Licence Tribunal
Appeal d'appel en
Tribunal matière de permis
DATE:
2013-05-15
FILE:
7847/CVOR
CASE NAME:
7847 v. Registrar of Motor Vehicles
Appeal under Section 50(1) of the Highway Traffic Act, R.S.O. 1990, c. H.8, from an Order of the Registrar of Motor Vehicles Pursuant to Section 47(1) - to Cancel the Commercial Vehicle Operators’ Registration Certificates and to Seize the Plate Portion of all Permits Issued
Gate-Way Trucking Ltd.
Applicant
-and-
Registrar of Motor Vehicles
Respondent
REASONS FOR DECISION AND ORDER
ADJUDICATORS:
Terrance Sweeney, Vice Chair
Simon Dann, Member
APPEARANCES:
For the Applicant:
Mark Reynolds, Paralegal
For the Respondent:
Patrick Moore, Counsel
Heard in Toronto:
April 9, 2013
REASONS FOR DECISION AND ORDER
The Applicant appeals to this Tribunal under section 50(1) of the Highway Traffic Act, R.S.O. 1990, c. H.8 (the “Act”), from an order of the Registrar of Motor Vehicles (the “Registrar”) issued on December 12, 2012, pursuant to section 47(1) to cancel a Commercial Vehicle Operators Registration (“CVOR”) certificate 164-853-904 and to seize the plate portion of any permits issued.
The grounds for the Order of Cancellation and Seizure, are that the Registrar, having considered the safety record of the Applicant, has reason to believe they will not operate safely.
The Tribunal heard from two witnesses, Jim Kirchner, a Carrier Safety Rating Administrator in the Registrar’s office and Ramananithy Panchacharam, an officer of Gate-Way Trucking Ltd. (“Gate-Way”). A corporation search showed that Mr. Panchachram was the sole officer of Gate-Way (Exhibit 3, Tab 9).
Registrar’s Evidence
Jim Kirchner is a Carrier Safety Administrator with the Ministry of Transportation. Among his tasks is to monitor the safety records of Commercial Vehicle Operators Registration (“CVOR”) licensees in Ontario. He referred the Tribunal to Ontario’s CVOR and Carrier Safety Rating Public Guideline (Exhibit 3, Tab 23). This is a point and weight based system used to evaluate the safety records of carriers relative to other carriers in Ontario.
Mr. Kirchner explained there are currently 54,093 carriers in Ontario and approximately 95% of them have an overall violation rate which is under 35%. Only .2% of carriers exceed their overall threshold level (100%). The overall violation rate is used to bring a carrier to the Ministry’s attention and to allow for consideration of actions to be taken at various rate levels. A violation rate over 100% would be considered for sanction.
The purpose of the intervention system is to get a carrier to improve their record and typically, 80% of carriers contacted regarding their safety performance rating do improve their record.
The essential details of the Ministry’s Safety Record Review of Gate-Way are not in dispute. The carrier’s record had reached a violation rate of 144.48%, comprised of contributions from Collisions (16.7%), Convictions (112.63%), and Inspections (15.15%). This record brought the company to the Ministry’s attention (Exhibit 3, Tab 1).
Gate-Way first obtained its CVOR certificate in May 2009 and by December 2009, it had already received a warning letter (Exhibit 3, Tab 13).
In July 2010, the carrier’s rating went from Satisfactory to Conditional. The only reason the carrier initially had a Satisfactory rating was because there was no prior history. A Conditional rating is not a good rating.
Mr. Kirchner pointed out that there was a possible affiliation between Gateway and G-Trans Logistics Inc. (“G-Trans”) which was under suspension for having failed to meet performance requirements and having unpaid fines. He also referred to events which went on the G-Trans CVOR record with vehicles that were plated to Gate-Way (Exhibit 3, Tab 1).
Mr. Kirchner reviewed an incident which occurred in November 2009 when a Gate-Way driver and co-driver were airlifted to hospital after their vehicle went into a ditch. Fatigue and careless driving were stated to have been the cause (Exhibit 3, Tab 2). Mr. Kirchner explained that fatigue is of particular concern to the Ministry and is checked by auditing driver log books to ensure hours of service are within the guidelines.
Gate-Way’s U.S. performance for vehicles Out-Of-Service (“OOS”) was less than the national average but driver performance of 22.2% was found to be substantially over the U.S. national average of 5.51% (Exhibit 3, Tab 1).
Mr. Kirchner reviewed the CVOR record for G-Trans which received its CVOR in May 2007. Four months later, a warning letter was issued to G-Trans. This was followed by a Conditional safety rating in July 2008 and a Suspension and Seizure Order in November (which was set aside). In November 2009 another Suspension and Seizure Order was issued against G-Trans. The company never came out of the suspension and eventually went into bankruptcy.
In March 2011, the Ministry issued a Notice of Cancellation and Seizure to Gate-Way and G-Trans (Exhibit 3, Tab 4).
At the Show Cause Meeting, which followed, Mr. Panchadcharam and his safety consultant, Sriram Rangan, of Vagans Inc. (“Vagans”), who had been hired to help the company with their CVOR and U.S. records, appeared for Gate-Way only. The meeting included an Action Plan submission by Mr. Panchadcharam and also listed Action items which had already been implemented.
The notes from that meeting (Exhibit 3, Tab 5) reported Mr. Panchadcharam as saying the owner of G-Trans was a friend who had suggested he buy a truck and the friend would operate it for him (Panchadcharam). At the time, Mr. Panchadcharam was the owner of a restaurant/bar.
Mr. Panchadcharam and his cousin purchased two vehicles which were then rented to G-Trans. When G-Trans went into bankruptcy in 2009, Mr. Panchadcharam began using the trucks under the Gate-Way CVOR.
In May 2011, the Registrar issued a Fleet Limitation and Cancellation Order. This Order effectively confirmed the cancellation of G-Trans’ CVOR, limited the fleet to one (1) for 24 months, and placed a number of performance conditions on Gate-Way instead of cancelling its CVOR (Exhibit 3, Tab 7).
Following a Show Cause Meeting in May 2011, four Performance Conditions were imposed on Gate-Way Two specific Performance Conditions required that the overall safety violation rate not exceed 50% and that the company could not fail a facility audit in the performance analysis period beginning May 21, 2011.
In October 2012, a Safety Record Review found that Gate-Way had in fact failed to meet those two performance conditions. The overall safety violation rate was 92.9% for the 12 months from May 2011 or, 71.3% for the May 2011 through October 2012 period.
In addition, the Applicant failed a facility audit in April 2012 (Exhibit 3, Tab 8).
Mr. Kirchner described the Ministry’s concern about whether the submitted Action Plan was being carried out or that it was not having any effect since rates were increasing instead of decreasing. He then reviewed a number of violations and defects leading to convictions (Exhibit 3, Tab 12).
The following Notice of Cancellation and Seizure, dated October 11, 2012, cited Gate-Way’s failure to meet specific performance conditions set in May 2011.
The Notice was followed by a Show Cause Meeting held at the Registrar’s office on November 21, 2012. This meeting was attended by Mr. Panchacharam and his then safety consultant, Zaf Iqbal (Exhibit 3, Tab 18).
The discussion reviewed Gate-Way’s operations and failure to meet the performance conditions set in 2011.
Mr. Panchacharam explained that Vagans, his previous safety consultant, had only worked for the company for six months and stopped when they learned that Gate-Way was only using one truck - Vagans said they were not making any money.
From then on, Mr. Panchacharam, who had previously dispatched loads, also began checking log books.
Mr. Panchacharam said that he was changing the business from long-haul to local loads for Rogue Transportation (“Rogue”). When Mr. Kirchner contacted Rogue, he was told that Gate-Way had not done any local runs.
When Mr. Panchacharam was questioned about documents showing that training was being carried out, he replied the documentation existed but he had not brought it with him.
At the conclusion of the Show Cause Meeting, Mr. Panchacharam was asked to provide a mileage report and a copy of training records for each driver from the time the performance conditions were issued. Mr. Kirchner said that these were not received.
In cross-examination, Mr. Kirchner confirmed that there was no additional activity on Gate-Way’s record after May 16, 2012.
Applicant’s Evidence
Mr. Panchacharam testified that since the fleet limitation was imposed he had been working as bartender.
He acknowledged it was suggested to him that he set up another company but stated he had no operational involvement with G-Trans. He is currently doing local runs through Gate-Way and has no employees.
Since he started doing this work, he has had no tickets and not failed any inspections.
Mr. Panchacharam explained he could not get Vagans to help as that consultant was not interested in working with a one truck company.
It was Mr. Iqbal who has done the driver training. Mr. Iqbal accompanied him to the November 2012 Show Cause Meeting and also wrote the December 19, 2012 letter certifying that he (Panchacharam) had received safety and compliance training (Exhibit 4).
Mr. Panchacharam said that a mechanic from RJ Truck and Trailer now does the maintenance work and he does his own additional inspections.
Mr. Panchacharam said that because he is now more experienced and operating by himself, he believed he would be able to operate safely.
In cross-examination, Mr. Panchacharam said he bought a first truck in 2009 and it was used in G-Trans, which was owned by ‘Arma Salam’ who has also been referred to as his friend. Mr. Panchacharam knew that G-Trans had been put under suspension.
After October 2009, his truck was not used by G-Trans and it went to Gate-Way. Mr. Panchacharam said he got his licence in December 2009 and started driving in 2012.
When Gate-Way first started operation, his friend (Salam) was the administrator until about Spring 2011, “he’s the one who helped me”. When he (Panchacharam) began to understand the operation, he thought it should be operated differently. Mr. Salam only worked at Gateway for about “9 months” from the time Gate-Way was started.
From early 2010 to early 2011, Mr. Panchacharam was the truck operator and he agreed there were a lot of problems. He said he was having trouble keeping up with maintenance and he only started going to RJ Truck and Trailer around December 2012. His driver was also not listening to what he was being told.
After the fleet limitation condition was imposed, he went to work at the bar because he did not have enough income. He owned the bar from 2003 to 2009.
Mr. Panchacharam acknowledged he did not do a good enough job in the past because he had to earn extra money but he now has the time to do it properly.
Mr. Panchacharam said the truck was not used between July 2012 and December 2012 and agreed the mileage would be less than what was reported. He realized that it was his responsibility to provide the information required by the Ministry.
When asked if he had the results of training provided by Mr. Iqbal, Mr. Panchacharam replied “no” and he expected it by the end of April.
Closing Submissions
Mr. Moore submitted it was his intention to show the company’s poor safety record and particularly, the high violation rate in 2011.
He cited the incident of fatigue where the Gate-Way driver and co-driver were airlifted to hospital after going into a ditch and trees. This incident also related the company’s safety performance relationship to G-Trans.
Mr. Moore said it was interesting that the violation rate of the company to that date was “middle of the road” and “not bad” when it came to the Show Cause meeting of April 2011.
The conditions which were then imposed were not difficult and the company simply needed to do what it said it was going to do in its Action Plan.
Mr. Moore submitted the company was given a second chance and failed because it did appear to comply with its undertakings.
At the Show Cause meeting (November 2012) there was no supporting documentation to confirm the training program had actually been implemented. The Out-of-Service (“OOS”) area turned into a very significant issue in 2012.
Turning to case law, Mr. Moore referred to John Linek Inc. (Re) [2007] O.L.A.T.D. No. 121 (“Linek”), pointing out that Linek agreed to performance conditions stating “the overall violation rate…could not exceed 65%” and, the overall out of service rate could not exceed 35% … Failure to meet either of these conditions would result in the cancellation of the CVOR certificate”. While the Linek fleet performance then achieved a 51% overall violation rate, the OOS rate went over 100%.
Mr. Moore referred the Tribunal to paragraph 11 of the Linek decision, which read, “The poor maintenance of the … fleet poses a substantial risk to the driving public [and] Mr. Linek was unable to offer any convincing evidence as to why the … certificate should be continued”.
Mr. Moore submitted that the case of Gate-Way is not exactly the same as Linek in the OOS performance but the violation rate is an issue. He added that with the company reduced to one truck, it should have been able to meet the performance conditions but that was not the result.
Mr. Moore also submitted that if the company had presented its mileage details the violation rate might be a lot higher, particularly as Mr. Panchacharam said the truck was not used for a period of time.
Mr. Panchacharam’s evidence also appeared to change through examination and cross-examination when he referred to his friend’s (Salam) involvement, first for a few months and then that the friend was blamed for the poor results.
Mr. Panchacharam agreed his company’s performance was poor from the time he took over and that he then paid less attention when he went to work at his bar.
Mr. Moore concluded the company was operated in an unreasonable manner because of the lack of attention that was paid to it.
Mr. Moore submitted that while Mr. Panchacharam is asking for another opportunity, it is the Ministry’s view that it would not be a safe proposition for the company to operate on the road.
Mr. Moore added that while there is an indication of a new consultant, the Tribunal does not have the benefit of any evidence from the consultant to confirm or support what the company has been doing or what beneficial effects have resulted from the training.
Mr. Reynolds acknowledged Mr. Panchacharam had no prior experience when he started Gate-Way and that he was convinced by friends at G-Trans that if he bought a truck they would help.
Mr. Reynolds submitted that when Vagans was hired, there was a good plan but it seems Vagans did not do a proper job because the driver performance did not match the intentions of the plan.
Mr. Reynolds submitted that Gate-Way is not a company that has blatantly gone forward to act badly and that Mr. Panchacharam has received training from a former MTO Officer.
He has hired a mechanic to do maintenance and now does not have other drivers. He has also volunteered the fleet reduction.
Mr. Reynolds referred to the collision report citing driver fatigue and submitted that there is no factual detail to support fatigue as the cause but also admitted no one is monitoring log books.
In conclusion, Mr. Reynolds submitted that the company should be given a conditional ability to operate.
ANALYSIS
The Tribunal has carefully considered all the evidence, both oral and documentary, and found that there is no evidence to support the claim the proposed Action Plan (presented at the November 2012 Show Cause Meeting) and training were in fact being implemented and or producing positive results.
Mr. Panchacharam’s testimony was that he did not bring anything with him to the hearing. The letter from Mr Iqbal (Exhibit 4), while commendable in its listing of training topics, was not supported by documentation of results.
It is noteworthy that Mr. Iqbal was not presented as a witness to provide supporting testimony.
Mr. Panchacharam said he expected the results of Mr. Iqbal’s training in April (after the hearing). But, on that point, the Tribunal notes Mr. Iqbal’s letter stated the training occurred on December 19, 2012, almost four months past.
It is difficult to believe that Mr. Iqbal had still not compiled a results report, especially considering the influence that such a report may have had in this hearing.
This undermined the credibility of any claims by Mr. Panchacharam that he had taken appropriate training or had implemented it in the past, with any Gate-Way drivers.
The relationship between G-Trans and Gate-Way is also noted, including the similarity of the safety performance chronology of the two companies:
Gate-Way G-Trans
2009/05 CVOR issued 2007/05 CVOR issued
2010/07 Conditional rating 2007/09 Warning letter
2011/03 Cancellation & Seizure Notice 2008/07 Conditional rating
2011/05 Fleet Limitation 2008/11 Suspension & Seizure
& Performance Conditions Notice set aside
2009/07 Facility Audit pass
2012/10 Cancellation & Seizure Notice 2009/11 Suspension & Seizure Order
It is not unreasonable to take the view that Gateway’s record ‘mirrors’ that of G-Trans in that both received Conditional ratings after just one year of operation and this was followed by sanctions within reasonably similar timeframes.
This is not surprising as by Mr. Panchacharam’ s own testimony, it was the principal of G-Trans who encouraged him to get into the trucking business. There is also contradictory testimony about the length of Mr. Salam’s involvement with Gate-Way, as pointed out by Mr. Moore.
Mr. Panchacharam also testified he was aware the company’s performance was poor and that he paid less attention than he should have because he was working at his restaurant/bar.
The fact that Mr. Panchacharam admitted he had no experience in the industry is not held against him. But, the fact that he did not act with demonstrated commitment to learn what was required of a CVOR holder after (1) receiving the Conditional rating in 2010, and then (2) implementing the proposed Action Plan after the Performance Conditions were imposed is seen with great concern.
In considering the Registrar’s request for the Cancellation and Seizure Order to be confirmed, the Tribunal finds itself in agreement with the Ministry’s view that “it would not be a safe proposition (for Gate-Way) to operate on the road”.
On a balance of probabilities, and having regard for Gate-Way’s record, and its failure to provide any substantive evidence that its Action Plan and safety training were implemented (reports, records, supporting witnesses), the Registrar is found to have proven that there is sufficient reason to believe the Applicant will not operate motor vehicles safely and in accordance with the Act.
However, and as in Linek, it is important to note that Mr. Panchacharam “will be able to to re-apply for a CVOR certificate if and when he is able to show” he has gained the knowledge and commitment to operate in accordance with the Act and the safety performance standards required of a CVOR holder.
ORDER
Pursuant to the provisions of section 50(2) of the Act, the Tribunal orders the Registrar to carry out the Cancellation and Seizure Order dated December 12, 2012 and to cancel CVOR certificate 164-853-904 issued to Gate-Way Trucking Ltd. and to seize the plate portion of all commercial vehicles and trailers registered in its name.
LICENCE APPEAL TRIBUNAL
Terence Sweeney, Vice-Chair
LICENCE APPEAL TRIBUNAL
Simon Dann, Member
Released: May 15, 2013