Captain Roadside Inc. o/a Limitless Towing v. Director of Towing and Vehicle Storage Standards, 2025 CanLII 58823

Licence Appeal Tribunal File Number: 17002 and 17069/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:

Captain Roadside Inc. o/a Limitless Towing Appellant

and

Director of Towing and Vehicle Storage Standards Respondent

MOTION DECISION AND ORDER

PANEL: Rupinder Hans Jan Dymond

Representatives: For the Appellant: Zain Atcha, Counsel For the Respondent: Patrick Moore, Counsel

Heard by videoconference: May 30, 2025

OVERVIEW

1Captain Roadside Inc. o/a Limitless Towing (the “appellant”) appeals from a cancellation order issued by the Director of Towing and Vehicle Storage Standards (the “respondent”) with regard to its tow operator certificate and vehicle storage certificate under the Towing and Vehicle Storage Safety and Enforcement Act, 2021, S.O. 2021, c. 26, Sched. 3, and Regulations (the “Act”).

2The respondent issued the cancellation order on April 15, 2025 (the “cancellation order”), and it went into effect on April 29, 2025. The respondent alleges that the appellant committed contraventions of the Act, failed to satisfy the qualification and requirements of the Act, 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 retained complied with the Act. The appellant disputes the allegations.

3The appellant brings the motion seeking a stay of the cancellation order pending a determination on the pending appeals before the Licence Appeal Tribunal (the “Tribunal”). The respondent opposes the motion. The parties attended before the Tribunal on May 30, 2025, and made oral submissions on the motion.

4We considered the entirety of the submissions and materials in making a determination.

ISSUE

[5] The 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 section 37(3) of O. Reg. 167/23 (the “Regulation”).

RESULT

6A stay of the cancellation order is granted.

ANALYSIS

7Section 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. In this case the cancellation went into effect on April 29, 2025.

[8] The 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.

9No 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 we have considered and taken into account. We note that there is no disagreement between the parties that the test outlined in RJR-MacDonald applies in this instance, and we discuss as follows.

Serious issue to be tried

10We note that 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 appeals, only that the matters before the Tribunal have merit, and that the matters are not frivolous or vexatious. For the reasons that follow, we find that the appellant has met this part of the test.

11The respondent submits that it is difficult to find that there is a serious issue to be tried given the number of alleged violations and the seriousness of the violations on the part of the appellant, including multiple staged collisions and failure to provide and maintain documentation. At the motion hearing and in the affidavit of Daniel Armstrong, a senior regulatory compliance administrator, the respondent provided further particulars regarding the allegations set forth in the cancellation order and took the position that there is limited likelihood that the appellant would succeed on its appeals.

12The appellant asserts that this is a serious issue to be tried in that the respondent’s cancellation order relies on serious, untested allegations that it must have the opportunity to challenge. These allegations include the appellant’s alleged participation in staged collisions, driver misconduct, recording keeping deficiencies and various regulatory contraventions.

13Schedule A to the Notice of Appeal sets forth the appellant’s grounds for appeal. The appellant submits that the respondent’s allegations regarding staged collisions are unsubstantiated, and the respondent’s reliance upon uncontextualized video footage is misplaced. Further, it submits that any driver misconduct was isolated and appropriately addressed through disciplinary measures or termination and cannot be attributed to systemic corporate failures. In addition, that any record-keeping deficiencies were not systemic in nature and have been rectified. Finally, the respondent picked the most severe option available under the Act, specifically, cancellation of its certificates, and there is a serious question as to whether the allegations and circumstances warrant that outcome.

14In finding the appellant has met this threshold, we find persuasive the affidavit of Mr. Sartaj Singh Jhaj, the owner and sole director of the appellant, who states, in part, that he has no knowledge nor did he direct or authorize any drivers to participate in staged collisions, and that there are no prior regulatory sanctions against the appellant under the Act. We find that the basis of the appellant’s opposition to the cancellation order, if proven, has merit.

15We find that 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

16We find that there would be irreparable harm to the appellant if a stay were not granted.

17The 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.”

18As 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. We agree and apply that principle here.

19The respondent takes the position that there is no denying that there will be financial effects on the appellant but the appellant would not suffer irreparable harm. Further, that the harm must be to the appellant and not its drivers and employees.

20In finding that the appellant has established that it will suffer irreparable harm if the stay is not granted, we found the affidavit of Mr. Sartaj Singh Jhaj persuasive. Mr. Jhaj states that, at present, the appellant has lost all active towing and storage customers and clients; twenty-three employees have been laid off or have left the business with no indication that they will return; monthly vehicle lease obligations exceed $70,000 with no ability to generate revenue to meet these fixed costs; daily operational losses ranging between $6,000 to $15,000 with fixed costs continuing despite the inability to operate, and the appellant’s line of credit is now fully extended with no further financing options available.

21The appellant asserts that it continues to suffer major operational losses, employee layoffs, reputational damage, and client terminations that a later reinstatement cannot remedy. The appellant submits that the major daily losses could result in the collapse of the business.

22We note the appellant’s fleet of 18 trucks sit idle while lease obligations continue and there is a loss of active towing and storage customers and clients. The loss of these customers and clients may be irreversible even if the appeal is successful at a later date. We find that not granting the stay could raise the potential of outright business failure. There is also a potential for a reduction in income associated with the loss of customers and clients while the certificates remain cancelled.

23We find the appellant has established it would suffer irreparable harm if a stay were not granted.

Balance of Convenience

24For the reasons that follow, we find that the balance of convenience favours the appellant.

25The 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, we 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.

26We 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.

27The respondent asserts that when a public authority is prevented from exercising its authority then 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. However, the Director’s duty is impacted if the appellant were permitted to operate during the appeal period given her authority to regulate and uphold the purposes of the Act. The respondent submits that the balance of the convenience favours the Director given consumer protection and safety on the roadways verses the financial or any other interest of the appellant.

28The appellant submits that regulatory action has already been taken against drivers that may have participated in staged collisions and they are no longer with the company, that there is no evidence of ongoing risk to public safety, and it has implemented new compliance protocols and internal oversight mechanisms. The appellant has hired a safety consultant to ensure compliance with the Act. There will also be disproportionate damages if the business is closed. Further, the respondent has not established any ongoing risk to public safety or sustained misconduct, and the balance of convenience favours preserving the appellant’s ability to continue operations while the appeal proceeds.

29We weighed the harm and find that the harm to the appellant from not granting a stay is greater than the harm to the public interest in granting a stay. We note the appellant has lost its active towing and storage customers - some of whom may not return, and has laid off twenty-three employees, some of whom may similarly not return even were the appeal to be granted. We note that a hearing date in the matter has not been scheduled, and therefore, a decision may not be available for several months. We further note the appellant continues to incur monthly vehicle lease obligations with no ability to generate revenue to meet fixed costs which may result in collapse of the business entirely.

30We note the appellant states that it has implemented additional oversight measures for its dispatch operations, engaged an external compliance consultant to review and strengthen its internal controls, and implemented an enhanced document retention policy. The appellant further asserts that it has implemented or is in the process of implementing an enhanced GPS and dashboard camera system in all vehicles to provide greater oversight, a whistleblower policy to encourage reporting of misconduct, and developed a comprehensive compliance manual.

31It appears the appellant has begun to improve its safety performance and taken active steps which would mitigate potential harm to public safety. When weighing the evidence before the Tribunal, we find that the balance of convenience favours granting of a stay in this case. We find that the harm to the appellant from not granting a stay is greater than the harm to the public interest by granting a stay.

32In the circumstances, we find the appellant has met its onus under the test set forth in RJR-MacDonald, and established, on a balance of probabilities, that there is a serious case to be tried, there is potential for irreparable harm from not granting a stay, and the balance of convenience favours granting a stay.

Conclusion

33The appellant has demonstrated on a balance of probabilities that a stay should be granted.

ORDER

34A stay of the suspension order is granted pursuant to section 37(3) of the Regulation.