The Applicants were unsuccessful in seeking an appeal of the Registrar of Motor Dealers decision to refuse the applicants request to demand forfeiture of a bond

23. September 2014 0

Administrative law – Decisions of administrative tribunals – Registrar of Motor Vehicle Dealers – Judicial review – Compliance with legislation – Remedies – Bonds – Forfeiture

Jardine v. Saskatchewan (Motor Dealers, Registrar), [2014] S.J. No. 484, 2014 SKQB 250, Saskatchewan Court of Queen’s Bench, August 11, 2014, M.D. Popescul C.J.Q.B.

The Applicants, the Jardines, sought a judicial review of the decision of the Registrar of Motor Dealers of Saskatchewan (the “Registrar”) that refused the Jardines’ request to demand forfeiture of a bond.

The Jardines entered into an arrangement for the purchase and sale of motor vehicles with M.R.P Auto Sales Inc. (“MRP”) for the purpose of sharing profits and losses from those sales. MRP was a registered corporation and a licensed motor dealer. At the time of licensing, MRP was required, pursuant to section 18 of the Motor Dealers Act (the “Act”), to deliver a $20,000.00 bond to the Registrar. The bond was issued by Western Surety Company. Over the course of their relationship, the parties bought 27 vehicles and sold 13 of them. The relationship broke down between the Jardines and MRP, and MRP eventually closed and went out of business. The Jardines believed that they were owed $73,787.92 by MRP pursuant to their agreement, and obtained a default judgment for that amount against MRP. Although the Jardines were not consumers, as they were investors, they nonetheless requested the Registrar to request forfeiture from Western Surety Company of the bond.

The Registrar refused the Jardines’ request because, in the opinion of the Registrar, the criteria as set out in the Act for demanding such a forfeiture were not satisfied. The Act sets the prerequisites that must be met before the Registrar can demand a bond be forfeited pursuant to clause 20(2)(b), namely the Jardines must obtain a judgment against MRP and that the judgment must arise out of a motor vehicle contract. The Registrar concluded that the Act was consumer protection legislation and that there are limitations on what properly falls within the definition of a “motor vehicle contract” in the context of bond forfeiture. The Registrar then held that the claim of the Jardines arose from a failed business venture or investment arrangement and not from the retail sale of motor vehicles to the public.

The Jardines sought to set aside the decision of the Registrar, arguing that it was unreasonable and legally incorrect. Specifically, the Jardines argued that the Registrar erred in law by concluding that the circumstances of the Jardines fell outside of the scope of section 20(2)(b) of the Act. The Court of Queen’s Bench (the “Court”) held that Registrar was correct in deciding that the Act is consumer protection legislation which regulates the retail sale of motor vehicles, and that the Jardines claim arose out of a business venture. The Court reasoned that the Registrar asked himself the correct question, identified the relevant law and then applied the law to the facts in an appropriate way. The Court dismissed the appeal, finding that the decision of the Registrar was not unreasonable and that its decision disclosed no error in law.

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