do not accept her testimony because of her pattern of failing to disclose damage history of vehicles and the several bills of sale that were provide to Mr. Pham not having any information until after the fact.
Mr. Ballani
23Mr. Ballani was not called as a witness. The acting manager for inspections provided information regarding his interactions with the appellants in writing and the appellant testified regarding this transaction. Mr. Ballani purchased a 2015 Ford Explorer from the Appellants. Ms. Lewal did not provide a Bill of Sale, did not disclose damage to the vehicle and made false statements to him. I find that Ms Lewal pled guilty to a charge of one count of committing an unfair business practice for making a false statement about why a CarProof was unavailable as the documentary evidence was provided. The appellant submitted that much of the information regarding Mr. Ballani’s deal is hearsay. While I can rely on hearsay under the powers of the Statutory Powers and Procedure Act, RSO 1990, c. S.22, I am cautious in my findings regarding these specifics. The strongest evidence regarding this deal is that the appellant pled guilty to the conviction under the Consumer Protection Act (“CPA”).
24The Appellant testified in saying that Mr. Ballani was not vulnerable, had sought the car as a taxi and much of the evidence regarding the deal was not reliable. She also submits that the evidence falls short of showing that the damage was not due to Mr. Ballani’s own use. Ms. Lewal testified that she bought this car for her own personal use and would never have driven a car that had significant damage. She initially did not want to sell the vehicle as she was using it for her family.
25Regardless of this justification, I accept the evidence regarding the conviction of making a false, misleading or deceptive representation contrary to s. 14(1) of the CPA. This conviction is proof of all the elements of the offence, including the element of intent behind it.
26If the CarProof showed pre-sale damage, the appellant cannot claim Mr. Ballani caused the damage. I do not agree that it would have been reasonable for Ms. Lewal to believe the vehicle was safe. I find this is further proof of dishonesty. See e.g. para 48 of Registrar, Motor Vehicles Act v. Jacobs, 2004 CanLII 9450 (ON SCDC):
By going behind the criminal conviction, and accepting Mr. Jacobs' explanation which was contrary to the findings of the criminal court, the Tribunal erred fundamentally in permitting and accepting a relitigation of the essential elements of the criminal conviction.
27I find that there is an element of intent to the conviction she received that fall in the pattern with the allegations levelled by the Registrar. Her conviction establishes that she made a false, misleading or deceptive representation. There is an element of intent to this type of conviction that includes falsifying important documents intended to assist with ensuring the safety of consumers. This is different than if these were allegations of simple oversight or inaccuracies.
28Based on all the evidence above, I find that Ms. Lewal has displayed a pattern of false and misleading conduct that gives reasonable grounds for belief that she will not carry on business with integrity and honesty and in accordance with the law. She failed to disclose damage history, lied about the existence of Carfax reports that may have disclosed that damage history and her behaviour had a serious impact on vulnerable consumers and the industry as a whole.
29There was very little evidence of “good behaviour” which can outweigh the harm she caused. She made some apologies at the hearing and some admissions, but I do not find that these are actions that would be signs of integrity or honesty or acting in accordance with the law. These elements require more than mere words and Ms. Lewal provided much too little, much too late.
30I find the Ms. Lewal on behalf of Fine Autos has a pattern of making false and misleading statements to consumers both orally and in writing. She admitted to not disclosing damage and documents. I find that she employed misleading tactics and made it difficult for the consumers to understand or ascertain the truth about their vehicles. She pled guilty to a conviction that confirms this type of conduct and adds to the pattern. She placed consumers in potentially dangerous driving situation through her actions and omissions. I find that her past conduct raises serious concerns for consumers. There are secondary impacts as well, such as on safety of other drivers and on the public, and loss of confidence in the industry. This past conduct provides reasonable grounds for me to find that she will not act with honesty or integrity or in accordance with the law.
31I must assess whether her attempted mitigation of this harm makes it reasonable to conclude she “could at some point” abide by the law and with integrity and honesty. The appellant submitted that she would abide by conditions. Ms. Lewal provided few signs of remorse during the hearing. Regarding Mr. Patso, she acknowledged that there was excessive time in making amends. She acknowledged that her paperwork was incorrect and false on occasion. She apologized specifically for anything she might have said at the time and apologized to OMVIC for having caused complaints to be issued.
32Despite these statements, the harm that she caused due to her actions are very serious and harmful. Despite this, members of the community were left at a loss and the reputation of the industry was lowered. The pattern of conduct she demonstrated was consistent and negatively harmed the consumers who testified, some of which were vulnerable types of people. The purchase of a vehicle is one of the largest made and an important decision for consumers in Ontario. Safety of vehicle is not an optional element to disclose and is heavily regulated for registrants to ensure integrity of the system. I do not find that conditions would assist in the circumstances as actions taken to resolve issues were not taken seriously at the time, meaning that promises for future actions of mitigation fall short of justifying conditions instead of revocation. The level of supervision required to assist Ms. Lewal and Fine Autos was not demonstrated to be available at the hearing. I find that her history of lacking integrity and honesty and not abiding by the law cannot be mitigated through conditions.
CONCLUSION
33I direct the Registrar to carry out its Proposal to Revoke the Registrations of the Appellants pursuant to S. 9(5) of the Act.
LICENCE APPEAL TRIBUNAL
Matthew Letourneau, Member
Released: February 8, 2022
Footnotes
- Ontario (Alcohol and Gaming Commission of Ontario) v. 751809 Ontario Inc. (Famous Flesh Gordon’s), 2013 ONCA 157 at para 18.