2300031 Ontario Inc. and Tai Ton Trading Inc. v. Registrar of Motor Vehicles, 2014 CanLII 14984

Licence Appeal Tribunal

DATE: 2014-03-12

FILE: 8513/CVOR, 8571/CVOR

CASE NAME: 8513, 8571 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 Suspend a Commercial Vehicle Carriers’ Registration Certificate and to Seize the Plate Portion of all Permits Issued

2300031 Ontario Inc. and Tai Ton Trading Inc. Applicant

-and-

Registrar of Motor Vehicles Respondent

REASONS FOR DECISION AND ORDER

ADJUDICATOR: D. Gregory Flude, Vice-Chair

APPEARANCES:

For the Applicant: Mark Reynolds, Paralegal

For the Respondent: Patrick S. Moore, Counsel Ryan De Faria, Counsel

Heard in Toronto: February 27, 2014

DECISION AND ORDER

1The 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 5, 2013 pursuant to section 47(1) to suspend a Commercial Vehicle Operators Registration (“CVOR”) # 172-362-457 and to seize the plate portion of any permits issued. There are two appeals before the Tribunal, one relating to the above CVOR certificate and one relating to the CVOR certificate of Tai Ton Trading Inc., a related company to the Applicant (LAT file # 8517/CVOR). The Suspension and Seizure Order issued by the Registrar does not impose any sanctions on Tai Ton Trading so that appeal was withdrawn at the outset of the hearing.

2The Tribunal heard evidence from MTO Officer Kyle Gray and Jim Kirchner on behalf of the Registrar and Paramjit Shaglania, a safety consultant, on behalf of the Applicant. The Registrar’s evidence focused primarily on the fact that companies allegedly related to the owner of the Applicant, Wei-Hung Chou, also known as William Chou, have failed Facility Audits conducted by staff of the Ministry of Transportation (MTO). As a result of the interrelatedness of the companies, the Registrar initially refused to register the Applicant. Following negotiations, the Applicant was registered for one year on terms, one of which required the Applicant to successfully pass a Facilities Audit during the year. The Applicant failed that audit and the Registrar’s proposal to refuse to issue a CVOR to the Applicant was appealed to this Tribunal. That appeal was settled on consent before the hearing and the Applicant was registered on terms. One of the terms was that the Applicant’s CVOR be suspended for the first 30 days after its registration became effective, that is, from 8:59 a.m. on September 25, 2013 to 8:59 a.m. on October 25, 2013. Notwithstanding that the Applicant consented to the terms, it was found to have operated commercial motor vehicles during the period of suspension.

3Mr. Shaglania directed his evidence towards the programs he has put in place to address the shortcomings found in the Applicant’s failed audit. His testimony also spoke about the difficulty he has had implementing new systems because of language barriers with Mr. Chou and his manager, Andrew Chau. He pointed out that these individuals have shown a desire to work with him and learn their duties and obligations in running a transportation enterprise. He feels that by April the company will successfully pass a Facility Audit.

4The only issue relied on by the Applicant to justify operating while suspended is the Applicant’s actions were not willful but were or based on a honest mistake. The Applicant advised the Registrar at a Show Cause meeting that Mr. Chau had misunderstood the law. A Commercial Motor Vehicle (CMV) is defined in the legislation as a vehicle with a Registered Gross Weight or actual gross weight in excess of 4500kg. A CMV can only be operated on the highway under the authority of a CVOR. During the suspension period, the Applicant rented several vans with a 4500kg gross weight to carry its freight. These vans could be operated without a CVOR as they fell below the weight limit in the definition, unless they were over loaded. On several occasions, there was too much freight so Mr. Chau authorized the use of other trucks in the fleet to carry the excess. He advised the Registrar that he thought that the vehicles did not need a CVOR to operate if their actual weight fell below 4500kg regardless of their registered gross weight. On this basis, Mr. Chau, and, by extension, the Applicant, had an honest but mistaken belief that the use of these trucks did not violate the suspension. The difficulty the Tribunal has with this position is the fact that the only evidence in support of it is in notes taken at the Show Cause meeting and in the evidence of Mr. Kirchner who attended that meeting. Mr. Chau attended the hearing for the whole day. He was available at any time to provide further details of the basis for his misunderstanding. He did not do so. There was also evidence given by Officer Gray to indicate that the Applicant was aware that he was operating his trucks in contravention of the law.

4Officer Gray testified that he attended at the Applicant’s premises specifically to determine the extent to which the Applicant was operating its trucks while suspended. One of the Applicant’s trucks had been found on the highway in Brantford during the suspension period so Officer Gray was assigned to audit the company. He asked Mr. Chau about two of the Applicant’s trucks and was informed that they were being repaired in Scarborough. When he attended the garage in Scarborough shortly afterwards he found only one of the two trucks. The mechanic advised him that the other truck had been returned several days before. Mr. Chau finally admitted that the truck had been used to make deliveries. This answer is inconsistent with a genuine belief that the Applicant was entitled to operate trucks so long as they were lightly loaded.

THE LAW

5The statutory authority for the actions of the Registrar and the jurisdiction of the Tribunal are set out in sections 47, 47.1 and 50 of the Highway Traffic Act (the Act), as follows:

47. (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;

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.

50. (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.

(2) The Tribunal may confirm, modify or set aside the decision of the Minister or Registrar.

ANALYSIS

6Given that the Applicant acknowledges that it drove commercial motor vehicles during the period of suspension, the Tribunal must determine the appropriate sanction. The Applicant argues that the breach of the suspension order was based on a sincerely held, but mistaken belief that the vehicles might be used as long as their actual gross weight was 4500kg or less regardless of the registered gross weight. Given that there was a genuine mistake, the Applicant argues that there should be no further sanction, that the Applicant’s owners and operators have taken steps to address their lack of understanding of both the English language and the regulatory scheme. If the Tribunal is disposed to sanction the Applicant, the Applicant argues that it should be suspended for three days to reflect the benefit the Applicant gained by breach of the suspension order.

7The Registrar argues that the owner of the Applicant has been in business with this and a related company for many years. Each of the companies owned by the Applicant’s owner has failed a Facility Audit and the language difficulty issue has been argued as the basis for the lack of knowledge over all of that time. Only now has the Applicant and its related company retained the services of Mr. Shaglania to bring it into compliance with its recordkeeping and regulatory obligations, and that process will not be complete until at least April, 2014. The Applicant consented to a 30 day suspension as a condition of being given a CVOR certificate and cannot now be heard to say that it did not understand the terms of the suspension. In the Registrar’s view, operating while suspended should attract a severe censure from this Tribunal. The Registrar asks that the Applicant be suspended for 30 days as set out in the Suspension and Seizure Order.

8The Tribunal is asked to focus on the bona fides of the Applicant. Notwithstanding that the Applicant based its whole case on its bona fides, it chose to rely on a very narrow evidentiary basis for doing so – statements made to the Registrar in a show cause meeting. At the heart of this submission was the fact that the person making the mistake, Mr. Chau, misread the legislation because of a poor command of English. No direct evidence was led by the Applicant concerning Mr. Chau’s ability to read and understand English or of his understanding of the legislation. The Applicant chose not to have Mr. Chau testify despite the fact that he was present at the counsel table throughout the hearing. While this Tribunal may rely on hearsay evidence, the issue with all relevant evidence is to assess its weight. The Tribunal assigns no weight to the comments made during the show cause meeting when the Applicant was engaging in an exercise in self-justification to avoid further sanctions. The failure of Mr. Chau to testify forces the Tribunal to conclude that either his English is much better than has been suggested or that his story that he had a mistaken but honest belief that his actions were permitted would not withstand cross-examination, or both. Put another way, the Tribunal draws an adverse inference from Mr. Chau’s silence.

9It may be argued that the Applicant did not carry the onus in this matter, that the burden of proof never left the Registrar. That is true. The Registrar carried the overall burden of proof to convince the Tribunal that the Applicant had breached the terms of its suspension. Having satisfied the onus, both by the evidence of Officer Gray and by the Applicant’s admissions, it was up to the Applicant to provide an evidentiary basis upon which the Tribunal could conclude that its operations while suspended were not as egregious as might first appear. It was to answer the prima facie case made by the Registrar that the Applicant had to put forward the best evidence it had available. It failed to do so. Rather, it chose to address its remedial efforts through the evidence of the very impressive Mr. Shaglania. The Tribunal feels sure that with Mr. Shaglania’s assistance, the Applicant will become a compliant carrier in the near future.

10The Tribunal takes a dim view of the breach of the suspension order and agrees with the Registrar that a penalty of a further 30 day suspension is appropriate. The Tribunal notes the comments of Vice-Chair Macklin in Ace-J Transportation Inc. [2011] O.L.A.T.D. No. 261 that to impose a suspension of equal length to the original suspension may not have the necessary deterrent effect such that the suspension should be for double the original time period. It appears that in that case the operator carried on operations throughout the suspension. In the present case, the evidence suggests that the Applicant operated for several days out of 30. The deterrent impact of a suspension of 30 days for the Applicant is sufficient to encourage the Applicant to address its shortcomings and operate within the law in the future.

ORDER

11Pursuant to the authority set out in s. 50 (2) of the Act, the Tribunal orders the Registrar to carry out the provisions of the Cancellation and Seizure Order dated September 18, 2013 with respect to CVOR # 119-211-107.

LICENCE APPEAL TRIBUNAL

D. Gregory Flude, Vice-Chair