Decisions

TATC File No. C-3621-09
MoT File No. 5258-8975

TRANSPORTATION APPEAL TRIBUNAL OF CANADA

BETWEEN:

Farm Air Ltd., Applicant

- and -

Minister of Transport, Respondent

LEGISLATION:
Aeronautics Act, R.S.C. 1985, c. A-2, s. 7.1(1)(b)


Review Determination
Elizabeth MacNab


Decision: March 14, 2011

Citation: Farm Air Ltd. v. Canada (Minister of Transport), 2011 TATCE 5 (Review)

Heard at Regina, Saskatchewan, on October 27, 2010

Held: The decision of the Minister of Transport to cancel the Air Operator Certificate of Farm Air Ltd. is confirmed.

I. BACKGROUND

 [1]  On August 31, 2009, the Minister of Transport ("Minister") issued a Notice of Cancellation ("Notice") of Air Operator Certificate ("AOC") number 8646 to Farm Air Ltd. ("Farm Air"), pursuant to paragraph 7.1(1)(b) of the Aeronautics Act ("Act"), on the grounds that Farm Air "ceases to meet the qualifications necessary for the issuance of the document or to fulfil the conditions subject to which the document was issued".

[2]  The specific condition that was not met was set out in the attachment to the Notice which reads as follows:

Farm Air Ltd. does not have legal custody and control of at least one aircraft of each category of aircraft that is to be operated as required by paragraph 702.07(2)(g) of the Canadian Aviation Regulations.

[3]  Norman Colhoun, acting on behalf of the Applicant, Farm Air, requested a review of this matter by the Transportation Appeal Tribunal of Canada ("Tribunal") on September 16, 2009. A Review Hearing was scheduled for April 7, 2010, and later rescheduled for October 27, 2010. Before the Hearing, Mr. Colhoun made a number of requests to the Minister relating to disclosure and, unsatisfied by the responses, filed a Motion before the Tribunal on September 30, 2010, seeking disclosure of specific items. On October 8, 2010, this Motion was denied but the Minister was ordered to provide the Applicant with the names of its witnesses and their "can‑say" statements, as well as any information from Mr. Welwood's investigation into Farm Air, Mr. Colhoun and Colhoun Farm, that relates to the Notice.

II. STATUTES AND REGULATIONS

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

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

. . .

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

[5]  The qualification that was alleged not to be met is set out in paragraph 702.07(2)(g) of the Canadian Aviation Regulations ("CARs"), SOR/96-433 as follows:

...

(2) For the purposes of subsection (1), an applicant shall have

(g) legal custody and control of at least one aircraft of each category of aircraft that is to be operated;

[6]  Section 103.07 of the CARs reads as follows:

Administrative Grounds for Suspension, Cancellation or Refusal to Renew

103.07 In addition to the grounds referred to in Sections 6.9 to 7.1 of the Act, the Minister may suspend, cancel or refuse to renew a Canadian aviation document where

(a) the Canadian aviation document has been voluntarily surrendered to the Minister by its holder;

(b) the Canadian aviation document has been mutilated, altered, or rendered illegible;

(c) the aircraft in respect of which the Canadian aviation document was issued has been destroyed or withdrawn from use; or

(d) the commercial air service, other service or undertaking in respect of which the Canadian aviation document was issued has been discontinued.

III. PRELIMINARY MOTIONS

[7]  On October 23, 2010, Mr. Colhoun filed three further Motions relating both to this matter, and three other files before the Tribunal, two of which named other entities. These Motions were not argued at that point but a Motion to adjourn for a period of at least 30 days was made at the opening of the Hearing by Mr. Colhoun and was the subject of argument.

[8]  Mr. Colhoun argued that the adjournment was necessary to allow him to receive the information requested, pursuant to the Access to Information Act, R.S.C., 1985, c. A-1. In support, he offered an email dated October 25, 2010, from Réginald Laurent, Director, Access to Information and Privacy, Transport Canada, stating that he expected to complete the outstanding requests within 30 days. I accepted this email as supporting the Motion and had it marked as Exhibit A‑1.

[9]  Mr. Colhoun further argued that this information would be relevant to the matter before me since it concerned the desire to use an aircraft that, although not authorized for use in commercial air application operations, he considered to be safer than those aircraft which were so authorized. He also pointed out that such aircraft could be used by "flying farmers" and by United States of America (USA) operators operating a specialty service in Canada under the North American Free Trade Agreement (NAFTA).

[10] In response, the Minister argued that any information relating to the proposed use of the aircraft was irrelevant to the issue before the Tribunal.

[11] Upon further questioning from the Tribunal Member, both parties agreed that the use of the aircraft in question was not currently permitted in the type of commercial operation carried out by the Applicant. On this basis, I ruled against the Motion on the grounds that the matter before me was restricted to the issue of whether the Applicant met the qualifications necessary for an AOC. Any material relating to an aircraft that could not be used to meet these qualifications was irrelevant. I noted, however, that I would be prepared to reconsider the matter later in the proceedings if any such relevance became apparent.

IV. EVIDENCE

A. Minister of Transport

(1) Paul Anthony McCulloch

[12] Paul Anthony McCulloch, a Civil Aviation Inspector with Commercial and Business Aviation in Winnipeg, has worked at Transport Canada for the past five years and before that operated an air taxi service. He testified that in March 2008, he was the Principal Operations Inspector assigned to Farm Air when he was informed that there was no aircraft registered to the company. He confirmed this with the Operations Manager, Mr. Colhoun, by telephone and informed him that there were three options available: the company could purchase and register another aircraft; it could voluntarily surrender its AOC; or it could be the subject of an investigation by Transport Canada that most probably would lead to a suspension or cancellation of its AOC.

[13] Farm Air chose to apply for a voluntary suspension for one year on the basis that it was attempting to purchase a "safer aircraft". Subsequently, Mr. Colhoun was sent an email on April 3, 2008, saying that he would be granted a voluntary suspension for one year (Exhibit M‑4) on the basis that if the conditions for issuance were not met at the end of that period, Transport Canada would take steps to formally cancel the AOC.

[14] On August 12, 2009, Mr. Colhoun was asked to justify his request for an extension to the voluntary suspension, and on August 13, 2009, he responded saying that the Enforcement Branch of Transport Canada was preparing charges against the company that reflect directly on its AOC and that the suspension should continue until those charges were disposed of by the Tribunal (Exhibit M‑6). Mr. Colhoun was informed by Terry Davis, Superintendent, Certification, that the possible enforcement action was not an adequate basis for granting an extension (Exhibit M‑6).

[15] In reply, Mr. Colhoun suggested that the AOC not be cancelled on the basis that the Tribunal could find that the basis for the suspension was that the company was trying to operate a safer, less noisy, and more economical aircraft. On August 31, 2009, Superintendent Davis responded that the enforcement action was irrelevant and that he would be preparing a formal Notice. (Exhibit M‑7).

[16] In cross‑examination, Mr. Colhoun asked a number of questions concerning the relative safety of piston and gas turbine engines. These questions were objected to on the basis that Mr. McCulloch was not qualified as an expert in that area. I allowed the questions with the caveat that any evidence would most likely be given very little weight given Mr. McCulloch's lack of expertise. In any event, his evidence was that relative safety was affected by a number of factors and for that reason, he could not give an answer other than "it depends". He stated that he was aware of occasions where there had been engine failures in both types of engines.

(2) Terrance Ronald Davis

[17] Terrance Ronald Davis is the Superintendent of Certification in the Commercial and Business Aviation Division of Transport Canada in Winnipeg. He testified that he issued a formal letter confirming Farm Air's voluntary suspension on May 20, 2008 (Exhibit M‑9), based on section 103.07 of the CARs on the grounds that the commercial air service had been discontinued. Mr. Davis explained that Transport Canada's database, the National Air Carrier Information System, maintains a list of air operators, and another database lists registered aircraft. He explained the extracts from these databases that showed that Farm Air was no longer the registered owner of any aircraft, and consequently did not meet the requirements of paragraph 702.07(2)(g) of the CARs, that it have legal custody and control of at least one aircraft of each category to be operated.

[18] Mr. Davis also discussed the Air Operator Certification Manual (Exhibit M-10) which sets out Transport Canada policies relating to suspensions. According to this Manual, a suspension for a seasonal operator should be no longer than one year and for other operators should be limited to 90 days.

[19] In cross‑examination, I allowed discussion of a possible reinstatement of the AOC and the costs that would be involved. While I allowed this discussion to take place, it was clear that it related to a possible settlement as opposed to clarifying Mr. Davis' testimony in chief. I adjourned the Hearing to allow the parties to further discuss the matter. After the adjournment, the parties had not come to an agreement and after a further adjournment, it was clear that no agreement would be reached. At that point I would not allow any further questions relating to fees for reinstatement although Mr. Colhoun felt that this refusal limited his ability to make full answer and defence.

B. Applicant

[20] Before offering any evidence, Mr. Colhoun pointed out that he felt he could not take full answer and defence in the matter because he had not yet received materials requested under the Access to Information Act. He also suggested that Transport Canada had ignored my Ruling concerning disclosure of Mr. Welwood's material. While I had earlier not precluded re‑examining the Motion for Adjournment, it became clear that any information that would be forthcoming related to the Applicant's wish to use a specific gas turbine aircraft in its business. On the basis that this Hearing was concerned only with the very narrow issue of whether the conditions for having an AOC had been met, I determined that the Hearing should continue. At that point, Mr. Colhoun decided not to present any evidence.

V. FURTHER DISCLOSURE MATTERS

[21] In response to Mr. Colhoun's allegation regarding the failure to provide Mr. Welwood's information in accordance with my Ruling of October 8, 2010, the Minister's representative stated that any information in the hands of Mr. Welwood relating to this matter had been disclosed, and he offered a letter from Mr. Welwood to that effect.

[22] After some discussion, I stated that in the absence of any sworn evidence on the matter, I would not consider the issue related to disclosure and offered Mr. Colhoun the opportunity to provide such evidence under oath. Mr. Colhoun declined once again to give evidence.

VI. ARGUMENTS

A. Minister of Transport

[23] The issue before the Tribunal is a very simple one. Was the Minister justified in cancelling Farm Air's AOC on the basis that it did not meet the qualifications set out in paragraph 702.07(2)(g) of the CARs? This provision requires an air operator to have legal custody and control of at least one aircraft of the category to be operated.

[24] The documentary evidence shows that Farm Air was not the registered owner of any aircraft since July 30, 2007. [I note that legal custody and control is signified by registration as owner of an aircraft.] Transport Canada treated the Applicant fairly and with consideration. It agreed to a voluntary suspension of one year and, in fact, allowed the suspension to continue past the one year anniversary until August 31, 2009. The suspension was granted on the basis that the Applicant was attempting to purchase a suitable aircraft but there has been no evidence of any attempt to do so. The Minister's witnesses testified that no AOC will be issued unless the applicant for the certificate is the registered owner of an aircraft. Registration is necessary so that Transport Canada can ensure aviation safety in general and adherence to the CARs.

B. Applicant

[25] Mr. Colhoun repeated his concerns regarding disclosure and the Access to Information Act. He also mentioned the issues raised in the Motions filed on October 23, 2010.

VII. ANALYSIS

[26] Subsection 7.1(7) of the Act provides that the Tribunal Member hearing a matter relating to the suspension, cancellation or refusal to renew a Canadian aviation document, pursuant to subsection 7.1(1), may confirm the Minister's decision or refer the matter back to the Minister for reconsideration. In this case, a Notice cancelling the Applicant's AOC was issued pursuant to paragraph 7.1(1)(b) of the Act.

[27] The basis for the cancellation is that the Applicant does not have legal custody and control of at least one aircraft that is to be operated as required by paragraph 702.07(2)(g) of the CARs. There was no real dispute by Mr. Colhoun that this was not the case. Instead, he argued that he wished to operate an aircraft that he considered to be safer than those he was authorized to use but one that could not be used in commercial operations. In effect, he was challenging the validity of the regulatory requirements and Transport Canada's policies. The Tribunal's authority, however, does not extend to a review of these policies but is limited to applying the law as it exists.

VIII. DETERMINATION

[28] On the basis of the evidence before me, the decision of the Minister of Transport to cancel the Air Operator Certificate of Farm Air Ltd. is confirmed.

March 14, 2011

Elizabeth MacNab

Member


Appeal decision
Richard F. Willems, Suzanne Racine, J. Richard W. Hall


Decision: August 23, 2011

Citation: Farm Air Ltd. v. Canada (Minister of Transport), 2011 TATCE 20 (Appeal)

Appeal Panel: J. Richard W. Hall, Suzanne Racine, Richard F. Willems 

Heard at Regina, Saskatchewan, on June 28, 2011

Held: In the opinion of the Appeal Panel, the only viable option to address a review process that has been tainted by a reasonable apprehension of bias is to quash the Review Determination and send the matter back for rehearing. This must be done in order to adhere to the principles of procedural fairness and natural justice so that the hearing process, which is currently flawed in the case before us, can be remedied.

Accordingly, the Review Determination dated March 14, 2011, is quashed, and the matter is to be reheard by another Member of the Tribunal.

I. BACKGROUND

[1] The Minister of Transport ("Minister") issued a Notice of Cancellation ("Notice") of the Appellant's Air Operator Certificate ("AOC") on August 31, 2009, pursuant to paragraph 7.1(1)(b) of the Aeronautics Act ("Act"). The Notice was issued because the Minister believed that the Appellant, Farm Air Ltd. ("Farm Air"), had ceased to meet the qualifications necessary for the issuance of its AOC or to fulfil the conditions subject to which the AOC was issued.

[2] Specifically, the Minister determined that Farm Air failed to have legal custody and control of at least one aircraft of each category of aircraft to be operated as required by paragraph 702.07(2)(g) of the Canadian Aviation Regulations ("CARs").The Appellant disagreed with the Minister's finding, and requested a review of this decision to the Transportation Appeal Tribunal of Canada ("Tribunal") on September 16, 2009.

[3] Prior to the Review Hearing, Norman Colhoun, acting for the Applicant, made multiple requests to the Minister with regard to disclosure. Unsatisfied by the responses he received, Mr. Colhoun filed a Motion to the Tribunal on September 30, 2010, seeking further disclosure. This Motion was denied by the Review Member on October 8, 2010, although the Minister was ordered to provide the Applicant with some additional information, including: a) the names of its witnesses; b) their "can-say" statements; and c) any information concerning the investigation into Farm Air, Mr. Colhoun, and Colhoun Farm which is related to the Notice.

[4] The Review Hearing took place in Regina, Saskatchewan, on October 27, 2010. A Review Determination was issued on March 14, 2011, in which the Review Member confirmed the Minister's decision to cancel Farm Air's AOC.

[5] On March 30, 2011, Mr. Colhoun requested an appeal of the Review Determination on behalf of the Appellant. The Appeal Hearing took place in Regina, Saskatchewan, on June 28, 2011.

II. REVIEW DETERMINATION

[6] The Review Determination dated March 14, 2011, confirmed the Minister's decision to cancel Farm Air's AOC.

[7] In the Review Determination, Elizabeth MacNab, the Tribunal Member, noted that the basis for cancelling Farm Air's AOC was that Farm Air did not have legal custody and control of at least one aircraft to be operated as required by paragraph 702.07(2)(g) of the CARs. The Member stated, in paragraph [27], that there was "no real dispute by Mr. Colhoun that this was not the case."

[8] The Review Member also considered Mr. Colhoun's desire to operate an aircraft he believes to be safer than those he is authorized to use, but which is not allowed to be used in commercial operations. The Member found that Mr. Colhoun was trying to challenge the validity of the regulatory requirements and Transport Canada's policies, and determined that such a policy review was beyond the jurisdiction of the Tribunal.

III. GROUNDS FOR APPEAL

[9] Mr. Colhoun submits that Transport Canada withheld disclosure of important documents, citing several unfulfilled Access to Information requests he made which are now in Deemed Refusal status. Mr. Colhoun submitted a letter from the Office of the Information Commissioner of Canada ("Information Commissioner") confirming an ongoing investigation into Mr. Colhoun's complaint of non-disclosure against Transport Canada.

[10] Mr. Colhoun also submits that, contrary to the Minister's findings, Farm Air had care, custody and control of a valid replacement aircraft pursuant to the CARs, as required to maintain its AOC.

[11] During the Appeal Hearing, Mr. Colhoun also raised a concern with regard to the Review Member's conduct during the Review Hearing. Mr. Colhoun alleged having seen the Member eat lunch with Counsel for Transport Canada and other Transport Canada representatives during a break in the Review Hearing.

IV. ISSUES

[12] The issues to be determined on this Appeal are as follows:

  1. What is the appropriate standard of review?
  2. Was there a reasonable apprehension of bias in this instance?
  3. What remedy can the Appeal Panel apply if the Review Hearing was found to be tainted by a reasonable apprehension of bias?

V. ARGUMENTS

A. Appellant

(1) Access to Information Requests

[13] The Appellant alleges that Transport Canada has intentionally and maliciously withheld disclosure from Farm Air. Mr. Colhoun notes that although many of his Access to Information requests were answered, some requests have been in Deemed Refusal status for over 700 days.

[14] Mr. Colhoun's unfulfilled Access to Information requests are in the process of being investigated by the Information Commissioner. Mr. Colhoun believes that Transport Canada's lack of disclosure had resulted in him being unable to make a full answer and defence at the Review Hearing before the Tribunal.

(2) Replacement Aircraft

[15] The Appellant also contends that it had the required care, custody and control of a valid replacement aircraft prior to the Review Hearing. Mr. Colhoun states that at the relevant point in time Farm Air had a C-FXTG Weatherly 620 B ("Weatherly") in its possession. He admits that the Weatherly was not registered to his company at this time, but submits that Farm Air had custody, care and control of the aircraft nonetheless. Mr. Colhoun states that this type of aircraft was on Farm Air's AOC, and as such did not require the addition of type to the AOC.

(3) Bias

[16] Mr. Colhoun also expressed concern regarding a potential issue of bias that stemmed from the Review Hearing. Mr. Colhoun states that the Tribunal Member sat down for lunch with Counsel for the Respondent as well as several other people from Transport Canada. As explained by Mr. Colhoun to the Appeal Panel:

Transport Canada had … five or six people there[.] [The Member] sat down at their table. There was no room for my wife or myself. We sat at another table[.] Now, I think there was some impropriety of us not being invited to the table when, in fact, [the Member] had specifically broke the proceedings so that we could negotiate a fee. [W]e weren't invited to sit at that table, nor were we privy to whatever discussions happened at that table at lunch … (Appeal Hearing Transcript, page 51, lines 2-16).

[17] The Appellant's concern was heightened after the lunch break. Mr. Colhoun alleges that upon reconvening the Review Hearing after lunch, Transport Canada changed its position regarding the cost to reinstate the Appellant's AOC. As stated by Mr. Colhoun at the Appeal Hearing:

So my understanding when we broke is we were going to talk to Transport Canada to see if we could work out what exactly the cost was going to be, if it was going to be $150, $450, $500 or $1,000. I wasn't at the table, so I can't say; maybe Mr. Wyllie can speak to what happened at the table. But I do know absolutely that when we came back and it was reconvened at 1:05, Transport Canada's position at that point was it's $2,500 to reinstate the OC, which is the same price as applying for a new one. And I thought, you know, something happened at noon that wasn't correct [emphasis added] (Appeal Hearing Transcript, page 61, lines 8-22). 

[18] Mr. Colhoun is concerned that the lunch shared between the Minister's Representative and the Review Member may have affected the increased cost of reinstating the Appellant's AOC, and that he should have been privy to the conversation that occurred over lunch.

B. Minister of Transport

(1) Access to Information

[19] Mr. Colhoun's main basis for appeal is his dissatisfaction with the response to his Access to Information requests. However, the Minister submits that the status of Mr. Colhoun's Access to Information requests is irrelevant to the case before the Appeal Panel as these requests do not relate to the cancellation of Farm Air's AOC. Indeed, some of these Access to Information requests deal with a time period outside of the relevant time frame of this proceeding, while others concern an enforcement proceeding involving Farm Air that is far outside the scope of the cancellation of Farm Air's AOC. It is the Minister's opinion that the Review Member was correct in determining that the Access to Information issue is outside of her jurisdiction; this issue is outside of the jurisdiction of the Appeal Panel as well.

(2) No Legal Custody and Control of a Replacement Aircraft

[20] Evidence before the Tribunal shows that Farm Air has not had legal custody and control of at least one aircraft of each category of aircraft to be operated as required by paragraph 702.07(2)(g) of the CARs since July 30, 2007.

[21] During the Review Hearing, Paul McCulloch, Civil Aviation Inspector and witness for the Minister, established that Farm Air had no aircraft registered to it in March 2008. Terry Davis, Superintendent of Certification for Transport Canada and witness for the Minister, provided evidence that Farm Air had not been the registered owner of any aircraft since July 30, 2007. Mr. Davis further testified that in order to have custody and control of an aircraft to be operated, an aircraft must be registered and airworthy. Moreover, the Minister notes that in order to operate an aircraft in Canada, the air operator must have an aircraft registered in Canada (see Shermet v. Canada (Minister of Transport), 1996 CAT File no. C-1021-02 (Review), and Canada (Minister of Transport) v. Schmitt, 2000 CAT File No. C-2031-33 (Review).

[22] In 2008, the Minister granted the Appellant a one-year voluntary suspension of its AOC as requested. Mr. Colhoun was made aware that if the Appellant could not fulfil the conditions of the AOC during this time, the AOC would be cancelled. In total, Mr. Colhoun had approximately 14 months, from May 2008 to August 2009, to find a replacement aircraft so that Farm Air could retain its AOC. However, the Appellant failed to have (and register) a valid replacement aircraft in its legal custody and control from April 3, 2008, to August 31, 2009; this resulted in the cancellation of the Appellant's AOC.

[23] Although Mr. Colhoun claims to have had a replacement aircraft at the relevant time, he did not bring any evidence during the Review Hearing to show that Farm Air had legal custody and control of at least one aircraft to be operated after July 30, 2007. The Minister submits that the Appellant cannot now bring evidence of having had an aircraft in its legal custody and control after failing to adduce this evidence at the Review Hearing (see Palmer v. The Queen, [1980] 1 S.C.R. 759, and Canada (Minister of Transport) v. Kokoska, 1989 CAT file No. P‑0053‑33 (Review). Furthermore, evidence before the Appeal Panel shows that Mr. Colhoun did not acquire the Weatherly until after the Review Hearing.

[24] Nevertheless, Mr. Colhoun's alleged replacement aircraft would not be a valid replacement aircraft of which the Appellant could have legal custody and control since it was not registered to Farm Air at the relevant point in time. Moreover, the Weatherly was never added to the AOC, despite the inaccurate representations the Appellant made during the Review Hearing to this effect.

[25] The Minister notes another inconsistency in Mr. Colhoun's statement at the Review Hearing. The Appellant said that the Weatherly was "currently owned by my holding company" (Review Hearing Transcript, page 104, lines 15-16). This is inconsistent with the evidence before the Appeal Panel which shows that the Weatherly was purchased by Mr. Colhoun from Arty's Air Service in Winkler, Manitoba on May 24, 2011. When asked, the Appellant conceded that Arty's Air Service was indeed not Farm Air's holding company. As noted by the Minister, "it is, I think, pertinent to show that there are a lot of contradictions in what Mr. Colhoun has to say, to be generous" (Appeal Hearing Transcript, page 101, lines 18-21).

(3) Allegation of Bias

[26] With regard to the allegation of bias brought by the Appellant, the Minister stresses that there was absolutely no conversation at all with regard to the proceedings during the lunch shared with the Tribunal Member. Although he acknowledges that "the lunch was an unfortunate situation," (Appeal Hearing Transcript, page 106, lines 5-6), the Minister submits that this did not affect the Tribunal Member's Review Determination or prejudice Mr. Colhoun in any way. Indeed, the Minister notes that while there may have been a breach of decorum in this instance, there was certainly no breach of natural justice (see Appeal Hearing Transcript, page 93, lines 10-13).

[27] The Minister submits that the Minister's decision to cancel the Appellant's AOC was valid and well-informed. The Review Member was correct in confirming the Minister's decision to cancel Farm Air's AOC, and there are no grounds in this instance to justify a reversal of the Review Member's Review Determination.

VI. ANALYSIS

A. Issue 1 What is the Appropriate Standard of Review?

[28] The first step in reviewing the Review Determination made by the Review Member is to determine the appropriate standard on which to review the Review Determination. The Supreme Court of Canada determined in Dunsmuir v. New Brunswick, 2008 SCC 9 at para. 57, that a full standard of review analysis is not necessary if the appropriate standard has already been established by jurisprudence.

[29] In Billings Family Enterprises Ltd. v. Canada (Minister of Transport), 2008 FC 17, Justice Harrington addressed the appropriate standard of review applicable to Tribunal decisions. Justice Harrington determined in Billings that review members are owed considerable deference with regard to findings of fact and issues of credibility that come before them. As such, so long as a decision on review is within a range of reasonable outcomes based on the evidence that was before the review member, the Appeal Panel should not interfere: see Dunsmuir at para. 72. Accordingly, this is the appropriate standard of review to use in determining whether the Review Determination to confirm the cancellation of the Appellant's AOC should be upheld.

[30] However, no deference is due to the Review Member with regard to issues of law: see Billings, and Canada (Minister of Transport) v. NAV CANADA, 2010 TATCE 28 (Appeal), TATC file no. H-3472-40. Accordingly, the issue of procedural fairness and natural justice in this instance will be determined on a standard of correctness.

B. Issue 2 – Was there a Reasonable Apprehension of Bias in this instance?

[31] The first issue for examination in this instance is whether a reasonable apprehension of bias existed which may have tainted the Review Hearing and the resulting Review Determination. This issue must be determined prior to considering the other grounds of appeal submitted by the Appellant, as the Review Determination cannot stand if a reasonable apprehension of bias is found to exist in this case.

(1) Circumstances Surrounding the Allegation of Bias

[32] During the Review Hearing, the Review Member suggested that the parties try to come to an agreement with regard to the cost of reinstating the Appellant's AOC over lunch. However, during the lunch break the Review Member sat with the Minister's Representative and other employees of Transport Canada. The Appellant told the Review Member that he would have tried to reach an agreement with the Minister as suggested by the Review Member, but he felt unable to do so because the Review Member was sitting with the Minister's Representative. This exchange is noted in the transcript from the Review Hearing:

Review Member: I had actually thought that the two of you would talk about [an agreement] over lunch, which I'm not certain why you didn't.

Mr. Colhoun: I'm sorry. I thought we were going to too, but you were at the table, and I didn't know if it was appropriate (Review Hearing Transcript, page 115, lines 3-8).

[33] In response to the Appellant's concern of bias, the Minister has assured the Appeal Panel that no Review Hearing matters were discussed during the lunch shared by the Review Member and Transport Canada employees. However, the Appeal Panel must nonetheless consider whether these circumstances could make the Review Hearing and resulting Review Determination vulnerable to an apprehension of bias or impartiality.

(2) Principles of Natural Justice

[34] The duty to act fairly is the foundation of administrative law. This duty – known as natural justice – is not concerned with the merits of a decision, but is concerned instead with the procedures followed by the decision-maker in reaching a decision.

[35] One major component of the principles of natural justice is the right to a decision made by an independent and unbiased decision-maker. Accordingly, the decision-maker must be completely independent and impartial in reaching his or her decision. This alone is not enough, however; it is also vital that the decision-maker is perceived as being unbiased and impartial.

[36] Consequently, an actual bias need not be proven for a decision to be put into disrepute; nor is it necessary to show that the apprehended bias affected the result of the hearing or prejudiced one of the parties (see Spence v. Spence, 1987 53 Sask R. 35). What matters is whether there was an apprehended bias that may have prejudiced a party or affected the decision.

[37] According to the Supreme Court of Canada in Committee for Justice and Liberty et al. v. National Energy Board et al., [1978] 1 S.C.R. 369, the test for considering a reasonable apprehension of bias is whether "an informed person, viewing the matter realistically and practically, having thought the matter through would conclude that there was a reasonable apprehension of bias." When performing this test, the "informed person" is presumed to have full knowledge of all the relevant circumstances of the situation, including the duty of impartiality (see, for example, R. v. S (R.D.), [1997] 3 S.C.R. 484).

(3) Content of the Duty of Impartiality

[38] In order to determine the existence of a reasonable apprehension of bias, we must first consider the scope and content of the principles of natural justice that are owed to those who come before the Tribunal and the related duty of impartiality attached to the decision-maker. The scope and content of this duty is contextual; it may vary based on the decision-maker's activities and the nature of its functions (see Imperial Oil Ltd. v. Quebec (Minister of the Environment), 2003 SCC 58). Indeed, determining what is "fair" requires balancing between effective and efficient performance of public duties on one hand, and the protection of the interested parties on the other. It is along this spectrum that an administrative law hearing, which is quasi-judicial in nature, is judged by those who participate.

[39] In order to identify the scope of natural justice and procedural fairness owed to the parties in this instance, the Appeal Panel must examine the role of the Tribunal and the statutory framework which enables it.

(4) Statutory Framework

[40] The Tribunal is a quasi-judicial tribunal governed by the Transportation Appeal Tribunal of Canada Act ("TATC Act"). The Tribunal has jurisdiction in respect of reviews and appeals as provided by the Act and other federal acts regarding transportation.

[41] Subsections 7.1(5) and (6) of the Act entitle a document holder and the Minister to a hearing that is consistent with procedural fairness and natural justice [emphasis added]. Moreover, section 15 of the TATC Act states that all matters will be dealt with by the Tribunal "as informally and expeditiously as the circumstances and considerations of fairness and natural justice permit [emphasis added]. These provisions demonstrate that a full and rigourous duty of impartiality is owed by the decision‑maker in the Tribunal context to the parties. Other factors that suggest a high level of natural justice is owed to those before the Tribunal are that Tribunal Members have been granted the powers of a Commissioner (section 16 of the TATC Act), and that Tribunal Members are not bound by the standard legal or technical rules of evidence (subsection 15(1) of the TATC Act).

[42] The fact that both the TATC Act and the Act place an emphasis on principles of procedural fairness and natural justice makes it clear that Parliament intended for a high level of procedural fairness and natural justice to govern the procedures of the Tribunal and hearings conducted under the Act. As such, we will proceed in our analysis with both a finding and an unimpeachable recognition that the Tribunal is tasked with upholding a high level of natural justice and a rigourous duty of impartiality. This is a significant and singular principle of justice that cannot be abrogated.

(5) Duty of Impartiality

[43] A presumption of impartiality exists which dictates that in the absence of any evidence to the contrary, public officers are presumed to act in a fair and impartial manner (see, for example, University of British Columbia v. University of British Columbia Faculty Assn., 2007 BCCA 201). Accordingly, the Appeal Panel must consider whether the Appellant has brought sufficient evidence to rebut this presumption and to demonstrate the existence of a reasonable apprehension of bias.

[44] According to Sara Blake's Administrative Law in Canada, 4th ed., (LexisNexis Butterworths, 2006), at page 108, two major concerns exist with regard to socialization between decision-makers and parties. First of all, there is concern that the Tribunal Member may have a bias in favour of those whom he or she has met with socially. Secondly, there is concern that the Tribunal Member may have heard evidence or submissions in the absence of other parties while socializing.

[45] The Appeal Panel does not believe that the latter concern is an issue on the facts of this case, as the Minister's Representative has sworn as an Officer of the Court that no Review Hearing matters were discussed over lunch. However, the first concern is a grave one in this instance, and must be examined further.

(6) Breach of Natural Justice

[46] The test to determine the existence of a reasonable apprehension of bias must be applied in the appropriate context, with a full understanding of all relevant facts of the situation. In this instance, relevant facts to consider include that:

  1. The Tribunal Member suggested at the Review Hearing that a deal could be made over lunch;
  2. the Appellant recommended a restaurant to those at the Review Hearing;
  3. both parties and the Review Member went to the same restaurant;
  4. the Review Member sat down with the Minister's Representative and staff of Transport Canada for lunch;
  5. the Appellant and his wife sat with another employee of Transport Canada at a different table;
  6. the Appellant is concerned that this prejudiced his ability to make an agreement with Transport Canada and alleges that Transport Canada changed its monetary position after the lunch break; and
  7. the Minister's Representative, as an Officer of the Court, states that no aspect of the case was discussed over the lunch time.

[47] The concern in this instance is that the Review Member socialized with one of the parties to the proceedings. By socializing with one of the parties to the proceedings, the Review Member may have been seen as aligning herself more closely with one of the parties than the other; this can result in a reasonable apprehension of bias. As noted in United Enterprises Ltd. v. Saskatchewan (Liquor and Gaming Licensing Commission), 1997 3 W.W.R. 497 at paragraph 28:

Judges and tribunals are not required to be aloof, but they are required to remain impartial. They must avoid any conduct which leads to the perception that they have a closer relationship with counsel for one side than with counsel for the other [emphasis added].

[48] In the case at hand, the Review Member proceeded to sit with one of the parties after having suggested that the parties come to an agreement over lunch. This resulted in the alienation of the other party, and may have – as suggested by the Appellant – also prejudiced the Appellant's opportunity to reach an agreement with Transport Canada. By having lunch with the Minister's Representative and employees of Transport Canada, the Review Member could reasonably be seen as favouring that party to the proceeding. This does not reflect the duty of impartiality required of those in quasi-judicial roles.

[49] Moreover, the Appeal Panel is satisfied that the apprehended bias in this instance could have been seen to have prejudiced a party or affected the result in this case. Indeed, the Appellant expressed concern with regard to the happenings of the lunch hour, stating during the Review Hearing, that he believed an agreement had been reached by himself and Transport Canada prior to breaking for lunch, but that the Respondent's offer rose to $2,500 after lunch (Review Hearing Transcript, page 155).

[50] Based on the aforementioned considerations, the Appeal Panel finds that an informed person, with full knowledge of the relevant facts, would determine that a reasonable apprehension of bias exists in the case at hand. Consequently, the Review Determination cannot be sustained because of the factual context in which it occurred.

[51] As previously mentioned, the Minister has attempted to characterize this incident as "a breach of decorum, possibly, something to be avoided in the future, possibly, but certainly not a breach of natural justice" (Appeal Hearing Transcript, page 93 at lines 10-13). The Appeal Panel cannot accept this distinction, as this incident has led to a reasonable apprehension of bias on the part of the decision-maker. There is simply no doubt that a high threshold of conduct is required of each and every Member of the Tribunal, as Members of a quasi-judicial body responsible for adjudicating matters related to transportation under Federal Statutes.

[52] Standards of judicial conduct were canvassed in Professor Gall's The Canadian Legal System (1977), at p. 167 and cited in Therrien (Re), 2001 SCC 35:

The dictates of tradition require the greatest restraint, the greatest propriety and the greatest decorum from the members of our judiciary. […] There must be no other group in society which must fulfil this standard of public expectation and, at the same time, accept numerous constraints. At any rate, there is no question that a certain loss of freedom accompanies the acceptance of an appointment to the judiciary.

Similar rigorous standards apply to a quasi-judicial administrative tribunal. Indeed, it is a high standard of conduct that is necessary for all Tribunal Members. If the required high standard of conduct is not met, the Tribunal risks losing its appearance of independence and impartiality. This is a risk that cannot be borne by this Tribunal at any time. It is incumbent on all who serve in a quasi-judicial capacity to preserve and protect our society's confidence in the wide-reaching and all-encompassing administrative law framework in place across Canada. To do otherwise would undermine a cherished legal foundation.

[53] The Appeal Panel agrees, under the circumstances, that the Review Hearing has been tainted by a reasonable apprehension of bias. Accordingly, the Appeal Panel need not consider the other grounds of appeal submitted by the Appellant. Since the Review Hearing process did not follow a basic rule of natural justice, the Review Determination stemming from this process cannot be upheld, regardless of any findings the Appeal Panel would make with regard to the other grounds of appeal before it.

[54] It is particularly important for the Appeal Panel to emphasize, however, that its conclusion with regard to apprehension of bias is not reflective of the Review Member's integrity, character, or capacity for decision-making; it is quite simply based on a reasonable apprehension of bias within the circumstances of this case. It is recognized by the Appeal Panel that this incident was simply a mistake on the part of the Review Member. Nonetheless, as was noted by the Ontario High Court of Justice in Reid et al. and Wigle, 29 O.R. (2d) 633 at paragraph 15, when a similar set of facts came before it, "[b]y (this) incident alone, it is said, the appearance of impartiality … was torn from its moorings."

C. Issue 3 - Whatremedy can the Appeal Panel apply if the Review Hearing was found to be tainted by a reasonable apprehension of bias?

[55] The Appeal Panel's Decision that this Review Determination cannot stand should not be interpreted as an indication that we believe that the Review Determination was unreasonable. However, because the Review Hearing process was tainted by a reasonable apprehension of bias, the resulting Review Determination cannot stand, even if it was found to be within a range of reasonable outcomes based on the evidence that was before the Review Member as per Dunsmuir.

[56] The Minister submits that if the Appeal Panel determines that the breach of natural justice occurred during the Review Hearing, that the only recourse available to the Tribunal is to refer the decision back to the Minister for reconsideration. However, if the Appeal Panel were to send this matter back to the Minister for reconsideration as suggested by the Minister, the Appellant would effectively be denied its right to an impartial review pursuant to the Act.

[57] If the Review Member or the Appeal Panel determines that the case before them is unreasonable or incorrect, the matter can be sent back to the Minister for reconsideration. The Minister must then take the Tribunal's findings into account in conducting his reconsideration.

[58] The hearing process is interrupted, however, when the Review Hearing is undermined by a reasonable apprehension of bias. Once a Review Hearing is found to have been tainted, the Appeal Panel may not fulfil its mandate and determine the case on its merits. Consequently, the Minister cannot then conduct a fair reconsideration of the decision.

VI. DECISION AND REMEDY

[59] In the opinion of the Appeal Panel, the only viable option to address a review process that has been tainted by a reasonable apprehension of bias is to quash the Review Determination and send the matter back for rehearing. This must be done in order to adhere to the principles of procedural fairness and natural justice so that the hearing process, which is currently flawed in the case before us, can be remedied. To do otherwise would be to desecrate a fundamental principle of administrative law that must always be upheld, and would be an affront to our legal heritage and future.

[60] Accordingly, the Review Determination dated March 14, 2011, is quashed, and the matter is to be reheard by another Member of the Tribunal.

August 23, 2011

Reasons for the Appeal Decision: J. Richard W. Hall, Chairperson

Concurred by: Suzanne Racine, Member

Richard F. Willems, Member