Licence Appeal Tribunal File Number: 15716/CVOR and 16003/CVOR

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

Between:

JJJ Express Ltd. and 14515021 Canada Inc. o/a Rhinos Express

Appellants

and

Registrar of Motor Vehicles

Respondent

DECISION

ADJUDICATOR:

Colin Osterberg

APPEARANCES:

For the Appellant:

Joyce Jeyapalan for JJJ Express Ltd., Director

Nivethanan Sivaguranathan for 14515021 Canada Inc., Director

For the Respondent:

Patrick Moore, Counsel

Court Reporter:

Taha Aqdas

Heard by videoconference:

November 14 and 15, 2024

OVERVIEW

1JJJ Express Ltd. (“JJJ Express”) and 14515021 Canada Inc. o/a Rhinos Express (“Rhinos Express”) (collectively the “appellants”) appeal from the Cancellation and Seizure Order (the “Order”) issued by the Registrar of Motor Vehicles (the “respondent”) on March 5, 2024. The Order is for the cancellation of the appellants’ Commercial Vehicle Operator’s Registration (“CVOR”) certificates and the plate portions of vehicle permits for all commercial motor vehicles and trailers issued to them by the respondent under ss. 47 and 47.1 of the Highway Traffic Act (the “Act”).

2The appellant JJJ Express filed an appeal with the Licence Appeal Tribunal (the “Tribunal”) pursuant to s. 50(2) of the Act on March 7, 2024. That appeal is identified as Tribunal File Number 15716/CVOR. The appellant Rhinos Express filed an appeal with the Tribunal pursuant to s. 50(2) of the Act on June 18, 2024, and is identified as Tribunal File Number 16003/CVOR. The two appeals are being heard together because they involve common issues of fact and law. The parties have consented to have the Tribunal treat the evidence presented in each appeal as if it were admitted in both appeals in accordance with s. 9.1(5) of the Statutory Powers Procedure Act, R.S.O. 1990, c. S.22 (the “SPPA”).

ISSUE

3The issues in dispute are:

1. Is there reason to believe, having regard to the safety record of the appellants or of a person related to 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 any other laws relating to highway safety?

2. If the answer is yes, then what is the appropriate outcome?

RESULT

4I find the respondent proved there is reason to believe the appellants will not operate commercial vehicles in accordance with the Act, the regulations, and any other laws relating to highway safety. I direct the respondent to carry out the Cancellation and Seizure Order is confirmed.

ANALYSIS

Are the appellants related?

5I find that the appellants are related to one another. As a result, the safety record of JJJ Express, in addition to any other relevant information, must be considered when determining whether there is reason to believe that Rhinos Express will not operate a commercial motor vehicle safely or in accordance with the Act, the regulations and other laws related to highway safety and whether its CVOR certificate should be cancelled.

6In addition, both JJJ Express and Rhinos Express are related to 2143983 Alberta Ltd. (the “Alberta Corporation”) and the safety record of that company must also be considered when determining whether there is reason to believe that JJJ Express and/or Rhinos Express will not operate a commercial motor vehicle safely or in accordance with the Act, the regulations and other laws related to highway safety and whether their CVOR certificates should be cancelled.

7Section 17(4) of the Act states that an applicant is related to a person if:

(a) the applicant and the person are related individuals;

(b) either the applicant or the person is a partner of the other or was a partner of the other or they have of have had partners in common;

(c) either the applicant or the person, directly or indirectly, controls or controlled or manages or managed the other; or

(d) the applicant and the person have or have had common officers or directors, or they are or have been controlled, directly or indirectly, by the same shareholders.

8Section 47(2.1) of the Act states that s. 17(4) applies with the modifications necessary for determining “related persons” for the purposes of s. 47(1)(f).

9The evidence shows, and the parties agree, that Joyce Jeyapalan (“Jeyapalan”) is the sole director, officer, and shareholder of JJJ Express. She has been solely in charge of the operations of JJJ Express since its incorporation in 2019. On November 8, 2022, Rhinos Express was incorporated and Jeyapalan was listed as a director of that corporation at that time. As a result, JJJ Express and Rhinos Express are related in accordance with s. 17(4)(d) of the Act since they have had common directors.

10I note that Jeyapalan was removed as a director of Rhinos Express on December 7, 2023, and the appellants argue that the safety record of JJJ Express should not be considered when determined whether Rhinos Express’ licence ought to be cancelled; however, I find that the Act is clear in stating that the safety record of companies which have had common directors are related and must be considered.

11With respect to the Alberta Corporation, the evidence includes a Corporate Profile Report dated November 8, 2019, which shows that Jeyapalan was a director of that corporation for a period of time. Therefore, in accordance with the above analysis, both JJJ Express and Rhinos Express are related to the Alberta Corporation. According to Jeyapalan, she was only named a director of the Alberta Corporation as a favour to her uncle and that she was never involved in its operation. Although Jeyapalan’s allegation in this regard may go to whether the safety record of the Alberta Corporation has a significant impact on whether the appellants will operate commercial vehicles safely, I find that the appellants are related to the Alberta Corporation and that its safety record must be considered in accordance with the Act.

The CVOR Program

12The 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 appellants’ safety ratings are available to the public, in summary form, as part of their commercial vehicle operator record.

13The 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.

14Depending 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.

15As 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. Only 25 carriers, or 0.04% of all carriers, had a violation rate above 100%.

The safety performance and MTO interventions regarding JJJ Express

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) 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.

17The 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).

18According to a Carrier Safety Record Review (“CSRR”) dated November 2, 2023, JJJ Express came to the ministry’s attention on July 17, 2023, due to high violation rates. At that time, the overall violation rate had reached 138.37%. The collision rate was 39.46%, the inspection rate was 179.75%, and the conviction rate was 216.60%.

19The same CSRR noted that there had been previous interventions because of JJJ Express’ poor safety record. A warning letter was issued October 14, 2022, a “Conditional” safety rating was assigned on June 20, 2023, and a Vehicle Freeze was applied on July 13, 2023. The CSRR notes that the safety record of JJJ Express demonstrated chronic non-compliance with regard to both vehicle maintenance and hours of service regulations. Safety inspections showed that drivers were not monitored by the company; daily vehicle inspection reports were not conducted or conducted properly; drivers were often permitted to exceed allowable driving hours and were not properly licenced. In addition, it was noted that the company did not ensure their drivers were qualified or adequately licenced and vehicles regularly exceeded registered weights, had serious mechanical defects and annual inspections were not being completed.

20The CCRR also reported that JJJ Express had an accumulation of 20 unpaid fines relating to charges laid against it under the Act totalling $7,337.68.

21Jeyapalan gave evidence at the hearing and acknowledged that the safety record of JJJ Express was poor. She explained that she was inexperienced in running a trucking company and that in 2023 she had purchased too many vehicles to properly manage. Jeyapalan says that, at some point in 2023 she had as many as 10 vehicles and that was a “disaster” and created “a lot of chaos”. She says that she now operates with 5 vehicles and that there has been a “bit of an improvement”. Jeyapalan has not provided any details with respect to the improved driving record.

22Jeyapalan also said that she has a master’s degree in psychology and in 2024 she obtained employment at Sick Kids Hospital in connection with that degree but, as a result of her own health concerns she has not been fit to work. She has more recently returned to working part-time doing behavioural therapy with clients.

23On November 7, 2023, the respondent issued a Notice of Cancellation and Seizure naming the appellants. A Show Cause Meeting was scheduled to take place January 24, 2024. Jeyapalan attended the Show Cause Meeting on behalf of JJJ Express. No one attended on behalf of Rhinos Express. It was recorded that, by that time the overall violation rate had risen to 403% and the company had accumulated unpaid fines in the amount of $11,205.88.

24At the Show Cause Meeting, it is recorded that Jeyapalan initially advised that her company was operating four trucks but when advised that only two had valid plates, she advised that she was only operating those two vehicles. During questioning it became clear that JJJ Express had: no significant collision reporting system; inadequate or non-existent driver training procedures; inadequate or non-existent record-keeping processes; and inadequate or non-existent vehicle maintenance processes.

25At the Show Cause Meeting, Jeyapalan was asked if she had an action plan and she responded that she did not know what an action plan was. This was concerning for a number of reasons. First, the letter to Jeyapalan scheduling the Show Cause Meeting stated that she should come to the meeting with an action plan. More importantly, JJJ Express’ safety record was by that time terrible to say the least. It is not reasonable for Jeyapalan to have no plan for improving that safety record when she attended the Show Cause Meeting and I find that to be an indication that she would not or could not adequately act to solve the safety issues identified by the respondent. Significantly, there is nothing in the record of the Show Cause Meeting to indicate that Jeyapalan had done anything to improve JJJ Express’ safety record or that she had actions in mind which were likely to do so.

26At the Show Cause Meeting, Jeyapalan was instructed that she should evaluate everything that has gone wrong from a safety perspective and come up with a well-written solution. She was specifically advised that simply decreasing the number of trucks she was operating is not a proper analysis of what went wrong and is a clear indication that she does not understand what it means to be a safe operator.

27On February 7, 2024, JJJ Express submitted its Action Plan along with a number of other documents requested by the respondent. The Action Plan document was submitted into evidence.

28Kelly Boudreau, the respondent’s Senior Program Administrator testified at the hearing that the Action Plan submitted by JJJ Express was inadequate. She testified that it contained no real detail and consisted of broad statements about the company’s goals with no specifics or timetable. I agree. I have reviewed the Action Plan and find it insufficient. It is vague and non-specific. It makes a number of undertakings but fails to provide any real information about the steps that are to be taken, the expected results or the time period within which the results can reasonably be expected. For example, the Action Plan undertakes to implement a hazard assessment protocol. There is no information setting out what that protocol consists of, who should conduct the assessment, how such a protocol would result in improvements in safety or when those improvements might be expected to result. The remainder of the undertakings in the Action Plan are similarly general and vague and indicate that Jeyapalan either is unable or is unwilling to take real measures to improve its safety record. The Action Plan is wholly inadequate to persuade me to believe that any real action would be taken or that such action would be effective.

29Indeed, at the hearing Jeyapalan presented no evidence of any concrete actions that have been taken since the submission of the Action Plan in February 2024 in furtherance of its objectives.

30On March 5, 2024, the respondent issued the Cancellation and Seizure Order. According to a CVOR record dated April 10, 2024, the overall violation rate was 213.67% at that time.

31In my view, the appellant’s safety record is significantly higher than is acceptable. Only 0.04% of all the operators in Ontario have overall violation rates in excess of 100% and JJJ Express’ has been significantly higher than 200% for many months. Jeyapalan alleges that her violation rates have had improvement over the 6 months leading up to the hearing but presented no evidence of that. Further Jeyapalan presented no evidence as to the measures she has implemented over the past year in order to improve the company’s safety record. She presented no evidence which suggests she has any understanding of the measures that would need to be taken in order to improve JJJ Express’ safety record.

32Based on its safety record alone, it is clear that the respondent has met its burden and has demonstrated that there is reason to believe JJJ Express will not operate its commercial vehicles safely and in accordance with the law.

Other factors regarding JJJ Express

33In addition to its dismal safety record, the respondent presented evidence that, by the time of the hearing, JJJ Express had outstanding fines under the Act exceeding $13,000, which had been accumulating for many months. Jeyapalan agreed that she had made no payments in respect of fines but stated that she intended to do so in the coming months. In my view, this suggests a lack of seriousness in the operation of her trucking company and a disregard for the requirements on that company required under the Act and regulations.

34In addition, the respondent referred to two other companies in which Jeyapalan was named as a director. The Alberta Corporation was the subject of a previous Cancellation and Seizure Order which was upheld by the Tribunal on appeal. Jeyapalan testified that she allowed herself to be named as a director at the request of her uncle. She was evasive in describing the reason for this but acknowledged that her uncle was having compliance problems with other trucking companies that he was involved in and that is why he wanted her to appear to be the director of the Alberta Corporation. She says she had nothing to do with the operation of that company and argues that she should not be penalized for whatever problems it may have encountered.

35Jeyapalan’s actions in allowing herself to be named as a director in the Alberta Corporation as a favour to her uncle, is further evidence that Jeyapalan has significant disregard for the laws and regulations related to trucking.

36Finally, Jeyapalan admitted at the hearing that she had herself named as the director of yet another company, 2774096 Ontario Ltd. o/a Reindeer Transportation & Warehousing which she says was actually owned and operated by another relative. She did that so that she could write the qualifying examination for a CVOR for that company in place of the relative who actually was operating it because that relative had a language barrier. I find this weighs against Jeyapalan as her behaviour is dishonest, indicates that she is prepared to flout the Act and regulations when those requirements are inconvenient.

37In my view, these actions of Jeyapalan are inconsistent with the likelihood that JJJ Express can be counted on to take the Act or its regulations seriously and amount to reasonable grounds that JJJ Express will not operate vehicles in accordance with the Act, the regulations or other laws relating to highway safety.

The status of Rhinos Express?

38I have found that the appellants are related to one another through Jeyapalan’s directorship in each of JJJ Express, Rhinos Express and the Alberta Corporation.

39The current director of Rhinos Express is Nivethanan Sivaguranathan (“Sivaguranathan”). Sivaguranathan is the cousin of Jeyapalan.

40According to both Sivaguranathan and Jeyapalan, he wanted to start a trucking business and asked for Jeyapalan’s help to do that. Therefore, Jeyapalan appeared on the corporate profile as a director of Rhinos until December 2023 as described above. Neither Sivaguranathan nor Jeyapalan provided a coherent answer as to why Jeyapalan had to be named as a director in order to help Sivaguranathan with Rhinos Express.

41The respondent pointed out that Jeyapalan only had herself removed as a director of Rhinos Express after the Notice of Cancellation and Seizure was served on November 7, 2023. It is agreed by the parties that JJJ Express then began transferring vehicles from JJJ Express to Rhinos Express. The Tribunal is concerned that the transfer of vehicles to Rhinos Express appears to be an effort to avoid the consequences of the impending Cancellation of JJJ Express’ CVOR Certificate.

42This concern is supported by the fact that Sivaguranathan appears to have had no significant experience operating a trucking company, that Jeyapalan was named as a director of Rhinos Express for no apparent reason, and that Jeyapalan had participated in misrepresenting her involvement in at least one trucking company in the past in order to avoid the regulatory requirements of the Act and regulations.

43It also appears that Jeyapalan was acting in a management capacity with respect to Rhinos Express during 2024. She filed the initial appeal on March 7, 2024, requesting that Rhinos Express be released and then filed a separate appeal in the name of Rhinos Express in June 2024. The trucks being used by Rhinos Express were all leased by JJJ Express and then transferred to Rhinos Express in 2024. In September 2024, Jeyapalan attended a Case Conference in Rhinos Express’ appeal and participated in that Case Conference. She did tell the adjudicator at that time that she was no longer affiliated with Rhinos Express and that further notices should be sent to Sivaguranathan.

44No evidence was presented that supports the appellants’ position that Sivaguranathan has participated actively in the management of Rhinos Express. Sivaguranathan did not attend the Show Cause meeting which took place in early 2024. Sivaguranathan did not file an appeal to the Tribunal of the Cancellation and Seizure Order. Sivaguranathan does not appear to have been actively involved in the transfer of the vehicles from JJJ Express to Rhinos Express. Sivaguranathan did not appear at the Case Conference with respect to the appear to the Tribunal. Additionally, he seemed to take only passing interest in the appeal hearing itself where he had filed no materials and appeared significantly late on the hearing dates. Further, Sivaguranathan testified that he was out of the country for significant periods of time in 2024 and that Jeyapalan was effectively managing the company during those periods.

45In my view, Jeyapalan has been significantly involved in the operations of Rhinos Express. As a result, the concerns which have been established with respect to her competence in operating a carrier company safely as described above are sufficient to establish reason to believe Rhinos Express will not operate its commercial vehicles safely and in accordance with the law.

Conclusion

46The respondent has proven that it has reason to believe that the appellants will not operate their commercial vehicles safely or in accordance with the Act, regulations, and other laws of highway safety.

Appropriate remedy

47While I am not bound to accept the outcome imposed by the Registrar, I find that it is appropriate in the circumstances. I have considered if other sanctions such as a suspension or fleet reduction would sufficiently protect public safety. I am not satisfied that they would.

48As noted, the appellant has been subject to various interventions and has been given multiple chances to improve its safety record but has not shown that it is able or willing to take necessary actions to improve that record. The appellant has not satisfied me that its safety record has improved since the Cancelation and Seizure Order was issued despite having many months to do so. Jeyapalan’s position appears to be that the appellant should be given yet another opportunity to take the necessary action despite the fact that the appellant has failed to take that action after previous interventions.

49I find that the only sufficient outcome in order to protect public safety is cancelation of the CVOR certificates as ordered by the Registrar.

ORDER

50Pursuant to section 50(2) of the Act, the Cancelation and Seizure Order dated March 5, 2024, is confirmed.

Released: January 27^th, 2025

__________________________

Colin Osterberg

Vice-Chair