Licence Appeal Tribunal
FILE: 9264/CVOR
CASE NAME: 9264 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 Certificates and to Seize the Plate Portion of all Permits Issued.
2369741 Ontario Inc. o/a Budget Load Solutions Appellant
-and-
Registrar of Motor Vehicles Respondent
REASONS FOR DECISION AND ORDER
ADJUDICATOR: Alex McCauley, Member
APPEARANCES:
For the Appellant: Mark Reynolds, Paralegal
For the Respondent: Ryan DeFaria, Counsel
Heard in Toronto: March 5, 2015
DECISION AND ORDER
The 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 November 13, 2014, pursuant to section 47(1) to cancel a Commercial Vehicle Operators Registration (“CVOR”) certificate and to seize the plate portion of any permits issued.
BACKGROUND
On September 19, 2014, the Deputy Registrar issued a Notice of Cancellation and Seizure to 1402092 Alberta Ltd. and 2369741 Ontario Inc.in respect of certificates # 167-390-044 and 177-537-042. The Notice was based on the poor safety records of 1402092 Alberta Ltd. and to a lesser degree 2369741 Ontario Inc. From August, 2012 until August, 2014, 1402092 Alberta Ltd. amassed an overall violation rate of 139.50%. 2369741 Ontario Inc. received its CVOR on August 28, 2013. The overall violation rate is considered high at 88.34%. There was also a record of unpaid fines against 1402092 Alberta Ltd. The Registrar further contends that there is a relationship, pursuant to section 17(4) of the Act, between 1402092 Alberta Ltd. and 2369741 Ontario Inc. that raises concerns for highway safety.
On October 15, 2014, a show cause meeting was held with the Deputy Registrar to show cause why the cancellation and seizure order proposed September, 19, 2014 should not be issued. No representative of 1402092 Alberta Ltd attended the meeting to make submissions,
2369741 Ontario Inc. is owned by Natalia Gatt and 1402092 Alberta Ltd. is owned by Vladimir Botvinnik. According to evidence received, Ms. Gatt and Mr. Botvinnik are husband and wife and reside at the same address. Ms Gatt did make submissions at the show cause hearing.
Ms. Gatt, admits to being married and cohabitating with Vladimir Botvinnik owner of 1402092 Alberta Ltd. but stated he has no interest in her business and nor do they discuss trucking business issues.
After hearing submissions from 2369741 Ontario Inc. at the show cause meeting of October 15, 2014, the Registrar imposed the order of cancellation and seizure. Mr. Botvinnik had the opportunity to attend the show cause meeting but did not with the result that the CVOR certificates of his company were cancelled.
The hearing concluded on March 5, 2015. The parties provided closing submissions, in writing.
THE EVIDENCE
The Registrar called one witness, Christopher Austin, who is a Carrier Rating Safety Administrator with the Ministry of Transportation. His role is to review carrier safety and the operator safety records and impose sanctions or other forms of intervention where and if necessary.
The CVOR system is designed to track the on-road performance of Ontario based carriers and identify those carriers that may present a safety risk. The CVOR system tracks three parameters that have been found to be indicia of safe operation, collisions, convictions and inspections by an officer of the Ministry of Transportation (MTO). A CVOR holder notifies the MTO on registration and thereafter, at least, annually of its fleet size and kilometric travel in Ontario. Based on these two factors, it is assigned a maximum number of points, referred to as its Violation Rate (VR).
The Registrar tracks each CVOR holder’s performance by measuring its actual points against the assigned maximum and expressing it as a percentage of the VR. To determine a carrier’s VR, each parameter is tracked separately and then weighted to give an overall number. The tracking system contemplates intervention by the Registrar at certain predetermined levels. At 35% VR, a carrier receives a warning letter advising it that its record is deteriorating and advising it to make adjustments to improve. At 50% VR, the Registrar may initiate a facility audit. A carrier may be called for an interview at 80% and the Registrar will consider sanctions when a carrier reaches 100%. Sanctions may range from suspension to revocation. 95% of carriers operate under 35% VR, only 0.1% are over 80% at any given time and 0.2% exceed 100%. In other words, about 100 carriers in Ontario out of 50,000 exceed 100%.
1402092 Alberta Ltd. had an overall safety violation rate of 139.50%.
The violation rate of 2369741 Ontario Inc. was increasing alarmingly, to 88.34%. There were some very serious safety violations, such as one incident when a wheel came off a trailer.
Vehicles and some drivers have been transferred from 1402092 Alberta Ltd. to 2369741 Ontario Inc.
Mr. Austin stated that at the show cause meeting on October 15, 2014 before the Deputy Registrar, Ms. Gatt when asked about Mr. Botvinnik, admitted he was her husband but stated that he had nothing to do with her company and they were not currently speaking to each other.
In cross examination, Mr. Austin admitted that the Ministry does not find it is uncommon for a company that has grown quickly to amass safety violations.
Natalia Gatt gave evidence on behalf of the Appellant. She stated that the company has reduced its fleet size to 4 vehicles from 15. She did this in attempt to control the soaring safety ratings. As well, it was an opportunity to let some of her drivers go. Based on safety concerns, she hired a safety consultant.
She reiterated that she and Mr. Botvinnik never discuss business matters, and keep their business affairs and finances separate. She stated that the vehicles purchased and transferred from 1402092 Alberta Ltd. were bought from a broker, not directly from the company.
In cross examination, Ms. Gatt was not able to list or recall the names of any of her drivers and appeared to have little knowledge as to who they were.
THE LAW
The 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:
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;
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.
ANALYSIS
It is clear from the evidence that the safety record of 1402092 Alberta Ltd. was dangerously high at a violation rate of 139.05%. The safety rating of 2369741 Ontario Inc. also deteriorated significantly after involvement with 1402092 Alberta Ltd, the most obvious connection being a transfer of vehicles and drivers from 1402092 Alberta Ltd. to 2369741Ontario Inc.
Ms. Gatt attended the show cause meeting as the owner of 2369741 Ontario Inc.
She stated at that meeting that there was no relationship between her company and that of her husband of two years, Mr. Botvinnik. This, in spite of the fact that several vehicles and drivers from 1402092 Alberta Ltd., had transferred into her company. In December 2014, four vehicles were transferred into the fleet of 2369741 Ontario Inc. from 1402092 Alberta Ltd., which evidence was not disputed by Ms. Gatt.
In her evidence before this Tribunal, Ms. Gatt did not appear to possess a great deal of knowledge about the business of which she is the sole owner. Despite having reduced the size of her fleet and being the person in control of business operations, she did not know the names of the company’s drivers.
Ms. Gatt would have the Tribunal believe that she has, had no discussion with her husband regarding her company and his.
The Tribunal does not find the evidence of Ms. Gatt to be credible. It defies logic that two people in a marital relationship, each having a business interest which obviously has overlapped, for example, with the transfer of vehicles and drivers, would have no discussion about business affairs. In addition, Ms. Gatt’s obvious lack of knowledge regarding the trucking business does not lend credence to her story that she is the sole operator of the trucking company.
Weighing the evidence on a balance of probabilities, it is the view of this Tribunal that there is indeed a relationship between 2369741 Ontario Inc. and 1402092 Alberta Ltd. The evidence suggests to the Tribunal that this is an attempt by Mr. Botvinnik to avoid the consequences of the cancellation of the CVOR certificate of 1402092 Alberta Ltd and to resurrect his trucking business through 2369741 Ontario Inc. The Registrar is justified in his concern given the safety record of 1402092 Alberta Ltd.
ORDER
Pursuant to Section 50(2) of the HTA, the Tribunal directs the Registrar of Motor Vehicles to confirm and carry out the cancellation and seizure order dated November 13, 2014 and pursuant to sections 47 and 47.1 of the HTA that CVOR certificate 177-537-042 and plate portions of permits for all commercial motor vehicles and trailers issued to 2369741 Ontario Inc. be cancelled and the plate portions seized.
LICENCE APPEAL TRIBUNAL
Alex McCauley, Member
Released on: April 9, 2015