Docket: A-242-16
Citation:
2016 FCA 314
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CORAM:
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NADON J.A.
DAWSON J.A.
SCOTT J.A.
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BETWEEN:
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DR. GÁBOR
LUKÁCS
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Appellant
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and
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CANADIAN
TRANSPORTATION AGENCY and NEWLEAF TRAVEL COMPANY INC.
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Respondents
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REASONS
FOR JUDGMENT
DAWSON J.A.
[1]
In the airline industry entities who do not
operate aircraft, but who purchase the seating capacity of an air carrier and
subsequently resell the seats to the public are referred to as “resellers” or “indirect air
service providers”.
[2]
The Canadian Transportation Agency determined
that resellers do not operate an “air service”
as that term is defined in subsection 55(1) of the Canada Transportation Act,
S.C. 1996, c.10 (Act) so long as they do not hold themselves out to the public
as an air carrier operating an air service (Decision No. 100-A-2016). It
followed from this conclusion that resellers are not required to hold an air
licence and that, based on its proposed business model, NewLeaf Travel Company
Inc. would not operate an air service.
[3]
On this appeal from the decision of the Agency,
the appellant argues that the decision is unreasonable and that in reaching its
decision the Agency exceeded its jurisdiction.
[4]
I respectfully disagree.
[5]
The Agency based its interpretation of
subsection 55(1) of its home statute on a textual, contextual and purposive
analysis. The Agency particularly noted that while section 57 of the Act
prohibits a person from operating an air service unless the person holds a
licence in respect of that service, section 59 does not require a person
selling an air service to be a licensee. Section 59 simply requires “a person” to hold a licence in respect of the air
service. Read together, these sections were found to evidence Parliament’s
intent that selling an air service to the public does not equate to operating
an air service, notwithstanding that resellers exercise commercial control over
an air service with respect to things such as routes, scheduling, pricing and
equipment, while licenced carriers operate the aircraft on the resellers’
behalf.
[6]
This was a reasonable interpretation of the Act.
It is to be remembered that when the words of a provision are precise and
unequivocal the ordinary meaning of the words plays a dominant role in the
interpretive process (Canada Trustco Mortgage Co. v. Canada, 2005 SCC
54, [2005] 2 S.C.R. 601, at paragraph 10). Nor was the decision unreasonable by
virtue of the Agency’s failure to provide a comprehensive exposition of all of
the indicia of what it means to operate an air service. It was sufficient for
the Agency to find that “what it means to operate an
air service does not capture resellers, as long as they do not hold themselves
out to the public” as operating aircraft or a domestic or international
air service.
[7]
In my view, the appellant’s most cogent argument
is that together sections 65 and 66 of the Act reflect Parliament’s intent that
persons with control over the fares, routes, schedules and frequency of service
of an air service be licensees. Because resellers exert such control the
appellant submits they should be licenced. However, the sections relied upon by
the appellant are remedial provisions. It was not unreasonable for the Agency
to interpret the Act to the effect that these remedial provisions are directed
to the licensee in a reselling arrangement, even if the reseller controls things
such as fares and schedules. Nothing in the Act expressly requires that a
licensee control matters such as fares, routes and schedules.
[8]
I also reject the appellant’s argument that
because of the absence of any contractual relationship between the licensee and
the passengers, the licensee in a reselling arrangement owes no obligations to
the passengers. As the Agency found, passengers will still be covered, and so
protected, by the terms and conditions of carriage set out in the tariff issued
by the licenced air carrier operating the aircraft on which the passengers
travel. Further, the licenced air carrier will be required to hold the
prescribed liability insurance. Put more broadly, licenced air carriers are
regulated under the Act when they provide an air service. The involvement of a
reseller does not obviate the requirement that licensees comply with all of the
obligations imposed upon them under the Act.
[9]
This last point answers the appellant’s
assertion, made in his written submissions, that the Agency exceeded its
jurisdiction by relieving a person from the requirement to have in place
prescribed liability insurance. The consequence of the Agency’s decision is
that resellers are not required to hold prescribed liability insurance. This is
a requirement imposed on the licenced air carrier. Resellers cannot be relieved
of an obligation which does not apply to them. Thus there is no jurisdictional
issue.
[10]
Nor did the Agency circumvent the requirement of
Canadian ownership. As the Agency observed, if a non-Canadian reseller acquired
ownership or control in fact of a licenced air carrier, that carrier would
cease to be Canadian and would cease to be eligible to hold a licence.
[11]
Finally, as the Agency noted, not requiring
resellers to obtain a licence does not equate to leaving consumers without
protection. In addition to the protection provided through the obligations
imposed on licenced air carriers, resellers are subject to any existing provincial
travel protection and consumer rights legislation.
[12]
It follows that I would dismiss this appeal. In
circumstances where there is a public interest in having the Agency’s decision
reviewed, I would not award costs against the appellant. Given that the
appellant’s challenge failed, I would not award costs in his favour.
“Eleanor R. Dawson”
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“I agree.
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M. Nadon J.A.”
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“I agree.
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A. F. Scott
J.A.”
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