Gill International Carriers Ltd. v. Registrar of Motor Vehicles, 2018 CanLII 107937

Date: 2018-08-02

Appeal from a Cancellation and Seizure Order of the Registrar of Motor Vehicles under the Highway Traffic Act

Between:

Gill International Carriers Ltd.

Appellant

and

Registrar of Motor Vehicles

Respondent

DECISION

Adjudicator: D. Gregory Flude, Vice-Chair

Appearances:

For the Appellant: Daljit Gill and Sudanshu Malhotra, Agents

For the Respondent: Patrick Moore, Counsel

Heard in Toronto, ON: July 6, 2018

1The appellant, Gill International Carriers Ltd. appeals the Cancellation and Seizure Order (the “Order”) of the Registrar of Motor Vehicles dated January 29, 2018. The effect of the Order is to terminate the appellant’s right to operate trucks on Ontario highways. The Registrar issued the Order because of concerns over the appellant’s safety record. The appellant does not deny that it has a poor safety record. It asks me to take into account the safety measures it has now put in place to address the appellant’s safety record, and argues that the safety measures are effective in that there has been an improvement in the appellant’s safety record.

2The Order names two companies, the appellant and Inkjyot Logistics Inc. Inkjyot Logistics did not appeal the Order. The Registrar takes the position that the two companies are related as defined in the Highway Traffic Act, R.S.O. 1990 c. H.8 (the “Act”). The Registrar asks me to take the safety record of Inkjyot Logistics into consideration pursuant to s. 47(1)(f) of the Act.

3The appellant does not dispute its relationship to Inkjyot Logistics. It admits that it and Inkjyot Logistics have common management and use the same drivers and trucks. It admits that the reason the appellant was formed was to take over the business of Inkjyot Logistics because of ownership concerns when the general manager of both companies, Daljit Gill, became divorced. Mr. Gill’s former wife had an ownership interest in Inkjyot Logistics and Mr. Gill did not want her to have a claim on his future business development. He formed the appellant and transferred Inkjyot’s trucks, drivers and good will to the appellant and kept on with the same business.

4As a result of this submission, I find that the appellant and Inkjyot Logistics are related companies and I heard evidence of Inkjyot Logistics’ safety record.

ISSUE

5The question I must decide is set out in s. 47(1)(f) of the Act:

a. Is there reason to believe, having regard to the safety record of the appellant or of a person related to the appellant, and any other relevant information, 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?

RESULT

6Based on the evidence, I find that there is reason to believe the appellant will not operate safely. Dealing with solely with the appellant’s safety record, it managed, within six or seven months of operation, to earn a safety record that aligned it with the worst 62 out of 50,000 truck operators in Ontario. When Inkjyot Logistics’ safety record is included in the analysis, it is clear that the appellant’s management did not take their obligations to operate safely seriously, despite being given a second chance. I confirm the Cancellation and Seizure Order.

THE SAFETY REGIME

7Lisa Venier has been a Carrier Safety Rating Administrator since October 2015. Prior to that she was a Commercial Vehicle Operator’s Registration (CVOR) Analyst for 16 years. She explained the CVOR safety rating process, the manner in which interventions are triggered by the computer program and provided a detailed breakdown of the safety ratings of the appellant and Inkjyot Logistics. The evidence following comes from Ms. Venier.

8Trucking companies in Ontario are assigned a safety rating, that is, a maximum number of infractions 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. It has an element of trust in as much as the Registrar relies on each company self-reporting the expected mileage. Companies with higher mileage will be permitted more infractions and vice versa.

9Infractions 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 points. 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.

10There 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 advises the company to take corrective action. When it hits 50%, the Registrar may send an auditor out 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.

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. Both Inkjyot Logistics and the appellant fell within that group of carriers.

INKJYOT LOGISTIC’S RECORD

12Inkjyot Logistics began operations in 2012 and operated 4 vehicles. In June 2015 it had passed the 35% VR level and received a warning letter. It was audited in March 2016 and failed the audit with a score of 27.92%. By January 2017 it had a 118.35% VR. The Registrar issued a Notice of Cancellation and Seizure and invited the company to a meeting to discuss its safety record. Daljit Gill attended on behalf of Inkjyot Logistics.

13Mr. Gill produced a safety action plan that included hiring a safety consultant, increased driver training, and hiring a new maintenance organization. After considering Mr. Gill’s submissions and the safety plan, the Registrar decided that a seven day suspension was an appropriate sanction and that Inkjyot Logistics’ safety record would improve with implementation of the safety action plan. Inkjyot Logistics was suspended from March 7 – 13, 2017.

14An analysis of Inkjyot Logistics’ safety rating indicates the problem areas were high rates of collisions and convictions. Safety ratings are broken down into subcategories: Collisions, Convictions and Inspections. These categories are then weighted and combined to give a final VR – 40% for collisions and convictions and 20% for inspections. Inkjyot Logistics scored 118.24% in the collision category, 161.76% in the convictions category and 31.74% in the inspections category. It had six collisions with four trucks between December 2014 and December 2017 and multiple convictions relating to moving and safety violations.

GILL INTERNATIONAL’S RECORD

15Gill International began operations in June 2017. By December 2017, six months after beginning its operations, it had a VR of 179.88%. The breakdown was 312% in the collisions category, 117% in the convictions category and 36% in the inspections category. Such performance can only be described as abysmal. It is made all the more disturbing by the fact that Mr. Gill’s evidence was that Gill International is simply a continuation of Inkjyot Logistics and Inkjyot had been given an opportunity to turn itself around in March 2017, when its CVOR was suspended not cancelled based on an action plan put forward by Mr. Gill in the meeting on January 24, 2018.

REMEDIAL MEASURES

16The appellant submits that it now has a plan in place to turn itself around. The plan is based on the action plan delivered to the Registrar January 24, 2018 as a result of a meeting with the appellant to discuss its safety record. In his evidence, Mr. Gill spoke to some changes in the action plan. The original safety consultant has been replaced by Mr. Malhotra. A GPS tracking system has been fitted to each truck. Each night, at midnight, the tracking system delivers a report to Mr. Gill of vehicle performance during the day, including areas where the truck may have been speeding. This feature has led to one driver being warned for driving at 75 km in a 50km zone. A second offence will result in a suspension and after a third offence the driver will be fired.

17In submissions and Mr. Gill’s evidence, Gill International argues that the action plan is taking effect as shown by a declining VR from 179.88% in December 2017 to 117.8% in June 2018. The Registrar questions these figures and points to a number of outstanding offences and one collision on June 22, 2018 that has not yet been included in the VR calculation. The Registrar also points to the annual mileage estimate put forward by the appellant and suggests that it is inflated having the effect of lowering the VR. I accept the Registrar’s position regarding inflated mileage.

18As stated above, infractions stay on an operator’s record for two years. Since the appellant did not start operating until June 2017, no infractions have dropped off its record. Thus any reduction in its % VR can only arise from an increase in mileage and a resulting higher total % VR.

19The appellant submitted maintenance invoices in support of its position that it is now devoting considerable resources to ensuring its trucks are safe. The invoices have odometer readings on the date of service. Ms. Venier took the odometer readings and applied a formula to arrive at an estimate of the annual mileage for each truck in the fleet. From that she calculated an estimated fleet mileage of approximately 440,000 km in 2018. In its CVOR update, the appellant estimated a mileage of 900,000 km. It is the 900,000km figure that is in the computer database and used to calculate the VR.

20The appellant argues that I should accept the higher figure because it now has a sixth truck and also uses rental trucks when its vehicles are in for service. Even allowing for a sixth truck and rentals, I accept Ms. Venier’s analysis. Of note is that Ms. Venier’s calculation is based on actual mileage driven. The addition of a sixth truck to a fleet of five trucks is unlikely to double the annual mileage. It is equally unlikely that the appellant’s fleet is out of service 50% of the time and that it is doing 450,000 km in rental vehicles.

21The mileage from June to December 2017 was reported as approximately 345,000 km. At the January 24, 2018 meeting, Mr. Gill reported that the fleet had actually traveled about 175,000 km in 2017. It would appear that the appellant applies a measure of wishful thinking when estimating mileage. If find the estimate of 900,000 km has inflated the likely mileage the appellant will travel in 2018 resulting in an apparent drop in its % VR.

22The June 22, 2018 accident earned the applicant 4 points on its record. When these points are added into its %VR calculation, they will create an increase in its overall %VR rate. I am not persuaded by the appellant’s submission that it has a decreasing %VR rate since the safety action plan was implemented.

CONCLUSION AND ORDER

23Having 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. In arriving at this conclusion, I have relied on the appellant’s own safety record. I have not had to take into account the record of Inkjyot Logistics except in so far as it represents a missed opportunity for the appellant to start afresh and apply the lessons learned from the operation of Inkjyot Logistics to its new operation.

24I confirm the Cancellation and Seizure Order of the Registrar dated January 29, 2018.