Appeal under section 50(1) of the Highway Traffic Act, R.S.O. 1990, c. H.8, (Act) from a Cancellation and Seizure Order Issued by the Registrar of Motor Vehicles pursuant to Section 47 and 47.1 of the Act.
Between:
D. Dermont Inc.
Appellant
-and-
Registrar of Motor Vehicles
Respondent
DECISION and ORDER
ADJUDICATOR: Stephen Scharbach, Member
APPEARANCES:
For the Appellant: Daniel Dermont, President
For the Respondent: Douglas Lee, Counsel
Heard: July 29, 2019
OVERVIEW
1D. Dermott Inc. (“appellant”) appeals an order of the Registrar of Motor Vehicles (“Registrar”) cancelling the Commercial Vehicle Operator’s Registration (“CVOR”) certificates and plate portion of permits for its commercial vehicles and trailers.
2Commercial vehicle operators are required to have a valid CVOR certificate to operate a commercial vehicle in Ontario.
3The appellant is a trucking company - a commercial vehicle operator - and holds CVOR certificates in respect of two vehicles.
4On December 20, 2018, Registrar issued an order cancelling the appellant’s CVOR certificates and the plate portion of permits issued to the appellant on the ground that its safety record indicates that it will not operate its commercial vehicles safely and in accordance with laws relating to highway safety.
5The appellant appeals that order to this Tribunal.
THE LAW
6Section 47(1)(f) of Highway Traffic Act, R.S.O. 1990, c. H.8, (“Act”) provides that the Registrar may, by order, suspend or cancel a CVOR certificate if the Registrar has reason to believe that:
…having regard to the safety record of the holder…and any other information that the Registrar considers relevant, that the holder will not operate a commercial vehicle safely or in accordance with this Act, the regulations, and any other laws relating to highway safety…
7Before making such an order, the Registrar is required to notify the person whose CVOR certificate is affected of the Registrar’s proposed order (Act, s. 47.1(1)).
8Section 50(1) of the Act provides that any person aggrieved by a decision or order of the Registrar under s. 47 may appeal the decision to this Tribunal
9The Tribunal may, on appeal confirm, modify or set aside the order of the Registrar (s. 50(2)).
THE ISSUE
10Is there reason to believe that, having regard to the safety record of the appellant and other relevant information before the Tribunal, the appellant will not operate its commercial vehicles safely or in accordance with the Act, the regulations, and any other laws relating to highway safety?
DECISION
11The Registrar has legitimate concerns about the appellant’s safety record. However, at the suggestion of the Deputy Registrar, the appellant has established an action plan and taken concrete steps to address those concerns.
12The Registrar’s order to cancel the appellant’s CVOR certificates is modified and I order that the appellant’s CVOR certificates be suspended for a period of 20 days commencing on a date to be determined by the Registrar.
PRELIMINARY MATTERS
(a) Adjournment Request
13Daniel Dermont, an officer (president) and director of the appellant, appeared on the appellant’s behalf. At the outset of the hearing Mr. Dermont requested an adjournment of the hearing as he has not been able to prepare sufficiently for the hearing due to family medical issues.
14He requested the hearing be postponed to give him additional time to prepare.
15The Registrar’s counsel opposed the adjournment request. He pointed out that the parties agreed to the present hearing date at a case conference held on May 2, 2019 and Mr. Dermont has had almost three months to plan and prepare for the hearing.
16In addition, the Registrar ordered cancellation of the CVOR certificates and permits because of serious concerns involving the appellant’s safety record. The cancellation is being held in abeyance pending the appeal and the appellant can still operate commercial vehicles. In the Registrar’s view, given the appellant’s safety record, it is in the public interest to deal with the appeal without delay.
17For the following reasons the appellant’s adjournment request is denied:
The request was made at the outset of the hearing apparently without any prior notice to the Registrar. The Registrar’s counsel and witnesses were present at the hearing and prepared to proceed.
The appellant agreed to the hearing date almost three months ago and has had sufficient time to plan and prepare for the hearing.
The Registrar’s order is based on serious concerns about the appellant’s ability to safely operate commercial vehicles on public highways. That order is in abeyance pending the appeal. Further delay is not in the public interest.
(b) Disclosure of Potential Conflict
18I informed the parties that I had a previous association with Mr. Douglas Lee, counsel acting for the Registrar in this matter.
19I stated that Mr. Lee and I worked together, along with approximately 12 other lawyers, in the Legal Services Branch of the Financial Services Commission of Ontario from approximately 2014 to May 2016. Since that time I have seen Mr. Lee at one or two social events involving staff or ex-staff of the Commission.
20I stated that my professional association with Mr. Lee ended over three years ago and in my view that previous association would not interfere with my ability to adjudicate this appeal objectively and impartially. I invited submissions from the parties.
21Mr. Lee confirmed my description of our previous association. Neither Mr. Lee nor Mr. Dermont objected to my adjudication of this appeal and the hearing continued.
BASIS FOR REGISTRAR’S CANCELLATION ORDER
(a) Carrier Safety Rating (“CSR”) Program
22The Ministry of Transportation (“MTO”) maintains a standardised system (Carrier Safety Rating (“CSR”) program) to monitor the safety and compliance record of commercial vehicle operators.
23The CSR program assigns each carrier a safety rating based on the following factors: collisions, safety inspections, convictions, and the results of audits. The goal of the program is to improve safety for all highway users by systematically monitoring operators and taking steps to warn, limit and, if necessary, remove privileges to operate commercial vehicles.
24The presence of any of the factors will result in points being assigned to the carrier. The number of points varies depending on the severity of the circumstances. Certain types of collisions, convictions or failed inspections will accumulate more points than others. All new events and points are recorded and those older than 24 months drop off. Thus the system monitors a carrier’s performance for a rolling two year period.
25The number of points accumulated by a carrier is measured against that carrier’s threshold level. The threshold level is based on the number of vehicles and drivers in the carrier’s fleet and the number of kilometers travelled. The threshold is the maximum violation rate deemed acceptable for a specific carrier. MTO interventions and sanctions are triggered if an operator reaches various percentage levels of the threshold.
(b) Appellant’s Carrier Safety Record
26The appellant’s commercial vehicle operator record as of November 27, 2018 indicates that the appellant’s overall violation rate was 97.74 %. In other words, the appellant had accumulated 97% of the maximum threshold number of points
27According to the Registrar’s witness, 97% is a very poor rate – only 122 or 0.22% out of 56,722 CVOR holders have a violation rate of more than 85%. By far, most CVOR holders (48,599 out of total of 56,722) have violation rates of 0-15% indicating that the appellant’s safety record is exceptionally poor compared to other CVOR holders.
28According to a summary included in the appellant’s record, that poor rate was mainly due to the following factors and circumstances:
In October 2018 the appellant “failed an audit”
There was a gap in the appellant’s insurance coverage
There were several inspections of the appellant’s vehicles which revealed deficiencies of various types, some of which resulted in 12 Provincial Offences Act convictions
One of the appellant’s vehicles was involved in a collision
The appellant did not pay a fine of $7,879.00 imposed after an incident in 2014 in which a wheel detached from a vehicle.
29According to the Registrar, when considered cumulatively these circumstances are grounds to conclude that the appellant will not operate a commercial vehicle safely or in accordance with laws relating to highway safety and justify cancellation of the appellant’s CVOR certificates.
30Mr. Dermont stated that when those circumstances are viewed in context and considered along with efforts he has taken to address previous issues, there are no longer grounds to conclude that the appellant will not operate its commercial vehicles safely or in accordance with law.
(c) Failed Audit
31On October 4, 2018, an MTO auditor noted that the appellant “failed an audit”. According to the auditor, the appellant did not respond to the auditors’ attempts to contact Mr. Dermont to arrange an audit of the company’s records. As a result the auditor noted “all documents scored missing” and the audit was considered failed.
32It appears that the failed audit was the immediate factor that triggered the Registrar’s cancellation order. From the summary contained in the appellant’s safety record, it appears that the appellant’s violation rate increased from 59.9% to 96.7% as a result of the failed audit and shortly afterwards (November 28, 2018) the Registrar started the process leading to cancellation by issuing a Notice of Cancellation and Seizure.
33The Registrar’s evidence with respect to the failed audit is contained in brief written notes created by the auditor. The auditor did not testify. In summary the notes say that in late September/early October 2018, the auditor spoke with “the operator” – presumably Mr. Dermont - and agreed to meet him at the appellant’s place of business.
34When the auditor realised the listed business address was a post office box, the auditor attempted to call back, left two messages but received no response. The auditor mentions in notes that letters were left at both the appellant’s business and residential addresses. No response was received and the audit was noted as “failed”.
35According to Mr. Dermont, he remembers receiving a call from the auditor who wanted to meet with him that day or the next. Mr. Dermont told the auditor that he couldn’t meet because he was in Winnipeg and was not sure of the exact date of his return. Apparently no new date was discussed or arranged. According to Mr. Dermont, he returned the auditor’s subsequent voice mail messages and recalls leaving one message that was not returned.
36Mr. Dermont confirmed that his wife received a written communication from the auditor and she left a note for the auditor saying that Mr. Dermont was out of town and would get in touch upon his return. Mr. Dermont returned from Winnipeg some days later and assumed the auditor would get back in touch to arrange an audit. However, he did not hear from the auditor again and apparently no further audit took place.
37It certainly appears that there was a lack of effective communication between Mr. Dermont and the auditor. However, I conclude that Mr. Demont failed to make adequate efforts to follow up with the auditor when he returned from Winnipeg. He was aware that the auditor was attempting to arrange an audit and it is unacceptable to simply ignore the auditors’ requests.
(d) Vehicle Inspections and Previous Convictions
38The Registrar introduced 7 vehicle inspection reports relating to road side inspections conducted in the two year period from November 28, 2016 to November 28, 2018.
39Those inspections revealed deficiencies, some of the deficiencies resulted in the vehicle being taken off the road until necessary repairs were completed. In other cases the driver was prohibited from driving for 72 hours. Several of the deficiencies resulted in Provincial Offences Act (POA) charges and convictions.
40For example, according to evidence submitted by the Registrar:
On September 19, 2019, one of the appellant’s vehicles failed to enter a truck inspection station. The truck was found parked on the side of the road before the inspection station and had to be escorted to the station to be inspected. The inspection revealed a number of serious deficiencies including an unsecure load, wheel fasteners loose or missing, and a seal leaking from a wheel bearing hub.
On May 11, 2018, a number of deficiencies were noted on an inspection of one of the appellant’s vehicles including a crack in “frame members”, unsecure load, and brake adjustment violations.
On April 4, 2018, a number of deficiencies were noted on an inspection. The inspector’s remarks stated “fail to carry/surrender daily log, forgot log book at last truck stop...Driver failed to return to TIS with daily log before my shift. Driver OAS for 72 hours…” In other words the driver was prohibited from operating for 72 hours.
On March 3, 2017, an inspection of one of the appellant’s vehicles revealed the trailer’s turn signals to be inoperative, the driver surrendered more than one daily log and the two logs were not the same. The driver was placed “out of service” for 72 hours.
41The evidence indicates that during the relevant two year period, the appellant or its drivers were convicted under the POA on 10 separate occasions on charges that included failing to stop at an inspection station, driving commercial vehicle with a major defect, failing to surrender motor vehicle permit, unsafe move, and having more than one log.
42The Registrar also noted that on July 14, 2014, a wheel from one of the appellant’s vehicles became detached resulting in POA charges and fines. According to the evidence, drivers are required to inspect wheels on a daily basis and the appellant’s driver failed to do so. Although that incident occurred more than 5 years ago, the current inspection reports include one in which wheel fasteners were found to be loose.
43In his testimony, Mr. Dermont essentially acknowledged the deficiencies but pointed that some of them were minor and some (for example insecure loads), were passed at other inspections.
44It was also apparent that many (if not most) of the deficient inspections and charges involved driver TD. TD is Daniel Dermont’s brother and was employed as a driver for the appellant. As discussed more fully below, TD’s employment with the appellant has now been terminated.
(e) July 23, 2017 Collision
45Another factor that contributed to the appellant’s poor safety record was a collision between one of the appellant’s trucks being driven by TD and a passenger vehicle on July 23, 2017.
46According to the collision report, the collision occurred on Kennedy Road in Mississauga. Although details in the report are sparse, it appears that the appellant’s truck collided with an oncoming passenger vehicle when the truck attempted to make a left turn.
47According to the collision report, TD was charged with making an improper turn and the police officer estimated the damage to the passenger vehicle was $6,000. There was no mention of any personal injury.
48Mr. Dermont testified that his brother was driving the truck and there was contact between his truck and the passenger vehicle but damage was minor and he believes that the police estimate of $6,000 is excessive. He stated that the passenger vehicle was scratched and there was no damage to the truck or trailer. His brother pled guilty to making an improper turn and paid a fine of $120.
49In Mr. Dermont’s view, the collision was a minor contact with minimal damage – the type of incident that occurs on a daily basis on the overcrowded and congested roads of the GTA – and is not a meaningful indicator of a poor safety record.
(f) Unpaid Fine
50According to the Registrar, the appellant owes unpaid fines imposed in connection with its trucking activity and the appellant’s failure to pay those fines suggests a lack of willingness or ability to operate in accordance with law.
51In a letter dated October 22, 2018, MTO’s Carrier Safety and Enforcement Branch informed the appellant that it has accumulated outstanding fines. It was asked to pay the fines and provide proof of payment within 45 days.
52At that point there were four outstanding fines. Three of the fines were for relatively small amounts. The appellant has paid those fines and provided proof of payment to the MTO.
53The fourth fine was in the amount of $7,210.00 and appears to have been imposed after the July 2014 wheel detachment incident.
54Mr. Dermont testified that he was unaware that his company had been charged or fined in connection with that incident and he was surprised when the MTO brought it to his attention in October 2018. He stated that he was aware that a wheel detached from one of his company’s vehicles and the driver was at fault for not inspecting the wheels on a daily basis. The driver was fired within a week of returning from that trip.
55Mr. Dermont understood that the driver was charged, pled guilty and paid a fine. Mr. Dermont claims that he received no notice that his company had been charged or a fined until the MTO brought it to his attention in October 2018.
56Mr. Dermont testified that soon after he found out about the fine, he got in touch with the court office. He was told that he might be able to re-open the case and was given (or referred to) a form to be completed and submitted to the court. He has not yet submitted that form and the fine is still outstanding.
(g) Gap in Insurance Coverage
57During the attempted audit in September/October 2018, the MTO made an attempt to verify that the appellant had valid insurance coverage. The appellant had earlier provided the MTO with a policy number indicating that it was insured with Intact Insurance. However, when MTO checked, Intact reported that the policy had been cancelled in January, 2018 and the appellant was not currently insured with it.
58The failure of a carrier to maintain valid insurance is clearly a serious matter and would warrant a firm regulatory response. Mr. Dermont testified however that his company has had valid insurance in place at all times when his company was operating.
59Mr. Dermont stated that his insurance coverage is arranged through an insurance broker “who takes care of everything”. He stated that his insurance coverage was suspended in early 2018 because he was in Poland dealing with his family issues and his company was not operating. When he returned his broker arranged new insurance with the Economical Insurance Company. However, the MTO was not informed of the new policy.
60When this issue was raised by MTO officials with Mr. Dermont in April 2019, he provided proof of coverage and MTO confirmed that Economical has provided valid coverage from February 2, 2018 and that coverage is in place until February 2020. In other words, there has been no lapse in coverage.
APPELLANT’S EFFORTS TO IMPROVE PERFORMANCE
61On April 10, 2019, MTO officials, including the Deputy Registrar, met with Mr. Dermont to discuss the appellant’s poor safety record and give Mr. Dermont a chance to present information relevant to the proposed cancellation of the appellant’s CVOR certificates.
62According to notes of that meeting prepared by the MTO, the Deputy Registrar asked Mr. Dermont to prepare and submit by May 1, 2019 an action plan that would describe the actions the appellant would take to improve the appellant’s safety record and increase Mr. Dermont’s knowledge of how to operate a trucking company safely.
63On May 1, 2019, Mr. Dermont sent some information to the MTO although it was apparently not received until one week later because he sent it to the wrong email address. In that communication Mr. Dermont stated that his company retained a trucking consultant to provide driver safety and compliance training and prepare a safety rating improvement plan to be put into place by the company.
64In his testimony at the hearing, Mr. Dermont elaborated on the action plan and the steps taken so far to improve the appellant’s safety rating. He stated that he has retained Garra Inc., apparently a trucking safety consultant, to assist the appellant with a strategy to improve the appellant’s safety rating in various areas. Mr. Dermont provided a written 11 point action plan that includes:
Garra Inc. will be involved in the new driver hiring process including road, pre-trip inspection, and vehicle operation tests
Garra Inc. will conduct a short driver course and training for all new and existing drivers
Safety meetings and safety performance talks will be given every 3 months or sooner if needed
A vehicle maintenance program will be introduced and safety maintenance records will be kept for a minimum of 2 years
All major and minor defects will be reported to the appellant by drivers and required repairs are to be done immediately by certified technicians
Driver logs will be collected and reviewed every two weeks and any problems will be addressed with driver
Vehicles will be safety inspected annually
Vehicles will be fully serviced every 40,000 km or as mandated by vehicle maintenance requirements
65With respect to steps already taken to improve the appellant’s safety record, Mr. Dermont testified that he has:
Provided proof of insurance as requested
Paid outstanding company fines except the wheel separation fine
Taken steps to re-open the wheel separation case
Retained Garra Inc. to improve company safety and conduct training
Installed GPS in the trucks
Terminated the employment of Tomasz Dermont
Completed a 2 day safety airbrake course
Held four safety and training meetings with trucking safety consultant.
ANALYSIS AND DECISION
66The Registrar’s concerns about the appellant’s safety record are certainly justified. However, Mr. Dermont struck me as sincere in his desire to improve his company’s safety rating and, as suggested to him by the Deputy Registrar at the meeting on April 4, 2019, he has put in place an action plan and has taken concrete and specific steps to improve the appellant’s performance.
67In my view, Mr. Dermont should be given a chance to put that plan into place and demonstrate that his company can operate safely.
68The Registrar’s central concern is the appellant’s ability to operate its commercial vehicles safely and the most alarming information in that regard is the appellant’s record of convictions and the results of vehicle inspections. They indicate serious deficiencies including wheel fasteners loose, maintenance issues, unsecured loads, drivers operating beyond their time limits and a false driver log.
69A review of the inspection records indicates that most of the serious problems revealed at involved TD as the driver. Mr. Dermont has now terminated his brother’s employment which he testified was a personally very difficult step but necessary to improve his company’s safety record.
70In addition, Mr. Dermont’s action plan involves features designed to rectify specific deficiencies and past safety concerns including a new driver hiring process, driver training, regular safety meeting and instruction, a systematic vehicle inspection and maintenance program, review of driver logs, and enhanced supervision.
71After listening to Mr. Dermont testify I was left with the impression that he requires assistance to identify, understand, and put into place measures to meet regulatory requirements. That may be due in part to the fact that English is not his first language. The appellant’s safety consultant is intended to provide constructive assistance to Mr. Dermont in understanding his responsibilities as a commercial vehicle operator.
72With respect to the failed audit, I note that the audit was marked as failed because the auditor was unable to meet with Mr. Dermont to review the appellant’s records and not because the auditor reviewed the records and found deficiencies.
73According to the Registrar’s witness, audits are done to confirm compliance or expose non-compliance with regulatory requirements. A failure to cooperate with an audit seriously hampers the Registrar’s efforts to ensure compliance with regulatory requirements, many of which are ultimately designed to promote public safety.
74The main concern here appears to be that Mr. Dermont failed to comply with the auditor’s request to meet and failed to co-operate with the audit by effectively proposing or arranging for a suitable date in the near future. Ultimately it is Mr. Dermont’s responsibility to comply with the auditor’s request. It is not acceptable to dismiss or ignore those requests.
75The Registrar’s counsel acknowledged the appellant’s action plan and the steps taken so far to improve but argued that it was too little and too late.
76Although I agree that the appellant’s safety record is poor, in my view the appellant should be given an opportunity to improve and I consequently decline to confirm the Registrar’s proposed order to cancel the appellant’s CVOR certificates. However, if the action plan does not result in significant improvement the result ultimately may be the cancellation the appellant’s CVOR certificates
77The Registrar’s counsel suggested that if I was not inclined to confirm cancellation, that I should consider imposing a suspension of 30 days. I agree that some form of sanction should be imposed to make it clear to the appellant that his company’s failures to co-operate with the auditor, operate safely and effectively supervise the performance of its drivers and vehicles will attract a sanction.
78However, I consider a 30 day suspension to be too long for that purpose and I do not wish to jeopardise the appellant’s ability to generate the income required to fund the safety consultant and put into place the action plan. I have therefore decided to modify the Registrar’s order and suspend the appellant’s CVOR certificates for a period of 20 days commencing on a date to be determined by the Registrar.
DECISION
79Pursuant to s. 50(2) of the Act, I modify the Registrar’s order and instead suspend the appellant’s CVOR certificates for a period of 20 days commencing on a date to be determined by the Registrar.
LICENCE APPEAL TRIBUNAL
Stephen Scharbach, Member
Released: September 16, 2019