Ramanathan Thangarajah and Unity-A-Automotive Inc v. Director of Vehicle Inspection Standards, 2012 CanLII 16169

Licence Appeal Tribunal

DATE: 2012-03-22

FILE: 5843/GAR

CASE NAME: 5843 v. Director of Vehicle Inspection Standards

Appeal From a Notice of Proposal of The Director of Vehicle Inspection Standards under the Highway Traffic Act, R.S.O. 1990, c. H.8 to Revoke a Motor Vehicle Inspection Station Licence and to Revoke a Motor Vehicle Inspection Station Mechanic’s Registration

Ramanathan Thangarajah and Unity-A-Automotive Inc Applicants

-and-

Director of Vehicle Inspection Standards Respondent

REASONS FOR DECISION AND ORDER (Amended)

ADJUDICATOR: Harinder Gahir, Vice-Chair

APPEARANCES:

For the Applicants: Symon Zucker, Counsel

For the Respondent: John T. Petrosoniak, Counsel

Heard in Toronto: August 8, 11, 2011, December 12, 13, 15, 16 and February 14, 2012

REASONS FOR THE DECISION AND ORDER (Amended)

BACKGROUND

This is an Appeal by Ramanathan Thangarajah (the “Applicant”) and Unity-A-Automotive Inc. (“Unity” and together, the “Applicants”) to the Licence Appeal Tribunal (the “Tribunal”), arising out of a Notice dated December 17, 2009¹ (the “Proposal”), issued by the Director of Vehicle Inspection Standards (the “Director”), proposing to revoke a Motor Vehicle Inspection Station (MVIS) Type 6 license of Unity and the mechanic registration of the Applicant as an MVIS Type 6 mechanic pursuant to Subsections 91(8)(a), (c) and (e) and 93(a) and (c) of the Highway Traffic Act (the “Act”). The Applicants hold Type 2 and Type 6 MVIS licenses.

The Director issued the Proposal for the following reasons:

(a) A Ministry audit found that, between the period September 2008 and February 2009, the Applicants issued Structural inspection Certificates (the “SIC”) for 22 vehicles, which did not meet the requirements of section 1 of Schedule 9 of the Regulation 611;

(b) By issuing the above certificates, the Applicants falsely certified the inspection certificates of the vehicles, when those vehicles did not meet those standards²;

(c) In March 2006, Unity made a false statement contrary to section 99 of the Act in Structural Inspection Certificate # 1098686 and was convicted of the same in November 2007;

(d) In April 2006, Unity issued a Structural Inspection Certificate #1098730 without a complete record, contrary to Regulation 601, s.10.1(2). Unity records for this and other certificates included the same falsified insurance estimates;

(e) Unity was convicted under section 10.1(1) of Regulation 601 of the Act on November 22, 2007 for failing to send the Director the required documents within seven days with respect to SIC Nos. 1100379 and 1102732;

(f) The Director issued warning letters to Unity for failing to send the Director the required documents within seven days with respect to the 24 SICs issued between August 25, 2005 and July 2008;

(g) In February 2007, Unity mechanic, Leonard Losier, issued four SICs in a period of time that was insufficient for proper inspections to have been performed on the vehicles certified. He also pre-signed blank parts audit forms at two occasions;

(h) In May 2006 and August 2006, the Director discovered pre-signed safety standard certificates at Unity, contrary to MVIS Circular # 11.

ISSUES:

The issues in this case may be summarized as follows:

Should the decision of the Director of Vehicle Inspection Standards to revoke the Motor Vehicle Inspection Station's licence be carried out?

Should the decision of the Director of Vehicle Inspection Standards to revoke the Motor Vehicle Inspection Station mechanic's licence be carried out?

EVIDENCE

The Director’s evidence included document briefs consisting of about 2000 pages and testimony of three witnesses. These included Ontario provincial Police (OPP) officer, John Gee, two expert witnesses, Daniel Chudy and the Ministry of Transport (the “Ministry”) Vehicle Branding Administrator, Dan Ventura. The Applicant testified on his own behalf.

The Tribunal marked the Registrar’s various document briefs as:

Director’s Exhibit Book Volume 1 Exhibit 3 Director’s Exhibit Book Volume II Exhibit 4 Director’s Exhibit Book Volume II Pt 2 Exhibit 4A Director’s Exhibit Book Volume III Exhibit 5 Director’s Exhibit Book Volume IV Exhibit 6 Director’s Exhibit Book Volume V Exhibit 7 Director’s Exhibit Book Volume VI Exhibit 8 Director’s Exhibit Book Volume VII Exhibit 9 Director’s Exhibit Book Volume VIII Exhibit 10 Email Communication Exhibit 11 Chart showing defected vehicles Exhibit 12

The hearing was conducted with the assistance of a Tamil/English interpreter.

Testimony of Officer John Gee

John Gee has been employed with the OPP since December 2009. Prior to this he was employed with the Ministry of Transport as a Motor Vehicle Inspector and Motor Vehicle Inspection Station Inspector. During his employment with the Ministry Mr. Gee dealt with Unity and has knowledge of the concerns the Director has with Unity. The Ministry licenses two types of inspection stations; one is Type 2 Safety for mechanical safety, and the second is Type 6 MVIS for certification of vehicles for frame body fitness of automobiles with accidental damage. The Type 6 MVIS is an important tool in the administration of the Mandatory Branding Program in Ontario.

Mandatory Branding Program

Mr. Gee explained the Mandatory Branding Program of the Ministry (“the Branding Program”). The Ministry started the Branding Program in March 2003 with the objective to make the roads safer, promote consumer protection, and discourage vehicle registration fraud and theft. Branding is the process by which a “brand” is assigned to a vehicle that indicates whether a vehicle has been severely damaged in the past. The brand is then recorded in the Ministry of Transportation’s Vehicle Registration System and ownership document of each vehicle. The branding program deals with vehicles written-off as a result of a collision, flood, fire or theft, causing a total loss.

Types of Brands:

There are four vehicles brands, which are:

i) Irreparable: this brand is assigned to a vehicle which is not worthy of repair and therefore cannot be driven again in Ontario. The vehicle can only be used for parts.

ii) Salvage: this brand is assigned when a vehicle can be repaired or used for parts or scrap.

iii) Rebuilt: This brand is assigned to a vehicle that was written-off, branded as “Salvage” and was repaired. To qualify for the rebuilt brand, the owners must have photographs showing the pre-repair damage, and receipts of the parts used for the repairs. Vehicles must have a Structural Inspection Certificate from an authorized technician at a licensed MVIS Type 6.

iv) None: this brand is assigned to a vehicle which may never have been in a collision. If it has been in a collision, the degree of the damage is not severe enough to meet branding criteria.

“Rebuilt” or “None” are the only acceptable brands for a consumer buying a used vehicle for on-road use. The mandatory branding program helps to protect the consumers by providing important information about possible past damage to a vehicle.

Mr. Gee explained the process of registering the MVIS and mechanics. He testified that the applicants are not required to take any course or write any exams to obtain a 310 body mechanic license. At the preliminary meeting with applicants, he normally goes over each piece of legislation with the applicants to explain what their obligations are and leaves manuals for the mechanics to read. He further testified that the preliminary meeting with the applicants would be for approximately two hours. He also testified that there are no requirements of any educational training to get a station license.

Process of assigning the Rebuilt brand to a vehicle:

A Type 6 MVIS issues a Structural Inspection Certificate (SIC) for a “salvage” branded motor vehicle after inspecting the vehicle in accordance with the inspection standards and compling with Schedule 9 of Regulation 611. The station has seven days after issuing the SIC, to send in a package of documents and information to the Branding Unit of the Ministry as set out in s. 10.1 of Regulation 601, which includes:

a. frame measurements taken by the licensee’s inspecting mechanic;

b. all documentation confirming the identity of the motor vehicle;

c. compiled insurance estimates for repair;

d. pictures of the vehicle before and after repair

e. identity of the owner and rebuilder;

f. invoices for all major part used to rebuild;

g. a Rebuilt Vehicle Parts Audit Form.

The responsibility to ensure that the documentation is complete and accurate rests equally with the inspecting mechanic as well as the station.

SIC #1134205 issued for 2006 Toyota Sienna

Officer Gee was involved with respect to investigation of allegations contained in paragraph 1 (e) of the Proposal. The Applicants had issued a SIC to a 2006 Toyota Sienna that was involved in an collision with damage to the front driver side in a total loss situation.³ The Applicants issued a SIC to this vehicle, the post SIC photographs of which showed multiple defects⁴. The front rebar requires six bolts to hold the rebar to the frame. The photographs showed that four bolts were missing and the rebar was connected with only two bolts. The rebar did not line up with the frame. Also, the energy foam behind the bumper was missing. Mr. Gee testified that this foam will not fall out on its own as in this particular situation the bumper was intact. The insurance estimate on this vehicle was for about $20,000.00 worth of parts and labor but the Applicants purchased parts for only about $2,000.00 to bring this vehicle within the manufacturer’s specifications.

SIC #1098730 for a 1996 Toyota Camry

Officer Gee also reviewed the Ministry file for the SIC #1098730⁵. The Applicant submitted a false insurance certificate to the Director as part of its rebuilt file⁶ pertaining to SIC #1098730 it had issued to a 1996 Toyota Camry. Mr. Gee testified that insurance estimate was a forged document submitted with the rebuilt file. The basis of the allegation was that the document had information of damage that did not belong to the vehicle in question and showed G.S.T. on the estimate. The damaged vehicle was a US vehicle and the estimate would not show a Canadian tax, GST. Moreover, the insurance estimate showed total replacement parts in the amount of $6,901.11. However, the Applicants provided invoice for parts purchased, to repair the vehicle, in the amount of $258.75. He further testified that most of the time the insurance estimates factor used parts.

Officer Gee went on to testify about an another instance of submitting false insurance estimates is contained that the Applicant had submitted to the Branding unit as part of the Rebuilt Vehicle Package⁷. The insurance estimate belonged to a two door soft top convertible car. However, the actual vehicle for which the SIC was issued was a four door, hard top with a roof rack and was not a convertible. Similarly, the Applicants issued a SIC #1092190 to a 2001 Chevrolet Express that was a full size non-convertible van with 6 doors with automatic transmission and non convertible. The insurance estimate he had submitted to the Director belonged to a two door soft top convertible with standard transmission⁸. The Applicants used the same insurance estimate for two different SICs and for two different motor vehicles⁹. The Director alleged, and the Tribunal agreed, that these are clearly, “cut and paste” creations of the same original estimate, where the VIN and vehicle is changed to reflect the VIN of the rebuilt vehicle.

Testimony of Daniel Chudy and Dan Ventura

Preliminary Matters

The Registrar proposed to call two expert witnesses, Daniel Chudy and Dan Ventura. The Applicant’s Counsel submitted that Mr. Chudy should not be qualified as an expert because of, as he said, Mr. Chudy’s youthful experience. He had obtained his 310 certification in summer of 2007. Moreover, he was never qualified as an expert by any Court or Tribunal in the past. The Applicant’s Counsel accepted Mr. Ventura testifying as an expert.

The law in this area is outlined by Supreme Court in decision in R. v. Mohan, 1994 CanLII 80 (SCC), [1994] 2 S.C.R. 9. At paragraph 17 the Court held:

Admission of expert evidence depends on the application of the following criteria:

(a) relevance;

(b) necessity in assisting the trier of fact;

(c) the absence of any exclusionary rule;

(d) a properly qualified expert."

It is the necessity and qualification of an expert that the Tribunal is dealing with at this stage.

In dealing with the issue of the qualifications of an expert, Mohan, supra, states at paragraph 27:

"... the evidence must be given by a witness who is shown to have acquired special or peculiar knowledge through study or experience in respect of the matters on which he or she undertakes to testify."

Furthermore, in The Law of Evidence in Canada, (Markham: Butterworths, 1999), Sopinka, Lederman and Bryant state with respect to this issue at p. 622 - 623:

"An expert is usually called for two reasons. The expert provides to the court basic information necessary for its understanding of scientific or technical issues involved in the case. In addition, because the court is incapable of drawing the necessary inferences on its own from the technical facts presented, an expert is allowed to state his or her opinion and conclusions. The expert's usefulness in this respect is circumscribed by the limits of his or her own [experience]. Before a court will receive the testimony on matters of substance, it must be demonstrated that the witness possesses special knowledge and experience going beyond the trier of fact. The test of expertise so far as the law of evidence is concerned is skill in the field in which the witness' opinion is sought."

The same principles apply when an expert testifies before a Tribunal. Mr. Chudy holds a 310 Auto Body Mechanic License he also holds a 310B Structural Interprovincial license. Since 2008 he has been employed with Centennial College as an auto body instructor and certainly benefited from his teaching experience in addition to his certifications. Since 2003, as he testified, he has worked on more than a hundred vehicles and is familiar with the Branding Program.

Prior to the hearing, the Director had asked Mr. Chudy to review the documents contained in various exhibits and to provide his opinion whether the vehicles in question met the prescribed standards at the time Unity issued SICs. He looked at the documents supplied by the Ministry on the basis of which he provided his expert reports¹⁰.

The Tribunal reviewed the reports of Mr. Chudy and the information contained in various exhibits. The Tribunal was persuaded that the testimony of Mr. Chudy will be of assistance to the Tribunal in understanding the technical issues involved in this appeal, specifically understanding the techniques used to do frame measurement of the vehicles. The Tribunal, on the basis of Mr. Chudy’s qualifications and experience, qualified Mr. Chudy, as an expert witness with respect to his review of Applicant’s various Rebuilt Files on the basis of his education and experience in the field of auto body structures. The Applicant’s Counsel had the opportunity to cross-examine Mr. Chudy on his testimony. However, the Counsel did not ask him questions to impeach his expertise. The Tribunal also noted that the Respondent had provided, in accordance with the Tribunal Rules, copies of the expert reports of Mr. Chudy to the Applicant’s Counsel. The Applicant’s Counsel did not raise any objections to those reports as exhibits.

Mr. Chudy testified about the techniques used to measure the vehicle frames and the manufacturer’s specifications pertaining to different vehicles. He also went over the documents the Applicants had submitted to the Ministry with respect to various rebuilt files. Mr. Chudy testified that in order to issue a SIC to a salvage brand vehicle, the vehicle frame must be measured in order to make sure that the vehicle has returned to the factory specifications. Car-O-liner is one of the measurement instruments that measure the body frame dimensions of vehicles. This is the instrument, the Applicants used to do inspections of rebuilt vehicles.

One of the areas of the Director’s concern was that the Applicants provided frame measurements of vehicles as part of his Rebuilt files and that those measurements were so much off the prescribed standards that those did not make any sense.

SIC #1134141 issued for 2003 Toyota Corolla.

Mr. Chudy reviewed documents presented in Exhibit 3, tab 10 that contains, pre-accident and post-accident pictures of a vehicle for which the Applicants had issued SIC #1134141. The photographs showed front impact energy absorber to be missing¹¹. Another photograph of the vehicle showed an area of the frame rail that was heated and rusted¹². He testified that the frame rail is a very important part of the vehicle body and cannot be heated, and in this instance had to be replaced as it had kinks¹³.

Mr. Chudy went on to review the document package that the Applicants submitted pertaining to SIC #1134196¹⁴. In his opinion the vehicle did not meet the requirements of Schedule 9 of Ontario Regulation 611. It requires, “the alignment of each chassis control point and reference point must be within three millimeters of the original vehicle manufacturers specifications.” The measurement sheets the Applicants had supplied make reference to the actual measurements of only 10 heights, with no reference to length or width¹⁵.

Mr. Chudy further testified that preprinted vehicle specification sheet includes measurements indicated in a ‘circled area’ to be used when the vehicle is being repaired has the engine in the vehicle. The measurements are indicated in ‘square boxes’ for when the engine is removed. This is stated in the ‘legend for Car-O-Liner’ that a technician must know in order to have any success using these measurements to repair vehicles. However, the Applicant did not follow the engine in and engine out measurement requirements in order to complete the specification sheet.

Mr. Chudy also testified that there were several discrepancies between the Rebuilt Vehicle Parts Audit Form and the damage estimate supplied by the insurance company, which the Applicants submitted to the Director as part of the vehicle rebuilt file. The damage estimate showed the replacement of the air bags, the A-post and rocker panel assembly. However, there was no indication on the file that those were ever taken care of. Mr. Ventura also testified about his experience with this file. After he completed the inspection of the vehicle in February 2008, he took it off the road due to the vehicle being unsafe. He also held the opinion that the Applicants should not have issued the SIC for this vehicle as it had serious structural defects.

SIC #1134239 issued for 2005 Nissan Altima[^16]

This vehicle was involved in a rear end accident. The measurement of the frame that the Applicants supplied to the Branding Unit as part of the Rebuilt Vehicle File were so much off the prescribed standards that those did not make any sense and may prove to be inaccurate. This vehicle was in a rear end collision. Instead of replacing the rear end of the vehicle, the Applicants fixed the trunk that left lots of kinking in the trunk.

Mr. Ventura testified that the insurance estimate for this vehicle was $12,572¹⁷. However, the Applicants showed that $189 was spent to make this vehicle road worthy. He did not replace any section of the rear body and other important parts that were included in the insurance estimate to bring this vehicle in compliance with manufacturers’ specifications.

Moreover, Mr. Ventura referred the Tribunal to the Car-O-Liner measurement sheet the Applicants had submitted with the rebuilt package, which showed measurement number that did not make any sense. In his opinion, the Applicant was not inspecting the vehicles but simply recording inaccurate numbers. In Mr. Ventura’s opinion, by issuing SIC, the Applicants put an unsafe vehicle on the road. By doing so they put the occupants and the public at risk. Mr. Ventura took this vehicle off the road and testified that as of the hearing date this vehicle was still off the road.

SIC #1134202 issued for 1996 Toyota Camry[^18]

Mr. Chudy and Mr. Ventura testified about the documents contained in the Rebuilt Vehicle File and the Ministry audit of the file after the Applicants issued the SIC. Mr. Ventura testified that the measurements of the vehicle frame taken after the certification did not meet specifications. Post certification pictures of the vehicle showed extensive corrosion and a crack in the left front rail was visible¹⁹. The pictures also showed kinks on the above parts, which is not acceptable as it makes the vehicle unsafe. Mr. Chudy further testified that any metal that is folded and kinked or has stress cracks must be replaced because the metal once deformed beyond its elastic limit will not return to its original shape.

Mr. Ventura testified and the Tribunal noted that the rebuilt parts list that the Applicants had supplied to the Branding Unit²⁰ had no mention of the replacement of frame rail, which was damaged to the extent of replacement.

Mr. Ventura testified that he had inspected this vehicle²¹ and found misalignment and gaps in parts. In addition, the vehicle showed use of excessive heat to repair important structural components²². He also testified that the insurance estimate to make this car road worthy was $8,060.78, but the Applicant provided receipts of parts and labor in the amount of approximately $1,400²³. By reducing the cost, he did not replace the damaged parts.

SIC#1134217 issued for a 2002 Honda Accord[^24]

In Mr. Chudy’s opinion this vehicle did not meet the standard at the time of the issuance of SIC. The structural inspection package submitted was incomplete as the Applicants did not submit photographs showing damage. They did not submit invoices for any parts used and the original damage estimate was also missing. The measurements taken by the ministry officer showed that the front frame rails had mashed and sway conditions. The vehicle had damage to the front section and was not properly measured when the SIC was issued. The front section was mashed 17mm on the left side and 10mm on the right side and swayed to the left 7mm. It was also showing sag of 7-8 mm. It is clear that the vehicle was not properly measured for length, width or datum at the time the structural certificate was issued.

SIC #1135686 issued for 2005 Toyota Sienna[^25]

Mr. Chudy testified that after reviewing the ministry officer’s inspection file, it was his opinion that the above vehicle did not meet the requirements for three reasons:

The bottom left front bumper reinforcement bar bolt was missing in the left front frame rail and the bottom left front bumper reinforcement bar bolt was missing in the right front frame rail. The right bottom bolt in the bumper reinforcement bar in the left front frame rail was also loose.

The left front frame rail was improperly sectioned, poorly welded and covered with body filler.

The front impact energy absorber was missing.

There are also several discrepancies between the Rebuilt Vehicle Parts Audit Form and the damage estimate by the Insurance Company that the Applicant submitted as part of the rebuilt file. The damage estimate showed the need of replacement of the air bags, engine and transmission as well as a front body section. These are not addressed on the re-built parts audit form leading Mr. Chudy and the Tribunal to believe that they were not replaced or repaired.

In Mr. Chudy’s opinion, if the vehicle was involved in a similar collision the vehicle will not perform as the manufacturer intended due to the crash structure being altered outside the manufacturer’s guidelines and two out of 6 bolts missing on the front bumper reinforcement bar. In addition, if the frame rail is not sectioned properly and in the correct place, the frame rail will not behave as the manufacturer intended. As Mr. Chudy testified, this altered frame rail in conjunction with the missing bolts could easily cause a failure of the crash structure. In his opinion the remaining two bolts could shear in a collision and greatly reduce the crash worthiness of the vehicle by failing to tie the frame rails together distributing the crash energy.

Mr. Chudy further testified that the manufacturer uses foam and plastic bumper energy absorbers to help the bumper cover hold its shape, reduce damage of low speed impacts and reduce injury to pedestrians. These energy absorbers must be replaced or the vehicles will not function as the manufacturer intended in these situations.

SIC # 1135660 issued in December 2008 for 2006 BMW X3[^26]

Mr. Ventura inspected this vehicle in July 2009 and found that the vehicle measurements were within the manufacturer’s specification. However, the measurements Unity had shown on its Car-O-Liner sheet showed that the vehicle did not meet the specifications and tolerances. This further proves that either the Applicant did not know the body frame specifications or did not know how to operate his equipment or was simply negligent. In any case, he did not do competent inspections. The pictures taken at the time of Ministry inspection showed that a nut was missing and another was loose on the rebar that connects to the frame. On the driver side the two nuts that connected the rebar with the frame were visibly loose²⁷. The rebar supports impact absorption and is an important safety feature of the vehicle. These loose parts could have been easily detected had the Applicants done a proper visual inspection of the vehicle.

SIC # 1135708 issued on January 8, 2009 for a 2003 Honda Accord[^28]

This vehicle came to the attention of Mr. Ventura due to discrepancies found in the Rebuilt File the Applicants had submitted to the Branding Unit. Prior to the issuance of SIC this vehicle was involved in front end collision. The insurance estimate to bring this vehicle in compliance with vehicle safety was for an amount of $16,002.00. This estimate included the price of the parts in the amount of $9,200.00. However, the invoices provided with the rebuilt file showed the vehicle was repaired using parts for $331.00.

The Director agreed to disregard paragraph 5 of the proposal

Applicant’s testimony

The Applicant took an auto mechanic college course in 1999 and shortly thereafter started his own garage. He got his structural mechanic license in 2008. He learned all his skills from a licensed body person. The first mechanic he employed was in 2004, he later fired him in 2006 or 2007 as Unity started getting issues with the work from the Ministry. The Applicant alleged that in 2004, when he applied for the MVIS Type 6 registration, no one from the Ministry came to train him but they left him material to read. They did not come back to check if he had read the material. He testified through an interpreter that he can read English to some extent but cannot understand everything. A few of his employees and his son helped him in understanding the documents that were in English.

Upon being questioned about measurements he had taken on one of the vehicles, wherein he had included ‘engine in” and “engine out” measurements, he testified that he had not taken the engine out to do the measurements (Exhibit 3, tab 11A, page 95).

When he purchased a Car-O-Liner the machine did not come with any instruction manual. The sellers of the machine had trained Unity’s mechanic. The Applicant took no training in the operation of the Car-O-Liner. The Applicant stated that he is willing to take training if the Tribunal puts it as a condition of his license. He also showed his willingness to retain a mentor as a condition of his license. With respect to the false insurance estimates, the Applicant testified that his body man was responsible for sending the documents to the Ministry. With respect to pre-signing the SICs he said that he did not authorize his mechanic to do that.

Under cross-examination the Applicant testified that he did not call the manufacturer to get a manual for the Car-O-Liner. He further agreed that he used the Car-O-Liner without any training and only by observing the mechanics using it.

Upon being referred to Exhibit 10 tabs E to K, which are Uniform Procedures for Collision Repairs, the Applicant testified that he was not familiar with these documents and stated that he had learned from his mechanic as to how each vehicle is to be repaired.

LAW

The Highway Traffic Act, R.S.O. 1990, c. H.8 states:

Motor vehicle inspection station licence

91. (1) No person shall establish, operate or maintain a motor vehicle inspection station except under the authority of a licence issued by the Director under this Act and the Director may issue a licence for a motor vehicle inspection station subject to the conditions that the Director may specify in the licence. R.S.O. 1990, c. H.8, s. 91 (1).

Issuance of licence

(2) Subject to subsection (3), any person who applies in accordance with this Act and the regulations for a licence to establish, operate or maintain a motor vehicle inspection station and who meets the requirements of this Act and the regulations and who pays the prescribed fee is entitled to be issued the licence. R.S.O. 1990, c. H.8, s. 91 (2).

Grounds for refusal

(3) Subject to section 95, the Director may refuse to issue a motor vehicle inspection station licence where, in his or her opinion,

(a) the past conduct of the applicant or, where the applicant is a corporation, of its officers or directors affords reasonable grounds for belief that the motor vehicle inspection station will not be operated in accordance with the law and with honesty and integrity;

(b) the proposed motor vehicle inspection station or its operation would contravene this Act or the regulations or any other Act or regulation or any municipal by-law respecting its establishment or location;

(c) the applicant is not competent to operate a motor vehicle inspection station in accordance with this Act and the regulations; or

(d) the equipment and premises are not suitable for the performance of the inspections for which the licence is sought. R.S.O. 1990, c. H.8, s. 91 (3).

Revocation of licence

(8) The Director may revoke or refuse to renew a motor vehicle inspection station licence where,

(a) …

(b) any inspection authorized by the licence is incompetently performed;

(c) the licensee or any motor vehicle inspection mechanic employed in the motor vehicle inspection station has misrepresented the condition of a vehicle with respect to the standards of equipment and performance prescribed by the regulations upon an inspection of the vehicle in the station for the purpose of determining whether or not to issue a safety standards certificate, sign a vehicle inspection record or affix a vehicle inspection sticker;

(d) there is a breach of a condition of the licence;

(e) the licensee does not comply with this Act or the regulations;

(f) the inspections that can be performed by the motor vehicle inspection station are misrepresented; or

Motor vehicle inspection mechanic

92. (1) No person shall sign a vehicle inspection record as mechanic or certify in a safety standards certificate that a vehicle complies with the standards of equipment and performance prescribed by the regulations unless the person is registered by the Director as a motor vehicle inspection mechanic in a motor vehicle inspection station and the Director may so register any person for whom application is made under subsection (2). R.S.O. 1990, c. H.8, s. 92 (1).

Registration

(2) Where a licensee or an applicant for a motor vehicle inspection station licence applies for the registration as a motor vehicle inspection mechanic in the motor vehicle inspection station of the licensee or in the proposed motor vehicle inspection station of the applicant for a licence, as the case may be, of any person who meets the requirements of this Act and the regulations, the person is entitled to be registered as a motor vehicle inspection mechanic in the motor vehicle inspection station. R.S.O. 1990, c. H.8, s. 92 (2).

Revocation of registration of motor vehicle inspection mechanic

93. The Director may revoke the registration of a motor vehicle inspection mechanic where,

(a) the registrant or the licensee has made a false statement in the application for registration of the registrant or in a safety standards certificate or in any report, document or other information required to be furnished by this Act or the regulations or any other Act or regulation that applies to the registrant;

(b) any inspection performed under the authority of the mechanic’s registration is incompetently performed by the registrant; or

(c) the registrant does not comply with this Act or the regulations. R.S.O. 1990, c. H.8, s. 93.

Hearing re terms of licence

94. (1) Where the Director issues a licence under this Act and the licensee is dissatisfied with the conditions thereof prescribed by the Director, he or she may by written notice given to the Director and the Tribunal require a hearing by the Tribunal, and the Tribunal shall appoint a time for and hold a hearing. R.S.O. 1990, c. H.8, s. 94 (1); 1999, c. 12, Sched. G, s. 24 (16).

Decision of Tribunal

(2) After a hearing under subsection (1), the Tribunal may affirm the conditions prescribed for the licence by the Director or may cancel the conditions or may prescribe the other conditions for the licence in the place of those prescribed by the Director that it considers proper and the conditions shall be conditions of the licence. R.S.O. 1990, c. H.8, s. 94 (2); 1999, c. 12, Sched. G, s. 24 (16).

Proposal to refuse to issue or revoke licence or registration

95. (1) Where the Director proposes,

(a) to refuse to issue or renew a licence;

(b) to refuse to make a registration; or

(c) to revoke a licence or registration,

the Director shall serve notice of his or her proposal, together with written reasons therefor,

(d) in the case of a proposal to refuse to issue a licence, upon the applicant;

(e) in the case of a proposal to revoke or to refuse to renew a licence, upon the licensee;

(f) in the case of a proposal to refuse to make a registration, upon the applicant or licensee and upon the proposed registrant; and

(g) in the case of a proposal to revoke a registration, upon the registrant and the licensee of the motor vehicle inspection station in which the registrant is employed. R.S.O. 1990, c. H.8, s. 95 (1).

Notice

(2) A notice under subsection (1) shall inform the person who is the applicant, licensee, registrant or proposed registrant, as the case may be, that the person is entitled to a hearing by the Tribunal if the person mails or delivers, within fifteen days after receiving service of the notice under subsection (1), notice in writing to the Director and the Tribunal requiring a hearing by the Tribunal and the person may so require the hearing. R.S.O. 1990, c. H.8, s. 95 (2); 1999, c. 12, Sched. G, s. 24 (16).

Powers of Director where no hearing

(3) Where the applicant, licensee, registrant or proposed registrant does not require a hearing by the Tribunal in accordance with subsection (2), the Director may carry out the proposal stated in the notice under subsection (1). R.S.O. 1990, c. H.8, s. 95 (3); 1999, c. 12, Sched. G, s. 24 (16).

Power of Tribunal where hearing

(4) Where the applicant, licensee, registrant or proposed registrant requires a hearing by the Tribunal in accordance with subsection (2), the Tribunal shall appoint a time for and shall hold the hearing and may by order direct the Director to carry out his or her proposal or refrain from carrying out his or her proposal and to take the action that the Tribunal considers the Director ought to take in accordance with this Act and the regulations, and for such purposes the Tribunal may substitute its opinion for that of the Director. R.S.O. 1990, c. H.8, s. 95 (4); 1999, c. 12, Sched. G, s. 24 (16).

ANALYSIS

The Act and the Regulations are designed to achieve the legislative objective of requiring persons to drive safe vehicles in Ontario. This objective is achieved, in part, by the licensing of motor vehicle inspection stations and mechanics, and the requirement that these licensees adhere to the provisions relating to vehicle safety before they issue structural inspection certificates. MVIS Type 6 play a central role in the administration of Mandatory Branding Program in Ontario.

A Type 6 license is authority to inspect a salvage motor vehicle in accordance with the inspection requirements and performance standards set out in Schedule 9. O. Reg. 818/93, s. 1; O. Reg. 372/98, s. 2; O. Reg. 117/08, s. 1; O. Reg. 474/09, s. 2; O. Reg. 79/11, s. 2²⁹.

Although, the Proposal outlined the revocation of Applicants’ Type 2 and Type 6 registrations³⁰, the Director’s Counsel submitted that it is only Type 6 registrations of the Applicants for which the Director is seeking revocation.

As Mr. Ventura testified, they are the last check points before a salvage branded vehicle goes back on road. The Tribunal finds the Applicant, a licensed operator and mechanic, significantly deviated from the responsibilities imposed upon him under the Act and Regulations on several occasions. Highway Traffic Act – R.R.O 1990, Regulation 611 requires:

7.1 (1) A structural inspection certificate shall only be issued in respect of a salvage motor vehicle but shall not be issued in respect of a salvage motor vehicle unless the vehicle has been inspected in accordance with the inspection requirements and complies with the performance standards set out in Schedule 9. O. Reg. 378/02, s. 2.

The Director’s Counsel submitted that allegations against the Applicants contained in paragraph 1 and 2 of the Proposal are very serious. These allegations pertain to 22 vehicles for which the station issued SICs between the period September 2008 and February 2009. They were problematic as the Ministry audit found:

• all vehicles failed on the basis of the required frame measurements submitted by the Applicants on their own Car-O-Liner report;

• some failed on the basis of a simple visual inspection;

• some failed on the basis of frame measurements taken by the MTO inspectors; and

• of the 22 cars inspected, some failed on the basis of all three criteria and some failed on two of those three criteria.

The Tribunal found that none of the 22 vehicles reviewed met the requirements of frame measurements on the basis of information submitted in the SIC package to the Director by the Applicants. The SIC for each of those vehicles was signed by the Applicant. He signed as the licensee in all cases and as the inspecting mechanic in all but one case. By signing the SICs he had falsely certified that the inspected vehicles met the prescribed standards.

Upon inspection by the MTO Officer, 7 of those vehicles did in fact meet the frame measurement parameters of the prescribed standards. Although, the Applicant’s measurements showed they did not. However, four of the 22 vehicles failed to meet the prescribed standards on a simple visual inspection by MTO inspectors

The Applicant confirmed the evidence of Director’s expert witnesses that the recorded frame measurements of 15 vehicles he submitted to the Director did not reflect an “engine out” situation. He testified that he did not remove the engines in any of the vehicles to conduct the measurements as required by Regulations. He also testified that he erroneously believed that the numbers in the “squares and circles” referred to the left and right side of the vehicle. It is clear that the measurements that he submitted, as a licensed mechanic and owner of the MVIS station, did not meet the minimum requirements set out in regulation³¹ and were also deceptive. The Tribunal finds that the Applicant did not understand the significance of the measurements on the Car-O-Liner specification sheet and the numbers he provided were complete fabrication.

The Director sent numerous warning letters, between August 2005 and July 2008, to the Applicants to address a variety of deficiencies.³² On November 22, 2007, three convictions were registered against Unity. One was for making a false statement in an SIC dated March 21, 2006 and two other convictions were entered the same day for failing to send in the documents required by regulations for SICs issued in May 2006 and July 2006.³³ The Director gave the Applicants ample warnings that their conduct was not acceptable and was, in fact, a violation of the law³⁴. The evidence suggests that the Applicants did not take the warnings seriously. The Applicant did not adduce evidence to counter the Registrar’s evidence that his operations did not improve subsequent to the above warning letters and convictions.

False insurance estimates

Furthermore, the Applicant provided false insurance estimates to the Director, numerous times, as part of rebuilt vehicle files³⁵. Although, the Director did not adduce evidence to establish who created those false insurance estimates, the Tribunal finds that it was the Applicants who had submitted them. Therefore, they are ultimately responsible.

The issuance of SICs is a privilege that comes with a concomitant responsibility to ensure compliance with the law. The MVIS type 6 registration, to issue Structural Inspection Certificates is also a matter of public safety. The allegations against the Applicants involve vehicles that were unfit for the road by the minimum standards established by the Ministry. Numerous vehicles for which the Applicant had issued SIC presented a safety hazard to their occupants and to others sharing the roads. The Tribunal has taken a consistent approach that vehicle owners and the general public have a right to expect that the trust associated with granting a Motor Vehicle Inspection Station licence will be rigorously honoured.

Dealing with the issue of revocation, the Tribunal in Little City Auto Service Inc. [2007] O.L.A.T.D. No. 526 held:

“..... Ontario invests those (MVIS) the public trust to ensure vehicles operating on the highway are safe. Breach of that trust may afford the reasonable grounds required by the statute for a revocation or refusal to renew a registration, especially where the breaches show a pattern of total disregard for the regulations, negligence, willful blindness or just plain dishonesty”.

In Re Ray Tek Motors Inc. [2007] O.L.A.T.D. No.215, the registrant issued three false safety certificates. As the Tribunal held, in each instance, he conceded that he certified vehicles as complying with safety standards whereas he did not inspect or even see the vehicles. Having been entrusted with ensuring the safety of vehicles using public roads, his actions were those of a person clearly unsuited to certifying vehicles as being in compliance with the Act and regulations. The Tribunal revoked the registration of the station and the mechanic.

The photographs submitted into evidence to corroborate the allegations against the Applicants clearly showed the breaches of the regulations by the Applicant. The vehicles that were issued their SICs by the Applicants were manifestly not in the condition required by the regulations. The only conclusion available to the Tribunal on the evidence is that either the Applicant did not carry out the required inspections or disregarded the defects prior to the issuance of the SIC.

In addition, the Applicant allowed the registered mechanic to pre-sign the blank SIC and possibly left for employees to fill out and issue. This could only mean that vehicles were certified as safe without the necessary review by a licensed mechanic. This in the view of the Tribunal was evidence of the Applicant treating both the regulations and his responsibility as a SIC issuing station with contempt.

The Applicant, during his testimony agreed that he did not have the manual for the Car-O-Liner nor did he take training to operate this vital equipment in his operations. Yet he kept using this equipment, with the result that he put unsafe vehicles on the road. Out of 22 vehicles files the Director audited, eight were taken off the road due to serious safety concerns. Ten of the vehicles frame measurements met the requirements despite that fact that the Applicants had shown in their documents that those did not meet the requirements³⁶.

The Applicant during his testimony showed his willingness to take training if the Tribunal puts it as a condition of his license. He also showed his willingness to retain a mentor as a condition of his license. The Tribunal finds that these solutions are too little and too late.

The Applicants’ solicitor submitted that the license should only be taken in an extreme case and the Applicants should be given a chance to rehabilitate. He further submitted that, at the time of initial registration, the Ministry gave him the registration and walked away. He suggested that other professional regulatory bodies provide training to members and that there is no such mechanism for the MVIS stations. He also submitted that problematic inspections of 22 vehicles, out of a few thousand vehicles for which he had issued SIC, was a small proportion. Therefore these violations should not weigh heavily against the Applicants. He suggested that the matter be resolved by imposing following terms and conditions on the registrations:

• The Applicant will take training to the satisfaction of the Ministry;

• Certificate from suppliers of Car-O-Liner that he is capable of doing inspections or bringing other competent mechanic to so inspections; and

• The Applicant will take English language courses to the satisfaction of the Ministry.

In analyzing the Counsel’s submissions the Tribunal is aware that the jurisdiction of the Tribunal is limited to apply the Act and its Regulations. Therefore, the Tribunal will not make any finding with respect to the procedures in place to issue registrations to potential applicants and the obligations of the Ministry to provide training to registrants. However, the Tribunal would expect registrants to conduct their business with honesty and integrity and in compliance with Act and its Regulations. The Tribunal cannot condone the Applicant’s submission of fraudulent documents to the Ministry and performance of incompetent inspections on the basis that, in his opinion, the Ministry did not sufficiently oversee him. As. Mr. Ventura testified there are approximately fewer than 500 MVIS in Ontario and given the limited resources, the Ministry cannot oversee each and every vehicle these stations inspect.

The record has established that the Director issued the Proposal in December 2009, which was an extreme step for the Director to take. Despite warnings, the Applicant did not take any steps to bring his operations in compliance with the Act and Regulations. There is no hope he will do it in the future if the Tribunal puts conditions of his registration.

The Tribunal concludes that the Applicant has been indifferent to his obligations under the Act and Regulations, both as a Motor Vehicle Inspection Station operator and a Motor Vehicle Inspection Station mechanic. The Act³⁷ allows the Director to propose to revoke the registrations of the Applicants upon even a single act of violation. In this instance, the Applicants’ conduct has, on numerous occasions, compromised public safety. It is appropriate, in the circumstances of this case, that Applicant’s Type 6 mechanic registration and Unity’s MVIS Type 6 registration be revoked.

ORDER

Pursuant to the authority vested in it under the provisions of the Act, the Tribunal directs the Director to carry out his Proposal to revoke the MVIS Type 6 registrations of the Applicants .

LICENCE APPEAL TRIBUNAL

Harinder S. Gahir Vice-Chair

Released: March 22, 2012

Footnotes

1. 1Exhibit 3, tab 1
2. 2Exhibit 3, tab 1, page 2 and 3
3. 3Exhibit 3, tab14
4. 4Exhibit 3, tab 14C
5. 5Exhibit 6, tab 34
6. 6Exhibit 6, tab 34
7. 7Exhibit 6, tab 35
8. 8Exhibit 6, tab 36
9. 9Exhibit 6, tab 34, page 817 and tab 35, page 844
10. 10Exhibit 10
11. 11Exhibit 3, tab 10, page 82
12. 12Exhibit 3, tab 10, page 83
13. 13Exhibit 3, tab 10, page 84
14. 14Exhibit 3, tab 11
15. 15Exhibit 10, tab 3 page 1672
16. 17Exhibit 3, tab 12A, page 110
17. 19Exhibit 3, tab 13 c and Exhibit 10, tab 5
18. 20Exhibit 3, tab 13A
19. 21Exhibit 3, tab 13B
20. 22Exhibit 3, tab 13C
21. 23Exhibit 3, tab 13A
22. 27Exhibit 4, tab 18C, page 340
23. 29Highway Traffic Act – R.R.O. 1990, Reg 601, section 3(6)
24. 30Exhibit 3, tab 1, page 2
25. 31Regulation 611, Schedule 9, s. 1.
26. 32Exhibit 3, tab 1, paragraph 7, page 7; see also Exhibit 7, tabs 48-71
27. 33Exhibit 3, pages 27 and 28
28. 34Exhibit 3, tab 1, paragraph 7
29. 35Exhibit 6, tabs 34-36
30. 36Exhibit 12
31. 37Section S. 91 (8) (b) & (c), S. 93 (a) & (b)
32. 16Exhibit 3, tab 12
33. 18Exhibit 3, tab 13
34. 24Exhibit 4, tab 16 and Exhibit 10 tab 8
35. 25Exhibit 4, tab 20 and Exhibit 10 tab14
36. 26Exhibit 4, tab18
37. 28Exhibit 5, tab 24