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

Citation: Angelika Mastrokalos v. Director of Vehicle Inspection Standards, 2020 ONLAT 12139 GAR Date: 2019-01-10

Appeal from a Notice of Proposal of the Director of Vehicle Inspection Standards under the Highway Traffic Act, R.S.O. 1990, c. H.8 to Refuse to Register a Motor Vehicle Inspection Station and to Refuse to Issue a Motor Vehicle Inspection Station Mechanic’s Registration

Between:

Angelika Mastrokalos (operating as ‘Avto Total Repair’) Appellant

And

Director of Vehicle Inspection Standards (“Director”) Respondent

DECISION

Adjudicator: Zahra Dhanani, Member

Appearances: For the Appellant: Self-Represented For the Respondent: Douglas Wai Lee, Counsel Ministry of the Attorney General

Place and date(s) of hearing: Toronto, October 3, 2019

REASONS FOR DECISION:

OVERVIEW

[1]. The Director of Vehicle Inspection Standards (Director) issued a Notice of Proposal to Refuse Registration (Notice) to Ms. Mastrokalo’s (the “appellant”), dated May 2nd, 2019, which proposed to:

a) Refuse to Register the appellant’s Motor Vehicle Inspection Station (MVIS) and,

b) Refuse to Issue a Motor Vehicle Inspection Station Mechanic’s (MVIM) registration to mechanic Victor Petrishchev (the appellant’s husband).

[2]. The Director proposed to refuse the appellant’s registration based on sections 91(3)(b) and 91(3)(c) of the Highway Traffic Act (the “Act”), namely that the proposed MVIS or its operation would contravene the Act and that the appellant is not competent to operate a MVIS in accordance with the Act and its regulations.

[3]. The Director concluded that the appellant would only be resurrecting her husband’s old business (which had numerous convictions against it in the past), but in a new name.

[4]. The Director also concluded that pursuant to sections 92(4)(a) and 92(4)(b) of the Act, Mr. Petrishchev’s past conduct affords reasonable grounds to believe that he will not act as an MVIM in accordance with the law, with honesty and integrity and that he is not competent to act as an MVIM.

[5]. The appellant appealed the Notice to the Licence Appeal Tribunal (Tribunal). A hearing was held on October 3, 2019 and two witnesses testified: Mr. Petrishchev and the appellant. The Director had initially introduced the Director Mr. Opdam as a witness, later in the hearing the Director decided that he would no longer like to call Mr. Opdam to testify.

ISSUES

[6]. I must decide whether the appellant, if registered under the Act, is competent to carry on her business and will do so in accordance with the law. I must also decide whether Mr. Petrishchev is competent to act as the MVIM and will do so with honesty, integrity and in accordance with the law.

[7]. Based on the Director's noted concerns, the following questions must be answered:

a) With respect to the appellant’s MVIS: a. Will the appellant or her husband own and manage the MVIS? b. If it is the appellant who will own and manage the MVIS, will she conduct the business competently and in accordance with the law?

b) With respect to Mr. Petrishchev’s MVIM: a. Does the past conduct of Mr. Petrishchev afford reasonable grounds for belief that he will not conduct his work as the MVIM with honesty, integrity and in accordance with the law? b. Is Mr. Petrishchev competent to act as the MVIM?

c) Finally, if a licence is issued, are there any conditions that could be attached to the registrations that would alleviate the Registrar’s concerns.

RESULT

[8]. For the reasons set out below, I find that the Director did not provide enough evidence to support a finding that the appellant is incompetent or will not run the MVIS in accordance with the law. I also find that the Registrar did not provide sufficient evidence to support a finding that Mr. Petrishchev will not conduct himself with honesty, integrity and in accordance with the law.

[9]. I am therefore directing the Director to refrain from carrying out the Notice and instead allowing the appellant’s and Mr. Petrishchev’s registrations. To address the Director’s concerns about reporting, I attach to the appellant's registration the condition that for the first year of the appellant’s operation of her MVIS she will have a quarterly phone meeting with the Directors office to report on business activity and the documentary reporting obligations.

PRELIMINARY MATTERS

Witnesses

[10]. At the outset of the hearing, the appellant informed the Tribunal that she and her husband would be testifying.

[11]. The Director submitted that he would be at a disadvantage if they testified because he had not received any notice or witness statements from the appellant and therefore.

[12]. I allowed the testimony of the appellant and her husband because: a) the submissions in the appellant’s Notice of Appeal (NOA) were lengthy and covered much of the appellant’s evidence; b) the NOA statement was written on behalf of both the appellant and her husband, giving the Director an idea of what the testimony would be; c) the appellant was self-represented and was confused about what it meant to provide “will-says” for her witnesses; d) self-represented parties can be afforded some measure of leeway with respect to procedural rules where it does not cause material prejudice to the other party; and e) on consent of the parties, the hearing began with the appellant’s witnesses, giving the Director an opportunity to hear the testimony before bringing his evidence.

Admitting in Mr. Petrishchev’s Technician Record

[13]. The Director asked Mr. Petrishchev if he would admit to the Enforcement History in his record as a Technician with the Ministry, located at Tab 5 of the respondent’s Book of Documents (Exhibit 2).

[14]. Mr. Petrishchev admitted that it was his record and he had no issues with it being introduced as part of the record. It was therefore admitted.

LAW

[15]. Section 91(3)(b) and (c) of the Act state: Subject to section 95, the Director may refuse to issue a motor vehicle inspection station licence where, in his or her opinion; (b) the proposed motor vehicle inspection station or its operation would contravene this Act… (c) the applicant is not competent to operate this motor vehicle inspection station…

[16]. Sections 92(4)(a) and (b) of the Act provide the grounds for refusing an MVIM registration: Subject to section 95, the Director may refuse to register a motor vehicle inspection mechanic where, in his or her opinion,

(a) the past conduct of the mechanic affords reasonable grounds for belief that the mechanic will not Act as a motor vehicle inspection mechanic in accordance with the law and with honesty and integrity; or

(b) the mechanic is not competent to Act as a motor vehicle inspection mechanic.

[17]. Section 95(4) outlines the powers of the Tribunal on appeals. The Tribunal may direct the Director to carry out the proposal or refrain from carrying it out and to take such action as the Tribunal considers the Director ought to take in accordance with this Act and the regulations, and for such purposes the Tribunal may substitute its opinion for that of the Director.

[18]. The Director bears the burden of proving at least one of the grounds for refusing registration. There are two different standards of proof that apply in this case: (a) Sections 91(3)(b) and (c) and section 92(4) (c) are grounds to be proven on a balance of probabilities. (b) Section 92(4)(a), concerning Mr. Petrishchev’s past conduct, need only be proven on the lower standard of “affords reasonable grounds for belief”.

ANALYSIS

Is the appellant competent to operate an MVIS and will the appellant conduct the business in accordance with the law? Will the appellant be the owner of the MVIS or is she resurrecting her husband’s previous business?

[19]. For the reasons that follow, I find that the appellant will be the owner and manager of the MVIS, solely responsible for the errors, omissions, liability, conduct and responsibility. I do not find that she is simply resurrecting her husband’s previous business as asserted by the Director.

[20]. The appellant submitted an application to the Director for a licence to operate a type 6 MVIS for “salvaged vehicles only”. On the application she named her husband Mr. Petrishchev as the proposed MVIM.

[21]. Between 2006 and 2008, Mr. Petrishchev operated a business called “Victor’s Auto Sales” in Hamilton, Ontario. At that time the appellant helped him out in small ways, but she was not a formal employee as she was employed elsewhere. Mr. Petrishchev exclusively ran this business, he was the registered MVIM and was responsible for the reporting and documentary requirements. During that period Mr. Petrishchev received 263 warnings and 161 convictions for failing to comply with the Act and Regulations, in particular for failing to submit required documents and paperwork. The warnings and convictions were all based on administrative reporting requirements.

[22]. The appellant testified that she is not resurrecting “Victor’s Auto Sales.” She is going to run her own new business. She is investing everything she has in it and she will be the one completely responsible for the MVIS.

[23]. One of the requirements to get licenced by the Director is to have the location of the MVIS secured. The appellant testified that since May of 2019 she has been paying rent to an autobody shop at a cost of $2000.00 plus HST per month.

[24]. The appellant has about $35,000.00 of equipment in the shop. She has also paid for all the licensing fees to date.

[25]. She testified that all the money that she is earning right now is going into this business. She stated that her husband covers all of their personal expenses, so she has the freedom to invest in the business.

[26]. The appellant testified that her business “Avto Total Repair” is licenced with the municipality in her name, the lease of the shop is in her name and that she will be completely responsible for the administration of the business.

[27]. I am convinced by the above facts that this business will be solely owned and managed by the appellant.

[28]. For the following reasons I am also convinced that Mr. Petrishchev has a vested interest in keeping his current full-time job and has no interest in managing the MVIS.

[29]. Mr. Petrishchev is employed on a full-time basis by the Toronto Transit Commission (TTC) as a “Collision Technician”. He is involved with daily inspections and repairs of streetcars.

[30]. He works the night shift from midnight to 7:30am. He testified that he is very committed to keeping his full-time job, he is good at it and he does not ever want to lose this job. He has been employed with the TTC for over five years and has full benefits and a pension. He gets very good annual performance appraisals and he is very content with his work at the TTC.

[31]. He testified that he sleeps every day from 4pm to 10pm (6 hours) and so he has his day from 9am to 4pm to do whatever he wants. Other than walking his dog he has no other obligations, he has gotten used to his irregular sleep schedule and he feels like he gets enough rest to be available to do his job with the TTC.

[32]. Mr. Petrishchev testified that he has no plan to run his wife’s business, but he will serve as her mechanic so that she does not have to pay anyone as she begins this venture. This will help her business succeed as it will give her the time to build up a client base and sufficient revenue.

[33]. I find therefore that the appellant will be the owner and manager of this MVIS business, and not Mr. Petrishchev.

Will the appellant run the business contrary to the Act and the regulations? Is she competent to conduct this business?

[34]. I find the appellant will not carry on business in contravention of the Act and I also find she is competent to operate an MVIS.

[35]. Based on the evidence below it is clear that the appellant is experienced in regulated businesses, she has made enquiries about the process and educated herself about was her obligations and responsibilities; she has a lease for a location and equipment; she understands the importance of public safety; and knows her spouse’s shortcomings regarding administrative reporting but is confident in the quality of his work on the vehicles.

[36]. The appellant submitted that most people who own and manage an MVIS are not licenced mechanics.

[37]. She testified that her husband had never been faulted for a bad inspection of a vehicle but rather for not submitting the paperwork associated with the inspections. The appellant testified that this problem will not reoccur because she will be doing all the paperwork, documentation and reporting for her business. She will not be relying on her husband for anything other than inspecting the vehicles.

[38]. She stated “I will be managing every single inspection and I will make sure all of the numbers from the testing is documented accurately. His job will be to measure the car and I will do the paperwork.”

[39]. Mr. Petrishchev corroborated this as he repeated several times that “this is not going to be my business” and that his wife will do all the paperwork.

[40]. The appellant testified that she has been working in different businesses that have to do with cars for most of her working life.

[41]. She also has the experience and the ability to administer the business successfully. She has been a registered used car salesperson for years and she has always complied with the reporting requirements. She has submitted all the paperwork required of a used car salesperson and has not had any warnings, infractions or convictions from the regulator and she was always in compliance with the reporting requirements.

[42]. She also completed the paperwork when she worked at a towing company without a problem.

[43]. The appellant testified that she is currently self-employed as a car parts delivery person for a company in Burlington. She wants to run this business as a person who is getting older because she wants a stable job that she can work at for the next twenty years.

[44]. Because the appellant currently is self-employed, she has a lot of flexibility to start her business slowly so that she can make sure everything is running according to the law.

[45]. She testified that she has the ability to operate an MVIS successfully because she has the space and all the equipment required.

[46]. The appellant knows how serious the work of an MVIS. She testified “I know that this is about life and death. If someone drives a car that was badly inspected, they could get seriously injured or even killed. I take this business very seriously. I would not do this if I didn’t think I could do it well.”

[47]. The appellant when asked, listed all the Director’s requirements of a licenced MVIS off the top of her head. She testified that should there be any issues she would immediately disclose this to the Director.

[48]. She testified that her husband is on the application as the MVIM because at the beginning she won’t be able to afford someone else. Mechanics are expensive and her husband is willing to help her out to begin with. She stated that in his history of doing inspections, he has never done a bad inspection and that he is good at that part of the job. She would not have him as the mechanic if she did not trust that he could do the job.

[49]. She believes that he is a really skilled technician and trusts that he will conduct all of the inspections without any risks to public safety. She testified that “I have a conscience, I will abide by all of the regulatory requirements and if he were to make a major mistake, I would not hesitate to hire someone else.”

[50]. When asked if she had to fire her husband for doing a bad inspection, she said it would be hard, she also doubts he would make a mistake to that degree, but if she had to, she would do it.

[51]. I am satisfied that the appellant is committed and passionate about the business and is capable and prepared to assume the responsibilities associated with an MVIS. She has researched and complied with all the requirements of running an MVIS to that point and is knowledgeable of the requirements to run an MVIS successfully and seems willing and able to do what it takes to make this business compliant with the law. She also understood the serious nature of this work. Thus, the evidence does not establish that it is likely that the appellant would operate the MVIS in a manner that contravenes the Act.

[52]. I find that the appellant is not re-creating her husband’s old business. She is invested in her own long-term compliant business. They have no dependants and she wants to work. I do not think it would be fair to judge the appellant by her husband’s past reporting record.

[53]. It is the Director's burden to establish that on a balance of probabilities the appellant will not conduct her business competently, in compliance with the Act. I am not satisfied that this threshold has been met and that these would be grounds to refuse registration.

Does Mr. Petrishchev’s past conduct establish that he will not conduct his work as the MVIM with honesty, integrity and in accordance with the law? Is Mr. Petrishchev competent to Act as the MVIM for the appellant’s MVIS?

[54]. The Director submitted that because of Mr. Petrishchev’s history of convictions when he was running his own business he cannot be trusted to act in accordance with the law as the MVIM for the appellant’s business.

[55]. The appellant testified that her husband is an excellent mechanic but a terrible administrator. He learned his lesson and is not likely to run a business again.

[56]. Mr. Petrishchev’s first language is Russian, he has lived in Canada for 25 years and he admits that doing paperwork is not his strength. He takes pride in his work as a tradesperson but has never had a talent for documentation.

[57]. Mr. Petrishchev has admitted to the record of infractions with the MTO, mostly late filing of inspection records. He stated that he had dealt with his record all at once and he paid a fine of $3000.00 for all of the convictions on file. He shut down his business because he could not run it after two years.

[58]. Mr. Petrishchev testified that he has been a certified technician for over 15 years and that he has never had a problem with the actual inspections that he performs.

[59]. He testified that it is close to impossible to make mistakes on the inspections because they employ technology that is a “highly precise electronic measuring system.”

[60]. He anticipates that he could inspect 1 or 2 cars in a day and that the appellant would do all of the paperwork associated with the inspection.

[61]. I agree that the evidence establishes Mr. Petrishchev is a terrible administrator, he is not good at documentation when he was running his business. However, the appellant seems very cognizant of her shortcomings and does not plan on having him be responsible for any of the paperwork in her business. The appellant testified that she will assume full responsibility for the documentation, and I believe that she is prepared to make sure the Act’s requirements are met.

[62]. Again, there is no doubt that Mr. Petrishchev on his own could not comply with the Director’s administrative requirements. I do however believe that the appellant can and that she will obey the law.

[63]. Mr. Petrishchev’s past conduct is related to paper-work offences, not actual bad inspections. Now that his wife is doing paperwork, I am not satisfied that his past conduct suggests that he will not act in accordance with the law and with honesty and integrity as an MVIM.

[64]. I also find that Mr. Petrishchev is competent to act as the MVIM, he is a good mechanic as there were no violations against his workmanship and quality of repairs, the issues were solely documentary (which is being handled by the appellant).

[65]. The Director provided the case 7693 v. Registrar of Motor Vehicles, 2013 CanLII 11843 (ON LAT) (“7693”). This case is similar to the one before us in that the appellant (Mr. Zurawski) had applied for a MVIS Type 6 licence and mechanic registration. The Director had issued a proposal to refuse his application and the proposal was upheld by the Tribunal.

[66]. In that case Mr. Zurawski had previously owned and been the mechanic for an MVIS. He had been issued 240 inspection certificates and had 141 outstanding files, culminating in 10 convictions for failure to send in complete documentation.

[67]. Mr. Zurawski abandoned his licensed premises and did not provide notice to the Ministry of Transportation (MTO) when he did this.

[68]. He was later given a second chance by the Director and opened a second MVIS business. Within two years it had 49 convictions.

[69]. The matter before me is distinguishable from 7693 in many ways. In this case the appellant will be manager and in charge of all documentation, whereas in 7693 Mr. Zurawski had submitted that his sister (who lived out of town and had another full-time job) would be managing his paperwork. It is very clear in the case before me that the appellant will be devoting most of her time to this endeavour and not simply working very part-time, as the appellant proposed in 7693.

[70]. Mr. Zurawski operated not one, but two MVISs in which his businesses culminated in convictions. Mr. Zurawski had already been given a second chance when the Director proposed to refuse his registration.

[71]. Mr. Petrishchev operated one business, paid his fines and testified that he will not be operating this business or doing the paperwork. He has a full-time job with benefits and a pension that he is not interested in losing. He will not own and manage the MVIS, he will solely be the MVIM.

[72]. Thus, I do not find that the Director has discharged his duty to establish past conduct that provides reasonable grounds to believe that Mr. Petrishchev should not get a licence to act as the MVIM for the appellant’s MVIS. I also do not find that on a balance of probabilities the Director has proven that Mr. Petrishchev is not competent to act as an MVIM in this case.

Condition

[73]. I think it is prudent to add a condition to support the successful compliance of the appellant’s MVIS. Meetings with the Director on a regular basis throughout the year should aid the appellant with documentation obligations. Should the appellant have any questions or concerns this will be an opportunity for her to have discussions with the Director.

ORDER

[74]. Pursuant to section 95(4) of the Act, I order the Director to refrain from carrying out the Notice. I attach to the appellant's registration the condition that for the first year of the appellant’s operation of her MVIS she will have a quarterly phone meeting with the Director’s office to report on business activity and the documentary reporting obligations.

LICENCE APPEAL TRIBUNAL

Zahra Dhanani, Member

Released: January 10, 2020