Licence Appeal Tribunal File Number: 17544/TSSEA

An appeal of a cancellation order issued under the Towing and Storage Safety and Enforcement Act, 2021, S.O. 2021, c. 26, Sched. 3 (the “Act”).

Between:

666654 Ontario Limited o/a K & K Towing and Automotive Repair

Appellant

and

Director of Towing and Vehicle Storage Standards

Respondent

MOTION DECISION AND ORDER

ADJUDICATOR:

Rupinder Hans

Representatives:

For the Appellant:

Ritesh Patel, Counsel

Rianne Conklin, Paralegal

For the Respondent:

Patrick Moore, Counsel

Heard by Teleconference:

October 14, 2025

OVERVIEW

1The appellant, 666654 Ontario Limited o/a K & K Towing and Automotive Repair, appeals an Order (“cancellation order”) of the Director of Towing and Vehicle Storage Standards (the “respondent”), cancelling its Tow Operator Certificate and Vehicle Storage Certificate pursuant to subsection 7(1) of the Towing and Vehicle Storage Safety and Enforcement Act, 2021, S.O. 2021, c. 26, Sched. 3 (the “Act”).

2The respondent issued the cancellation order on August 12, 2025, and it went into effect on August 27, 2025. The respondent alleges the appellant committed contraventions of the Act and its regulations; failed to satisfy the qualifications and requirements of the Act and O. Reg. 167/23 (the “Regulation”); failed to comply with a term or condition of its certificates including the obligation to comply with the Code of Conduct; and failed to ensure that persons employed or engaged by it complied with the Act and Regulation including the Code of Conduct.

3The appellant disagrees with the position taken by the respondent and believes the decision to cancel its certificates failed to consider alternative sanctions, was disproportionate, and misaligned with the purpose of the Act.

4The appellant brings the motion seeking a stay of the cancellation order pending a determination on the merits of the pending appeal before the Licence Appeal Tribunal (the “Tribunal”). The respondent opposes the motion. The parties attended before the Tribunal on October 14, 2025, and made oral submissions on the motion.

5I considered the entirety of the appellant and respondent’s submissions and motion materials, including affidavit evidence and support letters, in making a determination.

ISSUE

6The issue in dispute in this motion is:

i. Whether the Tribunal should order a stay of the cancellation order pending the outcome of a hearing pursuant to s. 37(3) of the Regulation.

RESULT

7A stay of the cancellation order is denied.

ANALYSIS

8Section 37(3) of the Regulation provides that the filing of an appeal on a cancellation order issued under the Act does not stay the decision of the respondent unless the Tribunal orders otherwise.

9The test to be applied on a motion for a stay pending appeal is well established and derived from the 1994 Supreme Court case RJR-MacDonald Inc. v. Canada (Attorney General), [1994] 1 SCR 311, 1994 CanLII 117 (“RJR-MacDonald”). The party seeking a stay must establish, on a balance of probabilities that:

a) the appeal raises a serious issue to be tried;

b) the applicant will suffer irreparable harm if the stay is not granted; and

c) the balance of convenience favours granting a stay.

10No one criteria of the three is determinative and they must be considered cumulatively on the question of whether the justice of the case merits or does not merit a stay. The parties referred to a number of court and Tribunal decisions that I have considered and taken into account. I note that there is no disagreement between the parties that the test outlined in RJR-MacDonald applies in this instance, and I discuss as follows.

Serious issue to be tried

11I find the appellant has met this part of the test.

12I note the threshold to meet this aspect of the test is a low one. The appellant does not need to demonstrate the likelihood of succeeding in the appeal, only that the matter before the Tribunal has merit, and that the matter is not frivolous or vexatious.

13The respondent submits that no serious issue has been raised by the appellant. The respondent asserts the appellant breached the requirements of the Code of Conduct to act with professionalism and integrity when it created and transmitted a “grisly video” of a deceased collision victim, that it has been convicted of violations of the Highway Traffic Act, R.S.O. 1990, c. H.8, and it failed to comply with its obligations under section 11 of the Act to ensure that its drivers complied with the Act and Regulation, including the Code of Conduct. The respondent argues that tow operator and tow truck driver are present at the scene of collisions to provide a public service, and it is a fundamental breach of their duties under the Act to treat a fatal collision scene as a source of entertainment by making a video of a deceased’s remains. The respondent presented an email from the Ontario Provincial Police, dated June 20, 2025, indicating that the video was circulated on the internet. In addition, the appellant continued to operate after the cancellation order came into effect, and cancellation is not a disproportionate penalty.

14The appellant acknowledges the existence of a video taken at the accident scene and states that Mr. Dylan Rosborough recorded the video and sent it to his father Mr. Gerald Kevin Rosborough, the sole corporate officer and director of the appellant, who inadvertently forwarded it to another employee. The appellant alleges there is no evidence to suggest the video was ever circulated or posted on social media, that the video should not have been taken as it was inappropriate, insensitive and unacceptable, and Mr. Dylan Rosborough faced prompt internal disciplinary consequences for his actions including immediate removal from all driving privileges, reassignment to repair shop duties, mandatory completion of training in Code of Ethics and Standards of Practice, and completion of a written apology letter.

15The appellant further acknowledges that, after the cancellation order came into effect, it responded to certain service calls from the Owen Sound Police Service (the “Service”) under the honest and reasonable belief that it was acting pursuant to lawful authority, and that its belief arose from an officially induced error of law, which, while not a defence, constitutes a valid legal excuse in the circumstances as set out by the Supreme Court of Canada in R. Jorgensen, 1995 CanLII 85 (SCC), [1995] 4 S.C.R. 55. The appellant states it misunderstood the legal effect of the cancellation order in the context of receiving direct calls from the Service for services. In his affidavit, Mr. Gerald Kevin Rosborough states that he responded to the direct service requests from the Service under the genuine, good faith, and reasonable belief that he was authorized to do so given the request was from a recognized law enforcement authority.

16The appellant submits the decision to cancel its certificates was disproportionate, failed to consider or apply alternative enforcement measures, and is inconsistent with the purpose of the Act.

17I find that the appellant has met this low threshold, and the appeal is neither frivolous nor vexatious because there are serious and untested allegations related to the cancellation of the tow operator and storage operator certificates that need to be decided at the substantive hearing. I find that the basis of the appellant’s opposition to the cancellation order, if proven, has merit.

18I find the appellant has met its onus in establishing that there is a serious issue to be tried before the Tribunal.

Irreparable harm if stay is not granted

19I find that there would not be irreparable harm to the appellant if a stay were not granted.

20The next part of the test requires the appellant to demonstrate that irreparable harm will result if relief is not granted. “Irreparable” refers to the nature of the harm rather than its magnitude. For instance, financial loss could be deemed irreparable if it is unclear how such a loss might be recovered. In RJR-MacDonald, the Supreme Court described the harm as that:

“. . . which either cannot be quantified in monetary terms or which cannot be cured, usually because one party cannot collect damages from the other. Examples . . . include instances where one party will be put out of business by the court’s decision, . . . where one party will suffer permanent market loss or irrevocable damage to its business reputation. . . or where permanent loss of nature resources will be the result when challenged activity isn’t enjoined.”

21As set forth in Ward’s Towing Service Ltd. v. Director of Towing and Vehicle Storage Standards, 2025 CanLII 25869 (ON LAT) the evidence of irreparable harm must be clear and not speculative.

22The respondent takes the position that the appellant has not met its burden to prove irreparable harm, and the appellant’s evidence is incomplete with no consideration of the means through which the appellant may mitigate harm. Specifically, the accountant and legal letters that the appellant provided do not include the assessment of the degree to which the harm the appellant is facing has resulted from decisions, such as the OPP suspension, that are separate from the decision under appeal. In addition, while the appellant has provided affidavits from its employees detailing harm being suffered, the harm must be to the appellant and not its drivers or other employees.

23The respondent submits the regulatory provisions do not grant an automatic stay of cancellation orders under these circumstances and argues that this legislative approach was intentional to indicate that there is a risk in permitting tow and vehicle storage operators to continue to operate pending the outcome of an appeal.

24The appellant asserts it will suffer permanent reputational damage including erosion of client relationships. Further, the financial impact of the short-term cessation of operations would be devasting and it continues to incur substantial ongoing costs and is unable to mitigate harm. The appellant presented a Financial Forecast prepared by PTMG CPA detailing the projected losses and business impact from the suspension. The approximate monthly costs include towing equipment lease obligations of $50,850.00, and maintenance and repairs costs for equipment totally $22,900.00, and rental costs of $6,500.00 for secure storage, and insurance and licensing fees totalling $13,500.00, and wage expenses of $83,300. The estimated monthly cash flow requirements are a total of $177,050.00.

25The appellant states it typically maintains approximately $600,000 in working capital; however, the short-term shutdown would rapidly deplete this reserve leaving the company insolvent. In addition, the working capital cushion, built over nearly 40 years of operation, would take years to rebuild and severely limit the appellant’s ability to respond to emergency repairs, capital expenditures and other operational needs.

26The appellant further asserts that employees losing their employment would result in significant liability under both the Employment Standards Act, 2000, S.O. 2000, c. 41, and common law. The appellant presented a Termination Costing Assessment, dated September 3, 2025, prepared by Siskinds LLP qualifying the potential liability in the minimum approximate amount $56,389.00, if all 19 employees are terminated, and much higher amounts ranging from $684,959.57 to $862,643.42 if all employees brought wrongful or constructive dismissal claims.

27I agree with the respondent that the appellant has not demonstrated irreparable harm will occur if the cancellation order is not stayed. I am persuaded by the appellant’s submissions that some financial loss will arise from the effects of the cancellation order including but not limited to ongoing monthly lease obligations, and rental costs. However, the appellant did not sufficiently quantify or describe the extent of those losses or how the financial costs might be mitigated or recovered. There was no evidence provided about how the appellant explored reducing its expenses and if those efforts failed. I am not convinced that the losses are irreparable as alleged by the appellant, and that mitigation is not possible. I further note that the amounts estimated if all employees brought wrongful or constructive dismissal claim are unclear and speculative.

28I find the appellant has not established it would suffer irreparable harm if a stay were not granted.

Balance of Convenience

29For the reasons that follow, I find the appellant has not met this part of the test.

30The last part of the test at set forth in RJR-MacDonald compels the Tribunal to consider which of the two parties will suffer the greater harm from the granting or refusal of a stay. As such, I must consider whether the harm to the appellant from not granting a stay is greater, less than or equal to the harm to the public interest by granting a stay.

31I note that RJR-MacDonald states that when the nature and declared purpose of legislation is to promote the public interest, a motions court must assume that it does so and in order to overcome the assumed benefit to the public interest arising from the continued application of the legislation, the applicant who relies on the public interest must demonstrate that the suspension of legislation would, itself, provide a public benefit. This means the appellant must demonstrate benefits to the public interest in granting a stay.

32The respondent submits that the Director of Towing and Vehicle Storage Standards will suffer irreparable harm if a stay is granted, and relies on GFL Environmental Inc. v. Registrar of Motor Vehicles, 2014 ONSC 2728, which states that:

“. . . the Supreme Court accepted that public authorities will suffer irreparable harm if their regulatory authority is interfered with and that thus in cases involving a public authority, it will be necessary to balance the irreparable harm suffered by the party seeking a stay with the inevitable irreparable harm suffered by the public authority.”

33The respondent also relies on H&B Transportation Ltd. v. Ontario (Registrar of Motor Vehicles), [2004] O.J. No. 5431 (Div. Ct.) and submits that the Divisional Court has held in multiple stay motions that the public interest in safe highways should outweigh any pecuniary harm to truck operators that might be occasioned by a denial of a stay.

34The respondent submits the appellant breached its cancellation order and operated without a valid certificate, and there is a strong risk that it will commit other additional violations if a stay is granted. The appellant acknowledges it made an error in this regard and responded to six service calls from the Service, and it has taken measures to ensure compliance. I note the actions of the appellant in continuing to operate, albeit in a limited manner, is concerning.

35The respondent also points to concerns regarding the safety record of the appellant. In his affidavit, Mr. Andrew Gill, Senior Regulatory Compliance Administrator, states the respondent has an overall violation rate of 40.71 percent, when about 97.75 percent of CVOR holders had a violation rate of less than 35 percent as of February 2025. In response, the appellant submitted the affidavit of Rianne Conklin, paralegal, who states that, despite infractions highlighted by the respondent, the appellant maintains a satisfactory-unaudited safety rating. The appellant also provided affidavit evidence of several employees providing explanations and details on violations.

36The appellant submits that refusing to grant a stay of the cancellation order will cause significantly greater harm to the appellant than any potential harm to the public interest, and that there is no evidence to suggest the appellant’s continued operation presents an ongoing risk. Furthermore, the appellant submits it has implemented additional internal compliance protocols, increased operational oversight, taken proactive steps to address any deficiencies in its operations, begun to improve its safety record, and taken active steps to mitigate potential harm to public safety.

37The appellant submits it has the support of the community as demonstrated by support letters, and the Tribunal must weigh the potential collapse of a long-standing, family run business against the Director’s regulatory interests.

38I find that harm to the public interest, in particular to highway safety, from granting a stay is greater than the harm to the appellant by refusing a stay. The Act and the Regulation exist for the protection of public safety and the regulation of the towing and storage sector. Section 9(2) of the Act is clear in stating that an appeal does not operate as a stay of a decision pursuant to s. 9(1), except as provided by the regulations. As noted above, s. 37(3) of the Regulation, states that filing an appeal on a cancellation order does not stay the decision, unless the Tribunal orders otherwise. I find the intent of the legislature in the Act and in the Regulation is clear and unambiguous. The prevailing intent of the legislation is to maintain the force of the legislation to protect the public interest.

39In his affidavit, Mr. Gerald Kevin Rosborough states the appellant provides an essential service in rural and underserved regions of Ontario and the suspension of its services would affect not only it but also local motorists, municipalities, and emergency services who rely on its services. In response, in his affidavit Mr. Gill states that other tow operators appear to have increased their fleet size to be able to receive calls previously completed by the appellant. There is no evidence before me to suggest that other companies are unable to fill the void in services left by the cancellation order. I can not find that a stay of the cancellation order would benefit the public interest.

40In addition, I took into consideration the appellant’s assertion that this is not a case of willful misconduct, there is no evidence to demonstrate the video was distributed to the public, that any violations on its record are dated, and it has a satisfactory-unaudited carrier safety rating. However, I note that a video of the remains of a deceased was made by an employee, and forwarded to the corporate director, who then forwarded the video to another employee. While there is no evidence before me to indicate the video was shared on social media, the conduct of the employee and corporate director of the appellant is serious.

41I further find that when a public authority is prevented from exercising its authority it suffers from irreparable harm, and there is no allegation the public will suffer harm if the appellant is not operating, and no information that the appellant’s continued operation is necessary for public safety purposes. I find that the balance of the convenience favours the respondent given consumer protection and safety on the roadways verses the financial or any other interest of the appellant.

42Accordingly, I find the balance of convenience favours denying a stay of the cancellation order.

43Taking the three elements of RJR-MacDonald cumulatively, I find the justice of the case favours denying a stay because although there is a serious case to be tried, the appellant has failed to persuade me of the potential for irreparable harm from denying a stay, and the balance of convenience favours denying a stay.

Conclusion

44The appellant has not demonstrated on a balance of probabilities that a stay should be granted.

ORDER

45A stay of the cancellation order is denied pursuant to section 37(3) of the Regulation.