2018 ONSC 6655
DIVISIONAL COURT FILE NO.: 625/18
DATE: 20181107
ONTARIO SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
BETWEEN:
HARTSTEIN SWINE CO. LTD.
Appellant
– and –
REGISTRAR OF MOTOR VEHICLES
Respondent
Carole McAfee Wallace, for the Appellant
Patrick Moore, for the Respondent
HEARD at Toronto: November 2, 2018
c. horkins J.
introduction
[1] The appellant, Hartstein Swine Co. Ltd., appeals the decision of the Licence Appeal Tribunal (the “Tribunal”) dated September 17, 2018. That decision confirmed the respondent’s Cancellation and Seizure Order (the Cancellation Order”) dated November 21, 2017.
[2] The Cancellation Order canceled the appellant’s Commercial Vehicle Operator’s Registration (CVOR) certificate and directed seizure of the plates of the appellant’s commercial motor vehicles. The result of this Cancellation Order is that the appellant’s business will cease to operate.
[3] There is no automatic stay of a Cancellation Order pending an appeal. As a result, the appellant brings this motion for a stay of the Tribunal’s decision pending the hearing of its appeal. The respondent is holding implementation of the Cancellation Order in abeyance, pending the outcome of this motion.
Background Facts
[4] The appellant is a small trucking company specializing in the transportation of livestock. The company is based in Stratford, Ontario. Michael Hartstein is a director and officer of the appellant. He is the only driver who has been involved in the inspections, violations and convictions, which have led to the appellant’s safety record.
[5] The appellant operates two trucks and five trailers that are designed for the transportation of livestock. The company has five employees.
[6] In order to operate its trucks on Ontario highways, the appellant requires a CVOR certificate in good standing.
[7] The Registrar monitors the safety record of all CVOR holders (bus and trucking companies). The CVOR sets out, among other things, the company's violation rate which is calculated based on points assigned to three types of events, over a 24-month moving window period:
(i) convictions under the Highway Traffic Act, R.S.O. 1990, c. H.8 and related charges laid against the company and its drivers;
(ii) inspections of the company's vehicles and its drivers; and
(iii) collisions
[8] Points are assigned to events when there are safety issues. With respect to collisions, points are assigned based on its severity, such as property damage, injury or fatality, and on impropriety, such as a vehicle defect, driver action or driver condition. Collisions with no damage, injury, fatality, impropriety or vehicle defects, appear on the CVOR but are not pointed. With respect to convictions, only those that are safety-related are assigned points. Administrative-related convictions will appear on the CVOR record but are not pointed. With respect to inspections, only defects which are "out-of-service", or fail to meet the minimum standard, are assigned points.
[9] The violation rate is compared to the company's threshold which is based on the number of kilometers the company's vehicles travel in Canada. The violation rate is expressed as a percentage of the threshold. A high violation rate suggests a problem with a company's safety record.
[10] The Registrar can take certain steps to intervene when it has concerns about a company's safety record. Interventions are used to engage with the company and try to change behavior. A violation rate of 35% will result in a warning letter; at 50% a Facility Audit may be ordered; at 85% an interview with the Registrar may be requested; and, at 100% a sanction such as the suspension or cancellation of the CVOR will be considered. A company may also come to the attention of the Registrar as a result of a significant event such as a wheel falling off or a severe or fatal accident.
[11] On October 6, 2017, the Registrar issued a Notice of Cancellation and Seizure of the appellant’s CVOR certificate based on the appellant’s safety record. The overall violation rate at that time was at 117.7%. Only 0.11% of CVOR certificate holders have a violation rate exceeding 100%.
[12] Before the proposed cancellation was carried out, the appellant attended a show cause meeting with the Registrar on November 7, 2017, in an effort to persuade the Registrar that cancelling its CVOR was not necessary. On November 19, 2017, the appellant provided the Registrar with an Action Plan. On November 21, 2017, the Registrar confirmed the Cancellation and Seizure Order, which was then appealed to, and confirmed by the Tribunal.
[13] At the hearing, the Tribunal reviewed the appellant’s safety record and the key events on that record which led to the cancellation: a failed Facility Audit on May 25, 2017, two collisions dated August 17, 2016 and July 18, 2017, three out of-of-service inspections and a number of convictions. The convictions included road violations such as Fail to Share the Road, Disobey a Stop Sign, Driving an Unsafe Motor Vehicle and Driving a Commercial Vehicle with a major Defect.
[14] There were three inspections of the appellant’s trucks in a two year period. In each inspection, out of service defects were noted. An out of service defect is a defect so serious that when a driver is found with one, the driver or vehicle cannot operate on a highway until it is rectified.
[15] The Tribunal set out the details of the vehicle defects and convictions in paras 14-15 of the reasons as follows:
[14] MTO has inspected appellant's vehicles three times. All three times the vehicles were placed out of service. Defects included:
a) July 18, 2017: Defective lighting system (stop lamp, turn signal); insecure load, brakes adjustment, air supply lines damaged; electrical cable dragging on ground from trailer, no stop lights or signal lights on trailer, broken wire under trailer dragging on ground. A vehicle maintenance charge was issued.
b) August 17, 2016: Brakes inoperative, air supply lines leaking, no insurance, no registration permit, no annual inspection sticker on truck and no annual inspection sticker on trailer. On this occasion Mr. Hartstein removed the trailer from the scene despite the OPP officer's order not to do so. He would not disclose where the trailer was taken or who took it. Mr. Hartstein refused to cooperate with the inspection. The plates were removed from the vehicles due to brake defects and no insurance and the truck and trailer placed out of service. An unsafe vehicle charge was issued.
c) January 6, 2016: No right turn signal, no trip inspection, tire defects (flat/leaking), stop lamp defect. Vehicle was placed out of service and Mr. Hartstein was told by OPP not to drive the vehicle until the defects are repaired. When OPP and MTO left the scene, Mr. Hartstein proceeded up Culloden Road approximately 800 meters from the original location to where MTO was parked waiting. Charges were laid, including failing to comply with direction of officer, trip inspection and vehicle maintenance.
[15] The appellant has had nine convictions that resulted in points deducted and one conviction without points including:
a) March 16, 2017: failure to share road
b) July 19, 2017: fail to assist examine vehicle; drive/operate unsafe vehicle
c) March 16, 2017: fail to have insurance card
d) June 2, 2016: drive commercial vehicle with defect; fail to carry daily report
e) July 6, 2016: disobey legal sign; fail to carry daily report
f) January 1, 2011: drive commercial vehicle with defect; drive commercial vehicle with defect
i) May 7 & 26, 2014: speeding
[16] By the time of the hearing before the Tribunal, the appellant’s record had improved. As of October 5, 2018, its overall violation rate had decreased to 28.66%. There was an improved violation rate because points expire over time and there were no new events resulting in points being added to the CVOR. The last event was the July 18, 2017 collision.
[17] The Tribunal released its decision on September 17, 2018. The appellant filed its notice of appeal on October 5, 2018 and informed the respondent that it would bring a motion for a stay order pending the appeal. The appellant was permitted to continue its business pending the stay motion that was promptly filed.
[18] After the Tribunal hearing, the Ministry continued to monitor the appellant’s safety record. On September 5, 2018, a Ministry enforcement officer performed a commercial vehicle inspection on one of the appellant’s trucks.
[19] The officer noted multiple mechanical defects and multiple counts of non-compliance with documentary requirements, relevant to commercial vehicles. Specifically, the truck's headlight and turning signal systems were defective, no insurance certificate was surrendered, and the licence plate attached to the trailer was not registered to that trailer. In addition, the officer noted that Michael Hartstein was not wearing a seat belt while driving the truck on an Ontario highway.
[20] This inspection took place after the Tribunal hearing during which Michael Hartstein testified, and before the release of the Tribunal Decision.
[21] On September 5, 2018, Michael Hartstein was charged with failing to surrender proof of insurance. A conviction for this offence was entered on September 19, 2018, which appears on Mr. Hartstein's safety record.
[22] The September 5 inspection did not result in any new points being assigned to the appellant’s safety record.
The Test
[23] This court may grant a stay pursuant to Rule 63.02(b) of the Rules of Civil Procedure. The appellant must satisfy the three part test in RJR-MacDonald Inc. v. Canada (Attorney General), 1994 117 (SCC), [1994] 1 S.C.R. 311:
(i) Is there a serious issue to be tried?
(ii) Would compliance cause irreparable harm?
(iii) Where does the balance of convenience lie?
analysis
Serious Question to be tried?
[24] The appellant states that there is a serious question to be tried. As explained below, the appellant has not proven irreparable harm or satisfied the balance of convenience test. Having failed to meet these parts of the test, it is not necessary to deal with the serious question to be tried. The standard of review of the Tribunal’s decision is reasonableness and given the thoroughness of the reasons, I have some doubt as to whether a serious issue to be tried exists.
Irreparable Harm
[25] Cancellation of a CVOR certificate is permanent and the appellant cannot reapply for a new certificate.
[26] The appeal has not been perfected. The appellant intends to seek an expedited hearing date as soon as possible.
[27] The appellant states that if a stay is not granted, it will suffer irreparable harm because it will no longer be able to service its three farm customers. The appellant will lose 85% of its revenue and will be “out of business” before the appeal is heard. The appellant states that the farm customers will hire a new trucking company and will be unlikely to return to the appellant if it is successful on appeal. The appellant also states that its competitors will use the Tribunal decision to disparage the appellant’s reputation.
[28] Evidence of irreparable harm must clear and not speculative (Sazant v. College of Physician and Surgeons (Ontario), 2011 CarswellOnt 15914 at para 11).
[29] While there is a risk that the appellant will lose some customers if a stay is not granted, the evidence is not sufficient to prove irreparable harm. The appellant transports livestock to processing plants for three farm customers. It is not known how often these transports occur. The appellant does not reveal if this is a daily, monthly or less frequent event. Such evidence would assist in understanding if a stay would cause irreparable harm. The appellant can quickly perfect the appeal and seek an expedited hearing date.
Balance of Convenience
[30] The appellant argues that the balance of convenience favours a stay. It relies on the fact that no new points have accumulated since July 18, 2017 and the violation rate has dropped from 117.7% to 28.66%.
[31] I am not persuaded that the balance of convenience favours a stay. Public safety is too important to take a risk. The public interest in road safety outweighs any pecuniary harm that the appellant may suffer (1445913 Ontario Inc. (c.o.b. HGC Transport) v. Ontario (Deputy Registrar of Motor Vehicles), [2008] O.J. No. 6041 at para. 31; H & B Transportation Ltd. v. Ontario (Registrar of Motor Vehicles), [2004] O.J. No. 5431 at para. 6).
[32] The seriousness of the appellant’s violations cannot be ignored. While he did not accumulate any new points as a result of the violations on September 5 2018, the new violations are relevant.
[33] Two of the inspections that were in evidence before the Tribunal revealed the presence of defective lighting systems on the appellant’s trucks. One would expect the appellant to acknowledge that this is a serious problem and make every effort to ensure that the trucks are in compliance, and yet the appellant has not done so. When one of the appellant’s trucks was inspected on September 5 2018, the headlight and turning signal systems were found to be defective.
[34] The Tribunal considered the appellant’s request to impose conditions on the CVOR certificate and rejected the request that it be given another chance and allowed to operate.
[35] The Tribunal noted that the appellant “delayed taking any concrete steps to improve until the show cause meeting”. It was acknowledged that the appellant had hired a consultant to “develop an action plan and help with improvements”. Before the Tribunal, Mr. Hartstein admitted that the “consultant had not done any training for the appellant or visited the appellant’s business” as of the hearing date. The consultant did not testify at the hearing.
[36] The Tribunal found at para. 28 “that this is not a situation where registration subject to conditions is appropriate”. The conditions suggested did not adequately address the public safety concerns and were inadequate to ensure that the appellant operated according to the law. In particular, the Tribunal was not satisfied that the appellant could be monitored closely enough to prevent future “misconduct”. This was particularly so “given Mr. Hartstein’s refusal to cooperate with the MTO and the OPP and to accept that vehicles cannot be driven when the plates are removed.”
[37] On this stay motion, there is no evidence that the appellant has taken any steps to pursue the action plan and improvements. The evidence of the September 5 inspection reinforces the Tribunal’s concern in para. 28.
Conclusion
[38] The appellant’s motion is dismissed.
[39] The parties have agreed on the costs of this motion. The appellant shall pay the respondent costs of this motion fixed at $2,000 all inclusive.
___________________________ C. Horkins J.
Released: November 7, 2018
2018 ONSC 6655
DIVISIONAL COURT FILE NO.: 625/18
DATE: 20181107
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
BETWEEN:
HARTSTEIN SWINE CO. LTD.
Appellant
– and –
REGISTRAR OF MOTOR VEHICLES
Respondent
REASONS FOR JUDGMENT
C. Horkins J.
Released: November 7, 2018