CAT File No. W-1218-41
MoT File No. SAP-6504-Z-24155
CIVIL AVIATION TRIBUNAL
Minister of Transport, Applicant
- and -
Canadian Aero Accessories Ltd., Respondent
Aeronautics Act, R.S.C. 1985, c. A-2, s 7.7, 26
Air Regulations, C.R.C. 1978, c. 2, s 101, 211, 214, 221
Airworthiness Manual, s 511, 513, 523, 561, 563, 571, 573, 575
Notice of Assessment of Monetary Penalty, Certification of Parts as Airworthy, Definitions: appliances, repair design approval, components, maintenance, type approval, supplemental type approval, modification, major modification, standard of airworthiness, aeronautical product, major repair, repair, overhaul, holder, Limitation Period, New evidence at the appeal level
Robert J. MacPherson
Decision: March 28, 1996
I have concluded the Respondent, Canadian Aero Accessories Ltd., has not contravened section 221 of the Air Regulations. The allegations are dismissed.
A Review Hearing on the above matter was held March 19 and 20, 1996, at 10:00 hours, at the Court House, Queen's Bench, in the city of Calgary, Alberta.
This case centres on the alleged use of non-approved parts, and the use of certain modifications, in the overhaul of aircraft components.
The Respondent, Canadian Aero Accessories Ltd. (CAA) has been in the business of overhauling aircraft accessories for 31 years. CAA currently is an "Approved Maintenance Organization" (AMO) and operates according to its "Maintenance Control Manual" (MCM).
CAA is alleged to have used substitute bearings and "O" rings, and modifying a seal. The items in question are an actuator and two fuel pumps.
CAA admits it performed the work and substituted parts. CAA states it has been operating in this manner for 30 years. CAA contends the modifications are minor in nature and in fact are an industry standard. CAA further contends the parts installed and modifications fall within the scope of its MCM.
By double registered letter dated December 20, 1995 Canadian Aero Accessories Ltd. was issued a Notice of Assessment of Monetary Penalty as follows:
Pursuant to Section 7.7 of the Aeronautics Act, the Minister of Transport has decided to assess a monetary penalty on the grounds that you have contravened the following provision(s):
Air Regulations, Section 221: that you did on or about the 24th day of February 1995, at or near Calgary, Alberta, certify an aeronautical component, to wit: a Horizontal Trim Actuator, Part Number 1136T100-23, Serial Number 712, as airworthy or serviceable when the applicable standards of airworthiness had not been complied with, specifically by installing unapproved bearings, contrary to the Air Regulations Section 221.
MONETARY PENALTY $1,000.00
Air Regulations, Section 221: that you did, on or about the 7th day of June 1994, at or near Calgary, Alberta, certify an aeronautical component, to wit: an Intertechnique Submerged Electrically Driven Fuel Pump, Part Number 2070-C-01, Serial Number 1604, as airworthy or serviceable when the applicable standards of airworthiness had not been complied with, specifically; you installed part number 207218 thrust washer which had been reworked by machining an additional notch 180 degrees from the original notch and in addition by installing a reworked carbon seal, part number 36BO-79EQ7A in said pump, contrary to the Air Regulations Section 221.
MONETARY PENALTY $1,000.00
Air Regulations, Section 221: that you did, on or about the 8th day of August 1994, at or near Calgary, Alberta, certify Lear Siegler /Romec Centrifugal Fuel Boost Pump, Part Number RR12830A Serial Number B916, as airworthy or serviceable when the applicable standards of airworthiness had not been complied with, specifically, by installing unapproved bearings, contrary to the Air Regulations Section 221.
MONETARY PENALTY $1,000.00
The total assessed penalty of $3,000.00 was to be paid on or before January 26, 1996. The penalty was not paid by the date specified.
THE AIR REGULATIONS – SECTION 221
No person shall certify an aeronautical product or a component as airworthy or serviceable, or certify an aircraft as released for return to service, unless the applicable standards of airworthiness have been complied with.
Transport Canada called nine witnesses and filed twenty-seven documents as evidence. The evidence shows that CAA is a company incorporated in Alberta. The company has an approval from Transport Canada to perform certain overhaul maintenance as is outlined in AMO Certificate 30-87 and CAA's Maintenance Control Manual (Exhibit M-2).
Overhaul manuals for the three components in question were tabled as Exhibits M-3, M-4 and M-5. Type certificates for the three aircraft from which the components came from were tabled as Exhibits M-6, M-7 and M-8.
The trim actuator, Part number 115-380111-19, Serial number 712, was originally manufactured by Talley. It was retrieved from Bearskin Airlines Ltd. The actuator is used on a Beech 99 aircraft. A teardown report was requested by Transport Canada from Condor Aircraft Accessories Inc. The teardown report states "Non-manufacturer's bearings were installed in unit" (Exhibit M-12). Mr. Olson of Transport Canada was present during the teardown and sized the bearings (Exhibit M-11). The actuator was invoiced to Bearskin by CAA on invoice #S 053278 (Exhibit M-10). The bearings (Exhibit M-11) bear the same description and part number as shown on the invoice (Exhibit M-10). These part numbers are not on the parts list for the Actuator as outlined in the overhaul manual (Exhibit M-3).
The fuel boost pump manufactured by Intertechnique was retrieved from Innotech Aviation Ltd. The part number is 2070 C01. The serial number is 1604. The fuel pump is used in a HS125 aircraft. Condor Aircraft Accessories was requested by Transport Canada to perform a Component Teardown Report (Exhibit M-13). The findings in Exhibit M-13 are as follows. "Possible comm end bearing – incorrect. Re: manf work carbon seal assy – incorrect vapour seal, re-worked seal washer, – com dia in limit. (Armature not new) o'rings – validity undetermined." The bearings were seized by Transport Canada and entered as Exhibit M-14. The pump had been overhauled by CAA as evidenced on work order S 048519 (Exhibit M-19) and invoice number S 048519 (Exhibit M-20) and overhaul tag (Exhibit M-18).
The fuel boost pump manufactured by Romec was received from Ptarmigan Airways Ltd. The part number is RR12830A bearing serial number B916. Condor Aircraft Accessories performed a Component Teardown Report (Exhibit M-17). The findings in Exhibit M-17 are as follows. "Negative brush worn beyond limits. (Substitute bearings found in unit) 1.626D, 1629D found in unit 1 RD 56166, 1 RG 56167 should be in unit." The pump had been overhauled by CAA on three occasions 11-02-93, 2-08-94 and 8-12-94.(Exhibit M-22).
The evidence shows none of the bearings tabled at this hearing, bore part numbers which were called for in the appropriate overhaul manuals.
Transport Canada argues the following points to show CAA was operating outside its approved scope.
- CAA AMO 30-87 defines the company authorization to perform specialized services on aeronautical appliances. These accessories include trim actuators and fuel boost pumps.(Exhibit M-2).
- The CAA MCM (Exhibit M-2) defines how the company will perform in the execution of its overhaul of aviation accessories. Transport Canada contends CAA breached section I 1.13 Quality Assurance, section II 2.1 Purchasing Procedures, 2 and 3 Receiving and Inspection Procedures. In this case parts other than Original Equipment Manufacture (OEM) parts were received, checked, installed and shipped to clients contrary to the approved MCM.
- The authority for Transport Canada to approve the company AMO and MCM are found in the Airworthiness Manual, Chapter 573, Subchapter C "Approved Maintenance Organizations."
- Transport Canada contends Chapter 511 of the Airworthiness Manual 511.3 Definitions, shows 511.3(c) minor change does not apply and 511.3(d) major change does, to the items in question. That is to say Transport Canada argues the substitution of a bearing or "O" ring, or the machining of a notch in a Thrust washer is a "Major" modification.
- Transport Canada has checked its files and found no "Repair design approvals" issued to CAA as outlined in Chapter 513 of the Airworthiness Manual.
- By letter dated April 13, 1995 from the law firm of Parlee McLaws, the company CAA admits to certain procedures and practices it is alleged to have contravened.
- By letter received from CAA President Mr. R. Runciman the company outlines the fact that it does use some procedures and parts as alleged.
CAA put forward the argument that Airworthiness Manual, Part 563.303 is confusing. Section 563-303 (2) reads: "Proprietary parts and accessories that are listed in approved product parts catalogues, but excluding those requiring approval to DOT appliance standards or FAA Technical Standard Orders shall have been received, by the distributor, with inspection release documents or tags traceable to the manufacturer or a DOT approved organization." CAA contends this applies to parts and components but not bearings that are part of a component (Exhibit D-28). Further CAA did have release statements traceable to the manufacturer.
CAA overhauled the accessories to the applicable standard using bearings other than those used by the original component manufacturer.
CAA contends it operated in a proper manner as outlined in Exhibit D-29 "notice to aircraft maintenance engineers and aircraft owners" (N-AME-AO) dated January 15, 1987. The section titled "Product Acquisition" reads as follows:
Aircraft Maintenance Engineers, owners and operators should acquire replacement parts and supplies for aeronautical products from either approved manufactures, approved distributors or approved maintenance organizations, however, some materials and commercial products may be acquired from sources other than the approved suppliers, provided such products are accompanied by company release documents, which certify conformity to design specifications.
The following products manufactured to national, international, or industrial standards may, therefore, be acquired from non-approved sources provided they are accompanied by release notes certifying conformity to applicable specifications.
(. . .)
(b) Aircraft standard parts, bearings, bushings, "O" rings, fasteners, rivets, cables and wire, etc.
CAA purchased the bearings in question from Industrial Equipment Company Ltd. of Calgary. It has been a supplier of record for 30 years. Industrial Equipment has always certified its products to CAA.
Transport Canada, by letter dated February 13, 1987, advised Industrial Equipment Co. Ltd. that the "company approval for the distribution of ball and roller bearings is no longer required" (Exhibit D-30). Industrial Equipment advised CAA of this letter by memo dated October 2, 1995.
CAA presented evidence (Exhibit D-30) on the replacement bearings in question taken from the Romec fuel pump. The min/max speed RPM of the motor is stated as 9,500 – 10,000. The bearings used have a limiting speed of 32,000 RPM they are sealed bearings and are lubricated with a product that exceeds the parameters of the original.
CAA presented evidence that the "O" rings used are manufactured from a newer product called "Fluoro silicone" which has a shelf life four times that of the original equipment.
CAA submitted drawings of the modification to the Intertechnique thrust washer, and seal.
DISCUSSION OF THE EVIDENCE
There appears to be no doubt that parts other than those of OEM were used in the accessory overhauls. This is evidenced in the exhibits, teardown reports, sworn testimony and letters from the Respondent. The reworking of the thrust washer is also documented by exhibits, testimony and drawings.
CAA admits and documents all of the foregoing. CAA has not attempted to hide the fact that it was using these parts or procedures.
CAA purchased bearings from a reputable manufacturer and distributor whom it believed were in a position to supply such items. In fact Industrial Equipment was a Transport Canada approved source of supply as is evidenced in Exhibit D-30.
CAA contends the practices it was following have been tolerated by Transport Canada for years and this constitutes tacit approval. CAA testified Transport Canada performs regular audits of its facilities, records, and stores and has never found these practices to be in conflict.
CAA testified all products used were, in its opinion equal to or better than OEM parts. CAA further testified the modification to the thrust washer was a minor modification and was similar to machining found in other OEM thrust washers with multiple slots.
CAA testified the procedures it uses are standard in the industry, both in the USA and Canada. CAA has not had any problems related to the use of original bearing manufacture (OBM) parts or its re-worked items. CAA contends that safety has not been compromised and that the repairs are of a minor nature. CAA uses N-AME-AO 01/87 (Exhibit D-29) as the basis for utilizing Industrial Equipment as a supplier and OBM bearings in its overhauls.
CAA produced a teardown report (Exhibit D-32) on a Horizontal Stabiliser Actuator, removed from a Transport Canada aircraft, that contained other than OEM bearings. It put its teardown report forward to evidence the fact that OBM bearings are a common practice in the industry.
The arguments put forward are based on interpretation of regulations and manuals. Did CAA exceed its authority as approved in its AMO and MCM? The arguments centre on whether or not the changes were major or minor, and whether CAA interpreted N-AME-AO 01/87 correctly.
CAA is obligated to operate in accordance with its authorities, namely the AMO and MCM. I refer to the introduction page of the MCM: "In the event of a conflict between the company's maintenance control manual and existing Transport Canada instructions and regulation the latter shall take precedence." I therefore will address my remarks to the Transport Canada instructions as they take precedence over the MCM. Chapter 511 of the Airworthiness Manual addresses in section 511.3:
"Minor change" means a change to the type design of an aeronautical product which has negligible effect on the weight, balance, structural strength, reliability, performance, powerplant operation, flight characteristics or other qualities which affect the airworthiness of the product.
"Major change" means a change other than a minor change, to the type design of an aeronautical product.
To determine if the changes were major in scope, I must first determine if they are minor in nature.
BEARINGS AND "O" RINGS
Weight - negligible effect
Balance - negligible effect
Structural strength - not applicable
Reliability - International industrial standard
Performance - International industrial standard
Power plant operation - not applicable
Flight characteristics - not applicable
I find the bearings and "O" rings in question constitute a minor change to the components in question.
Similarly I find the machining of a notch in the thrust washer to be minor in nature.
Having determined the substitution of bearings was minor in nature, I must now decide if the substitutions are allowed.
The purpose of N-AME-AO 01/87 is stated as follows: "to provide clarification with respect to the acquisition of aeronautical products from sources other than DOT approved manufacturing, distributing and maintenance organizations."
The supplier of the bearings and "O" rings, Industrial Equipment, was not a Transport Canada approved supplier at the time the allegations were made against CAA.
We have evidence that Industrial Equipment Company Ltd. was a Transport Canada approved distributor of ball and roller bearings from 1985 to 1987 (Exhibit D-30). We have testimony from Transport Canada that it is not its policy to advise the industry of changes to the status of distributors or suppliers.
The letter from Transport Canada to Industrial Equipment dated February 13, 1987 reads as follows:
It was decided that company approval for the distribution of ball and roller bearings is no longer required, and the responsibility for the integrity of these products now being that of the Aircraft Maintenance Engineer or approved maintenance organization. Therefore the approval presently held by your company for the distribution of ball and roller bearings u.
Industrial Equipment Company Ltd. returned the authority as requested. It continued to supply bearings to CAA in the same manner as it had in the past.
CAA testified it found out by memo dated October 2, 1995 of the letter dated February 13, 1987.
Industrial Equipment continued to supply CAA with bearings and continued with the standard release on its documentation.
N-AME-AO 01/87 allows "products manufactured to national, international or industrial standards may, therefore, be acquired from non-approved sources provided they are accompanied by release notes certifying conformity to applicable specifications."
Industrial Equipment supplied CAA with the following release note:
CERTIFICATE OF CONFORMANCE
I hereby certify that the items or materials covered by this document have been inspected and tested, and conform to the approved specifications relative thereto. This is substantiated either by my own inspection and test, or by satisfactory documentary evidence from this original source of supply.
This is dated and signed by an approved inspector employed by Industrial Equipment.
CAA testified its belief that the use of OBM bearings and "O" rings is permitted. I am in agreement with this belief. The only problem seems to arise in the wording of the release note. The wording used in the past is not acceptable to Transport Canada.
Transport Canada contends the release certificate to be used by non-approved distributors should read as set out in section 563.303 of the Airworthiness Manual.
Non-approved sources as outlined in N-AME-AO 01/87 do not have access to the Airworthiness Manual. In its letter to Industrial Equipment (Exhibit D-30), Transport Canada states "the responsibility for the integrity of these products now being that of the Aircraft Maintenance Engineer or approved maintenance organization."
As noted above, certain products other than those for which a DOT manufacturer, distributor or maintenance approval is necessary, may be acquired from non-approved sources, however, AMEs, aircraft owners and operators are reminded that, regardless of the source of supply of any product, care must be exercised to ensure that products conform to approved type design data. Personnel are also reminded that the Minister holds the person certifying the installation responsible for the airworthiness of the product.
My reading and interpretation of N-AME-AO 01/87 lead me to the following conclusion:
- Products may be purchased from sources other than DOT approved organizations.
- Certain products namely bearings, bushing and "O" rings may be acquired from non approved sources.
- Products purchased from non approved sources will have a release note certifying conformity to applicable specifications i.e., national, international or industrial standards.
- In purchasing and installing products from non-approved sources, the Minister holds the person certifying the installation responsible for the airworthiness of the product.
Based on the foregoing, I have concluded the Respondent Canadian Aero Accessories Ltd. has not contravened section 221 of the Air Regulations.
The allegations are dismissed.
I thank both parties for their well documented presentations in this matter.
Civil Aviation Tribunal
In hearing this case, it became evident the rules and regulations covering cases such as this are confusing and, as we have observed, open to interpretation.
The use of improved products and techniques is to be commended, as long as the products and techniques do not compromise safety.
The regulations are written in a generic manner in an attempt to cover all situations for all aircraft.
It appears the use of OBM parts is wide spread in the component overhaul industry.
It would seem prudent to issue a policy letter to component overhaul facilities holding AMO approval, outlining clearly the latitude allowed in the substitution of OEM parts.
Faye H. Smith, Fred W.R. Clarke, Robert L. Mortimer
Decision: January 23, 1997
The Appeal is allowed. Canadian Aero Accessories Ltd. violated the required standards of airworthiness when it installed unapproved parts in three aeronautical appliances during maintenance. We do not, however, find contravention in respect of offences 2 and 3 because of the effect of section 26 of the Aeronautics Act that these two offences are proscribed. The monetary penalty for offence number 1 is reduced to $750.00. The total penalty of $750.00 is payable to the Receiver General for Canada and must be received by the Civil Aviation Tribunal within fifteen days of the service of this determination.
An Appeal Hearing on the above matter was held before three designated Tribunal Members, Friday, November 15, 1996 at 10:00 hours at the Federal Court of Canada, in the city of Calgary, Alberta.
This appeal resulted from a determination made by Mr. Robert MacPherson following a Review Hearing on March 19 and 20, 1996. Canadian Aero Accessories Ltd. (CAA) was alleged to have contravened section 221 of the Air Regulations by certifying three aeronautical components as airworthy when the applicable standards of airworthiness had not been complied with, because unapproved bearings and a reworked thrust washer and carbon seal had been installed by CAA during maintenance work on those components.
Mr. MacPherson concluded that the related maintenance actions taken by CAA constituted minor changes to the components in question, and that such substitutions were allowed. He determined that Canadian Aero Accessories Ltd. had not contravened section 221 of the Air Regulations, and dismissed the allegations.
On April 19, 1996, the Minister of Transport requested an appeal of the Review Determination rendered by Mr. MacPherson, and on April 22, 1996, the Tribunal issued a Notice of Appeal.
GROUNDS FOR APPEAL
The Appellant specified three main grounds for the Appeal:
1. erroneous findings of fact in respect of;
- the use of unapproved and reworked parts were minor changes pursuant to Chapter 511 of the Airworthiness Manual (AM);
- the application of an inappropriate standard namely the industry standard rather than the airworthiness standard;
- the role of Industrial Equipment Company Ltd.; and
- the wording of the release statement.
2. errors of law namely;
- an erroneous interpretation of the onus of proof on the Minister;
- an erroneous interpretation of the AM respecting chapters 511 and 513; and
- an erroneous interpretation and use of the Notice to Aircraft Maintenance Engineers and Aircraft Owners (N-AME-AO 01/87).
3. an error in jurisdiction by determining that the installation of unapproved parts were minor changes according to AM chapter 511.
First the Appellant and later the Respondent requested that they be permitted to submit new evidence to the Appeal Panel.
These requests were denied because the evidence in question was either available at the time of the Review Hearing and should have been entered then, or it was part of a standing public document to which reference could be made without it having to be entered in evidence.
A number of important issues need to be addressed in this Appeal case. First, the standards of airworthiness for the three components must be clearly established.
Secondly, the maintenance actions taken by CAA on the three components must be considered against these established standards. Specifically, it must be determined whether the parts used by CAA in reassembly of the components met the standard required.
Thirdly, the issue of changing a standard of airworthiness should also be examined to establish the procedures and authorities that are required to make a valid change. This issue should address the matter of differentiating between major and minor changes to maintenance and repair procedures, and how each can be processed.
Fourthly and finally, the issue of regulations allegedly being confusing and contributing to the cause of deviations from those regulations needs examination.
INTERPRETATIONS AND DEFINITIONS
Section 101 of the Air Regulations interprets:
"aeronautical product" means any aircraft or any aircraft engine, propeller, or appliance;
"appliance" means any instrument, mechanism, equipment, apparatus or accessory that is
(a) used or intended to be used in operating or controlling an aircraft in flight,
(b) installed in or attached to or intended to be installed in or attached to an aircraft, and
(c) not part of the airframe, engine or propeller of an aircraft;
"component" means any material, part or subassembly intended for use on an aeronautical product;
"standard of airworthiness" means, for the ... maintenance of an aeronautical product, the description, in terms of a minimum standard, of the properties and attributes of the configuration, material, performance or physical characteristics of that aeronautical product and includes the procedures to ascertain compliance with or to maintain that minimum standard, as set out in the applicable parts of
(a) the Airworthiness Manual, the Engineering and Inspection Manual and the Federal Aviation Regulations (U.S.), ...
"type approval" means a type approval issued by the Minister pursuant to section 214;
The Concise Oxford Dictionary defines:
modify to mean "... make partial changes in ..."
modification to mean "... change made ..."
maintain to mean "take action to preserve (machine etc.) in good order"
overhaul to mean "take to pieces in order to examine; examine the condition of (and repair if necessary)"
repair to mean "restore (... machine ...) to good condition ...; renovate or mend by replacing or fixing parts ..."
Section 211 of the Air Regulations states in part:
211. (1) The Minister may cause to be published an Airworthiness Manual and an Engineering and Inspection Manual containing standards of airworthiness.
Section 214 of the Air Regulations states in part:
214. (1) Where the Minister receives an application for a type approval of an aeronautical product design, he shall, if within the period of time specified in the applicable standards of airworthiness he is satisfied that the aeronautical product design conforms to those standards, grant a type approval for that design.
Section 221 of the Air Regulations states:
221. No person shall certify an aeronautical product or a component as airworthy or serviceable, or certify an aircraft as released for return to service, unless the applicable standards of airworthiness have been complied with.
The Airworthiness Manual is an authority for the standards of airworthiness that must be complied with in aeronautical product maintenance and repair, as interpreted in section 101 of the Air Regulations noted above. The following parts of that Manual are reviewed for their applicability in this Appeal.
Airworthiness Manual (AWM) Chapter 511 is titled "TYPE APPROVAL: AERONAUTICAL PRODUCTS". It prescribes:
(a) The procedures for the issuance of a type approval for an aeronautical product pursuant to section 214 of the Air Regulations; and
(b) Rules governing the holder of a type approval.
In this matter, CAA neither was the holder of a type approval nor sought the issuance of a type approval; Chapter 511 therefore does not apply.
AWM Chapter 513 is titled "DESIGN APPROVAL: MODIFICATION AND REPAIR". It contains:
(1) The procedural requirements for granting a Supplemental Type Approval or a Repair Design Approval for an aeronautical product to record the approval of a modification design or repair design for that product; and
(2) the privileges and responsibilities governing the holders of Supplemental Type Approvals and Repair Design Approvals.
With the installation of bearings other than the ones specified in the component maintenance manuals, CAA in effect initiated a new modification or repair design. Chapter 513 therefore is applicable.
AWM Chapter 523 is titled "AIRWORTHINESS STANDARDS: NORMAL, UTILITY, AEROBATIC, AND COMMUTER CATEGORY AEROPLANES". It sets out "airworthiness standards for the issue of type approvals, and changes to those type approvals, for aeroplanes in the normal, utility, aerobatic, and commuter categories." It applies to a person who "applies for such a type approval or change to a type approval ...". CAA did not apply for issue of or change to a type approval, Chapter 523 therefore is not applicable.
AWM Chapter 561 is titled "MANUFACTURE OF AERONAUTICAL PRODUCTS". This Appeal does not concern the manufacture of aeronautical products, and Chapter 561 therefore is not applicable.
AWM Chapter 563 is titled "DISTRIBUTION OF AERONAUTICAL PRODUCTS". This Appeal is not concerned with the distribution of aeronautical products, and Chapter 563 therefore is not applicable.
AWM Chapter 571 is titled "MAINTENANCE OF AERONAUTICAL PRODUCTS". It sets out "rules governing the maintenance of engines, propellers, appliances and other aeronautical products installed or intended for installation on ... Canadian registered civil aircraft." Subchapter C concerns Unscheduled Maintenance and addresses repairs and modifications to aeronautical products. The latter activity is the subject of this Appeal, and Chapter 571 therefore is directly applicable.
AWM Chapter 573 is titled "APPROVED MAINTENANCE ORGANIZATIONS". CAA is an Approved Maintenance Organization and as such is subject to the requirements of Chapter 573, but the operation of the AMO as such is not at question, and Chapter 573 therefore has little relevance to this appeal.
AWM Chapter 575 is titled "MAINTENANCE CERTIFICATION AND TECHNICAL RECORDS". These matters are not at question in this Appeal, and therefore Chapter 575 does not apply.
NOTICE TO AIRCRAFT MAINTENANCE ENGINEERS AND AIRCRAFT OWNERS
Notices to Aircraft Maintenance Engineers and Aircraft Owners (N-AME-AOs) are directives issued periodically by Transport Canada. N-AME-AO 01/87 was issued on January 15, 1987, and concerned Distribution of Aeronautical Products. N-AME-AO 12/87 issued on August 20, 1987, which also concerned Distribution of Aeronautical Products, superseded N-AME-AO 01/87.
The N-AME-AO Numerical Index dated June 10, 1992 identifies N-AME-AO 12/87 as being cancelled. In light of their periods of validity and the dates on which the alleged offences occurred, neither N-AME-AO is directly applicable to this Appeal.
To determine "the description, in terms of minimum standard, of the properties and attributes of the configuration, material, performance or physical characteristics" of each of the subject components, reference is made to the applicable Chapters 513 and 571 of the AWM.
Three definitions in Chapter 513 are of interest:
"Holder" means the individual or organization whose name is recorded as the holder on any form of Supplemental Type Approval or Repair Design Approval.
"Repair Design Approval" means a document issued by the Minister in the name of the holder to record the approval of a repair design for an aeronautical product, specified in the document by serial number or other identification unique to each product, and references the documents and data defining the repair design and the limitations and conditions applicable as a result of that design change.
"Supplemental Type Approval" means a document issued by the Minister in the name of the holder to record the approval of a change to the type design of an aeronautical product and references the documents and data defining the change in the type design and the limitations and conditions applicable as a result of that design change.
Relevant sections of AWM Chapter 513 are:
Any individual or organization that controls a design may apply to the Minister for a Supplemental Type Approval or a Repair Design Approval.
513.21 Issue of Supplemental Type Approval or Repair Design Approval
The Minister may issue a Supplemental Type Approval or a Repair Design Approval where:
(a) The applicant:
(1) Satisfies the Minister that the aeronautical product, with the design change installed complies with the applicable standards of airworthiness; and
(2) Provides the Minister with the engineering data and documents specified in this Manual.
Three definitions in Chapter 571 are of interest:
"Major modification" means an alteration to an aeronautical product for which a type approval has been issued that, in the opinion of the Minister, may have other than a negligible effect on the weight and balance limits, structural strength, performance, powerplant operation, flight characteristics or other qualities affecting airworthiness or environmental characteristics.
"Major repair" means a design change which is intended to restore an aeronautical product, for which a type approval has been issued, to an airworthy condition that, in the opinion of the Minister, may have other than a negligible effect on the weight and balance limits, structural strength, performance, powerplant operation, flight characteristics or other qualities affecting airworthiness or environmental characteristics.
"Type approval" means a document issued by the Minister, or a type certificate issued by the Federal Aviation Administration of the United States of America which has been accepted by the Minister, which certifies that the type design of an aircraft, engine, propeller or appliance, complies with the applicable approval basis.
Relevant sections of AWM Chapter 571 are:
571.5 (d) The certificate of airworthiness of an aircraft is not in force if the aircraft or its required equipment has been repaired, modified, or otherwise maintained in a manner, or by using parts or materials, not in accordance with he requirements of this chapter.
571.203 Repairs and Modifications
(a) Repairs and modifications to aeronautical products shall be performed in accordance with data acceptable to the Minister.
(b) Major repairs and major modifications to aeronautical products shall be performed in accordance with:
(1) Data approved by the Minister; or
(2) Other data specified by the Minister.
(c) Repairs to aeronautical products may include the fabrication of detailed parts in accordance with specifications approved by the Minister.
Airworthiness Manual Advisories (AMAs) provide advice and guidance for maintaining aeronautical products. AMA 571.203A dated June 3, 1994 provides guidance on the classification of repairs and modifications to aeronautical products and to identify those data acceptable to the Minister for the performance of repairs and modifications. Selected extracts are:
5. CLASSIFICATION. All modifications and repairs shall be performed in accordance with data "acceptable" to the Minister. Modifications and repairs classified as major shall be performed in accordance with data that have been "approved" or "specified" by the Minister.
APPENDIX 1 of this AMA provides a listing of types of modifications and repairs that are classified as major.
APPENDIX 2 of this AMA provides additional guidance for the classification of modifications and repairs.
In certain circumstances, although the modification or repair may be identified as major in accordance with the preceding process, the modification or repair may appear to be minor. Where this occurs or when the classification remains in doubt, further direction should be sought from the Regional or District Office to ensure that the aeronautical product remains airworthy.
6.1 APPROVED DATA include:
(a) information referenced in authoritative documents such as type approvals, supplemental type approvals, ...
(b) other forms of approved data including drawings or other methods approved by the Minister ...
(c) drawings or methods described or referenced in Airworthiness Directives issued by the Minister ...
(d) data issued by the aircraft manufacturer or type approval/type certificate holder, such as modification orders, service bulletins, or engineering orders, ...
6.2 SPECIFIED DATA are information contained in authoritative documents which, although not approved by the Minister, have been accepted by the Minister as appropriate for the purpose of accomplishing major modifications and repairs. The following are designated as specified data: ...
(c) for Major Modifications or Major Repairs to aeronautical appliances and components.
(1) appliance or component manufacturer's installation, maintenance, repair, or overhaul manual, ...
7. ACCEPTABLE DATA. Acceptable data include drawings and methods recommended by the appliance, engine, propeller or airframe manufacturer and those found in advisory circulars or equivalent documents issued by foreign airworthiness authorities with whom we have entered into bilateral airworthiness agreements or memoranda of understanding.
In accordance with AWM Section 571.203 and AMA 571.203A, all repairs and modifications to aeronautical products shall be performed in accordance with data acceptable to the Minister. In addition, major repairs and major modifications to aeronautical products shall be performed in accordance with approved data or specified data. For aeronautical appliances and components, the manufacturer's installation, maintenance, repair, or overhaul manuals are designated as specified data.
Accordingly, applicable airworthiness standards for the three subject components overhauled and repaired by CAA are specified in part in:
(a) the Component Maintenance Manual for the Talley Horizontal Stabilizer Trim Actuator;
(b) the Overhaul Manual for the Intertechnique Submerged Electrically Driven Fuel Pump; and
(c) the Component Maintenance Manual for the Lear Romec Centrifugal Fuel Boost Pump.
When the Talley Trim Actuator was overhauled, two bearings were installed that were not the bearings specified in the Maintenance Manual. That substitution of bearings was a change or modification of the component. If that modification was major, then that substitution was a clear deviation from the airworthiness standards specified in the Maintenance Manual. If the modification was minor, it still must comply with drawings and methods recommended by the appliance manufacturer; no manufacturer's recommendations to use substitute bearings were identified. Thus, the installation of the unapproved bearings was a failure to meet the required airworthiness standards regardless of whether the modification was classified as major or minor.
Similarly, the installation of a reworked thrust washer and a reworked carbon seal in the Intertechnique Submerged Fuel Pump was not provided for in the Overhaul Manual. The installation of reworked parts was not recommended by the manufacturer, and therefore was a deviation from the airworthiness standard for that component, regardless of whether the modification was classified as major or minor.
Finally, the installation of non-specified bearings in the Lear Romec Centrifugal Fuel Pump was inconsistent with the Maintenance Manual published by the manufacturer for that component. Again, it was a deviation from the airworthiness standards for that component.
To determine whether the modifications made by CAA were major or minor, guidance is provided in the Appendices to AMA 571.203A. In reference to Appendix 2, an affirmative answer to the questions at items 2(e)(7) and 2(e)(13) would seem appropriate: the trim actuator involves flight controls, and a malfunction of either of the fuel pumps could prevent a safe flight and landing. By this criteria, the subject modifications were major. In addition, at the Review Hearing an expert witness in repair and modification, engineering and certification, Mr. Wright, testified that the three modifications were major modifications. The maintenance done by CAA, therefore, was required to be performed in accordance with approved data or specified data, which includes the maintenance and overhaul manuals.
It was established during the Review Hearing that CAA had not obtained either a Supplemental Type Approval (STA) or a Repair Design Approval (RDA) for any of the modifications made to the three components. Such Approvals would have provided CAA with the authority to make the changes while still meeting the required airworthiness standards. The relevant regulations, however, seem to preclude such an application by CAA, as the eligibility to apply for those approvals is limited to the individual or organization that controls a design (AWM 513.7). The only way in which CAA could have obtained Transport Canada authority to make the changes it did, therefore, would seem to be to request the component manufacturer to apply for STA/RDA on their behalf, but the manufacturer would likely have little incentive to act on the request. Thus CAA would have no straightforward way to seek and obtain approval for the modifications, which although seeming to be minor, would be classified as major.
CAA's intention of improving the quality of repair and reducing the costs of maintenance for its customers by making the changes is appropriate and commendable. However, all changes in maintenance must be in compliance with the applicable regulations, and in these three instances CAA did not so comply.
The regulations that pertain to the issues being considered are confusing. Determining which regulations apply and how they should be interpreted leads through a maze in which the intent is far from straightforward and clear. The recourse to directly approach Transport Canada for clarification, however, is always an available option. With the promulgation of the new Canadian Aviation Regulations it is hoped that much of the potential for confusion will have been removed.
CAA's contention that the practice of using bearings that meet the known relevant specifications but that are not necessarily specified in maintenance manuals is widespread seems to have some substance, and is undoubtedly a cause for frustration when it appears that the practice is continuing in other companies, apparently with impunity. Moreover, the fact that the practice has been long standing and may have been tacitly accepted by Transport Canada is equally a concern. But that does not absolve CAA from being responsible for its own actions.
The Review Hearing Member erred in invoking an expired N-AME-AO to justify the use of non-approved bearings which did not conform to approved type design data, and in judging the subject changes made by CAA to be minor.
In the three instances at question, CAA certified components as airworthy when they were not because the maintenance work done on them deviated from the required airworthiness standards.
Parts and procedures specified in the component manufacturers' maintenance and overhaul manuals for the three components are standards of airworthiness that were required to be met.
The subject parts used by CAA in overhauling the three components did not meet the standards of airworthiness required.
According to the criteria for classifying modifications as major or minor and expert witness testimony, the subject changes made by CAA were major modifications. Major modifications must be performed in accordance with approved data or specified data. For the changes made by CAA to have complied with regulations, a Supplemental Type Approval or a Repair Design Approval would had to have been obtained from Transport Canada, but neither such approval was given. The process to obtain such an approval, however, is neither clear nor straightforward. Transport Canada should establish some clearly understandable and "user-friendly" process by which initiatives may easily be taken by maintainers to get approval for changes that will improve maintenance efficiency without detracting from aviation safety.
The Appeal Panel agrees fully with the Review Hearing Member's postscript comments that the regulations concerning airworthiness standards for the three components are confusing, and considers them complex and convoluted, but those characteristics of the regulations do not provide reason for non compliance.
Identifying parts as "aeronautical", "standard", "specified", "approved", or "unapproved" adds to the confusion. It would seem that the terms are not mutually exclusive and that, for example, a standard part could be an approved part for aeronautical components if so designated by the manufacturer.
The overriding purpose of the maintenance regulatory framework is to ensure aviation safety. In that regard, the use of unapproved bearings and reworked parts by CAA does not seem to have reduced or compromised safety in any way. Moreover, some of the changes made could conceivably enhance safety, as CAA claimed, but no such firm conclusion is possible. CAA appears to be a company that is fully aware of its obligations with regard to quality work and safety, and that conscientiously works to meet all regulatory requirements. It is apparent that CAA believed its maintenance actions were in keeping with the requirements, and did not set out to intentionally violate any regulations.
The maximum monetary penalty set by Transport Canada is not warranted in the circumstances of this case.
NOTICE OF ASSESSMENT
The Appeal Panel observed that the Notice of Assessment of Monetary Penalty was dated December 20, 1995 and pointed out that the second and third offences listed in the Notice occurred more than twelve months prior to the date of Notice, thereby proscribing those two offences according to the provisions of section 26 of the Aeronautics Act.
The background facts are as follows:
A Notice of Assessment of Monetary Penalty dated June 5, 1995 was served on Canadian Aero Accessories Ltd. per subsection 7.7(1) of the Aeronautics Act. The assessed amount not having been paid on or before July 12, 1995, as required by the Notice, the Minister of Transport so advised the Tribunal on July 13, 1995 per subsection 7.7(2) of the Act. The Tribunal set the matter down for hearing and advised the parties on November 24, 1995 per subsection 7.9(1) of the Act.
Tribunal records indicate that on January 22, 1996 Transport Canada instructed the Tribunal to close its file in respect of the above notice as a new one had been issued with a payment due date of January 26, 1996. Evidently, this Notice of Assessment of Monetary Penalty was dated December 20, 1995, cited the same three offences, each with a lesser monetary penalty and was served on the Respondent in accordance with subsection 7.7(1) of the Act.
As well, the Notice dated December 20, 1995 contained the words "THIS SUPERSEDES NOTICE DATED 5 JUNE 1995". When the Respondent company failed to make payment by January 26, 1996, the date set out in the notice, the Minister notified the Tribunal of this fact on January 30, 1996, and the matter was set down for review.
Section 26 of the Aeronautics Act states as follows:
26. No proceedings under sections 7.6 to 8.2 or by way of summary conviction under this Act may be instituted after twelve months from the time when the subject-matter of the proceedings arose.
The said notice was issued pursuant to section 7.7 of Act, and clearly this provision has application. The word "proceeding" as contained in section 26 is not defined in the Act. We are of the view that the word "proceeding" which is the subject of the limitation period under section 26 of the Act is not the proceedings before the Tribunal. Rather it refers to the procedure followed by the Minister in choosing to proceed by way of the Notice as set out in subsection 7.7(1) of the Act, such Notice being the step by which that proceeding is instituted.
We note that the word "proceeding" is also used in the Act in apparent reference to the process which takes place before the Tribunal, as for example subsections 7.9(3) and (5). Of course, one must conclude that if the action under subsection 7.7(1) is commenced by the Minister more than 12 months after the material event, then inevitably the Tribunal's request or Notice of Hearing will also be beyond the limitation period.
Importantly, section 8 of the Act provides that if the Tribunal, at first instance, decides there has been no contravention, then (other than an appeal from that decision) "no further proceedings under this Part shall be taken against the person". This language can reasonably refer only to the Notice issued by the Minister under subsection 7.7(1). It is that Notice, in our view, which by section 26 of the Act must be issued within 12 months of the time when the subject matter of the proceedings (i.e. the alleged contravention) arose.
The allegations read in at the review and the references to the Notice of Assessment of Monetary Penalty and to its service were to the Notice dated December 20, 1995. We must therefore conclude that section 26 of the Aeronautics Act applies with the result that the second and third offences listed in the Notice of Assessment of Monetary Penalty dated December 20, 1995 are proscribed.
The issue of limitation period was raised by the Appeal Panel, and it is the conclusion of this panel that not only can matters of limitation be raised at any stage of proceedings before the Tribunal, but indeed must be so raised. It matters not whether the issue is raised by the parties or by the Tribunal, provided only that if the issue is raised by the Tribunal, the parties, as in this case, must be given the opportunity to make submissions on the issue.
In an administrative law context, it is reasonably well settled that the failure of a tribunal to consider statutory prescription – as regards its own proceedings – will amount to jurisdictional error. That is to say that, where there is a time limit within which a proceeding must be commenced before a Tribunal, failure to comply with such a requirement will deprive the Tribunal of jurisdiction to hear it.
In our view, it would be quite inappropriate for the Tribunal to ignore the fact that the Notice under subsection 7.7(1) did not comply with section 26 of the Act on the basis that the issue had not been raised by the parties. To do so would mean that the Tribunal was exercising its mandate in respect of a proscribed proceeding, something it has no authority to do.
The Appellant's suggestion that the Notice dated June 5, 1995 survives by reason of its amendment by the December 20 Notice, is totally without merit and contrary to the facts in this case. On the facts, no request for amendment was made to the Tribunal regarding the June Notice, rather a new Notice was issued in December and this Notice had a new date for payment and clearly started the clock running again. The Notice dated December 20, 1995 on its face is said to supersede or replace its predecessor and, as such, stands on its own as the Notice by which the proceeding was instituted against Canadian Aero Accessories Ltd. Hence, the proceeding which came on for hearing before the Tribunal was, in part, proscribed by reason of section 26 of the Act.
It is the opinion of this panel that the proper procedure would have been to proceed with the June 5 Notice and its scheduled review. At the commencement of the review, a request to the Tribunal Member to amend the penalty by reducing its amount would have avoided the issuance of a new Notice and thereby the consequences of the application of section 26 of the Aeronautics Act.
The Appeal is allowed. Canadian Aero Accessories Ltd. violated the required standards of airworthiness when it installed unapproved parts in three aeronautical appliances during maintenance. We do not, however, find contravention in respect of offences 2 and 3 because of the effect of section 26 of the Aeronautics Act that these two offences are proscribed. The monetary penalty for offence number 1 is reduced to $750.00 for a total penalty of $750.00.
Reasons for Appeal Determination by:
Robert Mortimer, Member
Faye Smith, Chairperson
Fred W.R. Clarke, Member
 The first numbered paragraph of a document entitled "Admissions" signed by the parties, and filed at review on behalf of the Minister of Transport states "That a Notice of Assessment of Monetary Penalty, dated 20 December, 1995, pursuant to s. 7.7(1) of THE ACT was served in accordance with s. 7.7(2) of THE ACT."
 PICA v. R., (1985) 9 Admin. L.R. 303; Viger v. Cloutier,  B.R. 120 (QCA).
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