Auto Zone & Rentals Inc. v. Registrar of Motor Vehicles, 2016 CanLII 50127

Licence Tribunal

Appeal d'appel en

Tribunal matière de permis

DATE:

2016-06-01

FILE:

10149/MVIA

CASE NAME:

10149 v. Registrar of Motor Vehicles

Appeal under Section 50.2 of the Highway Traffic Act, R.S.O. 1990, c. H.8 from an Impoundment Pursuant to Section 55.1(3) of the Act.

Appellant

Appellant

-and-

Registrar of Motor Vehicles

Respondent

REASONS FOR DECISION AND ORDER

ADJUDICATOR:

Nives Montano, Member

APPEARANCES:

For the Appellants:

Abdi Aden, Agent

For the Respondent:

Matthew Peachey, Counsel Sonia De Santis, Agent

Heard by teleconference:

April 21, 2016

REASONS FOR DECISION

OVERVIEW

This hearing is an appeal by Auto Zone & Rentals Inc. (the “Appellant”) of the impoundment of its vehicle. The Appellant is the owner of the vehicle; however, at the time of the impoundment, the Appellant had rented out the vehicle to an individual (the “Renter” or “JH”). When the Appellant rented the vehicle to JH, the Appellant’s agent made it clear to her that only licensed drivers included in the rental agreement were permitted to drive the vehicle. When the vehicle was impounded, it was driven by a third individual (the “Driver”), who was not included on the rental agreement and whose licence was suspended.

A hearing was held on April 21, 2016, by teleconference, to consider the Appellant’s appeal. At issue was whether, at the time of the impoundment, (1) the vehicle was “stolen”; (2) the owner exercised due diligence in attempting to determine that the licence of the driver at the time of the impoundment was not suspended: or (3) the impoundment resulted in exceptional hardship.

On April 28, 2016, the Tribunal ordered the Registrar of Motor vehicles (the “Registrar”) to release the vehicle with reasons to follow. For the reasons that follow, the Tribunal finds that the vehicle was stolen within the meaning of s. 50.2(3)(a) of the Highway Traffic Act, R.S.O. 1990, c. H.8 (the “HTA” or the “Act”).

The Tribunal carefully reviewed the written submissions that the Registrar’s Counsel provided after the hearing, with the Tribunal’s permission. Since the vehicle was released, the Tribunal did not require responding written submissions from the Appellant, who was represented by its owner and manager.

EVIDENCE

Evidence for the Appellant

Abdi Aden owns the Appellant company, which is a small business that was established 1 ½ years ago and owns fewer than 15 vehicles. He is the only employee.

On March 17, 2016, the Renter, JH, came to Mr. Aden’s business with her boyfriend to rent a vehicle. She rented a 2013 Mazda (the “vehicle”) for one week, which was covered by her insurance company while her vehicle was being repaired. Before renting the vehicle to JH, Mr. Aden took the additional step of confirming with JH’s insurer that it was authorizing the rental by her.

JH’s boyfriend wanted to be added as a second driver to the rental vehicle, but did not have his driver’s licence with him or his credit card. The boyfriend advised Mr. Aden that he would call him from home with the required information. Mr. Aden told JH’s boyfriend that a valid driver’s licence must be produced and viewed by him if he wanted to be added as a second driver, and there would be extra fees, because he would not be covered by JH’s insurance company.

JH initialled and signed the rental agreement with no added drivers. Mr. Aden explained the terms of the rental agreement to JH including the fact that no driver was permitted to drive the vehicle if he or she was not included on the rental agreement. JH initialled two areas of the rental agreement where she acknowledged that she is liable and responsible for any damage and costs to the vehicle caused by any driver not named in the agreement, as well as agreeing to pay for any parking and traffic infractions.

Three days later, Mr. Aden received a voicemail message from police at approximately 5 a.m. He returned the call shortly after 9 a.m., wherein he was informed that one of his rental vehicles had been impounded, specifically, the vehicle rented by JH. The police confirmed, after Mr. Aden provided police with the Renter’s driver’s licence and date of birth, that the driver at the time the vehicle was impounded was not JH. The police would not identify the suspended driver to Mr. Aden.

After speaking with police, Mr. Aden attempted to call JH. Mr. Aden spoke to and left a message with JH’s boyfriend. When JH returned the call, Mr. Aden asked her to confirm the location of the rental vehicle. JH advised Mr. Aden that the rental vehicle was in the parking spot and the keys were in her purse. Mr. Aden then told JH about the vehicle’s impoundment and asked if whomever she permitted to have care and control of the rental vehicle had advised her of the impoundment. At this point during the telephone conversation, JH’s boyfriend took over the call, became agitated, used profanity towards Mr. Aden and hung up the phone.

Mr. Aden testified that he believed the driver of the vehicle at the time of the impoundment was JH’s boyfriend, and that having rented the vehicle to JH, she was solely responsible for the vehicle. Mr. Aden testified that he did not understand the vehicle to be stolen, but he inferred from statements made to him by the police officer who impounded the vehicle that in these circumstances , when the vehicle was driven by someone who was not the renter, that it was stolen.

Evidence for the Registrar

A summary of the Registrar of Motor Vehicles (the “Registrar”) evidence follows. The documents tendered by the Registrar and admitted into the record on consent of the Appellant were as follows:

1. Copy of the Ministry of Transportation records indicating that, among other things, the impounded motor vehicle is registered in the name of the Appellant as owner ;

2. A copy of the notice prepared by the officer who detained the impounded motor vehicle indicating, among other things, that the vehicle at the time it was detained was being driven by the person convicted of the offence under the Criminal Code of Canada outlined in point 4 below. The notice identifies the driver of the vehicle as female;

3. Copy of the Notice forwarded to the Registrar of Motor Vehicles regarding the impoundment;

4. Copy of the Ministry of Transportation records indicating that the driver at the time of impoundment had been convicted of Driving While Disqualified under the Criminal Code of Canada, and the driver’s licence was under suspension for life as of August 1, 2012.

LAW

Section 55.1 of the Act provides that a motor vehicle may be detained and impounded, and section 50.2 provides the motor vehicle owner with a right of appeal to the Tribunal. The Tribunal on the appeal may, pursuant to subsection 50.2(5) of the Act, confirm the impoundment or order the Registrar to release the motor vehicle. Pursuant to subsection 50.2(8), the decision of the Tribunal is final and binding.

Subsection 55.1(3) of the Act states:

(3) A motor vehicle detained under subsection (1) shall be impounded as follows:

1. For 45 days, if there has not been any previous impoundment under this section, within a prescribed period, with respect to any motor vehicle then owned by the owner of the vehicle currently being impounded.

2. For 90 days, if there has been one previous impoundment under this section, within a prescribed period, with respect to any motor vehicle then owned by the owner of the vehicle currently being impounded.

3. For 180 days, if there have been two or more previous impoundments under this section, within a prescribed period, with respect to any motor vehicle then owned by the owner of the vehicle currently being impounded.

Regulation 631/98 provides that the prescribed period, referred to above, is two years.

The owner may appeal the impoundment on only four specific grounds set out in subsection 50.2(3):

(3) The only grounds on which an owner may appeal under subsection (1) and the only grounds on which the Tribunal may order the Registrar to release the motor vehicle are,

(a) that the motor vehicle that is impounded was stolen at the time it was detained in order to be impounded;

(b) that the driver’s licence of the driver of the motor vehicle at the time it was detained in order to be impounded was not then under suspension;

(c) that the owner of the motor vehicle exercised due diligence in attempting to determine that the driver’s licence of the driver of the motor vehicle at the time it was detained in order to be impounded was not then under suspension; or

(d) that the impoundment will result in exceptional hardship.

If any of these grounds are accepted by the Tribunal, the Tribunal would order the Registrar to release the motor vehicle. The Appellant here appeals on the basis of sections 50.2(3)(a), (c) and (d).

ISSUES

The issues on the appeal are whether:

1. the motor vehicle was stolen at the time the vehicle was detained in order to be impounded;

2. the owner of the motor vehicle exercised due diligence in attempting to determine that the driver’s licence of the driver at the time it was detained was not then under suspension; or

3. the impoundment resulted in exceptional hardship.

ANALYSIS

Was the vehicle stolen at the time it was detained?

The Tribunal accepts the evidence provided by Mr. Aden that he explained the conditions attached to the rental agreement to JH which she initialled and signed. Pursuant to these conditions, JH agreed that she would be the sole driver given that no other driver was named in the rental agreement. The owner in this case was very clear that only JH was permitted to use the vehicle. The question to be determined is whether the use of the vehicle contrary to the owner’s specific and explicit direction means that the vehicle was “stolen” as it appears in s. 50.2(3) of the Act.

The meaning of “stolen” is not defined in The Highway Traffic Act.

The Shorter Oxford English Dictionary, 3rd ed., provides the definition of “stolen” as follows:

Stolen: 1. Obtained by theft. 2. Accomplished or enjoyed by stealth; secret. 3. Of time: obtained by contrivance

Theft: 1. The action of a thief; the felonious taking away of the personal goods of another; larceny 2. That which is or has been stolen; the proceeds of thieving.

The Criminal Code of Canada (the "Code") R.S.C. 1985, Chap. C-46 provides some guidance. Section 1 of the Code states:

“steal” means to commit theft…

Section 322(1) of the Code states:

322. (1) Every one commits theft who fraudulently and without colour of right takes, or fraudulently and without colour of right converts to his use or the use of another person, anything, whether animate or inanimate, with intent,

(a) to deprive, temporarily or absolutely, the owner of it, or a person who has a special property or interest in it, of the thing or of his property or interest in it;

(b) to pledge or deposit it as security;

(c) to part with it under a condition with respect to its return that the person who parts with it may be unable to perform; or

(d) to deal with it in such a manner that it cannot be restored in the condition in which it was at the time it was taken or converted.

(2) A person commits theft when, with intent to steal anything, he moves it or causes it to move or to be moved, or begins to cause it to become movable.

(3) A taking or conversion of anything may be fraudulent notwithstanding that it is effected without secrecy or attempt at concealment.

(4) For the purposes of this Act, the question whether anything that is converted is taken for the purpose of conversion, or whether it is, at the time it is converted, in the lawful possession of the person who converts it is not material.

(5) For the purposes of this section, a person who has a wild living creature in captivity shall be deemed to have a special property or interest in it while it is in captivity and after it has escaped from captivity.

The Divisional Court held in Marshall v. Ontario (Registrar of Motor Vehicles), [2002] O.J. No. 745, that the Tribunal should not limit the meaning of “stolen” only to an intention to take the vehicle permanently. The Court held that the term “stolen” could also apply to an intention to take the vehicle temporarily. The Court reviewed the circumstances of that case and stated:

“In our opinion a vehicle is ‘stolen’ in this context when it is taken without the owner’s consent and when the perpetrator intends to deprive the owner of it, whether permanently or temporarily.”

The Registrar, in its submissions, questioned the Tribunal’s interpretation of the word “stolen” in recent decisions regarding this ground of appeal and reminded the Tribunal that it is not bound by its prior decisions. The Registrar suggested that the presiding member should decline to follow the case law of two recent decisions, LAT File Nos. 9424 and 9949, wherein the vehicles were released. The Tribunal agrees that it is not bound by previous Tribunal decisions, but in the interest of consistency and coherent jurisprudence, a tribunal should provide reasons if it departs from past decisions that may represent a consistent approach.

The main thrust of the Registrar’s argument is that the ground of “stolen” in these impoundment appeals must be interpreted to mean the same as “theft” in s. 322(1) of the Criminal Code. The Registrar states that this means that the Appellant – that is, the owner of the vehicle – must prove that the suspended driver had the required criminal intent to steal the vehicle. The case of Marshall is often cited by the Tribunal, and it refers to a vehicle being stolen “when it is taken without the owner’s consent and when the perpetrator intends to deprive the owner of it, whether permanently or temporarily”. This was in the context of overruling the Tribunal’s finding that the vehicle was not stolen because the suspended driver had not intended to take the vehicle permanently.

The Registrar referred to a number of insurance cases where the driver had used a vehicle contrary to the owner’s instructions, and the Court held that, in deciding issues of liability, the owner was still in possession or that the vehicle was not stolen. However, as acknowledged by the Registrar, these cases were in a different statutory context. In impoundment cases, the focus is not on whether a victim of an accident involving the vehicle should recover damages from the owner’s insurance company. Nor is the focus on whether someone is guilty of a criminal offence. The aim of the impoundment provisions in the Act is to make the roads safer, by keeping suspended drivers off Ontario’s roads. The focus is on the vehicle owner; specifically, a vehicle owner is responsible for ensuring that the persons who drive their vehicles have a valid driver’s licence. Public safety on the roads can also be promoted by criminal charges and licence suspensions against drivers. But an impoundment of a vehicle is essentially a consequence to the vehicle’s owner; in these cases, the right of appeal is with the owner only. An impoundment is a way to impose consequences on vehicle owners so that they do not make their vehicles readily accessible to suspended drivers.

In the context of s. 50.2(3) and in light of the legislative intent, it is difficult to see how the ground of “stolen” requires the Appellant to prove that the suspended driver had an actual criminal intent. The Registrar’s submissions suggest that the Appellant owner would need to provide evidence or proof that the suspended driver not only knew that she was driving the vehicle without the owner’s consent, but also that she had the criminal intention to steal the vehicle. Under this scheme, the rental vehicle company would need to prove what was in the mind of the driver which is not reasonable.

Mr. Aden testified that the police would not disclose the identity of the driver to him. Mr. Aden therefore could not find the driver and obtain her testimony. Mr. Aden does not, and cannot, know what was in the mind of the driver who used his vehicle without his consent. This is not the typical fact situation. Usually, in cases before the Tribunal, the owner knows who drove the vehicle. On these facts, to require the owner to prove the mindset of the unknown driver in order for the defences of s. 50.2(3) to apply would be unfair and lead to an absurd result. This cannot be what the legislature intended.

The Registrar also addressed the issue of deterrence, and submitted that finding in favour of the Appellant in the present circumstances would mean that the public pays for the impoundment fees, and the Renter and the suspended driver face no consequences. This is, however, legislation focused on the responsibilities on a vehicle owner. The public pays the impoundment fees when any of the defences under s. 50.2(3) apply, because the owner cannot and should not be held accountable in such situations.

In this case, it is very clear that the vehicle was taken and used without the Appellant’s consent. Someone other than JH was driving the vehicle. It cannot be found, on these facts, that the Appellant gave implied consent to this. The Tribunal accepts Mr. Aden’s evidence that he was very clear at the time of renting the vehicle to JH that only she was permitted to drive it. His unwillingness to add her boyfriend to the rental agreement without proof of a valid licence underscores the strength of his position in this regard. The clear restrictions in the rental agreement further corroborate his evidence: no one but JH was permitted by the Appellant to drive its vehicle.

Therefore, the Tribunal finds that this vehicle was “stolen” within the meaning of the impoundment provisions of the Highway Traffic Act.

As the Appellant has established that the vehicle was stolen, the Tribunal does not find it necessary to consider remaining grounds of appeal of due diligence and exceptional hardship.

DECISION

After considering the evidence, pursuant to the authority vested in the Tribunal under section 50.2(5) of the Act, the Tribunal ordered the Registrar to release the motor vehicle.

LICENCE APPEAL TRIBUNAL

Nives Montano, Member

Released: June 1, 2016