Once a final regulatory decision has been made, a registrant can usually appeal or seek judicial review. Such challenges take time. At least months. An important consideration for the registrant is whether the regulatory decision takes effect immediately or whether it is stayed (postponed) pending the court decision. Even where the enabling legislation addresses the issue, either party can bring a motion to the court to alter the pending status of the regulatory decision. While the courts look at each case individually, the decision usually boils down to whether the registrant’s personal interest outweighs the public interest in having the measures in place.
In Platinum Cars Inc. v. Registrar, Motor Vehicle Dealers Act, 2002, 2024 ONSC 2077 (CanLII), the registration of both a motor vehicle dealer and its controlling salesperson were revoked after a hearing before the Licence Appeal Tribunal (LAT). LAT had found that the registrants had engaged in a course of non-compliance with their ethical and regulatory obligations. These included failing to comply with previous conditions agreed to by the registrants related to remediation for past conduct concerns and material non-disclosure to both consumers and the regulator. Consumers were purchasing vehicles with defects. LAT, in effect, found the registrants to be ungovernable.
The registrants appealed the decision and sought a stay of the revocation order until the appeal could be heard. The registrants argued that temporary restrictions could satisfactorily address the public interest goals and that shutting down the registrants’ rather large business for months would be draconian, especially if the appeal succeeded.
The Court concluded that, despite the impact of the revocation order on the registrants, a stay was not warranted. In doing so, the Court applied the usual three-part test with some rigour.
The first part of the test, whether there is a serious issue to be tried on the appeal, is usually met with little effort. However, in this case, the Court was concerned that the grounds of appeal were quite general. Even at this stage, a preliminary assessment of the merits is required. The registrants provided no details of what might arguably be a palpable and overriding error in LAT’s decision.
The second part of the test relates to evidence of irreparable harm to the registrants if no stay is granted. The Court framed the test in terms of “disastrous consequences”. While there would obviously be financial implications for the registrants in closing their business and maintaining expenses, including for a 40-person sales staff and payment on a $30 million bank loan, the Court found that insufficient evidence was tendered as to the registrants’ full financial position in order to make a firm conclusion of irreparable harm.
The third part of the test was the balance of convenience between the impact on the registrants compared to the public interest. The Court concluded that the public interest took priority because of the registrants’ history of ungovernability, evidence that the registrants had continued to advertise their business after the revocation took effect, and the failure of the individual registrant to address even the minimal consent conditions that had been in place for four years, such as completing approved dispute resolution and anger management programs.
This decision indicates that courts will not routinely grant stays to registrants during an appeal of tribunal decisions. Registrants need to provide meaningful evidence to support the necessity for such an order, at least where the tribunal findings are significant.