Licence Appeal Tribunal File Number: 18634/MVIA

In the matter of an appeal under section 50.2 of the Highway Traffic Act, R.S.O. 1990, c. H.8, from an impoundment of a motor vehicle under section 55.1 of the Act

Between:

Insurance Replacement Systems Inc.

Appellant

and

Registrar of Motor Vehicles

Respondent

DECISION

VICE-CHAIR: Avril A. Farlam, Vice-Chair

Appearances:

For the Appellant: Hassan Choudry, Appellant’s CEO

For the Respondent: Martin He, Representative

HEARD: May 15, 2026

OVERVIEW

1Insurance Replacement Systems Inc, the appellant, appealed from the impoundment of its 2026 Volkswagen Jetta, the vehicle, on April 24, 2026 for 45 days. At the time of the impoundment the vehicle was being driven by a person who did not have a valid driver’s licence (the “driver”).

2The appellant appeals on the grounds that it exercised due diligence in attempting to determine that the driver’s licence of the driver of the vehicle at the time it was detained in order to be impounded was not then under suspension, and that the impoundment will result in exceptional hardship to it because it cannot rent the impounded vehicle out to its customers during the impoundment period as a consequence is losing rental revenue during the impoundment period, and because the impoundment of the vehicle is causing financial hardship for the appellant.

ISSUES

3The issues in dispute are:

i. Issue 1: Did the appellant exercise due diligence in accordance with s. 50.2(3)(c) of the Highway Traffic Act, R.S.O. 1990, c. H.8 (“HTA”).

ii. Issue 2: Will the impoundment result in exceptional hardship under s. 50.2(3)(d) of the HTA and s. 10 of the Regulation.

result

4On the first issue, I find that the appellant did not exercise due diligence. On the second issue I find that the exceptional hardship ground is not available to the appellant because it is an owner who has previously had a vehicle impounded under s. 55.1 of the HTA. As a result, I need not determine the second issue.

ANALYSIS

5The owner of a vehicle which has been impounded pursuant to s. 55.1 of the HTA may, pursuant to s. 50.2, appeal the impoundment and request an order that the Registrar release the vehicle.

6An owner may appeal only on the grounds set out in s. 50.2(3), - (a), (b), (c) and (d) of the HTA. The appellant appeals on ground (c) that it exercised due diligence in attempting to determine that the driver’s licence of the driver of the motor vehicle at the time it was detained in order to be impounded was not then under suspension, and (d), that the impoundment will result in exceptional hardship.

Issue 1: The appellant did not exercise due diligence in accordance with s. 50.2(3)(c) of the HTA

7I find that the appellant did not exercise due diligence in accordance with s. 50.2(3)(c) of the HTA in attempting to determine that the driver’s licence of the driver of the vehicle at the time of impoundment was not under suspension.

8To succeed on this ground of appeal, the appellant must show that it took reasonable steps to determine that the driver’s licence of the driver of the motor vehicle at the time it was impounded was not suspended and that it was valid. The circumstances of each case will dictate what steps would amount to due diligence.

9Hassan Choudry, the appellant’s CEO testified that the vehicle was leased to a person (the “lessee”) who was not driving the vehicle at the time of the impoundment and that the lessee’s driver’s licence was validated at the time the lease was entered into.

10Mr. Choudry also testified that that the appellant does not know how the driver came to be driving the vehicle at the time it was detained in order to be impounded as that person was not the lessee.

11It is clear from the testimony of Mr. Choudry and the documents filed by the Registrar which establish the identity of the driver, that the appellant did not take any reasonable steps to determine that the driver had a valid driver’s licence and I so find. Further, I find that the driver was not the intended driver of the vehicle and there was no due diligence exercised in respect of the driver.

12As the Tribunal has said before (see for example Walia v. Registrar of Motor Vehicles, 2003 CanLII 47529 (ONLAT) at para. 15-16), the due diligence ground set out in s. 50.2(3)(c) of the HTA requires the appellant to establish that the appellant took reasonable steps in attempting to determine that the driver’s licence of the driver of the vehicle at the time the vehicle was detained in order to be impounded was not then under suspension (emphasis added).

13As a result, the appellant has failed to establish that it exercised due diligence within the meaning of s. 50.2(3)(c) of the HTA.

Issue 2: Will the impoundment result in exceptional hardship under s. 50.2(3)(d) of the HTA and s. 10 of the Regulation

14I find that the exceptional hardship ground under s. 50.2(3)(d) of the HTA is not available to the appellant because it is an owner who has previously had a vehicle impounded under s. 55.1 of the HTA. As a result, I need not determine this second issue.

15The owner of a vehicle which has been impounded pursuant to s. 55.1 of the HTA may, pursuant to s. 50.2, appeal the impoundment and request an order that the Registrar of Motor Vehicles (“Registrar”) release the vehicle.

16An owner may appeal only on the grounds set out in s. 50.2 (3), (a), (b), (c) and (d) of the HTA. Here the appellant appeals on a second ground, specifically ground (d), that the impoundment will result in exceptional hardship. However, under s. 50.2(4) of the HTA, the right to appeal on the ground of exceptional hardship is not available to an owner of an impounded vehicle “…if there was a previous impoundment under section 55.1 with respect to any motor vehicle then owned by the same owner”.

17Mr. Choudry, having been provided with documents by the Registrar showing that the appellant owned another vehicle which was impounded in 2021, did not dispute that the 2021 impoundment took place.

18The Registrar’s documentary evidence filed establishes that there was a previous impoundment under s. 55.1 with respect to a motor vehicle then owned by the appellant, specifically the impoundment on November 11, 2021 for a 2020 Honda for 45 days under s. 55.1 of the HTA.

19As a result, the impoundment of the vehicle which is the subject matter of this appeal is the second impoundment of the vehicle owned by the appellant. Section 50.2(4) of the HTA provides that Clause (3)(d) of s. 50.2 does not apply if there was a previous impoundment under s. 55.1 with respect to “…any motor vehicle then owned by the same owner”. Clause (3)(d) provides that one of the grounds on which an owner may appeal an impoundment under s. 55.1 is that the impoundment will result in exceptional hardship.

20The ground of appeal of exceptional hardship does not apply here and is not a ground of appeal available to the appellant.

21The Registrar further submits that even if the exceptional hardship ground of appeal was available to the appellant, which it is not because of s. 50.2(4) of the HTA, that the appellant’s circumstances would not meet the definition in the legislation of exceptional hardship in any event given that the appellant has some 370 other vehicles to rent out to its customers during the impoundment period.

Given these facts, I find therefore that the exceptional hardship ground of appeal under s. 50.2(3)(d) is not available to the appellant because it is an owner of a vehicle who has previously had a vehicle impounded under s. 55.1 of the HTA.

Conclusion

22I find the appellant has not established that it exercised due diligence in attempting to determine that the driver’s licence of the driver of the vehicle at the time it was impounded was not under suspension within the meaning of s. 50.2(3)(c) of the HTA.

23I also find that the exceptional hardship ground under s. 50.2(3)(d) of the HTA is not available to the appellant because it is an owner who has previously had a vehicle impounded under s. 55.1 of the HTA. As a result, I need not determine the second issue.

ORDER

24Pursuant to subsection 50.2(5) of the HTA, I confirm the impoundment of the appellant’s vehicle.