Licence Appeal Tribunal
FILE: 9887/CVOR
CASE NAME: 9887 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 Operator’s Registration Certificate and to Seize the Plate Portion of all Permits Issued
Day & Night Cargo Inc. Appellant
-and-
Registrar of Motor Vehicles Respondent
REASONS FOR DECISION AND ORDER
ADJUDICATOR: Jacqueline Castel, Member
APPEARANCES:
For the Appellant: Sriram Rangan, Paralegal
For the Respondent: Matthew Peachey, Counsel
Heard in Toronto: May 24, 2016
DECISION AND ORDER
BACKGROUND
The Deputy Registrar of Motor Vehicles, by order dated November 3, 2015, ordered the cancellation of Commercial Vehicle Operator’s Registration (“CVOR”) certificate, 144-033-867, issued to Day & Night Cargo Inc., and that the plate portion of permits released to this CVOR be seized. The Order (the “Cancellation and Seizure Order” or the “Order”) was made pursuant to section 47 of the Highway Traffic Act, R.S.O. 1990, c. H.8 (the “HTA” or the “Act”). The Appellant appealed the Order by Notice of Appeal dated November 12, 2015.
THE EVIDENCE
The Tribunal heard evidence from Sherry Atallah on behalf of the Registrar. Ms. Atallah has been a Carrier Safety Rating Administrator at the Ministry of Transportation of Ontario (“MTO” or the “Ministry”) since 2001. At this time, two books of documents were filed on behalf of the Registrar and entered as Exhibits 3 and 4, respectively. Ms. Atallah referenced these documents throughout her testimony.
She reviewed the CVOR system. Ontario carriers must hold a CVOR to operate vehicles in excess of a certain weight threshold. Based on the size of the fleet and the estimated kilometers of travel in any given year, a CVOR holder is assigned a rating, called a violation rate (“VR”). This is analogous to demerit points on a personal licence. Three types of incidents may cause carriers to accrue points against the VR:
- at fault collisions;
- out-of-service safety defects on their trucks discovered during roadside inspections; and
- violations of the rules of the road (convictions).
A VR is calculated for each of these three types of violations, and the three individual violation rates are combined to obtain an overall violation rate. The collision and conviction violation rates each represent 40% of the overall violation rate and the inspection violation rate represents 20%. A CVOR holder’s record is expressed as a percentage of the maximum permissible VR.
Ms. Atallah stated that there are intervention levels when the MTO may take action against a carrier. The first intervention level, a warning letter, is typically triggered at 35% VR. The Registrar will send a letter to the carrier advising of a worsening record and asking for improvement.
Ms. Atallah stated that in 2015, only 0.2% of carriers had a VR exceeding 85%, and 0.1% of carriers exceeded 100% VR. 95% of carriers were below the 35% VR, the rate at which some form of intervention is normally considered. As such, the Ministry’s intervention system only touches a small percentage of the total carrier population. In addition, Ms. Atallah explained that the Ministry’s interventions are typically successful in motivating carriers to improve their safety performance. More than 80% of carriers subjected to an intervention improve their record to an acceptable standard.
Ms. Atallah testified that the Appellant received its CVOR in 2002 and has had a poor safety performance from the beginning. She summarized the following chronology of events:
- The Ministry issued a warning letter to the Appellant in June 2003, and it was downgraded to a conditional safety rating in July 2003.
- A facility audit was conducted in March 2004, and the Appellant received an overall VR of 62.9% (driver 41.8% and vehicle 84%) and a failing score.
- In September 2004, the Appellant was again downgraded to a conditional safety rating.
- In August 2006, the Ministry issued another warning letter, outlining the Registrar’s concerns and the consequences of not improving.
- In February 2008, the Appellant attended an interview with the MTO, at which time its VR was 95.4%. At the interview, the Registrar advised that many of the Appellant’s problems related to hours of service violations, including logbook infractions. After the interview, the Appellant put together an action plan which was signed by the safety manager and the president, Satnam Singh.
- In March 2010, a third warning letter was issued to the Appellant.
- In October 2012, a fourth warning letter was issued to the Appellant.
- In December 2013, the Appellant was again downgraded to a conditional safety rating.
Ms. Atallah stated that the Appellant attended a second interview with the MTO on February 24, 2014 where they were represented by Raj Chahal, a Safety Consultant. At that time, its overall violation rate was 84.5%. At this meeting, the company was told it needed to improve its safety record in order to avoid future sanctions and that hours of service violations continue to be a big concern. The Appellant provided the Ministry with an action plan to improve its safety performance. Ms. Atallah stated that it is very unusual for a company to have two interviews with the Ministry. Interviews are normally very effective tools in prompting companies to implement effective corrective measures. Companies normally improve and do not have to come back for a second interview.
By September 2015, the Appellant’s overall VR had increased to 117%. (Exhibit 3, Tab 9) Ms. Atallah explained that, in fact, the Appellant’s VR was higher – 168.85% – in September 2015, after certain convictions were retroactively added to the record. At the time of the hearing, the Appellant’s VR was 122% (Exhibit 8). Ms. Atallah referenced a number of inspection reports, occurring after the 2014 interview, where out-of-service defects (in roadside inspections) and hours of service violations were found.
Ms. Atallah stated that a search of the US SAFERWEB site shows that the Appellant is worse than the US national average for both vehicle and driver out-of-service categories.
Ms. Atallah testified that after the issuance of the Notice of Cancellation and Seizure Order, a show cause meeting took place (October 29, 2015), which Manjit Singh and Raj Chahal attended on behalf of the company. The purpose of the meeting was to permit the operator to present information that may impact the decision on the cancellation of the CVOR certificate. Mr. Singh stated that they have terminated the employment of a number of the drivers with hours of service violations that safety meetings are held three times a year, and that the CVOR record is reviewed every month. The company provided an action plan that was exactly the same as the one submitted during the 2014 meeting with the Ministry. Ms. Atallah stated that it is extremely unusual for a company to submit the identical action plan twice, and it appeared to her as though no thought was put into addressing the company’s ongoing safety performance problems.
Ms. Atallah testified that even after the Cancellation and Seizure Order was issued (November 3, 2015), the Appellant has had 4 inspections with out-of-service defects, and many other inspections where non out-of-service defects were found. Many of the defects pertained to hours of service.
Ms. Atallah acknowledged on cross-examination that there has been only 1 conviction in the last 4 months, that the company has reduced the number of drivers from 32 to 15, and that the employment of several drivers with a lot of violations have been terminated. Ms. Atallah also acknowledged that the Appellant has requested a MTO audit, but noted that even if the Appellant passes the audit it would only mean that its books are in order. A passing audit would not reflect upon driver behaviour, which has been the biggest problem.
On re-examination, Ms. Atallah stated that the Appellant has not reported changes to its fleet size or total kilometres driven.
Mr. Manjit Singh is the President of Day & Night Cargo Inc. Mr. Rangan filed a book of documents, which the Tribunal entered as Exhibit 5. Mr. Singh referred to the documents in this Exhibit throughout his testimony.
Mr. Singh testified that he started working in the trucking industry as a driver in 1996.
In 2006, he took over Day & Night Cargo Inc. with his brother. He initially worked as the dispatcher and his brother took care of repairs. In 2014, his brother got sick and Mr. Singh assumed all responsibilities. He hired two safety consultants in 2014.
Mr. Singh testified that the drivers with violations have been fired or quit. He indicated that new drivers must pass a test. He has also implemented the following disciplinary policy:
1st violation – Warning 2nd violation – Suspension 3rd violation – Employment Termination
He was not as strict before, when drivers committed violations, because the drivers are long standing employees who he considered to be like family. He also testified that safety meetings are conducted once a month, and drivers receive a bonus if they have a clean CVOR inspection record. The bonus system is helping to promote compliance. Mr. Singh stated that he may also reduce his fleet by 5 or 10 more vehicles.
When asked, on cross-examination, why he submitted the same action plan at the show cause meeting as was submitted at the 2014 interview, he stated that a new action plan was not required as this one addressed everything.
Mr. Singh stated that the kilometres registered with MTO, between the time of the 2014 interview and the 2015 cancellation and seizure order were incorrect. The number of kilometres driven directly affects the calculation of the VR. For this reason, he does not believe his VR worsened after the 2014 interview.
Mr. Singh stated that they will be introducing an electronic logging device, and that most of his drivers have started to use the Keep Truckin phone app.
Mr. Singh also testified that he has requested a voluntary facility audit and he is confident his company will pass 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
Written submissions were received and reviewed by the Tribunal.
Mr. Rangan submitted that although the Appellant does not dispute its “bad record”, it has taken “drastic” steps to improve the overall safety rating. He requests that the Order be modified to require that the fleet size be reduced to 15 for a period of 12 months, with the conditions that (a) the safety rating does not increase over 50%, and (b) the Appellant pass the voluntary audit it has requested.
Mr. Peachey requested that the appeal be dismissed and the Order be confirmed in light of the Appellant’s long-running pattern of non-compliance and MTO’s repeated warnings.
The evidence reveals that the Appellant has had an extremely poor safety record since it received its CVOR in 2002.
The Appellant was given numerous opportunities to address the concerns, including multiple warning letters, two meetings with Ministry officials, and a show cause meeting. The interventions to date have not been successful in bringing about compliance.
Despite all of these interventions, the Appellant’s overall violation rate remains unacceptably high and there are ongoing hours of service violations.
At the show cause meeting, the company submitted the exact same action plan that it submitted in 2014. This action plan was not effective in addressing the concerns in 2014. After the action plan was implemented, the company’s VR increased from 84.5% to 168.85% (September 2015). The Appellant failed to provide a credible explanation as to why the identical plan might be effective in 2016. The evidence does not support Mr. Rangan’s submission that the Appellant has taken “drastic” steps to improve its safety rating.
At the time of the hearing, the Appellant’s VR was still 122%, placing it in the bottom 0.1% of carriers in Ontario.
The Tribunal found Mr. Singh’s testimony about the incorrect number of kilometers being registered with MTO (between the 2014 interview and the 2015 Cancellation and Seizure Order), to be vague, unsubstantiated and self-serving. No questions were put to Ms. Atallah regarding a discrepancy in the kilometres. Further, Mr. Singh failed to explain why he did not attempt to have the kilometres changed with MTO, knowing that it would have a direct impact on the company’s VR.
While the Tribunal is mindful of the serious business and financial consequences of the loss of a CVOR certificate, the purpose of the legislation is to protect the public by ensuring only safe carriers can operate heavy trucks on the road. The Appellant has not demonstrated that it has implemented effective remedial measures resulting in significant improvements to its safety rating over a period of time. The Appellant has been given many opportunities to improve its safety performance over the years, and there have been no significant improvements. Any modest improvements at the last hour are too little and too late.
ORDER
As such, based on the evidence and pursuant to the authority vested in the Tribunal under s. 50(2) of the Act, the Tribunal confirms the Cancellation and Seizure Order, dated November 3, 2015 and dismisses the appeal.
LICENCE APPEAL TRIBUNAL
Jacqueline Castel, Member
Released: June 13, 2016