Shaun Jalili and Platinum Cars Inc. v. Registrar, Motor Vehicle Dealers Act, 2002, 2024 CanLII 20667

Tribunals Ontario

Licence Appeal Tribunal

Licence Tribunal File Number: 14328/MVDA

In the matter of an appeal from a Notice of Proposal to Revoke registrations under the Motor Vehicle Dealers Act, 2002

Between:

Shaun Jalili and Platinum Cars Inc. Appellants

-and-

Registrar, Motor Vehicle Dealers Act, 2002 Respondent

DECISION AND ORDER ON MOTION TO STAY PENDING APPEAL

ADJUDICATOR: Avril A. Farlam, Vice Chair

APPEARANCES:

For the Appellants: Symon Zucker and Laney Paddock, Counsel For the Respondent: Jillian Siskind and Jenna Little, Counsel

HEARD: February 27, 2024

ORDER

OVERVIEW

1Shaun Jalili and Platinum Cars Inc. ("appellants") appealed a Notice of Proposal dated September 21, 2022 made by the Registrar, Motor Vehicle Dealers Act, 2002 (“respondent”) proposing to revoke the registration of Shaun Jalili (“Mr. Jalili”) as a motor vehicle salesperson and the registration of Platinum Cars Inc. (“Platinum”) as a motor vehicle dealer under the Motor Vehicle Dealers Act, 2002, S.O. 2002, c. 30 Sched. B (the “Act”).

2Following an 11-day hearing, the Tribunal released its February 16, 2024 decision which directed the Registrar to carry out its proposal to revoke the registration of Mr. Jalili as motor vehicle salesperson and the registration of Platinum as a motor vehicle dealer (the “Decision”).

3On February 20, 2024, the appellants appealed the Decision to the Ontario Superior Court of Justice, Divisional Court (the “Court”), under s. 11 of the Licence Appeal Tribunal Act, 1999, S.O. 1999, c. 12, Sch. G, (the “LAT Act”) and brought this motion to the Tribunal for a stay of the Decision pending the outcome of their appeal.

4The Notice of Appeal sets out some 19 grounds of appeal.

5The appellants filed on this motion the affidavit of Shaun Jalili sworn February 20, 2024, submitted various case law and made oral submissions at the hearing.

6The respondent filed responding motion materials being the affidavit of Maureen Harquail affirmed February 26, 2024, submitted various case law and made oral submissions at the hearing.

7Neither of the affiants was cross-examined on their affidavits.

PRELIMINARY – APPELLANTS OBJECTION TO RESPONDENT’S MATERIAL

8At the beginning of the hearing the appellants raised an objection to the filing of the respondent’s motion material.

9This objection was later waived by the appellants, making a ruling unnecessary.

ISSUE

10This issue to be decided on this motion is whether the Decision should be stayed until the outcome of the appellants’ appeal to the Court.

RESULT

11For the reasons set out below, I dismiss the appellant’s motion.

ANALYSIS

12Section 9(9) of the Act provides that if a registrant appeals a Decision under s. 11 of the LAT Act, the Decision takes effect immediately, but the Tribunal may grant a stay until the disposition of the appeal.

13Both parties agree that the applicable test on this motion for a stay is set out by the Supreme Court of Canada in RJR-MacDonald v. Canada (Attorney General), 1994 CanLII 117 (SCC), [1994] 1 S.C.R. 311 (“RJR”). In summary, the party seeking the stay must prove on a balance of probabilities that:

a. The appeal raises a serious issue;

b. If the stay is not granted, the party will suffer irreparable harm; and

c. The balance of convenience favours granting the stay.

14The Supreme Court of Canada has made it clear that all three factors are to be considered and the significance of one factor in a particular case may override the significance of another factor. Considering all factors, the question is whether it is in the interests of justice to grant a stay.

15I will consider these factors below in light of the evidence, submissions and after taking into consideration case law submitted by both parties. The positions of the parties differ completely.

16The appellants submit that they meet all three branches of the test.

17The respondent submits that the appellant does not meet any of the three branches of the test.

18I conclude that the justice of the case requires that the appellants’ request for a stay of the Decision pending the outcome of their appeal to the Court be denied for the following reasons.

There is a Serious Issue to be Tried

19I am of the view that there are serious issues to be tried. The bar on this branch of the test is low. The appellants need only establish that there is some chance of success and that the appeal is not frivolous or vexatious.

20Although the respondent submits that there is little chance of success based on the grounds of appeal put forward by the appellants, it is not for me to determine whether the appeal to the Court is likely to succeed or not. As the Supreme Court of Canada has observed, prolonged examination of the merits on a stay motion is generally not necessary or desirable. Having reviewed the grounds for appeal, I find that they are not frivolous or vexatious or doomed to fail. As a result, I conclude that that there are serious issues to be determined by the Court on the appeal.

21This branch of the test has been met by the appellants.

No Irreparable Harm

22I am of the view that the appellants have not established that there is significant risk of their experiencing irreparable harm if a stay is not granted.

Appellants’ Evidence

23Mr. Jalili summarizes the appellants’ position in his affidavit as “…I will lose my business if I am forced to shut down while the appeal is pending” and describes his concerns as follows.

Staff

24In his affidavit, Mr. Jalili swears that Platinum would lose approximately 40 full-time, valued, employees who rely on their Platinum employment to support themselves. He states that the “sudden” loss of employment would cause hardship to these individuals and Platinum would suffer from loss of staff and would have to re-employ and retrain new personnel in the event the appeal is successful.

Financial Obligations of Platinum/Mr. Jalili

25Mr. Jalili swears that Platinum will be unable to meet significant financial obligations, and would default on its $30 million dollar bank operating facility with monthly interest of some $180,000.00 if it is not permitted to operate pending appeal. In addition, Platinum would be unable to meet its other monthly expenses of $330,000.00 comprised of mortgage payments for the sales premises, lease payments for storage premises, maintenance of facilities, payroll and advertising contracts and would be forced to close its doors making Platinum unable to recover from being unable to pay its monthly expenses. Platinum would be unable to reopen the business if its appeal is successful, in the event that a stay is not granted.

Mr. Jalili

26Mr. Jalili swears that the revocation of his registration under the Act will result in the loss of his means to earn a livelihood, given that he has been a motor vehicle salesperson for the past 20 years, has dedicated his professional life to becoming successful in the dealership industry and lacks career experience or professional training necessary in any other industry to continue earning at his current level. Mr. Jalili swears the “sudden” loss of income would result in him being unable to pay his personal living expenses and those of other family members he supports.

Respondent’s Evidence

27The Registrar under the Act, Maureen Harquail, swore an affidavit. Ms. Harquail swears that the Notice of Proposal was issued September 14, 2022, and was followed by a Notice of Further and Other Particulars dated June 22, 2023 after further information came to her attention relating to the fitness for registration of both appellants. Specifically, Mr. Jalili traded in motor vehicles of behalf of Platinum at a time when he had not yet completed a required certification course, thereby breaching a condition attached to his registration with his consent by a 2021 Consent Order of the Tribunal. Platinum also breached conditions attached to its registration by a Tribunal Consent Order by failing to designate a person responsible for dealing with customer complaints, resulting in customers who had complaints about Platinum’s trades and conduct left to negotiate with individual salesperson, leading to inconsistent and/or unsatisfactory responses to their concerns.

28Ms. Harquail swears that the Tribunal’s 2021 Consent Order was made because the appelllants agreed to have several conditions placed on their registrations under the Act in order to resolve a Notice of Proposal issued by the respondent in 2020. After the conditions were agreed to, the respondent discovered on an inspection that the appellants failed to comply with a number of these conditions and further there had been two consumer complaints. The Decision confirmed that several conditions of registration were not complied with Mr. Jalili personally and by Platinum.

29Ms. Harquail swears that the appellants have not taken steps to mitigate potential alleged harm caused by revocation at any time, including by complying with the conditions prior to the hearing or contingency planning for the event of a revocation. The affidavit of Mr. Jalili appears to confirm this as well.

30Ms. Harquail swears that any alleged irreparable harm to the appellants is the direct result of their continued and ungovernable actions, which could have been mitigated or even avoided completely, had the appellants simply complied with the conditions of their registration in the first place. Since the issuance of the Notice of Proposal in September, 2022, there have been 23 additional consumer complaints filed against Platinum, which indicates to the Registrar that even the prospect of losing their registrations did not cause the appellants to change the way they conduct their business. Further, correspondence sent to the Registrar February 26, 2024 confirms that Platinum has continued to advertise the sale of vehicles to consumers after the revocation became effective, an act of trade which requires registration. To give special treatment to these appellants which are not willing to comply with the laws in place for all registrants based on financial impacts caused by their failure and refusal to comply with the law is contrary to the purposes and intent of the statutory scheme. The consequences of their behaviour was foreseeable and avoidable.

Analysis

31My reasons for coming to the conclusion that the appellants have not established that there is significant risk of irreparable harm if a stay is not granted are as follows.

32Irreparable harm is the sort of harm that either cannot be quantified in monetary terms or which cannot be cured, usually because one party cannot collect damages from the other. It is the nature of the harm that is to be considered, not its magnitude: RJR, at p. 341. Evidence of irreparable harm must be clear, not speculative. Financial loss may be irreparable harm, but it is not determinative. In the context of a regulated industry, in particular, financial loss will inevitably result from revocation of a licence, but in itself does not establish irreparable harm, since otherwise the threshold would always be met when a licence is revoked.

33Any potential financial harm to Platinum regarding staff is not irreparable in that it can be quantified in monetary terms and cured. Staff lost by Platinum can be replaced if not re-hired, and retrained as necessary in the event that the appellants are successful in their appeal to the Court. To the extent that Platinum relies on alleged irreparable harm to the staff members and their families, it is the appellants themselves who must suffer irreparable harm, not third parties.

34Any potential financial harm to Platinum as a result of being unable to meet its financial obligations, including its $30 million dollar bank operating facility with monthly interest of some $180,000.00, is also not irreparable in that it can also be quantified in monetary terms. If during the appeal period Platinum is unable to meet its other monthly expenses of $330,000.00 comprised of mortgage payments for the sales premises, lease payments for storage premises, maintenance of facilities, payroll and advertising contracts and is forced to close this can be quantified in monetary terms and cured. Although Mr. Jalili states that Platinum would be unable to reopen the business if its appeal is successful in the event that a stay is not granted, he put forward no evidence other than his own opinion on this point which I do not accept as it lacks specificity and is without corroboration. There is no evidence before me as to what assets, if any, secures Platinum’s debt. Mr. Jalili swears that part of the monthly expenses is for mortgage payments for the sales premises which tends to indicate that at least part of Platinum’s business is not in the trade of motor vehicles but as a property owner. No specifics of these financial arrangements are put forward by Mr. Jalili in his affidavit.

35Any potential financial harm to Mr. Jalili is also not irreparable in that it can also be quantified in monetary terms. Even if Mr. Jalili were to be unable to earn income at his current level in another occupation, this again is not irreparable in that it can be quantified in monetary terms and cured. If he is successful on his appeal, he may resume his chosen occupation.

36The risk of loss from financial obligations that Mr. Jalili and Platinum have exposed themselves to in the face of issues with their regulator dating back to 2020 is a consequence of their choices and how Mr. Jalili has conducted himself as a motor vehicle salesperson and Platinum as a motor vehicle dealer.

37Although there is no evidence before me that Mr. Jalili, either personally or on behalf of Platinum, has considered any alternate personal or business plan to mitigate potential alleged harm caused by loss of the appellants’ registrations at any time since issues arose with the regulator in 2020, before the Tribunal hearing, during the six months course of the hearing, during the two months that the Decision was reserved, or between the release of the Decision and this stay motion, it is still open to the appellants to do so now. The adverse effects Mr. Jalili anticipates and describes by Mr. Jalili in his affidavit are not irreparable.

38In the event that a stay is not granted, and the appellants are successful in their appeal to the Court, I recognize however that there is a likelihood that the appellants will suffer some financial loss, but the appellants have not demonstrated that irreparable harm would result if a stay is not granted.

39This branch of the test has not been met by the appellants.

The Balance of Convenience Favours a Denial of the Stay

40The final element of the RJR test requires me to balance the interests of the appellants against the public interest. The public interest includes consumer protection, as well as public confidence in the administration of justice and in confidence in the regulatory process.

41I am of the view that the balance of convenience favours a denial of the stay.

42Mr. Jalili swears that the balance of convenience favours granting a stay because, since the respondent issued its Notice of Proposal in 2022, Platinum has continued to be registered and has sold some 1,343 cars.

43Ms. Harquail swears that any commercial and/or financial harm that may befall the appellants because of their own actions is outweighed by the potential harm to consumers from allowing registrants who do not act in accordance with the law and with honesty and integrity to remain licensed. The latest Notice of Proposal resulted from an extensive list of profoundly serious public welfare concerns. The overarching mandate of the Registrar is to protect the public from the type of harm that the appellants have been found to have caused.

44Ms. Harquail swears that if a stay is granted, the Registrar is concerned that Mr. Jalili will continue operating his business in the same way that he has in the past, as he will remain in control of Platinum. She states that it is clear from the issues that led the Registrar to issue the latest Notice of Proposal and from the Decision that Mr. Jaili lacks the honesty and integrity to disclose and deal appropriately with purchasers of vehicles, and to abide by conditions of registration agreed to by the appellants. Further, she states that Mr. Jalili continues to fail to take responsibility for his and Platinum’s actions, and shows a reckless and ongoing disregard for the importance of consumer protection and acting with honesty and integrity. Both the Registrar and the Tribunal have determined that the appellants do not meet the criteria for registration contained in s. 6 of the Act, the purpose of which is to protect consumers. The Registrar believes that there will be a significant risk to the public is a stay is granted. The Registrar states she cannot monitor the appellants’ day-to-day operations closely enough to properly protect the public interest, and the continued operation of the appellants as registrants would be a risk to the consumer public.

45My reasons for coming to the conclusion that the balance of convenience favours a denial of the stay are as follows.

46While I have recognized a likelihood that the appellants will suffer some unrecoverable financial loss if a stay is not granted, I have found that the appellants have not demonstrated irreparable harm. However, this final branch of the test requires that I weigh the public interest in immediate compliance with the Decision, given the consumer protection purpose of the Act, against the appellants’ private interest.

47Given the serious findings in the Decision regarding the appellants’ conduct, the appellants’ lack of co-operation with the Registrar, and their lack of willingness to abide by conditions on their registrations, I find that the Registrar’s interest in protecting the public outweighs the appellants’ private interests. The findings in the Decision engage the honesty and integrity of the appellants. In the Decision, the Tribunal declined to grant registration with conditions, on the basis that the appellants had demonstrated they could not be relied on to comply with conditions, and that conditions would not be appropriate to adequately protect the public. The fact that the appellants appear to be continuing in business after the release of the Decision and before the decision on this stay motion as set out in the affidavit of Ms. Harquail seems to offer further support for the conclusion that the appellants have no compunction about preferring their own business interests over protection of the public interest as set out in the Act. Advertising of vehicles appears to continue. Complaints continue.

48It is clear from Ms. Harquail’s affidavit that the appellants are either unwilling or unable to comply with the requirements in the Act and unwilling to do business as required in this regulated industry. This makes it impossible for the Registrar to enforce the requirements of the Act and thereby puts the consuming public at risk.

49The appellants submit that I should follow the cases they have cited and particularly Premium Cars Wholesale Limited, Hussein Shahnematollah-Yazde, Daniel Amirjani v. Registrar, Motor Vehicle Dealers Act, 2002, 2020 ONLAT MVDA 11221 (ONLAT). I have considered all the case law cited by both parties and particularly this decision. It is not binding on me, is specific to its facts, and I decline to follow it.

50This branch of the test has not been met by the appellants. The balance of convenience does not favour granting a stay. I find that it is in the interests of justice to deny a stay of the Decision pending its appeal.

Conditions if Stay Granted

51The appellants submitted that conditions could be imposed if a stay of the Decision was granted, and specifically suggested that the appeal to the Court be expedited, by requiring the appellants to expedite the ordering of transcripts.

52The respondent submitted that given that Mr. Jalili has been a long-time registrant under the Act, his aggressive and dishonest way of conducting business personally and through Platinum is not likely to change. Further, Mr. Jalili has failed to demonstrate that he has any understanding about his own role in the disfunction of Platinum and has failed to take the conditions on the appellants’ registrations seriously or to comply with them. Given these circumstances, conditions imposed by the Tribunal as part of an order staying the Decision would be ineffective to ensure that the appellants act with honesty and integrity.

53Here, having considered the evidence, submissions and case law cited by both parties, I find that there are no conditions which could adequately safeguard the public interest until the appeal is heard by the Court.

54The Decision has found that these appellants have breached conditions. Nothing in the evidence or submissions before me convinces me that granting a stay with further conditions is appropriate at this time.

CONCLUSION

55Considering all of the RJR factors above, the evidence, case law and submissions of both parties, I find that it is in the interests of justice to deny a stay. As a result, the appellants’ motion is dismissed.

ORDER

56For the reasons set out above, I dismiss the appellant’s motion for a stay.

LICENCE APPEAL TRIBUNAL

Avril A. Farlam, Vice Chair