Decisions

CAT File No. Q-2034-41
MoT File No. N5504-40969

CIVIL AVIATION TRIBUNAL

BETWEEN:

Minister of Transport, Applicant

- and -

Mistral Aeronautical Consultants, Respondent

LEGISLATION:
Aeronautics Act, R.S.C. 1985, c. A-2, s. 7.7
Canadian Aviation Regulations, SOR/96-433, s. 103.03


Review Determination
Carole Anne Soucy


Decision: November 17, 2000

TRANSLATION

The Minister has proven, on a balance of probabilities, that the Respondent contravened section 103.03 of the Canadian Aviation Regulations when, on or about November 25, 1999, it failed to return the certificate of airworthiness, after it was suspended, for the aircraft registered as C-FGZJ, issued June 15, 1990, and replaced September 22, 1999.

I therefore confirm that payment of the monetary penalty of $1,250 is to be made in full to the Receiver General for Canada within 15 days of service of this determination.

A review hearing on the above matter was held July 17, 2000, at 10:00 hours at the Federal Court of Canada, in Montréal, Quebec.

OBJECT OF THE REVIEW HEARING

Pursuant to section 7.7 of the Aeronautics Act, the Minister of Transport decided to assess a monetary penalty against the respondent for contravention of section 103.03 of the Canadian Aviation Regulations (CARs).

On or about November 25, 1999, the respondent failed to return the certificate of airworthiness, after it was suspended, for the aircraft registered as C-FGZJ, issued June 15, 1990, and replaced September 22, 1999.

The amount of $1,250 was to be paid in full on or before April 12, 2000, to the regional manager.

As the monetary penalty was not paid by the date specified, a copy of the notice of assessment of monetary penalty was sent to the Tribunal which set July 17, 2000, as the date of the review hearing.

THE FACTS

The respondent Mistral Aeronautical Consultants is the registered own of the aircraft registered as C-FGZJ (Exhibit M-3). Mr. Daniel Vachon is an aeronautical consultant for the respondent.

A certificate of airworthiness was issued June 15, 1990, lost and replaced September 22, 1999, at the request of Mr. Vachon (exhibits M-5, M-6, M-7).

On November 25, 1999, a notice of suspension was served on the respondent by registered mail and by fax (exhibits M-1, M-2, M-4).

The Minister of Transport decided to suspend the certificate of airworthiness of the above­mentioned aircraft because it no longer met the conditions of issuance of the document for the following reasons: "The aircraft is not maintained according to a maintenance schedule approved by the Minister, for operation of the aircraft, as stipulated in paragraph 605.86(1)(b) of the Canadian Aviation Regulations."

The notice of suspension was served at the address appearing on the aircraft's certificate of airworthiness, to wit, 3539 Rue Saint-Charles in Kirkland. The suspension took effect November 25 and an acknowledgment of receipt produced in a bundle as M-2 was received November 29, 1999.

At that time, Mr. Vachon was not in Montreal and was apparently notified of the receipt of the notice of suspension on December 6 or 7, 1999.

As no steps in respect of the suspension of November 25, 1999, were taken, the Minister of Transport had a notice of assessment of monetary penalty sent to the respondent pursuant to section 7.7 of the Aeronautics Act. The notice of assessment, dated March 9, 2000, required the respondent to pay a sum $1,250 by April 12, 2000.

A few months after receiving the notice of assessment, that is, around June 2000, Mr. Vachon approached the Minister, specifically Mr. Tamborriello, to settle the dispute, but took no follow-up action.

THE LAW

Subsection 7.7(1) of the Aeronautics Act stipulates:

7.7 (1) Where the Minister believes on reasonable grounds that a person has contravened a designated provision, the Minister shall notify the person of the allegations against the person in such form as the Governor in Council may by regulation prescribe specifying in the notice, in addition to any other information that may be so prescribed,

(a) subject to any regulations made under paragraph 7.6(1)(b), the amount that is determined by the Minister, in accordance with such guidelines as the Minister may make for the purpose, to be the amount that must be paid to the Minister by the person as the penalty for the contravention in the event that person does not wish to appear before a member of the Tribunal to make representations in respect of the allegations; and

(b) the time, being not less than thirty days after the date the notice is served or sent, at or before which and the place at which the amount is required to be paid in the event referred to in paragraph (a).

Paragraph 605.86(1)(b) of the CARs states as follows:

605.86 (1) Subject to subsection (3), no person shall conduct a take-off in an aircraft, or permit a take-off to be conducted in an aircraft that is in the person's legal custody and control, unless the aircraft is maintained in accordance with

[...]

(b) where the aircraft is operated under Subpart 6 of Part IV or under Part III, or is a large aircraft, a turbine-powered pressurized aircraft or an airship, a maintenance schedule approved by the Minister in respect of the aircraft operator pursuant to subsection (2).

(2) The Minister shall approve a maintenance schedule in respect of an aircraft if the schedule conforms to the Aircraft Equipment and Maintenance Standards.

Section 103.03 of the CARs states:

103.03 When a Canadian aviation document bas been suspended or cancelled, the person to whom it was issued shall return it to the Minister immediately after the effective date of the suspension or cancellation.

Subsection 103.08(1) of the CARs, referring to designated provisions, stipulates as follows:

103.08 (1) The provisions set out in column I of the schedule to this Subpart are hereby designated as provisions the contravention of which may be dealt with under and in accordance wish the procedure set out in sections 7.7 to 8.2 of the Act.

Section 3(1) of the Aeronautics Act defines "registered owner" as:

"registered owner," in respect of an aircraft, means the person to whom a certificate of registration for the aircraft bas been issued by the Minister under Part I or in respect of whom the aircraft bas been registered by the Minister under that Part;

Section 202.16 of the CARs respecting the requirements for registration stipulates:

202.16 The Minister, on receipt of an application in accordance with the Aircraft Marking and Registration Standards, shall register an aircraft where the owner of the aircraft

(a) is qualified to be the registered owner of a Canadian aircraft pursuant to section 202.15; and

(b) meets the requirements set out in those standards.

Subsection 202.35(2) of the CARs on the transfer of legal custody and responsibility stipulates:

(2) Where the registered owner of a Canadian aircraft transfers any part of the legal custody and control of the aircraft, the registered owner shall, by not later than seven days after the transfer, notify the Minister of the transfer in writing.

Section 202.51 of the CARs concerning the change in name or address of the registered owner states as follows:

202.51 Where the name or address of a registered owner of a Canadian aircraft changes, the registered owner shall, by not later than seven days after the change, notify the Minister in writing of the change.

Paragraph 222.16(1)(b) of the Aircraft Marking and Registration Standards states:

(1) An application for the registration of an aircraft, other than an application for provisional registration, shall meet the following requirements:

(a) the application form shall be signed in ink, [...]

(b) the application shall be accompanied by the bill of sale, lease, last will and testament or other legal document that establishes the applicant for registration as the aircraft owner;

THE EVIDENCE

There was no agreement between the parties, nor any preliminary remarks. However, in cross-examination, Mr. Vachon, representing the respondent, acknowledged not having returned the suspended document to the office of Transport Canada.

The Minister's representative presented his evidence, calling Mr. Vianney Paradis as a witness.

Mr. Paradis, who is a superintendent at Transport Canada, testified that on November 25, 1999, a notice of suspension of the certificate of airworthiness for the model F-27J aircraft registered as C-FGZJ was served by registered mail at 3539 Rue Saint-Charles in Kirkland, namely, the address shown on the aircraft's certificate of airworthiness. The notice of suspension was also sent by fax the same day (M-4). The said notice states that the aircraft no longer meets the conditions of issuance of the document for the following reasons: "The aircraft is not maintained according to a maintenance schedule approved by the Minister, for operation of the aircraft, as stipulated in section 605.86(1)(b) of the Canadian Aviation Regulations."

An acknowledgment of receipt of the notice of suspension dated November 29, 1999, has been filed in a bundle as M-2.

Mr. Paradis testified that the notice of suspension was sent to Mistral Aeronautical Consultants because it is the registered owner of the aircraft as stated on the aircraft's certificate of airworthiness (M-3).

He also testified that in September 1999, a request for replacement of the document and a statutory declaration were completed by Mr. Daniel Vachon after the certificate of airworthiness for the F-27J type aircraft bearing registration markings C-FGZJ was lost (M-5, M-6, M-7).

Mr. Paradis explained that at the bottom of the notice of suspension, it states that on the effective date of the suspension, the suspended document is to be returned to the regional office of Transport Canada and that "[f]ailure to return a suspended Canadian aviation document is a breach of the Canadian Aviation Regulations."

In cross-examination, and following the Minister's refusal to issue a flight permit, after having issued several previously, Mr. Paradis attempted to explain what the airworthiness directives are. They are directives issued by the aviation authorities of the aircraft's country of origin. These directives require the owner of the aircraft to take the necessary measures to rectify certain irregularities relating to the airworthiness of the aircraft. He stressed that when Transport Canada requests conformance with the airworthiness directives, this is not the same as requesting renewal of the certificate of airworthiness, but did not explain why. He added that according to the Transport Canada directives, a flight permit cannot be issued if the airworthiness directives are not met as required.

The Minister's evidence thus concluded, Mr. Daniel Vachon presented his evidence.

Mr. Vachon is an aviation consultant.

The F-27J model aircraft was sold by his services to a Panamanian company named J.O. Aviation Leasing, S.A.

In 1995, the latter asked Mr. Vachon to lease the aircraft far a period of 10 days, something the witness says is often done to get the aircraft to Panama and change the registration for a Panamanian registration. However, because of internal problems in Panama, the aircraft was seized for nearly 4 ½ years.

In September 1999, the owners contacted Mr. Vachon to sign another lease agreement with the respondent, in order to obtain a certificate of airworthiness that would allow them to convey the aircraft within Panama and obtain an airworthy aircraft.

Mr. Vachon testified that in the months leading up to November 25, 1999, he obtained five flight permits from Transport Canada allowing him to thus convey the aircraft, which at the time was in a condition of limited airworthiness.

On November 25, 1999, however, Transport Canada refused to issue another flight permit. According to the witness, the permit would have been used to convey the aircraft to a maintenance base to obtain a certificate of airworthiness so that the aircraft could be sold to another company.

Mr. Vachon testified that the Transport Canada inspector asked him to correct non-conformances with the airworthiness directives. After the misunderstanding between the parties and Transport Canada's refusal, Mr. Vachon notified the lessee J.O. Aviation Leasing, S.A. and withdrew from the matter. According to the witness, J.O. Aviation Leasing, S.A. is the company in possession of all documents pertaining to the aircraft.

In cross-examination, Mr. Vachon stated that his office, situated at 3539 Rue Saint-Charles in Kirkland, is a mailing address for which services are provided by the company P.O. Mail Boxes Etc. This company allows him to receive his mail in Quebec when he is not there. The notice of suspension sent by registered mail was signed by P. Tilli whom Mr. Vachon does not know but who is very likely an employee of P.O. Mail Boxes Etc.

The witness went on to say that he contacts his office when he is away. He was informed that a letter had been received from Transport Canada around December 6 or 7, 1999. He knew it was a notice of suspension of an aviation document.

When asked by Mr. Tamborriello whether he knew what his remedies were, and specifically about the possibility of filing a request to dispute the notice of suspension, he acknowledged that he did, but had not done this.

He went on to say that from Apri1 2000, the date he learned of the notice of assessment, until June, he took no steps to settle the matter. In June, he contacted Mr. Tamborriello. Even though he knew that the monetary penalty had to be paid, he admitted having preferred not to pay because, by his own choice, he wanted to appear before the Tribunal to point out the inconsistency of Transport Canada's services.

ARGUMENTS OF THE APPLICANT

The argument of Mr. Tamborriello, representing the Minister, was two-pronged. First of all, he referred to the regulations governing leased aircraft. Secondly, he explained the requirements of the Aeronautics Act regarding service of the notice of suspension on the owner.

The Minister's representative referred to the Aeronautics Act, especially the definition given in subsection 3(1) of the Act:

"registered owner," in respect of an aircraft, means the person to whom a certificate of registration for the aircraft has been issued by the Minister under Part I or in respect of whom the aircraft has been registered by the Minister under that Part;

The Minister's representative also referred to subsection 202.35(2) of the CARs which states:

(2) Where the registered owner of a Canadian aircraft transfers any part of the legal custody and control of the aircraft, the registered owner shall, by not later than seven days after the transfer, notify the Minister of the transfer in writing.

The Minister's representative went on to give the definition of the term "lease" found in section 203.01 of the CARs:

"lease" means an agreement in respect of the operation of an aircraft for hire or reward that specifies a commencement and a termination date and during the term of which the lessee has legal custody and control and the right to exclusive possession and use of the aircraft; (location) (My underlining)

The applicant explained that the respondent Mistral Aeronautical Consultants holds a certificate of registration pursuant to a lease agreement it entered into' with J.O. Aviation Leasing, S.A.

The applicant found it difficult to comprehend Mr. Vachon's testimony that ownership was transferred in September 1999, as Mr. Vachon continued to approach Transport Canada to obtain the flight permit needed for the Fairchild-27J aircraft. The Minister went on to say that at no time did lie receive a notice of transfer of ownership, contrary to the requirements of the Act.

The Minister's second point concerned the sending of the notice of suspension by registered mail as stipulated in subsection 7.1(1) of the Act. The Minister's representative argued firstly, that the notice of suspension was sent by registered mail, as attested by the acknowledgment of receipt; secondly, that after reading this notice, the respondent contacted the office of Transport Canada and has admitted not taking steps to settle the matter; and finally, that it is too late to dispute the notice of suspension at this stage.

As for the respondent's argument that the certificate of airworthiness was not in effect and therefore did not exist, the Minister argued that while the certificate of airworthiness was not valid, it still existed.

In conclusion, the Minister explained the monetary penalty with respect to section 103.03 of the CARs, assessed pursuant to section 103.08 relating to designated provisions and according to the excerpt from the Aviation Enforcement Procedures Manual[1] of Transport Canada.

The suggested monetary penalty for a first offence for a legal entity is $1,250, as required here by Transport Canada.

ARGUMENTS OF THE RESPONDENT

During arguments, the respondent disputed, firstly, the non-issuance of a flight permit in November 1999, the sudden need to comply with requisites regarding non-conformance with airworthiness directives and, secondly, the request for a document no longer in its possession. It went on to admit that Transport Canada had not been notified of the sale of the aircraft within seven days of the sale. It admitted not having replied to the notice of suspension from Transport Canada because it wanted to appear before the Civil Aviation Tribunal.

THE DISPUTE

The Tribunal must determine whether to accept the application of the Minister of Transport, and to assess the respondent's defence.

The respondent has admitted it did not return the certificates of airworthiness required by Transport Canada after it was suspended.

In its defence, the respondent argued:

  1. objection to the airworthiness directives from Transport Canada;
  2. the notice of suspension was sent by fax;
  3. the registered mail was not received in person;
  4. the certificate of airworthiness was not in effect, and was therefore non-existent;
  5. it was no longer in possession of the certificate of airworthiness.

I will analyze each argument.

First argument:

If the respondent wants to object to the airworthiness directives required by Transport Canada and leading to the suspension of the certificates of airworthiness, it must do so in accordance with the statutory legal provisions and within the time allowed. If the respondent fails to act with due diligence, it forfeits its remedy. In other words, the respondent could have disputed the suspension of the certificates of airworthiness by applying, within the time allowed, for a review before the Civil Aviation Tribunal. The latter would then have been able to assess a requirement respecting the airworthiness directives. By not opposing the suspension of the certificates, the respondent could not dispute its return. The wording of the Act is clear and unequivocal. Section 103.03 of the CARs stipulates:

103.03 When a Canadian aviation document has been suspended or cancelled, the person to whom it was issued shall return it to the Minister immediately after the effective date of the suspension or cancellation. (My underlining)

The respondent admits it did nothing about the matter until it received the notice of assessment. In view of the evidence submitted and the regulations, this argument is rejected.

Second and third arguments:

Points 2 and 3 refer to the sending of the notice suspension. It has been entered in evidence that on December 6 or 7, 1999, Mr. Vachon knew he had received a notice of suspension of an aviation document. In view of this admission, I refer back to the first argument and, therefore, reject these arguments.

Fourth argument:

As for the fourth point, in which the respondent argues that the certificate of airworthiness was not valid, I do not agree with this assertion and once again refer to the text of the Act, namely, section 103.03 of the CARs, which is clear.

Although it is no longer in effect, the certificate still exists, and the purpose of this section is to prevent the fraudulent use of the document. As the Tribunal cannot support the respondent's theory, it must reject the argument.

Fifth argument:

The certificate of airworthiness is no longer in its possession. It seems it is in the possession of the owner J.O. Aviation Leasing, S.A. following a sale of the aircraft. Section 202.51 of the CARs reads:

202.51 Where the name or address of a registered owner of a Canadian aircraft changes, the registered owner shall, by not later than seven days after the change, notify the Minister in writing of the change.

and subsection 202.35(2) reads:

(2) Where the registered owner of a Canadian aircraft transfers any part of the legal custody and control of the aircraft, the registered owner shall, by not later than seven days after the transfer, notify the Minister of the transfer in writing.

By his own admission, the respondent's representative acknowledges he did not notify Transport Canada of any change whatsoever.

Therefore, the respondent was still recognized as being the owner of the aircraft, since it met the requirements contained in the lease agreement with J.O. Aviation Leasing, S.A. as stipulated in subsection 222.16(2) of the Aircraft Marking and Registration Standards.

This argument also cannot be accepted, and the Tribunal must reject it.

The Tribunal understands that the respondent wanted to express its viewpoint about what it has described as inconsistency in the demande of Transport Canada as well as the discrimination it allegedly suffered. It would certainly have been more advantageous to act with greater diligence. Unfortunately, the Tribunal cannot rule on the respondent's complaints.

Therefore, in view of the evidence submitted;

considering the respondent's admission of the contravention;

considering that the arguments the respondent raised in its defence cannot be accepted;

considering that the maximum monetary penalty under the designated provisions for a contravention of section 103.03 of the CARs is $5,000 for a legal entity;

considering that the table of sanctions excerpted from the Aviation Enforcement Procedures Manual recommends a monetary penalty of $1,250 for a first offence;

the Tribunal is of the opinion that Mistral Aeronautical Consultants must pay the assessed monetary penalty of $1,250.

DETERMINATION

The Minister has proven, on the balance of probabilities, that the respondent contravened section 103.03 of the CARs when, on or about November 25, 1999, it failed to return the certificate of airworthiness, after it was suspended, for the aircraft registered as C-FGZJ, issued June 15, 1990, and replaced September 22, 1999.

Consequently, I confirm that the monetary penalty of $1,250 is to be paid in full within 15 days of the receipt of this determination.

Carole Anne Soucy
Member
Civil Aviation Tribunal


[1] Second Edition, TP 4751E.