Air Transat At Inc. c. Transports Canada, docket T-307-00

                                                                                                                                  Date: 20010130

                                                                                                                               Docket: T-307-00

OTTAWA, Ontario, January 30, 2001

BEFORE:        Rouleau J.

Between:

                                                        AIR TRANSAT A.T. INC.

                                                                                                                                               Plaintiff

And:

                                                         TRANSPORT CANADA

                                                                                                                                           Defendant

                                                                   JUDGMENT

[1]         The application is allowed in accordance with the content of the attached reasons.

Certified true translation

Suzanne M. Gauthier, LL.L. Trad. a.

                                                                                                                                  Date: 20010130

                                                                                                                               Docket: T-307-00

Between:

                                                        AIR TRANSAT A.T. INC.

                                                                                                                                               Plaintiff

And:

                                                         TRANSPORT CANADA

                                                                                                                                           Defendant

                                                    REASONS FOR JUDGMENT

ROULEAU J.

[1]         The plaintiff is asking the Court, pursuant to s. 44 of the Access to Information Act, R.S.C. 1985, c. A-1 (hereinafter "the Act"), to review a decision by the defendant dated January 28, 2000, authorizing disclosure of documents in response to applications for access to information made to the Department concerning plant inspection reports.

[2]         The plaintiff is an air transport business with its head office located at Mirabel, Quebec. It is governed by the Canadian Aviation Regulations (SOR/96-433), which set out the procedures for operating and maintaining aircraft.

[3]         In November 1988 the defendant conducted an evaluation of the plaintiff to determine whether it met the standards imposed by the Regulations. An inspection report was filed in 1999.

[4]         On November 12, 1999 the defendant informed the plaintiff that an application concerning its company had been received pursuant to the Act. The plaintiff then indicated that in its opinion part of the information contained in the 1999 evaluation report should not be released, pursuant to s. 20 of the Act.

[5]         On January 28, 2000 the defendant indicated to the plaintiff that only the information protected by ss. 19(1) and 20(1)(d) of the Act would not be released.

[6]         The plaintiff then filed this application for judicial review, alleging that passages of the report should not be disclosed pursuant to s. 20(1)(b) and (c) of the Act.

[7]         The issue is whether s. 20(1)(b) and (c) of the Act should be applied to the documents in question.

[8]         The plaintiff argued that the documents in question fall under the exception contained in s. 20(1)(b) of the Act, in that they contain commercial or technical information that is confidential in nature and has been consistently treated by it in a confidential manner.

[9]         The plaintiff maintained that the documents in question fall under the exception contained in s. 20(1)(c) of the Act in that their disclosure could reasonably be expected to result in material financial loss or gain to the plaintiff or prejudice its competitive position.

[10]       The defendant argued that the inspection report in question is a federal government document covered by the Act and therefore does not meet the condition of objective confidentiality.

[11]       Moreover, the defendant argued that the plaintiff had not discharged its burden of showing that s. 20(1)(c) of the Act applied. The plaintiff had not succeeded in showing a "a reasonable expectation of probable harm", as required by precedent. The defendant maintained that there is no basis for concluding that there was any fear of actual and certain financial loss in the event the inspection report was released.

Analysis

Exception based on confidentiality of information - s. 20(1)(b)

20. (1) Subject to this section, the head of a government institution shall refuse to disclose any record requested under this Act that contains

                                                                                                    . . . . .

(b)     financial, commercial, scientific or technical information that is confidential information supplied to a government institution by a third party and is treated consistently in a confidential manner by the third party . . .

[12]       The plaintiff considered that this exception should be applied to the information underlined in green at pp. 22 to 140 of its confidential record.

[13]       Four conditions must be met for this exception to apply. The information must be financial, commercial, scientific or technical in nature. The information must be confidential information. It must have been supplied to a government institution by a third party. Finally, it must have been treated consistently by the third party in a confidential manner.

[14]       The defendant maintained that the report is a federal government document covered by the Act and therefore does not meet the condition of objective confidentiality. In my view, the fact that a document is considered as a federal government document covered by the Act is not sufficient to support a conclusion that the content of the document cannot fall within the exception set out in s. 20(1)(b). A distinction should be made between the analysis done by the government organization from information obtained during the inspection and the information supplied directly to the inspectors by the third party. Where there is an inspection report, which additionally is a federal government document covered by the Act, anyone seeking an exception to the Act must prove the confidentiality of the information initially supplied as well as showing the ongoing confidentiality of the information. In other words, in my opinion it is necessary to establish that the information was confidential when it was given to the inspectors and had to remain confidential throughout the inspection report, which includes the information contained in the final report. This must be shown by the submission of real direct evidence. In my view, the defendant's argument is insufficient and the Court must analyse the claims of the defendant [sic] in accordance with the exception contained in s. 20(1)(b) and the four conditions for it to apply.

Commercial or technical information

[15]       The report contained information on the operating methods set out in the Maintenance Control Manual ("MCM"), the detailed content of the MCM in the form of tables of contents, various documents describing particular operating methods and various other technical information. Indeed, the whole inspection report could easily be regarded as containing technical information. It appears to the Court that this condition was unquestionably met.

Origin of information

[16]       The inspection report contained several copies of documents supplied by the plaintiff. At the same time, it also contained conclusions arrived at by the inspectors on the basis of information supplied by the plaintiff. Since the inspectors' conclusions are so closely related to the information supplied, they could not be dissociated from that information.

[17]       As to the third condition mentioned above, the relationship the communications of which it will benefit the public to keep confidential, the Court reviewed this briefly in Air Atonabee Ltd. v. Minister of Transport (1989), 27 F.T.R. 194, as follows:

As to the third element, the relationship between the parties, the president of the applicant company avers to the special relationship of confidence in communications between the parties here and between the airline industry and the department. He underlines the importance of that relationship in an on-going situation where the department's inspection staff must rely on industry operators for knowledge and experience in the operation of aircraft and where that staff is limited in its resources to oversee an industry that is expanding and diversifying in an era of deregulation. The special relationship between air industry and inspectors is dealt with in a recent study of the Law Reform Commission of Canada, Inspection: A Case Study and Selected References, by John C. Clifford (1988), which generally supports the applicant's view of the current relationship. This report, based in part on substantial field study of the air inspection services of the respondent's department, includes the following pertinent passages at p. 17:

The author accompanied airworthiness inspectors during routine inspections of aircraft and conversations with air crew. One inspector constantly stressed the importance of relations with airline staff, and underlined the fact that airworthiness inspectors are mainly interested in getting things corrected. This is accomplished by maintaining a strong network of contacts in the industry, checking with manuals, and generally using every available source of information. The airworthiness inspector . . . noted that many problems followed from the use of incomplete reports. Additionally, the airworthiness inspector expressed his difference of opinion respecting enforcement: specifically, he did not think it was always appropriate to follow up with enforcement measures when, for example, ‘snags' were reported by AMEs. He outlined their responsibilities, and noted the importance of interpersonal relations and shared backgrounds.

The airworthiness inspectors indicated that relations with the AMEs were very important because information about maintenance problems was typically passed on in confidence to the airworthiness inspector. As well, remote sources of problems were discussed.

                                                                                                    . . . . .

While I am not persuaded that the relationship here is one of special confidence in which all records should be exempt from disclosure and while it is not one of a fiduciary nature as in Montana, supra, it is consistent with the public interest, and the relationship would be fostered for the benefit of the public, in my view, by treating as confidential those communications which originate with the applicant where the applicant has considered them confidential. In this case the third party would be encouraged to be open and frank with inspectors if its understanding about the restricted purposes and circulation of its communications is recognized and respected. Where the records are from department sources, not otherwise exempt from disclosure under s. 20(1), the general purpose of the Act, which identifies as a public interest given priority by Parliament the provision of access of [sic] government controlled records, should be given effect unless the relationship between the third party and government is exceptional and warrants treating the records as confidential.

[18]       In my opinion, these comments are applicable to the case at bar and I feel that the third condition of confidentiality is also met, at least regarding the documents supplied by the plaintiff.

[19]       I do not think that in the circumstances of the instant case there is any serious question about the consistently confidential nature of the documents supplied by the plaintiff. As to the other information, namely the inspectors' conclusions and the lists of examples of non-compliance with the Regulations, the comments made under the previous heading are applicable.

[20]       After reviewing the arguments of the parties at the hearing and in accordance with their concessions on certain points of information contained in the report, I have decided to indicate in tabular form what should happen to each of the disputed items of information. The page numbers indicated correspond to the pagination in the defendant's record.

Exception based on prejudicial nature of information - s. 20(1)(c)

20. (1) Subject to this section, the head of a government institution shall refuse to disclose any record requested under this Act that contains

                                                                                                    . . . . .

(c)     information the disclosure of which could reasonably be expected to result in material financial loss or gain to, or could reasonably be expected to prejudice the competitive position of, a third party . . .

[21]       The plaintiff considered that this exception should be applied to the information highlighted in yellow at pp. 22 to 140 of its confidential record. These are in general negative conclusions regarding the plaintiff. The inspectors noted several incidents which indicated that the plaintiff was not in full compliance with the requirements of the Canadian Aviation Regulations.

[22]       In Canada Packers Inc. v. Canada (Department of Agriculture), [1989] 1 F.C. 47 (F.C.A.), the Court of Appeal indicated that the exception contained in s. 20(1)(c) required a reasonable expectation of probable harm (at p. 60 of the judgment). The plaintiff should show that the reports are so unfavourable that they could reasonably be expected to result in material financial loss or to prejudice its competitive position or interfere with contractual or other negotiations (Canada Packers, at 64-65).

[23]       In its memorandum the plaintiff alleged that [TRANSLATION] "a substantial quantity of information contained in the inspection report . . . called into question whether Air Transat A.T. Inc. was in compliance with certain of the rules contained in the Canadian Aviation Regulations". Further, [TRANSLATION] "such findings, when made in a field like that of air transport where customer confidence often depends on intangibles, could if it were released to third parties without being adequately placed in context irreparably injure the image of Air Transat A.T. Inc., and this would have an immediate effect on its goodwill".

[24]       The affidavits filed in support of the application do not discuss the question of the anticipated harm at any length. The affidavit of Denis Pétrin, the plaintiff's vice president, finance and administration, indicated that [TRANSLATION] "the disclosure of the information . . . without being previously placed in context and without further explanation would give the public a false image of the safety level of the company". Further, [TRANSLATION] "In a highly competitive market, such disclosure would by its negative impact on the public be very likely to give our competitors an advantage". Finally, he added [TRANSLATION] "In such a situation, financial loss could reasonably be expected to result". The other affidavits filed in support of the application are more or less to the same effect.

[25]       With respect, these general comments might be capable of applying to any situation in which an inspection report contains negative information on a company. In my view, showing that a reasonable expectation of probable harm exists requires more than mere general allegations of the type contained in the affidavits filed by the plaintiff. In the case at bar, there is no evidence of the extent of the harm anticipated. Further, the plaintiff gave no indication of the link between the information and the harm described. It also did not appear to take into account the fact that the report also contains several positive conclusions about it. Further, the plaintiff cannot assume, as it did, that the public could not properly interpret the information contained in the reports without supporting its arguments by concrete evidence (see Coopérative fédérée du Québec et al. v. Agriculture and Agrifood Canada and Bernard Drainville, F.C., File No. T-1798-98, January 7, 2000).

[26]       It is with this in mind that I have arrived at the following conclusions on the submissions made by the parties at the hearing:

Conclusion

[27]       I allow the application in accordance with the findings made above.

OTTAWA, Ontario

January 30, 2001

Certified true translation

Suzanne M. Gauthier, LL.L. Trad. a.

                                                   FEDERAL COURT OF CANADA

                                                               TRIAL DIVISION

                              NAMES OF COUNSEL AND SOLICITORS OF RECORD

COURT No.:                                                                     T-307-00

STYLE OF CAUSE:                                                         AIR TRANSAT A.T. INC. v.

TRANSPORTS CANADA

PLACE OF HEARING:                                                    Montréal, Quebec

DATE OF HEARING:                                                      January 10, 2001

REASONS FOR JUDGMENT BY:                                 ROULEAU J.

DATED:                                                                            January 30, 2001

APPEARANCES:

Pierre-Georges Roy                                                           FOR PLAINTIFF

Bernard Letarte                                                                  FOR DEFENDANT

SOLICITORS OF RECORD:

Bélanger, Sauvé                                                                 FOR PLAINTIFF

Montréal, Quebec

M. Rosenberg, Deputy Attorney General of Canada           FOR DEFENDANT

Ottawa, Ontario