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LAT reliant on factors outside its purview in revoking dealer's license

A Divisional Court ruling, which set aside a decision by the Licensing Appeal Tribunal (LAT) to revoke a car dealer’s license, highlights that the tribunal can only assess integrity and honesty of a dealer with the evidence before it, says Toronto licensing and compliance lawyer Anar Dewshi.

In Kamali-Mafroujaki v Registrar, Motor Vehicle Dealer Act, 2015 ONSC 3989 (CanLII), Nirramin Kamali-Mafroujaki, a wholesale car dealer, appealed a tribunal decision that revoked his license.

Back in 2011, Kamali-Mafroujaki was charged with sexual assault as a result of his conduct towards an employee of a dealership he was visiting. He was convicted in 2013 and was sentenced to two years’ probation — a conviction he is currently appealing.

In 2012, when Kamali-Mafroujaki applied to Ontario Motor Vehicle Industry Council (OMVIC) to renew his annual registration, he failed to honestly answer a question that asked whether he had been found guilty or convicted of an offence under the law.

Dewshi, who did not act in the matter and makes her comments generally, says that by making a false statement, Kamali-Mafroujaki violated s. 32(1)(a) of the Motor Vehicle Dealers Act (MVDA). This section states that a person is guilty of an offence if the person furnishes false information in any application under the MVDA or in any statement or return required under the MVDA. As a result, he was charged with a provincial offence for filing a false application and pleaded guilty to providing false information on the renewal forms.

Despite pleading guilty, in February 2014, the Registrar issued the Notice of Proposal to revoke Kamali-Mafroujaki’s registration under s. 6(1) of the MVDA on the following grounds: (1) his conduct surrounding the sexual assault; and (2) the false answers on his application for renewal forms.

Section 6(1) of the MVDA states that an applicant (salesperson and/or dealer) that meets the prescribed requirements is entitled to registration or renewal of registration by the registrar unless, (a) the applicant is not a corporation and, (ii) the past conduct of the applicant or of an interested person in respect 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, or (ii) the applicant or an employee or agent of the applicant makes a false statement or provides a false statement in an application for registration or for renewal of registration.  

Dewshi, principal of Dewshi Law Practice, tells that in carrying out the Notice of Proposal and revoking Kamali-Mafroujaki’s licence, the reasoning focused on his past conduct, which included: the conduct leading up to his conviction of sexual assault; his denial of responsibility for any of the conduct; and the adverse finding of credibility by the trial judge in the sexual assault case.

"These factors are contrary to the principles of criminal justice and in violation of the principles of fundamental justice under the Charter," she adds.   

In setting aside the decision and ordering a new tribunal hearing, the Divisional Court Panel wrote: “The Tribunal considered that it was the following two that additional factors tipped the balance against registration, even on terms and conditions: (a) the Appellant’s denials of wrongdoing, which reflect a failure to take responsibility for and show insight into the sexual assault; and (b) [Justice Robert P. Armstrong's] strong adverse findings of credibility against the Appellant, which cast doubt on the Appellant’s honesty and integrity, and is a further basis for concluding that the Appellant is in a state of denial over his conduct and thus at greater risk of reoffending."

The Divisional Court found that the factors were "serious errors of law" and "reflect a fundamental mishandling by the Tribunal of the criminal proceedings in a manner that strikes at the heart of the values of our system of criminal justice."

Dewshi says Kamali-Mafroujaki is "entitled under the Charter the right to full answer and defence by testifying on his own behalf at trial and the presumption of innocence by denying any wrongdoing on his part."

She says that LAT can only assess integrity and honesty of a dealer with the evidence before it. In this case, as explained by the Divisional Court, the LAT was "entitled to rely upon the fact of the conviction for sexual assault. It was entitled to rely upon the circumstances of sexual assault."

Kamali-Mafroujaki was not entitled to explain the conviction by the trial court because by doing so, would be retrying the allegations of sexual assault, which is what the Tribunal attempted to do, she adds. 


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