Charged with Curbsiding in Ontario? Understanding the Personal Use Exemption Under the Motor Vehicle Dealers Act

What Is Curbsiding Under Ontario Law?

"Curbsiding" refers to the practice of selling motor vehicles without being registered as a dealer under the Motor Vehicle Dealers Act, 2002 (MVDA). The term evokes the image of someone selling cars from the curb rather than from a licensed dealership — but the legal definition is broader and more nuanced than the stereotype suggests.

Section 4(1)(a) of the MVDA prohibits any person from acting as a motor vehicle dealer unless they are registered under the Act. The Ontario Motor Vehicle Industry Council (OMVIC) enforces this provision, and violations are prosecuted as provincial offences carrying potential fines of up to $100,000 for individuals and $500,000 for corporations, plus the possibility of imprisonment for up to two years less a day.

The Personal Use Exemption: Section 5 of the MVDA

What many people do not realize is that the MVDA contains an important exemption. Section 5 provides that the Act does not apply to individuals who trade in motor vehicles on their own account or for family members, provided the vehicle was used primarily for personal use.

This exemption exists because the legislature recognized that ordinary individuals should be able to buy and sell their own personal vehicles without the regulatory burden of dealer registration. The law targets commercial dealers operating without a license — not private individuals selling cars they personally own and use.

The key question under Section 5 is whether the vehicle was used "primarily for personal use." The Act does not define this phrase, nor does it place any restrictions on how many vehicles a person may sell while relying on the exemption. This creates a grey area that has significant implications for anyone who buys and sells vehicles with any regularity.

How OMVIC Investigates Curbsiding

OMVIC investigators typically identify potential curbsiders by monitoring online marketplaces such as Facebook Marketplace, Kijiji, and Autotrader for individuals who appear to be selling multiple vehicles. When a pattern emerges — particularly when sales are conducted from a residential address rather than a commercial lot — OMVIC may launch an investigation.

The investigation usually involves contacting buyers to obtain statements about their transactions, reviewing vehicle registration histories through the Ministry of Transportation, and compiling a Crown brief for prosecution. Charges are laid as provincial offences under the MVDA and, where applicable, under the Consumer Protection Act, 2002 (CPA) if the Crown alleges false, misleading, or deceptive representations were made during a sale.

Defending a Curbsiding Charge: Key Considerations

A defence to curbsiding charges typically centres on establishing that the Section 5 personal use exemption applies. Several factors are relevant to this analysis.

Vehicle Registration and Use

Courts will consider whether the vehicles were registered in the accused's own name and whether there is evidence of personal use. If the accused drove the vehicles, maintained them, and insured them for personal purposes before selling, this supports the exemption. The fact that ownership was brief does not, by itself, negate personal use — people sell vehicles for all sorts of legitimate reasons, from mechanical problems to changes in personal preference.

Profit Motive

The absence of a profit motive is a strong indicator that the accused was not operating as a commercial dealer. If the accused can demonstrate that they consistently lost money on vehicle transactions — after accounting for purchase price, repairs, modifications, and maintenance — this undermines the Crown's theory that the accused was engaged in commercial dealing.

The Car Enthusiast Defence

Some individuals buy and sell vehicles frequently not because they are running a business, but because they are automotive enthusiasts. For these people, the enjoyment comes from experiencing different vehicles — trying out different makes and models, customizing them, and appreciating the engineering. This pattern of acquiring, briefly owning, and then selling vehicles is consistent with an active hobby rather than a commercial enterprise. The MVDA was never intended to criminalize this kind of conduct.

No Consumer Harm

The MVDA is consumer protection legislation at its core. Where there is no evidence that any buyer was harmed, deceived, or disadvantaged by the transaction, this context matters. Courts should be reluctant to impose criminal sanctions on individuals whose conduct has caused no consumer harm, particularly where the evidence suggests personal rather than commercial motivation.

Strict Interpretation of Penal Statutes

When defending curbsiding charges, it is critical to remind the court that penal statutes must be interpreted strictly. The Supreme Court of Canada has repeatedly emphasized that where genuine ambiguity exists in a penal provision, it must be resolved in favour of the accused. As stated in R. v. McIntosh, [1995] 1 SCR 686, if after applying the purposive approach genuine ambiguities remain, the court should adopt the interpretation favouring liberty.

Section 64 of the Legislation Act also requires that remedial legislation be given a fair, large, and liberal interpretation to best ensure the attainment of its objects. A liberal interpretation of the Section 5 exemption focuses regulatory and enforcement resources on true commercial dealers — which is consistent with the consumer protection purpose of the MVDA — rather than on individuals selling personal vehicles.

Collateral Charges: Odometer Tampering and Unfair Practices

Curbsiding investigations sometimes involve collateral charges. Under the CPA, it is an unfair practice to make false, misleading, or deceptive representations about a vehicle. This can include allegations of odometer tampering or failure to disclose known defects.

These charges require the Crown to prove that the accused either knew or ought to have known about the misrepresentation. Where the accused purchased a vehicle with an already-tampered odometer from a third party and had no reason to suspect the tampering, the Crown's burden becomes extremely difficult to meet. Evidence such as pre-purchase inspection records, original sale advertisements showing the odometer reading, and the accused's own candid cooperation with investigators can all support a defence of innocent possession.

Practical Takeaways

If you buy and sell vehicles with any regularity in Ontario, it is important to understand the legal landscape. Keep detailed records of every purchase and sale, including receipts for repairs and modifications. Document your personal use of each vehicle. Be aware that selling from a residential address and advertising on private sale platforms does not, by itself, bring you within the MVDA's regulatory framework — but it may attract OMVIC's attention.

If you are contacted by an OMVIC investigator or charged with curbsiding, seek legal counsel immediately. The personal use exemption under Section 5 provides a meaningful defence, but it must be properly developed and presented. A qualified defence lawyer can assess the strength of the Crown's case, identify weaknesses in the evidence, and advocate for the correct interpretation of the statute.