Decisions

TATC File No. O-3248-09
MoT File No. 5258-12634

TRANSPORTATION APPEAL TRIBUNAL OF CANADA

BETWEEN:

Nexjet Aviation Inc., Applicant

- and -

Minister of Transport, Respondent

LEGISLATION:
Aeronautics Act, R.S.C. 1985, c. A-2, s. 7.1(1)(c), 7.92
Canadian Aviation Regulations, SOR/96-433, 101.01(1), 103.07(a), 103.12(a), 401.03(1), 605.94(1), 706.07, 726.07

Public interest, Insurance, Operator certificate, Journey Log Entries, Flight Crew Member, False entries with intent to mislead


Review Determination
Allister W. Ogilvie


Decision: July 28, 2006

The Minister has proved on a balance of probability that the public interest and the aviation record of NexJet Aviation and a principal of NexJet aviation, Ravinder Virdi, warrant the cancellation of NexJet's air operator certificate.

A review hearing on this matter was held on March 28 to 31, April 4 to 7, 18, 19, 21 and 25, 2006 in Toronto, Ontario.

BACKGROUND

NexJet Aviation Inc. (NexJet) is an air operator based at the Toronto Buttonville Municipal Airport in Ontario. It was issued an air operator certificate (AOC) no. 9799 in July 2002. The certificate allowed it to operate an air taxi service under section 703 of the Canadian Aviation Regulations (CARs) and aerial work under section 702 of the CARs. It utilized Cessna 310 aircraft and later Piper Navaho aircraft were added to the fleet. The company established a sub-base in Vancouver, British Columbia, in early 2006 to do bank courier runs in that province.

Since its inception, the company has been subject to the normal Transport Canada oversight in the form of regularly scheduled audits and also a special purpose audit. The effect of the oversight process caused Transport Canada officials to have some concerns with the company's performance. An incident with a company aircraft operating from the British Columbia base led to further concern and investigation.

Transport Canada officials also reviewed NexJet principal's aviation history. The cumulative effect of their reviews of the company and its principal led to a decision to cancel the company's AOC on March 8, 2006. A notice of cancellation was issued pursuant to paragraph 7.1(1)(c) of the Aeronautics Act in the following form:

Pursuant to paragraph 7.1(1)(c) of the Aeronautics Act, the Minister of Transport has decided to cancel your Air Operator Certificate indicated above for the following reasons:

The public interest and, in particular, the aviation record of NEXJET AVIATION INC. (Nexjet) and a principal of Nexjet, Mr. Ravinder Singh Virdi, warrant the cancellation of the Air Operator Certificate mentioned above. Details of the grounds for the cancellation are found in the attached Appendix to this Notice.

. . .

The detailed grounds for the Cancellation are as follows:

1. On July 18, 2002, NexJet Aviation Inc. (Nexjet) was issued Air Operator Certificate (AOC) Number 9799.

2. On November 20, 2002, Mr. Ravinder Singh Virdi (Mr. Virdi), a Nexjet Principal, failed to comply with subsection 401.03(1) of the Canadian Aviation Regulations (CARs) and a 60 day suspension of his Private Pilot Licence was issued. (Enforcement Management System File (EMS) 49446)

3. On April 25, 2003 Nexjet failed to comply with subsection 605.94(1) of the CARs and a $370.37 monetary penalty was issued. (EMS 51343)

4. On May 7, 2003, during a series of flights, Mr. Virdi, a Nexjet Principal, failed to comply with section 401.03 of the CARs (5 counts) and section 703.88 of the CARs (1 count). A $1250.00 monetary penalty and a 30 day suspension of Mr. Virdi's Private Pilot Licence were issued. (EMS 50684)

5. On May 7, 2003, during a series of flights, Nexjet was found to have failed to comply with paragraph 7.3(1)(c) of the Aeronautics Act (3 counts), subsection 703.88(1) of the CARs (2 counts), and section 703.02 of the CARs (1 count). Monetary penalties totaling $4625.00 and a 10 days suspension of Nexjet's Air Operator Certificate were issued. (EMS 50653, EMS 51340)

6. On May 8, 2003 Nexjet voluntarily surrendered their AOC because their Chief Pilot resigned and the operator did not have a suitably qualified pilot to carry out the duties.

7. On July 2, 2003 Nexjet nominated a qualified Chief Pilot candidate and applied for re-instatement of the AOC.

8. On July 7, 2003 a Notice of Refusal to Renew the AOC was issued because it had been found that Nexjet's Operations Manager was not fulfilling his responsibilities with respect to control of operations and operational standards.

9. On August 5, 2003 the AOC was reinstated because Nexjet met the conditions of issuance with a new Operations Manager and Chief Pilot who were approved by Transport Canada.

10. On May 14, 2004 Nexjet failed to comply with subsection 606.02(8) of the CARs on 2 counts and a $2000.00 monetary penalty was issued. (EMS 54429)

11. On June 25, 2004 Nexjet failed to comply with subsection 605.94(1) of the CARs (1 count), and a $1250.00 monetary penalty was issued. (EMS 54134)

12. On December 3, 2004 a Notice of Suspension (NOS) of Nexjet's AOC was issued because a regularly scheduled audit in November of 2004 found that the Operations Manager was not fulfilling his responsibilities with respect to their approved training program, ensuring operations are conducted in accordance with regulations, standards and air operator policy, and ensuring the qualifications of his flight crew. The NOS was to take effect on December 20, 2004, however, Nexjet demonstrated compliance prior to that date and the NOS was rescinded.

13. On January 19, 2005 a Special Purpose Audit (SPA) was completed. Results from the audit found that Nexjet failed to ensure that its Evaluation Program continued to comply with the requirements as stated in the CARs. Failure of the Maintenance Planning system has resulted in Nexjet's aircraft being operated with required scheduled maintenance overdue.

14. On March 3, 2005 a NOS for Nexjet's AOC was issued because Nexjet failed to comply with maintenance requirements as required by section 703.07 of the CARs.

15. On March 31, 2005, Nexjet complied with the conditions of reinstatement, and the NOS was rescinded.

16. On October 12, 2005 regular oversight of Nexjet revealed that the Acting Operations Manager was not fulfilling his responsibilities with respect to control of operations, dispatching of flights, and operational standards.

17. On October 18, 2005, a Notice of Suspension of Nexjet's AOC was issued.

18. On October 19, 2005 Nexjet nominated a new Operations Manager and the NOS for the AOC was rescinded on the same date.

19. Several fines against Nexjet remain outstanding and unpaid.

20. Continued monitoring of Nexjet's operation has revealed several non-compiances [sic] with the CARs and further charges are expected.

Overall the above aviation record has demonstrated that Nexjet and Mr. Virdi as a principal of the company have not shown the ability to operate a commercial air service in accordance with the CARs and Aeronautics Act.

NexJet wished to challenge the cancellation and requested a hearing of the matter which brought about these proceedings.

PRELIMINARY MOTIONS

NexJet's counsel, Scott Kirkpatrick, presented two motions at the commencement of the hearing.

The parties' positions may be briefly summarized as follows:

NexJet

1. Motion to quash ground 20. The ground was premature as it dealt with matters that were yet to be heard and therefore were not part of the company's record. As these matters were yet pending, the company did not have full knowledge of them and consequently could not properly respond to them.

2. Motion to strike or amalgamate certain of the grounds. Mr. Kirkpatrick asserted that some of the grounds were clearly not grounds for cancellation. For instance, ground 1 simply stated that the company was issued an AOC on July 18, 2002. Other grounds should be amalgamated, for instance, grounds 6 to 9 merely told the story of an employment transition at the company. Grounds 16 to 18 really dealt with only one transaction. Ground 19 addressed certain unpaid fines, but the fines had been subsequently paid.

Minister of Transport

Beverlie Caminsky responded on behalf of the Minister. She asked that no grounds be struck or amalgamated.

1. Charges pending were a consideration in the action taken and were put in to allow the document holder to know all the information being considered against it. It should not be struck but any evidence under the ground be given appropriate weight.

2. All of the grounds were relevant to set out the record of why the AOC had been cancelled. For instance, ground 1 was the reference point to begin the story. There was no prejudice to NexJet with its inclusion. Grounds 3, 4, 5, and 10 were the heart of the enforcement file dealing with violations. The ones dealing with non-enforcement matters were all relevant to reveal the past pattern of behavior.

Ruling

Both motions are dismissed.

The Transportation Appeal Tribunal of Canada's (Tribunal) mandate is to deal with matters as expeditiously as circumstances of fairness and natural justice permit. I find that the most expeditious manner of handling the matter is to hear all of the evidence proffered to establish it on the record rather than to strike any of the grounds.

It is clear that there are not 20 grounds for cancellation as is stated in the notice. At least some of the purported grounds such as number one are not grounds for cancellation but are background facts and they will be addressed as such in the determination.

OTHER PRELIMINARY MOTIONS

Motion for an in-camera hearing, Tuesday, March 29, 2006

At the commencement of the hearing I ordered that the parties' witnesses be excluded from the hearing room until it was time for their testimony. Several persons, none of whom were identified as being witnesses, were in the audience. Some of these people were observed to be in conversation with one of Transport Canada's witnesses during a break in proceedings.

NexJet

NexJet requested that the hearing or portions of it be closed to the public. Counsel argued that the exclusion of witnesses to avoid the tailoring of evidence would be defeated if people attended the hearing and then were able to speak to the witnesses in order to alert them to what had gone on during the hearing.

Minister of Transport

Transport Canada's representative asserted that it was in the public's interest that proceedings be transparent and open. A closed hearing should not be granted.

Ruling

Pursuant to subsection 15(4) of the Transportation Appeal Tribunal of Canada Act and the parties' submissions, I am not convinced that a public hearing would not be in the public interest. The hearing will remain open to the public. I have no powers under the legislation to instruct members of the public how to conduct themselves or with whom to converse when not in the hearing room. Counsel for NexJet may explore the possibility that witnesses may have been speaking to observers present in the proceeding during their cross-examination.

LAW

Paragraph 7.1(1)(c) of the Aeronautics Act reads:

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

. . .

(c) the Minister is of the opinion that the public interest and, in particular, the aviation record of the holder of the document or of any principal of the holder, as defined in regulations made under paragraph 6.71(3)(a), warrant it,

Section 7.92 of the Aeronautics Act reads:

7.92 If a person fails to pay the amount of the penalty specified in a notice under subsection 7.7(1) within the time specified in the notice and does not file a request for a review under subsection 7.91(1), the person is deemed to have committed the contravention alleged in the notice, and the Minister may obtain from the Tribunal a certificate in a form prescribed by the Governor in Council that indicates the amount of the penalty specified in the notice.

Subsection 101.01(1) of the CARs reads:

...

"airworthiness directive" - means an instruction issued by the Minister or by a civil aviation authority responsible for an aeronautical product type design that mandates a maintenance or operation action to ensure that an aeronautical product conforms to its type design and is in a condition for safe operation;

...

"airworthy" - in respect of an aeronautical product, means in a fit and safe state for flight and in conformity with its type design;

Paragraph 103.07(a) of the CARs reads:

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;

Paragraph 103.12(a) of the CARs reads:

103.12 For the purposes of subsection 6.71(1) and paragraph 7.1(1)(c) of the Act, "principal" means

(a) in respect of an air operator,

(i) any person who is employed or contracted by the air operator on a full- or part-time basis as the operations manager, the chief pilot or the person responsible for the maintenance control system, or any person who occupies an equivalent position,

(ii) any person who exercises control over the air operator as an owner, and

(iii) the accountable executive appointed by the air operator under section 106.02;

Subsection 401.03(1) of the CARs sets out the following:

401.03(1) No person shall act as a flight crew member or exercise the privileges of a flight crew permit, licence or rating unless

(a) subject to subsection (2) and Sections 401.19 to 401.27, the person is the holder of, and can produce while so acting and while exercising such privileges, the appropriate permit, licence or rating; and

(b) the person is the holder of, and can produce while so acting and while exercising such privileges, a valid and appropriate medical certificate.

Subsection 605.94(1) of the CARs reads:

605.94 (1) The particulars set out in column I of an item in Schedule I to this Division shall be recorded in the journey log at the time set out in column II of the item and by the person responsible for making entries set out in column III of that item.

Item 3 of Schedule I of subsection 605.94(1) of the CARs:

 

COLUMN I

COLUMN II

COLUMN III

Item

Particulars to Be Entered

Time of Entry

Person Responsible for Entry

3

Air time of each flight or series of flights and cumulative total air time and, where applicable, number of operating cycles or landings since date of manufacture

Daily, on completion of each flight or series of flights

The pilot-in-command of the aircraft or a person designated by an air operator, a private operator or a flight training unit

Section 706.07 of the CARs reads:

706.07 (1) An air operator shall, in order to ensure that its maintenance control system and all of the included maintenance schedules continue to be effective and to comply with these Regulations, establish an evaluation program that meets the applicable requirements of the Commercial Air Service Standards.

(2) The person appointed pursuant to Section 706.03 shall ensure that the records relating to the findings resulting from an evaluation program are efficiently distributed and controlled in accordance with the Commercial Air Service Standards.

Section 726.07 of the Commercial Air Service Standards (CASS) reads:

726.07 Air Operator Maintenance - Evaluation program

(1) Pursuant to Section 706.07 of the Canadian Aviation Regulations, each Air Operator must establish and maintain a program to ensure that the maintenance control system, including maintenance schedules, continue to comply with the regulations. It is not intended that this program be based on a system of end product inspection, but rather upon periodic verifications of all aspects of the systems and practices used for the control of maintenance, to ensure compliance with regulations and with the Air Operator's approved procedures. The program should provide an unbiased picture of the Air Operator's performance, to verify that activities comply with the MCM and confirm that the systems and procedures described in the MCM remain effective and are achieving the Air Operator's requirements.

(2) The program must be under the sole control of either the person responsible for the maintenance control system, or a person to whom, pursuant to Subsection 706.03(3) of the Canadian Aviation Regulations, the management function for the program has been assigned. It must, as a minimum, cover all functions defined within the MCM. It must include all elements necessary to confirm that the Air Operator is in compliance with the applicable regulations and with the MCM. It must ensure that all referenced procedures remain applicable and effective.

...

PARTIES' POSITIONS

Minister of Transport

Mr. Lipiec submitted that the "public interest" in this case was aviation safety. The cancellation of the AOC was done in the interests of aviation safety. He suggested that the question that I must answer was whether the Minister's decision to cancel the AOC was reasonable.

In his view it was reasonable given the record in aviation of both Mr. Virdi and NexJet. The enforcement record as set out in the grounds had been proven on a balance of probability. From his review of the record, he concluded that it showed a substantial period of non-compliance with the regulatory system. It showed that the company was out of control.

Non-enforcement issues also arise. The functional record of a company was an indicator of the over-all health of a company. In his opinion, NexJet was not a healthy company. The AOC imposes a continuous obligation on the holder to live up to the conditions of issuance. One such obligation was to provide training for the area of operation to ensure the air operator is able to achieve an acceptable level of safety — the public interest. He argues that NexJet did not live up to that obligation.

Mr. Lipiec submitted that the allegations against Mr. Szwalek for making racists comments were unfounded. Those allegations were but a ploy by Mr. Virdi to excuse his own behavior. NexJet had no case regarding detrimental reliance. The allegations are unfounded as they did not satisfy the test set out in case law. The Minister asked that the notice of cancellation be confirmed.

NexJet / Ravinder Virdi

Mr. Kirkpatrick, counsel for Mr. Virdi and NexJet, submitted that "public interest" considerations consist of various demands and addresses the needs of all parties. The interest may include freedom of commerce and the opportunity to develop and to sustain a viable commercial operation. Other public interest considerations may be freedom from discrimination, from racism, or unfair scrutiny.

He argued that the notice was deficient as subparagraph 7.1(2)(a)(iii) of the Aeronautics Act specifies that the contents of the notice include the elements of the public interest on which the decision of the Minister was based. As the notice did not indicate the elements of public interest on which the decision was based, his client had not had the opportunity to fairly respond to public interest allegations. He asserted that, as the notice was based largely on alleged infractions and on-going allegations that came to light only very shortly before the notice was issued, the standard of review should be correctness.

A great many of the infractions or allegations could be directly attributable to four causes:

1) detrimental reliance on poor advice from Transport Canada inspectors; 2) unfair or biased scrutiny; 3) the premature reliance on incomplete information when satisfactory explanations exist; and 4) disgruntled ex-employees who sabotaged operations or contravened regulations pointing the finger at Mr. Virdi.

He submitted that the application was not to have me reinstate the AOC but to refer it back which would give the Minister an opportunity to take into account complete information from reliable sources.

NexJet asked that the cancellation of the AOC be sent back to the Minister for reconsideration.

ANALYSIS / DISCUSSION OF EVIDENCE

Issue

Both parties have stated their opinion as to what constitutes the appropriate standard of review. I believe that a standard of review criterion is more properly undertaken in appeal matters not reviews at first instance.

I must decide whether the Minister has proven on a balance of probability that the public interest and the aviation record of NexJet and a principal of NexJet, Ravinder Virdi, warrant the cancellation of NexJet's AOC.

Held

I find that the public interest and their records in aviation do warrant the cancellation of the AOC.

The analysis requires two steps: 1) establishing the record of Mr. Virdi and NexJet; and 2) determining if those records and the public interest warrant the cancellation of the AOC.

Mr. Virdi sought to revisit the factual validity of each of the violations or suspensions found in the grounds. I do not think it the function of this hearing to do that. It is not within my power to vary the record established by his or NexJet's payment of the penalty. Each of the contraventions or suspensions that had been alleged could have been challenged before this Tribunal. They were not.

For each of those that were not challenged and the fine paid or suspension served or for which the penalty remained unpaid, the record is established. This approach is consistent with Tribunal jurisprudence regarding cancellations, pursuant to section 7.1 of the Aeronautics Act, in Spur Aviation Ltd. v. Minister of Transport, CAT File No. W-1284-09.

Much of the testimony is contradictory and inconsistent. To make findings of fact, I must choose between different versions of the evidence, a task requiring me to make findings of credibility.

In my analysis I have found that Mr. Virdi is not a credible or trustworthy witness. His testimony was given in a straightforward and very courteous manner. Mr. Virdi was unfailingly polite. By itself his testimony would have been convincing. But there is substantial contradictory evidence given by ex-employees, by Transport Canada's personnel and by witnesses called by Mr. Virdi himself. Mr. Virdi's version of events or circumstances related to me at the hearing is sometimes not in accord with the documentary evidence.

Some of the testimonial and documentary evidence entered is hearsay. Subsection 15(1) of the Transportation Appeal Tribunal of Canada Act stipulates that the Tribunal is not bound by any legal or technical rules of evidence in conducting any matter that comes before it. Relevant evidence of a hearsay nature was admitted on that basis subject to it being accorded the appropriate weight.

The Aviation Record of Mr. Virdi and NexJet

The notice of cancellation lists 20 grounds. It is apparent that some of the "grounds" are not grounds for cancellation but when read together form a history of the company and Transport Canada's oversight and interaction with it.

Events occurring in late February 2006 into March of 2006 were precipitous in Transport Canada's decision to cancel the AOC on March 8, 2006. These events emanated from NexJet's decision to establish a base in Vancouver to do bank courier runs in British Columbia. They are addressed under "West Coast Operation".

Also included at ground 20 under continued monitoring was evidence regarding on-going investigations. Other than regarding an outstanding AD, Ms. Elliott has issued to the company letters of investigation in these matters to which the company has yet to respond.

I do not view the on-going investigatory files to be part of NexJet's record for the purpose of evaluating it for cancellation as the company has yet to respond, and there may be a reasonable explanation for the conduct being investigated.

However, ground 20 speaks to continued monitoring of NexJet's operation. It is alleged that the monitoring revealed several non-compliance with regulations. As those are yet allegations, I accept that there can be a challenge to their validity or an explanation of the circumstances that may go to mitigating the extent to which they form a ground to cancel the AOC.

2002

1. Ground one is historical fact establishing that NexJet was issued AOC no. 9799 on July 18, 2002.

The factual basis upon which all allegations in grounds 2, 3, 4, and 5 is established, as the allegations were not originally contested and the penalties were paid or the suspensions served.

2. On November 20, 2002, Mr. Virdi failed to comply with section 401.03 of the CARs in that he operated a multi-engine aircraft when he did not hold a multi-engine rating. He served a 60-day suspension between May 8 and July 6, 2003. As he was then operations manager of NexJet by operation of section 103.12 of the CARs, he was at that time a principal of NexJet.

2003

3. After April 25, 2003, NexJet failed to comply with subsection 605.94(1) of the CARs. Seven flights were operated on aircraft C-FMSF but the flights were not recorded in the journey log book. A monetary penalty was issued and paid.

4. On May 7, 2003, Mr. Virdi failed to comply with section 401.03 of the CARs in that he acted as a crew member when he did not hold: 1) a commercial pilot licence; 2) a night rating; 3) an instrument rating and 4) a multi-engine rating (four counts, monetary penalty of $1 250).

On May 7, 2003, Mr. Virdi acted as a flight crew member when he had not completed a pilot proficiency check or competency check for the type of aircraft (30-day licence suspension).

5. On May 7, 2003, NexJet violated subsection 7.3(1) of the Aeronautics Act in that false entries were made in the log book for aircraft C-FMSF in that the log entries did not reflect the actual times flown.

On May 7, 2003, NexJet failed to comply with section 703.88 of the CARs in that the company permitted persons to act as flight crew members when they were not properly qualified (two counts).

On May 7, 2003, NexJet failed to comply with section 703.02 of the CARs in that it did not comply with the conditions of its AOC in that it did not employ a chief pilot. Monetary penalties totalling $4 625 and a 10-day suspension of NexJet's AOC were imposed.

6. On May 8, 2003, NexJet voluntarily surrendered its AOC as the chief pilot had resigned. Mr. Leuangthong had resigned as of May 3rd.

This ground reflects the last count in ground 5 above, the violation of section 703.02 of the CARs, in that the company did not employ a chief pilot. The company could not function as a commercial air operator in absence of a chief pilot but did so on the series of flights of May 7th as noted in the previous grounds. Mr. Virdi was the operations manager at the time.

7. On July 2, 2003, NexJet nominated a qualified chief pilot, Mr. Rampulla, and applied to have its AOC reinstated.

8. On July 7, 2003, a notice of refusal to renew the AOC was issued. It found that NexJet's operations manager, Mr. Virdi, was not fulfilling his responsibilities regarding control of operations and operational standards.

That opinion was based upon Mr. Virdi, the operations manager, allowing the company to operate commercially on the series of flights on May 7, 2003 with the consequent violations as described above. As I have accepted the allegations in grounds 4 and 5 as established, I must concur with Transport Canada's opinion in issuing the notice of refusal to renew. It was justified and forms part of the NexJet's record.

9. On August 5, 2003, the AOC was reinstated as NexJet met the conditions of issuance with a new operations manager and chief pilot (Messrs. Martinez and Rampulla respectively).

Among the conditions for reinstatement is the provision that the new managerial personnel show that they have the ability to perform the functions without being influenced by other principals of NexJet.

2004

10. On July 20 and 21, 2004, NexJet failed to comply with subsection 606.02(8) of the CARs in that on two occasions on that date it operated a C-150 without the required liability insurance. A notice of assessment of monetary penalty was issued. NexJet did not pay the penalty nor request a hearing. By operation of section 7.92 of the Aeronautics Act, NexJet is deemed to have committed the violation and a certificate was issued on February 7, 2005.

[Note: Regarding ground 10, the notice and some documentary evidence of exhibit M-58 show the occurrence as May 14, 2004, but the notice of assessment of monetary penalty and the subsequent certificate from the Tribunal lists the violation as occurring on July 20 and 21, 2004.]

11. On June 25, 2004, NexJet failed to comply with subsection 605.94(1) of the CARs in that it failed to make journey log book entries. A notice of assessment of monetary penalty was issued. NexJet did not pay the penalty or request a hearing. By operation of section 7.92 of the Aeronautics Act, NexJet is deemed to have committed the violation.

12. On December 3, 2004, a notice of suspension of NexJet's AOC was issued as a regularly scheduled audit revealed that the operations manager, Mr. Rampulla, was not fulfilling his responsibilities with respect to the approved training program: ensuring operations were conducted in accordance with regulations, standards and policy; and ensuring that flight crew were properly qualified. The notice was rescinded December 20, 2004.

2005

13. On January 19, 2005, a special purpose audit revealed that NexJet failed to ensure its evaluation program complied with the requirements stated in the CARs. NexJet aircraft were being operated with required scheduled maintenance overdue.

14. On March 3, 2005, a notice of suspension was issued as NexJet failed to comply with maintenance requirements as required by section 703.07 of the CARs.

The notice of suspension reflects the findings of the audit of January 19, 2005. The evaluation program was found to be ineffective. The failure of the program to assess the maintenance schedule had contributed to aircraft component overruns. The specific overruns addressed at audit AOC-11-01 indicated that both right and left-hand fuel pumps had been operated beyond the approved overhaul interval. The technical record did not show that the fluid hoses had been changed within the interval specified in that approved maintenance schedule.

15. On March 31, 2005, NexJet had complied with the conditions of reinstatement. The notice of suspension was rescinded.

16. On October 12, 2005, regular oversight of NexJet revealed that acting operations manager, Mr. Virdi, was not fulfilling his responsibilities with respect to control of operations, dispatch of flights, and operational standards.

This ground arose from the interaction between Mr. Virdi and Inspector Fukomoto regarding the flight of October 12, 2005 to Charlotte, North Carolina. Although the flight was eventually dispatched legally, the inspector felt that Mr. Virdi, having dispatched it, exhibited an attitude and lack of knowledge that should preclude him from acting as operations manager and made that recommendation to his supervisor, Mr. Hill.

17. On October 18, 2005, a notice of suspension of NexJet's AOC was issued based upon the criteria in ground 16.

18. On October 19, 2005, the notice of suspension was rescinded. A new operations manager had been nominated (Mr. Sventzouris) and accepted which satisfied the condition for reinstatement.

19. No fines remain outstanding.

The fines regarding grounds 10 and 11 were for violations occurring on June 25 and 26, 2004, and July 20 and 21, 2004. These fines were due on February 3, 2005 and December 20, 2004 respectively. Payment of these fines was made on March 22, 2006 approximately one week before this hearing.

20. Continued Monitoring — The evidence under this ground has been addressed under west coast operation and was divided into subheadings. The analysis follows that format.

The West Coast Operation

I have grouped several facets of evidence under the general heading of the west coast operation. These are separate occurrences as follows:

  1. The snag flights — February 23, 24, and 25, 2006
  2. The icing flights — February 27 and 28, 2006
  3. The gear collapse flight — February 28, 2006
  4. The ramp check — March 1, 2006
  5. Issues arising from testimony in the above

1. The Snag FlightsFebruary 23, 24, and 25, 2006

The evidence regarding the west coast operation is contradictory. Mr. Virdi's recollection of events varies considerable from that of the pilots. I prefer the pilots' evidence as one corroborates the other on the essential issues.

The snag flights raise several issues:

Dispatch with outstanding snags

Aircraft C-GAKM (AKM), a Piper PA-31 owned by NexJet, underwent a 50-hour inspection at Lindair Services Ltd. (Lindair) maintenance facility in Vancouver, British Columbia on February 23, 2006. Lindair personnel signed off in the journey log the work accomplished in completion of the inspection. They also noted a list of 49 defects that were outstanding.

The aircraft was dispatched the next day and completed its flights of February 24 and 25, 2006 without incident. The outstanding snags were neither rectified nor deferred. Evidence has shown that many of the snags could not have been deferred. The aircraft could not have been considered airworthy.

The flight was to have been conducted by Messrs. Sandhu and Sampayo. Upon reviewing the journey log and noting the outstanding defects, Mr. Sampayo refused to do the flight. Mr. Sventzouris, the chief pilot, was substituted.

Mr. Sandhu testified as to pressures brought to bear upon him by Mr. Virdi to do the flight with snags outstanding. Mr. Virdi has denied doing so. I accept that he did bring such pressure as the testimony is consistent with that of Mr. Rampulla. He also related that applying pressure to pilots, threatening to fire them, or withholding more lucrative trips were common actions of Mr. Virdi. There is also the corroborative hearsay testimony given by Mr. Thompson of another pilot/PRM, Mr. Ramos-Frances who said he experienced such pressure.

Mr. Sventzouris had been told by Mr. Virdi that all of the snags had been deferred. He only learned later that they were not. He had observed Mr. Virdi yelling at Mr. Sandhu to do the trip. Mr. Virdi has stated that it was the pilots' decision to take the flight. There was another aircraft available if they had wanted it. However, from the pilots' testimony, I find that he did pressure Mr. Sandhu to take that aircraft on that day.

The Swanson Estate v. Canada case proffered in jurisprudence at the hearing illustrates that it is possible to bring pressure to bear upon pilots to persuade them to do things that they would not otherwise do. It also illustrates the possible disastrous consequences of doing so. At the Federal Court of Canada Trial Division, [1990] F.C.J. No. 195, it states at page 6:

There was considerable evidence to establish that Wapiti Aviation Ltd. exerted considerable pressure on its pilots to induce them to fly in marginal weather conditions, flying under VFR (Visual Flight Rules) at night when weather conditions required that the flights be undertaken under IFR (Instrument Flight Rules), which require a second pilot or at least an auto-pilot in good operating condition. Flying by IFR would use more fuel flying at higher altitudes and have other disadvantages from an operational point of view. Moreover, the planes used were frequently not in perfect operating condition (although there was some evidence that usually the engines and more important parts operated satisfactorily) and frequently not carried out at the times required.

The evidence given at trial and on discovery disclosed that Wapiti pilots were not directly ordered to break the rules with respect to single pilot IFR (Instrument Flying Rules) flights or to fly VFR (Visual Flight Rules) illegally in weather unsuitable for such flights were nevertheless urged by their employers and particularly by Delbert Wells to do so. Failure to undertake such a flight would result in punitive measures, such as not assigning them to other flights for some days and obliging them to do mechanical maintenance work in the interval.

Mr. Virdi's Involvement

I must address Mr. Virdi's role. I take as a starting point that Mr. Sampayo's version of events regarding other than minor inconsistences, such as who arrived when that morning, to be correct. Mr. Sampayo, much to his credit, exercised good judgement in his assessment of the outstanding snags when he refused to take the flight. He was fired. Mr. Virdi has stated that he did not fire him for refusing to take the flight but fired him for not following procedures.

Mr. Virdi's story does not bear scrutiny. Mr. Sampayo went to his captain, Mr. Sandhu, with the log book and problem. To the best of his knowledge, Mr. Sandhu was also the PRM. According to the testimony given, that was proper procedure in dealing with snags.

However, two pilots take a flight with 49 outstanding snags, contrary to procedure, but are not fired. I find it more likely that Mr. Sampayo was terminated for having the temerity to refuse the flight. More problematic is that with the knowledge that the aircraft had maintenance problems, Mr. Virdi did not call a halt to the operation but pressured personnel to take it.

He has stated that he did not see the actual snag list until Monday, February 27th at 9:30 a.m. in Toronto and even then found it confusing. I do not believe that Mr. Virdi did not see the snag list given his interaction with the pilots and Lindair that morning. However, even if he did not actually view the list of snags, he was fully aware that there was a maintenance problem. It could not have been otherwise, as he was faced with the crewing problem that resulted.

Mr. Sampayo related that after the aircraft had departed he returned to the townhouse with Mr. Virdi who swore at him and called him a child saying that he should have taken the flight as there was progressive maintenance. Mr. Virdi had also told Mr. Sandhu that the aircraft had progressive maintenance and told Mr. Sventzouris the snags were deferred. I find that Mr. Virdi was aware of the snag issues before it departed. Even if I am wrong in finding that he knew of the snags before departure, he had to become aware of them through his conversation with Mr. Sampayo.

Mr. Sampayo testified that Mr. Virdi relented and re-hired him recognizing the validity of his concerns. His concern was the safety of an aircraft with 49 outstanding snags. In argument, Mr. Kirkpatrick recognized that Mr. Virdi had become aware of the defects during his confrontation with Mr. Sampayo.

Even upon learning about the outstanding defects after departure, he made no attempt to stop flight. He allowed it to continue on four legs over two days. The evidence shows that it would have been possible to stop it as the flight was IFR so could have been contacted, and the pilots were staying at company approved accommodation overnight.

Much of the evidence also buttresses my finding of credibility regarding Mr. Virdi. He has said in both direct and cross-examination that he did not use intemperate language or pressure the pilots. Messrs. Sampayo and Sandhu say that he used profanity against them. Mr. Sventzouris witnessed it. Mr. Rampulla also verifies that Mr. Virdi exerts pressure on the pilots.

Defect Recording

The AMO, Lindair, entered the series of snags in the journey log. I accept as fact the testimony of the pilots that at NexJet it was common practice not to enter snags in the journey log. Messrs. Sventzouris, Sandhu and Rampulla have each testified to that fact in different words. Putting snags in the log was frowned upon by the company. Although these gentlemen are all members of the "disgruntled ex-employee" group, I accept their evidence as truthful, as Mr. Sampayo confirmed that approach by NexJet. He had learned of the company's philosophy by observation. He said that you could see it as there were absolutely no defects entered in the journey logbooks. Whenever there was a defect it was mentioned to Mr. Virdi, and then he would elect to fix it or not.

Control of Operations

From the pilots' testimony it is also apparent that Mr. Virdi, whatever his title, ran the operation. Mr. Sandhu had said that his role as PRM was merely as Mr. Virdi's secretary. He had no control but just tracked items and Mr. Virdi decided. Mr. Sventzouris told a similar tale. Management personnel had titles but no control over issues. The pilots did not go to him, as chief pilot, but to Mr. Virdi. From the testimony regarding defect entry, it is apparent that Mr. Virdi assumed the role of PRM as well.

Mountain Training

Mr. Colaris testified to having created a mountain training syllabus for NexJet but could not say when or if it had been disseminated to the pilots. Messrs. Sampayo and Sventzouris have each stated that they did not receive any mountain flying training.

Single Pilot IFR Operation

Initially when Mr. Sampayo refused to do the flight of February 24, 2006, Mr. Sandhu stated that Mr. Virdi insisted that he do it solo. I believe Mr. Sandhu on that point as it is consistent with Mr. Virdi's view expressed in evidence that single pilot IFR operations are allowed. However, the configuration of that particular aircraft precluded that and Mr. Sventzouris was brought in.

Mr. Papadopoulos' flight of February 27, 2006, when he encountered icing, was flown single pilot IFR. Just before Mr. Papadopoulos quit, Mr. Virdi had recalled the aircraft with the intention of assigning Mr. Sampayo to another flight, replacing Mr. Sandhu. The result would have been that both flights would have been operated by single pilots.

2. The Icing Flights — February 27 and 28, 2006

February 27, 2006

Mr. Papadopoulis was scheduled to take a single pilot IFR flight in aircraft C-GJMT on Monday, February 27, 2006. Severe icing was forecast. Mr. Virdi contacted him on several occasions that morning urging him to go. Mr. Papadopoulis gave in to the pressure, and commenced the flight. He encountered severe icing which coated the aircraft. He lost control of the aircraft. It entered a spiral dive. He recovered control and with assistance from air traffic control (ATC), he returned to the airport without mishap. He conceded that it was his own bad decision to do the flight.

Mr. Sampayo was also flying on Monday, February 27, 2006. He had been informed of the icing and advised Mr. Virdi. Mr. Virdi told him to take the load and go anyway. Mr. Sampayo called the flight service station to get a re-routing which he hoped would take him clear of the ice, but it did not. He too returned to Vancouver.

The evidence shows that NexJet was conducting single pilot IFR flights. I have concluded that doing so is contrary to its company operations manual. Mr. Colaris, called on behalf of Mr. Virdi, has stated in cross-examination that NexJet was not approved for single pilot IFR as has Inspector Fukumoto. The excerpts from the manual at exhibits M-69 and M-70 indicate that as well.

Mr. Virdi has stated that Inspector Fukumoto told him single pilot IFR was allowed. I do not accept that. Mr. Virdi has stated that on two occasions during the hearing, but the details he relates differ with the telling. I find it unbelievable that Mr. Virdi does not know what type of operation is allowed by his own manual. I find that he knowingly dispatches his aircraft contrary to his own company operations manual.

The C-310 was being dispatched into known icing. I accept Inspector Fukumoto's testimony that it is not certified to do so.

February 28, 2006

Captain Papadopoulos was scheduled to fly a trip the next day on February 28th with first officer Sampayo. Weather reports from the FSS indicated moderate icing in the area so the departure was delayed a couple of hours. When they decided to depart and were taxiing out, Mr. Virdi contacted them saying that Captain Sandhu was ill so instructed them to return to the ramp so that Mr. Sampayo could conduct the other flight leaving Captain Papadopoulos to go single pilot IFR once again. Captain Papadopoulos refused to do so whereupon Mr. Virdi admonished him in very intemperate language which called the pilot's manhood into question. That caused Captain Papadopoulos to quit and walk away from the aircraft.

First Officer Sampayo verified the language that was used by Mr. Virdi.

Mr. Virdi denies swearing and also states that he did not get a chance to say anything. I do not believe him in light of the pilots' testimony.

3. Gear Collapse FlightFebruary 28, 2006

A NexJet C-310 aircraft, C-GSJP, landing at Victoria suffered a gear collapse on the starboard side. A Civil Aviation Daily Occurrence Reporting System (CADORS) report was filed on the occurrence. It was through that CADORS' report that Mr. Thompson, the company's PMI, became aware of the west coast operation. Mr. Sampayo was the PIC on that flight. It was conducted subsequent to the aborted flight with Captain Papadopoulos of the same day. He related that when told of the incident Mr. Virdi was very concerned for his personal safety.

I do not find anything in the actual flight of February 28, 2006 that would have an effect on the cancellation of NexJet's AOC. What is of consequence for my consideration is Mr. Virdi's testimony about it.

Mr. Virdi was asked what Mr. Tolen, the aircraft maintenance engineer (AME) who had inspected the aircraft, was going to say in his report. He stated at page 79 (transcript of April 19, 2006).

He said, according to his inspection, which he spent nine hours doing the landing gear inspection, he said in his report he is going to mention that it wasn't mechanical or a faulty part that gave up. It was pilot error. It was a hard landing by the pilot. It was side loading that broke a particular linkage, and that is what the report is going... (emphasis added)

In the questioning of Mr. Tolen by Mr. Kirkpatrick at page 124 (transcript of April 21, 2006):

What I related to Ravi and his lawyer is that without doing a full, complete diagnostic of the landing gear system on this plane, I cannot tell you what happened to it. I can only tell you what it is, and I can give you an opinion on what I think might have happened to this plane.

His conclusion was that the main gear had failed because of a shock load. He was of the opinion that it could be attributed to a hard landing.

In cross-examination, Mr. Tolen was asked how much time he had spent on the aircraft, looking at it to make his preliminary diagnosis; "about two hours" was his reply. He went on to say that he had spent about nine hours which included taking the aircraft off the end of the runway, securing its landing gear, stopping a fuel leak, towing it back to his hangar, parking it, photocopying pages out of the log book of the journey log, faxing them, and making phone calls.

But Mr. Virdi tells me he spent nine hours doing the landing gear inspection. It is that type of blatant embellishment that makes me look with suspicion at all of his evidence.

4. The Ramp Check — March 1, 2006

A NexJet aircraft C-GJMT, a PA-31, was inspected by Transport Canada personnel from the Pacific Region on March 1, 2006. The inspector noted some deficiencies and issued a letter of notification (exhibit M-40) to the company.

The ramp check showed that there was an oil leak. A 200-hour inspection was not certified in the log and that a current weight and balance was not available. The evidence on the weight and balance issue does not clearly demonstrate that it was NexJet's error as it did have weight and balance on board and the new one created did not differ from that one. I do not find that this item has any consequence as to the cancellation of the AOC.

5. Ancillary Issues

During testimony regarding ground 13, ancillary issues were raised which do not go directly to that ground.

Mr. Virdi raised the issue of his and NexJet's relationship with Mr. Thompson, NexJet's PMI. Mr. Virdi had found Mr. Thompson would go out of his way to be helpful. He provided advice that went beyond the inspector's usual duties. NexJet came to rely on that advice.

Mr. Thompson had a woodworking hobby. While on business at NexJet's premises, he would offer to sell items that he had crafted. Mr. Virdi said that he felt obliged to purchase them to continue to receive the advice from Mr. Thompson.

However, reliance on the advice proved to be detrimental. He suffered business losses when aircraft C-FMSF was grounded to rectify the fuel pump/hose problem (grounds 13-15). He followed Mr. Thompson's advice not to purchase a particular aircraft.

Airworthiness Directive (AD)

Aircraft C-FMSF had been on the company's AOC for four years. During that time a particular AD had not been accomplished. The AD was to modify the fuel filler opening with a restrictor plate which would preclude misfueling of the aircraft with jet fuel, a circumstance which could result in an engine failure.

Mr. Virdi suggested that Mr. Thompson should have discovered that the AD had not been done during the course of the document inspection when bringing the aircraft on line for commercial use. He eventually conceded that it was the company's obligation to ensure completion.

Does the aviation record and public interest warrant cancellation of the AOC?

Public Interest

The Minister has submitted that the public interest is aviation safety, whereas the applicant has argued that it is much broader and could encompass, among other things, freedom of commerce and the opportunity to sustain a viable commercial operation.

The Minister has broad responsibilities as set out under section 4.2 of the Aeronautics Act, some of which may touch upon matters raised by the applicant. But for the purpose of this hearing, I must address the public interest as it arises in paragraph 7.1(1)(c) of the Aeronautics Act. In that section the public interest is one ground upon which the Minister may decide to cancel a Canadian aviation document. I do not see freedom of commerce or viable commercial operation as being grounds to cancel a document.

The public interest has been raised in other Tribunal jurisprudence coming under the same or like provisions. The Alvin Bancarz v. Minister of Transport case, (TATC File No. W-3058-27), was a consideration of the Minister's decision to refuse to issue an AME licence on the grounds of incompetence and the public interest under paragraphs 6.71(a) and (c) of the Aeronautics Act. The issues were referred back to the Minister for consideration as the member could not conclude that the Minister had proven the incompetence or that his record in relation to aviation justified the refusal.

I find useful the words from a passage in Bancarz, where the member in concurring with the Minister's position on the public interest, said:

Hence, it is entirely correct for the Department to produce the history or record of the applicant's past contraventions in establishing its concern for the public interest. The public interest as asserted by the Minister is a societal interest that relates to the protection and safety of the public and the users of the system as part of its policy regarding the development, regulation and supervision of all matters connected with aeronautics, and the maintenance of an acceptable level of safety.

I find that the public interest for the purposes of paragraph 7.1(1)(c) of the Aeronautics Act is the same as that quoted above from the passage in Bancarz.

In Spur Aviation, cited above, a case where the member upheld a cancellation of an approved maintenance organization (AMO) in part, because of numerous regulatory infractions, he summed up by saying:

What about the travelling public? They too have rights. They should know that a Canadian operator is a safe operator.

The public interest comes to the forefront here. The public must have the assurance that flying with a licensed Canadian operator is safe.

Aviation Record

The aviation record that I have found to be established has been set out above. It must be examined to see if such a record and the public interest warrant the AOC cancellation.

Ground 2 — The aviation records of Mr. Virdi and NexJet are separate but closely intertwined. On November 20, 2002, Mr. Virdi, a principal of the company, had operated an aircraft when he was not qualified to do so. The 60-day suspension was to commence on May 8, 2003.

Grounds 3, 4 and 5 — On May 7, 2003, the day before Mr. Virdi was to surrender his licence for the November 20, 2002 violation, he was again engaging in the same conduct for which he had to surrender his licence — flying an aircraft when not qualified to do so. Flying a multi-engine aircraft on November 20, 2002 when not qualified to do so was a serious violation, but to do so again on the day before he must surrender his licence for the same conduct, I think shows his contempt for the regulations.

The May 7th series of flights resulted in several violations regarding the qualification of the crew, and include a violation for not entering flights in the journey log. The evidence has shown that it is import that the log be current so that those pilots flying afterward can be fully appraised of the condition of the aircraft.

Of interest in the May 7th violations are the three breaches of subsection 7.3(1) of the Aeronautics Act. Here the company was found to have under-reported in the journey log book the times flown by the aircraft. Evidence establishes that aircraft are subject to inspections on a specific hourly basis and many components of aircraft have specific time limits within which they must be serviced or overhauled. To under-report the times is to extend the limits of those inspections or servicing. Those approved service times are established with a certain safety measure which is defeated by the practice of time shaving.

The provision violated is one of the hybrid sections that forbids one from making false entries "with intent to mislead or wilfully omit to make any entry" (emphasis added). NexJet incurred a 10-day suspension of its AOC for intentionally misleading or wilful conduct.

Ground 8 — The July 7, 2003 notice of refusal to renew the AOC was based upon Mr. Virdi as operations manager not fulfilling his duties. I believe the refusal to be well-founded as it was Mr. Virdi who accepted the trip of May 7th when the company did not have a chief pilot so could not operate commercially.

Grounds 10 and 11 — Ground 10 relates to the operation of an aircraft without liability insurance. Ground 11 was another charge for not making timely journey log entries, the seriousness of which I have previously addressed. However, for both charges, when payment was due on December 20, 2004 and February 3, 2005, NexJet ignored paying the fines until about two weeks prior to the hearing.

Ground 12 — NexJet next incurred a suspension of its AOC on December 3, 2004. This suspension occurred as a result of the findings of a prior audit which revealed multiple problems with the company's training program. The training pilot and operations manager, Mr. Rampulla, was not himself qualified which resulted in the qualifications of those that he trained to be invalid.

The training component goes straight to safety issues. The standards for flight crew training are set by Transport Canada to ensure only qualified persons are flying aircraft. At NexJet there was a breakdown in the training program which resulted in unqualified people being assigned operational flight, a situation with unacceptable safety implications.

Ground 13 — A special purpose audit was held in January of 2005. It revealed that NexJet failed to comply with its evaluation program which resulted in aircraft component overruns. I find this issue to be troubling but instructive as it shows an attitude towards responsibility by Mr. Virdi.

The evidence accepted included NexJet's response to the audit wherein it admitted that a clerical error by their former PRM caused the fuel pumps and fluid hoses to be prematurely placed on-condition in their tracking program when permission to do so had been rejected. That response went to Transport Canada on March 18, 2005 under Mr. Virdi's signature (exhibit M-36). That illustrated that the company had prior knowledge that there was no approval but continued to run the aircraft as if it did. That resulted in those components not being changed within times specified in the approved manual, a situation with direct safety implications.

At the hearing, Mr. Virdi still insisted that the letter of May 27, 2002 had given him permission for them to go on-condition despite the company's response to the audit. Regarding the evaluation program, Mr. Virdi still insisted that it was designed and approved by Mr. Thompson so any finding of inadequacy was to be attributed to him. The evidence revealed that it was the lack of application of the program not a faulty program.

Grounds 16, 17 and 18 — NexJet next incurred a notice of suspension on October 18, 2005, (rescinded on the 19th), as Mr. Virdi was not fulfilling his duties as operations manager. This occurred as a result of Inspector Fukumoto's recommendation after their interaction regarding the Charlotte flight.

The flight did operate legally but its dispatch caused concerns about Mr. Virdi's attitude and aptitude for the operations manager position. I concur with the Inspector's concerns. Although the legal minimum standards were met, it was his rush to dispatch the flight without having the captain get a full briefing which raises concerns.

Ground 19 — Both fines have now been paid. However, payment was made on March 22, 2006, just prior to this hearing, long after payment was due on February 3, 2005 and December 20, 2006 respectively. Ignoring the payment for the violation deemed to have incurred, I think, shows NexJet's continued flouting of the CARs.

Ground 20 — I find that the evidence regarding the west coast operation reveals that NexJet was operating in violation of regulations and contrary to its own company operations manual and procedures. Although NexJet had operational people in place, Mr. Virdi had usurped all authority and ran the operation as he saw fit. Ostensibly, the company had self-dispatch by the pilots but the testimony shows that Mr. Virdi controlled it. He dispatched aircraft AKM when it was not airworthy, an action that speaks for itself as far as safety implications go. He used intimidation or threats to persuade Mr. Sandhu to accept the flight.

Single pilot IFR flights were often dispatched although not allowed by the company operations manual. Although the pilots often seemed to accept those flights as the norm, Mr. Papadopoulos' flight of February 28, 2006 also shows that Mr. Virdi would use coercion to persuade a pilot to go. The C-310 was not certified for flight into known icing but was dispatched into known icing conditions. Snags were not being recorded [other than by the third party AMO]. Pilots next taking the aircraft would not be aware of any outstanding mechanical problems.

Airworthiness Directive — NexJet operated aircraft C-FMSF for four years with an outstanding AD. Having done so shows that the company has never been able to fully comply with its maintenance evaluation program.

NexJet has been in operation for four years but has compiled a substantial enforcement and regulatory record. It has incurred several suspensions of its AOC, one voluntary surrender, and one refusal to renew in that time. Testimony from Transport Canada personnel shows such a record is unique as among like operators. Many of the hundreds that Transport Canada oversees go for years without any problems.

Mr. Virdi too has a record of infractions having twice had his licence suspended and having incurred a monetary penalty.

Applicant's Position

I earlier set out the parties' positions in which Mr. Kirkpatrick specified four grounds upon which he asserts I should dismiss the case. He has also raised the issue of racism.

I feel obliged to make comment upon certain facets of Mr. Kirkpatrick's argument. He has, I believe, mis-characterized some evidence. He alluded to Mr. Papadopoulos having re-routed to avoid icing whereas that was Mr. Sampayo. In speaking to Mr. Rampulla being "forced down NexJet's throat", he stated that Mr. Pongracz was put forth as a candidate with more hours, more training, and more experience than Mr. Rampulla. But the evidence shows that Mr. Pongracz has a total time of 2 550 hours and Mr. Rampulla had a total time of 9 000 hours out of which 2 900 hours was multi-time.

I am unable to find the evidence of a list of items to be changed on aircraft C-FMSF being provided by Inspector Thompson to Enterprise Airlines as Mr. Kirkpatrick has argued.

Deficient Notice

The Aeronautics Act specifies that the contents of the notice include the elements of the public interest on which the Minister's decision was based. As the notice did not indicate the elements on which the decision was based, his client had not had the opportunity to fairly respond to the public interest allegation.

The notice does not contain the public interest element upon which the Minister relies. At the outset of proceedings, Mr. Kirkpatrick made motions for the amalgamation or striking of grounds in the notice. I would have expected this issue to arise there and it may have had some substance then as he had yet to hear from the Minister, but by closing argument he was very aware of the public interest element. From his evidence and argument, I find that his client did know and respond to the public interest allegation so as there is no prejudice suffered.

Detrimental Reliance

Mr. Kirkpatrick's first point regarding detrimental reliance was that it was Mr. Fukumoto who told NexJet that cargo VFR (emphasis added) flights could be single pilot. I do not see how reliance on advice regarding VFR flights applies to the flights in question here that were conducted under IFR.

It is argued that Mr. Thompson's advice and activity within and beyond his normal duties were relied upon to NexJet's detriment. His actions bringing the C-310 on line, his creation and approval of the evaluation program, and his advice not to purchase a particular aircraft from a Mr. Behrendt are cited. As well, Mr. Virdi related that he felt obliged to purchase hobby craft of Mr. Thompson to stay in favour and receive the advice.

Although Mr. Virdi gave testimony as to the great amount of time spent by Mr. Thompson in overseeing the work done by the AMO and his scrutiny of the documentation, I prefer the evidence of Mr. Thompson. He stated that his inspection of aircraft MSF was not a thorough inspection but more of a 20 minute walk-around. That is in keeping with the aircraft inspection report that he completed on May 27, 2002 (exhibit A-7). He spoke to doing spot checks of documents not a complete review. I think that Mr. Virdi's testimony of Mr. Thompson's extensive involvement is the type of embellishment demonstrated in his testimony regarding the C-310 gear inspection.

The evaluation program was generic, not a creation of Mr. Thompson. The ensuing problem was that it was not being implemented. I do not see how detrimental reliance could arise from that circumstance.

Mr. Thompson did say that he warned Mr. Virdi that the particular aircraft, if purchased, would undergo extra scrutiny. Mr. Virdi says he acted upon the advice and did not buy it, so he lost the deal. However, he has not shown how that reliance has negatively affected him.

As I do not find detrimental reliance on those issues, I do not see Mr. Thompson's sale of handy work contributed. But his sale of his handy work to those that he supervises on behalf of Transport Canada was ill-advised as can be seen by the very fact that it has become an issue here. I do think that it was imprudent although innocuous. I take his word that it was in no way tied to his official capacity.

Unfair or Unbiased Scrutiny

I do not accept that Transport Canada's scrutiny was unfair. From the evidence adduced, there was ample objective criteria upon which they could and should have acted.

Premature Reliance on Incomplete Information

I have not taken into consideration any of the testimony of allegations of on-going enforcement actions offered by Inspector Elliott.

Disgruntled Ex-employees Pointing the Finger at Mr. Virdi

There is clearly some animosity or ill will on behalf of some ex-employees toward Mr. Virdi. But Mr. Kirkpatrick has argued that Mr. Sampayo is a credible witness. Much of the evidence that I have accepted given by that group of ex-employees is corroborated by Mr. Sampayo. In other cases, their evidence was corroborative of one another, to an extent that I found it to be credible.

Racism

Mr. Virdi has testified as to a racist attitude and remarks that he largely attributes to Mr. Szwalek although he has alluded to it from others from Transport Canada. Mr. Thompson was questioned as to his observation of elements of racism from others, but he has denied witnessing it.

Mr. Virdi referred to the remarks made by Mr. Szwalek about constantly being on Transport Canada's radar screen and having a neon sign over his head. Most upsetting was Mr. Szwalek's statement to him that he should consider going into a less regulated industry; that perhaps he should be running a convenience store.

Mr. Virdi testified to having made a specific complaint about Mr. Szwalek in a letter to him regarding the notice of suspension of NexJet's AOC of December 3, 2004. The letter is dated June 27, 2003, but Mr. Virdi has said that was a mistake. It would have been sent in early December after NexJet had received its notice of suspension.

Mr. Szwalek specifically denied having any knowledge of the letter or that he had made any racist remark to anyone. He did concede that he had probably told Mr. Virdi several occasions that he was on the radar screen or had a neon sign above him.

In cross-examination, Mr. Kirkpatrick laid the ground work to impeach Mr. Szwalek's testimony when he asked whether he had also recommended to a Mr. Bal Singh, a principal of a company called JetLink Aviation, that he too should open a convenience store. Mr. Szwalek denied having done so.

However, Mr. Singh was never called to testify. I have only Mr. Virdi's accusation and Mr. Szwalek's denial regarding the remarks about running a convenience store. I have found that Mr. Virdi is an unreliable witness. As there is no corroborative testimony for the allegation, I accept Mr. Szwalek's testimony that he did not make such a remark.

Conclusion

The records of NexJet and its principal show a continuing pattern of non-compliance with regulations or its own approved procedures. That is illustrated by the number of suspensions it has incurred in its four-year history. The grounds underlying the suspensions are most often safety related. Several of these suspensions were of short duration as the company took quick action to come into compliance. The troubling factor is that not long after coming into compliance, the company reverts to its former style.

Mr. Kirkpatrick had asked somewhat rhetorically what had happened after October 19, 2005, when that last notice of suspension was rescinded. He pointed out that at that time Transport Canada must be taken to be satisfied that the public interest was being served and that NexJet was a safe operation as it restored the AOC.

What happened next was the company's west coast operation and the litany of unsafe practices that unfolded under Mr. Virdi's stewardship. It could not be said that aviation safety and hence the public interest were being served by allowing NexJet to operate as it did. I concur with the Minister's decision to cancel the AOC.

Held

DETERMINATION

The Minister has proved on a balance of probability that the public interest and the aviation record of NexJet Aviation and a principal of NexJet aviation, Ravinder Virdi, warrant the cancellation of NexJet's AOC.

July 28, 2006

Allister Ogilvie
Vice-Chairperson
Transportation Appeal Tribunal of Canada