Licence Tribunal
Appeal d'appel en
Tribunal matière de permis
2015-10-27
FILE:
9309/CVOR
CASE NAME:
9309 v. Registrar of Motor Vehicles
An appeal under Section 50(1) of the Highway Traffic Act from an Order of the Registrar of Motor Vehicles Pursuant to Section 47(1) to suspend the Commercial Vehicle Operators’ Registration Certificates and to Seize the Plate Portion of all Permits Issued
6233317 Canada Inc. o/a Rockwell Truck Line
132455 Ontario Inc. o\a Bramlea Motors
2138692 Ontario Inc.
EKJOT Transport Inc.
Target Trucking Inc.
DOT Transport Inc.
Appellants
-and-
Registrar of Motor Vehicles
Respondent
REASONS FOR DECISION AND ORDER
ADJUDICATOR:
Alex McCauley, Member
APPEARANCES:
For the Appellants:
Richard J. Posner, Counsel
For the Respondent:
Patrick S. Moore, Counsel
Heard in Toronto:
August 27 and 28, 2015
DECISION AND ORDER
6233317 Canada Inc. o/a Rockwell Truck Line, 132455 Ontario Inc. o\a Bramlea Motors, 2138692 Ontario Inc., EKJOT Transport Inc., Target Trucking Inc., and DOT Transport Inc. (the “Appellants”) have appealed an Order of the Registrar of Motor Vehicles (the “Registrar” or “Ministry”) issued on December 10, 2014, to suspend their Commercial Vehicle Operator’s Registration (CVOR) Certificate and to Seize the Plate Portion of all Permits for a period of fifteen (15) days.
BACKGROUND
On October 10, 2014, the Registrar issued a Notice of Cancellation and Seizure Order proposing the cancellation of the CVOR certificates of the Appellants. The Proposal also called for the seizure of the plate portion of permits for all commercial motor vehicles and trailers registered in the names of the Appellants.
On November 14, 2014, a show cause meeting was held with the Deputy Registrar in which the Appellants were permitted to make submissions as to why the cancellation and seizure order should not be issued.
After consideration of the submissions made at the meeting of November 14, 2014, the Deputy Registrar decided that the original notice of cancellation and seizure would be changed to a 15 day suspension and seizure order.
Mr. Posner has conceded the relationship between the 6233317 Ontario Inc. o/a Rockwell Truck Line and its affiliated carriers, all of whom are appellants in this proceeding.
THE EVIDENCE
The Registrar called David Mercanti who is a carrier safety rating administrator with the Ministry of Transportation. His role is to monitor the safety records of commercial carriers and operators and to evaluate and recommend interventions, if required, to the Deputy Registrar.
Mr. Mercanti explained the responsibilities of a CVOR certificate holder which are set out in the Public Guidelines issued by the MTO (Exhibit 3, Tab 22).
Mr. Mercanti originally recommended the cancellation and seizure order to the Deputy Registrar.
Mr. Mercanti explained that 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 MTO.
The system identifies unsafe carriers by assigning points for at-fault collisions, offences, and out-of-service defects. Carriers are given the maximum allowable point total based on the number of trucks they operate and the number of kilometers they travel annually on Ontario roads. Points are recorded against the maximum allowable number of two years and expressed as a percentage of the maximum allowable violation rate (VR). The system anticipates interventions for carriers whose VR is increasing. At a 35% VR, a warning letter is generated. Currently 85% of carriers operate under a 35% VR. At a 50% VR, an audit is triggered, and at 80%, a carrier may be called in for an interview. Sanctions are usually imposed if the VR exceeds 100%. Approximately 0.1% of carriers or approximately 50 out of 50,000 carriers exceed 100%.
As outlined in Exhibit 3, tab 2, the violation rate for 6233317 Canada Inc. o/a Rockwell Truck Line (“Rockwell” or the “company”) was 175.4%. This is based on the commercial vehicle operator’s summary in Exhibit 3, tab 5, page 13. The timeframe for this particular audit was for a two-year period from September 4, 2012, to September 3, 2014.
Critical to this particular audit are the kilometres travelled, as reported by the operator. The kilometres travelled as reported were strenuously contested by Rockwell. Its position was that through error they had miscalculated the kilometres travelled producing numbers that they contend were far below the actual kilometres travelled. The result of this miscalculation would be that they would get a higher violation rate based on the numbers being ascribed to less kilometres travelled.
The Registrar’s witness stated there were no concerns with the affiliated companies and that they were only included because of the relationship to Rockwell.
At the show cause meeting on November 14, 2014, Rockwell representatives outlined what steps they were prepared to take in order to reverse the trend leading to the past unsafe operations. At this meeting, Rockwell did not bring forth any of their concerns regarding the issue of the kilometres travelled which had been submitted to the Ministry and which was used by the Ministry in determining the overall safety violation rate of 175.4% as outlined in their commercial vehicle operators summary covering the periods of September 4, 2012 through September 3, 2014.
The result of this show cause meeting was that the Registrar determined that they would proceed with a suspension as opposed to a revocation of the CVOR permits.
Mr. Mercanti advised that he did a recalculation of the kilometres travelled after he received an indication that there may be a discrepancy. He increased the numbers of the kilometres travelled to 242,841 from the submitted numbers of 195,850. His recalculations are outlined in a spreadsheet in Exhibit 6. The impact of his recalculations changes the violation rate from 175.41% to the new rate of 173.43%. The overall calculations which included added events and an increase to the values of the kilometres travelled brought the net violation rate down to 124.29%.
In cross-examination, Mr. Mercanti was asked about information contained in Exhibit 9 which, based on different calculations, yielded a violation rate over the two-year period of 2012 to 2014 of 94.99%. These were calculations developed by Tariq Mahmud, a commercial vehicle safety and compliance consultant retained by the Appellants. When asked about these new calculations Mr. Mercanti admitted that there was a reasonable possibility that the numbers were accurate.
Mr. Mercanti pointed out that he was not disputing the methodology used by Mr. Mahmud but he pointed out that the calculations did not reflect the 24 month period.
He acknowledged that the company had not changed its fleet size between 2012 and 2014, and stated that the overall safety rating for the company in the United States was excellent.
There was a high violation rate as a result of the audit as outlined in Tab 5 of Exhibit 3. Mr. Mercanti did not speak to the auditor with regard to the accuracy of the audit.
The Appellants called Rupinderpal (Paul) Sidhu as a witness. Mr. Sidhu is a Director of Rockwell and oversees the general operation of the company. He has been involved in the trucking industry from March 2000 until present. In 2010, Rockwell was established and between 2012 and 2014, there were 26 trucks operating in its fleet.
They are general freight carriers who travel to the USA and in the area of the GTA. The majority of their work is with Chrysler and Ford. Throughout his evidence, he spoke of his efforts to develop a positive safety rating for his company. He oversees the company personally and he’s brought in professionals to ensure that the operations are done safely.
In the past, many of the functions such as ensuring that logbooks and maintenance were up-to-date, were left up to the individual drivers. Since the last audit, there have been a number of changes made. In the past, the company didn’t have a maintenance policy. They now have a progressive policy that ensures that every 90 days every unit goes through a preventative maintenance program and there is now a policy in place for hiring drivers. In addition, drivers are scrutinized by the CVOR points they accumulate, which can result in action taken against them.
Mr. Sidhu hired Bill Landry as Operations Manager. Mr. Landry has 35 years of experience in the business, and is responsible for auditing logbooks to ensure the accuracy of the entries on a weekly basis. He also ensures the accuracy of the fuel receipts and all the records that are required to ensure accurate disclosure is made to the Ministry especially in the face of pending audits.
Mr. Sidhu understands more now than ever before the value of his CVOR and his need to protect the integrity of it. Public safety is extremely important to the company. In the past, they admittedly were not doing their job well. For example, previously, they only had two mechanics; now they have six and their safety record has improved.
Mr. Sidhu states that going forward their plan is to grow to be number one. The company’s safety record is improving and all indications are that the company is on the right track. Some examples he gave include: the company’s CVOR is monitored regularly; their old equipment has been replaced; and they have dismissed drivers who have been involved in serious mishaps, in some cases, involving criminal driving charges. He is very confident that the violation rate will not climb to the numbers experienced in the past and to bolster that assertion, Mr. Sidhu referred to the recent CVOR record for the company (Ex. 11) for the period of July 2013 to July 2015 which showed the overall violation rate at 31.5%.
There is now a full-time Safety Compliance Manager in place and have instituted a software program that monitors various aspects of the company’s operation including items such as when planned maintenance is due.
There are incentive plans that reward good drivers and a policy to monitor and discipline poor drivers. An example is the collision policy that is in place, if a driver is involved in an at-fault collision the matter is reviewed and action is taken. This action can be anywhere from a warning letter to an outright dismissal.
Mr. Sidhu admitted that they did not bring up the mileage issue at the show cause hearing with the Deputy Registrar.
In cross-examination, Mr. Sidhu admitted in the past that they did not have a suitable monitoring system in order to properly review the driving records of the drivers. He stated that that was why the record of M.W., as outlined in Exhibit 3, was allowed to progress to the state that it was by the time this driver was properly dealt with. Mr. Sidhu admitted that had there been a warning system in place they would have been able to deal with this person well before his record escalated to the point that it was.
Tariq Mahmud was called as a witness. He was hired by Rockwell at the end of November 2014 as commercial vehicle safety and compliance consultant. He was retained to assist the company in developing a plan to improve compliance with the Ministry and to ensure that the company would pass its next audit. Mr. Mahmud has several years of experience in commercial vehicle inspection including registration of trailers and in safety and compliance is considered a specialist. In addition, he has many years of commercial vehicle operation instruction, and worked as a commercial vehicle facility auditor and compliance reviewer, a trainer for upgrade licence from G to DZ or a Z and is an Occupational Health & Safety specialist.
It was his opinion that on the original audit, outlined in Tab 5 of Exhibit 3, that the kilometres travelled had been improperly calculated and that the numbers submitted by Rockwell were low. His reasons were varied. He stated that the mileages were not calculated correctly on the part of the fleet that was operating in Ontario as opposed to the fleet that was travelling to the United States. He maintained that the company submitted mileages only based on the International Fuel Tax Agreement (IFTA) records. By using only those numbers, they ignored the mileages of the portion of the fleet operating in Ontario. This fact was disputed by the Registrar who submitted that the mileages were submitted with the assistance of a professional firm, MCI Truckworld, and signed off by company officials.
He was also concerned about the way that the mileage was gathered and reported. It was his opinion that the most reliable source was the Periodic Mandatory Commercial Vehicle Inspections (PMCVI) numbers. He stated that these numbers are highly reliable because they are entered by Ministry certified mechanics during routine inspections that are taken directly from the odometer readings from the fleet vehicles. Using this number and information received from Rockwell files, Mr. Mahmud developed a new chart outlined at Exhibit 9, tab E which showed a violation rate of 94.99%. It is to be noted that the study, covered a one-year period only.
Mr. Mahmud spoke extensively about the failed audit for Rockwell as outlined in tab 5 of Exhibit 3. He stated that many of the convictions that the management of Rockwell plead guilty to were as a result of the audit which may have been flawed. With respect to Mr. Mahmud’s evidence on this point, the Tribunal does note that a lot of this evidence was based on speculation. The fact is that the Appellant did plead guilty to all of the offences arising from the audit.
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
The issues before the Tribunal are first, whether there is reason to believe, having regard to the safety record of the Appellants, that the Appellants will not operate its commercial motor vehicles safely or in accordance with the Act, the regulations and other laws relating to highway safety and, second, if there is such reason, what order the Tribunal should make.
The genesis of this matter stems from the Ministry audit that covered the period of September 4, 2012 to September 3, 2014. This audit revealed that Rockwell had an overall safety violation rate of 175.4%. This resulted in a cancellation and seizure order against Rockwell and its affiliated carriers in October 2014 and the show cause meeting with the Deputy Registrar on November 14, 2014.
The Registrar through its evidence and submissions maintains that the suspension is necessary in order to ensure compliance with the Act and safe operation of the Appellant’s fleet.
Rockwell, for its part, frankly admits that there have been mistakes in the past but that has taken significant steps to correct these defects and the proof is in the latest audit for the time period between July 2013 and July 2015 which showed the overall safety violation rate for that period to be 31.5%, and its out of service rate under 24%, well below the provincial average.
The Tribunal was very impressed with the evidence of Mr. Sidhu who has led the company to a virtual turnaround in regard to its overall operation and its safe operation. He was very candid and forthright in his evidence. He has retained staff and utilized automation to ensure that he and his business partners have a firm grip on the overall operations of the company.
The Tribunal is very impressed with the latest numbers which show a dramatic turnaround in the overall safety violation rate. The purpose of the CVOR system is first and foremost to ensure that commercial vehicles operate safely on our highways. It appears to the Tribunal that Mr. Sidhu is working towards that goal and, in effect, attaining it.
Much of the evidence heard dealt with the earlier audit of 2012 to 2014. The Tribunal heard arguments about the calculations used to come up with the recorded kilometres travelled. The Tribunal is prepared to acknowledge that there may have been some variation in the numbers used in that particular audit. The numbers, though, would not be significant enough to alter the negative impact of that particular audit.
The Tribunal was impressed with the credentials of Mr. Tariq Mahmud and sees him as a positive asset to Rockwell. It was clear in his evidence, however, that he did not have all of the firsthand information that was available at the time of the original audit.
The Registrar, in submissions, stated that improved records should not absolve the company from suspension based on their previous poor records. Companies must be held to account for poor performance. Their position is not without some merit, but in the case before it, the Tribunal notes that this company, at the time of the audit, was still developing as a business. The audits previous to the 2012 audit were favorable to the company.
The Tribunal was referred to the case of Thistletown Motor Freight (2003) Inc. [2006] O.L.A.T.D. No. 580. In this decision Vice-Chair J. Weary wrote at paragraph 53:
If the aim of the Registrar’s available sanction is, as has been held in earlier decisions, to attain compliance, then the Registrar’s actions up to the show cause hearing effectively succeeded. In this regard, issuance of the original order was appropriate and in keeping with the Registrar’s duty under the act. However, to continue to insist on applying a suspension in the face of credible and detailed evidence of actions undertaken to improve compliance, and, more importantly, the passage of time illustrating actual improved performance outcomes, is indeed punitive. Especially in the circumstances present here where, to do so will, according to the Applicant’s uncontradicted testimony, significantly damage, if not destroy, the Applicant’s ability to remain in the business. Certainly, there are no grounds upon which the Tribunal can conclude the upholding of the seven day suspension as proposed will in some way further improve public safety.
Based on the evidence heard, the Tribunal concludes that to sustain the Registrar’s order under the circumstances would indeed be punitive and not in keeping with the intention of the legislation. Rockwell has taken great strides to improve its overall safety record and there is no evidence to suggest that these efforts will not continue into the future.
ORDER
Pursuant to the authority vested in it under section 50(2) of the Highway Traffic Act, the Tribunal directs the Registrar not to carry out the Suspension and Seizure Order dated December 10, 2014.
LICENCE APPEAL TRIBUNAL
Alex McCauley, Member
Released: October 27, 2015