TATC File No. W-2754-41
MoT File No. SAP-5504-47335 P/B
TRANSPORTATION APPEAL TRIBUNAL OF CANADA
Minister of Transport, Applicant
- and -
Cascade Avionics Ltd., Respondent
Aeronautics Act, R.S.C. 1985, c. A-2, ss. 7.7, 8.4
Canadian Aviation Regulations, ss. 573.09, 571.02(1)(a)
Quality assurance program, Person Responsible for Maintenance (PRM), Original Equipment Manufacturer (OEM), Approved Maintenance Organization (AMO), Maintenance manuals
Philip D. Jardim
Decision: July 11, 2003
Cascade Avionics Ltd. did contravene paragraph 571.02(1)(a) and section 573.09 of the Canadian Aviation Regulations. The fines as levied shall stand. The total penalty of $2,500.00 must be paid to the Receiver General for Canada and received by the Tribunal within fifteen days of service of this determination.
A review hearing on the above matter was held Wednesday, June 25, 2003 at 10:00 hours at the Federal Court of Canada, in Calgary, Alberta.
Cascade Avionics Ltd. [hereinafter Cascade] is a Transport Canada approved maintenance organization (AMO) which carries out maintenance on aircraft avionics and associated instruments and systems, at Calgary International Airport.
Transport Canada carried out a routine audit on Cascade at Calgary International Airport, between April 29 and May 1, 2002. The audit team found some 15 anomalies in the operation of Cascade. This resulted in the immediate suspension of the company's AMO certificate, under paragraph 7.1(1)(b) of the Aeronautics Act, dated May 1, 2002, on the grounds that public safety was compromised.
A copy of the audit report was also sent to the enforcement branch: an investigation ensued, and Transport Canada issued a Notice of Assessment of Monetary Penalty, under section 7.7 of the Aeronautics Act, against Cascade, dated January 22, 2003. The fine imposed was $2,500.00, $1,250.00 on each of two counts. The fine was not paid, and the Minister applied to the Tribunal for a review hearing.
Although it is related, this hearing is not concerned with the suspension action referred to above, under paragraph 7.1(1)(b) of the Aeronautics Act.
Schedule "A" of the Notice of Assessment of Monetary Penalty:
OFFENCE #1 – CARs 573.09
On or about the 29th day of April 2002, at or near Calgary, Alberta, you did fail to establish a quality assurance program to verify and ensure that maintenance and [its] administration continue to comply with section 573.09 of the Canadian Aviation Regulations, more specifically you failed to maintain a record of the previous two audit cycles.
MONETARY PENALTY – $1,250.00
OFFENCE #2 – CARs 571.02(1)(a) Vicarious Liability section 8.4(4) Aeronautics Act
On or about the 27th day of February 2002, at or near Calgary, Alberta, being a person responsible for maintenance of an aeronautical product, to wit a King KT76A Transponder, work order # 24838, you did fail to use the most recent methods, techniques or practices specified for the aeronautical product in the most recent maintenance manual, more specifically revision # 7, or instructions for continued airworthiness developed by the manufacturer of that product, a violation of section 571.02(1)(a) if the Canadian Aviation Regulations.
MONETARY PENALTY – $1,250.00
TOTAL MONETARY PENALTY – $2,500.00
Section 573.09 of the Canadian Aviation Regulations (CARs):
573.09 An approved maintenance organization (AMO) certificate holder shall establish a quality assurance program to verify and ensure that maintenance and its administration continue to comply with these Regulations, in accordance with the standards set out in Chapter 573 of the Airworthiness Manual.
Paragraph 571.02(1)(a) of the CARs:
571.02 (1) Subject to subsection (2), a person who performs maintenance or elementary work on an aeronautical product shall use the most recent methods, techniques, practices, parts, materials, tools, equipment and test apparatuses that are
(a) specified for the aeronautical product in the most recent maintenance manual or instructions for continued airworthiness developed by the manufacturer of that aeronautical product;
The Minister's case presenting officer, Mr. Bill Curtain, presented five witnesses, who were all Transport Canada employees. They included the three members of the audit team, an enforcement inspector, and the superintendent of the Calgary office, Mr. David McNab. Mr. McNab was also the convening authority of the audit team, and the person who had signed the Notice of Suspension of Cascade's AMO certificate. Mr. Curtain alluded to "aggravation" on both counts, meaning that there had been contentious incidents during the audit and subsequent investigation.
Through his five witnesses, Mr. Curtain introduced 15 exhibits and copies of the relevant legislation, section 573.09 and paragraph 571.02(1)(a) of the CARs. I found all of the witnesses highly credible, and the evidence presented clearly pointed to the alleged breaches of the regulations. The audit report revealed some 15 breaches and weaknesses in the company's operation as an AMO (see Exhibits M-1 and M-2). Some of these were stated to be repetitive. However, the enforcement branch chose to proceed against the company on only two of them: 1. the failure to maintain its quality assurance system, and 2. failure to keep its technical publications up to date.
With respect to charge No. 1 (CARs 573.09), Exhibits M-3 and M-4 identify that there was no record of the two previous audits, that is, prior to April 2002. These records are required under this regulation, specifically subparagraph 573.09.2(f)(vii) of the Airworthiness Manual. The purpose of this regulation is to identify audit deficiencies noted, and to list the corrective actions carried out.
In addition, the Minister attempted to introduce evidence which pointed to the audit record of the company. I declined to accept this evidence on the basis of relevance to the charges before this hearing, and on the grounds of fairness and natural justice. The past record of a document holder does not go to prove that current infractions were committed.
Its president, Mr. Stanley Wong, represented the Respondent, Cascade. I was at pains to familiarize Mr. Wong with the procedure of a review hearing, and sought to guide him on procedure throughout. This necessitated significant interventions from me, to keep Mr. Wong and the hearing on track. It seemed that Mr. Wong was using the hearing as a means of questioning Transport Canada on its conduct of the audit which had led to this hearing. He became contentious at times, and it was necessary to intervene to calm things down.
Offence No. 2 is a vicarious liability offence, and I was careful to brief Mr. Wong on sections 8.4 and 8.5 of the Aeronautics Act. He said that he understood its meaning. During his cross-examinations of witnesses, Mr. Wong admitted that Cascade did not refer to manuals: they had been doing this work for 18 years, considered it routine and did not refer to the original equipment manufacturer (OEM) maintenance manuals, specifically in this case the King manual for the KT76A transponder. The latest amendment to this document was found to be still in its polythene wrapper by the audit team, and had not been referred to prior to, or during, the maintenance done in work order No. 24838. Mr. Wong sought to justify this lapse by making out that revision No. 7 was not relevant to the work performed on that particular job. The Minister's witness replied that because the KT76A manual had not been amended, nor consulted either before or during the maintenance, Cascade had no way of knowing whether the subject revision was relevant to the work carried out. Further, Mr. Schroeder identified a number of other manuals which were not up to date, and that work had been carried out on the respective equipment without access to current and up to date manuals. Exhibit M-7, extracted from Cascade's maintenance policy manual states: "Cascade Avionics Ltd. uses the most current issue of the manufacturer's manuals or publications for the performance of maintenance tasks." Exhibits M-8, M-9 and M-10 also point to library deficiencies.
It became evident from Mr. Wong's statements during his cross-examination of the witnesses that he did not appreciate the need to either refer to, or to keep these manuals current. Indeed, he did say that manuals were not used. He frequently asked questions of the Transport Canada witnesses during his cross-examination, as to what Cascade had done wrong to affect public safety. These questions arose with respect to the suspension pursuant to paragraph 7.1(1)(b) of the Aeronautics Act which was not before this hearing, today, and bore little relevance to the alleged offences, which are the subject of this review hearing.
Mr. Wong also took issue with the severity of the fines imposed upon Cascade, when he was questioning Mr. Paulhus, from the enforcement branch. It was explained that the fines were for a first offence by a corporation. This was $1,250.00, as opposed to $250.00 for an individual.
Mr. Wong aggressively cross-examined the final witness, Mr. McNab, on the reasons for having suspended Cascade's AMO certificate and the issue of public safety. I had to intervene to advise him that this was not the matter before this hearing, and that this was not the forum for seeking information on this matter. This was an issue which was, by now, 13 months old, and which he should have addressed at the time with Mr. McNab. The witness patiently answered Mr. Wong's questions in an articulate and sympathetic manner.
I had counselled Mr. Wong at the outset of the hearing, and at the close of the Minister's case, that it was his opportunity to present evidence/witnesses in defence of the allegations. He said that he had no evidence to present, nor did he have any witnesses. He chose to give a summary of the case against him as he saw it. At no time did he deny, or present evidence to counter the allegations against him.
In his summary, Mr. Wong acknowledged the quality assurance infractions. He said that he had appointed a Mr. Cox to be in charge of maintenance (PRM - Person responsible for maintenance, see Exhibit M-13). Mr. Wong is no longer responsible for maintenance. This was one of the conditions for the reinstatement of the company's AMO certificate.
Mr. Wong questioned the second charge and its relevance to the work carried out on work order No. 24838. He reiterated that revision No. 7 to the King manual did not refer to the work carried out under this work order. He also questioned the magnitude of the fine ($1,250), and questioned the effect of this infraction on public safety. He felt that the audit team was "heavy handed" and that this charge was not warranted and unfair.
His company had been put under serious financial strain, and had suffered a loss of credibility. Many experienced personnel who had been employed at Cascade had moved on to very responsible positions in larger organizations. One of them had become a director of maintenance.
Mr. Wong said that he viewed an audit like a "high school report." One may not achieve 100%, but 80 to 85%. Mr. Cox was now in charge of maintenance and "these things should not happen again."
Mr. Curtain's summary reiterated the Minister's evidence. He highlighted Mr. Wong's statement that "an AMO does not have to consult manuals." This is clearly irresponsible. In speaking to sanction, he pointed out that the fines imposed were the minimum for a first offence.
DISCUSSION AND DETERMINATION
The Minister has proved that Cascade is in breach of the regulations under reference above, on a balance of probabilities. Further, it appears that Transport Canada has been somewhat lenient, in that it has chosen to proceed against the company for only two breaches, when the audit report and other evidence point to several others. As this is a first offence, it is evident that Transport Canada would like to work with the company to improve its performance and observance of the regulations.
Mr. Wong has objected to charge No. 2 as unfair. While his reason for this belief seems to stem from the fact that revision No. 7 to the King manual did not impact the work actually carried out on the subject work order No. 24838, this was only discovered after the fact. The revision was still in its wrapper several months later, when the audit team visited. Further, Mr. Wong's apparent disregard for manuals is abundantly evident.
Cascade is a small company, and I am sympathetic with the financial impact of substantial fines on the company. However, the evidence adduced by the Minister does point to the repetitive nature of these infractions. Mr. Wong's persistent statements about his disregard for manuals, and his apparent contempt for audits, do not encourage me to reduce the penalties imposed. I find that, if anything, Transport Canada has been lenient in this case.
At the conclusion of this hearing, I have determined that the Minister of Transport has proven on a balance of probabilities that Cascade did contravene paragraph 571.02(1)(a) and section 573.09 of the CARs. The fines as levied shall stand.
Philip D. Jardim
Transportation Appeal Tribunal of Canada
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