Glenview Iron & Metal Ltd. v. Director of Vehicle Inspection Standards, 2015 CanLII 72231

Licence Tribunal

Appeal d'appel en

Tribunal matière de permis

DATE:

2015-10-21

FILE:

9494/GAR

CASE NAME:

9494 v. Director of Vehicle Inspection Standards

Appeal From a Notice of Proposal of The Director of Vehicle Inspection Standards under the Highway Traffic Act, R.S.O. 1990, c. H.8 to Refuse to Issue a Motor Vehicle Inspection Station Licence

Glenview Iron & Metal Ltd.

Appellant

-and-

Director of Vehicle Inspection Standards

Respondent

REASONS FOR DECISION AND ORDER

ADJUDICATOR:

Douglas R. Wallace, Vice-Chair

APPEARANCES:

For the Appellant:

Robert Riddell, Paralegal

For the Respondent:

Matthew Peachey, Counsel

Heard in Ottawa

July 8 & 9 and August 24 & 25, 2015

DECISON AND REASONS

This is an appeal to the Licence Appeal Tribunal by Glenview Iron & Metal Ltd. (the "Appellant") respecting a Notice of Proposal by the Director of Vehicle Inspection Standards (the "Director" or "Respondent") to refuse the issuance of a Motor Vehicle Inspection Station licence, dated March 2, 2015.

BACKGROUND

The Appellant has held a Commercial Vehicle Operator's Registration (CVOR) since 1990 and operates with Mackat Inc., an affiliated company. In June 2013, it applied to the Ministry of Transportation for a Motor Vehicle Inspection Station (MVIS) Licence. For reasons which were said to relate to the surrender or revocation of an earlier MVIS licence, this application was neither issued nor refused. In November 2014, the Appellant applied again. It is this application the Director of Vehicle Inspection Standards proposes to refuse.

The Director's proposed refusal is based on the following grounds:

1. Glenview was previously registered as an MVIS. Its licence was revoked by the Ministry of Transportation (the "Ministry") in 1989.

2. Prior to having its licence revoked, Glenview was convicted three times in 1988 for issuing a Safety Standard Certificate("SSC") or vehicle inspection sticker to a vehicle that:

   1. was not inspected by a motor vehicle inspection mechanic;
   2. was not inspected at an MVIS; or
   3. did not comply with the inspection requirements and performance standards, contrary to the former section 74(3)(a) of the Act.

3. On May 16, 2013, an employee of Glenview issued SSC #19531565 when he was not licenced as a motor vehicle inspection mechanic. The SSC was issued at Glenview's place of business when Glenview was not licensed as a MVIS. SSC #19531565 was issued to Mackat Inc., a corporation that is closely associated with Glenview.

4. Glenview obtained Annual Inspection Certificates for its vehicles despite knowing that those vehicles were not properly inspected as required by the Act and its regulations.

5. Glenview is the holder of CVOR certificate #080-219-686. Its safety record demonstrates that it has a history of not complying with relevant traffic laws, as well as a history of failing to ensure that its employees comply with relevant traffic laws.

PRELIMINARY MOTION

The Respondent tendered two books of documents supporting the grounds alleged in the Notice of Proposal. The Appellant's representative, Mr. Riddell, moved at the opening of the hearing for an order excluding three classes of documents included in Tab 2 of the Respondent's Exhibit Book dated May 15, 2015. These documents include Commercial Vehicle Operator Reports, Facility Audit Findings and Commercial Vehicle Inspection Reports. The grounds relied upon were that the documents were prejudicial, lacked relevance and materiality, and contained errors which made them unreliable. Further, the introduction of such records violated the Appellant's constitutional right to make full answer and defence as provided by the Canadian Charter of Rights and Freedoms. Counsel for the Respondent, Mr. Peachey, relied on the statutory requirements for the compilation of such records found in section 205 (1) of the Highway Traffic Act R.S.O. 1990, c. H.8 (the "Act") and O. Reg. 424/97. He also noted that the exclusion of such records would frustrate the achievement of the legislation's purpose of public protection.

Having heard the representatives' submissions and considered the authorities cited by them the Tribunal ruled that the documents were relevant and that the Tribunal should exercise its discretion under section 15 of the Statutory Powers Procedure Act, to allow their introduction. In making its ruling, the Tribunal noted that the Appellant would have been made aware of the content of these records in the normal course of events shortly after they were created and had a right to challenge their accuracy either at that time or before the Tribunal by calling witnesses to testify as to the facts set out in the records. The records were accordingly admitted as exhibits subject to any concerns which might arise if the facts were disputed by oral evidence. In the Tribunal's opinion, the introduction of such records after appropriate notice to the Appellant does not violate the provisions of sections 7 or 11 of the Charter.

EVIDENCE

The Respondent called two employees of the Ministry of Transportation to testify as to how and when the records filed as exhibits were created and how they should be interpreted. Mr. Peachey also called two former employees of the Appellant to give evidence as to their experience working as mechanics in the Appellant's garage. The Appellant cross-examined the Respondent's witnesses but did not call any witnesses.

The Respondent's evidence concerning paragraphs 1 and 2 of the Director's Proposal is found in a one-page Station Record Summary. This document shows the Appellant obtained a MVIS licence in August 1984, was convicted of three offences under the Act relating to the issuance of Safety Standards Certificates in November 1988 but nevertheless received a renewal of his licence in January 1989. There is also an indication that a revocation of the Appellant's licence was pending in July 1989 and that the licence is now considered revoked.

In cross-examination, Jeff Duncan, a long-term Transportation Enforcement Officer with the Ministry of Transportation, admitted that no further details were available concerning the nature of the offences that led to the Appellant's convictions and that the notification of "revoked" could well indicate a voluntary surrender of the Appellant's MVIS licence.

In paragraph 3 of his Notice of Proposal, the Director alleges that an employee of the Appellant's issued a SSC to a company affiliated with the Appellant's company. In paragraph 4, the allegation is that Annual Inspection Certificates ("AIC") were placed on the Appellant's vehicles without the proper inspections being carried out. The evidence, on both these allegations, was provided by two former employees.

Employee "A" was, for approximately 5 years prior to May 2013, a truck mechanic certified to do inspections and issue AIC and SSCs in a licensed MVIS. On May 15, 2013, at the request of the Appellant, he inspected a vehicle owned by Mackat Inc. at the Appellant's garage and issued a SSC for the vehicle. He was later charged and convicted under the Act for issuing a SSC based on an inspection carried out on a premise that was not licensed as a MVIS. Employee "A" also testified that both AIC and SSC were issued by an MVIS owned by LL who runs a small garage and attached to vehicles owned by the Appellant during the three months he worked for the Appellant. Although he was employed at the time as the shop supervisor with responsibility for maintaining the Appellant's fleet of vehicles, he never saw these vehicles going out for inspections by LL.

Employee "B" worked as a mechanic for the Appellant for approximately 8 years. During this time he was responsible for the maintenance and repair of trucks and trailers owned by the Appellant, its affiliated company, Mackat Inc., and a third company, Palmer. He stated both in his oral testimony and in a recorded interview with a Ministry of Transportation inspector in preparation for the hearing that he saw AIC issued by LL's MVIS applied to the Appellant's vehicles without the vehicles having been taken from the Appellant's garage. On one occasion he saw the employee he reported to personally applying a certificate to a vehicle owned by the Appellant.

The Tribunal heard a great deal of evidence on the fifth ground alleged by the Respondent relating to the Appellant's safety record and failure to ensure its employees complied with relevant traffic laws.

The first document introduced with respect to these grounds was a Safety Record Review which summarizes the performance of the Appellant and its affiliated company while operating as CVOR carriers over a number of years prior to the Appellant's application for a MVIS licence. In addition to this Review, the Tribunal received and reviewed the following:

1. A CVOR Abstract (level II) providing additional details over a shorter period of time;
2. Detailed event data for collisions, convictions and vehicle inspections over a 5 year period;
3. Copies of facility audits;
4. A station record; and
5. A series of warning letters issued to the Appellant.

The Safety Record Review notes that over the 25 years prior to its application for a MVIS licence, the Appellant received seven warning letters, four facility audits and an interview with a Ministry official respecting its performance as the holder of a CVOR certificate. The Appellant's affiliated company, Mackat Inc., received three warning letters and was also subject to four facility audits over the 15 year period covered by its review.

Richard Borris is, a long-term employee of the Ministry of Transportation presently working in the CVOR Carrier Safety Rating Administration. He testified that the warning letters, facility audits and interviews are all interventions by the Ministry as a result of concern about the carrier's performance and are designed to improve compliance with the requirements of the CVOR regulations.

Both the Appellant and its affiliated company passed two of their facility audits and failed two. The two most recent facility audits of the Appellant were carried out in 2008 and 2014. They both resulted in passing grades although the most recent was a bare pass. The earlier two audits performed in 2000 and 2004 resulted in failing grades.

Mackat Inc. failed its 1998 and 2002 facility audits and passed audits in 1999 and 2007.

The Safety Record Review also considered Safety Violation Rates for both the Appellant and its affiliated company. This rate is based on three weighted components; the number of collisions a CVOR certificate holder's vehicles have been involved in over the past two years, the number of Highway Traffic Act convictions by drivers, and the number of defects found during vehicle inspections at roadside inspection stations or during on-site inspections.

The Safety Violation Rate for the Appellant was determined to be 74.06% and that of its affiliated company 32.07%. This placed the Appellant in the bottom 0.3 percentile of registered CVOR certificate holders and the affiliated company in the bottom 12.3 percentile. Carriers receive warning letters whenever their safety violation rate exceeds 35% of their threshold, a facility audit when their rate exceeds 50% and an interview at 85%.

As a result of the Appellant's overall safety record its certificate was rated as "Conditional" while the affiliated company was rated "Satisfactory".

With regard to the paragraph 5 of the Director's Proposal which states that the Appellant has a history of failing to ensure that its employees comply with relevant traffic laws, the Tribunal reviewed the records of the Ministry of Transportation showing convictions registered against the Appellant and its drivers. The records show that the Appellant' drivers were convicted on 11 charges under the Act in the past five years. Many of these offences were admittedly beyond the control of the Appellant. The records also reveal, however, that drivers were often found driving vehicles with defects that they should have been able to detect themselves if they had received proper training and carried out their own vehicle inspections before leaving the carrier's premises. These defects include such matters as improper load security.

Both former employees of the Appellant described the steps taken by the Appellant to ensure its vehicles were maintained in good, safe condition at all times in accordance with its obligations under the CVOR system. Employee "B", the experienced mechanic in charge of the Appellant's maintenance and repairs for approximately eight years, kept a detailed monthly log for much of the time he was employed by the Appellant showing not only the work done on vehicles during the month, but the work that was overdue or required to be done in the near future. His evidence was that his reports were largely ignored by the principals of the two affiliated companies and that when he did receive feedback it was inevitably negative. Many vehicles were shown as requiring maintenance or repairs for a number of consecutive months with no corrective action authorized. In cross-examination, he admitted that many of the repair or maintenance work noted did not render the vehicle immediately unsafe but were rather required to avoid future breakdowns and more expensive repairs. He also admitted that his lists did not contain detailed descriptions showing the degree to which the worn part fell short of the standard required.

Employee "A" was employed for a much briefer period of time during the summer of 2013. Although he kept no detailed records, he considered that serious safety related defects were attended to in a fairly prompt manner during his period of employment.

The Tribunal reviewed the Commercial Vehicle Operator Record showing the results of inspections carried out on the Appellant's vehicles over the 5 year period preceding the application for this licence. This review found that the number of defects reported rose each year from 2010 to 2014. Over the same period of time, the Commercial Vehicle Inspection Reports indicate that the number of points accumulated for out-of- service defects remained constant for the 2 years shown of 2013 and 2014. The Tribunal notes that there are a significant number of defects noted in each series of reports, but is unable to draw any conclusion as to whether the level of maintenance was increasing or decreasing over time as the number of inspections varied from year to year.

Of greater significance in determining the level of vehicle maintenance are the comments made by Ministry inspectors conducting facility audits.

In 2002, the comments included the following:

• Operator's maintenance records do not indicate all repairs, maintenance and inspections performed.
• Operator has not prepared a written statement or description of the preventative maintenance program for each vehicle.

In 2004, the report noted:

• Operator has not prepared a written statement or description of the preventative maintenance program for each vehicle.
• Operator has not established a periodic inspection, repair and maintenance program to ensure that all subject vehicles are systematically repaired, maintained and inspected in accordance with their maintenance program and relevant provincial legislation.
• Operator's maintenance records do not indicate all repairs, maintenance and inspections performed.

In 2008, the comments were no better and included the following:

• Operator has not ensured that all power units and trailers operated including owned, leased and those operated by owner operators, meet the prescribed standard set out in Regulations 611, "Safety Inspections".
• Operator does not ensure that every commercial motor vehicle is inspected and a device indicating proof of inspection is affixed in accordance with the annual mandatory periodic inspection program.
• Operator has not always followed their established periodic inspection, repair and maintenance program to ensure that all subject vehicles are systematically repaired, maintained and inspected in accordance with their maintenance program (statement) and relevant provincial legislation.

Finally, the Facility Audit findings on the 2014 audit included the following:

• Operator does not ensure that every commercial vehicle is inspected and a device indication proof of inspection is affixed in accordance with the annual mandatory periodic inspection program.
• Operator has not always followed their established periodic inspection, repair and maintenance program to ensure that all subject vehicles are systematically repaired and inspected in accordance with their maintenance program (statement) and relevant provincial legislation.

The responsibility of an operator to maintain its vehicles is set out in the "Public Guidelines for Commercial Vehicle Operators" filed as an exhibit. The following excerpt is found at page 2:

CVOR responsibilities

Carriers are responsible for all the drivers and vehicles in their operation. For example, these responsibilities include:

• Keeping vehicles in good, safe condition at all times.
• Ensuring load security.
• Ensuring daily and annual/semi-annual inspections are completed.
• Keeping records on file (e.g. vehicle repairs, kilometres travelled per year, annual inspection reports, etc.).

LAW:

The following are the relevant sections of the Act:

Motor vehicle inspection station licence

91. (1) No person shall establish, operate or maintain a motor vehicle inspection station except under the authority of a licence issued by the Director under this Act and the Director may issue a licence for a motor vehicle inspection station subject to the conditions that the Director may specify in the licence. R.S.O. 1990, c. H.8, s. 91 (1).

Issuance of licence

(2) Subject to subsection (3), any person who applies in accordance with this Act and the regulations for a licence to establish, operate or maintain a motor vehicle inspection station and who meets the requirements of this Act and the regulations and who pays the prescribed fee is entitled to be issued the licence. R.S.O. 1990, c. H.8, s. 91 (2).

Grounds for refusal

(3) Subject to section 95, the Director may refuse to issue a motor vehicle inspection station licence where, in his or her opinion,

(a) the past conduct of the applicant or, where the applicant is a corporation, of its officers or directors affords reasonable grounds for belief that the motor vehicle inspection station will not be operated in accordance with the law and with honesty and integrity;

(b) the proposed motor vehicle inspection station or its operation would contravene this Act or the regulations or any other Act or regulation or any municipal by-law respecting its establishment or location;

(c) the applicant is not competent to operate a motor vehicle inspection station in accordance with this Act and the regulations; or

(d) the equipment and premises are not suitable for the performance of the inspections for which the licence is sought. R.S.O. 1990, c. H.8, s. 91 (3).

Proposal to refuse to issue or revoke licence or registration

95. (1) Where the Director proposes,

(a) to refuse to issue or renew a licence;

(b) to refuse to make a registration; or

(c) to revoke a licence or registration,

the Director shall serve notice of his or her proposal, together with written reasons therefor,

(d) in the case of a proposal to refuse to issue a licence, upon the applicant;

(e) in the case of a proposal to revoke or to refuse to renew a licence, upon the licensee;

(f) in the case of a proposal to refuse to make a registration, upon the applicant or licensee and upon the proposed registrant; and

(g) in the case of a proposal to revoke a registration, upon the registrant and the licensee of the motor vehicle inspection station in which the registrant is employed. R.S.O. 1990, c. H.8, s. 95 (1).

Power of Tribunal where hearing

(4) Where the applicant, licensee, registrant or proposed registrant requires a hearing by the Tribunal in accordance with subsection (2), the Tribunal shall appoint a time for and shall hold the hearing and may by order direct the Director to carry out his or her proposal or refrain from carrying out his or her proposal and to take the action that the Tribunal considers the Director ought to take in accordance with this Act and the regulations, and for such purposes the Tribunal may substitute its opinion for that of the Director. R.S.O. 1990, c. H.8, s. 95 (4); 1999, c. 12, Sched. G, s. 24 (16).

ISSUE

Does the past conduct of the Appellant afford reasonable grounds for belief that the MVIS will not be operated in accordance with the law and with honesty and integrity?

APPLICATION OF THE LAW TO FACTS:

The Tribunal has considered the past conduct of the Appellant both as the operator of a MVIS station and as the holder of a CVOR licence. Of particular concern is the misuse of Safety Standard Certificates. The use of these certificates plays an essential role in maintaining public safety on Ontario highways. A review of the Ministry records indicates conclusively that the Appellant abused the use of these certificates.

Counsel for the Appellant submitted that the Appellant's conviction for the misuse of these certificates while operating a MVIS station occurred many years ago. This is true. And if this were the only sign of misuse the incident would have little weight in determining the likely direction of future conduct. However, the evidence of Employee "A" shows that this was not an isolated incident. In May 2013, the Appellant requested and accepted a SSC from someone he knew had not inspected his vehicle at a licensed MVIS station. Further, the Tribunal finds, based on the evidence of both Employees "A" and "B", that it is more likely than not that the certificates issued by LL were applied to the Appellant's vehicles without proper inspections in a MVIS licensed facility.

The second area of great concern is the failure of the Appellant to fulfil its obligation as a CVOR carrier to keep vehicles in good, safe condition at all times. This failure is documented in the monthly log of repairs kept by Employee "B", the detailed event data for collisions, convictions and vehicle inspections and the facility audits.

Counsel for the Appellant submitted that many of the reported vehicle defects noted on the employee's log and the detailed event data were minor and did not require immediate repair to avoid the risk of an accident. While this may be true, the documented lack of a proper maintenance schedule and vehicle repair records noted in the facility audits increases the risk that more serious defects may go undetected

Counsel also submits that the issuance of a MVIS licence to the Appellant will facilitate the Appellant achieving its goal of improving the maintenance and repair of its vehicles. The Tribunal agrees that this could be the result if the Appellant were determined to improve its record, but the Tribunal heard no direct evidence that this was the reason the Appellant was seeking a licence. If this were the Appellant's main motivation, one would expect to see the results of increased efforts to improve maintenance over the years. No such evidence was seen despite the ample opportunities offered by 7 warning letters, the comments on 3 facility audits and the downward classification of its certificate from "satisfactory" to "conditional". In the absence of such evidence, and given the past misuse of Safety Standards Certificates, the Tribunal fears the issuing of a MVIS licence to the Appellant might result in further misuse rather than an improvement.

Based on the evidence of the Appellant's past conduct, both as a licensed MVIS holder and as a CVOR carrier, the Tribunal finds that there are reasonable grounds for belief that the Appellant will not operate a motor vehicle inspection station in accordance with the law and with honesty and integrity.

DECISION

Pursuant to the provisions of section 95(4) of the Act, the Tribunal orders the Director to carry out the Proposal dated March 2, 2015 to refuse to issue a motor vehicle inspection station licence to Glenview Iron & Metal Ltd.

LICENCE APPEAL TRIBUNAL

Douglas R. Wallace, Vice-Chair

Released: October 21, 2015