Decisions

CAT File No. H-2267-80
MoT File No. M4352/S466/00-01 (OTC)

CIVIL AVIATION TRIBUNAL

BETWEEN:

Canadian Transportation Agency, Applicant

- and -

Sky King Inc., Respondent

LEGISLATION:
Canada Transportation Act , ss. 57(a), 180


Review Determination
Allister W. Ogilvie


Decision: February 8, 2002

The Canadian Transportation Agency has proven, on a balance of probability, that Sky King Inc. contravened paragraph 57(a) of the Canada Transportation Act on the occasions and in the manner stipulated in the Notice of Violation dated March 27, 2001. I find that the Agency considered all the pertinent factors in coming to a quantum for the penalty. The minimum penalty suggested in the Agency's Enforcement Manual is appropriate in this case. I uphold the penalty as stated in the Notice of Violation for $5,000 on each count for a total of $20,000. The payment shall be made payable to the Receiver General for Canada and shall be received by the Civil Aviation Tribunal within 15 days of service of this determination.

A review hearing on the above matter was held Thursday, January 17, 2002 at 10:00 hours at the Standard Life Building, in Ottawa, Ontario.

BACKGROUND

Sky King is a foreign air operator based in Sacramento, California, USA. It holds a Federal Aviation Administration (FAA) operating certificate authorizing it to operate Federal Aviation Regulation (FAR) Part 125 operations. The company's specialized business is transporting the players and equipment of professional sports franchises from venue to venue. It also transports high profile entertainment groups.

Recently, it has contracted with the Vancouver Hockey Club to fly the Vancouver Canucks to and from Vancouver and various other cities during the course of their playing season.

Although Sky King has flown in and out of Canada on many occasions for over 10 years, only recently did its activities come to the attention of the Canadian Transportation Agency (the Agency).

Transport Canada is the entity tasked with ensuring that carriers operating to, from and within Canada meet prescribed technical and safety standards. It too became aware of Sky King's operations and issued a Notice of Assessment of Monetary Penalty against it regarding some of the same operations. That matter is the subject of a separate Civil Aviation Tribunal file (No. H-2316-41).

Pursuant to an investigation by the Agency, a Notice of Violation was issued to Sky King alleging that, between October 3, 2000 through November 26, 2000, it had operated an air service without holding a licence in respect of that service. As the monetary penalty was not paid, the Agency applied for a hearing of the matter.

PRELIMINARY ISSUES

Prior to the hearing, the parties consented to certain documents being entered as exhibits (C-1 to C-10) and came to an agreed statement of facts. The Respondent Sky King admitted to the four operations listed in the Notice of Violation dated March 27, 2001 issued by an enforcement officer designated by the Agency. It also admitted that it did not hold a Canadian Transportation Agency licence to operate either a domestic service or a non-scheduled international service on the dates specified in the Notice of Violation. Sky King did not admit that the operation contravened paragraph 57(a) of the Canada Transportation Act (the Act).

THE LAW

The relevant portion of paragraph 57(a) of the Act states:

57. No person shall operate an air service unless, in respect of that service, the person
(a) holds a licence issued under this Part;
[‘this Part' refers to Part II of the Act, Air Transportation.]

EVIDENCE

The requirement for a foreign air carrier to hold a Canadian licence issued under Part II of the Act was established through the testimony of Ms. Catherine MacDonald. She was accepted as an expert witness, her specialty being government relations and bilateral agreements. Ms. MacDonald participated in and was a senior advisor to Canada in the Canadian/American bilateral air transport agreements. Examination and cross-examination probed the esoteric language and meaning of several diplomatic notes and agreements exchanged between Canada and the USA. As an expert, she succinctly distilled the diplomatic exchanges into understandable terms. Simply put, U.S. Part 125 operators, such as Sky King, are considered by Canada to be publicly available charters and are required under the Act and the Air Transportation Regulations to hold a Canadian licence.

The Respondent's admissions stipulate that Sky King did not hold a Canadian Transportation Agency licence on the dates specified in the Notice of Violation of March 27, 2001.

Mr. Gregg Lukenbill is an entrepreneur/businessman and the president and sole shareholder of Sky King Inc. His testimony established that the company's certification from the American authorities was for Part 125 operations, a designation which restricted it from holding out or publicly advertising the company's services. As the carriage was not publicly available it was akin to private carriage. As such he did not believe that he required any additional authority to operate in Canada. The company had operated openly into Canada on numerous occasions over a twelve-year period complying with all customs, immigration and other authorities, paying the required fees to airports and NAV CANADA. Never in that time was the company made aware that it required any additional authority. Once made aware of the licencing requirement, the company complied as soon as possible.

DISCUSSION

The Agency must establish each element of the alleged offence. In this instance, the admitted statement of facts facilitates the proof of some of those elements. A violation of paragraph 57(a) of the Act requires proof of the following:

  • the identity of the "person";
  • that the person operated an air service;
  • when no licence under Part II had been issued.

"Person" includes a corporation in enactments in Canada[1]. Sky King is admittedly the corporate person in this matter.

The admissions establish that it transported passengers or goods or both on the aircraft on the dates and locations indicated in the Notice of Violation. That operation is consistent with the definition of an "air service" found at subsection 55(1) of the Act which states "a service, provided by means of an aircraft, that is publicly available for the transportation of passengers or goods, or both".

That the service was "publicly available" was established by Ms. MacDonald's testimony as was the requirement to hold a licence issued by the Agency.

Sky King acknowledged that it did not hold a licence to operate either a domestic service or a non-scheduled international service on the dates in question.

Therefore, each element of the offence has been made out, proving that Sky King committed a violation by contravening paragraph 57(a) of the Act.

SANCTION

The Notice of Violation lists four violations assessed at $5,000 each for a total of $20,000. Sky King contested both the propriety and quantum of sanction.

Mr. Laliberté is the enforcement officer who had conducted the investigation, issued a report and recommended that a Notice of Violation be issued. He explained that each of the four offences were a group of flight segments that the Agency considered to be one flight and thus one violation. For instance, offence one consisted of flight segments between October 3rd and 9th where air transportation was provided between Vancouver, Philadelphia, Fort Lauderdale, Tampa and return to Vancouver.

The Notice of Violation was signed by Mr. David Western, the Director of Enforcement, who also related the rationale for the number of offences and quantum of the penalty. The offences were for four movements of teams from and back to Canada. The Table of Designated Provisions at section 6.7.1 of the Agency's Enforcement Manual (the Manual) provides that a violation of paragraph 57(a) is regarded as a level 5 offence. In turn, Table of Penalty Amounts at section 6.10 provides that a level 5 offence for a 1st violation by a corporate offender is $5,000. Mr. Western stated that he took into consideration all of the mitigating circumstances such as Sky King's cooperation and that it obtained the licence as quickly as possible. In light of those circumstances and the Manual, he considered the minimum penalty to be appropriate.

Counsel for Sky King advanced argument on several fronts. He contended that as the company had operated into Canada for many years with no interference from authorities, the Agency could not now decide to enforce the regulations. There was a duty on the Agency to communicate their decisions to those that it affected before any action was taken.

He maintained that there should only be one offence in the circumstance, failure to get approval from a Canadian authority. In this instance, there were multiple allegations from two different bureaucratic departments alleging the same offences on the same facts without one having knowledge of the other. This was, as he coined it, a case of "bureaucratic disconnect".

Counsel further argued that if sanctions were to be applied, all factors must be considered. Sky King cooperated and complied as soon as able, after it became aware of the requirement. No deterrent effect was possible as no other Part 125 operator would know about the penalties. The Manual was only a guideline, common sense and equity should prevail.

DISCUSSION

I do not agree with Sky King's assertion that the Agency was required to give some form of notice before the regulations were to be enforced. By virtue of the decision to enter a regulated field, Sky King can be taken to accept the terms and conditions of entry into the field[2], including the regulations that are in force. It is especially important, when entering a foreign jurisdiction, to ascertain the rules of conduct in force there lest they be different than those with which you are familiar.

Counsel was of the view that there should only be a single offence. I must reject that contention. The allegations asserted by the agency covered four distinct movements at four different times. The movements involved for offences one, three and four were the operation from Vancouver, with stops in the USA, returning to Vancouver. At offence two, the operation was from Vancouver to Saint-Hubert, Quebec and from there to Buffalo, New York. In each instance, Sky King was operating an air service into or out of Canada without holding the appropriate authority. Each operation is properly the subject of a separate charge.

The operation by Sky King has offended two different statutes administered by two different enforcement offices. Testimony shows that the Agency was not coordinating its efforts with those of Transport Canada. However, I have not been offered any law or authority that would establish that the pursuit by each separately was in any way improper. That the two enforcement offices may have been afflicted with "bureaucratic disconnect" does not vitiate the offence.

Mr. Western testified that he had taken the mitigating circumstances, such as the company's cooperation and rectification of the problem, into consideration when establishing the penalty. He conceded that the Manual was only a guide but used his judgment in following it to establish the minimum recommended penalty.

DETERMINATION

The Agency has proven, on a balance of probability, that Sky King Inc. contravened paragraph 57(a) of the Canada Transportation Act on the occasions and in the manner stipulated in the Notice of Violation dated March 27, 2001.

I find that the Agency considered all the pertinent factors in coming to a quantum for the penalty. The minimum penalty suggested in the Manual is appropriate in this case. I uphold the penalty as stated in the Notice of Violation for $5,000 on each count for a total of $20,000.

Allister Ogilvie
Vice-Chairperson
Civil Aviation Tribunal


[1] Interpretation Act, R.S., c. I-23, subsection 35(1).

[2] R. c. Wholesale Travel Group Inc., [1991] 3 S.C.R. 154.