Decisions

TATC File No. H-3814-80
MoT File No. 10-05159

TRANSPORTATION APPEAL TRIBUNAL OF CANADA

BETWEEN:

Guardian Eagle Co., Applicant

- and -

Minister of Transport, Respondent

LEGISLATION:
section 19 of the Transportation Appeal Tribunal of Canada Act, S.C. 2001, c. 29


Interlocutory Decision
Elizabeth MacNab


Decision: January 16, 2014

Citation: Guardian Eagle Co. v. Canadian Transportation Agency, 2014 TATCE 4 (Ruling)

Heard by written submissions

RULING ON APPLICANT'S REQUEST FOR COSTS

Held: I find that the Tribunal has no jurisdiction to consider the award of costs after a Notice of Violation, issued under section 180 of the Canada Transportation Act, has been withdrawn.

I. BACKGROUND

[1] On July 5, 2011, the Canadian Transportation Agency (Agency) issued a Notice of Violation (Notice) to the Applicant, Guardian Eagle Co., alleging that it operated an air service without a licence as required by paragraph 57(a) of the Canada Transportation Act, S.C. 1996, c. 10 (CTA). The Notice assessed a monetary penalty of $30 000, which was later reduced to $10 000, as counts B, D, E and F were withdrawn. The Applicant requested a review of the matter by the Transportation Appeal Tribunal of Canada (Tribunal), and after numerous delays, a hearing was set for October 2 and 3, 2013. On September 16, 2013, the Agency withdrew the Notice. On September 24, 2013, the Applicant wrote to the Tribunal stating that it did not consent to the withdrawal of the Notice and was seeking costs in the matter, on the basis that the original Notice was frivolous and vexatious.

[2] The Tribunal asked both parties for written submissions on the matter, including representations concerning the Tribunal's jurisdiction to hear an application for costs once the Notice had been withdrawn.

II. STATUTE

[3] Subsection 19(1) of the Transportation Appeal Tribunal of Canada Act, S.C. 2001, c. 29 (TATC Act) provides:

19. (1) The Tribunal may award any costs, and may require the reimbursement of any expenses incurred in connection with a hearing, that it considers reasonable if

(a) it is seized of the matter for reasons that are frivolous or vexatious;

(b) a party that files a request for a review or an appeal and does not appear at the hearing does not establish that there was sufficient reason to justify their absence; or

(c) a party that is granted an adjournment of the hearing requested the adjournment without adequate notice to the Tribunal.

III. ARGUMENTS

A. Applicant

[4] The Applicant set out its position in the letter of September 24, 2013. Its representative argued that a bureaucracy should be held to a higher standard than an applicant, since the relaxed standards of the Tribunal process is intended to allow document holders to participate without the necessity of representation. He pointed out that the Applicant had consistently taken the position that any violations which occurred had been committed by others and that, at a meeting in April 2013, the Applicant indicated it would be asking for costs at the conclusion of the hearing.

[5] The Applicant's representative argued that all the criteria for awarding costs set out in section 19 of the TATC Act had been met. The issue of the Notice was frivolous and vexatious since the evidence showed that the Applicant did not actually operate the aircraft involved. The withdrawal, two weeks before the date of the hearing, was without adequate notice to the Tribunal and the justification for the withdrawal, that being the lack of availability of witnesses, had existed for a considerable time.

[6] On October 25, 2013, the Applicant's representative wrote to the Tribunal stating that he no longer had any authority to make representations on behalf of his client but that he was not withdrawing his earlier representations.

B. Respondent

[7] On October 2, 2013, the Agency wrote to the Tribunal, challenging the allegations of bad faith and abuse of authority set out in the Applicant's request dated September 24, 2013. It took the position that, on the basis of the facts as it set them out, including the contractual arrangements with the air services, it was clear that the Applicant was operating an air service within the meaning of the CTA, even if it did not operate the aircraft. Further, the delays in scheduling a hearing were not caused by the Agency. Finally, one factor in deciding to withdraw the Notice was the inability to subpoena one witness, although diligent attempts to do so were carried out over the summer with the result that, to continue, the Agency would need to ask for an adjournment. Balancing the time and costs associated with such a request against the passage of time since the alleged violation, and the current compliance of the Applicant, it was decided to withdraw the Notice.

[8] Further, the Agency submitted that none of the criteria for awarding costs set out in subsection 19(1) of the TATC Act had been met. The Notice was not frivolous or vexatious within the meaning of paragraph 19(1)(a) since there was documentary evidence supporting the allegation that the Applicant was the operator of an air service. Paragraph 19(1)(b) applies only to the party who requested the review. Paragraph 19(1)(c) refers to a request for an adjournment made without adequate notice to the Tribunal, and no request for an adjournment was made. Further, the Tribunal set out its expectations of adequate notice in relation to a settlement in its Notice to Parties, requesting notice of five days, or at least two days, when possible—time enough to cancel accommodation and avoid service fees. The notice of withdrawal was given two weeks before the date of the hearing.

[9] On October 29, 2013, the Agency provided further material, in response to the Tribunal's request for submissions, concerning its jurisdiction to hear an application for costs after the Notice had been withdrawn. It argued that the powers of the Tribunal are limited to those found in sections 177 to 181 of the CTA that set out the authority to assess an administrative monetary penalty by means of a Notice of Violation, the ability to request a review and the powers of the Tribunal in respect of that review. Consequently, it argues that once the Notice is withdrawn, the Tribunal has no jurisdiction over the matter. The submission refers to two cases where it was held that an adjudicative tribunal's power was that given to it by statute and if the foundation for that power, a complaint, was withdrawn, the tribunal had no further jurisdiction in the matter. This was determined by the Federal Court of Canada in McKeown v. Royal Bank of Canada, [2001] 3 FC 139, with respect to the withdrawal of complaints under Part III of the Canada Labour Code, and by the Federal Court of Appeal in Canada (Attorney General) v. Lebreux, 178 NR 1, with respect to the withdrawal of grievances under the Public Service Staff Relations Act.

[10] The Agency also argued that the request in the Applicant's letter of September 24, 2013 was limited to a request for costs. There was no request for a determination of whether the contravention occurred or the penalty was justified. Even if the Tribunal had jurisdiction to order costs after a notice was withdrawn, it could only do so if, after a review, it could find that one of the criteria set out in subsection 19(1) of the TATC Act had been met.

[11] The Agency also pointed out that the Applicant, by suggesting that the Tribunal should require justification before consenting to the withdrawal of the Notice in a manner analogous to the courts, is in fact suggesting that the Tribunal should read into its governing statutes the authority to require justification and award costs when a notice is withdrawn. It is submitted that this view cannot be maintained in the absence of express statutory authority. While courts and some administrative tribunals may award costs when a matter before them is withdrawn, such costs are awarded on the basis of authority to do so set out in the governing statute or rules made under the authority of that statute.

[12] Finally, the Agency repeated the points made in its letter of October 2, 2013, which argued that even if the Tribunal had the ability to assess costs, none of the criteria set out in subsection 19(1) of the TATC Act had been met.

IV. DISCUSSION AND ANALYSIS

[13] The Applicant has invited the Tribunal to hold the Agency to a higher standard than the Applicant and to find that the Agency should not be allowed to unilaterally withdraw its Notice. Its actual request, however, was to institute a process that would allow the Applicant to recover its costs on the basis that all three of the situations described in subsection 19(1) of the TATC Act had been met. The Agency responded that since the Notice has been withdrawn, the Tribunal no longer has any jurisdiction in the matter, but even if it did, its authority is limited to the circumstances set out in subsection 19(1) of the TATC Act, none of which apply in this matter.

[14] Administrative tribunals are creatures of the statutes that govern them. Apart from the authority given by those statutes, they have no ability to adjudicate. The Tribunal's jurisdiction is set out in subsections 2(2) and (3) of the TATC Act. Subsection 2(3) grants jurisdiction “in respect of reviews and appeals in connection with administrative monetary penalties provided for under sections 177 to 181 of the Canada Transportation Act…”. I agree with the Agency's position that this provision limits the Tribunal's jurisdiction to hearings that determine whether or not a violation alleged in a notice issued under section 180 of the CTA did, in fact, occur and whether the monetary penalty assessed was appropriate in the circumstances. The basis for the hearing is the notice and, if the notice is withdrawn, that basis disappears and the Tribunal has no further jurisdiction in the matter.

[15] Subsection 19(1) of the TATC Act establishes a further jurisdiction of the Tribunal; a limited jurisdiction to assess costs in specified circumstances. The Tribunal has consistently held, most recently in Kipke v. Canada (Minister of Transport), 2013 TATCE 13 (Appeal), TATC file no. C-3449-33, that the jurisdiction to award costs is limited to those situations set out in the subsection. This jurisdiction, however, does not stand alone and must be read as an adjunct to the authority granted to the Tribunal under the statutes listed in section 2 of the TATC Act. Paragraphs 19(1)(b) and (c) refer to situations where there is a hearing or an adjourned hearing, and paragraph (a) refers to a situation where the Tribunal is “seized of the matter for reasons that are frivolous or vexatious”. On the basis of this wording, section 19 of the TATC Act can only apply where the Tribunal has jurisdiction over the matter. As pointed out above, the Tribunal has no jurisdiction once the notice is withdrawn and consequently cannot make an order as to costs.

[16] While I have found that there is no jurisdiction to order costs in this matter, for the sake of clarity, I would point out that in any event, were the Tribunal to have jurisdiction on this issue, there would be no basis for ordering costs in the circumstances set out in the material before me. While there is no proven evidence available, from the documentation before me there seems to be a genuine issue as to whether the Applicant was the operator of the air service and so it cannot be said that the Agency was acting for frivolous or vexatious reasons in issuing the Notice. The Notice was withdrawn two weeks before the hearing and, to the extent that the withdrawal is analogous to an adjournment, that period has been considered adequate by the Tribunal in other circumstances. I note in this connection that the requirement in paragraph 19(1)(c) is “adequate notice to the Tribunal” and it is for the Tribunal to determine whether that requirement is met. Similarly, even if the withdrawal were analogous to a failure to appear at a scheduled hearing as provided for in paragraph 19(1)(b), that paragraph only applies to the party that requested the review.

V. RULING

[17] I find that the Tribunal has no jurisdiction to consider the award of costs after a Notice of Violation, issued under section 180 of the Canada Transportation Act, has been withdrawn.

January 16, 2014

Elizabeth MacNab

Member