Decisions

TATC File No. H-3587-80
MoT File No. 08-08492

TRANSPORTATION APPEAL TRIBUNAL OF CANADA

BETWEEN:

Marina District Development Company, Applicant

- and -

The Canadian Transportation Agency, Respondent

LEGISLATION:
Canada Transportation Act , ss. 57(a)


Review Determination
Howard M. Bruce


Decision: May 31, 2010

Citation: Marina District Development Company v. Canadian Transportation Agency, 2010 TATCE 14 (review)

Heard at Toronto, Ontario, on February 8 and 9, 2010

Held: The Canadian Transportation Agency did not prove, on a balance of probabilities, that Marina District Development Company was operating an air service that was "publicly available" and contravened paragraph 57(a) of the Canada Transportation Act. Consequently, the penalty of $25 000 imposed by the Canadian Transportation Agency is cancelled.

I. BACKGROUND

[1] On April 15, 2009, the Canadian Transportation Agency ("Agency") issued a Notice of violation ("Notice") to the Applicant, Marina District Development Company, d.b.a. Borgata Hotel Casino & Spa ("Borgata") operating in Atlantic City, New Jersey, United States of America (USA). A monetary penalty of $25 000 (CAD) was imposed for an alleged contravention of paragraph 57(a) of the Canada Transportation Act ("CTA"), pursuant to section 180 of the CTA.

[2] The Notice reads in part:

Between July 9, 2008 and March 1, 2009, Marina District Development Company and Marina District Finance Company dba the Borgata Hotel Casino & Spa operated 10 flights transporting passengers between Atlantic City, New Jersey, USA and Montreal, Quebec, Canada and Toronto, Ontario, Canada using its two BAE 125 Series 800A aircraft bearing registration N2QG and N3QG, without holding a licence issued in respect of that service, thereby violating paragraph 57(a) of the Canada Transportation Act, S.C. 1996, c. 10.

Penalty: $25 000 CAD

[3] On May 22, 2009, the Applicant filed a request for a Review Hearing with the Transportation Appeal Tribunal of Canada ("Tribunal"). Therefore, arrangements were made to hold a Review Hearing, as provided for in subsection 180.3(1) of the CTA.

II. STATUTES, REGULATIONS AND POLICIES

[4] A definition of the term "air service" is provided in subsection 55(1) of the CTA. Sections 56 and 57 of the CTA read as follows:

55.(1) In this Part,

. . .

"air service" means a service, provided by means of an aircraft, that is publicly available for the transportation of passengers or goods, or both;

. . .

56.(1) This Part does not apply to a person that uses an aircraft on behalf of the Canadian Armed Forces or any other armed forces cooperating with the Canadian Armed Forces.

(2) This Part does not apply to the operation of an air flight training service, aerial inspection service, aerial construction service, aerial photography service, aerial forest fire management service, aerial spraying service or any other prescribed air service.

(3) This Part does not apply to the provision of an air service if the federal government or a provincial or a municipal government declares an emergency under federal or provincial law, and that government directly or indirectly requests that the air service be provided to respond to the emergency.

(4) The Minister may, by order, prohibit the provision of an air service under subsection (3) or require the discontinuance of that air service if, in the opinion of the Minister, it is in the public interest to do so.

(5) The order is not a statutory instrument within the meaning of the Statutory Instruments Act.

57. No person shall operate an air service unless, in respect of that service, the person

(a) holds a licence issued under this Part;

(b) holds a Canadian aviation document; and

(c) has the prescribed liability insurance coverage.

III. EVIDENCE

A. Agreed Statement of Facts

[5] At the outset of the Review Hearing, the parties produced a joint agreed statement of facts (Exhibit C-1), which states the following:

The Applicant and Respondent hereby agree to the following Statement of Facts:

Between July 9, 2008 and March 1, 2009, and more specifically on the dates listed below, two British Aerospace BAE125 Series 800A Aircraft owned and operated by the Applicant pursuant to U.S. Federal Aviation Regulation Part 91 operated ten rotations between Atlantic City, New Jersey and Montreal, Quebec or Toronto, Ontario, on the dates listed below:

Date of Flight

Canadian Point

Aircraft Registration

July 9, 2008

Montreal

N2QG

August 13, 2008

Toronto

N2QG

Dec. 30, 2008

Toronto

N3QG

Jan. 2, 2009

Toronto

N2QG

Jan. 10, 2009

Toronto

N2QG

Jan. 12, 2009

Toronto

N2QG

Feb. 8, 2009

Toronto

N2QG

Feb. 10, 2009

Toronto

N2QG

Feb. 27, 2009

Toronto

N3QG

March 1, 2009

Toronto

N3QG

Seven of these flights were conveying U.S. originating traffic from their respective points in the U.S. to a point in Canada, with the aircraft returning on each occasion by an empty ferry flight.

Three of these flights ( December 30, 2008, January 10, 2009 and February 8, 2009) were operating as an empty ferry flight from Atlantic City, New Jersey to a point in Canada and conveying Canada originating traffic from the respective point in Canada to Atlantic City.

All of these flights had the purpose of conveying Canadian prospective customers of the Applicant either to, or from, a Canadian point to, or from Atlantic City, New Jersey.

B. Canadian Transportation Agency

[6] The Agency also produced as evidence, with the consent of the Applicant's Counsel, four affidavits from passengers who had flown on some of the flights referred to above. Each passenger answered a series of predetermined questions, which the Applicant and his Counsel had agreed to. An Affidavit was signed by the Secretary of the Agency, stating that the Applicant does not hold a licence to operate an air service under Part II of the CTA (Exhibit C-8).

(1) Affidavit of Jonathan Wayne Gurman

[7] Mr. Gurman confirmed that about 3 or 4 times in 2008 he was a passenger of flights to and from the Borgata, and that, to the best of his knowledge, these flights were owned and operated by the owners of the Borgata.

[8] To the question concerning the Borgata's complimentary flight service, Mr. Gurman answered that, sometime after his first visit, he was contacted by a Borgata's Marketing Host who explained to him the policy concerning free flights. As he understood, the Borgata would assist good customers with their travel to and from the Borgata's premises. Depending on how much customers play at the casino during a previous stay, they may be offered a free flight.

[9] To the question concerning promotions for the premium service at the Borgata's casino, Mr. Gurman answered that he received promotional material on a fairly regular basis, including mailings and faxes, which details the entertainment on offer. To the best of his knowledge, these were sent to all customers. He did not believe that any of these materials make any reference to the availability of free flights. Mr. Gurman confirmed that he never received any boarding passes, tickets, itinerary or other record of travel.

[10] Mr. Gurman could not recall exactly on what dates he flew but he was able to describe how the arrangements for flights were generally made. There are two ways in which he has made arrangements. First, upon receiving promotional material, he contacted a Marketing Host to express his interest. On other occasions, it was the Marketing Host who contacted him. In both cases, he was regularly offered a free flight on the Borgata's aircraft in connection with his visit. He has never been told that he must play at a certain level if he accepted this service.

[11] To the question whether or not an employee of the casino was on board with him during the flights, Mr. Gurman confirmed that, in all instances, the only people on board the aircraft with him during the flights have been two pilots and members of his family and friends.

[12] Mr. Gurman explained that if he wanted to visit the casino, he would contact a Marketing Host or would be contacted by a Marketing Host. Mr. Gurman stated that he knows of other casinos that offer a free air service.

(2) Affidavits of Barry  Cohen and Margaret Cohen

[13] In their Affidavits (Exhibits C-4 and C-5), Barry Cohen and Margaret Cohen could not confirm that they were on the flight from Atlantic City to the Toronto-Lester B. Pearson International Airport on July 7, 2008.

[14] To the question concerning the Borgata's complimentary flight service, the Cohens answered that they were invited to the Borgata by a friend and had no details as to his relationship with the Borgata. They did not pay for the flight.

[15] Until the present proceedings, the Cohens were unaware of a "premium service" at the Borgata. They never received any documentation pertaining to any service offered by the Borgata.

[16] The Cohens stated that they were asked by a friend if they wanted to join him and his wife for a short stay in Atlantic City. Mr. Cohen made the assumption that they would not be billed anything.

[17] The Cohens did not believe there was any employee of the casino aboard the flight. They were on the flight as invited guests and never invited anyone to join them. They stated that they never had another contact with the casino. As they do not know what service was offered to their friend, they were unable to comment on what other casinos may offer in comparison.

(3) Affidavit of Alan Zaihang Chen

[18] In his Affidavit (Exhibit C-6), Alan Zaihang Chen stated that he resides in Gormley, Ontario. He confirmed that he was a passenger on a flight from Atlantic City to the Toronto-Lester B. Pearson International Airport on January 12, 2009.

[19] Mr. Chen indicated that he was made aware of the complimentary flight service by the Borgata but he was not aware of any promotions for premium service at the Borgata's casino. He did not receive any documentation pertaining to this service. Even though he has a player's card, he was unaware of any categories of service that were given or promoted at the casino.

[20] Mr. Chen confirmed that his contact at the casino is a man named Jason Lyons, who informed him about various concerts and events that took place at the casino. He indicated that Mr. Lyons would arrange for complimentary transportation by private jet if he was interested in attending.

[21] Mr. Chen stated that there was no employee of the casino on board with him during the flight. He said that there were no guests on this particular flight but that he had brought his family along during other flights.

[22] Mr. Chen stated that when he wanted to visit the casino again, he would call Mr. Lyons who would make all the necessary arrangements for him. He indicated that he was not aware of other casinos offering the same service.

(4) Michael Pearson

[23] Michael Pearson is the Manager of the Enforcement Division for the Agency, as well as a Designated Enforcement Officer.

[24] During Mr. Pearson's testimony, an Investigative Report was filed in evidence (Exhibit C-2), along with an Affidavit signed by Alain Garceau who was the Enforcement Officer with the Agency at the time of the investigation (Exhibit C-7). This Report provides details on the investigation process in the present matter.

[25] After receiving information regarding a Borgata's flight that flew into Canada on July 9, 2008, an investigation was commenced regarding the Borgata's activities. A search conducted in the Federal Aviation Administration Aircraft Registry ("FAA Registry") in the USA confirmed that the aircraft used for this flight belonged to the Applicant (Exhibit C-2, Appendix 2).

[26] In his letter of December 10, 2008, Mr. Garceau informed the Applicant that an investigation was being conducted and requested the following information (Exhibits C-2, Appendix 3 and C-7):

  • copy of the aircraft journey logs or flight records and/or flight manifests for flights that operated into Canada since June 1, 2008;
  • copy of the proof of billing/invoicing for these flights into Canada since June 1, 2008; and
  • proof of liability insurance coverage.

[27] On December 16, 2008, Joseph A. Corbo, Jr., Vice-President and General Counsel for the Applicant, wrote to Mr. Garceau to inform him that the aircraft used was privately owned by the Applicant and was not for hire. Mr. Corbo also specified that these flights are a complimentary service extended to the Borgata's premium customers and that the Applicant operates its aircraft under the USA Federal Aviation Regulations, Part 91, and that section 57 of the CTA does not apply to its operations (Exhibit C-2, Appendix 4).

[28] On March 13, 2009, Mr. Garceau wrote to the Applicant and requested some additional information, including answers to the following questions (Exhibit C-2, Appendix 5):

1) On what basis do the Borgata clients become entitled to this premium service?

2) Are these "customers" in the true sense of the word, as opposed to individuals with a corporate relationship to the Borgata (employees or shareholders)?

3) What proportion of the Borgata's overall clientele does the "premium customer" group amount to?

4) How is this clientele advised of the possibility of using this service, i.e. how is the "premium clientele" solicited?

5) What was the nature of the air service, i.e. the purpose of the trips to points in Canada?

[29] In this same letter, Mr. Garceau reiterated the request for the aircraft journey logs or flight records and/or flight manifests for flights that operated into Canada since June 1, 2008, as well as proof of liability insurance coverage for the aircraft used for such flights.

[30] In his reply of March 31, 2009, Mr. Corbo stated that the Borgata's customers may be offered certain premium services based on the level of their play in the casino and that these services could include travel to and from the Borgata's premises. Mr. Corbo indicated that, due to strict company controls, only these selected premium clients as well as the Applicant's employees or its parent company are permitted to be transported on the aircraft. The proportion of these clients is relatively small. Mr. Corbo also stated that, if a client warrants such a premium service, he will be contacted by a casino Marketing Representative who will notify him of this possibility. As requested, a copy of the airplane flight logs since June 1, 2008, for any flights to Canada, was attached with Mr. Corbo's letter (Exhibit C-2, Appendix 6).

 

[31] According to Mr. Pearson, the fact that the Applicant's clients were not charged for the flights is not a determining factor, as the applicable criterion is that the air service must be publicly available.

(5) John Touliopoulos

[32] John Touliopoulos is the Manager, Financial Evaluation, with the Agency, and he has held this position for six months. Part of his work is to evaluate licensed air carriers and ensure that they meet all necessary requirements under section 57 of the CTA. He also determines if a carrier is offering an air service, which is publicly available.

[33] Mr. Touliopoulos referred the Tribunal to section 55 of the CTA, which defines "air service". He stated that the qualification of a carrier being publicly available is a factual question and that there is no real definition of "publicly available" in the applicable legislation. According to Mr. Touliopoulos, the Agency does not consider a corporate jet used for bringing employees for a specific business purpose to be "publicly available".

[34] During cross-examination, Mr. Touliopoulos agreed that in order for an air service to be considered as publicly available, the public must be able to avail itself of the service. Upon further questioning, he stated that, in order for the service to be publicly available, members of the public must have a right to use the service, assuming that they have met all the necessary requirements.

[35] Mr. Touliopoulos further stated that the term "publicly available" should be interpreted restrictively and that each case must be examined on a case by case basis.

(6) Catherine MacDonald

[36] Catherine MacDonald testified as an expert witness on the Agency's matters and its jurisdiction. She is presently the Manager of the International Agreements, Division B of the Agency and has been with this organization since 1974.

[37] Ms. MacDonald stated that the jurisdiction of the Agency includes all flights entering into and departing from the Canadian territory with passengers and that the Agency sets out the licensing requirements which must be met to provide an air service. The term "air service" is defined as a publicly available air service.

[38] It is Ms. MacDonald's understanding that if a USA operator flies to Canada with passengers, it must comply with the CTA and its regulations.

[39] The CTA applies to a carrier offering a service publicly available. In the event that a carrier is not sure if the service he offers is publicly available, he may request a ruling from the Agency.

C. Applicant

(1) Michael Nichols

[40] Michael Nichols is the Vice-President of the National Business Aviation Association (NBAA) which represents over 8 000 members.

[41] Mr. Nichols indicated that aviators, operating under the USA Federal Aviation Regulations, Part 91, the general operating and flight rules for private aircraft, do not need an operator certificate. The Tribunal was referred to an excerpt of the USA Federal Aviation Regulations, Part 91, and more specifically subsection 91.501(5), which permits the "Carriage of officials, employees, guests and property of a company on an airplane operated by that company…"(Exhibit R-1).

(2) Joe Corbo

[42] Mr. Corbo is the Vice-President of the Borgata, which has been in operation in Atlantic City for six and a half years. The Borgata has about 2 800 hotel rooms and includes 5 000 to 6 000 employees.

[43] The Borgata is in competition with the major Las Vegas casinos and other international resorts and has a very active marketing department. An important part of the marketing strategy is relationship marketing, which consists of Marketing Representatives or Hosts developing personal relationships with customers.

[44] Mr. Corbo stated that one of the primary assets for the Borgata is its customers' list. The customers who are served by the personal relationship marketing strategy are high‑level customers and they can be offered a bevy of complimentary services, including free rooms, food, tickets to shows as well as free flights to and from the Borgata on the company's aircraft. These complimentary perks are a key ingredient to the Borgata's marketing strategy for these high-end clients.

[45] Mr. Corbo stated that the Borgata owns two aircraft, and that they are used to flying the high-end customers to and from the Borgata's premises. These aircraft fly approximately 600 to 800 hours per year.

[46] The high-end customers are contacted by their personal Marketing Representative or Host and are offered a flight to the Borgata. There is no fixed limit on what they have to gamble during their stay.

[47] Mr. Corbo explained that there are different levels of gamblers and that only the highest level of clients can be offered this service. In his estimation, this level of clients represents one-tenth of one percent of the Borgata's clientele. There is no entitlement to such service and every perk, such as the free flights, are at the Borgata's sole discretion.

[48] During cross-examination, Mr. Corbo stated that the Borgata is open to the public. Guests should be at least 21 years old, and anyone admitted to the premises is allowed to gamble. If a person starts gambling a lot, one of the casino's employees will notice, and eventually if the gambling reaches a certain level, a Marketing Representative will contact this person.

[49] Mr. Corbo was referred to the Affidavit of Mr. Gurman (Exhibit C-3), and he agreed that, if Mr. Gurman continued to gamble at the same level, it was likely that the Borgata would continue to offer free flights to him. However, any complimentary service may be terminated if a person stops gambling at a sufficient rate, and that decision is at the Borgata's discretion.

(3) Sam Barone

[50] Sam Barone is the President of the Canadian Business Aviation Association ("CBAA"), a non-profit organization which aims to be the voice of business aviation in Canada.

[51] In 2003, Transport Canada delegated to the CBAA the authority to grant certificates under section 604 of the Canadian Aviation Regulations, SOR/96-433, ("CARs"), which are known in the industry as Private Operator Certificates ("POCs"). During Mr. Barone's testimony, a copy of sections 604.01 to 604.05 of the CARs was produced as evidence (Exhibit R-2).

[52] Mr. Barone made a distinction between the POC and the Air Operator Certificate ("AOC"), and a copy of sections 700.01 and 700.02 of the CARs was filed in evidence (Exhibit R-3). The Tribunal's attention was drawn to the fact that subsection 700.02(1) applies only to "air transport service".

[53] To define what is covered by the term "air transport service", a copy of that definition from subsection 101.01(1) of the CARs was presented as evidence. It provides as follows: "air transport service" means a commercial air service that is operated for the purpose of transporting persons, personal belongings, baggage, goods or cargo in an aircraft between two points (Exhibit R-4).

[54] A copy of section 3 of the Aeronautics Act, drawing special attention to the definition of a commercial air service, was presented as evidence. It provides as follows: "commercial air service" means any use of aircraft for hire or reward" (Exhibit R-5).

[55] Mr. Barone described the process by which one may obtain a POC. The applicant must apply to the CBAA, which will issue a POC if the standards set out in section 604 of the CARs are respected. According to Mr. Barone, members of the CBAA come from all sectors of the Canadian economy, including the Royal Canadian Mounted Police ("RCMP") and major banks and corporations.

[56] Finally, an excerpt of section 3 of the Air Carrier Regulations that were applicable in 1998 was filed in evidence, to demonstrate that, at that time, there was a requirement for private operations to hold what was called a "Class 5 licence". Mr. Barone indicated that this requirement no longer exists (Exhibit R-6).

[57] During cross-examination, Mr. Barone recognized that the CBAA does not have any authority to issue licences and that its authority is limited to issuing POCs. He also agreed that it is the responsibility of Transport Canada to determine what constitutes a commercial air service. Mr. Barone also indicated that, despite the fact that the Class 5 category no longer exists, the operators still act in practice as if it still does.

(4) Valerie Dufour 

[58] Until 2007, Valerie Dufour worked at Transport Canada. In 1987 and 1988, she was the Director of National Air policy.

[59] Ms. Dufour testified as an expert witness, as to the mandate of Transport Canada but not as to the operations or functioning of the Agency. During her testimony, she explained that, according to her understanding, the mandate of the Agency was limited to the task of determining the criteria for licensing publicly available transportation. She stated that all other matters are regulated under the Aeronautics Act.

[60] Ms. Dufour's concept of a service being publicly available is that it provides a choice made by an individual among choices available in the public domain. The choice is that of the traveller, not of the entity providing the service.

[61] In fact, through its activities, the Agency follows and enforces rules related to the choice made by the consumer, such as tariffs and prices which enable the traveller to make an informed decision. According to Ms. Dufour, none of these characteristics are found when a private aircraft is used. Her conclusion is that private businesses using their own aircraft for their own purposes, to pursue objectives of their business, are not commercial operators.

[62] During cross-examination, Ms. Dufour reiterated that the mandate of the Agency is to address only transportation that is publicly available.

IV. ARGUMENTS

A. Canadian Transportation Agency

[63] The Agency argues that its burden of proof in the present matter is to establish a contravention of paragraph 57(a) of the CTA. This constitutes a strict liability offence and the Applicant's intention does not apply to this concept.

[64] According to the Agency, the facts in the present matter are uncontested, and the only question which must be answered is whether the Applicant was providing a publicly available service.

[65] The decision in the matter of Manitoba v. Canada (National Transportation Agency (C.A.) [1995] 1 F.C. 603 was submitted and provided as an example of a publicly available air service, namely an air ambulance service operated by the Manitoba Health Services Commission.

[66] The Agency then refers the Tribunal to the decision in R. v. Biller [1999] 8 W.W.R. 629, and more specifically to paragraph 51, which states that section 71 of the National Transportation Act, R.S.C 1985, c.28, contains a number of exclusions on different types of air service and that ". . . Parliament appears to have intended to cast a wide net as to all other forms of air services. Parliament could have excluded the type of air service Mr. Biller provided . . ." It is the Agency's position that the same statement applies to the services provided by the Borgata in the present matter. Paragraph 61 of the Biller decision provides as follows:

61.. . . While Mr. Biller's passengers must be guests before they can use the flight service, such a qualification does nothing more than define a subset of the public using the service. A service may be publicly available despite the fact that it is not "without qualification."

[67] In Canada (Attorney General)  v. Rosin (C.A.) [1991] 1 F.C. 391, the Federal Court of Canada states the following at paragraph 8:

8. In order for a service or facility to be publicly available, it is not required that all the members of the public have access to it. It is enough for a segment of the public to be able to avail themselves of the service or facility. Requiring that certain qualifications or conditions be met does not rob an activity of its public character . . .

[68] According to the Agency, the fact that the Applicant controls who uses its services does not mean that they are not publicly available. Mr. Corbo testified that, as long as you stay in the preferred customer bracket, the Applicant will likely continue to offer you this service.

[69] The Agency also submits two of its own decisions as to the application of the term "publicly available".

[70] First, in the Agency Decision No. 543-A-2005, an application was made to determine if a flight during which the following points apply, would be a "publicly available" service:

  • the passengers on board are owners of the aircraft;
  • the flight is for private use only;
  • the flight is non-commercial;
  • the flight is not public;
  • the flight is not for hire;
  • it is a non-revenue generating flight; and
  • there is no advertisement for the flight.

In this matter, the Agency determined that the operator would not be operating a publicly available flight.

[71] In the Agency Decision No. 389‑A‑2003, an application was made to determine if a flight during which a corporation operates a helicopter which is fully dedicated to the carriage of logs in addition to carrying ground support personnel which includes fallers, who are working for the company as employees and contractors, was offering a publicly available service. The Agency decided that the service provided by the corporation was a service which was excluded from the application of Part II of the CTA, pursuant to subsection 56(2) of the CTA.

[72] In the matter of the Agency Order No. 2003-A-228, the Agency determined that Service aérien gouvernemental du Québec ("SAG") had operated two round trip flights between Mont‑Joli and Port‑Menier, Quebec, for Société des établissements du plein air du Québec ("SÉPAQ"). The Agency decided that SAG had operated an air service within the meaning of section 55 of the CTA.

[73] Finally, the Agency refers the Tribunal to the Decision in Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R. 27, in which the Supreme Court of Canada stated that Parliament speaks through its elected officials.

[74] For the Agency, it is clear that the Applicant operates a publicly available service, and that restrictions as to who may have access to the service does not change this fact. Also, according to the Agency, the fact that you can be chosen for a service does not mean that it is not publicly available.

B. Applicant

[75] Counsel for the Applicant argues that the sole question before the Tribunal is to determine if the flights, in the present matter, were publicly available.

[76] Counsel for the Applicant submits that the term "available" is defined in the Black's Law Dictionary as "Open or available for all to use, share or enjoy".

[77] Counsel for the Applicant also points out that, in the Rosin Decision, "the public must be able to avail itself". According to the Counsel for the Applicant, there has to be a right to the flight before it can be considered publicly available.

[78] Counsel for the Applicant agrees with the Biller Decision, presented by the Agency. In addition, Counsel for the Applicant states that no one is excluded from potentially booking flights with Biller.

[79] The flights made by the Applicant in the present matter were not "publicly available", as there has to be a right to use the service before it can be considered publicly available.

V. EVIDENCE, LEGISLATION AND POLICY ANALYSIS

[80] What is a "publicly available" air service? Both parties agree with the Tribunal that this is the core question before it. Unfortunately, the applicable legislation does not define this term.

[81] The Tribunal notes with interest the following sentence submitted by the Agency in the Rosin Decision cited above: " . . . It is enough for a segment of the public to be able to avail themselves of the service or facility . . . ". What is usually meant by the expression "avail oneself" of a service?

[82] The Canadian Oxford Dictionary defines the word "available" as "capable of being used", while the Webster's Dictionary uses the terms "accessible, obtainable".

[83] The Tribunal thus comes to the conclusion that, in order to be publicly available, a service must be accessible and obtainable by members of the public who are interested in obtaining the said service.

[84] However, the Tribunal agrees with the premise in the Rosin Decision that, for a service or facility to be publicly available, it is not required that all members of the public have access to it. It is enough for a segment of the public to be able to avail themselves of the service.

[85] Yet, we cannot ignore the fact that the word "public" must be interpreted in contrast with the word "private", and that the segment of the public which must be able to avail itself of a service must not be a small, restrictive group. The smaller and more restrictive a segment of the public is, the closer we are to a private service rather than a public service.

[86] We must distinguish the context in the present case with that of the Rosin Decision, in which the term "publicly available" was interpreted with respect to a potential violation of rights guaranteed by the Canadian Human Rights Act by a public entity. This Decision also states the following at paragraph 8: "The cases have shown that "public" means "that which is not private…"

[87] It is also important to look at the scope of activities which are covered by the CTA. Section 5 of the CTA states as follows:

5. It is declared that a competitive, economic and efficient national transportation system that meets the highest practicable safety and security standards and contributes to a sustainable environment and makes the best use of all modes of transportation at the lowest total cost is essential to serve the needs of its users, advance the well-being of Canadians and enable competitiveness and economic growth in both urban and rural areas throughout Canada. Those objectives are most likely to be achieved when

(a) competition and market forces, both within and among the various modes of transportation, are the prime agents in providing viable and effective transportation services;

(b) regulation and strategic public intervention are used to achieve economic, safety, security, environmental or social outcomes that cannot be achieved satisfactorily by competition and market forces and do not unduly favour, or reduce the inherent advantages of, any particular mode of transportation;

(c) rates and conditions do not constitute an undue obstacle to the movement of traffic within Canada or to the export of goods from Canada;

(d) the transportation system is accessible without undue obstacle to the mobility of persons, including persons with disabilities; and

(e) governments and the private sector work together for an integrated transportation system.

[88] The CTA regulates matters concerning economic issues related to the transportation industry, such as "Unreasonable fares or rates" in subsection 66(1) and "Tariffs to be made public" in subsection 67(1).

[89] The Agency may make regulations in relation to the matters enumerated in section 86 of the CTA, and more specifically those indicated in paragraphs 86(1)(a) to (h). The main focus of its jurisdiction is on financial and economic matters:

86. (1) The Agency may make regulations

(a) classifying air services;

(b) classifying aircraft;

(c) prescribing liability insurance coverage requirements for air services or aircraft;

(d) prescribing financial requirements for each class of air service or aircraft;

(e) respecting the issuance, amendment and cancellation of permits for the operation of international charters;

(f) respecting the duration and renewal of licences;

(g) respecting the amendment of licences;

(h) respecting traffic and tariffs, fares, rates, charges and terms and conditions of carriage for international service and

(i) providing for the disallowance or suspension by the Agency of any tariff, fare, rate or charge,

(ii) providing for the establishment and substitution by the Agency of any tariff, fare, rate or charge disallowed by the Agency,

(iii) authorizing the Agency to direct a licensee or carrier to take corrective measures that the Agency considers appropriate and to pay compensation for any expense incurred by a person adversely affected by the licensee's or carrier's failure to apply the fares, rates, charges or terms or conditions of carriage applicable to the service it offers that were set out in its tariffs, and

(iv) requiring a licensee or carrier to display the terms and conditions of carriage for its international service on its Internet site, if the site is used for selling the international service of the licensee or carrier;

[90] As indicated in section 5 of the CTA, the affordability and the existence of a fair market for protection of the public are central to the Agency's mandate, as is seen by the indication of the importance of the following matters:

a) providing transportation at the lowest cost to consumers;

b) maintaining a competitive system;

c) rates and conditions must not constitute an undue obstacle to the movement of traffic.

[91] The Tribunal must consider all the above-mentioned factors when defining the expression "publicly available air service".

[92] The Biller Decision is especially pertinent. Verne Kenneth Biller and Cree Lake Lodge Inc. owned and operated a fly-in fishing camp in northern Saskatchewan and also owned a plane which was used to fly guests to the camp if they so desired without additional charge for this service. The Saskatchewan Court of Appeal concluded that the presence of a qualification is not a tenable means by which to determine whether a flight is publicly available. However, the Court ordered a new trial and did not state whether the flights offered were publicly available.

[93] In cases where a service provider clearly offers flights, advertises his fares, schedules and conditions and is able to be contacted by members of the public who wish to book a flight, there is no doubt that this is a publicly available service.

[94] In other instances, such as in the present case, where there are no fares, no schedules and no competitor offering the same service to the same segment of the public, it is necessary to establish a test which will enable us to determine if the service is publicly available.

[95] The Tribunal establishes the following test to determine if a service is publicly available. Any member of the public who is interested in obtaining the service can, of his own initiative, contact the service provider to enquire about the availability of flights and reasonably expect to be able to book a flight. Should the conditions be to his satisfaction including price and schedule and they meet certain conditions, if any exist, the service provider is offering an air service that is publicly available. If any member of the public cannot do so, the service is not publicly available and section 57 of the CTA does not apply. This test gives results that are consistent with the facts present in the jurisprudence submitted by the Agency in the present matter.

[96] In Manitoba v. Canada (National Transportation Agency) cited above, any member of the public could reasonably expect that the air ambulance service was obtainable and that this service could be booked by members of the public who could use this service at their own initiative, should all conditions be to their satisfaction and should they meet the necessary requirements.

[97] In the Agency Decision No. 543-A-2005, the Agency determined that the operator would not be operating a publicly available air service. This is in line with the Tribunal's test, as members of the public could not contact the corporation and reasonably expect to book a flight.

[98] The same result is obtained when applying the test to the Agency Decision No. 398-A-2003. Any member of the public could not reasonably expect to contact a corporation which operates a helicopter fully dedicated to the carriage of logs, in addition to carrying ground support personnel which includes fallers who are working for the company as employees and contractors and expect to be able to book a flight.

[99] In the matter of the Agency Order No. 2003-A-228, members of the public had booked flights of their own initiative with SÉPAQ, and SAG simply operated two of these flights between Mont‑Joli and Port‑Menier. In this matter, the flights were clearly publicly available.

 

[100] It is important to note that the burden of proof in the present matter rests on the Agency to establish to the Tribunal's satisfaction that the Borgata was offering an air service that was publicly available when providing the 10 flights described in the joint agreed statement of facts. The Tribunal can only consider the evidence before it and cannot extrapolate as to the existence of other facts.

We will thus apply the following test to the evidence before the Tribunal in the present case:

Any member of the public who is interested in obtaining the service can, of his own initiative, contact the service provider to enquire about the availability of flights and reasonably expect to be able to book a flight. Should the conditions be to his satisfaction including price and schedule and they meet certain conditions, if any exist, the service provider is offering an air service that is publicly available. If any member of the public cannot do so, the service is not publicly available and section 57 of the CTA does not apply.

[101] Does the Borgata publicize or promote the free flights to and from its premises for certain clients in any manner? The evidence presented by the Agency is that it does not.

[102] In his Affidavit (Exhibit C-3), Mr. Gurman states that he received promotional material on a fairly regular basis, mailings, faxes, which detail the entertainment on offer. To the best of his knowledge, these are sent to all customers. He does not believe that any of these materials make any reference to the availability of free flights.

[103] In his Affidavit, Mr. Chen states that he was not aware of any promotions for "premium service" at the Borgata's casino, nor did he ever receive any documentation pertaining to this service.

[104] In the present matter, could members of the public contact the Borgata to enquire about the availability of flights and reasonably expect to be able to book a flight, should the conditions be to their satisfaction including price and schedule and they meet certain conditions? The evidence is that they could not.

[105] In his Affidavit (Exhibit C-3), Mr. Gurman states that, sometime after his first visit to the Borgata, he was contacted by a Borgata Marketing Host, and the policy concerning free flights was explained to him. As he understood, Borgata will assist good customers with their travel to and from its premises. Depending on how much a customer plays during a previous stay, he may be offered a free flight.

[106] Mr. Gurman also states that there are two ways in which he has made arrangements. First, upon receiving promotional material as to upcoming entertainment, he contacted a Marketing Host to express his interest. On other occasions, it was the Marketing Host who contacted him. In both cases, he was regularly offered a free flight on the Borgata's aircraft in connection with his visit. He has never been told that he must play at a certain level if he accepts this service.

[107] In his Affidavit (Exhibit C-6) Mr. Chen confirmed that his contact at the casino was a man named Jason Lyons who informed him about various concerts and events taking place at the casino. If Mr. Chen was interested in attending, Mr. Lyons would arrange for complimentary transportation by private jet.

[108] During his testimony, Mr. Corbo indicated that these complimentary flights are a key ingredient to the Borgata's marketing strategy for these high-end clients. According to Mr. Corbo, these customers, who represent one-tenth of one percent of the Borgata's clientele are contacted by their personal Marketing Representative or Host, and are offered a flight to and from the Borgata's premises. There is no fixed limit on what they have to gamble during their stay and there is no entitlement to such service and every perk, such as the free flights, are at the Borgata's sole discretion.

[109] The fact that the availability of these flights is at the Borgata's complete discretion means that there can be no reasonable expectation from any member of the public, or even from one of the Borgata's customers who can call the Borgata and arrange for a flight.

[110] The fact that, during cross-examination, Mr. Corbo indicated that the Borgata is open to the public with the requirement that a person be at least 21 years old, and that anyone admitted to the premises is allowed to gamble, does not mean that every person who visits the Borgata has reasonable expectation to be able to contact the Borgata and arrange for free flights if that person gambles at a sufficient level.

[111] The modus operandi for obtaining the flights revolves around a contact made by the Borgata through a Marketing Host, and it is only open to specific clients at the Borgata's discretion.

[112] There is no evidence, in the present file, that the Borgata makes available to the public, or even to its clients, information relating to the schedule, preliminary conditions, pricing and other details related to the flights that it offers, such as information on its Web site, information given on the premises, advertising or any other medium which would make the public aware of such a service.

[113] For a service to be considered publicly available, its existence must be known to the public or even just to a segment of the public, such as the Borgata's customers in the present matter. In other words, to be able to contact the service provider to enquire about the availability of a service, one must be made aware that such a service exists.

[114] A distinction must be made with the Biller Decision. The segment of the public in the Biller Decision is the guests of the lodge. All guests had the option of obtaining a flight, and every guest could have a reasonable expectation that they would be able to get a flight to the lodge when they booked their stay.

[115] This is clearly not the case in the present matter, where the Applicant's guests cannot reasonably expect to contact the Borgata and book a flight on the Borgata's private aircraft.

[116] The Tribunal cannot accept the premise that the premium customers are a segment of the public. The fact that this group represents one-tenth of one percent of the Borgata's customers makes this segment inconsequential and more akin to the definition of private than to public.

[117] The Tribunal comes to the conclusion that members of the public, or even members of a segment of the public in the present matter, such as the Borgata's clients as a whole, who are interested in obtaining complimentary free flights from the Borgata cannot of their own initiative contact the Borgata to enquire about the availability of flights and reasonably expect to be able to book a flight, should the conditions be to their satisfaction.

[118] In the present matter, the Borgata was not offering an air service that was publicly available for the transportation of passengers and thus, is not in contravention of section 57 of the CTA.

VI. DETERMINATION

[119] The Canadian Transportation Agency did not prove, on a balance of probabilities, that Marina District Development Company was operating an air service that was "publicly available" and contravened paragraph 57(a) of the Canada Transportation Act. Consequently, the penalty of $25 000 imposed by the Canadian Transportation Agency is cancelled.

May 31, 2010

Howard M. Bruce

Member


Appeal decision
Suzanne Racine, Elizabeth MacNab, Patrick T. Dowd


Decision: January 10, 2012

Citation: Canadian Transportation Agency v. Marina District Development Company, 2012 TATCE 1 (Appeal)

Heard at Ottawa, Ontario, May 11, 2011

Held: The Appeal is allowed. The Appeal Panel overturns the Review Determination and upholds the Canadian Transportation Agency's decision that the Respondent violated paragraph 57(a) of the Canada Transportation Act. The Appeal Panel reduces the penalty from $25 000 CAD to $12 500 CAD.

The total amount of $12 500 CAD is payable to the Receiver General for Canada and must be received by the Transportation Appeal Tribunal of Canada within thirty-five (35) days of service of this Decision.

I. BACKGROUND

[1] On April 15, 2009, the Canadian Transportation Agency ("Agency") issued a Notice of Violation ("Notice") to the Respondent, Marina District Development Company, d.b.a. Borgata Hotel Casino & Spa ("Borgata") operating in Atlantic City, New Jersey, United States of America ("USA"), for an alleged contravention of paragraph 57(a) of the Canada Transportation Act, S.C. 1996, c. 10 ("CTA"), pursuant to section 180 of the CTA.

[2] The Notice reads in part as follows:

Between July 9, 2008 and March 1, 2009, Marina District Development Company and Marina District Finance Company dba the Borgata Hotel Casino & Spa operated 10 flights transporting passengers between Atlantic City, New Jersey, USA and Montreal, Quebec, Canada and Toronto, Ontario, Canada using its two BAE 125 Series 800A aircraft bearing registration N2QG and N3QG, without holding a licence issued in respect of that service, thereby violating paragraph 57(a) of the Canada Transportation Act, S.C. 1996, c. 10.

Penalty:$25000CAD

 

[3] The contravention alleged against Borgata is that it operated ten flights between Canada and the USA between July 9, 2008 and March  1, 2009 without holding a licence in respect of that service, violating paragraph 57(a) of the CTA, which provides that:

57. No person shall operate an air service unless, in respect of that service, the person

(a) holds a licence issued under this Part;

[…]

[4] On May 22, 2009, the Respondent filed a request for a Review Hearing with the Transportation Appeal Tribunal of Canada ("Tribunal"). Consequently, arrangements were made to hold a Review Hearing, as provided for in subsection 180.3(1) of the CTA.

[5] In his Determination for the Review Hearing, dated May 31, 2010, the Review Member found that the Agency did not prove, on a balance of probabilities, that Borgata operated an air service that was ‘publicly available' and thus did not contravene paragraph 57(a) of the CTA.

[6] Relevant to the case is subsection 55(1) of the CTA which defines ‘air service' as "a service, provided by means of an aircraft, that is publicly available for the transportation of passengers or goods, or both".

[7] There is no dispute that the flights took place or that passengers who were not owners or employees of Borgata were carried on those flights. The essential issue is whether the flights were ‘publicly available' within the meaning of the definition of "air service". The Review Member who heard the Review Hearing established the following test to describe ‘publicly available':

Any member of the public who is interested in obtaining the service can, of his own initiative, contact the service provider to enquire about the availability of flights and reasonably expect to be able to book a flight. Should the conditions be to his satisfaction including price and schedule and they meet certain conditions, if any exist, the service provider is offering an air service that is publicly available. If any member of the public cannot do so, the service is not publicly available and section 57 of the CTA does not apply. (Review Determination at para. [100])

[8] On this basis, the Review Member determined that Borgata was not operating an air service and did not contravene paragraph 57(a) of the CTA.

II. GROUNDS FOR APPEAL

[9] Although the request for the appeal listed eight grounds for appeal, only the three grounds listed below were argued before the Appeal Panel:

  1. The Tribunal exceeded its jurisdiction and erred in law by attempting to establish a legal test for determining whether an air service is ‘publicly available' for the purpose of the CTA, which was then applied to this case ("Test");
  2. The Tribunal erred in law by attempting to establish a Test for determining whether an air service is ‘publicly available', which is inconsistent with principles of statutory interpretation and the intent and purpose of the CTA;
  3. The Tribunal erred in its application of the Test to the facts of the case in determining whether a service is ‘publicly available'.

III. ARGUMENTS

A. Appellant

(1) Standard of Review

[10] First, the Appellant argued that the standard of review should be the one set out in Dunsmuir v. New Brunswick, 2008 SCC 9 ("Dunsmuir"). The three issues set out are all matters of law and the standard is correctness. Since there is no dispute as to the facts of the case, even the third issue in dispute is really an elaboration of legal principles. The Appellant also referred to Billings Family Enterprises v. Canada (Minister of Transport), 2008 FC 17 ("Billings"), where the Federal Court stated that an appeal panel of the Tribunal must give considerable deference to the Review Member's findings of fact and credibility, but that a panel is entitled to its own view of the law.

(2) Ground for Appeal 1: Jurisdiction to Determine the Meaning of Publicly Available'

[11] The Appellant argued that the Review Member exceeded the Tribunal's jurisdiction by establishing a Test for determining if a service is ‘publicly available'. He referred to sections 180.1 and 180.3 of the CTA which authorize a person who has received a notice of violation to request "a review of the facts of the alleged contravention". The Tribunal must determine whether the facts, proven on a balance of probabilities, satisfy all the elements of the offence but in doing so it must rely on existing jurisprudence established by the Agency and the Courts. It cannot provide its own interpretation of ‘publicly available' and thereby create a test in support of that interpretation.

[12] The Appellant submitted that it is for the Agency to determine the meaning of ‘publicly available' in the course of administering the licensing scheme under Part II of the CTA. By not defining ‘publicly available' in the CTA, it was Parliament's intention that the concept be interpreted by the Agency as part of its mandate. The Supreme Court of Canada recognized the Agency's expertise in transportation matters in Council of Canadians with Disabilities v. VIA Rail Canada Inc., 2007 SCC 15 ("VIA Rail").

[13] The Agency has made rulings as to whether services are ‘publicly available'. In one matter, Angel Flight, Canadian Transportation Agency, Agency Ruling, Order 2006-A-671 (December 21, 2006) ("Angel Flight"), it ruled that a charitable organization that provided free flights for people requiring medical services was publicly available. In another matter, Decision No. 543-A-2005 (Cassels, Brock and Blackwell), (August 30, 2005), C.T.A., the Agency ruled that a client of that firm, which was operating flights where only the owners of the aircraft were passengers, is not ‘publicly available'.

[14] The Agency's decisions may be appealed to the Federal Court of Appeal on questions of law and to the Federal Cabinet as well. If the Tribunal's jurisdiction were to extend to establishing a test for determining public availability, it could result in conflicting bodies of jurisprudence, leading to confusion and conflict. Parliament could not have intended to authorize two quasi-judicial bodies to interpret the meaning of ‘publicly available'.

[15] Thus, the Appellant argued that, in characterizing the issue before the Tribunal as determining what a ‘publicly available' service is, the Tribunal exceeded its jurisdiction.

(3) Ground for Appeal 2: the Test for Publicly Available' is Inconsistent with Principles of Statutory Interpretation and the Intent and Purpose of the CTA

[16] Secondly, the Appellant argued that the Tribunal erred in law by establishing a legal test for determining whether a service is ‘publicly available' that is inconsistent with principles of statutory interpretation, law and the intent and purpose of the CTA.

[17] The Test established by the Tribunal, as set out in both paragraphs [95] and [100] of Marina District Development Company v. Canada (Minister of Transport), 2010 TATCE 14 (Review), TATC file no. H-3587-80 ("Review Determination"), includes a statement that the service must be available to any member of the public. This aspect of the Test is inconsistent with existing law as expressed in Agency rulings, as in Canada (Attorney General) v. Rosin (C.A.), [1991] 1 F.C. 391 ("Rosin") and in R. v. Biller (1999), 174 D.L.R. (4th) 721 (Sask. C.A.) ("Biller"). Later in the Review Determination, however, the Review Member acknowledged that a service is ‘publicly available' if it is available only to a segment of the public as determined in Biller, but found the segment of the public in this matter to be so small as to be insignificant and the operation more akin to a private one. The Appellant submitted that ‘publicly available' depends more on the relationship between the passenger and the service provider than an arbitrary reliance on a percentage of persons who can obtain a flight. Even considering the percentage as relevant, however, the Appellant states that one tenth of one percent of Borgata's customers is still a significant number.

[18] The Test established the further criterion that a member of the public must be able to contact the service provider to enquire about the availability of flights and reasonably expect to be able to book a flight if satisfied with the price and schedule. That aspect of the Test is not based on any precedent but rather on a simple dictionary definition, a partial reading of the National Transportation Policy and the opinions of Borgata's witnesses. Further, the reference to ‘price' and ‘schedule' brings in the concept of ‘hire' or ‘reward'; a concept that was expressly removed from the Agency licensing scheme and is now only relevant for a commercial air operator certificate required under the Aeronautics Act, R.S.C. 1985, c. A-2.

[19] The Appellant submitted that in order to interpret ‘publicly available', it is necessary to look at the CTA as a whole and in the context of the licensing scheme. The CTA specifically exempts certain types of specialty services that would not fall within the Test from the requirement to have a licence and authorizes the Agency to make regulations establishing further exemptions. Some of these services, such as aerial photography or aerial construction do not meet the Test for ‘publicly available' as enunciated by the Tribunal Review Member and to ignore their implications for the meaning of ‘publicly available' is to ignore the principle that words must be interpreted in the context of the CTA as a whole.

[20] In relying on the statement of the National Transportation Policy set out in section 5 of the CTA, the Tribunal Review Member emphasized the financial and economic aspects of that policy and ignored the statement that the system should meet "the highest practicable safety and security standards" and that, in paragraph 5(b), "regulation and strategic intervention are used to achieve economic, safety, security, environmental or social outcomes that cannot be achieved satisfactorily by competition and market forces…". Section 57, in addition to requiring that an air service have an Agency licence, requires it to have a Canadian aviation document and insurance. These requirements have been established for the protection of the public and even a small segment of the public, such as Borgata's preferred customers, are entitled to these protections.

(4) Ground for Appeal 3: Error in the Application of the Test to Facts

[21] Finally, the Appellant argued that even if the Appeal Panel finds that the Test was within the Tribunal's jurisdiction and that it was legally correct, the Tribunal Review Member erred in concluding that Borgata's air service did not meet the requirements of that Test. The Test requires that the service be available to the public or a segment thereof and that there must be a ‘reasonable certainty' that a flight can be booked. Borgata's preferred customers and their families and friends are a segment of the public. The evidence shows that, while Borgata has discretion with regard to whom the flights are offered, once a person has met the conditions for a flight, the service is usually provided. Further, while Borgata does not promote its flights to the general public, it actively markets them to its preferred customers through its hosts who inform those customers that flights are available. Flights are arranged either at the suggestion of the marketing host or at the request of the customer.

B. Respondent

(1) The Standard of Review

[22] The Respondent first addressed the standard of review. He argued that the standard set out in Dunsmuir applies to judicial reviews and the correct standard to apply in a statutory appeal is that set out in Housen v. Nikolaisen, 2002 SCC 33. While he agreed that the proper standard for questions of law is ‘correctness', he argued that the standard for questions of fact should be ‘palpable and overriding error'. In questions of mixed fact and law, the standard depends on whether the inference drawn is a factual or legal one. In this matter the inference is factual; whether the facts meet the legal standard of ‘publicly available'. He pointed out that the Review Member made a number of findings of fact in addition to those agreed to by the parties that should be considered in reaching a conclusion.

(2) Ground for Appeal 1: The Jurisdiction to Determine Meaning of Publicly Available'

[23] The Respondent argued that the Tribunal has the jurisdiction to determine questions of law including those arising from enforcement proceedings under Part VI of the CTA. He suggested that an administrative tribunal may have an explicit or implicit authority to make such determinations and that the Tribunal has implicit authority based on the test set out in Nova Scotia (Workers' Compensation Board) v. Martin, 2003 SCC 54 ("WCB v. Martin"). The factors to be considered include the statutory mandate of the Tribunal; its interaction with other elements of the administrative system; its adjudicative nature; its expertise, composition and procedure; and any appeal route available.

[24] Determinations as to jurisdiction must be based on the entire wording of the statute. Thus while section 180.3 of the CTA provides that a person who has been served with a notice may request that "the facts of the alleged contravention … [be] reviewed", section 180.5 of the CTA directs the Tribunal to determine whether there has been a contravention, necessarily requiring the Tribunal to determine the meaning of a provision before applying it to the facts. The wording of the designated provisions of the CTA closely parallels the provisions of the Aeronautics Act, specifically section 7.8 which authorizes a person who has been served with a notice to seek a review of "the facts of the alleged contravention". It has been recognized, since the Federal Court decision in Canada (Attorney General) v. Gill, [1992] 3 F.C. 3 (F.C.T.D.), that the scheme as set out in the Aeronautics Act authorized the Tribunal's predecessor tribunal (the Civil Aviation Tribunal) to determine questions of law including those regarding the application of the Constitution Act, 1982. More recently, in the Billings matter, the Federal Court held that the standard of review applicable to the Tribunal's decisions on questions of law is correctness with the clear implication that the Tribunal can consider questions of law.

[25] Under Part VI of the CTA, the Agency does not act in a quasi-judicial capacity. A notice is issued by a designated enforcement officer who, after investigating, forms the belief that there has been a contravention. The Agency, in other circumstances, possesses both legislative functions in its regulation-making powers and quasi-judicial functions such as those set out in Part V of the CTA and exercised in the VIA Rail case cited by the Appellant; however, the powers set out in Part VI relating to investigation and enforcement are clearly administrative in nature. While acting under Part VI, Agency decisions are not binding on the Tribunal. Furthermore, even if Agency adjudicative decisions are inconsistent with those of the Tribunal, the remedy is a determination by a review court in the same manner that inconsistent decisions of courts are resolved by an appeal to a higher level court. The general power to make rulings, such as that described in the Angel Flight matter referred to by the Agency, has no relevance to this case since the required procedure was not followed and no order was given.

(3) Ground for Appeal 2: The Test for Publicly Available' is Inconsistent with Principles of Statutory Interpretation and the Intent and Purpose of the CTA

[26] The Respondent submitted that the Tribunal Review Member did not err in law in the formulation of the Test for ‘publicly available'. He further submitted that the Review Member considered the words in the context of the scheme and object of the entire CTA, dictionary definitions for the words and jurisprudence from other areas, and then formulated the Test. In considering the scheme and object of the CTA, the Respondent suggested that the Agency's role is limited to economic regulation, financial fitness and Canadian control. The Agency's explanation of its role on its website does not include ‘safety and security'. Consequently, ‘publicly available' must be interpreted within this economic context.

[27] The Respondent noted that in accordance with the decision in NOVA, an Alberta Corp. v. Canada, (1988) 87 N.R. 101 (F.C.A.) ("NOVA"), the Tribunal can receive expert evidence to determine the meaning of words. The Respondent also referred to the evidence of Valerie Dufour, formerly of Transport Canada. Her evidence, beginning at page 186 of the transcript of the Review Hearing (February 9, 2010), is that the CTA leaves large areas of transportation not considered to be publicly available to be regulated by Transport Canada, including most private and business aviation. She said that ‘publicly available' means that the opportunity and decision rests with the individual and, if the decision is made by anyone other than the traveller, it is not ‘publicly available'. Flights such as Borgata's do not need to be regulated since they are not part of the National Transportation System.

[28] The Respondent argued that the definition of ‘public' in Rosin was made in a human rights context interpreting a human rights statute that is required to be given a large and liberal interpretation and therefore that definition ought not be applied in the context of the CTA, which should be interpreted on the basis of its own context. However, Rosin was correct in determining that ‘public' includes a segment of the public.

[29] The Test did not adopt a ‘hire or reward' criteria as alleged by the Appellant. Instead, it is an ‘objective reasonable expectation standard'. The reasonable expectation is that a member of the public can take the initiative and contact the operator to book a flight if the conditions are to his satisfaction. These conditions can include pricing, scheduling and marketing. This Test and these conditions are all consistent with Biller and the provision of specialty services. In Borgata's case, the public cannot have a ‘reasonable expectation' since Borgata has absolute discretion as to whom flights are made available. These flights should be characterized as "business flights" that are by their nature exempt from the requirements of the CTA. He pointed to the evidence of Michael Nichols of the National Business Aviation Association that business aircraft in the USA are often used to bring customers to owners' plants (Review Hearing Transcript, page 117, February 9, 2010).

(4) Ground for Appeal 3: Error in Application of Test to Facts

[30] The Respondent argues that the Tribunal's findings in applying the Test to Borgata should be accorded significant deference. The key findings that flights are at Borgata's sole discretion and that its clients have no entitlement to free flights are undisputed and fail to meet the Test for ‘publicly available'.

(5) Current Practices

[31] The Respondent's Representative also argued a number of practical points. He argued that ‘industry' has been working on the basis of the Review Member's Determination for ‘publicly available' and has carried a huge amount of non-public traffic on the basis that if the operator controls the availability it is not public. He referred to the disappearance of Class 5 operations from the ambit of economic regulation with the coming into effect of deregulation and states that Class 5 would cover corporate operations. A comparison with specialty services is nonsensical since such services can be requested by the public even though the service may not include the carriage of passengers.

[32] He referred to the Introduction to Part II of Annex 6 to the Convention on International Civil Aviation, 7 December 1944, Can. T.S. 1944 No. 36 ("Chicago Convention") relating to General Aviation. The Introduction to the Chicago Convention states that owners and operators should be responsible for the safety of their operations; States do not have an equivalent duty of care to non-fare paying passengers. Nevertheless, the Introduction also states that standards are needed for large and turbo jet operations.

[33] The Respondent agreed that the concept of public includes a segment thereof and the magnitude of the segment is irrelevant if the flights are available. He argued, however, that the ruling related to the Angel Flight mentioned by the Appellant is wrong and only stands because the organization could not afford an appeal.

(6) Penalty

[34] Finally, the Respondent submitted that even if Borgata is operating a ‘publicly available' service, the penalty is far too high given the longstanding business practice of operating such flights without interference from the Agency.

C. Appellant in Reply

[35] The Appellant confirmed its position that specialty services are publicly available, which is the reason that they require an exemption from the requirement to hold a CTA licence. The Agency has always recognized that safety regulation is a Transport Canada function and that a Canadian aviation document from Transport Canada is a necessary qualification for an Agency licence. To that extent, ‘safety' is a consideration that is relevant to a determination of ‘publicly available'. The authority for the Agency to make rulings is derived from section 26 of the CTA as it relates to section 57.

[36] In determining the Tribunal's jurisdiction, some meaning must be given to the words "to have the facts of the alleged contravention … reviewed" in subsection 180.3(1) of the CTA. The Tribunal must look at the facts and determine whether an Agency enforcement officer is able to prove them. If it finds that case law has been misapplied or can be distinguished on the facts, the Tribunal can find that there has been no contravention.

[37] While NOVA is an authority for accepting expert evidence as to the meaning of words, the Tribunal's reliance on such evidence presented by the Respondent went beyond the reasonable scope of that decision. The Respondent's witnesses at the Review Hearing gave opinions, whereas the Agency examined the jurisprudence established in Biller.

IV. ANALYSIS

[38] Section 14 of the Transportation Appeal Tribunal of Canada Act, S.C. 2001, C. 29 ("TATC Act") provides that:

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.

[39] The Appeal Panel has reviewed the record and heard oral arguments from representatives of each party.

A. Standard of Review

[40] The first step of the Appeal Panel's decision-making process includes a determination of the appropriate standard of review. The Appellant argued that the appropriate standard of review is described in Dunsmuir, with the standard of review on questions of law being ‘correctness' and on questions of fact being ‘reasonableness'. The Respondent argues that while this standard applies to judicial reviews, a review by an administrative body should be subject to a different standard. While it is agreed that the standard of review for questions of law is correctness, the standard of review for questions of fact should be an overriding and palpable error as set out in Housen v. Nikolaisen. The Appeal Panel notes, however, that this case was decided before Dunsmuir and did not deal with the judicial review of a decision by an administrative body. Further, the Appeal Panel notes that the Tribunal adopted the standard of review set out in Dunsmuir in its Appeal Decisions regarding Canada (Minister of Transport) v. NAV CANADA, 2010 TATCE 28 (Appeal), 2010 TATCE 29 (Appeal), and 2010 TATCE 30 (Appeal), TATC File Nos. H‑3472‑40, H‑3473‑40, and H‑3474‑40.

[41] In its first ground for appeal, the Appellant contends that the Tribunal exceeded its jurisdiction and erred in law by attempting to establish a legal test to determine whether an air service was ‘publicly available' for the purpose of the CTA.

[42] As noted by the Federal Court in paragraph 28 of Billings: "I hold the findings of fact or credibility made by [the Member] were entitled to considerable deference. The Appeal Panel was entitled to its own view of the law." As such, the Appeal Panel will use a standard of correctness to determine whether the Tribunal exceeded its jurisdiction in creating a legal test for determining whether an air service is ‘publicly available' under the CTA.

[43] Similarly, the Appeal Panel finds that a standard of correctness is appropriate to determine whether the Review Member erred in creating a legal test which is inconsistent with principles of statutory interpretation and the intent and purpose of the CTA.

[44] The Appellant also alleges that the Tribunal Review Member erred in its application of its legal test to the facts of the case. The Appeal Panel finds that, pursuant to Billings, the examination of a Review Member's finding of facts requires a review on the standard of reasonableness. As such, the Appeal Panel must determine whether the Review Member applied the facts of the case before him to the legal test in a reasonable manner.

B. Ground for Appeal 1: the Jurisdiction to Determine Meaning of Publicly Available'

[45] The first ground of appeal argued by the Appellant is that the Review Member exceeded his jurisdiction and erred in law by establishing a legal test for determining whether an air service is publicly available for the purposes of the CTA that was then applied to the facts of this case. Essentially, this ground was argued on the basis that it was beyond the jurisdiction of the Tribunal to interpret the CTA and that such interpretations could only be made by the Agency or the courts. The Appellant argued that the Agency, a quasi-judicial body, is given the authority to issue licences under Part II of the CTA and thus has the ability to determine who meets the licensing criteria. It also has the authority under section 26 to make rulings as to whether or not a licence is required. The Appellant further argued that the wording of subsection 180.3(1) of the CTA, which provides that a person who has received a notice of violation and wishes to "have the facts of the alleged contravention or the amount of the penalty reviewed" may apply to the Tribunal for a review, while section 180.5 of the CTA sets out the powers of the Tribunal with regard to a review pursuant to section 180.3 of the CTA. The Appellant argued that the effect of this wording is to limit the Tribunal's jurisdiction to a consideration of whether the alleged facts were proven on a balance of probabilities and whether the amount of the penalty should be sustained.

[46] The Respondent argued that the Tribunal's authority to determine questions of law has been established by the Federal Court in Gill and, further, that the provisions of the TATC Act meet the criteria for an implicit authorization to determine questions of law as set out in WCB v. Martin. While both Gill and Billings were determined in relation to contraventions of the Aeronautics Act, the Respondent noted that the wording relating to the review of an alleged contravention of a designated provision in the Aeronautics Act closely parallels that in the CTA. While the Agency has quasi-judicial powers, these powers do not apply to decisions made by its officials who are acting in a purely administrative capacity as enforcement officers appointed for that purpose under the CTA.

[47] The Appeal Panel finds that it is entitled to decide questions of law relating to the interpretation of provisions governing the matters before it. There is no basis for a determination that the powers of the Tribunal in relation to the review of alleged violations of designated provisions under the CTA is any different from its jurisdiction for such reviews under the Aeronautics Act. The wording in the authorizing provisions in each act is similar where it is not an exact duplicate. For example, section 180.1 of the CTA exactly repeats the words of section 7.8 of the Aeronautics Act. Similarly, subsection 180.3(1) of the CTA is the same as subsection 7.9(1) of the Aeronautics Act except for the internal references. Moreover, section 180.5 of the CTA, which sets out the authority of the Tribunal in relation to its determinations, is the same as section 8 of the Aeronautics Act. Indeed, the two versions are so closely aligned that section 180.8 of the CTA was included to provide that references to "Minister" in sections 180.3 to 180.7 should be read as references to the Agency or person appointed by the Agency.

[48] While the Agency may itself be a quasi-judicial body for some purposes, the Appeal Panel is not reviewing decisions of the Agency and its Members, but rather those of enforcement officials designated under subsection 178(1) of the CTA who exercise administrative authority granted to them under section 180 of the CTA.

[49] It seems clear that Parliament intended that the Tribunal have the same powers in relation to the review of alleged violations of designated provisions under the CTA as it has in relation to those under the Aeronautics Act.

[50] The authority given to the Tribunal under section 180.5 of the CTA and section 8 of the Aeronautics Act allows the Tribunal to determine whether or not the person seeking the review has contravened the designated provision. While that person might need to ask for a review on the basis of the facts, there is no limitation of the grounds on which the Tribunal can base its decision. While there has not been a specific discussion of the Tribunal's powers of interpretation, the Federal Court held in Gill that the Tribunal had an implied power to determine the application of the Canadian Charter of Rights and Freedoms. Gill also stated in paragraph [19] that:

In my view it should not be lightly concluded that a tribunal has no authority to decide questions of law and constitutionality: generally speaking tribunals should endeavour to act consistently with the law and must form some view as to what the law is …

[51] If it is argued that Gill dealt with section 6.5 of the Aeronautics Act and that Billings is a judicial review of the Tribunal's decision concerning the breach of a designated provision, the Appeal Panel finds that, in deciding that the standard of review on a question of law was correctness, the Federal Court clearly implied that the Tribunal would determine questions of law.

[52] Finally, the Appeal Panel notes that subsection 179(2) of the CTA recognizes that some matters may be treated as either an offence or a violation. Offences are, of course, proceeded with in front of a Court. Biller was, in fact, the prosecution of an offence for operating an air service without the licence required by the National Transportation Act,1987, R.S.C. 1985 (3rd suppl.), c. 28, the predecessor of the CTA. It would be difficult to justify a situation where the ability to determine questions of law would depend upon a choice between issuing a notice of violation reviewed by the Tribunal or charging with an offence resulting in a determination by the Court.

[53] Nevertheless, while the Appeal Panel has found that the Tribunal has jurisdiction to determine the meaning of ‘publicly available' as a question of law, the Test that the Review Member formulated exceeded that jurisdiction, as explained below.

C. Ground for Appeal 2: The Test for Publicly Available' is Inconsistent with Principles of Statutory Interpretation and the Intent and Purpose of the CTA

[54] The second basis for appeal is that the Review Member erred in law in establishing a legal test for determining whether an air service is ‘publicly available', contrary to principles of statutory interpretation, case law and the intent and purpose of the CTA.

[55] The parties agreed that the words of paragraph 57(a) should be interpreted in their grammatical and ordinary sense taking into account the context and purpose of the CTA but disagreed over the proper interpretation.

[56] Part of the disagreement centered on the interpretation given to section 5 of the CTA that sets out the National Transportation Policy. The Review Member emphasized the economic regulatory functions of the Agency referred to in paragraphs (a), (b), and (c) of section 5 and in section 85 of the CTA which set out the Agency's regulation‑making powers. The Respondent argued that this is the correct interpretation and that the Agency's functions are limited to economic matters while Transport Canada is responsible for safety issues. The Appellant argued that this position improperly narrows the scheme of the CTA and ignores the overarching declaration in section 5 of the CTA that a "competitive, economic and efficient national transportation system" should meet "the highest practicable safety and security standards".

[57] The Appeal Panel has found that, while consideration should be given to the declaration of the National Transportation Policy as enunciated in section 5 of the CTA, the words "publicly available" must also be considered in the context of their ordinary meaning. In creating the CTA, Parliament deliberately chose to use the economically neutral phrase "publicly available" as opposed to a phrase that included a concept that payment was involved. This is in contrast to the provisions of the Aeronautics Act where the distinction in the regulatory scheme was made between commercial services that are provided for hire or reward and those that are not. While, in order to obtain an Agency licence an operator must meet certain economic requirements (as well as show conformance to safety requirements through a Canadian aviation document issued by Transport Canada), the obligation to obtain that licence rests not on any economic activity on the part of the operator, but rather on whether the service is ‘publicly available'.

[58] The Appellant objects to the Test established by the Review Member partly on the ground that it included a reference to price inferring that there would be a commercial element involved. The Appeal Panel notes that the reference to price is given as an example of possible conditions governing availability and is not, in and of itself, adequate to constitute an error in law.

[59] There is, however, jurisprudence that formulates a definition of ‘publicly available' and the Appeal Panel finds that there is no basis for elaborating on that formulation. The Test as set out in the Review Member's Determination refers to "any member of the public". Both Rosin and Biller hold that a service available only to a segment of the public is ‘publicly available' and in paragraph [84] of his Review Determination the Review Member acknowledged that this is the case. He, nevertheless, found that the segment cannot be "a small restrictive group" but, other than finding that premium clients of Borgata who are offered the free flights constitute such a group, he gives no basis for determining where to draw the line between public and private availability.

[60] The Review Member's Test is partially based on his analysis of the meaning of ‘available' in paragraphs [82] and [83] of his Review Determination. He relies on its definition in Webster's Dictionary of "accessible, obtainable" to conclude that to be ‘publicly available', the service must be accessible and obtainable by members of the public who are interested in obtaining that service. On this basis, he established the criteria that a member of the public must, on his own initiative, be able to contact the service provider to enquire about the availability of flights and reasonably expect to be able to book a flight. Even supposing that this definition is definitive, as opposed to the one found in the Canadian Oxford Dictionary, "capable of being used" (also cited by the Review Member), that definition does not imply that either the person seeking a service or the person providing a service must take the initiative. Indeed, one definition of ‘obtain' (and its adjectival form ‘obtainable') in the Concise Oxford Dictionary is "have granted to one".

[61] In paragraph [113] of the Review Determination, the Review Member held that in order for a service to be publicly available, the affected public must be made aware of the service so that it may contact the service provider in order to enquire about its availability. He found that there was no general information made available by Borgata that would allow the general public to become aware of the flights. Instead, information was given to eligible clients on an individual basis. While it is undeniably true that a passenger must be aware of a flight in order to take part in it, the manner in which he becomes aware of that flight does not determine whether it is ‘publicly available'.

[62] The Appeal Panel has found that it is the nature of the service provided that determines whether it is ‘publicly available'. How it is made known to the affected public and whether the initial contact is made by a member of that public is irrelevant. If the flight is made available to a segment of the public, even at the initiative of the operator, then it is ‘publicly available'.

[63] Consequently, the Appeal Panel finds that the Review Member erred in law in establishing a Test that defines ‘publicly available' in a manner that is inconsistent with interpreting the phrase in accordance with its ordinary meaning and within the context of the statute.

D. Ground for Appeal 3: Error in the Application of the Test to Facts

[64] The third ground for appeal is that the Review Member erred in its application of the Test to the facts in the case.

[65] The Appellant argued that the facts before the Review Member would satisfy the Test that he established. It was shown that a discrete group of customers who played at a high level were offered free transportation and that once persons were established as part of that group, they and their family and friends could obtain air transportation to the casino either at their request or at the suggestion of Borgata's marketing staff.

[66] The Respondent argued that the Review Member made no overriding and palpable error in his findings and that they should be given significant deference. The Review Member relied on the key findings, set out in paragraphs [108] and [109] of the Review Determination, that complimentary flights are at Borgata's sole discretion and that not even those few clients who come within the category of premium clients can have a reasonable expectation that they can enquire about and access a complimentary flight.

[67] As noted, the Appeal Panel has determined that the standard for review is reasonableness. Although the Review Member's findings of fact should be given deference, in this instance, the findings are in direct contradiction of the evidence. Joe Corbo, the Vice-President and General Counsel for Borgata testified that "[i]f [the customer] continues at that level and we don't change within our internal system anything, it's likely that he would continue to receive that free complementary air service" (Review Hearing Transcript, page 145, February 9, 2010).

[68] Taken together with the affidavit evidence of John Gurman (Exhibit C‑3) that he is regularly offered free flights whether the contact comes from him or Borgata, a finding of fact that a premium client cannot have a reasonable expectation that they can enquire about and access a free flight seems to the Appeal Panel to be unreasonable.

[69] Consequently, the Appeal Panel has found that, even in the light of the Test proposed by the Review Member, Borgata is operating a ‘publicly available' service.

E. Current Practices

[70] While current practices may be a reflection of an industry's understanding of the situation, they do not necessarily reflect the law. The Appeal Panel notes that much of the evidence on this point related to the situation in the USA but, as it was held in Canadian Transportation Agency v. Sky King Inc., 2002, CAT File no. H-2267-80 (Review) ("Sky King"), all aircraft, while operating in Canada, must do so in accordance with Canadian law. There was no direct evidence given of specific Canadian operations nor was any jurisprudence cited in support.

[71] The reference to the Introduction to Part II of Annex 6 of the Chicago Convention is also irrelevant. While the International Civil Aviation Organization may have decided that States may impose lesser safety requirements on private operations, Canada has complied with any obligations in this respect through regulations and standards under the Aeronautics Act. Obligations under the CTA, however, are not based on whether the service is commercial, but rather on whether or not it is ‘publicly available'.

F. Penalty

[72] The Respondent suggested that in light of widespread industry practices that have been carried out in accordance with its common understanding of the meaning of ‘publicly available', the penalty of $25 000 should be reduced. The Appeal Panel noted that the Agency Enforcement Officer chose to treat the ten flights, some of which were ferry flights, as a single violation. The Appeal Panel also notes that it is the Respondent's first violation of paragraph 57(a) of the CTA and that $25 000 is the maximum penalty that may be assessed under paragraph 174(b) of the CTA. Although the Appeal Panel has found that the sentencing principles set out in Canada (Minister of Transport) v. Wyer, 1988, CAT File no. O-0075-33 (Appeal) apply in respect of matters arising under the CTA, it does not consider industry's current practices and its common understanding of the meaning of ‘publicly available', as alleged by the Respondent, to be mitigating circumstances coming within those principles. Nevertheless, given that it is a first offence, the Appeal Panel finds that a penalty of $12 500 is a sufficient deterrent.

V. DETERMINATION

[73] The Appeal is allowed. The Appeal Panel overturns the Review Determination and upholds the Canadian Transportation Agency's decision that the Respondent violated paragraph 57(a) of the Canada Transportation Act. The Appeal Panel reduces the penalty from $25 000 CAD to $12 500 CAD.

January 10, 2012

Reasons for the Appeal Decision: Elizabeth MacNab, Member

Concurred by: Suzanne Racine, Member

P. Terry Dowd, Member


Appeal decision (2)
Suzanne Racine, Elizabeth MacNab, Patrick T. Dowd


Decision: December 19, 2013

Citation: Canadian Transportation Agency v. Marina District Development Company 2013 TATCE 36 (Appeal)

Heard by written submissions

APPEAL DECISION AND REASONS

FOLLOWING THE FEDERAL COURT'S DECISION

Held: The matter is moot, as the Notice of Violation has been withdrawn by the Canadian Transportation Agency. Consequently, the Tribunal declines jurisdiction to reconsider its decision.

I. BACKGROUND

[1] On April 15, 2009, the Canadian Transportation Agency (Agency) issued a Notice of Violation (Notice) to Marina District Development Company, d.b.a. Borgata Hotel Casino & Spa (Borgata) operating in Atlantic City, New Jersey, United States of America, alleging that it operated a publicly-available air service without the required licence, contrary to paragraph 57(a) of the Canada Transportation Act, S.C. 1996, C-10 (Act). The alleged violation was based on a number of flights of Borgata's corporate aircraft, between points in Canada and Atlantic City, carrying passengers, some of whom were substantial gamblers at the casino.

[2] On May 22, 2009, Borgata filed a request for a Review Hearing with the Transportation Appeal Tribunal of Canada (Tribunal). Arrangements were made to hold a Review Hearing, as provided for in subsection 180.3(1) of the Act. The member of the Tribunal hearing the matter found in his Review Determination, dated May 31, 2010, that the Agency had not proven on the balance of probabilities that Borgata had operated an air service that was publicly available and thus had not contravened paragraph 57(a) of the Act.

[3] The Agency filed a request for appeal of this determination on June 30, 2010. An Appeal Hearing was held on May 11, 2011, and a decision was issued on January 10, 2012. This decision overturned the Review Determination and found that Borgata had operated a publicly-available air service.

[4] Borgata then sought judicial review of the Appeal Decision, requesting an order that it be quashed and the Review Member's determination reinstated. The Federal Court heard the matter on January 21, 2013, and issued a judgment on July 18, 2013, referring the matter back to the Tribunal for redetermination of its interpretation of the meaning of publicly-available air service according to paragraph 57(a) of the Act.

[5] On September 5 and 17, 2013, the Tribunal wrote to the parties asking for written submissions on the matter.

[6] After the Federal Court decision referred the matter back to the Tribunal, the Agency explained in its submission that, in keeping with its commitment to modernize and improve transparency and clarity of its legislation and regulations, it issued on October 7, 2013, decision no. 390-A-2013, to address the issue of what constitutes a publicly-available air service according to subsection 55(1) and paragraph 57(a) of the Act.

[7] On October 8, 2013, Designated Enforcement Officer Sasova of the Agency informed Marina Development Company that he believed, in reference to decision no. 390-A-2013, that Borgata no longer required a licence issued pursuant to the Act and was withdrawing the Notice issued against it on April 15, 2009.

II. STATUTES AND REGULATIONS

[8] Section 57 of the Canada Transportation Act provides:

57. No person shall operate an air service unless, in respect of that service, the person

(a) holds a licence issued under this Part;

(b) holds a Canadian aviation document; and

(c) has the prescribed liability insurance coverage.

[9] “Air service” is defined in subsection 55(1) of the Act as follows:

55. (1) In this Part,

“air service” means a service, provided by means of an aircraft, that is publicly available for the transportation of passengers or goods, or both;

III. ARGUMENTS

A. Appellant

[10] On October 17, 2013, the Agency wrote to the Tribunal setting out its position that the matter was moot, and that the Tribunal should exercise its discretion and decline to conduct a redetermination of the matter. This position was taken because the Notice issued to Borgata was withdrawn by the Agency on October 8, 2013.

[11] The reason given for the withdrawal was that, on the basis of the criteria set out in Agency decision no. 390-A-2013, Borgata no longer required a licence to operate an air service. This decision considered the meaning of “publicly available” in the context of the Act and sets out four criteria that must be met in determining that an air service had been established; the service must be:

  1. offered and made available to the public;
  2. provided by means of an aircraft;
  3. provided pursuant to a contract or arrangement for the transportation of passengers or goods; and
  4. offered for consideration.

[12] The Agency's submission pointed out that the Supreme Court of Canada set out a basic principle underlying the doctrine of mootness in Borowski v. Canada (Attorney General), [1989] 1 SCR 342, which applies if a decision of the court will not resolve a controversy between the parties and will have no practical effect upon their rights. In such a situation, a court should decline to hear the matter even if circumstances leading to the lack of controversy arose after the action was initiated. The Agency's position is that the existing circumstances between the parties come within this principle.

B. Respondent

[13] Borgata took no position concerning the Agency's argument that the matter is moot but stated that if the Tribunal decided to exercise its jurisdiction in the matter, the redetermination should be carried out by an Appeal Panel made up of members different from those who heard the original appeal.

IV. DISCUSSION AND ANALYSIS

[14] The Appeal Panel agrees with the position that the matter is now moot, as the Notice has been withdrawn by the Agency. In addition, we note that the Agency clearly intends that its decision should apply to pre-existing situations. Paragraph [54] of this decision states that:

If a person believes that the criteria set out in this Determination may impact a previous determination of their requirement to hold an Agency licence, they may request the Agency to reconsider the matter.

[15] On this basis, the Appeal Panel agrees that it should decline the jurisdiction to reconsider the matter. There is, therefore, no reason to determine whether it would be more appropriate for the reconsideration to be carried out by a differently-constituted Appeal Panel.

V. DECISION

[16] The matter is moot, as the Notice of Violation has been withdrawn by the Canadian Transportation Agency. Consequently, the Tribunal declines jurisdiction to reconsider its decision

December 19, 2013

Reasons for the decision: Elizabeth MacNab, Member

Concurred by: Suzanne Racine, Member

P. Terry Dowd, Member