CITATION: SMITH v. REGISTRAR, MOTOR VEHICLE DEALERS ACT, 2011 ONSC 829
DIVISIONAL COURT FILE NO.: 29/08
DATE: 20110214
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
BROWN RSJ., SACHS, HERMAN JJ.
BETWEEN:
STEVEN A. SMITH
Appellant
– and –
REGISTRAR, MOTOR VEHICLE DEALERS ACT
Respondent
William Kelly, for the Appellant
Michael Rothe, for the Respondent
HEARD at Toronto: October 4, 2010
I. NATURE OF PROCEEDINGS
[1] On July 12, 2007, the Registrar, Motor Vehicle Dealers Act (the “Registrar”) issued a Notice of Proposal (the “proposal”) to revoke the registration of Steven A. Smith (“the “appellant”) as a motor vehicle salesperson. The grounds for the proposal included the appellant’s June 18, 2007, industry related conviction for the offence of counselling Mr. Diamond, the appellant’s customer, to commit the indictable offence of arson.
[2] A hearing was held before the Licence Appeal Tribunal (the “Tribunal”) on November 22, 2007. In its decision released on December 20, 2007 (the “decision”), the Tribunal directed the Registrar to carry out the proposal to revoke the appellant’s registration as a motor vehicle salesperson.
[3] The appellant now appeals to this court from the decision of the Tribunal and seeks an order directing the Registrar not to revoke the appellant’s registration and an order to renew or continue the appellant’s registration, or, in the alternative, an order directing that a new hearing be held before a different member of the Tribunal.
II. BACKGROUND
[4] The appellant has worked in the motor vehicle sales industry for the majority of his career, beginning in 1993. Before the incident that gave rise to this matter, his record was unblemished.
[5] The appellant was employed with Davidson Chrysler in early 2006 when he was contacted by phone by a customer, Mr. Diamond, who expressed concern regarding his decision to lease a vehicle through the dealership about a week earlier. Mr. Diamond told the appellant that because he had entered the car lease, he was now having difficulties in obtaining a mortgage.
[6] At Mr. Diamond’s request, the appellant met with him the next day at the appellant’s office to review the value of the vehicle and to determine the cost of Mr. Diamond surrendering the vehicle. During the meeting, the appellant advised Mr. Diamond that to return the leased vehicle would cost Mr. Diamond approximately $10,000.
[7] Mr. Diamond then began to cry and became very upset. He advised the appellant that “my wife’s going to leave me. She is going to take my kids. We just bought a new house. I’ll lose everything”.
[8] The meeting ended with the appellant agreeing to make further phone calls to determine if he could reduce the amount required for Mr. Diamond to surrender the newly leased vehicle. Mr. Diamond was going to speak to relatives to see if they could assist him financially and he was going to contact a mortgage broker to whom the appellant had referred him.
[9] Mr. Diamond called the appellant the following day advising the appellant that Mr. Diamond’s family could not assist him financially. During the telephone call Mr. Diamond sounded very upset. He requested a second meeting with the appellant.
[10] Mr. Diamond met with the appellant on a second occasion. Mr. Diamond tape recorded this meeting without the knowledge of the appellant. At this meeting, Mr. Diamond asked if there were other options. The appellant stated that the only other option would be if the vehicle were to disappear. The appellant further advised Mr. Diamond that the only way there would be an immediate payout from the insurer was if the vehicle were destroyed through a fire. The appellant then provided Mr. Diamond with the name and phone number of a person the appellant thought could assist Mr. Diamond should he decide to destroy the vehicle. The appellant knew that what he was doing was wrong and illegal, but he acted out of desperation, believing that he was the only person who could help Mr. Diamond out of his situation.
[11] Mr. Diamond subsequently disclosed the tape recorded conversation to Mr. Davidson, the appellant’s employer, and the appellant was demoted from sales manager to sales representative. The matter was referred to the police by Mr. Diamond in the fall of 2006, and the appellant was charged with counselling to commit the indictable offence of arson.
[12] The appellant submitted an application on January 10, 2007, to have his registration as a motor vehicle sales person renewed under the Motor Vehicle Dealers Act R.S.O., 1990 c.M. 42 (the “Act”). The standard renewal form asks, “Are there currently any charges pending or has the applicant ever been found guilty or convicted under any law?” In response, the appellant ticked “yes” and attached an addendum, which read:
For the first time in my professional career, I have recently been charged with an offence called “counselling to commit an indictable offence”. I have not been convicted and I have every intention of defending this charge in court. It is a long story that I would be happy to share but I am confident that the charges are erroneous and that at the end of the day, they will be reduced to a conditional discharge.
[13] Shortly thereafter, a representative of the Registrar from the Ontario Motor Vehicle Industry Council (“OMVIC”) requested further information from the appellant regarding the particulars of the criminal charge that the appellant referred to in his application. The appellant replied that he would “see if his lawyer has it”. The appellant contacted his lawyer who advised him that providing additional particulars could hurt his outstanding criminal charge because it is public information at that point. The appellant did not provide any further particulars, nor did he contact the Registrar or its representatives further.
[14] On June 18, 2007, the appellant pled guilty and was convicted of counselling Mr. Diamond to commit the indictable offense of arson, contrary to s. 464(a) of the Criminal Code. He received a conditional discharge with 18 months probation (ending in January 2009) and 125 hours of community service.
[15] The Registrar issued a Notice of Proposal to revoke the appellant’s registration on July 12, 2007. The particulars of the Notice state that the appellant’s past conduct is inconsistent with the objectives of the Act, which include the protection of the public interest, and which require registrants to carry on their business in accordance with the law and with integrity and honesty.
[16] The criteria for registration is set out in section 5 of the Act which reads as follows:
- (1) An applicant is entitled to registration or renewal of registration by the Registrar except where,
(a) having regard to the financial position of the applicant, the applicant cannot reasonably be expected to be financially responsible in the conduct of business; or
(b) the past conduct of the applicant affords reasonable grounds for belief that the applicant will not carry on business in accordance with law and with integrity and honesty.
[17] The appellant appealed the proposal to the Tribunal by Notice of Appeal issued July 26, 2007, stating:
In my respectful submission, this single incident [i.e. the criminal conviction] does not afford the Registrar reasonable grounds to believe that I will not carry on business in accordance with law and with integrity and honesty.
[18] On November 22, 2007, a hearing was held before the Tribunal. Testimony was provided by Constable Kevin Neath of the Toronto Police Services; Carey Smith, the Director of Investigations with OMVIC at the relevant time; the appellant; the appellant’s employer; and the appellant’s wife.
[19] In it decision of December 20, 2007, the Tribunal found that the appellant’s past conduct affords reasonable grounds for the belief that he will not carry on business in accordance with law and with integrity and honesty. In light of this finding, the Tribunal directed the Registrar to carry out the proposal to revoke the appellant’s registration as a motor vehicle salesperson under the Act. The appellant now appeals to this court from the Tribunal’s decision.
III. ISSUES
[20] The appellant raises four grounds of appeal:
(i) The Tribunal erred on the evidence presented during the hearing in concluding that the appellant’s past conduct affords reasonable grounds for the belief that the appellant will not carry on business in accordance with law and with integrity and honesty.
(ii) The Tribunal erred in concluding that there was a financial gain or motive for the appellant to become involved in the events that resulted in the Registrar refusing to renew the appellant’s registration.
(iii) The Tribunal erred in determining that there was not sufficient evidence at the hearing to establish that the appellant would not, or could not, become involved in events similar to those that resulted in the Registrar revoking the appellant’s registration.
(iv) The Tribunal erred in determining that the appellant’s response to the Registrar’s request for particulars, after the appellant had disclosed the offence to the Registrar, was self-serving and illegal.
IV. STANDARD OF REVIEW
[21] The applicable standard of review from the decision of the Tribunal is one of reasonableness. See Dunsmuir v. New Brunswick, 2008 SCC 9; Goselin v. Ontario (Motor Vehicle Dealers Act, Registrar), [2009] O.J. No. 1433 (Div. Ct.).
V. ANALYSIS
(i) Did the Tribunal err on the evidence presented during the hearing in concluding that the appellant’s past conduct affords reasonable grounds for the belief that the appellant will not carry on business in accordance with law and with integrity and honesty?
[22] In reaching its conclusion that the appellant’s past conduct affords reasonable grounds for the belief that the appellant will not carry on business in accordance with law and with integrity and honesty, the Tribunal held as follows at pg.10 of its decision:
A person with the applicant’s education and experience ought to have known at the time, that the counsel he was giving the consumer was not in accordance with the law and that he was not acting with honesty and integrity. The applicant had ample time to consider other alternatives….When the customer returned for advice, the applicant counselled him to commit a criminal act as well. Choosing the latter alternatives are not considered by the Tribunal as acting with honesty, integrity, and within the law…This legislation is intended to protect the unsuspecting public. For the Tribunal to support the registration of an applicant who has a recent conviction for a very serious industry related offence and is still serving the eighteen month sentence imposed by the court would be sending an incorrect message to the industry and to the public.
[23] The appellant submits that in rendering its decision the Tribunal erred in failing to consider the appellant’s conduct in the vehicle sales industry both before and after the appellant’s finding of guilt on the criminal charge. The appellant submits that the appellant’s finding of guilt is not, in itself, sufficient to establish reasonable grounds to deny renewal of the appellant’s registration as a motor vehicle sales person. In all the circumstances, the appellant submits that the Tribunal’s decision was too severe and draconian and that the appropriate result should have been a renewal of the appellant’s registration as a motor vehicle salesperson, subject to certain terms and conditions.
[24] I see no merit to this ground of appeal. The past conduct referred to in s. 5(1) of the Act may, in certain circumstances, consist of one isolated mistake, if it is of such a nature and in circumstances that there are reasonable grounds for belief that the person applying to be registered would not carry on business in accordance with law and with integrity and honesty. See Ontario (Registrar of Motor Vehicle Dealers and Salesman) v. Clermont, [1974] O.J. No. 1028 at para. 7 (Div. Ct.). Given the serious nature of the appellant’s conduct and how directly it arose out of his work as a motor vehicle salesperson, this is a case where one isolated mistake could reasonably support the belief that the appellant would not carry on business in accordance with law and with integrity and honesty.
[25] In my view, the decision of the Tribunal was reasonable in that it fell within a “range of possible, acceptable outcomes which are defensible in respect of the facts and law” as the reasonable test has been defined by the Supreme Court of Canada in Dunsmuir, supra at para. 47.
[26] While some particular passages of evidence might have supported different findings of fact, that is no basis to interfere with the result. The Tribunal heard the evidence and made findings of fact that are fully supported by the evidence. The Tribunal was entitled to base its finding on the whole of the evidence, including the appellant’s finding of guilt for a serious industry related criminal offence, and the decision was not unreasonable on the evidence before it.
(ii) Did the Tribunal err in concluding that there was a financial gain or motive for the appellant to become involved in the events that resulted in the Registrar refusing to renew the appellant’s registration?
[27] With respect to the issue of financial gain by the appellant, the Tribunal said the following at pg. 10 of its decision:
The Applicant, in his testimony, did not dispute his charge or conviction as rendered by the court nor did he dispute the charge was industry related. The Applicant did not admit that there was any financial benefit to him as a result of the advice he gave to the customer, but one of his witnesses explained the compensation package and clearly there was some financial gain for the Applicant.
[28] The appellant submits that the Tribunal misapprehended the evidence of financial gain or motive for the appellant to become involved in the events in question. The appellant refers to the evidence of Mr. Davidson, the appellant’s employer, who testified on behalf of the appellant that the compensation package for one lease deal might only be $30 to $50.
[29] Even accepting that the Tribunal may have misapprehended the significance of the financial gain to the appellant, I am of the view, for the reasons expressed earlier, that the Tribunal arrived at its factual conclusions reasonably when considering the whole of the evidence before it. I am not satisfied that the evidence of financial gain was material to the reasoning process of the Tribunal in the circumstances. It is clear from the decision of the Tribunal that what was significant to the Tribunal in regard to the past conduct of the appellant was his engaging in the criminal act of counselling to commit arson. Whether it was motivated by financial gain or otherwise was peripheral to the reasoning of the Tribunal.
[30] I would not give effect to this ground of the appeal.
(iii) Did the Tribunal err in determining that there was not sufficient evidence at the hearing to establish that the appellant would not, or could not, become involved in events similar to those that resulted in the Registrar revoking the appellant’s registration?
[31] With respect to this ground for appeal, the appellant takes issue with the following passage from the Tribunal’s decision at pg. 10:
Even though the Applicant stated that this was a huge mistake and other witnesses testified this was out of character for the Applicant, the Tribunal heard no convincing testimony that this would not happen again as all were shocked it happened this time.
[32] The appellant submits that the reasoning of the Tribunal is flawed in that it fails to give sufficient weight to the evidence led by the appellant regarding 1) his unblemished work record; 2) his good character, and 3) his sense of remorse regarding the events in question.
[33] While I accept that the Tribunal might have chosen better words to express itself when dealing with the issue of character evidence, I am of the view that the impugned passage was not unreasonable. The Tribunal was entitled, on the evidence before it, to conclude that it was not satisfied that the appellant’s past conduct would not be repeated for future customers. The Tribunal was entitled to weigh evidence of his past conduct, his present attitude and character witnesses. The Tribunal’s conclusion was not unreasonable on the evidence before it.
[34] I would not give effect to this ground of appeal.
(iv) Did the Tribunal err in determining that the appellant’s response to the Registrar’s request for particulars, after the appellant had disclosed the offence to the Registrar, was self-serving and illegal?
[35] With respect to the lack of response to the Registrar’s request for additional particulars, the Tribunal said the following at pg. 10:
The Applicant did attempt to explain why he did not provide a response to the Registrar’s request for additional particulars and details by stating that his lawyer advised him it may affect his court case. Even though he had received that advice, he could have chosen to respond to the Registrar indicating the direction he had received from his lawyer or provide a full explanation. The Tribunal views the lack of response to the Registrar’s authority as self-serving in this case, as well as not within the law. This causes concern to the Tribunal as to whether or not the Applicant would respond honestly, with integrity and in a timely manner in the future.
[36] The appellant submits that the Tribunal erred in drawing the adverse inference it did regarding the appellant’s failure to respond to the Registrar’s request for further particulars. The appellant submits that he disclosed his outstanding criminal charge in his application of January 10, 2007 and that was a sufficient response in the circumstances and should not have resulted in any negative inference by the Tribunal. By drawing an adverse inference as it did, the appellant submits that the Tribunal incorrectly reversed the onus of proof onto the appellant by requiring him, in effect, to provide particulars to the Registrar regarding his outstanding criminal charge.
[37] I do not see merit in this ground of appeal. Here again, the Tribunal might have chosen better words to express itself. For instance, I question whether the failure to provide particulars to the Registrar in the circumstances of this case can be construed as “not within the law”. That being said, the inferences drawn by the Tribunal were not unreasonable.
[38] When asked by a representative of the Registrar for further information regarding his pending criminal charge, the appellant stated that “he will see if his lawyer has it”. However, the appellant chose not to get back to the Registrar’s representative to provide them with any further information whatsoever. The inquiry of the Registrar’s representative was perfectly reasonable because there was nothing in the applicant’s application which indicated 1) whether the criminal charge was industry related or 2) the nature of the indictable offence that the appellant was alleged to have counselled. I accept that the appellant was subsequently advised by his lawyer that providing particulars could hurt his outstanding criminal charge because such particulars would become public information. However, the appellant’s failure to get back to the Registrar’s representative to simply advise her of that fact was a factor that the Tribunal could reasonably consider and it was not unreasonable in the circumstances for the Tribunal to draw the inferences it did.
VI. CONCLUSION AND COSTS
[39] For the above reasons I would dismiss the appeal. Costs to the respondent fixed at $3,000, all inclusive.
BROWN RSJ.
SACHS J.
HERMAN J.
Released: February 14, 2011
CITATION: SMITH v. REGISTRAR, MOTOR VEHICLE DEALERS ACT, 2011 ONSC 829
DIVISIONAL COURT FILE NO.: 29/08
DATE: 20110214
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
BROWN RSJ., SACHS, HERMAN JJ.
BETWEEN:
STEVEN A. SMITH
Appellant
– and –
REGISTRAR, MOTOR VEHICLE DEALERS ACT
Respondent
REASONS FOR JUDGMENT
Released: February 14, 2011