Licence Tribunal
Appeal d'appel en
Tribunal matière de permis
DATE:
2016-07-26
FILE:
10168/CVOR
CASE NAME:
10168 v. Registrar of Motor Vehicles
Appeal under Section 50(1) of the Highway Traffic Act, R.S.O. 1990, c. H.8, from a Suspension and Seizure Order of the Registrar of Motor Vehicles pursuant to Sections 47 and 47.1.
Dun Rite Logistics Inc.
Appellant
-and-
Registrar of Motor Vehicles
Respondent
REASONS FOR DECISION AND ORDER
ADJUDICATOR:
Mary Ann Spencer, Member
APPEARANCES:
For the Appellant:
Carol McAfee Wallace, Counsel
For the Respondent:
Patrick S. Moore, Counsel
Heard in Toronto:
July 8, 2016
REASONS FOR DECISION AND ORDER
The Appellant, Dun Rite Logistics Inc., 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 March 6, 2013 pursuant to sections 47 and 47.1 of the Act, to suspend the Commercial Vehicle Operator’s Registration ("CVOR") Certificate issued to the Appellant and the plate portion of any permits issued.
The Suspension and Seizure Order was based on the Appellant’s failure to meet performance conditions which were set in February, 2012. Those conditions related to the occurrence and accumulation of unpaid fines and of outstanding fees, penalties or interest with respect to fees due under the Act.
EVIDENCE
Registrar’s Evidence
The evidence of the Registrar comprised a book of documents (Exhibit 3), a vehicle inspection report (Exhibit 6) and the testimony of Travis Donohue, a Carrier Safety Rating Administrator employed by the Ministry of Transportation.
Mr. Donohue explained that in January, 2012, the Registrar had reason to believe that the Appellant, and three other carriers affiliated through their common principal, Leonard Baldini, were related to a cancelled carrier. This belief was proven to be unfounded. However, in the course of the investigation, the Appellant and the affiliated carriers were discovered to have accumulated unpaid fines and fees, the latter due to the issuance of NSF cheques. Some of the fees were for international registration (“IRP”) plates, which are required for inter-jurisdictional travel. They are issued by a carrier’s home jurisdiction which collects the fees and, based on the percentage of travel in each jurisdiction, forwards the appropriate amount to other jurisdictions. At the time the review was conducted, the Appellant’s overall safety violation rate was 17.71%. Mr. Donohue noted that there was some concern, however, that the Appellant’s vehicle out of service rate was 33.33%.
As a result of the unpaid fines and fees, on February 2, 2012, the Registrar issued a Suspension and Seizure order to the Appellant and to the affiliated carriers, 6824081 Canada Inc., Echo Trucking Limited and Leonard Baldini. Mr. Donohue explained the status of the Appellant and CVOR registration history of the three affiliated companies:
Leonard Baldini was issued a CVOR certificate on July 11, 1989 which expired on July 20, 2009.
Echo Trucking Limited was incorporated on March 8, 2005 and was cancelled on January 5, 2013. Its CVOR certificate was issued on August 18, 2005 and was later voluntarily terminated.
6824081 Canada Inc. was incorporated on August 16, 2007 and was dissolved on August 4, 2011. Its CVOR certificate was issued August 30, 2007 and expired on August 1, 2009.
Dun Rite Logistics was incorporated on May 22, 2008. Its CVOR certificate was issued on June 4, 2008 and expired on March 8, 2013.
On February 16, 2012, in a letter to the Ministry of Transportation, Mr. Baldini undertook to pay $4,856.92 owed by the Appellant by March 15, 2012. Similarly, he undertook to pay $1,785.10 owed by Echo Trucking Limited by April 15, 2012; $2,984.21 CDN and $721.94 USD owed by 6824081 Canada Inc. by July 15, 2012 and the $3,815.85 he owed by September 15, 2012. As a result of these commitments, the Registrar set aside the Suspension and Seizure Order on February 29, 2012.
In March, 2013, a Safety Record Review was prepared. The Appellant’s overall safety violation rate had increased to 31.49% with a vehicle out of service rate of 72.43%. The affiliated carriers were no longer operating; however, their CVOR records indicate all had “satisfactory-unaudited” safety ratings. The IRP amounts owing to the Ministry as of March 1, 2013 were $4,856.92 by the Appellant; $1,785.10 by Echo Trucking Limited and $1,343.41 CDN and $721.94 USD, and a $35 CDN administrative fee by 6824081 Canada Inc.
As a result of the fees still outstanding, the Registrar issued the Suspension and Seizure Order dated March 6, 2013. The Order was sent by courier to the Appellant’s address on record at the Ministry of Transportation but was returned as undeliverable with the notation “Moved – No Forwarding Address”. The Ministry subsequently suspended the Appellant.
The Appellant’s principal, Leonard Baldini, subsequently sought a CVOR registration and discovered the suspension. In a letter dated January 15, 2016, the Appellant’s representative, OTT Legal Services, advised the Registrar that Mr. Baldini had been granted extensions of time and had established a payment schedule totalling $575.75 per month to address outstanding fines under the Provincial Offences Act.
On February 9, 2016, Mr. Baldini attended a meeting at the Ministry of Transportation with the Deputy Registrar of Motor Vehicles and Mr. Donohue, among others. The minutes, taken by Mr. Donohue, indicate that Mr. Baldini advised he had been unable to make payments in the past due to illness but committed to pay the outstanding fees and fines once he received his CVOR certificate.
Mr. Baldini subsequently provided the Registrar with copies of the Appellant’s certificate of insurance, tractor’s safety certificate, licence under the International Fuel Tax Agreement and a letter from S & S Forwarding Ltd. indicating its willingness to retain the Appellant. However, on February 19, 2016, the Deputy Registrar advised that the Suspension and Seizure Order would remain in effect.
Mr. Donohue testified that the total amount currently owed by the Appellant and the three affiliated companies to the Ministry of Transportation with respect to fees is $14,046.18 CDN and $721.94 USD. Referring to reports from the ICON system, the provincial database of fines, dated April 25, 2016, he indicated the total outstanding fines under the Provincial Offences Act total $2,372.95. The reports indicate that a total of $544.08 had been paid, but do not indicate the date these payments were made.
Finally, Mr. Donohue testified that on April 2, 2016, a vehicle belonging to the Appellant was stopped by a Ministry inspector and put out of service because it had no valid CVOR certificate and its plates were expired.
On cross-examination, Mr. Donohue acknowledged that Mr. Baldini’s companies had operated for some time without any intervention by the Ministry with respect to unpaid fines. He stated this was because once a company had defaulted, Mr. Baldini had started a new one. Ms. Wallace questioned whether there was any evidence to indicate that the various companies had not overlapped. Mr. Donohue pointed out that the last incidents reported on the CVOR abstract for 6824081 Canada Inc. pre-dated the Appellant’s operations but acknowledged that the companies’ operations could have overlapped without reported incidents.
Appellant’s Evidence
Leonard Baldini testified on behalf of the Appellant.
Mr. Baldini is 75 years old and has been in the trucking business since he was 17. He explained that he initially worked as a driver and then, in 1989, began to operate under his own name. He later incorporated Echo Trucking Limited because he was asked to buy a company for which he was working. He operated it for a year but lost the company after he had a heart attack and pneumonia. While he was ill, the company’s office and all its records were lost. When he could not carry its debt load, he declared bankruptcy and later incorporated 6824081 Canada Inc. However, his health prevented him from operating the company. He testified that he cannot remember it “doing a day’s work.” He later began to operate the Appellant.
Mr. Baldini testified that since 2000, he had suffered from a number of illnesses, including an abdominal aortic aneurysm in 2000, a heart attack in 2002, and pneumonia which resulted in a two month hospitalization in 2007, as set out in the letter dated June 13, 2016 that he submitted from his family physician (Exhibit 4). The letter also states that he has been diagnosed with an early adenocarcinoma of the lung. However, Mr. Baldini testified that he is now doing well and he believes he can work again. He is not currently working, and his sole sources of income are his Canada Pension and old age security.
Mr. Baldini agrees that he owes the fees and fine amounts entered into evidence by the Registrar. With respect to the fees owed to the Ministry of Transportation, he stated that he had not intentionally issued NSF cheques. Rather, he had issued cheques on the expectation that he would receive payments for the work he had done and funds would be available before the cheques cleared.
Mr. Baldini testified that he had every intention of meeting the payment commitments he set out in his February 16, 2012 letter to the Ministry. However, illness intervened and prevented him from doing so. He was unaware that his CVOR had in fact been suspended until he reapplied to the Ministry which he did because a former driver approached him asking for work. Mr. Baldini was aware that he would have to obtain his CVOR and plates in order to work. In anticipation of working, he took his Kenworth truck to be fixed in October, 2015 (Exhibit 5). Because the work was more expensive than he anticipated, he was unable to pay and the truck remained at Kenworth’s facility. However, when Kenworth threatened to sell the vehicle, he borrowed the money to pay the bill. On April 2, 2016, a neighbour agreed to help him by driving the vehicle back to his home. Mr. Baldini did not believe that he required a valid CVOR and plates to do this since the vehicle was being operated for personal rather than business reasons. He acknowledged that this belief was incorrect. After the vehicle was stopped, he had it towed to his home.
Mr. Baldini stated that he cannot pay the amounts he owes unless his CVOR is reinstated and he can generate revenue. He emphasized that he knows how to operate safely. At the February, 2016 meeting with the Ministry, he proposed to pay $1,000 a month towards the fees and indicated he would be able to pay off everything owing over the span of one year. Extensions of time for payment of the POA fines owing were sought before the meeting with the Ministry in anticipation of receiving his CVOR. He indicated he was “trying to do my best", paying from his pensions. He did make payments towards the fines before the meeting, indicating he was “trying to get the little ones out of the way”.
Asked on cross-examination how he was able to incorporate new companies but unable to pay his debts, Mr. Baldini indicated that because he was unwell, even though his companies operated, those operations were not optimal. With respect to his February, 2012 commitments to a payment schedule, he was operating two trucks and thought he was fit enough to operate and make the payments. Asked why he could not make the first payment due on March 15, 2012, only a month after the meeting, he indicated he was sick. He acknowledged that there was company income at that time but stated that the revenue was not handled properly. He also stated that he was so busy with medical issues that he “gave up”. He also acknowledged that he should have surrendered his CVOR certificate and repeated that he was not “at his fullest” to ensure the company was operating properly.
Mr. Baldini repeated a number of times that he could now rectify his past mistakes. Asked if the doctor’s letter he submitted indicated his health had now improved, Mr. Baldini stated that he believed that the letter indicates that, with medication and regular checkups, his health has stabilized. He repeated that he now felt well enough to operate and to meet his obligations; that he has the capability, knowledge and contacts to make his business work.
THE LAW
The statutory authority for the actions of the Registrar and the jurisdiction of the Tribunal are set out in 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,
(d) misconduct for which the holder is responsible, directly or indirectly, related to the operation or driving of a motor vehicle;
(e) conviction of the holder for an offence referred to in subsection 210 (1) or (2);
(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).
Powers of Tribunal
(2) The Tribunal may confirm, modify or set aside the decision of the Minister or Registrar.
ISSUE
The issue before the Tribunal is whether or not there are sufficient grounds for the Suspension and Seizure Order issued by the Registrar on March 6, 2013.
SUBMISSIONS
Registrar’s Submissions
Mr. Moore submitted that the issuance of NSF cheques by the Appellant with respect to fees owed to the Ministry of Transportation constitutes misconduct as set out in section 47.1(d) of the Act. The Appellant failed to meet a basic obligation. This “regular business practice” of Mr. Baldini resulted in the Province of Ontario not only not receiving payment for its fees but also losing the funds that were paid to other jurisdictions in respect of their fees. The Registrar submits that the failure to pay did not stem from Mr. Baldini’s medical issues; and, even if this were the cause, there is no evidence to indicate the health issues have resolved. In particular, Mr. Moore highlighted that Mr. Baldini’s failure to meet the commitments he set out in the February, 2012 payment plan he submitted after the first Suspension and Seizure Order was issued provides grounds for doubt that he would meet future commitments. Further, the failure to pay provides reason to believe that the Appellant will not operate in accordance with the Act and the regulations as set out in section 47.1(f) of the Act.
Appellant’s Submissions
Ms. Wallace submitted that there is no evidence that Mr. Baldini knowingly issued NSF cheques to the Ministry. There is evidence that he had serious health issues. Moreover, she noted that the Ministry made no effort to pursue this issue until it investigated the Appellant for its potential affiliation with a cancelled company. There is no evidence that the Appellant operated unsafely. Because his pensions are Mr. Baldini’s only sources of income and because he is unable to drive now, he cannot pay the outstanding fees and fines. He has made some effort to address the fines by requesting extensions of time and, even on his limited income, made some payments. Mr. Baldini’s evidence is that he is capable of working now. His vehicle is roadworthy and insurance is in place. Moreover, Mr. Baldini has given an undertaking to pay the outstanding fees and fines not only for the Appellant but also for the three affiliated companies.
ANALYSIS
There is no dispute between the parties that the amount currently owed by the Appellant and the three affiliated companies with respect to fees totals $14,046.18 CDN and $721.94 USD and that the outstanding fines under the Provincial Offences Act total $2,372.95. The outstanding fee of $3,815.85 owed by Leonard Baldini dates from June, 1998. Echo Trucking Limited’s outstanding fee of $1785.10 dates from June, 2007. Four of the five fees owed by 6814081 Canada Inc. also date from 2007; with the outstanding CVOR renewal fee dating from May, 2009. The Appellant’s outstanding fees date from August, 2011. The Tribunal does not accept that cash flow was responsible for Mr. Baldini’s failure to pay these fees. While he might not have issued NSF cheques knowingly, the fact that he failed to replace them negates this explanation.
It is the Registrar’s submission that rather than meeting his financial obligations, Mr. Baldini abandoned his previous companies and obtained a new CVOR certificate. Mr. Baldini’s explanation is that he became ill in 2000 and had a series of subsequent health issues that prevented him from properly managing the affairs of his companies.
The medical letter submitted from his family physician confirms that his health issues began in 2000.
The Appellant explained that he formed Echo Trucking Limited at the request of one of the companies for whom he was working under his own CVOR certificate. He also explained that Echo Trucking Limited later experienced financial difficulties and ultimately, bankruptcy. The Tribunal accepts that these explanations provide some basis for why Echo Trucking Limited’s CVOR certificate was voluntarily surrendered and why Mr. Baldini subsequently operated 6814081 Canada Inc. which was issued a CVOR certificate on August 30, 2007. However, four NSF cheques were issued with respect to 6814081 Canada Inc.’s fees in the period from May to December, 2007. The Appellant’s CVOR certificate was issued on June 4, 2008. The fact that 6814081 Canada Inc.’s record shows a number of convictions in March and April of 2008 and that the first inspection listed on the Appellant’s CVOR abstract is in August, 2008 lends credence to the Registrar’s position, as does the fact that there is a significant outstanding fee from 1998 associated with the CVOR certificate issued in Mr. Baldini’s name.
The Tribunal notes, however, that the Appellant sought to renew 6814081 Canada’s CVOR certificate in May, 2009. This suggests that he had some intention to continue to operate the company, notwithstanding the fact that he issued an NSF cheque for the renewal. Further, the Tribunal notes that the outstanding fees were accumulated in 2007, the year the letter from Mr. Baldini’s physician indicates he was hospitalized for two months with pneumonia. The Tribunal accepts that these health issues may well have precluded him from operating his businesses in an optimal manner. However, neither the health issues nor the cash flow explanation adequately explain the fee outstanding from 1998.
That Mr. Baldini made no apparent effort to pay his outstanding fines, particularly the one dating from 1998, may be at least partially be due to the fact that, until 2012, the Ministry of Transportation appears not to have pursued payment or, at least, not to have made the connection between the various CVOR certificates held by Mr. Baldini and the companies he operated. Mr. Baldini was able to obtain CVOR certificates notwithstanding the fact that fees were outstanding.
On February 2, 2012, the Ministry did issue a Suspension and Seizure Order which it set aside on February 29, 2012 after receiving a written payment plan proposal from the Appellant on February 16, 2012 and a letter from his representative, James Lee, on February 27, 2012. Mr. Baldini failed to make the first payment due on March 15, 2012 and in fact made no payments. His evidence is that he was too ill to do so. The Tribunal notes that the letter from Mr. Baldini’s physician is not specific as to the state of Mr. Baldini’s health at that time.
The Commercial Vehicle Operators’ Safety Manual describes the CVOR system as follows:
The Commercial Vehicle Operator’s Registration system and the Carrier Safety Rating program were developed by the Ministry of Transportation as part of Ontario’s ongoing commitment to road safety. These programs promote the safe operation of trucks and buses on Ontario’s roadways.
Non-payment of fees and fines is the sole reason cited for the Registrar’s current Suspension and Seizure Order. The evidence indicates that the Appellant’s last overall safety violation rate was under the 35% level at which the Ministry issues a warning letter. Although Mr. Donohue indicated that the vehicle out of service rate was very high, he testified that this was not a ground for the Order. While the Tribunal agrees that payment of fees is a basic obligation of a CVOR certificate holder, it is the Tribunal’s view that sections 47(1)(d) and (f) of the Act are written with respect to operations and safety and that it is a stretch to categorize outstanding fees and fines as misconduct in operating a vehicle, or as an indicator that a commercial vehicle would be unsafely operated.
The Tribunal notes that Mr. Baldini did violate the Act by allowing his neighbour to drive his truck without plates or a valid CVOR certificate from the Kenworth facility, where it was repaired, to his home in April, 2016. However, it also notes that no mechanical problems were found with the vehicle and that it was being operated by a properly licensed driver when it was pulled over for inspection. Because there were no safety related findings at the inspection, the Tribunal is prepared to accept Mr. Baldini’s explanation that he did not believe a CVOR certificate was required because the trip was not done for business purposes, notwithstanding the fact that Mr. Baldini acknowledges that he was aware that valid plates were required, was frustrated with the length of time he had been dealing with the Ministry of Transportation, and therefore took a significant risk.
The question before the Tribunal is whether or not Mr. Baldini’s past pattern of non-payment of fees is sufficient reason to confirm the Suspension and Seizure Order. Notwithstanding the fact that Mr. Baldini has made commitments in the past to pay his outstanding fees and failed to do so, he testified that he is prepared to make and honour further commitments as a condition of operating. There is evidence that he has made some effort to address some of the outstanding fines by seeking extensions of time for their payment and that some payments were made in February and March, 2016. However, it appears that Mr. Baldini had some expectation that this matter might be easily and/or quickly resolved when he made these commitments and may, given his limited sources of income, have over-committed. In his testimony, he expressed some considerable frustration that the Registrar could not understand that he was prepared to pay his obligations but could not do so unless he was able to generate income. He also expressed some frustration with the length of time he has been trying to address the Suspension and Seizure Order.
While the Tribunal acknowledges that failure to pay fees and fines is not insignificant, the fact that Suspension and Safety Order is not safety related persuades the Tribunal that Mr. Baldini should be given one further opportunity to meet his obligations with respect to his outstanding fees and fines. Mr. Moore suggested that there was nothing in the June 13, 2016 medical letter to support that Mr. Baldini’s current state of health will permit him to direct the attention required to manage the Appellant’s affairs. The Tribunal notes that while the letter indicates that Mr. Baldini has not been able to work in a “consistently linear fashion” since the year 2000, there is nothing to indicate he cannot work at this time. The evidence before the Tribunal is that he has in fact been able to direct considerable attention to preparing to operate again. He retained assistance to request extensions of time to pay his outstanding fines; he has ensured his vehicle is roadworthy; he has obtained insurance; a driver is available; and, the letter from S & S Forwarding Ltd. indicates that work is immediately available for the Appellant.
The Tribunal is not prepared to order the Registrar to set aside the Suspension and Seizure Order without placing conditions on the Appellant. In this regard, Mr. Baldini indicated that he would pay the outstanding fees and fines over the span of one year. To ensure that the outstanding amounts are paid, the Tribunal will require the Appellant to make minimum monthly payments and has calculated a minimum payment due with respect to Ministry fees by dividing the total amount outstanding by twelve. Given Mr. Baldini testified that not only was work readily available but also that the company he proposed to work for paid quickly, the Tribunal will require that the first such payment be made within 45 days of the issuance of a CVOR certificate. The Tribunal has not calculated a minimum payment amount with respect to the outstanding fines. Mr. Baldini has established payment plans as a part of the time extensions he has been granted. Given that he has defaulted on these plans, he will need to address the payments required with the various court administrations.
The Tribunal notes that setting aside the Suspension and Seizure Order does not mean that the Appellant can begin to operate immediately. Because the Appellant’s CVOR certificate has expired, the Appellant must re-apply to the Ministry of Transportation and must meet all the application requirements, including the successful completion of a written test. And, because the Appellant intends to operate between Ontario and Quebec, it may require require IRP registration, as it previously held. Mr. Moore advised the Tribunal that the Minister has the right to refuse to issue the required plates if IRP fees are outstanding. The Tribunal notes that fees with respect to IRP plates are among those owed by the Appellant. Given the Tribunal is ordering a payment plan for these fees as a condition of its Order, it is the Tribunal’s expectation that the Registrar would not circumvent the Order’s intent in this manner.
ORDER
Pursuant to the provisions of section 50(2) of the Act, the Tribunal orders the Registrar to set aside the Suspension and Seizure Order dated March 6, 2013 subject to the following conditions:
Any fees associated with a new CVOR and/or IRP application by Dun Rite Logistics Inc. shall be paid by cash, certified cheque or money order.
All outstanding amounts owed with respect to Ministry of Transportation fees by Dun Rite Logistics Inc., Echo Trucking Ltd., 6824081 Canada Inc. and Leonard Baldini shall be paid in full within one year of the date on which a new CVOR certificate is issued to Dun Rite Logistics Inc. Similarly, all outstanding fines incurred by these carriers and owed under the Provincial Offences Act shall be paid in full within one year of the date on which a new CVOR certificate is issued to Dun Rite Logistics Inc.
A minimum payment of $1250 per month shall be made in respect of the outstanding fees owed to the Ministry of Transportation. The first payment shall be made no later than 45 days following the date on which a CVOR certificate is issued to Dun Rite Logistics, with further payments to be made at 30 day intervals.
If the Appellant is in breach of any of the above terms and conditions, the Registrar may propose to suspend or revoke its CVOR certificate.
LICENCE APPEAL TRIBUNAL
Mary Ann Spencer, Member
Released: July 26, 2016