Tribunals Ontario Licence Appeal Tribunal

Tribunaux décisionnels Ontario Tribunal d'appel en matière de permis

An appeal under Section 50(1.0.1) of the Highway Traffic Act, R.S.O 1990, c. H.8 (the “Act”), from a Cancellation and Seizure Order and a Seizure Order of the Registrar of Motor Vehicles under sections 47 and 47.1 of the Act

Between:

2171775 Ontario Inc. o/a J G T Transport and Kalvinder Lally

Appellants

and

Registrar of Motor Vehicles

Respondent

DECISION AND ORDER

VICE-CHAIR: Geneviève Painchaud

APPEARANCES:

For the Appellants: Kalvinder Lally

For the Respondent: Isabel Jennings, Senior Program Administrator

Patrick Moore, Counsel

Observer: Tranveer Lally, Appellant’s son

Reporter: Josh Grieve

Heard by Videoconference: March 3, 2025

REASONS FOR DECISION AND ORDER

BACKGROUND

12171775 Ontario Inc. o/a J G T Transport (“JGT”) appeals to this Tribunal under s. 50(1) of the Highway Traffic Act, R.S.O. 1990, c. H.8 (the “Act”), from an order of the Registrar of Motor Vehicles (the “Registrar”) issued pursuant to s. 47(1) of the Act on July 19, 2024 to cancel the Commercial Vehicle Operator’s Registration (“CVOR”) certificate and vehicle registrations and to seize the plate portion of any permits and number plates registered for all commercial motor vehicles and trailers registered in the name of the company. This is Tribunal file number 16362/CVOR.

2Mr. Kalvinder Lally appeals to this Tribunal under s. 50(1) of the Act from an order of the Registrar issued pursuant to s. 47(1) of the Act on August 9, 2024 to seize the plate portion of any permits and number plates for all commercial motor vehicles and trailers registered to him. This is Tribunal file number 16363/CVOR.

3At a case conference held on December 2, 2024, the Registrar brought a motion to combine the two files. They involve the same or similar questions of fact and law and as per subsection 9.1(1) (b) of the Statutory Powers Procedures Act, RSO 1990, c. S. 22, the Tribunal may hear the proceedings at the same time in such instances, with the consent of the parties. Mr. Lally is the owner of JGT, and therefore, the witness in both proceedings. Accordingly, the Tribunal ordered that the files be combined and the files for JGT and Mr. Lally (collectively the “appellants”) be heard together and that the evidence admitted in each appeal be treated as if it was also admitted in the other appeal.

4The Registrar alleges that there is reason to believe that the appellants will not operate a commercial motor vehicle safely or in accordance with the Act, the regulations and any other laws relating to highway safety. The Registrar bears the onus of convincing the Tribunal that there is reason for such belief.

5Section 50(2) of the Act allows the Tribunal to confirm, modify or set aside the decision of the Registrar.

PROCEDURAL ISSUES

6Mr. Lally requested an adjournment of the hearing by sending an e-mail to the Tribunal on the Saturday prior to the Monday morning hearing. In his e-mail, he wrote that he just moved to a new home and did not have internet installed and only had access to public wi-fi.

7At the start of the hearing, Mr. Lally was not in attendance. The Tribunal and the Registrar’s counsel attempted to reach him by phone and e-mail to no avail. Mr. Lally then called the Registrar’s counsel 30 minutes after the time set for the commencement of the hearing. He was then able to call into the hearing by phone where he made his request for an adjournment orally based on his lack of internet access. After some problem-solving, he was able to sign-in to the Zoom videoconference hearing using his son’s cellular phone. He agreed that his adjournment request was now moot and that we could proceed with the hearing.

8At the December 2, 2024 case conference, Mr. Lally was strongly encouraged to retain an interpreter for the hearing. At the hearing, he stated that he was unable to find one but that his son, Tranveer Lally, could assist him. The Registrar agreed. I allowed Tranveer Lally to provide some assistance to his father throughout the hearing when needed.

ISSUES

9The issues before me in this combined appeal are:

(a) Is there reason to believe, having regard to the safety record of the appellants and any other relevant information, that the appellants will not operate a commercial motor vehicle safely or in accordance with the Act, the regulations and other laws relating to highway safety?

(b) If the answer to the first issue is yes, what is the appropriate outcome?

RESULT

10For the reasons that follow, I find:

(a) There is reason to believe that the appellants will not operate a commercial motor vehicle safely or in accordance with the Act, the regulations and other laws relating to highway safety; and,

(b) Having considered the parties’ submissions, this is not an appropriate case for conditions. I therefore confirm the Registrar’s order to cancel the appellants’ CVOR certificate and vehicle registrations and to seize the plate portion of permits and number plates for all commercial motor vehicles registered in their name.

LAW

11Under s. 47(1) of the Act, the Registrar may, by order, suspend or cancel a CVOR certificate and the plate portion of a permit if the Registrar has 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 motor vehicle safely or in accordance with the Act, the regulations and other laws relating to highway safety.

12The Registrar and the Tribunal are required under s. 47(1)(f) to have regard to the safety record of the appellants when determining whether the appellants’ CVOR certificate ought to be cancelled. The Tribunal owes no deference to the Registrar in arriving at its decision.

13According to the Court of Appeal in Registrar, Alcohol and Gaming Commission of Ontario v. 751809 Ontario Inc. operating as Famous Flesh Gordon’s, 2013 ONCA 157, the issue is whether those facts afford reasonable grounds for belief that the business will not be carried on in accordance with the law and with integrity and honesty.

14The “reasonable grounds to believe” standard requires something more than mere suspicion but less than proof on a balance of probabilities. In other words, the Registrar does not have to show that the conduct of the appellants makes it more likely than not that they will not carry on business as required. The Registrar need only show that there are reasonable grounds for belief that they will not operate a commercial motor vehicle safely or in accordance with the Act.

15According to the Supreme Court of Canada in Mugesera v. Canada (Minister of Citizenship and Immigration), 2005 SCC 40 at para. 114, reasonable grounds for belief must be more than mere suspicion and will be found to exist where there is an objective basis for the belief which is based on compelling and credible information.

16Further, there must be a nexus between the past conduct in issue and the appellants’ ability to operate a commercial motor vehicle safely or in accordance with the laws relating to highway safety: see CS v Registrar, Real Estate and Business Brokers Act, 2002, 2019 ONSC 1652 (Div. Ct.) at para. 32.

EVIDENCE AND ANALYSIS

17The Registrar submits that the appellants’ safety record provides reason to believe that they will not operate a commercial motor vehicle safely or in accordance with the Act, the regulations and other laws relating to highway safety.

18On July 19, 2024, JGT was issued a Notice of Cancellation and Seizure based on the safety record review dated July 2024 showing an unacceptable overall violation rate with respect to collisions and convictions over a 24-month period. A show cause meeting was set for August 9, 2024 if JGT wanted to dispute the proposed cancellation and seizure and meet with the Deputy Registrar.

19Mr. Tally, as representative for JGT, failed to attend the scheduled show cause meeting on August 9, 2024, and also failed to provide submissions as to why the Deputy Registrar should not proceed with a cancellation and seizure order.

20Based on the non-attendance at the August 9 show cause meeting, and because Mr. Tally is directly affiliated to JGT, the Registrar issued Mr. Tally a Notice of Seizure that same day as he held a Registrant Identification Number (RIN) not included under the JGT order. A right to dispute at a show cause meeting scheduled for September 24, 2024 was also indicated.

21Mr. Tally attended the September 24, 2024 show cause meeting.

22Isabel Jennings, Senior Program Administrator for the Ministry of Transportation (“Ms. Jennings”) testified on behalf of the respondent.

JGT’s Safety Record

23Ms. Jennings testified that the safety ratings of CVOR certificate holders are based on records that take into consideration collisions, convictions and inspection infractions, which are evaluated over a ‘sliding’ two-year window. The collisions, convictions and inspection infractions are assigned certain points which are then translated into percentages. An Overall Violation Rate (“OVR”) is then produced, combining the three criteria, multiplying collision and conviction percentages x 40% each inspection infraction percentages x 20%.

24Ms. Jennings presented the following statistical chart, outlining the levels of OVRs of Ontario CVOR holders as of April, 2024:

Violation Rate Percentage (%)	Number of CVOR Holders	Percentage of Total
0 - <35%	61,869	98.30
35 - <50%	669	1.06
50 - <70%	277	0.44
70 - < 85%	58	0.09
85 - < 100%	39	0.06
≥ = 100%	25	0.04

25JGT’s CVOR was commenced on March 7, 2011.

26A Commercial Vehicle Operator Record of JGT was produced, for the period of June 19, 2022 to June 18, 2024, which showed:

i. JGT’s OVR at 164.78%.

ii. JTR has a 40% overall out of service rate with a vehicle out of service rate of 44%, and a driver out of service rate of 0.0%.

iii. The percentage of set threshold of inspections is 94.61% with 20 total units inspected. 9 of 10 inspections contained defects, and 4 of those inspections contain out-of-service defects.

iv. The percentage of set threshold of convictions is 277.99% based on 21 events.

v. The percentage of set threshold of collisions is 86.66%, including 4 collisions.

vi. One vehicle is registered and one driver.

27As of July 2024, the Registrar submits that JGT had fines in default in the amount of $2,652.20 from offences under the Act, which have since increased to $3,547.20.

28The Registrar submits that JGT’s OVR has not been improving even after many interventions. It pointed to many collision and inspection reports demonstrating repeated issues with the vehicle being driven overweight, brake defects, standards not being met, load spilling on roadway, and failure to record defects. It is concerned that allowing the appellants to operate creates a risky environment for the public.

29JGT did not submit any evidence regarding its OVR nor dispute the Registrar’s position. Mr. Lally simply stated that this was because of past employees and that he will do better in the future.

Mr. Lally’s Record

30The Registrar submits that seizure of Mr. Lally’s plate portion of permits and number plates is justified because he is directly related to JGT as a corporate officer, because he failed to attend the show cause meeting for JGT on September 9, 2024, and because of anti-avoidance legislation. A RIN does not have a violation rate and only CVORs do so the process of seizing the permits of individuals and companies is somewhat different.

31It adds that it is standard procedure in accordance with anti-avoidance legislation, when a CVOR with problems warranting action under s. 47(1) and a RIN are affiliated, to seize the plate portion of relevant permits.

32Mr. Lally submits that he is very careful and has a good record. His company is very important to him, and he used to have a few drivers who were not listening to him in the past. He wants to only have 1-2 trucks.

33I agree with the Registrar and find that as owner of JGT, Mr. Lally’s RIN is directly related to JGT and that his conduct as an operator is linked to his RIN to ensure it is not used to circumvent any restrictions on the company or any future companies. His plates can be seized to prevent avoiding sanctions by transferring them to a related entity.

34The Registrar submits that the past conduct and safety record of JGT creates a reasonable belief that the appellants will not operate a commercial vehicle safely or in accordance with the Act, the regulations and other laws relating to highway safety.

Steps Taken by the Registrar

35The Registrar submits that starting at the 35% OVR mark, it undertakes progressive interventions starting with warning letter to show cause meetings. The last and most severe step involves sanctions which happen when an operator passes the 100% OVR threshold. This impacts only 0.04% of CVR holders.

36The Registrar previously sent warning letters in 2016 and 2020. A facility audit conducted in 2023 demonstrated an overall regulatory compliance score of 38%, meaning it failed the audit.

37Following the Cancellation Order for JGT, Mr. Lally attended a show cause meeting on September 24, 2024, on his behalf and on behalf of JGT. Notes from this meeting show that:

i. The Registrar explained the violation rate and showed the record of numerous collision and inspection concerns.

ii. Mr. Lally stated that he was now the only driver for JGT and was only using one truck because business was slow, and he had difficulty retaining drivers.

iii. Mr. Lally recalled one collision but was unsure of any others and did not appear to have a collision reporting procedure in place.

iv. When shown that 9 out of 10 inspections had defects and asked if there was a process to track inspections, Mr. Lally stated that he conducts his own maintenance or has a mobile mechanic attend, and that he is more careful now and takes his vehicle to the shop.

v. Mr. Lally indicated that he trained his own drivers but that they do not listen. He plans to hire more experienced drivers and ensure they take things seriously.

vi. When asked about a May 31, 2024 inspection where he was the driver and an expired plate validation issue was raised, Mr. Lally said he had difficulty paying and that the bank was looking at foreclosing on his home.

vii. Mr. Lally said he now understands the importance of inspections and that his former drivers would not complete trip inspections nor notify him of issues, but that he would now take the issues more seriously.

viii. The Registrar expressed concern as to why Mr. Lally took so long to recognize the seriousness of the issue and wanted to lay blame on the drivers.

ix. The lack of Mr. Lally having a plan to address any changes was also a concern for the Registrar. He was so unorganized that he had not even updated his contact information with the Ministry.

x. The Registrar is concerned that Mr. Lally would continue operating until something catastrophic happens.

38Before making a decision, the Registrar requested the following documents from Mr. Lally:

By September 25, 2024:

i. A copy of his complete insurance policy

By October 8, 2024:

i. Vehicle and driver list, clearly outlining when vehicles/drivers left/were added to the company in the last year.

ii. An explanation of what commitments will be made with respect to managing the company and addressing all the knowledge gaps that appear between what is being done and what is required by legislation that were discussed during the meeting and the rationale for his decisions, and how these commitments would be implemented.

iii. Return of Kilometric Travel update form with corresponding annual inspection certificates.

iv. Proof of defaulted fine payments (and/or payment arrangements with the courts).

39The Registrar submits that on October 7, 2024, Mr. Lally sent an email outlining the names of three drivers, including himself, and the VIN of the only truck he has on the road currently and stating that he was awaiting a copy of his insurance policy. An insurance policy was provided the following day, but in someone else’s name. After several reminders, none of the other documents were provided to the Registrar. One week later, the Registrar proceeded with the cancellation order.

40As for the insurance policy, Mr. Lally testified that it was in his older son’s name. That he has been driving for his son for 2 years and that he transferred his truck to his brother’s insurance as his policy was getting too expensive due to his safety record. He testified that if something happened with his brother’s insurance, he would return to using his own insurance.

41The Registrar is concerned that the Mr. Lally is trying to circumvent the orders and their impact by having his vehicle insured under his son’s insurance policy.

42The Registrar also submits that the appellants does not have a plan to improve but that Mr. Lally mainly states that he will do better, which the Registrar argues is not enough. They have performed several interventions and are not seeing any changes. Also, putting fleet limitations would have no impact as the appellants are only using one vehicle currently. The Registrar submits that this is putting the public at risk.

Analysis

43I find that the appellant was unable to demonstrate any concrete plan to improve the safety of his fleet. While he stated repeatedly that he would improve, he was given several chances to do as such and had vehicles on the road that could have caused serious accidents.

44I agree with the Registrar that the CVOR demonstrating an overall violation rate of 164.78% is very concerning. This rate is reached by less than 1 % of operators. Of particular concern is that there were different steps taken by the Registrar to assist the appellants in addressing past violations and ensuring improvement, and also that all the areas of collision, inspection and conviction were problematic. There were many instances of vehicles needing to come off the road when inspected.

45I am concerned that there is a great risk to the public if commercial motor vehicles operating on our roads do so in a dangerous manner, and the appellants’ vehicles were involved in a significant number of collision and convictions. I find it alarming that the appellants have not yet paid many of the past fines and are in default. While the appellants cite having financial difficulties in the past, there was no mention of an intention to pay these fines.

46I find that the appellants’ defense was mostly focused on blaming past employees. However, as an operator, I find that it was his responsibility to oversee them and his fleet. There were many instances of loads being significantly overweight, there were issues with brakes and an insecure load, among others, which demonstrate serious safety concerns, and the defects were not recorded as they needed to be.

47I also agree with the Registrar that Mr. Lally showed little insight on what he would do differently except that he will be very careful in the future. He has said he wants to work under his son’s company/insurance but that if his son has issues with his company, he will go back on his own and have only 1-2 drivers. I find that this does not demonstrate that anything will be addressed in the future but is an attempt to circumvent any order.

48On the basis of the evidence before me, I conclude that the safety record and the conduct of JGT and Mr. Lally provide a reason to believe that appellants will not operate a commercial motor vehicle safely or in accordance with the Act, the regulations and other laws relating to highway safety.

Conclusion

49Based on the above, I find that the Registrar has established that there is reason to believe, having regard to the safety record of the appellants, that the appellants will not operate a commercial motor vehicle safely or in accordance with the Act, the regulations and other laws relating to highway safety.

What is the appropriate sanction?

50I am not bound to accept the outcome proposed by the Registrar. I find, however, that it is appropriate in the circumstances. The appellants have not established that other sanctions would sufficiently protect public safety or that the appellants can be trusted to comply with conditions placed on registration. Even a reduction in the size of the fleet will have no effect as there is only one vehicle on the road currently, and there were not many vehicles involved while the safety issues arose.

51The appellants were provided with valuable insights, information and recommendations from the Registrar at the show cause meeting as to how to improve their record of and to ensure the safe management of operations. This would have assisted their ability to maintain their CVOR certifications. Instead, there is little, if any, evidence that the appellants made any improvements to their ability to operate safely, or that they will in the future and did not even abide by the request for documents from the Registrar.

52As such, I confirm the Registrar’s decision.

ORDER

53Pursuant to s. 50(2) of the Act, the Tribunal confirms the Registrar’s order to cancel JGT’s CVOR and vehicle registrations and to seize the plate portion of any permits and number plates registered for all commercial motor vehicles and trailers registered in the name of the company, and to seize the plate portion of any permits and number plates for all commercial motor vehicles and trailers registered to Mr. Lally.

Licence Appeal Tribunal

Geneviève Painchaud

Vice-Chair