Licence Tribunal
Appeal d'appel en
Tribunal matière de permis
2013-05-21
FILE:
7770/CVOR
CASE NAME:
7770 v. Registrar of Motor Vehicles
Appeal from an Order of the Deputy Registrar of Motor Vehicles under Section 50(1) of the Highway Traffic Act, R.S.O. 1990, c. H.8 to refuse a Commercial Vehicle Operators’ Registration Certificate
2147213 Ontario Inc. o/a Master Truck Line
Applicant
-and-
Registrar of Motor Vehicles
Respondent
REASONS FOR DECISION AND ORDER
ADJUDICATOR:
Harinder Gahir, Vice-Chair
APPEARANCES:
For the Applicant:
Larry Young, Paralegal
For the Respondent:
Douglas W. Lee, Counsel
Heard in Toronto:
March 5 and April 22, 2013
Reasons for Decision and Order
2147213 Ontario Inc. o/a Master Truck Line (the “Applicant” or “214 Inc.”) appealed to the Licence Appeal Tribunal (the “Tribunal) from the Refusal of its application for Commercial Vehicle Operator’s Registration (“CVOR”) by the Deputy Registrar of Motor Vehicles (the “Registrar”) dated October 24, 2012.
The Registrar refused the Applicant’s application for a CVOR on the following grounds:
Pursuant to Section 17 of the Highway Traffic Act (“Act”), the Deputy Registrar is satisfied that the Applicant will not operate commercial motor vehicles safely and in accordance with the Act, the regulations and other laws relating to highway safety, based on1:
Baljinder Singh directly or indirectly controls or manages or will control or manage the Applicant, who also directly or indirectly controls or manages 1380211 Ontario Inc., to which the Registrar has assigned an “Unsatisfactory” safety rating under Section 17.1 of the Act2.
Background
The Registrar’s case against the Applicant is two-fold.
First, the Registrar alleges that one of the two directors of the Applicant, Mr. Baljinder Singh (“Mr. Singh”), is associated with 1380211 Ontario Inc. (“138 Inc.”) to which the Registrar had assigned an unsatisfactory rating due to the failure of a related company to pay the fines levied against it.
Second, at the time of the hearing, the Registrar raised the allegation that the Applicant included on its application insurance information of a policy, which had expired and did not belong to the Applicant.
Issue
The issue to be decided in this matter is:
Having regard to the Applicant’s or its related company’s safety record and any other relevant information, will the Applicant operate a commercial motor vehicle safely or in accordance with the Act, the regulations and other laws relating to highway safety?
Evidence
The Parties’ evidence consisted of the oral testimony of the Registrar’s witness, Daniel Ramer, and of the Applicant’s witnesses, Baljinder Singh, Michael Pereira and KD, as well as documentary evidence of both.
The Registrar’s only witness, Mr. Ramer, has been a Safety Rating Officer with the Ministry of Transportation for the last three years. As part of his job, he monitors carriers in the province and sends them warning letters if the carriers exceed 100% threshold of the safety rating. He explained the process to obtain a CVOR. He confirmed that he prepared majority of the documents included in Registrar’s Exhibit Book.
The Registrar’s evidence focused on Mr. Singh’s alleged involvement with 138 Inc. and the safety record of its related companies.
Mr. Ramer testified that the Registrar did not have any objections to Mr. Pereira being granted a CVOR for 214 Inc. as there have not been issues with his past record. However, Mr. Singh was one of the directors of 138 Inc. causing the Applicant to be related to a company whose CVOR has been suspended.
Related Companies
It is essential to review the structure of 1380211 Ontario Inc. (“138 Inc.”), Himat Transport Inc. (“Himat”) and Konke Transport Inc. (“Konke”) in order to understand the allegations against the Applicant. The Registrar alleged that BS was a common director of all these entities.
The Registrar believes that following were, at some point of time, officers and directors of the alleged three related companies:
Company name
Corporate Officers/Director(s)
138 Inc.
KD BD; BS; Mr. Singh
Himat
BS
Konke
BS
A Corporate Point in Time Report provided by the Registrar shows Mr. Singh, BD and KD as directors of 138 Inc.3 Mr. Singh became director and president of 138 Inc. on February 12, 2007. Thereafter, in March 2009, Mr. Singh’s name and his alleged signatures appeared on the Articles of Revival for 138 Inc. which were forwarded to the Ministry of Government Services with a cover letter signed by KD.4 The Registrar alleged that, in the Ministry of Transportation (MTO) records, BS was a director of 138 Inc. He was also a director of Himat and Konke, the common link relating the three companies, making these companies related within the meaning of section 17(4) of the Act.5
On March 11, 2007, the Registrar issued a Suspension and Seizure Order against the CVORs registered under the names of Himat, Konke and 138 Inc.6 Mr. Ramer testified that the Registrar took this action against these companies due to Himat having outstanding fines in the amount of $4,011.25. Although at no fault of their own, the Director issued Suspension and Seizure Order against 138 Inc. and Konke because they were considered related to Himat due to the commonality of BS as a director.
All of these companies used the same address at Matheson Blvd, Mississauga. Mr. Ramer expressed concern that in the past the CVOR’s relating to 1225 Matheson Blvd, Mississauga had not been successfully operating. Mr. Singh operates his automotive business from the same address.
The CVOR’s of Himat, 138 Inc. and Konke remain suspended due to the outstanding fines yet to be honoured by Himat.
Because of Mr. Singh appearing as a director on the Ministry of Government Services record of 138 Inc. and now as a director for the Applicant, the Registrar considered these two corporations related within the meaning of section 17(4) of the Act. As a result of this alleged relation, the Registrar refused to grant the Applicant a CVOR.
Mr. Singh’s testimony
Mr. Singh has been an auto-body and diesel mechanic throughout his entire working life. At one point, he also owned a truck dealership. He, along with Mr. Pereira, is a director of 214 Inc.
In response to Mr. Ramer’s testimony that all the associated companies used the Matheson Blvd, address, Mr. Singh testified that he did not have any knowledge as to why Konke used his business address as he had never rented space to it. He further testified that the Matheson property has a few other units as well that have different businesses.
Mr. Singh asserted that he neither signed any documents for 138 Inc. (including the Articles of Revival) nor was he ever a director of 138 Inc. He became aware of his alleged involvement with 138 Inc. after the Registrar refused the Applicant’s CVOR application. At that time, he obtained 138 Inc.’s record from the Ministry of Government Services. After finding his name on the record, he spoke to KD who provided him with a letter stating that his name was entered in error7.
Explaining his relationship with KD and BD, Mr. Singh testified that BD previously owned an auto repair shop where Mr. Singh worked from 1988 to 1992. Thereafter, in 1999, Mr. Singh purchased the auto repair shop from BD. He took over BD’s lease of the premises located at Matheson Blvd., Mississauga, and since then has been operating the business.
Mr. Singh has minimal experience in trucking, with the exception that he once owned a truck. Therefore, he decided to collaborate with Mr. Pereira and they incorporated 214 Inc. in August 2012. They agreed to share responsibilities, whereby Mr. Singh would perform the repair work and Mr. Pereira would handle the administrative responsibilities. To further assist Mr. Singh, his wife plans to take courses in trucking and help him with the management of the business.
KD’s testimony
KD’s husband, BD incorporated 138 Inc. in 1999 for the purposes of running a trucking business. In early 2000, BD had a run- in with the criminal justice system and had to quit the business. As she emphasized, since then, 138 Inc. has not been doing business. The sole reason for 138 Inc. remaining active is that the company has two cars registered under its name. In 2005, KD came on board as a signing officer of 138 Inc. as her husband, BD and she were planning to start trucking and her name was added in order to facilitate banking. In the same year, BD’s name was removed. Thereafter at some point in 2007, KD requested that the accountant transfer her role to BD. She believed her accountant had completed the Articles of Revival.
Testifying about Mr. Singh’s name shown on the Corporate Profile Report of 138 Inc.8 and MTO’s records, she was surprised as to how Mr. Singh’s name appeared on the documents of 138 Inc. She further claimed that he had nothing to do with the corporation. She stressed that she and her husband, and Mr. Singh had the same accountant, who might have added Mr. Singh’s name instead of BD in an error. Her accountant passed away two months ago.
The Tribunal directed KD to the Articles of Revival for 138 Inc. She identified the signatures on those documents as that of her husband and stressed that his last name was missing on the signatures9. She confirmed that her husband usually signs with his last name. She agreed that the form where her husband had signed had the name of Mr. Singh and insisted that her husband might have overlooked it.
When the Tribunal put before KD the MTO records for 138 Inc. that show Mr. Singh and BS as officers of 138 Inc10., she insisted that she was not aware as to how the name would have ended up on the Ministry record. She insisted that BS used to deal with the administrative part of the company, but should not have been listed in the MTO records as an officer.
Issue of the insurance Policy
Coming to the issue of the insurance policy, the Applicant’s application for the CVOR lists Jevco Insurance Company as the insurance provider for the Applicant and also had specified a policy number11. However, Mr. Ramer testified his enquiries with the insurance company revealed the information was incorrect. The insurance policy belonged to a different operator and had expired in July 2012, while the current application was submitted in August 2012.
In response to a question as to why the Applicant supplied an expired insurance policy to the Registrar in support of the application, Mr. Singh and Mr. Pereira both testified that they retained a consultant to complete the application. Mr. Pereira testified that the consultant asked him whether the Applicant previously held any insurance to which Mr. Pereira informed the consultant of the particulars of previously held insurance.
Mr. Pereira further testified that he had signed the blank application and did not review the completed forms which were completed by the consultant on the basis of the information provided.
THE LAW
The relevant sections of the Act are as follows:
- (1) The Registrar shall issue a CVOR certificate to and renew a CVOR certificate of every person who applies for the certificate or renewal in the form approved by the Minister and meets the requirements of this Act and the regulations. 2002, c. 18, Sched. P, s. 4 (1).
Terms and conditions
(1.1) The Registrar may issue a CVOR certificate subject to any terms and conditions that the Registrar considers appropriate. 2002, c. 18, Sched. P, s. 4 (1).
Refusal to issue
(2) The Registrar may refuse to issue a CVOR certificate to an applicant if the Registrar has reason to believe, having regard to the applicant’s safety record and any other information that the Registrar considers relevant, that the applicant will not operate a commercial motor vehicle safely or in accordance with this Act, the regulations and other laws relating to highway safety. 1996, c. 33, s. 2.
Same
(3) The Registrar may refuse to issue a CVOR certificate to an applicant if the applicant is related to,
(a) a person whose CVOR certificate has been cancelled, is or has been under suspension or is or has been subject to a fleet limitation;
(b) a person whose CVOR certificate suspension, cancellation or fleet limitation is under appeal; or
(c) a person who the Registrar has reason to believe, having regard to the person’s safety record and any other information that the Registrar considers relevant, will not operate a commercial motor vehicle safely or in accordance with this Act, the regulations and other laws relating to highway safety. 1996, c. 33, s. 2.
Same
(3.1) The Registrar may refuse to issue, replace or renew a CVOR certificate if the applicant is indebted to the Minister of Finance in respect of,
(a) an outstanding fee, or an outstanding penalty or interest in respect of a fee, due under this Act or the Public Vehicles Act; or
(b) an outstanding public vehicle-related fee, or an outstanding penalty or interest in respect of such fee, under the Motor Vehicle Transport Act, 1987 (Canada). 2002, c. 18, Sched. P, s. 4 (2).
Same
(3.2) The Registrar shall refuse to renew a CVOR certificate,
(a) that was issued subject to terms or conditions; or
(b) that has been invalid for more than 12 months before the application for renewal is received by the Registrar. 2002, c. 18, Sched. P, s. 4 (2).
Interpretation
(4) An applicant is related to a person for the purpose of subsection (3) if,
(a) the applicant and the person are related individuals;
(b) either the applicant or the person is a partner of the other or was a partner of the other or they have or have had partners in common;
(c) either the applicant or the person, directly or indirectly, controls or controlled or manages or managed the other; or
(d) the applicant and the person have or have had common officers or directors or they are or have been controlled, directly or indirectly, by the same shareholders. 1996, c. 33, s. 2.
- (1) Every holder of a CVOR certificate shall notify the Registrar in writing within 15 days after any change in the holder’s name or address or, where applicable, the persons constituting the officers, directors or partners of the holder, of the change made
ANALYSIS
The onus of proof rests upon the Registrar to prove that the evidence presented to the Tribunal affords reasonable grounds for the belief that Applicant will not operate a commercial motor vehicle safely or in accordance with the Act, the regulations and other laws relating to highway safety.
While the Act entitles an applicant to registration, it also allows the Registrar to refuse registration on grounds set forth in section 17(2) of the Act. The Tribunal has analyzed and considered the issues involved in this matter as well as the testimony of the witnesses, documentary evidence filed and the submission of the parties.
The Tribunal believes KD that she and her husband, as well as Mr. Singh used the same accountant to do all of the corporate paperwork for their respective businesses. As KD insisted, it is very plausible that, because of this commonality, the accountant may have caused the mix up in the paperwork resulting in Mr. Singh’s name appearing on the corporate documents of 138 Inc.
Section 18 of the Act requires that every holder of a CVOR certificate shall notify the Registrar in writing within 15 days after any change in the holder’s officers, directors or partners. In accordance with the Corporate Profile Report of 138 Inc., Mr. Singh’s name would have been added in the MTO records in February 2007. During that time there must have been a correspondence between 138 Inc and the Registrar that would have been helpful to determine the Mr. Singh’s relation with 138 Inc. However, the Registrar did not provide such correspondence
The alleged Involvement of BS as a corporate officer of 138 Inc. and Himat makes both companies related. However, the Corporate Profile Report12submitted by the Applicant and the Corporate Point in Time Report for 138 Inc.13 submitted by the Registrar do not show BS as a director or officer for 138 Inc. Since he is the alleged link between 138 Inc, Himmat and Konke, making them related companies, such evidence would be highly relevant. The absence of such evidence tips the balance in favor of the Applicant.
The Tribunal also accepts the evidence of Mr. Singh that he had no connection with 138 Inc. That assertion is supported by the testimony of KD who stressed that 138 Inc. did not do any business after the year 2000. In view of this evidence, the Tribunal sees no reason why Mr. Singh’s name would be added to a dormant company, particularly when its CVOR was suspended. Therefore, the Tribunal finds that Mr. Singh is not related to 138 Inc. within the meaning of section 17(4) of the Act.
Analyzing the issue of providing false insurance information in the application for CVOR, The Tribunal finds that Mr. Pereira was irresponsible in completing the Applicant’s application. This begs the question as to whether the Applicant should be refused a CVOR because of this director’s conduct. The Tribunal does not condone the careless conduct of the Applicant. However, the Tribunal is mindful that Mr. Pereira previously had a CVOR and during that time he did not have any safety or other issues. Furthermore, the Registrar’s witness, Mr. Ramer, testified that had Mr. Pereira applied for the CVOR without having Mr. Singh as a director of the Applicant, the Registrar would have no issues about his suitability and would have granted his application.
Considering the above factors, the Tribunal, on balance, finds that there is insufficient evidence for the belief that the Applicant will not operate a commercial motor vehicle safely or in accordance with this Act, the regulations and other laws relating to highway safety.
ORDER
Pursuant to the authority vested in it under the provisions of the Act, the Tribunal directs the Registrar not to carry out its Refusal of Applicant’s application for CVOR.
LICENCE APPEAL TRIBUNAL
Harinder S. Gahir
Vice-Chair
Released: May 21, 2013