Compensation Fund
12. (1) The Fund is established as of the 1st day of July, 1986, to stand in the place of a participant for the payment out of the Fund of claims of customers of the participant where the transactions occurred during the period when the participant was registered under the Act and where the participant has refused after demand or is unable to pay the claims. (2) Revoked: O. Reg. 283/92, s. 2 (2). (3) A customer may make a claim against the Fund where the customer gives written notice of the claim to the Registrar within two years of the participant’s refusal or failure to pay, even if the motor vehicle dealer with respect to whom the claim is being made ceased to be a participant after the refusal or failure to pay, and where the claim meets one of the following requirements: 1. The customer has recovered in any court in Ontario a judgment in respect of the claim and the judgment has become final by reason of the expiration of the time for appeal or of having been confirmed by the highest court to which an appeal may be taken and the customer makes an application, supported by the judgment and statement of claim, for payment of the unsatisfied portion of the judgment and costs as assessed. 2. The participant has been convicted of an offence under the Criminal Code (Canada) involving fraud, theft or false pretences in connection with a transaction out of which the claim arose and the claim is for a liquidated amount and the customer makes an application that is supported by evidence of the conviction and of the correctness of the liquidated amount. 3. The participant has become a bankrupt or a winding-up order has been made or a receiver appointed in respect of the business of the participant under the Bankruptcy Act (Canada) and the claim is for a liquidated amount and the customer makes an application that is supported by evidence of the allowance of the claim by the Trustee in bankruptcy, liquidator or receiver, less any amount that may have been paid on account of the claim by the Trustee, liquidator or receiver. 4. The customer has made payment by way of deposit, down payment or otherwise to a participant with respect to an undelivered motor vehicle and the customer has not received the motor vehicle contracted for or an alternative motor vehicle that is acceptable to the customer and the claim is for a refund of the payment made to the participant where the customer has made a demand for payment from the participant and the participant has refused without legal justification to make the payment or is unable to pay by reason of bankruptcy or insolvency, but is not a claim for a refund of money paid by the customer to a participant where the customer has been provided with the motor vehicle contracted for and the demand for a refund is based on the cost, value or quality of the vehicle provided. 5. The customer has made payment for an extended warranty or service plan to a participant where the warranty or plan is not underwritten by an insurer and the term of the warranty or plan has not expired and the claim is for a non-earned premium or for a repair under the warranty or plan. (4) Revoked: O. Reg. 207/00, s. 1 (2). (5) No customer of any participant shall have any vested or absolute right to payment of a claim against the Board, the Tribunal, the Trustee or the Fund. (6) The Board shall determine the eligibility and the amount of any claim made by a claimant and shall direct the Trustee to pay any claim or any part of it that meets the requirements of this Schedule and, subject to section 15 of this Schedule, the decision of the Board is final. (7) A claim against the Fund may only be made by a claimant giving written notice of the claim to the Registrar supported by an affidavit in the form provided by the Minister and such other material as may be required by the Board for transmittal to the Board with full particulars of the claim and of any payment recovery in respect of it and the Trustee may require, as a condition precedent to making payment of the claim or any part of it, the delivery and execution of such documents as the Trustee in its discretion or upon the advice of its counsel considers necessary, including documents as are necessary for transferring to the Trustee the interest of the claimant in the claim so as to subrogate the Trustee to the position of the claimant against the participant. (8) No amount shall be paid out of the Fund until the claimant assigns to the Fund any judgment or other right of any kind that the claimant has against the participant or any other person in respect of the claimant’s claim. (9) Despite subsections (6) and (7), the Board may on any claim require that the claimant, (a) obtain a judgment, issue an execution and cause a levy or levies to be made under it and examine the judgment debtor or debtors; (b) exhaust any other legal remedies in addition to those referred to in clause (a) available to the claimant in respect of the claimant’s claim; or (c) bring an action against all persons against whom the claimant might reasonably be considered as having a cause of action in respect of the claim. (10) Despite subsections (1), (2), (3) and (6) and subsection 15 (3) of this Schedule, there shall not be paid out of the Fund, (a) more than $15,000, exclusive of costs, to each claimant in respect of each transaction, in respect of a claim or claims against any one participant; (b) any amount for interest, including interest on a judgment or on costs; (c) where there is a judgment, any amount for costs in excess of actual disbursements and fees as assessed; (d) any amount in respect of a claim that arose out of a transaction that took place before the 1st day of July, 1986; (e) any amount in respect of a claim that arose out of a transaction that took place on or after the 1st day of July, 1986 and before the 30th day of September, 1986, unless the motor vehicle dealer with respect to whom the claim is made is a participant; or (f) any amount in respect of a claim or repair under an extended warranty or service plan where the need for repair was incurred after the default of the participant. (11) For the purposes of subsection (10), a partnership and its members shall be deemed to be one participant and a corporation and its officers shall be deemed to be one participant. (12) Where any amount is recovered from any other source in partial satisfaction of the total claim against a participant, the maximum amount authorized by clause (10) (a) is reduced by the amount so recovered.