Licence Appeal Tribunal
Appeal from a Notice of Proposal by the Registrar, Motor Vehicle Dealers Act, 2002, S.O. 2002, c. 30, Sched. B. – to Refuse and Revoke Registrations
Between:
Clifford Ernest Pilon, Easywheels.ca Inc., Main Street Auto Importers Ltd. o/a Gold Fleet Subaru & Main Street Auto Importers Ltd. o/a Easywheels.ca
Appellants
and
Registrar, Motor Vehicle Dealers Act, 2002
Respondent
MOTION DECISION
ADJUDICATOR: Raymond Ramdayal, Member
APPEARANCES:
For the Appellants: Justin Jakubiak, Counsel
For the Respondent: Jillian Siskind, Counsel
Held by videoconference: February 28, 2023
OVERVIEW
1By Order and Decision dated January 16, 2023 (the “Order”), the Licence Appeal Tribunal (“Tribunal”) directed the Registrar, Motor Vehicle Dealer’s Act, 2022 (the “respondent” or “Registrar”) to carry out its Notice of Proposal (“NOP”) to refuse the registration of Easywheels.ca Inc. as a motor vehicle dealer; to revoke the registrations of Main Street Auto Importers Ltd. o/a Gold Fleet Subaru and Main Street Auto Importers Ltd. o/a Easywheels.ca (“Easywheels.ca”) as motor vehicle dealers; and to revoke the registration of Clifford Ernest Pilon as a motor vehicle salesperson under the Motor Vehicle Dealers Act, 2002, S.O. 2002, c. 30, Sched. B (the “Act”).
2Clifford Ernest Pilon, Easywheels.ca Inc., Main Street Auto Importers Ltd. o/a Gold Fleet Subaru & Main Street Auto Importers Ltd. o/a Easywheels.ca (the “appellants”) are seeking a stay of the Order pending determination of an appeal filed with the Ontario Divisional Court. Initially, their motion was also seeking that the stay be granted pending the outcome of their request for reconsideration from the Tribunal. However, the reconsideration was dismissed by the Tribunal one day prior to the commencement of this hearing. As such, their reason for requesting the stay now lies solely on the pending appeal which will go before the Divisional Court later this year.
3In their Reconsideration Decision, the Tribunal found that the appellants did not demonstrate that the Tribunal would have reached a different result had errors alleged by the appellants not been made. In addition, the Tribunal found that the appellants did not establish the grounds for reconsideration as set out in Rule 18.2 of the Licence Appeal Tribunal, Animal Care Review Board, and Fire Safety Commission Common Rules of Practice and Procedure, Version 1 (October 2, 2017).
ISSUE
4The issue to be decided is whether the Order should be stayed until the disposition of the appeal by the Divisional Court.
5In order to determine whether a stay should be granted, I must consider:
a. Whether the appellants demonstrate a serious question to be tried;
b. whether the appellants demonstrate that irreparable harm will result if the relief is not granted; and
c. the balance of inconvenience to the parties. A consideration of the public interest must be taken into account in making this assessment.
RESULT
6For the reasons set out below, the appellants’ request for a stay of the Order pending the appeal to the Divisional Court is denied.
ANALYSIS
7Pursuant to s. 9(9) of the Act, an order made by the Tribunal after a hearing takes effect immediately, but the Tribunal may grant a stay until the disposition of an appeal to the Divisional Court under s. 11 of the Licence Appeal Tribunal Act, 1999, S.O. 1999, c. 12, Sched. G (“LAT Act”).
8The test for granting a stay in these circumstances is set out in RJR-MacDonald Inc. v. Canada (Attorney General), 1994 CanLII 117 (SCC), as follows:
a. Whether the appellants demonstrate a serious question to be tried;
b. whether the appellants demonstrate that irreparable harm will result if the relief is not granted; and
c. the balance of inconvenience to the parties. A consideration of the public interest must be taken into account in making this assessment.
Is there a serious issue to be tried?
9The threshold to meet this aspect of the test is a low one. The appellants need not establish that the appeal will likely be successful, only that it has some chance of success. The appeal must at least be arguable and raise a serious issue to be tried. It must not be frivolous or vexatious.
10In their Notice of Motion dated January 16, 2023, the appellants state that there is a serious issue to be tried as they believe there may be mistakes of fact which were integral in the Tribunal’s decision to direct the Registrar to carry out the NOP, which is now under appeal to the Divisional Court.
11The appellants allege in their Notice of Appeal that the Tribunal made various errors including:
A significant factual error, with related sub-errors, which appear to have been heavily relied upon by the Tribunal in coming to the decision to direct the Registrar to carry out the NOP.
The factual finding that the Registrar made an order or otherwise directed that Belinda Brown was prohibited from working for any dealership owned by Mr. Pilon.
The conclusion in multiple locations throughout the decision that Mr. Pilon “flouted this prohibition”, acted in “defiance” of it and would not “adhere to the law when non-compliance could result in expedience”.
12It is the respondent’s position that the law has been properly applied by the Tribunal in its previous decision by taking into account the fact that the Registrar revoked the registrations in part because Mr. Pilon made false statements in ten separate annual applications for the renewal of his and the corporate appellants’ registration. Therefore, the respondent believes that this is not a serious issue and that the appeal is frivolous and is not arguable.
13It is not my role to determine the likelihood that the appeal to the Divisional Court will succeed or fail, only to determine whether the grounds for appeal are not frivolous, vexatious, or doomed to fail. I find that they are not and that there are serious issues to be determined on the appeal.
Is there the risk of irreparable harm if relief is not granted?
14It is the appellants’ position that if the stay is not granted, the appellants will be forced out of business and six employees will lose their jobs. The appellants also allege they will lose their ability to sell inventory in the normal course. They contend there will also be irreparable reputational harm and damage to customer relations.
15The respondent does not believe that irreparable harm will be suffered and pointed out that Easywheels.ca Inc. has never been registered under the Act and, if it had sales, then those sales were made illegally. During the motion hearing, one of the appellants, Mr. Pilon, spoke about selling Easywheels.ca (i.e., Main Street Auto Importers, which had its registration revoked) to one of his employees, which would mitigate any harm by allowing the corporation to carry on undisrupted.
16I find that the risk for irreparable harm is low if a stay of the Order is not granted. It is also difficult to quantify the reputational harm to the company. I also do not expect that the vast majority of the public will have any knowledge of the appellants’ misconduct. Considering the Registrar’s position, Mr. Pilon has no firm plans to sell Easywheels.ca.; however, I recognize that several avenues of mitigation exist if the business is sold: a prospective new owner may consider changing the name or making clear that the business is under new ownership to distance itself from any tainted reputation. If the new owner is an existing registered dealer, it would be able to incorporate Easywheels.ca’s assets and staff into its own business and apply to have Easywheels.ca’s registered salespersons transferred to it. If they are not yet registered, the new owner can seek registration.
17At the motion hearing, Mr. Pilon advised that Mr. Johnson Collins is currently in charge of Easywheels.ca. During cross examination, the Registrar confirmed that she has no concerns with Mr. Collins; however, the Registrar’s contention is that Mr. Pilon wishes to continue to play a role at Easywheels.ca.
18I agree with the respondent’s suggestion that once Mr. Pilon is removed from Easywheels.ca, it is not likely that Easywheels.ca or its successor and employees would continue to suffer the reputational harm alleged by the appellants.
19However, I accept that, if a stay is not granted and the appeal is successful, the appellants will likely suffer some irreparable harm in the sense that they will experience financial loss that will not be recoverable due to the loss of income while the registrations remain under revocation pending appeal and a potential reduction of income associated with loss of clients and referrals while the registrations remain under revocation.
The Balance of Convenience – What is in the public interest?
20This criterion involves a determination of which of the two parties will suffer the greater harm from the granting or refusal of the stay pending the appeal. In the case of the Registrar, its interest is in protecting the public by ensuring that those who offer their motor vehicle sales services to the public do so while properly registered and in accordance with the law and with integrity and honesty.
21This branch of the test therefore involves an assessment of the appropriate balance between the appellants’ private interests and the Registrar’s interest in ensuring that the public is protected.
22With respect to the harm suffered by the appellants if the stay is denied, as described above I conclude that the appellants will likely suffer some unrecoverable financial loss.
23The appellants’ loss must be balanced against the potential harm to the public if a stay is granted. In assessing that potential harm, I proceed on the assumption that the findings of the Tribunal are correct. Without recounting the entirety of the Tribunal decision, it found that the appellants:
demonstrated a pattern of dishonesty by providing false information on ten application renewal forms;
demonstrated past conduct which affords reasonable grounds for belief that the appellants will not carry on business in accordance with the law and with honesty and integrity; and,
had a laissez-faire approach towards the necessary education of employees and compliance with the Registrar raises serious concerns that no oversight or conditions could be effective in protecting the public.
24I cannot ignore the concerning pattern of intentional falsification of information and believe that an unsuspecting and uninformed public should be protected from this potential harm given Mr. Pilon’s past conduct. I am satisfied that these public interests outweigh the appellants’ stated interests in a stay of the Order.
25Mr. Pilon has been registered as a salesperson under the Act since 1983. Although he has been registered for a long time without incident, the Tribunal found that he omitted important information on renewal applications. This is concerning. So too was other testimony I received regarding an employee with whom he was in a personal relationship. This individual, Belinda Brown, was accused of forging signatures in the course of her employment. This involved falsified signatures on 38 bills of sale while she was a motor vehicle salesperson employed by Mr. Pilon with Gold Fleet Subaru.
26This conduct goes contrary to protecting the public’s interest and I am concerned that granting a stay would place the public at undue risk. This risk is very easily mitigated by allowing the appeal to play itself out and allow the Divisional Court to determine if the Tribunal’s decision should be overturned.
27I have not heard anything substantial that would suggest an imminent need for the appellants to be granted a stay from the effect of the Tribunal’s order in the interim. Mr. Pilon testified that that he would not participate in the daily operation of the business or selling vehicles. He testified that someone else would be in charge of Easywheels.ca. His desire is to remain at arm’s length as he plans to be the financier for the new owner who will take over. This suggests to me that he would still be able to exert a certain degree of influence over management.
28I received testimony from the appellants that Gold Fleet Subaru is not the subject of the appeal or this stay motion. Mr. Pilon sold Gold Fleet Subaru in early January 2023. As such, there is no impact of this decision on this dealership. The appellants request that the order revoking Easywheels.ca’s dealer registration be stayed pending the appeal so that it can continue to operate.
29I do not accept the appellants’ submission that they will not be able to keep the business open until the appeal can be heard by the Divisional Court later this year, making the appeal process moot.
30At the motion hearing, it was evident to me that, with the recent sale of Gold Fleet Subaru for approximately 5.5 million dollars, the appellants would likely be able to cover the approximate cost of $7,500 per month to maintain Easywheels.ca until a decision can be made by the Divisional Court.
31I also heard testimony from Mr. Pilon expressing concern that six Easywheels.ca employees, who rely on their income to provide for their families, will be laid off in the event a stay is not granted. He noted that one of those employees is a single mother of four children. While I am sympathetic to the potential consequences for the employees, I find that they are outweighed by the public interest in protecting consumers. I also did not receive any evidence directly from the employees which lessens the weight that I attribute to this factor.
32I have also taken into consideration that Easywheels.ca has approximately 55 cars in its inventory and, without a dealer licence, will be forced to sell the inventory through a wholesale auction. It is anticipated that the appellants will be able to recoup their costs although a loss may be incurred. Once again, I weigh that loss against the potential exposure to public safety if I grant the stay.
33I have taken into consideration that Mr. Pilon has not been involved in other disciplinary matters with the OMVIC Discipline Committee or has not come to the attention of the Tribunal in prior proceedings. However, the Tribunal’s findings about his lack of honesty and integrity do not provide me with any assurance that the balance of convenience should weigh in the appellants’ favour. Again, the Tribunal was satisfied that the appellants committed misconduct that warranted revocation and refusal of their licences.
34While Mr. Pilon proactively terminated Ms. Brown after the forgeries came to light and he notified OMVIC of his action, the Tribunal also found that Mr. Pilon wished to re-engage Ms. Brown as a salesperson after a few months. According to the appellants, this is because her replacement had not worked out and she knew the business well. As a result, Ms. Brown contacted OMVIC to seek to have her licence reinstated.
35While there was nothing to prohibit Mr. Pilon from rehiring Ms. Brown, this decision gives me pause and I believe there have not been any substantial changes since the Tribunal’s decision to direct the Registrar to carry out the NOP. Therefore, there is nothing to suggest that risk to the public has diminished. There are no significant mitigating factors to address the concerns about the appellants, including Mr. Pilon, not carrying on business in accordance with law.
36Indeed, this point convinces me to weigh the balance of convenience against the appellants. It is Mr. Pilon’s desire to maintain a crucial role in Easywheels.ca, particularly as a financier in support of Mr. Collins but, as I consider it, not limited to that role. He states that part of his motivation to remain in charge is in the event the arrangement does not work out with Mr. Collins, he would have to step in for a short period of time to allow the business to continue. Mr. Pilon also provided an example of having a contingency in case Mr. Collins fell ill. He states that it is not his intention to participate on a long-term basis. I am not convinced that this is the only motivation for him retaining his licence while awaiting the appeal with Divisional Court. There are other mechanisms that can be used as contingencies which do not require Mr. Pilon to retain his registration. As I stated earlier, I am not persuaded that the circumstances at Easywheels.ca have changed from those that led to the Tribunal’s revocation decision.
37I find that the risk to the public outweighs the harm the appellants will experience if the stay is refused.
DECISION
38I have taken into consideration the appellants’ request for a stay the Tribunal’s order until the matter is heard and decided upon in Divisional Court. I did not hear anything compelling which would persuade me to do so.
39Moreover, I find that while there is a serious question to be tried, the appellants have not demonstrated that significant irreparable harm would result if the relief is not granted. In addition, I find that the balance of convenience favours a refusal of the request for a stay.
I ORDER AS FOLLOWS:
40The appellants’ request for a stay of the Tribunal’s decision pending the appeal before the Divisional Court is denied.
LICENCE APPEAL TRIBUNAL
Raymond Ramdayal, Member
Released: April 05, 2023