Docket: T-444-15
Citation:
2018 FC 97
Ottawa, Ontario, January 29, 2018
PRESENT: The
Honourable Madam Justice McVeigh
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BETWEEN:
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ROTOR MAXX
SUPPORT LTD.
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Applicant
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and
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MINISTER OF
TRANSPORT
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Respondent
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JUDGMENT AND REASONS
I.
Introduction
[1]
In October 2012, Transport Canada determined
that Rotor Maxx Support Ltd. (the Applicant, or Rotor Maxx) was not properly
recertifying undocumented parts according to Canadian Aviation Regulations,
SOR/96-433 [CAR] standards. The two tried working together but Transport Canada
refused to consider contrary evidence, Rotor Maxx refused to provide a list of
recertified parts, and both were confused over what procedure applied. In 2014,
Transport Canada notified Rotor Maxx about its intent to issue a Civil Aviation
Safety Alert (CASA) against Rotor Maxx, but without telling them about all the
parts at issue. On February 24, 2015, following a review and comment period,
Transport Canada notified Rotor Maxx it still intended to issue the CASA and
did so.
[2]
I judicially reviewed the Minister’s decision to
issue the CASA for procedural fairness and reasonableness. Because a decision
that does not disclose the information relied upon is a decision that lacks
procedural fairness, and because an unintelligible decision without
justification or transparency is not a reasonable decision, I will grant this
application and quash the Minister’s decision to issue a CASA for the reasons
that follow.
[3]
As this is a highly technical and specialized
area, I have included the following for reference:
- A glossary of Acronyms
- Appendix A
- A timeline of
events - Appendix B
- A list of
individuals and their respective professional capacities - Appendix C
- Standard 571 Appendix
H of the Canadian Aviation Regulations “Process
to Evaluate Undocumented Aircraft Parts” - Appendix D (and its
related flow chart, Appendix E)
- Policy letter
titled “Maintenance and Manufacturing Policy
Letter 36” [MPL 36] issued on February 2, 2006 by Transport Canada
to interpret proposed amendments to the CAR Standard 571 Appendix H
process and the flow chart - Appendix F
- Canadian
Aviation Regulation 571.13 “Installation of Parts, General” – Appendix G
- Civil Aviation Safety
Alert regarding aircraft components and parts supplied by Rotor Maxx
Support Ltd. dated January 15, 2015 – Appendix H
- Section 9 of the
Staff Instruction Civil Aviation Document Development Procedures effective
date June 16, 2014 –Appendix I
- Rotor Maxx’s AMO
certificate dated December 22, 2014 – Appendix J
- Other relevant
sections of Canadian Aviation Regulations – Appendix K
II.
Background
[4]
Rotor Maxx is a certified Transport Canada
Approved Maintenance Organization (AMO) pursuant to CAR 573.02. In addition, Rotor
Maxx holds specialized ratings for components, turbine engines, as well as
non-destructive testing (NDT). Rotor Maxx specializes in the maintenance and
repair of Sikorsky helicopters which have been out of production since 1980.
[5]
As with other out-of-production aircraft
manufacturers, the original equipment manufacturer (OEM) of Sikorsky helicopter
parts cannot supply all maintenance parts on a regular basis. Although special orders
for OEM replacement parts can be requested, some replacement parts take up to
two years to receive.
[6]
Parliament sought to fix this delay by legislatively
implementing a process to recertify undocumented parts that meet type design (type
design is a requirement of aircraft parts). Parts that can be traced
back to the OEM are considered “documented parts.”
Parts that cannot be traced back to the OEM are considered “undocumented parts.” While some undocumented parts
are unauthorized third party products that do not meet type design, many others
are genuine parts simply lacking the history or proper OEM documentation. The process
for AMOs to evaluate and recertify undocumented parts is found in CAR Standard
571 Appendix H and possibly in MPL 36.
[7]
The proper application of the Appendix H process
formed the core dispute between the parties. Namely, Transport Canada had
concerns that Rotor Maxx did not meet Appendix H requirements. Rotor Maxx,
however, claims that they met and in some cases exceeded Appendix H requirements.
[8]
Extensive discussions took place between Rotor
Maxx and Transport Canada from February 2011 to March 2015. The following
summary lists some of the most important interactions but is by no means an
exhaustive reproduction of the record. A detailed timeline of events can be
found under Appendix B.
[9]
On March 3, 2011, Rotor Maxx submitted a
Maintenance Policy Manual (MPM) to the Minister of Transport for approval. A
MPM outlines an AMO’s procedures and limitations and must be approved by a
Minister’s delegate. Rotor Maxx’s 2011 MPM included a new procedure under section
9.4 which outlined an added privilege for the company. Section 9.4 allowed
Rotor Maxx to recertify undocumented aeronautical parts pursuant to the CAR Standard
571 Appendix H process. The Minister’s delegate (Michael Godsell) approved
Rotor Maxx’s new privilege.
[10]
A year later, Chris Fry resigned from his
position as Rotor Maxx’s Quality Assurance Manager. Chris Fry then advised Transport
Canada about concerns he had regarding the process Rotor Maxx used to recertify
undocumented parts. This led Michael Godsell and a colleague to conduct a
Process Inspection (PI) at Rotor Maxx’s facilities from November 7-8, 2012.
During this early stage of the inspection, it became apparent that Rotor Maxx
and Transport Canada had different opinions about how to recertify undocumented
parts pursuant to the Appendix H process.
[11]
Transport Canada issued a PI Finding against
Rotor Maxx on February 12, 2013, questioning the recertification of three impugned
parts (an engine bolt, a Garlock seal, and a bearing). Although the PI Finding
is dated February 12, 2012, that is a typo for obvious chronological reasons. The
PI Finding stated these parts did not have sufficient records to verify that
they conformed to type design. Transport Canada requested Rotor Maxx address
their parts recertification by completing a Corrective Action Plan (CAP) by
March 18, 2013.
[12]
Rotor Maxx issued a response to Transport Canada
disputing the PI Finding. In their letter to Transport Canada, they argued that
the three impugned parts are each categorized by aircraft and engine
manufacturers as non-critical parts. They go on to argue that they conducted
material and dimensional analysis and comparison with a known authentic part (KAP)
according to the Minister’s Maintenance and Manufacturing Policy Letter #36,
dated February 2, 2006 (MPL 36). Rotor Maxx concluded by stating that, as a
precautionary measure, they suspended parts recertification in November pending
a review. Rotor Maxx requested that Transport Canada withdraw its PI Finding.
[13]
On April 26, 2013, Michael Godsell replied to
Rotor Maxx on behalf of Transport Canada, refusing to withdraw the PI Finding.
In his reasons, Michael Godsell described how a failure by any of the three
impugned parts could cause a catastrophic failure and was therefore a critical
part pursuant to MPL 36. The parts also needed a material certification from
the OEM which was missing. Michael Godsell again requested a CAP (which was by
this point overdue) and corrective action for any other non-conforming
components which Rotor Maxx could identify. He concluded by suggesting that
Rotor Maxx should consider further suspension of its parts recertification
program.
[14]
Over the next several weeks, Transport Canada
personnel exchanged multiple emails questioning their position and that of
Rotor Maxx. On May 14, 2013, Keith Labrecque (Regional Manager, Transport
Canada Civil Aviation, Standards Coordination) exchanged messages with John
Nehera (Associate Director Operations for Transport Canada’s Pacific Region)
explaining that an exemption to the CAR 571 Appendix H process exists for AMOs “with an avionics, instrument or component rating to recertify
parts, within the scope of their approval, if they have the necessary
instructions for continued airworthiness to maintain the aeronautical
products.” It is undisputed that at all relevant times, Rotor Maxx had
the appropriate instrument and component ratings and did not go outside the
scope of their approval.
[15]
On May 17, 2013, Jeff Phipps (Chief, Operational
Airworthiness, Standards Branch, Transport Canada Civil Aviation) wrote to Keith
Labrecque clarifying that the criticality of a part was not part of the
recertification process. Specifically, he wrote that “[o]nce
a part has been evaluated and tested and certified we don’t have any regulatory
requirements to identify the criticality of the part.” In a further
email that same day, Jeff Phipps wrote to John Nehera and Keith Labrecque and
copied Michael Godsell, Mitchell Holme (Superintendent, Transport Canada Civil
Aviation Safety Inspector, Airworthiness), and John Glavind (Program Manager,
Transport Canada, Operational Airworthiness). In this message Jeff Phipps
describes how “CAR 571 generically refers to ICAs [Instructions
for Continued Airworthiness].” No mention of certification from the OEM
is made. He concludes his email by saying that although MPL 36 and the
undocumented parts recertification process needs updating, Transport Canada lacks
the resources or ability to do so.
[16]
In reply, Michael Godsell again suggests that
Rotor Maxx ignored the significance of parts criticality despite Jeff Phipps’s
acknowledgment that criticality is not a regulatory requirement. To this, John
Nehera adds that they “don’t have a problem dealing
with the examples that [Rotor Maxx] has recertified.” He goes on to say
that “[w]e’ll ask for their data and they’ll not have
sufficient data or analysis to confirm conformity. I was just getting
background on the ICAs referenced in the MPL. I’ll be arguing that they’re
inadequate when they try to use them.”
[17]
After a May 22, 2013 meeting with
representatives from Rotor Maxx, John Nehera wrote that the process in “Appendix H is worded in general terms to include a range of
processes for evaluation. It is not perscriptive [sic].” His notes also
reflect an acknowledgment from Rotor Maxx that the documents submitted for the
three impugned parts were incomplete. Rotor Maxx would therefore “submit a CAP to Mike Godsell with supporting documentation
and an enhanced process for certifying undocumented parts.” On May 29,
2013, Rotor Maxx submitted its first CAP.
[18]
Rotor Maxx’s first CAP was rejected by Michael
Godsell on behalf of Transport Canada on June 20, 2013. The reasons for
rejecting the CAP were because it “failed to identify
all the additional examples of recertified undocumented parts” and “failed to adequately address the causal factors to the
finding.” Michael Godsell concludes by demanding Rotor Maxx to cease all
parts recertification and submit a revised CAP. The revised CAP needed details
about all the recertified parts Rotor Maxx had processed, including traceability
information about which aircraft these parts may have been installed on.
[19]
Numerous further emails were exchanged resulting
in a second CAP submission and independent analysis of the three impugned parts
by R.J. Waldron & Company (1987) Ltd (Waldron). The subsequent report
provided by Waldron included destructive material analysis of the impugned bolts
(three bolts were destroyed out of the batch which were impugned) and concluded
the bolts were authentic after comparing them to an OEM drawing. Waldron
re-evaluated the impugned Garlock seal pursuant to Rotor Maxx’s newest
recertification worksheet and found it was compliant. The impugned bearing was
also re-evaluated and found to meet the requirements of the OEM drawing.
[20]
The second CAP was rejected on July 22, 2013, for
the same reasons as the first CAP rejection. Transport Canada again demanded a
list identifying all additional undocumented parts Rotor Maxx had recertified. Although
Transport Canada acknowledged receipt of the Waldron report and said that it
was currently under review, they advised the report would not affect the
reasons for the CAP rejection. The rejection notice demanded Rotor Maxx remove
any reference to the recertification of undocumented parts in its MPM and cease
recertification until further notice.
[21]
Following the second CAP rejection and its
ensuing correspondence, Rotor Maxx hired DTI Training Consortium, International
(DTI). DTI had worked with Transport Canada on several occasions in the past
and was hired to act as a trusted independent third party in the resolution of
their CAP.
[22]
After several more internal emails, Mitchell
Holme acknowledges that “[t]he physical list would not
normally be required as part of a CAP, it would have to be available at our
request.” In response Michael Godsell acknowledges that “[t]he CAP now is almost irrelevant.” Mitchell Holme
shared this position with Rotor Maxx in an August 23, 2013 email to Matthew
MacWilliam (Rotor Maxx’s new Quality Assurance Manager) stating that “Transport is requesting that the ‘list’ be submitted now,
asap but before CAP, as it is not directly related to the CAP.”
[23]
On September 12, 2013, Rotor Maxx submitted a
third CAP. Once again there was significant discussion within Transport Canada
and with Rotor Maxx personnel. By the end of October 2013, a Notice of
Suspension (NOS) against Rotor Maxx was drafted and circulated within Transport
Canada. On November 8, 2013, Transport Canada notified Rotor Maxx that its
third CAP was rejected due in part to Rotor Maxx’s failure to submit a list of
recertified parts.
[24]
Over the following weeks, Mark Trainor (Program
Manager, Approved Organization Standards, Operational Airworthiness) emphasized
on several occasions that an NOS would be inappropriate. On November 22, 2013,
he stated that “[t]he [NOS] was not supported by the
documented findings” and on January 22, 2014, warned that he “cannot see where the company has broken a specific
regulation… the process and certification of the parts followed the current
Appendix H and regulatory requirements.”
[25]
In a January 31, 2014, email to Mitchell Holme, Frédéric
Bellemare (Civil Aviation Safety Inspector, Standards) emphasizes that “all AMOs that have appendix H approval should be treated
equally, and should be sent a similar letter” cancelling their
recertification process. The comments by Frédéric Bellemare echoed comments made
earlier by Mark Trainor to Jeff Phipps on January 24, 2014, which stated that “if we tell a company in Pacific region that they cannot use
this process we must tell all others the same thing.”
[26]
Despite the foregoing discussion, on April 4,
2014, Michael Godsell again advocated for Transport Canada to issue an NOS to
Rotor Maxx and demand a list of all undocumented parts they recertified. John
Nehera informed Michael Godsell on April 11, 2014, that since Transport Canada’s
Enforcement division did not support an NOS issuance, they would not proceed.
[27]
Several weeks of demands and discussions ensued.
During a July 23, 2014 teleconference, Transport Canada acknowledged that they
had no records for the basis of a Suspected Unapproved Part Report investigation,
and they would instead issue a CASA against Rotor Maxx. Rotor Maxx was informed
of the potential CASA against them on September 11, 2014.
[28]
In the meantime, Michael Godsell was sent a box
including approximately 15 Work Orders and 340 tasks. Of these, Michael Godsell
conducted an “informal review” of seven tasks and
concluded that these additional parts were deficient. On September 5, 2014, Michael
Godsell informed Jeff Phipps of his informal review and his intention to review
the remainder of the tasks. However, Michael Godsell did not conduct any
further reviews.
[29]
On September 24, 2014, Jeff Phipps confirmed to
Michael Godsell that design data was required for recertifying parts and that
ICA information could not be used. He suggests that Rotor Maxx should have sent
all parts back to the OEM for recertification. A draft CASA was sent to Rotor
Maxx for comments on November 19, 2014.
[30]
On November 24, 2014, Michael Godsell wrote to Rotor
Maxx to inform them that their new Appendix H process was “an excellent template for performing and documenting the
recertification of undocumented parts” but could not be accepted as it
did not include the MPL 36 process. He added that all aeronautical parts (not
just critical parts) required some engineering design data and that ICAs are only
for maintenance on an assembly or complete product.
[31]
Rotor Maxx provided comments to John Nehera on
November 26, 2014, arguing the draft CASA was factually inaccurate, did not
reflect a breach of any CAR, and improperly interpreted the Appendix H process.
John Nehera informed Rotor Maxx on February 24, 2015, that Transport Canada’s
intended to issue the CASA on March 17 2015, almost two and a half years after
the initial PI was conducted.
[32]
Rotor Maxx filed for judicial review of the
Minister’s decision to issue the CASA on March 24, 2015.
III.
Issues
[33]
Rotor Maxx raises the following issues on
judicial review:
- Whether the
Minister acted without authority and contravened the purpose, object, and
scheme of the Aeronautics Act by issuing the CASA when Enforcement
had refused to prosecute Rotor Maxx for a contravention of the regulations
and when Rotor Maxx had never been found by an independent impartial
tribunal to have contravened any regulation?
- Whether the
Minister abrogated, abridged, and infringed Rotor Maxx’s right to a fair
hearing in contravention of section 2(e) of the Canadian Bill of Rights
and the rules of natural justice and procedural fairness by issuing
the CASA without affording Rotor Maxx the opportunity to make full answer
and defence to the allegations against it?
- Whether the
Minister misinterpreted the recertification procedures as set out in CAR
571, Appendix H and thereby wrongly concluded that Rotor Maxx had breached
the regulations when recertifying undocumented aeronautical parts?
- Did the Minister
act without authority in issuing the CASA?
- Whether the
Minister abused authority by refusing to allow Rotor Maxx to recertify
undocumented parts using its own standard procedure as permitted by the
Minister’s exemption?
- Did the Minister
act contrary to the principles of natural justice by issuing the CASA
without providing an opportunity for full answer and defence?
- Whether the
Minister based the decision to issue the CASA on erroneous findings of
fact made in an arbitrary and capricious manner and without regard to the
facts before him by concluding that Rotor Maxx’s recertified parts had
created a critical safety issue?
[34]
I would reframe the issues much as Transport
Canada did:
- Did the Minister
breach Rotor Maxx’s right to procedural fairness in issuing the CASA?
- Was the
Minister’s decision to issue the CASA reasonable?
IV.
Standard of Review
[35]
The parties agree, as do I, that the applicable
standard of review of the Minister's decision to issue a CASA is
reasonableness. The CASA was introduced on October 1, 2010, as a non-mandatory
and discretionary means of alerting the public about situations that the
Minister finds satisfy the four criteria in the Staff Instruction. Thus, it
involves the Minister applying expertise in civil air safety to interpret the
required criteria in the Staff Instruction. Such decisions are afforded
deference and are reviewed for reasonableness (Dunsmuir v New Brunswick,
2008 SCC 9).
[36]
Issues of procedural fairness are reviewed on
the correctness standard (Canada (Citizenship and Immigration) v Khosa,
2009 SCC 12).
V.
Conclusions
[37]
The Court appreciates the Respondent counsels’
concise and relevant arguments as well as the fact they conceded the difficulties
in their arguments. Despite their advocacy, I will grant this application for
the reasons that follow.
[38]
The breach of procedural fairness is
determinative of this review, but the decision was also unreasonable. This
decision did not exhibit justification, transparency, and intelligibility
within the decision making process and was not within the range of possible,
acceptable outcomes, defensible in fact and law.
VI.
The Statutory Scheme
[39]
Both parties agree, as do I, that the object of
the Aeronautics Act, RSC 1985, c A-2 [Aeronautics Act] is civil
air safety. The Minister bears a heavy responsibility to the public to ensure
their safety. This is not a responsibility that was taken lightly on these
facts by either party.
[40]
Rotor Maxx is an AMO, and filed an AMO
certificate dated December 22, 2014, that supersedes a certificate dated July
29, 2010. This AMO certificate was approved pursuant to CAR 573.02 for aircraft,
components, engines, and NDT (attached as Appendix J).
[41]
The legislation that empowers the steps taken by
Transport Canada is extensive but, for ease of reference, I have only included
the material directly related to these facts. The legislation is attached in
appendices, in the logical order.
VII.
Objection Ruling
[42]
During the hearing, Transport Canada objected to
a document Rotor Maxx wanted filed (a photo on the last page of Certified Tribunal
Record [CTR] Volume 8) as it was not in the CTR when the cross examination took
place. I will grant the objection and disregard that document.
VIII.
Analysis
A.
Did the Minister breach Rotor Maxx’s right to
procedural fairness in issuing the CASA?
(1)
Procedural Fairness-Factors
[43]
A CASA is an informational bulletin sent to all
industry members providing immediate updates on critical safety issues,
aeronautic recommendations, and alerts. The authority to issue a CASA is found under
the heading “Civil Aviation Safety Alerts” of the
Transport Canada Staff Instruction, SI QUA-003, at section 9.
[44]
The Minister’s position is that because CASAs
are issued for urgent aviation safety issues, the amount of procedural fairness
attracted by a decision to issue a CASA is minimal. The Minister submits that
the low procedural fairness is also due to the fact CASAs are alerts notifying
the public of a concern and possible problem, but are not entered on an
aviation record. Transport Canada says they met their procedural fairness obligations
by letting Rotor Maxx review the CASA before issuing it.
[45]
In Baker v Canada (Minister of Citizenship
and Immigration), [1999] 2 S.C.R. 817 at paragraph 22 [Baker], Justice
L’Heureux-Dubé, on behalf of the Supreme Court of Canada (SCC), affirmed a duty
of procedural fairness in the making of administrative decisions. Specifically,
administrative decisions must be made “using a fair and
open procedure, appropriate to the decision being made and its statutory,
institutional, and social context.” She added that the amount of
procedural fairness owed depends on the context, and so the amount may not be
the same in every case. Accordingly, I must consider all the circumstances
leading to the decision in this case to determine the extent and content of the
Minister’s duty of procedural fairness.
[46] According to Baker at paragraphs 23-26, factors to consider
when assessing the minimum degree of participatory rights required include:
- the nature of the decision being
made and process followed in making the decision;
- the nature of the statutory scheme
and the terms of the statute pursuant to which the body operates;
- the importance of the decision to the
individuals affected;
- the legitimate expectations of the
person(s) affected by the decision;
- the agency or administrator's choice
of procedure.
[47]
Nature of the decision- Before Transport Canada may issue a CASA, the decision must
satisfy the four criteria set out in the Staff Instruction. The criteria include
whether the issue is a critical safety matter and whether the information needs
urgent dissemination.
[48]
In this case, Transport Canada’s application of
the Staff Instruction came after investigations, communications with Rotor Maxx,
and at times the use of the MPL 36 guidelines to interpret the Appendix H recertification
process. The Staff Instruction itself says that the CASA consultation process
is discretionary, and amendments are allowable after its publication. This
illustrates that the process of deciding to issue a CASA does not resemble the
judicial process, and places Rotor Maxx’s procedural fairness participatory
rights on the lower end of the spectrum.
[49]
The second factor is the nature of the
legislative scheme. The regulatory scheme is very complex and important to public
safety. As a component of this scheme, the CASA plays an important role in the
Minister’s execution of the duty to ensure public safety. This important safety
role places the participatory rights at the lower end of the procedural
fairness spectrum.
[50]
Once the decision to issue a CASA is made and
the document is published, amendments may occur. However, the Aeronautics
Act and its accompanying regulations do not allow a right of appeal and
only judicial review is possible. The procedural fairness obligations on the
Minister are higher due to this feature.
[51]
The third factor is the importance of the
decision to issue the CASA to the individuals affected. While Transport
Canada pointed out that a CASA is not entered on an AMO’s record, an adverse
entry on an aviation record is not the only way to affect the reputation of an
AMO. One must remember that CASAs are issued in the aviation industry where
safety is of the utmost importance. And alerts to the public about critical
safety issues may cause huge financial consequences to the AMO it is issued
against. Such an alert may also be injurious to commercial reputation because
it impacts the perceived integrity and professionalism of the AMO. On the other
hand, airworthiness is of extreme importance to the Canadian public. The safety
aspect tempers the procedural fairness which was raised higher on the spectrum
due to the serious effect it may have on those it is issued against.
[52]
The legitimate expectation factor is very
dependent on the particular facts of a case. On these facts, Rotor Maxx had
worked with and continued to cooperate and work with Transport Canada to meet
all the requirements as they moved towards an acceptable CAP. Rotor Maxx was
just finalizing the fourth CAP before the CASA was issued. The Minister chose
to exercise the discretion afforded under the Staff Instruction, and provided
the draft CASA to Rotor Maxx for their review and comments prior to its
issuance.
[53]
In the highly regulated aeronautics industry, there
is a legitimate expectation that Transport Canada can explain with clear and intelligible
reasoning how any CASA they issue satisfies the Staff Instruction criteria. In
addition, there is a legitimate expectation that the Minister consider the relevant
comments brought forward.
[54]
In this case, this puts the participatory rights
level higher on the spectrum, though I could envision other urgent critical
safety fact situations that would rest lower on the spectrum.
[55]
Choice of Procedure - The Minister chose to establish the CASA and its related criteria
in the Staff Instruction. The Staff Instruction (see below) is clear that if
all the CASA
criteria are not met then Transport Canada is to consider another option:
9.2(3) If it does not meet the criteria in
paragraph (1), then it should be considered as another type of document, such
as an Airworthiness Directive or Advisory Circular.
[56]
The Staff Instruction criteria and its sequence
of steps are important because they help ensure the Minister satisfies the duty
of procedural fairness. In this case, Transport Canada reversed the steps in
the Staff Instruction by first considering another type of document; in
particular, an NOS. And it was only when Rotor Maxx did not meet the criteria
for the NOS sanctions that Transport Canada considered a CASA (see above paragraphs
26 & 27) but never thereafter considered an Airworthiness Directive or
Advisory Circular. The requirement to consider other options attracts a higher
level of procedural fairness as the instruction is specific: all the criteria
must be met, otherwise other options must be considered. The exercise of
ensuring the criteria are met would have enabled Transport Canada to explain
how Rotor Maxx met the criteria— and if they did not meet the criteria, then
Transport Canada had a positive directive to consider other options. According
to Baker, deference is given to the Minister’s choice of procedure, but
the steps taken must satisfy the duty of procedural fairness which is higher on
spectrum due to the Staff Instruction criteria.
[57]
When all of these factors are balanced, the
participatory rights begin on the lower end of the scale as the urgency and
critical safety factors are of great weight. Cumulatively, however, the
particular facts of this case then raise the content and extent of procedural
fairness to a higher level that would include: notification to Rotor Maxx about
all the parts tested; the reasons Transport Canada felt that all the criteria
for a CASA were met; an opportunity to respond; and a transparent procedure to
recertify parts. In other words, procedural fairness required the absence of a moving
target of what was needed to have an approvable CAP, an explanation about how
the criteria for a CASA were met, and an explanation about the other options
available if the criteria were not met.
[58]
Rotor Maxx made a number of arguments related to
alleged procedural unfairness that fit into the reasonableness analysis. For
that reason, I will only deal with the arguments in this section that clearly
fit into the issue of procedural fairness.
(2)
Additional Parts - Without Opportunity to Respond
[59]
Rotor Maxx alleged that Transport Canada acted procedurally
unfair in the course of this matter. For instance, Rotor Maxx had only been
told that Transport Canada had identified three (3) parts as being at issue, but
would later learn the decision to issue the CASA was based on an additional 17
parts under review from the additional tasks reviewed in the work orders. It
was only during the examinations for the injunction motion that Rotor Maxx found
out that Transport Canada had considered and made their decision on these
additional undisclosed parts. Prior to this, Rotor Maxx had made three CAP
submissions, hired DT1 Training Consortium to assist them, and was preparing a
fourth CAP submission. But since Rotor Maxx was unaware about additional parts at
issue, they had no opportunity to address Transport Canada’s concerns, nor
provide submissions other than on the three parts they thought were at issue.
[60]
I note that I use the figure of 17 additional
parts as that is the most consistent number used by the parties, although it
may have been 7 or 10 additional parts. The fact is, whether the amount is 7,
17, or somewhere in between, it was a significant amount more than the three
parts Rotor Maxx knew were at issue regarding critical parts, destructive
testing, and type design. The exact number does not impact this analysis.
[61]
Transport Canada submits that they repeatedly
went above and beyond any duty of procedural fairness owed. Although Rotor Maxx
was not informed of the 17 additional parts reviewed by Michael Godsell, Transport
Canada argues Rotor Maxx had no procedural right to know every piece of
evidence. Transport Canada’s position is that Rotor Maxx repeatedly failed to
address the Minister’s concerns, was provided notice that they intended to
issue a CASA, and were even provided an opportunity to comment on a draft CASA
prior to its issue. A CASA, by its very nature, is not an enforcement document
and is not an adverse entry on a CAD holder’s aviation record. As a result, the
Minister says that only a low duty of procedural fairness is owed and the
failure to inform Rotor Maxx of the additional parts being considered does not
breach procedural fairness. After a review of the years of correspondence in
letter and email form, as well as the minutes of meetings, it is hard not to be
struck that something was unfair. But of course the unfairness I see in this
case is something very particular to these facts and not something that can or
should be applied in universal or widespread fashion to the industry or
issuance of CASAs.
[62]
Part of the unfairness is that Rotor Maxx was
never made aware of the additional parts under review. Instead, all of the
discussions between the various Transport Canada employees, Rotor Maxx
individuals, their legal counsel, as well as the numerous CAP submissions and
consultant work revolved around the findings related to three parts. For
instance, the parties discussed how recertification should take place in regards
to those three parts, and how to apply the legislation in force at the time to
those three parts in particular.
[63]
Rotor Maxx went above and beyond the Minister’s
own requirements to prove the authenticity of those three parts. For example, they
hired Waldron to prove that each of the three impugned parts met the proof of
conformance, which involved destructive testing amongst other proof of
conformity and safety testing. Michael Godsell admitted he did not look at the
proof of conformance as it would take some time to review, and advised Rotor Maxx
that the proof of conformance did not prove anything.
[64]
Rotor Maxx submitted a detailed report to Transport
Canada about the bolts, bearing, and seal. And Rotor Maxx’s evidence was that
they would have provided the same analysis for the 17 additional parts but was
not provided with the opportunity to do so before the decision was made to
issue the CASA.
[65]
Transport Canada’s review of the additional
parts was cursory and only looking for engineering drawings. Nevertheless, Transport
Canada also concluded in this informal review that Rotor Maxx had a “systemic issue” within its parts recertification
program and was non-compliant. It is evident from the injunction hearing evidence
that the Minister used the cursory review of the additional undisclosed parts
to move the process to the issuance of the CASA.
[66]
Disclosure is a basic tenant of procedural
fairness. Generally, the obligation on a decision maker is to disclose
information prior to making a decision. As the SCC explained in May v
Ferndale Institution, 2005 SCC 82 at paragraph 92:
In the administrative context, the duty of
procedural fairness generally requires that the decision-maker discloses the
information he or she relied upon. The requirement is that the individual must
know the case he or she has to meet. If the decision-maker fails to provide
sufficient information, his or her decision is void for lack of jurisdiction.
[67]
Of course there are times where urgency may
require a departure from the general rule. But on the facts of this case, the
actions of the Minister illustrate the general rule still applied. For
instance, a lengthy consultation period took place after the informal review of
the additional parts. Despite this passage of time, the additional parts
remained undisclosed.
[68]
At this hearing, binders full of correspondence
and reports were provided, but as a result of the nondisclosure, the
information was limited to the three parts. Once Rotor Maxx was finally told at
the cross examinations of the testing of the additional 17 parts, they then
provided evidence that each of those parts met the standards. Given the facts
of this case, I find that the additional undisclosed parts were important, and disclosure
was necessary so that Rotor Maxx could answer the case against them.
[69]
Transport Canada also failed to disclose some of
its conclusions. For instance, in making the decision to issue the CASA,
Michael Godsell concluded the bolt, bearing, and seal were critical but did not
say why. In fact he came to this conclusion despite contacting Sikorsky and GE
who said these were not critical parts. Michael Godsell attests in his
cross examination that he relied on info from Richard Manning (a Transport
Canada employee with technical Sikorsky training) before swearing his affidavit
about the criticality of the parts, but no record exists of their conversation.
Although Michael Godsell also relied on a Google search for his affidavit, he
admits he did the Google search after swearing his affidavit. The
Minister began drafting a CASA on July 23, 2014, assuming Rotor Maxx would fail
to provide the demanded documents by the deadline. But throughout the
consultation process, Michael Godsell never informed Rotor Maxx of his
inquiries with Sikorsky, his inquiries with General Electric, the results of
his Google search, his discussions with Transport Canada colleagues, or of the 17
other parts he reviewed. Even Michael Godsell’s own colleague, John Glavind,
disagreed with his interpretation of the Appendix H process (which was also not
communicated to Rotor Maxx). It is unknown why Michael Godsell felt all engine,
transmission, flight control, and drive train parts are critical as he did so
without making reference to where it states this in the Appendix H process. This
lacks transparency.
[70]
Although Transport Canada says they went above and
beyond the duty of procedural fairness by allowing Rotor Maxx to review and
comment on the draft CASA, a review and comment is meaningless if the party
does not know the case against themselves. I do not agree that all the
procedural fairness needed in this case was to show Rotor Maxx the draft CASA. On
the facts of this case, the content of the duty of fairness included notifying
Rotor Maxx about the additional parts at issue as well as other information
obtained and used so they could know the case against themselves.
(3)
Moving Target
[71]
By way of background, on February 2, 2006, Transport
Canada issued MPL 36 to assist AMOs interpret proposed amendments to the
Appendix H. However, the proposed amendments never came into force.
[72]
Confusion within Transport Canada regarding
whether Rotor Maxx was to follow the MPL 36 is sprinkled throughout these facts.
Specifically, the confusion relates to the fact that, although MPL 36 came
into effect immediately upon its release, the MPL 36 policy itself is in
regards to proposed amendments to the Appendix H regulatory process that never
came into force. The result is the limitation cannot run because the
crystalizing event of legislative amendments coming into force has still not
occurred.
[73]
As a result of this confusion, Transport
Canada’s underlying decisions which led to the CASA are sometimes based on
reasoning that the MPL 36 is valid and sometimes that it is invalid. For
instance, on June 15, 2011, when Michael Godsell approved Rotor Maxx’s MPM, he
did so without requiring the MPL 36 process. Later, Michael Godsell stated he
followed the MPL 36 policy in his November 2012 PI of Rotor Maxx’s facility.
Similarly, in an email dated April 11, 2013, Jeff Phipps stated the MPL 36 is
valid.
[74]
Yet on January 22, 2014, Mark Trainor said an
NOS is legally unsupportable because Rotor Maxx had not broken a single
regulation, a conclusion that indicates MPL 36 is valid. In accordance with
this, a report dated April 30, 2014 by Enforcement Manager, Toke Adams explains
the Notice of Proposed Amendments was “not yet
promulgated at the time of the alleged contravention. The MPL was still in
effect; however, it was not enabled through CAR 571” (emphasis
added). More confusion within Transport Canada of what the target was that
Rotor Maxx had to meet.
[75]
In this case, Transport Canada used the MPL 36
process in their inspection of Rotor Maxx even though the limitation period had
not started (as the regulations had not been promulgated). The difference
between the MPL 36 process and the Appendix H process is apparent in flow
charts provided by Transport Canada which summarize the steps to take. The Appendix
H process also suggests multiple means may be used for conformity.
[76]
The difference between the processes is also apparent
from internal Transport Canada emails discussions dated May 16, 2013 to Jeff
Phipps. This discussion explains “STD 571, Appendix H,
does not mention criticality but MPL defines “critical as”… parts whose failure
or malfunction could cause a catastrophic failure…” and “non-critical” parts as those parts that failure would result
in “…a possible loss of system redundancy.” The email discussion then
asked if the three specific parts (the engine bolts, Sikorsky bearing, and
Sikorsky gearbox seal) are “critical” for the
purposes of undocumented parts. Jeff Phipps’s response deals with the three
examples and after a detailed discussion he says:
However the data required to confirm
their conformity during the undocumented parts evaluation could be data used to
evaluate a non-critical part. Again the important part of the evaluation is if
there is sufficient data to confirm conformity. Once a part has been evaluated
and tested and certified we don’t have any regulatory requirements to identify
the criticality of the part.
[77]
John Nehera then responded that there was
confusion surrounding the MPL 36 permitting the use of an ICA. John Phipps answered
the specific question and ended with:
Based on this
we have changes to make to CAR 571 once TCCA officially incorporates the
definition of ICAs into the CARs. We also have a longstanding project to update
MPL-36 and the undocumented parts process but have not had the resources to
update the CARs yet. Well plus even if we did have the resources CARAC is not
functioning.
[78]
The line of emails ends with the comment that
they will deal with the examples and see if they have the sufficient data to
confirm conformity.
[79]
All this is to say that whether or not the MPL
36 is valid, it is unreasonable to make a decision that Rotor Maxx was not
certifying undocumented parts properly when Transport Canada was unsure of
which flow chart was inforce. The duty of fairness requires transparency in a
decision maker’s choice of procedure. Clearly, the procedure in this case
lacked transparency. Transport Canada’s decision makers were unsure if the MPL
36 is supported by the regulation or, as the Enforcement Manager concluded, in
effect but not supported by regulation. This confusion led a Transport Canada
official to state that “all AMOs that have appendix H
approval should be treated equally, and should be sent a similar letter”
cancelling their recertification process. That equal treatment did not occur,
and Rotor Maxx argued that they were treated differently than other AMOs. As a
result, the consultant focused on meeting what they saw as an ever shifting
target given by Transport Canada due to their confused interpretation about
whether or not MPL 36 applied. This confusion within Transport Canada
illustrates the moving target that Rotor Maxx had to meet was unfair.
[80]
I find that the decision to issue a CASA was
procedurally unfair when applying the Baker factors. That does not of
course mean that every decision to issue a CASA must meet the procedural
fairness that is dictated in this situation as this is a unique set of facts as
outlined above. This keeps in mind Justice L’Heureux-Dubé’s directions that
procedural fairness requires “a fair and open
procedure, appropriate to the decision being made and its statutory,
institutional, and social context,” and that the extent of the
procedural fairness owed will change accordingly with the totality of the
circumstances of the decision at issue.
(4)
Improper Motive & Misfeasance
[81]
Rotor Maxx suggested that the Minister issued
the CASA for an improper purpose. The Minister countered that the only evidence
of misfeasance is the delay in issuing the CASA and said this delay is due to
the lengths through which the Minister tried to work with Rotor Maxx. The
Minister submits that at all times the concern about improperly recertified
undocumented parts being used by industry members was the reason Transport
Canada issued the CASA.
[82]
Rotor Maxx went on to argue that the Minister
breached the principles of natural justice by acting with an improper motive
and acting outside the purpose of the Aeronautics Act in issuing the
CASA.
[83]
Rotor Maxx alleged that Transport Canada decided
to issue a CASA as a way of avoiding the statutory right of review afforded
under other Aeronautics Act enforcement measures. As well, prior to
issuing a CASA, Transport Canada had planned to issue NOS to Rotor Maxx for
failing to produce a list of all the recertified undocumented parts.
[84]
The Airworthiness department checked with Mark
Trainor to see if Rotor Maxx had contravened the regulations. He concluded that
Rotor Maxx had applied the Appendix H process (or something similar) and
followed the regulatory requirements. Additionally, he could not see where
Rotor Maxx had broken a specific regulation. It was partly based on this
analysis that the Transport Canada Enforcement division recommended not to
proceed with an NOS. Despite the fact that Mark Trainor was someone who Jeff
Phipps trusted and relied on, Jeff Phipps later said that Mark Trainor’s report
was just his opinion based on the information at that time.
[85]
According to Rotor Maxx, when the Transport
Canada Enforcement division would not support the NOS (as they had no evidence
of non-compliance), the CASA was used as an alternative way to punish them. Rotor
Maxx submits the CASA led to huge financial ramifications and Transport Canada
was procedurally unfair in pursuing this alternative.
[86]
I see no basis for these submissions on improper
motive and misfeasance, and dismiss the argument that the Minister acted for
improper purposes.
B.
Was the Minister’s decision to issue the CASA
reasonable?
[87]
Rotor Maxx presented several arguments related
to the following: the criteria to issue a CASA; whether the parts in question
were critical; if there was a critical safety issue; and the process and
substance of developing a CAP that is acceptable to Transport Canada. Some of
those arguments were put forward as procedural unfairness, but are better
categorized as going to whether the decision was reasonable.
[88]
Counsel for the Minister presented concise
arguments on the judicially reviewable issues presented regarding
reasonableness The Minister’s position is that safety was always the first and
foremost concern. According to Transport Canada, it was impossible to determine
which undocumented parts had been recertified incorrectly or their whereabouts.
Because of this, Transport Canada submitted their decision to issue the CASA
was reasonable.
[89]
Counsel acknowledged that it appeared on the
record that some personal differences had arisen between certain members on
either side of this dispute. However, counsel also argued that despite the
differences between a select few people, the overall decision made by multiple
members of Transport Canada was reasonable.
[90]
In order to issue a CASA, the matter must
satisfy all of the criteria in section 9.2 of the Staff Instruction:
9.2 Initiation of CASA
(1) All of the following criteria are to
be considered when determining if a CASA is to be used.
(a) Is it a critical safety issue?
(b) Does the information need to be
disseminated urgently?
(c) Is there a recommended action?
(d) Is this the best means to address the
issue?
(2) If all of the criteria are met in
paragraph (1), then a notice of intent should be communicated to the other
Branch responsible for the issuance of a CASA.
(3) If it does not meet the criteria in
paragraph (1), then it should be considered as another type of document, such
as an Airworthiness Directive or Advisory Circular.
[Emphasis added]
[91]
The Staff Instruction explains the purpose of a
CASA is “to convey important safety information and
recommended action to the appropriate stakeholders” (at section 9.1(2)).
In addition to the four criteria that each CASA must satisfy, the Staff
Instruction repeats the necessity for urgency and timeliness :
9.1 (2)…The information contained in a CASA
is critical and shall be sent in a timely manner.
…
(5) Due to the urgency of disseminating
critical safety information, the consultation process for CASA’s may differ
from other documents.
…
9.4 Consultation of CASA
Due to the urgency of disseminating
critical safety information, the consultation
process for CASAs is left to the discretion of the accountable manager.
[Emphasis added]
[92]
Transport Canada’s position is that Rotor Maxx
did not provide a list they felt was urgent to receive before some part failed
and jeopardized someone’s safety. The Minister argued that a CASA is not an
adverse entry on an aviation record or a punishment. Instead, Transport Canada
describes a CASA as simply a notice to all other industry members that there
may be a possible risk. When it comes to safety, the Minister submits there is
a responsibility to err on the side of safety.
[93]
Transport Canada submits that a CASA is for
urgent situations, and a safety risk was always present in this case. Transport
Canada said the reason for the delay is because they tried to work with Rotor
Maxx. Transport Canada added they may have allowed the delay, but the CASA was
still issued with urgency.
[94]
While I agree that a CASA is an effective
document in situations of critical safety that require urgent dissemination, I
do not agree that the Minister reasonably decided this matter required urgent
dissemination. (see also paragraphs 103 & 104 below)
[95]
First, the Minister’s decision is plagued by an
incorrect analysis of a CASA. Transport Canada’s position that “[a] CASA is simply a notice to all other industry members
that there may be a possible risk” (emphasis added) does not
align with the Staff Instruction criteria which mandates the existence of critical
safety information that requires urgent dissemination.
[96]
In this case, Transport Canada did not
issue the CASA after their audit; after a number of failed CAP submissions; or
after they received the draft comments from Rotor Maxx. Instead the CASA consultation
process itself took more months to complete after a long investigative and CAP
process, making the Minister’s finding of urgency unintelligible and unjustifiable.
[97]
The CASA issued in this case says “that Rotor Maxx Support Ltd. did not consistently determine
that the parts they were certifying for installation on components or parts
that were for sale met their approved type design.” The CASA then recommends
that anyone who used one of these parts or whose inventory contains such parts quarantine
the part until the airworthiness of the part is determined. But the CASA blithely
disregards the evidence submitted by Rotor Maxx that on June 11, 2013 —approximately
1 ½ years before Transport Canada issued the CASA—they voluntarily quit
distributing uncertified parts. During the comment and review period, Rotor
Maxx explained to Transport Canada the significance of this voluntary action:
since the parts at issue are small consumable parts they would have been
re-overhauled already. That is to say, by the time the CASA was issued, the
parts would already be out-of-service on civilian aircraft as Rotor Maxx had
not been able to use the Appendix H process for 17 months.
[98]
Other important evidence before the decision
maker was not considered. For example, Michael Godsell admitted he ignored the
full destructive testing results for the three parts. The resulting report he
ignored had shown that the parts conformed and there was no safety issue.
[99]
On February 24, 2015, after the review and
comment period, Transport Canada notified Rotor Maxx about its decision to
issue the CASA despite their comments. This decision—again, a decision that critical
safety information required urgent dissemination—was made 27 months after the
PI finding on November 7, 2012. This passage of time demonstrates that the
decision maker had enough time to consider the information brought forward by
Rotor Maxx. The decision is not within the range of acceptable outcomes,
defensible in fact and law.
(1)
Factual Error
[100] Rotor Maxx argued the CASA contains several material errors. Or, as Rotor
Maxx characterized the issue, Transport Canada proceeded on “alternative facts.”
[101] Transport Canada provided the draft CASA to Rotor Maxx’s legal
counsel on November 19, 2014, and for their response by December 3, 2014.
[102] Rotor Maxx’s legal counsel responded on November 25, 2014 in a
detailed letter with legislative references and point-by-point discussion about
why the draft CASA did not comply with the criteria set out in their Staff Instruction
at section 9.2(1). In that letter Rotor Maxx’s legal counsel pointed to several
errors, including the statement that Rotor Maxx “certified
undocumented parts during the period between June 15, 2011 and April 22, 2014”
when in fact Rotor Maxx had voluntarily quit recertifying parts on June 11,
2013.
[103] Additionally, the evidence shows that Transport Canada knew that
Rotor Maxx had voluntarily quit recertifying parts before receiving this letter,
as seen in a Transport Canada document titled “Teleconference
Record, Decisions & Actions” dated July 23, 2014. These
teleconference notes first say: “The company
voluntarily suspended its recertification process in June 2013” and
after much discussion: “Decision taken to pursue the
CASA process.” The participants of that teleconference are named as: J.
Glavind, M. Trainor, J. Pilon, M. Holme, M. Godsell, R. Lau, P. Tang, S.
Stanfield, B. Caminsky, and J. Nehera. The individuals that were informed that
Rotor Maxx was not certifying parts since June 2013 were some of the same
individuals that were involved in the issuance of the CASA that said Rotor Maxx
certified parts between June 15, 2011 and April 22, 2014 which is in error.
[104] The letter also addressed the lack of urgency and critical safety.
For instance, the letter points out that Transport Canada waited 25 months to
act after finding out about the lack of paper for some parts, and aircraft had
flown at least 17 months without any issues. As explained earlier, 17 months is
significant. By this time these small consumable parts would have been both re-overhauled
and out-of-service on civilian aircraft. In addition, the letter argued there
was no urgency because Rotor Maxx had quarantined the other parts not for
civilian end users.
[105] Although not stated in the letter, further evidence, such as the
full destructive testing on the three parts (again, the only parts at issue
that Rotor Maxx was aware of), was before the decision maker. This evidence had
shown that the parts conformed and there was no safety issue, but was not
considered by the decision maker.
[106] In a response dated February 24, 2015, John Nehera states that they
have reviewed Rotor Maxx’s comments regarding the draft CASA and will not make
any substantive changes when they release the CASA on March 17, 2015. Rotor
Maxx indicates this error caused them further loss of their reputation.
[107] I agree that the error makes the decision unreasonable because this
illustrates the decision maker did not consider the proper issue, and proceeded
without ensuring the Staff Instruction criteria were satisfied. The effect of
this error is apparent from John Nehera’s response to Rotor Maxx’s comments, where
he does not consider errors that are relevant to the criteria to be substantive
errors: In particular he states that “[w]hile the
comments have resulted in minor changes to the CASA in terms of qualifiers and
process, they continue to reflect an incorrect interpretation of the Canadian
Aviation Regulations and have therefore not resulted in substantive changes
to the original draft” (emphasis added).
[108] Although given twenty days to respond (from November 14, 2014 until
December 3, 2014), Rotor Maxx provided a full response by November 24, 2014. And
yet despite the delay in Transport Canada’s response (dated some months later
on February 24, 2015), their decision was still to proceed with issuing the
CASA on March 17, 2015. After this additional passage of time the Minister’s
decision to issue the CASA is even more unintelligible.
[109] Next, Rotor Maxx argued that the Minister’s delegates
inappropriately alleged that they certified parts as “new”.
Rotor Maxx argues that this is not possible since the certification of new
parts is reserved for OEMs and Rotor Maxx has never had this authority.
Transport Canada did not present evidence to indicate that Rotor Maxx
represented itself as an OEM, or used the OEM process for certifying parts as
new. In fact, the evidence indicates that Transport Canada knew Rotor Maxx did
not certify the parts as new. In particular, on the Authorization Release Certificate
form the box for parts manufactured in conformity (13 A) is crossed off and the
box for used parts (14 A) is utilized. Since this Authorization Release
Certificate form is dated June 11, 2013, the evidence is also that Transport
Canada knew Rotor Maxx did not certify the parts as new well before receiving
Rotor Maxx’s letter.
[110] Yet despite this knowledge, the CASA does say that: “This advisory deals with parts and components certified as new,
overhauled, or repaired by Rotor Maxx Support Ltd. Approved Maintenance
Organization (AMO) # 86-06 between June 15, 2011 and April 22, 2014” (emphasis
added). Again, Rotor Maxx’s letter pointed to this error but the error was not
changed. Providing this error of fact to the industry could cause economic harm
and it was not reasonable for Transport Canada to use the term when they had no
evidence to support it, and even further unreasonable to do so after Rotor Maxx
had brought the error to their attention.
[111] I find that the decision was unreasonable as all of the criteria to
issue a CASA must be met for the Minister to come to a reasonable decision. Because
I have found the decision is unreasonable and procedurally unfair on other
points so it is unnecessary to comment on the further errors argued by Rotor
Maxx. The application is granted.
IX.
Remedy
[112] The remedies sought by Rotor Maxx include the following:
- This Court quash
the CASA;
- An order for the
Respondent to remove the CASA and notify all recipients about its removal
from the website for 12 a month period;
- For this Court
to issue a declaration that Rotor Maxx complied with the CARs recertification
procedure;
- A writ of mandamus
to approve the CAR 571 recertification procedures, or in the alternative,
a declaration that Rotor Maxx is exempt, always has been exempt, and is
entitled to use its own procedures.
[113] Transport Canada argued against the remedies sought by Rotor Maxx as
not being appropriate in this judicial review other than the quashing of the
decision if Rotor Maxx was successful.
[114] I am not prepared to grant the remedies sought by Rotor Maxx and
will order the CASA quashed and to have it removed from any published form.
X.
Costs
[115] Several proceedings before this judicial review ordered costs. Costs
were awarded in regards to an injunction application heard by Justice Shore over
three days in April 2015, and included 4 days of cross-examination in Victoria.
Justice Shore dismissed the motion for an interlocutory injunction with costs
to the Respondent. On March 19, 2015, Justice St-Louis ordered costs in the
cause. As well, at the conclusion of a one-half-day motion in December 2015 in regards
to rule 317 of the Federal Courts Rules, SOR/98-106, Prothonotary Lafrenière
ordered additional documents and costs of $2,000.00 and disbursements of
$500.00 payable in the cause to Rotor Maxx.
[116] Rotor Maxx argued for enhanced costs as they have suffered damages
within the industry because of the CASA. If I award lump sum costs, Rotor Maxx
asked the lump sum to be elevated over Column 3 of Tariff B. Their reasoning is
that this matter has taken a long time and exceeded the timeline set by a case
manager. Rotor Maxx further suggested that a lump sum of $425,000.00 (25% less
than the actual bill) would be fair and reasonable.
[117] Transport Canada’s position is that costs should be from Column 3. Although
two counsels were used on occasion they claimed only for one, and that their
draft bill came to $74,353.70 including disbursements. If Transport Canada is
unsuccessful, then they submitted it must be remembered that the Minister did
not issue the CASA for an improper purpose and the delay was due to a change of
counsel as well as the logistics of holding a cross examination in a number of
cities. Transport Canada also felt that there was more cooperation between the
parties, and that the relationship had never risen to a caustic disrespectful
level. The Respondent rounded out the costs and seeks $75,000 including
disbursements.
[118] This matter was unnecessarily complicated and lengthy. The record is
20 volumes long and contains over 9,000 pages. Cross examination on the
affidavits lasted 6 days in Victoria, 1 day in Vancouver, and 2 days in Calgary.
Several other motions were brought over a long period of time. The cause could
be due to the remedy sought by Rotor Maxx (a significant amount of evidence was
brought since they asked that I make the decision instead of sending it back
for redetermination). In addition, the matter is complex because of the
affiant’s different geographical locations which necessitated counsel to
travel.
[119] I will award costs in lump sum amount of $100,000.00 plus disbursements
not to exceed $10,000.00 to Rotor Maxx. This amount is inclusive of the interim
motions that did not already award lump sum costs before this judicial review. In
regards to the motion where costs were awarded to the Respondent, these costs
can be assessed by an assessment officer or agreed to by the parties and then
setoff. Costs are to be payable forthwith.
JUDGMENT in T-444-15
THIS COURT’S JUDGMENT is that:
1.
The judicial review is granted and the CASA is
quashed;
2.
Costs are awarded to Rotor Maxx in the lump sum
of $100,000.00 plus disbursements not to exceed $10,000.00 to be paid forthwith
by the Respondent.
"Glennys L. McVeigh"
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