Prestige Toys Ltd.’s appeal of the revocation of its registration under the Motor Vehicles Dealers Act was dismissed. The Registrar’s cross-appeal with respect to the registration of Lioubimova, the sole officer and director of Prestige, was allowed because the Tribunal had failed to analyze any of the relevant evidence related to her wrongdoing.

Administrative law – Decisions of administrative tribunals – Motor Vehicle Dealers – Permits and licences – Revocation – Judicial review – Standard of review – Reasonableness simpliciter – Compliance with legislation – Evidence – Admissibility – Past conduct

Prestige Toys Ltd. v. Ontario (Motor Vehicle Dealers Act, Registrar), [2009] O.J. No. 3437, Ontario Superior Court of Justice, Divisional Court, August 11, 2009, K.E. Swinton, W. Low, and A. Karakatsanis JJ.

The Appellant, Prestige Toys Ltd., appealed a decision made by the Licence Appeal Tribunal directing the Registrar under the Motor Vehicle Dealers Act, R.S.O. 1990, c. M. 41 (the “MVDA”) to revoke Prestige’s registration as a motor vehicle dealer pursuant to s. 5(1) of the MVDA. The Respondent, the Registrar, cross appealed the Tribunal’s decision not to revoke Svetlana Lioubimova’s registration under the MVDA as salesperson. Lioubimova was the sole officer and director of Prestige.

Section 5(1)(b) of the MVDA provides that the Registrar may refuse to register or renew an applicant’s registration where past conduct affords reasonable grounds for belief that the applicant will not carry on business in accordance with law and with integrity and honesty.

Applying this provision, the Tribunal directed the Registrar to revoke Prestige’s registration based on the fact that Prestige did not disclose material information to consumers at the time of the sale of three separate motor vehicles, and because Prestige also created a false and misleading bill of sale with respect to two of these motor vehicles. The Tribunal found that there was no evidence that Lioubimova was personally involved in any of the sales transactions before the Tribunal, or that she was aware of the improper or dishonest activity. Accordingly, the Tribunal declined to revoke Lioubimova’s registration.

On appeal, the Court found that the applicable standard of review was one of reasonableness. The Court rejected the Appellant’s argument that the Tribunal had erred in considering the past conduct of the corporate car dealership in making its determination. Applying basic principles of statutory interpretation, the Court held that an examination of the past conduct of the car dealership accorded with the purpose of the MVDA.

The Court found that there was evidence before the Tribunal that Lioubimova, as sole officer and director, had failed in her duties to effectively manage or supervise the dealership, and that her inadequate management and supervision afforded reasonable grounds for the belief that the dealership would not carry on business in accordance with the law and with honesty and integrity. Accordingly, the Tribunal found that the decision of the Tribunal in this regard was reasonable.

The Court found, however, that the Tribunal had failed to analyze any of the evidence regarding Lioubimova’s personal involvement to support the finding that she was not privy to the improper or dishonest activity. Without a sufficiently articulated basis for these findings, meaningful appellate review was prevented. Accordingly, the cross-appeal was allowed and the decision not to revoke the registration of Lioubimova was remitted back to the Tribunal.

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