Licence Appeal Tribunal File Number: 15293/CVOR

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 Deputy Registrar of Motor Vehicles under sections 47 and 47.1 of the Act

Between:

DGMS Management Services Inc.

Appellant

and

Registrar of Motor Vehicles

Respondent

Decision

ADJUDICATOR:

Laura Hodgson, Member

APPEARANCES:

For the Appellant:

Annicia Laurence, Representative

For the Respondent:

Patrick Moore, Counsel

Heard by videoconference:

January 18 and 19, 2024

OVERVIEW

1DGMS Management Services, a trucking company, appeals from the Cancellation and Seizure Order issued by the Registrar of Motor Vehicles (the respondent) on October 16, 2023. The respondent submits that the appellant’s poor safety record, ongoing incompliance, and affiliation with a company with a cancelled Commercial Vehicle Operator Registration (CVOR), provides reason to believe that it will not operate a commercial motor vehicle safely or in accordance with the Highway Traffic Act, R.S.O. 1990, c.H.8 (the “Act”), its regulations and other laws relating to highway safety.

2The appellant appeals the order pursuant to s.50(1) of the Act. They submit that appropriate steps have now been taken to improve company safety and compliance.

3Based on all the evidence, I find the respondent has established there is reason to believe that the appellant will not operate commercial vehicles safely or in accordance with laws relating to highway safety. For the reasons set out below, I am satisfied that alternatives such as a suspension or continued licensing with conditions are not appropriate and I confirm the Cancellation and Seizure Order.

PRELIMINARY ISSUE

4Ms. Laurence is employed as a safety and compliance officer with the appellant. At the outset of the hearing, she indicated that she and Tariq Mahmud would be representing the appellant before the Tribunal. Mr. Mahmud is a safety consultant retained by the appellant. According to Ms. Laurence, he helped her prepare for the hearing and would also be giving evidence as a witness for the appellant.

5The respondent objected to Mr. Mahmud representing the appellant. He also requested an order excluding witnesses.

6Mr. Mahmud cannot represent the appellant. Under Rule 24 of the Licence Appeal Tribunal Rules, 2023, a party may be self-represented, or they may have a representative. If a party wishes to have a representative, the representative must file a Declaration of Representative (DOR) with the Tribunal and serve it on the other parties. Only persons licensed by the Law Society of Ontario or who fall within the licensing exemptions approved by the Law Society may represent a party before the Tribunal. No DOR was filed, and Mr. Mahmud does not meet the Law Society criteria. The appellant was self represented, with Ms. Laurence, an employee, presenting its case.

7I made an order excluding witnesses. As a result, Mr. Mahmud was excluded from the hearing until it was time for him to provide evidence.

ISSUES

8The issues to be decided are:

Issue 1; Having regard to the appellant’s safety record and other relevant information is there reason to believe that it will not operate commercial motor vehicles safely or in accordance with the Act, the regulations and other laws relating to highway safety?

Issue 2; What is the appropriate outcome?

ANALYSIS

Issue 1: There is reason to believe the appellant will not operate commercial motor vehicles safely

9After considering the appellant’s affiliation with a carrier with a poor safety record and the appellant’s own safety record, I find there is reason to believe the appellant will not operate a commercial vehicle safely or in accordance with the act.

10Under section 47(1)(f) of the Act, the Registrar may cancel a CVOR on the grounds that:

(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 vehicle safely or in accordance with this Act, the regulations, and any other laws relating to highway safety.

11An order under s. 47 may be appealed to this Tribunal and, on an appeal, the Tribunal may confirm, modify or set aside the order of the Registrar (see s. 50 of the Act). The onus is on the respondent to establish that the appellant’s CVOR should be revoked. The Ontario Court of Appeal has held that as a standard of proof, ‘reasonable grounds for belief’ is lower than ‘balance of probabilities.’ It requires more than mere suspicion and an objective basis for the belief which is based on compelling and credible information (see Ontario (Alcohol and Gaming Commission of Ontario) v. 751809 Ontario Inc. (Famous Flesh Gordon’s), 2013 ONCA 157 at paras 18-19). The Court of Appeal emphasized that any and all past or present conduct can and should be considered.

Related Companies

12Firstly, I find that, when considering the appellant’s safety record, I can also consider the safety record of the company DeGenaral Management Inc. It qualifies, under the Act, as a “related” company.

13Sections 47(1), 47(2.1), and 17(4) provide that one entity is related to another if, among other things, the entities have or have had common officers or directors, or they are or have been controlled, directly or indirectly, by the same shareholders.

14Extensive evidence was called with respect to the ownership of various trucking companies, including the appellant company, by three brothers - Dillion, Devon and Delon Bovell. There has been an ongoing rotation of the three brothers and other persons as corporate directors since the first company was issued a CVOR certificate in 2014. It is not necessary to detail these numerous corporate changes for the purposes of this appeal.

15The respondent established that Dillion Bovell was previously a corporate director of DeGenaral Management. This carrier’s CVOR certificate was cancelled in 2018 because of a poor safety record. The respondent also established, through federal corporation documents, that Dillion Bovell has been, at numerous times, listed as a corporate officer at the appellant company, DGMS Management Services Inc.

16In November 2022, Dillion Bovell was a corporate officer of the appellant company. Following the notice of the cancellation being issued to the appellant on August 28, 2023, and the Registrar’s request that Dillion Bovell as the corporate officer attend a meeting, new corporate documentation was filed. That documentation named brothers Devon and Delon Bovell and not Dillion as officers of the appellant company.

17A notarized letter dated December 7, 2023, from Dillion Bovell was tendered as an exhibit by the appellant. In that letter, Dillion states that he has not participated in the appellant’s affairs since June 2019 and that “responsibility for corporate ownership has been successfully transferred to my brothers, Delon and Devon Bovell”. He also indicates that “my credentials were utilized by my brother, Delon Bovell, for alteration to corporate documents...”.

18The appellant does not appear to dispute that, as recently as September 2023, Dillian Bovell was listed as the appellant’s corporate officer. Dillion’s contention of non-involvement is also weakened by documentation tendered by the respondent showing him employed by the appellant as a driver in 2022 and owner of a company that received a transfer of vehicles from the appellant company in 2023.

19I find the appellant and DeGenaral Management Inc. are related entities because Dillion Bovell has been a corporate officer of both companies. As a result, I can consider DeGenaral Management’s cancelled CVOR certificate when considering the appellant’s safety record.

Safety History of Appellant

20The Respondent submits that, regardless of whether the cancelled CVOR of the related entity DeGenaral Management is considered, the appellant’s safety record on its own establishes reason to believe it will not operate a commercial vehicle safely or in accordance with the Act.

21To operate a commercial vehicle in Ontario, carriers must hold a CVOR certificate. In Metrix Redi-Mix Ltd. v. Registrar of Motor Vehicles, 2022 ONSC 2496 at para 6 - 9, the Divisional Court summarized the CVOR system as follows:

The Ministry of Transportation monitors commercial vehicle operators in several ways, including a safety rating based on collisions, inspections, and convictions. Each operator is assigned a “threshold” number of points, based on the number of kilometres the operator is expected to travel in a 12-month period. Infractions are tracked in a database which collects data from various sources, including police reports and road safety officer reports, and are assigned points.

For collisions, points are assigned based on their severity. No points are assigned where there are no “improprieties” or where the collision was not preventable. Points may be disputed, and the Registrar can investigate collisions to determine whether points should be assigned.

Based on the points assigned to infractions over the preceding 24 months, violation rates are calculated as a percentage of the assigned threshold. Collisions, convictions, and inspections are assigned individual VRs. There is also an overall violation rate which is calculated as a weighted average of the three individual VRs as follows: collision (40%), conviction (40%), and inspection (20%).

22At this hearing, Sherry Werner, a Senior Program Administrator with the Carrier Sanctions and Investigations Office at the Ministry of Transportation, gave evidence about carrier regulation in Ontario generally and the appellant’s specific safety history.

23According to Ms. Werner, the purpose of the CVOR system is to identify safety concerns and address them, either by operator action or sanction before they become a major safety concern. Ms. Werner testified that the CVOR system automatically generates the violation rate for each operator based on data collected from collision reports, inspections and conviction records. Operators with a 35% violation rate automatically receive a warning letter and the Ministry typically initiates sanctions for those with a 100% or more violation rate. Depending on the circumstances, however, the Registrar may impose sanctions when violation rates are below 100%.

24According to Ms. Werner, interventions typically result in the successful rehabilitation of an operator. She also explained that over 98% of operators do not even come to the attention of the Registrar and intervention is unnecessary because of their low violation rates.

25With respect to the appellant’s violation rate, Ms. Werner noted that since first receiving its CVOR certificate in 2018 it has consistently remained in the 70 to 100% overall violation rate range. She also noted less that 1% of all carriers fall into this range.

26In 2021, the appellant had a violation rate of 82.86% with a collision rate of 71.93% and conviction rate of 121.42%. On March 31, 2021, the Registrar issued a Cancellation and Seizure Order effective April 8, 2021.

27This order was appealed to this Tribunal. In a decision dated November 24, 2021 (2021 CanLII 140962), the Tribunal found that because the appellant had implemented an action plan and its violation rate had improved, a “second chance” and a sanction short of cancellation of the CVOR was warranted. The appellant was permitted to retain its CVOR certificate subject to two conditions: its fleet be limited to eight vehicles and Delon Bovell, the company owner and manager at the time, complete the CVOR test mandated by the Ministry.

28Ms. Werner explained that this fleet limitation order was effective for 190 days - until June of 2022. She noted that when a fleet limitation order is made, the carrier is issued vehicle identification number (VIN) specific certificates for the limited number of vehicles it is permitted to operate. The certificates are to be carried in the specific vehicles and no other vehicles can be used without permission of the Ministry.

29Ms. Werner testified that, following a fleet limitation order, it is expected that a carrier’s violation rate will improve. In this case, however, she found that during the period of the fleet limitation order the appellant’s overall violation rate increased to 101.83% with five collisions and two convictions during that period. As a result, a Notice of Cancellation and Seizure Order was issued on July 6, 2022.

30A “show cause” meeting was held with the appellant on July 25, 2022. At that meeting the Deputy Registrar and the appellant’s representatives discussed possible remedial measures. Annica Laurence, the company Safety and Compliance Manager and Delon Bovell, a corporate officer at the time, presented an ‘action plan’ that included driver training, strict disciplinary action and increased adherence to regulations.

31As a result of the appellant’s submissions, the Registrar did not issue the Cancellation and Seizure Order but instead, on September 6, 2022, issued a second fleet limitation order. The appellant was restricted to the operation of four vehicles for a one-year period. Additionally, performance conditions were imposed and the appellant was advised that a Cancellation and Seizure Order could be issued if the collision violation rate exceeded 50% for a one year period, the appellant failed to report collisions on a quarterly basis or the appellant’s ‘action plan’ was not implemented.

32The following August, after a review of the appellant’s performance, the Registrar issued a Notice of Cancellation and Seizure Order. At that time the overall violation rate (for the two-year period of July 2021 to July 2023) was 94.5% with a collision violation rate of 128.58% and conviction rate of 95.76%. The performance report for the 11-month period of the fleet limitation order showed the collision violation rate to be 95.25%. Ms. Werner noted that this was almost double the amount permitted by the 2022 fleet limitation order. She also testified that the appellant’s VR, at the time of this hearing, remained over 100%.

33In reviewing the appellant’s collision and conviction reports, Ms. Werner noticed that in two instances the vehicles involved were not vehicles included in the fleet limitation order. Additionally, the Ministry discovered that three of the four vehicles subject to the fleet limitation order had actually been transferred to another company on January 3, 2023, without authorization from the Ministry. The vehicles were transferred to 13401774 CANADA INC. This company, the Ministry determined, is owned by Dillion Bovell.

34Ms. Werner explained that if a vehicle is subject to a fleet limitation order, it can not be transferred without authorization by the Ministry. The Ministry received no notice of the transaction and, she noted, it would not have been approved because Dillion Bovell had been an owner of a previously cancelled carrier.

35On August 28, 2023, the Registrar issued the appellant a Notice of Cancellation and Seizure. A show cause hearing was scheduled for September 19, 2023. Because the corporate officer Dillion Bovell could not attend on that date, the meeting was rescheduled to October 5, 2023. No one appeared for the appellant on that date and no submissions were received. As a result, on October 5, 2023, a Cancellation and Seizure order was issued to the appellant. It is this order that the appellant appeals from.

Appellant’s evidence

36With respect to its safety record, the appellant relied mostly on the fact that Devon Bovell, and not his brothers Dillion and Delon, is now running the company. Devon suggested that, with the assistance of a safety consultant and the company’s Safety and Compliance Manager, he is now aggressively addressing safety and compliance issues.

37Devon Bovell testified that he took control of the appellant company in October of 2023. He stated that although he had previously been listed as a company officer, he played no role in the operation of the appellant company. His only role had been as a driver and driver trainer. In his view, his brothers had mismanaged the company. While acknowledging that his brother Delon Bovell remains on record as a corporate officer, Devon indicated that Delon will not be involved in the company’s operations.

38In cross examination, Devon testified that he was not aware that his company was under a fleet limitation order in 2022 and 2023. Nor did he know that three trucks, included in the order, had been transferred in January 2023 to a company owned by his brother Dillion.

39Tariq Mahmud, a Safety and Compliance Consultant retained by the appellant company, testified about the appellant’s past and future safety record. Mr. Mahmud, who has a background in military and driver training, offers carriers advice with respect to road safety and CVOR compliance. Mr. Mahmud does not have a formal contract with the appellant but since he was retained in October 2023, has visited the site five times and will continue to work with the company.

40Mr. Mahmud indicated that, after reviewing the respondent’s disclosure, he realized that the appellant had underreported the number of kilometers travelled in the 2018 to 2020 period. This, he testified, inaccurately inflated the calculation of the violation rate for that period. In cross examination, Mr. Mahmud acknowledged he did not know what the correct mileage or violation rate for that period was. He also agreed that this alleged error would not have impacted the current violation rate of over 100% which is based on the prior two years.

41Mr. Mahmud testified that he prepared the appellant’s most recent action plan which was tendered as evidence. The action plan, with implementation dates of March 11, 2024, included improved driver training, upgrading of drivers’ licences, implementation of management spot checks and development of a review committee. Mr. Mahmud indicated that aspects of the plan have been already implemented and some were in progress. He acknowledged that the appellant has previously developed action plans that were not effectively implemented. Mr. Mahmud also agreed that the success of any plan depends on the company’s commitment.

42With respect to noncompliance with the 2022 fleet limitation order, the appellant’s Safety and Compliance Manager, Annica Laurence took responsibility for this mistake. Ms. Laurence testified that she mistakenly believed that, as long as only four vehicles were in operation, the appellant was in compliance with the order and that they were permitted to operate a fifth “back up” vehicle. Ms. Laurence acknowledged that she did not understand that the fleet limitation order was vehicle/VIN specific. Further, like Devon Bovell, Ms. Laurence had no knowledge, that four of the vehicles included in the fleet limitation order were transferred to another company owned by Dillion Bovell in January 2023.

Findings

43As noted, I find the appellant and DeGenaral Management are related companies and so I may consider that an entity related to the appellant had a cancelled CVOR. I agree with the respondent, however, that the appellant’s safety record alone provides reason to believe that it will not operate commercial motor vehicles safely or in compliance with the law.

44Despite the numerous prior sanctions and “second chances”, the appellant’s overall violation rate is over 100%. Less than one percent of all carriers fall within this range. The appellant’s violation rate has, in fact, continued to increase since its CVOR was first issued. Of significant concern is the fact that although the 2022 fleet limitation order required the appellant’s collision violation rate to not exceed 50%, in August of 2023 it was 95%. This clearly raises concerns about road safety.

45Not only did the appellant’s collision rate increase while it was subject to the 2022 fleet limitation order, the company also failed to comply with the fleet limitation order. Ms. Laurence fairly acknowledged her mistaken understanding about which and how many vehicles could be used under the order. While she is clearly a dedicated employee, as Safety and Compliance Manager Ms. Laurence should have carefully reviewed the fleet limitation order which included four VIN specific certificates. If she had any questions about substituting vehicles or having a “back up” vehicle she should have inquired with the Ministry. It is also concerning that Ms. Laurence, like Devon Bovell, had no knowledge that four of the vehicles included in the fleet limitation order were transferred to another company in January 2023. Again, this is a transaction that Ms. Laurence should have been aware of as it impacted compliance with the fleet limitation order.

46I am also not convinced that there has been a significant change in company leadership or protocols that will impact the appellant’s safety record and compliance issues. Devon Bovell presented as the sole owner and manager of the appellant company. His brother Delon, however, remains as a corporate officer on record. Further, in January 2023, trucks were transferred from the appellant company to a company owned by Devon’s other brother Dillion. Devon indicated his displeasure with the prior management practices of his brothers and his motivation to change the company’s course. I did not, however, find his evidence easy to follow or convincing. Devon wavered with respect to his brothers’ prior and current involvement, was unaware of orders limiting the company’s fleet and was unaware of a significant company transaction that occurred while he was a corporate officer.

47While clearly taking decisive steps in hiring a safety consultant, the appellant has not demonstrated that proposed remedial measures will result in significant improvements to its safety rating. As noted, the appellant has previously presented action plans that were not implemented and failed to impact its safety rating.

48Given the appellant’s safety history and its prior failure to demonstrate that it can implement meaningful remedial measures, I find reason to believe that the appellant will not operate a commercial vehicle on the highway safely or in accordance with the Act, the regulations and other laws relating to highway safety.

Issue 2: Cancellation and Seizure is the Appropriate Outcome

49While I am not bound to accept the outcome imposed by the respondent, I find that it is appropriate in the circumstances. I have considered if other sanctions such as yet another fleet reduction or a conditional ability to operate would sufficiently protect public safety. I conclude that it would not.

50As already noted, the appellant has been subject to various interventions since 2021 and been given multiple chances to improve its safety rating and retain its CVOR certificate. These previous chances involved some form of conditional licence, i.e., a limited trucking fleet and specific performance measures. Progressive sanctioning has failed to improve the appellant’s violation rate and the public remains at risk. I am therefore not satisfied that continued licencing with conditions and/or fleet limitations is appropriate.

51In all the circumstances, I find that the cancellation and seizure order is appropriate.

Order

52Based on the evidence and further to s. 50(2) of the Act, the Tribunal confirms the Cancellation and Seizure Order, dated October 5, 2023.