Company that provides ex-military vehicles to B.C. film shoots wins court case against province

An M998 military Humvee is seen in this photo from Blueleader Enterprises Ltd.'s website. (blueleader.ca)

A company that rents out ex-military vehicles for B.C. film productions has won a court order quashing a provincial manager's decision that it claimed had rendered such vehicles "unrentable" and without a resale market in the province.

Blueleader Enterprises Ltd. petitioned the B.C. Supreme Court for judicial review of a pair of "bulletins" issued in 2021 by the provincial government's Manager of Vehicle Inspection and Standards, an office of the Commercial Vehicle Safety and Enforcement branch.

The bulletins were addressed to authorized inspectors and designated inspection facilities in the province, and were intended to address a perceived "loophole" in B.C.'s rules for vehicle inspections, according to Justice Bruce Elwood's decision, which was issued last week and published online Tuesday. 

While the director of the CVSE argued that Blueleader lacked standing to challenge the bulletins and that the documents constituted "administrative guidance" rather than a regulatory change, Elwood ultimately ruled in the company's favour.

ICBC raised initial concerns

The bulletins came about after a December 2020 email from ICBC to the CVSE expressing concerns about the province's rules for registering military vehicles, according to Elwood's decision.

Specifically, the provincial insurer reported that an individual – who was not associated with Blueleader – had successfully imported a U.S. military Humvee into B.C. and had it inspected, registered and insured for unlimited use on provincial highways.

"At the point it was processing an application for a Vehicle Identification Number ('VIN') for the vehicle, ICBC realized that it was designed for off-highway military use and not certified as being … compliant for on-highway use," the decision reads.

ICBC asked the CVSE to look into the case and weigh in on what the inspection and registration process for imported vehicles that don't conform to the federal government's Canada Motor Vehicle Safety Standards should be.

In response, the CVSE took the position that the Humvee in question should be considered a "utility vehicle" and therefore ineligible for inspection. It told ICBC it would communicate this interpretation of the rules to inspectors, which it did through the two bulletins, according to the decision.

The bulletins informed inspectors that ex-military vehicles that do not conform to the CMVSS should be considered utility vehicles, and ended with a reminder that "any improper inspection of vehicles is a violation" of B.C.'s Motor Vehicle Act Regulations and could result in enforcement action.

CVSE exceeded its authority to close loophole

This threat of enforcement action, combined with the bulletins' use of the term "non-conforming ex-military vehicle," which is not defined in existing regulations, convinced Elwood that the bulletins were not merely administrative guidance, but rather "regulatory in nature."

"In my view, the manager did more than provide administrative guidance in the bulletins; he sought to close a perceived 'loophole' in the existing regulatory regime," the judge's decision reads.

"The branch was concerned that owners of ex-military vehicles were presenting their vehicles to designated inspection facilities and obtaining certificates of inspection with which they could then register and insure the vehicles for on-highway use, when those vehicles were not designed for that purpose and may pose a safety hazard to the owner and others."

While that scenario may be a legitimate concern, and the CVSE's interpretation of ex-military vehicles as "utility vehicles" under existing law may be correct, the bulletins still exceeded their sender's legal authority by creating a ban on inspecting such vehicles where none previously existed, Elwood concluded.

"The difficulty is that the manager did not have statutory authority to prohibit the inspection of utility vehicles or any other vehicles," the decision reads. "The existing regulations restrict the use of a utility vehicle on a highway; however, they do not prohibit the inspection of a utility vehicle. Instead, they exempt utility vehicles from the inspection requirement for imported vehicles. An exemption from inspection cannot be relied on as the source of a prohibition on inspection."

"If there is a loophole in the inspection regime that allows owners of ex-military vehicles that were designed for off-road use to register and license those vehicles for use on the highway, it must be closed by regulation or a valid exercise of the powers delegated to the director … It cannot be closed with an information bulletin from the manager."

Having concluded earlier in his decision that the bulletins had a "direct impact" on Blueleader's economic interests and therefore the company had standing to bring the case, Elwood granted the company an order quashing the bulletins.