Decisions

TATC File No. O-3486-18
MoT File No. 5015-6516

TRANSPORTATION APPEAL TRIBUNAL OF CANADA

BETWEEN:

Allen Airways Ltd., Applicant

- and -

Minister of Transport, Respondent

LEGISLATION:
Canadian Aviation Regulations, SOR/96-433, Part V, subpart 73


Review Determination
Elizabeth MacNab


Decision: June 22, 2009

Citation: Allen Airways Ltd. v. Canada (Minister of Transport), 2009 TATCE 18 (review)

Heard at Winnipeg, Manitoba, on March 17 and 18, 2009

Held: The Tribunal confirms the Minister's decision to suspend the approved maintenance organization certificate of Allen Airways Ltd.

Files Nos. O-3486-18

O-3487-10

I. BACKGROUND

[1] Allen Airways Ltd. held both an air operator certificate (AOC, file no. O-3487-10) and an approved maintenance organization certificate (AMOC, file no. O-3486-18). On March 3, 2008, a notice of suspension was issued with respect to each of these documents. Each notice stated that the suspension would come into effect on April 3, 2008, unless the conditions for reinstatement had been met by that time. In the opinion of the Minister, the conditions were not met and the suspensions came into effect on the above date. Requests for review were filed with the Tribunal on April 1, 2008. Each request asked for a stay of the suspension until the hearing. No stay was granted, since the Tribunal found that it has no authority to grant such a stay.

[2] The suspension of the AOC was made pursuant to paragraph 7.1(1)(b) of the Aeronautics Act (Act), on the grounds that the certificate holder has failed to maintain the conditions of issuance contained in part VII, subpart 3 of the Canadian Aviation Regulations (CARs). Detailed grounds for the suspension and the conditions for reinstatement were set out in an appendix to the notice of suspension.

[3] The suspension of the AMOC was also made pursuant to section 7.1(1)(b) of the Act, on the grounds that the certificate holder had failed to maintain the conditions of issuance contained in part V, subpart 73 of the CARs. Detailed grounds for the suspension and the conditions for reinstatement were set out in the appendix to the notice of suspension.

[4] Each notice of suspension also included a statement that, if the conditions for reinstatement were not complied with by April 3, 2009, the certificate would be cancelled.

II. LAW

[5] Paragraph 7.1(1)(b) of the Act provides the following:

7.1 (1) If the Minister decides to suspend, cancel or refuse to renew a Canadian aviation document on the grounds that

. . .

(b) the holder or any aircraft, airport or other facility in respect of which the document was issued ceases to meet the qualifications necessary for the issuance of the document or to fulfil the conditions subject to which the document was issued.

A. Air Operator Certificate (File No. O-3487-10)  

[6] The condition required to be complied with by the holder of an AOC is found in paragraph 703.07(1)(d) of the CARs:

703.07 (1) Subject to Section 6.71 of the Act, the Minister shall, on receipt of an application submitted in the form and manner required by the Commercial Air Service Standards, issue or amend an air operator certificate where the applicant demonstrates to the Minister the ability to

[…]

(d) comply with maintenance requirements.

[7] The maintenance requirements referred to in paragraph 703.07(1)(d) are found in section 706.02 and subsections 706.07(1) and (3), and standards 726.07(1) and (3):

706.02  No person shall operate an aircraft unless the aircraft is maintained in accordance with a maintenance control system that

(a) meets the requirements of this Subpart; and

(b) is described in the air operator's maintenance control manual (MCM) required by Section 706.08.

706.07 (1) An air operator shall, in order to ensure that its maintenance control system and all of the included maintenance schedules continue to be effective and to comply with these Regulations, establish and maintain a quality assurance program that

(a) is under the sole control of the person responsible for the maintenance control system appointed under paragraph 706.03(1)(a); and

(b) meets the requirements of section 726.07 of Standard 726 - Air Operator Maintenance of the Commercial Air Service Standards.

(3) The person responsible for the maintenance control system shall establish an audit system in respect of the quality assurance program that consists of the following:

(a) an initial audit within 12 months after the date on which the air operator certificate is issued;

(b) subsequent audits conducted at intervals set out in the MCM;

(c) a record of each occurrence of compliance or non-compliance with the MCM found during an audit referred to in paragraph (a) or (b);

(d) checklists of all activities controlled by the MCM and the maintenance schedules;

(e) procedures for ensuring that each finding of an audit is communicated to them and, if management functions have been assigned to another person under subsection 705.03(3) or (4), to that person;

(f) follow-up procedures for ensuring that corrective actions are effective; and

(g) a system for recording the findings of initial and periodic audits, corrective actions and follow‑ups.

726.07 Quality Assurance Program

Information Note:

The Quality Assurance Program (hereinafter the program) established under section 706.07 of the Canadian Aviation Regulations (CARs) is not intended to be based solely on a system of end product inspection, but rather upon periodic verifications of all aspects of the systems and practices used in the control and performance of maintenance. The program should provide an unbiased picture of the air operator's performance, to verify that activities comply with the MCM and confirm that the systems and procedures described in the MCM remain effective.

726.07(1) The program shall, as a minimum, cover all functions defined within the MCM and include all elements necessary to ensure effectiveness, quality and safety. It shall confirm that the air operator is in compliance with the applicable regulations and with the MCM by addressing operational and environmental conditions, organizational structure, record keeping systems, etc., and ensure that all referenced procedures remain applicable and effective.

[…]

(3) The audits required under paragraphs 706.07(3)(a) and (b) may be conducted on a progressive or segmented basis, provided that the entire organization is audited within the applicable interval.

[8] The requirement to appoint a person responsible for maintenance (PRM) and the duties of that person and the Minister are set out in section 706.03:

706.03 (1) The holder of an air operator certificate shall

(a) appoint a person responsible for the maintenance control system;

(b) subject to subsection (4), ensure that the person responsible for the maintenance control system has achieved a grade of 70% or more in an open-book examination that demonstrates knowledge of the provisions of the Canadian Aviation Regulations;

(c) ensure that the person responsible for the maintenance control system demonstrates to the Minister knowledge of the topics set out in subsection 726.03(1) of Standard 726 - Air Operator Maintenance of the Commercial Air Service Standards within 30 days after their appointment;

(d) ensure that the person responsible for the maintenance control system performs the duties referred to in subsections 706.07(2) and (3);

(e) provide the person responsible for the maintenance control system with the financial and human resources necessary to ensure that the holder of the air operator certificate meets the requirements of these Regulations;

(f) authorize the person responsible for the maintenance control system to remove aircraft from operation if the removal is justified because of non-compliance with the requirements of these Regulations or because of a risk to aviation safety or the safety of the public; and

(g) ensure that corrective actions are taken in respect of any findings resulting from a quality assurance program established under section 706.07.

(2) The Minister shall conduct an interview with the person appointed under paragraph (1)(a) to assess their knowledge of the topics referred to in paragraph (1)(c).)

(3) The Minister shall notify the person appointed under paragraph (1)(a) of the results of the assessment and identify any deficiencies in their knowledge of the topics within ten days after the interview.

(4) The knowledge requirement set out in paragraph (1)(b) does not apply in respect of

(a) a person responsible for the maintenance control system who held that position on January 1, 1997; or

(b) the holder of an aircraft maintenance engineer (AME) licence.

(5) The holder of an air operator certificate shall ensure that no person is appointed to be responsible for the maintenance control system or remains responsible for the system if, at the time of their appointment or during their tenure, they have a record of conviction for

(a) an offence under section 7.3 of the Act; or

(b) two or more offences under any of sections 605.84 to 605.86 not arising from a single occurrence.

(6) The person responsible for maintenance control system of the holder of an air operator certificate may assign the management functions for specific maintenance control activities, to another person if the assignment and its scope are described in the maintenance control manual (MCM) of the air operator.

(7) If the holder of an air operator certificate is also the holder of an approved maintenance organization (AMO) certificate issued under section 573.02, the person appointed under paragraph (1)(a) shall be the person responsible for maintenance of the AMO appointed under paragraph 573.03(1)(a).

B. Approved Maintenance Organization Certificate (File No. O-3486-18)

[9] The first condition that is required to be complied with by the holder of an AMOC relates to the establishment of a quality assurance program as set out in subsection 573.09(1):

573.09 (1) The holder of an approved maintenance organization (AMO) certificate shall establish and maintain a quality assurance program consisting of provisions for sampling maintenance processes to evaluate the AMO's ability to perform its maintenance in a safe manner.

[10] The specific requirements concerning the quality assurance program are set out in subsection 573.09(3) and standard 573.09:

573.09 (3) The person responsible for maintenance shall establish an audit system in respect of the quality assurance program that consists of the following:

(a) an initial audit within 12 months after the date on which the AMO certificate is issued;

(b) subsequent audits conducted at intervals set out in the MPM;

(c) checklists of all activities controlled by the MPM;

(d) a record of each occurrence of compliance or non-compliance with the MPM found during an audit referred to in paragraph (a) or (b);

(e) procedures for ensuring that each finding of an audit is communicated to them and, if management functions have been assigned to another person under subsection 573.04(4) or (5), to that person;

(f) follow-up procedures for ensuring that corrective actions are effective; and

(g) a system for recording the findings of initial and periodic audits, corrective actions and follow-ups.

573.09 Quality Assurance Program

Information Note:

The Quality Assurance Program (hereinafter the program) established under section 573.09 of the Canadian Aviation Regulations (CARs) is not intended to be based solely on a system of end product inspection, but rather upon periodic verifications of all aspects of the systems and practices used in the performance of maintenance. The program should provide an unbiased picture of the AMO's performance, to verify that activities and results comply with the MPM and confirm that the MPM and the systems and procedures described within it remain effective.

573.09(1) The program shall, as a minimum, cover all functions defined within the MPM and include all elements necessary to ensure effectiveness, quality and safety. It shall confirm that the AMO is in compliance with the applicable regulations and with the MPM by addressing operational and environmental conditions, organizational structure, record keeping systems, etc., and ensure that all referenced procedures remain applicable and effective.

(2) The audits referred to in paragraphs 573.09(3)(a) and (b) of the CARs may be conducted on a progressive or segmented basis, provided that the entire organization is audited within the applicable interval.

Information Note:

A proportion of random audits should be carried out while maintenance is in progress, including work being performed at night time.

(3) Activities related to the program may be performed by employees of the AMO or by external agents. Persons may be assigned responsibility for other duties, in addition to those related to the program, provided that the program responsibilities take precedence over all other responsibilities.

[11] The second condition is a requirement to appoint a PRM in accordance with the provisions of subsections 573.03(1) and (4):

573.03 (1) The holder of an approved maintenance organization (AMO) certificate shall

(a) appoint a person responsible for maintenance;

(b) ensure that the person responsible for maintenance meets the requirement set out in subsection 573.04(1);

(c) subject to subsection (4), ensure that the person responsible for maintenance

(i) has achieved a grade of 70% or more in an open-book examination that demonstrates knowledge of the provisions of the Canadian Aviation Regulations, and

(ii) meets the experience requirement set out in subsection 573.04(1) of Standard 573 - Approved Maintenance Organizations;

(d) ensure that the person responsible for maintenance demonstrates to the Minister knowledge of the topics set out in subsection 573.04(2) of Standard 573 - Approved Maintenance Organizations within 30 days after their appointment;

(e) ensure that the person responsible for maintenance performs the duties referred to in subsections 573.04(2) and (3) and 573.09(2) and (3);

(f) provide the person responsible for maintenance with the financial and human resources necessary to ensure that the holder of the AMO certificate meets the requirements of these Regulations;

(g) ensure that corrective actions are taken in respect of any findings resulting from a quality assurance program established under subsection 573.09(1) or a safety management system referred to in section 573.30; and

(h) conduct reviews of the safety management system to determine its effectiveness.

(4) The knowledge requirement set out in subparagraph (1)(c)(i) does not apply in respect of

(a) a person responsible for maintenance who held that position on January 1, 1997; or

(b) the holder of an aircraft maintenance engineer (AME) licence.

[12] The responsibilities of the Minister in relation to the PRM are set out in subsections 573.03(2) and (3):

573.03 (2) The Minister shall conduct an interview with the person appointed under paragraph (1)(a) to assess their knowledge of the topics referred to in paragraph (1)(d).

(3) The Minister shall notify the person appointed under paragraph (1)(a) of the results of the assessment and identify any deficiencies in their knowledge of the topics within ten days after the interview.

[13] The duties of the PRM are set out in subsections 573.04(1) to (3):

573.04 (1) The person responsible for maintenance shall, within 30 days after their appointment under paragraph 573.03(1)(a), submit to the Minister a signed statement that they accept the responsibilities of their position.

(2) The person responsible for maintenance shall manage the activities of the approved maintenance organization (AMO) in accordance with the policies set out in the maintenance policy manual (MPM) established under section 573.10.

(3) The person responsible for maintenance shall, where a finding resulting from a quality assurance program established under subsection 573.09(1) or a safety management system referred to in section 573.30 is reported to them,

(a) determine what, if any, corrective actions are required and carry out those actions;

(b) keep a record of any determination made under paragraph (a) and the reason for it;

(c) if management functions have been assigned to another person under subsection (4) or (5), communicate any determination regarding a corrective action to that person; and

(d) notify the accountable executive of any systemic deficiency and of the corrective action taken.

III. EVIDENCE

A. Minister of Transport

(1) Steven McLeod

[14] Steven McLeod is a civil aviation safety inspector based in the Thunder Bay office of Transport Canada. From 2002 to 2005, he was the principal maintenance inspector for Allen Airways Ltd. In that capacity, he approved, in 2004, the maintenance control manual (MCM) required for an AOC and the maintenance policy manual (MPM) required for an AMOC.

[15] Although Inspector McLeod was no longer Allen Airways' principal inspector, he was part of the team that carried out a regulatory inspection of the company in February 2007. That inspection resulted in eight findings where the regulatory requirements were not met. The company, and specifically George Allen as PRM, was informed of these findings in a letter dated February 27, 2007 (exhibit M-8). The letter also described the need for the company to provide, by April 12, 2007, a corrective action plan with respect to these findings and contained a description of what needed to be included in such a plan.

[16] Inspector McLeod explained that a corrective action plan must contain a short term corrective action, a root cause analysis of the identified problem and a long term corrective action together with time frames for their accomplishment. Once a plan has been submitted, it is reviewed by Transport Canada to determine that it effectively meets the regulatory requirements and that the time frame is acceptable. Allen Airways submitted a corrective action plan that was approved on October 19, 2007 (exhibit M-9).

(2) Daniel Maunula

[17] Daniel Maunula is a civil aviation inspector for Transport Canada based at Thunder Bay. He stated that he carried out a follow-up inspection of Allen Airways on February 22, 2008, to determine whether the approved corrective action plan had been carried out. During that inspection, he found that parts of the corrective action plan had not been carried out in relation to all eight of the findings of the 2007 regulatory inspection, and that in six of the eight findings the discrepancies with the plan were so great that the findings could not be closed. The issues remaining related to:

  • changes to the maintenance control manual that had not been completed;
  • the lack of proper documentation for maintenance time extensions;
  • the failure to always use work order checklists and to make amendments to manuals reflecting the checklists;
  • the failure to carry out an internal audit with respect to the quarantine of undocumented parts;
  • the failure to complete internal audits by persons who were not responsible for the original activity; and
  • the failure to amend manuals to reflect the current status of welding authorities.

[18] Throughout the corrective action plan, an internal audit was listed as part of the long term corrective action plan. The audit relating to the AOC could not be found and the one relating to the approved maintenance organization (AMO) was incomplete.

[19] Finally, Inspector Maunula testified that he had been present at a meeting held with Mr. Allen and his wife, Janet Allen, on December 1, 2008 to discuss corrective action plans. He had reviewed a number of plans in relation to the company's internal audit and found them to be inadequate in that the long term corrective action did not affect the root cause of the problem.

(3) James Dusolt

[20] James Dusolt has been the principal Transport Canada civil aviation inspector for Allen Airways since January 1, 2008. He testified that he had called Mr. Allen on March 3, 2008 to alert him to the suspensions of his AOC and his AMOC on the grounds that neither had an effective quality assurance program (QAP), and that the PRM was not properly carrying out his duties. Notices of suspension were faxed to the company later that day. Each notice included an appendix that set out detailed descriptions of the grounds for suspension and the conditions that would need to be met for reinstatement. Because there were no immediate safety issues involved, the suspension would not come into effect for 30 days. The fax also included a copy of the Transport Canada Aircraft Maintenance & Manufacturing Staff Instructions setting out the circumstances where a suspension for an ineffective QAP should be issued (exhibit M‑13).

[21] On March 25, 2008, the Allens brought a number of documents to the Transport Canada office at Thunder Bay in an attempt to comply with some of the conditions for reinstatement of their documents. These documents included an AMO quality audit checklist dated October 5, 2007 and March 20, 2008, a quality assurance audit for the AOC dated March 20, 2008 and a manual audit checklist dated March 22, 2008 (exhibit M-14). Inspector Dusolt stated that an initial review of these documents raised some concerns in that not all of the checklist questions had been answered. It was not clear whether the audit had been carried out by a person other than the one responsible for the activity, as required by the regulations, and problems were not adequately identified by the audit. In this connection, the testimony was that it was usual to find 10 or more problems in such an audit, whereas these had only identified one and had not addressed the outstanding findings of the 2007 Transport Canada regulatory inspection. Nevertheless, it was decided that no action would be taken regarding these documents until a site visit to Allen Airways was made.

[22] This visit was made on March 31, 2008 with Inspector Dusolt and his supervisor, Glen Rowlinson. The purpose of the visit was to follow up on the effectiveness of the quality assurance audit and to conduct the PRM interview. During the site visit Inspector Dusolt and his supervisor followed up on the corrective action plan from the original Transport Canada regulatory inspection to determine the effectiveness of the quality assurance system. During this inspection, Inspector Dusolt noted a number of deficiencies relating to the recording of tolerances, the carrying out of airworthiness directives (ADs) past the required time and the failure to record them both adequately and in the proper logs, the identification of parts, and welding. Inspector Dusolt's notes show that Mr. Allen's attitude was somewhat dismissive of the regulatory requirements regarding record keeping (exhibit M-16).

[23] The interview portion of the visit consisted of a series of questions set out in the Transport Canada document "Interview of a Candidate Appointed as a Person Responsible for of an AOC/AMO" (exhibit M-15). This document also sets out the information that should be included in the answers. Mr. Allen's mark on this interview was 42 percent while the minimum mark for success was 70 percent (exhibit M-15). Inspector Dusolt faxed a letter to Mr. Allen on April 1, 2008 confirming the failure, setting out the areas where he had demonstrated insufficient knowledge and pointing out that the interview had been terminated because of Mr. Allen's inappropriate behavior while an attempt was being made to explain the deficiencies (exhibit M‑17).

[24] The suspension came into effect on April 3, 2008. Mr. Allen hired a consultant to assist in preparing a quality assurance audit. After some telephone discussions concerning the requirements, a document was submitted on May 1, 2008. Upon review by Inspectors Dusolt and Mel Bushby, this document was found not to meet the requirements for a quality assurance audit, primarily because the root cause analysis was inadequate for the findings of non-compliance. Inspector Dusolt explained that a root cause analysis or reason for determination that corrective action is necessary forms the basis for deciding what would be an effective long term corrective action. In the document submitted, the root cause analysis was inadequate because, in many cases, it did not address the systemic failure leading to the non-compliance and also, the analysis did not match the proposed long term corrective action. Finally, the document was inadequate in that the proposed long term corrective actions were not specific with regard to who would carry out such actions and did not set out a measurable time frame. On May 14, 2008, Inspector Dusolt faxed a letter to Mr. Allen detailing the deficiencies and noting those that were safety concerns (exhibit M-19).

[25] Meanwhile, on April 24, 2008, Mr. Allen submitted a detailed plan of action for his AMO which was accepted as meeting conditions 1(c) and 2(b) of the notice of suspension for the AMOC. It was noted, however, that this approval is no longer in effect because the dates specified in the plan have passed (exhibit M-20).

[26] On May 1, 2008, Mr. Allen underwent a second interview at the Transport Canada office at Thunder Bay for a PRM limited to the AMO only. This interview was conducted by Inspectors Dusolt, Rowlinson and David Humenny, a superintendent at the Pearson Centre, Transport Canada. Mr. Allen obtained the required pass mark of 70 percent at this interview, and consequently met condition 2(a) of the notice of suspension for the AMOC suspension (exhibit M‑22).

[27] During the rest of the year, there were many communications both by telephone and in writing between Allen Airways or its consultant, including an updated detailed plan of action which is also currently ineffective since the dates for actions have passed (exhibit M-25). A quality assurance audit was received on September 3, 2008, which was found to be inadequate The questions used in the audit checklist did not cover all the regulatory requirements for such an audit, in that there was no explanation of how the requirement for random checks throughout the year or for work performed at night. In addition, the audit did not recognize that some of the manuals being used had been superseded by newer versions. Finally, the problems regarding corrective actions had not been resolved.

[28] In response to his letter outlining these deficiencies, a further submission was received on September 2, 2008, which, while an improvement, failed to resolve the issues relating to corrective actions. At this point, Transport Canada ceased to deal with the consultant and spoke only to Mr. Allen.  After several long telephone discussions, another submission was received on November 12, 2008. This submission was again unacceptable because it continued to have problems with the questions asked and the corrective action plans. Since it appeared that communicating by telephone was not working, a meeting was held on December 1, 2008, as mentioned in Inspector Maunula's testimony.

[29] In cross-examination, applicant's counsel asked a number of questions concerning the issues arising out of the inspection on March 31, 2008. The first questions concerned the 10‑hour extension. Applicant's counsel introduced as evidence a work order (exhibit A-1) that included a copy of an inspection check sheet for the inspection carried out by the pilot before the 10‑hour extension was granted. After some discussion, it was clarified that the issue was not that the inspection had not been carried out but that it had not been properly recorded by the pilot in the journey log book. He also showed Inspector Dusolt journey log books indicating that inspections had taken place, and that the times required for such inspections by ADs had been met. Inspector Dusolt's response was that these entries had not been made when he inspected the journey log books. He pointed out that they had been made with a different pen.

[30] Applicant's counsel also questioned the witness regarding the concerns raised about unmarked parts. He suggested that in the case of one part (the gauge cluster) the authorized release certificate was on the shelf beneath it. Inspector Dusolt responded that in his recollection, the shelf had been empty. Applicant's counsel also suggested that other parts, the aircraft struts, were being kept near the aircraft being worked on in accordance with the company MPM. In response, Inspector Dusolt disagreed and said that they were in a bonded area, where new and serviceable parts were kept and were not near the area where the aircraft was being rebuilt. Finally, applicant's counsel produced as evidence photographs of a Cessna "skin" currently in the Allen's shop (exhibit A-5). He pointed out that all Cessna parts have a number stamped on them, and that enables them to be traced. Inspector Dusolt stated that he was aware that most manufacturers stamped their parts in this manner but pointed out that, in this case as in the others, neither Mr. nor Mrs. Allen provided documentation when asked about it during the inspection.

[31] Applicant's counsel also asked Inspector Dusolt about the notes made at the meeting with regard to welding. The response was that he had been told by Mr. Allen that he would like to turn in his welding certificate since it was no longer worth it to weld legally, and that he would do so when necessary as in the case where he welded a part that had been sent out unsuccessfully three times.

[32] Applicant's counsel also asked a number of questions as to how a small operation like Allen Airways could comply with the regulatory requirements. The response from Inspector Dusolt was that a single person could occupy a number of the mandated positions, and that there was always someone other than the person carrying out an activity who could audit it for quality assurances purposes, whether it be another employee, a consultant, a relative or even a cooperative agreement with another small organization. Inspector Dusolt also explained the importance of systems in quality assurance activities. It is important to ensure not only that the end result is acceptable in a particular case but also that systems are in place to ensure that in future activities the result would be the same.

[33] Finally, applicant's counsel asked Inspector Dusolt if, during the March 31, 2008 meeting, he had said to Mrs. Allen that she "looked guilty and must be hiding something" and asked Mr. Allen if he could read. Inspector Dusolt denied making these statements.

(4) Glen Rowlinson

[34] Inspector Rowlinson is the Transport Canada superintendent who issued the suspension of the AMOC and recommended the suspension of the AOC to the Ontario regional office, on the basis that the corrective action plans from the 2007 regulatory inspection had not been implemented and that the QAP was deemed to be ineffective.

[35] Inspector Rowlinson was present at the March 31, 2008 inspection and the PRM interview. During the inspection, Inspectors Dusolt and Rowlinson looked at technical records, ADs, parts and stores control and journey log book requirements. Once it was determined that the corrective actions were ineffective, the interview proceeded at Mr. Allen's choice. There was an attempt to debrief him after the interview but that attempt was halted by Mr. Rowlinson because of Mr. Allen's unacceptable behavior.

[36] Mr. Allen indicated in a letter dated April 23, 2008, that he did not want to pursue the reinstatement of his AOC at this point and a PRM interview for an AMO was scheduled for May 1, 2008. In order to maintain an unbiased atmosphere, Inspector Humenny attended. Mr. Allen passed this interview thus meeting one of the conditions for reinstatement of the AMO.

[37] Inspector Rowlinson also testified concerning the September 3, 2008 meeting with the Allens and the consultant. He said that the meeting was also attended by the Ontario regional manager, Manufacturing and Maintenance, Ole Nielsen, who told the Allens that they were close to meeting the conditions for reinstatement but that they needed to be receptive to criticism and to work on their submissions. After that meeting, Inspector Rowlinson had a number of exchanges with Mr. Allen and his consultant that discussed what was needed for an adequate quality assurance submission.

[38] In cross-examination, Inspector Rowlinson said that at the March 31, 2008 inspection, he was with Inspector Dusolt when they inspected the stores but that he did not personally pick up any of the parts. He also agreed that there had been a lot of back and forth on the issues, and that there was no how to package available for small operators on how to meet the requirements.

(5) Mel Bushby

[39] Mel Bushby is a civil aviation safety inspector, Maintenance and Manufacturing, from the Buttonville office, Transport Canada. He stated that he was asked to assist Inspector Dusolt in assessing the submission made by the consultant on April 3, 2008. He also reviewed and agreed with the attachment to the letter dated May 8, 2008, sent to Mr. Allen by Inspector Dusolt (exhibit M-19).

[40] Inspector Bushby participated in a conference call with the Allens and the consultant on May 14, 2008 where they discussed Mr. Allen's willingness to make the necessary corrective actions and possible shifts in the organization to comply with the regulations. He suggested an approach that could be taken, and stressed the need to clearly understand the regulations and the objectives behind them.

(6) Imtiazali Waljee

[41] On April 2 and 3, 2008, Imtiazali Waljee was acting as the Ontario regional manager, Manufacturing and Maintenance, Transport Canada. In this capacity, he returned a telephone call from Mr. Allen, who explained his dealings with the Thunder Bay office of Transport Canada and asked for an extension of the date of the suspension. In response, Inspector Waljee asked for some documentation that would show what steps had been taken to comply with the conditions of reinstatement, so that he could determine if an extension was warranted. Mr. Allen responded with a short letter on April 3, 2008, saying that he had hired a consultant who was doing the audits and would do the follow-ups (exhibit M-34). He was then asked to submit more detailed information and provided a copy of the detailed plan of action dated April 3, 2008. During a telephone conversation with Inspector Waljee, Mr. Allen told him that he had been unsuccessful in the interview for a PRM, and that there was no one else available to be appointed to that position.

[42] In deciding not to grant the extension, Inspector Waljee took into account that there was no PRM, and that the detailed plan of action was ineffective to meet the conditions for reinstatement set out in the notices of suspension. An important point in reaching this conclusion was that, while the conditions for reinstatement required an internal audit that used check sheets that covered all required aspects of the organization, one of the activities indicated that the plan of action was to amend the audit check sheets to include all areas of the operation. Further, the plan had no time commitments and no analysis. In his letter of April 3, 2008, informing Mr. Allen that the extension would not be granted, Inspector Waljee also mentioned that the notices of suspension were based on a failure to implement the corrective action plan for the deficiencies observed in the February 2007 regulatory inspection, as determined in the follow‑up visits in February and March 2008 (exhibit M-35).

B. Applicant

(1) George Allen

[43] Mr. Allen began his testimony by saying that he started working in the aviation industry in 1959 and obtained aircraft maintenance engineer (AME) licences in 1962 and 1965. He began his own aircraft maintenance business in Sioux Lookout, Ontario, 35 years ago and obtained an AMOC in 1991, the year that certificates became a requirement for his type of operation. He also obtained an AOC in that year, and he has operated as many as five aircraft under that certificate. He stated that there had never been an accident or incident related to his maintenance activities nor had there been any in the operation of his air service, apart from one occasion when running over a rock damaged a float.

[44] Mr. Allen was then asked about items listed in Inspector Dusolt's notes, with respect to the concerns arising out of the March 31, 2008 inspection. In relation to the 10-hour extension, he testified on a work order for the 100-hour inspection of the aircraft introduced as evidence. He had attached to it the pilot inspection sheet for the inspection that the pilot carried out before the extension was granted. He explained that this was kept in the file relating to the aircraft and would have been available on March 31, 2008 (exhibit A-1).

[45] The checklist attached to the work order included a reference to a 50-hour check being carried out on "seat belts and shoulder harnesses and seat stops, seat rails, upholstery, structures and mounting" (exhibit A-1). These were the subject of the AD that Inspector Dusolt had noted as being overdue for the required 100‑hour inspection. When asked about Inspector Dusolt's note that quoted him as saying "The seat track AD was not too important and it was fine for him to action it late because it was stupid anyway" (exhibit M-16). Mr. Allen said that he was probably annoyed because, if the maintenance had been done properly, the AD would not have been necessary. Pages from the air time and engineering log book were also introduced as evidence to show that the inspections were carried out at intervals that would meet the time requirements of the AD (exhibit A-2).

[46] Mr. Allen also testified concerning the storage of parts. He pointed out sections in the company MPM (exhibit M-4) that provided that suppliers tags could be used if adequate for traceability, that parts with serial numbers and log book entries required no further identification, and that parts being used in rebuilding aircraft should be kept in a special area. He testified that with regard to the gauge cluster from the unidentified parts listed by inspector Dusolt, the serial number, date of overhaul and company name were stamped on a metal label that was glued to the part. He also said that there was a maintenance release certificate offered as an exhibit on the shelf beneath the part. With regard to another item listed, he said that the struts were from an aircraft being worked on but they were too large to be kept on the appropriate shelf marked for that aircraft's parts. There was no possibility of them being misused because there was only one aircraft of the type being repaired in the shop at that time.

[47] With regard to the propeller noted in the list as being on the floor, Mr. Allen testified on the maintenance record for the propeller that was introduced as evidence (exhibit A‑4). Since it showed the serial number which was also stamped on the propeller, Mr. Allen stated that it met the requirements for marking set out in the MPM. Finally, Mr. Allen identified the photographs of Cessna aircraft skins and pointed out that they showed examples of the identification labels that were on all Cessna parts and so would have been on the skins mentioned in Inspector Dusolt's list (exhibit A-5).

[48] The next item discussed was welding, the final item on Inspector Dusolt's list. Mr. Allen explained that, at one time, he was certified to do structural welding on aircraft. He said that the last time he had done welding for aircraft was three or four years ago when he was still certified, and that after sending out a part for repair, he eventually did the welding himself because the repairs were not done so that the part would fit in the particular model of the aircraft. He stated that he still had welding equipment in his shop but that he only used it for non-structural aircraft welding, permissible under the regulations, and for non-aircraft repairs.

[49] In discussing the PRM interview that took place on March 31, 2008, Mr. Allen explained his failure by saying that he had not expected the interview to be based on the regulations but rather on more practical questions. When applicant's counsel suggested that some of his comments recorded in the Minister's exhibits were "less than flattering", Mr. Allen agreed and said he was probably quite upset when they were made. His opinion was that a quality maintenance system was one where after a maintenance activity, the aircraft goes out, performs properly and does not come back until the next maintenance is due. He went on to say that he had never had a "come back". He explained that, as a small operation consisting of three family members and one employee, he had great difficulty in adapting to the paper system required by the regulations. He had not understood the meaning of root cause but said that in his operation, each checked the other's work and that the proof that it was adequate was that there had never been any accident or other trouble.

[50] Mr. Allen also discussed an earlier part discrepancy where he had ordered a part from Cessna for a Beaver aircraft in accordance with that aircraft operating manual. When the part arrived, however, the attached tag limited its application to Beaver aircraft. In the end, Cessna removed the limitation from the tag and the part was allowed to be used on Beaver aircraft.

[51] In cross-examination, when asked about the work order, Mr. Allen said that the pilot inspection form had been signed off by Mrs. Allen, and confirmed that certain parts of the checklists had not been filled out. He agreed that the line for the signature of the person carrying out the inspection had not been filled in but also said that it did not need to be. He also explained the discrepancy between the part number of the gauge cluster on the invoice and the authorized release certificate as the result of a change in the supplier of the fuel gauges.

[52] In cross-examination, the Minister's representative referred to Mr. Allen's letter of April 3, 2008, setting out a proposed detailed plan of action. She referred to item 2(b) and asked if the MCM and MPM had been amended, as provided for in the plan. Mr. Allen responded that they had not been amended. She also referred to the item which state that the internal audit had determined a requirement to make significant changes to the recording of maintenance activities. Mr. Allen testified that the changes had been made and, in response to a question as to whether they had been made after April 3, 2008, said that they had been made, as problems were identified during the internal audit which had started before that date.

(2) Janet Allen

[53] Mrs. Allen works in the office, organizes parts and does anything else assigned by the others. She was present at the March 31, 2008 inspection and was not made aware of any problems with the tagging of the Cessna skins. She told Inspector Dusolt that the gauge cluster was marked, that the applicable paper work was there and that the propeller on the floor had a log book and was allowed to be there.

[54] She recalled that Inspector Dusolt said that she looked guilty when he entered the shop. During her testimony, she assumed that he meant it to be a humorous statement since he cannot remember it but she took it seriously at the time.

[55] There was also an argument with Inspector Dusolt concerning entries in the maintenance log book when he told her that she could not make entries in it any longer. When she challenged this, she said he remained upset with her for the rest of the visit. On cross‑examination, however, she acknowledged that Inspector Dusolt clarified his comments by saying that while entries could be made in the maintenance log book, they must be made in the journey log book and technical records.

(3) David Allen

[56] David Allen, who is an AME with the company, reported that at the March 31, 2008 inspection he heard Inspector Dusolt who said "[Y]ou look guilty. You must have something to hide". On cross-examination he said he was not at the meeting and had no conversation with the inspectors. At the time the statement was made, he was outside the door and could have been seen by them.

IV. MINISTER'S POSITION

[57] The Minister argued that it had been shown that, on a balance of probabilities, the suspension was justified both on March 3, 2008, when it was issued and on April 3, 2008, when it came into effect because of the failure of Allen Airways to comply with the regulations. Neither the fact that Allen Airways has never been in an accident nor its size as a small operation, excuses it from compliance with the regulations. The evidence has shown that a regulatory inspection in 2007 indicated that Allen Airways did not always comply with its manuals, and records were inadequate to ensure compliance with the regulations. There was inadequate training on the regulations and audits were being carried out by the person responsible for carrying out the activities being audited. A follow-up inspection in 2008 determined that six of the eight deficiencies identified in 2007 had not been corrected, and that the internal audits, that were to be carried out as part of the corrective action plan resulting from the 2007 inspection, could not be found in the case of the AOC and were incomplete and inadequate in the case of the AMOC.

[58] Inspector Dusolt testified that upon review of the above matters and in consultation with Inspector Rowlinson, it was decided to suspend the AOC and AMOC, as provided for in the maintenance staffing instructions. In accordance with this document, the suspensions would not come into effect for 30 days. On March 31, 2008, a visit by two Transport Canada inspectors confirmed that the conditions for reinstatement had not been met. Inspector Dusolt's opinion is that this continues to be the case, even in the light of the documents shown to him on cross‑examination. Mr. Allen himself admitted that he did not do well in the PRM interview.

[59] After the suspension came into effect, Transport Canada made consistent and sustained attempts to assist Allen Airways to meet the conditions for reinstatement. At least four officials were involved in reviewing documents submitted by Allen Airways or its consultant, or participating in conference calls or meetings.

[60] The chronology described by the witnesses shows that Allen Airways has not yet complied with all the elements of its corrective action plan arising out of the February 2007 inspection that was approved in October 2007, nor has it met the conditions for reinstatement set out in the notices of suspension. Although Mr. Allen has succeeded in a PRM interview with respect to the AMO, he has not done so for the air operation. Allen Airways has not been able to put together an effective QAP, as is required in sections 703.03 and 706.03 of the CARs. A serious lack has been Allen Airways' failure to identify and implement effective corrective actions in relation to findings of non‑compliance, including those identified in its own internal audit.

[61] The Minister submits that the decision to issue the notices of suspension and that the decision that the conditions of reinstatement had not been met were reasonable and that the suspensions should be confirmed.

V. APPLICANT'S POSITION

[62] Applicant's counsel argues that the evidence shows that Mr. Allen's QAP was effective in that for 50 years he has been maintaining safe aircraft, which is the fundamental purpose of the regulations. He pointed out that at the March 31, 2008 inspection, there was some unpleasantness but that there was evidence showing that everything on Inspector Dusolt's list was incorrect. As for the PRM, Mr. Allen, under various titles, has been a PRM for 50 years and produced a quality product. The end product is not a paper trail but a safe aircraft.

[63] According to Inspector Waljee, Mr. Allen was not required to take the exam when the regulations first came into effect because the regulations excused those who were persons responsible for maintenance at the time they came into effect. Further, he suggested that an examination that scores someone with 50 years of quality experience at 44 percent could not be using relevant questions.

[64] Mr. Allen made many attempts to come up with a QAP on paper that would satisfy Transport Canada officials but each came back with criticisms and indicated that there might be more problems. There were no guidelines for small operations that could help Mr. Allen in this area.

[65] The underlying issue is that the regulations are inappropriate when applied to a small family operation where there are only three people on the floor, each constantly looking over the other's shoulder. While there are admittedly paper deficiencies, applicant's counsel submits that the cooperative working practices of the company's employees constitute an effective audit and that the company has an adequate quality assurance program in place, as shown by 50 years of a safe operation.

VI. ANALYSIS

[66] The following are the issues to be decided:

  • Were the notices of suspension justified on March 3, 2008?
  • Were the conditions of reinstatement within the authority of the Minister?
  • Were the conditions met by April 3, 2008?
  • Have the conditions for reinstatement been met since April, 2008?

A. Approved Maintenance Organization Certificate (File No. O-3486-18)

(1) Were the notices of suspension justified on March 3, 2008

[67] The appendix to the notice of suspension describes two conditions of issuance that Allen Airways failed to maintain as follows:

  1. Maintaining a QAP consisting of provisions to evaluate the AMO's ability to perform maintenance in a safe manner, as required by section 573.09 of the CARs, and by not verifying that the program covered all functions defined within the MPM, including all elements necessary to ensure effectiveness, quality and safety, and confirming that the AMO was in compliance with the applicable regulations and with the MPM, as required by standard 573.09 of the CARs.
  1. Ensuring that the PRM performed the duties referred to in sections 573.04 and 573.09 of the CARs, and by not ensuring that the corrective actions were taken in respect of findings resulting from the QAP, as required by section 573.03 of the CARs.

[68] Section 573.09(1) of the CARs sets out the basic requirement for a QAP and standard 573.09 of the CARs provides a more detailed description of the minimum requirements of the program. Section 573.03 of the CARs sets out the responsibilities of the certificate holder and the Minister in the appointment of a PRM. Section 673.04 and subsections 573.09(2) to (5) of the CARs set out the responsibilities of the PRM.

[69] The Minister has shown that the regulatory inspection of Allen Airways in February, 2007 identified eight areas of non-compliance with the regulations, and that one year later, the follow‑up inspection on February 22, 2008 showed that six of the eight non‑compliances had not been corrected. The internal audit that was part of the corrective action plan was not complete, even in respect of those where the corrective action had been marked complete. I note that there was no challenge made to these findings in cross-examination.

[70] The Tribunal decided in the following decision, High Terrain Helicopters Ltd. v. Canada (Minister of Transport), 2007 TATCE 26 (review), [2007] C.T.A.T.D. no. 18 (QL), that findings arising out of a regulatory inspection, together with a failure to correct the deficiencies in accordance with a corrective action plan amounted to a failure to maintain a QAP.

[71] Applicant's counsel put forward the positions that an effective quality assurance was one that resulted in safe aircraft, and that Allen Airways met that qualification. The regulations and standards, however, are explicit in providing that the QAP looks at the entire process rather than merely the result. This intention is clearly stated in the Information Note to standard 573.09 which states that the program ". . . is not intended to be based solely on a system of end product inspection, but rather upon periodic verifications of all aspects of the systems and practices used in the performance of maintenance." This purpose is given regulatory force by the provisions in standard 573.09 and in sections 573.04 and 573.09 of the CARs.

[72] The publication by Transport Canada entitled Aircraft Maintenance & Manufacturing Staff Instruction (MSI 28, August 15, 2006, exhibit M-13) also stresses in item 2.1 the importance of a QAP as ". . . the main component on which an aviation organizations approval is based". Item 2.3 of this document recognizes that some organizations ". . . have been slower to take full advantage of the more proactive nature of QA, and may still be operating in a largely reactive mode. A proactive QAP is essential to ensure ongoing regulatory compliance."

[73] It seems clear that Allen Airways fell within the above description and had been reluctant to accept the proactive requirements of a QAP but would rather rely on its unblemished safety record as justifying its continued approval.

[74] The MSI 28 also states that ineffective quality assurance programs are the primary cause of certificate suspension actions. The document sets out procedural guidelines and provides at item 3.2(b) that, where the non-conformance findings indicate that the QAP is not fully effective but where no safety issues are detected, the appropriate sanction is a notice of suspension with a 30 day effective date, when the lack of an effective QAP is cited as the grounds for the suspension.

[75] I find that on March 3, 2008, Allen Airways did not have an effective QAP, as evidenced by the findings of non-conformity and the failure to correct these in accordance with its approved corrective action plan, and that the notice of suspension was properly issued.

(2) Were the conditions for reinstatement within the Minister's authority?

[76] The first ground for the suspension listed three conditions for reinstatement: condition 1(a) mirrors the requirements of standard 573.09 and paragraph 573.09(1)(c) of the CARs; condition 1(b) sets out the requirements of section 573.04 of the CARs; condition 1(c) requires the certificate holder, within 90 days of the receipt of the notice of suspension, to give a written undertaking that the follow-up procedures will be in place to ensure that corrective actions are effective as required by paragraph 573.09(3)(f) of the CARs. Essentially, this last condition is similar to condition 2(c), in that it requires the submission of a corrective plan of action. It imposes a time limit of 90 days to do so, and I find that it is a reasonable requirement in view of the fact that some of the matters requiring action had been outstanding since February 2007.

[77] The second ground for the suspension related to the company's failure to ensure that its PRM performed his duties in accordance with the regulations and listed two conditions for reinstatement. The first was that it should ensure that the PRM would be interviewed by the Minister, in accordance with section 573.03 of the CARs. During Inspector Waljee's cross‑examination, applicant's counsel suggested that, as a person who was equivalent to a PRM when the requirement came into effect, this person was not required to requalify. Inspector Waljee agreed that this was the case when the regulations came into effect but that the person had to manage the operation of the AMO in accordance with the regulatory requirements.

[78] In fact, section 573.03 of the CARs requires the certificate holder to ensure that a PRM meet two knowledge requirements. Subparagraph 573.03(1)(c)(i) of the CARs refers to an ". . . open book examination that demonstrates knowledge of the provisions of the Canadian Aviation Regulations." Subsection 573.03(4) of the CARs exempts persons, such as Mr. Allen from that requirement. Paragraph 573.03(1)(d) of the CARs, however, requires the certificate holder to ensure that the PRM demonstrates to the Minister knowledge of the topics set out in standard 573.04(2) of the CARs within 30 days of the appointment. There is no exemption from this requirement, although the Minister may have decided not to enforce it at the time the regulation came into effect as a matter of policy. I note that subsection 573.03(2) of the CARs requires the Minister to conduct an interview with the person appointed as the PRM to assess this person's knowledge of the topics referred to in paragraph 573.03(1)(d), and subsection 573.03(3) of the CARs requires the Minister to notify the person interviewed of the results and identify any deficiencies within 10 days of the interview.

[79] I find that there is no exception to or time limit on the Minister's ability to conduct an interview with a person appointed as a PRM and that, while paragraph 573.03 (1)(d) of the CARs imposes a duty on the certificate holder to ensure that the interview takes place within 30 days of the appointment, the failure to do so within the required time cannot excuse it from the obligation.

[80] Condition for reinstatement 2(b) requires the certificate holder to submit a plan of action that details the certificate holder's means of continued compliance with section 573.03 of the CARs. Since the certificate holder is obligated to comply with the regulations, I find that this condition is reasonable and justified.

(3) Were the conditions met by April 3, 2008?

[81] There seems to be no dispute that condition 2 was not met by that date.

[82] With regard to condition 1, Mr. Allen submitted a number of documents to Transport Canada, including an internal audit of the AMO on March 23, 2008 (exhibit M-14). An early examination of these documents identified a number of concerns but it was decided to let a decision concerning them await the result of a site inspection. After that inspection, a new internal audit prepared by a consultant was submitted. Inspector Dusolt testified that this submission did not meet the requirements of condition 1, in that a number of questions were not answered and some of the answers did not meet the requirements of an effective QAP. This evidence was not contradicted and I find that condition 1 was not met by April 3, 2008.

[83] The site visit took place on March 31, 2008, and identified four areas of concern. In each of these areas, Mr. Allen offered evidence at the hearing to contradict the findings.

[84] The first issue noted by the inspector was that the inspections, to be carried out by the pilot before a tolerance was granted, were not properly noted in the journey log book at the time it was performed but rather would be completed by Mr. Allen when the aircraft returned to Sioux Lookout. To contradict this, Mr. Allen produced a work order to which was attached a document entitled Pilot Inspection for 10 Hr Extension for 50 & 100 Hr Extensions (exhibit A‑1). Apparently, this document was available at the time of the inspection but was not produced at that time. I note that the last item on the document is to " . . . put entry in journey log book".  Since it is the nature of the log entry that is the issue, I find that the problem remains as stated by Inspector Dusolt.

[85] The second issue disputed by Mr. Allen was that Inspector Dusolt's concerns regarding the timing and recording of maintenance was addressed in accordance with ADs. Mr. Allen produced pages from the air time and engineering record (exhibit A-2) that showed that regular inspections had taken place for the AD every 50 hours, although the requirement was to inspect every 100 hours, and so the 10‑hour extension discussed above would not mean that the 100‑hour deadline had passed.

[86] Section 28 of the Act provides the following:

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.

[87] In this case, there is some evidence to the contrary. When Inspector Dusolt was shown the journey log books in cross‑examination, he pointed out that the notation regarding the ADs was written in different ink and that they were not there at the time of the March 31, 2008 inspection. Inspector Dusolt's notes of the meeting (exhibit M-16) indicate that Mr. Allen made some disparaging comments about the ADs, indicating that it was "stupid" and "not important". When asked about the remarks in his testimony, Mr. Allen responded that he was probably "a little annoyed". He certainly did not take the opportunity to point out the entries in the journey log books which would seem to be the logical thing to do in the face of an allegation by Transport Canada that the AD was overdue.

[88] In his notes of the March 31, 2008 inspection, Inspector Dusolt noted that ADs were only being entered into the modification log and not the applicable technical logs. This note is to some extent borne out by Mrs. Allen's testimony concerning her conversation with Inspector Dusolt, with respect to the ability of recording maintenance activities in the modification log but also the necessity of recording it in the journey log book and other required technical records.

[89] In view of the above, I find that there is evidence to the contrary of the entries in the air time and engineering logs and, on a balance of probabilities, the entries were made after March 31, 2008. I would like to emphasize, however, that I do not doubt that the work was done as noted but only that the records concerning that work were inadequate.

[90] The next item in Inspector Dusolt's notes concerning his inspection that was challenged by Mr. Allen in his testimony was that of the tagging of parts. Inspector Dusolt identified four aviation items that did not have tags applied in accordance with company procedures or the corrective action plan.

[91] The first item listed by Inspector Dusolt was a gauge cluster. Mr. Allen testified that the tag was on the instrument itself and that there was an authorized release certificate on the shelf beneath it. Inspector Dusolt stated in cross-examination that there was no document beneath the gauge cluster when he picked it up from the shelf and admitted that if there had been, it would have been properly tagged. Inspector Rowlinson, who was also present, stated that he saw Inspector Dusolt examine parts but he made no mention of seeing any document when the gauge cluster was lifted from the shelf. There was no discussion with Inspector Dusolt of the information attached to the gauge cluster. In view of the uncontradicted evidence, I find that there was information attached to the item. On a balance of probabilities, I find that the certificate was not kept with the gauge cluster on March 31, 2008.

[92] The next item listed was aircraft struts that did not have any tags. Mr. Allen's testimony was that they were from an aircraft being worked on and that the PRM provided that such items need not be tagged if they were kept in an identified place and that, in this case the struts would not fit upon the shelf that was identified and left leaning against the wall. I find that this was not in compliance with the requirements.

[93] The third item identified was a propeller lying on the floor with no tag. Inspector Dusolt reported that Mr. Allen said that they knew where it was from and that was adequate. In his evidence, however, Mr. Allen testified on the maintenance record for the propeller (exhibit A-4) and pointed to the provision in the maintenance policy manual that stated that items marked with a serial number and which had a log book entry were properly identified. Mr. Allen also stated that a serial number was attached to the propeller. This evidence was not contradicted, and so I find that the propeller was properly marked.

[94] The final item listed was untagged sheet metal skins. Again, at the time, the Transport Canada inspectors were told that the Allens knew what they were and that they did not need to be tagged. In his evidence, however, Mr. Allen offered photographs of Cessna skins currently in his possession, with the aim of showing that all Cessna skins (and, indeed, all Cessna products) are marked in a manner that meets the tagging requirements. The Minister's representative objected to the introduction of these photographs as evidence, on the grounds that they were not the skins that were observed during the inspection. I agreed to allow the introduction on the basis that I would later determine their evidentiary weight. When the photographs were shown to Inspector Dusolt on cross-examination, he was unable to say that they were the same parts or types of skins that he examined. While he agreed that most manufacturers identify their parts with a part number, he pointed out that when he was examining the skins, he asked the Allens where the documentation was. He was not told that it was on the back of the skin.

[95] I note that Mr. Allen testified that Cessna has marked its parts for the last 10 years. There was no evidence, however, as to the age of the parts examined by Inspector Dusolt, although he said that they were Cessna parts that had been stamped by that company. Like Inspector Dusolt, I find it difficult to understand why a manufacturer's tag attached to an item was not pointed out at the time of the inspection and why there would be a statement, as recorded by Inspector Dusolt, that a tag was not needed. I find, as admitted by Inspector Dusolt, that there was some sort of part number attached to the skin.  I give very little weight to it, however, being in the form of the stamp on the skins photographed in view of the lack of evidence of the age of the parts, and the possibility that Cessna may have altered the form of the stamp in the intervening time. In view of the failure of the Allens to point out the information stamped on the skin, I find that Inspector Dusolt was justified in noting that the skins were not properly tagged.

[96] The final item on Inspector Dusolt's list from the March 31, 2008 inspection was the follow-up on the welding aspect of the corrective action plan of October 2007. Mr. Allen's testimony was that he had not done any welding that required certification since his certification was out of date. There was, however, no discussion as to whether the amendment to the manual required under the corrective action plan had in fact been made.

[97] It seems that the purpose of providing evidence intended to refute Inspector Dusolt's findings at the March 31, 2008 inspection would be to show that the problems identified in the February 2007 inspection had been resolved and that, consequently, the suspension should not have come into effect. Even if all the evidence had been accepted, however, that would not have been the case since the conditions for reinstatement relating to the internal audit and the PRM interview had not been met.

(4) Have the conditions for reinstatement been met since April, 2008?

[98] On May 1, 2008, Mr. Allen underwent another interview for a PRM limited to the AMO. He was successful in this interview. I find that condition 2(a) for reinstatement has been met.

[99] On April 2, 2008, Mr. Allen submitted a detailed plan of action, as required by conditions 1(c) and 2(b). On April 28, 2008, he was sent a letter saying that these conditions were met. However, since the plan of action included dates for accomplishing certain activities and these dates passed, the plan no longer satisfies the conditions. A plan with modified dates was submitted on August 1, 2008, but again, the dates in that plan have passed and need to be revised. I find, therefore, that these conditions are not currently met but that, since the substantive activities outlined in the plan have been approved, the conditions could be complied with by a simple updating of the time frames involved.

[100] A large portion of the Minister's evidence was devoted to the requirements of the quality assurance audits required by conditions 1(a) and (b), and in particular the requirement in 1(b), that the corrective actions ". . . that a determination, and the reason for that determination has been made for any finding noted to prevent recurrence . . . " Much of this discussion focused on the reason for that determination or in the terminology of Transport Canada, the root cause of the determination. Written evidence shows that a number of submissions were made to Transport Canada between May and December, 2008, in an attempt to comply with these conditions. None of these documents were acceptable. In some cases, the checklists were inadequate, questions were not answered, corrective actions were not provided for determinations or the corrective actions were inadequate. These inadequacies range from not having a measurable goal, to the root cause analysis not identifying the systemic failure leading to the determination to long-term corrective actions, not describing the necessary supportive measures (e.g. manual changes) or establishing measurable goals.

[101] There was very little evidence presented by Allen Airways to refute the Minister's position. Instead, the emphasis was on the difficulties faced by a small organization in complying with the quality assurance requirements and the lack of available guidance material. I find that conditions 1(a) and (b) have not been met.

[102] It is my impression from the witnesses that Transport Canada has been diligent in its attempts to help the Allens to meet the regulatory requirements. There have been numerous meetings and telephone calls attempting to explain these requirements. There has also been involvement by officials from other Transport Canada offices to ensure that there was no bias in their views. It is also my impression that after a somewhat rocky start, the Allens have done their best to comply. It is clear, however, that they are finding it difficult to adjust to a new system that places an emphasis on self-audit and review, the more especially since they have had an exemplary safety record.

B. Air Operator Certificate (File No. O-3487-10)

[103] The provisions and conditions set out in the appendix to the notice of suspension are similar to those relating to the AMO. They require an air operator to establish a maintenance control system in accordance with a MCM, to appoint a PRM control system and to establish a quality assurance program. The appendix to the notice of suspension lists three conditions of issuance that Allen Airways failed to maintain as follows :

1. ensuring that its maintenance control system as required by section 706.02 of the CARs continued to comply with the requirements stated in the CARs, in that the quality assurance program (evaluation program) as required by section 706.07 of the CARs and as detailed in the company's MCM is ineffective;

2. ensuring that the person responsible for the maintenance control system performed the duties referred to in section 706.07 of the CARs; and

3. ensuring that corrective action was taken in respect of findings resulting from the quality assurance program as required by section 706.03 − Duties of the Certificate Holder − of the CARs.

(1) Ground 1

[104] The condition for reinstatement relating to the first ground of suspension requires the operator to carry out an internal audit that mirrors the requirements established by standard 726.07 of the CARs. It is similar to condition 1(a) of the AMOC.

(2) Ground 2

[105] There are two conditions for reinstatement that relate to ground 2. Condition 2(a) requires the certificate holder to submit a plan of action showing how the operator will measure continuing compliance with the requirements of paragraph 706.03(1)(d) of the CARs, and condition 2(b) requires the certificate holder to ensure that the person responsible for the maintenance control system is assessed, and that the result of the assessment is found acceptable to the Minister. These conditions parallel conditions 2(b) and 2(a) relating to the AMOC.

(3) Ground 3

[106] There are also two conditions for reinstatement relating to ground 3. Condition 3(a) requires the certificate holder to submit a plan of action detailing how compliance with paragraph 106.03(1)(g) will be ensured, and condition 3(b) requires the certificate holder, within 90 days of receipt of the notice of suspension, to give a written undertaking that follow-up procedures will be in place to ensure that corrective actions are effective, as required by paragraph 706.07(3)(f) of the CARs. These conditions mirror conditions 1(c) and 2(b) relating to the AMOC.

[107] Throughout these proceedings, very little distinction has been made between the two documents in that the audits and corrective action plans dealt with both. This changed after the PRM interview on March 31, 2008 which was for both PRM positions where Mr. Allen was unsuccessful. On April 23, 2008, Mr. Allen confirmed that he would only be interviewed for PRM for the AMO and since that time, it seems that there were no further submissions or discussions relating to the AOC.

[108] For the reasons discussed in considering the conditions for reinstatement of the AMOC, and taking into account any differences in the regulatory schemes, I find that the notice of suspension of the AOC was justified on March 3, 2008, that the conditions for reinstatement were within the authority of the Minister, that the conditions for reinstatement were not met by April 3, 2008, and that the conditions have not been met since that date.

[109] At the end of the proceedings, Mr. Allen's counsel referred to the sentence in each of the notices of suspension which stated that if the conditions for reinstatement are not met by April 3, 2009 the certificate will be cancelled. He asked that I make an order staying the cancellation pending the result of the hearing. I replied that such an order was outside my jurisdiction. Section 7.1(8) of the Act authorizes the Tribunal to stay a suspension or cancellation if it decides to refer the matter back to the Minister for reconsideration but it does not allow such an order to be made pending that decision. I also pointed out that the sentence referred to did not in itself constitute a notice of cancellation and that separate notices of cancellation would need to be issued before they could come into effect. The Minister's representative agreed with this position.

VI. DETERMINATION

[110] The Tribunal confirms the Minister's decision to suspend the air operator certificate and the approved maintenance organization certificate of Allen Airways Ltd.

June 22, 2009

Elizabeth MacNab

Member