Car Dealer Lawyer

The Ontario Motor Vehicle Industry Council regulates motor vehicle dealers and salespersons by administering the Motor Vehicle Dealers Act ("MVDA"). This act requires registration of dealers and salespersons, which involves meeting and maintaining certain levels of honesty, integrity, and financial responsibility. OMVIC has broad registration, discipline, and prosecution powers to uphold these standards.

Services 

Burokas Law acts as a car dealer lawyer by representing dealers and salespersons with all their dealings with OMVIC. Services include:

• providing advice and advocacy when applying to OMVIC for registration;
• appealing proposals to refuse, refuse to renew, suspend, apply conditions, or revoke registration to the Licence Appeal Tribunal; 
• responding and defending against complaints and discipline proceedings;
• defending against charges laid under the MVDA or the Consumer Protection Act;
• appealing convictions and sentences from Provincial Offences Act charges in appellate courts, and;
• applying for judicial review of OMVIC and Licence Appeal Tribunal decisions.

OMVIC’s powers are generally divided into- Registration, Discipline, and Prosecution.

Registration

Motor vehicle dealers and salespersons must acquire registration from OMVIC to legally "trade" in motor vehicles. "Trade" is an extremely broad term including buying, selling, leasing, advertising, negotiating, inducing, and attempting to induce an interest in a motor vehicle.

OMVIC employs a “Registrar” who makes administrative decisions regarding registration. These actions include:

• refusal of application for registration;
• refusal to renew a registration;
• imposition of conditions on a registration;
• suspension of a registration, and;
• revocation of a registration

The Registrar’s authority, while broad, is not absolute. Applicants and registrants (registered individuals or business) can appeal the Registrar’s decision to the License Appeal Tribunal (“LAT”), an independent tribunal that decides whether the Registrar’s administrative action should be accepted or not. 

Registration with OMVIC involves meeting both prescribed requirements and general tests for registration. Prescribed requirements can be found in the “General” Regulation of the MVDA- Ontario Reg 333/08 and differ between dealers and salespersons. OMVIC will not process your application if you have not met them and you will not be entitled to a hearing regarding that decision.

General Test for Registration

Once an individual or business has met all the prescribed requirements they are entitled to registration. If a regulator seeks to refuse their application, they must establish at least one of the following:

• having regard regard to the applicant’s, officer’s or director’s (for corporations), or an “interested person’s" financial position, the applicant cannot reasonably be expected to be financially responsible in business;
• the past conduct of the applicant, officer or director (for corporations) or interested person, affords reasonable grounds for the belief that the applicant will not carry on business lawfully and with honesty and integrity; 
• the applicant, officer or director (for corporations) makes a false statement in an application for registration;
• the applicant of “interested person” is carrying on activities, or will be if registered, in contravention of the act and it’s regulations (excluding Code of Ethics);
• the applicant is in breach of a condition of registration, or;
• the applicant fails to comply with a request by the registrar.

At least one of these criteria must be proven by the Registrar to refuse, refuse to renew, revoke, suspend, or impose conditions on  a registered individual or business. If the Registrar wants to take one of these actions, they must issue a “notice of proposal” to refuse, revoke, suspend, refuse to renew, or impose conditions whereby they are required to explain what criteria above they are relying on and why. 

Interested Persons

The MVDA employs a concept called an “interested person” to the registration criteria above. An interested person is someone who is either: 1) in at least one of many types of legal relationships with the applicant or officer/directors (ex. partners in the same partnership) or, 2) in the opinion of the registrar:

• the person has, or may have a beneficial interest in the other person’s business;
• the person exercises, or may exercise control either directly or indirectly over the other person, or;
• the person has provided, or may have provided, financing either directly or indirectly to the other person’s business.

OMVIC uses the interested persons concept to look beyond the face of a business to determine who is really in control. They are wary of people who appear good on paper being used as fronts for other individuals who would otherwise not be eligible for registration under the forgoing criteria. 

Appealing Proposals

Once an applicant or registrant receives service of a notice of proposal, they have 15 days to file a Notice of Appeal with the Licence Appeal Tribunal (“LAT”). LAT will schedule a “case conference” to:

• facilitate settlement;
• agree on facts prior to a hearing;
• identify parties to a hearing;
• set obligations and timelines for disclosure of evidence;
• schedule hearing dates, or;
• determine whether there are any pre-hearing motions.

Hearings at LAT

Hearings at LAT are heard by an impartial member, vice-chair, or chair of the Licence Appeal Tribunal. They are structured similar to a trial in court, although slightly less formal. In most cases the member will make determinations on contentious factual issues and then determine whether or not the Registrar’s Notice of Proposal should be carried out, not carried out, or not carried out subject to certain conditions on a registration. LAT’s rules and procedures for case conferences and hearings are outlined in their own Rules of Practice and the Statutory Powers and Procedure Act, 1990.

Conditions of Registration

An individual or business may have conditions on their registration that create additional obligations or limit their ability to practice. Conditions arise either when the applicant or registrant (as the case may be) consents to conditions (often as an alternative to a proposal to refuse or revoke) or, the Registrar issues a Notice of Proposal to impose conditions on a registration. The latter can be appealed to LAT in the same manner as a refusal, suspension, refuse to renew, or a revocation.

Discipline

OMVIC is empowered to pursue discipline proceedings. These proceedings deal with the question of whether a business or individual registrant violated their Code of Ethics, which include specific prohibitions for registered individuals and businesses. If the Registrar alleges that they have breached the Code of Ethics, they can issue a “Notice of Complaint” similar to a Notice of Proposal that will outline which part of the Code of Ethics is alleged to have been breached and why. 

Registered individuals can appeal a Notice of Complaint to a “Discipline Committee” administered by the OMVIC but with independent adjudicators. The OMVIC Discipline Committee has its own procedural Rules of Practice similar to LAT and also holds pre-hearing conference for the same purposes. Matters that go to a hearing are heard by adjudicators who may make findings of fact and will determine whether the relevant registered individual or business violated the Code of Ethics. 

The consequences for an individual or business being found in violation of the Code of Ethics include:

• requirements to take further educational courses and fund such courses, and;
• impose fines up to $25,000 

OMVIC also has an Appeals Committee that hears appeals from decisions of the Discipline Committee. 

Discipline is often used for conduct that is concerning to the Registrar but falls below the registration criteria to impose conditions/suspend/revoke.

Complaints

OMVIC is also empowered by their legislation to receive complaints from the public and compel a registered individual or business to provide information regarding the complaints as “soon as practicable”. OMVIC has compliant handlers empowered to mediate complaints, but they can also refer the matter to the Registrar who may then issue a Notice of Proposal to revoke, suspend, impose conditions, or refuse to renew a registration; or may issue a Notice of Discipline. 

Hearing complaints is a common way OMVIC receives information that initiates one or more of their administrative powers- proposals, discipline, and prosecution. It’s important for registrants to work with complaint handlers and adhere to their requests for information to avoid administrative action.

Inspections

Inspections is another primary way OMVIC obtains information that may lead to administrative action. Unlike individuals being investigated for an offence by investigators (see below) or the Police, registered individuals and business in the Motor Vehicle industry can be subject to inspections for the purpose of ensuring compliance with their rules and regulations, dealing with a complaint, or ensuring that the individual or corporation remains entitled to registration.

These inspectors are entitled to search and seize access to money, valuables, documents, data storage devices, and records relevant to the inspection, and may temporarily seize such items. During the course of an inspection, a Regulator’s inspector may require a person to produce documents, records, data storage devices. All registrants are prohibited from obstructing the inspector. 

Prosecution

OMVIC also employs “Investigators” to investigate offences under the MVDA. They have Police like powers in executing search warrants and gathering evidence. Such investigations can lead to a prosecution, discipline, proposals, or any combination thereof.

A person (not just a registrant) is guilty of an offence if they fail to comply with any section of the MVDA (including regulations) except their Code of Ethics. Individuals convicted under these Acts are liable to a fines up to $50,000 ($250,000 for corporations) and two years less a day in prison. Common offences include acting as an unregistered agent, falsifying documents, and furnishing false documents. Individuals or corporations may also be charged by OMVIC under the Consumer Protection Act, 2002, often for unfair business practices related to unconscionable, false, misleading, or deceptive representations. 

The charges laid by OMVIC are considered “quasi-criminal” offences under the Provincial Offences Act, 1990. Individuals charged will be provided by the Regulator’s investigator with an Summons to Appear that will legally require an individual (or their agent) to appear at Provincial Offences Court in the Ontario Court of Justice closest to where the offence is alleged to have occurred. OMVIC has prosecutors that will act similar to a Crown Attorney in a criminal matter in prosecuting the matter in court.

Once before the courts, the matter will progress similar to criminal charges where they will be a series of court appearances, disclosure of evidence to the accused, possible conferences with a Justice of the Peace, and possibly a trial before a Justice of the Peace.

Being found guilty of an offences under the MVDA or the Consumer Protection Act will not create a criminal record but will severely prejudice an individual's or business's ability to practice in the motor vehicle sales industry.