Licence Appeal Tribunal
FILE: 7823/MVIA
CASE NAME: Enterprise Rent-A-Car Canada v. Registrar of Motor Vehicles
Appeal under Section 50.2 of the Highway Traffic Act, R.S.O. 1990, c. H.8 from an Impoundment Pursuant to Section 55.1(3) of the Act.
Enterprise Rent-A-Car Canada Applicant
-and-
Registrar of Motor Vehicles Respondent
REASONS FOR DECISION AND ORDER
ADJUDICATOR: ANTOINE AOUAD, M.D., Member
APPEARANCES:
For the Applicant: JAMES WHITLEY, Agent
For the Respondent: RUSSELL MCKNIGHT, Agent
Heard in Toronto: January 23, 2013
REASONS FOR DECISION
A hearing was held on January 23, 2013 to consider the Applicant’s appeal pursuant to section 50.2 of the Highway Traffic Act, R.S.O., 1990, c. H.8 (the “HTA” or the “Act”).
THE TRIBUNAL RULED TO CONFIRM THE IMPOUNDMENT. As a result the Applicant’s motor vehicle will remain detained at the impound facility for 180 days.
BACKGROUND
A motor vehicle was impounded pursuant to section 55.1 of the Act and the impoundment was appealed by the owner. The owner, motor vehicle, and date of appeal in this matter are as follows:
Owner: Enterprise Rent-A-Car Canada
Motor Vehicle: 2012 TOYT CBS (the “vehicle”)
Date of Appeal: December 19, 2012
All documents were entered into evidence as exhibits with the consent of both parties
ISSUES
As set out in the Applicant’s request for hearing (Exhibit #1), the owner appeals on the basis that the vehicle owner exercised due diligence (i.e. all reasonable efforts) to determine that the driver's licence was not suspended as provided in section 50.2(3)(c) of the Act.
Should the Tribunal order the Registrar to release the motor vehicle on the basis that the owner of the motor vehicle exercised due diligence in attempting to determine that the driver’s licence of the driver of the motor vehicle at the time in respect of which the vehicle was detained in order to be impounded was not then under suspension?
FACTS
Evidence for the Applicant
A summary of the Applicant’s evidence follows.
The Applicant’s written submission filed with the Tribunal in support of the appeal was entered as Exhibit #1. The owner of the impounded vehicle is a rental car company.. In a letter, under the company letterhead, attached to the Notice of Appeal, addressed ”To Whom it May Concern”, dated December 18, 2012, the Risk Supervisor, pleads for the return of the vehicle on the ground that company staff exercised due diligence. The Risk Supervisor states that the suspended driver presented company staff with a driver’s licence “which was to expire May 31, 2014.”
At the hearing, the Applicant’s Risk Supervisor, Mr. Whitley, acted as Agent and was a witness for the Applicant.
Mr Whitley testified that all stores across Canada follow the same procedures when renting a vehicle. All stores are consistent in requiring three pieces of ID, one of which is a driver’s licence.
He noted that the corporation processes approximately 55,000 rentals a month and stressed that customer satisfaction depends on the duration of the transaction. Given that each transaction must be kept as short as possible, the Applicant’s Agent maintains that it is not feasible for the staff to check the validity of each licence directly with the Ministry. Not only does it take time to sort through the ‘push button” telephone system but the cost of $2.50 would not make the business competitive in a market where none of the other rental companies incur the expense.
Mr Whitley asserts that due diligence is carried out in that each renter must present a driver’s licence.
In cross-examination, Mr Whitley confirmed that the staff will look at a driver’s licence to verify that the picture matches the individual, and to verify the expiry date and the class of licence.
The Registrar’s Agent questioned Mr Whitley about the credit card authorization procedures. In response, he stated that in millions of transactions in the course of a the years, there have been only 2 or three impoundments, thus, the cost and time of each call to the Ministry does not justify implementing a change in policy. He pointed out that in attempting to verify the validity of an employee’s driver’s licence he spent 9 minutes on the phone as the website was down.
The Applicant’s witness testified that based on the nature of the allegations against a renter, there is a country-wide list of unacceptable renters. In this matter, the renter’s name did not come up as a blocked renter.
Evidence for the Registrar
A summary of the Registrar’s evidence follows.
The documents tendered by the Registrar and admitted into the record on consent of the Applicant were as follows:
Copy of the Ministry of Transportation records indicating that, among other things, the impounded motor vehicle is registered in the name of the Applicant as owner;
A copy of the notice prepared by the officer who detained the impounded motor vehicle indicating, among other things, that the vehicle at the time it was detained was being driven by the person convicted of the offence under the Criminal Code of Canada outlined in point 4 below;
Copy of the Notice forwarded to the Registrar of Motor Vehicles regarding the impoundment;
Copy of the Ministry of Transportation records indicating that the driver at the time of impoundment had been convicted of Dangerous Driving under the Criminal Code of Canada pursuant to which the driver’s licence of the driver was then under suspension until January 19, 2013.
The Registrar called no other evidence.
LAW
Section 55.1 of the Act provides that a motor vehicle may be detained and impounded, and section 50.2 provides the motor vehicle owner’s right of appeal to the Tribunal. The Tribunal on the appeal may, pursuant to subsection 50.2(5) of the Act, confirm the impoundment or order the Registrar to release the motor vehicle. Pursuant to subsection 50.2(8), the decision of the Tribunal is, final and binding.
Subsection 55.1(3) of the Act states:
(3) A motor vehicle detained under subsection (1) shall be impounded as follows:
For 45 days, if there has not been any previous impoundment under this section, within a prescribed period, with respect to any motor vehicle then owned by the owner of the vehicle currently being impounded.
For 90 days, if there has been one previous impoundment under this section, within a prescribed period, with respect to any motor vehicle then owned by the owner of the vehicle currently being impounded.
For 180 days, if there have been two or more previous impoundments under this section, within a prescribed period, with respect to any motor vehicle then owned by the owner of the vehicle currently being impounded.
Regulation 631/98 provides that the prescribed period, referred to above, is two years.
The owner may appeal the impoundment on only four specific grounds set out in subsection 50.2(3):
(3) The only grounds on which an owner may appeal under subsection (1) and the only grounds on which the Tribunal may order the Registrar to release the motor vehicle are,
(a) that the motor vehicle that is impounded was stolen at the time it was detained in order to be impounded;
(b) that the driver’s licence of the driver of the motor vehicle at the time it was detained in order to be impounded was not then under suspension;
(c) that the owner of the motor vehicle exercised due diligence in attempting to determine that the driver’s licence of the driver of the motor vehicle at the time it was detained in order to be impounded was not then under suspension; or
(d) that the impoundment will result in exceptional hardship.
The Applicant here appeals on the basis of sections 50.2(3) (c).
The Shorter Oxford Dictionary, 3rd ed. provides the definition of “due diligence” as follows:
Due: A. adj. 1. That is owing or payable, as a debt. 2. Belonging or falling to by right. 3. That ought to be given or rendered; merited. 4. Such as ought to be; fitting; proper; rightful. 5. Such as is requisite or necessary; adequate. 6. To be ascribed or attributed; owing to, caused by, in consequence of. 7. Under engagement or contract to be ready or arrive (at a defined time).
Diligence: 1. The quality of being diligent; industry, assiduity. 2. Speed, dispatch. 3. Careful attention, heedfulness, caution. 4. Law. The attention and care due from a person in a given situation....
Also, “due diligence” in Black’s Law Dictionary (sixth edition) at page 457 is defined as follows:
Due diligence: Such a measure of prudence, activity, or assiduity, as is properly to be expected from, and ordinarily exercised by, a reasonable and prudent man under the particular circumstances; not measured by any absolute standard, but depending on the relative facts of the special case.
APPLICATION OF LAW TO FACTS
In closing, the Applicant‘s Agent emphasized that the only people who make money in these matters are the tow truck and the impound companies. The Applicant‘s Agent asserts that due diligence was exercised and maintained that it would take much too long to verify validity of each licence, and customers would not be happy.
The Registrar’s Agent noted that the Applicant appealed on due diligence, which requires that all reasonable efforts be made to ensure the validity of a driver’s licence.
According to the Registrar’s Agent, the test that needs to be met for an early release of a vehicle to a rental company is that the vehicle must have been rented to a licenced driver. According to the Registrar’s Agent, this is not the case, as the renter’s licence was in fact suspended.
The Registrar’s Agent contends that this Applicant has had a number of vehicles suspended in the past, and still fails to utilize the options available through the Ministry. He argues that the Applicant would take further steps to investigate when a credit card is declined, yet fails to verify a renter’s driver’s licence. Thus, the Registrar cannot accept that due diligence has been exercised
The onus is on the Applicant to establish due diligence, as grounds of appeal, as provided in sections 50.2(3)(c) of the Highway Traffic Act which prescribes:
(c) that the owner of the motor vehicle exercised due diligence in attempting to determine that the driver’s licence of the driver of the motor vehicle at the time it was detained in order to be impounded was not then under suspension; or
The legislation intends that owners of motor vehicles try to determine whether or not the licence of the person who is to drive the owner’s car is a valid licence. The courts have held that to rely on a defence of due diligence, an Applicant must demonstrate that reasonable steps were taken to ensure the validity of an individual’s driver’s licence prior to allowing that individual to drive. In this case, the Applicant was aware of the risks of renting to a suspended driver .and the obligation upon it to ensure a valid licence is held by a person who rents one of its vehicles. Indeed, the Applicant has had vehicles impounded in the past pursuant to this statutory provision, as evidenced by the fact that the impoundment under appeal is for 180 days.
It is evident that the Applicant accepts all licences at face value. The Tribunal heard no evidence regarding any policy implemented to respond to previous impoundments due to the rental to persons without a valid licence. It seems that despite the known risks and consequences, the Applicant has taken no additional measures to mitigate the problem despite the fact that it has vehicles impounded previously Thus, given these particular facts, the Tribunal concludes that the Applicant cannot be said to have exercised due diligence pursuant to section 50.2(3)(c) of the Act.
DECISION
After considering the evidence, pursuant to the authority vested in the Tribunal under section 50.2(5) of the Act, the Tribunal confirms the impoundment of the Applicant’s motor vehicle, and it will remain at the impound facility for 180 days.
LICENCE APPEAL TRIBUNAL
Antoine Aouad, M.D., Presiding Member
RELEASED: February 1, 2013