Date: 20070206
Docket: T-48-06
Citation: 2007
FC 129
Ottawa, Ontario, February 06, 2007
PRESENT: The Honourable Mr. Justice Martineau
BETWEEN:
SIERRA
FOX INC.
Applicant
and
FEDERAL
MINISTER OF TRANSPORT
Respondent
REASONS FOR ORDER AND ORDER
[1]
The applicant
Sierra Fox Inc. operates a flight training school at Muskoka Airport and is the registered owner of a Piper
PA-28-140 (C-FYTC) (the aircraft or YTC) used for flight training. The Minister
of Transport (the Minister) is the respondent to this judicial review
proceeding.
[2]
The
applicant challenges the legality of a Minister’s decision rendered on July 4,
2005 (the impugned decision) after the Transportation Appeal Tribunal of Canada
(the Tribunal) had ordered the Minister to reconsider its earlier decision of
October 31, 2003 suspending the certificate of airworthiness of YTC (the
suspension decision). Both decisions were made under the Aeronautics Act,
R.S.C. 1985, c. A-2, as amended (the Act).
[3]
Essentially,
the applicant submits that the impugned decision, which upheld the suspension decision,
should be set aside and the matter referred back for reconsideration on the
ground that the respondent failed to observe a principle of natural justice,
procedural fairness and other procedure that it was required by law to observe.
The respondent submits on the contrary that all procedures set out in the Act
were followed and that there has been no breach whatsoever of a principle of natural
justice or procedural fairness.
[4]
For the
following reasons, I have come to the conclusion that procedural fairness has
been breached by the respondent and that the present application should be
allowed.
I - LEGAL FRAMEWORK
[5]
The
existence of the duty to act fairly is flexible, variable and depends on a
variety of circumstances (Knight v. Indian Head School Division No. 19,
[1990] 1 S.C.R. 653). The nature of the decision being made and the
process followed in making it, the nature of the statutory scheme, the
importance of a decision to the person affected and his legitimate expectations
are relevant to determining what is required by the duty of fairness in a given
set of circumstances (Baker v. Canada (Minister of Citizenship and
Immigration), [1999] 2 S.C.R. 817 at paras. 21-28; Kiss v. Canada
(Minister of Transport), [1999] F.C.J. No. 1187 at para. 22; Air Nunavut
Ltd v. Canada (Minister of Transport)(T.D.), [2001] 1 F.C. 138 at para.
51). But this list is not exhaustive and other factors may also be relevant in
this analysis. As stated by Justice L’Heureux Dubé in Baker, above, at
para. 22, “the purpose of the participatory rights contained within the duty of
procedural fairness is to ensure that administrative decisions are made using a
fair and open procedure, appropriate to the decision being made and its
statutory, institutional, and social context, with an opportunity for those
affected by the decision to put forward their views and evidence fully and have
them considered by the decision-maker”.
[6]
The
Minister bears a heavy responsibility towards the public to ensure that
aircraft and air carrier operations are conducted safely. This is especially so
for Transport Canada inspectors who are in
practice charged with the duty of maintaining safety (Aztec Aviation
Consulting Ltd. v. Canada, (1990) 33 F.T.R. 210 at para. 6 (T.D.); Swanson v.
Canada (Minister of Transport)(C.A.), [1992] 1 F.C. 408 at 414 and 424-426
(F.C.A.)). The direct responsibility of the Minister to ensure public safety is
to be inter alia found in the issuance of the certificate of
airworthiness of the aircraft itself, which is subject to the operations
specifications and conditions expressed therein. Among these there is the
general requirement that the document holder comply with the provisions of the
Act and of the Canadian Aviation Regulations, SOR/96-433 (the CARs).
[7]
Under the
current statutory scheme, ministerial action in the form of a suspension of
document and/or the imposition of a monetary penalty may follow an audit or
administrative inquiry conducted by an inspector or other official of Transport
Canada. In the case at bar, the
suspension decision was made under paragraph 7.1(1)(b) of the Act, which
authorises the Minister to suspend, cancel, or refuse to renew an aviation
document on the grounds that:
(b)
the holder or any aircraft, airport or other facility in respect of which the
document was issued ceases to meet the qualifications necessary for the issuance
of the document or to fulfil the conditions subject to which the document was
issued…
[8]
It is not
contested that the Minister must always act in good faith and has the burden to
justify the reasonableness of any action taken against a document holder under
the Act. In this regard, the Minister cannot act arbitrarily and in the absence
of evidence. However, the Act does not formally require that the document
holder be heard prior to the taking of a suspension decision by the Minister.
It simply requires that a notice of the decision taken accordingly by the
Minister be sent to the person before the decision comes into effect (see
subsections 6.71 (2), 6.9 (2), 7 (2), 7.1 (2), 7.21 (2) and 7.7
(2) of the Act). The legality of the Minister’s decision, including the
sufficiency of the notice, may in turn be examined by this Court once the
document holder has exhausted its right to have the matter reviewed in first
instance and in appeal by the Tribunal (Aztec Aviation Consulting Ltd.,
above, at paras. 17 and 18; Aviation Québec Labrador Ltée v. Canada (Minister of
Transport) (1998),
157 F.T.R. 24 at paras. 11-13 (F.C.T.D.)).
[9]
Established
by section 2 of the Transportation Appeal Tribunal of Canada Act, S.C.
2001, c. 29 (the TATC Act), the Tribunal replaces the Civil Aviation Tribunal
previously created under Part IV of the Act and has an extended jurisdiction in
respect of reviews and appeals made under other federal legislations pertaining
to the marine and railway sectors. The Tribunal is a quasi-judicial tribunal
composed of full-time or part-time members appointed by the Governor in Council
who collectively have expertise in the multi-modal transportation sectors in
respect of which the federal government has jurisdiction (sections 3 and 4 of
the TATC Act). The procedure before the Tribunal is adversarial. The Minister
and the holder of the document (or the owner or operator affected by the decision)
will have an opportunity, consistent with procedural fairness and natural
justice, to present evidence and make representations in relation to the
decision under review (subsections 6.9(7), 7(6) and 7.1(6) of the Act).
[10]
In any
proceeding before the Tribunal, a party that has the burden of proof discharges
it by proof on the balance of probabilities, but the Tribunal is not bound by
any legal or technical rules of evidence, except that it shall not receive or
accept as evidence anything that would be inadmissible in a court by reason of
any privilege under the law of evidence (subsections 15 (1), (2) and (5) of the
TATC Act). While informal, proceedings before the Tribunal closely resemble
those followed in the courts. Hearings are normally held in public and a party
to a proceeding before the Tribunal may appear in person or be represented by
another person, including legal counsel (subsections 15(3) and (4) of the TATC
Act). Witnesses are sworn in and may be compelled to answer questions and
produce documents. Indeed, the Tribunal, and each of its members, has all the
powers of a commissioner under Part I of the Inquiries Act, R.S.C. 1985,
c. I-11 (section 16 of the TATC Act). Proceedings before the Tribunal shall be
recorded, and the record shall show all evidence taken and all determinations,
decisions and findings made in respect of the proceedings (section 20 of the
TATC Act).
[11]
If the
document holder is unsatisfied by the decision rendered by the member of the
Tribunal, a right of appeal exists before an appeal panel composed of three
members of the Tribunal (subsection 7.2 (1) of the Act). The current statutory
scheme also grants a right of appeal to the Minister in cases where the member
may determine the matter by confirming the Minister’s decision or by
substituting his or her own determination (paragraph 7.2 (1)(b) of the Act, which
refers to a determination made under subsection 6.9 (8) or paragraph 7 (7)(b)
of the Act). An appeal shall be on the merits based on the record of the
proceedings before the member from whose determination the appeal is taken, but
the appeal panel shall allow oral argument and, if it considers it necessary
for the purposes of the appeal, shall hear evidence not previously available.
Moreover, both the member who conducts a review and the appeal panel are
compelled to provide reasons (section 17 of the TATC Act).
[12]
In the
case at bar, a single member of the Tribunal confirmed the validity of the
suspension decision taken under section 7.1 of the Act. Section 7.2 of the Act delineates
the jurisdiction of the appeal panel of the Tribunal in such a case. Under
paragraph 7.2 (3)(a) of the Act, the appeal panel may either dismiss the appeal
or refer the matter back to the Minister for reconsideration. That being said,
section 21 of the TATC Act provides that “[a] decision of an appeal panel of
the Tribunal is final and binding on the parties to the appeal”. This gives
legal recognition to the binding character of any final determination made by
the Tribunal, unless same is judicially reviewed by this Court under sections
18 and 18.1 of the Federal Courts Act, R.S.C. 1985, c. F-7, as amended.
In the case at bar, an appeal panel of the Tribunal overturned the decision made
by a single member and referred the matter of suspension back to the respondent
for reconsideration.
[13]
In
the event a
matter is referred back to the minister for reconsideration, the Act currently
provides that the decision of the Minister remains in effect until the
reconsideration is concluded, subject to the granting of a stay by the
Tribunal. Nothing further is provided in the Act with respect to the process
and particular manner the Minister will reconsider a former decision.
Respondent’s counsel has submitted in this regard that the basic policy and
process followed by the Minister on a reconsideration is still the one
previously set out in Civil Aviation Directive (CAD) No. 34 – Reconsideration
of Civil Aviation Tribunal Decision (CAD 34), which generally provides
that “reconsideration of suspensions or cancellations of Canadian aviation
documents must be conducted in a manner that ensures fairness and
transparency”.
[14]
Both the
impugned decision and the CAD 34 upon which the respondent relies in this case
refer to former subsection 7.1(9) of the Act. The latter provision provides
that where a matter of suspension or cancellation or refusal to renew an
aviation document is referred back to the Minister, the suspension or
cancellation shall cease to be of any force or effect until the Minister
decides otherwise as a consequence of the reconsideration. However, this
provision has been repealed by section 37 of the TATC Act. Be that as it may,
in Aztec Aviation Consulting Ltd, above, this Court indicated
that “should the Minister not agree with [the Civil Aviation Tribunal]
decision, he must reconsider the matter and decide the question again. In doing
so, he would of course be under a legal obligation to take into account all
of the evidence, representations and findings of the review proceedings
during which the plaintiff will have had a full opportunity to be heard and to
present evidence” [emphasis added].
[15]
That being
said, CAD 34 provides that the “responsible authority”, here the Minister’s
designated delegate, shall appoint a “team” of at least three people having the
appropriate expertise to review the case. It is not clear in reading CAD 34
whether or not the “team” or the “responsible authority” may consider
documentary evidence that was not previously submitted to the Tribunal or
receive the unsworn declarations of persons who did not previously testify
before the Tribunal. Questioned at the hearing by the Court in this regard,
respondent’s counsel answered in the affirmative. This would allow for the
presentation of evidence not previously submitted by the applicant who could
also ask to be heard in person. It would also permit the presentation of
additional hearsay evidence that the “team” or the “responsible authority” has obtained
on their own from persons who did not testify before the Tribunal or that comes
from documents gathered after the Tribunal’s final decision to refer the matter
back to the Minister. This issue involves procedural fairness. The applicant
submits in this regard that the respondent cannot accept uncorroborated hearsay
evidence. CAD 34 also provides that the team shall prepare a report setting out
the factors that the team considered, the conclusions it reached and the
recommendation the team is making to the responsible authority. The responsible
authority shall review the team report and either accept or reject the team’s
recommendation. CAD 34 provides that the responsible authority shall prepare a
letter that sets out the Minister’s decision and that explains the reasons for
the decision and the factors taken into consideration in coming to the
conclusion. In the event that the responsible authority rejects the
recommendation of the team, the responsible authority must document the reasons
for rejection.
II- CONTEXTUAL ANALYSIS
[16]
It is not
possible to dispose of the complex issues of natural justice and procedural
fairness raised in this case without first examining in detail the process that
has led to the suspension decision, the review determinations and the final
decisions of the Tribunal, as well as to the impugned decision following the
reconsideration of the matter by the Minister.
A)
Suspension decision and penalties assessment
[17]
In the
case at bar, during a routine maintenance audit of the applicant, Mr. Ross
Jackson, a Transport Canada inspector, noticed that YTC seemed to have a low
air time for a flight training aircraft. He and one of his colleagues, Mr. Mark
Dixon, another inspector, compared the number of flights listed in the aircraft
journey log book (the log book) to the Daily Air Traffic Records (DATRs) for
the Muskoka Airport.
[18]
The
aircraft journey log book (the log book) is a document that is required by the
Act to be kept for an aircraft in which, among other items, the actual air
times flown are to be recorded. In particular, section 605.94 of the CARs
provides that the total air time (TAT) for each flight shall be recorded in the
log book in accordance with the particulars set out in columns I, II and III of
the corresponding item in schedule I. Indeed, a person who wilfully omits to
record a flight in the log book is guilty of an indictable offence or an
offence punishable on summary conviction by a court of competent criminal
jurisdiction (paragraph 7.3(1)(c) and 7.3(2) of the Act). That being said, section
28 of the Act further provides that in any action or proceeding under the Act,
an entry in any record required to be kept under the Act “is, in the absence of
evidence to the contrary, proof of the matters stated therein as against the
person who made the entry or was required to keep the record…”
[19]
The DATRs
are written records of local air traffic movements for a particular airport that
are used by NAV CANADA and Statistics Canada. In the
case at bar, the DATRs had recorded aircraft movements for the aircraft that
were not listed in the log book. A further investigation ensued. The two inspectors
then compared the entries in the log book to the Muskoka DATRs for the period
between August 1 and September 30, 2003. They observed that there were a number
of discrepancies between the two records, which led them to conclude that YTC
had flown on numerous occasions but that the flight times had not been recorded
in the log book. As a result, the certificate of airworthiness (the document)
of YTC was suspended on October 31, 2003.
[20]
The notice
of suspension signed on behalf of the Minister by Mr. Jackson, stated in part:
Pursuant to section 7.1 (1)(b) of the
Aeronautics Act, the Minister of Transport has decided to suspend the
Certificate of Airworthiness, the Special Certificate of Airworthiness or the
Flight Permit in respect of the above aircraft on the ground that the aircraft
does not comply with conditions subject to which the document was issued for
the following reasons:
The aircraft had not been maintained in
accordance with the approved maintenance schedule as required by CAR 605.86 (1)(b).
It was noted that flights had been conducted and not recorded in the Aircraft
Journey Log Book. These discrepancies have rendered the calculation of Total
Air Time inaccurate.
[21]
Succinctly
put, paragraph 605.86 (1)(b) of the CARs, which is specifically mentioned in
the notice dated October 31, 2003, provides that the person who has legal care
and control of an aircraft cannot permit the take-off of the aircraft if it has
not been maintained in accordance with the individual maintenance plan as
detailed in the Small Operator Maintenance Control Manual (the manual). The
maintenance plan as approved by the Minister is compulsory and the only
variations permitted are those specifically authorized by the Minister.
[22]
From the
point of view of the document holder, owner or operator, the suspension,
cancellation or refusal by the Minister to renew a certificate of airworthiness
has a great importance and is likely to cause severe financial hardship. In
this case the applicant’s ability to carry on business has been severely
affected. On or around November 3, 2003, the applicant requested that the
respondent reinstate the document and alleged that he was not aware that he had
forgotten to enter flights in the log book. Therefore, the applicant asked the
Minister to provide details of those flights so that the applicant’s
representative could make the required corrections immediately in the log book.
Moreover, the applicant also served and filed with the Tribunal a request for
review of the suspension decision (TACT File No. O‑2988‑10).
Since the issuance of the notice of suspension on October 31, 2003, the
suspension has remained in effect and the Minister has refused to reinstate the
document.
[23]
Before the
Tribunal had an occasion to review the legality of the suspension decision, on or around March 22, 2004, pursuant to section 7.7 of the Act, the
Minister decided to assess monetary penalties totalling $1,750.00 against the applicant
(the assessment decision). First, the
Minister alleged that the applicant had contravened subsection 605.86 (1) of
the CARs, in that between August 1 and September 30, 2003 (the period in
question), the applicant had permitted take-offs to be conducted in YTC when
the aircraft had not been maintained in accordance with its approved
maintenance schedule; flights conducted but not recorded caused the calculation
of the cumulative air time or TAT of the aircraft to be inaccurate. Penalty was
assessed at $1,250.00 (the first charge). Second, the Minister alleged that during
the period in question the applicant had operated YTC on several flights at or
near Muskoka and had failed to record the TAT in the log book in accordance
with the particulars set out in the regulations, thereby violating subsection
605.94 (1) of the CARs. Penalty was assessed at $500.00 (the second charge). The applicant
challenged the legality of the assessment decision and filed a request for
review with the Tribunal (TACT File No. O-2997-41).
[24]
Prior to
the matter being heard by the Tribunal, the applicant offered to do a one
thousand hour inspection on YTC in order to satisfy the respondent’s concerns,
if any, about the safety of the aircraft. This offer was dismissed by the
respondent.
B) Review determinations by the Tribunal
[25]
The
requests for review made by the applicant (TACT Files Nos. O-2988-10 and O‑2997‑41)
were heard by a single member of the Tribunal, Mr. James E. Lockyer, on
June 16 and July 14, 2004. Both files were decided on common evidence and oral
submissions by the parties.
[26]
At the
opening of the hearing, the single member took the position that the Minister
had to prove, on a balance of probabilities, that the applicant had contravened
the Act and the CARs. He also indicated that the applicant had the right to
present evidence, cross-examine the respondent’s witnesses and make submissions
at the end of the proceedings. The single member also characterized the charges
in question, which refer to violations of section 605.86 and 605.94 of the
CARs, as “strict liability offences”. The single member stated that it was
entirely within the applicant’s right not to adduce evidence. Indeed, no
adverse inference would be drawn if the respondent was unable to prove the
facts upon which each allegation or infringement was based. (Subsection 7.7(1)
of the Act expressly requires that the Minister have “reasonable grounds [to
believe] that a person has contravened a designated provision” while subsections
7.91(4) and (5) of the Act further provide that the burden of establishing that
a person has contravened a designated provision is on the Minister and that a
person who is alleged to have contravened a designated provision is not
required, and shall not be compelled, to give any evidence or testimony in the
matter).
[27]
However,
the single member explained that “once the Minister establishes the elements of
[each] offence the burden shifts to the Document Holder to show all due
diligence as to why the activity, if it is in fact proved, should not fall
within the contravention” (Tribunal’s hearing transcript, June 16, 2004, applicant’s
record at pages 28‑29). Asked by applicant’s counsel to clarify what this
actually meant with respect to the suspension decision (which as mentioned
above was taken pursuant to paragraph 7.1(1)(b) of the Act), the single member stated
that “if, in fact, the offence is not proved, then the suspension is nullified
effectively” (Ibid. at page 29). Whether the single member was right or
wrong in making this ruling of law is not at issue in this proceeding, but there
was certainly a legitimate expectation that the validity of the suspension would
be contingent upon a Tribunal’s finding that the applicant had indeed committed
the offences in question. It is on these fundamental premises that the hearing was
conducted and that the parties presented their evidence and made their
submissions to the Tribunal.
[28]
The case
presenting officer for the respondent called Mr. Jackson, the investigator who had
issued the notice of suspension as well as Mr. Dixon, the other inspector from
Transport Canada who had reviewed the DATRs for the Muskoka Airport for August and September 2003. As I
already indicated earlier, their conclusion was that YTC had flown more air
time than was identified in the aircraft’s log book. As a result of this
finding, Mr. Dixon forwarded the file to Mr. David Bland, acting
regional manager, aviation enforcement for the Ontario region of Transport Canada. The respondent also called Ms.
Tracy Kirkhus who was the NAV CANADA site manager for the Toronto flight service station (FSS) housed
in the Buttonville Airport Terminal Building located in Markham, Ontario. The Buttonville Nav
Canada facility using the remote
aerodrome advisory service (RAAS) system was responsible for monitoring all
aircraft movements at Muskoka Airport, and recording these
movements on the DATRs. She explained that Muskoka Airport did not have a control tower with a NAV
CANADA flight service specialist onsite but that its air traffic and aviation
weather advisory service was provided remotely by the Toronto FSS at
Buttonville through the RAAS system. A NAV CANADA flight service specialist at
Buttonville would monitor the Muskoka Airport radar screen and
respond to all calls from an aircraft approaching for landing, and all calls
from an aircraft about to enter the manoeuvring area (taxiways, runways, etc.)
of the airport prior to the departure. All aircraft movements identified as a
result of the radio call would be registered on the Muskoka Airport DATR by the
flight service specialist. She indicated there were occasional discrepancies in
the DATRs caused by workload or other operational considerations. She explained
that the DATR top sheet was sent by NAV CANADA to Transport Canada. After 30 days, the top sheet was
destroyed. The second sheet went to the airport manager and the third went to
Statistics Canada. She indicated that the DATR sheets produced in this case by
the respondent (Exhibits M-1 and M-2) did not appear to have been altered in
any material way. The respondent also called Mr. Steve Faulkner, the Muskoka Airport manager. He testified
that he would receive fax copies of the DATRs from NAV CANADA on a daily basis. He retained the
original copies and brought them to the hearing. He compared the originals with
the photocopies of the DATRs admitted into evidence as Exhibits M-1 and M-2 and
found no difference in data. Mr. Randy Miller, a Transport Canada Civil
aviation inspector and a certified aircraft maintenance engineer (AME) also
testified for the respondent. He stated that he found 34 entries for YTC in the
DATR of the Muskoka
Airport for August and September 2003
for which there were no corresponding entries in the log book of the aircraft.
He testified that while accurate computation of flight times or air times from
the DATRs is not possible, he suggested that the cumulative air time not
recorded in the log book could total in this case to 20 or more hours. He
exchanged correspondence with the applicant’s representative, Mr. Sandro
Ferrari, and subsequently met with him. He said that Mr. Ferrari indicated the
log book was correct and that the DATRs contained inaccuracies and were
therefore unreliable. Indeed, counsel for applicant, during cross-examination
of Mr. Miller, pursued the notion that significant inaccuracies were contained
in the DATRs. He pointed to five examples as justification for the premise that
DATRs were unreliable and could not be used to substantiate the allegations of
the respondent.
[29]
Mr.
Ferrari did not testify at the hearing. That being said, the applicant called
one witness, Mr. Claude Radley. In his testimony, he seriously questioned the
reliability of the DATRs. Mr. Radley had been a flight service specialist since
1970 and had worked at the Muskoka FSS for 18 years. He had filled out
thousands of DATRs; they were always a low priority item. He explained that the
initial information received from the pilot was put on air traffic control
(ATC) “strips” and then transferred to the DATRs when time permitted. His testimony
was that the accuracy of the DATRs was “questionable at best”. He testified
they were often subject to “padding”. He explained “padding” as being false or
erroneous entries in the DATRs made by a flight service specialist to inflate
workload. This was done to justify his or her position in order to maintain
staffing levels and keep their job. He cited the St. Catherines Airport as an example where this practice had
taken place. He also said padding took place at the Muskoka Airport FSS while
he worked there until 1996 when it was closed and the service transferred to
Buttonville. He pointed out that the DATR for Muskoka Airport for September 6, 2003 identified
56 aircraft movements with the comment, “if they actually occurred this is
incredible”. He surmised this was evidence of padding. However, in
cross-examination, Mr. Radley stated that he had never padded any DATRs over
his 34 years of service. He said he was not working at Buttonville during the
period of August to September 2003. He also said that he had no knowledge that
any of the entries identified in Exhibits M-1 and M-2 were padded.
[30]
Both
review determinations and accompanying common reasons were issued by the Tribunal
on August 27, 2004 (the review determinations). First, the Tribunal found that
the applicant had contravened subsections 605.86
(1) and 605.94 (1) of the CARs and upheld the monetary penalties assessed by
the Minister (TACT
File No. O-2997-41). Second, in view of the former determination, the Tribunal
confirmed the suspension of the document (TACT File No. O‑2988-10).
[31]
In his decision,
the single member took a rather straightforward approach in defining the sole
issue in this case as being simply “whether there were flights conducted in
aircraft C-FYTC between August 1, 2003 and September 30, 2003 which were not
entered in the aircraft’s journey log book”. Indeed, he noted that the
principal evidence with respect to the allegation in question was “documentary
and contradictory”. Therefore, it boiled down to deciding which of the two
documents was credible: the DATRs for Muskoka Airport, which indicate YTC made
numerous flights during August and September 2003 that were not recorded
in the log book, or the log book of the aircraft, which does not show the
alleged flights being made. In this regard, the single member was plainly aware
that in this instance there were “no eye witnesses of the flights or
corroborative evidence to support either document”.
[32]
In his
decision, the single member stressed that the applicant’s case was centred on
the premise that the DATRs being relied on by the Minister for the period in
question were not “accurate, reliable or credible”. Consequently, it was the applicant’s
position that the DATRs should not be admitted in evidence because such hearsay
evidence would infringe procedural fairness and natural justice. I pause to
mention here that all the witnesses agreed that DATRs cannot be used to
determine air times and accordingly, the single member accepted that “for the
purposes of these matters, air time and therefore TAT cannot be accurately
determined from analysis of the DATRs”. In this regard, the single member
recognized that the log book is the only record that totals the amount of time
the aircraft is in the air and determines when the required maintenance as set
out in the manual must be performed by the document holder.
[33]
However, the
single member decided that the DATRs (certified copies of the original copies
of same) may be admitted into evidence and used for enforcement purposes
without corroboration. Indeed, he accepted that the DATRs were admissible in this
case notwithstanding the document holder’s concerns regarding hearsay: “In view
of the fact the document holder has had every opportunity to address and deal
with the exhibits and viva voce evidence presented in this case, I am satisfied
the admissibility of the DATRs does not infringe on procedural fairness or
natural justice”. The single member also noted that Mr. Radley’s testimony
raised the issue of whether any of the entries in the DATRs for August and
September 2003 were falsified. However, he noted that there was no evidence
from Mr. Radley or anyone else, that any entries in Exhibits M-1 and M-2 were actually
the subject of padding or falsification. Accordingly, he found as a fact that
they were not padded or falsified.
[34]
The crux
of the determinations made by the single member with respect to the two ministerial
decisions under review was set down in the following key findings:
I have, for the reasons indicated,
admitted the DATRs into evidence. Counsel for the document holder did not
contest or cross-examine any witnesses in relation to the 34 tabbed entries in
Exhibits M-1 and M-2 alleged by the Minister to be flights of aircraft C-FYTC.
Their value as to the 34 tabbed entries has not been impeached. Other than the
journey log book, there was no corroborative evidence introduced by the
document holder to show those flights were not conducted or to call that
information into question. The document holder has not provided any evidence of
due diligence or the applicability of any exceptions or defences as provided
for in section 8.5 of the Aeronautics Act.
I conclude on the evidence before me that
the flights identified in the DATRs, as conducted in aircraft C-FYTC, did take
place. I also conclude there were no corresponding entries recorded in the
journey log book for the 34 flights tabbed in Exhibits M-1 and M-2. I therefore
find that Sierra Fox Inc. violated subsection 605.94(1) of the CARs on 34
occasions. I also find that Sierra Fox Inc. violated paragraph 605.86(1)(b)
of the CARs in that it allowed aircraft C‑FYTC to be flown when the
aircraft had not been maintained in accordance with its approved maintenance
schedule.
I therefore find the Notice of Suspension of the certificate of
airworthiness of aircraft C-FYTC and the Notice of Assessment of
Monetary Penalty under paragraph 7.1(1)(b) and section 7.7 of the Aeronautics
Act, respectively, were appropriate measures in the circumstances
[emphasis added].
[35]
The applicant
appealed both review determinations.
C) Final
decisions of the Tribunal
[36]
The two appeals
lodged by the applicant were heard together on January 21, 2005 by a
three-member panel of the Tribunal composed of Mr. Allister Ogilvie,
vice-chairperson and Mr. William H. Fellows and Mr. Frank Morgan, members
(the appeal panel). The appeal panel did not hear witnesses or accept new
documentary evidence. However, both parties provided extensive arguments on the
issues of law and procedural fairness raised in the proceeding. The appeals
centered on questions of admissibility and reliability of the respondent’s hearsay
evidence. The Tribunal allowed the appeals in both files on March 31, 2005.
[37]
While the
appeal panel agreed that the DATRs may be admitted into evidence and used for
enforcement purposes, it found that it was an error of law to accept
uncorroborated hearsay evidence as the sole source of evidence to uphold an
allegation of contravention. I pause to mention that the main allegation made
in the notice of suspension is that “[t]he aircraft had not been maintained in
accordance with the approved maintenance schedule as required by CAR 605.86
(1)(b)”. This allegation is based on the assumption made by the inspectors,
based on the DATRs, that during the period in question some “flights had been
conducted and not recorded in the Aircraft Journey Log Book”.
[38]
Coming
back to the final decision of the Tribunal, the appeal panel acknowledged that
the Tribunal was relieved of the legal and technical rules of evidence by the
operation of section 15 of the TATC Act. However, it added: “Being relieved of the legal and
technical rules of evidence does not mean that no rules apply.” In the case at
bar, the appeal panel found that Exhibits M-1 and M-2, the DATRs, were “hearsay”
as they consist of written statements made by persons otherwise than in testimony
at the proceeding in which they are offered as proof of the truth of their
contents: John Sopinka, Sidney N. Lederman and Alan W. Bryant, The Law of
Evidence in Canada (Toronto: Butterworths, 1992) at 156. That being said,
the appeal panel also found that such hearsay evidence was relevant because, if
true, it would go to establishing the factual basis upon which the
contravention could be found: “But not all relevant evidence is of equal
probative value”.
[39]
I note
that the inspectors of Transport Canada
had no actual or direct proof that the aircraft had not been maintained in
accordance with the individual maintenance plan. Here, the DATRs were used by
the inspectors to justify the legality of both the suspension decision and the
assessment decision made by the Minister. There is no evidence on the record
that physical inspection of the aircraft was conducted on site by Mr. Jackson
and Mr. Dixon, the two inspectors who testified during the review determination
before Mr. Lockyer. Upon review of the applicable jurisprudence, the appeal
panel noted that only the Pizzardi case (Minister of Transport v. Richard
Pizzardi and Donald Doyle, [1996] CAT File No. O‑0494‑37) “accepted
hearsay alone as being sufficient proof of an alleged contravention, but no reasons
for such acceptance was provided”. Indeed, according to the appeal panel
“[m]ost of the jurisprudence found that hearsay, by itself, was not sufficient
proof of an alleged offence and some reasoning was provided”. In its analysis
of the jurisprudence, the appeal referred to a number of cases decided after
the Pizzardi case that supported its conclusion: Minister of Transport v.
James Jeffrey Rowan, [1997] CAT File No. A‑1500-33; Minister
of Transport v. 641296 Ontario (North East Air Services), [1997] CAT File No. O‑1342‑37;
Minister of Transport v. Paul George Daoust, [1999] CAT File No. C-1697-33; Minister of
Transport v. Centre École de Parachutisme Para-Nord Inc., [2001] CAT File
No. Q‑2150-37; William
R. Long v. Minister
of Transport,
[2004] CAT File No. O-2824-02 (appeal).
[40]
The appeal
panel also found that accepting hearsay evidence as the sole source of evidence
to uphold an alleged contravention would be contrary to the tenets of fairness
and natural justice that the Tribunal was bound to respect. The appeal panel
noted that section 15 of the TATC Act specifically provides that matters shall
be dealt with by the Tribunal as informally and expeditiously as the
circumstances and considerations of fairness and natural justice permit, while
section 16 of the TATC Act provides that the Tribunal has the powers of
commissioners under Part I of the Inquiries Act, which in turn gives
members the power to summon witnesses and to require them to give evidence
under oath and affirmation: “As the DATR exhibits are hearsay in nature the
truth of their contents cannot be given by a witness under oath or affirmation.
The document holder is deprived of his right under natural justice to
cross-examine anyone on the truth of their contents”. Accordingly, the appeal panel found that
when the evidence is documentary and contradictory, corroborative evidence is
required. The appeal panel further noted that while the Minister did not
introduce corroborative evidence, this did not mean that such corroborative
evidence did not exist. The appeal panel pointed to the fact that during the
audit of the flight school operated by the applicant, the inspectors would have
had access to many records kept by the school. Student pilots could have been
“potential eyewitnesses” and “[e]ven student pilots are required by regulation
to keep log books, perhaps another source of corroborative evidence.” The
appeal panel also indicated that the jurisprudence reveals other sources of possible
corroborative evidence such as fuel receipts to prove that the aircraft had
actually flown at the dates indicated in the DATRs.
[41]
Therefore, it turned
out in this case that the Minister had simply failed to demonstrate to the
satisfaction of the Tribunal that the applicant had contravened subsections 605.86(1) and 605.94(1) of the CARs during the period
in question. Accordingly,
the contraventions of subsections 605.86(1),
605.94(1) of the CARs were dismissed (TACT File No. O-2997-41). Moreover, the suspension of the aviation document was not an appropriate measure
and, as a result,
the matter was referred back to the Minister for reconsideration (TACT File
No. O‑2988‑10). As mentioned above, both appeal decisions and
accompanying common reasons were issued on March 31, 2005.
D) Reconsideration of the suspension decision
[42]
Sometime
in June 2005, the applicant received a letter dated June 1, 2005 from Transport
Canada signed by Mr. Marquis
Monfette, A/Chief, Operations, Aircraft Maintenance & Manufacturing (the
reconsideration notice). Mr. Monfette did not submit an affidavit in this
proceeding. According to the Affidavit of Ms. Beverlie Caminsky, Mr. Monfette
and two other knowledgeable persons employed by Transport Canada were appointed to review the
circumstances of the suspension of the document and make their recommendations
to the “Responsible Authority”, here the Minister’s delegate. CAD 34 defines
the “Responsible Authority” as meaning “the person who has been authorized to
exercise the Minister’s reconsideration authority under subsection 7(9) or 7.1(9)
of the Aeronautics Act” (see paragraphs 10-16 of the affidavit of Ms.
Beverlie Caminsky and “definitions” of CAD 34).
[43]
The
reconsideration notice informs the applicant that:
A panel has been convened in the
Transport Canada Headquarters pursuant to section 7.9 of the Aeronautics Act,
to reconsider the Transportation Appeal Tribunal of Canada (TATC) appeal
decision in the matter of Sierra Fox Inc. and Minister of Transport, TATC File
No. O-2988-10.
As part of the reconsideration process,
it is your right to make representations or submissions to introduce any
relevant information other than what has already been disclosed during
the review and appeal hearings. This information can be presented to the panel
in person, by pre-arranged teleconference, or in writing, but in all cases, no
later than June 17, 2005.
[44]
According
to the applicant’s representative, Mr. Ferrari, the letter on June 1, 2005 was
a follow up to a phone call from Mr. Monfette which had taken place a day
before and which he summarized during his cross-examination in the following
manner:
First of all the telephone call came as a
surprise to me, because he said that he had been instructed to convene a
committee to investigate the Notice of Suspension. And he said that there were
three members and only two of them were there and they had started the
investigation at that time, without the third party. And he asked me if I had
any new evidence to submit and I said no, that the only evidence was submitted
at the review. And I said based on that evidence, that the suspension was not
valid.
He informed me then that they were not
required to abide by any tribunal decision, they were not obligated to accept
any testimony being truthful and they were not obligated to accept any evidence
as being factual. Which was pretty much the whole thing (Respondent’s record at
page 58).
[45]
On or
around June 15, 2005, through his legal counsel, the applicant responded
to the reconsideration notice in the following manner:
I respond to your letter of June 1, 2005.
My client intends to proceed against Transport Canada for damages suffered and caused by the
malicious prosecution by your department which proceedings were ultimately
dismissed in my clients’ favour. During the time taken by these criminal
proceedings my client lost the sale of his business, the airplane (C-FYTC) over
which the certificate of air worthiness was suspended has deteriorated and my
client has lost revenues not being able to operate his charter business and
ground school. He has no interest in providing further information. Your
department has investigated and reviewed and had the opportunity of same over
the following records:
1 the student records;
2 the flight sheets;
3 the journey log book for the
C-FYTC aircraft.
[46]
On or
around June 18, 2005, the reconsideration panel submitted its report to the
Minister’s delegate. The reconsideration panel recommended, inter alia,
that the suspension of the certificate of airworthiness remain in effect, and
apparently reached that determination by “balancing the value of the log book
versus DATRs”, concluding that “on the balance of probabilities the DATRs is
more likely to be accurate on the whole than the Journey Log Book.”
[47]
The
reconsideration panel recognized in its report that there was no corroborative
evidence of the entries made in the DATRs, which are hearsay in nature.
However, while there may be errors or omissions in the DATRs that are used for
billing and other purposes by NAV CANADA and Statistics Canada, “[t]here would
appear to be little motive for Nav Canada personnel to make false entries to
the DATRs, whereas there are reasons for aircraft operator to omit entries in
the Aircraft Journey Log Book due to the cost of maintenance tied to aircraft
hours (engine maintenance, airframe maintenance, component replacement
/overhaul, etc.).”
[48]
The
reconsideration panel also found that “[f]or the two‑month period
reviewed, the aircraft could conservatively be confirmed as flying 3.5 times as
many hours as were logged”.
[49]
In its
report, the reconsideration panel also referred to an offer purportedly made by
the applicant’s representative, Mr. Ferrari, on May 31, 2005 to the effect that
“he was willing to do the highest-level inspection (1000 hour)”. The authors of
the report noted in this regard that “[w]e did not discuss this as we are not
the decision maker, and we did not discuss component overhaul”.
[50]
The issue
of the 1000 hours inspection came in the course of the discussion Mr. Monfette
had with Mr. Ferrari on May 31, 2005 prior to the day the reconsideration
notice was sent to the applicant. In his cross-examination on affidavit, Mr.
Ferrari has mentioned in this regard:
The one thousand hour inspection came up
and basically how that came about is that prior to the initial review, there
was a conference where I offered to do a one thousand hour inspection. Their
concern was the aircraft was not safe to fly and I said one thousand hour
inspection would more than satisfy their concern about the safety of the
aircraft. And at that time it was offered as an opportunity to get things
resolved; the Transport rejected that offer and that is the reference to the
one thousand hour inspection. That offer was never made again after that. So
that is the reference to the one thousand hour inspection (Respondent’s record
at pages 58-59).
[51]
That being
said, the reconsideration panel noted in the recommendation section of their
report that “[t]he suspension document does not state what conditions are to be
met for reinstatement.” Accordingly, the reconsideration panel recommended to
the Minister that “[r]einstatement conditions […] be provided in writing to the
owner” and stated that “[t]hose conditions
should presume that the aircraft has been operated for a significant period of
time without all required maintenance, i.e. that the aircraft has an incomplete
maintenance history with what amounts to unknown usage gaps.” The
reconsideration panel then referred to the “Approved Maintenance Schedule”. In
this regard, “[t]he aircraft owner should be required to demonstrate that the
aircraft has been returned to compliance with the maintenance schedule by an
inspection to the highest level specified in the Approved Maintenance
Schedule”. However, the reconsideration panel added
that “[t]he Approved Maintenance Schedule may have some room for amendment
prior to undertaking the required maintenance actions.”
[52]
The report
prepared by the reconsideration panel was not transmitted for comment to the
applicant prior to the taking of the impugned decision.
[53]
The impugned
decision was issued some 13 weeks after the final decision of the Tribunal had
been rendered in this case. The impugned decision is in the form of a letter
dated July 4, 2005 signed by the Minister’s delegate, Ms. Jacqueline
Booth-Bourdeau. There appears to have been some confusion concerning the matter
which was actually the object of reconsideration by the Minister. At first, the
applicant was advised in writing by the Minister’s delegate that “the
Minister’s decision to suspend the Applicant’s Approved Maintenance Organization
Certificate is upheld” (exhibit 1 to cross-examination of Beverlie Caminsky).
[54]
However,
in his corrected version (exhibit 3 to cross-examination of Beverlie Caminsky)
which was sent by fax to the applicant on July 4, 2005, the letter of the
Minister’s delegate has been modified to now read:
At the conclusion of your TATC
proceedings, the Tribunal Members referred your case back to the Minister for
reconsideration.
As required by Civil Aviation Directive
(CAD) 34, all case referrals, as per subsection 7.1(9) of the Aeronautics Act,
must be reviewed by a panel of experts. A team of inspectors who are
knowledgeable in this subject matter reconsidered your case file. The minutes
of the reconsideration panel’s deliberations are attached as Appendix A.
Having given consideration to the TATC
review and appeal determinations, and to the reconsideration panel’s
determination and recommendation, it is my determination that the Minister’s
decision to suspend the Certificate of Airworthiness for Canadian registered
aircraft C-FYTC is upheld [emphasis added].
[55]
Attached
to the impugned decision was a copy of the purported “minutes of the
reconsideration panel’s deliberations” (the reconsideration panel report).
III- BREACH OF PROCEDURAL FAIRNESS
[56]
The
present judicial review proceeding follows the refusal of the Minister to
rescind the suspension decision after having reconsidered the matter. There are
a number of issues raised in this case by the applicant that involve procedural
fairness. They cover three aspects:
1) the service and content of the
original notice of suspension;
2) the transparency and fairness of
the reconsideration process; and
3) the use of uncorroborated
hearsay evidence.
[57]
I will
consider each of these three aspects successively.
A)
Service and content of the original
notice of suspension
[58]
The
applicant argues that, from the very start, the procedures set out in the Act
were not followed by the respondent. First, the notice of suspension was
somewhat deficient as it “failed to identify, set out or list the condition(s)
upon which the notice was issued” contrary to paragraph 7.1 (2)(a)(ii) of
the Act. Second, the service of the notice was non-compliant with the Act as
the respondent “purported to suspend the certificate of airworthiness of the
aircraft by faxing a copy to the applicant and by leaving a message on [the
applicant’s representative’s] voice machine that the certificate of
airworthiness had been suspended”.
[59]
I will
start with the issue of service by noting that subsection 7.1(1) of the Act
requires that the notice be sent to the holder of the document or the owner or
operator of the aircraft by “personal service or by registered or certified
mail”. Accordingly, the Minister does not comply with the requirements imposed
by the latter provision if he simply faxes a copy of the notice and leaves a
message on a voice machine. That being said, the applicant acknowledged receipt
of the suspension decision by registered mail dated November 3, 2003.
Moreover, subsection 7.1(2.1) of the Act provides that the Minister’s decision
to suspend or cancel a Canadian aviation document takes effect on the date of
receipt of the notice, unless the notice indicates that the decision is to take
effect on a later date. Accordingly, the suspension decision could not legally
take effect on October 31, 2003, as indicated in the notice. However,
considering that the procedural defects noted above are not fatal – as it
appears the document holder received the notice of suspension through other
means
– and that the
applicant had suffered no prejudice, I find that the suspension decision
actually took effect on November 3, 2003, that is on the date that the
applicant acknowledged receipt of the notice of suspension.
[60]
The second
procedural concern is related to the contents of the notice itself, in that it
is missing certain essential elements. The general purpose of the notice is set
out in paragraph 7.1 (2)(a)(ii) of the Act, which requires that the
Minister indicate “the conditions subject to which the document was issued that
the Minister believes are no longer being met or complied with”. In the case at
bar, the notice of suspension clearly states the ground upon which the
suspension decision was taken in the first place, which was that in the opinion
of the Minister “[t]he aircraft had not been maintained in accordance with the
approved maintenance schedule as required by CAR 605.86 (1)(b)”. That being
said, a closer reading of the particulars contained in the notice confirms that
the suspension decision was indeed taken because some “flights had been
conducted and not recorded in the Aircraft Journey Log Book”. Therefore, since
the applicant had purportedly contravened section 605.86 of the CARs, the
aircraft did not comply “with conditions subject to which the document was issued”.
It is important to stress here that the suspension decision was not taken by
the respondent on the grounds that “an immediate threat to aviation safety or
security exists or is likely to occur” (which is the case where a suspension
decision is taken under section 7 of the Act), but because the alleged
contravention and failure to record some flights in the log book had caused
“… discrepancies [that] have rendered the calculation of Total Air Time
inaccurate” as the notice of suspension further explains. While the notice of
suspension did not specifically state what these “discrepancies” were, it later
became apparent to the applicant in the course of the proceedings before the
Tribunal that the respondent was indeed relying on some 34 entries for YTL in
the DATRs of the Muskoka Airport for August and September 2003 for which there
were no corresponding entries in the log book of the aircraft. But the use of
such hearsay evidence without corroborating evidence has been legally
questioned and is now raised by the applicant as a specific ground for setting
aside the impugned decision which, again, is based again on the same hearsay
evidence that was held to be unreliable by an appeal panel of the Tribunal as
explained above.
[61]
At the
hearing before this Court, respondent’s counsel submitted that the legality of
the suspension decision was not contingent upon the notice of suspension
setting out what particular conditions had to be met in order to have the
suspension lifted by the Minister. It is not necessary to decide this issue. I
will only note that on November 3, 2005, the respondent sent to the applicant a
copy of the original notice of suspension issued on October 31, 2003, as well
as an “appendix” that purported to clarify the conditions required to reinstate
the certificate of airworthiness of the aircraft. This letter was prepared
precisely two years after the suspension decision had come into effect (the
applicant would now have the right under subsection 8.3(1) of the Act to make
an application to the Minister to have the notation of the suspension removed
from the record, and same shall be granted by the Minister unless “the removal
from the record would not be in the interest of aviation safety or security”.)
B) Transparency and fairness of the reconsideration
process
[62]
There is
no mention of CAD 34 in the reconsideration notice. Counsel for the respondent
acknowledged at the hearing of this application that the reference to section
7.9 of the Act in the reconsideration notice was wrong and, perhaps, misleading.
Indeed, section 7.9 of the Act provides that if a person who is served with a
notice of penalty assessment under subsection 7.7 (1) pays the amount specified
in the notice, the Minister shall accept the amount as and in complete
satisfaction of the amount of the penalty for the contravention alleged in the
notice and “no further proceedings under this Part shall be taken against the
person in respect of that contravention”. But in this case, the penalties
imposed by the Minister had already been annulled by the Tribunal on
March 31, 2005. Following a query made by respondent’s counsel near
the conclusion of Mr. Ferrari’s cross-examination on affidavit on April 6,
2006, applicant’s counsel stated that when he looked at the letter dated June
1, 2005, he “didn’t understand how [section] 7.9 [of the Act] had anything to
do with the issue” but did not make further enquiries about it “because [Mr.
Ferrari] indicated to whoever called from the Panel, that there wasn’t any
further evidence other than what was in the record” (Respondent’s record at
pages 60-61).
[63]
Moreover,
the reasons to uphold “the Minister’s decision to suspend the Certificate of
Airworthiness for Canadian registered aircraft C-FYTC”, mentioned in the
amended letter of July 4, 2005, are lacking particulars with respect
to the evidence and factors considered by the decision-maker, here the
Minister’s delegate, Ms. Booth-Bourdeau. However, I am ready to accept
respondent’s submission that, in accordance with CAD 34, the reasons for
maintaining the suspension are to be found in the report of the reconsideration
panel since the Minister’s delegate apparently decided to accept the
recommendation that “[s]uspension should remain in effect”. However, I note
that the Minister’s delegate decision does not address what seems to be another
important aspect of the reconsideration panel report, which is what should be
the required level of maintenance that ought to be performed by the applicant under
the “Approved Maintenance Schedule”. It is not clear whether the Minister’s
delegate was in agreement or disagreement with the particular recommendations
made by the reconsideration panel in this regard. The failure to address this
issue in the impugned decision certainly affected the transparency of the process.
[64]
I note at
this point that the reconsideration panel’s reasons for accepting the DATRs are
similar or identical to the reasons earlier provided by the single member of
the Tribunal. However, with respect to the particular finding that the aircraft
has flown 3.5 times as many hours as were logged during the period in question,
it is not clear from the reading of the reconsideration panel report on what documentary
and/or testimonial evidence this very important factual assumption was made.
That being said, it seems to be a clear departure from the finding previously made
by the single member of the Tribunal to the effect that: “[a]ll witnesses
agreed that, for various reasons, DATRs cannot be used to determine air times”.
The report also mentions the names of Mike Bird, Mel Bushby, Denis Paré, in
addition to Mark Dixon who has previously testified. This raises serious doubts
as to what was exactly the input of these persons in the decision-making
process. We also do not know what they have said to the members of the
reconsideration panel.
[65]
There is
no evidence on record that the applicant was aware of the policy set out in CAD
34 with respect to the reconsideration cases. Since the applicant’s
representative, Mr. Ferrari, had not testified before the Tribunal, the
respondent had the duty to provide him with an opportunity to submit any
relevant information on the entries made by the applicant in the log book.
Procedural fairness also required that the applicant be given the opportunity
to respond to any additional evidence upon which the respondent intended to
rely on. The notice that was actually sent to him was deficient and misleading.
It appears that during the reconsideration process, persons who had not been
witnesses were contacted and interviewed in the absence of the applicant.
Moreover, the applicant was not provided with an opportunity to comment on the
report and the recommendations made by the reconsideration panel prior to the
taking of a final decision by the Minister’s delegate. Accordingly, I find that
the process followed by respondent to make the impugned decision has been far
from being fair and transparent. This finding would be sufficient in my opinion
to set aside the impugned decision and return the matter back to the Minister,
but I will nevertheless examine the use of uncorroborated hearsay evidence by
the Minister in the present circumstance of this case.
C) Use
of uncorroborated hearsay evidence
[66]
In the
case at bar, it is not contested that the Minister had the obligation to consider
all the relevant evidence. This certainly included all the admissible evidence
previously adduced before the Tribunal. At issue in this proceeding is, inter
alia, the Minister’s right to base the impugned decision solely on uncorroborated
hearsay evidence, which has been held by the Tribunal to be unreliable in the
absence of corroborative evidence. It is not necessary to determine, absent of
a Tribunal ruling, whether the Minister can generally make a decision based on
hearsay evidence. Here, the issue of hearsay must strictly be examined from the
point of view of legitimate expectations when a ruling of the Tribunal has been
made in regard of evidentiary and procedural fairness matters.
[67]
The main
submission by the respondent in this case is that the impugned decision was
discretionary and that it could be based on uncorroborated hearsay evidence despite
the fact that the Tribunal has held such evidence to be unreliable. In my
opinion, this submission by the respondent results from a misreading of the Act,
which must be read in conjunction with the TATC Act, and cannot withstand an
analysis thereof.
[68]
It has
been stated by this Court in Kiss, above, at para. 31, that “the
statutory scheme vests broad discretion in the Minister in the interest of
public safety”. In practice, this ministerial discretion manifests itself in
the discretion left to the inspectors of Transport Canada to choose what
particular action, monetary penalty or other mean of enforcement or prosecution
will be taken in the name of the Minister against a document holder, an owner
or an operator of aircraft who does not comply with the Act or the CARs (Swanson,
above, at 414 and 424-26 (F.C.A.); Canada (Attorney General) v. Woods (2003),
223 F.T.R. 298 at paras. 13-15, 26 and 29 (F.C.)). I note that the
obligation to record a flight in the log book is a very serious matter. Any
dereliction of the duty to record in the log book each and every flight and the
corresponding air time may disrupt the maintenance schedule and render it
impossible to follow. In the case at bar, no criminal charge has been laid out
against the applicant under paragraph 7.3 of the Act for the alleged omission
to record during the period in question some flights in the log book. Moreover,
an appeal panel of the Tribunal, by final decision, has dismissed the
allegations made by the Minister that the applicant has contravened subsections
605.86 (1) and 605.94 (1) of the CARs during the period in question.
[69]
The
discretion vested to the Minister or a delegate to suspend or cancel an
aviation document is not absolute and can only be exercised on a ground
mentioned in an applicable provision of the Act. In this case, as indicated in
the notice of suspension, the certificate of airworthiness of YTC has been
suspended in the first place because the Minister purportedly had proof or
reasons to believe that “[t]he aircraft had not been maintained in accordance
with the approved maintenance schedule as required by CAR 605.85(1)(b)”. While
the authority to revoke or maintain the suspension of the document rests
exclusively with the Minister, section 21 of the TATC Act provides specifically
that “[a] decision of an appeal panel of the Tribunal is final and binding on
the parties to the appeal”. It turned out that the evidence upon which the
suspension decision was purportedly taken under the authority of paragraph
7(1)(b) of the Act was all hearsay in nature. The appeal panel of the Tribunal
found in this regard that when the evidence is documentary and contradictory,
as it is here when the log book is compared with the DATRs, corroborative
evidence is required. Accordingly, the applicant had a legitimate expectation
that following the appeal panel’s decision to refer the matter of suspension
back for reconsideration, the Minister would have to seek corroborative
evidence to supplement the DATRs if he wished to uphold his initial finding
that the aircraft had not been maintained in accordance with the approved
maintenance schedule, as required by paragraph 605.85(1)(b) of the CAR.
[70]
I conclude
that a document holder would be placed in an intolerable position if the
Minister was free to reconsider a suspension decision made earlier without
regard to a final decision of the Tribunal or the principle involved in it, in
this case, the acceptance of uncorroborated hearsay evidence to uphold an
allegation of contravention to the CARs (which was raised by the Minister as a
ground to suspend the certificate of airworthiness of the aircraft and to
assess monetary penalties against the applicant). There should be strong
argumentative reasons not to follow a binding and final decision of the
Tribunal. It is not alleged by the respondent that the Tribunal overlooked a
statutory provision or a case that ought to have been followed with respect to
the use and conditions of use of hearsay evidence. The laconic observations
made in the report of the reconsideration panel concerning the effect of the
appeal panel ruling, and the lack of reasons in the impugned decision made by
the Minister’s delegate, do not come close to a justification. If I were to
accept the respondent’s submission in this case, a decision of the Tribunal
would have no finality on any legal point. This is contrary to the intent of
Parliament, which is clearly expressed in the TATC Act. This would also lead to
a sense of injustice on the part of parties who expect a decision rendered by
an appeal panel of the Tribunal on a point of law, including an issue of
natural justice, to be binding and final. Indeed, in the case at bar, the error
of law and the breach of a principle of natural justice mentioned in the
decision of the appeal panel of the Tribunal constituted the very reasons why
it dismissed the allegations of contravention and returned the matter of
suspension back to the Minister for reconsideration.
IV- CONCLUSION
[71]
To
summarize, I have found that the Minister has an important role to play in the
area of aeronautics and must ensure that aircrafts and airline operations are
safe. The suspension decision was of crucial importance to the applicant and
its owners and employees and same affected the applicant’s ability to carry on
business. After a thorough examination of the matter by a quasi‑judicial
tribunal, the Minister was asked to reconsider the suspension decision. The
decision made by the appeal panel of the Tribunal was a final one and has not
been overturned by this Court.
[72]
I have
also found that the reconsideration process must be fair and transparent. The
determinations made by the Minister are factual in nature and must be based on
the evidence. In the case at bar, the reconsideration panel was not empowered
to make a final decision, but only to make a recommendation to the Minister’s
delegate. The applicant had the right to present evidence and comment on any
new evidence considered by the Minister. The reconsideration panel in this case
contacted persons who never testified before the Tribunal and there is no way
to ascertain what they actually told the reconsideration panel. Moreover, the
applicant was not provided with the opportunity to comment on the report and
the recommendations made by the reconsideration panel before a final decision
was made by the Minister’s delegate.
[73]
I have
also found that the logbook is proof of the matter stated therein, absent
evidence to the contrary. In the case at bar, the Minister’s delegate decided
to uphold the suspension based on the evidence contained in the report that
“[f]or the two-month period reviewed, the aircraft could conservatively be
confirmed as flying 3.5 times as many hours as were logged”. This finding is
based on the same hearsay evidence that was held to be unreliable by an appeal
panel of the Tribunal. The applicant had a legitimate expectation that, in the
reconsideration process, the Minister would not accept uncorroborated hearsay
evidence. The final determination made by the Tribunal in this regard was not set
aside by this Court and must stand.
[74]
Consequently,
I have found that the respondent has breached a principle of natural justice or
procedural fairness. The impugned decision should be set aside and the matter
returned for reconsideration by another reconsideration panel and another Minister’s
delegate. In view of the result of this proceeding, the applicant is entitled
to its costs against the respondent.
ORDER
THIS COURT ORDERS that:
1.
The
application for judicial review is allowed with costs against the respondent;
and
2.
The
decision rendered on July 4, 2005 on behalf of the Minister to uphold the
Minister’s initial decision to suspend the certificate of airworthiness of the
aircraft is set aside and the matter is referred back for reconsideration by
another reconsideration panel and another Minister’s delegate.
“Luc
Martineau”
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