Court File and Parties

CITATION: 1855456 Ontario In. v. Registrar, Motor Vehicle Dealers Act, 2002, 2021 ONSC 2905

DIVISIONAL COURT FILE NO.: 568/20

DATE: 20210420

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

Dambrot, Fregeau and Penny JJ

BETWEEN:

1855456 ONTARIO INC. O/A 1ST CLASS AUTO SALES and RASHEED HALBOUNI Appellants

and

REGISTRAR, MOTOR VEHICLE DEALERS ACT, 2002 Respondent

Counsel: Justin J. Jacubiak and Diana F. Saturno for the Appellants Michelle Samaroo and Jane Samler for the Respondent

HEARD by videoconference: April 19, 2021

Reasons for Decision

Penny J.

[1] This is an appeal from a decision of the Licence Appeal Tribunal made under the Motor Vehicle Dealers Act, 2002, S.O. 2000, c. 30 Sch. B.

[2] The tribunal found there were reasonable grounds to believe that the appellants would not carry on business as motor vehicle dealers in accordance with law and with integrity and honesty, and that the appellants breached conditions of their registration, all contrary to section 6 of the MVDA. The tribunal ordered that the appellants’ registration be revoked.

[3] The appellant appeals liability and penalty.

[4] Section 11(1) of the Licence Appeal Tribunal Act, 1999, S.O. 1999, c.12, Sch G, provides that, subject to subsections (2) to (6), an appeal lies from a decision of the tribunal under the MVDA to the Divisional Court.

[5] The standard of review on a question of law is correctness. Regarding questions of fact and mixed fact and law, the standard of review is palpable and overriding error, unless there is an extricable issue of law (for which the standard of review is correctness).

[6] This appeal involves the tribunal’s application of section 6 of the MVDA to the facts, as found by the tribunal. The application of the law to the facts is a question of mixed fact and law. There is no extricable question of law. Accordingly, the standard of review on this appeal is palpable and overriding error.

[7] Here, the two questions before the tribunal were:

(1) whether the appellant’s conduct afforded reasonable grounds to believe they would not carry on business in accordance with the law and with integrity and honesty; and

(2) whether the appellants breached a condition of their registration.

[8] The tribunal, in lengthy and detailed reasons, reviewed the evidence and made findings of fact, based on a balance of probabilities. These findings included that the appellants:

(a) sold two vehicles with false and inaccurate safety certificates;

(b) blindly relied on these safety certificates when they had strong reason to suspect the certificates were false or invalid;

(c) failed to disclose important facts about the vehicles sold to two consumers including material facts about the defective condition of the vehicles;

(d) neglected to verify whether repairs to the vehicles which they knew were required (and which they advised the consumers would be done) had, in fact, been completed prior to the conclusion of the sale;

(e) in the case of Consumer B, did not have a safety inspection and certification performed to resolve identified problems, contrary to a specific undertaking given to the consumer that they would do so;

and that:

(f) the vehicles sold were, in fact, in a “terrible and unsafe condition”; and

(g) the defects in the vehicles were of such a nature as to potentially put the driver, passengers, and other users of the road at risk.

[9] There was ample evidence to support these findings. Further, these findings provided ample support for the tribunal’s conclusion:

(a) that there were reasonable grounds to believe the appellants would not carry on business in accordance with law and with integrity and honesty; and

(b) that the appellants breached conditions of their registration.

[10] The appellants argue that insufficient consideration was given to the appellants’ previously clean record in the assessment of the appellants’ past conduct giving rise to the necessary “reasonable grounds to believe”. I am unable to agree. The tribunal was clearly aware that the appellants had a clean prior record of registration. The tribunal took that into account but nevertheless concluded, based on its findings of fact concerning the infractions in question, that there were reasonable grounds to believe that the appellants would not carry on business as motor vehicle dealers in accordance with law and with integrity and honesty. We are not, on appeal, permitted to re-assess or re-weigh that evidence.

[11] For these reasons, I conclude that no palpable and overriding error has been shown regarding the tribunal’s findings that the appellants were in breach of s. 6 of the MVDA.

[12] On the question of penalty, it is well established that in order to overturn a penalty imposed by a regulatory tribunal, it must be shown that the decision-maker made an error in principle or that the penalty was “clearly unfit”: Mitelman v. College of Veterinarians of Ontario, 2020 ONSC 3039 at para. 18.

[13] Courts in the criminal context have used a variety of expressions to describe a sentence that reaches this threshold, including “demonstrably unfit”, “clearly unreasonable”, “clearly or manifestly excessive”, “clearly excessive or inadequate” or representing a “substantial and marked departure” from penalties in similar cases. This high threshold applies equally in the administrative law context. To be clearly unfit, the penalty must be disproportionate or fall outside the range of penalties for similar offences in similar circumstances. A fit penalty is guided by an assessment of the facts of the particular case and the penalties imposed in other cases involving similar infractions and circumstances, College of Physicians and Surgeons of Ontario v. Peirovy, 2018 ONCA 420 at para. 56.

[14] The appellants’ principal argument is that the tribunal conducted insufficient analysis of the possibility of imposing a penalty less severe than revocation. While more might have been said on this topic in the reasons, the tribunal was alive to the requirement that revocation was neither an automatic nor the default remedy and that other, lesser remedies such as conditions of registration, must also be considered. In doing so, the tribunal cited the relevant precedent, Arulappu v. Registrar, Real Estate and Business Brokers Act, 2011 ONSC 797. The tribunal did consider the appellants’ prior clear record, but nevertheless concluded that the two proven breaches involved sufficiently serious misconduct as to warrant revocation. This was also a case where the registrants were already subject to comprehensive conditions, which the tribunal found they had breached.

[15] In my view, it has not been shown that these findings amounted to an error in principle or that the penalty was clearly unfit.

[16] For these reasons, I would dismiss the appeal.

[17] The Registrar sought costs of $2,500. This sum is reasonable, having regard to what the appellant would have sought if successful ($15,000). Accordingly, I would award costs (all inclusive) to the Registrar in the amount of $2,500.

Penny J.

I agree _______________________________

Dambrot J.

I agree _______________________________

Fregeau J.

Released: April 20, 2021

CITATION: 1855456 Ontario In. v. Registrar, Motor Vehicle Dealers Act, 2002, 2021 ONSC 2905

DIVISIONAL COURT FILE NO.: 568/20

DATE: 20210420

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

Dambrot, Fregeau and Penny JJ

BETWEEN:

1855456 ONTARIO INC. O/A 1ST CLASS AUTO SALES and RASHEED HALBOUNI

Appellants

and

REGISTRAR, MOTOR VEHICLE DEALERS ACT, 2002

Respondent

REASONS FOR JUDGMENT

A

Released: April 20, 2021