CAT File No. C-1790-37
MoT File No. RAP6504-C-032752 (P)
CIVIL AVIATION TRIBUNAL
Minister of Transport, Applicant
- and -
Venture Aviation Services Ltd., Respondent
Aeronautics Act, S.C., c. A-2, s. 8.5
Canadian Aviation Regulations, SOR/96-433, s. 202.35(2)
Loi sur l'aéronautique, L.R.C. 1985, c. A-2, art. 7.1
Transfer of Legal Custody, Registered Owner, Notice, Due Diligence, Defences, Control of Aircraft
Decision: August 10, 1999
The Minister of Transport has proved, on a balance of probabilities, that the Respondent, being the registered owner of a Canadian aircraft, transferred legal custody and control of said aircraft and failed to notify the Minister in writing of such transfer within seven days. However, I also find that, pursuant to section 8.5 of the Aeronautics Act, the Respondent has not contravened subsection 202.35(2) of the Canadian Aviation Regulations because it has proved on a balance of probabilities that it exercised all due diligence to prevent such contravention.
A Review Hearing on the above-noted matter was held on Tuesday, July 13, 1999 at 10:00 hours, at the Federal Court of Canada in Vancouver, British Columbia.
The allegation in this case arises out of the May 28, 1998 sale of the aircraft bearing registration marks C-GPMG from Venture Aviation Services Ltd. ("Venture"), the Respondent in this case, to a third party. The Respondent was assessed a monetary penalty of $100 for an alleged infraction of subsection 202.35(2) of the Canadian Aviation Regulations (CARs). The relevant portions of the Notice of Assessment of Monetary Penalty read as follows:
Pursuant to section 7.7 of the Aeronautics Act, the Minister of Transport has decided to assess a monetary penalty on the grounds that you have contravened the following provision(s):
Canadian Aviation Regulation 202.35(2), in that on or about June 5, 1998, being the registered owner of a Canadian aircraft, ... C-GPMG, who transferred the legal custody and control of the said aircraft, you did fail to notify the Minister in writing by not later than seven days after the transfer, more specifically, you transferred legal custody and control of the said aircraft on May 28, 1998 and did not notify the Minister by June 4, 1998.
The Minister called one witness, Mr. James Welwood, to give evidence in this case. The Minister also tendered six exhibits as documentary evidence:
- M-1 : Certificate of Registration for C-GPMG dated October 19, 1994
- M-2 : Certificate of Airworthiness for C-GPMG dated December 20, 1991
- M-3 Fax from Venture to Transport Canada Aviation Enforcement dated October 9, 1998 with Aircraft Bill of Sale dated May 28, 1998 attached
- M-4 Notice of Assessment of Monetary Penalty dated February 16, 1999 with two pages attached evidencing delivery by registered mail
- M-5 Letter from Department of Justice dated May 31, 1999 to Mr. James Welwood and attached Secretary's Certificate, Certificate of Registration for C-GPMG, Aircraft Bill of Sale and completed Application for Registration of Aircraft form
- M-6 Letter from Nav Canada dated June 11, 1998 with four pages attached regarding a June 5, 1998 Aircraft Occurrence Report with respect to C-GPMG.
Mr. Welwood testified that he is employed with Transport Canada Aviation Enforcement Branch ("Enforcement") in Winnipeg. On June 5, 1998, the Regina Flight Service Station filed an Aircraft Occurrence Report indicating that the pilot of an aircraft bearing the registration GPMG had failed to close a VFR flight plan after landing at Uranium City, Saskatchewan. On June 19, 1998, the Winnipeg Enforcement office received a copy of this Occurrence Report and on June 23, 1998, an Enforcement file was opened with respect to it. Mr. James Welwood was tasked with investigating the alleged failure to close the flight plan. On June 29, 1998, Mr. Welwood received the file. Upon doing so, Mr. Welwood conducted a computer search of the Canadian Civil Aircraft Registry to determine who was the registered owner of GPMG. The computer showed that Venture was the registered owner of the aircraft.
Following the search, Mr. Welwood faxed Venture on June 29, 1998, asking about GPMG's journey log. On July 2, 1998, Venture called him back and advised him that Venture had sold GPMG to Mr. Calvin Thistle on May 28, 1998. Mr. Welwood called Mr. Thistle, the new owner, and got the journey log information he required.
Some three months later-by October, 1998-Mr. Welwood was investigating the fact that Mr. Thistle had not registered GPMG in his name. On October 9, 1998, Mr. Welwood requested that Venture fax to him a copy of the bill of sale regarding GPMG. Venture did this immediately. This fax, and attached Aircraft Bill of Sale dated May 28, 1998 were entered in this case as Exhibit M-3. Ultimately, Mr. Thistle, the new owner of GPMG, was sanctioned for failing to register the aircraft in his name.
In the course of the investigation of Mr. Thistle's alleged contravention, on October 16, 1998 Mr. Welwood had requested from Ottawa the "paper file" on aircraft C-GPMG. He received it on November 6, 1998. The file contained the Certificate of Registration and the Certificate of Airworthiness in respect of GPMG. These documents, entered as Exhibits M-1 and M-2, showed Venture to be the registered owner of the aircraft. Mr. Welwood concluded from these documents that C-GPMG was a Canadian aircraft duly registered to Venture.
Mr. Welwood testified that he then realized that the vendor, Venture, had not notified the Minister of Transport, in writing, of the sale of GPMG to Mr. Thistle, in accordance with subsection 202.35(2) of the CARs. On December 7, 1998, Mr. Welwood opened a file with respect to this alleged contravention by Venture and sent a Letter of Investigation to Venture the same day. He received no response and filed a case report on the matter. Ultimately, Enforcement issued a Notice of Assessment of Monetary penalty dated February 16, 1999 to Venture by registered mail, assessing a $100 penalty for an alleged contravention of subsection 202.35(2) of the CARs (Exhibit M-4 and attachments).
The Minister also tendered as evidence in this case Exhibit M-5, a letter from the Department of Justice to Mr. Welwood with an attached Certificate signed by the Acting Secretary, Department of Transport and purporting to offer evidence pursuant to section 27 of the Aeronautics Act. This Certificate annexed the following documents: the Certificate of Registration for aircraft C-GPMG issued to Venture on October 19, 1994; a copy of the Aircraft Bill of Sale of GPMG from Venture to Calvin Thistle; and an Application for Registration of Aircraft for C-GPMG from Calvin Thistle dated October 28, 1998. The Certificate states that according to Department of Transport records, between May 28, 1998 and October 28, 1998, no notification from the registered owner of aircraft C-GPMG pursuant to subsection 202.35(2) of the CARs was received by or on behalf of the Minister of Transport, in respect of the transfer of the aircraft.
In cross-examination, Mr. Welwood admitted that Venture had been cooperative in its dealings with him and did not attempt to delay or mislead Mr. Welwood. Also in cross-examination, questions were raised regarding whether or not the Minister knew on June 5, 1998 that Venture had sold GPMG, since there had been a search for the aircraft on that day. Exhibit M-6 is a letter dated June 11, 1998 from Nav Canada to the Enforcement address in Winnipeg and attaching the June 5, 1998 Aircraft Occurrence Report and other information regarding the landing of GPMG in Uranium City. Mr. Welwood said that Transport Canada would not have been involved with the search for GPMG on June 5 since that is a Nav Canada function. Transport Canada did not become involved until receiving the Nav Canada letter on June 19, 1998, as evidenced by the date-received stamp on the letter.
A Flight Service Station teletype transmission that forms part of M-6 indicates that its sender believed that C-GPMG was owned by "Shimoon's." However, Mr. Welwood said that the aircraft had not in fact been sold again after Venture had sold it to Calvin Thistle. Mr. Welwood said he believed that Shimoon's was merely the operator involved on that particular June 5, 1998 flight.
Document M-6 had not been disclosed to the Respondent prior to the hearing. However, I find that there was no prejudice to the Respondent by the Minister of Transport's failure to disclose document M-6. The Minister did not rely on this document as evidence in this case except to confirm dates when questioned about them by the Respondent. The document was of no assistance to the Respondent in making out his defence.
Mr. Ken Leyden, President and Director of Venture, presented the case for Venture. He said that he had sent a document to the Minister notifying them of the change in ownership.
Venture submitted three documents as evidence in this matter:
- D-l Notification of Change of Owner(s) form 26-0425 (03-90) (blank)
- D-2 Notification of Change of Owner(s) form 26-0519 (96-10) (blank)
- D-3 Canadian Civil Aircraft Register computer search printout
Mr. Leyden testified that he had no reason not to submit documents regarding the sale of GPMG and that he is familiar with the process. He said he had handled over 600 aircraft transactions and has never had a problem before. In the past, the Minister has never let him know that they have received documents advising them of a sale. He said there is no way to contact the Minister to find out if they have received such documents. Mr. Leyden tendered as Exhibits D-1 and D-2 two samples of a Transport Canada form, an older and a newer version, entitled "Notification of Change of Owner(s)...." These forms are, or were, attached to aircraft Certificates of Registration when sent to aircraft owners. Exhibits D-1 and D-2 allow a registered owner to identify him or herself and to state to whom they are transferring ownership of a particular aeroplane. The forms are printed on one side with prepaid postage and a Department of Transport or Transport Canada address in Ottawa. Although the addresses differ somewhat on the two forms, they both use the same postal code.
Mr. Leyden said that he had checked with the post office and discovered that this type of mail is of a "low class" that would go by ground and take at least five days to get from Vancouver to Ottawa. This type of mail is delayed if there is a heavy volume of mail. Mr. Leyden pointed out that there is no phone number, fax or E-Mail address listed on these forms that a document holder could use to verify that the Minister had received the document. He wondered how a document holder is expected to know whether the Minister has received this type of notification since the Minister does not call to say it has been received. There is no second copy for the document holder to retain, he or she would have to make a photocopy. He also pointed out that the form does not provide for the case where the legal custody and control is transferred by a lease.
Mr. Leyden stated his belief that the Minister has been overzealous in this case. He said he believed that the Minister knew about the sale on June 5, 1998 because of the flight plan incident, since they had to establish ownership at that time. He stated his belief that the matter could have been cleared up in June because he had talked to Mr. Welwood in June and had later faxed him a copy of the bill of sale. He also stated his belief that the Minister had not proved that he did not mail them the required notice, only that they did not receive it. Mr. Leyden argued that Venture should not be vilified for another party's delay in registering the aircraft.
In cross-examination, Mr. Leyden admitted that he normally does the paperwork advising the Minister of the sale of aircraft. He agreed that although he had said he submitted the Notification of Change of Owner(s) form in respect of the sale of GPMG, he did not make a copy of it, even though he has a photocopier in his office. He said he did not usually do that and he has never had a problem in the past. Also in cross-examination, Mr. Leyden admitted that he did not post the notice with respect to GPMG himself. He put it in the common mailing area in Venture's office. He agreed that he could not prove that he filled out the document and sent it to the Minister. He admitted that he knew how to contact Transport Canada locally and has done so in the past regarding registrations and other matters. However, he did not check locally to find out if the registration for GPMG had been changed, even after receiving a letter of investigation in this matter.
Mr. Leyden stated that he had sent a copy of the bill of sale for GPMG to Mr. Welwood on or about June 29, 1998, but on further cross-examination and reference to M-3, Venture's October 9, 1998 fax, he admitted that between May 28, 1998 and October 9, 1998 he had not made any attempt to notify the Minister in writing. He said that was because he did not know that the Minister had not received the first document he had sent. Also, he thought that Mr. Welwood had rectified the situation at the end of June 1998 because he had told Mr. Welwood then that the aircraft was sold. Mr. Welwood had accepted that and had not asked for the bill of sale at that time. Mr. Leyden thought he had fulfilled the requirements at the end of June 1998, although he does not know what written documents were on file at that time. He admitted he did not take any steps to get Venture's name off the record after his conversation with Mr. Welwood at the end of June 1998.
Also in cross-examination, Mr. Leyden admitted that the use of the forms D-1 and D-2 are not the only way of notifying the Minister of a change of ownership. However, he normally advised the Minister of a change by using the forms. He has never kept a record of these forms, but said he will now.
Mr. Leyden submitted a copy of Aircraft Information for C-GPMG from the Canadian Civil Aircraft Register, a computer printout, Exhibit D-3, which had been disclosed to him by the Applicant. This exhibit contains a handwritten note that includes a telephone number and "Sold May 28 to Calvin Thistle." The computer printout is dated June 29, 1998 and lists the owner as Venture.
Mr. Holbrook, for the Applicant, submitted that the role of the Minister of Transport is to ensure the safety and efficiency of the air transportation system. A crucial part of that system is who has custody and control of aircraft. He submitted that it is not unreasonable for the Minister to require written advice of aircraft transfers within seven days. He said a delay of five days in the mail is not a problem since Transport Canada accepts postmark dates. He submitted that since Transport Canada offices have 24-hour faxes, the Respondent could have faxed the notification to Transport Canada or could have given a handwritten note to the local office. Mr. Holbrook argued that although Mr. Leyden had said that the document advising of the transfer was submitted, Mr. Leyden had provided no evidence to substantiate that claim and the Minister's evidence shows that no notification was received. Further, once Mr. Leyden learned of the discrepancy he did not take action in writing to rectify it. Mr. Holbrook submitted that since Mr. Leyden was in regular contact with the local Transport Canada office, he could have checked with them. He also could have checked the Certificate of Registration on the Internet. Mr. Holbrook submitted that a business should not allow its name to be attached to an aircraft it no longer owns. Mr. Holbrook denied that the Minister had proceeded with extreme vigour in this case but had instead simply proceeded with standard policy and procedure. He submitted that the Minister had shown on a balance of probabilities that Venture was the registered owner, had sold the aircraft thereby transferring custody and control, and did not advise the Minister of that transfer in writing within seven days. Further, the Respondent failed to notify the Minister in writing even after being notified that there was a problem. Mr. Holbrook asked the Tribunal to uphold the Minister's decision.
Mr. Leyden for the Respondent submitted that Venture had no reason to delay or not submit the proper documents. He argued that the process is flawed because there is no provision for verification by the owner. An owner does not have to file a bill of sale, only the notice of change. He said no one could take a copy of such a notice that would prove anything. There is no Transport Canada fax number on the form that could be used and there is no way to find out if the notice has actually been received by the Minister. Mr. Leyden submitted that the Minister knew of the sale of GPMG as early as June 1998, but did not ask for the bill of sale until October. He believes he should not be prosecuted for another party's failure to register. He submitted that the Minister had not proved that he did not send the notice, only that they did not receive it. The procedure is in his view a hodge podge. He said that most people do not know the local fax numbers of the Minister of Transport offices. He submitted that Venture should not be held accountable and there should be no penalty levied in this case.
Mr. Holbrook for the Applicant pointed out that the maximum sanction for the infraction alleged in this case is $2,500 and the recommended sanction for a first offence is $500. He submitted that since the Minister knew that this case was not safety related and there may have been mitigating circumstances, the Minister exercised leniency and assessed only a $100 penalty.
The onus is on the Applicant Minister of Transport to prove each element of the alleged contravention on a balance of probabilities.
Subsection 202.35(2) of the CARs provides as follows:
(2) Where the registered owner of a Canadian aircraft transfers any part of the legal custody and control of the aircraft, the registered owner shall, by not later than seven days after the transfer, notify the Minister of the transfer in writing.
The Minister has clearly proved in this case that the Respondent Venture was a registered owner who transferred legal custody and control of the Canadian aircraft bearing registration marks C-GPMG on May 28, 1998. The question for me to decide is whether or not the Minister has proved on a balance of probabilities that Venture failed to notify the Minister of such transfer within seven days, contrary to subsection 202.35(2) of the CARs.
"Notify" is defined in the Oxford English Dictionary: "...To make known...To give notice to; to inform...". The term "notify" includes an element of one party receiving information as well as one party sending information. Where one party does not receive a communication, I do not think it can be said that the first party did notify them, though they may have attempted to do so.
Exhibit M-5 is a letter from the Department of Justice dated May 31, 1999 and attaching a certificate purporting to be issued pursuant to section 27 of the Aeronautics Act and signed by the Acting Secretary, Department of Transport (the "Secretary").
Section 27 of the Aeronautics Act provides as follows:
27.(1) In any action or proceeding under this Act, any document purporting to be certified by the Minister, the Secretary of the Department of Transport or the Secretary of the Canadian Transportation Agency to be a true copy of a document made, given or issued under this Act is, without proof of the signature or of the official character of the person appearing to have signed the document, evidence
(a) of the original document of which it purports to be a copy;
(b) that the original document was made, given or issued by or by the authority of or deposited with the person named therein and was made, given, issued or deposited at the time stated in the certified copy, if a time is stated therein; and
(c) that the original document was signed, certified, attested or executed by the persons and in the manner shown in the certified copy.
(2) In any action or proceeding under this Act, any certificate purporting to be signed by the Minister, the Secretary of the Department of Transport or the Secretary of the Canadian Transportation Agency stating that a document, authorization or exemption under this Act
(a) has or has not been issued to or in respect of any person named in the certificate or in respect of any aircraft, aerodrome or other aviation facility identified in the certificate, or
(b) having been issued to or in respect of any person named in the certificate or in respect of any aircraft, aerodrome or other aviation facility identified in the certificate, has expired, or has been cancelled or suspended as of a date stated in the certificate, and stating, in the case of a suspension, the period of the suspension,
is evidence of the facts stated therein, without proof of the signature or of the official character of the person appearing to have signed the certificate and without further proof thereof.
The documents attached to the letter marked M-5 include a copy of the Certificate of Registration for C-GPMG issued October 19, 1994 and showing Venture as registered owner. They also include another copy of the Aircraft Bill of Sale for C-GPMG dated May 28, 1998 and a copy of an Application for Registration of Aircraft apparently completed by Calvin Thistle.
The following statement is contained in the last paragraph of the Secretary's Certificate:
THAT, according to the records of the Department of Transport, between May 28, 1998 and October 29, 1998, no notification from the registered owner of aircraft C-GPMG pursuant to subsection 202.35(2) of the Canadian Aviation Regulations was received by or on behalf of the Minister of Transport, in respect of the transfer of the aircraft.
As set out above, subsection 27(2) gives the Secretary the authority to state in a certificate that a document, authorization or exemption under the Aeronautics Act has or has not been issued, has expired, or has been cancelled or suspended. The section does not specifically give the authority to the Secretary to make statements in a certificate about whether or not a notification has been received by the Minister of Transport. I can only assume that in reaching his conclusion, the writer of this statement looked at the same records that Mr. Welwood did when searching for information about the ownership of GPMG and then inferred from that information that no notice was received. Rather than give weight to the statement contained in the last paragraph of the Secretary's Certificate, I prefer to rely on the witness evidence of Mr. Welwood as to the results of his computer search on GPMG and his search of the paper file on the aircraft. From that information, I may draw the inference that the Minister did not receive written notification that GPMG was sold.
The evidence of Mr. Leyden on behalf of the Respondent was that he had completed a Notification of Change of Owner(s) form but had not posted it himself since there is a common area in his office where outgoing mail is placed. However, subsection 202.35(2) of the CARs sets out a strict liability offence. This means that the Minister need not prove that the alleged offender had an intention to commit the offence, only that the offence was committed.
Section 8.5 of the Aeronautics Act provides that:
8.5 No person shall be found to have contravened a provision of this Part or of any regulation or order made under this Part if the person exercised all due diligence to prevent the contravention.
Thus, once the offence is proved, the evidentiary burden shifts to the alleged offender to prove that he took all reasonable care to prevent the commission of the offence.
The Minister's evidence, as given by Mr. Welwood, is that on June 29, 1998, a computer search of the Canadian Civil Aircraft Register revealed that Venture was shown as the registered owner of aircraft C-GPMG. Even by November 6, 1998, the Respondent, Venture, was listed as the registered owner of C-GPMG, although the aircraft was sold on May 28, 1998. The only documentary evidence indicating that the Respondent had given written notice of the transfer to any department of the Minister is M-3, a fax requested and received by Enforcement in Winnipeg on October 9, 1998.
Although it is possible that an error was made by the record-keepers of the Minister of Transport in this matter by failing to remove the Respondent's name from its ownership records after receiving the Notification of Change of Owner(s) form completed by Mr. Leyden on or about May 28, 1998, I think it is not probable. I find on the evidence that, on a balance of probabilities, the Applicant has proved that the Minister did not receive such notification and as such I find on a balance of probabilities that the Respondent failed to notify the Minister of a transfer of the legal custody and control of C-GPMG by not later than seven days of the transfer, contrary to subsection 202.35(2) of the CARs.
Did the Respondent exercise all due diligence to prevent the contravention? Mr. Leyden said that he completed the Notification of Change of Owner(s) form for the sale of GPMG and placed it in his office's mailing area. The Notification of Change of Owner(s) forms are provided by the Minister to all registered aircraft owners with their Certificates of Registration. They are official, pre-addressed, pre-posted forms, which suggests that they are to be sent by regular mail. There are no fax numbers on the forms, or E-Mail addresses, or any suggestion that they ought to be sent by registered mail. The Minister does not normally let people know whether or not they have received a form, and there is no procedure set out for the sender to verify that the Minister has received it. The pre-printed form appears to be the vehicle that the Minister requires owners to use to notify the Minister of a change in ownership. Mr. Leyden said that he has been involved in over 600 aircraft transactions in his career. He normally uses the form as he did in this case to notify the Minister of changes in ownership. He has never had a problem with this system in the past.
My conclusion is that in these circumstances, Mr. Leyden, by completing the Notification of Change of Owner(s) form for the sale of GPMG and placing it in his office's mailing area, exercised on behalf of Venture all reasonable care to prevent the contravention of the offence alleged.
The Applicant has proved on a balance of probabilities that the Respondent contravened the CARs as alleged in the Notice of Assessment of Monetary Penalty. However, I also find that the Respondent exercised all due diligence to prevent the contravention and as such, is not liable for the contravention.
Civil Aviation Tribunal
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