Pan American World Airways Inc. v. The Queen et al., [1981] 2 SCR 565

Supreme Court of Canada

Pan American World Airways Inc. v. The Queen et al., [1981] 2 S.C.R. 565

Date: 1981-12-18

Pan American World Airways Inc. Appellant;

and

Her Majesty The Queen and the Minister of Transport Respondents.

The Flying Tiger Line Inc. Appellant;

and

Her Majesty The Queen and the Minister of Transport Respondents.

Trans World Airlines Inc. Appellant;

and

Her Majesty The Queen and the Minister of Transport Respondents.

1981: December 1; 1981: December 18.

Present: Laskin C.J. and Martland, Ritchie, Dickson, Beetz, Estey, McIntyre, Chouinard and Lamer JJ.

ON APPEAL FROM THE FEDERAL COURT OF APPEAL

Air law—International law—Legality of fees for telecommunication and en route navigation for aircraft overflying Canada and on high seas—Services provided by and from facilities within Canada—Interpretation of Aeronautics Act and the Convention on International Civil Aviation—“Prescribing” charges—Aeronautics Act, R.S.C. 1970, c. A-3 as amended, ss. 4, 5, 6—Air Regulations, C.R.C. 1978, c. 2, s. 500—Chicago Convention, 1944, arts. 12, 15, Annex 2.

Appellants based in the United States, challenged the legality of fees exacted by the federal Minister of Transport for telecommunication and en route navigation services provided at their request by and from facilities within Canada. None of the flights landed in Canada although in some instances they passed through Canadian air space.

Held: The appeals should be dismissed.

There is no warrant for reading into s. 5 of the Aeronautics Act the words “flights within Canada” which appear in s. 4. Section 5 authorizes the prescription of charges for the use of any facility or service provided in respect of any aircraft and a limitation to Canadian aircraft or to flights within Canada would be

[Page 566]

to distort the plain meaning of s. 5(a). The dictionary meanings of “prescribe”, as used in s. 5, gave authority not only to fix the charges but also to impose an enforceable legal obligation of payment upon the appellants.

Articles 12 and 15 of the Convention on International Civil Aviation, even accepting that they had been brought into force in Canada, could not apply in the present case.

APPEALS from a judgment of the Federal Court of Appeal[1], affirming a judgment of Mahoney J.[2] Appeals dismissed.

M.E. Corlett, Q.C., and G.B. Greenwood, for the appellants.

W.I.C. Binnie, Q.C., and David Sgayias, for the respondents.

The judgment of the Court was delivered by

THE CHIEF JUSTICE—The appellant air lines, all three having their headquarters and home bases in the United States, challenge the legality of fees exacted from them by the federal Minister of Transport, on behalf of the Canadian Government, for certain telecommunication and en route navigation services provided at their request All the services were provided by and from facilities within Canada, and related to flights over the polar route between points on the west coast of the United States and Europe and over the North Atlantic route between points in eastern United States and Europe. None of the flights landed in Canada, although in some instances they passed through air space over Canadian territory. The plaintiffs’ declaratory action and a claim for refund of fees paid under protest were dismissed by Mahoney J., who allowed a counterclaim of the Crown in right of Canada for the recovery of unpaid fees. His judgment was affirmed by the Federal Court of Appeal which simply agreed with his decision and agreed, in substance, with his reasons.

[Page 567]

The appellants founded their action and their refund claim on two grounds. They contended, first, that they were entitled to rely on the Convention on International Civil Aviation (the Chicago Convention), signed on December 7, 1944 and in force on April 4, 1947. Both Canada and the United States are parties to the Convention. In order to support this reliance they were required, of course, to show that the Convention, and particularly articles 12 and 15 thereof which were the focus of their submission, had become part of the domestic law of Canada. They asserted that it had, in its relevant provisions, become effective as Canadian law by virtue of s. 6 of the Aeronautics Act, R.S.C. 1970, c. A-3 and the Air Regulations promulgated thereunder, especially Air Regulation 500. The second ground of objection to the lawfulness of the fees was based on ss. 4 and 5 of the Aeronautics Act, the contention being that the two sections should be construed to apply only to flights within Canada (although only s. 4 is so expressed) and, alternatively, that the power given in s. 5 to “prescribe” charges does not encompass authority to exact or collect them.

I shall deal with these two grounds in order but, before doing so, I should say that a third argument based on alleged customary international law forbidding the exercise of sovereignty by any State in the airspace over the high seas, fails for want of relevance even if it were otherwise an acceptable principle in a domestic court. There is here no assertion of sovereignty in the airspace over the high seas but a matter of the provision of services centered in Canada and given at the request of the appellants. Although it is a fact that the request is obligatory by reason of the dictate of their national government, that gives them no immunity from paying charges for the services if the charges are lawfully exacted under Canadian law. There is no occasion here to apply a principle of construction favouring the compatibility of domestic law with international law. Either international law invoked in this case is effective because expressly incorporated into Canadian law or the exactions are not, in any event, authorized under Canadian law;

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there is no other challenge that the appellants can mount.

Turning then to the first of the two grounds advanced by the appellants, I reproduce articles 12 and 15 of the Chicago Convention which are as follows:

Article 12

Rules of the Air

Each contracting State undertakes to adopt measures to insure that every aircraft flying over or maneuvering within its territory and that every aircraft carrying its nationality mark, wherever such aircraft may be, shall comply with the rules and regulations relating to the flight and maneuver of aircraft there in force. Each contracting State undertakes to keep its own regulations in these respects uniform, to the greatest possible extent, with those established from time to time under this Convention. Over the high seas, the rules in force shall be those established under this Convention. Each contracting State undertakes to insure the prosecution of all persons violating the regulations applicable.

Article 15

Airport and similar charges

Every airport in a contracting State which is open to public use by its national aircraft shall likewise, subject to the provisions of Article 68, be open under uniform conditions to the aircraft of all the other contracting States. The like uniform conditions shall apply to the use, by aircraft of every contracting State, of all air navigation facilities, including radio and meteorological services, which may be provided for public use for the safety and expedition of air navigation.

Any charges that may be imposed or permitted to be imposed by a contracting State for the use of such airports and air navigation facilities by the aircraft of any other contracting State shall not be higher,

(a) As to aircraft not engaged in scheduled international air services, than those that would be paid by its national aircraft of the same class engaged in similar operations, and

(b) As to aircraft engaged in scheduled international air services, than those that would be paid by its

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national aircraft engaged in similar international air services.

All such charges shall be published and communicated to the International Civil Aviation Organization: provided that, upon representation by an interested contracting State, the charges imposed for the use of airports and other facilities shall be subject to review by the Council, which shall report and make recommendations thereon for the consideration of the State or States concerned. No fees, dues or other charges shall be imposed by any contracting State in respect solely of the right of transit over or entry into or exit from its territory of any aircraft of a contracting State or persons or property thereon.

I do not see how article 12 can apply here, accepting that it has been brought into force in Canada. The regulation-making power in s. 6 of the Aeronautics Act relates to air navigation over Canada and conditions under which aircraft registered in Canada may be operated over the high seas or any territory not within Canada. Regulation 500 of the Air Regulations, now Consolidated Regulations of Canada, 1978, c. 2 reads as follows:

500. All Canadian aircraft in flight over the high seas shall comply with the Rules of the Air contained in Annex 2 to the Convention as amended from time to time.

The incorporation of Annex 2 of the Convention, dealing with rules of the air, and of supplementary procedures fixed thereunder has no effect in this case when there is a limitation under Regulation 500 to Canadian aircraft. Moreover, I do not see how the Annex can affect adversely Canadian competence to charge for facilities and services that it provides within Canada.

Nor is the appellants’ position any better under article 15 of the Convention. In so far as the article deals with charges for the use of air navigation facilities, it merely requires that they be imposed on a non-discriminatory basis and there was no suggestion here that there was any violation of this requirement.

[Page 570]

The first ground of objection to the charges fails and I turn to consider the second ground.

Sections 4 and 5 of the Aeronautics Act are in these terms:

4. The Governor in Council may make regulations imposing upon the owners or operators of aircraft, wherever resident, in respect of flights within Canada, charges for the availability during such flights of any facility or service provided by or on behalf of the Minister, and every charge so imposed constitutes a legal obligation enforceable by Her Majesty by action in the Federal Court of Canada.

5. The Governor in Council may make regulations, or, subject to and in accordance with such terms and conditions as may be specified by him, authorize the Minister to make regulations prescribing charges for the use of

(a) any facility or service provided by the Minister or on his behalf for or in respect of any aircraft; and

(b) any facility or service not coming within paragraph (a) provided by the Minister or on his behalf at any airport.

At one time, these provisions were included in the same section: see 1966-67 (Can.), c. 10, s. 1, adding s. 3A to the Aeronautics Act. There were intermediate changes (which it is unnecessary to examine) before the present ss. 4 and 5 were enacted.

I accept the submission of counsel for the respondent Attorney General of Canada that there is no warrant for reading into s. 5 the qualifying words “flights within Canada” which appear in s. 4. This first mentioned provision uses the comprehensive words “any aircraft” in clause (a) thereof and a limitation to Canadian aircraft or to flights within Canada would be to distort the plain meaning of the clause, especially when considered against the different purposes reflected in ss. 4 and 5. Section 4 authorizes charges against either foreign or domestic aircraft operators (“wherever resident”) in respect of flights within Canada “for the availability during such flights of any facility or service” (the italics are mine) while s. 5 authorizes the prescription of charges for the use of any facility or service (the italics are, again, mine)

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provided in respect of any aircraft.

It is obvious that s. 4 is more commanding in its language than s. 5. Charges imposed pursuant to regulations made under s. 4 constitute an enforceable legal obligation. There are no such words in s. 5 under which the charges exacted here were collected, and it is because of this difference in the two sections that federal authority to collect them is questioned. The charges in issue are founded on the Air Services Fees Regulations, SOR/72-487, as amended by SOR/74-137.

Sections 19, 20, 24 and 25 of these Regulations are as follows:

19. (1) The fee is $30.00 for each flight in the course of which an aircraft uses international frequencies to obtain telecommunication services provided by or on behalf of the Minister at the following aeronautical stations:

Cambridge Bay, N.W.T.	Mont-Joli, P.Q
Churchill, Man.	Montreal, P.Q.
Edmonton, Alta.	Resolute, N.W.T.
Frobisher, N.W.T.	Sydney, N.S.
Gander, Nfld.	Vancouver, B.C.
Goose Bay, Nfld.	Winnipeg, Man.
Moncton, N.B.

(2) Subsection (1) does not apply in respect of state aircraft.

20. (1) For the use by an aircraft, in the course of a flight over the North Atlantic, known as the North Atlantic Route, of the en route navigation facilities or services set out in Column II of the table to this section provided by or on behalf of the Minister, at a location set out in Column I of that table, opposite that facility or service, the fee is $33.00.

(2) For the use by an aircraft in the course of a flight proceeding to and from Europe, Greenland or Iceland, known as the Polar Route, of the en route navigation facilities provided by or on behalf of the Minister, at the Area Control Centre at Edmonton, Alberta, the fee is

(a) $16.50, for the period commencing April 1, 1974 and ending March 31, 1976; and

(b) $33.00, after April 1, 1976

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(3) Subsections (1) and (2) do not apply in respect of state aircraft:

TABLE

Column I	Column II
Location	Facility of Service
Battle Harbour, Nfld.	Navigation Aids
Bonavista, Nfld.	Navigation Aids
Gander, Nfld.	Area Control Centre
	Navigation Aids
Goose Bay, Nfld.	Navigation Aids
St. Anthony, Nfld.	Navigation Aids
St. John’s, Nfld.	Navigation Aids
Sept-Îles, P.Q.	Navigation Aids
Stephenville, Nfld.	Navigation Aids

Computation and Payment of Fees

24. Where a fee calculated according to these Regulations is not a multiple of five cents, the fee payable shall be reduced or increased to the nearest multiple of five cents.

25. All fees are due and payable when incurred except for the annual parking fee which is payable in advance.

There were some changes in the Regulations in Consolidated Regulations of Canada, 1978, c. 5 but they remain substantially in the same terms as before.

Obviously, the provision in s. 25 aforementioned that “all fees are due and payable when incurred” cannot avail to make the fees payable unless authority to that end is found in the regulation making power conferred by s. 5 of the Aeronautics Act. Do then the words in s. 5 authorizing the “prescribing” of charges connote not only fixing the quantum of charges but also the imposition and consequent liability to pay them? Mahoney J., after reference to dictionary meanings of the term “prescribe” concluded that s. 5 gave authority not only to fix the charges, but also to impose a legal obligation to pay them. I find no reason to differ from him on this issue and would, accordingly, reject the submission that s. 5 is deficient in its formulation to lay an obligation of payment upon the appellants.

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The factum of the respondent included the submission that the charges were, in any event, payable as a matter of contract or quasi-contract because the services in question here were requested by the appellants and supplied at their request. The submission was not, however, pushed and Mahoney J. noted a possible issue of his jurisdiction if it were. The appellants did not take any jurisdictional point and the respondent joined issue only on the scope of s. 5.

In the result, I would dismiss the appeals with costs and affirm the judgment for the respondent on its counterclaim.

Appeals dismissed with costs.

Solicitors for the appellants: Maclaren, Corlett, Tanner and Greenwood, Ottawa.

Solicitor for the respondents: R. Tassé, Ottawa.