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: 2019-10-25

Appeal under section 50.2 of the Highway Traffic Act, R.S.O. 1990, c. H.8, from an impoundment of a motor vehicle under section 55.1 of the Act

Between:

JR Events & Promotions Inc.

Appellant

and

Registrar of Motor Vehicles

Respondent

DECISION AND ORDER

Adjudicator: Patricia McQuaid, Vice-Chair

Appearances:

For the Appellant: Troy Katerenchuk, Agent

For the Respondent: Stella Velocci, Agent

Heard by teleconference: October 23, 2019

REASONS FOR DECISION AND ORDER

Overview

1The appellant, JR Events & Promotions Inc (“JR” or the “appellant”), appeals the impoundment of its vehicle, 2005 FRHT FM, which is a 26 foot commercial vehicle with a refrigeration unit. On September 11, 2019, C.S., who is a suspended driver, was driving the vehicle when he was stopped by police. The vehicle subsequently was impounded for 45 days, to October 26, 2019.

2Troy Katerenchuk appeared as agent for the appellant. He is an employee and son in law of the principal of the appellant, Zacharias Sakellis. He confirmed his authorization to appear on the appellant’s behalf. The primary ground of appeal is that the impoundment of the vehicle has caused the appellant exceptional hardship. Mr. Katerenchuk did call the suspended driver as a witness, but did not actively pursue due diligence as a ground of appeal, that is, that the appellant exercised due diligence in attempting to determine that the driver of the vehicle at the time of the impoundment had a valid driver’s licence. That evidence will, however, be reviewed briefly below.

3The Registrar argues that the appellant has not shown that it exercised due diligence and not made out his onus to show that there is exceptional hardship and therefore the impoundment should be confirmed.

4After considering all of the evidence and submissions provided, the Tribunal finds that the appellant has not established, on a balance of probabilities, that it has experienced exceptional hardship as a result of the impoundment. The Tribunal confirms the impoundment.

EVIDENCE AND ANALYSIS

5Mr. Katerenchuk testified that JR is a seasonal business, supplying food products to various summer weekend festivals throughout the province. The vehicle is owned by JR, but is used more often by its sister company, Sakellis Foods, both to pick up raw product from locations in Ontario and Quebec for the manufacture of its brand product, pancake, waffle and crepe mix, and to then deliver that manufactured product to its customers. There is a lease agreement in place between JR and Sakellis Investments Limited (referred to by Mr. Katerenchuk as Sakellis Foods in this hearing) though the lease payments to JR are minimal. Mr. Katerenchuk stated that JR and Sakellis Foods are small family run businesses.

6On September 11th, the appellant was scheduled to deliver a large quantity of meat to a Ribfest festival. Their usual driver called in sick and CS, one of the seasonal employees, offered to do the delivery. As Mr. Katerenchuk stated, “on the spur of the moment”, because of the need to get the product to the customer, he agreed. CS told him that he had a licence. Mr. Katerenchuk accepted CS’s statement and did not do an independent licence check. In his testimony, CS stated that he knew his licence had been suspended, for a ‘DUI’ but it was his understanding that it was a one year suspension and that period of suspension had expired. In fact, the Ministry of Transportation (“MTO”) records show that CS was suspended indefinitely on April 5, 2018 for driving with more than 800 mgs alcohol in his blood, a Criminal Code offence. CS had taken no steps to reinstate his licence so it remained suspended as of September 11, 2019.

7Though CS may have had an honest, though incorrect, understanding that his licence was no longer under suspension, the appellant not take any steps to verify the status of his licence, which fact Mr. Katerenchuk acknowledged. It cannot be said that the appellant exercised due diligence in the circumstances.

Exceptional hardship

8Under s. 50.2(3)(d) of the Highway Traffic Act (the “Act”), the appellant may appeal the impoundment of his vehicle on the basis that the impoundment will result in exceptional hardship. The onus is on the appellant to prove exceptional hardship.

9Section 10 of O. Reg. 631/98 (the Regulation) provides specific criteria that must be considered when determining the outcome of an appeal under this section.

10Under that Regulation, I must first consider whether there are reasonable alternatives available for the impounded vehicle.

11If there is no reasonable alternative to the impounded vehicle, then I may consider a threat to health or safety to a person as well as the following factors:

• financial or economic loss,

• loss of employment or employment opportunity, or

• loss of education or training.

12In order to meet the test of exceptional hardship, the above losses must:

• be immediate, significant and lasting,

• impact on a person ordinarily transported by the vehicle, and

• impact someone other than the suspended driver.

13Mr. Katerenchuk testified that JR was able to honour its contracts for the remainder of the 2019 festival season. There are fewer festivals in September and they are smaller festivals so they were able to make things work with other vehicles.

14The economic and financial impact is on Sakellis Foods. Mr. Katerenchuk characterized JR and Sakellis Foods as sister companies, with Sakellis Foods being the main, and year round, business. The vehicle was principally used by Sakellis Foods. Mr, Katerenchuk stated that the cost to rent a vehicle similar to the impounded vehicle was not sustainable, costing in the range of $10000 for the impoundment period. Sakellis Foods does have one vehicle which is a cargo van. It does the daily deliveries of various supplies to restaurants. The impounded vehicle, because of its size and refrigeration, is integral to the production and distribution of the Sakellis brand products. Because they have not had the capacity to pick up their required raw product, production has slowed and they have not been able to meet customer demand, even with rental of a smaller vehicle. Some Sakellis Food employees have had their hours reduced or been laid off.

15In addition to this financial impact on the business, Mr. Karenchuk expressed concern that with Sakellis Foods’ reduced revenue, there is a risk that it will not be able to pay the entrance fees for JR to secure contracts for the 2020 festival season. These fees are due in the spring of the year and range from $4500 to $9000 per festival.

16Mr. Katerenchuk stated in cross examination that once the vehicle is returned to them, Sakellis Foods may be able to resume its level of production and recover some of the business lost, though there is no certainty and there is a concern that employees may have found work elsewhere in the interim.

17As noted above, the first step is to determine if there is an alternative to the impounded vehicle before I can assess whether there has been exceptional hardship. The evidence is that JR, the owner of the vehicle, was able to meet its commitments with the use of other vehicles. Furthermore, there has been no immediate, significant and lasting financial loss to JR. Evidence regarding an inability to pay entrance fees for festivals in 2020 is speculative at this point.

18Based on the credible testimony from Mr. Katerenchuk, the impact from the impoundment has been much more problematic for Sakellis Foods, which does appear to have suffered a financial loss during the impoundment period. However, any hardship suffered by Sakellis Foods is not that of the owner of the vehicle. JR and Sakellis Foods may be sister companies and very much intertwined, but they are two separate corporate entities as reflected in the lease agreement.

19This legislation is very prescriptive and the grounds on which the Tribunal can order the release of the vehicle are limited which can, in some situations, result in harsh consequences. While I am sympathetic to the circumstances faced by Sakellis Foods, as it is not the owner of the vehicle it cannot avail itself of the relief that the Act might provide.

20On the facts before me, I find the appellant owner has not satisfied the onus to establish, on a balance of probabilities, that the impoundment will result in exceptional hardship under s. 50.2(3)(d) of the Act.

ORDER:

21After considering the evidence provided, pursuant to the Tribunal’s authority under s. 50.2(5) of the HTA, the Tribunal denies the appeal and confirms the impoundment.