Date: 20080129
Docket: T-746-06
Citation: 2008 FC 109
Ottawa, Ontario, January 29,
2008
PRESENT: The Honourable Mr. Justice O'Reilly
BETWEEN:
INSIGHT
INSTRUMENT CORPORATION
Applicant
and
MINISTER
OF TRANSPORT
Respondent
REASONS FOR JUDGMENT AND JUDGMENT
[1]
Insight Instrument Corporation manufactures specialty instruments for small
aircraft. Since 1990, Transport Canada has designated Insight as an approved
maintenance organization (AMO). Insight’s AMO status requires it to comply with
its Quality Program Manual (QPM), which includes periodic self audits (s.
573.09, Canadian Aviation Regulations, 1996, SOR 96-433; incorporating
subparagraphs 573.09(2)(f)(i) and (ii) of the Airworthiness Manual;
relevant enactments are set out in an Annex). In turn, inspectors from
Transport Canada carry out conformance audits to ensure that AMOs are complying
with their QPMs.
[2]
In February 2004, an inspector found that Insight had not carried out a
self-audit between September 2001 and February 2004. Transport Canada issued a
Notice of Assessment of a Monetary Penalty ($1250.00) to Insight in November
2004 (under s. 7.7 of the Aeronautics Act, R.S.C. 1985, c. A-2). Insight
sought to review that decision before the Transportation Appeal Tribunal of
Canada (TATC). The TATC member confirmed the assessment but reduced the amount
to $400.00. Insight appealed to the TATC Appeal Panel. The Appeal Panel
dismissed the appeal.
[3]
Insight argues that the Appeal Panel erred in finding that it had not
carried out a self-audit during the relevant time period. Insight also submits
that the one-year limitation period in s. 26 of the Aeronautics Act, should have precluded
Transport Canada from initiating any proceedings against it for alleged
non-compliance. Insight asks me to overturn the Appeal Panel’s decision and
order a new hearing before a different panel. I can find no basis for doing so,
however, and must, therefore, dismiss this application for judicial review.
I.
Issues
- Did the Appeal Panel err in
finding that Insight had failed to carry out a self-audit during the
relevant period?
- Did the Appeal Panel err when it
found that the proceedings were not outside the one-year limitation
period?
[4]
In addition to these main issues, Insight raised a preliminary question
about an affidavit filed by Transport Canada for purposes of this judicial
review. Insight argues that I should draw an adverse inference from the fact
that the affidavit and supporting exhibits, sworn by Mr. Imtiazali Waljee and which
make reference to Insight’s compliance history, are incomplete and should have
been disclosed earlier. Transport Canada submits that the affidavit was
intended to address certain representations made by Insight’s deponent, Mr. John
Youngquist, in the affidavit filed in support of the application for judicial
review. In addition, Transport Canada notes that the information contained in
the Waljee affidavit was, in any case, in Insight’s possession and could have
been presented and supplemented if Insight believed it supported its position.
[5]
Insight concedes that the information in the Waljee affidavit
constitutes fresh evidence before me. There exists a well-established rule that
an application for judicial review must be decided on the basis of the record
before the decision-maker. Both parties had ample opportunity to present
evidence before the tribunals below. I see no reason to receive fresh evidence
at this point nor any basis for drawing an adverse inference from the conduct
of the parties in respect of the evidence they previously submitted or chose
not to submit.
I.
Analysis
1. Did
the Appeal Panel err in finding that Insight had failed to carry out a
self-audit during the relevant period?
(a) The
Decision of the TATC
[6]
Insight’s QPM requires it to carry out an audit of its quality assurance
program over a “one year period”. Insight carried out an audit in 2003, which
it says satisfied its obligation for that year. The 2003 audit was conducted
for the benefit of the Cessna Corporation which was evaluating Insight’s
operations to determine if it would be a suitable supplier to Cessna. The TATC
found that the evaluation done for Cessna in 2003 was not an acceptable substitute
for the self-audit required under the QPM. The member was of the view that
audits should be carried out according to a standard procedure. If the Cessna
audit were to satisfy Insight’s self-audit obligation, other AMOs could put
forward their own versions of self-audits and there would cease to be a
standard reporting requirement. This would be contrary to the purposes of the Aeronautics
Act and Regulations, which are aimed at setting uniform standards across
the aviation industry.
[7]
The TATC found that Insight had contravened s. 573.09 of the
Regulations. It also found that Transport Canada’s own conduct was problematic
in that it had advised Insight in September 2004 that Insight had
satisfactorily corrected the shortcomings noted in the February 2004
inspection. Subsequently, Transport Canada advised Insight that it was in
contravention of its QPM because of its failure to carry out a self-audit. In
light of this confusion, the Member reduced Insight’s monetary penalty from
$1250.00 to $400.00.
(b) The
Decision of the Appeal Panel
[8]
The Appeal Panel found that while the Cessna audit was a “rigorous
exercise” it did not fulfill Insight’s obligation to carry out a self-audit
under the Regulations and its own QPM. The Panel rejected Insight’s submission
that the “one-year” period for self-assessments was not necessarily a calendar
year, as well as its suggestion that there was confusion about when audits were
required. The Panel agreed with Transport Canada that the one-year period
should be interpreted as a calendar year unless specified otherwise in a QPM.
[9]
The Panel also noted that Insight had been in the aviation manufacturing
business since 1980 and had held its AMO status since 1990. If there had been
actual confusion about the requirement for yearly audits, Insight could have
asked Transport Canada for clarification. The fact that Transport Canada could
have taken the initiative to make Insight’s obligation clearer, and had failed
to do so, had already been taken into account in determining the amount of the
monetary penalty.
(c) Discussion
and Conclusion
[10]
I can overturn the Appeal Panel’s finding that Insight had contravened
the Act if I conclude that it was unreasonable: Hudgin v. Canada
(Minister of Transport) 2002 FCA 102, [2002] F.C.J. No. 369 (F.C.A.) (QL); Asselin
v. Canada (Minister of Transport), [2000] F.C.J. No. 256 (F.C.T.D.)
(QL); Butterfield v. Canada (Attorney General), 2006 FC 894,
[2006] F.C.J. No. 1132 (F.C.) (QL).
[11]
In my view, the Appeal Panel’s conclusion was reasonable. Insight may
well have considered the Cessna audit to have been rigorous and assumed that it
had done enough self-analysis in 2003 to satisfy its regulatory obligations.
Further, it might well have thought that it was entitled to carry out
self-audits within rolling twelve-month periods. However, I cannot conclude
that the Appeal Panel’s characterization of the Cessna audit was unreasonable.
Further, if Insight had wished to establish a reporting period other than a
calendar year, it could easily have done so by amending its QPM.
2. Did the Appeal Panel err
when it found that the proceedings were not outside the one-year limitation
period?
(a) The
Decision of the TATC
[12]
The TATC noted that s. 26 of the Aeronautics Act states that no
proceedings can be commenced “after twelve months from the time when the
subject-matter of the proceedings arose”. Insight was informed of the
assessment of a monetary penalty in November 2004. Given that Insight’s alleged
non-compliance with the self-audit obligation had come to light in February
2004, the TATC found that proceedings against Insight had been properly
commenced within twelve months of that inspection.
(b) The
Decision of the Appeal Panel
[13]
Before the Appeal Panel, Insight argued that any non-compliance with the
Act or Regulations was out of time in November 2004. It said that it had
completed a self-audit in February 2004 and, given that it had an obligation to
conduct audits over a one-year period, any non-compliance must have occurred
prior to February 2003. Proceedings in relation to any such non-compliance
could not, therefore, be commenced any time after February 2004.
[14]
Given its conclusion that self-audits must be carried out within each
calendar year, the Appeal Panel found that the February 2004 audit satisfied Insight’s
obligations for the year 2004. The question was whether Insight had complied
with its obligation to conduct a self-audit in 2003. The Appeal Panel found
that there was no evidence of Insight’s compliance with that obligation in the
twelve months prior to the date when proceedings were commenced against Insight
(i.e. after November 17, 2003) or, for that matter, earlier in 2003,
having already rejected the proposition that the 2003 Cessna audit could be
considered a self-audit for purposes of the Regulations. Accordingly, at the
end of 2003, Insight was in a situation of non-compliance and proceedings
against it could be commenced within the ensuing twelve months. The notice of
assessment, dated November 28, 2004 was, therefore, valid.
(c) Discussion
and Conclusion
[15]
On this issue, which involves the interpretation of a statutory
limitation period, I can overturn the Appeal Panel’s decision if I find that it
was incorrect. To repeat, s. 26 states that no proceedings “may be instituted
after twelve months from the time when the subject-matter of the proceedings
arose.”
[16]
I agree with the Appeal Panel’s conclusion that the “subject matter” referred
to in s. 26 is a contravention of the regulations. Accordingly, proceedings
must be commenced within twelve months of an infraction. Here, the proceedings
were commenced in November 2004, less than eleven months after the end of 2003.
At that point, Insight, having failed to conduct a self-audit in 2003, had
contravened the Act. Therefore, the proceedings were commenced within the
required twelve months of the infraction and are valid.
[17]
Accordingly, this application for judicial review must be dismissed,
with costs.
JUDGMENT
THIS COURT’S ORDER IS
that
1. The
application for judicial review is dismissed, with costs.
“James
W. O’Reilly”
Annex
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Canadian
Aviation Regulations, 1996,
SOR 96-433
573.09 (1) The holder of an approved maintenance organization
(AMO) certificate shall establish and maintain a quality assurance program
consisting of provisions for sampling maintenance processes to evaluate the
AMO's ability to perform its maintenance in a safe manner.
(2) The person responsible for
maintenance shall ensure that records relating to the findings resulting from
the quality assurance program are distributed to the appropriate manager for
corrective action and follow-up in accordance with the policies and
procedures specified in the maintenance policy manual (MPM).
(3) The person responsible for
maintenance shall establish an audit system in respect of the quality
assurance program that consists of the following:
(a) an initial audit within 12 months after the
date on which the AMO certificate is issued;
(b) subsequent audits conducted at intervals set
out in the MPM;
(c) checklists of all activities controlled by the
MPM;
(d) a record of each occurrence of compliance or
non-compliance with the MPM found during an audit referred to in paragraph (a)
or (b);
(e) procedures for ensuring that each finding of
an audit is communicated to them and, if management functions have been
assigned to another person under subsection 573.04(4) or (5), to that person;
(f) follow-up procedures for ensuring that
corrective actions are effective; and
(g) a system for recording the findings of initial
and periodic audits, corrective actions and follow-ups.
(4) The records required under
paragraph (3)(g) shall be retained for the greater of
(a) two audit cycles; and
(b) two years.
(5) The
duties related to the quality assurance program that involve specific tasks
or activities within an AMO's activities shall be fulfilled by persons who
are not responsible for carrying out those tasks or activities.
Canadian Aviation Regulations 2007-1
Quality Assurance Program
(amended 1998/06/01; previous version)
573.09 (1) Pursuant to
section 573.09 of the CARs, each AMO Certificate holder must establish and
maintain a program to ensure that the maintenance system continues to comply
with the regulations.
[…]
(2) The program must:
[…]
(f) employ audit checklists to identify all functions controlled by the
MPM. Having regard to the complexity of the AMO’s activities, checklists must
be sufficiently detailed to ensure that all maintenance functions are
addressed. Specifically, the program must include the following elements:
(i) an initial internal audit, using the
audit checklists, that covers all aspects of the AMOs technical activities,
within 12 months of the date on which the certificate is issued;
(ii) a recurring cycle of further
internal audits, conducted at intervals established in the approved MPM;
Aeronautics
Act, R.S. 1985, c. A-2
Notice of assessment of monetary penalty
7.7 (1) If the Minister
believes on reasonable grounds that a person has contravened a designated
provision, the Minister may decide to assess a monetary penalty in respect of
the alleged contravention, in which case the Minister shall, by personal
service or by registered or certified mail sent to the person at their latest
known address, notify the person of his or her decision.
Limitation period
26. No
proceedings under sections 7.6 to 8.2 or by way of summary conviction under
this Act may be instituted after twelve months from the time when the
subject-matter of the proceedings arose
|
Règlements
de l’aviation, 1996,
DORS 96-433
573.09 (1) Le
titulaire d’un certificat d’organisme de maintenance agréé (OMA) doit établir
et maintenir un programme d’assurance de la qualité qui comporte des
dispositions qui permettent l’échantillonnage des processus de maintenance
pour évaluer la capacité de l’OMA à effectuer la maintenance d’une manière
sécuritaire.
(2) Le
responsable de la maintenance doit veiller à ce que les dossiers concernant
les constatations qui découlent du programme d’assurance de la qualité soient
distribués au gestionnaire compétent pour que des mesures correctives soient
prises et que le suivi soit assuré conformément aux lignes de conduite et aux
marches à suivre précisées dans le manuel de politiques de maintenance (MPM).
(3) Le
responsable de la maintenance doit établir un système de vérification à
l’égard du programme d’assurance de la qualité qui comprend les éléments
suivants :
a) une vérification initiale dans les 12 mois qui suivent
la date de délivrance du certificat OMA;
b) des vérifications ultérieures effectuées à des
intervalles indiqués dans le MPM;
c) des listes de contrôle de toutes les activités régies
par le MPM;
d) une inscription de chaque cas de conformité ou
non-conformité avec le MPM qui est relevé au cours d’une vérification visée aux
alinéas a) ou b);
e) une marche à suivre pour que chaque constatation qui
découle d’une vérification lui soit communiquée et, si des fonctions de
gestion ont été attribuées à une autre personne en application des
paragraphes 573.04(4) ou (5), soit communiquée à cette dernière;
f) des modalités de suivi pour faire en sorte que les
mesures correctives soient efficaces;
g) un système pour consigner les constatations qui
découlent des vérifications initiales et des vérifications périodiques, les
mesures correctives et les mesures de suivi.
(4) Les
dossiers exigés par l’alinéa (3)g) sont conservés pendant la plus
longue des périodes suivantes :
a) deux cycles de vérification;
b) deux ans.
(5) Les
fonctions relatives au programme d’assurance de la qualité qui comportent des
tâches ou activités particulières dans le cadre d’activités de l’OMA doivent
être remplies par des personnes qui ne sont pas responsables de leur
exécution.
Règlement de l'aviation canadien 2007-1
Programme d'assurance de la
qualité
(modifié 1998/06/01; version précédente)
573.09 (1) En vertu de
l'article 573.09 du RAC, chaque titulaire de certificat d'OMA doit établir et
mettre en oeuvre un programme garantissant que le système de maintenance
respecte toujours la réglementation.
…
(2) Le programme doit :
…
f) prévoir l'utilisation de listes de vérifications pour identifier les
fonctions dont le contrôle est défini dans le MPM. Ces listes doivent être
suffisamment détaillées, en fonction de la complexité des activités de l'OMA,
pour s'assurer que toutes les fonctions de maintenance sont abordées. Plus
précisément, le programme doit inclure les éléments suivants :
(i) une vérification interne initiale, à
l'aide des listes de vérifications, de tous les aspects des activités
techniques de l'OMA, dans les 12 mois de la date de délivrance du certificat;
(ii) d'autres vérifications internes
périodiques à effectuer aux intervalles établies dans le MPM approuvé;
Loi
sur l’aéronautique,
L.R. 1985, ch. A-2
Avis établissant le
montant de l'amende
7.7 (1) Le
ministre, s'il a des motifs raisonnables de croire qu'une personne a
contrevenu à un texte désigné, peut décider de déterminer le montant de
l'amende à payer, auquel cas il lui expédie, par signification à personne ou
par courrier recommandé ou certifié à sa dernière adresse connue, un avis
l'informant de la décision.
Prescription
26.
Les poursuites au titre des articles 7.6 à 8.2 ou celles
visant une infraction à la présente loi ou à ses règlements punissable sur
déclaration de culpabilité par procédure sommaire se prescrivent par douze
mois à compter de la perpétration de l’infraction.
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