Licence Tribunal
Appeal d'appel en
Tribunal matière de permis
DATE:
2013-10-08
FILE:
8139/CVOR
CASE NAME:
8139 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 Certificate and to Seize the Plate Portion of all Permits Issued
Transco Logistics International Ltd.
Applicant
-and-
Registrar of Motor Vehicles
Respondent
REASONS FOR DECISION AND ORDER
ADJUDICATOR:
Mary Ann Spencer, Member
APPEARANCES:
For the Applicant:
Mark Reynolds, Paralegal
For the Respondent:
Patrick Moore, Counsel
Heard in Toronto:
September 26 and 27, 2013
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 May 21, 2013 pursuant to section 47(1) to cancel a Commercial Vehicle Operators Registration (“CVOR”) certificate and to seize the plate portion of any permits issued.
In summary, the grounds for the Order of Cancellation and Seizure are that the Registrar, having considered the Applicant’s record, has reason to believe the Applicant will not operate safely.
EVIDENCE AND FACTS
Registrar’s Evidence
The evidence of the Registrar comprised documents (Exhibits 3, 4 and 5) and the testimony of Ministry of Transportation employee Sherri Attalah.
The following is a summary of the relevant evidence:
Sherri Atallah has been employed as a Carrier Safety Rating Administrator with the Ministry of Transportation since 2001. Her responsibilities include monitoring and analyzing the safety records of CVOR certificate holders, conducting interviews with certificate holders to address safety records and preparing action plans for the consideration of the Deputy Registrar.
Ms Atallah explained the CVOR system, the goal of which is to improve road safety for all users of Ontario highways by having an effective monitoring and intervention system for all carriers. The responsibilities of certificate holders are set out in the Public Guideline issued by the Ministry of Transportation (Exhibit 3, Tab 17) and include, among others, employing qualified and licensed drivers; monitoring their safety performance, including hours of service; resolving driver safety issues; keeping vehicles in good, safe condition at all times; ensuring load security; and keeping required records.
A carrier’s performance is recorded and assessed over a two year rolling window and is expressed as an overall safety violation percentage. To determine the safety violation percentage, information such as fleet size and kilometers travelled, provided by the carrier with its annual renewals, is used to establish threshold levels against which performance is assessed. The CVOR system assigns points for collisions, convictions and inspections which are weighted to determine the overall safety violation rate. Collisions and convictions each form 40% of the record with inspection findings comprising 20%.
Collision points are assigned based on the severity of the collision only where there is impropriety. Pre-determined points assigned for convictions are set out in the Conviction Code Table which lists offences under the Act and indicates whether a conviction is administrative or safety related. Only safety related convictions are assigned points. Inspection points are assessed only for “out of service” findings, that is mechanical defects or issues such as drivers exceeding their allowed hours of service which result in the vehicle being pulled from the road.
At pre-determined percentage levels, the Ministry intervenes or considers sanctions which can include suspension, cancellation or fleet limitation. Warning letters are issued at 35%, a request for a facility audit is triggered at 50%, at 80% an interview is requested and at 100%, a sanction analysis is conducted. Ms Atallah testified that 80% of companies improve following Ministry intervention.
The Ministry produces two types of reports or CVOR abstracts which contain information about a carrier’s safety performance. A Level I abstract is a one page summary document available to the public. A Level II abstract is available to the carrier and includes summary data for a two year period with detailed data on collisions, convictions and inspections. The Ministry expects carriers to regularly review their performance by obtaining CVOR abstracts.
Ms Atallah testified that as at March 31, 2013, only .4% of carriers or 283 of 54,699 had violation rates exceeding 85% (Exhibit 3, Tab 18). 81.5% of carriers had a violation rate of less than 15%.
The Applicant’s CVOR certificate was issued on June 6, 2005. On October 28, 2009, a facility audit was conducted which the Applicant passed with a score of 76.45% (Exhibit 3, Tab 1). The audit findings included that the Applicant had not ensured that all records were kept as required; that a periodic inspection, repair and maintenance program had not been established to ensure vehicles were properly maintained; that there was no monitoring system in place to ensure drivers did not violate hours of service limits; and, that all drivers were not required to submit log book copies and there was no monitoring system in place to ensure logs and time records were accurate.
On September 27, 2011, the Ministry issued a Notice of Cancellation and Seizure to the Applicant (Exhibit 3, Tab 2). Ms Atallah testified that the Ministry’s Safety Record Review (Exhibit 3, Tab 3) indicated that the Applicant’s safety violation rate for the two year period ending August 12, 2011 was 123.95%. The overall out of service rate was 35.71% with a driver rate of 14.29%. Ms Atallah indicated that the Ministry considers a driver rate greater than 5% to be excessive although she noted this is not a formal standard. Notwithstanding the Ministry’s expectation that performance would improve following an audit, in the one year period following the Applicant’s facility audit, the safety violation rate had increased to 155.45%. At the time the Safety Record Review was conducted, the Applicant had outstanding fines totaling $1,469.00.
A Show Cause Meeting was held with the Ministry on October 21, 2011. Attending on behalf of the Applicant were Operations Manager Arthur Podgajny and Safety Consultant Paramjit Singh Shanglania. The Applicant’s safety management plan (Exhibit 4) included undertakings to review the carrier’s and driver’s CVOR abstracts every 30 days and 3 months respectively; to require drivers to undertake a road test; and complete training in, among others, hours of service, logbooks and vehicle inspections. With respect to maintenance, the carrier undertook to conduct a monthly inspection and a Periodic Mandatory Commercial Vehicle Inspection every 6 months rather than every 12 months as required by regulation. A full vehicle inspection would be conducted every 60 days. Further, a full annual review of each driver’s record would be conducted. A driver disciplinary policy and an incentive bonus plan would be implemented.
As a result of the information presented at the Show Cause meeting, the Ministry of Transportation issued a Suspension and Seizure Order on October 26, 2011 (Exhibit 3, Tab 5) for a ten day suspension which the Applicant appealed. Following withdrawal of the appeal, a seven day suspension was ordered on December 28, 2011 (Exhibit 3, Tab 7).
The January 2013 Safety Record Review (Exhibit 3, Tab 8) indicates the Applicant’s overall safety violation rate for the two year period ending December 24, 2012 was 139.45% with an overall out of service rate of 39.34% and a driver rate of 16.39%. There were no collisions assigned points during the period but there were 36 convictions, 31 of which were assigned points and 61 inspections, with 24 out of service findings (Exhibit 3, Tab 9). The violation rate in the 11 month period following the suspension was 116.53%. Unpaid fines totaled $4,284.53.
Ms Atallah reviewed the summary information contained in the Applicant’s Level II CVOR abstract dated January 24, 2013 and noted that the issues following the Applicant’s suspension were similar to those which arose before it. Among others, she highlighted findings including driver’s hours of service on February 7, July 2, September 3, and September 10, 2012; a driver operating with a suspended licence on April 17, 2012; and brake issues on July 2, August 19, September 3 and September 12, 2012.
The Ministry issued a further Notice of Cancellation and Seizure on February 4, 2013. Mr. Podgajny was the only company representative to attend the Show Cause meeting held on February 20, 2013 (Exhibit 3, Tab 14). Mr. Podgajny advised that vehicle maintenance was being conducted every 3 months rather than monthly as set out in the 2011 safety management plan. Hours of service and log book training had taken place but not all training on pre-trip inspections had been completed. She further indicated that the Applicant’s Level II abstract and drivers abstracts were being pulled every 3 months and 6 months respectively in contrast to the monthly and 3 month commitments in the safety plan. Two rather than six safety meetings had been held. Mr. Podgajny noted that poor drivers had been terminated, the company had purchased new equipment and was investigating the installation of electronic logs. He advised that the Ministry had incorrect mileage records; Ontario kilometers travelled should be 1.1 million. The company was asked to submit a list of drivers and vehicles which are contained in Exhibit 3, Tab 15.
Fines owed at the time of the Show Cause meeting were approximately $4,284.53. Defaulted outstanding fines as at September 23, 2013 total $7,241.93 (Exhibit 5).
Exhibit 3, Tab 11 contains a report prepared by the U.S. Federal Motor Carrier Safety Administration dated June 27, 2013. This indicates that the American out of service percentage for the Applicant’s vehicles is 14.8%, under the national average of 20.72%. The driver out of service percentage at 8.4%, however, exceeds the national average of 5.51% by over 50%.
On cross-examination, Ms Atallah agreed that a September 25, 2013 Level I abstract indicates the Applicant’s current safety violation rate is 88.1% (Exhibit 7). Asked if a company could solve all issues immediately following a suspension, Ms Atallah stated that she would expect to see significant improvement.
Asked by Mr. Reynolds if there was a way for operators to contest points assigned for inspections, she advised that the operators can contact the Ministry but indicated that she did not know how often a carrier would be successful in having points removed from the record. Asked if there was not a risk that Ministry records might include points which should not be on the record, Ms Atallah reiterated that there was a process to contact the Ministry if carriers wished to contest inspection findings.
Applicant’s Evidence
Paramjit Singh Shanglania, the principal of Freight Solutions and safety consultant to the Applicant, testified on behalf of the Applicant speaking to a revised Safety Management Plan entered into evidence as Exhibit 6. Freight Solutions provides services to the Applicant in the areas of hiring, drug testing and the provision of safety advice and has been working full time for the Applicant since November, 2011.
Mr. Shanglania testified that he is working with the Applicant to create a safety culture. However, in areas such as maintenance, the results have not come as quickly as expected and he stated “we need more time” to fully implement the safety management plan. He noted that while there have been convictions in the 2013 calendar year, there have also been a number of clean inspections.
Mr. Shanglania testified that his concern is that the Applicant’s drivers be properly trained and indicated that “slowly, slowly”, this is being accomplished. His focus is on properly educating drivers in areas such as hours of service and roadside inspections but he noted that after the 2011 Show Cause meeting, drivers were not willing to take the time to travel to his Brampton office for training and therefore training is now being conducted on an individual basis. He highlighted the drivers’ certificates contained in Exhibit 6 as examples of completed training and indicated that he has further records of training in his office files. Asked what occurs if someone continues to have violations after training, Mr. Shanglania stated that he reports the violations to Mr. Podgajny and retrains the driver.
Mr. Shanglania testified that he reviews drivers’ CVOR abstracts every 3 months and logbooks every 30 days. He provides feedback to Mr. Podgajny who makes the decision with respect to retention of the driver. Asked by Mr. Moore to comment on the fact that at the Show Cause meeting, Mr. Podjgany stated that the corporate abstract was reviewed every 3 months and drivers’ abstracts were reviewed every 6 months, Mr. Shanglania stated that Mr. Podgajny was in error and noted that the abstracts were also required to be sent to the insurance company. Further, he meets with the insurance company twice a year.
Mr. Shanglania testified that drivers with high violation rates have been terminated. He agreed that a number of drivers retained by the Applicant have multiple violations on their CVOR record but noted that these drivers have a commitment to learning and want to get better results in the future. Reviewing the record of driver A.N., Mr. Moore asked if Mr. Shanglania agreed this driver was one of the Applicant’s better performers. Mr. Shanglania indicated that he could not recall what his recommendation to the owner was in this case. In the case of driver A.R., Mr. Shanglania noted that he recommended the driver’s termination in 2012 because of violations. He also recommended that driver A.L. be terminated. He then stated that every driver has some kind of problem and noted that all were aware they needed to improve.
Driver road testing is conducted by Mr. Podgajny. Mr. Shanglania testified that he recommended that the insurance company conduct this testing but noted that road tests are expensive.
With respect to the driver bonus incentive plan set out in both the 2011 and the 2013 safety management plans, Mr. Shanglania indicated that in recommending bonuses, he considers not only a driver’s safety record but also the length of his employment and his commitment. An annual cash bonus is available for the top three drivers. To date, only the mid level bonus has been awarded. Mr. Moore noted that the driver who had received the bonus had two out of service findings in September, 2013 which Mr. Shanglania then advised were being contested. No driver has received the half yearly bonus available to drivers with no violations because minor violations disqualify them. Mr. Shanglania agreed that the bonus policy has not been applied as set out in the safety management plans but noted that “we have to create a safety culture”.
Referring to the September 13, 2013 letter from the Applicant’s insurer (Exhibit 6) which contains two recommendations, Mr. Moore noted that the first recommendation states:
It is recommended that a though (sic) analysis of your CVOR be performed. The results should indicate the areas of concern for the company. Once the problematic areas are identified then appropriate action plane (sic) needs to be devised and put into action. This may include training opportunities for drivers, mechanics, dispatchers or managers.
Mr. Shanglania stated that he does review the company’s CVOR record every month and the drivers’ records every three months. He indicated that the insurance company meant that review should be continuous adding that “in some areas we have been delayed and that’s why it’s written that way”. He further testified “it means we are improving and have to put more focus on driver training…we have to take more action”.
Mr. Shanglania testified that since the February 2013 Show Cause meeting, the size of the Applicant’s fleet has been gradually reduced to 7. Asked if this reduction has been reported to the Ministry, Mr. Shanglania stated that he had difficulty obtaining the required update form from the Ministry and indicated he had left messages with the Ministry in attempts to obtain it. He agreed that operating fewer vehicles, the Applicant’s mileage would be lower than reported on the record and the current safety violation rate of 88.1% is therefore understated.
Mr. Podgajny is in charge of vehicle maintenance. Mr. Shanglania stated that the Periodic Mandatory Commercial Vehicle Inspection was being done every 12 months. When Mr. Moore pointed out that the 2011 safety management plan stated it would be done every 6 months, Mr. Shanglania noted that the 2013 plan states every 12 months and explained that new equipment had been purchased which does not require maintenance as frequently. All vehicles are maintained every 90 days. Asked by Mr. Moore why this frequency had been reduced from the 60 day commitment contained in the 2011 plan, the witness repeated that the Applicant has new trucks and then stated “we have to save money from where we can”. Mr. Shanglania then testified that he did recommend that inspections be done more frequently and then noted that “we have to be very careful what we’re writing” because auditors would review performance against written policy.
Mr. Shanglania testified that Mr. Podgajny is changing the garage which performs maintenance. Asked when he started to recommend that this occur, Mr. Shanglania indicated that there have been problems for three years and that he has not given any specific recommendation. Rather, he has been asking Mr. Podgajny about the issues since 2011.
THE LAW
The statutory authority for the actions of the Registrar and the jurisdiction of the Tribunal are set out in the Highway Traffic Act (the Act), as follows:
Suspension and cancellation of licence, etc., general
- (1) Subject to section 47.1, the Registrar may suspend or cancel,
(a) The plate portion of a permit as defined in Part II;
… Or
(c) A CVOR certificate,
On the grounds of,
(f) the Registrar having reason to believe, having regard to the safety record of the holder or of a person related to the holder, and any other information that the Registrar considers relevant, that the holder will not operate a commercial motor vehicle safely or in accordance with this Act, the regulations and other laws relating to highway safety;
(2.1) Subsection 17 (4) applies, with necessary modifications, for the purpose of determining who related persons under clause (1) are (f).
Related Person
- (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.
Power to seize number plates
(8.1) If the plate portion of a permit is suspended or cancelled under clause (1) (a), the Registrar may order that the plate portion of the permit or the number plates issued in connection with the plate portion of the permit be seized and any police officer or officer appointed for carrying out this Act may seize the plate portion of the permit and the number plates and deliver them to the Ministry.
Definitions, “commercial motor vehicle” etc.
(9) For the purposes of this section and section 47.1,
“commercial motor vehicle,” “operator” and “safety record” have the same meanings as in subsection 16 (1)..
Notice of proposed action, s. 47
47.1 (1) Before taking any action under clause 47 (1) (a) or (c) or subsection 47 (2), the Registrar shall notify the person whose plate portion of a permit or CVOR certificate is to be affected of his or her proposed action.
- (1) Every person aggrieved by a decision of the Minister made under subsection 32 (5) for which there is a right of appeal pursuant to a regulation made under clause 32 (14) (n) or a decision of the Registrar under section 17 or 47 may appeal the decision to the Tribunal.
Powers of Tribunal
(2) The Tribunal may confirm, modify or set aside the decision of the Minister or Registrar.
ISSUE
The issues before the Tribunal are first, whether there is reason to believe, having regard to the safety record of the Applicant or of a person related to the Applicant, that the Applicant will not operate a commercial motor vehicle safely or in accordance with the Act, the regulations and other laws relating to highway safety and, second, if there is such reason, what order the Tribunal should make.
ANALYSIS
In reaching its conclusions, the Tribunal has considered the evidence of the parties and the decisions submitted by Counsel for the Registrar for consideration: Re: West Wind Express Inc., [2011] O.L.A.T.D. No. 342; and Re: Lee Trans Corp. v. Ontario (Registrar of Motor Vehicles) [2011] O.J. No. 4820.
The evidence indicates that the Applicant’s overall safety violation rate for the two year period ending August 12, 2011 was 123.95%. Ms Atallah testified that the performance of 80% of CVOR certificate holders improves following Ministry intervention. In this case, a facility audit, which is triggered by the CVOR system when the safety violation rate reaches 50%, was conducted on October 28, 2009. Notwithstanding the fact the Applicant passed the facility audit, its safety violation rate in the one year period following the audit actually increased to 155.45%. The CVOR certificate of the Applicant was suspended for seven days in January, 2012 as a result of its poor safety performance.
Ministry statistics as of March 31, 2013 show that only .4% of carriers or 283 of 54,699 had violation rates exceeding 85%. Only .2% of all CVOR certificate holders have violation rates that exceed 100%.
The January 2013 safety record review indicates the Applicant’s overall safety violation rate was 139.43% for the two year period ending December 24, 2012. For the one year period following the January 2012 suspension, the Applicant’s safety violation rate did in fact improve. However, that rate was still 116.53%, placing the Applicant among the worst performers, notwithstanding the fact that at the Show Cause meeting held on October 21, 2011, various commitments to training and maintenance scheduling were made in a safety management plan of the same date.
A Level I abstract dated September 25, 2013 indicates the Applicant’s safety violation rate is 88.1%. While this rate is significantly lower than that which initially triggered the Ministry’s intervention, it still places the company among the worst .4% of performers. Further, the Tribunal notes that Mr. Shanglania testified that the fleet size of the company has been reduced in 2013 to 7 vehicles and, although he testified he had made attempts to obtain the required forms, the mileage on record with the Ministry of Transportation has not yet been amended. Mr. Shanglania agreed that the 88.1% safety violation rate is therefore likely understated.
Finally, the Tribunal notes that at the time of the September, 2011 and January, 2013 safety record reviews, the Applicant owed outstanding fines totaling $1,469.00 and $4,284.53 respectively. As of September 23, 2013, the outstanding fines total $7,241.93.
Based on its unacceptable safety performance, the Tribunal finds, on balance of probabilities, that there is reason to believe that Transco Logistics International Ltd. will not operate a commercial motor vehicle safely or in accordance with the Act, its regulations and other laws relating to highway safety.
The Tribunal has carefully considered the appropriate action to order the Registrar to take.
Mr. Reynolds argued that it is unreasonable to expect a company’s record to show dramatic improvement only 11 months after its suspension and that it must be given sufficient time to improve its record. Mr. Shanglania testified that the Applicant must create a safety culture and indicated that efforts are underway in that respect but more time is needed.
The Applicant provided a safety management plan to the Ministry on October 21, 2011 following the Ministry’s issuance of a Notice of Cancellation and Seizure on September 27, 2011. The Applicant has had 23 months to implement this plan. Even if the Tribunal were to accept that the September 23, 2013 overall safety violation rate of 88.1% was accurate, which the Applicant’s safety consultant admits it likely is not, this violation rate still places the Applicant among the worst .4% of CVOR certificate holders.
An undated revised safety management plan was entered into evidence as Exhibit 6 at this hearing. This plan includes a letter from Old Republic Insurance dated September 13, 2013 which sets out two recommendations. The first of these is that a thorough analysis of the CVOR be conducted. Mr. Shanglania testified that he interpreted this recommendation as meaning that the Applicant’s current efforts should be continued. The Tribunal notes that that the second recommendation is very specific in stating “you continue (emphasis added) to monitor driver behavior”. While it goes on to state that drivers appear to be improving in the hours of service category, it states that the improvement needs to be continual and this can be done with constant monitoring. Given the specificity of the second recommendation, the Tribunal does not accept Mr. Shanglania’s interpretation of the first recommendation. Rather it accepts it as it is written and notes the commitment to review the corporate CVOR contained in the safety management plan submitted at this hearing in fact is decreased to every two months from monthly in the 2011 plan.
The 2013 safety management plan also increases maintenance frequency intervals. Mr. Shanglania testified that new equipment requires less frequent maintenance. However, he also stated “we have to save money from where we can”. The list of tractors submitted to the Ministry following the February 2013 show cause meeting indicates that one of 15 tractors is newer than 2008. However, the age of the currently owned fleet of 7 vehicles is unknown.
The Tribunal questions Mr. Podgajny’s commitment to creating the safety culture which Mr. Shanglania testified he believes must be created at the Applicant’s firm. Mr. Podjgany did not testify at this hearing. The Tribunal therefore has no information before it as to why Mr. Podjgany is continuing to employ drivers whom his safety consultant, after review of their records, has recommended be terminated; why he is administering road tests himself when Mr. Shanglania recommended these be done by the insurance company; or why, when Mr. Shanglania has been advising of problems since 2011, the Applicant is only now considering changing its maintenance garage. Further, there was no evidence provided of any plan to address the Applicant’s growing outstanding fines.
Mr. Reynolds noted that convictions and inspection points are responsible for the Applicant’s record which shows no collisions. He further noted that there is no formal process to contest inspection points. No evidence, however, was provided to indicate that the inspection points which have contributed to the Applicant’s record are questionable. Mr. Reynolds also argued that the U.S. results indicate that the company is below the U.S. average for vehicle out of service findings. The Tribunal acknowledges this fact but notes that the same U.S. record shows the Applicant’s driver out of service percentage to be over 50% higher than the U.S. average. And, as noted above, the Applicant continues to employ drivers whom its safety consultant has recommended be terminated.
The Tribunal has considered whether a suspension or other sanctions would be appropriate in this case. The Applicant has had 23 months following receipt of the Ministry’s first Notice of Cancellation and Seizure in which to improve its record. The safety management plan submitted at this hearing is essentially the same as that submitted to the Ministry in October, 2011 with revisions to decrease the frequency of monitoring of the corporate CVOR and decrease maintenance frequency. Notwithstanding the time it has had to implement the previous safety management plan, the safety performance of the Applicant has not substantively improved and remains among the worst of CVOR certificate holders. The Tribunal concludes that a further suspension is unlikely to be effective in acting as an incentive for improvement, particularly when the revised safety management plan is less rigorous, and therefore concludes that the Applicant’s CVOR registration should be cancelled.
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 May 21, 2013 and to cancel CVOR certificate 150-131-515 issued in the name of Transco Logistics International Ltd. and to seize the plate portions of all commercial vehicles and trailers registered in its name.
LICENCE APPEAL TRIBUNAL
Mary Ann Spencer, Member
Released on: October 8, 2013