Licence Appeal Tribunal File Number: 16122/MVDA
In the matter of an appeal from a Notice of Proposal to Refuse Registration as a motor vehicle salesperson issued by the Registrar pursuant to the Motor Vehicle Dealers Act, 2002, S.O. 2002, c. 30, Sch. B.
DECISION AND ORDER
ADJUDICATOR:
Rupinder Hans
APPEARANCES:
For the Appellant:
Carson Frankum, Paralegal
For the Respondent:
Zackary Kowalsky, Counsel
Heard by videoconference:
January 28, 2025
OVERVIEW
1On July 12, 2024, the Registrar under the Motor Vehicle Dealers Act, 2002 (the “Registrar”) issued a Notice of Proposal to Refuse Registration (“NOP”) of Mr. Babar Chaudhry (the “appellant”) as a motor vehicle salesperson pursuant to subsection 6(1)(a)(ii) of the Motor Vehicle Dealers Act, 2002, S.O. 2002, c. 30, Sch. B. and Regulations (the “Act”). The Registrar alleges the appellant’s past conduct affords reasonable grounds for belief that he will not carry on business in accordance with law and with honesty and integrity.
2From November 12, 2008 until June 3, 2021, the appellant operating as Cars Dome was a registered motor vehicle dealer. On or about June 4, 2021, his registration was terminated following a Licence Appeal Tribunal (the “Tribunal”) decision, dated March 11, 2021 (the “2021 Decision”), that directed the Registrar to carry out its notice of proposal to revoke the appellant’s motor vehicle dealer registration under the Act. The Registrar relies upon, and asserts, the findings set forth in the 2021 Decision.
3There were two witnesses at the hearing, the appellant and Ms. Joan Murray, a Registration Officer at OMVIC.
ISSUES
4The issues to be decided in this hearing are:
a. Is there new or other evidence available, or is it clear that the appellant’s material circumstances have changed?
b. Has the Registrar established that the past conduct of the appellant affords reasonable grounds for belief that he will not carry on business in accordance with law and with integrity and honesty which disentitles him to registration pursuant to section 6(1)(a)(ii) of the Act.
RESULT
5I find the appellant has established that there is new or other evidence available and he may apply for registration.
6I find the Registrar has satisfied its burden to establish the past conduct of the appellant affords reasonable grounds for belief that he will not carry on business as a motor vehicle salesperson in accordance with law and with integrity and honesty. I find that the public interest can not be adequately protected with the imposition of conditions, and that refusal of the registration is appropriate. I direct the Registrar to carry out the NOP.
The Law
7Under s. 6(1)(a)(ii) of the Act, an applicant is disentitled to registration as a motor vehicle salesperson if the past conduct of the applicant or of an interested person in respect of the applicant affords reasonable grounds for belief that they will not carry on business in accordance with the law and with integrity and honesty.
8Under s. 8(1) of the Act, the Registrar may refuse to register an applicant if, in his or her opinion, the applicant 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 refusal 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 (“Flesh Gordon’s”) 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 his ability to conduct business as a motor vehicle salesperson serving the interests of the public.
ANALYSIS
A. I find the appellant has presented new or other evidence which allows him to apply for registration.
14For the reasons that follow, I find the appellant has presented new or other evidence which allows him to reapply for registration.
15According to s. 12 of the Act, an applicant whose license has been previously refused, revoked or refusal renewal may reapply for registration only if:
(a) the time prescribed to reapply has passed since the refusal, revocation or refusal to renew; and
(b) new or other evidence is available or it is clear that material circumstances have changed.
16The Registrar acknowledged that the appellant did wait until the prescribed time for reapplication had passed. There is no dispute the appellant has met the first part of the test.
17The Registrar is more concerned with the second part of the test whether new or other evidence is available or it is clear that material circumstances have changed.
18The appellant submits that, since the 2021 Decision, he has made some personal and professional changes in his life. These include the following:
a. On February 15, 2024, the appellant completed the Automotive Certification course offered by the Automotive Business School of Canada for the Ontario Motor Vehicle Industry Council (“OMVIC”). He presented a copy of his test results from Georgian College which reflected a passing grade of 87 percent.
b. After the 2021 Decision, pending appeal of the 2021 Decision before the Divisional Court, the appellant was permitted to act as a wholesale dealer for a seven month period, and during that time, he sold approximately 10 vehicles without issue.
c. The appellant obtained mentorship from Baljinder Badesha, an experienced salesperson and dealer principal at 1063155 Ontario Inc. o/a RSB Car Sales (“RSB”). He has practiced certain skills including completing mock bills of sale to sell inventory to fictional customers for Mr. Badesha’s review and guidance.
d. The appellant has continued to be employed as a settlement counselor/worker at an immigration services agency working with newcomers and assisting them in obtaining government services and benefits such as, health cards, applying for child benefits, and finding housing.
e. He also devoted his time to working as a fundraiser for various regional charities involved in assisting refugees, cancer patients, and food insecure families.
19I find that, at minimum, the evidence regarding the appellant’s completion of the Automotive Certification course offered by the Automotive Business School of Canada for OMVIC with an 87 percent grade, and his mentorship is new or other evidence that satisfies the second part of the test. I understand that completion of the certification course is a prerequisite for registration, nonetheless, he completed it after the 2021 Decision and it is new or other evidence.
20Having found that the appellant has presented new or other evidence, it is unnecessary to consider whether material circumstances have changed. I find the appellant is therefore eligible to reapply for registration under the Act.
B. I find that there are reasonable grounds for belief that the appellant will not carry on business in accordance with the law and with integrity and honesty
21For the following reasons, I find the past conduct of the appellant affords reasonable grounds for belief that he will not carry on business in accordance with law and with integrity and honesty.
22The Registrar bears the burden of proving that the past conduct of an appellant affords reasonable grounds for belief that the appellant will not carry on business in accordance with law and with integrity and honesty. The standard of proof is "reasonable grounds for belief", which as noted above is a lower standard of proof than proof on a “balance of probabilities”: see Famous Flesh Gordon's.
23In the Flesh Gordon’s case, the Court of Appeal for Ontario articulated that there must be reasonable grounds for belief that the person will, in future, carry on activity in a way that is contrary to the public interest and will not act in accordance with the law, with honesty and with integrity. It emphasized that any and all past or present conduct can and should be considered. In this case, all of the allegations against the appellant arise in the context of trading in vehicles, thus establishing the link between past conduct and his proposed registration as a motor vehicle salesperson.
24The Registrar submits the appellant’s past conduct which led to the 2021 Decision is significant, and that he has demonstrated repeated failures to comply with the Act as set forth in the 2021 Decision. I agree with this submission.
25The 2021 Decision states that the appellant repeatedly violated the Act with his failure to properly disclose vehicle accidents, loss declarations by insurer, and repair histories and costs to customers as required under s. 42 of the O. Reg. 333/08 made under the Act (the “Regulation”). The Tribunal found that the appellant failed to conduct his business in accordance with law and integrity and honesty in accordance with the Act.
26Specifically, the Tribunal noted that s. 42 contains an extensive list of required disclosure that a motor vehicle dealer is required to provide to potential purchasers, and all important information regarding a motor vehicle must be disclosed. Specifically, the Tribunal found the appellant breached the following:
a. s. 42.19 provides that, if the total costs of repairs to fix the damage caused to the motor vehicle by an incident exceed $3,000, then a statement to that effect and, if the total cost is known, then a statement of total costs.
b. s. 42.21 requires that, if a vehicle was declared by the insurer to be a total loss, regardless of whether the vehicle was classified as irreparable or as salvage, then a statement to that effect.
c. s. 42.25 requires disclosure regarding “[a]ny other fact about the motor vehicle that, if disclosed, could reasonably be expected to influence the decision of a reasonable purchaser or lessee to buy or lease the vehicle on the terms of the purchase or lease.”
27Further, s. 52(2)(d) of the Regulation provides that a vehicle dealer shall maintain a record including “if the registered motor vehicle dealer causes work to be done on the vehicle, including any repair or reconditioning, the full and accurate particulars of the work, the sources of any parts used for the work, the cost of the work and the name of the person doing the work”.
28The Tribunal noted that, sometime in March 2018, the appellant applied to become a member of the board of directors of OMVIC which triggered an automatic review of his history as a motor vehicle dealer. The review disclosed three vehicle trades having a number of alleged deficiencies, namely the failure to disclose information about the vehicles and failure to maintain repair records for the vehicles. The matter came before the discipline committee of OMVIC, and was settled without a hearing. The disciplinary committee decision noted that the appellant had breached section 7 and 9 of the Code of Ethics (O. Reg. 332/08), and imposed a $3,000 fine, the requirement that the appellant take the Automotive Certification Course and he comply with the Act.
29As set forth in the 2021 Decision, the disciplinary committee found that a 2008 Honda Civic was purchased by the appellant, on or about July 12, 2017, from Allstate Insurance Company and the body of the bill of sale contained the notation “Loss Type COLLISION”. The retail bill of sale from the appellant to the customer does not disclose the vehicle was declared a total loss by the insurer. Similarly, another 2008 Honda Civic was purchased by the appellant, on or about September 1, 2017, from Allstate Insurance Company and the wholesale bill of sale noted “Loss Type: COLLISON.” The retail bill of sale to the appellant’s customer, dated September 23, 2017, does not disclosure the statement that the vehicle was declared a total by the insurer. Finally, a third vehicle, a 2006 Honda CR-V, was declared a total loss by the insurer, and the retail bill of sale to the appellant’s customer, dated February 8, 2018 did not disclose the vehicle was declared a total loss by the insurer.
30Despite being found in breach and required to pay a fine and take the Automotive Certification Course, the appellant again failed to adhere to the Act. A subsequently inspection commenced in July 2019 and completed in September 2019, revealed alleged infractions related to 14 vehicle trades. These infractions, again, related to failures to disclose required information related to vehicle accidents and repair histories, and failure to maintain repair records. Consequently, the Registrar issued a notice of proposal which the appellant appealed to the Tribunal resulting in the 2021 Decision.
31The Tribunal found that the bill of sale for 9 of the 14 vehicles did not contain information that the vehicle had been declared a total loss. Specifically, a 2009 Honda Civic, a 2006 Dodge Caravan, a 2008 Nissan Rogue, a 2012 Nissan Altima, a 2006 Honda Pilot, a 2010 Toyota Corolla, a 2006 Honda CR-V, a 2010 BMW X5, and a 2010 Toyota Corolla. The Tribunal found that the appellant understood what was required of him and had an understanding of the term “total loss.”
32With regards to the 2010 Toyota Corolla, the retail bill of sale prepared by the appellant contained the notation “No accident”. Yet the Tribunal found that the appellant was fully aware that the vehicle had been in an accident and been declared a total loss by the insurer.
33The Tribunal further found that the appellant knew and understood his obligation to disclose accident repair costs on his retail bills of sale, yet he failed to do so on six occasions.
34The Tribunal further found that he repeatedly failed to maintain repair records for work done in accordance with s. 52(2)(d) of the Regulation despite repeated reminders from OMVIC inspectors, and that there is no possibility that he did not know or understand his obligation.
35I find that the past conduct of the appellant demonstrates a disregard for his obligations under the Act. I am not persuaded by the appellant’s submission and testimony that he had some issues with not understanding his disclosure obligations. I note that even if the appellant initially did not understand his obligations with regards to disclosure under s. 42 of the Regulation, I am persuaded that he certainly understood after the disciplinary committee decision found him in breach and required him to pay a $3,000 fine and take a course, and after reminders from OMVIC inspectors.
36In my view, there was no notable progress in his conduct after the disciplinary committee decision. I note that the subsequent 9 trades where he failed to disclose a total loss declaration by an insurer occurred after he had been disciplined for this exact conduct.
37I refer to the 2021 Decision which notes the appellant failed to meet obligations that he knew and understood. He knew the vehicles he was selling had been in an accident such that there would be damage, and he was under a positive obligation to obtain accurate information and disclose it to customers. To the extent that the appellant’s new evidence is that he has been learning about his obligations, the fact is that he has previously been found to have breached obligations of which he was aware.
38The appellant testified that he made mistakes in the past and he will not repeat them. He acknowledges that his record keeping was not complete, and he was not stating “total loss” as required by the Act.
39I considered all the personal and professional changes that the appellant has made since the 2021 Decision. His completion of the Automotive Certification course with a grade of 87 percent speaks to the efforts that he is making.
40The appellant has also secured mentorship with Mr. Badesha and proposes to work for his dealership. However, no evidence was presented from the mentor/prospective employer or the appellant to show the scope of the mentorship relationship and prospective employment. Mr. Badesha did not attend the hearing to testify on the specifics of the mentorship arrangement and prospective employment. I found the appellant’s testimony in this regard to be scarce. I cannot be sure of the scope of the mentorship arrangement and how much supervision and mentorship Mr. Badesha will provide.
41I find that the past conduct which led to the previous Tribunal decision was serious.
42After weighing the totality of the evidence, based upon the appellant’s conduct prior to the 2021 decision, I find that there are reasonable grounds for belief that he will not carry on business in accordance with the law and with integrity and honesty.
The Registrar’s refusal to register the appellant as a motor vehicle salesperson is appropriate.
43I have considered whether the public interest can be adequately protected through granting registration with conditions. In this case, I do not find that conditions are an appropriate alternative to refusal to register given the appellant’s poor past conduct.
44The appellant submits that his risk is manageable, he made a mistake, he does not have a criminal record, and he has re-educated himself. At minimum, he wants to be able to sell motor vehicles wholesale to dealers and not directly to consumers. He submits that, since the 2021 Decision, he has sold 10 vehicles as a wholesaler without incident. However, no documents or particulars were presented to the Tribunal or the Registrar with regards to the 10 vehicles.
45The appellant further submits that he is being mentored which will assist him in complying with the Act. He testified that his mentor has already provided him with opportunities to fill in mock paperwork, and he is intending to work at RSB under the supervision of his mentor.
46The Registrar did not propose any conditions and submits the appellant is not manageable as a registrant. The Registrar submits the appellant did not make mistakes or lack knowledge, and instead, the 2021 Decision establishes he deliberately attempted to deceive and does not have the honesty required. The Registrar submits there is no information or statement from the appellant’s mentor/proposed employer on how the appellant would be mentored, and how Mr. Badesha would ensure the appellant follows any conditions and the Act. Further, that terms and conditions were already attached to his registration under the Act, and he did not comply.
47Ms. Murray testified that the Automotive Certification Course the appellant has completed is a precondition to registration, and that no information was received from the proposed mentor on how the appellant was going to be mentored. She testified the appellant did not provide any documents regarding the 10 vehicles he sold as a wholesaler, and thus, she was not able to confirm if he was in compliance. She further testified that he has not followed conditions in the past, and conditions will not protect a consumer if he does not follow them.
48In my view, the appellant was already subject to conditions, was provided with guidance and reminders from OMVIC inspectors, and was subject to a disciplinary committee decision (which required him to take the Automotive Certification Course), and yet, he continued to not carry on business in accordance with the law and with integrity and honesty. There was also no documentary evidence presented regarding the 10 vehicles he sold as a wholesale to demonstrate compliance. I cannot find that this is an appropriate case for conditions.
49I find that public interest cannot be adequately protected with the imposition of conditions, and that refusal of the registration is appropriate.
CONCLUSION
50I find that the Registrar has established that the past conduct of the appellant affords reasonable grounds for the belief that the appellant will not carry on business as a motor vehicle salesperson in accordance with the law and with integrity and honesty.
ORDER
51Pursuant to s. 9(5) of the Act, the Tribunal directs the Registrar to carry out the NOP to refuse the registration of the appellant as a salesperson under the Act.
LICENCE APPEAL TRIBUNAL
Rupinder Hans
Released: April 9, 2025