The Appellant car dealer was unsuccessful in seeking a judicial review of the Respondent Registrar of Motor Dealers’ decision that the Appellant committed a deceptive act in the course of the sale of a motor vehicle

Administrative law – Decisions of administrative tribunals – Motor Vehicle Dealers – Investigations – Consumer protection – Judicial review – Compliance with legislation – Natural justice – Procedural requirements and fairness

Windmill Auto Sales & Detailing Ltd. v. British Columbia (Registrar of Motor Dealers), [2014] B.C.J. No. 1005, 2014 BCSC 903, British Columbia Supreme Court, May 23, 2014, R.A. Skolrood J.

The Appellants, Windmill Auto Sales & Detailing Ltd. (“Windmill”) and Sam Romaya, sought a judicial review of the decision of the Registrar of Motor Dealers for the Province of British Columbia (the “Registrar”) that found that the Appellants had committed a deceptive act.

The Registrar found that the Appellants had breached the Motor Dealer Act (the “MDA”) by failing to disclose to Ron and Melinda Harris (the “Harrises”) that the motor vehicle they purchased from the Appellants had previously sustained damage in excess of $2,000.00. The Registrar issued a compliance order pursuant to s. 155 of the Business Practices and Consumer Protection Act, directing the Appellants to refund the entire purchase price of the motor vehicle to the Harrises, subject to the Harrises returning the truck, and imposed administrative penalties on both Windmill and Mr. Romaya, the principal of Windmill.

The Appellants sought to set aside the decision of the Registrar, arguing that that the Registrar violated the principles of procedural fairness by effectively denying them the right to be heard. The Appellants alleged that the Manager of Compliance and Investigations for the Motor Vehicle Safety Authority (the “MVSA”) led them to believe that if they admitted the facts contained in the affidavit of the investigator for the Motor Vehicle Safety Authority (the “Affidavit”), the Registrar would make a deduction in the refund amount to account for the Harrises’ use of the vehicle and subsequent accident. The Appellants further alleged that they were never advised that the Registrar could make a finding of fraud against them. The Appellants argued that the effect of the misrepresentations by the MVSA and the failure to give notice of the possibility of a finding of fraud meant that they were not fully informed of the case they had to meet and were denied the opportunity to present a full and proper response.

The Court held that the Registrar did not breach the principles of procedural fairness in his treatment of the Appellants. The Court accepted that while the Appellants may not have been told that a finding of fraud against them was possible, the Registrar did not find the Appellants had committed fraud, but rather found that they committed a deceptive act.

The Court then held that the Appellants were not denied the right to be heard and to present a full answer due to anything said by the MVSA, as the notice of hearing clearly set out the specific nature of the allegations being advanced against the Appellants and the range of possible outcomes. Further, the Court held that the Appellants were provided with the Affidavit setting out the evidence in support of the allegations four months in advance of the hearing and had a chance to review its veracity.

The Court stated that any misunderstanding the Appellants had was not caused by the MVSA, but rather from the Appellants’ own failure to take proper steps to understand the process and act accordingly in their own interest. It was the Court’s view that it is incumbent upon a party that operates within a regulated industry to develop at least a basic understanding of the regulatory regime, including its obligations under the regime, as well as the obligations, and the authority, of the regulator. In this case, the Registrar was under no obligation to remind the Appellants to either read or read carefully the notice of hearing or the statutory provisions referenced therein.

The Court dismissed the application, finding that there was no breach of natural justice or breach of duty of procedural fairness owed to the Appellants in the overall context of the hearing complaint. The Court further accepted the choice of remedy made by the Registrar since the Registrar had a broad discretion as to the scope of a compliance order issued and such an order could include the full refund of the purchase price.

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