Decisions

CAT File No. W-1278-02
MoT File No. SAP-6504-P-369164-27930

CIVIL AVIATION TRIBUNAL

BETWEEN:

Lionel Gartner, Applicant

- and -

Minister of Transport, Respondent

LEGISLATION:
Aeronautics Act, R.S.C., c.A-2, s.6.9, 8.4(3)
Air Regulations,Series VIII, No. 1s.101(1), 700

Valid certificate, Suspension of CAD, Commercial air service


Review Determination
Ken Clarke


Decision: November 13, 1996

I find Mr. L Gartner contravened section 700 of the Air Regulations and therefore confirm the suspension by the Minister. I reduce the time of suspension from sixty days to six days. Said suspension will begin on the fifteenth day following the service of this determination.

The Review Hearing on the above matter was held Friday, October 25, 1996 at 10:00 hours at Canada Place, in the city of Edmonton, Alberta.

BACKGROUND

A Transport Canada investigation of a possible overweight flight revealed the apparent commercial use of a privately registered aircraft. Mr. Gartner had been hired to supervise the installation of an urgently needed part on a remote oil drilling rig. The part was transported from Edmonton to the rig airstrip by Mr. Gartner in his private aircraft. Transport Canada subsequently issued a Notice of Suspension regarding Mr. Gartner's private pilot licence. A Stay of Suspension was granted by the Civil Aviation Tribunal until the Review Hearing and Determination.

In part the Notice of Suspension reads:

Pursuant to section 6.9 of the Aeronautics Act, the Minister of Transport has decided to suspend the above indicated Canadian aviation document on the grounds that you have contravened the following provision(s):

That you did on or about the 6th day of February 1996, A.D. at or near Edmonton, Alberta, operate a commercial air service in Canada and did not possess a valid and subsisting Minister's Certificate allowing you to do so, contrary to Section 700 of the Air Regulations and did thereby commit an offence pursuant to Section 7.3(3) of the Aeronautics Act, ...

The suspension comes into effect on the 27th of May 1996, and remains in effect until the 25th of July 1996.

THE LAW

Section 700 of the Air Regulations:

700. No person shall operate a commercial air service in Canada unless he holds a valid and subsisting certificate issued by the Minister certifying that the holder thereof is adequately equipped and able to conduct a safe operation as an air carrier.

Subsection 101(1) of the Air Regulations:

"commercial air service" means any use of aircraft for hire or reward;

Subsection 3(1) of the Aeronautics Act:

"hire or reward" means any payment, consideration, gratuity or benefit, directly or indirectly charged, demanded, received or collected by any person for the use of an aircraft;

Subsection 8.4(1) of the Aeronautics Act:

8.4 (1) The registered owner of an aircraft may be proceeded against in respect of and found to have committed an offence under this Part in relation to the aircraft for which another person is subject to be proceeded against unless, at the time of the offence, the aircraft was in the possession of a person other than the owner without the owner's consent and, where found to have committed the offence, the owner is liable to the penalty provided as punishment therefor.

Subsection 8.4(3) of the Aeronautics Act:

(3) The pilot-in-command of an aircraft may be proceeded against in respect of and found to have committed an offence under this Part in relation to the aircraft for which another person is subject to be proceeded against unless the offence was committed without the consent of the pilot-in-command and, where found to have committed the offence, the pilot-in-command is liable to the penalty provided as punishment therefor.

Section 28 of the Aeronautics Act:

28. In any action or proceeding under this Act, an entry in any record required under this Act to be kept is, in the absence of evidence to the contrary, proof of the matters stated therein as against the person who made the entry or was required to keep the record or, where the record was kept in respect of an aeronautical product, aerodrome or other aviation facility, against the owner or operator of the product, aerodrome or facility.

Section 7 of Air Navigation Order, Series IV, No. 2:

7. No person shall act as a flight crew member of an aircraft operated in a commercial air service or, except as provided in the Private Aircraft Exemption Order, accept remuneration for acting as a flight crew member unless that person is the holder of a commercial pilot, airline transport pilot, flight navigator or flight engineer licence.

Paragraph 4(a) of Air Navigation Order, Series VII, No. 1:

4. The owner of a private aircraft is exempt from the provisions of section 700 of the Air Regulations when he uses that aircraft on his employer's business and is reimbursed therefor on a mileage basis, where

(a) the owner has received prior approval from the Air Transport Committee permitting the acceptance of compensation;

PRE TESTIMONY

The allegation was reviewed and the order of the proceedings detailed. It was determined that no pre-hearing conferences, agreements or other matters took place that needed to be brought to my attention. All evidence was by sworn testimony, and the witnesses were excluded until called.

THE EVIDENCE

Acting for the Minister, Mr. Ribout introduced the case and then called Inspector Pollock as his witness. A description of his involvement in the case was made by Inspector Pollock. In the course of an investigation he had determined that an aircraft owned by Mastco Derrick Services Ltd. departed Edmonton on or about February 6, 1996 with a torque convertor. The destination was a drill rig in British Columbia.

Four pages of documentation regarding aircraft and corporate registration were entered as Exhibit M-l. Mastco is a registered owner of the aircraft noted in the allegation. This was followed by submission of three pages reflecting billing to, and payment from, Waterous Diesel Equipment in the amount of $3,103.00 for "Travel to Ft. Nelson and deliver parts". The three pages were received as Exhibit M-2 and showed a date of February 9, 1996.

Minister's Exhibit M-3 is copies of five pages from the aircraft journey log that include the flight on the day of the alleged violation and appropriate cargo load. No passengers had been carried according to the log. Exhibit M-5 consists of three pages of sections of the Aeronautics Act.

Mr. Pollock said he had two interviews with Mr. Gartner. He described Mr. Gartner as cooperative at all times. Mr. Gartner did not believe that he had committed a violation, and at one point required more time to track the billing.

In cross-examination it was confirmed that Mr. Gartner had a "clean" record. It was further confirmed a criminal sanction might have been sought. The course to decide the penalty was described. It was revealed that the bill had been sent to Waterous after incorrectly going to Beaver Drilling.

Mr. Johnson introduced his defence with two exhibits. Entered as Exhibit D-1 was a copy from Corporate Law in Canada describing Corporate Entity and a court decision. Exhibit D-2 is a copy of portions of section 101 of the Air Regulations.

Mr. Johnson presented a motion there was insufficient evidence. He stated that, as operator, Mastco should be charged and not Mr. Gartner. Mastco was also the owner. I find that there is sufficient evidence to proceed against Mr. Gartner, and I note the Minister may proceed against the owner, operator, or pilot-in-command. The latter is applicable in this matter. It is also noted that Mr. Gartner is president of Mastco, and the penalty is more severe against a corporation.

In a second motion, Mr. Johnson requested that the proceeding be struck as there was a failure to disclose the sections violated and therefor no opportunity for a proper defence. I rule that proper disclosure of the sections violated has been made.

As the first witness, Mr. Schafer was called to testify. He described himself as employed as Operations Manager for Beaver Drilling. The drive to the rig was described as about 15 hours, provided you did not get lost once in the bush. The Beaver rig was in northern British Columbia. Mastco had been contracted to install the torque convertor that had shut down the rig for about 41 hours. Waterous Diesel had worked on the part and was considered the supplier. Mechanical work was on a warranty basis, with Beaver being the owner. Beaver Drilling directed Waterous to use any aircraft, but assumed the carrier would be Alta Flights. After having difficulties loading the part, Waterous advised Mr. Schafer the part was being trucked from Calgary to an aircraft in Edmonton. Up to that point of approximately 7:00 a.m., on the day in question, there was no different understanding of the carrier.

Prior to any aircraft availability difficulties, Mr. Gartner had been requested to supervise the part installation. No discussion of his transporting the part had taken place.

There was concern that sufficient daylight would not be available at the unlighted airstrip by the time an appropriate aircraft became available. After being told by a Waterous representative that numerous inquiries had been unsuccessful, Mr. Schafer said for them to ask Mr. Gartner if he could take the piece. That request was made, and Mr. Gartner measured and weighed the part. He then flew it to destination. No discussion took place regarding compensation.

When shown an invoice copy, Mr. Schafer explained that he had received that bill by mail and then spoke with Mastco's bookkeeper. He directed the bill should go to Waterous for the trip as it was their responsibility, and that Beaver had to pay for Mr. Gartner. He said the bill would have been claimed on a warranty if not paid. Mr. Schafer told Mastco's bookkeeper to charge whatever is fair, and did not discuss the matter with Mr. Gartner.

Entered as Exhibit D-3 was a copy of an invoice sent to Beaver Drilling for "– Fly to Beaver Rig #4, supervise installation on torque convertor. – Return to shop." The date was February 7, 1996 and the amount $3,103.00.

Cross-examination showed the drill site was near Beaton River, British Columbia, and was approximately halfway between Fort Nelson and Fort Saint John. Unloading time was not determined as it was variable. The need to have Mr. Gartner was described along with duration. In testimony it was said the measurement and approval of the part were done at the airstrip. Thus, the lack of need for Mr. Gartner was determined at that time. Mr. Schafer described the business arrangement and basis for payment Mr. Gartner had with Beaver. He continued that he had told the bookkeeper (secretary) at Mastco to charge on the basis of mileage. In response to questioning it was stated the amount was higher than normally charged by Mr. Gartner. Additionally he said that, had the part not been at the location, Mr. Gartner would not have been required.

By way of redirect, Mr. Schafer testified that Mastco effectively dealt with Waterous from 9:00 a.m. until 5:30 p.m. He then said it was not uncommon for a job to take longer than expected nor to have Mastco bills in excess of five thousand dollars.

Mr. Schembri, a Field Superintendent, was the next witness. He confirmed previous testimony, and stated the part would not fit in Alta Flights' aircraft. He said other carriers would be too late regarding the amount of daylight. When Alta Flights would have a suitable aircraft, it also would be too late. Mr. Gartner was then approached and asked by Beaver to take the part. At that time, he was not aware Mastco had been contracted to supervise installation.

In cross-examination Mr. Schembri said night was at about 5:30. He had been told by Mr. Gartner that the Twin Otter available at 3:30 p.m. was big and slow. At about 10:30 a.m. he was told it would fit in Mr. Gartner's aircraft. Mr. Schembri's task was to arrange transportation of the torque converter. He was not familiar with Mr. Gartner's lack of commercial qualification.

Mr. Gartner was next called. He described himself as one of the shareholders of Mastco. He testified that on the Sunday he spoke with Mr. Schafer and agreed to supervise the part installation, and there was no discussion about transport. On February 6, Mr. Schembri called in the morning to advise there were difficulties with the carrier, and discussed the carrier's call. Mr. Gartner advised he would need to leave by noon in order to land before dark. He was then asked if he could take the part with him. No idea of time required was had until arrival at the strip. At that time measurements were made, and it was determined that he was not required at the rig.

A description of Mr. Gartner's charges to Beaver was made. Basically the charge is time plus expenses. He said no charge for taking the torque converter was included. It was testified there was no intention of such billing, and it was carried as a favour for a good customer. The flight was approximately four hours from Edmonton to the rig.

Mr. Gartner said all money came from Waterous, and they did not own the part. It was then explained that he did not see the bill and it was handled by people in the office. Until someone from Transport came, he was unaware the bill had been rerouted to Waterous. The amount of this bill is considered small. An explanation of the need to make measurements at the rig and not at the point of loading was made.

In redirect Mr. Gartner said he was the chief executive officer of Mastco. He then explained how the charges are calculated; however, a breakdown was not clear. Under questioning Mr. Gartner conceded that he received a benefit by the part being carried. In closing it was stated that the part was urgently needed, and daylight time was critical.

In summation Mr. Johnson put forth the suggestion that de minimis non curat lex (the law does not concern itself about trifles) is applicable. He said there were no safety concerns, and that Mastco had been contracted to supervise and install the torque converter. The initial conversations did not have any mention of transporting the part. It was argued that Mr. Gartner had already been contracted to install the part, and by happenstance had a plane, and by happenstance was one that could haul the converter. The intention was to use commercial transport, and great efforts were made to secure a carrier. In any event, Mr. Gartner was hired to go to the site, and Mr. Ribout's question regarding the need to be there if the part was not, was placing the cart before the horse. Mr. Gartner was going to the rig, and that is why they asked him, and not that he has an aircraft.

The significant length of suspension would cause considerable hardship argued Mr. Johnson. He continued to suggest that the Tribunal should look at the purpose of the law.

Mr. Johnson said his understanding of the regulation required a connection to be made between the service and the benefit received. He continued that Beaver paid nothing, there was no contract between Waterous and Mastco, and no extra charge made for carriage. In closing, Mr. Johnson concluded that Mastco, and not Mr. Gartner, perhaps violated the provision.

Mr. Ribout commenced his summary by stating the Minister has the right under section 6.9 of the Aeronautics Act to proceed with document suspension. He pointed out that Mr. Gartner is the directing mind of Mastco and was also the pilot-in-command, and as such may be proceeded against for carriage of the part. He said that demanding payment directly or indirectly was a violation. He said the lack of a breakdown to allow determination of charges does not permit anyone to know if only operating expenses were billed. Mr. Ribout then said section 700 of the Air Regulations does not allow for exemption for any reason. He stated safety concerns were not an issue in this case. If a commercial service took place, however, safety became an issue as operation took place without meeting the more stringent requirements.

The Minister did not agree this was a minor infraction as it is subject to summary conviction.

ANALYSIS AND CONCLUSION

There was no contest of particulars that led up to the alleged violation. I accept Mr. Gartner's position that he did not believe a violation had taken place. It is quite understandable that Mr. Gartner only attempted to assist a good customer with an urgent need. A judgement call was made with the consideration of daylight time limitations. I do not believe there was any intent by Mr. Gartner to take business away from anyone for his own gain.

The question of part ownership and to whom billing was made does not affect my decision. In particular I refer to aircraft operating expenses, and note that may have affected the defence.

I do not accept that this is a trifling matter. In fact I consider it most serious. There has been a movement away from regulation in this country; however, certain regulations such as allegedly violated, continue to stand. Besides erosion of the commercial sector, there are such considerations as dangerous goods, duty times, floor loading, weight and balance and numerous other areas at risk when not handled by an authorized operator. It is my belief an appropriate carrier could have provided the required service had a better search been made. Additionally, the part fit in Mr. Gartner's aircraft and so would have fit in other similar planes.

I acknowledge the hardship imposed by the length of the suspension, and at the same time realize the Minister could have sought a more severe penalty. Again I make mention that the corporation is at greater jeopardy than an individual. The Minister has the right to proceed against either.

The connection between the service and the benefit has been made. The service being the torque converter carriage, and the benefit being compensation requested. Receipt was on the balance of probabilities, and lack of evidence to the contrary. I do not believe the public would be better served by a lengthy suspension. It is my opinion that the record on file serves as sufficient deterrent. Many events of this case appear circumstantial.

I believe the Minister has proven his case. All of Mr. Ribout's points in summary are agreed with, except I do find provision for exemption by application. That request was not made. Most significantly, I agree that demanding payment directly or indirectly is a violation.

DETERMINATION

For the above described reasons, I find Mr. L Gartner contravened section 700 of the Air Regulations and therefore confirm the suspension by the Minister. I reduce the time of suspension to six days.

REMARK

I draw attention that provision is made so that one may seek removal of information from his file at Transport Canada. This is not to mean there exists an obligation of the Minister. I thank all participants for their well ordered and meaningful presentations.

Ken Clarke
Member
Civil Aviation Tribunal


Appeal decision
Allister W. Ogilvie, Robert J. MacPherson, Robert L. Mortimer


Decision: April 15, 1997

The appeal is allowed. The Minister failed to prove that the Document Holder transported a part for hire or reward and therefore operated a commercial air service in violation of section 700 of the Air Regulations. The allegation is dismissed and the suspension is cancelled.

An Appeal Hearing on the above matter was held before three designated Tribunal Members on Monday, March 17, 1997 at 10:00 hours at the Federal Court, in the city of Edmonton, Alberta.

BACKGROUND

This appeal resulted from a determination made by Mr. Ken Clarke following a Review Hearing on October 25, 1996. Mr. Gartner was alleged to have contravened section 700 of the Air Regulations in that he did operate a commercial air service in Canada and did not possess a valid and subsisting Minister's Certificate allowing him to do so.

Mr. Clarke found that Mr. Gartner did contravene section 700 of the Air Regulations, and confirmed the suspension of his Private Pilot Licence by the Minister, but reduced the time of suspension from sixty days to six days.

On November 29, 1996, Mr. Johnson on behalf of the Appellant requested an appeal of the Review Determination of Mr. Clarke. On that same date the Tribunal issued a Stay of Suspension until the Appeal Hearing consideration and determination. On February 5, 1997, the Tribunal Notice of Appeal Hearing was issued.

NEW EVIDENCE

The Civil Aviation Tribunal received written notice of intention to submit additional evidence from the Appellant's counsel on March 14, 1997. The motion pursuant to the notice was argued as a preliminary issue before the Appeal Hearing.

Counsel for the Appellant argued that he had been unaware of a provision relied upon at the Review Hearing by the Minister, specifically, subsection 8.4(3) of the Aeronautics Act which provides for the pilot-in-command to be proceeded against in respect of and found to have committed an offence in relation to the aircraft for which another person is subject to be proceeded against. He wished to introduce a prior Tribunal decision which contained a Notice of Assessment wherein the Minister explicitly included a reference to section 8.4. He stated that the decision was relevant in that it showed the Minister's previous pattern included specific reference to the section relied upon.

The Respondent's counsel countered by direct reference to subsection 7.2(3) of the Aeronautics Act which states:

An appeal to the Tribunal shall be on the merits based on the record of the proceedings of the member of the Tribunal from whose determination the appeal is taken but the Tribunal shall allow oral argument and, if it deems it necessary for the purposes of the appeal, shall hear evidence not previously available.

She argued that the document which was sought to be entered was previously available and was not necessary for the purpose of the appeal. Further, she asserted that the case was on different allegations, contained different facts, and one case could not be construed as a pattern.

After considering the motion and argument, the Appeal Panel found that the document which the Appellant sought to be entered was previously available and that it was not necessary for the purpose of the appeal. The motion to include new evidence was therefore denied.

GROUNDS FOR APPEAL

The Appellant specified three grounds for the appeal:

  • The Member erred in law in his finding that there was sufficient evidence presented that would establish Mr. Gartner had violated section 700 of the Air Regulations.
  • The Member erred in law in finding that the Minister had properly disclosed those sections of the Aeronautics Act which the Minister was relying on in the prosecution.
  • The Member erred in law in finding that Mr. Gartner had received either direct or indirect benefit from the transportation of the goods in question.

OPERATION OF A COMMERCIAL AIR SERVICE

Section 700 of the Air Regulations states that:

No person shall operate a commercial air service in Canada unless he holds a valid and subsisting certificate issued by the Minister certifying that the holder thereof is adequately equipped and able to conduct a safe operation as an air carrier.

Mr. Gartner was alleged to have operated a commercial air service without the proper authority when he transported a torque converter in aircraft CF-YFA from Edmonton to an oil drilling site in northern B.C. on February 6, 1996.

A number of undisputed facts were established during the Review Hearing. Mr. Gartner is an employee and the Chief Executive Officer of Mastco Derrick Services Ltd. The aircraft is registered as being owned by Mastco Derrick Services Limited and Mr. Donald Thompson. Mr. Gartner was the pilot-in-command of CF-YFA on the day in question, and he did in fact transport the torque converter in the aircraft. The torque converter was being provided under warranty by Waterous Diesel Equipment to Beaver Drilling Ltd.

Certain criteria determine whether or not a commercial air service is being operated. The Aeronautics Act defines commercial air service as "any use of aircraft for hire or reward", and hire or reward as "any payment, consideration, gratuity or benefit, directly or indirectly charged, demanded, received or collected by any person for the use of an aircraft".

Evidence entered at the Review Hearing included a Mastco Derrick Services Ltd. invoice dated February 7, 1996 in the amount of $3,103.00 sent to Beaver Drilling Ltd. Another Mastco invoice for the same amount was sent two days later on February 9, 1996 to Waterous Diesel Equipment. A Waterous Diesel Equipment cheque in the amount of $3,103.00 in favour of Mastco Derrick Services was issued on March 15, 1996.

OPERATION OF A COMMERCIAL AIR SERVICE – THE ISSUE

The issue is whether the invoice sent from Mastco Derrick Services to Waterous Diesel Equipment or the payment of $3,103.00 to Mastco from Waterous, in whole or in part, constituted hire or reward to Mr. Gartner for the transportation of the torque converter on CF-YFA. This issue encompasses both the first and third grounds of appeal made by the Appellant.

OPERATION OF A COMMERCIAL AIR SERVICE – DISCUSSION

In his sworn testimony, Mr. Gartner stated that on February 5, 1996 Mr. Schaffer of Beaver Drilling Ltd. asked him to go to the subject Beaver drill site to supervise the installation of a torque converter, which Mr. Gartner tentatively agreed to do.

Mr. Gartner stated he received a call from Mr. Schembri of Beaver Drilling at 09:00 hours on February 6, advising him that they were having trouble getting the part to the site, and that Mr. Gartner should delay going to the site. Mr. Schembri also asked whether Mr. Gartner knew of any flight service that could transport the part, and when Mr. Gartner could not suggest any that had not already been tried, Mr. Schembri asked if he could take the part with him. Mr. Gartner said that if it fit, he would take it, and subsequently did.

Mr. Gartner further testified that he did not charge any amount for taking the torque converter to the site (transcript p.78). He stated he took the part with him in his aircraft because Beaver Drilling wanted to get the rig going, and they could not find another aircraft to transport it to the site that day. He further stated he transported the torque converter as a favour for Beaver Drilling, and he had no intention of billing them for hauling the torque converter (transcript p.79).

Later in his direct testimony, Mr. Gartner stated he was not aware, at the time, of the invoices that were sent to Beaver Drilling and subsequently to Waterous Diesel Equipment. He explained that all invoicing was done by the company bookkeeper and accountant (transcript p.79-80).

Mr. Pat Schaffer, the Operations Manager for Beaver Drilling, testified that when the invoice to Beaver Drilling dated February 7, 1996 was received, he took it back to Mastco and directed Fran, the secretary / bookkeeper there, to bill the amount of the invoice to Waterous because he "...figured they might as well pay for the trip." (transcript p. 48). His instruction to the Mastco secretary / bookkeeper to bill Waterous was made without any conversation with Mr. Gartner.

In comparing the invoice sent to Beaver (Exhibit D-3) with the one sent to Waterous two days later (Exhibit M-2), it is noted that the description of services was changed:

  • Invoice MC6388 Feb. 7, 1996 to Beaver Drilling Ltd. "– Fly to Beaver Rig #4, supervise installation on torque converter. – Return to shop."
  • Invoice MC 6477 Feb. 9, 1996 to Waterous Diesel Equipment. "– Travel to Ft. Nelson and deliver parts".

No evidence was entered or testimony recorded that would indicate Mr. Gartner had any involvement with the change in description of services provided. Both invoices were for the same Job Number (#1904) and the same amount: $2,900.00 plus $203.00 GST for a total of $3,103.00.

In response to a question during his testimony, Mr. Gartner stated that the bulk of the bills submitted to Beaver Drilling from Mastco would be in excess of $10 – 20,000.00 for work performed (transcript p. 80).

The Mastco method of determining charges and calculating billing amounts were then described by Mr. Gartner in his testimony (transcript p. 83). He explained they used a "rule of thumb" in calculating charges based on the distance travelled, and such calculations encompassed all fees and expenses for the particular job. These charges were $50.00 for each inch on a 1:1,000,000 scale map, which is equal to a distance of 16 nautical miles (NM). Mr. Gartner stated his aircraft travelled at 125 to 130 knots.

If this crude criterion is applied to the flights in question, it appears that the charge of $2,900.00 is roughly the amount that would result, without any additional charge being levied for transporting the torque converter. $2,900.00 @ $50.00 per inch represents a distance of 58 inches; if that is assumed to be the return distance being charged for, then the one way distance would be approximately 29 inches, or 464 NM. The total flight time for the two legs from Edmonton to the Beaver site was 3.3 hours, which at 130 knots in a no-wind condition would cover a distance of some 429 NM. From these rough basic calculations the amount of $2,900.00 seems to be a normal billing amount given the apparent imprecision of Mastco billing procedures.

NOTICE OF SUSPENSION / DISCLOSURE

In the Notice of Suspension sent to Mr. Gartner, the Minister did not make any reference to subsection 8.4(3) of the Aeronautics Act, the subsection which provided the basis for proceeding against Mr. Gartner.

The Notice of Suspension reads as follows:

Pursuant to section 6.9 of the Aeronautics Act, the Minister of Transport has decided to suspend the above indicated Canadian aviation document on the grounds that you have contravened the following provision(s):

That you did on or about the 6th day of February 1996, A.D. at or near Edmonton, Alberta, operate a commercial air service in Canada and did not possess a valid and subsisting Minister's Certificate allowing you to do so, Contrary to Section 700 of the Air Regulations and did thereby commit an offence pursuant to Section 7.3(3)of the Aeronautics Act, R.S.C. 1985 and amendments thereto.

The requirement for the contents of the Notice is found at subsection 6.9(2) of the Aeronautics Act where it is stated:

A notice under subsection (1) shall be in such form as the Governor in Council may by regulation prescribe and shall, in addition to any other information that may be so prescribed,

(a) indicate the provision of this Part or of the regulation or order made under this Part that the Minister believes has been contravened; and...

The Notice did indicate the regulation that the Minister believed had been contravened.

The regulation that was prescribed is found in the form of Air Regulations Series I, No. 2 where it is stated:

3. A notice issued by the Minister pursuant to subsections 6.9(1) and (2) of the Act shall include

(a) a description of the particulars of the alleged contravention;

(b) where the Minister has decided to suspend the Canadian aviation document, a statement of the duration of the suspension; and

(c) a statement that a request for review by the Tribunal does not prevent the suspension or cancellation from coming into effect but that an application may be made in writing to the Tribunal, pursuant to subsection 6.9(4) of the Act, to stay the suspension or cancellation until the review of the decision of the Minister has been concluded.

In this case the Notice was issued pursuant to section 6.9 and:

(a) a description of the particulars of the alleged contravention was given;

(b) the duration of the suspension was stated; and

(c) a statement that a request for review by the Tribunal does not prevent the suspension from coming into effect was provided.

The Notice of Suspension on its face, therefore, met the conditions of subsection 6.9(2) of the Act and the requirement of section 3 of Air Regulations Series I, No. 2. However, the inter-relation of the parties coupled with the Minister's approach to the allegation brings the adequacy of the Notice/Disclosure into issue. Although he was the pilot-in-command, the Notice alleges that Mr. Gartner did "operate" a commercial air service.

A review of the transcript reveals that, at the outset, counsel for the Applicant argued the effect of there being two separate legal entities, that of Mastco and that of Mr. L. Gartner. He illustrated that the billings (the hire or reward) were as between Mastco and another company, Waterous Diesel. That is, there was no evidence that Mr. Gartner as an individual received remuneration. Simply put, he argued that the Minister proceeded against the wrong person. He therefore made a motion to dismiss as the Minister had not proven all essential elements of the case.

It was in response to that motion that the Minister's reliance upon the "vicarious liability" section was revealed. The Minister's representative responded to the motion by stating that Mr. Gartner was proceeded against as he was the holder of a Canadian aviation document whereas the owner of the aircraft was not (transcript p.29). He also referred to subsection 8.4(3) of the Aeronautics Act for the first time and read the section into the record.

In further explanation, the Minister's Case Presenting Officer stated "As pilot-in-command of the aircraft he may be proceeded against according to this and he is subject to the same penalty as Mastco would have been; therefore, under vicarious liability it is a legal proceeding to proceed against Mr. Gartner rather than against Mastco and that is the decision the Minister made in this instance. He has proceeded by vicarious liability and suspended a Canadian aviation document rather than taking Mastco on a summary conviction." (transcript p.31)

The Appellant's counsel then raised another basis on which the proceeding should be struck. He contended the Minister must fully state what the offence is and on what grounds he will proceed to prove that offence, but the Minister had given no prior indication of his intention to use the vicarious liability provision in the Act.

NOTICE OF SUSPENSION / DISCLOSURE – THE ISSUE

The issue is whether a Notice of Suspension or disclosure which includes only an indication of the provision of the regulation alleged to have been contravened is adequate, where the Minister also relies upon the provision of subsection 8.4(3).

This issue relates to the second ground of appeal.

NOTICE OF SUSPENSION / DISCLOSURE – DISCUSSION

The term vicarious liability is not defined in the Act or Regulations. Black's Law Dictionary describes it as:

Indirect legal responsibility; for example, the liability of an employer for the acts of an employee

The section of the Aeronautics Act which might be referred to as the vicarious liability section is 8.4, although it does not include that term. The specific subsection referred to in this instance is, as previously noted, 8.4(3). It specifically allows proceedings to be taken against the pilot-in-command, in respect of an offence in relation to the aircraft, for which another person is subject to be proceeded against. The link between the pilot-in-command and the other person who is subject to be proceeded against is "an offence under this Part in relation to the aircraft".

In this case Mr. Gartner was the pilot-in-command. The offence in relation to the aircraft was that the flight in question was operated as a commercial air service when he (Mr. Gartner) did not possess a valid and subsisting Minister's Certificate allowing him to do so. The section also requires that the other person (Mastco) is subject to be proceeded against.

The count alleged that there was an offence committed under subsection 7.3(3), which states:

Except as otherwise provided by this Part, every person who contravenes a provision of this Part or any regulation or order made under this Part is guilty of an offence punishable on summary conviction.

It was alleged that section 700 of the Air Regulations was violated. Therefore the other person (Mastco) could have been proceeded against. Thus, the requirements of the "vicarious liability" section could have been fulfilled.

During the Appeal Hearing the Minister's counsel argued that the information in the disclosure package was of such nature as to alert the alleged offender of the Minister's reliance on vicarious liability even though it was not specified in the Notice of Suspension.

The Appellant's counsel contended that the alleged offender must know what facts the Minister is relying upon and cannot be required to guess.

The procedure at a review hearing held pursuant to section 6.9 of the Aeronautics Act is addressed at 6.9(7) which states:

At the time and place appointed under subsection (6) for the review of the decision, the member of the Tribunal assigned to conduct the review shall provide the Minister and the holder of the Canadian aviation document or the owner or operator affected by the decision, as the case may be, with a full opportunity consistent with procedural fairness and natural justice to present evidence and make representations in relation to the suspension or cancellation under review. (emphasis added)

The concept of procedural fairness and natural justice are inter-related as the following excerpt from a leading text Hearings Before Administrative Tribunals[1], illustrates:

What then is "fair"? To a large extent the dictates of fairness have come to be expressed in the concept of natural justice and fairness of which there are two major principles: the right to be heard (audi alteram partem) and the right to be heard by someone who is listening...

Natural justice's guaranty of a right to be heard dictates that agencies must ensure that their hearings provide parties with ample opportunity

i.to know the case made against them;

ii.to dispute, correct or contradict anything which is prejudicial to their positions; and

iii.to present arguments and evidence supporting their own case.

As regards knowing the case made against them, Sara Blake writing in Administrative Law in Canada[2] states at 2.9 Disclosure of the Case to be Met:

Fairness requires that a party to be affected by a decision have an opportunity to make representations. To do so, the party must first be informed of the case to be met. Without knowledge of the matters in issue one cannot effectively exercise one's right to be heard.

Not only the evidence but the issues to be considered should be revealed. A party should not be left in the position of discovering, upon receipt of the tribunal's decision, that the latter turned on a matter on which the party had not made representations because the party was not aware it was in issue. Nor is it fair to have an issue sprung on a party during a hearing without prior notice.

The most complete and detailed disclosure is required in cases involving the discipline of professionals or the revocation of a licence to carry on business. All allegations should be described with full particulars in the notice of the proceeding or in a supplementary document. However, a notice should not read like an Information in a criminal proceeding.

The foregoing review of fairness and natural justice, tenets upon which the review is conducted, provides insight to the requirement of Notice and disclosure.

Macaulay & Sprague find that the right to be heard entails an opportunity to know the case against them and to dispute, correct or contradict anything prejudicial to one's position. As the previously noted definition of vicarious liability provides, the very essence of the concept is that one is legally responsible for the act of another. The case against one is in fact the case made against another. Surely, this should be made known to an alleged offender in order to provide him the opportunity to correct or contradict the prejudice against him, caused by the action of another.

Blake's view is that not only evidence but issues to be considered should be revealed. The Minister argued on this appeal that the Appellant should have known from the contents of the disclosure package that the Minister was proceeding by way of vicarious liability. The Appeal Panel finds Blake's view to be instructive. In this case the disclosure package revealed the evidence that the Minister intended to rely upon, but it did not raise the "issue" of vicarious liability.

Particularly pertinent to the facts of this case is the view that it is not fair to have an issue sprung upon a party during a hearing without prior notice. That seems to be exactly the case at hand as was illustrated in the transcript, by the Minister's response to the motion to dismiss. This is the type of situation that Blake contemplated as not being fair. Hence, complete and detailed disclosure is required.

As well in Blake's view the most complete and detailed disclosure is required in the discipline of professionals or the revocation of a licence to carry on business. Here the effect of a suspension is twofold, in that it would serve to discipline the pilot-in-command and would then prevent him from operating that part of his business which entailed the use of the aircraft.

During oral argument the Minister's counsel urged that subsection 8.4(3) should be "read in", but there is no obvious connection or linkage between section 700 of the Air Regulations and subsection 8.4(3) of the Aeronautics Act. Rather than expecting it to be "read in", subsection 8.4(3) should have been "written in" to ensure all concerned were aware of the issues to be considered.

Transport Canada's policy on disclosure in the Regulatory Compliance Procedures Manual[3] states in part:

12.6.1 Disclosure – Statement of Policy

...full disclosure shall include any evidence which may assist the document holder in his defence. TCA's full disclosure policy has two main purposes:

(1) to ensure that the document holder knows the case to be met and is able to make full answer and defence; and,

(2) to encourage the resolution of facts at issue including, where appropriate, the resolution of the case prior to the hearing date.

This policy does not require disclosure of information that should not be disclosed in the public interest,...

The policy statement refers to both "evidence", a specific purpose category of information, and more broadly simply to "information". Subsection 8.4(3) is information that relates to the first main purpose of the disclosure policy as noted above, and that is to ensure that the document holder knows the case to be met and is able to make full answer and defence (emphasis added). Inclusion in the Notice of Suspension, or subsequently in the disclosure package, of all sections of the Aeronautics Act that are relevant to the intended course of proceedings against the document holder would ensure the document holder knew the case to be met.

The Respondent has stated that the absence of subsection 8.4(3) in the Notice was not "fatal" to the case, but again no evidence was offered to support that contention. From the transcript of the Review Hearing, however, it seems that Mr. Johnson prepared his defence without consideration of subsection 8.4(3). Reference to that section in the Notice of Suspension would have ensured that Mr. Gartner knew the basis of the case against him and accordingly could have better prepared his defence.

A review of Tribunal cases reveals that in other instances the Minister's reliance upon section 8.4 was included as a part of a paragraph in the Notice. For example in CAT File No. O-1129-05, the Notice issued by the Minister included the paragraph: "Pursuant to the Aeronautics Act, s.8.4(1) [document holder], as a registered owner of ..., is liable for the penalty provided for the contraventions". In CAT File No. P-1053-41 the Notice of Monetary Penalty included the paragraph: "Pursuant to section 8.4(2) of the Aeronautics Act, [document holder] as the operator of ... is liable for the penalty provided for the contravention." Such references to section 8.4 would seem to be in accordance with the policy of ensuring the document holder knows the case to be met, insofar as which sections of the Aeronautics Act apply. Had that been done in this case, much of the argument at review and at appeal would have been rendered unnecessary.

CONCLUSIONS

From a careful review of the transcript and the exhibits, and the arguments presented by parties at the Appeal Hearing, the Appeal Panel concludes that the circumstances leading up to Mr. Gartner transporting the torque converter to the Beaver Drilling site were extenuating. There was an urgent requirement to get the part to the site as quickly as possible; no suitable commercial aircraft was available in time to transport it on February 6, 1996; Mr. Gartner had been requested to supervise the installation of the torque converter at the site, and he was preparing to fly himself there. In the absence of a commercial aircraft to fly the part to the site, the Field Superintendent for Beaver Drilling asked Mr. Gartner if he could take it with him; Mr. Gartner agreed to take it subject to fit, which it did.

At the Review Hearing Mr. Gartner testified that he transported the torque converter as a favour; that he had no intention to and that he did not charge for transporting it. The evidence of the two invoices, the testimony related to the redirection of the first invoice, and a calculation check of the amount charged, all support that testimony. The evidence and argument presented by the Minister to refute Mr. Gartner's sworn direct testimony were the second invoice and the contention that the amount charged included an unspecified amount for transporting the torque converter, but that contention was not proven. In addition, nothing was revealed to indicate that this was other than a unique incident in which Mr. Gartner transported a part to a site where he was flying to provide his services.

In his Review Determination, the Member stated that it is quite understandable that Mr. Gartner only attempted to assist a good customer with an urgent need, and that Mr. Gartner did not intend to take business away form anyone for his own gain. The Member then concluded that compensation had been requested for carrying the torque converter, but does not give reasons for that conclusion. Moreover, he gives no recognition to and makes no comment on Mr. Gartner's sworn testimony that he transported the part as a favour, that he had no intention of charging for transporting it, and that he had no knowledge of the invoicing action until after the fact. Nor did the Member make any explicit finding on whether the amount invoiced was normal or whether it included an additional amount for transporting the part.

The Appeal Panel concludes that the allegation that Mr. Gartner operated a commercial air service is unfounded because the contention that he used CF-YFA for hire and reward has not been proven.

In the Review Hearing, the Member found that proper disclosure had been made of the sections violated. Subsection 8.4(3) of the Aeronautics Act, however, is not a section that was allegedly violated, but rather it is a section that in part provided the authority for suspending Mr. Gartner's Private Pilot Licence. The Member did not address that aspect in his determination.

Reference should have been made by Transport Canada to subsection 8.4(3) of the Aeronautics Act in the Notice of Suspension sent to Mr. Gartner to ensure that he would know the case to be met and would be able to make full answer and defence if the decision was made by the document holder, as it was, to seek a review of the sanction by the Civil Aviation Tribunal.

This appeal has been determined on grounds other than that concerning the adequacy of the Notice of Suspension or disclosure. In view of the foregoing analysis, however, the Appeal Panel found that the tenets of procedural fairness and natural justice would require the Minister to reveal expressly his reliance upon the vicarious liability section, whether by inclusion in the Notice of Suspension or clear expression in the disclosure package.

DETERMINATION

The appeal is allowed. The Minister failed to prove that the Document Holder transported a part for hire or reward and therefore operated a commercial air service in violation of section 700 of the Air Regulations. The allegation is dismissed and the suspension is cancelled.

Reasons for Appeal Determination by:

Allister Ogilvie, Vice-Chairperson

Concurred:

Robert MacPherson, Member
Robert L. Mortimer, Member


[1] R.W. Macaulay & J.L.H. Sprague, Hearings Before Administrative Tribunals (Toronto: Carswell, 1995) at 12-5.

[2] S. Blake, Administrative Law in Canada (Toronto and Vancouver: Butterworths, 1992) at 24-26.

[3] Transport Canada Aviation Regulation Directorate, Regulatory Compliance Procedures Manual, Document No. TP 4751E (March 1995) at 12 - 4.