CITATION: Platinum Cars Ltd. v. Registrar, Motor Vehicle Dealers Act, 2002, 2024 ONSC 3225
DIVISIONAL COURT FILE NO.: 117/24
DATE: 2024/06/06
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
Sachs, Reid and Davies JJ.
BETWEEN:
Platinum Cars Ltd. and Shaun Jalili
Appellants
– and –
Registrar, Motor Vehicle Dealers Act, 2002
Respondent
Symon Zucker and Laney Paddock, for the Appellants
Jillian Siskind, for the Respondent
HEARD at Toronto: May 23, 2024
H. Sachs J.
Overview
[1] The Licence Appeal Tribunal (the “LAT”) upheld the decision of the Registrar, Motor Vehicle Dealers Act, 2002 (the “Registrar”) to revoke the Appellants’ registrations under the Motor Vehicle Dealers Act 2002, S.O. 2002, c. 30, Sched. B. (the “Act”). The Appellants have appealed that decision to the Divisional Court. They sought a stay of the revocation order until the hearing of their appeal.
[2] On April 9, 2024 Leiper J. dismissed their application for a stay pending appeal. The Appellants now seek to set aside and vary Leiper J.’s order and seek to have this panel grant them a stay pending appeal.
[3] For the reasons that follow, the motion to set aside is dismissed.
Background
[4] Mr. Jalili was a motor vehicle salesperson registered under the Act. He is also the sole officer and director of Platinum Cars Inc. (“Platinum”), a registered motor vehicle dealer.
[5] On January 7, 2020, the Registrar issued a Notice of Proposal (“NOP”) to revoke the registrations of Platinum and Mr. Jalili, who then appealed to the LAT. The parties resolved the issues and, on consent, the Registrar placed conditions on the registration of the parties.
[6] On September 14, 2022, the Registrar issued a second NOP to revoke Mr. Jalili’s registration and to revoke Platinum’s registration as a dealer. The grounds of revocation were failure to comply with the conditions of registration, failure to meet disclosure obligations and the alleged dishonest conduct of Mr. Jalili.
[7] Platinum and Mr. Jalili appealed to the LAT, which held an eleven-day hearing. On February 16, 2024, the LAT found that Platinum and/or Mr. Jalili were in breach of various conditions of their registration, including some conditions to which they had consented . The conditions that the LAT found had been breached consisted of the following:
(a) Condition 25 of the consent order required Platinum to provide a specific set of headlights to a consumer within 30 days. This did not happen and the consumer at issue died without the condition being satisfied.
(b) Condition 15 of the consent order required the Appellants to disclose significant material facts on bills of sale. The LAT found that on August 29, 2021 Platinum sold a used BMW to a customer without disclosing to that customer that the vehicle had a significant problem with its cooling system and that Mr. Jalili and Platinum knew of the defect when they sold the vehicle to the consumer. The LAT also found that Mr. Jalili was not truthful with the customer when she complained and that he failed to accept responsibility for making repairs when it was clear that both he and Platinum ought to have done so. Further, neither Platinum nor Mr. Jalili reported the issue to the Ontario Motor Vehicle Industry Council (“OMVIC”), although this was required by Condition 19 of the consent order. The consumer was the one who reported the issue to OMVIC.
(c) Condition 2 of the consent order required Mr. Jalili to refrain from trading motor vehicles until he completed the OMVIC certification course. Mr. Jalili agreed that he continued to purchase motor vehicles for the purpose of selling them prior to his completion of the OMVIC course. Since the Act defines “trade” as buying motor vehicles, the LAT found that Mr. Jalili had breached Condition 2. In doing so the LAT did not accept Mr. Jalili’s explanation that he did not know that he was trading in motor vehicles when he purchased the vehicle at issue for Platinum. It found that Mr. Jalili had been in business for at least 10 years, that he had testified that Platinum was probably the biggest used car dealer in Canada and that what constitutes “trading” is basic to the regulation of motor vehicle sales.
(d) Condition 6 of the consent order required Mr. Jalili to successfully complete within 6 months of the order, both an anger-management course and a dispute-resolution course approved by the Registrar. Mr. Jalili failed to comply with this condition.
[8] The LAT considered the nature of the breaches, the Appellants’ history of prior misconduct and made a finding that there were serious issues with the Appellants’ governability and integrity. Thus, it concluded that the appropriate remedy was revocation of registration and not registration with conditions.
[9] On February 19, 2024, the Appellants appealed the LAT decision to the Divisional Court.
[10] On February 27, 2024, the Appellants moved for a stay of the order revoking their registration. On March 11, 2024, the LAT declined to order a stay.
[11] The Appellants brought an urgent motion in Divisional Court seeking a stay. On April 9, 2024, the motion judge dismissed their motion finding that “it is not in the interests of justice to grant a stay.”
The Motion Judge’s Decision
[12] The motion judge applied the test for a stay that the parties agreed was appropriate – namely the test set out in RJR-MacDonald Inc. v. Canada (Attorney General), 1994 117 (SCC), [1994] 1 S.C.R. 311. That test requires a consideration of three factors: (1) Is there a serious issue to be tried?; (2) Will the moving party suffer irreparable harm if the stay is not granted?; and (3) Does the balance of convenience favour the granting of a stay? The overarching question is whether the moving party has demonstrated that it is in the interests of justice to grant a stay: BTR Global Opportunity Trading Limited v. RBC Dexia Investor Services Trust, 2011 ONCA 620, 283 O.A.C. 321, at para. 16.
[13] The motion judge found that the Appellants had failed to establish that there was a serious issue to be tried. In doing so she reviewed the Notice of Appeal, the Appellants’ factum as filed before her and the LAT’s decision. She found that the “grounds of appeal are numerous, but general. They allege a raft of unspecified errors which are not apparent from a preliminary review of the [LAT’s] reasons. The Appellants provide no detail of any alleged palpable and overriding errors of fact. The [LAT] made findings of credibility which on their fact do not appear to be based on any incorrect principles or misunderstandings of the evidence.”
[14] With respect to the question of irreparable harm, the motion judge referred to the Divisional Court’s decision in Yazdanfar v. College of Physicians and Surgeons of Ontario 2012 ONSC 2422, 292 O.A.C. 341 (Div. Ct.), where the court found that the evidence of irreparable harm has to be “clear, not speculative, and supported by evidence” and that “there will be disastrous consequences beyond financial loss or inconvenience.” The motion judge considered the Appellants’ evidence that they would not be able to service their $30 million loan facility with the bank if a stay was not granted and found that the record before her did not provide a complete financial picture of either Mr. Jalili’s corporate or personal assets. Therefore, she was not satisfied that the Appellants had satisfied this aspect of the test for a stay.
[15] Finally, the motion judge found that the public interest outweighed the financial harm the Appellants would experience if a stay was not granted. In making this finding the motion judge referred to the findings of the LAT that called into question the governability of the Appellants, a concern that was reinforced by the behaviour of the Appellants since the LAT decision. This behaviour included failing to remove their online advertising for their luxury vehicles after their registrations were revoked and Mr. Jalili’s ongoing failure to seek approval for and take the anger management and dispute resolution courses he had been ordered to take. Thus, the balance of convenience favoured denying the stay.
[16] The motion judge concluded by finding that “it is not in the interests of justice to grant a stay.”
Standard of Review
[17] This is a motion pursuant to s. 21(5) of the Courts of Justice Act, R.S.O. 1990, c. C.43. Both parties agree that a motion under s. 21(5) is not a rehearing of the motion. As set out in Guillaume v. Barney Rivers Investments Inc., 2022 ONSC 1123 (Div. Ct.), at para. 4:
This court will only interfere if it is established that the motion judge made an error of law or a palpable and overriding error of fact: Marsden v. Her Majesty the Queen, 2012 ONSC 6118 (Div. Ct.), at para. 2; Ontario Federation of Anglers and Hunters v. Ontario (Natural Resources and Forestry), 2017 ONSC 518, at para. 7 (Div. Ct.). Where a motion judge is exercising discretion, this court will not interfere unless a moving party shows that the impugned decision is “so clearly wrong that it amounts to an injustice” or the motion judge “gives no or insufficient weight to relevant considerations”: Franchetti v. Huggins, 2022 ONCA 111, at para. 5.
The Appellants’ Position
[18] The Appellants argue that the LAT’s decision discloses the following palpable and overriding errors:
(i) The Appellants maintain that with respect to the one consumer complaint involving a BMW, the evidence disclosed that the vehicle concerned had been repaired under warranty by BMW prior to being purchased by the Appellants for resale. Thus, when the issue arose, Mr. Jalili urged the consumer to take the vehicle to BMW for repair at the Appellant’ expense. Neither the LAT nor the motion judge made reference to this key evidence. This resulted in both decision makers making a palpable and overriding error when they found that the Appellants had failed to disclose a pre-existing condition to a consumer who was purchasing one of their vehicles.
(ii) Mr. Jallili testified that he voluntarily disclosed that he was only purchasing vehicles, not selling them. This candour on his part indicates that the LAT and the motion judge made a palpable and overriding error when they accepted that he had knowingly breached a condition not to trade in vehicles.
(iii) Mr. Jalili testified that he tried to get the assistance of the Registrar in finding an anger management and dispute resolution course. Therefore, as put by the Appellants in their factum, “it does not lie in the mouth of the [LAT] to hold that the Appellant Jalili did not take the correct course.”
(iv) The LAT on the stay motion found that the Appellants continued to be in business after the revocation. In doing so it ignored the fact that there was no evidence of ongoing business and the clear evidence that the Appellants cannot transfer ownership of any vehicle without an active dealer’s licence.
[19] Given these alleged palpable and overriding errors and given the fact that the Appellants were also appealing penalty, the motion judge erred when she found that the Appellants had not met the first part of the test for a stay i.e. demonstrating that there is a serious issue to be tried.
[20] With respect to the second part of the test for a stay, irreparable harm, the Appellants submit that the motion judge failed to consider the uncontroverted evidence that in the absence of a stay the Appellants will be unable to satisfy their financial commitments to their banker and the bank will call in their debt, which is secured by the vehicles they own. This would result in the destruction of the Appellants’ business, which is clearly irreparable harm.
[21] With respect to balance of convenience the Appellants submit that the motion judge made a palpable and overriding error when she found that the public interest outweighed the harm to the Appellants. She did so because she ignored or failed to consider the following facts:
(e) The Appellants have been in business for over ten years and have sold in excess of 100,000 vehicles. Viewed against this, the one consumer complaint at issue is a minor matter. Further, no evidence was put forward comparing sales to complaints in the industry at large.
(f) The Appellants attempted to remove his online advertising, but this is very difficult to do as search engines copy advertising and replicate its ads and content.
(g) Mr. Jalili made efforts to comply with the condition respecting the taking of courses and the Registrar failed to assist him in fulfilling this condition.
(h) Since the revocation, Mr. Jalili reached out to the consumer at issue and paid her the monies she had expended to repair her BMW. He also apologized to her.
Analysis
[22] The motion judge reviewed the material before her, including the Notice of Appeal and found that it did not disclose any evidence of what could be considered palpable and overriding errors.
[23] The Appellants’ assertion that the record of the hearing before the LAT disclosed that the BMW had been repaired by the dealer prior to being sold to the consumer is not supported by the findings of the LAT on the issue. These findings were made because there was no evidence to support this assertion. The evidence that was accepted by the LAT was that the BMW dealership had produced an estimate to make the repair that the consumer eventually complained about.
[24] With respect to the failure to accept Mr. Jalili’s testimony that he did not know that purchasing vehicles constituted “trading”, this was a finding of credibility on the part of the LAT. Overturning credibility findings is not the function of an appellate court.
[25] It is clear from the LAT’s decision that it considered Mr. Jalili’s evidence concerning his and his counsel’s interactions with the Registrar about satisfying the course requirement. After having done so, the LAT rejected the Appellants’ argument that these efforts demonstrated a good faith attempt to satisfy the condition at issue. As the LAT correctly found, the condition was a clear one and the evidence was uncontradicted that the courses had not been taken within the specified time period.
[26] The fact that the Appellants cannot transfer vehicles once their licences have been revoked does not detract from the finding of the motion judge that advertising for the sale of motor vehicles after a licence has been revoked is considered “trading” in motor vehicles under the Act and is a violation of the Act.
[27] The fact that the Appellants were also appealing the penalty imposed does not mean that they were able to demonstrate to the motion judge that penalty imposed fell outside the range of penalties available to the LAT for the behaviour at issue. Behaviour amounting to “ungovernability” frequently attracts a penalty of revocation.
[28] Thus, while another decision maker might have found (as the LAT did on the stay motion it heard) that the issues raised met the first part of the test for a stay, it cannot be said that the motion judge committed an error in law or a palpable and overriding error of fact when she found that this threshold had not been met.
[29] With respect to irreparable harm, the motion judge did consider the Appellants evidence about their bank loan and found that the Appellants had not been completely forthcoming about their financial situation. She explained the basis for this finding. Further, and more importantly, she relied on the decision in Yazdanfar to find that demonstrating irreparable harm means demonstrating that “there will be disastrous consequences beyond financial loss or inconvenience.” The loss that the Appellants allege constitutes irreparable harm is financial loss. Thus, the motion judge did not err in law when she found that the Appellants had not met the second part of the test for a stay.
[30] On the question of balance of convenience, the evidence relied upon by the Appellants does not demonstrate that the motion judge made a palpable and overriding error when she found that the public interest outweighed the harm to the Appellants. None of the evidence referred to by the Appellant detracts from the LAT’s findings that the Appellants failed to comply with numerous conditions that had been imposed upon them in a prior discipline proceeding. Given this, and given the Appellants’ prior discipline history, the LAT found that the Appellants were ungovernable. Registrants in businesses that are regulated in the public interest who then fail to abide by the orders of their regulators pose a risk to the public.
[31] In the end the motion judge weighed the relevant factors and exercised her discretion to find that the test for a stay had not been met. Her decision is not so clearly wrong as to amount to an injustice, nor does it disclose a failure to consider relevant considerations.
Conclusion
[32] For these reasons the motion to set aside or vary the motion judge’s order is dismissed. As agreed by the parties, as the successful party, the Registrar is entitled to its costs, fixed in the amount of $4000, all inclusive.
H. Sachs J.
I agree _______________________________
Reid J.
I agree _______________________________
Davies J.
Released: June 6, 2024
CITATION: Platinum Cars Ltd. v. Registrar, Motor Vehicle Dealers Act, 2002, 2024 ONSC 3225
DIVISIONAL COURT FILE NO.: 117/24
DATE: 2024/06/06
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
Sachs, Reid and Davies JJ.
BETWEEN:
Platinum Cars Ltd. and Shaun Jalili
Appellants
– and –
Registrar, Motor Vehicle Dealers Act, 2002
REASONS FOR JUDGMENT
Sachs J.
Released: June 6, 2024