Moonstone Transport Ltd. v. Registrar of Motor Vehicles, 2015 CanLII 20233

Licence Appeal Tribunal

DATE: 2015-03-04

FILE: 9045/CVOR

CASE NAME: 9045 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

Moonstone Transport Ltd. Appellant

-and-

Registrar of Motor Vehicles Respondent

REASONS FOR DECISION AND ORDER

ADJUDICATOR: D. Gregory Flude, Vice-Chair

APPEARANCES:

For the Appellant: Manraj S. Grewal, Agent

For the Respondent: Patrick S. Moore, Counsel

Heard in Toronto: January 28 & 29, 2015

DECISION AND ORDER

1The Appellant 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 July 25, 2014 pursuant to section 47(1) to suspend its Commercial Vehicle Operators Registration (“CVOR”) for seven days and to seize the plate portion of any permits issued for that time period.

2The Appellant has two major problems: its drivers and its implementation of its own periodic maintenance schedule. The problem with the drivers is both extensive and chronic. They do not keep their logbooks up to date. Worse than that, some actively prepare false logbooks or have more than one logbook. Improper driver logbooks have caused a number of out of service defects at inspections stations on major highways. In several audits of the Appellant’s facilities (Facility Audits), the Appellant has scored zero in the implementation of its preventative maintenance program, failed the vehicle maintenance section of the audit and failed the Driver Records section. Out of four Facility Audits, the Appellant has failed three. Two audits have resulted in a total of 94 charges, largely arising out of false, missing or incomplete logbooks. As a result of its poor on-road performance and failed Facility Audits, over the years the Appellant has come to the attention of the Registrar.

3The Registrar operates a system to track the safety performance of carriers that is not unlike the system used to track the safety performance of individual drivers. Carriers’ collisions, out of service defects discovered on the highway and convictions are recorded, and points are assigned. Incidents stay on the record for 2 years. Given the size of the carrier, the number of trucks it operates and the annual kilometres traveled in Ontario, any specific carrier is given a maximum points’ threshold. Its actual points at any given time are measured against its maximum allowable points to give a percentage of its permitted violation rate (%VR). If the %VR reaches certain thresholds, the performance triggers interventions by the Registrar. The first intervention is a warning letter. It is triggered at 35% VR. The Appellant was granted a CVOR in January 2003. It received its first warning letter in April 2004. The Appellant received a second warning letter in January 2008 and a third in January 2010.

4Should the VR rate reach 50%, it may trigger a Facility Audit. As stated above, the Appellant has had four Facility Audits; August 2008, November 2010, March 2012 and May 2013. It failed all but the November 2010 audit. During a Facility Audit, the auditor will pick a certain period and review all of the driver logbooks and documentation for that month. In both March 2012 and May 2013 the auditor discovered numerous logbook defects during the single randomly chosen month period. It is not hard to extrapolate from this rate of failure that the Appellant’s drivers have developed a culture of inattention or deliberate flaunting of the statutory hours of service rules.

5Violation rates of 85% may trigger an interview with the Deputy Registrar and a VR in excess of 100% will attract sanctions. In April, 2014, the Appellant had a VR of 104.06% although it had been as high as 155.4% on January 30, 2014. The Appellant was called in for a show cause meeting with the Deputy Registrar on July 2, 2014 It pointed out the efforts it was making to improve its performance, particularly in the area of driver logbook training. It had hired a new consultant to implement the training as well as meet with defaulting drivers one on one. It has a discipline policy escalating from a warning to dismissal over four offences, although Mr. Grewal, in his evidence before the Tribunal, was unsure of the specifics. It has fired nine drivers. Based on the Appellant’s presentation, the Deputy Registrar proposed to levy a seven day suspension.

6It is of some importance to ask if the standards set by the CVOR system are overly onerous or unattainable by reasonably prudent carriers. The statistics suggest that those carriers who reach the 100% VR sanction level are a highly exclusive club. Of approximately 55,000 carriers in Ontario, on January 1, 2014, 95.6%, or approximately 52,100 carriers, had a VR of less than 35% with the vast majority, 45,791 carriers, being under 15% VR. Only 0.6% of carriers exceed 70% VR and 0.2%, or approximately 110 carriers out of 55,000, exceed 100% VR. The numbers suggest that it requires a serious lack of commitment to on-road safety to exceed 100% VR.

7Having set out its plan for improvement at the July 2014 meeting, did the plan translate into improved performance? Unfortunately it did not. In the period ending December 7, 2014, approximately 5 months after the Appellant laid out its plan for improvement to the Deputy Registrar, its VR increased from 104.06% to 119.9%.

THE LAW

8The statutory authority for the actions of the Registrar and the jurisdiction of the Tribunal are set out in sections 17, 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; or

(g) any other sufficient reason not referred to in clause (d), (e) or (f).

(2.1) Subsection 17 (4) applies, with necessary modifications, for the purpose of determining who are related persons under clause (1) (f).

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

9In closing submissions, counsel for the Registrar argued that the recent deterioration of the Appellant’s record called for a suspension in excess of seven days. The Appellant argued that no sanction should be applied but, rather, that it be given six months to allow its new compliance program to take effect. The difficulty with the Appellant’s position is that it has not improved over the years despite ample notice that its performance was not acceptable. Three warning letters and numerous audit findings have identified the problem. Indeed, the audit findings show recurring problems with little or no improvement from one audit to the next. The Tribunal has no confidence in the Appellant’s assertion that it in the next six months it will turn itself around.

10The more important question for the Tribunal is whether it should exercise its discretion to modify the Registrar’s order and impose greater sanctions. The Tribunal has before it the deteriorating safety record of the Appellant after the show cause meeting and the issuance of the Suspension and Seizure Order in July. Given the lack of improvement in the face of these steps by the Registrar, it is difficult to identify what sanction will cause the Appellant to take its obligations seriously.. Accepting that the Appellant has hired a new consultant and may now have a team in place to make serious improvements, the Tribunal will exercise its discretion to levy greater sanction, a longer suspension followed by terms.

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 Suspension and Seizure Order dated July 25, 2014 with respect to CVOR # 143-081-450 subject to the following modifications:

1. The period of suspension is increased from seven days to ten days, and

2. For the 24 months measured from the end of the suspension, the VR rate of the Appellant shall not exceed 35%.