Licence Appeal Tribunal File Number: 15088/CVOR

In the matter of an appeal from a Suspension and Seizure Order of the Registrar of Motor Vehicles under the Highway Traffic Act, RSO 1990, Ch H.8 (the “Act”).

Between:

Xtreme Towing Inc.

Appellant

and

Registrar of Motor Vehicles

Respondent

DECISION

ADJUDICATOR: Bruce Stanton

APPEARANCES:

For the Appellant: Diane Melo, Representative of the Appellant Robert Weafer, Paralegal

For the Respondent: Adriana Nigro, Counsel

Heard by videoconference: February 5, 6, 7, 2024

OVERVIEW

1Xtreme Towing Inc. (the “appellant”) appeals from the 30-day Suspension and Seizure Order (the “Order”) issued it by the Registrar of Motor Vehicles (the “respondent”) on July 20, 2023.

2The appellant filed an appeal with the Licence Appeal Tribunal (the “Tribunal”) pursuant to s. 50(2) of the Act, on July 26, 2023.

ISSUE

3The issue in dispute is:

1. Is there reason to believe the appellant will not operate its commercial motor vehicles safely and in accordance with the Act, the regulations, and any other laws relating to highway safety?

RESULT

4I find the respondent proved there is reason to believe the appellant will not operate its commercial vehicles in accordance with the Act, the regulations, and any other laws relating to highway safety. In recognition of the appellant’s recent commitment to improving its safety record, the Order is modified to a period of 21 days, rather than 30.

ANALYSIS

Circumstances of the suspension and seizure order

5The appellant operates a fleet of tow trucks, both conventional and flat-bed/tilt-bed trucks, in the GTA and has been operating under a Commercial Vehicle Operator Registration (“CVOR”) certificate since November 2014. It routinely has up to 40 vehicles on the road and has approximately 48 employees.

The CVOR Program

6The CVOR program is operated by the Ontario Ministry of Transportation (“MTO”) to promote the safe operation of trucks and buses on Ontario’s roadways. The CVOR program collects data on the inspections, collisions, and convictions of each certificate holder and its drivers to monitor the holder’s safety performance. CVOR holders are subject to facility audits where MTO agents may inspect the facility where their vehicles are serviced. Under a CVOR, the operator has obligations to ensure the safe operations of its vehicles and the MTO provides feedback to the operator on its safety performance. The CVOR holder can obtain a detailed copy of its safety record from the MTO at any time. The appellant’s safety rating is available to the public, in summary form, as part of its commercial vehicle operator record.

7The safety record of a CVOR holder is calculated by assigning points to the collisions, inspections, and convictions it experiences, where the more severe the infraction or collision, the greater the points assigned. The points are then applied to an overall violation rate. Once a CVOR holder’s violation rate goes above a given threshold, the MTO intervenes to encourage the holder to improve its safety performance.

8Depending on the circumstances, interventions can include warning letters, interviews, notices to suspend or cancel a CVOR certificate, and up to an immediate suspension or cancellation for the most urgent of safety infractions.

9In 2023 the MTO recorded 61,143 commercial carriers with CVORs in the province, of which 98.39%, or 60,160 had a violation rate below 35%, the rate below which the MTO would likely have no cause to intervene with the carrier, i.e. an acceptable safety performance level.

The appellant’s safety performance and MTO interventions

10The appellant received a warning letter on January 10, 2018 noting its violation rate exceeded 35% and that action was required to come into compliance and prevent further unsafe operations. The warning letter advised that appellant’s CVOR privileges were at risk of being suspended or cancelled if suitable actions were not taken to correct the safety record.

11The appellant received two more, similar warning letters on May 15, 2020 and September 18, 2020 due to notable safety infractions. MTO officials then interviewed senior staff of the appellant, Dominic Travassos, operations manager, and Joe Melo (spouse of Diane Melo), maintenance and general manager, on December 9, 2020, regarding the appellant’s safety performance. In the previous 15 months, the appellant had experienced three at-fault collisions, one of which resulted in a fatality, and one wheel separation, and its violation rate was 53.4%, among the 0.6% of all carriers with a violation rate above 50%.

12The appellant’s safety performance did not improve after the December 2020 interview. In the two-year period from April 2, 2021 to April 2, 2023, it recorded 30 collisions including two wheel separations, and five of the collisions resulted in non-fatal injuries. In the same period, the appellant recorded 19 convictions including speeding, defective brakes, red light camera, insecure loads, and various moving violations. Twelve inspections occurred in the period and recorded an out-of-service rate of 33.3%. (Out-of-service infractions are vehicle defects or deficiencies relating to the driver’s licence or hours of service that are deemed to be a hazard to the motoring public and are assigned points based on severity.) The appellant’s overall violation rate had increased to 60.53% by the end of the two-year period.

13As a result of the appellant’s declining safety performance and unacceptable violation rate, the MTO issued it a Notice of Cancellation and Seizure Order on May 3, 2023, and invited the appellant to attend a Show Cause meeting with MTO officials on May 17, 2023 to discuss why a cancellation and seizure order should not be issued and what action plan or measures the appellant is taking to address its unacceptable safety performance.

14At the Show Cause meeting, the MTO determined that the Cancelation and Seizure Order would be reduced to the Order that is the subject of this appeal, whereby all the appellants’ commercial vehicles would have their licence plates and plate-portion of their permits seized for a period of 30 days.

Is there reason to believe the appellant will not operate safely and in accordance with the law?

15I find the respondent has met its burden and demonstrated there is reason to believe the appellant will not operate safely and in accordance with the law.

16Section 47(1) of the Act authorizes the Registrar to suspend or cancel a CVOR certificate and the plate portion of permits for its associated commercial vehicles. The grounds for doing so are set out in subsections (d) through (g). Subsection 47(1)(f) provides grounds for suspension where the Registrar has reason to believe, in regard to the safety record of the CVOR holder, and any other information the Registrar considers relevant, that the holder will not operate a commercial vehicle safely or in accordance with the Act, regulations and laws relating to highway safety.

17The standard of proof, being “reason to believe”, is a lower standard than the balance of probabilities (more likely than not) standard commonly found in administrative tribunal matters, as articulated by the Court of Appeal in Ontario (Alcohol and Gaming Commission of Ontario) v. 751809 Ontario Inc. (Famous Flesh Gordon’s), 2013 ONCA 157, In the Famous Flesh Gordon’s case, a reasonable ground for the belief is described as one that would require “something more than mere suspicion”, and “an objective basis for the belief which is based on compelling and credible information.” For the Tribunal to confirm the Order, the respondent must prove there is reason to believe the appellant meets the ground set out in s. 47(1)(f).

18A witness for the respondent, Dan Armstrong, Senior Program Administrator with the Carrier Sanctions and Investigations branch of the MTO, testified that the appellant has a history of non-compliance and safety infractions reaching back to 2017, including serious collisions: a fatality and a collision where driver fatigue played a role, and five personal injury collisions since 2020. Its record includes three wheel-separations and a consistently unacceptable violation rate. He testified that previous interventions and warnings, including the interview in 2020, taken to encourage the appellant to address its safety performance, have not resulted in any improvement to its violation rate and it was therefore served with the Cancellation and Seizure Order in May 2023.

19Mr. Armstrong represented the MTO at the Show Cause meeting. He testified that a safety plan proposed by the appellant at that meeting did not have all the important elements the MTO was seeking, including measurability. By the end of the Show Cause meeting, he testified, the Deputy Registrar still believed remedial action, in the form of the Order, was necessary.

20The respondent submits that the appellant’s record of poor safety performance and lack of compliance with safety regulations reaching back to 2017, and its seeming indifference to previous MTO interventions (warning letters, interview in 2020) led to the Cancellation and Seizure Order in May 2023, and subsequently warranted the Order which is the subject of this appeal.

21The respondent submits that it “spent years trying to impress upon this carrier the need for safety”, and it was only after the appellant was served with a cancellation sanction that it finally sought the services of a consultant to help improve its safety performance. The respondent describes the appellant’s inattention to safety in its operations as “too little; too late”. It calls on the Tribunal to confirm the Order.

22The appellant submits that it is on a learning curve and working to “adapt to the CVOR and towing regulations that were recently imposed upon our industry.” It claims the MTO overstated its violation rate and disputes some of the collision, conviction, and inspection reports, hence the number of points applied, which increase its violation rate. The appellant did not provide evidence in support of the disputed reports.

23Diane Melo, a principal of the appellant, attended the Show Cause meeting on behalf of the appellant and testified that the problems with the company’s safety performance are due to the lack of qualified, competent drivers. Ms. Melo stated it is “hard to get drivers” and that their convictions for such things as red light camera violations were ending up on the company’s CVOR abstract. Ms. Melo described the calibre of the drivers as the key to keeping a CVOR and that they were having difficulty recruiting and retaining good drivers. If they suspend or discipline them, they simply leave and go work for a different tow company.

24Ms. Melo testified that she did not realize how strict the CVOR obligations were until she started receiving warning letters in 2018. However, after a positive facility audit in April 2019 (98.57 % in compliance) and the December 2020 interview, the warning letters stopped, so she thought the company was doing okay. Ms. Melo did not refer me to any inquiries she or the appellant took to be apprised of its safety performance after the December 2020 interview. She said she did not know that she could get the company’s safety abstract online.

25Ms. Melo testified that the company took steps to improve its safety performance after the warning letters and interview in December 2020, including implementing an electronic dispatching and monitoring system called “Motive”, and strengthening its driver discipline policies. She testified that they began calling drivers in and giving them verbal warnings if their activities caused a safety infraction, but they did not suspend them. She stated that with the high cost of lease and insurance payments she did not want to have a truck parked.

26Ms. Melo testified that when their drivers got tickets (convictions) she would contest them in court, and she challenged collision or inspection reports on the company’s record which the company and/or its drivers disputed or disagreed with.

27The appellant submits that if the Order is confirmed, the business will lose its CAA affiliation, its insurance rates will become uneconomical, and its business will not survive. Forty-eight employees will lose their jobs, and the principals of the company may lose their home. Accordingly, the appellant submits that the Order is not required for it to achieve an acceptable safety record but if the Tribunal finds the grounds for the Order have been met, it seeks modifications to the Order, that would limit the seizure of vehicle plates and permits to only 10% of the fleet for a period of no more than seven days, and is prepared to commit to reaching safety performance outcomes for a defined period of time ahead.

The appellant’s actions since the Order was issued

28The appellant submits that since the Show Cause meeting, it has retained a consultant to help develop and implement a Safety Action Plan (“SAP”) and that its violation rate has already begun to improve.

29The appellant submits that since July 2023 the company has gotten its violation rate down to 42% by implementing the first elements of its updated SAP and it needs more time to operationalize the full spectrum of the plan. The respondent disputes the accuracy of the 42% violation rate claim. The appellant submits that it could take between 12 to 24 months for the SAP to get the company’s violation rate back down below 35% on a consistent basis.

30A witness for the appellant, Bill Nickerson, a principal at Nickerson CVOR Consultants, testified that he and his company are assisting the appellant to develop the SAP, strengthen its policies and procedures in relation to safety, and conduct training for drivers and employees. They began their engagement with the appellant July 21, 2023.

31He describes his company as a CVOR consultant to the commercial carrier sector that routinely has 9 or more active clients. His company includes his spouse, Sylvie Nickerson, who is a former CVOR inspector for the MTO. Mr. Nickerson has been serving as a consultant to the industry the last 18 years.

32Mr. Nickerson described the elements of the SAP his company has developed collaboratively with the appellant and testified that the MTO has reviewed its proposals and gotten back with suggestions for areas of the plan to improve and elaborate upon. An updated SAP, reflecting feedback from the MTO and the appellant, was submitted on November 30, 2023.

33The appellant submits that the CVOR system is designed to identify carriers with poor safety performance so that interventions by MTO will increase the carrier’s attention to safety and bring it back into compliance. It submits that the appellant’s engagement with the consultant since July 2023 attests to the desired outcome of the CVOR system, but that more time is needed to bring it into compliance.

The respondent has met its burden

34I find the respondent has met its burden and proved there is reason to believe, based on the appellant’s safety performance, that it will not operate safely and in accordance with the law.

35I find that the appellant had, up until May 2023, largely been dismissive of MTO interventions and seemed more devoted to challenging and disputing the various collisions, inspections, and infractions it recorded than treating them as a basis to improve safety. The appellant’s impulse was to fight infractions instead of learning from them. The strategy it deployed, seemingly to get infractions taken off its safety record as way to reduce its violation rate, displayed a vast misunderstanding, not only of its obligations under the CVOR, but of the very purposes of the CVOR in preventing collisions and promoting safety on Ontario roads.

36I conclude this because a) the appellant’s response to its rising violation rate was to dispute the veracity of inspection and collision reports it disagreed with and challenge driver convictions in court, b) there was no evidence that the appellant responded to any of the three warning letters issued between January 2018 and September 2020, and c) the appellant’s violation rate worsened after the December 2020 interview, with 30 collisions and two more wheel separations in the two-year period up to April 2, 2023. The appellant was of course entitled to avail themselves of available legal processes, and to challenge decisions that affect them, such as driver convictions. However, its overall strategy was misguided and lacked insight.

37The appellant also placed most of the blame for its unacceptable safety performance with its drivers. Ms. Melo remarked that drivers are the key to keeping a CVOR. While it is true that drivers have responsibilities under the Act and regulations and they were individually associated with the collisions, inspection defects and convictions recorded, it is the company, the CVOR holder, that is responsible for the safety performance of the company. The appellant did not seem to fully understand this distinction until it was served with a cancellation sanction.

38I agree with the respondent’s statement that, “The business of a carrier is their business. The ministry [MTO] only gets the results of it. The behaviours in the business are within its purview, the dynamics, the decisions made etc.”. The respondent’s reflections here are important and go right to the heart of accountability within the CVOR system. The regulator, MTO, uses the CVOR to monitor carriers, collect information, and share it with carriers as a tool to aid compliance and promote safety. What carriers do with that information is up to them, but under the CVOR system they are ultimately held to account for their safety performance. It is incumbent on carriers to respond when the MTO intervenes, and evidently most carriers do.

39The statistics demonstrate the CVOR system is working well. More than 98% of the 61,000 carriers in Ontario have violation rates under 35%. It suggests to me that carriers are responding to the information the MTO is sharing with them by improving their safety performance and that is ultimately resulting in the prevention of motor vehicle collisions and incidents, making Ontario roads safer.

40Only since July 2023, and its engagement of a CVOR consultant, has the appellant seemed to come to a better understanding of its responsibilities for the company’s safety performance. Ms. Melo was forthright and convincing in her testimony that the company is more committed to safety. I believe her when she states, now, that she would rather face having a tow truck off the road (due to a suspended driver), and incur its associated costs, than compromise on safety.

41I find the appellant has been taking important steps toward improving the safety of its operations since July 2023, with its consultant’s advice. It developed a new SAP, had it vetted by the MTO, and updated it as of November 2023. Its engagement with the consultant is ongoing and the evidence I heard leads me to conclude that if the updated is SAP is implemented, the appellant will improve its safety performance in the months ahead.

42These recent measures are laudable, but they come only after five years of generally dismissing the respondent’s attempts and interventions to address the appellant’s unacceptable safety performance. Under the circumstances, the appellant’s recent measures do not dissuade me from concluding that its safety record provides sufficient grounds for an Order under s. 47(1)(f) of the Act.

43I find the respondent has proven it has reason to believe that the appellant will not operate its commercial vehicles safely and in accordance with the Act, regulations and other laws relating to highway safety.

A modest modification of the Order is appropriate

44Under s. 50(2) of the Act, the Tribunal may confirm, modify or set aside an order of the Registrar under the Act. Any modifications to the Order should be considered within the purposes of the Act in promoting highway and public safety.

45Following the hearing, I invited the parties to make written submissions on the question of possible modifications to the Order that it might suggest.

46The respondent submits that confirming the Order is appropriate in these circumstances, but that if the Tribunal wishes to consider modifications, only a modification to the length of the suspension should be considered. It directs me to, and I am persuaded by 2075498 Ontario Inc. vs. Registrar of Motor Vehicles, [2009] O.L.A.T.D. No. 199, at paragraph 36, in which Tribunal Vice-Chair Flude commented that the Tribunal should be on guard “to ensure carriers take the various escalating warnings in the CVOR scheme seriously.” The fact that a carrier has finally reacted to a Notice of Suspension and Seizure should not insulate them the abysmal record that informed the issuing of it.

47As noted above, the appellant sought modifications to the Order during the hearing, that the suspension only be seven days and affect only 10% of its fleet. In its written submission following the hearing, the appellant agrees to a 30-day suspension but only for five of its vehicles (approximately 10%).

48Although the appellant’s attention to its safety performance since July 2023 is commendable and the consultant’s SAP, if pursued seriously in the coming months, presents a likelihood of bringing the violation rate back into the acceptable range (below 35%) within a reasonable time, this late conversion to a safety attitude cannot mitigate the Order to anything near the level the appellant is seeking.

49I find that taking five vehicles off the road for 30 days does not sufficiently account for the five years the appellant dismissed the progressive cautions the MTO issued to it. As noted above, the CVOR system is highly successful because over 98% of carriers manage their operations in such a way as to achieve an acceptable safety performance record. It follows then, that to uphold the integrity of the CVOR system, carriers who repeatedly dismiss MTO interventions must face the consequences of this inattention.

50I find that imposing a significant consequence for a carrier who has neglected its safety performance is in the interest of highway safety and it is the appropriate outcome for a carrier that neglects, as the appellant does, its safety obligations under the CVOR. A significant consequence also reflects that 98% of carriers appear to routinely pay attention to their safety performance, and will act as a deterrent to neglecting these important and achievable responsibilities in future.

51Dan Armstrong testified that the MTO sees the CVOR system a means to correct non-compliant behaviour by informing the carrier of its safety performance and intervening as necessary. He said, we want the carriers to stay in business and we give them chances to improve. The evidence shows that, although the appellant neglected MTO interventions up to May 2023, it has since taken a more concerted effort towards coming into compliance. Its recent efforts to improve safety performance cannot alleviate the five unacceptable years, but evidently the Order has finally convinced the appellant to make the necessary changes to be in compliance.

52Therefore, in consideration of ensuring an appropriate consequence is met for its inattention to safety obligations under the CVOR, and in recognition of the recent efforts of the appellant to dedicate itself to reaching an acceptable safety performance in the months ahead, the Order is modified to a period of 21, rather than 30 days.

Conclusion

53The respondent has proven that it has reason to believe that the appellant will not operate its commercial vehicles safely and in accordance with the Act, regulations, and other laws of highway safety. It is appropriate that the appellant experience a significant consequence for its inattention to safety; however in recognition that the appellant has committed itself, and is taking concrete steps, to come into compliance, I have determined that the Suspension and Seizure Order shall be modified to a period of 21 days, rather than 30.

ORDER

54I order the following:

a) The Suspension and Seizure Order dated July 20, 2023 is modified insofar as the appellant’s CVOR certificate is suspended for a period of 21 days rather than 30 days.