Overview

[1] The appellants, Lee Trans Corporation (“Lee Trans”), 1565252 Ontario Inc. (“156”) and 2105360 Ontario Inc. (“210”), appeal from the decision of the Licence Appeal Tribunal dated January 19, 2011, in which the Tribunal ordered the Registrar of Motor Vehicles to carry out an order to cancel the appellants’ Commercial Vehicle Operator’s Registration (“CVOR”) and to seize the appellants’ CVOR certificates and the plates for the appellants’ commercial vehicles. At issue on this appeal is the reasonableness of the sanction, particularly in light of fresh evidence which the appellants seek leave to introduce.

[2] For the reasons that follow, I would dismiss the appeal.

Background Facts

[3] Lee Trans and 210 are operated by Leeladhar Gurprasad, while 156 is operated by his son, Andrew Gurprasad. The companies are involved in gravel hauling.

[4] Operators such as the appellants are required to hold a CVOR certificate issued by the Registrar of Motor Vehicles in order to operate their commercial trucking business legally in the province.

[5] The Registrar is required by s. 205(1)(c)(ii) of the Highway Traffic Act, R.S.O. 1990, c. H.8 (“HTA”) to keep safety performance records for CVOR certificate holders, with the contents prescribed by s. 5 of O. Reg. 424/97. A carrier is evaluated on the basis of a number of events, including collisions, driver and carrier convictions, safety inspections and detentions, and the results of facility audits.

[6] The violation rate, an important number in this particular proceeding, is a percentage rate calculated based on events in the past 24 months. It involves the assignment of point values to events such as collisions, inspections and convictions for offences under the HTA. Calculations compare point totals with thresholds appropriate to the distance travelled by an operator’s fleet, resulting in an overall violation rate expressed as a percentage. A higher percentage denotes a worse safety record.

[7] The CVOR safety performance system is an automated system. At a 35% violation rate, a warning letter is normally sent. At a 50% violation rate, a request for a facility audit may be triggered. When the violation rate reaches 85%, an interview is requested. If a CVOR certificate holder’s violation rate rises to 100% or higher, the Registrar considers whether to impose a cancellation or a suspension. However, the CVOR Guideline also states that “chronic non-compliance” may lead to sanctions (regardless of whether that rate is 100% or more). In 2009, 96% of operators had a violation rate of 35% or less, while only 0.3% of operators had a violation rate of 85% or more.

[8] Pursuant to s. 47(1) of the HTA, the Registrar may suspend or cancel the plate portion of a permit or a CVOR certificate on a number of grounds, including the following:

(f) the Registrar having reason to believe, having regard to the safety record of the holder or of a person related to the holder, and any other information that the Registrar considers relevant, that the holder will not operate a commercial motor vehicle safely or in accordance with this Act, the regulations and other laws relating to highway safety …

[9] As an alternative to suspension or cancellation, the Registrar can limit the number of vehicles operated by a certificate holder, in accordance with s. 47(2):

As an alternative to a suspension or cancellation under subsection (1), the Registrar may, subject to section 47.1, restrict the number of commercial motor vehicles that may be operated by a holder of a CVOR certificate during the period that the Registrar stipulates.

[10] On September 14, 2010, the Deputy Registrar of Motor Vehicles issued an order proposing the cancellation and seizure of the appellants’ CVOR certificates and plates. Lee Trans had received a 30-day suspension in 2004 for safety violations (subsequently reduced to 24 days). Prior to the September 2010 proposed cancellation and seizure, Lee Trans was not actively operating (or may have been operating two trucks, according to the appellants) and had a 0% violation rate as a result. However, 210 had a violation rate exceeding 115.18%, and 156 had a violation rate exceeding 88.6%.

[11] As a result of these ratings, the Registrar had held a show cause meeting with the appellants on August 31, 2010 to discuss whether the CVOR certificates should be cancelled. The presidents of the appellants, Leeladhar Gurprasad and Andrew Gurprasad, attended with a representative.

[12] The Registrar proposed to deal with the three appellants as “affiliated” companies pursuant to ss. 17(4), 47(1) and 47(2.1) of the HTA, with which the appellants took no issue at the show cause hearing. The Registrar considered the appellants’ submissions but ultimately issued the proposed Order of Cancellation and Suspension.

The Tribunal’s Decision

[13] The appellants appealed to the Tribunal pursuant to s. 50(1) of the HTA. This caused an automatic stay of the Order. Over the course of a two day hearing, the Tribunal heard two witnesses, Sherry Atallah, a Carrier Safety Rating Administrator with the Ontario Ministry of Transportation, and Freda Dimopoulos, a consultant who worked for the appellants.

[14] The Tribunal framed the issue before it as whether it had “reason to believe, having regard to the safety record of the Applicants and any other relevant information before it, that the Applicants will not operate a commercial motor vehicle safely or in accordance with the Act, the regulations and other laws relating to highway safety” (Reasons, p. 2). If the response was yes, the Tribunal was required to determine the appropriate order.

[15] The Tribunal concluded that the three companies were in a similar position to that of Lee Trans in 2004. It reviewed the evidence and concluded that there were reasonable grounds to believe that the appellants would not operate a commercial vehicle safely or in accordance with the law. It stated (at p. 10 of the Reasons):

Although the Tribunal has noted that things improved with Ms. Dimopoulos’s involvement and that both numbered companies have scored ‘excellent’ on a facility audit, there is little or no evidence that the improvement in compliance in this area has translated to an improved safety record as one would have expected. In view of this fact, this achievement is not adequate evidence, in the Tribunal’s opinion, to provide confidence that improved road safety is achievable by these Applicants and there was no other evidence put forward to satisfy the Tribunal that there have been or will be permanent changes in policy or in the approach to safety.

[16] The Tribunal refused to order a sanction other than cancellation, as the 2004 suspension had apparently not succeeded in effecting lasting safety changes, nor were safety improvements likely to result from a reduced fleet size. Therefore, the Tribunal found that the Order of Cancellation and Seizure was appropriate in the circumstances.

[17] Following that decision, the appellants obtained an order from Wilton-Siegel J. staying the Tribunal’s order because of the pending appeal (Lee Trans Corp. v. Ontario (Registrar of Motor Vehicles), 2011 ONSC 1803 (Div. Ct.)). As a result of the stay, the appellants have continued to operate since the Tribunal decision.

The Issues on Appeal

[18] At the hearing of this appeal pursuant to s. 50(3.1) of the HTA, counsel for the appellants indicated that he did not take issue with the Tribunal’s finding that some sanction was warranted, given the safety performance of the appellants. However, he argued that the cancellation of the CVOR certificates was unreasonable at the time it was made. Moreover, he asked the Court to accept fresh evidence showing what he described as a significant improvement in the appellants’ performance in the period since the decision, which demonstrates, in his submission, that the penalty is too harsh.

[19] The appellants conceded that the standard of review of the Tribunal’s decision is reasonableness. Therefore, there are three issues to be decided:

Was the decision to order cancellation of the CVOR certificates unreasonable when it was made?
Should the fresh evidence be admitted?
If so, is the penalty imposed unreasonable?

[20] The appellants ask that the penalty decision be set aside and the matter referred back to the Tribunal to determine the sanction in light of the fresh evidence. Counsel suggested that a suspension of 30 to 45 days would be appropriate, perhaps with additional conditions.

Issue No. 1: Was the decision to order cancellation of the CVOR certificates unreasonable when it was made?

[21] The appellants argue that the cancellation of the CVOR certificates was excessive and unduly harsh, given the changes made to the safety policy and the disciplinary policy in the spring of 2010. These changes were described by Ms. Dimopoulos as including safety meetings and driver courses on matters such as airbrake use and defensive driving.

[22] According to the appellants, the steps taken to improve its safety record were not given adequate weight. However, it is not the task of this Court, on an appeal, to reweigh the evidence.

[23] The Tribunal heard no evidence from the principals of the companies or from Mark Terenzi, who had come on board as a full-time safety and compliance manager in July 2010. The only person who testified on behalf of the appellants was Ms. Dimopoulos, who had worked as a safety consultant for the appellants since the spring of 2008. She worked for the appellants a few hours each month, coming in two or three times during the month. It appears that her main task with the appellants was to improve record keeping by drivers and the companies. She conceded that management had not been strict enough with drivers in the past.

[24] In my view, the Tribunal could reasonably come to the conclusion, on the record before it, that a sanction was warranted because of the poor safety performance of 210 and 156. At the time the appellants were asked to attend a show cause hearing by the Registrar in July 2010, 210’s safety violation rate stood at 115.2% and 156’s at 88.6%. The Guideline published by the Ministry describing the CVOR system states that an interview is normally triggered at 85% and a sanction analysis at 100% or over.

[25] The evidence also shows that 210 had had a conditional safety rating (that is, its on-road performance level exceeded 70% of its overall CVOR threshold) in July 2008, and it had received a warning letter in November of that year. Between March 2009 and July 2009, it achieved a satisfactory level (reaching 70% or less of its overall CVOR threshold), but it then returned to a conditional rating in 2009 which continued into 2010. By June 30, 2010, the overall safety violation rating had climbed to 115.2%. This was due, in part, to nine collisions in the reporting period, of which six were with points. According to the Guideline, points are assigned on the basis of severity of the collision (taking into consideration property damage and personal injury) and impropriety on the part of the driver or vehicle. There were also 26 convictions, of which 11 were attributed to drivers.

[26] 156 had a CVOR rating of 88.6% by July 2010, putting it in the conditional rating category. It also had an Out of Service rate of 44.74%, meaning the vehicles were taken out of service on almost half of their inspections because of the violations detected in the inspection. There were also 20 convictions with points, of which 14 related to the driver. 156 also had received a warning in August 2008.

[27] Given the evidence, it was reasonable for the Tribunal to conclude that a suspension or an order to reduce the fleet would not be a satisfactory way to protect the public. The evidence showed an ongoing problem with the CVOR violaton ratings and continued safety problems despite a 24-day suspension of Lee Trans’ CVOR certificate in 2004. The Tribunal could reasonably conclude that the management of the companies did not take seriously the need to improve their safety performance. Therefore, the cancellation of the CVOR certificates was a reasonable sanction in order to protect the public.

Issue No. 2: Should the fresh evidence be admitted?

[28] The appellants brought a motion for fresh evidence, seeking to admit affidavits of Tariq Mahmud and Mark Terenzi.

[29] Mr. Terenzi was hired as Safety and Compliance Manager for the appellants in July 2010. He worked for them for 11 months on a full time basis. In his affidavit, he described the company safety policy and the termination of employment of several drivers. One of these drivers had been dismissed before the Tribunal hearing.

[30] Mr. Mahmud was engaged by the appellants as their Safety and Compliance consultant on May 1, 2011. He was retained as a condition imposed in the stay order granted by Wilton-Siegel J. in March 2011. His evidence dealt with such issues as the errors allegedly made by Ms. Atallah in her testimony before the Tribunal, the violation ratings of the appellants at the time of the Tribunal hearing in December 2010, the operational changes made since the Tribunal’s decision, and the violation ratings as of September 2011.

[31] The test for fresh evidence requires the moving party to show that the evidence is credible, that it could not have been obtained with reasonable diligence at the time of the original hearing, and that the evidence will likely be conclusive of an issue on the appeal (Sengmueller v. Sengmueller, 1994 8711 (ON CA), [1994] O.J. No. 276 (C.A.) at para. 9).

[32] Clearly, most of the evidence of Mr. Terenzi was available prior to the Tribunal hearing, as he states that he was employed full time from July 2010. There is no explanation as to why he failed to testify at the hearing in December 2010 about the safety policy in effect before the Tribunal’s hearing or about the employee dismissed in November 2010. Therefore, this evidence is not admissible.

[33] With respect to his evidence of events after the Tribunal hearing, the evidence does not assist. While he says that there has been a “drastic reduction in roadside violations”, he provides no data to back up this statement. Therefore, his evidence would not call into question the reasonableness of the sanction imposed, and his affidavit should not be admitted.

[34] The appellants also sought to admit the evidence of Mr. Mahmud, the safety consultant who started working with the appellants on a part-time basis in May 2011. His evidence with respect to the violation ratings in December 2010 could have been obtained with due diligence prior to the Tribunal hearing, as the appellants could have obtained copies of their CVOR ratings by visiting a Ministry website and paying a $5.00 fee. As well, evidence about the operations of Lee Trans could have been obtained prior to the hearing. Therefore, the evidence relating to matters that occurred before the Tribunal hearing is not admissible.

[35] The appellants argue that the new evidence of the improved safety policy, improved violation ratings, and actions taken since the decision should all be admitted. They rely on the decision of the Divisional Court in 1132165 Ontario Ltd. carrying on business as the Docks by Cherry v. Registrar of the Alcohol and Gaming Commission of Ontario, 2007 7997 (Div. Ct.), in which the Divisional Court overturned a decision of the Alcohol and Gaming Commission because of fresh evidence pertaining to the licensee’s conduct after the decision was made to revoke its liquor licence. Leave to appeal the decision was granted by the Court of Appeal, but the appeal was moot at the time it was argued because of a change in the ownership of the premises (2008 ONCA 536 at para. 3). Therefore, the merits of the appeal were not determined.

[36] The appellants’ counsel argued that this new evidence should be admitted in the same way that a court of appeal accepts new evidence in a sentencing appeal in a criminal case. However, the function of an appellate court on a sentencing appeal is different from the role of a court hearing an appeal from an administrative tribunal. In a sentence appeal pursuant to s. 687 of the Criminal Code, the court is to “consider the fitness of the sentence appealed against, and may on such evidence, if any, as it thinks fit to require or to receive” vary the sentence or dismiss the appeal.

[37] The task of this Court, on appeal from a decision of the Tribunal, is to determine whether the Tribunal’s decision to uphold the cancellation of the CVOR certificates was reasonable, given the safety record of the appellants and other information available. The Registrar and the Tribunal, in determining the appropriate sanction, have a responsibility to protect public safety, and deference should be accorded to the Tribunal’s findings of mixed fact and law (Dunsmuir v. New Brunswick, 2008 SCC 9 at para. 53). Therefore, the Divisional Court, on an appeal from the Tribunal, does not play the same role as an appellate court in a sentencing appeal.

[38] It is not necessary to decide, in the present case, when a court, on appeal from a decision of an administrative tribunal, may admit evidence of changed circumstances going to the reasonableness of the sanction. Even if the evidence of Mr. Mahmud were admitted showing steps taken to improve the appellants’ performance and the decline in the violation ratings of 210 and 156 to 58.7% and 60.6% by September 2011, these actions have come too late in the day, and they do not warrant a referral of this matter back to the Tribunal for reconsideration.

[39] As the Court of Appeal stated in Muscillo Transport Ltd. v. Ontario (Licence Suspension Appeal Board), [1998] O.J. No. 1488 at para. 4:

The issue is not simply one of sanction, but rather one of the safety of the public and the appellant’s dedication in that regard. We find no error in principle in the reasons of the Board. It has not been shown that the sanction imposed was manifestly unfit.

[40] There is still no affidavit evidence from the management of the companies indicating their awareness of the serious safety problems in the past and expressing their commitment to better performance in the future. This is important, as the significant changes within the companies on which the appellants rely were not taken immediately after the show cause hearing, nor even immediately after the Tribunal’s decision. Rather, the significant changes appear to have come with the hiring of Mr. Mahmud in May 2011, and as a result of the order of Wilton-Siegel J. on March 25, 2011 making it a condition of a stay that Mr. Mahmud be retained as a safety advisor. No explanation is given for the delay in retaining him until May 1, 2011.

[41] The appellants’ past record and the information available to the Tribunal at the time of its decision warranted the sanction of cancellation of the CVOR certificates. Despite a lengthy suspension of Lee Trans’ CVOR certificate in 2004, the appellants’ violation rates continued to be high and, in the case of 210, exceeded 100% at the point that the Registrar decided to impose a sanction. Even if the new evidence is considered, the sanction imposed is not manifestly unfit. It is a reasonable sanction in order to protect the public, given the appellants’ safety record.

Conclusion

[42] For these reasons, the appeal is dismissed. Costs to the respondent are fixed at $4,000.00 inclusive of HST and disbursements. Given the disposition of the appeal, the stay of the order of the Tribunal is lifted.

Swinton J.

Dambrot J.

Harvison Young J.

Released: October 31, 2011

CITATION: Lee Trans Corporation v. Registrar of Motor Vehicles, 2011 ONSC 6003

COURT FILE NO.: 49/11

DATE: 20111031

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

DAMBROT, SWINTON and HARVISON YOUNG JJ.

BETWEEN:

LEE TRANS CORPORATION, 1565252 ONTARIO INC. and 2105360 ONTARIO INC.

Appellants

and -

REGISTRAR OF MOTOR VEHICLES

Respondent

REASONS FOR JUDGMENT

Swinton J.

Released: October 31, 2011

Lee Trans Corporation v. Registrar of Motor Vehicles, 2011 ONSC 6003

Case Summary

Overview

Background Facts

The Tribunal’s Decision

The Issues on Appeal

Issue No. 1: Was the decision to order cancellation of the CVOR certificates unreasonable when it was made?

Issue No. 2: Should the fresh evidence be admitted?

Conclusion

Judges

Counsel

Parties

Areas of Law

Fact Patterns

Financial Outcomes

Issues

Statutory Provisions 2

Legal Tests 1

Legislation 3