2345098 Ontario Inc. o/a Front Line Towing Services v. Registrar of Motor Vehicles, 2024 CanLII 86450

Licence Appeal Tribunal File Number: 15763/CVOR

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

Between:

2345098 Ontario Inc. o/a Front Line Towing Services

Appellant

and

Registrar of Motor Vehicles

Respondent

DECISION

ADJUDICATOR: Bruce Stanton

APPEARANCES:

For the Appellant: Koneswaran Sangarasiva, Officer Richard Lande, Counsel

For the Respondent: Patrick Moore, Counsel

Court Reporter: Chelsea Griffiths

Heard by videoconference: July 19, 2024

OVERVIEW

12345098 Ontario Inc. (the “appellant”) appeals from the Cancellation and Seizure Order (the “Order”) issued it by the Registrar of Motor Vehicles (the “respondent”) on February 26, 2024.

2The appellant filed an appeal with the Licence Appeal Tribunal (the “Tribunal”) pursuant to s. 50(2) of the Act, on March 25, 2024.

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. The Cancellation and Seizure Order is confirmed.

ANALYSIS

Circumstances of the cancellation and seizure order

5The appellant operates a fleet of tow trucks in the GTA and has been operating under a Commercial Vehicle Operator Registration (“CVOR”) certificate, number 177-714-075 since November 2017. At the time the Order was issued, the appellant had 13 commercial vehicles (tow trucks) operating under his CVOR.

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.

9As of April 2024, the MTO recorded 62,937 commercial carriers with CVORs in the province, of which 98.30%, or 60,869 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 November 8, 2021 noting its safety record showed an unacceptable performance. Dan Armstrong, a Senior Program Administrator with the Carrier Sanctions and Investigations Office of the MTO, appeared as a witness for the respondent and testified that the warning letter was triggered because the appellant’s violation rate exceeded 35%.

11The warning letter advised that immediate action was required to come into compliance and prevent further unsafe operations. The warning letter advised that the appellant’s CVOR privileges were at risk of being suspended or cancelled if suitable actions were not taken to correct the safety record.

12Nine months later, on August 9, 2022, the appellant attended an interview with Sherry Werner, an official with the MTO’s Carrier Sanctions Office. The interview was requested by the MTO as part of its progressive intervention steps when CVOR operators’ safety records are not improving or worsening. The appellant’s violation rate at the time of the interview had grown to 75.45% covering the two-year period between June 2020 to June 2022. The appellant’s safety record at that time included 5 collisions with property damage, 11 convictions for speeding and other highway infractions. Its inspection violation rate was acceptable.

13After the interview, the appellant committed to working with a CVOR consultant to develop and implement an action plan to address its high violation rate. Ms. Werner advised the appellant that if his safety record deteriorates further, sanction proceedings will be commenced against his CVOR.

14The appellant’s safety performance did not improve after the August 9, 2022 interview. It got worse. In the 24 months from November 2021 to November 2023, the appellant’s violation rate increased to 116.8% including 5 collisions, 15 convictions and 2 out-of-service infractions during inspections. On January 9, 2024, the MTO issued the appellant a Notice of Cancellation and Seizure.

15The MTO invited the appellant to attend a Show Cause Meeting (“SCM”) on January 23, 2024 to discuss why a cancellation and seizure order should not be issued and what action plan or measures the appellant is prepared to take to address its unacceptable safety performance.

16At the SCM, the MTO determined that a cancellation and seizure order is merited and issued the Order on February 26, 2024. The Order requires that the CVOR certificate and the plate portion of permits for all commercial motor vehicles and trailers shall be cancelled on March 11, 2024 and the plate portion of permits and the number plates be seized.

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

17I find the respondent has met its burden and demonstrated there is reason to believe the appellant will not operate its commercial vehicles safely and in accordance with the law.

18Section 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) of section 47(1). Subsection 47(1)(f) provides grounds for cancellation 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.

19The standard of proof, being “reason to believe”, is a lower standard than the balance of probabilities (more likely than not) standard commonly applied 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, a reasonable ground for 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).

20Mr. Armstrong testified that the appellant has a history of non-compliance and safety infractions reaching back to the period prior to November 2021 when it was issued its first warning letter. He completed a carrier safety review of the appellant on January 8, 2024 in the lead up to giving notice of the Order. His safety review notes that the appellant failed to follow through with the safety action plan he submitted following the August 9, 2022 interview. Although Armstrong did not attend the interview, I give it weight because his colleague, Sherry Werner, who conducted the interview, is a senior program administrator with MTO and the interview sheet documents her observations of the appellant’s CVOR performance. The Tribunal may consider hearsay evidence pursuant to section 15 of the Statutory Powers Procedure Act, RSO 1990, c S.22 (“SPPA”).

21Mr. Armstrong testified that by April 11, 2024, the appellant’s violation rate reached 197.36% based on the previous 24 months safety data including 3 impropriety (for which points were assigned) collisions and 24 convictions that accrued points. The convictions rate had the greatest weight in calculating the high violation rate. The severity of some of convictions were highlighted by Mr. Armstrong including three incidences of speeding at 89 km/h, 84 km/h, and 82 km/h, each in a 40 km/h zone, and several for failing to stop at a red light.

22Mr. Armstrong testified that the appellant’s convictions rate is among the worst that he has seen in his role at the Carrier Sanctions and Investigations Office. He added that the August 2022 interview had no effect in persuading the appellant to take steps to improve his safety record.

23The respondent submits that continuing to allow the appellant to operate a CVOR represents a dangerous risk to road safety. It submits that the appellant’s inability to correct the steadily worsening trajectory of his safety record between 2021 to 2024 demonstrates he has not come to grips with the safety obligations of his CVOR. The respondent seeks the Tribunal’s confirmation of the Order.

24The appellant submits that he recognizes managing a 13 to 15 tow truck operation is beyond his abilities. He testified that his business began as an autobody repair shop in 2007. Until 2017, the business contracted towing services as needed. He applied for the CVOR in 2017 so that the body shop operation could rely on its own tow trucks rather than contractors. Having an associated towing business was intended to replace the high cost of contracted towing that was often not fully compensated by insurance companies, and help direct new customers to the autobody repair business.

25The appellant testified that in the first three years, from 2017 to 2020 he operated 4 tow trucks and had an acceptable safety rating. After 2020, he grew the tow-truck fleet to 13 trucks. His safety rating began to deteriorate during the fleet expansion in 2020.

26In June 2021, the appellant suffered a brain aneurism, was hospitalized for 6 months, and spent an additional 6 months at home recovering. During this year away from the daily pulse of the business, the safety record of the towing business suffered. The appellant testified that his absence from the business for health reasons was the main cause of his CVOR’s poor safety record.

27Recognizing now that he cannot manage a fleet of 13 tow trucks and sustain an acceptable safety record, the appellant testified that he is downsizing his fleet. He testified that he has sold all but one tow truck and would like to continue his CVOR on that basis.

28He submits that his career as a body shop technician is his mainstay for the future. His attempts to operate a related tow truck business failed and have resulted in a 50% loss of revenue to the body shop. He submits that having one tow truck in his CVOR, that will be used only for moving customer vehicles and not to attend motor vehicle accidents (for tow and body shop referrals), will restore an acceptable safety record, as it was prior to 2020.

29On the question of maintaining a CVOR with only one tow truck, Mr. Armstrong testified that having a CVOR is a privilege, not a right. The holder must demonstrate that it meets the obligations to keep a CVOR. In this case, he testified, the holder has shown a disregard for the rules and a complete disregard for on-road safety. Mr. Armstrong testified that, in his opinion, the appellant should lose his privilege to keep a CVOR.

30Mr. Armstrong added that during the SCM the appellant proposed a fleet reduction from 13 to 7 tow trucks. In a follow-up email February 5, 2024 to the MTO from appellant’s counsel, in relation to the SCM, the appellant reported on its actions since the SCM. It included a commitment to reduce the fleet size from 13 to 7 tow trucks, and the number of drivers from 13 to 7.

31Now, Mr. Armstrong testified, he is proposing only one truck. He testified that given the appellant’s poor safety record, “even one vehicle might not eliminate the potential risk to public safety. We say potential because no one can predict the future, but the Deputy Registrar weighs the history and record [of the CVOR] against the imperatives of public safety on the roads.”

32The appellant submits that implementing the Order will permanently prevent him, a family member, or connected person from successfully obtaining another CVOR. He submits that at age 41, he has many years ahead in his career and has learned his lesson from the failure of the tow truck business. It has already cost him up to 50% of his autobody shop revenue.

33He seeks an order from the Tribunal to modify the Order such that the CVOR not be canceled and that the permits be seized for all but one vehicle. He submits that with just one truck, he could manage driver performance and restore the CVOR safety record to an acceptable level.

34I find that the Order shall be confirmed. The respondent meets its burden in establishing it has reasonable grounds for the belief that the appellant will not operate his commercial vehicles safely and in accordance with the Act and regulations.

35The respondent presented a convincing, factual basis that establishes reasonable grounds for its belief. The record shows that despite MTO interventions with a warning letter in November 2021 and interview in August 2022, the CVOR safety record got progressively and significantly worse, reaching a violation rate of 197.36% as of April 11, 2024. That rate puts the appellant’s CVOR in a very small group of 25, out of 62,937 certificate holders, with violation rates above 100%; 0.04% of the total.

36I was persuaded by Mr. Armstrong’s description of the appellant’s lack of attention to the warnings given by the MTO. The appellant had opportunities to address and correct the safety issues starting in November 2021 with the first warning letter. The evidence supports Mr. Armstrong’s contention. The warning letter was clear in stating that action was required to prevent unsafe, non-compliant activities, and failure to do so could result in further interventions (facility audit, interview) up to and including the suspension or cancellation of CVOR privileges.

37By the August 2022 interview, nine months later, the interview notes give little indication the appellant took any actions to improve his safety record. I recognize that the appellant was still recovering from his brain aneurism but his obligations to uphold safety standards in his CVOR operation did not cease during his illness and recovery.

38The interview notes reflect that there were no collision reporting policies, records of truck maintenance and preventative maintenance were lacking, no accident prevention policies or training was in place, and no driver discipline program. The appellant committed to engaging a consultant to devise an action plan to address these deficiencies.

39The SCM notes of January 2024, 17 months later, indicate that the action plan submitted prior to the SCM was essentially a re-hash of the action plan submitted post-interview 2022, and it was evident that most of the action plan items since the interview had not been actioned.

40By example, the issue of excessive tint on the truck windows was raised as a conviction issue during the interview in 2022. By the time of the SCM, the window tint issue had not been resolved. The appellant deflected fault to the drivers for putting the tint on themselves.

41The appellant did not direct me to any evidence of actions or steps he took during those 17 months to address his rising violation rate.

42I find the notes from the interview and SCM reflect the appellant’s indifference towards the safety prerogatives of the CVOR and an apparent inability to manage those obligations effectively. The appellant has had more than two years to take actions and steps to get his safety record corrected but it was not until he was threatened with cancellation that he took the issue more seriously.

43The appellant seemed to realize at the interview in 2022 that he was having difficulty managing the tow-truck operation and he consequently proposed reducing his fleet so that it would be more manageable.

44It is a theme he repeated at the SCM and during this hearing. I have no confidence that the appellant will act on those commitments because he did not follow through on them in the past.

45At the August 2022 interview, the appellant is said to have stated that the tow truck operation was becoming unmanageable, having added 6 trucks to the fleet in the preceding year. He stated that he would be downsizing to 4 trucks in the coming months. The kilometric charts show that in the year ending June 2022, the CVOR listed 12 trucks averaging 54 km/day across the fleet. The following year ending June 2023 there were 11 trucks averaging 84 km/day across the fleet. There was effectively no reduction in fleet activity following the August 2022 interview. At the SCM the appellant responded, claiming that he was unable to reduce his fleet due to the COVID-19 pandemic and that times were tough.

46For the reasons stated above, I find that the respondent has met its burden in demonstrating there is a reasonable ground for the belief that the appellant will not operate its commercial vehicles in accordance with the Act and the regulations.

47I have considered the appellant’s proposal that I modify the Order by restricting the fleet size to one truck and find that even one commercial vehicle in a CVOR fleet demands a disciplined, orderly safety attitude and regimen. It requires daily attention and management systems to ensure that appropriate standards of vehicle maintenance, road-safety and load procedures, and driver training and discipline, among other elements, will be adhered to. The complexity of meeting the operational and safety obligations of a CVOR, even for one truck, are extensive and suitably so, considering the greater risk that larger, heavier vehicles pose to road safety.

48I find that the appellant was either unable and/or unwilling to take his CVOR’s safety obligations seriously. Over a two-year period the MTO actively intervened and prompted him to take action and he did not respond, seemingly until he faced a cancellation and seizure order. The appellant’s CVOR history and safety record, coupled with the rigorous requirements of maintaining an acceptable safety record, leave me to conclude that the appropriate action is to confirm the respondent’s Order.

Conclusion

49The 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.

ORDER

50Pursuant to section 50(2) of the Act, the Cancelation and Seizure Order dated February 26, 2024 is confirmed.