CITATION: Metrix Redi-Mix Ltd. v. Registrar of Motor Vehicles, 2022 ONSC 2496
DIVISIONAL COURT FILE NO.: 932/21
DATE: 2022/04/27
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
Sachs, Backhouse and Akbarali JJ.
BETWEEN:
METRIX REDI-MIX LTD. and STANDARD READY MIX INC.
Appellants
– and –
REGISTRAR OF MOTOR VEHICLES
Respondent
Carole McAfee Wallace and Andrea Fernandes, for the Appellants
Patrick Moore and Adriana Nigro, for the Respondent
HEARD at Toronto by videoconference: April 13, 2022
Sachs J.
Overview
[1] The Appellants are affiliated companies who carry on business as producers and suppliers of concrete. On November 20, 2020 the Registrar of Motor Vehicles (“Registrar”) issued a Notice of Cancellation and Seizure to cancel the Appellants’ Commercial Vehicle Operator’s Registration (“CVOR”). The Appellants appealed the Registrar’s decision to the Licence Appeal Tribunal (“Tribunal”) and on November 29, 2021. The Tribunal dismissed their appeal and directed the Registrar to carry out its Notice of Cancellation. This is an appeal of the Tribunal’s decision.
[2] A major factor leading to the Appellants’ CVOR cancellation is that the Appellants’ drivers were involved in four fatal accidents, three of which involved pedestrians. On this appeal the Appellants submit that the Tribunal made two palpable and overriding errors in its analysis of these accidents. First, it erred when it failed to conduct an analysis of management’s role in the accidents at issue. In particular, there were no findings of mechanical failure or driver tiredness. Second, it erred in attributing any fault to the driver for the fourth accident. The Appellants also argue that the Tribunal made a third palpable and overriding error when it failed to take account of all the evidence regarding the Appellants’ safety record, particularly their improved record in the year prior to the hearing before the Tribunal. Finally, the Appellants submit that the penalty imposed on them, cancellation, was disproportionate. In this regard the Appellants emphasize that under the applicable legislation, a CVOR cancellation is permanent.
[3] For the reasons that follow, I would dismiss the appeal. I do not find that the Tribunal committed any palpable and overriding errors or that the penalty imposed was disproportionate.
Background
Metrix and Standard
[4] Metrix and Standard operate a fleet of cement trucks in Ontario. Each holds a CVOR certificate that allows it to operate commercial vehicles on public roads. Metrix began operating in 1998. Standard was organized sometime after in case Metrix became unionized, which eventually occurred. The two companies are managed by the same person, Stephen Della Fazia, and run as if they are one entity.
[5] Both parties agree that the two companies are “related” for the purposes of the Highway Traffic Act, R.S.O. 1990, c. H.8 (“HTA”). The Ministry of Transportation was not aware of this until 2020, because their listed officers and directors were different. Some Standard vehicles were marked with Metrix signs, making it difficult to determine whether Standard vehicles were being operated by Metrix drivers, or whether each had its own set of drivers in their regulatory reporting.
The safety rating system
[6] The Ministry of Transportation monitors commercial vehicle operators in several ways, including a safety rating based on collisions, inspections, and convictions. Each operator is assigned a “threshold” number of points, based on the number of kilometres the operator is expected to travel in a 12-month period. Infractions are tracked in a database which collects data from various sources, including police reports and road safety officer reports, and are assigned points.
[7] For collisions, points are assigned based on their severity. No points are assigned where there are no “improprieties” or where the collision was not preventable. Points may be disputed, and the Registrar can investigate collisions to determine whether points should be assigned.
[8] Based on the points assigned to infractions over the preceding 24 months, violation rates (“VRs”) are calculated as a percentage of the assigned threshold. Collisions, convictions, and inspections are assigned individual VRs. There is also an overall violation rate (“OVR”) which is calculated as a weighted average of the three individual VRs as follows: collision (40%), conviction (40%), and inspection (20%).
[9] There are several trigger points in the OVR where the system will automatically flag an issue that may need the Registrar’s attention. The Registrar will typically take the following actions when the corresponding trigger point is met:
• 35%: warning letter advising the operator to take corrective action
• 50%: facility audit
• 85%: interview
• 100%: sanctions, ranging from suspension to cancellation.
[10] However, the actions are not automatic, and will depend on the overall history of the operator and the circumstances. The Registrar is particularly concerned where an operator is chronically non-compliant despite multiple interventions, and the Registrar may impose sanctions even where VRs and OVRs are below 100%.
[11] Before sanctions are imposed, it is the Registrar’s practice to invite the operator to a “Show Cause” meeting where the operator may put forward remedial measures. The Registrar may issue a Cancellation and Seizure Order, issue a suspension notice, or take no action, to give the operator the opportunity to implement the remedial measures and improve its safety record.
[12] As of February 1, 2020, there were 60,541 registered operators in Ontario. 86.93% had an OVR of less than 15% and 96.83% had an OVR of less than 35%. As of January 25, 2021, 98.39% of operators had an OVR of less than 35%.
The Appellants’ safety records
[13] Since commencing operations in 1998, Metrix has been subject to several interventions and sanctions, including four warning letters, five audits, one interview, and one fleet limitation. The Registrar has proposed cancelling Metrix’s CVOR certificate on two previous occasions, and its safety rating has been downgraded to “conditional” three times.
[14] In October 2010, the Registrar conducted an interview with Metrix. At the time of the interview, its OVR was 82.3%, although it had reached 111.1% the year before. Metrix submitted an action plan, but the measures were never implemented and its OVR rose to 103.88% by December 2011, including a collision VR of 152.97%.
[15] The Registrar issued a Notice of Cancellation and Seizure in March 2012, and a Show Cause meeting was held in April 2012. Mr. Della Fazia presented a new action plan to improve its safety record, and brought a transportation consultant, Mr. Mahmud, whom it was represented would implement the plan. The Registrar agreed to set aside the Notice on Metrix’s undertaking to implement the action plan and keep its OVR lower than 50% in the future. Metrix’s safety record improved, and the Registrar rescinded the Notice in June 2013. However, around the same time that the Notice was rescinded, Mr. Mahmud ended his involvement with Metrix, and the action plan was either never implemented or discontinued.
[16] Metrix’s performance deteriorated. In 2017, another Notice of Cancellation and Seizure was issued, and a Show Cause meeting was held. Mr. Della Fazia again attended with Mr. Mahmud and stated that Mr. Mahmud had been re-hired to implement changes. However, Mr. Della Fazia lost touch with Mr. Mahmud a month or two after the meeting, and the changes were never implemented. A Fleet Limitation Order was made from April 2017 to April 2018.
[17] Prior to the current proceedings, Standard was subject to warning letters in 2008 and 2018. Its safety rating was downgraded to conditional in 2014.
The current proceedings
[18] Standard was involved in four fatal collisions from 2018 to 2020, which led to the present proceedings. By June 1, 2021, Standard had an OVR of 54.62% and a collision VR of 122.85%. Previous reported OVRs were found to be artificially low, because the kilometres travelled by Standard had been inflated.
[19] A Show Cause meeting was held on November 14, 2020, where Mr. Della Fazia presented a new action plan to address the safety record. Based on the advice and warning of his insurance broker, Mr. Della Fazia retained Mr. Richardson, an experienced safety consultant, to implement the safety plan.
[20] On November 20, 2020, the Registrar issued a Notice of Cancellation and Seizure, proposing to cancel the CVOR certificates and seize the number plates for all commercial motor vehicles and trailers registered to the Appellants and three other related corporations. The proposal was based on the grounds that the Registrar had reason to believe that the Appellants would not operate commercial vehicles safely or in accordance with the laws relating to highway safety under s. 47(1) (f) of the HTA. That section provides:
47(1) Subject to section 47.1, the Registrar may, by order, suspend or cancel,
(c) a CVOR certificate,
on the grounds of,
(f) the Registrar having 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 this Act, the regulations and other laws relating to highway safety;…
[21] The Appellants appealed the Notice to the Tribunal, pursuant to s. 50(1) of the HTA.
The Tribunal Decision
[22] Before the Tribunal, the Appellants primarily argued that all, or some, of the fatal collisions should not appear on Standard’s safety record, because its drivers were not at fault.
[23] The Tribunal reviewed the four collisions, with the aid of the accompanying Motor Vehicle Collision Reports (“MVCR”) and some expert evidence, and found that the points against Standard’s safety record were properly assigned:
• June 26, 2018: The Appellants’ driver was travelling on Highway 401, when it rear-ended a transport truck that had stopped for traffic. The Appellants’ driver was killed. The MVCR stated that the driver was “following too close”. Although there was evidence that the vehicle ahead had stopped quickly because of traffic ahead of it, in the Agreed Statement of Facts the Appellants admitted that the collision was caused by the Standard driver. The Appellants presented no evidence to suggest that the collision was not preventable, and the Tribunal therefore found that points were properly assigned.
• September 10, 2019: The Appellants’ driver struck a pedestrian while making a right turn. It was making the turn from the left lane because of the length of the truck. The pedestrian was within the crosswalk area and crossing with a green light. The MVCR attributed it as an “improper turn”, and the Tribunal found that points were properly assigned.
• November 13, 2019: The Appellants’ driver struck a pedestrian while making a right turn. The reporting police officer indicated that the driver’s action was “fail to yield the right of way”. The investigation indicated that, despite a yield sign, the driver did not slow down or yield the right of way. The Tribunal found that even if the pedestrian had stepped in front of the truck and not given it time to stop, the driver’s failure to yield was still an impropriety. The points were properly assigned.
• November 4, 2020: The Appellants’ driver struck a pedestrian while making a right turn. A police officer testified that the pedestrian stepped onto the roadway when the truck was too close to come to a complete stop. The driver required 2.89 seconds to stop, but only had 2.5 seconds. The Tribunal found, however, that even if the driver was not capable of coming to a complete stop, he did not slow down, which could have avoided a fatality. Although the driver may not have committed a chargeable offence and the pedestrian may have caused the accident, the appellant driver still committed an impropriety and the points were properly assigned.
[24] The Appellants also argued that their safety records were improving, with the assistance of Mr. Richardson, and that Standard’s OVR had dropped to 40% by the time of the Tribunal hearing, and Metrix’s had dropped to 12.26%. However, the Tribunal was not satisfied that the recent safety measures were permanent or sufficient to overcome its past actions. It accepted the Registrar’s argument that Metrix had a long history of poor safety performance and had made previous commitments which it had failed to live up to. It concluded that cancellation and seizure was appropriate in the circumstances, and the only sanction that would adequately protect the public interest.
Issues Raised
[25] As already noted, the Appellants raise four issues on this appeal:
Did the Tribunal err by failing to consider how management was responsible for the fatal collisions?
Did the Tribunal err in finding, with respect to the November 4, 2020 collision, that the fatality could have been avoided?
Did the Tribunal err by failing to take into account all of the evidence about the Appellants’ past and current safety records and compliance?
Was cancellation and seizure a disproportionate sanction?
Jurisdiction and Standard of Review
[26] Section 50(1) of the HTA provides that, where a decision is made by the Registrar under s. 47, it may be appealed to the Tribunal. Section 50(3.1) provides that a decision by the Tribunal with respect to an order under s. 47 may be appealed to the Divisional Court.
[27] The parties agree that as a statutory appeal the appellate standard of review applies. Thus, on questions of fact or mixed fact and law (where there is no extricable error of law), the standard of review is palpable and overriding error. The first three issues all require that the Appellants demonstrate a palpable and overriding error.
[28] The fourth issue concerns the penalty imposed. As the Registrar correctly argued, in order to set aside a penalty imposed, the Appellants must demonstrate that the Tribunal committed an error in principle or that the penalty was clearly unfit (see Dr. Jonathan Mitelman v. College of Veterinarians of Ontario, 2020 ONSC 3039 (Div.Ct.)).
Analysis
Did the Tribunal Err by Failing to Assess How Management was Responsible for the Fatal Collisions?
[29] The Appellants argue that the Tribunal did not undertake any analysis or assessment of how the actions or inactions of management led to the fatal collisions. They submit that none of the fatal collisions had evidence of a vehicle defect or driver fatigue as a contributing factor to the collision. While the Appellants concede that “fatal collisions are not to be taken lightly”, they argue that “in order for these collisions to be the basis for cancelling the Appellants’ CVOR, there needs to be a clearly articulated analysis that links management conduct to these collisions” (Appellants’ Factum, para. 42).
[30] The first problem with the Appellants’ submission is that under s. 16(2) of the HTA a commercial motor vehicle operator is required to hold a valid CVOR. The term “operator” is defined in s. 16(1) as:
the person directly or indirectly responsible for the operation of a commercial motor vehicle including the conduct of the driver of, and the carriage of goods or passengers, if any, in, the vehicle or combination of vehicles. [Emphasis added.]
[31] On this basis, the Registrar correctly argues that as the “operator”, the Appellants were responsible for the conduct of their drivers, not merely for mechanical defects or driver fatigue.
[32] Second, the Tribunal did not just base its decision on the fatal collisions. It also based its decision on the Appellants’ safety record, a record that was replete with warnings and interventions. Most notably, in 2017 Metrix undertook to take measures to reduce its collision problem. It hired a safety consultant who, among other things, was to provide drivers with a defensive driving program and make the discipline policy for drivers more stringent. None of these steps were ever implemented. Nor were they implemented after the first fatal collision, the second, or the third.
[33] The next time a safety consultant was retained was after the fourth fatal collision when the Appellants’ insurance broker warned that they may lose coverage. That safety consultant, Mr. Richardson, testified before the Tribunal and confirmed that when he was asked by the Appellants how they could “reduce accidents and educate drivers”, he answered “the only way to do it is meetings, meetings, and meetings. Either they get sick and tired of seeing me and do it right, or they don’t work here. That’s basically how you deal with it.” Thus, there was clear evidence before the Tribunal that had the Appellants taken steps to properly educate drivers as they committed to doing in 2017, the fatal collisions at issue might have been avoided.
[34] As the Registrar points out, the Appellants could have provided evidence that it could not have prevented the accidents despite exercising due diligence, but they did not do so. Instead, as the Tribunal found, the record demonstrates that the Appellants did not take the steps they had committed to take to prevent collisions.
Did the Tribunal Err in its Analysis with Respect to the November 4, 2020 Collision?
[35] The Appellants argue that the expert evidence was clear – the collision could not have been avoided and the Appellants’ driver was not moving too fast for the conditions. According to the Appellants, if their driver was not at fault for the collision any points assessed against them as a result of the collision should be removed.
[36] The Tribunal did not disagree with the expert’s evidence. Rather, it focused on the expert’s evidence that the “driver didn’t attempt to stop. If you look into the video, driver actually stopped way off… truck stopped approximately 22.16 metre south of the pedestrian crosswalk, so definitely he didn’t stop.” The expert then went on to confirm that he could not be certain whether the driver could or should have stopped in time, given that he did not actually try to stop. Based on this evidence the Tribunal found:
[74] However, the evidence shows that the appellants’ driver did not begin to slow the truck until after it had struck the pedestrian. Had he done so sooner, the truck would have been going very slowly when the pedestrian was struck, and the collision may not have resulted in a fatality. While the driver may not have committed a chargeable offence in this incident, and the pedestrian may have been a cause of the accident, that does not mean that the driver did not commit an impropriety.
[75] I find that the evidence demonstrated that the appellants’ driver committed an impropriety and, although the collision may not have been preventable, the fatal result may have been. I find that points were properly assigned with respect to this collision.
[37] I agree with the Appellants that there may be some reason to question the Tribunal’s conclusion regarding the driver’s impropriety. However, any error, if there is one, does not rise to the level of palpable and overriding. Because of the volume of other evidence and the Appellants’ safety record as a whole, I do not accept that the result would have been different even if the points at issue had not been assigned. The Tribunal’s decisions are not mathematical – the point system serves as a guide; it in no way dictates what penalties should be imposed.
Did the Tribunal Err by Failing to Take into Account all of the Evidence about the Appellants’ Past and Current Safety Records and Compliance?
[38] The Appellants submit that the primary trigger for intervention by the Registrar is the OVR, and that their OVRs were well below the threshold for a sanction of cancellation at the time the sanction was imposed. As of November 2020 (when the Registrar issued its Notice of Cancellation and Seizure) Metrix’s OVR was 22.26% and Standard’s was 25.46% (and later 57.87% after correcting for the inflated number of kilometres). At the time of the Tribunal hearing in October of 2021, Metrix’s OVR was 12.26% and Standard’s was 40%. The Appellants also argue that the Tribunal focused heavily on their safety record histories, without appropriate regard for their history of compliance, including the fact that they had undergone five facility audits between December of 2001 and March of 2015, all of which they passed.
[39] Dealing first with the facility audits, as the Registrar points out, facility audits do not evaluate road driver performance, which was the big safety concern in this case.
[40] With respect to the Appellants’ submissions that they had improved by the time of the hearing, the Tribunal considered this evidence and found as follows:
[96] The relative improvements that the appellant has made to the safety records of Metrix and Standard are not sufficient to mitigate the safety concerns the Tribunal has when reviewing their history of poor safety performance. I am not satisfied that the recent safety measures taken by the appellants, including the retainer of Mark Richardson, are either permanent or sufficient to overcome the appellants’ past actions or to alter my finding that there is reason to believe that the appellants will not operate commercial motor vehicles safely.
[41] There was ample evidence to justify this conclusion, including the fact that the Appellants have a history of hiring safety consultants when under investigation by the Registrar and then, when the pressure is off, letting go of the consultants and not implementing their recommendations.
Was the Cancellation and Seizure a Disproportionate Sanction?
[42] Once the Tribunal found reason to believe that the Appellants would not operate safely, the Appellants submit it was required to undertake a proportionality analysis with respect to the penalty, taking into account the current safety risk that the Appellants posed. In their view, given that the purpose of s. 47 of the HTA is to improve and encourage compliance rather than to punish, the Tribunal should have considered whether alternative sanctions such as suspension or a fleet restriction would be appropriate. According to the Appellants, the Tribunal erred when it failed to consider these alternative sanctions.
[43] The Appellants’ submission about the purpose of s. 47 is based on the dissenting opinion in Muscillo Transport Ltd. v. Registrar of Motor Vehicles, 1998 2672 (Ont. C.A.), where at para. 9 the dissent states:
The purpose of a sanction under s. 47(2) of the Highway Traffic Act is to improve, assist and encourage the licence holder to adhere to appropriate safety standards in order to ensure the safety of highway users and others.
[44] The majority in Muscillo does not adopt this statement. Instead, they emphasize that “[t]he issue is not simply one of sanction, but one of the safety of the public” (at para. 4). In Lee Trans Corporation v. Registrar of Motor Vehicles, 2011 ONSC 6003, the Divisional Court similarly emphasized the need for a sanction that protects the public. As held by the Divisional Court in that case:
[27] Given the evidence, it was reasonable for the Tribunal to conclude that a suspension or an order to reduce the fleet would not be a satisfactory way to protect the public. The evidence showed an ongoing problem with the CVOR violation ratings and continued safety problems despite a 24-day suspension of Lee Trans’ CVOR certificate in 2004. The Tribunal could reasonably conclude that the management of the companies did not take seriously the need to improve their safety performance. Therefore, the cancellation of the CVOR certificates was a reasonable sanction in order to protect the public.
[45] In this case, as in Lee Trans, the evidence showed an ongoing problem with CVOR violation ratings and continued safety problems despite previous interventions including four warning letters, one interview, one fleet limitation and two prior proposals by the Registrar to cancel Metrix’s CVOR certificate. The most serious sanction imposed was the Fleet Limitation Order in 2017, an order that was imposed instead of cancellation based on the Appellants’ undertaking to implement an action plan to train its drivers to drive more safely. The plan was never implemented.
[46] It is also important to note the following comments by the Tribunal about how the way that Mr. Della Fazia operated his business undermined the efficacy of the Fleet Limitation Order:
[46] A Fleet Limitation Order was made for the period April 25, 2017 to April 24, 2018. I suspect that such an order would likely be less impactful to Mr. Della Fazia’s overall operations given that the order would not apply to Standard since he had not made MTO aware that he was operating two fleets in combination. I also note that the number of trucks being operated by Standard went from 53 in 2016 to 60 in 2017 and that the kilometers reported with respect to Standard rose from 2,169,019 in 2017 to 2,700,000 in 2017. This raises the concern that, in response to the Fleet Limitation Order, Mr. Della Fazia simply moved business operations from Metrix to Standard.
[47] After the Fleet Limitation Order was imposed, the Appellants’ drivers were responsible for three fatal accidents involving pedestrians and still the Appellants took no steps to implement a plan to improve driver safety. They only did so when their insurance was threatened. As put by the Tribunal:
[93] It is frankly incomprehensible that after four fatal collisions involving its drivers, it took the demands of the appellants’ insurer and the threat of cancellation by the Registrar for the appellants to take action to make their operations safe. This demonstrates a complete disregard for the safety of the motorizing public.
[48] On this basis the Tribunal found that the only sanction that would adequately protect the public was cancellation and seizure. In coming to this conclusion, the Tribunal committed no error in principle and the penalty imposed was not manifestly unfit.
Conclusion
[49] For these reasons the appeal is dismissed. As agreed by the parties the Appellants shall pay the Respondent its costs fixed in the amount of $7000.00, all inclusive.
Sachs J.
I agree _______________________________
Backhouse J.
I agree _______________________________
Akbarali J.
Released: April 27, 2022
CITATION: Metrix Redi-Mix Ltd. v. Registrar of Motor Vehicles, 2022 ONSC 2496
DIVISIONAL COURT FILE NO.: 932/21
DATE: 2022/04/27
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
Sachs, Backhouse and Akbarali JJ.
BETWEEN:
METRIX REDI-MIX LTD. and STANDARD READY MIX INC.
Appellants
– and –
REGISTRAR OF MOTOR VEHICLES
Respondent
REASONS FOR JUDGMENT
SACHS J.
Released: April 27, 2022