CITATION: 2017210 Ontario Inc. v Registrar of Motor Vehicles, 2022 ONSC 6939

DIVISIONAL COURT FILE NO.: DC-572/22
DATE: 20221129

ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT

BETWEEN:

2017210 ONTARIO INC.

Derek E. Zulianello, for the Appellant

Ryan Bodnar, for the Appellant/Moving Party

Appellant/Moving Party

– and –

REGISTRAR OF MOTOR VEHICLES

Patrick Moore, for the Respondent

Respondent

HEARD at Toronto: November 29, 2022 (by videoconference)

MATHESON J. (Orally)

[1] This is the matter of 2017210 Ontario Inc. and the Registrar of Motor Vehicles. The numbered company (the moving party), has brought this motion for a stay pending this appeal from the decision of the Licence Appeal Tribunal dated September 21, 2022 (the “Decision”).

[2] The moving party is a towing company that holds a commercial vehicle operators’ registration, also known as a CVOR, which allows it to operate commercial vehicles on public roads.

[3] The Deputy Registrar of Motor Vehicles issued a “cancellation and seizure” order of that licence on November 24, 2021, under the Highway Traffic Act, R.S.O. 1990, c.H.8.

[4] The moving party exercised its right to appeal that order, resulting in the Decision of September 21, 2022.

[5] After the Decision, the Deputy Registrar of Motor Vehicles issued a further order that had the effect of setting the enforcement of the original order to begin on October 20, 2022. An appeal was brought to this Court. The appeal was originally scheduled to be heard in April 2023, but has now been expedited to be heard on January 10, 2023.

[6] There is no automatic stay, and, therefore, the moving party has brought its motion.

[7] By way of very brief background, the moving party’s business is in and around North Bay, and is subject to the Highway Traffic Act safety requirements.

[8] Among other things, the legislative regime provides for various safety requirements, and a process is used that provides a safety rating – a percentage of violations. That percentage is a two-year rolling percentage.

[9] At the time of the original order in 2021, the safety percentage for the moving party was about 37 percent. That percentage is high and indicates poor safety performance. Before that order, the moving party had had three warnings about its safety performance.

[10] After the 2021 order, the moving party took steps to improve the safety percentage. As of the LAT hearing, there was some improvement. The percentage has continued to improve. As of October 2022, it is at about 14 percent, which is within a band of 0 to 15 percent that is regarded as excellent.

[11] There is another course of events that is relevant to these proceedings. Some time ago, an agreement was entered into to sell this business. In or around 2018 an agreement was entered into and the purchasers included Messrs. Opal and Kang. The agreement extended over a five-year period, stretching to 2023, and has not yet closed.

[12] The moving party has put forward evidence on this motion indicating that, from its standpoint, the purchasers are in default and the sale will not close. This is significant because, in the Decision, the LAT considered these two people and their businesses as related parties, and therefore their safety ratings were taken into account. Their safety ratings were poor.

[13] There is a dispute about the affidavit evidence that has been put forward on this motion. The respondent submits that the evidence should not be used in reviewing the Decision that is under appeal. I agree that it is not available on this motion for that purpose. And it is unlikely that it would be admissible on an appeal, in any event. However, I accept the affidavit evidence as potentially relevant to other branches of the stay test, apart the merits of the proposed appeal. I also note that the respondent has, itself, put forward an affidavit with some evidence on this stay motion.

[14] Moving to the LAT Decision, I note that the Decision arose after a three-day hearing with witness testimony and other evidence. I further note that the hearing was conducted, and the Decision reached, with no deference to the order of the Deputy Registrar that was the subject of the appeal to LAT.

[15] As shown in the Decision, the LAT considered the relevant regulatory regime. I will not address it in detail but note that s. 47 of the Highway Traffic Act sets out relevant grounds for the LAT appeal and expressly includes both the safety record of the licensee and the safety record of what are called “related parties”. More specifically, the section refers to the safety record of the “holder, or of a person related to the holder”.

[16] In the Decision, the LAT confirmed the order of the Deputy Registrar and declined to modify the sanction. The LAT found there was reason to believe the moving party would not operate safely. The LAT considered the lack of improvements after the 2018 warning and noted that there had been some improvement as of the appeal hearing. The LAT further considered the relationship with Messrs. Opal and Kang. The LAT concluded that it was not satisfied that the business concerns of the moving party outweighed the interest in safe roads, and dismissed the appeal.

[17] There is no issue between the parties about the test on a motion for stay, as set out in RJR-MacDonald, 1994 117 (SCC), [1994] 1 SCR 311. I therefore move to the three factors, as set out in that case.

[18] The first factor is whether there is a serious issue to be tried in the appeal. I agree with the moving party’s submissions that the threshold is low. With respect to the issues on the appeal, the moving party focusses on two areas:

(i) whether the sanction of cancellation is justified, submitting that it was clearly unfit, and, therefore, there is some merit to that appeal; and,

(ii) whether the LAT erred in relying on the alleged relatedness of the moving party to Messrs. Opal and Kang and their companies.

[19] The respondent submits that the standard of review on an appeal has to be taken into account, which it does. The respondent further submits that the Decision is largely, if not entirely, the consequence of the balancing of the facts after a three-day hearing, weighing the evidence of the witnesses and other evidence and considering the submissions put forward before the Tribunal. The respondent also submits that, with respect to the sanction, the standard of review is particularly high.

[20] Having considered all the submissions, I find that the appeal will be an uphill one, but I allow for the possibility of a successful appeal, which is all that is required for this element of the test.

[21] Moving to irreparable harm, the moving party has put forward affidavit evidence saying that if the stay is not granted, the business will become insolvent, and be lost entirely.

[22] In response, the respondent indicates that financial considerations are not dispositive and that the evidence with respect to financial harm is inadequate because the affiant does not provide any background or substance to the conclusion about the impact on the business. For example, there is no evidence that indicates whether these truckers, if they are temporarily not employed by the moving party, would return to work for the moving party after a period of time, or whether, similarly, customers would, or would not, begin to use this company again if the business was suspended for a period of time. I emphasize that because that is, of course, the effect of an interim stay, pending appeal.

[23] I agree with the respondent that the impact of a period of suspended business, pending appeal, is not elaborated on in the moving party’s evidence.

[24] I then move to the third factor, which is balance of convenience. The moving party correctly submits that I can consider its current safety rating, which I have, and also indicates that I can consider its current relationship with Messrs. Opal and Kang, or lack thereof. I have considered that evidence about the agreement to sell the company, but note that it remains an open question whether or not that sale will close.

[25] Most importantly, the moving party submits that the important public safety concerns have been addressed by the plan put forward after the order was made and the steps taken since that time.

[26] Not surprisingly, the respondent mainly relies on the important public interest in safe highways. There is no question that the legislative regime is focused on that important public interest. The respondent has put forward a number of cases in support of the proposition that the public interest in safe highways, if not determinative, is a very significant factor in the balance of convenience. Those cases begin with RJR-MacDonald, at para. 71, and continue with a number of Divisional Court cases in which requests for stays pending appeal were denied.

[27] I accept that in a number of those Divisional Court cases, the factual matrix was different. On stay motions, issues are very fact-specific.

[28] The moving party relies heavily on one of the decisions from this Court, Lee Trans Corporation v. Registrar of Motor Vehicles, 2011 ONSC 6003, where a stay was granted. The respondent’s cases include another more recent case in this Court, 2143983 Alberta Ltd. v. Registrar of Motor Vehicles, 2021 ONSC 7422, where a stay was denied. In the end, I conclude that each case is dependent on its own facts, but all of them recognize the important public interest in highway safety as a substantial consideration.

[29] With respect to safety, the respondent accepts the current safety record, but notes that it is unable to say whether or not that would be maintained in the future. Not surprisingly the moving party acknowledges there is no way to know what will happen in the future. That is so.

[30] The respondent also notes that the current good safety rating must be considered in the context that violation rates went down, generally, during the COVID-19 pandemic. The respondent therefore submits that this may account for some if not all of the improvement in the moving party’s safety record.

[31] The respondent further submits, strongly, that the further involvement of Messrs. Opal and Kang is not known at this time, and their safety record is so poor that their involvement remains a matter of significant concern.

[32] I have considered all the evidence, and submissions, in the exercise of my discretion. Given the now, very expedited appeal date in January, I have considered the issues in the context of the potential for a less than six-week suspension of the operations of the moving party. I say less than six weeks because the respondent has acknowledged that some notice is required before one of these orders should be enforced, in order that that process can be implemented in an orderly way. Without limiting my consideration, I note the following:

(i) although I accept that there is an adequate case on the merits to meet the low threshold, it will be an uphill appeal;

(ii) the sale to Messrs. Opal and Kang, while now uncertain, has not actually been terminated;

(iii) while the safety record has improved substantially, that may have been due to other factors, as such as the COVID-19 pandemic;

(iv) this company had a history of safety problems that pre-dated the original order, and pre-dated the involvement of Messrs. Opal and Kang;

(v) although I accept that there will be financial harm with any suspension of any operations, I find the evidence on the motion is conclusory; and,

(vi) the public interest in safe highways is a very important consideration.

[33] I conclude that that public interest in safe highways outweighs the potential pecuniary harm on the moving party over the next less than six-week period, pending the hearing of this appeal. I deny the motion for a stay.

[34] The motion is dismissed with costs to the respondent in the agreed amount of $5,650, all inclusive. The order of the Deputy Registrar of Motor Vehicles issued on Nov. 24, 2021, shall take effect on December 13, 2022.

___________________________ MATHESON J.

Date of Oral Reasons for Judgment: November 29, 2022

Date of Written Release: December 9, 2022

CITATION: 2017210 Ontario Inc. v Registrar of Motor Vehicles, 2022 ONSC 6939

DIVISIONAL COURT FILE NO.: DC-572/22
DATE: 20221129

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

BETWEEN:

2017210 ONTARIO INC.

Appellant

– and –

REGISTRAR OF MOTOR VEHICLES

Respondent

ORAL REASONS FOR JUDGMENT

MATHESON J.

Date of Oral Reasons for Judgment: November 29, 2022

Date of Written Release: December 9, 2022