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MVDA - General. St. Laurent Automotive Group Inc. v. Cheryl Britt
In St. Laurent Automotive Group Inc. v. Cheryl Britt (Ont Div Ct, 2026) the Ontario Divisional Court allowed a Small Claims Court appeal, this brought against an order for "damages in the amount of $15,000 to St. Laurent Automotive Groups Inc. (Respondent) for the Appellant’s breach of non-export clause".
The court considered the 'unfair practices' provisions of the Consumer Protection Act, 2002, here as it relates to 'non-export acknowledgements' in auto sales:Did the trial judge fail to apply the Consumer Protection Act?
Decision
[129] First, NEAs have been found to be enforceable on the parties.
[130] In Eurotrend Fine Cars Ltd. v. Li, 2020 SKQB 108, at paras. 40-42, the court accepted that non-export agreements are permissible as part of the purchase agreement.
[131] In the unreported decision of St. Laurent v. Patenaude (Respondent’s compendium tab 31), the court upheld the terms of the non-export agreement.
[132] The NEA is not a stand-alone agreement but part of a bill of sale and therefore not one sided.
[133] The NEA does not limit the resale but rather limits the time frame when the vehicle can be exported: see Walthers Pontiac Buick GMC Ltd v. Smith,, 2002 BCPC 541. The terms in Walthers were similar to the NEA in the case at bar. The Court found that it was enforceable and not against public policy. See also Eurotrend Fine Cars Ltd. v. Li, 2020 SKQB 108 at para. 70.
[134] The court in Wolfe Chevrolet Oldsmobile Ltd. v. 552234 B.C. Ltd., 2004 BCPC 154, upheld a non-export clause as enforceable. The dealership was facing a loss of cars as a result of vehicles being exported. The court emphasised the right of parties to bargain and when a contract is freely agreed to, the court should not rescue a party from the bargain unless they show unconscionability: at para. 13.
[135] There was evidence in Wolfe that General Motors was prepared to impose financial penalties on franchises or dealers who were not vigorous in attempting to curtail exports.
[136] Also, in Automobiles Silver Star Montreal Inc. v. Shahab, 1999 CarswellQue 281, the court found that the non-export agreement was not illegal.
[137] The next issue is whether the Appellant’s waiver of her rights amounted to an unfair practice under the CPA.
[138] The CPA protects individuals in personal/household transactions, covering online shopping, door-to-door sales, and contracts by ensuring fair practices, clear disclosures, and rights to cancel within “cooling-off” periods.
[139] Section 14(2)13 of the CPA reads:14 (1) It is an unfair practice for a person to make a false, misleading or deceptive representation.
(2) Without limiting the generality of what constitutes a false, misleading or deceptive representation, the following are included as false, misleading or deceptive representations:
13. A representation that the transaction involves or does not involve rights, remedies or obligations if the representation is false, misleading or deceptive. [140] Section 15 is also relevant here:15 (1) It is an unfair practice to make an unconscionable representation.
(2) Without limiting the generality of what may be taken into account in determining whether a representation is unconscionable, there may be taken into account that the person making the representation or the person’s employer or principal knows or ought to know,
(a) that the consumer is not reasonably able to protect his or her interests because of disability, ignorance, illiteracy, inability to understand the language of an agreement or similar factors;
(b) that the price grossly exceeds the price at which similar goods or services are readily available to like consumers;
(c) that the consumer is unable to receive a substantial benefit from the subject-matter of the representation;
(d) that there is no reasonable probability of payment of the obligation in full by the consumer;
(e) that the consumer transaction is excessively one-sided in favour of someone other than the consumer;
(f) that the terms of the consumer transaction are so adverse to the consumer as to be inequitable;
(g) that a statement of opinion is misleading and the consumer is likely to rely on it to his or her detriment; or
(h) that the consumer is being subjected to undue pressure to enter into a consumer transaction. [141] There is an ambiguity if the vehicle is stolen and then exported. Would the consumer be held liable under the NEA as it was exported without their intent? Section 11 provides:11 Any ambiguity that allows for more than one reasonable interpretation of a consumer agreement provided by the supplier to the consumer or of any information that must be disclosed under this Act shall be interpreted to the benefit of the consumer. [142] The notice provisions under Part IX which outlines procedures for consumer remedies sets out sections 91 and 92 do not apply to remedies claimed under unfair practices under Part III.
[143] The issue is whether there were misleading or unconscionable representations.
[144] According to the NEA, the Appellant would be responsible under all circumstances if the vehicle is resold for export within one year of purchase. The dealership is placing the risk of the export to the consumer regardless of whether the vehicle was exported by a purchaser of the vehicle or was stolen and then exported.
[145] Once it is exported, the dealer is denied inventory of two vehicles, and this clause requires the consumer to pay the loss that the dealer would face regardless of whether the customer had a hand in the export or not.
[146] When asked about whether the purchaser would be responsible if the vehicle was stolen, Mr. Scott said he would want to see the police report before he would commence proceedings.
[147] Here the consumer waived her rights, which would mean that she is responsible for all occurrences beyond her control and there was no evidence led that there would be exceptions to the NEA even if stolen.
[148] The consumer has taken on the allocation of risk that the manufacturer imposes on the dealer and there are no exceptions that would make it fair and just. In my view, this is an unfair practice within the meaning of the CPA.
[149] I am guided by the well-reasoned decision of Deputy Judge DiGregorio in an unreported decision of Downtown Porsche et al. v. Bensalmon et al. He found that the prohibition of exports in that case was enforceable and not a restraint of trade and the liquidated damages was a fair estimate of damages and not a penalty. It was not a restraint of trade as “[t]he purchaser would have the right to protect himself by getting an indemnity agreement from its purchaser…or he could just increase the price by $10,000.00 to get the money the (sic) back”.
[150] The defendants soon decided that the vehicle was too small for the family and sold it to a dealer in Quebec for a loss. It changed hands a few times and then the plaintiff alleges that the vehicle was exported within one year.
[151] The plaintiff accepted a report from the Gray Market report sent by Porsche Canada to the dealer which said that the vehicle had arrived in China. The defendant denied that she had arranged the export.
[152] The court in that case found that the clause was ambiguous in that the clause “[w]ill not be exported implies some form of control which a reasonable thinking individual might read it to mean I cannot export it, not a third party that I sell it to. It would have been easy to state will not be exported by myself as purchaser or any third party I may sell the vehicle to. That puts the purchase on notice that he or she has to take steps”.
[153] Later, the court stated: “If the vehicle had not been sold by the defendant but had been stolen instead during the one-year period and then the thief exported the vehicle to China according to the plaintiffs’ interpretation of the clause this purchaser would have to pay $10,000 because it was exported. Surely that cannot be the meaning of the clause. That is not just. That is not fair. But yet, that would be a logical consequence if the agreement were interpreted [in] the manner that the plaintiff is asking me to interpret it.
[154] The court found that the contra profentum rule came into play and was used against the maker. There was other conflicting evidence of whether the vehicle had been indeed exported. Ultimately, the court dismissed the action. He found the clause was a restraint of trade.
[155] These principles apply here.
[156] Section 18 of the CPA provides:18 (1) Any agreement, whether written, oral or implied, entered into by a consumer after or while a person has engaged in an unfair practice may be rescinded by the consumer and the consumer is entitled to any remedy that is available in law, including damages. [157] In addition, s. 93 sets out the remedy:93 (1) A consumer agreement is not binding on the consumer unless the agreement is made in accordance with this Act and the regulations.
(2) Despite subsection (1), a court may order that a consumer is bound by all or a portion or portions of a consumer agreement, even if the agreement has not been made in accordance with this Act or the regulations, if the court determines that it would be inequitable in the circumstances for the consumer not to be bound.
13. A representation that the transaction involves or does not involve rights, remedies or obligations if the representation is false, misleading or deceptive. [158] In Connect Electric Inc. v. Pullen and Greensides, 2013 ONSC 1837, Justice Conlan stated:[55] But not every illegal contract that fails to comply with the CPA is unenforceable against the consumer. The Court may order that the consumer is bound by the agreement where it would be inequitable to hold otherwise: subsection 93(2).
[56] This is merely a recognition of the distinction between illegality as to contractual formation and illegality as to contractual performance: Beer v. Townsgate I Ltd., 1997 CarswellOnt 3753 (Court of Appeal for Ontario), at paragraph 12.
[57] In deciding whether to apply subsection 93(2) of the CPA, a Court ought to consider the serious consequences of invalidating the contract, the social utility of those consequences and the class of persons for whom the prohibition was enacted: Morrell v. Cserzy, 2002 CarswellOnt 658 (Ontario Superior Court of Justice, Templeton J.), at page 11, in turn citing High Court Justice Krever, as His Honour then was, in Royal Bank of Canada v. Grobman et al (1977), 1977 CanLII 1113 (ON SC), 18 O.R. (2d) 636 at pages 652-653.
[58] A Court may also consider whether the contract was bargained for at arm’s length, whether the consumer was unfairly taken advantage of, whether the agreement was wholly or substantially completed, the degree of benefit derived by the consumer and whether it would be inherently wrong or contrary to public policy to enforce the contract: Morrell, supra at page 14, in turn citing General Division Justice Sharpe, as His Honour then was, in Johnson v. Lazzarino (1998), 1998 CanLII 14835 (ON SC), 39 O.R. (3d) 724 at page 728. See also Agasi v. Wai, 2000 CarswellOnt 2903 (Ontario Superior Court of Justice, Boyko J.), at paragraphs 46 and 47. [159] It would be inherently wrong and contrary to public policy to enforce the NEA that transfers the risk of the export completely to the consumer even it is out of the control of the consumer.
[160] Therefore, the court finds that the trial judge erred in law in finding that the CPA did not apply to the NEA. . Draven v. Ontario Motor Vehicle Industry Council
In Draven v. Ontario Motor Vehicle Industry Council (Ont Divisional Ct, 2025) the Divisional Court dismissed "a motion to extend the time to file an Application for Judicial Review".
Here the court illustrates the operation of s.82 ['Determination of claims'] of the MVDA:[5] On or about June 18, 2019, the Applicant submitted an initial claim ("2019 Claim") to the Motor Vehicle Dealers Compensation Fund ("MVDCF"). The Claim arose from the Applicant's purchase of a motor vehicle from 2551276 Ontario Inc. o/a Kia of Newmarket ("Dealership").
[6] The MVDCF is a fund established by the Motor Vehicle Dealers Act, 2020, to reimburse eligible customers who have suffered a proven pecuniary loss related to a vehicle purchased or leased from a registered dealer. An independent Board of Trustees reviews claims and determines compensation in accordance with the criteria set out in the MVDA and its regulations.
[7] Section 82(3) provides that:Before a customer is paid compensation from the Fund in respect of a claim, the Board may require that the customer:
(a) obtain a judgment in respect of the claim, cause an execution to be issued under it, cause levies to be made under it and examine the judgment debtors;
(b) exhaust any other legal remedies, in addition to those described in clause (a), available to the customer in respect of the claim; or
(c) bring an action against any person against whom the customer might reasonably be considered as having a cause of action in respect of the claim. O. Reg. 333/08, s. 82 (3).
[8] On September 11, 2019, the Fund wrote to the Applicant that "the Board was unable to make a decision and agreed to exercise its discretion under in Section 82(3) and will require you to obtain a judgment in respect of your claim." . Veerasingam v. Licence Appeal Tribunal
In Veerasingam v. Licence Appeal Tribunal (Ont Divisional Ct, 2025) the Divisional Court dismissed an appeal, here from a "decision of the Licence Appeal Tribunal (LAT) ... requir[ing] that the Registrar of the respondent Ontario Motor Vehicle Industry Council (OMVIC) carry out its proposal to refuse the registration of the appellant as a motor vehicle salesperson under the Motor Vehicle Dealers Act, 2002, S.O. 2002, c. 30, Sched. B (MVDA), due to misconduct".
Here the court illustrates MVDA procedures in these circumstances:[3] The appellant had been registered under the MVDA from mid-2010 until June 2022, when his registration terminated because his employment had been terminated. He then applied to be registered, proposing to work for a different motor vehicle dealer.
[4] Under s. 8 of the MVDA, the Registrar may refuse to register an applicant if, in the Registrar’s opinion, the applicant is not entitled to registration. Under s. 6(1)(a)((ii), a person will not be registered if the past conduct of the applicant affords “reasonable grounds for belief that the applicant will not carry on business in accordance with law and with integrity and honesty”.
[5] The Registrar must notify an applicant if the Registrar intends to refuse registration. In this case, the Registrar notified the appellant of the intention to do so because of incidents of sexual harassment in 2021 and 2022. The appellant then exercised his right to a hearing before the LAT, giving rise to the Decision.
[6] The issues before the LAT were whether the past conduct of the appellant precluded registration under s. 6(1)(a)(ii) and, if so, whether the public interest could be adequately protected through granting registration with conditions.
....
[13] As set out in the Decision, Vice-Chair Osterberg found that the Registrar had satisfied the burden of proving that the past conduct of the appellant afforded reasonable grounds for belief that he would not carry on business as a motor vehicle salesperson in accordance with s. 6(1)(a(ii) of the MVDA and that the appropriate remedy was to refuse registration rather than grant it with conditions.
[14] There is no issue that the Vice-Chair set out the correct legal principles that establish the standard of proof with respect to reasonable grounds for belief. The belief must be more than a mere suspicion but it does not need to be shown that it is more likely than not that the appellant would not carry on business as required. There must be an objective basis for the belief based on compelling and credible information and there must be a nexus between the past conduct and the appellant’s ability to conduct business as a motor vehicle salesperson serving the interests of the public.
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Issues and Standard of Review
[17] The appellant has an unrestricted right of appeal under s. 11 of the Licence Appeal Tribunal Act, 1999, S.O. 1999, c 12, Sched. G. . Platinum Cars Inc. v. Registrar, Motor Vehicle Dealers Act, 2002
In Platinum Cars Inc. v. Registrar, Motor Vehicle Dealers Act, 2002 (Div Court, 2024) the Divisional Court denied a motion for a stay pending appeal, here where the appellant appealed a LAT order "directing the Respondent Registrar to carry out a Notice of Proposal" to revoke both a car dealer and motor vehicle salesperson MVDA registration.
Here the court illustrates the operation of the MVDA 'Notice of Proposal' regime, related procedures and a LAT appeal:Background
[3] The Appellant Shaun Jalili was a motor vehicle salesperson registered under the MVDA, 2002 or the “Act”. He is also the sole officer and director of the Appellant, Platinum Cars Inc.
[4] On September 14, 2022, the Registrar issued a Notice of Proposal (“NOP”) to revoke Mr. Jalili’s registration and to revoke Platinum Cars Inc.’s registration as a dealer. To summarize, the grounds for revocation were failure to comply with conditions of registration, failure to meet disclosure obligations and the alleged dishonest conduct of Mr. Jalili.
[5] The Appellants appealed the NOP to the Licence Appeal Tribunal. The Tribunal held an eleven-day hearing, beginning with a motion to stay for abuse of process brought by the Appellants. The Tribunal dismissed the stay motion, adjourned the hearing and resumed the hearing on the merits several months later. During the appeal proceedings below, the Appellants continued to carry on business pursuant to their registrations.
[6] The background to the 2023 appeal arises from a prior consent order made by the Registrar concerning the Appellants’ registrations. On January 7, 2020, the Registrar issued a NOP to revoke the registrations of Platinum and Mr. Jalili. The Appellants appealed that NOP. Prior to the scheduled hearing before the Tribunal, the parties resolved the issues. On consent the Registrar placed conditions on the Appellants’ registrations. The Tribunal issued the order on May 12, 2021.
[7] The relevant provisions of the 2020 consent order are found in the Tribunal’s reasons of February 16, 2024:21. Jalili agreed to, among others, the following conditions:
a) Not trade in motor vehicles until he had provided proof to the Registrar that he had successfully completed the “Ontario Motor Vehicle Industry Council (OMVIC) Certification Course” with a mark of at least 80%,
b) Successfully complete the “Automotive Laws and Ethics” (Laws1009) offered by Georgian College, and to achieve a mark of at least 80%,
c) Successfully complete within 6 months both an anger-management course and a dispute-resolution skills course approved by the Registrar,
d) Be responsible for ensuring Platinum Cars’ compliance with the conditions of registration.
22. Platinum Cars agreed to, among others, the following conditions:
a) Provide a specific set of headlight parts to a former customer for a 2015 Mercedes-Benz (VIN: WDDHF6HB0FB162434) purchased from Platinum Cars,
b) Inform the Registrar in writing of any complaints it receives from its customers related to a trade of a motor vehicle and which have not been resolved to the customer’s satisfaction within 30 days,
c) Disclose in writing on its bills of sale all material facts about the vehicles it sells or leases to its customers, including any facts which would reasonably affect a customer’s decision to purchase or lease the vehicle,
d) Research the history of all of the vehicles that it sells or leases in order to ensure that all material facts are disclosed, and
e) Resolve complaints in such a way as to bring it into compliance with the requirements of the Act, the Consumer Protection Act, 2002, the Sale of Goods Act and its conditions of registration ....
Penalty Findings
[19] The Tribunal took into account the nature of the breaches, the Appellants’ history of prior misconduct and found serious issues with the Applicants’ governability and integrity. These portions of the reasons read:[138] (sic) In my view, the breaches of conditions and the conduct of Platinum and Jalili affords grounds for belief that they will not act in accordance with the law, integrity and honesty are serious. They are even more serious in the context of the registration history of Platinum and Jalili.
[129] The conditions breached by the appellants were imposed in the course of a Tribunal proceeding in respect of a Registrar’s Notice of Proposal to revoke the appellants’ registrations. Previously, the appellants were fined a combined total of $24,500 by the Discipline Committee for breaches of advertising requirements under the Act. In 2018 there was Notice of Proposal to suspend registrations of Platinum and Jalili.
[130] Jalili has consistently failed to recognize the authority of the Registrar as a regulator. He failed to bring himself into compliance with the educational requirements of his conditions of registration even when he knew he was in default of those conditions. He continued to trade in motor vehicles despite the clear condition that he does not do so until he brought himself into compliance with the conditions.
[131] Platinum failed to disclose on a bill of sale an engine defect which resulted in a repair estimate of almost $12,000 within two months of the sale in breach of a condition of registration. It also failed to notify the Registrar in writing of unresolved complaints and did not comply with a condition for the provision of certain parts to a consumer without making any determination as to whether the Registrar found its excuse to be satisfactory.
[132] In my view, registration along with the imposition of conditions would not be sufficient in the circumstances. The appellants have demonstrated that they cannot be relied on to comply with conditions and that they are likely to simply decide themselves which conditions to comply with and which ones need not be complied with.
[133] Further, the conduct upon which my finding that there are reasonable grounds for belief that Platinum and Jalili will not carry on business in accordance with law, integrity and honesty arises largely out of their failure to comply with their obligations under the Act. The requirement that defects be disclosed to consumers is an important requirement under the Act and plays a central part in the protection of consumers. The failure of Platinum and Jalili to comply with this basic obligation under the Act makes it even more unlikely that conditions imposed by this Tribunal would be honored.
[134] I find that the appellants have presented no basis in evidence for the Tribunal to conclude that registration with conditions would be appropriate or would adequately protect the public.
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