Licence Appeal Tribunal File Number: 15173/MVDA
In the matter of an Appeal from a Notice of Proposal to Revoke Registration issued by the Registrar pursuant to the Motor Vehicle Dealers Act, 2002, c. 30, Sch. B
Between:
Stephen Fitzgerald Motors Ltd.
Appellant
and
Registrar, Motor Vehicle Dealers Act, 2002
Respondent
DECISION AND ORDER
ADJUDICATOR:
Rupinder Hans
APPEARANCES:
For the Appellant:
Stephen Fitzgerald, Representative
Jason Varrin, Representative
For the Respondent:
Zachary Kowalsky, Counsel
Held by videoconference:
January 12, 2024
OVERVEW
1Pursuant to a Notice of Proposal (“NOP”) dated August 9, 2023, the Registrar, Motor Vehicle Dealers Act, 2002 (the “Registrar”) proposed to revoke the registration of Steven Fitzgerald Motors Ltd. (the “appellant”) as a motor vehicle dealer under the Motor Vehicle Dealers Act, 2002, S.O. 2002, c. 20, Sched. B (the “Act”) and Regulations.
2The appellant has been registered as a dealer under the Act since in or around September 1997. At all material times, Mr. Stephen Fitzgerald (“Mr. Fitzgerald”) was the sole officer and the person in charge of the day-to-day operations of appellant.
3The NOP is based upon the ground that, as the Registrar alleges, the past conduct of Mr. Fitzgerald, by failing to comply with the obligation to advertise all-inclusive vehicle prices contrary to section 36(7) of Ontario Regulation 333/08, and sections 4, 6, and 9 of the Code of Ethics in Ontario Regulation 332/08, affords reasonable grounds for belief that the appellant will not carry on business in accordance with the law and with integrity and honesty.
ISSUES
4The issues to be decided in this hearing are:
i. Has the Registrar established that Mr. Fitzgerald’s past conduct, as the sole officer of the appellant, affords reasonable grounds for the belief that the appellant will not carry on business in accordance with law and with integrity and honesty which disentitles it to registration pursuant to section 6(1)(d)(iii) of the Act.
ii. If so, is revocation of the licence of the appellant as a motor vehicle dealer appropriate.
RESULT
5Having considered all the evidence, I find that the Registrar has not satisfied its burden and has not established that the past conduct of Mr. Fitzgerald affords reasonable grounds for the belief that the appellant will not carry on business as a motor vehicle dealer in accordance with law and with integrity and honesty.
6For the reasons that follow, I substitute the Tribunal’s opinion for that of the Registrar and set aside the NOP.
The Law
7Under s. 6(1)(d)(iii) of the Act, an applicant corporation is disentitled to registration as a motor vehicle dealer if the past conduct of its officers or directors or of an interested person in respect of the corporation affords reasonable grounds for belief that its business will not be carried on in accordance with the law and with integrity and honesty.
8Under s. 8(1) of the Act, the Registrar may revoke a registration if, in his or her opinion, the registrant is not entitled to registration under s. 6.
9Section 9(1)(a) of the Act provides that the Registrar must provide written notice of the proposed revocation and the appellant may request a hearing by the Tribunal pursuant to section 9(2).
10Section 9(5) of the Act provides that the Tribunal shall hold the hearing and following the hearing, may direct the Registrar to carry out the proposal or substitute its opinion for that of the Registrar and the Tribunal may attach conditions to its order.
11The onus is on the Registrar to establish the grounds alleged in the NOP.
12The Court of Appeal in Ontario (Alcohol and Gaming Commission of Ontario) v. 751809 Ontario Inc. (Famous Flesh Gordon’s), 2013 ONCA 157 at paras. 18-19, held that the standard of proof with respect to reasonable grounds for belief does not require the Registrar to go so far as to show that the past or present conduct makes it more likely than not that the appellant will not carry on business as required.
13According to the Supreme Court of Canada in Mugesera v. Canada (Minister of Citizenship and Immigration), 2005 SCC 40 at para.114, the reasonable grounds for belief must be more than mere suspicion and will be found to exist where there is an objective basis for the belief which is based on compelling and credible information. Further, as per CS v. Registrar, Real Estate and Business Brokers Act, 2002, 2019 ONSC 1652 (Div. Ct.) at para. 32, there must be a nexus between the appellant’s past conduct and its ability to conduct business as a motor vehicle dealer serving the interests of the public.
ANALYSIS
Issue i: Has the Registrar established the Mr. Fitzgerald’s past conduct, as the sole officer of the appellant, affords reasonable grounds for the belief that the appellant will not carry on business in accordance with law and with integrity and honesty?
14For the following reasons, I find the that past conduct of Mr. Fitzgerald does not afford reasonable grounds for belief that the appellant will not carry on business in accordance with law and with integrity and honesty. I find that the Registrar has not met its onus.
15The Registrar submits a failure to comply with the obligation to advertise all-inclusive vehicle prices (“all-in pricing”), as the advertised price for a vehicle was not all-inclusive, and thus, is not in compliance with section 36(7) of Ontario Regulation 333/08, and sections 4, 6, and 9 of the Code of Ethics in Ontario Regulation 332/08 regarding disclosure/marketing and accountability and professionalism.
16Section 36(7) of Ontario Regulation 333/08 of the Motor Vehicle Dealers Act, 2002 states:
“If an advertisement indicates the price of a motor vehicle, the price shall be set out in a clear, comprehensible, and prominent manner and shall be set out as the total of,
(a) The amount that a buyer would be required to pay for the vehicle; and
(b) subject to subsection (9) and (10), all other charges related to the trade in the vehicle, including, if any, charges for freight, charges for inspection before delivery of the vehicle, fees, levies, and taxes.”
17The Registrar argues that despite two prior disciplinary proceedings that dealt with the appellant’s failure to comply with the all-pricing regulation, the appellant continues to fail to comply with the all-in pricing regulation. The Registrar presented evidence of conduct which it submits affords reasonable grounds for belief that Mr. Fitzgerald’s past conduct affords reasonable grounds for belief that the appellant’s business will not be carried on in accordance with the law and with integrity and honesty, and therefore, warrants the disentitlement of the appellant to registration under the Act.
18The parties agree, and I find that, at all material times, Mr. Fitzgerald was the sole officer of the appellant as well as the person in charge of the day-to-day activities of the appellant. I note that Mr. Fitzgerald testified that he is the owner, operator and sole officer of the appellant.
19At the hearing, there was no objection to the Tribunal considering the facts of the two prior disciplinary proceedings that resulted in Discipline Order #1 and Discipline Order #2, which I will only review briefly.
Discipline Order #1
20As set forth in the NOP, on or about September 10, 2018, the Registrar issued a Notice of Complaint against the appellant and Mr. Fitzgerald for failing to comply with the all-in pricing regulation.
21On or about April 2, 2019, the Discipline Committee issued an Order pursuant to a negotiated resolution. A copy of the Discipline Decision and included Order is attached as Schedule A to the NOP. The appellant was ordered to pay a fine in the amount of $4,800. Mr. Fitzgerald was ordered to successfully complete the Automotive Certification Course no later than June 21, 2019. On or about October 23, 2019, Mr. Fitzgerald successfully completed the Course. The appellant was also ordered to ensure that all sales staff employed by the appellant reviewed the August 2017 Ontario Motor Vehicle Industry Council (“OMVIC”) advertising webinar. On or about March 22, 2019, the appellant provided confirmation that all staff had reviewed the webinar.
22I note that this was a negotiated resolution.
23The appellant did not offer any evidence to dispute the above facts, and I accept the above.
Discipline Order #2
26As set forth in the NOP, on or about August 25, 2021, the Registrar issued a 2nd Notice of Complaint against the appellant, Mr. Fitzgerald and a salesperson, Vern Potvin, for failing to comply with the all-in pricing regulation.
27The Registrar submitted a Synopsis which notes that, in July 2021, OMVIC staff attended the appellant’s location posing as consumers to shop for a 2017 Nissan Frontier advertised on the appellant’s website for $29,995. Upon discussing the pricing, the OMVIC staff noticed that there was an “installation and delivery” fee for $399 added to the advertised price. The appellant was subsequently served with a notice for discipline.
28On or about March 8, 2022, the Discipline Committee issued an Order pursuant to a negotiated resolution. A copy of the Decision and Reasons and included Order is attached as Schedule B to the NOP. The appellant was ordered to pay a fine in the amount of $5,000. Messrs. Fitzgerald and Potvin were each ordered to pay a fine in the amount of $500. The appellant was ordered to offer all current and future sales staff the opportunity to complete an Automotive Certification course.
29I note that this was again a negotiated resolution.
30The appellant did not offer any evidence to dispute the above facts, and I accept the above.
31The Registrar asserts that despite being disciplined twice in a five-year period the appellant continued to contravene the Act, and did so again with its more current non-compliance.
Alleged Current Non-Compliance
32The appellant disputes the particulars of the alleged more current non-compliance from May 2022, which I will discuss at length.
33Ms. Judi Hughes, Manager of Investigations with OMVIC, testified that she was conducting an inquiry into the all-in pricing advertisements placed by the appellant. She testified that, on May 2, 2022, she attended the appellant’s location posing as a customer. She testified that she had with her two advertisements for vehicles for sale but she was unable to locate either on the appellant’s lot so she decided to shop one of the many vehicles on the lot with window hangers listing prices. She chose a 2017 Honda Pilot (stock # 20-735) (the “Honda vehicle”) with an advertised sale price of $33,500 as stated on the window hanger. She took a picture of the window hanger. I note that the picture clearly shows the window hanger with the listed sale price of $33,500, plus H.S.T. and licensing, for the Honda vehicle. Ms. Hughes testified that she met Mr. Fitzpatrick and, after they viewed the Honda vehicle, they began to discuss pricing and payments.
34Ms. Hughes testified that she asked Mr. Fitzgerald whether there was anything else added to the advertised price of $33,500, other than H.S.T. She testified that Mr. Fitzgerald orally told her that there was also a $399 administration fee. She testified that he told her that the administration fee was a good deal as others were charging more. She asked if she was able to write down the numbers and he provided her with a blank piece of paper, and she wrote on it. She testified that she confirmed with him that the price for the Honda vehicle would be $33,500, plus a $399 administration fee, plus tax. She also made contemporaneous notes upon leaving the appellant’s location which state that Mr. Fitzgerald verbally told her that there was also a $399 administration fee.
35Ms. Hughes testified that it was her understanding that Mr. Fitzgerald stated that the $399 administration fee was added on top of the advertised price of $33,500, plus H.S.T. for the Honda vehicle.
36Mr. Fitzgerald disputes that he told Ms. Hughes that the $399 administration fee was added to the advertised price for the Honda vehicle. He testified that he does not remember meeting Ms. Hughes, but believes that she must have misunderstood him. He testified that there is indeed a $399 administration fee that the appellant applies, but that it is included in the advertised price. He believes that he told her that there was a $399 administration fee, but not that it was added to the advertised price. Mr. Fitzgerald testified that he is familiar with the past two disciplinary matters, and as such, he would not have stated that the $399 is in addition to the advertised price.
37The appellant submits that, in accordance with his testimony, Mr. Fitzgerald did not state that the $399 administration fee is added to the advertised price for the Honda vehicle. In further support of Mr. Fitzgerald’s explanation, the appellant submitted a used bill of sale, dated May 12, 2022 (the “May 12^th^ Bill of Sale”), for the Honda vehicle. The Honda vehicle was sold to a customer several days after Ms. Hughes’ visit. The May 12^th^ Bill of Sale is signed by the purchaser, D.M., and the salesperson is listed as Mr. Jason Varrin. The May 12^th^ Bill of Sale lists the selling price as $33,091, plus an administration fee of $399, totalling $33,490. I note that the advertised price for the Honda vehicle was $33,500, and the $399 administration fee is therefore clearly included in the advertised price, and not applied on top of it. There is an additional $300.00 that the purchaser paid for a brake controller, bringing the total to $33,790.00.
38Mr. Varrin, a sales manager with the appellant and the individual who signed the May 12^th^ Bill of Sale for the Honda vehicle, testified that the appellant does not charge the $399 administration fee on top of the advertised price. He testified that the administration fee is always retracted from the advertised sale price and not added to it. Based upon the May 12^th^ Bill of Sale and his understanding of the appellant’s practices, Mr. Varrin believes that the appellant has been in complete compliance.
39In further support of the appellant’s position that it was in compliance with the all-in pricing requirement, the appellant provided, and Mr. Varrin reviewed during his testimony, several bills of sale for sold vehicles around the time period of Ms. Hughes’ visit to the appellant. These include:
Date of used bill of sale
Selling Price
Admin fee
Subtotal
Advertised Price
April 6, 2022
$17,091
$399
$17,490
$17,500
April 23, 2022
$15,091
$399
$15,490
$16,500
May 3, 2022
$22,091
$399
$22,490
$22,500
May 5, 2022
$49,091
$399
$49,490
$49,500
May 9, 2022
$28,091
$399
$28,490
$28,500
May 9, 2022
$36,091
$399
$36,490
$36,500
June 6, 2022
$30,591
$399
$30,990 (not including the extended warranty of $3,199)
$31,000
40In my view, the evidence is that the administration fee of $399 is included in the advertised price in these bills of sale, and not added to it. I note that each subtotal, which includes the $399 administration fee, is less than the advertised price.
41I especially note that several of the bills of sale pre-date Ms. Hughes’ visit to the appellant on May 2, 2022, and prior to the appellant becoming aware of an investigation.
42I find that Mr. Fitzgerald is a credible witness and I find that his explanation is plausible. I accept Mr. Fitzgerald’s testimony that there must have been a misunderstanding and that he did not state that the administration fee was on top of the advertised price. My finding that Mr. Fitzgerald is a credible witness on this point is corroborated by my review of the used bills of sale submitted by the appellant. I find, on a balance of probabilities, that the appellant was including the $399 administration fee in the advertised price and was in compliance with the all-in pricing regulation.
43Several of the provided bills of sale that the appellant relies upon appear to have been prepared prior to the appellant learning that an OMVIC investigator had attended its premises. Those I find to be the most persuasive in demonstrating that the appellant was in compliance with the all-in pricing requirement and was not adding the $399 administration fee to the advertised sale price. I find these bills of sale lend considerable corroboration to the testimony of Mr. Fitzgerald. I further note that the May 12^th^ Bill of Sale for the Honda vehicle shows that the $399 administration fee was included in the advertised sale price, and not added on top of the advertised price.
44I am not persuaded by the Registrar’s submission that all the used bills of sale are from Mr. Varrin, and not Mr. Fitzgerald. Mr. Varrin testified that Mr. Fitzgerald checks the bills of sale at the end of each month. I accept Mr. Varrin’s evidence that his practice reflected in the bills of sale also reflects Mr. Fitzgerald’s practice, since Mr. Fitzgerald checks the bills of sale at the end of each month. In addition, the Registrar is seeking to revoke the licence of the appellant and I find the records of the appellant, including used bills of sale completed by Mr. Varrin, to be relevant to the matter and can be weighed for consideration.
45After considering the evidence, I find that the appellant’s explanation, and Mr. Fitzgerald’s evidence in general, with respect to the alleged current non-compliance to be credible. I accept Mr. Fitzgerald’s testimony.
46I must weight the entirety of the evidence presented with regards to Mr. Fitzgerald’s past conduct. There is no question that, as established in the two disciplinary proceedings that resulted in Discipline Order #1 and #2, there was past non-compliance with the all-in pricing regulation. However, when considering the more recent past conduct alleged by the Registrar, I cannot find that Mr. Fitzgerald’s past conduct is such that the appellant’s advertised price for the Honda vehicle was not all-inclusive and in contravention of the section 36(7) of Ontario Regulation 333/08 and sections 4, 6, and 9 of the Code of Ethics in Ontario Regulation 332/08.
47While I found Ms. Hughes’ testimony to be forthright, in that she was sincere in her belief as to the meaning of her conversation with Mr. Fitzgerald, I am persuaded that she was mistaken. I am particularly swayed by the used bills of sale for the time period relevant to her visit to the appellant. These bills of sale, including the bill of sale for the Honda vehicle, along with Mr. Fitzgerald’s and Mr. Varrin’s testimonies are compelling.
48After weighing the totality of the evidence, I find that the Registrar has not established that Mr. Fitzgerald’s past conduct affords reasonable grounds for belief that the appellant will not carry on business in accordance with the law and with integrity and honesty, thereby disentitling the appellant to registration pursuant to section 6(1)(d)(iii) of the Act.
49With regards to possible conditions, neither party proposed any conditions. I find that no conditions are warranted or necessary as I am satisfied that Mr. Fitzgerald and the appellant understand and comply with the law.
CONCLUSION
50I find that the Registrar has not established that the past conduct of Mr. Fitzgerald affords reasonable grounds for the belief that the appellant will not carry on business as a motor vehicle dealer in accordance with the law and with integrity and honesty.
ORDER
51Pursuant to s. 9(5) of the Act, the Tribunal substitutes its opinion for that of the Registrar and directs the Registrar not to carry out its proposal to revoke the registration of the appellant.
Released: February 20, 2024
___________________________
Rupinder Hans
Adjudicator