1302679 Ontario Inc. v. Registrar of Motor Vehicles, 2019 CanLII 83586

Licence Appeal Tribunal

Date: 2019-08-20

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:

1302679 Ontario Inc., 2025755 Ontario Inc., and Darren Zumpe Appellants

and

Registrar of Motor Vehicles Respondent

DECISION AND ORDER

Adjudicator: Asad Ali Moten, Member

Appearances:

For the Appellants: Darren Zumpe For the Respondent: Patrick Moore, Counsel

Heard in St. Catharines on: May 15 and 16, 2019

REASONS FOR DECISION AND ORDER

OVERVIEW

1The appellants are two Ontario numbered companies and Darren J. Zumpe who goes by ‘The one called darren’. ‘The one called darren’ is the sole owner and director of the numbered corporations. It is estimated that, as CVOR certificate holders, the three appellants collectively own or operate between seven and eleven commercial vehicles. All of their commercial trucking activity takes place within Ontario. ‘The one called darren’ has been a CVOR holder since 1994.

2In December 2018 the respondent Registrar issued a Notice of Cancellation and Seizure to the appellants and invited their response. Receiving none, the Registrar issued a Cancellation and Seizure Order in January 2019. The appellants provided written submissions in response to the Cancellation and Seizure Order. On January 25, 2019, the Registrar amended the order to instead suspend the appellants’ CVOR certificates for fifteen days and to seize the licence plates of the appellants’ trucks (the Suspension Order). The appellants then appealed the Suspension Order.

3The Registrar argues that the suspension and seizure are warranted based on the appellants’ safety records. In addition, the Registrar argues, ‘the one called darren’s’ interactions with the Ministry are very concerning and warrant a sanction by the Registrar.

4For the reasons below the Tribunal finds that the Registrar has satisfied its onus to prove that grounds exist for suspension and seizure. The Tribunal confirms the Amended Order of Cancellation and Seizure, and orders that the appellants’ CVOR certificates be suspended for fifteen days.

PRELIMINARY ISSUES

Applicants’ Summons

5Two days before the hearing, ‘the one called darren’ requested the Tribunal to issue summonses to four witnesses: Jeff Yurek, Minister of Transportation for Ontario at the time of the hearing; David Lametti, Attorney General of Canada; Alfred Sean Doussept, Deputy Registrar of Motor Vehicles, and Linda Davies, a Court Services Administrator for the Ministry of Transportation. The Tribunal issued the summonses, and the Registrar brought a motion to quash the summonses.

6This motion was heard at the outset of the hearing. None of the witnesses summonsed were present. ‘The one called darren’ agreed to withdraw the summonses with respect to all the witnesses except the Minister of Transportation (the Minister).

7While the Summons to a Witness form submitted by ‘the one called darren’ to the Tribunal did not describe why the Minister was being summonsed or the Minister’s relationship to this proceeding, ‘the one called darren’ described his reasons to the Tribunal during the hearing of the motion. These reasons are:

i. To ask the Minister whether or not the officers responsible for inspecting the appellants’ businesses were acting within the bounds of their duties or if they were acting outside of those bounds; and,

ii. To tell the Minister about the goings on and conduct of employees within his Ministry.

8The Registrar argued that the summons was an abuse of process because the appellants had not complied with the Tribunal’s order to deliver a list of witnesses and were using the summons process for a fishing expedition. Further, the Registrar argued, the Minister has no information that would be relevant to this proceeding were he to be called as a witness.

9The Tribunal granted the motion to quash the summons for the following reasons. First, the Tribunal agrees with the Registrar that the Minister would not have any knowledge relevant to the issues to be decided in this case; or, even if he did, he would not be the witness best positioned to convey that knowledge to the Tribunal. Therefore, the Minister’s testimony would not contribute to the Tribunal’s fact-finding mission. Second, the role of a witness in a proceeding is not to receive information, but to give it. Therefore, summonsing a witness so that a party may tell the witness about something is not a proper use of the Tribunal process. The appellants may achieve this goal through other means, such as writing a letter.

Standing – Individual Appellant

10A second preliminary issue was whether or not ‘the one called darren’ was the same person as the ZUMPE, DARREN J. to whom the Notice and Orders were issued, and who was listed as the owner and director of the numbered companies. ‘The one called darren’ argued that ZUMPE, DARREN J. was a legal entity, a name, given to a human being, but was not the human being. In essence, ‘the one called darren’ argued that he was not ZUMPE, DARREN J. The Tribunal then raised the issue of standing, querying with the parties whether ‘the one called darren’ then had standing as a party before the Tribunal since he was not named in the correspondence from the Registrar or on the CVOR certificate. ‘The one called darren’ then conceded that for the purposes of this proceeding he was the named party ZUMPE, DARREN J., and had the capacity to bind that legal person.

11For the purposes of this proceeding, ‘the one called darren’ is the individual to whom the ZUMPE, DARREN J., Darren Zumpe, and Darren J. Zumpe CVOR certificates, correspondence from the Registrar, and Tribunal documents are addressed. He is referred to in his human form as ‘the one called darren’ throughout this decision.

ISSUES

12The issues to be decided by the Tribunal are:

A. Do the appellants’ safety records and other relevant information give reason to believe that the appellants will not operate a commercial vehicle safely or in accordance with this Act, the regulations and other laws relating to highway safety?

B. If a suspension is warranted, how long should the suspension be?

EVIDENCE, LAW AND ANALYSIS

13Section 47(1) of the Highway Traffic Act, R.S.O. 1990, c. H.8 (the Act) states that the Registrar may, by order, suspend or cancel a CVOR certificate on the grounds of:

s. 47(1) …

(f) the Registrar having reason to believe, having regard to the safety record of the holder or of a person related to the holder, and any other information that the Registrar considers relevant, that the holder will not operate a commercial motor vehicle safely or in accordance with this Act, the regulations and other laws relating to highway safety; or,

(g) any other sufficient reason not referred to in clause (d), (e) or (f).

14Where there has been an appeal from such an order, the Tribunal has the power to confirm, modify, or set aside the order, pursuant to section 50(2) of the Act.

15A “person related to the holder”, as referenced in section 47(1)(f) above, is determined according to section 17(4) of the Act, and may be where either the applicant or the person related to the holder, directly or indirectly, controls or controlled or manages or managed the other; or the applicant and the person related to the holder have or have had common officers or directors or they are or have been controlled, directly or indirectly, by the same shareholders.

16In this instance, the Tribunal finds that the Ontario numbered company appellants, specifically 1302679 Ontario Inc. and 2025755 Ontario Inc. are persons related to the holder, ZUMPE, DARREN J. This is for the following reasons. First, both numbered companies list Darren John Zumpe as Director, President, Secretary, and Treasurer continuously since their inception. No other directors or officers are listed for either company. Second, both share the same corporate address as ZUMPE, DARREN J. Therefore, for the purposes of this proceeding, findings made with respect to ‘the one called darren’ are relevant to whether or not the CVOR certificates of the numbered companies should be suspended, and vice versa.

17The Registrar argues that the appellants’ safety record and ‘the one called darren’s’ interactions with the Ministry give the Registrar reason to believe 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. Further and in the alternative, the Registrar argues that ‘the one called darren’s’ actions are sufficient reason, under section 47(1)(g), to warrant a suspension of the appellants’ CVOR licence.

18‘The one called darren’ appeared on behalf of all three appellants. He did not testify under oath or affirmation and did not call any witnesses. He cross-examined the Registrar’s witnesses and provided closing submissions with respect to why the Suspension Order should not be carried out. Some of what came out of cross-examination and the appellants’ closing submissions may be considered evidence, and the Tribunal has the power, pursuant to section 15 of the Statutory Powers Procedure Act R.S.O. 1990, c. S.22, to admit such evidence. The Tribunal is also free to accord to this evidence the appropriate weight.

Appellants’ safety records

19‘The one called darren’ has three CVOR certificates. He has been a CVOR holder in his personal capacity since 1994. His CVOR record lists no trucks operating under this certificate in 2018, and four trucks operating in 2017. He is also the sole officer and director of the numbered companies, which are also CVOR holders.1302679 Ontario Inc. has been a CVOR holder since 1998 and is listed as operating five trucks in 2018. 2025755 Ontario Inc. has been a CVOR holder since 2003 and is listed as operating two trucks in 2018.

20Section 5 of Regulation 474/97 under the Act itemizes what is to be contained within a CVOR holder’s safety record. Relevant to this proceeding it includes all warning letters, convictions, collisions, inspection findings, safety ratings, audit findings, fleet size, kilometric travel, and any analysis of the above information, such as an overall violation rate.

21The Registrar put forward evidence in relation to ‘the one called darren’s’ CVOR Level II abstract to demonstrate the CVOR holder’s safety record. Rick Borris, Carrier Safety Rating Administrator for the Ministry, testified as to how truck inspection findings, collision investigations, convictions, and other events are included in the abstract and tabulated to arrive at a total violation rate. The formula is complex and will not be reproduced here. In sum, points accumulated through collisions and convictions carry greater weight than points assigned through truck inspection findings, and the final violation rate is relative to an acceptable threshold. This acceptable threshold is operator-specific, examining fleet size and kilometric travel, and is determined by the Ministry based on reporting by an operator. A CVOR holder’s violation rate can trigger other actions by the Registrar, such as warning letters, facility audits, operator interviews, and sanctions.

22The CVOR Level II abstract for ‘the one called darren’ indicates 13 convictions between October 30, 2016 and October 30, 2018. In eight of these instances, the convictions were listed as against the carrier or operator.¹ In this instance there is no evidence to indicate that the operator is any person other than ‘the one called darren’. The following are the findings during this period:

• Inspection on January 1, 2017 resulted in a conviction against the carrier for not having a valid permit;
• Inspection on July 6, 2017 resulted in a conviction against the carrier for not having a valid permit;
• Inspection on February 23, 2018 uncovered issues with respect to truck brakes and trip inspection. A truck was taken out of service, and the inspection resulted in convictions against the carrier for push rods exceeding their limit, failure to ensure accurate reporting, and failure to ensure standards met and a conviction against the driver for failing to comply with reporting requirements;
• Inspection on March 24, 2018 resulted in a conviction against the carrier for overweight vehicle, and a conviction against a driver for failing to produce a driver’s licence;
• Inspection on April 1, 2018 of two trucks resulted in a conviction against the carrier for no valid permit;
• Inspection on May 1, 2018 resulted in convictions against the carrier for no valid permit, and failure to display;
• A warning letter was sent to ‘the one called darren’ on May 2, 2018 because the violation rate had exceeded 35 percent;
• Inspection on July 20, 2018 resulted in convictions against a driver for failure to report and for not wearing a seatbelt;
• Collision on August 21, 2018 resulted in property damage, but no injury or convictions against carrier or driver.

23It is important to note that in none of the instances above was the driver ever ‘the one called darren’. In every instance, however, the investigating officer found the truck operator, or carrier, to be ‘the one called darren’. As such, these incidents are attached to his CVOR record.

24By October 30, 2018 the total violation rate for ‘the one called darren’ was 60.53 percent. His conviction violation rate was 147 percent. This puts him, as an operator, in the worst 4 percent of operators.

25‘The one called darren’ argued that he was not the operator of the trucks during this time because his trucks had been leased to other operators. Therefore, according to him, he should not be the one held responsible for convictions or the violation rate. The Tribunal does not accept this argument. ‘The one called darren’ presented no documentary evidence, such as lease agreements or correspondence with a lessee, to support this argument. The only evidence to this effect was ‘the one called darren’s’ oral assertions, to which the Tribunal gives little weight as they were not made in the context of testimony and could not be tested through cross-examination. The Tribunal has no information to indicate that the operator of the trucks was anyone other than the person to whom the CVOR certificates were issued.

26‘The one called darren’ did not make any submissions with respect to, or dispute in any substantive way, the overall violation rate calculated by the Ministry. In addition, he did not provide any evidence or submissions about safety plans, improvements to his operations, or safety processes put in place since October 30, 2018 that might address the Registrar’s grounds. Therefore, the Tribunal has no evidence as to how ‘the one called darren’, as CVOR holder would operate differently now as compared to the period from October 30, 2016 to October 30, 2018.

27In addition, the Tribunal finds that ‘the one called darren’ did not meet his obligations under the Act to accurately advise the Ministry with respect to changes in fleet size. Section 6 of Regulation 424/97 under the Act requires CVOR holders to report a change in fleet size of greater than 20 percent to the Registrar within 15 days of the change. For the 2018 calendar year, ‘the one called darren’ provided to the Registrar a projected fleet size of zero, and projected kilometric travel of zero. However, as the Tribunal found above, several inspections conducted on Ontario roads indicate that ‘the one called darren’ did have trucks operating on Ontario roads under his CVOR certificate during 2018. There is no evidence that ‘the one called darren’ advised the Registrar that his fleet size had changed.

28It should be noted that while ‘the one called darren’, as CVOR holder, has a poor total violation rate, the two numbered companies, in relation to which ‘the one called darren’ also holds the CVOR certificates, are quite the opposite. 1302679 Ontario Inc. has a total violation rate of 10 percent. In May 22, 2018, an inspection found two trucks operating under this numbered company to have maintenance issues so significant that they were taken out of service immediately. Nonetheless, this numbered company overall has maintained a good safety record thus far, including a rare ‘satisfactory’ rating after a 2003 facility audit. Similarly, 2025755 Ontario Inc. has a zero percent violation rate.

‘The one called darren’s’ interactions with the Ministry

29The Registrar has the authority to enter a facility and inspect records pursuant to section 225 of the Act. The provision also states that it is an offence to obstruct an officer of the Ministry from doing anything they are authorized to do, or to conceal or destroy a record. Because of ‘the one called darren’s’ total violation rate exceeding 50 percent, the Registrar initiated a facility audit as a follow up.

30Officer James Shannon, Facility Auditor for the Ministry of Transportation, testified that he was requested by the Deputy Registrar to conduct a Tier 1 facility audit of ‘the one called darren’s’ business and records. During such an audit, the inspector examines maintenance records, annual inspections, safety inspections, hours of service records, time cards, log books, cycle violations, daily violations, and hours of service violations. A Carrier Safety Rating is generated after the audit. A good rating can assist an operator with insurance costs or getting certain contracts. A report is also provided to assist operators in improving their record keeping. All in all, a facility audit can be a process helpful to both the operator and the Ministry in protecting the public interest.

31Officer Shannon began preparing for the facility audit on November 19, 2018. He checked Ministry records for ‘the one called darren’s’ driver’s licence and noted that it was suspended for unpaid fines. He prepared a form letter, dated that same day, advising ‘the one called darren’ of the facility audit scheduled for November 20, 2018. The letter lists the types of records that might be requested for inspection. Officer Shannon and another officer hand delivered the letter to ‘the one called darren’s’ primary place of business and left the letter with an employee.

32‘The one called darren’ later called Officer Shannon and advised that he would permit an audit only if his conditions were met, which included: (a) compensation for time spent at a rate of $1,000 per hour; (b) that the Minister and Deputy Minister attend the audit; and (c) no photocopying or pictures of any documents, and no documents leaving the property. Officer Shannon advised ‘the one called darren’ of the statutory authority to conduct inspections, and that these conditions were not within his powers. At no point did ‘the one called darren’ ask for more time or indicate that 24 hours would not be enough to gather the records.

33On November 20, 2018 Officer Shannon and Officer Chris Austin attended the business to conduct the facility audit. The uncontroverted evidence of Officers Shannon and Austin in the absence of ‘the one called darren’ testifying is that ‘the one called darren’ was present at the audit, reiterated his conditions, advised that he did not recognize the authority of the officers or of the Act, advised that he would be recording the officers, and stated that he would call the police if the officers remained or tried to conduct the audit without meeting his conditions. After a half hour of discussion and requests of ‘the one called darren’, the officers disengaged and left the property. The Tribunal finds that ‘the one called darren’ effectively prevented the officers from inspecting records in furtherance of the facility audit.

34‘The one called darren’ argues that because he never used the words “demand”, “refuse”, or used any threatening language, his behaviour and actions cannot be interpreted as obstructive. He argues that his motivation was to negotiate. The effect, however, of negotiating or placing conditions on access to records, particularly conditions that ‘the one called darren’ was advised are not within the officers’ powers, is the same as an outright refusal. It is constructively preventing the officers from carrying out their statutory duty.

35He also argues that the process of a facility audit is a transaction between the CVOR holder and the Ministry, and therefore, like any commercial transaction, there should be some consideration in return for access to the records. In this instance, his requested considerations were the conditions he stated. Again, the Tribunal finds this argument without any basis. The statutory authority permitting inspections does not describe the process as optional as non-participation is an offence. ‘The one called darren’s’ choice is a macro one – to be a CVOR holder or not. Once he chooses to accept that privilege, he is required to submit to the statutory regime. While an authority, such as the Ministry, is free to negotiate conditions with a CVOR holder, for instance time, place, or scope of inspection, they are under no obligation to do so. And, in any case, the effect of ‘the one called darren’s’ insistence of meeting his conditions is the same – preventing the officers from carrying out their statutory duty.

36The day after the scheduled audit date, ‘the one called darren’ sent a letter to the Ministry. The letter again reiterated his conditions for permitting a facility audit and included several additional conditions. Officer Shannon testified that none of these conditions were within his powers. He did not respond to the letter and did not follow up with any further visits to the property.

37Officer Shannon completed his facility audit based on the information he had and listed the operator as having failed to provide records with respect to: vehicle maintenance; hours of service; and, qualifications, records and reporting. ‘The one called darren’ was assessed an audit compliance score of 30.83 percent. A score of less than 55 percent is categorized as a fail, and as a result, ‘the one called darren’ failed the audit. His safety rating was changed, as of November 29, 2018 from ‘satisfactory un-audited’ to ‘conditional’.

38On December 7, 2018 the Registrar sent the appellants a Notice of Cancellation and Seizure. This Notice permitted the appellants to provide written submissions before December 21, 2018. On December 10, 2018, ‘the one called darren’ wrote to the Deputy Registrar, inviting the Deputy Registrar to provide supporting facts for the conclusions in the Notice, and reiterating a list of nine conditions that the Ministry must meet to do business with ‘the one called darren’. Mr. Borris, Carrier Safety Rating Administrator, then called ‘the one called darren’ and advised him of his options under the Notice.

39On January 7, 2019 the Registrar issued a Cancellation and Seizure Order, stating that no submissions had been received by the appellants. On January 9, 2019, ‘the one called darren’ again wrote to the Deputy Registrar requesting clarification on the facts supporting the allegations in the Notice. Again, Mr. Borris called him, and they walked through the Notice point by point. After this conversation, ‘the one called darren’ sent a letter responding to each individual allegation in the Notice. A significant material change was that ‘the one called darren’ had paid all outstanding fines.

40As a result, on January 25, 2019 the Registrar issued an Amended Cancellation and Seizure Order which, instead of cancelling the appellants’ CVOR certificates, ordered that they be suspended for 15 days.

Has the test for suspending the appellants’ CVOR certificates been met?

41Pursuant to section 47(1)(f) of the Act, and based on ‘the one called darren’s’ safety record, including high total violation rate, non-reporting of changes in fleet size, and facility audit findings, as well as other relevant information including the lack of evidence with respect to a safety plan or improved processes, and obstructionist and resistant to regulation interactions with the Ministry since October 2018, the Tribunal finds that there is reason to believe that ‘the one called darren’ will not operate a commercial motor vehicle safely or in accordance with this Act, the regulations and other laws relating to highway safety. While ‘the one called darren’s’ payment of outstanding fines and some positive interaction with the Ministry are mitigating factors, the Tribunal is of the opinion that the test for suspending ‘the one called darren’s’ CVOR certificate is nevertheless met.

42With respect to the numbered companies, the Tribunal finds that both have very good overall violation rates. Nonetheless, the Tribunal is entitled to consider both the safety record of a related holder and any other relevant information in determining whether a suspension is warranted. This is intended to mitigate against avoidance measures by operators who might have ownership or control of several CVOR holders. In this instance, ‘the one called darren’ has exhibited a resistance to regulation, particularly when confronted with poor compliance rates. It is foreseeable that, were the Tribunal to suspend only ‘the one called darren’s’ CVOR certificate, he may migrate this approach to regulation to the numbered companies and operate them in a manner that puts public safety at risk. Therefore, the Tribunal finds that ‘the one called darren’s’ safety record, as a related holder to the numbered companies, and his interactions with the Ministry meet the test for suspending the numbered companies’ CVOR certificates.

43As the Tribunal has found that the test for suspending the appellants’ CVOR certificates is met under section 47(1)(f), there is no need for the Tribunal to consider whether “any other sufficient reason” exists under section 47(1)(g) that would warrant suspension.

How long should the CVOR certificates be suspended?

44The appellants made no submissions as to what an appropriate length of suspension might be, save for arguing that there should be no suspension. The Registrar provided no persuasive case law as to what length of suspensions have resulted from similar findings of fact. The Registrar did argue, however, that the fifteen-day suspension ordered by the Registrar is a lighter touch suspension than what it could have ordered, and that it is appropriate in these circumstances to deter future violations and encourage compliance.

45According to the Registrar, the minimum length of suspension would be seven days, and the maximum thirty. While there is no statutory reference to support this range, the Tribunal accepts that this is the practical range within which the Registrar makes suspension orders.

46In this instance, the Tribunal finds that a fifteen-day suspension, as a halfway point in the range of suspension lengths generally ordered by the Registrar, is appropriate. This is because ‘the one called darren’s’ safety record indicates serious issues with reporting and compliance. This is further exacerbated by ‘the one called darren’s’ unwillingness to accede to the regulatory authority of the Registrar. Such conduct is to be deterred. On the other hand, ‘the one called darren’ did pay off his fines and has displayed some ability to maintain an acceptable level of compliance and safety through his numbered companies. These are mitigating factors that are reflected in the Registrar’s decision to amend the order from a cancellation to a fifteen-day suspension. To encourage this type of ongoing compliance a suspension should not be unnecessarily heavy-handed.

CONCLUSION AND ORDER

47The Tribunal finds that the Registrar has satisfied its onus to prove under section 47(1)(f) of the Act that there is reason to believe, having regard to the safety record of ‘the one called darren’ as CVOR holder and related holder to the numbered companies, and other relevant information including the absence of any evidence pointing to a safety plan and ‘the one called darren’s’ interactions with the Ministry that the appellants will not operate a commercial motor vehicle safely or in accordance with the Act, the regulations, and other laws relating to highway safety.

48Therefore, the Tribunal confirms the Registrar’s Amended Order of Cancellation and Seizure and orders the Registrar to carry out a 15-day suspension of the appellants’ CVOR certificates and seizure of the plate portions of permits and number plates.

Footnotes

1. 1The term carrier is used interchangeably by the Ministry with the term ‘operator’ as defined under the Act. Section 16(1) of the Act defines an operator as the person directly or indirectly responsible for the operation of a commercial motor vehicle including the conduct of the driver and the carriage of goods or passengers. An operator must hold a valid CVOR certificate.