Appeal Under Section 50.2 of the Highway Traffic Act, R.S.O. 1990, c.H.8 from an impoundment of a motor vehicle pursuant to section 55.1 of the Act for driving while suspended
Between:
Highbury Ford Sales Ltd.
Appellant
and
Registrar of Motor Vehicles
Respondent
DECISION AND ORDER
ADJUDICATOR:
Harriet Lewis, Member
APPEARANCES:
For the Appellant:
David Zwambag Agent
For the Respondent:
Sanjay Kapur, Agent
Heard by Teleconference:
February 17, 2021
DECISION AND ORDER
Overview
1Highbury Ford Sales (Highbury or the appellant) sells and leases new and used vehicles and runs a garage and body shop. It appeals the impoundment of a new Ford truck ( the truck) which was detained and impounded on January 8, 2021, pursuant to s. 55.1 of the Highway Traffic Act, R.S.O. 1990, c H.8 (the HTA), as a result of being driven by N.D., a person whose licence was suspended.
2The truck had been leased on June 1, 2020 by Highbury to N.D. for a period of 3 years. On June 2, 2020, the vehicle was registered to N.D. as lessee and to Highbury as lessor.
3An owner of an impounded vehicle may appeal the impoundment pursuant to s.50.2 of the HTA and request the Tribunal order the Registrar to release the vehicle. N.D. did not appeal the impoundment and appears to have abandoned the truck and the lease. Highbury appeals the impoundment.
4The appellant relies on the following grounds of appeal pursuant to s. 50.2 of the HTA:
50.2(3) (c) that the owner of the motor vehicle exercised due diligence in attempting to determine that the driver’s licence of the driver of the motor vehicle at the time it was detained in order to be impounded was not then under suspension or subject to the condition described in paragraph 2 of subsection 55.1 (1).
5Because of the strict wording of 50.2(3)(c), and with some regret, I cannot find that the appellant exercised due diligence in attempting to determine that N.D.’s license was not under suspension at the time of the lease.
Issues
6The issue to be determined is whether the appellant exercised due diligence in attempting to determine that N.D.’s licence was not under suspension at the time the truck was impounded.
Evidence and Analysis
7Mr. Zwambag is employed as the financial controller of Highbury and gave evidence on its behalf. He testified that Highbury has been in the automotive business for forty-six years. At or about the time of the lease to N.D., Highbury had an in-house leasing portfolio of some two-hundred and sixty-nine vehicles, including several fleet leases.
8In leasing the truck to N.D., Highbury followed its long standing and standard procedure. It requested to see his driver’s licence which was provided and copied for the file. The licence appeared to be valid because it showed an expiry date of November 2, 2020. Highbury also requested and obtained proof of N.D.’s automobile insurance coverage for the truck in a form of a letter from BrokerLink, attesting that N.D. had had vehicle insurance coverage with it from February 5, 2020 and that the insurance was in full force and effect for the truck as of June 5, 2020.
9On June 6, 2020, Highbury attended to the registration of the truck. The vehicle’s commercial plates were registered in the name of N.D. as lessee and Highbury was shown as lessor. Each of the copy of N.D.’s driver’s licence, the BrokerLink insurance letter and the vehicle and plate registration were provided as part of the appellant’s submissions.
10On cross-examination, Mr. Zwambag confirmed that it was not part of Highbury’s standard procedure to order a driver’s licence check through the on-line service prior to leasing its vehicles, nor to obtain driver’s abstracts for its lessees. He indicated that Highbury relied on the clients’ documents. He also indicated that drivers’ licence searches would not even be possible in the case of fleet leases, nor would it make sense, as the Respondent’s agent suggested, to require the lessor to search the driving record of each individual lease at regular intervals during the term of a lengthy lease, although Highbury does require that insurance coverage is confirmed annually.
11Highbury relied on N.D.’s honesty in presenting a valid driver’s licence and insurance letter. It also relied on the Ministry’s acceptance of the (apparently) valid driver’s licence upon the registration of the vehicle plates in N.D’s name.
12Documents tendered by the Ministry confirm that N.D’s driver’s licence was suspended for 5 years in August 2016 for dangerous driving.
Did Highbury exercise due diligence in attempting to determine that the driver’s licence was not under suspension at the time of the lease?
13Due diligence is defined in Black’s Law Dictionary as : “Such a measure of prudence, activity, or assiduity, as is properly to be expected from, and ordinarily exercised by a reasonable and prudent man under the particular circumstances; not measured by any absolute standard, but depending on the relative facts of the special case”.
14Highbury has been in the vehicle leasing business for some time. It followed its standard procedure for leasing a vehicle which has apparently stood it in good stead over the years. It received from N.D. what on its face was a valid driver’s licence and had no apparent reason to believe it was not. It received an insurer’s letter attesting to valid insurance being in place. It was able to register the lease and transfer N.D.’s plates to the truck the following day. In tendering his suspended driver’s licence for the purpose of obtaining the vehicle lease from Highbury, N.D. was misrepresenting that he had a valid licence to obtain a lease, and Highbury was his victim.
15Mr. Zwambag testified that although Highbury had not made a practice of doing driver’s records searches, given this experience, it intends to implement a driver’s record search as part of its leasing program for individuals in the future. I do not take that as an admission that Highbury did not exercise due diligence, rather it is evidence of a recognition that it was intentionally misled into believing N.D. had a valid licence. As a result, Highbury has decided to put extra measures in place to ensure they are not a victim of a similar misrepresentation in the future.
16This Tribunal is bound by the wording of the Act. While the initial receipt of paperwork may have been duly diligent, the Act requires that the due diligence be exercised at or near the time the vehicle is impounded. That makes it very difficult for a lessor on a long-term lease to show due diligence according to the wording of the statute.
17The Registrar’s agent argued that to meet the threshold of due diligence, a lessor should do intermittent driver’s records checks on its licensees several times a year, possibly as frequently as every 3 months, during the period of the lease. I do not agree. That would not be practical in circumstances where a dealer has a large lease portfolio such as Highbury’s, nor possible in cases where a leased vehicle is part of a fleet and has many drivers. However, it is possible for the lessor to order a driving record or driver’s abstract before leasing a vehicle to an individual or require a potential lessor to provide one at that time and from time to time, and that was not done in this case.
18In finding that the onus of showing due diligence has not been met in this case, I acknowledge that the effect on Highbury and similar leasing companies may seem to them to be unfair. However, the Tribunal is bound by the strict wording of the Act as applied to these particular facts.
Order
19Relying on the evidence as presented in this case, and pursuant to subsection 50.2 (5) of the Highway Traffic Act, the appeal fails, and the impoundment is confirmed.
LICENCE APPEAL TRIBUNAL
____________________________
Harriet Lewis, Member
Released: March 23, 2021