Decisions

CAT File No. H-2316-41
MoT File No. 5504-Z-1-043213

CIVIL AVIATION TRIBUNAL

BETWEEN:

Minister of Transport, Applicant

- and -

Sky King Inc., Respondent

LEGISLATION:
Aeronautics Act, R.S., c. 33 (1st Supp), s. 7.7
Canadian Aviation Regulations, SOR/96-433, s. 700.02(1)

Mitigating factors, Duplicity


Review Determination
Allister W. Ogilvie


Decision: February 8, 2002

The Minister has proven, on a balance of probability, that Sky King Inc. contravened subsection 700.02(1) of the Canadian Aviation Regulations on 12 occasions. I find that the mitigating factors discussed should have been considered in coming to the appropriate penalty. In the result, I lower the amount of penalty by $1,000 per count. Therefore, the total penalty becomes $4,000 per count for a total of $48,000. 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 Wednesday, January 16, 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 Transport Canada.

The Canadian Transportation Agency (CTA) is the entity tasked with ensuring that carriers operating to, from and within Canada meet certain economic requirements. It too became aware of Sky King's operations and filed a Notice of Violation against it regarding some of the same operations. That matter is the subject of a separate Civil Aviation Tribunal file (No. H-2267-80).

Pursuant to an investigation by Transport Canada, a Notice of Assessment of Monetary Penalty was issued to Sky King alleging that, on various dates in the year 2000, it had operated an air transport service in Canada when it did not hold an air operator certificate that would have authorized such a service. As the monetary penalty was not paid, Transport Canada applied for a hearing of the matter.

PRELIMINARY ISSUES

Prior to the hearing, the parties consented to certain documents being entered as exhibits (M-1 to M-10) and came to an agreed statement of facts. The Respondent admitted that it operated the specific aircraft itemized in the 12 operations listed in Schedule "A" of the Notice on the dates and to the locations indicated in the information. It also admitted that it did not hold an air operator certificate issued by any Canadian authority.

That Sky King required a Canadian certificate to perform those operations was not conceded.

THE LAW

The relevant portion of the Canadian Aviation Regulations (CARs) subsection 700.02(1) states:

No person shall operate an air transport service unless the person holds and complies with the provisions of an air operator certificate that authorizes the person to operate that service.

EVIDENCE

The requirement for a foreign air carrier to hold a Canadian document was established through the testimony of Captain D. Guindon, the chief of foreign inspection for Transport Canada. All commercial carriers operating in Canada are required to have a document. Although Part 125 operators are regarded as private carriers in the United States, it was his testimony that Canada views them as commercial operations regardless of the certification in the country of origin.

Sky King's admission stipulates that it did not hold a Canadian licence at the pertinent time. The certificate signed by the Secretary of the Department of Transport (M-10) establishes that in the year 2000 no air operator certificate was issued by the Minister of Transport to Sky King authorizing it to operate an air transport service in Canada.

Mr. Gregg Lukenbill is an entrepreneur/businessman and the president and sole shareholder of Sky King Inc. He testified that the company's certification from the US authorities was for private carriage as compared to a common carriage. As such he did not believe that he required any additional authority to operate in Canada and in fact had operated into the country on numerous occasions for about 12 years. Never had anyone made him aware that any additional authority was required. He had no intention of breaking the regulations and rectified the licensing problem as soon as he became aware of it.

DISCUSSION

The Minister must establish each element of the alleged offence. In this instance, the admitted statement of facts facilitates the proof of some of the elements. A violation of subsection 700.02(1) of the CARs requires proof of the following elements:

  • the identity of the "person";
  • that the person operated an air transport service;
  • that the person did not hold an air operator certificate.

"Person" includes a corporation in enactments in Canada.[1] Sky King Inc. is admittedly the corporate person in this matter, so the first element is established.

As to the second element, Sky King admitted that it operated the aircraft itemized in Schedule "A"of the Notice on the dates, times and at the locations indicated in the Schedule. The purpose of the flights was to transport persons, personal belongings, baggage, goods or cargo between two points.

Subsection 101.01(1) of the CARs defines an "air transport service" as "a commercial air service that is operated for the purpose of transporting persons, personal belongings, baggage, goods or cargo in an aircraft between two points".

Section 3 of the Aeronautics Act defines a "commercial air service" as "any use of aircraft for hire or reward".

The Act defines "hire or reward" as "any payment, consideration, gratuity or benefit, directly or indirectly charged, demanded, received or collected by any person for the use of an aircraft".

Sky King was by definition an air transport service as its aircraft were operated for the purpose of transporting persons, personal belongings, baggage etc. for hire or reward as Sky King had received payment for those operations. It did not hold an air operator certificate that authorized it to operate such a service. Therefore, Sky King was in contravention of subsection 700.02(1) of the CARs.

SANCTION

The Notice listed 12 offences to be assessed at $5,000 each for a total of $60,000. Sky King contested both the propriety and quantum of sanction.

Mr. J.-F. Mathieu, the chief of aviation enforcement for Transport Canada, had signed the Notice. He was guided in the amount of the penalty by reference to Chapter 11 of the Aviation Enforcement Procedures Manual (the Manual) which addresses sanctions. Regarding this offence, the recommended sanction for a first offence, corporate offender, was $5,000. He felt that there were no mitigating nor aggravating factors which would have caused him to vary the amount.

Twelve counts were charged as the logs indicated 12 flights were flown between the dates of October 3rd and November 27th. Although section 9.7.3 of the Manual allows that flights involving intermediate stops may be treated as one flight, he was of the opinion that these flights did not meet that characteristic.

Counsel for Sky King advanced argument on several fronts. On a general note, he contends that as Sky King had operated in Canada for many years with no interference from authorities, Transport Canada could not now decide to enforce the regulations without giving notice of its intention to do so. As two government entities had charged his client for basically the same offence on the same facts there was a duplicity of charges which could not be said to be an equitable administration of justice.

He asserted that there should only be one offence, the lack of the operating certificate, not an offence for each flight without one. If there were to be more than one offence, then the operations should be regarded as having intermediate stops within the meaning of section 9.7.3 of the Manual so multiple legs with stops should be regarded as a single flight which would result in three operations rather than 12 separate flights. Some of the flights that were the subject of allegations were ferry or positioning flights for which a customer is not charged so should not be the subject of an offence. Regarding the level of sanction, Mr. Clark maintained that Transport Canada must look at all of the factors in its assessment of penalty and had not done so as there were many mitigating factors that should have been considered but were not.

DISCUSSION

I do not agree with Sky King's argument that Transport Canada was required to give it 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 there. It is especially important, when entering a foreign jurisdiction, to ascertain the rules of conduct in that jurisdiction lest they be different from those with which it is familiar. Further, there is no evidence that Transport Canada was not enforcing the regulations, only evidence that this particular company had escaped Transport Canada's attention for some time.

Counsel had maintained that there was a duplicity of charges. I take that to mean there are duplicate charges arising out of the same facts, not that the charges are duplicitous. Basically, the rule against duplicity is that the information in one count must not charge more than one offence[3].

In this instance, each count stipulates but a single offence, operating without an air operator certificate. They cannot be said to be duplicitous. In this circumstance, that operation without a certificate has offended two different statutes administered by two different departments. I have not been offered any law or authority that would establish the pursuit of charges by each one as being in any way improper.

Also at issue, is whether a trip that compromises one or more segments is a single flight or is made up of as many flights as there are segments. Counsel had argued that the company's activity should only be the subject of a single offence. Alternatively, the flights should be viewed as having intermediate stops which would have the effect of treating multiple segments as one flight. There was no evidence adduced of what should be considered an intermediate stop, as per section 9.7.3. of the Manual, other than Mr. Mathieu's statement that he considered them to be separate and distinct with no intermediate stops. I have only argument from the Respondent to the contrary. I do note that the Act addresses continuing offences at section 7.31 where it states:

7.31 Where an offence under this Part is committed or continued on more than one flight or segment of a flight, it shall be deemed to be a separate offence for each flight or segment of a flight on which the offence is committed or continued.

The section gives authority for the proposition that each flight segment can subject of an offence.

I do not accept that ferry or positioning flights are exempt from being the subject of an offence because the customer is not charged for that leg. I do not believe that an entity slips in and out of its designation as an air transport service depending on whether or not the leg being flown is revenue producing. No authority was produced for that proposition.

As to mitigating factors, I find that counsel for Sky King does have a point. The Manual, at section 9.7.3, addresses Transport Canada's choice of factors affecting sanction. In reviewing sanction, the Tribunal has often referred to the Wyer determination[4] which addresses sanction more fully. It details some of the principles of determining an appropriate monetary penalty such as denunciation, deterrence, rehabilitation and enforcement recommendations. It suggests aggravating and mitigating factors that may be considered in arriving at a penalty.

I find that some of the mitigating factors enunciated in that determination could have been taken into consideration. There were no previous offences of the same nature. Sky King's President expressed remorse at having contravened the regulation and cooperated with Transport Canada when he became aware of the infraction. Although during the hearing, counsel did not concede that a certificate was required, Mr. Lukenbill basically admitted the offence when stating that he had made an honest mistake.

Regarding the general principles, some degree of denunciation is required as public repudiation of the wrongful act. As Sky King complied with the regulation as quicky as possible and expressed its desire to cooperate, no specific deterrence or rehabilitation is called for, but general deterrence for others in that type of the aviation community is still required.

Counsel for Transport Canada argued that the penalty was already the minimum recommended. Sky King asserted that there were mitigating factors but did not suggest by what amount the penalty should be lowered to reflect those circumstances. I am left to consider the implications without their further guidance.

DETERMINATION

The Minister has proven, on a balance of probability, that Sky King contravened subsection 700.02(1) of the CARs on those 12 occasions and in the manner stipulated in Schedule A to the Notice of Assessment of Monetary Penalty dated 2001/06/29.

I find that the mitigating factors discussed above should have been considered in coming to the appropriate penalty. In the result, I lower the amount of penalty by $1,000 per count. Therefore, the total penalty becomes $4,000 per count for a total of $48,000.

Allister Ogilvie
Vice-Chairperson
Civil Aviation Tribunal


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

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

[3]R. v. Sault Ste. Marie, [1978] 2 S.C.R. 1299.

[4]Minister of Transport v. Wyer, CAT File No. O-0075-33, Appeal.