Licence Appeal Tribunal

Safety, Licensing Appeals and Standards Tribunals Ontario

Tribunal d’appel en matière de permis

Tribunaux de la sécurité, des appels en matière de permis et des normes Ontario

Date: 2017-12-06

Appeal under Section 50(1) of the Highway Traffic Act, R.S.O. 1990, c. H.8, from a Cancellation and Seizure Order of the Registrar of Motor Vehicles pursuant to Section 47

Between:

Lewicki Transportation Co. Inc.

Appellant

-and-

Registrar of Motor Vehicles

Respondent

DECISION AND ORDER

Adjudicator: Mary Ann Spencer, Member

Appearances:

For the Appellant: Carol McAfee Wallace, Counsel

For the Respondent: Patrick Moore, Counsel

Place and dates of hearing:

Toronto, Ontario

October 26 & 27, 2017

REASONS FOR DECISION AND ORDER

A. Overview

1This is a hearing before the Licence Appeal Tribunal of an appeal by Lewicki Transportation Co. Inc. of a Cancellation and Seizure Order issued by the Registrar of Motor Vehicles on June 28, 2017.

2Lewicki is a small bus company which has been operating since the 1960’s. It has held a CVOR (Commercial Vehicle Operator’s Registration) certificate since 1989. Because of its poor safety record, the Registrar has suspended Lewicki’s CVOR certificate twice; for 7 days in 2013 and for 30 days in 2015. The Registrar is now proposing to cancel the CVOR certificate because Lewicki continues to have an unsatisfactory safety record and has shown chronic non-compliance with the laws related to highway safety.

3Lewicki’s position is that its safety record has improved since the 2015 suspension. Its safety violation rate is at a level below that at which the Ministry considers sanctions and cancellation of its CVOR certificate would not be fair or reasonable.

4For the reasons set out below, I find that the Registrar’s order should be set aside subject to a fleet limitation condition.

B. ISSUE

5The issue to be considered in this appeal is:

(a) whether the safety record of the appellant provides reason to believe that it will not operate a commercial motor vehicle safely or in accordance with the Act, the regulations and other laws relating to highway safety.

6If I find that there is reason to believe that the appellant cannot operate a commercial vehicle safely or in accordance with the law, then I must determine the appropriate action to direct the Registrar to take.

C. LAW

7Section 47 (1)(f) of the Highway Traffic Act provides for cancellation of a CVOR certificate where the Registrar has reason to believe that the certificate holder will not operate a commercial motor vehicle safely or in accordance with the Act, the regulations and other laws relating to highway safety.

8Section 50 (2) of the Act provides that the Tribunal may confirm, modify or set aside a decision of the Minister or the Registrar.

D. EVIDENCE

The CVOR System

9Sherry Werner has been a Carrier Safety Rating Administrator with the Ministry of Transportation since 2001. Ms. Werner testified that the purpose of the CVOR system is to ensure road safety. An operator’s performance is recorded and assessed over a two-year rolling window and is expressed as an overall safety violation percentage. To determine this percentage, information such as kilometers travelled is used to establish a threshold level against which performance is assessed. Points are assigned for collisions, convictions and inspection findings and are weighted to determine the overall safety violation rate. Collisions and convictions each form 40% of the record with inspection findings comprising 20%. Ms Werner advised that the system was designed in consultation with the transportation industry and is predictive of collisions.

10The Ministry intervenes or considers sanctions, which can include conditions such as fleet limitation, suspension, or cancellation, when the safety violation rate reaches pre-determined levels. When the violation rate reaches 35%, the Ministry issues a warning letter. A request for a facility audit occurs at 50%. At 85%, the Ministry could request an interview. When the rate reaches 100%, sanctions are considered. Ms Werner advised that these levels are no longer set out in the “Commercial Vehicle Operators’ Safety Manual”. The Ministry can also initiate sanctions when there is habitual non-compliance or if there has been a catastrophic event. Ms Werner testified that Ministry statistics indicate that 80% of operators improve their performance after a Ministry intervention.

11Referring to Ministry statistics prepared as of January 1, 2017, Ms. Werner testified that over 85% of approximately 50,000 CVOR certificate holders have a safety violation rate of less than 15%. Fewer than 0.5% of certificate holders have a rate exceeding 70%. She also testified that the Ministry looks at bus companies carefully because they are transporting passengers rather than goods. However, the CVOR system applies equally to all types of certificate holders and she acknowledged that the Safety Manual makes no reference to different levels of review for bus companies.

12CVOR operators are assigned one of five safety ratings: excellent, satisfactory, conditional, unsatisfactory and satisfactory – unaudited. Operators with performance levels of up to 15% are assigned ratings of “excellent”. Operators with levels greater than 15% but less than 70% are assigned a rating of “satisfactory” if their audit score exceeds 55%; the rating is “conditional” if the audit score is lower. A rating of “conditional” is assigned to all operators with a performance level between 70% and 100%. The “unsatisfactory” rating is assigned when the performance level exceeds 100%.

Lewicki Transportation Inc.

13Shelley Lewicki is the owner and president of the appellant, which was founded by her mother in the 1960’s. Ms Lewicki became president in 2004. Lewicki has a number of long-held contracts, including one with a day care facility. During the school year it drives children to and from the facility, and during the summer it also operates excursions. The company also drives school sports teams and takes seniors on regularly scheduled shopping trips. In addition, the company is available for one-day excursions. In this regard, Ms Lewicki advised that the Ministry of Transportation had hired Lewicki after the Notice of Cancellation and Seizure had been issued.

14Ms Lewicki testified that the company currently operates a motor coach and three school buses. This fleet of four vehicles is a reduction from the seven operated in 2016 and twelve operated in 2015. She stated that the company needs new vehicles but will not acquire these until sometime in 2018.

15Ms Lewicki provided inspection certificates for the four vehicles she is operating. The inspections were conducted by Little City Auto Service Inc., a licensed motor vehicle inspection station (MVIS), at her facility on May 9, 2017. She was not aware that it was a violation for these inspections to be conducted outside of the licensed MVIS garage. The inspections were done at her facility because “we were short on time”.

16Lewicki currently employs four drivers. Ms Lewicki also drives for the company on occasion. However, her primary role is the administration of the company. She takes bookings and does all the bookkeeping. She meets with the service technician and occasionally orders required parts.

Lewicki’s Safety Record

17Ms Werner testified that Lewicki’s safety rating has been either “conditional” or “unsatisfactory” since 2008 and explained the Ministry documents which outline the appellant’s safety record.

18Warning letters were issued to Lewicki in 1993, 1995, 2012 and 2014. It failed facility audits conducted on September 30, 2008 and July 8, 2015. On October 16, 2013, it was suspended for 7 days following an unsuccessful appeal to this Tribunal of an Order of Suspension. On September 10, 2015, the Ministry issued a Notice of Cancellation and Seizure following a safety record review which indicated the company had an overall safety violation rate of 104.36%. On November 5, 2015, the Ministry held a Show Cause meeting with Shelley Lewicki. Based on the safety action plan Ms Lewicki provided, the Ministry issued a 30-day suspension effective December 7, 2015 which Ms Werner testified is the maximum the Ministry levies.

19On June 2, 2017, when Lewicki was late to renew its CVOR certificate, Ms Werner conducted a review of its safety record. For the two-year period ending May 7, 2017, Lewicki’s overall safety violation rate was 124.78%. Convictions were the chief contributor to the safety violation percentage. There were also five collisions during the period, four of which resulted in points being assigned which Ms Werner explained is only done when there is driver impropriety.

20Ms Werner testified that Lewicki’s overall safety violation rate for the period following the 2015 suspension was 64.12%. Four collisions on its record caused concern. The Ministry was also concerned with the number of vehicle inspection findings because inspections are pre-arranged with the operator.

Vehicle Maintenance and Inspections

21Nicholas Arruda, an Enforcement Officer with the Ministry of Transportation, testified with respect to inspections of Lewicki’s vehicles.

22Mr. Arruda explained that the Act requires each vehicle to be inspected annually at a Motor Vehicle Inspection Station. Buses must also be inspected semi-annually by a mechanic; and drivers must conduct a daily inspection. Reports of the inspections must be kept.

23Mr. Arruda testified that Ministry safety inspections are conducted in accordance with Regulation 611 and with Regulation 612 which applies to school buses, and requires compliance with CSA standard D-250. The vast majority of bus inspections are arranged with the operator one to two weeks in advance.

24Mr. Arruda reviewed the Ministry’s reports of inspections of Lewicki’s vehicles for the period May 21, 2015 to May 10, 2017. Defects were found at 13 of the 18 inspections. These included a non-functioning pedestrian cross-arm on a school bus; brakes requiring adjustment; inoperative signal lights; and, unsecure seat mountings. Some defects caused the vehicles to be put out of service; for example, a cracked rail frame on one bus that was sent for inspection twice with the same defect. Other defects restricted the vehicles from carrying passengers; for example, a stop arm that did not fully extend. There were also a number of paperwork issues found including a failure to display the annual safety inspection sticker and a failure to have a daily inspection report.

25Ms Lewicki testified that she does expect her drivers to inspect vehicles and stated they had done so before the vehicles were taken for Ministry inspection. She also stated that she should have appealed some inspections and gave the example of a February 17, 2016 inspection at which Mr. Arruda found two out-of-service defects. She testified that she had just purchased the bus and had it inspected only days before the Ministry’s inspection. She conducted a pre-trip inspection but stated that this does not require her to crawl under the bus, the only way she would have found the rail frame defect. She submitted an MVIS inspection certificate dated February 12, 2016, an invoice for the repair by SN Diesel on February 18, 2016 and a post-repair MVIS inspection certificate dated February 24, 2016.

26With respect to Lewicki’s maintenance program, Ms Lewicki explained that at the Show Cause meeting held before the 2015 suspension, she advised the Ministry she had hired service technician E.S. whom she described as an expert. However, she dismissed him because she was having trouble getting work done and had discovered he was using her company’s facility to work on others’ vehicles. She hired A.H. to replace him. She stated that while A.H. is technically still employed, he is not readily available because he is taking courses. Therefore, in July 2017, she also hired C.V. who has worked at bus mechanic shops in the past.

27Ms Lewicki testified that A.H. is a mechanic although she did not verify his qualifications when she hired him. She also has not verified C.V.’s qualifications; she was not aware that there was an organization she could check with. Ms Lewicki is aware that C.V. is not authorized to work on air brakes but stated this is not a limitation. She attends daily at the company’s facility to review what C.V. has diagnosed. While she is not a mechanic herself, she is qualified to do certain schedules of inspections. She stated “I know what I know and what’s out of my area”. She uses different garages for specialty work.

Notice of Cancellation and Seizure

28On June 6, 2017, the Ministry issued a Notice of Cancellation and Seizure. Ms Werner explained that Lewicki’s post-suspension safety violation rate of 64.12% was high enough for the Ministry to be concerned; the expectation was that the violation rate would be below 35% after the suspension. Lewicki’s vehicles had been involved in four collisions. Two of the collisions involved driver J.M. who had also been involved in a collision which took place in the month before the suspension.

29Ms. Lewicki testified that the collisions were also a concern for her. Driver J.M. had been with her for five years. After his first collision, she had him take refresher training with driver trainer N.C. Based on N.C.’s recommendation, J.M. was trained a second time. Ms Lewicki also sent driver D.C., who was involved in one of the four collisions, for training. Asked why she retained J.M., Ms Lewicki stated that she “gave him another chance” because she believed he could be attentive and was capable of operating a bus; in hindsight, she indicated she should have dismissed him. She did dismiss him after she received complaints from customers.

30On June 27, 2017, Ms. Lewicki attended a Show Cause meeting at the Ministry which Ms Werner attended. Ms Lewicki advised that J.M. had been dismissed and provided the Ministry with a list of the company’s current drivers. Ms. Werner testified that one of those drivers was found to have been convicted of driving with a suspended licence when the Ministry pulled the drivers’ records. Ms Lewicki also advised that the company had replaced its maintenance technician and she had made a plan with a collection agency to pay $500 a month towards Lewicki’s outstanding fines. On June 28, 2017, the Ministry issued the Cancellation and Seizure Order under appeal.

Outstanding Fines

31Ms Werner testified that Lewicki has outstanding fines with respect to its convictions. When she conducted her review on June 2, 2017, the amount owing was $10,569. As of October 18, 2017, the overdue fines totaled $11,894 with a further $6,255 due by November 3, 2017.

32Ms Lewicki admitted that she cannot pay the fines due on November 3, 2017 and will owe approximately $18,000. She intended to pay $500 a month towards the fines as she told the Ministry at the Show Cause meeting. However, her budget forecasts were not accurate. Her priorities are wages, fuel and repairs and there has not been sufficient revenue over the past months to allow her to pay the fines. And, she has legal fees. She testified that she will be able to start payments in mid-November. She believes she can increase the payment to $1,000 in February 2018 when some of her lease payments end. This would mean all fines would be paid off within two years.

Lewicki’s Updated Safety Record

33Ms Werner presented an updated safety record for Lewicki for the two-year period ending September 18, 2017 which indicates its safety violation rate is 76.5%. However, she advised that the record of kilometres driven, which is used in the calculation of the safety violation rate to determine thresholds for collisions and convictions, was incorrect for an eight-month period and stated that the Ministry relies on the CVOR operators to submit the record of kilometres driven. The safety violation rate would be lower if the kilometres were adjusted.

34On the second day of this hearing, Ms Werner produced a safety violation rate for the two year period ending May 7, 2017 which was adjusted using a kilometre estimate based on past actuals. The result was a reduction in the overall safety violation rate from 124.78% to 84.5%. She noted that the rate for the period following the suspension would also be reduced from 64.12% but did not produce that calculation.

Lewicki’s Plan

35Asked what she has done to demonstrate a commitment to compliance, Ms Lewicki testified that she has shifted more of her focus onto vehicle maintenance, partially because C.V. is a still a new employee. And she has reduced her fleet to four vehicles. She stated that if she adds vehicles they will be new. She will likely order in the winter so will continue to operate only these four until the spring of 2018.

E. SUBMISSIONS

36Mr. Moore submitted that the appellant’s history of warning letters, suspensions, convictions, collisions and inspection findings proves that the Registrar has reason to believe that Lewicki will not operate safely. He noted that the record of collisions and inspection findings acquired after the 30-day suspension demonstrates that the company has not significantly improved its operations in spite of sanctions. There has been no change in the management of the company and Ms Lewicki did not present evidence of a plan to make improvements. Lewicki’s CVOR certificate should be cancelled to ensure public safety.

37Ms McAfee Wallace submitted that the CVOR guidelines apply equally to trucks and buses and it is not fair to impose a higher standard on a bus company. Without taking the kilometric correction into account, Lewicki’s overall safety violation rate has been reduced to 64.12% after the 30-day suspension, lower than the 100% that Ms Werner testified was the level at which the Ministry considers sanctions. She submitted that to propose cancellation when the safety violation rate is not greater than 100% is to hold Lewicki to a standard that is neither fair nor reasonable. She further submitted that the appellant has taken action. There have been no collisions in the past 10 months. Driver J.M. has been dismissed. Inspections represent only 10.42% of the 64.12% violation rate and Ms Lewicki is more involved in maintenance now.

F. ANALYSIS

Does Lewicki’s safety record provide reason to believe it will not operate safely or in accordance with the Act?

38The issue before me is whether or not Lewicki’s safety record provides reason to believe that it will not operate safely or in accordance with the Act and regulations and other laws related to highway safety.

39The evidence is that Lewicki has a history of non-compliance. The safety rating assigned by the Ministry of Transportation has been either “conditional” or “unsatisfactory” since 2008. The Ministry issued warning letters in 1993, 1995, 2012 and 2014. Lewicki failed facility audits in September 2008 and July 2015; and its CVOR certificate has been suspended twice; for 7 days in October 2013 and for 30 days in December 2015. For the two-year period ending May 7, 2017, Lewicki’s adjusted safety violation rate was 84.5%, placing it among the worst 0.5% of approximately 50,000 certificate holders.

40In addition to this lengthy record of non-compliance, the evidence is that Lewicki had overdue fines totalling $11,894 as of October 18, 2017 with a further $6,255 due by November 3, 2017.

41Based on the safety record of the appellant and its failure to pay fines, in accordance with s. 47 (1)(f) of the Act, I find that the Registrar has reason to believe that Lewicki will not operate safely or in accordance with the Act, the regulations and other laws relating to highway safety. Having made this finding, I must decide what action to order the Registrar to take.

(ii) What action should the Registrar take?

42Ms McAfee Wallace referred me Muscillo Transport Ltd. v. Registrar of Motor Vehicles 1998 CanLII 2672 (ON CA) with respect to the purpose of a sanction:

The purpose of a sanction under s. 47(2) of the Highway Traffic Act is to improve, assist and encourage the licence holder to adhere to appropriate safety standards in order to ensure the safety of highway users and others.

Lewicki’s CVOR certificate was suspended for 30 days from December 7, 2015 to January 8, 2016. Has its safety performance improved sufficiently since this sanction to permit it to continue to operate?

43At this hearing, safety violation rates for Lewicki were presented for different periods of time and with different start dates. Only one of those rates was adjusted for missing kilometres, making it somewhat challenging to assess and compare Lewicki’s performance over time.

44The safety review prepared by Ms Werner for the two-year period ending May 7, 2017 indicated Lewicki’s overall safety violation rate was 124.78%. When Ms Werner adjusted this rate for kilometres travelled, it dropped to 84.5%. For the period ending September 18, 2017, the safety violation rate was 76.5%. Because this rate has not been adjusted, it is comparable to and shows a significant improvement from the unadjusted 124.78% for the period ending four months earlier. Ms Werner testified the rate would be lower if it were adjusted for missing kilometres. Whether it would change by as much as the rate did for the May period is unknown. However, the decrease in the safety violation rates do indicate that Lewicki’s performance has improved.

45A Show Cause meeting was held on November 5, 2015 before the Ministry issued the Suspension Order on November 16, 2015. The minutes of that meeting indicate the safety violation rate at that time was 121%. For the post-suspension period ending May 7, 2017, Lewicki’s safety violation rate was reduced to 64.12%. I note that Ms Werner testified this rate would also be reduced if it was adjusted for missing kilometres travelled.

46The Ministry did not present a more up to date safety violation rate for the post- suspension period. I note that the only event on Lewicki’s record after May 7, 2017 is an inspection on May 10, 2017. Defects were found and charges were laid, resulting in the addition of both inspection and conviction points to the record. Whether the negative impact of adding the conviction points would outweigh the positive impact of adjusting the 64.12% rate for kilometres travelled is unknown.

47The evidence is that Lewicki’s inspection record has improved since the 30-day suspension. Because the calculation of inspection percentages is not dependent on kilometres travelled, they can be compared. On the two-year safety record report submitted by Ms Werner for the period ending May 7, 2017, inspection findings, at 114.38%, exceeded the 100% threshold. The performance report submitted for the 16 month post-suspension period indicates inspections are at 52.08% of the threshold.

48Eight inspections have taken place since the suspension ended. Out-of-service defects were found at two inspections on February 17, 2016 and at inspections on February 26, 2016 and, as noted above, on May 10, 2017. Ms Lewicki presented evidence that an MVIS inspection certificate had been issued on February 12, 2016 for one of the two vehicles the Ministry inspected on February 17, 2016. Therefore, I do not find it reasonable to attribute the inspection findings on that vehicle solely to Lewicki’s maintenance practices.

49Similarly, Ms Lewicki submitted MVIS inspection certificates dated May 9, 2017 for the four vehicles she is currently operating. One of these was issued for the vehicle which the Ministry inspected on May 10, 2017 when eight defects, including one out-of-service defect, were found. While Ms Lewicki testified that the inspections were done at her facility “because we were short of time”, she also testified that she was not aware that section 90 (3)(a) of the Act requires that the inspections be carried out at the MVIS licensee’s premises. The fact that the MVIS licence holder was prepared to conduct inspections at Lewicki’s facility and issue certificates is not Ms Lewicki’s responsibility. And, Ms Lewicki was entitled to rely on those certificates, notwithstanding her acknowledgement that the inspections might have been better had they been done at the more fully equipped MVIS garage.

50I share the Ministry’s concern with Lewicki’s post-suspension record of four collisions and question Ms Lewicki’s judgment in deciding to retain driver J.M. until she received customer complaints and to re-hire D.C. However, the evidence is that she did take some action to re-train both these drivers. And I note that the driver who had been hired shortly after a licence suspension is no longer in Lewicki’s employ.

51I also share the Ministry’s concern that, contrary to her commitment at the Show Cause meeting, Ms Lewicki has made no effort to make even nominal payments on what she agrees is now over $18,000 in outstanding fines.

52However, the empirical evidence is that Lewicki’s performance has improved in the period following its suspension to a rate which Ms Werner acknowledged is less than the reported 64.12%. There are only three events on Lewicki’s record between June 29, 2016 and September 18, 2017, a period of almost 15 months. Only two of these resulted in the assignment of points; the December 13, 2016 collision involving D.C. and the May 10, 2017 inspection. With respect to the inspection, as noted above, Ms Lewicki had reason to believe the vehicle was free of defects because she had received an MVIS inspection certificate only the day before.

53I acknowledge that some of the improvement in the safety violation rate may well be the result of fewer inspections; only one took place between June 29, 2016 and September 18, 2017. However, I cannot speculate that more inspections would have resulted in more findings. Ms Lewicki testified that she is more focused on maintenance and that she has hired A.H. and C.V. Only inspection results would indicate the impact of these changes.

G. CONCLUSION

54Based on the evidence of its performance improvement, I am persuaded to give Lewicki one further opportunity to demonstrate it can operate safely. However, because there is still substantial room to improve its safety performance, I am ordering that Lewicki’s CVOR certificate be subject to a condition.

55Lewicki has been operating with only four vehicles in 2017, a reduction in the size of its fleet from seven in 2016 and twelve in 2015. Its safety record has improved during the period it has operated with fewer vehicles. Therefore, I am ordering a condition to limit the fleet to its current size for a period of 24 months.

56Ms Lewicki has been the president of the company since 2004. Its past unacceptable safety record was largely acquired under her management. I accept her testimony that she uses facilities with licensed mechanics for specialized repairs. However, she also testified that she did not check the qualifications of the technicians she has hired and was not aware that there was a way to do so. She would be well advised to check the qualifications of technicians and the records of drivers before she hires them, and to act more quickly and decisively when they fail to perform. She would also be well advised to enter into a payment plan for the company’s outstanding fines. I note that the Ministry may re-issue the Cancellation and Seizure Order if Lewicki’s compliance with the laws and regulations related to highway safety does not continue to improve.

ORDER

Pursuant to the authority set out in section 50 (2) of the Act, the Tribunal orders the Registrar to set aside the Cancellation and Seizure Order dated June 28, 2017 subject to the following condition:

1. For a period of 24 months from the date of release of this order, the fleet size of Lewicki Transportation Co. shall be limited to four vehicles.