A Registrar’s appeal from a decision of the License Appeal Tribunal (the “Tribunal”) was allowed where the Court found that the Tribunal had directed Unity-A-Automotive be registered as a motor vehicle dealer and Thangarajah be registered as a salesperson without addressing whether his past conduct provided reasonable grounds to believe he would act in accordance with the law and with honesty and integrity

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

Ontario (Motor Vehicle Dealers Act, Registrar) v. Unity-A-Automotive Inc., [2009] O.J. No. 5198, Ontario Superior Court of Justice, December 3, 2009, W.L. Whalen, M.R. Dambrot and K.E. Swinton JJ.

Thangarajah immigrated to Canada from Sri Lanka in 1991. He trained as a mechanic. In 1999, he incorporated Unity-A-Automotive (“Unity”). Over the next eight years, Unity was convicted of 26 violations under the Motor Vehicle Dealer’s Act, RSO 1990, c. M.42 and three offences under the Highway Traffic Act, RSO 1990, c. H.8. In January 2008, Unity applied to become registered as a dealer and Thangarajah applied to become registered as a salesperson under the MVDA. The application was filled out by Thangarajah’s wife. On the application, the reply was “no” to the question whether the company had been found guilty of an offence under law, or whether there were any charges pending. On May 13, 2008, the Registrar issued a notice of proposal to refuse registration because the applicant’s past conduct was inconsistent with the intention and objective of the MVDA that registrants carry on business in accordance with law and with integrity and honesty. Thangarajah and Unity appealed to the Tribunal which overturned the Registrar’s decision. The Registrar then appealed the Tribunal’s decision.

The Court noted that the determination made by the Tribunal was one of mixed fact and law and the appropriate standard of review was reasonableness, citing Prestige Toys Limited v. Registrar, Motor Vehicle Dealer’s Act, [2009] O.J. No. 3437 (Ont.Div.Ct).

Upon reviewing the Tribunal’s decision, the Court noted that the Tribunal had found that Thangarajah’s past conduct was explained by his lack of knowledge of the law and his literacy and language problems. However, the Court concluded that the reasons of the Tribunal led to the conclusion that the Tribunal had failed to consider the evidence in light of the requirements of the statute to assess whether the conduct afforded reasonable grounds to believe that the business would be carried on in accordance with law, integrity and honesty in the future. There was no examination of the evidence in order to determine whether there were reasonable grounds to believe that the business would be conducted differently in the future.  Therefore, despite the fact that the reasonableness standard was a deferential one, the decision of the Tribunal was not reasonable given that the Tribunal failed to consider the implications of Thangarajah’s past conduct for the future conduct of his business. The appeal was allowed and the Tribunal’s decision was set aside.

To stay current with the new case law and emerging legal issues in this area, subscribe here.