Court File and Parties

Info No.: 12/10958

Ontario Court of Justice

Between:

Ontario Motor Vehicle Industry Council

— and —

Clarke Chevrolet Buick GMC Limited, James A. Clarke and Jesse Ryan Howell

Before: Justice Sharman Bondy

Judgment Released: April 1, 2015

Counsel:

• P. Stunt for the Appellant
• G. Goulin for the Respondent

BONDY J.

REASONS FOR JUDGMENT

1: INTRODUCTION

[1] This is a Crown appeal pursuant to s. 116 of the Provincial Offences Act (hereinafter described as "P.O.A.") from acquittals on charges against a motor vehicle dealer and two salespersons for engaging in an unfair business practice by making an unconscionable representation as prohibited by s. 17 of the Consumer Protection Act, 2002, S.O. 2002 as amended (hereinafter described as the "Act") and thereby committing an offence pursuant to s. 116(1)(b)(ii). This is count one on an Information sworn April 17, 2012 on which a second count of retaining the services of an unregistered salesman under the Motor Vehicle Dealers Act, 2002, S.O. 2002 (hereinafter described as "M.V.D.A.") is not the subject of this appeal.

[2] The trial of these proceedings took place over the course of nine days on November 7, 8, 9, 13, 29 and 30, 2012 and February 26, 17, and 28, 2013. Lengthy reasons for judgment were delivered on May 10, 2013.

[3] The Crown, represented by the Ontario Motor Vehicle Industry Council (hereinafter described as "OMVIC"), as the appellant, argues that the learned Justice of the Peace made errors of law, made errors in fact that amounted to errors in law and her Reasons overall are deficient as to the essentials of the offence before her, credibility findings and determinations of fact and law sufficient to enable appropriate appellate review. Conversely, the respondents request the acquittals after trial be confirmed.

2: THE EVIDENCE AT TRIAL

[4] The trial of this matter involved three accused and one count of unfair business practice by making an unconscionable representation under the Act. As an appellate court, I propose to summarize the evidence that I have reviewed. To do so, I have reviewed the entire 1,560 pages of trial evidence, the submissions of counsel and the reasons included with the transcripts on this appeal.

[5] Clarke Chevrolet Buick GMC Limited, (hereinafter described as "Clarke Chev") was a motor vehicle dealership located in Amherstburg, Ontario. It is the named corporate defendant in this proceeding. Jesse Ryan Howell (hereinafter described as "Howell") and James A. Clarke (hereinafter described as "Clarke") are the other named defendants in this proceeding. Both were car salespersons employed by Clarke Chev at the time of the alleged offence. Howell was at all times a sales consultant and held the title of New/Used Car Sales Manager for the company. He was directly involved in the negotiation and sale of a 2011 GMC Acadia (hereinafter described as "Acadia") with Mr. Brendan Vetoretti (hereinafter described as "Mr. Vetoretti") together with Josh Beneteau (hereinafter described as "Beneteau") and Doug Davis (hereinafter described as "Davis"), the Finance Manager for Clarke Chev. Davis arranged the financing for Mr. Vetoretti and prepared at least one and likely all of the sales contracts on the Mr. Vetoretti's purchase. Beneteau is best described as the unregistered salesman involved in the Vetoretti purchase with Howell. Clarke held the title of General Manager for the company at the time of Mr. Vetoretti's purchase and signed the November 23, 2011 bill of sale.

[6] Mr. Vetoretti, a consumer within the meaning of the Act, negotiated a contract for the purchase of an Acadia with Clarke Chev and the salesmen and/or managers above resulting in a bill of sale and conditional sales contract of January 13, 2012. Part of the purchase of the Acadia was financed by a trade-in of Mr. Vetoretti's 2011 Saturn Vue (hereinafter described as "Saturn") for $15,000.00 which he purchased nine months previously from another car dealer. Even with the trade-in value, Mr. Vetoretti still owed the sum of approximately $22,000 on his car loan on the Saturn which he "rolled over" or added to his purchase of the Acadia. The January 13, 2012 contract called for a down payment of $4,100 by Mr. Vetoretti. Put simply then, the purchase price and financing costs for the Acadia were a total of approximately $83,000 with the Acadia having a suggested manufacturer's retail price of approximately $38,000 before freight, warranties and other purchase features were added to that price.

[7] This type of transaction is commonly described as being "under water" or "upside down" or more properly a "negative equity transaction" where the amount that Mr. Vetoretti paid for the Acadia was more than it was worth. The difference between the value of the vehicle and the total purchase and financing costs was blended into the monthly payments on the purchase of the Acadia.

[8] The record reveals Mr. Vetoretti was also "under water" or in a negative equity position relating to his Saturn when he first attended at the Defendant dealership. The Saturn was valued for trade-in purposes at $15,000. When Mr. Vetoretti purchased the Saturn he paid approximately $40,000 for a car valued at approximately $28,000.

[9] A factual sub-issue that arose was whether there were one or two other contracts negotiated for the purchase of the Acadia that pre-dated the January 23, 2012 bill of sale. According to the defendants, there was a contract signed and negotiated with Clarke Chev and Mr. Vetoretti on November 17, 2011. No contract for November 17, 2011 could be produced as Davis testified that he had shredded it as his practise is that he only keeps a copy of the final bill of sale and conditional sales contract. According to Davis he did things that way as then he only has the last signed copy for safekeeping and reference. Mr. Vetoretti could not recall signing a bill of sale or negotiating the purchase of the Acadia on November 17, 2011. He had no copy of his bill of sale. Mr. Vetoretti's version was all he gave to Howell or Davis was a deposit to "hold" the car and all he ever wanted to do is cancel the deal when he realized he could not afford to make the monthly payments. The issue of whether he made a deposit or signed a contract was raised. If a deposit was made, the Act provides for a return of that deposit with no further or continuing obligation. If a contract was signed, the Act does not provide for cancellation with deposit. The issue then became whether Mr. Vetoretti was then induced and/or agreed to sign new contracts with different down payment amounts or whether he was forced to sign a contract when all he made was a deposit.

[10] Another one of the major factual issues at trial involved whether Mr. Vetoretti was not able to reasonably protect his interests when he agreed to purchase an Acadia from the defendants due to a disability, ignorance, illiteracy or an inability to understand the language of the agreements he signed. When Mr. Vetoretti attended on the November 17, 2011, his mother attended with him. OMVIC's theory was that Mrs. Vetoretti's presence at the dealership with her son should have been a clue or signal that something was amiss with Mr. Vetoretti and surely that at each stage of the various transactions they "ought to have known" that he was unable to understand the language of the agreement and/or the complexity of the negative equity transaction giving rise to a duty not to sell the Acadia to Mr. Vetoretti as he lacked the capacity to understand what it entailed and further, he was incapable of making the payments.

[11] According to Mr. Vetoretti, he left the dealership, realized he could not make the payments and wanted to cancel the deal. Howell and Davis asserted that he called about increasing his down payment by $15,000 and spoke to Davis and Howell separately about this on two different days. Mr. Vetoretti said he was scared and was told by Howell that he had to close the deal unless he did eight different things. Mr. Vetoretti did not ask what the eight things were. Mr. Vetoretti however took delivery of the Acadia on November 19, 2011, only paid $4,100 down and four days later, by contract dated November 23, 2011, he agreed to pay an additional $15,000 for a total down payment of $19,100 as he said that Howell told him he would help him finance the additional down payment.

[12] Mr. Vetoretti testified that he knew he could not come up with the funds for the increased down payment or qualify for borrowing these funds. Nonetheless he closed the deal and left the dealership with the Acadia. Mrs. Vetoretti confirmed her son's account of what he says happened.

[13] This evidence and these contrary accounts by Mr. Vetoretti, his mother, Davis and Howell remained conflictual throughout the proceedings. Howell's testimony was largely consistent with Davis. Interestingly, Davis was a witness called for the prosecution and Beneteau largely had no recall or specific recollection of the events. Each of Howell, Beneteau and Davis played a different role and had a different part in the sale of the Acadia to Mr. Vetoretti.

[14] The evidence revealed that by January 2012 Mr. Vetoretti had not found the monies to make the additional down payment. He had driven the Acadia since November 19, 2011. His account was that he did not qualify to borrow any further monies. He was turned down for credit by the lending institutions Howell referred him to. According to Mr. Vetoretti, this is when Howell suggested he cash in his RRSP's which were on deposit at a local bank. Howell disputed this and testified it was Mr. Vetoretti who made this suggestion as he wanted the Acadia so long as he could afford the monthly payments.

[15] Mr. Vetoretti eventually met with his banker and his account was that he did not cash in his RRSP's as he was told he could not do so. According to Mr. Vetoretti's banker, she did not refuse or stop him from cashing in his RRSP's but she cautioned him from doing so given his other debt issues. She also was of the opinion that he did not understand the contracts he had signed. She was the party who originally contacted OMVIC on behalf of Mr. Vetoretti.

[16] Mr. Vetoretti's personal banker was a witness for the prosecution. She was not aware he had previously signed a "negative equity type" purchase agreement for his Saturn when he last purchased this car and had previously negotiated several car purchases including leases and buyouts on those leases. She was unaware of the full extent of his previous financial dealings. During cross-examination, she agreed that he could afford the Acadia.

[17] Mr. Vetoretti testified that he was then pressed by Howell and others to sign the January 23, 2012 contract. That left him with payments of over $800 monthly. The theory of the prosecution's case was Mr. Vetoretti was pressed to sign the January 23, 2012 contract by Howell and Howell who knew or ought to have known that Mr. Vetoretti could not satisfy the payments and the transaction as such was inequitable.

[18] The contract of November 23, 2011 had the same length of loan, amortization and balloon payment as the January 13, 2012 contract. What was different in the November contract was the amount of the down payment, reduced financing costs and a much reduced monthly payment.

[19] Davis was called by the prosecution as he prepared the bills of sale and credit applications and financing documentation for Mr. Vetoretti. Mr. Vetoretti's car loan for the Acadia was arranged with a major bank. The loans were arranged with an on-line application. No one from the bank directly met or spoke with Mr. Vetoretti. Davis testified that Mr. Vetoretti's credit application was submitted and approved without issue. Davis and Howell both testified that Mr. Vetoretti had excellent credit and Davis testified he arranged on January 13, 2012 for a three month deferral of Mr. Vetoretti's monthly payments on the Acadia as this allowed Mr. Vetoretti more time to pay off another debt and could then better afford the monthly payments for the Acadia.

[20] Davis provided a detailed account of the steps he took when he arranged Mr. Vetoretti's financing. He inputted the wrong annual income on the credit application. He said that Mr. Vetoretti provided him with this amount. He was adamant he reviewed the contracts thoroughly with Mr. Vetoretti and Howell was adamant that he too had reviewed the negative equity features of the contract with Mr. Vetoretti making sure he knew the difference between the debt he was rolling over and the financing terms. Davis testified he routinely did not seek income confirmation from customers, including Mr. Vetoretti. Both Davis and Howell testified that the question they ask customers is "Can you afford the payments?" According to them, Mr. Vetoretti's bottom line was, "What's this going to cost me each month?"

[21] Davis' position was that Mr. Vetoretti's income and debt load verification was the bank's responsibility, as "[I]t was the bank who was providing the financing for Mr. Vetoretti." The transcripts reveal a confusing mix of evidence as to what and why documents, applications and consents were printed and signed and what documents stayed on-line.

[22] Another twist to the tale occurred when at some point Mr. Vetoretti was pressed by his bank to make two car loan payments – one for the Saturn and the other for the Acadia. Curiously, the bank holding the security against his Saturn was seeking payment on the Saturn even though it had been received in trade by the defendants and sold to a wholesaler, Mr. Hirani. Contrary to Davis' account, Mr. Vetoretti testified that it was he who personally made arrangements with the bank or banks that his monthly payments be deferred. OMVIC asserted that the failure to satisfy the Saturn lien or at least the fact that Mr. Vetoretti was still being pressed to satisfy the loan payments on the Saturn was yet another example of a pattern of unconscionable conduct. Eventually, Mr. Vetoretti's banker contacted OMVIC and these proceedings were eventually commenced while OMVIC and the Defendant Clark Chev "unwound" the deal and returned Mr. Vetoretti's Saturn vehicle to him.

[23] Other issues which arose in this proceeding were whether Davis and Howell owed a duty of explanation to Mr. Vetoretti by reviewing the contracts line by line with Mr. Vetoretti as he was apparently dyslexic and allegedly could not read well and often refused to read, never disclosing this condition to Howell, Davis or Beneteau. Another sub-issue was whether Howell, yet not Davis, owed a duty of ensuring that Mr. Vetoretti could afford the car such as verifying his income and/or debts especially in the face of a seven year loan with his purchase. Other issues that arose in the course of the testimony were whether the credit applications which accompanied Mr. Vetoretti's car purchases were strictly on-line applications or whether copies were printed and signed for Mr. Vetoretti to review before he signed each bill of sale. Another issue was why the conditional sales contracts were only signed and available at the time that Mr. Vetoretti signed the bill of sale. Davis testified as to his usual and customary practises without contradiction as he was a witness for the Crown (OMVIC).

[24] Beneteau's evidence was that he largely could not recall the transactions and had a limited memory of entirely what happened and when and if contracts were signed even though his signature was on the November 23, 2011 agreement which was prepared by Davis. Apparently Howell assisted Beneteau with Mr. Vetoretti's purchase as he was a new salesman and required supervision and assistance. Eventually it was revealed that Beneteau was not properly registered as a car salesman under the M.V.D.A. Beneteau was called by OMVIC as he testified that at the time of the purchase he told Howell and Davis he thought Mr. Vetoretti was slow and that he was told to "sell the car" nonetheless.

[25] Davis and Beneteau were not charged with making an unconscionable representation under the Act. OMVIC appeared to be relying on Beneteau's testimony that Mr. Vetoretti was "slow" and Davis had previously told investigators that he thought Mr. Vetoretti was "socially slow".

[26] The evidence revealed that Mr. Vetoretti had been transacting business his whole life. He frequently failed to read the documents presented to him. He did not routinely, if ever, disclose that he had some trouble reading, never expressing his inability or difficulty to read, relying extensively on his memory. He was proficient with numbers and demonstrated a good memory and recall of numbers during the trial. The evidence revealed that many times he simply chose not to read, as he found it difficult to do and would not take the time or make the effort. He borrowed frequently and he often carried long term debt and made monthly minimum payment with his debts.

[27] At trial, OMVIC did not call or produce evidence from the major bank involved with Mr. Vetoretti's financing approval arranged by the Defendant Clarke Chev. Evidence was conflicted and confused regarding the usual practice of on-line car loan credit applications. OMVIC did not call or produce the lending institutions or banks that Mr. Vetoretti testified he was referred to by Howell. The evidence about practices in the field came from the references to alleged breaches of M.V.D.A. Regulations relating to the content of the bills of sale and Code of Ethics obligations. No separate charges were brought under the M.V.D.A. Mr. Vetoretti's banker was called to testify about his capacity to contract and did not regularly arrange negative equity car loans, if at all. OMVIC did not move to cross-examine Davis or Beneteau as hostile or adverse witnesses or move to cross-examine them on inconsistent statements. As a result, Davis' evidence on his financing practices and errors and his response to irregularities in his bills of sale and credit application practises prescribed by M.V.D.A. regulations were largely unchallenged and un-contradicted.

[28] Summing all of this up, the trial record reveals serious inconsistencies and/or contradictions among the various prosecution witnesses themselves. One such example was Mr. Vetoretti and his mother's testimony rejecting that he was "slow" or "learning disabled" or "incapable of contracting" as OMVIC had presented to the defendants. Mrs. Vetoretti's described her son as intelligent. Apparently, Mr. Justin Brown told Clarke that such was the case and Clarke referred to this in a letter to OMVIC dated February 27, 2012 presented at trial.

[29] The foregoing, then, is a summary of the evidence in the extensive record before me and some of the myriad factual and legal issues reviewed on this trial.

3: SOME PRELIMINARY OBSERVATIONS

[30] As I alluded to above, the trial of these proceedings involved many factual disputes too numerous to recount. The trial was complicated and presented a complex array of facts which likely contributed to it extending over a period of nine days and over several months. In addition to what I have identified, the record is marked with numerous objections and legal argument over adequate and timely disclosure and notice of productions by OMVIC; questions asked and answers provided; admissibility of documents related to the lien discharge on the Saturn, the admission of hearsay and/or narrative evidence proposed to be adduced by OMVIC; the admission and relevance of lay or expert testimony relating to Mr. Vetoretti's capacity to contract and in particular; the question of his alleged disability, illiteracy, general ignorance or any other factor that would have contributed to his inability to understand the agreements signed; and last, but not least, was the issue of the relevance of post offence conduct by the defendants in connection with the lien discharge on the Saturn, the value of the trade-in between the Defendant Clarke Chev and a wholesaler, Mr. Hirani and what significance to the finding of unconscionability did Exhibit No. 3 (Acknowledgement of February 4, 2012) and Exhibit No. 4 (correspondence of February 27, 2012 exchanged between OMVIC and Clarke) play in this scenario.

[31] Throughout all of this and on reviewing all 10 volumes of testimony and all 1,560 pages of the transcripts including submissions by counsel, one observation that I would offer is that the record reveals the learned Justice of Peace was most patient; she was thoughtful, considerate, timely and accommodating to counsel and the array of witnesses that OMVIC and the defendants produced. The record reveals she listened carefully, she did not interrupt counsel throughout the course of the trial or submissions and she attempted, with great patience, to stem the flow of interruptions and arguments by counsel. She reserved on her reasons, ordered transcripts of all the evidence and submissions and delivered those reasons a few months later, orally.

[32] I would comment that the submissions reveal counsel for OMVIC did not marshal the evidence that it relied upon in exquisite detail. Its evidence was not organized in a meaningful way in attempting to support its view of the facts. Both counsel provided oral submissions only. In hindsight, this likely contributed to a lack of focus in respect of the submissions and the ensuing judgment. OMVIC's submissions did not clearly and succinctly identify the factual and legal issues. The submissions reveal that OMVIC's counsel read entire portions of witness testimony from the transcripts to support its view of the facts. The submissions reveal that after this approach the Justice of the Peace asked the following question: "The unconscionable representation, could you just specifically state just as briefly as you can what it is?" It was only in response to that enquiry that counsel finally made reference to the various subsections of s. 17 of the Act and specifically referred to s. 4, 6 and 9 of Reg. 332/08 of the M.V.D.A. as a general Code of Ethics that applied to car dealers and salespersons. Previous to the Justice's request, OMVIC counsel did not review the statutory and regulatory provisions in detail that applied but said, "I've copied the relevant portions of the Consumer Protection Act and Motor Vehicle Dealers Act and certain regulations but I won't go through them with you." As for case law interpretation relating to the phrase "unconscionable" OMVIC's counsel said, "You'll see from the case called Wright v. United Parcel Service Canada Ltd., 2011 ONSC 5044, [2011] O.J. No. 3936 where Justice Horkins wrote no Ontario court has considered the meaning of unconscionable." He then referred the Justice to the Black Law Dictionary definition of unconscionability for assistance in interpretation.

[33] As for reference to case law authorities counsel for OMVIC said, "I'm not going to drop a lot of case law on you because frankly there isn't much," and then referred solely to the case of Wright v. United Parcel Service Canada Ltd., supra.

[34] As for explaining the characterization of what type of regulatory offence an unconscionable representation was, counsel for OMVIC referred to Ontario v. K-Tech Building Systems, [2012] Carswell 4865, indicating in argument that OMVIC's position was that it was a mens rea offence - the defence of due diligence was not available. Counsel said, "...all that need be proven is that the defendant's conduct has been a marked departure from the standard of care of a reasonable person in similar circumstances."

[35] I think it would be fair to say that counsel for the defendants was "equivocal" on the issue of whether the offence in question was a mens rea or strict liability offence. That remained his position on this appeal. The record reveals there was little legal argument received on this issue. Defense counsel's submissions were focused on the factual issues and the findings and credibility assessments that he proposed the Justice of the Peace should make.

[36] Having reviewed these considerations I shall now turn to the Justice's reasons for judgment.

4: REASONS FOR JUDGMENT DATED MAY 10, 2013

[37] Her Worship began her judgement by reciting the charges and the standard of proof beyond a reasonable doubt in respect of each of the offences, against each party. She then addressed the contents of count one, referred to Part III of the Act which defines unfair practices, further referred to s. 15 which is the definitional section for an "unconscionable representation" and noted that the count "did not give any particulars as to the nature of the representation relied upon by the prosecution." As a result and in these circumstances Her Worship then stated that she had "...examined all of the circumstances surrounding the transaction between November 16, 2011, the date the Vetorettis first came into the dealership and January 13, 2012, the date of the second contract..." in determining the issue of whether an unconscionable representation had taken place.

[38] Her Worship then referred specifically to s. 15(2) of the Act and recited the section and various sub-sections. She noted, pursuant to submissions made by OMVIC counsel, that there was no definition in the Act for an "unconscionable representation" and referred to Wright above. She noted, again pursuant to OMVIC counsel's submissions, that no Ontario Court had considered the meaning of unconscionability pursuant to the Act and so she ascribed the meaning found in Black's Law Dictionary, all again pursuant to the OMVIC counsel's submissions before her. She said, "This conclusion can only be reached by examining the factors contained in s. 15(2) of the Act and the circumstances surrounding the purchase."

[39] Her Worship then provided a basis for classification of the offence as a strict liability offence and found that it was essential to the prosecution's case that it proved the defendants knew or ought reasonably in the circumstances to have known any one or a combination of the factors listed in s. 15(2) of the Act had occurred and she found that the "...test is that of the reasonable person."

[40] After reviewing the witness evidence Her Worship also said the following:

"The question that the court has to ask itself then is whether the prosecution has proven its case beyond a reasonable doubt that the three defendants engaged in unfair practice by making an unconscionable representation having regard to the evidence. That they showed no regard for conscience in their dealings with the Vetorettis and their conduct was an affront to justice, decency or reasonableness."

[41] Her Worship spent several pages outlining the witness evidence before her and made certain factual and credibility findings in the course of reviewing the evidence and the circumstances giving rise to the charge before the court. She detailed Mr. Vetoretti's account of what happened and his mother's, noting that Mrs. Vetoretti was familiar with her son's earnings, expenses and debts and her opinion was that he could not afford a payment of $873 a month, referring to the monthly payment obligation on the January 13, 2012 bill of sale.

[42] She considered the evidence of Chantelle Lawton, Mr. Vetoretti's banker and found that she had a fundamental misunderstanding relating to the purchase of the Acadia. She thought the dealership he purchased the Saturn from had called him back and re-negotiated a deal that left him, mere months later, with a significant long term negative equity loan. This was a significant fact to the justice and she noted so. She acknowledged Ms. Lawton's opinion that Mr. Vetoretti did not understand the terms of the contract, but noted that Ms. Lawton revealed Mr. Vetoretti never told her he had any difficulty reading or any particular disability. She considered Ms. Lawton's evidence that Mr. Vetoretti was slow and "child minded" as he described himself as cleaning toilets rather than his occupation as a janitor and he tinkered with model planes.

[43] Her Worship made two critical findings. The first was the finding that Ms. Lawton did not refuse Mr. Vetoretti cashing in his RRSP's to make an increased down payment on the Acadia and she contrasted that finding with the evidence she received from Mr. Vetoretti and his mother. The second was that she noted Ms. Lawton's evidence was that Brendan (Mr. Vetoretti) could have afforded the Acadia.

[44] The Justice of the Peace referred to the testimony of Justin Brown, OMVIC's complaint handler and mediator. She reviewed his testimony in detail. She noted his concern about the undischarged lien on the Saturn and why it was not discharged. She noted his communications with Howell over this issue and whether Mr. Vetoretti was coached to cash in his RRSP's. She noted Howell had denied this right from the get go to Brown. As for his suggestion the transactions left Mr. Vetoretti in a dire financial state, she found that the loan payments were temporarily deferred. She was not convinced that the sale of the Saturn to the wholesaler, Mr. Hirani and the evidence that Clarke Chev failed to disclose the Saturn was a U.S. daily rental to him, was material or relevant. She relied on the contract filed by the defendants to the wholesaler which included a disclosure the Saturn was a U.S. daily rental. Most critically, on the issue of alleged breaches of provisions of the M.V.D.A., she found that the failure to promptly discharge the lien was not good business, a factor in assessing credibility and may be an issue between Clarke Chev and the wholesaler but was not material to her determination of whether there was an unconscionable representation where Mr. Vetoretti was concerned. She did not consider this factor relevant to the issue she had to decide under the Act. She found that this evidence was not "...proof of the charge laid before the court." She also found that there was no evidence of overpayment for the Acadia. Her Worship discounted Mr. Brown's opinion that Mr. Vetoretti had a slower or compromised intellect as a result of his being a janitor. She noted that the source of Mr. Brown's opinion was Ms. Lawton and she noted that Mr. Brown never met Mr. Vetoretti in person. She referred to his testimony where "...he had put two and two together and came up with the obvious." She was aware that Mrs. Vetoretti had communicated to the mediator that Mr. Vetoretti "...got himself into a lot of trouble."

[45] She made several critical credibility findings related to Mr. Brown's conduct as a mediator for OMVIC. She was critical that although he described himself as a complaint mediator, she found he acted more so like an investigator, taking steps to locate Mr. Vetoretti's Saturn, investigating whether the lien was discharged and speaking with the wholesaler – long before he turned to Clarke Chev or other defendants to ascertain what "...their side of the dispute was." To support those conclusions, she found he delayed contacting the dealership altogether between the period January 26 and February 3, 2012 while he pursued his investigation. She was critical of his assumption that Mr. Vetoretti's case was similar to another "investigation" he was previously involved with, namely the Orangeville Mazda case. In the course of the trial, the record does not reveal precisely what this case entailed but the reasons reflect that Mr. Brown used the closure of a Mazda dealership following an OMVIC investigation into the alleged sale of a vehicle to a developmentally compromised consumer as fodder to ensure the defendant dealership "unwound" Mr. Vetoretti's car purchase. She characterized his reference to the Orangeville case to Howell and Clarke as intimidation. As for his opinions related to Mr. Vetoretti's capacity to contract, she found he relied on the opinions of Mr. Vetoretti's banker who she previously did not find credit with. She did not find credit that he pressed on pursuing Howell and Clarke to resolve the issue with Mr. Vetoretti after he committed to wait for Clarke to return from holiday to resolve the dispute. She was critical of his steps with Howell and noted that Clarke told Mr. Brown he would see what they (the dealership) could do to "...get them into a vehicle with lower payments." She noted that the reference in the February 27, 2012 communication from Clarke and the opinions expressed therein relating to Mr. Vetoretti (ie, that he had a learning disability and may not be qualified to enter into a contract) came from OMVIC, not from Clarke or the dealership itself.

[46] Critically, the Justice of the Peace rejected the evidence of Mr. Brown relating to the issue of an unconscionable representation with the following two examples. She rejected the argument that post offence conduct demonstrated by the defendants in failing to discharge the lien met that test. As for the non-compliant bills of sale under M.V.D.A. regulations and the potential breaches of OMVIC ethics, she expressly rejected the argument that this was persuasive of an unconscionability finding. She also noted that the alleged breaches were not the subject of a separate charge under the M.V.D.A. and not the subject of the specific charge before the court.

[47] Relating to Mr. Hirani's testimony, Her Worship found that the value of the trade-in of the Saturn by Clarke Chev was $19,000. The figure of $20,000 was assigned by the wholesaler only. Critically, she found that Mr. Hirani, who was not a General Motors dealer, opined that in operating his business he had never given the profit on re-sale back to a consumer. She recited his evidence that he was in the business of making a profit. Relating to the issue of whether the trade-in value assigned to the Saturn was too low, she noted that the Saturn sat on his lot unsold for at least six weeks after his purchase from the defendant dealership.

[48] Her Worship addressed the evidence of the prosecution witness Beneteau, the unregistered salesman with the defendant dealership. She expressly found that Mr. Vetoretti attended with his bill of sale on the first day he attended at the Clarke Chev. This finding is contrary to Mr. Vetoretti's evidence that he could not remember when he attended with it. She found that this is how Howell confirmed it was a U.S. daily rental vehicle for valuation purposes. She found that Beneteau had little recall of the transaction(s). He could not recall if a contract was signed on November 17, 2011. He could not recall the date of possession or whether the down payment of $19,100 was paid on that date. As for the bill of sale of November 23, 2011, he was satisfied Mr. Vetoretti understood the paperwork. On the critical issue of whether he told "...either or them or both," that Mr. Vetoretti was "...kind of mentally not there ...lower IQ," Her Worship found serious credibility issues with this testimony. She noted that he had little recall of the transactions overall. She gave no credit for his opinion that Mr. Vetoretti was "...mentally not there." She notes that his evidence revealed he told this to "...either or them or both" without disclosing who and yet he had little recall of most other aspects of the contracts signed. She ultimately rejected both his opinion relating to Mr. Vetoretti's intellect and his testimony that he relayed this finding to Howell or others.

[49] Her Worship addressed the evidence of the prosecution witness Davis. She found that Beneteau was not involved in securing the financing for the Acadia but Davis was. She noted that Davis would arrange the financing, insurance and protection packages for the Acadia after the trade-in value and price of the new vehicle were determined by Beneteau or Howell. She noted that with a credit application, Davis would ask for the consumer's yearly income and did not seek a summary of his debts or expenses. She noted proof of income was not requested by the bank nor did he think it was Clarke Chev's obligation to ask for one or provide one (to the Bank). She recites his evidence that he sought the lowest financing rate for Mr. Vetoretti, that he explained the document or bill of sale to Mr. Vetoretti, that Mr. Vetoretti's concern was the amount of the payment, as long as possible so as to keep the payments low. He repeated that Mr. Vetoretti was a payment driven buyer.

[50] Continuing with the evidence of Davis, Her Worship reviewed how the down payment was amended from $4,100 to $19,100 at Mr. Vetoretti's request; how and why the bill of sale was dated for November 23, 2011; why he shredded documents related to the November 17, 2011 and that he routinely did so; why the financing documents were only printed for November 23, 2011; the loan approval for the November 17, 2011 would have been provided to OMVIC's investigator, Mr. Carey Smith; and, the arrangements Davis made for a deferral of loan payments by Mr. Vetoretti in connection with the January 13, 2012 agreement. Relating to the many errors in the bill of sale of January 13, 2012, Her Worship was clearly satisfied with the explanation provided by Davis and found there was no suggestion the errors were fraudulent, false or Mr. Vetoretti was paying for something he did not receive. Her Worship clearly found credit with the testimony of Davis and how the bookkeeping, computer entries, preparation, printing, shredding and posting of documents took place.

[51] Her Worship addressed the evidence of the last prosecution witness, OMVIC investigator Mr. Carey Smith. She recited his opinion was that on meeting Mr. Vetoretti and his mother, he found Mr. Vetoretti "childlike" and "unsophisticated". She referred to his example that Mr. Vetoretti stared blankly at him when he asked him to tell the difference between the words "term" and "amortization". She recited Mr. Vetoretti's evidence that he did not like to read as he had some difficulty reading but he could still read. She noted his mother's characterization of his condition as dyslexia. She did not find credit with Mr. Smith's opinions on Mr. Vetoretti's capacities or abilities. She found no other basis to conclude that Mr. Vetoretti could not read other parts of a sentence and postulated that his problem with saying the word "amortization" could merely be a problem with pronunciation.

[52] Her Worship turned her mind to the issue of the shredding of contracts, the errors in the bills of sale and, in reviewing the evidence of Mr. Smith, the critical issue that the "negative equity" amount of $22,000 was not reflected properly in the bills of sale which in many respects were not compliant with the M.V.D.A. regulations. She specifically addressed the amount listed in contracts for the Saturn's trade-in amount in the bill of sale, the amount listed for the manufacturer's suggested retail price, the financing rates for lending and whether Howell, Davis or others could obtain less expensive borrowing or financing options for Mr. Vetoretti. She did not find credit with this complaint instead finding that there was no other evidence presented showing less expensive rates were in fact available, instead preferring the evidence of Davis that he obtained the lowest rate possible especially since there was no manufacturer's rate for a negative equity transaction. She noted with interest that Mr. Carey Smith's testimony was that he had purchased a car with "negative equity" and he too could not obtain manufacturer's financing either.

[53] I will address the evidence of Howell as it relates to the acquittals on count one. Her Worship noted that he was the used car sales manager for the defendant, Clarke Chev, and performed the valuation on the Saturn's trade using a 2009 value as Saturns were not sold in Canada after 2010. She noted that he also took into account it was a U.S. vehicle and used for daily rental. She notes that according to Howell, Mr. Vetoretti wanted to "...get rid of the vehicle," referring to the Saturn. He used the term "upside down" explaining to Mr. Vetoretti that he owed more against the Saturn than it was worth. She noted that according to Howell, Mr. Vetoretti knew he was getting $15,000 for the Saturn and was still $22,000 in the negative. According to Howell, Mr. Vetoretti said, "What's my payment?" again describing Mr. Vetoretti as a payment driven buyer. He confirmed Davis arranged the credit applications.

[54] Her Worship reviewed the consistency in the evidence of Howell and Davis. She noted that Howell could not confirm if a contract was signed on November 17, 2011 as he took a deposit and directed him to Davis for financing and preparing the bill of sale. Howell confirmed that Mr. Vetoretti later called him, did not think he could swing the deal, so was directed to come in and "...we'll work together. Do you want the vehicle? Yes, come on in." The evidence of Davis and Howell was noted as consistent in detailing that Mr. Vetoretti was a payment driven buyer and that putting another $15,000 down would reduce his payments. As for reviewing the bill of sale of November 23, 2011 with Mr. Vetoretti, Her Worship noted Howell's evidence was that he reviewed it with Mr. Vetoretti. As for cashing in his RRSP's, Her Worship noted that according to Howell this suggestion came from Mr. Vetoretti and not him. According to Howell, Mr. Vetoretti wanted a new car and was unhappy with his Saturn.

[55] As for the issue of the trade-in value of the Saturn, Her Worship noted Howell's evidence was that he thought it was fair; he would have paid more, if asked; that Mr. Vetoretti did not complain or ask for more; and, that Mr. Hirani paid too much for the Saturn.

[56] As for the issue of Howell's post offence conduct relating to an Acknowledgment of February 4, 2012 (Exhibit No. 3) which he asked Mr. Vetoretti and his mother to sign, Her Worship noted his evidence was that he asked them to sign it as "Mr. Vetoretti was happy three times…" - "…all of a sudden OMVIC is coming down our throats saying these people are angry. Justin Brown is yelling at me. I am trying to protect myself." She again noted that the Clarke's letter of February 27, 2012 and the suggestion that Mr. Vetoretti was learning disabled and not qualified to enter into the contract came from Clarke's communication with Justin Brown of OMVIC.

[57] And lastly, Her Worship noted that the evidence presented relating to the defendant Clarke consisted of his signature appearing on the November 23, 2011 bill of sale and his giving a handshake to the Vetorettis when they left the dealership on November 19, 2011.

[58] Her Worship then addressed the following findings in her reasons after stating the test before her, reviewing the evidence, and after engaging in the preceding factual findings and credibility assessments to which I will hereinafter summarize:

1. As for ss.15(2)(a) and whether the consumer was reasonably able to protect his interests because of disability, ignorance, illiteracy, inability to understand the language of an agreement or otherwise, Her Worship provided some 18 examples, at least, of why she could not conclude Mr. Vetoretti was "disabled" or otherwise and, as such, was unable to understand the language of the agreements put before him and which the defendants knew or ought to have known when transacting the car contracts with him. She concluded that Mr. Vetoretti was dyslexic, but she also found he could read and he chose at times not to read as he found it difficult, at times choosing to simply not read completely and thoroughly what was before him, as others are ought to do. She found that at no time in his dealings with the defendants did he complain or express that he could not read and his mother, who was fully intelligent, was there with him at all times making no complaint or seeking further questions or clarification.

2. Her Worship considered several different sources of testimony in arriving at her conclusions. Previously she had rejected Mr. Brown's assertion that Mr. Vetoretti was slow or incapable of negotiating a contract as the evidence revealed that he did not personally meet with Mr. Vetoretti and he had relied on the opinions of Mr. Vetoretti's banker. As for the banker, she rejected the basis of her opinion that Mr. Vetoretti was slow or did not understand the language of a contract when the evidence revealed that Ms. Lawton had relied on the fact that Mr. Vetoretti said he cleaned toilets and tinkered with toy planes as a hobby. She relied on Mrs. Vetoretti's testimony that her son was not slow or unintelligent, merely dyslexic. Mrs. Vetoretti's evidence had included a reference to the fact that John F. Kennedy was dyslexic. Her Worship referred to that testimony and Mrs. Vetoretti's assessment of her son's abilities against that benchmark.

3. OMVIC's counsel had argued that correspondence of February 27, 2012 (Exhibit No. 4) revealed that Clarke and other defendants were aware of Mr. Vetoretti's "learning impairment". The Justice rejected that submission as she found that the likely source of that information was from OMVIC's mediator, namely Mr. Justin Brown, who received that information from Mr. Vetoretti's banker. In any event Mr. Vetoretti's mother was outraged with this suggestion and blamed the defendants for this mischaracterization of her son and his abilities.

4. She accepted with credit the testimony of Davis who at first had opined that Mr. Vetoretti was a "little slow" to OMVIC investigators but later clarified in evidence that all he meant by that expression is that Mr. Vetoretti seemed a little socially slow or socially challenged and he compared him to his brother whom he described as book smart but socially challenged. Moreover, Her Worship relied on Davis' testimony that Mr. Vetoretti was asking questions during their negotiations about balloon payments and financing that same balloon payment after the end of the 84 month term on the Acadia which indicated to him that Mr. Vetoretti well understood what he was being asked to do.

5. She found that Mr. Vetoretti understood what the trade-in value of his Saturn was (ie. $15,000) and understood that he had still more monies to pay on his Saturn (ie. $22,000). She found that Mr. Vetoretti typically borrowed from one source to buy from another source and she found that he intended to borrow the remaining down payment of $15,000. She found that he was not misled when he answered the dealership's promotional call and he understood that he was only receiving a credit of $1,100 at the time of his original purchase. She found that he understood that his monthly payment for the Acadia would increase if he was not making the down payment of $19,100. She found that he chose not to cash in his RRSP's likely on what he thought was the advice of his banker. She also found there was no confusion for Mr. Vetoretti between the contracts and payments of November 17, 2011, November 23, 2011 and January 13, 2012 and their terms.

6. She relied on the evidence that Mr. Vetoretti had previously invested with mutual funds, had credit cards and had previously leased at least 2 vehicles in addition to the vehicle he used as a trade-in when he purchased the Saturn, all without difficulty. She noted that Mr. Vetoretti had "left his lease early" on one of these vehicles when he purchased the Saturn and incurred a penalty in doing so.

7. At all times, Her Worship found that Mr. Vetoretti wanted the Acadia, did not dispute the trade-in value for the Saturn and "It was only when the payments hit him that he was concerned." She found that the purchase price and negative equity financing did not concern Mr. Vetoretti – it was the monthly payment.

8. Although posed in the form of a question, Her Worship considered that the evidence revealed Mr. Vetoretti had previously negotiated a line of credit, used and applied for credit cards, signed for a mortgage, negotiated for mutual funds and purchased many other vehicles and understood all those agreements, she accordingly could not conclude that he was now unable to understand the language of the contracts negotiated in the charge before the court.

9. As for ss. 15(2)(b) and whether the price for the Acadia grossly exceeds the price at which similar goods are readily available to like consumers, Her Worship recited there was no suggestion that this subsection applied and found there was no evidence that the listed or advertised price of the Acadia was greater than the price for the same vehicle at other dealerships.

10. As for ss. 15(2)(c) and whether the consumer is unable to receive a substantial benefit from subject matter of the representation, Her Worship recited that although the evidence of Mr. Carey Smith was to the effect that a dealer should not sell a car that is not in the consumer's best interests, she could not conclude there was sufficient evidence before her to reach a conclusion in the subsection. On the evidence before her, she found that Mr. Vetoretti had previously owned vehicles, he negotiated a trade of his Saturn and he wanted to part with this vehicle after a short period of ownership.

11. As for ss. 15(2)(d) and (e) whether there was no reasonable probability of payment in full by the consumer or whether the transaction was excessively one sided in favour of someone other than the consumer, Her Worship concluded that the evidence revealed there was no basis for a finding under these sections either. In reaching this conclusion, she made critical factual findings that Mr. Vetoretti wanted the Acadia vehicle and, when he realized he could not afford the original monthly payments, this is when he attempted to obtain $15,000 more towards the down payment. In coming to this conclusion, Her Worship noted that Mr. Vetoretti knew what long term debt was as he had managed his credit card debt payments this way and he knew from his mortgage that a debt would be renegotiated at the expiration of its term and often remain outstanding over his lifetime. She found that the evidence revealed he understood what a balloon payment was. She was also satisfied there was no evidence before her that Mr. Vetoretti's credit application was intentionally untrue or misleading. She concluded that he had the ability to cash in his RRSP's and chose not to do so. I would add that increasing the down payment significantly reduced Mr. Vetoretti's monthly payments for the Acadia.

12. Her Worship found that the financial incentive Clarke Chev received was $1,100, and although not reflected on the face of the bill of sale, was none-the-less not so unusual in the trade. As the Vetoretti sale was a negative equity transaction, no manufacturing incentives for credit were available and she noted the uncontradicted evidence of Davis was that he obtained the lowest rate thereafter that was possible.

13. Even though the Saturn was sold for $4,000 more than the trade-in value to Mr. Hirani, Her Worship found that in the real world of business it was not unreasonable to earn a profit on the Saturn's resale. She referred to the evidence of Mr. Hirani, the wholesaler, who had testified he does not return his profit to the previous owner. She also noted there was a distinction to be drawn between the failure of Clarke Chev in earning a profit on the resale and the fundamental issue of whether or not the steps taken by the defendants could be characterized as unconscionable. She also referred to the testimony of Mrs. Vetoretti who was content with the trade-in value, as the Saturn was a U.S. daily rental vehicle and who expressed there was no complaint as their consensus was the car was not worth more than the trade-in value assigned.

14. Her Worship found that on the entire transaction (the trade-in of the Saturn and the sale of the Acadia) the uncontradicted evidence of Davis was that the dealership made between $900 and $4,000. She noted the evidence revealed that the bank would receive $17,257.22 on account of the cost of borrowing, the lien holder $37,635.10 and the car company the price of the vehicle.

15. Addressing ss. 15(2)(f) and the entire issue of whether the terms of the transaction were so adverse to the consumer to be inequitable, Her Worship made a factual finding that the transactions were "...clearly negative equity transactions on the higher end," and adopted once again the evidence of the OMVIC witness Davis that "any transaction that Mr. Vetoretti would have attempted to get into at that stage would have resulted in this." She noted that the evidence revealed the Bank approved all financing transactions for the purchase. Mr. Vetoretti was only interested in the monthly payments and if that could be arranged than Mr. Vetoretti was then content with the "deal." Her findings reveal that she concluded Mr. Vetoretti understood completely all aspects of the transactions, he understood the trade-in value for his Saturn, he went about borrowing the $4,000 down payment, he was fully prepared to sell his Saturn for $15,000 and his method of paying of things was to borrow.

16. Her Worship concluded that simply because Mr. Vetoretti found himself in financial difficulties did not mean that the transaction was "unconscionable." She also opined that simply because Mr. Vetoretti had extended himself more than he could handle was not a measure or indicator of his intelligence. In this respect, she referred to the testimony of the OMVIC mediator and his conclusion that as Mr. Vetoretti got into trouble with the deal, he could not have fully understood the transaction. She expressly rejected that conclusion and that logic.

17. Her Worship concluded there was no statement of opinion that was misleading that the consumer likely relied on to his detriment in accordance with ss. 15(2)(g). Under this subsection, she reviewed what the statements could have been or possibly have been. She considered the price given by Howell for the trade-in, Mr. Vetoretti's communication with Howell and Davis over his allegation that "they wouldn't let him out of the deal," the promotional call that Mr. Vetoretti received and the circumstances surrounding the lien which was apparently not discharged. With each of these factors, Her Worship reviewed the evidence before her and made findings. One critical finding is that "...no one told him [Mr. Vetoretti] that he could not be let out of the contract. No one told him he would get into trouble. He thought he would."

18. Lastly, Her Worship considered ss. 15(2)(h) whereby the consumer was being subjected to undue pressure to enter into the contract. Under this sub-category, the Justice of the Peace made factual findings that Mr. Vetoretti was not compelled to make the initial deposit, the further $4,100 down payment nor accept the trade-in value assigned to his Saturn. On the important issue of the cashing in of his RRSP's, she noted that the evidence was 'confusing' as to when and how this proposal was made and by whom. She had noted earlier that "...what this really came down to was an issue of credibility." She expressed that this was not a case that she did not believe him, rather, she found that Mr. Vetoretti simply misinterpreted what his banker's direction was and she relied on the testimony of the banker where she did not prohibit him from cashing in his RRSP's. Her Worship was not rejecting Mr. Vetoreti's account of what happened with his banker over cashing in his RRSP's; what she did find was that when Mr. Vetorietti's banker advised him not to use his RRSP's, he interpreted it as the bank not letting him cash them in.

[59] The following summarizes Her Worship's final conclusions:

"In the circumstances having regard to the factors that are set out in the Act having regard to the evidence before the court, the court finds that the prosecution has not proven its case beyond a reasonable doubt with respect to this charge against any of the defendants and accordingly, dismisses this charge against all three defendants."

5: THE APPELLANT'S SUMMARY SUBMISSION

[60] OMVIC advanced six grounds of appeal but as some of the grounds are repetitious, I have narrowed the grounds to what I believe to be the three primary grounds:

1. That the learned Justice of the Peace erred in her determination of the onus under s. 17 of the Consumer Protection Act.

2. That the learned Justice of the Peace erred in failing to produce reasons with respect to the essentials of the offence, conclusions with respect to her credibility findings and determinations of fact and law sufficient to enable Appellate review and particularly by:

a) Erred in restricting her decision to an examination of s. 15(2)(1) (sic) and failing to address findings of culpability under ss. 15(2)(d), (e) and (f) of the Act; and

b) Erred in failing to provide fulsome reasons relating to her credibility findings.

3. That he learned Justice of the Peace erred in her factual determinations including but not limited to her failure to address:

a) Mr. Vetoretti's inability to understand several terms and words and not simply the word "amortization";

b) Davis' shredding of the November 17, 2011 contract and his non-compliance with M.V.D.A. Regulations;

c) The failure to return the deposit of November 17, 2011 in accordance with the Act;

d) The misstatements in the bills of sale pursuant to the Act and M.V.D.A. Regulations;

e) The contents of Exhibit No. 3 and the incriminating evidence therein; and

f) The failure to discharge the lien against the Saturn pursuant to the Act and Regulations.

6: THE RESPONDENT'S SUMMARY SUBMISSIONS

[61] As to the first ground of appeal (that the Justice erred in her determination of the onus) the respondents submit that she was well entitled to reject the submissions of the appellant that it was a mens rea offence as Her Worship was not bound by the decision of Justice of the Peace Quon in K-Tech, supra, and regardless of the nature of the offence, the actus reus, the act of the offence, must be made out.

[62] As to the second ground of appeal (that the reasons preclude effective appellate review) the respondents submit that Her Worship engaged in a thorough review of the evidence out of which she made factual determinations and credibility assessments, the result of which Her Worship reviewed all possible interpretations of an "unconscionable representation" under the Act, compared same to the evidence at trial, on the facts as she found them to be concluded the allegations had not been established and determined that a wrongful act had not been committed.

[63] As to the third ground of appeal (errors in fact and credibility findings) the respondents dispute that such errors were made. The respondents describe this as a very lengthy and confusing prosecution. They assert there were significant credibility issues among the prosecution witnesses that resulted ultimately in an acquittal verdict. They submit the Justice of the Peace's determination of the credibility of the witnesses and factual findings are entitled to considerable deference by an appellate court. The respondents request that the acquittals at trial be confirmed.

7: THE RELIEF AVAILABLE

[64] Section 121(b) of the P.O.A. permits an appeal court to (i) dismiss the appeal or (ii) order a new trial, or enter a finding of guilt with respect to the offence of which, in its opinion, the person should have been found guilty, and pass a sentence that is warranted in law. OMVIC seeks to have its appeal allowed and convictions registered against all the defendants on count one. In the alternative, OMVIC seeks a new trial.

8: THE LAW

8.1: The Standard of Review

[65] In Ontario (Ministry of Labour) v. Dufferin Construction Co., [2004] O.J. No. 5866, Justice Nadel of this court provides an excellent and concise review of the jurisprudence relating to the standard of review on appeal. I adopt his analysis without reservation:

[15] The standard of review on appeal varies according to the nature of the error made – see Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235. The standard of review for a pure question of law is correctness. However, where the error alleged is based in whole or in part on findings of fact then "[t]he standard of review for findings of fact is that such findings are not to be reversed unless it can be established that the trial judge made a 'palpable and overriding error.'" (Housen at [10]) [my emphasis added]

[16] A palpable error is an error that is clear to the mind or plain to see; i.e. an error that is so obvious that it can easily be seen or known. In short a palpable error is one that is readily or plainly seen. (Housen at [5])

[17] Housen holds that there are three types of factual errors where the standard of palpable and overriding error applies: (i) errors in the findings of fact at trial simpliciter; (ii) errors committed in drawing factual inferences from facts; and, (iii) factual errors enmeshed in questions of mixed fact and law where a legal standard is applied to a set of facts. [my emphasis added]

[18] "[T]here is one, and only one, standard of review applicable to all factual conclusions made by the trial judge – that of palpable and overriding error. (Housen at [25]) Moreover, Housen stresses that "it is not the role of appellate courts to second-guess the weight to be assigned to the various items of evidence. ... The appellate court is not free to interfere with a factual conclusion that it disagrees with where such disagreement stems from a difference of opinion over the weight to be assigned to the underlying facts." (Housen at [23])

[19] Despite the apparent clarity of this paradigm there is one further complication. If a purely legal error can be extricated from an application of mixed fact and law then the standard of review is correctness, as the issue becomes a purely legal one. The Supreme Court identified, by example only, how a correct analysis of an application of mixed fact and law may resolve into a purely legal error to be reviewed on a standard of correctness; e.g. "...if a decision-maker says that the correct test requires him or her to consider A, B, C, and D, but in fact the decision-maker considers only A, B, and C, then the outcome is as if he or she had applied a law that required consideration of only A, B, and C. If the correct test requires him or her to consider D as well, then the decision-maker has in effect applied the wrong law, and so has made an error of law. Therefore, what appears to be a question of mixed fact and law, upon further reflection, can actually be an error of pure law." (Housen at [27]) But, "[w]here the trier of fact has considered all the evidence that the law requires him or her to consider and still comes to the wrong conclusion, then this amounts to an error of mixed law and fact and is subject to [the] more stringent standard of review: ..." (Housen at [28]) [emphasis added] [my emphasis added]

8.2: The Sufficiency of Reasons

[66] Some of the salient jurisprudence relating to the sufficiency of reasons follows:

(1) Reasons for judgment must (i) tell the parties why the decision was made; (ii) demonstrate patently that justice was done; and, (iii) be sufficient to permit effective appellate review. Their sufficiency is assessed contextually given the trial record, the issues joined and the submissions of counsel. The question is whether, viewing the reasons in their entire context, the foundations for the trial judge's conclusions – the why for the verdict are discernable. [See: Ontario (Ministry of Labour) v. Dufferin Construction Co., supra.]

(2) Deficiencies in a trial judge's reasons alone do not automatically constitute reversible error or afford a stand alone ground of appeal. The obligation to provide adequate reasons depends on the circumstances and context of the case. [See: R. v. Kendall, [2005] O.J. No. 2457 (O.C.A.)] If the record as a whole, including the reasons, plainly indicates the basis of the trial judge's decision, deficiencies in the reasons will not support appellate intervention. [See: R. v. R.(D.), [1996] 2 S.C.R. 291]

(3) R. v. Sheppard, 2002 SCC 26, [2002] S.C.J. No. 30 and R. v. Kendall, supra, can be taken to stand for the proposition that where the trial record as a whole plainly establishes the pathway taken by the trial judge and illuminates the basis for the trial decision such that the appeal court is able to explain the trial result to the parties in its own reasons, then there would be no need for a new trial notwithstanding the deficiency. [See: R. v. Hein, [2010] O.J. No. 1576 (O.C.J.)]

8.3: Due Deference to Factual Findings and Credibility Assessments

[67] A useful analysis of this jurisprudence is found at R. v. D.T., 2014 ONCA 44, [2014] O.J. No. 255 (O.C.A.) at paragraphs 72, 76 and 78.

[72] Appellate courts cannot focus on omitted details, or begin their analyses from "a sceptical perspective."

[76] Appellate courts must give a very high degree of deference to trial judges' credibility determinations. As Bastarache and Abella JJ. explained in R. v. Gagnon, 2006 SCC 17, 2006 SCC17, at paras 20-21:

Assessing credibility is not a science. It is very difficult for a trial judge to articulate with precision the complex intermingling of impressions that emerge after watching and listening to witness and attempting to reconcile the various versions of events. That is why this Court decided, most recently in H.L. v. Canada (Attorney General), 2005 SCC 25, [2005] 1 S.C.R. 401 that in the absence of a palpable and overriding error by the trial judge, his or her perceptions should be respected. ...

[78] Trial judges are not required to expressly consider every issue, discuss all of the evidence, or address every argument made by the defence: Vuradin, at para 17; Dinardo, at para 30; R.E.M., at paras 32 and 64. While a failure to consider all of the evidence relating to the ultimate issue of guilt or innocence is an error of law (R. v. Morin, [1992] 3 S.C.R. 286, at p. 296), there is no obligation on a trial judge to record every aspect of the deliberation process: R. v. Walle, 2012 SCC 41, [2012] 2 S.C.R. 438, at para 46.

[68] Further, Goudge, Sharpe and Simmons JJ.A., in Barclays Bank PLC v. Devonshire Trust (Trustee of), [2013] O.J. No. 3691 at para 90, opined that:

[90] Second, findings of fact by the trial judge attract deference on appeal and are only reviewable by this court if they reveal palpable and overriding error: Waxman v. Waxman (2004), 186 O.A.C. 201 (C.A.) at para 291. This standard applies to all factual findings, whether based on credibility assessments, the weighing of competing evidence, expert evidence, or the drawing of inferences from primary facts: see Waxman, at paras 359-60. Findings of fact grounded in credibility assessments are particularly difficult to disturb on appeal: see Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235, at para 24. The trial judge was free to accept some, none, or all of the evidence of the Barclays witnesses, and he gave adequate reasons for rejecting much of it.

8.4: Sheppard and Acquittals

[69] And lastly, I return once again to Justice Nadel's decision in Ontario (Ministry of Labour) v. Dufferin Construction Co., supra, at paras 24 and 25:

[24] A trial judge's duty to provide adequate reasons applies to reasons given for a conviction or an acquittal. But, the assessment of the sufficiency of reasons for an acquittal is informed by the presumption of innocence and the burden of proof beyond a reasonable doubt. This assessment is particularly significant given that Canadian jurisprudence does not recognize the concept of an unreasonable acquittal. "The point was expressed very clearly in R. v. Biniaris, 2000 SCC 15, [2001] 1 S.C.R. 381, at para 33: '...as a matter of law, the concept of 'unreasonable acquittal' is incompatible with the presumption of innocence and the burden which rests on the prosecution to prove its case beyond a reasonable doubt.'"

[25] Moreover, in assessing whether reasons for an acquittal are functionally adequate, Cromwell J.'s comments in R. v. J.M.H., 2011 SCC 45, [2011] S.C.J. No. 45 at paragraph [39] must be kept in mind: "...a reasonable doubt does not need to be based on the evidence; it may arise from an absence of evidence or a simple failure of the evidence to persuade the trier of fact to the requisite level of beyond reasonable doubt. ... It is only where a reasonable doubt is tainted by a legal error that appellate intervention in an acquittal is permitted."

9: DISCUSSION AND CONCLUSION

[70] Given my review of the trial context, given my review of the content of the reasons and given the factual findings and credibility assessments made by Her Worship, it is my opinion that her conclusions on Count 1, dismissing the charges, are clearly understandable and patent, no error of law is evident and her reasons are sufficient for the purposes of Sheppard.

[71] Regardless of the characterization of the offence of unconscionable representation under the Act, and whether that offence is a mens rea or strict liability offence, it is of course trite law that every regulatory offence MUST involve a finding of fact that the actus reus or wrongful act that constitutes the offence has been established. That is fundamental to every prosecution of a regulatory offence. As to the error of law alleged, I do not find favour with this argument.

[72] In R. v. Sault Ste. Marie, [1978] 2 S.C.R. 1299, Dickson J. speaking for the court observed that compelling grounds existed for recognizing three distinct offences, rather than the traditional two. In commenting on mens rea regulatory offences, he found that offences to which mens rea applies, consisting of some positive state of mind such as intent, knowledge or recklessness, must be proved either as an inference from the nature of the act committed or by additional evidence. Strict liability offences, which most regulatory offences fall into, do not require the necessity of proving the existence of mens rea. The doing of the act prima facia makes the offence. They involve a consideration of what a reasonable man would have done. For that reason, the defence of mistake of fact or due diligence is allowed.

[73] Justice Dickson found that a regulatory offence would fall into the first category of mens rea offence only if such words as "wilfully" "with intent" "knowingly" or "intentionally" are contained in the statutory provision creating the offence. See also: Strasser v. Roberge, [1970] S.C.R. 953. As Justice Libman addresses in Libman on Regulatory Offences in Canada, the use of these words alone is not wholly dispositive of the issue. Although they may signal that the prosecution must prove mens rea, where the intention of the legislature is not clear, the presence of imprisonment or other severe penalties, along with other indicia of mens rea, may be considered to overcome the presumption of strict liability in favour of mens rea. See: Latulippe v. Desruisseaux (1986), 3 Q.A.C. 75(CA); R. v. Perez, [2002] NWTJ 93

[74] To follow this discussion, I will refer to the following sections of the Act:

116 (1) A person is guilty of an offence if the person,

(b) contravenes or fails to comply with,

(ii) in respect of Part III, Unfair Practices, subsection 17(1)

14 (1) It is an unfair practice for a person to make a false, misleading or deceptive representation

(2) Without limiting the generality of what constitutes a false, misleading or deceptive representation, the following are included (my emphasis) as false, misleading or deceptive representations:

1. A representation that he goods or services have sponsorship, approval, performance characteristics, accessories, uses, ingredients, benefits or qualities they do not have.

2. A representation that the person who is to supply the goods or services has sponsorship, approval, status, affiliation or connection the person does not have.

3. A representation that the goods or services are of a particular standard, quality, grade, style or model, if they are not.

4. A representation that the goods are new, or unused, if they are not or are reconditioned or reclaimed, but the reasonable use of goods to enable the person to service, prepare, test and deliver the goods does not result in the goods being deemed to be used for the purposes of this paragraph.

5. A representation that the goods have been used to an extent that is materially different from the fact.

6. A representation that the goods or services are available for a reason that does not exist.

7. A representation that the goods or services have been supplied in accordance with a previous representation, if they have not.

8. A representation that the goods or services or any part of them are available or can be delivered or performed when the person making the representation knows or ought to know they are not available or cannot be delivered or performed.

9. A representation that the goods or services or any part of them will be available or can be delivered or performed by a specified time when the person making the representation knows or ought to know they will not be available or cannot be delivered or performed by the specified time.

10. A representation that a service, part, replacement or repair is needed or advisable, if it is not.

11. A representation that a specific price advantage exists, if it does not.

12. A representation that misrepresents the authority of a salesperson, representative, employee or agent to negotiate the final terms of the agreement.

13. A representation that the transaction involves or does not involve rights, remedies or obligations if the representation is false, misleading or deceptive.

14. A representation using exaggeration, innuendo or ambiguity as to a material fact or failing to state a material fact if such use or failure deceives or tends to deceive.

15. A representation that misrepresents the purpose or intent of any solicitation of or any communication with a consumer.

16. A representation that misrepresents the purpose of any charge or proposed charge.

17. A representation that misrepresents or exaggerates the benefits that are likely to flow to a consumer if the consumer helps a person obtain new or potential customers.

15 (1) It is an unfair practice to make an unconscionable representation.

(2) Without limiting the generality of what may be taken into account in determining whether a representation is unconscionable, there may be taken into account that the person making the representation or the person's employer or principal knows or ought to know, (my emphasis)

(a) that the consumer is not reasonably able to protect his or her interests because of disability, ignorance, illiteracy, inability to understand the language of an agreement or similar factors;

(b) that the price grossly exceeds the price at which similar goods or services are readily available to like consumers;

(c) that the consumer is unable to receive a substantial benefit from the subject-matter of the representation;

(d) that there is no reasonable probability of payment of the obligation in full by the consumer;

(e) that the consumer transaction is excessively one-sided in favour of someone other than the consumer;

(f) that the terms of the consumer transaction are so adverse to the consumer as to be inequitable;

(g) that a statement of opinion is misleading and the consumer is likely to rely on it to his or her detriment; or

(h) that the consumer is being subjected to undue pressure to enter into a consumer transaction.

17 (1) No person shall engage in an unfair practice.

(2) A person who performs one act referred to in section 14, 15 or 16 shall be deemed to be engaging in an unfair practice.

[75] The Act uses multiple terms such as "shall engage" "includes" "knows or ought to know" "deemed to be engaging" but does not use the term "knowingly" "willingly" "with intent" or "intentionally" in the offence creating subsection.

[76] Prior to the passage of the Act, the Business Practices Act, R.S.O. 1990, (hereinafter described as "B.P.A.") applied in respect of consumer representations. It was repealed and replaced with the Act in 2005. Under the B.P.A., the offence section for an unfair trade practice used the term "knowingly" and sections 2.1, 2.2, 3(1) and 3(2) employed similar but slightly varied wording. False, misleading or deceptive representations were deemed to include certain acts. An unconscionable representation under the B.P.A. provided that the person making the representation knew or ought to know that one of eight subsections was in play.

[77] In K-Tech, Justice of the Peace Quon found that a ss. 17(1) offence or unconscionable representation under the Act was what he described as an objective mens rea offence in which a mental element has to be proven by the prosecution in addition to the actus reus of the offence. The prosecution, he found, must prove beyond a reasonable doubt that the defendant's conduct was a marked departure from the standard of care of a reasonable person in similar circumstances. As such, he found there was no defence of due diligence. At para 209 of his ruling, prosecution counsel referred to the SCC decision in R. v. Hundal, [1993] S.C.J. No. 29 as support for its position. Justice of the Peace Quon's reasoning is brief. K-Tech does not include a review of the B.P.A. or a discussion of the language of the predecessor sections in the B.P.A. or the significance of the removal of the word "knowingly" from the offence section.

[78] The appellant's argument simply put is, since the learned Justice of the Peace characterized the charge of an unconscionable representation as a strict liability offence at the outset of her decision, that thereinafter her review of the facts and application of legal principles and resulting findings was "tainted." With the greatest of respect, I do not agree.

[79] Whether or not an offence under s. 116(1)(b)(ii) of the Act remains a mens rea offence, I find is a moot point. Namely, Her Worship did not find that the actus reus of the offence of unfair trade practice by an unconscionable representation took place and as such that ended the issue. Moreover, on the scarcity of the argument before me and what appears to be agreement by counsel that an unconscionable representation is a mens rea offence, I would be remiss if I made a finding in the absence of fulsome argument by counsel. My obiter ruling is that there may be considerable merit to the learned Justice's brief analysis of this issue for the reasons I have revealed. Quon J.P., in K-Tech, did not address the issue of the amendments removing the term "knowingly" from the offence subsection of the Act. Moreover, Her Worship is not bound by Quon J.P.'s ruling.

[80] Whether the Justice of the Peace was wrong in law in characterizing the offence as a strict liability one, I find that nothing turns on this issue as she found no wrongful act, no actus reus on the evidence before her and thereafter she was not required to engage in the objective mens rea analysis required if this is a mens rea offence or the due diligence argument if this is a strict liability offence. The appellants have failed to demonstrate where a "tainting" thereafter took place. The argument seems to be that having "got the mens rea argument wrong" Her Worship "got the rest of it wrong." I do not find favour with this argument whatsoever.

[81] On the issue of factual error and unwarranted credibility assessments, I cannot find favour with this argument either. Overall, it is not my function to interfere with the Justice of the Peace's findings of fact and credibility assessments particularly when Her Worship's findings are based on her assessment of the facts unless the error is manifest or not plainly seen, where facts are unsupported by any evidence, where she has ignored conclusive or relevant evidence, misunderstood the evidence or drew erroneous conclusions from it.

[82] Counsel largely referred to the shredding by Davis of the November 17, 2011 bill of sale, the characterization of the transaction of November 17, 2011 as a deposit which should have been returned to Mr. Vetoretti, the "mistakes" or errors in the January 13, 2012 bill of sale by Davis, Her Worship's rejection of the relevance of post offence conduct in Exhibit No. 3 (the Acknowledgment where Mr. Vetoretti agreed he did not hold Clark Chev responsible in connection with the contracts signed and his agreement to withdraw his claim from OMVIC forthwith) and the issue of the undischarged lien on the Saturn vehicle. Some of these examples reflect OMVIC's position at trial and in submissions that the defendant's alleged non-compliance with M.V.D.A. regulatory provisions was a serious incriminating fact that should have resulted in adverse credibility findings against the defendants and supported a factual conclusion that supported a finding under ss. 15(d), (e) and (f) of the Act. This was largely the evidence and opinions of Mr. Carey Smith, OMVIC's chief investigator.

[83] As I have previously addressed in my review of the reasons, the Justice of the Peace was faced with an enormous array of factual issues and sub-issues that were not clearly identified either in the count before the court or in the submissions presented to her. One such issue alone was the matter of what was signed by Mr. Vetoretti's credit applications at the time of the transactions. Accordingly to Mr. Smith, his "experience was that the application was printed, the consumer signs it and they keep it on file." Cross-examination revealed that he was referring to his own experience when he purchased a car and he did not know if the consent to input the credit information had to be signed. Davis' evidence was that his reasons for shredding the November 17, 2011 agreement had only to do with keeping the final signed copy for reference so as to avoid confusion between various copies of the same contract leading to the November 23, 2011 contract. As for the credit application, he offered that it was likely in the company file when Mr. Smith attended and took the entire file away for copying rather than copying its contents on site. Moreover, he opined that online credit applications cannot be printed and signed.

[84] This was not a charge for non-compliance of M.V.D.A. regulations but rather an unconscionable transaction under the Act. Her Worship clearly perceived this case as a credibility assessment between Mr. Vetoretti's account of what transpired, his mother's impressions and the competing account that Howell and Davis were only doing what Mr. Vetoretti wanted and he was capable of arranging the deals he made with the cashing in of his RRSP's. Add to that Mr. Vetoretti's banker's opinion that he could afford the transaction and the evidence that Mr. Vetoretti had demonstrated a pattern of borrowing and transacting debt time and time again.

[85] Whether or not negative equity loans of seven years in length are in and of themselves so adverse as to be "inequitable' exposing consumers to long term debt and the inability to receive a substantial benefit from these transactions and excessively one sided in favour of someone other than a consumer was simply not proven in this case. Whether or not OMVIC's objective through Mr. Smith is that "all consumer transactions should be in the best interests of the consumer" was not the subject of this charge. As it relates to the relevance of post offence conduct, Her Worship was not convinced that Clarke's exchange of letters and acknowledgments were persuasive either, especially as she determined that Justin Brown had largely sourced the information in the letter and was clearly satisfied with Howell's reasons for having Mr. Vetoretti and his mother sign an acknowledgment. I also find no basis to conclude that the learned Justice of the Peace merely relied on ss. 15(2)(a) of the Act in reaching her findings.

[86] What the appeal record reflects is that the appellants take a different view of the evidence and want me to adopt that view. Her Worship reached factual findings based in part on her conclusions about the credibility or reliability of the evidence. Approaching the grounds of appeal in this fashion is nothing short of an attempt by the appellants to reargue their case and an invitation for this Court to substitute its view of the evidence for that of the trial judge. Even though it may have been open to the Justice of the Peace to reach different conclusions on the evidence, I am satisfied that the ones she reached are supportable on the evidence, especially so because many of her findings depend in part or in whole on conclusions about the credibility or the reliability of the evidence.

[87] Once again, I concur with the following statement of the law in Ontario (Ministry of Labour) v. Dufferin Construction Co., supra, at para 55:

"The application of the doctrine of reasonable doubt to a set of facts merits defence...It must be remembered that '...a reasonable doubt does not need to be based on the evidence; it may arise from an absence of evidence or a simple failure of the evidence to persuade the trier of fact to the requisite level of beyond reasonable doubt. ...It is only where a reasonable doubt is tainted by legal error that appellate intervention in acquittal is permitted.'"

[88] As to the sufficiency argument relating to Her Worship's reasons, let me be perfectly candid at the outset that Her Worship's reasons are not what I would describe as an easy read. I trust with the delivery of these reasons that the Appellant's have a clearer explanation for why she decided what she did with clear structure, precision, clarity, plain language and context. To be fair, she did not identify or state the issues precisely; but neither did counsel. This was a confusing and complicated trial which resulted in some degree of confusion and complication with the delivery of Her Worship's reasons. Frankly, Her Worship should have insisted on the production of written argument and submissions after such a lengthy trial and the number of issues and sub-issues raised. However, I am not satisfied that the reasons themselves, in the absence of error of law or fact, warrant directing a new trial in this matter.

[89] It needs to be emphasized that Her Worship was not required to expressly consider every issue, discuss all of the evidence, address every argument made by the Appellants, nor was there an obligation that she record every aspect of her deliberation process in her Reasons.

[90] In this case, Her Worship's reasons, inter alia, contain all of the following findings either expressly or by necessary inference from her other findings:

• Mr. Vetoretti's account of what happened on November 17, 2011 was not credited;

• Mr. Vetoretti's account of being forced or induced to complete the November 23, 2011 and January 13, 2012 contracts was not credited;

• Her Worship accepted the evidence of Davis (a Crown witness) and Howell (a defendant) relating to the contracts signed and the manner in which they explained the transactions to Mr. Vetoretti;

• Mr. Vetoretti's testimony that he could not cash in his RRSP's was rejected not as a falsehood but she found that he misunderstood what was said.

• At all times, Mr. Vetoretti could cash in his RRSP's and satisfy the down payment on the Acadia so that his monthly payments were manageable;

• Her Worship accepted that Mr. Vetoretti's banker said he could afford to purchase the Acadia;

• Her Worship accepted that Mr. Vetoretti typically borrowed to buy things and did so in connection with his purchase of the Acadia;

• Her Worship accepted that Mr. Vetoretti had transacted several other car purchases which included rolling over of debt and/or lease obligations and understood what long term debt meant;

• The evidence was equivocal as to why the lien on the Saturn was not discharged;

• The evidence was equivocal as to who made the loan deferral arrangements on the Acadia and why;

• The evidence was equivocal as to why there was no copy of the original credit application;

• The evidence was equivocal as to whether the consent and credit application should be printed and signed;

• There was insufficient evidence about who was responsible for ensuring that Mr. Vetoretti could satisfy the debt payments; namely, the defendants or the bank;

• Her Worship did not find the evidence relating to potential M.V.D.A. regulation breaches determinative or persuasive of a finding of unconscionability;

• Her Worship did not find the evidence relating to the wholesaler material to the issue of why the lien on the Saturn was not discharged;

• Her Worship did not find evidence of post offence conduct as persuasive or determinative of unconscionability;

• Her Worship rejected the lay evidence relating to Mr. Vetoretti's capacity offered by Messrs. Brown, Smith and Mr. Vetoretti's banker;

• Her Worship accepted with credit Mrs. Vetoretti's evidence that her son was intelligent, he suffered from dyslexia and was capable of conducting business and contracting;

• Her Worship rejected the evidence of Beneteau that he told others Mr. Vetoretti was slow and that he was told nonetheless to "close the deal";

• Her Worship found that Mr. Vetoretti's banker "got this all wrong" from the beginning when she contacted OMVIC thinking Mr. Vetoretti had been duped into buying a second more expensive vehicle from the same dealership related to a car purchase made nine months earlier; and

• There was evidence that reduced loans were not available for negative equity transactions from the car manufacturer.

[91] Given this constellation of facts and findings and given the presumption of innocence, the burden of proof and the doctrine of reasonable doubt, I cannot say that the decisions reached by Her Worship demonstrate palpable and overriding error on count one.

[92] The appeal with respect to count one is hereby dismissed.

Released: April 1, 2015

"original signed and released"

Sharman S. Bondy Justice