Decisions

TATC File No. W-3250-37
MoT File No. SAP-5504-58438 P/B

TRANSPORTATION APPEAL TRIBUNAL OF CANADA

BETWEEN:

Stephen Watson, Applicant

- and -

Minister of Transport, Respondent

LEGISLATION:
Aeronautics Act, R.S.C. 1985, c. A-2, s. 7.7
Canadian Aviation Regulations, SOR/96-433, s. 501.01(1)a)


Review Determination
Keith Edward Green


Decision: April 16, 2007

Citation: Watson v. Canada (Minister of Transport), 2007 TATCE 11 (review)

Heard at Edmonton, Alberta, on November 8, 2006

Held: I find that the Minister has proven on a balance of probabilities that Stephen Watson did not submit the mandatory Annual Airworthiness Information Reports as required under the Canadian Aviation Regulations, SOR/96-433 (CARs). I therefore find that Mr. Watson has contravened section 501.01(1)(a) of the CARs on two separate occasions. The monetary penalties of $100 (offence 1) and $250 (offence 2) assessed by the Minister are confirmed. The total monetary penalty of $350 is to be made payable to the Receiver General for Canada and must be received by the Transportation Appeal Tribunal of Canada within 35 days of service of this determination.

I. BACKGROUND

[1]     William Curtain, Civil Aviation Safety Inspector, Transport Canada, had suspicion that Stephen Watson, the applicant, had not filled an Annual Airworthiness Information Report (AAIR) for an aircraft registered under his name. Therefore, Mr. Curtain decided to launch an investigation against Mr. Watson, which led to a notice of assessment of monetary penalty being issued on March 9, 2006. It reads 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):

. . .

OFFENCE #1 – CARs 501.01(1)(a)

On or about the 15th day of March 2005, at or near Spruce Grove, Alberta, being the owner of a Canadian aircraft, to wit a Zenair CH 180, Canadian registration C-GVZU, you did fail to submit to the Minister an Annual Airworthiness Information Report in respect of the said aircraft in the form and manner specified in Chapter 501 of the Airworthiness Manual, as an individual report, a contravention of section 501.01(1)(a) of the Canadian Aviation Regulations.

MONETARY PENALTY - $100.00

OFFENCE #2 – CARs 501.01(1)(a)

On or about the 13th day of January 2006, at or near Spruce Grove, Alberta, being the owner of a Canadian aircraft, to wit a Zenair CH 180, Canadian registration C-GVZU, you did fail to submit to the Minister an Annual Airworthiness Information Report in respect of the said aircraft in the form and manner specified in Chapter 501 of the Airworthiness Manual, as an individual report, a contravention of section 501.01(1)(a) of the Canadian Aviation Regulations.

MONETARY PENALTY - $250.00

TOTAL MONETARY PENALTY - $350.00

II. LAW

[2]     Section 501.01(1) of the CARs reads as follows:

Requirement to Report

501.01 (1) Subject to subsection (2), the owner of a Canadian aircraft, other than an ultra-light aeroplane, shall submit to the Minister an Annual Airworthiness Information Report in respect of the aircraft, in the form and manner specified in Chapter 501 of the Airworthiness Manual, either as

(a) an individual report; or

(b) where approved in conformity with Chapter 501 of the Airworthiness Manual, a consolidated fleet report.

(2) The submission of the Annual Airworthiness Information Report is not required where the aircraft is out of service and its owner

(a) reports, in the form and manner specified in Chapter 501 of the Airworthiness Manual, that the aircraft is out of service and is expected to remain out of service for one or more of the reporting periods for which an Annual Airworthiness Information Report would otherwise be required; and

(b) notifies the Minister forthwith when that aircraft is brought back into service.

[3]     Chapter 501 of the Airworthiness Manual provides the following:

. . .

501.01 Requirement to Report

(1) Unless a consolidated fleet report is used as provided for in subsection (2), or unless an aircraft is out of service as provided for in subsection (3), an Annual Airworthiness Information Report shall be submitted on form # 24-0059. As required by 501.02 of the Canadian Aviation Regulations the report shall include either additions of new information or corrections to any current Transport Canada (TC) information which may be pre-printed on the form. The report shall be submitted to the appropriate Transport Canada regional office not later than the due date . . . .

Information Note:

A computer generated copy of form #24-0059, pre-printed with current Transport Canada information about the aircraft, is normally mailed to the last known address of the registered owner several weeks in advance of the due date, which is printed on the form. It is therefore the owner's responsibility to ensure TC is advised of any address change.

. . .

(3)

(a) Except as provided in (c), the owner of an aircraft that is out of service for one or more reporting periods is relieved from the obligation to submit a report for those reporting periods provided the appropriate section of form 24-0059 has been completed indicating, in the space provided, the approximate date that the aircraft is expected to return to service.

. . .

(c) The status of any out of service aircraft shall be indicated on the applicable consolidated fleet report.

. . .

III. EVIDENCE

A. Minister's Evidence

[4]     The Minister introduced into evidence 13 documents, ranging in both complexity and weight. However, this determination will only reference those documents considered to be specifically relevant, or more precisely, pertinent to a particular fact of evidence. Consequently, exhibits will not necessarily be introduced or presented in order of submittal.

William (Bill) Curtain

Examination-in-chief

[5]     A copy of the current certificate of registration of aircraft, which is relevant to each of the two offences, was entered in evidence (exhibit M-5). It provides the following information:

  • manufacturer's designation of aircraft: Super Acro Zenith CH180;
  • serial number: 18 847;
  • name of owner: Stephen Watson;
  • nationality and registration marks: C-GVZU;
  • purpose: private; and
  • date of issue: December 8, 1995.

[6]     A record of specific aircraft information maintained by Transport Canada, as of October 13, 2005, was also entered in evidence (exhibit M-10); this information is accessible to the general public on the Transport Canada Web site. It collaborates the recorded ownership of aircraft C-GVZU. It verifies that Mr. Watson at the time of the alleged offences was the registered owner of C-GVZU and had been so since June 19, 1990. It also records that, as of the date the document was printed, the contact address given for Mr. Watson as "52206 R.R. #272, Spruce Grove, Alberta, T7X 3R6" was not the correct mailing address. The document also confirms the aircraft weight at 689 kg, being over the maximum permissible weight of 544 kg for an ultra-light aircraft by 145 kg.

[7]     Mr. Curtain explained to the Tribunal how he had searched the Transport Canada files where specific aircraft information is stored, discovering a bill of sale for C-GVZU to Mr. Watson, dated May 13, 1990 (exhibit M-4). Mr. Curtain also discovered an application for a certificate of airworthiness for the same aircraft, signed on January 12, 1993 by Mr. Watson (exhibit M-8). This document reveals that Mr. Watson was the registered owner at the time of the alleged offences.

[8]     Mr. Curtain informed the Tribunal that as a result of the recorded aircraft weight, the aircraft owner was required to have an AAIR filed on or before the anniversary date of every subsequent year as recorded against the certificate of airworthiness, being January 13, 1993 (exhibit M-9). Transport Canada records indicated that there had not been an AAIR filed for C-GVZU since December 30, 1996 (exhibit M-6).

[9]     Transport Canada submitted a written request dated February 25, 1997 to Mr. Watson, as the registered owner of C-GVZU, requesting that an AAIR be submitted (exhibit M-7). Mr. Curtain informed the Tribunal that there was no record within the Transport Canada system of a reply having been made or an AAIR having been submitted in response to that request. Further, Mr. Curtain's investigation failed to locate any document or record requesting or granting an exemption to file and as a result of the outstanding non-compliance, the Minister was compelled to take action.

[10]     The Minister introduced two certificates issued by the Secretary, Transport Canada, confirming that there had not been an AAIR submitted to the Minister in respect of C-GVZU during the periods between January 1 and December 31, 2005 (exhibit M-1), and between January 1 and December 31, 2006 (exhibit M-2). Another certificate was introduced confirming that a certificate of registration of aircraft had been issued to Mr. Watson on June 19, 1990 for C-GVZU (exhibit M-3); it verifies that the certificate of registration was valid at the time the Secretary certificate was issued on August 17, 2006.

[11]     The introduction of exhibit M-4 established a bill of sale had been submitted as a legal document for the transfer of ownership to Mr. Watson on May 13, 1990. The bill of sale confirmed that the purchaser of C-GVZU was Mr. Watson and that he purchased it on May 13, 1990, making him the legal owner.

[12]     The AAIR filed with Transport Canada on December 30, 1996 and signed by Mr. Watson was entered in evidence (exhibit M-6). Mr. Curtain explained to the Tribunal that it confirms that Mr. Watson completed and submitted an AAIR for C-GVZU on December 30, 1996 for the reporting period of January 1 to December 31, 1996. Additionally, it confirms the maximum approved take-off weight at 1 519 lbs. (approximately 689 kg). The weight of the aircraft, as explained by the witness, is relevant to the aircraft category classification. In this particular situation, C-GVZU was over the maximum allowable for an ultra-light aircraft. Mr. Curtain explained that the AAIR entered as exhibit M-6 was the last AAIR to be reported by Mr. Watson for C-GVZU that Transport Canada had on file. Additionally, Mr. Curtain explained that it is the owner's responsibility to submit an AAIR to Transport Canada annually.

[13]     The request from Transport Canada on February 25, 1997 (exhibit M-7) lists Mr. Watson's address as "62206, R.R. #272, Spruce Grove, Alberta, T7X 3R6", which is different from the addresses provided in exhibits M-5, M-6 and M-10. Mr. Watson later testified that the address in exhibit M-7 was wrong.

[14]     Continuing, the Minister introduced an application for a certificate of airworthiness (exhibit M-8). The significance of this exhibit, signed by Mr. Watson on January 12, 1993, demonstrates that Mr. Watson, as the registered owner of the aircraft, made an application to Transport Canada for C-GVZU for a special certificate of airworthiness – amateur-built category. Transport Canada accepted the application and subsequently issued the special certificate of airworthiness – amateur-built category – on January 13, 1993 (exhibit M-9). The certificate limits C-GVZU to a maximum permissible take-off weight of 1 519 lbs. The same weight is recorded in the C-GVZU journey log (exhibit M-11).

[15]     Mr. Curtain explained that there are two kinds of ownership involving an aircraft. The first is the registered ownership under which the applicant has custody and control of the aircraft. The second type of ownership is legal ownership under which the applicant owns the commodity. According to Mr. Curtain, Mr. Watson qualified as both the registered owner and the legal owner being effective respectively on June 19, 1990 and May 13, 1990.

[16]     Further testimony by Mr. Curtain revealed that a significant question he was confronted with was whether the Minister had granted an exemption to Mr. Watson to not file an AAIR. Mr. Curtain stated that he was unable to discover any documents on file within the Transport Canada system, for which an exemption had been granted. Additionally, Mr. Curtain explained that he had received no submission from Mr. Watson, even after he had sent him a letter requesting that he confirm whether an exemption had been issued to him.

[17]     Mr. Curtain stated that in his mind, Mr. Watson was the legal and registered owner of C-GVZU and that, as no AAIR had been submitted since the last recorded date of December 30, 1996, he had decided to recommend that proceedings be initiated against Mr. Watson.

Cross-examination

[18]     The applicant Mr. Watson commenced his cross-examination by asking Mr. Curtain if he had a list of the addresses the applicant had stayed at. Mr. Curtain replied that he had some addresses and that he had personally sent him three letters of which the very first one was returned and marked "incorrect address", prompting a change to the Transport Canada database. Apparently, the second and third letters were sent and subsequently verified by Canada Post. Mr. Watson pressed his line of questioning, asking Mr. Curtain if he could confirm that the addresses were the correct ones, to which Mr. Curtain replied that he did not know. Mr. Watson proffered the notion that as he did not receive the letters sent to him and that the address on one of the letters was an address he had never resided at, it would be reasonable to assume that he did not receive the letters. The Minister raised an objection, considering the question to be hypothetical, prompting Mr. Watson to withdraw it.

[19]     When asked if he knew where the information to complete an AAIR could be found, Mr. Curtain explained that he had never personally completed an AAIR but that he would probably obtain the information from the aircraft journey log. Mr. Curtain confirmed that the regulation requiring the owner of an aircraft to submit an AAIR exempted aircraft placed into long-term storage (removed from service). However, he was not able to verify the existence of documents confirming whether C-GVZU had been placed into long-term storage. Mr. Curtain suggested that, as he did not see anything to the contrary within the Transport Canada records pertaining to C-GVZU having been removed from service or exempting Mr. Watson from filing, it was reasonable to assume that the absence of records within Transport Canada indicated that Mr. Watson was not exempt. Mr. Curtain also indicated that he could only comment on what he did and did not find and not on the hypothetical situation, as suggested by Mr. Watson, where Transport Canada had lost such document exempting him from submitting an AAIR.

[20]     When asked as to who is required to complete and submit an AAIR if an aircraft is seized by a financial institution, Mr. Curtain answered that it is still the owner, being the person who has legal custody and control of the aircraft.

B. Applicant's Evidence

Stephen Watson

[21]     Mr. Watson explained that C-GVZU was originally purchased by his parents in 1990. However, it was decided that the aircraft would be registered under his name to facilitate a specific flight requirement (aerobatic). Accordingly, a bill of sale (exhibit M-4) was drawn up, listing Mr. Watson as the owner, although it was understood by the parties involved that the aircraft still belonged to Mr. Watson's parents. Mr. Watson introduced a letter of agreement between his parents and himself as evidence supporting the legal ownership of C-GVZU to be that of his parents, William Watson and Bonnie Watson (exhibit D-1).

[22]     Mr. Watson explained that he flew the aircraft "under his control" from 1990 to 1993, which was the last time he reportedly piloted it. However, in 1997 his parents decided that they wanted the aircraft back and under their control, whereupon a letter was drafted by Watson Flight Centre Inc., advising Stephen Watson that effective January 15, 1997, aircraft C-GVZU would be transferred to the custody and control of Watson Flight Centre Inc. (exhibit D-2), under the agreement dated May 12, 1990 (exhibit D-1).

[23]     Mr. Watson explained that shortly after the agreement was signed on May 12, 1990 (exhibit D-1), Transport Canada visited him and an inspector suggested that C-GVZU be put into "long-term storage" so that if it should not fly again, the AAIR requirement would not be applicable. Mr. Watson informed the Tribunal that since no further AAIR notifications arrived from that time forward, it was his personal assumption that the aircraft had been placed into long-term storage.

[24]     Mr. Watson demurred over the letter from Transport Canada of February 25, 1997 (exhibit M-7), stating that it was new to him and that he had only seen the letter in the disclosure package. Additionally, the date on the letter was wrong and the address "62206 RR. #272, Spruce Grove, Alberta, T7X 3R6" was also incorrect. He stated that he had never resided at that address. Mr. Watson explained that he heard nothing further from Transport Canada. According to him, should they have had an issue, they would have had no difficulty contacting either himself or his parents. As it transpired, Mr. Watson testified that he had no communication from Transport Canada until 2005.

[25]     According to Mr. Watson, the only reason why C-GVZU became an issue was due to his divorce, when it was queried as a result of a spousal support petition. Mr. Watson also stated that prior to this, Transport Canada was investigating him over a series of allegations, which his estranged wife had informed the Minister on. Mr. Watson said that there were several occasions when the matter could have been raised but it was not. In 2005, an attempt was made by the sheriff to seize the aircraft but Mr. Watson's father was able to produce documentation from his accountant, Waters & Associates Inc., who explained who had physical custody of the airplane (exhibit D-3). Mr. Watson stated that since 1997 he did not have physical access to the log books or the aircraft and consequently, he could not have filled out an AAIR.

Cross-examination

[26]     The Minister queried Mr. Watson's understanding that an aircraft flown within an aerobatic box must be registered under the name of the pilot. Mr. Watson replied that he had only learned after 1997 that this was not a regulation and that it might have been only what he perceived as a policy within Transport Canada.

[27]     In response to a question by the Minister as to whether Mr. Watson had sent the letter of agreement (exhibit D-1) to Transport Canada, he responded in the negative. Further questions were put to Mr. Watson concerning the bill of sale (exhibit M-4), inter alia, whether he agreed that after reviewing the bill of sale, he considered himself as being the purchaser, to which Mr. Watson agreed. Mr. Watson explained that although his parents purchased the aircraft, they made out the bill of sale under his name. He stated "I had control and custody of the aircraft but I did not pay for it". The Minister asked Mr. Watson to confirm the name appearing on the bill of sale, being "Stephen Watson" and whether he was the purchaser of the aircraft, to which Mr. Watson replied "I have no idea".

[28]     The application for a certificate of airworthiness (exhibit M-8) was next brought into question. The Minister referenced the date against the document as January 12, 1993, Mr. Watson's name and the word "owner". Mr. Watson confirmed that the signature on the form was his. However, as he explained, the word "owner" appearing in brackets was added after he had signed the document on the suggestion by Transport Canada, possibly because Mr. Watson was not an aircraft maintenance engineer at the time and the document references to this qualification.

[29]     The Minister asked Mr. Watson if he was an owner of Watson Flight Centre Inc. Mr. Watson responded that he had been at one time but he could not remember when nor could he remember when he stopped having shares in that company. Mr. Watson informed the Tribunal that he had no idea whether the aircraft was still registered in his name and neither did his ex-wife, who had she known of it, would have questioned it.

Re-examination

[30]     Mr. Watson testified that his parents had bought the aircraft and it was their asset. However, his parents registered it under his name to try to avert problems with Transport Canada. Mr. Watson also verified that he had "control and custody" of the aircraft from 1990 until 1997 when he returned custody and control over to his parents (Watson Flight Centre Inc.). From that point on, he did not receive another request to submit an AAIR from Transport Canada until 2005, prior to which, he believed, the ownership issue had been addressed.

IV. ANALYSIS

[31]     In review of the evidence presented by both parties, I find that there is sufficient information to make a clear and concise determination. I have paid particular attention to the weight offered to each exhibit.

[32]     Section 501.01(1) of the CARs requires that "the owner of a Canadian aircraft, other than an ultra-light aeroplane, shall submit to the Minister an Annual Airworthiness Information Report . . . ." Therefore, two fundamental questions must be answered; namely, who the owner of C-GVZU was at the time of the alleged infractions and what category was the aircraft registered under.

[33]     In order to answer the first question, it is necessary to determine if C-GVZU qualifies as an ultra-light aircraft. The Minister referred to the definition of "basic ultra-light aeroplane" found in section 101.01(1) of the CARs. It sets out that the maximum take-off weight is not to exceed 544 kg. The recorded weight of C-GVZU was referenced in several exhibits, including a copy of the aircraft journey log front page (exhibit M-11) which lists the authorized maximum gross weight in pounds as 1 150 for aerobatic and 1 520 for ferry. Additionally, the special certificate of airworthiness (exhibit M-9) lists the maximum permissible take-off weight at 1 519 lbs. or, when converted, at 689 kg, thus exceeding the regulation requirement of 544 kg by 145 kg and ultimately, excluding the aircraft as an ultra-light. Having determined that C-GVZU is not an ultra-light aircraft, the registered owner must submit an AAIR, as provisioned under section 501.01(1) of the CARs.

[34]     This in turn raises a new question: was the aircraft reported to be out of service, in accordance with the requirements of section 501.01(2) of the CARs by the legal owner, before the time of the two alleged infractions? But first, one must determine who the legal owner is.

[35]     At the time of the alleged infractions, the Minister presumed the legal owner to be Stephen Watson and consequently believed Mr. Watson had custody and control of the aircraft. The bill of sale (exhibit M-4) was one document presented by the Minister to establish ownership. Mr. Watson's name appears in this document along with the date of May 13, 1990 and a witness signature. The certificate of registration of aircraft of December 8, 1995 (exhibit M-5) also records Mr. Watson as the owner of C-GVZU. The address recorded is "52206 R.R. #272, Spruce Grove, AB, T7X 3R6". Additionally, the application for a certificate of airworthiness (exhibit M-8) also clearly indicates that Mr. Watson was the registered owner of C-GVZU. A comparison of the address recorded on the letter from Transport Canada (exhibit M-7) and the address recorded on other exhibits, i.e. the certificate of registration of aircraft (exhibit M-5) or the AAIR (exhibit M-6), shows a discrepancy/error. Specifically, the address number on exhibit M-7 is "62206", while on all other exhibits, it reads "52206". It would appear that the number "5" was transcribed for the number "6", which could have prevented the first Transport Canada letter from reaching Mr. Watson, as claimed by him.

[36]     However, the Minister stated that the first letter sent to Mr. Watson dated February 25, 1997 (exhibit M-7) was returned due to an incorrect address, prompting a change to the Transport Canada database. The Minister submitted the initial and subsequently returned letter in evidence (exhibit M-7). Without additional information or substantiating evidence, I am forced to reduce the weight accorded to it, as the address is clearly incorrect. However, as the registered and legal owner of C-GVZU, Mr. Watson was still responsible to ensure that all applicable requirements under the CARs relevant to his aircraft were met.

[37]     Section 101.01(1) of the CARs defines "owner" as follows: ". . . in respect of an aircraft, means the person who has legal custody and control of the aircraft" (emphasis added). The requirement does not take into consideration which party paid for the aircraft, only that the person shall have "legal custody and control".

[38]     Under cross-examination, Mr. Watson stated that he "had control and custody of the aircraft" from 1990 to 1997, when he attempted to return the custody back to his parents. Mr. Watson also verified that his parents had originally bought the aircraft and that he was not the purchaser. However, the evidence submitted clearly indicates that Mr. Watson was the legal owner of C-GVZU, regardless whether his parents purchased the aircraft with their own money or other. The fact remains that it was clearly registered to the applicant under his name and Mr. Watson was responsible for it as he testified that it was under his custody and control. Mr. Watson was under no illusion that his name appeared in several legal documents naming him as the owner. Surprisingly, when asked if he was the purchaser of the aircraft, Mr. Watson replied that he "had no idea".

[39]     Having established on a balance of probabilities that the aircraft category was other than an ultra-light and that Mr. Watson was at the time of the alleged offences still the legal owner of C-GVZU, the Minister's case was virtually met. However, two issues still remain to be answered:

1) Was the aircraft returned to Mr. Watson's parents "legal custody and control"?

2) Was the aircraft reported to be out of service, in accordance with the requirements of section 501.01(2) of the CARs by the legal owner, before the time of the two alleged infractions?

[40]     The affirmative answer to either of these two questions would, in effect, render Mr. Watson blameless of the alleged charges. All of the Minister's evidence suggests very strongly that Mr. Watson was the legal owner and consequently Mr. Watson was the person responsible to ensure that the condition of his aircraft, with respect to section 501.01(2) of the CARs, was reported accordingly and accurately to the Minister.

[41]     Mr. Watson presented three exhibits. The first, the letter of agreement (exhibit D-1), is a copy of a handwritten letter between himself and his parents, dated May 12, 1990. It verifies that the aircraft was the "fisical [sic] property" of Mr. Watson's parents and that the "Transport Canada bill of sale for the purpose of registration is not intended to transfer the fisical [sic] asset to Stephen Watson". The second exhibit, which is a letter from Watson Flight Centre Inc. dated January 15, 1997 (exhibit D-2), states that they will be "taking care custody and control . . . including all paper documents and log books. . . ." The third exhibit is a letter from Waters & Associates Inc. dated October 25, 2005, acting on behalf of the Watson Group of companies (exhibit D-3). It explains the basic stewardship, history of transfer, who the original purchaser was and when the aircraft was assigned to the books of Watson Flight Services Inc.

[42]     Mr. Watson effectively demonstrated that his parents originally purchased the aircraft with monies from their own account, be it under another company name or not. However, the real question is not who paid for the aircraft but who, under section 101.01(1) of the CARs defining "owner", was the person who held legal "custody and control" of the aircraft at the time of the alleged offences.

[43]     As presented under the certificate of the Secretary, Transport Canada (exhibit M-3), it was confirmed that a certificate of registration was in effect up to August 17, 2006, under the name of Stephen Watson. Had Mr. Watson submitted evidence attesting further communication with Transport Canada over the ownership transfer, the additional proof and due diligence may have prevented Transport Canada from levying the alleged offences, but he did not. Therefore, on a balance of probabilities, I find that Mr. Watson was the registered legal owner of C-GVZU at the time of the alleged offences and that he had direct custody and control of the said aircraft at the time of the two alleged offences.

[44]     The question as to whether the aircraft was reported to be out of service in accordance with the requirements of section 501.01(2) of the CARs by the legal owner, before the time of the two alleged infractions, is the last question and test to be proved.

[45]     I could find little supporting evidence to validate the exclusion under section 501.01(2) of the CARs that C-GVZU was reported to Transport Canada as being "out of service". Mr. Watson's explanation over a Transport Canada inspector visiting his facility and suggesting C-GVZU be put into "long-term storage", should it not fly again, thus rendering the AAIR requirement not applicable, is further proof that Mr. Watson knew what should have been done. Mr. Watson's statement that since he had not received any further AAIR notifications from that time forward, making him assume that the aircraft had been placed into long-term storage, was at very best an extremely poor assumption.

[46]     Unfortunately, I could find little value to Mr. Watson's statement regarding the Transport Canada inspector, not only because Mr. Watson could not validate his testimony but also, and possibly more importantly, a recommendation made by a Transport Canada official would not relieve an aircraft owner of his/her responsibilities with regard to ensuring that accurate and timely records are maintained. As a very minimum, an entry into the applicable aircraft journey log for C-GVZU would have confirmed the removal of the aircraft from service. Therefore, provided only with a general statement suggesting that a Transport Canada inspector had removed C-GVZU from service for or on behalf of Mr. Watson, was an unreasonable assumption for Mr. Watson to have made. In this respect, I believe Mr. Watson was derelict in his duties and responsibilities with regard to ownership, custody and control of aircraft C-GVZU.

V. CONCLUSION

[47]     The two alleged offences are strict liability offences and consequently the Minister need only prove on a balance of probabilities that the alleged offences were committed, thus behoving the applicant to prove otherwise. The Minister's case, therefore, was to prove that Mr. Watson had contravened section 501.01(1)(a) of the CARs, having failed to submit to the Minister, on two separate occasions, an AAIR in respect of C-GVZU.

[48]     I find that the Minister was able to prove that Mr. Watson was the registered and legal owner of C-GVZU at the time of the infractions and was consequently accountable for the custody and care of the aircraft as provisioned under the CARs, which includes the submittal of an AAIR for aircraft over 544 kg (as relevant to Mr. Watson's case). Additionally, the Minister was able to substantiate that there were no specific records within the Transport Canada system which attested to a change of ownership, an exemption under section 501.01(1)(a) of the CARs, or any supplementary AAIR forms as having been filed since the last recorded AAIR (see exhibit M-6: reporting period of January 1 to December 31, 1996).

[49]     At this point, the Minister's case was met, unless Mr. Watson could prove otherwise and/or demonstrate that he exercised all due diligence in the prevention of the alleged offences.

[50]     I find Mr. Watson's case, consisting of three exhibits and testimony, to be inconclusive. Additionally, I find Mr. Watson's testimony wanting in detail and credibility. For example, when questioned over his involvement with Watson Flight Centre Inc., he was at one point unable to remember the period of his involvement or when he had stopped having shares in the company. Additionally, when asked if he was the purchaser of C-GVZU, he responded that he had "no idea" and yet later he was most adamant that it was his parents who had purchased the aircraft and not him.

[51]     Mr. Watson's case mostly rested on two defences: firstly, he was not the legal owner of the aircraft at the time of the alleged infractions and, secondly, the aircraft was exempt under section 501.01(2)(a) as having been removed from service. I find that both defences were wanting in substantive evidence and consistency. A person cannot profess to be an owner of an aircraft or any other type of conveyance to facilitate a particular condition -- real or supposed -- and then deny the responsibilities. Clearly, Mr. Watson was the registered owner of C-GVZU, and in whose own words Mr. Watson had "control and custody", regardless as to who originally paid for it. The fact remains that Mr. Watson was the registered owner.

[52]     Aviation is not something to be taken lightly or wantonly. It is a deathly serious affair with potentially disastrous consequences, especially when, among other factors, complacency is allowed to develop. I find Mr. Watson's disregard and lack of concern over the regulations to be entirely unsatisfactory; indeed, as a pilot and registered owner of an aircraft, he should have been very familiar with those regulations.

[53]     There are several methods by which an aircraft can be removed from service. A simple statement in the journey log is one method or the submission to Transport Canada of an AAIR reporting its condition and removal is another. Both of these methods are the responsibility of the owner and/or pilot, neither of which were accomplished and subsequently proven by Mr. Watson as a defence of due diligence. For the owner of an aircraft to rely on another individual (i.e. a Transport Canada inspector or other to perform a duty that is clearly and legally the responsibility of the aircraft owner) is not only foolhardy but it is neglectful, verging on being negligent. Additionally, the knowledge Mr. Watson exhibited over his responsibilities, as an aircraft owner and pilot, was disappointing. Regardless, ignorance of the law is not an excuse. Mr. Watson could not substantiate that the aircraft had been removed from service and neither was he able to validate a change of ownership for C-GVZU before the alleged infractions.

VI. DETERMINATION

[54]     I have scrutinized the admissible evidence, lending the appropriate weight and consideration deserved. I have heard the Minister's and the applicant's case fairly and without bias. Equally as important, I have listened to what both parties had to convey. In the final analysis, I have determined my conclusion upon the facts and evidence as presented before me.

[55]     The Minister demonstrated on a balance of probabilities that Mr. Watson did not submit the mandatory AAIRs as required under the CARs. I therefore find Mr. Watson has contravened section 501.01(1)(a) of the CARs, as alleged by the Minister, on two separate occasions. The monetary penalties of $100 (offence 1) and $250 (offence 2) assessed by the Minister are confirmed.

April 16, 2007

Keith E. Green
Member


Appeal decision
E. David Dover, James E. Foran, Tracy Medve


Decision: March 14, 2008

Citation: Watson v. Canada (Minister of Transport), 2008 TATCE 15 (appeal)

Heard at Edmonton, Alberta, on December 11, 2007

Held: The appeal is allowed. The appellant did not contravene section 501.01(1)(a) of the Canadian Aviation Regulations. Therefore, the monetary penalties of $100 and $250 are cancelled.

I. BACKGROUND

[1] By notice of assessment of monetary penalty dated March 9, 2006, Stephen Watson was advised by the Minister that he had been assessed a monetary penalty in the amount of $100 on the following grounds:

On or about the 15th day of March 2005, at or near Spruce Grove, Alberta, being the owner of a Canadian aircraft, to wit a Zenair CH 180, Canadian registration C-GVZU, you did fail to submit to the Minister an Annual Airworthiness Information Report in respect of the said aircraft in the form and manner specified in Chapter 501 of the Airworthiness Manual, as an individual report, a contravention of section 501.01(1)(a) of the Canadian Aviation Regulations.

[2] He was assessed an additional penalty of $250 on the following grounds:

On or about the 13th day of January 2006, at or near Spruce Grove, Alberta, being the owner of a Canadian aircraft to wit a Zenair CH 180, Canadian registration C-GVZU, you did fail to submit to the Minister an Annual Airworthiness Information Report in respect of the said aircraft in the form and manner specified in Chapter 501 of the Airworthiness Manual, as an individual report, a contravention of section 501.01(1)(a) of the Canadian Aviation Regulations.

[3] Section 501.01 of the Canadian Aviation Regulations, SOR/96-433 (CARs), states:

Requirement to Report

501.01 (1) Subject to subsection (2), the owner of a Canadian aircraft, other than an ultra-light aeroplane, shall submit to the Minister an Annual Airworthiness Information Report in respect of the aircraft, in the form and manner specified in Chapter 501 of the Airworthiness Manual, either as

(a) an individual report; or

(b) where approved in conformity with Chapter 501 of the Airworthiness Manual, a consolidated fleet report.

(2) The submission of the Annual Airworthiness Information Report is not required where the aircraft is out of service and its owner

(a) reports, in the form and manner specified in Chapter 501 of the Airworthiness Manual, that the aircraft is out of service and is expected to remain out of service for one or more of the reporting periods for which an Annual Airworthiness Information Report would otherwise be required; and

(b) notifies the Minister forthwith when that aircraft is brought back into service.

[4] Mr. Watson requested a review hearing which was held on November 8, 2006 in Edmonton, Alberta. The review hearing member, Keith E. Green, upheld the assessment of both penalties.

II. GROUNDS FOR APPEAL

[5] On May 14, 2007, Mr. Watson requested an appeal of the review determination. His grounds for appeal were, in summary, as follows:

Ground 1: As of January 15, 1997, he did not have custody and control of the aircraft, having given the aircraft to Watson Flight Centre Inc.

Ground 2: Having given up custody and control of the aircraft, he did not have access to the records required to obtain the information necessary to complete the Annual Airworthiness Information Reports (AAIR).

Ground 3: The aircraft was placed into long-term storage in January 1995. Based on representations from a Transport Canada airworthiness inspector, Barry Muskcrop, Mr. Watson was given to believe that Mr. Muskcrop was going to enter the fact that the aircraft was in storage into the Transport Canada system which would trigger a discontinuation of the requirement to fill out any more AAIRs. At the time (1996), there was no requirement in the regulations to file a form 24‑0059. Pursuant to section 501.01(2) of the CARs, the owner is now required to advise Transport Canada that an aircraft has been put into storage.

III. PRELIMINARY MOTIONS

[6] On November 20, 2007, Mr. Watson filed a notice of intention to submit new evidence at the appeal. The purpose of the evidence was to show that Mr. Watson did in fact return custody and control of the aircraft to Watson Flight Centre in January 1997. The new evidence proposed for submission included a bill of sale from Mr. Watson to Watson Flight Centre, dated January 15, 1997, together with an invoice from Watson Flight Services Inc. (formerly Watson Flight Centre) selling the engine from the aircraft to Vick Zubot. Mr. Watson submitted that he did not present this evidence at the review hearing because he did not have access to the documents until after the review hearing. The Minister's representative filed an objection to the submission of this new evidence.

[7] Section 14 of the Transportation Appeal Tribunal of Canada Act, S.C. 2001, c. 29, provides that:

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

[8] On December 6, 2007, the appeal panel ruled that Mr. Watson would not be permitted to submit the new evidence on the grounds that the information was previously available and, in any event, was not required for the purposes of the appeal.

[9] Mr. Watson did not raise the matter of the bill of sale dated January 15, 1997 during the review hearing. He did not give evidence as to his attempts to locate the bill of sale. Nor did he call anyone from Watson Flight Centre as a witness to give testimony as to the existence or content of the bill of sale. All of these omissions led the appeal panel to conclude that admission of the bill of sale at the appeal hearing would not be appropriate. Given its nature, that is, a document prepared by Mr. Watson, we concluded that the bill of sale, as well as any testimony regarding its existence and contents, was "previously available" evidence and should thus not be introduced at the appeal. A similar conclusion was arrived at with respect to the invoice for the sale of the engine to Mr. Zubot.

[10] The appeal panel also concluded that the information contained in these two documents was not necessary for the purposes of this appeal. The evidence provided in the case was adequate to make our decision.

IV. FACTS

[11] For the purposes of this appeal we accept the following facts, based on evidence presented at the review hearing and the review determination.

[12] Mr. Watson was the registered owner of the Zenair CH 180 aircraft, Canadian registration C‑GVZU since June 19, 1990. The aircraft is not an "ultra‑light" aircraft within the meaning of section 501.01(1) of the CARs and therefore is not exempt from the requirement to file an annual AAIR. The last AAIR on Transport Canada's file for the aircraft is dated December 30, 1996 and was submitted by Mr. Watson. No exemption from filing the AAIR had ever been granted to Mr. Watson. His name appeared in Transport Canada's records as the registered owner of the aircraft at the relevant times coinciding with the dates of the alleged infractions of section 501(1)(a) of the CARs. Mr. Watson had custody and control of the aircraft from 1990 to 1997.

V. ANALYSIS AND CONCLUSION

A. Ground 1

[13] We agree with the member's conclusion that, having established that Mr. Watson was the registered owner at the time of the alleged infractions and that the aircraft was not an ultra-light aircraft, there were two questions which remained to be answered, as set out in paragraph [39] of the review determination:

1) Was the aircraft returned to Mr. Watson's parents "legal custody and control"?

2) Was the aircraft reported to be out of service, in accordance with the requirements of section 501.01(2) of the CARs by the legal owner, before the time of the two alleged infractions?

[14] We believe the member's findings of fact were reasonable and we do not intend to overturn them. However, with respect to the application of the law, we believe that the jurisprudence would support ensuring that the standard of "correctness" is met, as interpreted in Canada (Minister of Transport) v. Arctic Wings Ltd., [2006], appeal decision, TATC file no. W‑2899-41, [2006] C.T.A.T.D. no. 10 at ¶ 9 (QL). In this case, we do not believe that the member's conclusion met this standard.

[15] Specifically, the problem with the member's conclusion is that he uses the existence of the certificate of registration as evidence to conclude that Mr. Watson had legal custody and control of the aircraft. He states:

[48] I find that the Minister was able to prove that Mr. Watson was the registered and legal owner of C‑GVZU at the time of the infractions and was consequently accountable for the custody and care of the aircraft as provisioned under the CARs, which includes the submittal of an AAIR for aircraft over 544 kg (as relevant to Mr. Watson's case). . . . (emphasis added)

[16] In fact, exhibit D‑2 indicates that legal custody and control was being returned to Watson Flight Centre as of January 15, 1997. Mr. Watson gave uncontroverted evidence that the aircraft was in fact returned to them. In fact, the member rightly confirms, at paragraph [30] of the review determination, that "Mr. Watson also verified that he had ‘control and custody' of the aircraft from 1990 until 1997 when he returned custody and control over to his parents (Watson Flight Centre Inc.)".

[17] Having concluded that Mr. Watson no longer had custody and control of the aircraft in 1997 by virtue of the fact that he transferred custody and control back to Watson Flight Centre in 1997, we must also conclude that the certificate of registration was, at that time, cancelled. We base this conclusion on the requirements of sections 202.35(1) and (3) of the CARs which stipulate that:

202.35 (1) Subject to Subpart 3, where the registered owner of a Canadian aircraft transfers any part of the legal custody and control of the aircraft, the certificate of registration of the aircraft is cancelled.

(3) For the purposes of this Division, an owner has legal custody and control of a Canadian aircraft when the owner has complete responsibility for the operation and maintenance of the aircraft.

[18] It was Mr. Watson's uncontroverted evidence that he gave up custody and control and that he had no access to logbooks — which would be required for him to properly perform maintenance on the aircraft — and that he did not operate the aircraft.

[19] Section 202.35(2) of the CARs requires that:

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

[20] It was clear from the evidence that Mr. Watson did not notify the Minister of the transfer of custody and control of this aircraft. The Minister could have taken action against Mr. Watson for his failure to do so. But this was not the matter before the review member or the appeal panel.

[21] Section 501.01(1) requires that the "owner" of an aircraft (other than an ultra-light aircraft) shall submit an AAIR. By definition contained in section 101.01(1) of the CARs, an "owner" in respect of an aircraft means the person who has legal custody and control of the aircraft. So we must conclude that there was evidence at the review hearing, accepted by the member, that Mr. Watson did not have custody and control of the aircraft after January 15, 1997. Therefore, he could not be an "owner" within the meaning of section 101.01(1) of the CARs. Since he was not an owner there was no requirement for him to file an AAIR with respect to the aircraft after 1997.

[22] Therefore, we agree with Mr. Watson's first ground of appeal that he did not have custody and control of the aircraft as of 1997, and this relieves him of the obligations of an owner to file an AAIR as required by section 501.01(1) of the CARs.

B. Grounds 2 and 3

[23] Having determined that Mr. Watson was not an owner of the aircraft after January 15, 1997 and consequently not required to file an AAIR, we do not consider it necessary to address Mr. Watson's other grounds of appeal relating to his lack of access to the aircraft records, whether the aircraft was in storage and whether the regulatory requirement to advise the Minister that the aircraft was out of service was in effect at the time of the alleged infraction.

VI. DECISION

[24] The appeal is allowed. The appellant did not contravene section 501.01(1)(a) of the CARs. Therefore, the monetary penalties of $100 and $250 are cancelled.

March 14, 2008

Reasons for appeal decision by: Tracy Medve, Member

Concurred by: E. David Dover, Member

James Edward Foran, Member