Great Lakes Offshore Services Inc. v. Registrar of Motor Vehicles, 2018 CanLII 107932

Date: 2018-08-28

Appeal from a Cancellation and Seizure Order of the Registrar of Motor Vehicles under the Highway Traffic Act, R.S.O. 1990, c. H.8

Between:

Great Lakes Offshore Services Inc., Darrin Smith and Hoover’s Marina Limited.

Appellants

and

Registrar of Motor Vehicles

Respondent

DECISION

Adjudicator: D. Gregory Flude, Vice-Chair

Appearances:

For the Appellant: William Whelan, Agent

For the Respondent: Patrick Moore, Counsel

Heard in St. Catharines: July 17, 2018

1The appellants, Great Lakes Offshore Services Inc. (“Great Lakes”), Darrin Smith and Hoover’s Marina Limited appeal the Cancellation and Seizure Order (the “Order”) of the Registrar of Motor Vehicles dated March 6, 2018. The effect of the Order is to terminate the appellants’ right to operate trucks on Ontario highways. The Registrar issued the Order because of concerns over the safety record of Great Lakes. Darrin Smith is the owner of Great Lakes and a part owner of Hoover’s Marina Limited. The Registrar asks me to take Great Lakes’ safety record into account and revoke the right of both Darrin Smith and Hoover’s Marina to register trucks pursuant to s. 47(1)(f) of the Highway Traffic Act, R.S.O. 1990 c. H.8 (the “Act”).

2The appellants do not deny the poor safety record. They ask me to take into account the safety measures Great Lakes has now put in place to address that safety record. They argue that the measures are now showing effect and the record is improving.

3Other than the admission by Great Lakes that Darrin Smith is a part owner of Hoover’s Marina and that Hoover’s Marina operates a 1 ton vehicle, I heard no other evidence relating to these two appellants. The whole focus of the hearing was on Great Lakes.

ISSUE

4The question I must decide is set out in s. 47(1)(f) of the Act. I paraphrase it here:

a. Is there reason to believe, having regard to the safety record of the appellants, Great Lakes, Darrin Smith and Hoover’s Marina, and any other relevant information, that the appellants will not operate a commercial motor vehicle safely or in accordance with this Act, the regulations and other laws relating to highway safety?

RESULT

5Based on the evidence, I confirm the Cancellation and Seizure Order dated March 6, 2018 with respect to Great Lakes. With respect to Darrin Smith and Hoover’s Marina, I was directed to no specific authority in the Act to cancel a Registrant Identification Number (RIN).

THE SAFETY REGIME

6Sherry Werner has been a Carrier Safety Rating Administrator for many years. In her evidence, she explained the CVOR safety rating process, the manner in which interventions are triggered by the program and provided a detailed breakdown of the safety ratings of the appellant, Great Lakes. Her evidence disclosed a steadily worsening safety record despite interventions by the Registrar, coupled with the conspicuous lack of involvement of Darrin Smith in committing to an improved safety record.

7Trucking companies in Ontario are assigned a safety rating, that is, a maximum number of infractions, or threshold, before the Registrar will seek to take action. The rating is based on the number of kilometres the company will travel in a twelve month period in Ontario. Companies with higher mileage will be assigned a higher threshold and vice versa.

8Infractions in the form of moving and safety violations, at fault collisions and vehicle safety violations are tracked in a computer database. The information is entered from police and road safety officer reports. Infractions are assigned points and the total number of points, from time to time, is expressed as a percentage of the total permitted threshold. This number is expressed as a percentage violation rate (% VR). Points stay on a company’s record for two years so a % VR shows the company’s performance over the last two years.

9There are trigger points when the Registrar will take action. If a company’s VR reaches 35%, the Registrar issues a letter pointing out the rising % VR and advising the company to take corrective action (Warning Letter). When it hits 50%, the Registrar may send an auditor to audit the company’s operation. At 85% there is an interview and at 100% the Registrar will consider sanctions ranging from suspension to cancellation.

10Prior to imposing sanctions, it is the Registrar’s practice to invite the trucking company to a meeting to discuss its safety record and any remedial measures the operator proposes to employ to correct its record. This meeting is called a Show Cause meeting and is conducted by the Deputy Registrar. Following that discussion the Registrar may issue a Cancellation and Seizure order, as happened in this case, issue a suspension notice, or take no immediate action, giving the operator an opportunity to improve its safety record based on the remedial measures the operator put forward at the meeting.

11It is indicative of the general commitment of the trucking industry to safety that, as of January 2018, of approximately 50,000 carriers operating in Ontario, 85.8% of carriers had a 15% or less VR and approximately 96% were below the first intervention level of 35% VR. Only 62 carriers, 0.11% of the total number, exceeded 100% VR. Great Lakes fell within the 0.11% over 100% VR.

GREAT LAKES’ RECORD

12Great Lakes’ record began prior to it being granted a Commercial Vehicle Operator’s Registration (“CVOR”). It started operating trucks on January 27, 2010. By September 2010, it received a warning letter from the Registrar. In October 2010 its safety rating was changed from Satisfactory to Conditional indicating a %VR of 70% or greater. It applied for a CVOR. The Registrar raised concerns about its safety rating, but following discussions, issued a CVOR on January 19, 2012.

13A week prior to the issuance of the CVOR on January 19, 2012, Great Lakes’ then Operations Manager, C.F., wrote to the Registrar setting out steps to be taken to ensure road safety. The letter addressed a number of points:

a. Great Lakes only employs temporary drivers on an as needed basis;

b. Temporary drivers will be required to submit a driver’s abstract before being hired;

c. Drivers operating company vehicles will immediately report safety or maintenance issues to Mr. Ferguson before moving the equipment;

d. If a driver deems repairs are necessary, appropriate action will be taken;

e. C.F. will monitor any new drivers and discuss, in depth, maintenance and safety records before the drivers leave Great Lakes’ facility; and

f. There will be a zero tolerance policy and drivers will be terminated if the daily inspections and safety and maintenance reports are not followed.

14From a starting point of 0% VR on January 19, 2012 as a new CVOR holder to December 2013, Great Lakes’ safety record slowly deteriorated until it reached around 35% VR. Under the intervention system for monitoring carrier safety, the Registrar sent a warning letter to Great Lakes advising it of the trend and requiring it to take steps to improve. Great Lakes’ record now placed it in the worst 4% of operators in Ontario. The record did not improve and by July 2015 it was 72% VR. At this level, the monitoring system triggered a facility audit.

15The facility audit focusses on three areas: driver record keeping of logs and hours of operation; vehicle maintenance records; and driver qualifications. Each area is marked individually out of 100% and a passing grade in each area is 50%. To pass the audit, an operator must get a passing grade in each area and an overall score of 55% when all three scores are combined.

16Darrin Smith was not present at the audit. He met the auditor at a local coffee shop and designated William Whelan as Great Lakes’ contact person. Mr. Whelan was identified as having recently joined the company to perform vehicle maintenance. The applicant failed the audit. It had no driver records and highly deficient vehicle maintenance records. It had no written policies on maintenance. The one area it passed was in confirming that its drivers had the correct qualifications.

17By March 2017, Great Lakes had a %VR around 80%. It was called in for an interview. Mr. Whelan had recently been appointed as Traffic Manager to manage driver logbooks, pre-trip inspections, driver training and discipline. He attended the interview on behalf of the company. Mr. Smith did not attend. It appears from the interview notes that, while Mr. Whelan had been given responsibility for the areas listed above, he lacked authority. Mr. Smith handled the hiring of drivers; neither the office staff nor the drivers forwarded information on convictions to Mr. Whelan; and the drivers did not seem to take him seriously.

18As a result of the interview, Great Lakes prepared an action plan and submitted it to the Registrar. The action plan provided for a number of steps to be taken immediately:

a. The company would get driver abstracts for all drivers and test all new hires;

b. Load security training would be given to all drivers;

c. Defective equipment would be reported in writing; and

d. Drivers would have to fill out daily inspection reports and logbooks before leaving the yard each day.

19The action plan also had several future steps:

a. By the end of March 2017 Great Lakes would develop policies about routes, permitting and policies for moving large equipment;

b. Maintenance would be carried out in accordance with Ministry of Transportation and manufacturer’s guidelines, effective as soon as possible;

c. A new computer-based record keeping system for scheduling and recording maintenance was to be in place by the end of April 2017; and

d. New equipment would be purchased and added to the fleet during the summer of 2017.

20By February 2018 Great Lakes had exceeded the 100% VR threshold. It now sat at 127% VR. The Registrar determined to cancel Great Lakes CVOR. He sent a Notice of Cancellation and Seizure and invited representatives of Great Lakes to a Show Cause meeting, scheduled for February 28, 2018. Mr. Whelan attended the February 28 meeting on behalf of Great Lakes. Mr. Smith did not attend. At Mr. Whelan’s suggestion, the Registrar scheduled another meeting for March 3, 2018 to permit Mr. Smith to attend.

21J.K., Program Standard Manager at the Ministry, attended the February 28 meeting and covered the action plan Great Lakes had produced some 10 months earlier. Mr. Whelan stated that it had been his intention to implement the action plan but he had been called away to carry out maintenance functions and didn’t get around to it. The company had not trained all drivers on load security and vehicle inspections. Mr. Whelan had taken training on load security, inspections and logbooks. He was then expected to train the drivers.

22J.K. broke Great Lakes safety record into its constituent parts; collisions, convictions and violations. He noted that the company’s trucks were found to have out of service defects every time they were inspected. He also noted that there was an inordinately high conviction rate, 242% of the rate allowed for convictions. When Mr. Whelan argued that the record had improved, J.K. pointed to a recent inspection for an over-length vehicle with load security issues.

23Several convictions and inspection defects were attributable to one driver. When asked the status of this driver Mr. Whelan stated that he was no longer employed by the company. He did not know why the driver had been terminated.

24The Registrar scheduled a follow-up meeting on March 5, 2018 to allow Mr. Smith to attend. Mr. Smith had little to add to the information provided by Mr. Whelan except to advise the Registrar that Mr. Whelan was responsible for safety. Following the meeting, the Registrar confirmed his intention to cancel Great Lakes’ CVOR and issued the Cancellation and Seizure Order that is the subject of this appeal on March 6, 2018.

REMEDIAL MEASURES

25I heard from two witnesses for the appellant: William Whelan and Sarah Misner. I was impressed by the sincerity of each of these witnesses and I formed the impression that they genuinely are making efforts to make Great Lakes a safe operator.

26Ms. Misner testified about the efforts the appellant has made to ensure that it does not fail another audit. There is a new computer record tracking system that records all maintenance performed on the trucks. It also records driver hours of service, log books and daily inspection reports. The appellant now checks driver abstracts and there is a collision reporting system, adopted from the appellant’s insurer’s collision reports. According to Ms. Misner, Mr. Smith attends the business at least once a day and usually about 3 times per day.

27In cross-examination, Ms. Misner stated that she was previously trained as a heavy equipment operator with no specific background or training in the trucking industry. When challenged on her lack of training, she described how she had read all of the regulations around driver hours of service and the keeping of logbooks. When further challenged, she reeled off the applicable hour limits for drivers and I am satisfied that she has sufficient knowledge of the subject to effectively administer the control of driver hours of service and the tracking of logbooks.

28Mr. Whelan testified about driver training and equipment in his evidence. He stated that, by the date of the hearing, the drivers had not yet undergone training but that it was scheduled to occur within about two weeks at a truck driving school. To address equipment issues, the appellant has bought new tractors and trailers.

29Both witnesses spoke about increased staffing. There are now three people in the office looking after record keeping. There is an apprentice mechanic. Mr. Smith is much more involved in the day to day running of the business and that brings weight to Mr. Whelan’s role as traffic manager in charge of maintenance and safety. Where, in the past, drivers did not listen to Mr. Whelan, they do now.

30Both Mr. Whelan and Ms. Misner take great pride in their recent efforts to bring the appellant into compliance. They are confident that their record keeping could withstand the Registrar’s scrutiny. Mr. Whelan wants, and perhaps challenges, the Registrar to conduct another facility audit, secure in the knowledge that it will pass.

31The evidence raised two major concerns with respect to the appellant’s commitment to safety. Above, I identified one particular driver who was responsible for numerous infractions. In fact, out of 20 incidents comprising 5 convictions and 5 inspections, this driver was implicated in 10 of the incidents. At the February 28 meeting, Mr. Whelan advised that this driver was no longer with the appellant. Mr. Whelan did not know why the driver was terminated. What is more troubling is the fact that this driver has since been hired back. The Registrar produced a recent vehicle out of service report where at least one of the issues was insecure load. The driver was the same driver who had such a bad record in the past. Mr. Whelan had no say in the rehiring of this driver, believing him to have been rehired by a site supervisor.

32It is clear from the rehiring of this driver that the appellant still lacks the necessary controls to ensure that it hires only safe personnel. I find this lack of hiring controls undermines the appellant’s statements about ensuring it has driver abstracts and is committed to safety.

33Overall, notwithstanding the fact that the appellant has improved in a number of areas, I remain concerned that there has not been the necessary fundamental commitment to safe operation where it counts, that is, on the road. Promised remedial measures were not carried out, at least one unsafe driver has been hired back and the safety and traffic manager has insufficient control or authority to carry out his mandate.

Darrin Smith and Hoover’s Marina - RIN

34The Registrar included cancellation of the RIN of each of Darrin Smith and Hoover’s Marina as a term in the Cancellation and Seizure Order. I heard no evidence about this issue other than that Mr. Smith has a RIN; he owns Hoover’s Marina and Hoover’s Marina also has a RIN; and Hoover’s Marina operates a 1 ton truck. The issue was not addressed in closing submissions.

35I can find no authority in the Act that permits the cancellation of a RIN. According to s. 47(1), the Registrar may cancel a plate portion of a permit as defined in Part II of the Act, a driver’s licence or a CVOR certificate. Part 11 defines a “permit” as a permit issued under s. 7(7) consisting of a vehicle portion and a plate portion. Section 7(7) of Part II defines a permit tautologically: “The Ministry may issue a permit of any prescribed class, number plates and evidence of validation to any person who meets the requirements of this Act and the regulations.” A permit, then, must consist of a vehicle portion and a plate portion. A RIN is a right to register a vehicle for a permit, not a permit in itself. Accordingly, s. 50 does not give the Registrar the right to revoke a RIN. It flows from that analysis that I have no right to cancel a RIN.

CONCLUSION AND ORDER

36Having considered all of the evidence, I find that there are reasonable grounds to believe that the appellant will not operate a commercial motor vehicle safely or in accordance with this Act, the regulations and other laws relating to highway safety.

37I confirm the Cancellation and Seizure Order of the Registrar dated March 6, 2018 with respect to Great Lakes Offshore Service Inc.

38I set aside the Cancellation and Seizure Order of the Registrar with respect to the Registration Identification Numbers of Darrin Smith and Hoover’s Marina Limited.