Date: 20080107
Dockets: T-2272-06
T-2295-06
T-2297-06
Citation: 2008 FC 17
Docket: T-2272-06
BETWEEN:
BILLINGS FAMILY ENTERPRISES
LTD.
Applicant
and
THE MINISTER OF TRANSPORT
Respondent
Docket: T-2295-06
AND
BETWEEN:
THE ATTORNEY GENERAL OF CANADA
Applicant
and
BRANT PAUL BILLINGS
Respondent
Docket: T-2297-06
AND
BETWEEN:
THE ATTORNEY GENERAL OF CANADA
Applicant
and
CHALLENGER INSPECTIONS (2006) LTD.
formerly
BILLINGS FAMILY ENTERPRISES LTD.
Respondent
REASONS FOR ORDERS
HARRINGTON J.
[1]
These
three intertwined judicial reviews concern one man, two helicopters, three
corporations and nineteen alleged contraventions of the Canadian Aviation
Regulations under the Aeronautics Act. It is common ground that 13
of the 19 contraventions occurred. The defence on those 13 belongs more to
corporate law than it does to aeronautics. The defence is that the
contraventions were committed by someone else, a related corporation which, for
the flights in question, was operating the helicopters which were then in its possession,
legal custody and control. This defence succeeded for the individual who was an
officer and director as well as the alter ego of the corporations. It did not
succeed for the corporation which was listed as the registered owner of the
helicopters. There are three groups of alleged contraventions which must be
segregated, and analyzed.
Airworthiness Directive
[2]
The
Minister of Transport was of the view that Billings Family Enterprises Ltd.
(BFEL), the registered owner of the two helicopters, authorized 10 flights
while the helicopters were in its “legal custody and control”, at a time when a
required maintenance inspection of a tail rotor pitch control bearing was
overdue, the whole in contravention of section 605.84 of the Canadian
Aviation Regulations (CARs). He imposed a penalty of $5,000 for each
of the 10 flights. On review, the Transportation Appeal Tribunal of Canada
(TATC) agreed that it was BFEL, now known as Challenger Inspections (2006)
Ltd., which committed the contraventions, but reduced the penalty to $4,000 for
each of the 10 flights. On appeal therefrom, the TATC’s three-person Appeal
Panel upheld the finding on the contraventions, but further reduced the penalty
to $500 for each of the 10 flights.
[3]
This
has led to two judicial reviews. In T-2272-06, BFEL seeks to set aside the
finding that it was in legal custody and control of the two helicopters. In
T-2297-06, the Minister seeks judicial review of the $500 penalty. He submits
that the $4,000 penalty for each of the 10 flights should be reinstated.
Air Transport Service/BFEL
[4]
The
Minister was further of the view that BFEL operated an air transport service on
six occasions without holding the air operator certificate required by CAR 700.02.
He imposed a penalty of $5,000 for each of the six flights.
[5]
On
first review, which took the form of a hearing de novo, the TATC quashed
the Minister’s decision on the ground that it was not BFEL which operated the
air transport service. However, the TATC’s Appeal Panel maintained the
Minister’s appeal and reinstated his decision both on liability and penalty.
[6]
BFEL
seeks a judicial review under court docket number T-2272-06. It denies it was
operating an air transport service. In the alternative, its position is that nobody
was operating an air transport service on the flights in question. In any
event, it submits the penalty is too high.
Air Transport Service/Brant
Paul Billings
[7]
Finally,
the Minister took the position that Brant Paul Billings, the man behind BFEL,
had personally on three occasions operated an air transport service without
holding the required air operator certificate. His pilot’s licence was
suspended for 14 days for each of the three contraventions. On review, the
Minister’s decision was upheld. Mr. Billings appealed that decision and
succeeded before the TATC’s Appeal Panel, which dismissed the charges against
him. The Minister seeks a judicial review of that decision under docket
T-2295-06.
[8]
Mr.
Billings and BFEL complain about the conduct of the review hearing.
Certificates were allowed in as evidence without their being given an
opportunity to cross-examine the maker thereof, and the member failed to take
proper account of a motion made at the close of the Minister’s case to dismiss
on the grounds of no evidence. They add that their liberty rights under section 7
of the Charter were violated.
The Corporate Structure
[9]
The
tactics of the parties were driven to some extent by their perception of the
burden of proof, and so the record is not as complete as it could have been.
Records from the British Columbia registry were filed with respect to the three
“Challenger” corporations.
[10]
The
registered owner of the two helicopters is now known as Challenger Inspections
(2006) Ltd. To avoid confusion, I will refer to it under its name at the time
the events in question took place in 2004; Billings Family Enterprise Ltd. or
BFEL. Brant Paul Billings is the president and a director thereof. The British
Columbia
registry does not give shareholding details.
[11]
The
second company is Challenger Helicopters Ltd. Mr. Billings is also the
president and director of that corporation. The third is Challenger Inspections
Ltd. Mr. Billings is its president, secretary and director.
[12]
Mr.
Billings, who was considered to be an honest and forthright witness, readily
called the companies his own. Of course he was speaking as a layman, not as a
corporate lawyer. There is no doubt, however, that he was the directing mind
behind the three corporations.
[13]
As
Viscount Haldane said in Lennard’s Carrying Company, Limited v. Asiatic
Petroleum Company, Limited, [1915] A.C. 705 at page 713
My
Lords, a corporation is an abstraction. It has no mind of its own any more than
it has a body of its own; its active and directing will must consequently be sought
in the person of somebody who for some purposes may be called an agent, but who
is really the directing mind and will of the corporation, the very ego and
centre of the personality of the corporation.
[14]
Nevertheless,
a corporation is a person in law, distinct from its officers, directors and
shareholders (Salomon v. Salomon & Co., [1897]
A.C. 22 (H.L.), Kosmopoulos v. Constitution Insurance Co.
of Canada, [1987] 1 S.C.R. 2, 34 D.L.R. (4th) 208).
[15]
The
defence of BFEL and Mr. Billings is that at the relevant times the two
helicopters were in the legal custody, possession and control, and operated by
Challenger Inspections Ltd. It was Challenger Inspections Ltd. which issued
commercial invoices and which received payment. Although it is a separate and
distinct corporation, in some correspondence it stated it was a division of
Challenger Helicopters Ltd. Challenger Helicopters Ltd. in turn advertized
itself as being specialized in oil field aviation. The helicopters were simply
one way of getting to remote well sites. Land vehicles were also used. Be that
as it may, neither Challenger Inspections Ltd. nor Challenger Helicopters Ltd.
was charged with the contraventions in issue.
Offences under the Aeronautics
Act
[16]
The
Minister considers that BFEL contravened subsection 605.84 (1)(c)(i),
and that on separate occasions both BFEL and Mr. Billing contravened
subsection 700.02 (1) of the CARs issued pursuant to the Aeronautics Act.
[17]
Paragraph
605.84(1)(c) of the CARs provides:
605.84 (1) […] no
person shall conduct a take-off or permit a take-off to be conducted in an
aircraft that is in the legal custody and control of the person […], unless the aircraft
(c) […] meets the requirements of any
notices that are equivalent to airworthiness directives and that are issued by
(i)
the competent authority of the foreign state that, at the time the notice was
issued, is responsible for the type certification of the aircraft, engine,
propeller or appliance […]
605.84 (1) […] il est interdit à toute personne
d’effectuer […] le décollage d’un aéronef dont elle a la garde et la
responsabilité légales ou de permettre à toute personne d’effectuer le
décollage d’un tel aéronef, à moins que l’aéronef ne réponde aux
conditions suivantes :
[…]
il est conforme aux exigences
relatives aux avis qui sont des équivalents des consignes de navigabilité, le
cas échéant, et qui sont délivrés par :
(i) l'autorité compétente de l'État
étranger qui était, au moment où les avis ont été délivrés, responsable de la
délivrance du certificat de type de l'aéronef, des moteurs, des hélices ou des
appareillages […]
[18]
Subsection
700.02(1) of the CARs reads :
700.02 (1) No
person shall operate an air transport service unless the person holds and
complies with the provisions of an air operator certificate that authorizes the
person to operate that service.
700.02 (1) Il est interdit d’exploiter un service de transport aérien à moins
d’être titulaire d’un certificat d’exploitation aérienne qui autorise
l’exploitation d’un tel service et de se conformer à ses dispositions.
[19]
Section
605 is in the division of the CARs dealing with aircraft maintenance
requirements. In essence, the person with legal custody and control of the
helicopters is prohibited from permitting a take-off when a maintenance
inspection is overdue.
[20]
The
two helicopters were American built. There was a requirement of Air Direction
2003-04-04 issued by the (U.S.) Federal Aviation Administration which
applied to Robinson R22 Helicopters, one of the two helicopter models in
question. In order to detect possible corrosion of a tail rotor pitch control
bearing, an inspection was to be carried out within 20 hours time-in-service
and thereafter at intervals not to exceed 300 hours time-in-service or 12
months, whichever came first. At the time of the contraventions more than 12
months, but less than 300 hours in-service, had elapsed since the last
inspection. When finally carried out, the inspection revealed no corrosion.
[21]
Turning
to the air transport service contraventions, CAR 700.02(1), subsection 101.01(1)
of the CARs defines “air transport service” as meaning “a commercial air service that
is operated for the purpose of transporting persons, personal belongings,
baggage, goods or cargo in an aircraft between two points”. According to
subsection 3(1) of the Aeronautics Act, “commercial air service” is
defined as meaning “any use of aircraft for hire or reward”, and “hire or
reward” is defined as meaning “any payment, consideration, gratuity or benefit, directly or
indirectly charged, demanded, received or collected by any person for the use
of an aircraft”.
[22]
CAR
703.07 deals with the issuance of Air Operator Certificates. Among other
things, the applicant must demonstrate to the Minister the ability to maintain
an adequate organizational structure, an operational control system, meet the Commercial
Air Service Standards for the operation and have in place an appropriate
training program. The applicant must have legal custody and control of at
least one aircraft of each category of aircraft that is to be operated.
[23]
The
Act establishes various offences, some of which are indictable (s. 7.3(1)(ii)).
However the contraventions in this case are of a different order all together.
They are strict liability administrative infractions, with the burden of proof falling
upon the Minister on the balance of probabilities. However, the person charged
with the contravention is not a compellable witness. Subsection 7.6(1) of the Act
permits the Governor in Council, by regulation, to treat certain
regulations as a “designated provision” the contravention of which may be dealt
with in accordance with the procedures set out in subsections 7.7 to 8.2. CAR
605.84 (1)(c)(i) and CAR 700.02 (1) are designated provisions.
[24]
The
“designated provision” procedure has four phases. Initially, if the Minister
believes on reasonable grounds that a person contravened a designated provision
he may decide to assess a penalty. The person affected may seek a review by a
member of the Transportation Appeal Tribunal of Canada (TATC), which was
established under the Transportation Appeal Tribunal of Canada Act, R.S.
2001, c. 29. As aforesaid, the review is a hearing de novo with the
burden of proof resting with the Minister. Thereafter either the Minister or
the person may appeal to a three-person appeal panel of the TATC. Leaving aside
medical issues, which are not relevant here, the member, and the review panel (members
sometimes sit in first instance and sometimes in appeal), must have expertise
in the transportation sector involved. The reviewing member and the three
members of the appeal panel were all pilots, and lawyers. The norm, which was
followed in this case, is that the appeal is on the record which was before the
reviewing member. Thereafter the appeal decision is subject to judicial review
by this Court in accordance with section 18 and following of the Federal
Courts Act. An appeal from the decision on judicial review may be taken to
the Court of Appeal.
Standard of Review
[25]
Two
issues arise. The first is the deference this Court owes the Appeal Panel of
the TATC. The second is the deference, if any, the Appeal Panel owed its member
who reviewed the Minister’s decision. As stated by Chief Justice McLachlin in Dr.
Q v. College of Physicians and Surgeons, 2003 SCC 19, [2003] 1 S.C.R. 226 at
paragraphs 22 and 26:
22.
To determine standard of review on the pragmatic and functional approach,
it is not enough for a reviewing court to interpret an isolated statutory
provision relating to judicial review. Nor is it sufficient merely to
identify a categorical or nominate error, such as bad faith, error on
collateral or preliminary matters, ulterior or improper purpose, no evidence,
or the consideration of an irrelevant factor. Rather, the pragmatic and
functional approach calls upon the court to weigh a series of factors in an
effort to discern whether a particular issue before the administrative body
should receive exacting review by a court, undergo “significant searching or
testing” ([Canada (Director of Investigation and Research) v. Southam Inc., [1997] 1 S.C.R. 748],
at para. 57), or be left to the near exclusive determination of the
decision-maker. These various postures of deference correspond,
respectively, to the standards of correctness, reasonableness simpliciter,
and patent unreasonableness.
[…]
26. In the pragmatic and functional
approach, the standard of review is determined by considering four contextual
factors -- the presence or absence of a privative clause or statutory right of
appeal; the expertise of the tribunal relative to that of the reviewing court
on the issue in question; the purposes of the legislation and the provision in
particular; and, the nature of the question -- law, fact, or mixed law and
fact. The factors may overlap. The overall aim is to discern legislative
intent, keeping in mind the constitutional role of the courts in maintaining
the rule of law. […]
[26]
There
have been decisions of this Court dealing with the TATC, or one of its
predecessors, the Civil Aviation Tribunal, but most either deal with issues of
law on which the standard of review is correctness or procedural fairness which
is beyond the scope of the functional and pragmatic approach (See: Air
Nunavut v. Canada (Minister of Transport), [2001] 1 F.C. 138, [200] F.C.J.
No. 1115; Canada (Attorney General) v. Woods, [2002] F.C.T. 928, [2002]
F.C.J. No. 1267; Canada (Attorney General) v. Yukon, 2006 FC 1326,
[2006] F.C.J. No. 1671; and Sierra Fox Inc. v. Canada (Minister of
Transport), 2007 FC 129, [2007] F.C.J. No. 166). Nevertheless, these cases are
helpful in putting the legislation in context.
[27]
One
must take into account both the relevant provisions of the Aeronautics Act,
as well as the Transportation Appeal Tribunal of Canada Act as well as
the pertinent regulations. The decision of the Appeal Panel is final,
without right of appeal, but subject to judicial review. The Tribunal has
greater expertise than the Court with respect to aeronautics in general, and air
safety in particular. Safety is paramount in this case. One of the Minister`s
responsibilities under section 4.2 of the Act is to “investigate matters
concerning aviation safety”. In my view, Parliament intended that upholdings of
fact of the Appeal Panel not be disturbed unless patently unreasonable, that
mixed questions of fact and law are to be reviewed on a reasonableness simpliciter
standard and no deference is owed on questions of law.
[28]
As
to the deference the Appeal Panel owed the member, Mr. Ogilvie, who first
reviewed the Minister’s decision, Dr. Q. is again helpful. In that case,
the relevant legislation authorized an appeal from a decision of the Inquiry
Committee of the College of Physicians and Surgeons of British
Columbia to the British Columbia Supreme Court. Drawing on paragraph 18
thereof, I hold the findings of fact or credibility made by Mr. Ogilvie were entitled
to considerable deference. The Appeal Panel was entitled to its own view of the
law.
[29]
The
issue of deference, according to the Minister, lies in the Appeal Panel’s
apparent willingness to consider de novo the amount of the penalty
imposed on BFEL for operating an air transport service. I am of the view that
the TATC Appeal Panel was explicitly authorized by Statute to advance its own
opinion as subsection 8.1(3) of the Aeronautics Act provides that the
Appeal Panel “…may dispose of the appeal by dismissing it or allowing and, in allowing
the appeal, the panel may substitute its decision for the determination appealed
against.”
[30]
Indeed,
I think this position is consistent with what was said by the Supreme Court in Paul
v. British
Columbia (Forest Appeals Commission), 2003 SCC 55, [2003] 2
S.C.R. 585 at paragraphs 43 and 44. That was an appeal within an administrative
scheme to a specialized appeal panel, a panel one would think would be expected
to use the expertise its members were required to have.
The Case against
Mr. Billings – Air Transport Service: T-2295-06
[31]
To
repeat, CAR 700.02(1) reads:
|
No person
shall operate an air transport service unless the person holds and complies
with the provisions of an air operator certificate that authorizes the person
to operate that service.
|
Il
est interdit d'exploiter un service de transport aérien à moins d'être
titulaire d'un certificat d'exploitation aérienne qui autorise l'exploitation
d'un tel service et de se conformer à ses dispositions.
|
[32]
Although
Mr. Billings was the pilot in charge of the helicopters for the three flights
in question, it is not in that capacity that he was charged with the
contravention. The reviewing member of the TATC, Mr. Ogilvie, its vice-chair, was
of the view that although the payments were demanded and received by Challenger
Inspections Ltd., Mr. Billings was the sole owner and operator thereof and
therefore personally fell within the definition of “hire or reward”.
[33]
The
Appeal Panel did not share that legal opinion. As Mr. Billings was not the
owner of the helicopters and did not have custody and control in his own name,
notwithstanding he was the pilot, he in effect was acting as an employee. As a
pilot and employee, there was no requirement that he be personally licensed to
operate an air transport service.
[34]
The
role of the registered owner is quite contentious in the Billings Family
Enterprise matters. However, whether the operator was BFEL or Challenger
Helicopters Ltd. or Challenger Inspection Ltd., the result is the same as far
as the case against Mr. Billings is concerned. Although he undoubtedly
indirectly benefited from the service, be it as a director, officer or
shareholder of whichever corporation or corporations were operating the service,
as well as through his employment as pilot on the flights in question, he was
not personally operating an air transport service. The corporations were not a
mere front, or sham. The Appeal Panel of the TATC was correct. This judicial
review shall be dismissed.
[35]
If
anyone knew the corporate structure it was Mr. Billings. Perhaps he could have
been charged under subsection 8.4 (3) of the Act which provides:
|
8.4
(3) The pilot-in-command of an aircraft
may be proceeded against in respect of and found to have committed an offence
under this Part in relation to the aircraft for which another person is
subject to be proceeded against unless the offence was committed without the
consent of the pilot-in-command and, where found to have committed the
offence, the pilot-in-command is liable to the penalty provided as punishment
therefor.
|
8.4 (3) Lorsqu’une personne peut
être poursuivie en raison d’une infraction à la présente partie ou à ses
textes d’application relative à un aéronef, le commandant de bord de celui-ci
peut être poursuivi et encourir la peine prévue, à moins que l’infraction
n’ait été commise sans le consentement du commandant.
|
However, he was not.
The Case against BFEL - Air
Transport Service: T-2272-06
[36]
It
now becomes necessary to determine whether BFEL, or either of the two
Challenger corporations, or indeed if all three were operating an air transport
service. Distinctions have to be drawn among different concepts: registered
ownership of as opposed to legal title to the helicopters; ownership as opposed
to legal custody and control; and operation of an air transport service as
opposed to operation of the helicopters themselves.
[37]
BFEL
holds title to and is the registered owner of the two helicopters. In
aeronautics, where many aircraft are leased, the two concepts are quite
distinct. Section 3 of the Act identifies a “registered owner” as a “…person to whom a
certificate of registration for the aircraft has been issued by the Minister”. The
registered owner may or may not have title to the aircraft, but is supposed to
have legal custody and control thereof (See: CAR 202.35). This distinction is
borne out by the decision of the Supreme Court in Canada 3000 Inc., Re;
Inter-Canadian (1991) Inc. (Trustee of), 2006 SCC 24, [2006] 1 S.C.R. 865)
particularly at paragraph 55.
[38]
It
is the registered owner of the aircraft who receives Air Directives and other
matters pertaining to the safe operation and maintenance of the aircraft. In
this case, Mr. Billings received Air Directives in his capacity as a director
of BFEL.
[39]
CAR
202.35 (2) requires the registered owner of a Canadian aircraft who transfers
any part of the legal custody and control of the aircraft to notify the
Minister in writing within seven days thereof. The then current Certificate of
Registration is cancelled. No such notice is in the record.
[40]
Having
undertaken a contextual and purposive analysis of the Act and the CARs,
particularly the safety aspects thereof, as required by such cases as Bell
ExpressVu Limited Partnership v. Rex, 2002 SCC 42, [2002] 2 S.C.R. 559, I
conclude that even if BFEL had transferred custody and control to either of the
Challenger companies it does not lie in its mouth to say so. The transfer was
not legal as no notification was given. It cannot invoke its own breach of one
regulation to avoid liability under another.
[41]
However,
should I have misinterpreted the Act and the CARs, I am of the view that the
evidence as a whole shows that the Minister discharged the burden of proof.
Once it was established that BFEL was the registered owner of the helicopters,
the burden shifted to it. The only evidence in the record is that invoices were
issued by Challenger Inspections Ltd., called at times a division of Challenger
Helicopters Ltd., and that the latter advertised in trade journals. No evidence
whatsoever was led as to the contractual arrangements which may, or may not,
have been in place among the three corporations. This was information within
the exclusive knowledge of Mr. Billings, and the corporations. It was not
information within the knowledge of the Minister, who is entitled to rely upon
public records. Speculation is not called for. This is not to say that
“Challenger” could not also have been charged.
[42]
Counsel
for BFEL argued that the evidence that no air operator certificate was in place
was insufficient. Certificates had been issued by the Secretary of the
Department of Transport pursuant to section 27 of the Aeronautics Act stating
that during the period between 1 January 2004 and 31 August 2004 no AOC was
issued either to Brant Paul Billings or to Billings Family Enterprises Ltd.
authorizing the operation of an air transport service. These certificates are
deficient in that they do not preclude the possibility that a certificate may
have been issued prior to 1 January 2004, or that certificates may have been
issued to either of the two Challenger corporations. However, Mr. Ogilvie, who
was upheld in his finding that BFEL operated an air transport service without
an AOC in place, was alert to the shortcomings of the certificates, and did not
rely upon them. I am satisfied that it was reasonably open to Mr. Ogilvie to
make the findings he did. Mr. Billings testified with respect to a safety audit
from one of the customers. It was not patently unreasonable for Mr. Ogilvie to
conclude that neither Mr. Billings nor BFEL nor either Challenger corporation
held an AOC:
We had a safety audit from one of my
customers. So, it’s an independent auditor came in and took a look at what we
did and how we operated and they found that we had a very good
reporting system, a very good program, trip following program, and so on. We
weren’t perfect, but we – she was very impressed with the fact that
we had – and felt that there was some things that we were doing tht the larger
– those with AOC’s, those larger companies, could go ahead and benefit
from. [Emphasis added]
Was anybody operating an
Air Transport Service?
[43]
In
its written submissions, BFEL only disputed four of the six flights. It was
given leave to file supplemental written argument, and took advantage of that
leave to attempt to bring all six flights into issue. I hold that there was
absolutely no evidence of a contravention on one of the four flights originally
contested. There was sufficient evidence on all the others.
[44]
There
is no doubt that BFEL was operating a commercial air service. However, that
service is only an air transport service if operated for the purpose of
“transporting persons, personal belongings, baggage, goods or cargo in an
aircraft between two points.”
[45]
The
basis of counts 1 and 2 was the log book for the helicopter in question
together with an invoice to a customer. The invoice states “sign installed”.
The overall evidence of Mr. Billings, including pre-hearing statements,
certainly led to the implication that the signs which were installed at well
sites were signs belonging to the customers, and carried to the sites by
helicopter. Vice-Chairman Ogilvie’s conclusion that signs were carried on
these flights were not patently unreasonable, nor was the decision of the
Appeal panel to uphold him. Counts 3, 5 and 6 relate to “brush cutting of
leaves”. Again it was not patently unreasonable for Mr. Ogilvie to conclude on
the basis of the record that the necessary equipment was carried to the site by
helicopter. Whether the equipment could be considered as personal belongings,
goods or cargo, the activity fell within the definition of an “air transport
service”.
[46]
Count
4 was that on 10 July 2004 a passenger was carried on helicopter C-FNNE. The
basis for Mr. Ogilvie’s conclusion that the regulations were contravened was
“the log book for aircraft C-FNNE indicates a flight of July 10, 2004, by Mr.
Billings from Challenger base for 1.6 hours. It indicates the carriage of a
passenger.” However, I must say that that finding was patently unreasonable, as
was the Appeal panel’s decision to uphold him. The log book indicates that the
person carried was a Mr. Brint, a member of the flight crew. Mr. Brint is shown
in the log as the pilot on other occasions. A “passenger” is defined in CAR
101.01 as meaning “a person other than a crew member, who is carried onboard an
aircraft”. Consequently, this contravention, and the penalty, must be quashed.
Natural Justice
[47]
It
had been agreed at the outset of the review hearing that the Minister would put
in his evidence on all alleged contraventions of the regulations, before Mr.
Billings and BFEL were called upon to reply. The record shows that they were
aware that they were not compellable witnesses. At the close of the Minister’s
case, counsel for Mr. Billings and BFEL moved for dismissal on the basis of no
evidence. The essence of the submission was that if anyone had contravened the
regulations it was Challenger Inspections Ltd. Counsel argued that at the very
least Mr. Ogilvie should take the motion under advisement. The effect would be
that if Mr. Billings testified, then Mr. Ogilvie was required to make a
double analysis. If satisfied that the Minister had not made out a case he
could not take into account Mr. Billings’ testimony. Only if the Minister made
out a case, would it become necessary to consider that testimony.
[48]
Mr.
Ogilvie pointed out that the TATC was an administrative tribunal and not bound
by the rules of evidence (except as regards privileged information). He said
the motion was:
“--- denied because I think there may be
some evidence. So, I will disagree. There may be some evidence. I have to
look. So, they’re denied. So, I am not going to do, I’m having a hard time
characterizing this, bifurcating it, if you will, or whatever. I mean, I think
everything you’ve said I can hear in final argument about the whole case. So,
no. If you go on and give evidence, or just to warn you on the procedure, if
you give evidence, I’ll be looking at the evidence as a whole. Does that make
it clear?”
[49]
In
his reasons Mr. Ogilvie expressed the view that the Minister had made out a prima
facie case. I agree that the Minister had shifted the burden of proof and
that had Mr. Billings not testified, it would still have been open to Mr. Ogilvie
to find that the contraventions had occurred.
[50]
As
stated by Mr. Justice Sopinka in Prassad v. Canada (Minister of
Employment and Immigration), [1989] 1 S.C.R. 560, [1989] S.C.J. No. 25
at paragraph 16:
“16. We are dealing here with the powers
of an administrative tribunal in relation to its procedures. As a general
rule, these tribunals are considered to be masters in their own house. In the
absence of specific rules laid down by statute or regulation, they control
their own procedures subject to the proviso that they comply with the rules of
fairness and, where they exercise judicial or quasi-judicial functions, the
rules of natural justice.”
[51]
Although
not argued before him, section 7 of the Charter has been raised before me. It
reads:
|
7. Everyone
has the right to life, liberty and security of the person and the right not
to be deprived thereof except in accordance with the principles of
fundamental justice.
|
7. Chacun
a droit à la vie, à la liberté et à la sécurité de sa personne; il ne peut
être porté atteinte à ce droit qu'en conformité avec les principes de justice
fondamentale.
|
[52]
Reliance
was placed on the decision of the Supreme Court in R. v. Wholesale Travel
Group Inc. [1991] 3 S.C.R. 154, [1991] S.C.J. No. 79. However that reliance
was misplaced. That case dealt with criminal offences, not administrative
offences. As noted by the Federal Court of Appeal in Main Rehabilitation
Co. Ltd. v. Canada, 2004 FCA 403, [2004]
F.C.J. No. 2030, the general principle is that only human beings can enjoy the
right to life, liberty and security of the person guaranteed by section 7 of
the Charter. The exception is the ability of a corporation charged with a
criminal offence to challenge the constitutionality of the statute as part of
its defence. The charges in this case are administrative, not criminal.
The Case Against
BFEL/Airworthiness Directive: T-2272-06 and T-2297-06
[53]
For
reasons already given, I am satisfied based on the limited evidence in the
record that the Minister discharged the initial burden upon him to show that
the two helicopters were in the legal custody and control of BFEL. Either it
did not lie in its mouth to invoke its own turpitude as a defence or it did not
shift the burden back by providing evidence that legal custody and control had
been transferred to one or the other of the two Challenger corporations.
[54]
The
Minister first imposed a penalty of $5,000 for each of the 10 flights taken
while the maintenance inspection was overdue. On review, Mr. Ogilvie reduced
that penalty to $4,000 per flight. In turn, that penalty was reduced by the
Appeal Panel to $500 per flight.
[55]
It
is common ground that, pursuant to section 8 of the Act, the reviewing member
in this case, Mr. Ogilvie, was entitled to determine the amount payable in
respect of the contraventions.
[56]
In
fixing an appropriate penalty, he set out the circumstances in which the
contraventions occurred. Quite rightly, he took into account the importance of
following air directives to ensure that an aircraft is in condition for safe
operation. The Air Directive was intended to detect corrosion of a bearing and
to prevent bearing failure and “subsequent loss of directional control of the
helicopter.” As Mr. Ogilvie said, the consequences could have been disastrous.
He referred to an appeal determination of TATC’s predecessor in Wyer v.
Minister of Transport, [1988] O-0075-33. The principles there summarized include
denunciation, deterrence, both specific and general, rehabilitation, and
enforcement recommendations. Both aggravating and mitigating factors are to be considered.
[57]
He
was of the view that denunciation and general deterrence needed strong emphasis.
He did not consider specific deterrence as important, especially as there was
an honest misinterpretation of the Air Directive, and no previous offences. As
far as denunciation is concerned, he pointed out that Transport Canada
distributed a misleading press release which declared that BFEL had failed to
replace a tail rotor pitch control bearing. Mr. Billings testified to having
received numerous calls from clients on this point. The directive was only to
inspect and to replace if necessary.
[58]
The
Minister had imposed a penalty of $5,000 for each of the 10 flights. The
maximum penalty could have been $25,000. However, it should also be kept in
mind that there was only one missed inspection. Mr. Ogilvie decided to reduce
the penalty to $4,000 per contravention, which he was entitled to do.
[59]
The
Appeal Panel justified the further reduction to $500 per contravention as follows:
[23] Although the AD was missed,
there were no immediate safety consequences for the aircraft in that the
inspection revealed no requirement to replace the tail rotor pitch control
bearing. We agree with the member at review that there is no need for specific
deterrence as Mr. Billings, an officer and director of the company, had
satisfied the member at review that he was remorseful and he was at all times
cooperative with the regulatory authorities.
[24] We differ from the member at
review regarding general deterrence in this case. We consider it a message of
general deterrence that a penalty of $5 000 can be assessed for each alleged
violation of subparagraph 605.84(1)(c)(i) of the CARs. However, there are
multiple counts because there were 10 take-offs following Mr. Haab’s one error
of missing the 12-month AD. Considering that fact and taking into account the
unfortunate wording of the press release and possible consequences to the
company, we consider it fair to further mitigate the penalty that would
normally be assessed for general deterrence. In going so, we restrict this
consideration to the stated facts of this case. We accordingly reduce the
penalty to $500 for each of the 10 breaches for a total penalty of $5 000.
[60]
As
stated earlier in these reasons, subsection 8.1(3) of the Act provides
that the appeal panel “may dispose of the appeal by dismissing it or allowing
it, and, in allowing the appeal, the panel may substitute its decision for the
determination appeal against.”
[61]
However
broad the discretion a decision-maker may have in determining the amount of a
penalty, that discretion can be no wider than that given to a Minister of the
Crown in administrative matters. An administrative discretionary policy
decision is not subject to judicial review unless it was made in bad faith,
does not conform with the principles of natural justice or relies upon
considerations that are irrelevant or extraneous (Maple Lodge Farms Limited
v. Canada, [1982] 2 S.C.R. 2, 137 D.L.R. (3d) 558). Under the modern pragmatic
and functional approach to judicial review, this usually translates into patent
unreasonableness (C.U.P.E. v. Ontario (Minister of
Labour),
2003 SCC 29, [2003] 1 S.C.R. 539).
[62]
The
Appeal Panel did not put Mr. Ogilvie’s findings of fact, and credibility, in
issue. It decided to reduce the penalty because of its view regarding general
deterrence, and “…taking into account the unfortunate wording of the press
release and possible consequences to the company.”
[63]
It
had the expertise, and the Court will not interfere with its view that the
overall penalty should be reduced because there was only a single error in
misinterpreting the AD. However, neither Mr. Ogilvie nor the Appeal Panel
should have taken into account the Minister’s misleading press release. That
was quite a different matter, irrelevant or extraneous to the penalty. Perhaps
BFEL has a cause of action against the Minister, perhaps not. My only comment
is that the press release is not a factor to be taken into consideration when
fixing a penalty for contraventions of Regulations under the Aeronautics Act,
the purpose of which is to promote air safety.
[64]
BFEL
submitted that the penalties were grossly unfair compared to other decisions of
the TATC or its predecessor, both in terms of the number of charges laid and
the penalties imposed. Perhaps one might conclude that the treatment by the
Minister of contraventions in the past, and the review thereof by the TATC,
were woefully inadequate given the importance of air safety. The penalties
imposed were nowhere near the maximum, and charges could have been made with
respect to other flights but were not. I see no legal reason to interfere.
[65]
Consequently,
the matter of the penalty, but not liability, is to be referred back to an
Appeal Panel of the TATC, the same panel if practicable.
Costs
[66]
As
success has been divided, as Mr. Billings and BFEL were represented by the same
counsel and as the three dockets were heard together, I shall make no order as
to costs.
[67]
In
summary:
(a) The
application by the Attorney General of Canada for judicial review of the
decision of the appeal panel of the Transportation Appeal Tribunal of Canada
dismissing as against Brant Paul Billings the contraventions of section
700.02(1) (air transport service) is dismissed (T-2295-06).
(b) The
application by Billings Family Enterprises Ltd. for judicial review of the
decision that it operated an air transport service on six occasions without
holding an air operator certificate is maintained with respect to one flight.
The decision with respect to count 4 is quashed. The application with respect
to the other five flights is dismissed, and the $5,000.00 penalty with respect
to each of the said five flights remains in place (T-2272-06).
(c) The
application by Billings Family Enterprises Ltd. for judicial review of the
decision that it had on ten occasions permitted take-offs when the aircraft did
not meet the requirements of an Airworthiness Directive (CAR 605.84(1)(c)(i))
is dismissed (T-2272-06).
(d) The
application by the Attorney General of Canada for judicial review of the
decision reducing the penalty from $4,000.00 to $500.00 for each of the said
ten contraventions of an Airworthiness Directive (CAR 605.84(1)(c)(i)) is
granted, and the matter of the penalty is referred back for re-determination in
accordance with these reasons (T-2297-06).
“Sean Harrington”
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