Date: 20060606
Docket: T-431-06
Citation: 2006 FC 705
Toronto, Ontario, June 6, 2006
PRESENT: Madam Prothonotary Milczynski
BETWEEN:
JAZZ AIR LP
Applicant
and
TORONTOPORT AUTHORITY,
CITY CENTRE AVIATION LTD., REGCO HOLDINGS INC.,
PORTER AIRLINES INC. and ROBERT J. DELUCE
Respondents
REASONS FOR ORDER AND ORDER
Issue and Summary
[1] This is a motion brought on behalf of the Respondents, City Centre Aviation Ltd., Regco Holdings Inc., Porter Airlines Inc and Robert J. Deluce, (the "Deluce Parties") for an Order pursuant to section 18.4(1) of the Federal Courts Act, that this application for Judicial Review be treated and proceeded with as an action. In the alternative, the Deluce Parties seek an Order pursuant to Rule 58 of the Federal Courts Rules to regularise the Notice of Application in this matter, specifically requiring Jazz Air LP ("Jazz") to:
a. list with particulars the decision of Toronto Port Authority ("TPA") which Jazz seeks to have reviewed in accordance with Rule 301;
b. limit the Notice of Application to a single decision of the TPA in accordance with Rule 302; and
c. striking from consideration on this application, all matters duplicative with an action commenced by Jazz in the Ontario Superior Court.
[2] This application, as currently framed, is a square peg being made to fit into a round hole - the Applicant seeks by way of a single application for judicial review to place under judicial scrutiny, a number of decisions and actions of the TPA regarding its development and operation of the Toronto City Centre Airport on the Toronto Island. Some of these decisions and actions are identified with a degree of specificity, others are not. The Applicant says these decisions are related and comprise a "course of conduct" - but this conduct spans a number of years and involves some speculation on the Applicant's part as to how many or what some of the decisions or actions might be that comprise all of the conduct complained of. A common thread alleged by Jazz to be running throughout and motivating this course of conduct, is the TPA's bad faith in its dealings with Jazz, and a conspiracy between the TPA and the Deluce Parties to exclude or marginalize Jazz in its operation of a scheduled passenger airline service at the City Centre Airport, and to create a monopoly for one of the Deluce Parties, Porter Airlines. Such conspiracy and resulting monopoly, Jazz asserts, is in contravention of the TPA's mandate under the Canada Marine Act, and in contravention of section 45 of the Competition Act.
[3] For the reasons below, I find that a disposition of the issues raised cannot and ought not proceed in the summary fashion contemplated by an application for judicial review, and do not lend themselves to be severed into separate self-contained applications for judicial review, even if heard together. This proceeding is, in essence, a complex commercial dispute involving a series of decisions and transactions for the operation of scheduled passenger airline services at the Toronto City Centre Airport, with serious allegations of a conspiracy. The proper determination of the dispute is better suited to a trial.
Background and Jazz Application for Judicial Review
[4] The within application for judicial review was commenced in the Federal Court on March 9, 2006, shortly after the dismissal of an application for an injunction in the Ontario Superior Court. There, Jazz has commenced an action seeking substantial damages against the same parties who are the Respondents here, under the Competition Act for conspiracy and intentional interference with economic relations. Jazz also seeks damages against City Centre Aviation Ltd. ("CCAL") for wrongful termination of its lease. Jazz's claim includes a claim for punitive damages.
[5] The application for judicial review alleges that the TPA has acted in excess of the statutory jurisdiction granted to it under the Canada Marine Act, and that the TPA has made decisions and acted in a manner that is ultra vires its jurisdiction and contrary to law by:
(i) refusing to directly lease land or provide facilities for Jazz to operate a scheduled passenger airline service at the Toronto City Centre Airport;
(ii) insisting upon a particular form of commercial carrier operating agreement ("CCOA") that Jazz alleges is exceptionally restrictive, arbitrary and discriminatory in its terms regarding allocation of take-off and landing slots, route allocation and financial restrictions;
(iii) imposing an August 31, 2006 deadline for Jazz to accept the proposed CCOA, without meaningful negotiation of its terms; and
(iv) entering into agreements and arrangements with one or more of the Deluce Parties which have the effect of creating a monopoly or dominant position for Porter Airlines at the Toronto City Centre Airport and that is in restraint of trade in breach of section 45 of the Competition Act.
[6] Jazz seeks declaratory relief in respect of the above, and an order requiring the TPA to provide it with adequate alternative space and/or facilities so that it can operate a scheduled passenger airline service at the Toronto City Centre Airport. Jazz also seeks to set aside any acts or decisions of the TPA that are found to have been made in excess of its jurisdiction and are ultra vires, in restraint of trade or have been made in breach of its obligations to act fairly, reasonably and in good faith. This relief would have a direct impact on the Deluce Parties who plan to have Porter Airlines in operation providing a scheduled passenger airline service at the Toronto City Centre Airport in the fall of 2006.
[7] As indicated above, Jazz alleges that for the fall 2006 start-up of Porter Airlines, the TPA has entered into agreements and arrangements with the Deluce Parties that are in restraint of trade, deliberately limit access by Jazz to Toronto Island Airport facilities, create a monopoly on and give disproportionately preferential access to the Deluce Parties of all of the existing facilities at the Island that are capable of being used for passenger processing terminals. In addition, Jazz alleges that the Deluce Parties have been given the vast majority of take-off and landing slots in a discriminatory manner, and by imposing certain route restrictions on Jazz in its proposed CCOA, the TPA has provided Porter Airlines with route exclusivity to fly to certain regional destinations without competition from Jazz or from any other airline.
[8] The Toronto Island has been without airline service since March of 2006, when Jazz suspended its service after some sixteen years of flying from the City Centre Airport (either in its present incarnation as Jazz, or earlier as Air Ontario). The suspension was due to termination of Jazz's lease by CCAL (a Deluce controlled company). This suspension will become permanent unless Jazz agrees to a CCOA and enters into a lease arrangement with another company, Stolport, that has facilities on the Island available to Jazz. Stolport has refused to deal with Jazz unless it has entered into a CCOA with the TPA.
[9] The Notice of Application contains the background set out above, and details further the long history of operations at the City Centre Airport, TPA announcements regarding improved passenger ferry facilities between the mainland and the Island, Air Canada's announcements of expanded Jazz service, and the more recent contentious events surrounding the various meetings, exchange of correspondence and attempts by Jazz to come to some accommodation. Overshadowing these events is the spectre raised by Jazz that these decisions are connected or motivated by a conspiracy of the TPA and one or more of the Deluce Parties to lesson competition, eliminate or marginalize Jazz at the Island Airport and give Porter Airlines an unfair advantage.
[10] For its part, the TPA states that to properly address the allegations made by Jazz and to explain its decisions and actions, it must provide a context and assemble material from the past sixteen years. For the TPA, it is about how to develop a successful and commercially viable airport on the Toronto Island. It claims that to date, the City Centre Airport has been underutilized, and essentially abandoned by Jazz and its predecessor, Air Ontario.
[11] This is the "record" upon which the judicial review would be based. Such record would, according to the TPA, necessarily include a voluminous amount of documentation outlining the past sixteen years of its dealings with Jazz, Air Ontario and, more recently, the Deluce Parties. The record would include the confidential and commercially sensitive agreements and documents of not only the parties to this proceeding but also third parties. Settling the issues surrounding the record would therefore necessarily involve notice to these third parties and orders being sought to determine the relevance of certain documents and orders under Rule 151 of the Federal Courts Rules sealing some of those documents in the Court Registry. The Deluce Parties themselves might find their confidential agreements and documents incorporated in the record - including their CCOA, whatever lease and financial arrangements they have made for the establishment of Porter Airlines, the terms for the lease or purchase of aircraft, the lease of lands or facilities, and approvals or licences from Transport Canada. Not surprisingly, Jazz has expressed a keen interest in obtaining the TPA "record".
Discussion
[12] (a) Rules
As a starting point, the notice of application filed by Jazz does not comply with the Federal Courts Rules. The application seeks judicial review of multiple decisions, some of which are not properly identified but, as submitted by Jazz, await delivery of the record to determine what, if anything else, should be specifically challenged. By casting its net so widely, Jazz appears to have engaged in speculation of what the TPA has done, and embarked upon an elaborate fishing expedition to see what arrangements have been put into place by the Deluce Parties.
Rule 302 of the Federal Courts Rules provides that a judicial review application shall be limited to a single decision. An application may, in some cases, encompass more than one decision, but only where the decisions are related and indicate a course of conduct or involve an ongoing situation. This is not to say, however, that a number of complex decisions and transactions, spanning a number of years meet this exception. The decisions and actions being challenged here were made at different times, may involve different considerations and appear to have a different focus. On the one hand, they are the decisions and actions that have been identified as between Jazz and the TPA (refusal to lease, ultimatum regarding the CCOA, refusal to negotiate, imposition of an arbitrary deadline). On the other hand, they are the decisions and actions as between the TPA and the Deluce Parties, some or all of which Jazz has not seen, but nonetheless takes exception to (Porter Airline's CCOA, access to facilities, allocation of slots and routes). According to Jazz, at least part of what is driving the TPA in making the Jazz and Deluce decisions, is the allegation that there is an illegal conspiracy between the TPA and the Deluce Parties.
These allegations are certainly intriguing, but the more mundane conclusion upon reading the notice of application is that, contrary to the Rules, the decisions are not properly identified, the number of the decisions sought to be reviewed is indeterminate, and that there is consequently, a lack of a complete and concise description or statement of the grounds for review.
(b) Conversion into action
Subsection 18.4(2) of the Federal Courts Act provides that in those cases that the Court finds it appropriate, the Court may direct that an application for judicial review be treated and proceed as an action. The factors to consider include:
- whether the determination of the issues require viva voce evidence;
- whether there is a multiplicity of proceedings that should be managed through the trial process; and
- whether the matters in dispute are such that their determination is better suited to the process and procedures available in a trial rather than in an application.
(Chen v. Canada (Minister of Citizenship and Immigration), [2005] 3 F.C.R. 82 (F.C.); Drapeau v. Canada (Minister of National Defence) (1995), 179 N.R. 398 (F.C.A.); Macinnis v. Canada(Attorney General) (1994), 113 D.L.R, (4th 529)
I find that all three factors apply here.
Viva VoceEvidence
There are serious allegations being made of a conspiracy, as well as bad faith, and arbitrary and discriminatory conduct in commercial dealings. To establish that there has been a breach of section 45 of the Competition Act, Jazz must show:
- the existence of an agreement or arrangement between the TPA and the Deluce Parties;
- that the TPA and the Deluce Parties intentionally entered into such agreement or arrangement;
- that this agreement or arrangement would unduly lessen competition in a market if implemented; and
- that the parties knew, or ought to have known that such agreement or arrangement, if proven, would unduly lessen or prevent competition.
To properly adjudicate the allegations of criminal conspiracy and to determine the subjective intentions and knowledge of the parties, the Court should have the opportunity to assess the credibility of witnesses. I agree with the submissions of the Deluce Parties, that viva voce evidence will be essential and that these issues cannot be properly determined on affidavit evidence, or in a summary proceeding.
Multiplicity of Proceedings
In Drapeau v. Canada(Minister of National Defence), the Federal Court of Appeal noted that a key consideration in converting the matter into an action was the fact that the allegations in the judicial review application also gave rise to damages:
...a motions judge, seized of a motion to convert an application for judicial review into an action...does not err in giving consideration to the desirability of avoiding a multiplicity of proceedings. In the present case the motions judge was dealing with attacks upon a series of decisions, alleged to have been made in bad faith and in breach of natural justice, which were said to have caused damage to the plaintiff.
Similarly, Jazz attacks a number of decisions that it alleges were made in bad faith and in furtherance of a conspiracy. The very same acts that Jazz says give rise to judicial review, form the basis of its action for damages in the Ontario Superior Court. Currently, the TPA and the Deluce Parties face the prospect that the serious allegations of a criminal conspiracy will be dealt with summarily in a Federal Court application for judicial review, to their potential detriment subsequently in the Ontario Superior Court action. Again, I agree with the Deluce Parties' submissions that the risk of any such prejudice should be avoided and that at some point, the fact that there are parallel proceedings should be addressed.
Commercial Dispute
The underlying dispute in this proceeding is commercial in nature - what airline carrier or carriers will operate a scheduled passenger airline service at the Toronto City Centre Airport, and on what terms. The determination of this dispute as between Jazz, the TPA and the Deluce Parties will involve consideration of the history of the commercial relationships between the parties, the TPA's plans to develop a commercially viable airport on the Toronto Island, and a determination of the issues surrounding the allegation of a conspiracy in breach of the Competition Act. A proper determination of these issues, and to ensure fairness to the parties, requires the enlistment of the processes and procedures available in an action - in particular, production and discovery, and a full hearing and evaluation of the evidence at a trial (see: Radil Bros. Fishing Co. v. Canada (Department of Fisheries and Oceans, Pacific Region), [1998] F.C.J. No. 292 (QL - F.C.T.D.); (1998), 158 F.T.R. 313 (F.C.T.D)).
(c) Prejudice
That this application for judicial review, as presently constituted, does not comply with Federal Courts Rules presents a problem of substance and not merely of form. The application is unwieldy, complex and without the procedural protections or benefits of an action. Already the preparation and delivery of the record has raised significant issues regarding its compilation, timing of its delivery and notice to third parties of possible disclosure of their confidential agreements or other documents, and orders to protect confidentiality pursuant to Rule 151 of the Federal Courts Rules. It will take time to complete this preliminary step, which itself indicates very clearly that, (assuming without deciding either that the decisions of the TPA are those of a federal board, commission or tribunal, or that Jazz has standing to seek review of the Deluce agreements), the decisions of the TPA that are the subject of this application, are inappropriate for judicial review.
[13] Furthermore, the matters put in issue by Jazz, require the determination of what the decisions are that are being attacked, the timeliness of the commencement of their review, and the determination of serious allegations of misconduct, all on the basis of a paper record without the benefit of a trial and pre-trial procedures. As in Agustawestland International Ltd. v. Canada (Minister of Public Works and Governments Services) 2005 FC 1640 (QL - F.C.), I find that the facts in this case are of a nature which cannot be satisfactorily established or weighed through consideration of the record and the affidavit evidence. There is a need for viva voce evidence to allow the Court to have full grasp of the evidence and the veracity of the allegations that have been made.
[14] Finally, as noted, whatever the result in the Federal Court - the result may in turn affect the trial for damages in the ongoing action in the Ontario Superior Court.
[15] Accordingly, I find that the need for a full and fair determination of the issues by way of action outweighs whatever prejudice may arise to Jazz in so doing. The matter of delay and prejudice to Jazz has already been considered, and I note the decision of Spence J. in his disposition of the application for an injunction brought by Jazz:
The business which Jazz does through the Island Airport is not a material part of its business. Jazz earns its revenues almost entirely from the fees it receives from Air Canada for the use of Jazz's capacity, whether the flights relate to the Island Airport or to Pearson. Whether there will likely be a material reduction in the revenues of Jazz is not shown. Since any such reduction would be calculable it seems that the harm be quantifiable in damages and therefore could not be regarded as irreparable.
ORDER
THIS COURT ORDERS that:
1. The motion to convert this application for judicial review into an action is allowed.
2. The Applicant shall file its statement of claim within twenty days of the date of this Order, and subject to any further order or direction of the Court, the procedural steps and timelines set out for actions in the Federal Courts Rules shall apply.
3. The dates for the hearing of the application on September 5 and 6, 2006 are hereby vacated.
4. In the event the parties cannot agree on costs of this motion, they shall, within twenty days of the date of this Order, provide dates of availability for a teleconference to deal with the matter of costs.
"Martha Milczynski"
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