Licence Tribunal
Appeal d'appel en
Tribunal matière de permis
2015-04-14
FILE:
9424/MVIA
CASE NAME:
9424 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.
Quest Automotive Leasing Services
Division of Scarborough Chrysler Dodge Jeep Ltd.
Appellant
-and-
Registrar of Motor Vehicles
Respondent
REASONS FOR DECISION AND ORDER
ADJUDICATORS:
Gary Yee, Associate Chair (presiding)
Dr. Eleanor White, Member
APPEARANCES:
For the Appellant:
H. Gary Peacock, Agent
For the Respondent:
Steve Grootenboer, Agent
Heard in Toronto:
March 25, 2015
REASONS FOR DECISION
A hearing was held on March 25, 2015, in Toronto, to consider the Appellant’s appeal under section 50.2 of the Highway Traffic Act, R.S.O., 1990, c. H.8 (the “HTA” or the “Act”).
By Order dated March 25, 2015, the Tribunal ORDERED THE REGISTRAR TO RELEASE THE VEHICLE to Quest Automotive Leasing Services Division of Scarborough Chrysler Dodge Jeep Ltd.
BACKGROUND
A motor vehicle was impounded under section 55.1 of the Act, and the impoundment was appealed by Quest Automotive Leasing Services Division of Scarborough Chrysler Dodge Jeep Ltd. (“Quest Automotive Leasing” or the “Appellant”), which was one of the registered owners. The other registered owner was a person (“the lessee”) who had leased this vehicle from this Appellant. The lessee had also appealed, but then withdrew. The registered lessor owner in the Ministry of Transportation records is listed as Scarborotown Chrysler Dodge Jeep Ltd., operating as Quest Automotive Leasing Services. The motor vehicle and date of appeal in this matter are as follows:
Motor Vehicle: 2014 Jeep GCK (the “vehicle”)
Date of Appeal: March 3, 2015
The Appellant, Quest Automotive Leasing, leased the vehicle to the lessee, on June 21, 2013. The lessee apparently loaned the vehicle to a driver whose licence was under suspension for impaired driving, when the vehicle was seized and impounded on February 17, 2015.
ISSUES
The Appellant’s grounds for appeal were simple – as set out in the Appellant’s notice of appeal (Exhibit #1), the Appellant leasing company had no control over the lessee loaning the vehicle to the suspended driver, and the Appellant should not be held responsible for that. While there was some evidence about exceptional hardship and due diligence, this appeal turned on the issue of whether the vehicle had been “stolen”, as provided in sections 50.2(3)(a) of the Act.
FACTS
Evidence for the Appellant
The Appellant, Quest Automotive Leasing, was represented by the General Manager – H. Gary Peacock. Another employee of the leasing company was present – Charlene Mason. Ms. Mason was responsible for risk management. Both of these employees testified at the hearing. They were credible and their testimony was not challenged.
Mr. Peacock referred to the “Master Lease Agreement – Closed End Lease” (Exhibit #2B), which had been filed with their Notice of Appeal. Mr. Peacock specifically pointed out section 5 of that Agreement, the relevant part of which states:
The Lessee will not permit the leased vehicles to be used for illegal purposes or activities, and the Lessee covenants and agrees that the leased vehicles will be used wholly or mainly within Canada or the Continental United States, and only by licensed and qualified drivers of an age not incompatible with the requirements of law or applicable insurance coverage, who are authorized, employed of [sic] controlled by the Lessee.
(emphasis added)
The lessee was in violation of this section when he permitted a suspended driver to drive the vehicle. Quest Automotive Leasing only found out about the impoundment two weeks after it had occurred, when the lessee’s lawyer wrote them a letter (Exhibit #2E) dated March 2, 2015, to advise them that the lease was ended and the vehicle had been impounded and it was available to be picked up at the towing company.
Quest Automotive Leasing found out that the vehicle’s insurance had been cancelled on February 27, 2015. The lease payments had stopped. The storage fees from the towing company were $130 a day, but Ms. Mason said she was informed by the towing company that they would be prepared to drop the fee to $100 a day. The pick-up fee was $350. The total for 45 days, including tax, would be almost $5,500.
In cross-examination by the Ministry’s representative, Mr. Peacock stated that this was the first time he had experienced a leased vehicle being impounded in his 36 years in business. This included working for two companies that had a combined total of over 4,000 leased cars on the road. When questioned about how the leasing company could recover costs, Mr. Peacock said that they use a bailiff to seize vehicles where the lessee is behind in payments or where the lessee has cancelled the insurance on the vehicle. In this case, no bailiff is needed since the vehicle is being held through the impoundment.
Mr. Peacock stated that he had dealt with this lessee personally in the past 15 to 17 years. The lessee had gone through three bankruptcies, and he had previously leased 61 vehicles. Mr. Peacock said this means that this lessee would know about the restrictions and conditions, such as paragraph 5 in the Master Lease Agreement, about who could use or not use the vehicle. This vehicle was for the lessee’s personal use, and another vehicle leased from Quest Automotive Leasing was for the lessee’s spouse. When the Tribunal asked both of the Appellant’s witnesses if they were aware of any previous incidents where paragraph 5 of the Lease being violated, they both said they did not.
Evidence for the Registrar
The documents tendered by the Registrar and admitted into the record 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 Appellant as the lessor owner, and also registered in the name of the lessee;
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 impaired driving under the Criminal Code of Canada on November 21, 2013, pursuant to which the driver’s licence of the driver was then under suspension for life.
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.
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 Appellant here provided evidence and submissions that could be related to the grounds of stolen, due diligence and exceptional hardship. The Tribunal identified the ground of stolen as the main one for consideration but will address each of the grounds.
Section 10 of Ont. Reg. 631/98 sets out very detailed and strict criteria that the Tribunal must apply when deciding whether there is exceptional hardship. First, the Appellant must prove that there is no available alternative to the impounded vehicle. Only then may the Tribunal consider whether the impoundment results in exceptional hardship, which is defined in a narrow way by the legislation. As such, it would be very difficult for a leasing company with many vehicles to get past this first hurdle.
Although the Appellant framed its main argument on the ground of due diligence, the specific wording of section 50.2(3)(c) refers to the owner exercising “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.” In this situation, the lessor owner may have exercised due diligence with respect to the licence status of the lessee, but the owner had no contact or knowledge about the driver to whom the lessee loaned the vehicle.
In the end, this appeal can be decided most clearly and directly by considering the ground of “stolen.” The Tribunal notes that the meaning of “stolen” is not defined in the Highway Traffic Act. The Criminal Code of Canada (the "Code") R.S.C. 1985, Chap. C-46, provides some guidance, but the word “stolen” must be interpreted in the context of the Highway Traffic Act, and in the context of these impoundment provisions.
Section 1 of the Code states that “steal” means to commit theft. Section 322(1) of the Code defines “theft” as follows:
- (1) Every one commits theft who fraudulently and without colour of right takes, or fraudulently and without colour of right converts to his use or the use of another person, anything, whether animate or inanimate, with intent,
(a) to deprive, temporarily or absolutely, the owner of it, or a person who has a special property or interest in it, of the thing or of his property or interest in it;
(b) to pledge or deposit it as security;
(c) to part with it under a condition with respect to its return that the person who parts with it may be unable to perform; or
(d) to deal with it in such a manner that it cannot be restored in the condition in which it was at the time it was taken or converted.
(2) A person commits theft when, with intent to steal anything, he moves it or causes it to move or to be moved, or begins to cause it to become movable.
(3) A taking or conversion of anything may be fraudulent notwithstanding that it is effected without secrecy or attempt at concealment.
(4) For the purposes of this Act, the question whether anything that is converted is taken for the purpose of conversion, or whether it is, at the time it is converted, in the lawful possession of the person who converts it is not material.
The Divisional Court held in Marshall v. Ontario (Registrar of Motor Vehicles), [2002] O.J. No. 745, that the Tribunal should not limit the meaning of “stolen” only to an intention to take the vehicle permanently. The Court held that the term “stolen” could also apply to an intention to take the vehicle temporarily. The Court reviewed the circumstances of that case and stated:
“In our opinion a vehicle is ‘stolen’ in this context when it is taken without the owner’s consent and when the perpetrator intends to deprive the owner of it, whether permanently or temporarily.”
The burden of proof is on the Appellant to satisfy the Tribunal that at least one of the grounds of appeal has been proven on a balance of probabilities.
FACTS AND ANALYSIS
The Tribunal finds that the Appellant’s vehicle was stolen within the meaning of the Act. While the vehicle may not have been “stolen” as between the suspended driver and the lessee – since the lessee apparently permitted the suspended driver to drive the vehicle, it was “stolen” from the viewpoint of the leasing company. Quest Automotive Leasing leased this vehicle under conditions that included paragraph 5 of the Master Lease Agreement, which prohibited use of the vehicle by unlicensed or unqualified drivers. The suspended driver may have had the lessee’s permission to drive the vehicle, but he clearly did not have the leasing company’s permission. The perspective of the owner is important when considering whether the vehicle was “stolen” because the impoundment provisions are intended to deter and penalize owners of vehicles from deliberately or carelessly allowing suspended drivers to drive their vehicles.
The Tribunal notes that there may be some situations with car rental or leasing where the company has enough information about the potential for irresponsible use of the vehicle that the company should be held liable for the use by a third party who was not the lessee. In some of these situations, the defence of “stolen” may not be supportable if there is a finding of implied consent, or perhaps acquiescence. For example, the leasing company may have information about the lessee lending the vehicle to unlicensed drivers, but the leasing company condones it or turns a blind eye to it.
There is no such evidence at all in this case. The Ministry’s representative attempted to blame the Appellant for leasing to someone with a bad credit history, but this is not relevant to the lessee unexpectedly permitting the vehicle to be driven by a suspended driver.
The Ministry’s representative acknowledged that the use of the leased vehicle by a suspended driver may have been out of the control of the leasing company, but submitted that the leasing business is a risk, and this impoundment was part of that risk. The Tribunal finds that this submission by the Ministry would mean that the legislative scheme for impoundments is one of absolute liability, where vehicle owners are responsible for the misuse of their vehicles regardless of any fault on their part. The Tribunal does not accept this interpretation of these provisions. The grounds for appeal include “due diligence” and “stolen.” This is consistent with the purpose of the impoundment legislation, which would appear to be to reduce opportunities for certain suspended drivers to have access to a vehicle, and to encourage vehicle owners to be more careful about who they let use their vehicles, thereby promoting greater safety on the roads.
The leasing company has no practical control over who drives their vehicle, apart from exercising due diligence over the lessee’s licence status, and also imposing restrictive provisions in the lease agreement about who else can or cannot drive the vehicle.
The wording of the legislative provision is clear, and there is no need to consider broader issues of the legislative purpose or intent behind this provision. In this case, the facts are clear enough to support a finding that this vehicle was “stolen” within the meaning of section 50.2(3)(a) of the Act.
DECISION
After considering the evidence and the law, under the authority of section 50.2(5) of the Act, the Tribunal ordered the Registrar to release the motor vehicle to the lessor owner, Quest Automotive Leasing Services, Division of Scarborough Chrysler Dodge Jeep Ltd.
LICENCE APPEAL TRIBUNAL
Gary Yee, Associate Chair
Dr. Eleanor White, Member
Released: April 14, 2015