Decisions

TATC File No. P-3114-41
MoT File No. EMS 54589

TRANSPORTATION APPEAL TRIBUNAL OF CANADA

BETWEEN:

Billings Family Enterprises Ltd., Applicant

- and -

Minister of Transport, Respondent

LEGISLATION:
Aeronautics Act, R.S.C. 1985, c. A-2, s. 7.7
Canadian Aviation Regulations, SOR/96-433, subparagraph 605.84(1)(c)(i), paragraph 605.86(1)(a) and subsection 700.02(1)


Review Determination
Allister W. Ogilvie


Decision: January 16, 2006

CAR 605.84(1)(c)(i) - The Minister has proven each element of the offence. I uphold the charges on all 10 counts but reduce the sanction to $4,000.00 per count for a total amount of $40,000.00.

CAR 605.86(1)(a) - re: fire extinguisher - 7 counts are dismissed; re: emergency locator transmitter (ELT) - I uphold the 7 counts regarding the ELT but reduce the penalty to $1,000.00 per count for a total amount of $7,000.00; re: annual compass calibration -

2 counts - penalty cancelled.

CAR 700.02(1) - 6 counts - I dismiss the charges against BFEL.

The amount of $47,000.00 is to be made payable to the Receiver General for Canada and received by the Tribunal within thirty-five days following service of this determination.

A review hearing on these matters was held on September 12 to 15, 2005 at the George Dawson Inn, in Dawson Creek, British Columbia.

BACKGROUND

The issues in these files came to the attention of the Minister through a tip or complaint from a former employee of the Billings Family Enterprises Ltd. (BFEL). Transport Canada conducted an investigation into that company and its principal, Mr. Brant Paul Billings. The Transport Canada Inspector became concerned over what he perceived to be safety issues in the operation of two Robinson helicopters. His inquiries also led him to other companies associated in some manner with BFEL. The investigation culminated with the Minister alleging that violations of the Aeronautics Act and the Canadian Aviation Regulations (CARs) had occurred. These allegations form the substance of three separate files: a Notice of Assessment of Monetary Penalty issued to BFEL, a Notice of Assessment of Monetary Penalty issued to Mr. Brant Paul Billings and a Notice of Suspension of Mr. Billings' commercial helicopter licence. The allegations are reproduced in full below, but for convenience, may be summarized as follows:

TATC File P-3115-02 – On various dates and places, Mr. Brant Paul Billings operated an air transport service (ATS) when he did not hold and comply with the provisions of an air operator certificate (AOC) authorizing the service, thereby contravening CAR 700.02(1) – 4 counts. The Minister of Transport withdrew count 4 at the commencement of the hearing.

TATC File P-3113-33 – On June 15, 2004, at or near Charlie Lake, British Columbia, Mr. Brant Paul Billings conducted a take-off in an aircraft that was in his legal custody and control when the aircraft did not meet the requirements of an airworthiness directive (AD), thereby contravening CAR 605.84(1)(c)(i) – 1 count.

TATC File P-3114-41 – On various dates and places, BFLE permitted take-offs to be conducted in an aircraft that was in its legal custody and control when the aircraft did not meet the requirements of an AD, thereby contravening CAR 605.84(1)(c)(i) – 10 counts.

On various dates and places, BFEL conducted take-offs in an aircraft that was in its legal custody and control when the aircraft was not maintained in accordance with a maintenance schedule that conformed to the required maintenance standards in that the fire extinguisher and the emergency locator transmitter were overdue for inspection and the compass was overdue for calibration, thereby contravening CAR 605.86(1)(a) – 16 counts.

On various dates and places, BFEL operated helicopters in an air transport service without holding an AOC, thereby contravening CAR 700.02(1) – 6 counts.

On January 13, 2005, the Minister of Transport issued three Notices of Assessment of Monetary Penalty to Billings Family Enterprises Ltd./Brant Paul Billings which stated:

TATC File P-3113-33

1. On or about June 15, 2004, at approximately 08:00 hours local time, at or near Charlie Lake, in the Province of British Columbia, you conducted a take-off in an aircraft, bearing Canadian registration C-FNNE, that was in your legal custody and control, when the aircraft did not meet the requirements of an airworthiness directive, issued by a competent authority of the foreign state, that, at the time the notice was issued, was responsible for the type certificate of the aircraft. To wit: The aircraft was not in compliance with Airworthiness Directive 2003-04-04, thereby contravening section 605.84(1)(c)(i) of the Canadian Aviation Regulations. Monetary Penalty Assessed: $1,000.00

Total Monetary Penalty Assessed: $1,000.00

TATC File P-3114-41

1. On or about April 05, 2004, at approximately 08:30 hours local time, at or near Charlie Lake, in the Province of British Columbia, Billings Family Enterprises Ltd. did permit a take-off to be conducted in aircraft, bearing Canadian registration C-FNNE, that was in your legal custody and control, when the aircraft did not meet the requirements of an airworthiness directive, issued by a competent authority of the foreign state, that, at the time the notice was issued, was responsible for the type certificate of the aircraft. To wit: The aircraft was not in compliance with Airworthiness Directive 2003-04-04, thereby contravening section 605.84(1)(c)(i) of the Canadian Aviation Regulations. Monetary Penalty Assessed: $5,000.00

2. On or about April 22, 2004, at approximately 08:10 hours local time, at or near Charlie Lake, in the Province of British Columbia, Billings Family Enterprises Ltd. did permit a take-off to be conducted in aircraft, bearing Canadian registration C-FNNE, that was in your legal custody and control, when the aircraft did not meet the requirements of an airworthiness directive issued by a competent authority of the foreign state that, at the time the notice was issued, was responsible for the type certificate of the aircraft. To wit: The aircraft was not in compliance with Airworthiness Directive 2003-04-04, thereby contravening section 605.84(1)(c)(i) of the Canadian Aviation Regulations. Monetary Penalty Assessed: $5,000.00

3. On or about April 25, 2004, at approximately 08:00 hours local time, at or near Paddle Prairie, in the Province of Alberta, Billings Family Enterprises Ltd. did permit a take-off to be conducted in aircraft, bearing Canadian registration C-FNNE, that was in your legal custody and control, when the aircraft did not meet the requirements of an airworthiness directive issued by a competent authority of the foreign state that, at the time the notice was issued was responsible for the type certificate of the aircraft. To wit: The aircraft was not in compliance with Airworthiness Directive 2003-04-04, thereby contravening section 605.84(1)(c)(i) of the Canadian Aviation Regulations. Monetary Penalty Assessed: $5,000.00

4. On or about April 30, 2004, at approximately 18:00 hours local time, at or near Charlie Lake, in the Province of British Columbia, Billings Family Enterprises Ltd. did permit a take-off to be conducted in aircraft, bearing Canadian registration C-FNNE, that was in your legal custody and control, when the aircraft did not meet the requirements of an airworthiness directive issued by a competent authority of the foreign state that, at the time the notice was issued was responsible for the type certificate of the aircraft. To wit: The aircraft was not in compliance with the Airworthiness Directive 2003-04-04, thereby contravening section 605.84(1)(c)(i) of the Canadian Aviation Regulations. Monetary Penalty Assessed: $5,000.00

5. On or about July 13, 2004, at approximately 11:00 hours local time, at or near Charlie Lake, in the Province of British Columbia, Billings Family Enterprises Ltd. did permit a take-off to be conducted in aircraft, bearing Canadian registration C-FNNE, that was in your legal custody and control, when the aircraft did not meet the requirements of an airworthiness directive issued by a competent authority of the foreign state that, at the time the notice was issued was responsible for the type certificate of the aircraft. To wit: The aircraft was not in compliance with Airworthiness Directive 2003-04-04, thereby contravening section 605.84(1)(c)(i) of the Canadian Aviation Regulations. Monetary Penalty Assessed: $5,000.00

6. On or about July 09, 2004, at approximately 16:30 hours local time, at or near Charlie Lake, in the Province of British Columbia, Billings Family Enterprises Ltd. did permit a take-off to be conducted in aircraft, bearing Canadian registration C-FNNE, that was in your legal custody and control, when the aircraft did not meet the requirements of an airworthiness directive issued by a competent authority of the foreign state that, at the time the notice was issued was responsible for the type certificate of the aircraft. To wit: The aircraft was not in compliance with Airworthiness Directive 2003-04-04, thereby contravening section 605.84(1)(c)(i) of the Canadian Aviation Regulations. Monetary Penalty Assessed: $5,000.00

7. On or about July 12, 2004, at approximately 11:00 hours local time, at or near Charlie Lake, in the Province of British Columbia, Billings Family Enterprises Ltd. did permit a take-off to be conducted in aircraft, bearing Canadian registration C-FNNE, that was in your legal custody and control, when the aircraft did not meet the requirements of an airworthiness directive issued by a competent authority of the foreign state that, at the time the notice was issued was responsible for the type certificate of the aircraft. To wit: The aircraft was not in compliance with Airworthiness Directive 2003-04-04, thereby contravening section 605.84(1)(c)(i) of the Canadian Aviation Regulations. Monetary Penalty Assessed: $5,000.00

8. On or about July 23, 2004, at approximately 07:00 hours local time, at or near Charlie Lake, in the Province of British Columbia, Billings Family Enterprises Ltd. did permit a take-off to be conducted in aircraft, bearing Canadian registration C-FNNE, that was in your legal custody and control, when the aircraft did not meet the requirements of an airworthiness directive issued by a competent authority of the foreign state that, at the time the notice was issued was responsible for the type certificate of the aircraft. To wit: The aircraft was not in compliance with Airworthiness Directive 2003-04-04, thereby contravening section 605.84(1)(c)(i) of the Canadian Aviation Regulations. Monetary Penalty Assessed: $5,000.00

9. On or about July 29, 2004, at approximately 07:00 hours local time, at or near Jedney, in the Province of British Columbia, Billings Family Enterprises Ltd. did permit a take-off to be conducted in aircraft, bearing Canadian registration C-FNNE, that was in your legal custody and control, when the aircraft did not meet the requirements of an airworthiness directive issued by a competent authority of the foreign state that at the time the notice was issued was responsible for the type certificate of the aircraft. To wit: The aircraft was not in compliance with Airworthiness Directive 2003-04-04, thereby contravening section 605.84(1)(c)(i) of the Canadian Aviation Regulations. Monetary Penalty Assessed: $5,000.00

10. On or about August 02, 2004, at approximately 07:00 hours local time, at or near Charlie Lake, in the Province of British Columbia, Billings Family Enterprises Ltd. did permit a take-off to be conducted in aircraft, bearing Canadian registration C-FNNE, that was in your legal custody and control, when the aircraft did not meet the requirements of an airworthiness directive issued by a competent authority of the foreign state that at the time the notice was issued was responsible for the type certificate of the aircraft. To wit: The aircraft was not in compliance with Airworthiness Directive 2003-04-04, thereby contravening section 605.84(1)(c)(i) of the Canadian Aviation Regulations. Monetary Penalty Assessed: $5,000.00

1. On or about April 05, 2004, at approximately 08:30 hours local time, at or near Charlie Lake, in the Province of British Columbia, Billings Family Enterprises Ltd. did conduct a take-off in an aircraft bearing Canadian registration C-FNNE, that was in your legal custody and control, when the aircraft was not maintained in accordance with a maintenance schedule, that conformed to the Aircraft Equipment and Maintenance Standards. To wit: the fire extinguisher was overdue for inspection, thereby contravening section 605.86(1)(a) of the Canadian Aviation Regulations. Monetary Penalty Assessed: $1,250.00

2. On or about April 06, 2004, at approximately 12:00 hours local time, at or near Charlie Lake, in the Province of British Columbia, Billings Family Enterprises Ltd. did conduct a take-off in an aircraft bearing Canadian registration C-FNNE, that was in your legal custody and control, when the aircraft was not maintained in accordance with a maintenance schedule, that conformed to the Aircraft Equipment and Maintenance Standards. To wit: the fire extinguisher was overdue for inspection, thereby contravening section 605.86(1)(a) of the Canadian Aviation Regulations. Monetary Penalty Assessed: $1,250.00

3. On or about April 07, 2004, at approximately 17:00 hours local time, at or near Charlie Lake, in the Province of British Columbia, Billings Family Enterprises Ltd. did conduct a take-off in an aircraft bearing Canadian registration C-FNNE, that was in your legal custody and control, when the aircraft was not maintained in accordance with a maintenance schedule, that conformed to the Aircraft Equipment and Maintenance Standards. To wit: the fire extinguisher was overdue for inspection, thereby contravening section 605.86(1)(a) of the Canadian Aviation Regulations. Monetary Penalty Assessed: $1,250.00

4. On or about April 08, 2004, at approximately 09:15 hours local time, at or near Charlie Lake, in the Province of British Columbia, Billings Family Enterprises Ltd. did conduct a take-off in an aircraft bearing Canadian registration C-FNNE, that was in your legal custody and control, when the aircraft was not maintained in accordance with a maintenance schedule, that conformed to the Aircraft Equipment and Maintenance Standards. To wit: the fire extinguisher was overdue for inspection, thereby contravening section 605.86(1)(a) of the Canadian Aviation Regulations. Monetary Penalty Assessed: $1,250.00

5. On or about April 08, 2004, at approximately 14:20 hours local time, at or near Charlie Lake, in the Province of British Columbia, Billings Family Enterprises Ltd. did conduct a take-off in an aircraft bearing Canadian registration C-FNNE, that was in your legal custody and control, when the aircraft was not maintained in accordance with a maintenance schedule, that conformed to the Aircraft Equipment and Maintenance Standards. To wit: the fire extinguisher was overdue for inspection, thereby contravening section 605.86(1)(a) of the Canadian Aviation Regulations. Monetary Penalty Assessed: $1,250.00

6. On or about April 09, 2004, at approximately 13:05 hours local time, at or near Charlie Lake, in the Province of British Columbia, Billings Family Enterprises Ltd. did conduct a take-off in an aircraft bearing Canadian registration C-FNNE, that was in your legal custody and control, when the aircraft was not maintained in accordance with a maintenance schedule, that conformed to the Aircraft Equipment and Maintenance Standards. To wit: the fire extinguisher was overdue for inspection, thereby contravening section 605.86(1)(a) of the Canadian Aviation Regulations. Monetary Penalty Assessed: $1,250.00

7. On or about April 09, 2004, at approximately 14:35 hours local time, at or near Charlie Lake, in the Province of British Columbia, Billings Family Enterprises Ltd. did conduct a take-off in an aircraft bearing Canadian registration C-FNNE, that was in your legal custody and control, when the aircraft was not maintained in accordance with a maintenance schedule, that conformed to the Aircraft Equipment and Maintenance Standards. To wit: the fire extinguisher was overdue for inspection, thereby contravening section 605.86(1)(a) of the Canadian Aviation Regulations. Monetary Penalty Assessed: $1,250.00

1. On or about April 05, 2004, at approximately 08:30 hours local time, at or near Charlie Lake, in the Province of British Columbia, Billings Family Enterprises Ltd. did conduct a take-off in an aircraft bearing Canadian registration C-FNNE, that was in your legal custody and control, when the aircraft was not maintained in accordance with a maintenance schedule, that conformed to the Aircraft Equipment and Maintenance Standards. To wit: The Emergency Locator Transmitter was overdue for inspection, thereby contravening section 605.86(1)(a) of the Canadian Aviation Regulations. Monetary Penalty Assessed: $1,250.00

2. On or about April 06, 2004, at approximately 12:00 hours local time, at or near Charlie Lake, in the Province of British Columbia, Billings Family Enterprises Ltd. did conduct a take-off in an aircraft bearing Canadian registration C-FNNE, that was in your legal custody and control, when the aircraft was not maintained in accordance with a maintenance schedule, that conformed to the Aircraft Equipment and Maintenance Standards. To wit: The Emergency Locator Transmitter was overdue for inspection, thereby contravening section 605.86(1)(a) of the Canadian Aviation Regulations. Monetary Penalty Assessed: $1,250.00

3. On or about April 07, 2004, at approximately 17:00 hours local time, at or near Charlie Lake, in the Province of British Columbia, Billings Family Enterprises Ltd. did conduct a take-off in an aircraft bearing Canadian registration C-FNNE, that was in your legal custody and control, when the aircraft was not maintained in accordance with a maintenance schedule, that conformed to the Aircraft Equipment and Maintenance Standards. To wit: The Emergency Locator Transmitter was overdue for inspection, thereby contravening section 605.86(1)(a) of the Canadian Aviation Regulations. Monetary Penalty Assessed: $1,250.00

4. On or about April 08, 2004, at approximately 09:15 hours local time, at or near Charlie Lake, in the Province of British Columbia, Billings Family Enterprises Ltd. did conduct a take-off in an aircraft bearing Canadian registration C-FNNE, that was in your legal custody and control, when the aircraft was not maintained in accordance with a maintenance schedule, that conformed to the Aircraft Equipment and Maintenance Standards. To wit: The Emergency Locator Transmitter was overdue for inspection, thereby contravening section 605.86(1)(a) of the Canadian Aviation Regulations. Monetary Penalty Assessed: $1,250.00

5. On or about April 08, 2004, at approximately' 14:20 hours local time, at or near Charlie Lake, in the Province of British Columbia, Billings Family Enterprises Ltd. did conduct a take-off in an aircraft bearing Canadian registration C-FNNE, that was in your legal custody and control, when the aircraft was not maintained in accordance with a maintenance schedule, that conformed to the Aircraft Equipment and Maintenance Standards. To wit: The Emergency Locator Transmitter was overdue for inspection, thereby contravening section 605.86(1)(a) of the Canadian Aviation Regulations. Monetary Penalty Assessed: $1,250.00

6. On or about April 09, 2004, at approximately 13:05 hours local time, at or near Charlie Lake, in the Province of British Columbia, Billings Family Enterprises Ltd. did conduct a take-off in an aircraft bearing Canadian registration C-FNNE, that was in your legal custody and control, when the aircraft was not maintained in accordance with a maintenance schedule, that conformed to the Aircraft Equipment and Maintenance Standards. To wit: The Emergency Locator Transmitter was overdue for inspection, thereby contravening section 605.86(1)(a) of the Canadian Aviation Regulations. Monetary Penalty Assessed: $1,250.00

7. On or about April 09, 2004, at approximately 14:35 hours local time, at or near Charlie Lake, in the Province of British Columbia, Billings Family Enterprises Ltd. did conduct a take-off in an aircraft bearing Canadian registration C-FNNE, that was in your legal custody and control, when the aircraft was not maintained in accordance with a maintenance schedule, that conformed to the Aircraft Equipment and Maintenance Standards. To wit: The Emergency Locator Transmitter was overdue for inspection, thereby contravening section 605.86(1)(a) of the Canadian Aviation Regulations. Monetary Penalty Assessed: $1,250.00

1. On or about April 05, 2004, at approximately 08:30 hours local time, at or near Charlie Lake, in the Province of British Columbia, Billings Family Enterprises Ltd. did conduct a take-off in an aircraft bearing Canadian registration C-FNNE, that was in your legal custody and control, when the aircraft was not maintained in accordance with a maintenance schedule, that conformed to the Aircraft Equipment and Maintenance Standards. To wit: The annual compass swing was overdue, thereby contravening section 605.86(1)(a) of the Canadian Aviation Regulations. Monetary Penalty Assessed: $1,250.00

2. On or about April 09, 2004, at approximately 14:35 hours local time, at or near Charlie Lake, in the Province of British Columbia, Billings Family Enterprises Ltd. did conduct a take-off in an aircraft bearing Canadian registration C-FNNE, that was in your legal custody and control, when the aircraft was not maintained in accordance with a maintenance schedule, that conformed to the Aircraft Equipment and Maintenance Standards. To wit: The annual compass swing was overdue for inspection, thereby contravening section 605.86(1)(a) of the Canadian Aviation Regulations. Monetary Penalty Assessed: $1,250.00

1. On or about January 19, 2004, at approximately 10:30 hours local time at or near Charlie Lake, in the Province of British Columbia, Billings Family Enterprises Ltd. operated a Robinson R44, bearing Canadian registration C-GZXA, in an air transport service, without holding an air operator certificate, thereby contravening 700.02(1) of the Canadian Aviation Regulations. Monetary Penalty Assessed: $5,000.00

2. On or about January 24, 2004, at approximately 15:00 hours local time at or near Charlie Lake, in the Province of British Columbia, Billings Family Enterprises Ltd. operated a Robinson R44, bearing Canadian registration C-GZXA, in an air transport service, without holding an air operator certificate, thereby contravening 700.02(1) of the Canadian Aviation Regulations. Monetary Penalty Assessed: $5,000.00

3. On or about July 10, 2004, at approximately 07:00 hours local time at or near Charlie Lake, in the Province of British Columbia, Billings Family Enterprises Ltd. operated a Robinson R44, bearing Canadian registration C-GZXA, in an air transport service, without holding an air operator certificate, thereby contravening 700.02(1) of the Canadian Aviation Regulations. Monetary Penalty Assessed: $5,000.00

4. On or about July 10, 2004, at approximately 08:00 hours local time at or near Charlie Lake, in the Province of British Columbia, Billings Family Enterprises Ltd. operated a Robinson R22, bearing Canadian registration C-FNNE, in an air transport service, without holding an air operator certificate, thereby contravening 700.02(1) of the Canadian Aviation Regulations. Monetary Penalty Assessed: $5,000.00

5. On or about July 11, 2004, at approximately 07:00 hours local time at or near Charlie Lake, in the Province of British Columbia, Billings Family Enterprises Ltd. operated a Robinson R44, bearing Canadian registration C-GZXA, in an air transport service, without holding an air operator certificate, thereby contravening 700.02(1) of the Canadian Aviation Regulations. Monetary Penalty Assessed: $5,000.00

6. On or about July 12, 2004, at approximately 07:00 hours local time at or near Charlie Lake, in the Province of British Columbia, Billings Family Enterprises Ltd. operated a Robinson R44, bearing Canadian registration C-GZXA, in an air transport service, without holding an air operator certificate, thereby contravening 700.02(1) of the Canadian Aviation Regulations. Monetary Penalty Assessed: $5,000.00

Total Monetary Penalty Assessed: $100,000.00

TATC File P-3115-02

1. On or about August 06, 2003, at approximately 08:00 hours, local time, at or near Helmet, in the Province of British Columbia, you operated an air transport service, when you did not hold and comply with the provisions of an air operator certificate, that authorized you to operate that service, thereby contravening subsection 700.02(1) of the Canadian Aviation Regulations. Suspension assessed: Commercial Helicopter Pilot License-14 Days

2. On or about July 02, 2003, at approximately 05:00 hours, local time, at or near Charlie Lake, in the Province of British Columbia, you operated an air transport service, when you did not hold and comply with the provisions of an air operator certificate, that authorized you to operate that service, thereby contravening subsection 700.02(1) of the Canadian Aviation Regulations. Suspension assessed: Commercial Helicopter Pilot License-14 Days

3. On or about February 09, 2003, at approximately 13:00 hours, local time, at or near Fort St. John, in the Province of British Columbia, you operated an air transport service, when you did not hold and comply with the provisions of an air operator certificate, that authorized you to operate that service, thereby contravening subsection 700.02(1) of the Canadian Aviation Regulations. Suspension assessed: Commercial Helicopter Pilot License-14 Days

4. On or about July 07, 2003, at approximately 06:00 hours, local time, at or near Charlie Lake, in the Province of British Columbia, you operated an air transport service, when you did not hold and comply with the provisions of an air operator certificate, that authorized you to operate that service, thereby contravening subsection 700.02(1) of the Canadian Aviation Regulations. Suspension assessed: Commercial Helicopter Pilot License-14 Days

Total Suspension Assessed: 56 Days

NOTE - As these files have closely related parties and evidence in common, the files were heard together, as if they were one. However, for simplicity I have addressed each file and the evidence pertaining to it separately. Because of the nature of the allegations, some evidence and discussion necessarily overlaps or pertains to more than one matter.

Motions

Witnesses by Conference Call

By fax dated August 3, 2005, Mr. Eric Villemure, representative for the Minister, submitted a motion to have witnesses in the P-3115-02 matter testify by conference call to avoid the cost of their personal attendance for testimony of short duration. He undertook to have facilities in place to properly identify the witnesses. Their testimony would be short and would not entail identifying documents. They could be cross-examined by opposing counsel.

Mr. Leslie G. Dellow, on behalf of the applicant, opposed the motion by fax dated September 2, 2005. He noted the high monetary exposure that his client could face should Transport Canada prevail. In order to properly assess witnesses, the Tribunal should be able to see them to observe demeanor and body language. The Tribunal rules did not specifically allow an order to be made that would allow evidence to be given by telephone. It would be inconsistent to do so in light of subsection 16(3) of the Transportation Appeal Tribunal of Canada (TATC) Rules which allows evidence by affidavit, but only with the consent of each party. It would be anomalous to allow evidence by telephone without the consent of each party. Departing from well established rules of procedure may place participants in a proceeding in an unfair position or lead to a miscarriage of justice.

Mr. Villemure filed a reply on September 5, 2005.

Ruling/Reasons

The motion was granted, the parties being advised by fax on September 6, 2005. TATC Rule 4 allows that where a procedural matter not provided for by the Act or Rules arises during the course of a proceeding, the Tribunal may take any action it considers necessary to enable it to settle the matter effectively and fairly.

No specific rule allows testimony to be heard by teleconference. I rely upon Rule 4 for granting the motion. The Tribunal has granted similar motions in the past and the procedure has been recognized elsewhere.[1] The applicant is not prevented from cross-examination. The duration of the evidence was to be short, such that there would be little opportunity to observe the witness in any case. I am satisfied that satisfactory arrangements had been made to identify properly the proposed witnesses. I have taken into consideration that the applicant's response was filed September 2, 2005 for a hearing on September 12, 2005, which left little time for making satisfactory arrangements for the witnesses to attend in person.

Secretary's Certificates

The production of the certificates (Exhibits M-17 and M-18) was objected to by Mr. Dellow on the grounds that it was an unsworn document to be used to prove a material fact. He produced jurisprudence in support of the objection.[2] Further, even if accepted, the certificate did not establish that there was not a valid and subsisting document. It only showed that a document had not been issued within the time frame stipulated.

I accepted the exhibits into evidence. The case law proffered did not persuade me to his point. Paragraph 27(2)(a) of the Aeronautics Act makes express provision for the certificates.

No Evidence Motions

At the conclusion of the Minister's evidence in the P-3115-02 and P-3114-41 matters, Mr. Dellow made a motion to dismiss the case on the basis that the Minister had adduced no evidence which would support a conviction. The motion was denied. There was a prima facie case on which a finding of the operation of an ATS could have been made.

TATC FILE P-3115-02

Evidence

Transport Canada has alleged that on three occasions Mr. Billings operated an ATS when he did not hold and comply with the provisions of an AOC.

Operation of Aircraft — Hire or Reward

In support of count one is an excerpt from the journey log book of helicopter C-GZXA, a Robinson R44 (Exhibit M-3). According to Mr. Billings' testimony, BFEL owns the aircraft and is its registered owner as well (Exhibit M-7). It shows a flight on August 6, 2003, in the vicinity of Helmut, British Columbia with Mr. Billings as pilot. Exhibit M-15 is invoice no. 170 from Challenger Inspections Ltd. (CIL), charging Ish Energy Ltd. for flying an operator to various locations. Exhibit M-15 also contains a cheque stub in the same amount as the invoice payable to CIL. Exhibit M-16 is a statement from a Mr. Damon Henne stating that he was the operator flown to the various locations listed on the invoice. The invoice is dated August 13, 2003, but the log indicates August 6, 2003.

Regarding count two, Exhibit M-3 reveals a flight of July 2, 2003 flown by Mr. Billings in the Grandhaven area. Exhibit M-21 is invoice no. 112 from CIL charging Murphy Oil Company Ltd. for well site inspection, 1.6 hours for RH44 helicopter air time. Attached is a cheque stub in the same amount as the invoice payable to CIL. Mr. Kirk Fowler testified to being the passenger on board that flight. He identified Mr. Billings as the pilot and confirmed the invoice. He did not know what the corporate structure might be or who owned the aircraft.

Count 3 is supported by Exhibit M-3 which shows a flight of February 9, 2003 flown by Mr. Billings in the Grandhaven area. Exhibit M-14 is invoice no. 1008 from CIL to Encana, Les Hailey for 5 hours air time. Attached is a cheque stub in the same amount as the invoice payable to CIL. Mr. Les Hailey gave testimony by teleconference. He stated that he was not on board but had a part delivered. All his dealings were with CIL.

Corporate Structure

A B.C. Company Summary for three companies, Billings Family Enterprises Ltd. (BFEL), Challenger Helicopters Ltd. (CHL), and Challenger Inspections Ltd. (CIL) was entered into evidence (Exhibit M-8). The first two companies list Mr. Brant Paul Billings and Ms. Elizabeth Ann Billings as Directors and Officers, whereas the latter lists only Mr. Billings in those capacities.

The relationship between the latter two companies is described in a letter on CIL letterhead, dated May 1, 2003 to Baytex Energy Ltd., signed by Mr. Billings (Exhibit M-11). Under the signature line it states: Brant Billings, Owner/Operator of Challenger Inspections, a Division of Challenger Helicopters. A CIL Company Profile attached to the letter states that CIL is solely owned and operated by Brant Billings of Fort St. John, British Columbia and is a division of CHL.

As regards CHL, an advertisement in an oil field publication states in part, that it provides Specialized Oilfield Aviation Transportation and Hot Shot Wellhead Management (Exhibit M-10).

Aircraft

Mr. Billings testified that BFEL acquired C-GZXA in 2002. It is registered to BFEL.

Air Operator Certificate

A Secretary's Certificate states that according to Transport Canada's records, no AOC was issued by the Minister to Mr. Billings between January 1 and August 31, 2003, authorizing the operation of an ATS (Exhibit M-17).

In a September 16, 2004 statement to a representative of the Canadian Transportation Agency (CTA), Mr. Billings stated that he did not hold an AOC (Exhibit M-19).

Law

In the discussion of this matter the following provisions apply:

Subsection 700.02(1) of the CARs:

700. 02 (1) 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.

Section 35 of the Interpretation Act — definition of person:

"person", or any word or expression descriptive of a person, includes a corporation;

Subsection 101.01(1) of the CARs — Interpretation:

"air transport service" - means 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;

Subsection 3(1) of the Aeronautics Act — Interpretation:

"commercial air service" means any use of aircraft for hire or reward;

"hire or reward" means any payment, consideration, gratuity or benefit, directly or indirectly charged, demanded, received or collected by any person for the use of an aircraft;

Discussion

The Minister must prove each element of the alleged offence. In this case it must be proved that:

  1. at the date, time and places alleged,
  2. Mr. Brant Paul Billings operated an ATS,
  3. when he did not hold or comply with the provisions of an AOC.

It is through a combination of definitions that one can discern what constitutes an ATS. An ATS has two facets. It means:

  1. a commercial air service;
  2. which is operated for the purposes of transporting persons and/or other items between two points.

To be a commercial air service means using the aircraft for hire or reward. Hire or reward is defined as "payment . . . directly or indirectly charged, demanded, received or collected by any person for the use of an aircraft."

The evidence of the journey log books establishes that Mr. Billings operated the aircraft on the dates, times and places as alleged in the Notice. The aircraft was owned by and registered to BFEL.

The testamentary evidence shows that persons, goods and/or cargo were transported in an aircraft between two points.

To be a commercial aircraft service the aircraft must be used for hire or reward. Exhibits M-14, M-15 and M-21 are invoices sent by CIL to three companies charging for the use of the aircraft. The exhibits also contain payment information from the companies to CIL.

Exhibit M-15 is dated August 13, 2003, whereas the alleged flight and log book are dated August 6, 2003. There is no suggestion in the evidence that the date of the invoice must necessarily correspond to the date of the flight for which payment is demanded although the others do correspond. I accept that invoice no. 179 (Exhibit M-15) is invoicing the flight of August 6, 2003.

The Minister produced a Secretary's Certificate (Exhibit M-17) which stipulated that no AOC was issued to Mr. Billings authorizing the operation of an ATS between January 1 and August 31, 2003. That does not preclude the possibility that there was an existing AOC issued before the dates on the certificate.

Exhibit M-19 is a statement given by Mr. Billings to Mr. Woolridge of the CTA on September 16, 2004 during the course of the investigation. In that statement, Mr. Billings stated that he did not hold an AOC. The statement is hearsay evidence but hearsay is admissible under the TATC more relaxed evidentiary procedures. The evidence is relevant as it goes to the proof of issues in dispute. Mr. Billings also gave direct evidence during the hearing. When doing so he was candid and forthright. I have found him to be an honest witness. I have no reason to believe that he was any less so when being interviewed by Mr. Woolridge. As a result I find that Mr. Billings' statement to Mr. Woolridge proved that he did not hold an AOC in that time period.

Issue

The foregoing analysis shows that an ATS was being operated when there was no AOC in place. The issue to be decided is who operated the ATS?

The Minister has alleged that Mr. Billings did. He argued that it is the operation of the "hire and reward" definition which establishes that Mr. Billings operated the ATS. He conceded that Mr. Billings did not get cash directly but that his company CIL received the consideration. As he was the sole director and shareholder of CIL he was rewarded indirectly. One did not have to "pierce the corporate veil" in this instance but rather rely upon the definition of "hire and reward". The result, the allegation against Mr. Billings, is consistent with the aim of the regulation, to pursue the person doing the flights.

Mr. Dellow says that the wrong party is charged. He stated that one must adhere to corporate law principles which would allow that Mr. Billings and CIL are separate legal entities. As it was CIL who received the hire and reward it must be the entity that operated the ATS. There were no circumstances which would allow the trier of fact to pierce the corporate veil, nor was there any evidence that Mr. Billings received any benefit directly or indirectly.

I uphold the charges against Mr. Billings. The evidence shows that he operated an ATS as he derived an indirect benefit for the use of the aircraft.

Four entities are at play in this circumstance:

  1. Mr. Billings who flew the flights in helicopter C-GZXA;
  2. BFEL which owned and to which the aircraft was registered;
  3. CIL which demanded and received payment for the flights; and
  4. CHL of which CIL is a division.

Mr. Billings was one of the officers and directors of each of the companies. Exhibit M-11 identifies him as the sole owner/operator of CIL.

The Minister has argued that as the owner and director of CIL Mr. Billings must have received an indirect benefit. He relies upon the definition of "hire or reward" to be broad enough to encompass the circumstance.

A TATC case, Tomassini[3], addressed the application of the "hire or reward" definition. In doing so the member reviewed several court cases that also dealt with the alleged operation of air transport services without holding an AOC.[4] A reading of the jurisprudence reveals that, as was stated by the Saskatchewan Court of Appeal in R. v. Biller at paragraph 25:

All the court decisions which have interpreted and applied the meaning of these terms have consistently agreed upon a literal and broad interpretation of the meaning of "hire or reward."

"Hire and reward" has been found in situations where no fee was charged for the use of an aircraft but the court found that a benefit had accrued to the operator in that the guest would not have booked the facility had the aircraft not been available.[5]

In another instance, heating oil was purchased at one location and flown by aircraft to another where the oil was resold at a higher price. The court found that a benefit had been received for use of the aircraft as the company was able to obtain the contract; and secondly, the selling price included at least a contribution to the cost of operating the aircraft.[6]

In the TATC case, Tomassini,[7] a package price of $1850.00 was charged for transporting guests to a hunting/fishing camp. That fee was more than the costs of fuel, oil and fees charged, so the overage constituted a benefit for the use of the aircraft.

Here CIL directly charged and collected payment for use of an aircraft for transporting persons and goods between points.

TATC jurisprudence[8] has recognized the basic precept of corporate law enunciated in the Salomon case[9] which states that the legal persona created by incorporation is an entity distinct from its shareholder and directors and that even in the case of a one-man company, the company is not an alias for the owner. Mr. Billings is then not the same legal entity as either of the companies.

However, the definition of "hire or reward" in a literal and broad interpretation as suggested by the jurisprudence would capture Mr. Billings in this circumstance. As sole owner/operator of CIL, the payment demanded and received by the company would benefit the owner of the company, Mr. Billings. There is a direct connection between himself and CIL as he is owner/operator, director and president of the company. A benefit derived by the company is a benefit to him.

I am of the opinion that the broad definition of "hire or reward" was designed in part to encompass such circumstance where multiple legal entities are carrying on enterprise. It is designed to capture such circumstance because it is critical that Transport Canada be able to exercise its safety oversight responsibilities in order to protect the general public which may engage air transport services from such a company.

Penalty

I uphold the 14-day suspension of Mr. Billings' commercial pilot licence for each of the three counts for a total suspension of 42 days. I do not see any mitigating or aggravating circumstances that would persuade me to alter the suggested penalty.

TATC FILE P-3113-33

Transport Canada has alleged that on or about June 15, 2004 near Charlie Lake, British Columbia, Mr. Billings conducted a take-off in aircraft C-FNNE that was in his legal custody and control when the aircraft did not meet the requirements of an AD No. 2003-04-04.

Evidence

AD 2003-04-04 (Exhibit M-4) was issued by the Federal Aviation Administration (FAA). It applies to Robinson R22 helicopters up to and including serial number 3328. Its effective date is March 26, 2003. The substance of the directive is to detect corrosion of a tail rotor pitch control bearing. The AD was to be accomplished within 20 hours time-in-service and thereafter at intervals not to exceed 300 hours time-in-service or 12 months, whichever occurs first.

Exhibit M-5 is a copy of a document taken from the Official Canadian Civil Aircraft Register database. It identifies C-FNNE as a Robinson R22 model helicopter, serial no. 1284. The country of manufacture is the United States of America (USA). Mr. Billings stated that the company BFEL had purchased it in 2000, and it was registered to that company (Exhibit M-6).

The journey log book for C-FNNE (Exhibit M-2) reveals that the AD was accomplished on March 28, 2003. A review of the log shows that it was not accomplished again within the next 12-month period. Mr. Haab, the AME who had worked on the aircraft stated that the AD had been overlooked.

The log book (Exhibit M-2) shows that on June 15, 2004, Mr. Brant Billings flew the aircraft.

Discussion

The Minister must prove each element of the offence. In this allegation it must be proved:

  • on the date, time and place alleged, Mr. Billings conducted a take-off in aircraft C-FNNE;
  • C-FNNE was in his legal custody and control; and
  • the aircraft did not meet the requirements of an AD.

Law

Subparagraph 605.84(1)(c)(i) of the CARs:

605. 84 (1) Subject to subsections (3) and (4), no person shall conduct a take-off or permit a take-off to be conducted in an aircraft that is in the legal custody and control of the person, other than an aircraft operated under a special certificate of airworthiness in the owner-maintenance or amateur-built classification, unless the aircraft

[...]

(c) except as provided in subsection (2), meets the requirements of any notices that are equivalent to airworthiness directives and that are issued by

(i) the competent authority of the foreign state that, at the time the notice was issued, is responsible for the type certification of the aircraft, engine, propeller or appliance, or

[...]

Subsection 101.01(1) of the CARs — Interpretation:

"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;

"owner" - in respect of an aircraft, means the person who has legal custody and control of the aircraft;

Subsection 3(1) of the Aeronautics Act — Interpretation:

"registered owner", in respect of an aircraft, means the person to whom a certificate of registration for the aircraft has been issued by the Minister under Part I or in respect of whom the aircraft has been registered by the Minister under that Part;

The evidence of the journey log establishes that Mr. Billings did conduct a take-off in aircraft C-FNNE on June 15, 2004, near Charlie Lake.

The Robinson helicopter was manufactured in the USA (Exhibit M-5). Mr. Bryant's testimony establishes that the FAA is the civil aviation authority responsible for the type certificate and is the authority competent to issue an AD for that aircraft. The journey log book and testimony from the AME establish that AD 2003-04-04 had not been accomplished within the required time limit. Therefore the aircraft was operated when it did not meet the requirements of the AD.

Exhibit M-5 shows the owner of the aircraft to be BFEL. Mr. Billings testified that the company had purchased the aircraft in the year 2000.

Issue

The issue is whether aircraft C-FNNE was in Mr. Billings' legal custody and control.

Held

The charge is dismissed. As can be seen by CAR 101.01(1), it is the owner who has legal custody and control of the aircraft. In this case, that is BFEL, not Mr. Billings. Although he is a director and officer of the company the two are separate legal entities. TATC jurisprudence[10] has recognized the basic precept of corporate law enunciated in the Salomon case[11] which states that the legal persona created by incorporation is an entity distinct from its shareholder and directors and that even in case of a one-man company, the company is not an alias for the owner. As Mr. Billings did not have legal custody and control of C-FNNE, the Minister has not proven the allegation.

TATC FILE P-3114-41

Airworthiness Directive (AD)CAR 605.84(1)(c)(i)

Transport Canada has alleged that on 10 different occasions BFEL permitted take-offs to be conducted in aircraft C-FNNE that was in BFEL's legal custody and control when the aircraft did not meet the requirement of AD 2003-04-04.

Evidence

AD 2003-04-04 (Exhibit M-4) was issued by the FAA. It applies to Robinson R22 helicopters up to and including serial number 3328. Its effective date is March 26, 2003. The substance of the directive is to detect corrosion of a tail rotor pitch control bearing. The AD was to be accomplished within 20 hours time-in-service and thereafter at intervals not to exceed 300 hours time-in-service or 12 months, whichever occurs first.

Exhibit M-5 is a copy of a document taken from the Official Canadian Civil Aircraft Register database. It identifies C-FNNE as a Robinson R22 model helicopter, serial no. 1284. The country of manufacture is the USA. Mr. Billings stated that the company BFEL had purchased it in 2000. It was registered to that company (Exhibit M-6).

The journey log book for C-FNNE (Exhibit M-2) reveals that the AD was accomplished on March 28, 2003. A review of the log shows that it was not accomplished again within the next 12-month period. Mr. Haab, the AME who had worked on the aircraft, stated that AD had been overlooked.

The log book (Exhibit M-2) shows that the aircraft flew on the dates stipulated in the Notice.

Discussion

The Minister must prove each element of the offence. In this instance it must be proved:

  • on the dates, times and places alleged, BFEL permitted take-offs to be conducted in C-FNNE;
  • C-FNNE was in BFEL's legal custody and control; and
  • the aircraft did not meet the requirements of an AD.

Law[12]

The evidence of the journey log shows that C-FNNE was flown by various individuals on the dates, times and places listed in the Notice. Mr. Billings' testimony and Exhibit M-5 established that BFEL owned the aircraft. The definition in the CARs provides that the owner is the person with legal custody and control.

As the company had custody and control, it was in a position to permit the various individuals to conduct take-offs in it. As a corporation can by definition be considered a "person", it qualifies as the person contemplated in section 605.84.

The Robinson helicopter was manufactured in the USA (Exhibit M-5). Mr. Bryant's testimony establishes that the FAA is the civil aviation authority responsible for the type certificate and is the authority competent to issue an AD for that aircraft. The journey log book and the testimony of Mr. Haab establish that the AD had not been accomplished within the requisite time period. Therefore the aircraft did not meet the requirements of the AD when it was operated.

Issue

Did the Minister prove that BFEL permitted take-offs to be conducted in an aircraft in its legal custody and control when the aircraft did not meet the requirements of an AD?

Held

The Minister has proven each element of the offence. I uphold the charges.

Maintenance schedule — CAR 605.86(1)(a)

Transport Canada has alleged that on 16 occasions take-offs were conducted in an aircraft that was in BFEL's legal custody and control when the aircraft was not maintained in accordance with the maintenance schedule that conformed to the standards because:

Counts 1 to 7 — fire extinguisher was overdue for inspection;

Counts 1 to 7 — emergency locator transmitter (ELT) was overdue for inspection;

Counts 1 and 2 — the compass was overdue for calibration.

The counts regarding the fire extinguisher, ELT and annual compass swing have a common evidentiary and legal foundation so are amenable to being discussed together.

These 16 offences are alleged to have taken place on 7 flights. For all flights, both the fire extinguisher and the ELT were alleged to have been overdue for inspection and on the first and last flights, the annual compass swing was alleged to have been overdue as well.

Evidence

The excerpt from the journey log of C-FNNE (Exhibit M-2) shows that on March 28, 2003, the aircraft underwent maintenance. The fire extinguisher was removed for certification and reinstalled. The ELT was removed for battery replacement and reinstalled. A compass swing was carried out.

A review of the log book pages for the following 12-month period shows that those particular items were not addressed again within that 12-month period. Log entries do show that those items were attended to on April 20 and 30, 2004. The log entries show that the aircraft flew between March 28 and April 20, 2004 at Challenger Base local. Testimony has established that the Challenger base is in proximity to Charlie Lake.

Exhibit M-5 and the testimony of Mr. Billings establish that BFEL was the owner of the aircraft.

Discussion

The Minister must prove each element of the offence. In these allegations it must be proved:

  1. on the dates, times and places alleged,
  2. BFEL conducted take-offs in C-FNNE,
  3. when C-FNNE was in its legal custody and control,
  4. and C-FNNE was not maintained in accordance with a maintenance schedule that conformed to standards, as the fire extinguisher and the ELT were overdue for inspection and the compass was overdue for calibration.

Law[13]

Subsection 605.86(1)(a) of the CARs:

605.86 (1) Subject to subsection (3), no person shall conduct a take-off in an aircraft, or permit a take-off to be conducted in an aircraft that is in the person's legal custody and control, unless the aircraft is maintained in accordance with

(a) a maintenance schedule that conforms to the Aircraft Equipment and Maintenance Standards; and

[...]

Part VI, Standard 625.86 of the CARs

625.86 Maintenance Schedules

Information Notes:

(i) The phrase "no person shall conduct a takeoff, or permit another person to conduct a take off" is used in the regulations to clearly emphasize an aircraft owner's responsibility to advise any person operating his/her aircraft of any maintenance that the aircraft might require pursuant to the regulations.

(ii) CAR Part I defines "Owner" as the person who has legal custody and control of the aircraft.

[...]

BFEL, as owner of C-FNNE, had legal custody and control of the aircraft. The log book shows that flights were conducted on the dates, times and places as alleged.

Legislative scheme regarding maintenance schedules:

  1. Subsection 605.86(1) allows that no take-off shall be made unless the aircraft is maintained in accordance with a maintenance schedule that conforms to the Aircraft Equipment and Maintenance Standards.
  2. Subsection 625.86(1) is the applicable standard. Paragraph 2(a) directs you to Part I and Part II of the maintenance schedule detailed in Appendix B of the standards. Paragraph 2(b) stipulates that owners of non-commercially operated small aircraft must also comply with Appendix C for out of phase tasks and equipment maintenance requirements.
  3. Part I of Appendix B is for small aircraft other than balloons.
  4. Appendix C is for out of phase items and equipment maintenance requirements. It contains a list of items that are to be inspected and at what time intervals.

Items in Appendix C at issue here are:

Item 9 is the non-stabilized magnetic direction indicator. Paragraph a) provides that it shall be calibrated and a dated correction card installed for each indicator at intervals not exceeding 12 months. Note: In the normal aviation vernacular, the non stabilized magnetic direction indicator is referred to as the compass and its calibration is known as a compass swing.

Item 10: Survival and Emergency Equipment (fire extinguisher) shall be overhauled at intervals recommended by the manufacturer.

Item 11: ELTs shall be checked at intervals not exceeding 12 months.

The journey log book entries establish that an interval in excess of 12 months had passed between the date of March 28, 2003 when those three items were last serviced and when they were next serviced in April of 2004.

Appendix C establishes that the required service for items 9 and 11 must be provided at intervals not exceeding 12 months. The Minister has proven that the ELT was overdue for its check and the compass had not been calibrated within the required time interval.

Appendix C provides that the fire extinguisher be overhauled at times recommended by the manufacturer. No evidence was adduced as to the manufacturer's recommendation. The Minister asserts that BFEL's doing the inspection on this item at the same time as the others does provide proof that it should be considered a 12-month interval. That may be a logical conclusion but falls short of the proof required as to the manufacturer's recommendation.

The charges regarding the fire extinguisher are dismissed.

Single Offence, Multiple Counts

The 16 offences were alleged to have occurred on 7 flights. On each flight, the fire extinguisher and ELT were alleged to have been overdue for inspection and on the first and last flights, the annual compass calibration was overdue as well. The counts regarding the fire extinguisher have been dismissed for the reasons above; so 9 allegations remain.

Issue

This scenario raises the issue of whether each instance of an item being overdue for inspection supports a separate allegation as the Minister has proposed here.

Mr. Dellow submits that there is only one offence, that of conducting a take-off in an aircraft when the aircraft was not maintained according to standard. To find that each count is a separate offence would constitute double jeopardy.

Mr. Villemure asserts that each instance supports a separate offence which should attract the suggested penalty.

I do not agree that this situation constitutes double jeopardy. The issue in double jeopardy is whether one accused, having been convicted of one offence, should in respect of the same act, also be convicted of another offence. I understand the "another offence" to be a different offence, the breach of a different regulation. When analyzing double jeopardy issues, the Tribunal has compared the charges to ascertain whether there was a legal nexus between them. That shows that two different charges are being compared. If double jeopardy is found the lesser of the charges is stayed. That is illustrative of there being two different charges. Tribunal and Federal Court jurisprudence confirms that approach.[14] Here there is a single offence, the alleged violation of CAR 605.86(1)(a), but with 16 counts. Double jeopardy does not arise as there are not multiple offences.

CAR 605.86(1)(a) has two fundamental aspects:

  1. the prohibition of take-off in the aircraft;
  2. when the aircraft has not been maintained in accordance with a maintenance schedule that conforms to the standards.

The various items that are alleged to have been overdue for inspection here are particularizations of the latter facet – not separate violations. Any one item overdue for inspection would establish that the aircraft was not maintained in accordance with a schedule that met the standards. It is the number of take-offs when the aircraft has not been maintained according to the standards that determines the number of allegations, not the number of items overdue for inspection.

I believe that is the proper approach as it is consistent with prior jurisprudence.[15] In another case involving the breach of paragraph 605.86(1)(a), three items were overdue for inspection. They formed the basis of a single allegation of the aircraft not being maintained in accordance with the standard. The subsequent take-off was found to be a violation.

Held

The Minister has established that seven take-offs were conducted in an aircraft in BFEL's legal custody and control when the aircraft was not maintained in accordance with a maintenance schedule that conforms to the maintenance standards. The ELT being overdue for inspection and the compass being overdue for calibration establish that the aircraft was not maintained in accordance with the maintenance schedule.

Penalty

The penalties for violations of sections 605.84 and 605.86 of the CARs are amenable to being discussed together.

Mr. Villemure argues that any maintenance related item must be taken very seriously. A strong message must be sent both to the person operating the aircraft and to the public and other pilots. There needs to be punishment and deterrence. The non-compliance with an AD renders the aircraft not to be airworthy. It should be grounded. But here it continued to fly, in remote areas, in uncontrolled air space. The quantum of penalty was justified as both specific and general deterrence. No mitigating circumstances arise. All the non AD items were of significant importance as well.

Mr. Dellow suggests that the violations would fit the diminimus level of seriousness. Flights that took place after certain items were overdue for inspection were just local flights for training purposes conducted within a 5-mile radius of the base. The AD was not critical as it was just an inspection to see whether a tail rotor pitch control bearing was rough or binding. When eventually inspected it was not found to be so. He also avered to the number of charges filed, submitting that it was unprecedented to file such a number and asked that the Tribunal take it into consideration.

Between the institution of charges and the review hearing Transport Canada distributed a press release that was misleading. Mr. Dellow characterized the AD as a directive to inspect and replace if necessary; whereas the press release said BFEL failed to replace a tail rotor bearing as required by an AD. Mr. Billings testified to having numerous calls from friends and clients because of it. Mr. Dellow says that his clients have already been punished by the press release's misstatement of facts.

I concur with Mr. Villemure regarding the seriousness of accomplishing an AD in a timely manner. As can be seen by its definition, an AD is in part an instruction that mandates a maintenance action to ensure that the aircraft is in condition for safe operation. This AD was intended to detect corrosion of a bearing and to prevent bearing failure and "subsequent loss of directional control of the helicopter"[16] — a possible disastrous consequence. Therefore, it is not to be taken lightly.

Both parties have referred to the Wyer[17] decision for guidance as to sentencing principles. The principles enunciated in the case include denunciation, deterrence, both specific and general, rehabilitation, and enforcement recommendations. Both aggravating and mitigating factors are to be regarded when addressing the proper balance within the principles.

In this instance I believe that denunciation and general deterrence need strong consideration. The aviation community and travelling public need to know that violations of this nature are taken seriously. I do not feel that specific deterrence is as important. It is my opinion, from observing Mr. Billings and hearing his testimony, that he is unlikely to put himself into such a situation again. In the same vein rehabilitation is not a key factor.

I accept as mitigating circumstances that there have been no previous offences. Mr. Billings is remorseful and did cooperate with authorities. The press release incorrectly attributed certain actions to BFEL regarding the airworthiness directive. That did cause negative consequences for BFEL through Mr. Billings. That circumstance can be seen as mitigating as an improper manner of proceeding by authorities.

Transport Canada has recommended a penalty of $5,000.00 per violation. In light of the mitigating circumstances, I reduce that to $4,000.00 per violation. The principles of denunciation and general deterrence need to be strongly emphasized in an airworthiness issue. The essence of an AD is to ensure the safety of the aircraft. The aviation community and travelling public need to know that the issue is taken very seriously.

The same principles apply to the violations regarding the items overdue for inspection. The annual inspection of an aircraft is an integral part of assuring its airworthiness. Given the mitigating factors spoken to above, I reduce the penalty for each violation from $1,250.00 to $1,000.00.

Operating an ATS with no AOC — CAR 700.02(1)

The Minister has alleged that on 6 occasions, at or near Charlie Lake, British Columbia, BFEL operated aircraft C-GZXA and C-FNNE in an ATS without holding an AOC.

Evidence

Operation of Aircraft — Hire or Reward

Counts 1 and 2

In support of count 1 is an excerpt from journey log book of helicopter C-GZXA, a Robinson 44 helicopter (Exhibit M-3). It shows a flight of January 19, 2004 from Grandhaven with Mr. Billings as pilot, 2.1 hours. Exhibit M-12 is CIL invoice no. 256 charging Burlington Resources Canada Ltd. for 2.4 hours of helicopter time on January 19, 2004.

Regarding count 2, C-GZXA's journey log indicates a flight on January 24, 2004, by Mr. Billings from Grandhaven for 1.2 hours. CIL invoice no. 256 charges Burlington Resources 1.5 hours of helicopter time on C-GZXA for that day.

The amounts charged for flights on January 19 and 24, 2004 are among others on invoice no. 256 which also shows that a sign was carried. Attached to this exhibit is a cheque from Burlington Resources to CIL in the amount of the whole of invoice no. 256 which include the charges discussed above.

Counts 3, 5 and 6

The journey log book shows flight in C-GZXA on July 10, 11 and 12, 2004. Each flight is flown by Mr. Billings from Challenger base local for 1.0, 1.2 and 1.0 hour respectively. Exhibit M-13 is CIL invoice no. 260 charging Devon Canada Corporation for .6, .8 and .6 hours of helicopter time on C-GZXA respectively.

Count 4

The log book for aircraft C-FNNE indicates a flight of July 10, 2004, by Mr. Billings from Challenger base for 1.6 hours. It indicates the carriage of a passenger. That time is reflected in CIL invoice no. 260 for July 10, 2004 charging Devon Canada Corporation 1.2 hours for helicopter time.

Corporate Structure

A B.C. Company Summary for three companies, Billings Family Enterprises Ltd. (BFEL), Challenger Helicopters Ltd. (CHL), and Challenger Inspections Ltd. (CIL) was entered into evidence (Exhibit M-8). The first two companies list Mr. Brant Paul Billings and Ms. Elizabeth Ann Billings as Directors and Officers whereas the latter lists only Mr. Billings in those capacities.

The relationship between the latter two companies is described in a letter on CIL letterhead, dated May 1, 2003 to Baytex Energy Ltd., signed by Mr. Billings (Exhibit M-11). Under the signature line it states: Brant Billings, Owner/Operator of Challenger Inspections, A Division of Challenger Helicopters. A CIL company profile attached to the letter states that CIL is solely owned and operated by Brant Billings of Fort St. John, British Columbia, and is a division of CHL.

As regards CHL, an advertisement in an oil field publication states in part, that it provides Specialized Oilfield Aviation Transportation and Hot Shot Wellhead Management (Exhibit M-10).

Aircraft

Mr. Billings testified that BFEL owned both aircraft. They were both registered to BFEL (Exhibits M-6 and M-7).

Air Operator Certificate

A Secretary's Certificate states that according to Transport Canada's records no AOC was issued by the Minister to BFEL between January 1, 2004 and July 31, 2004 authorizing the operation of an ATS (Exhibit M-18). In evidence adduced common to all the files, there was a statement given to Mr. Woolridge of the CTA (Exhibit M-19). In questions directed to Mr. Billings, he acknowledged that he did not possess an AOC. He was not questioned as to whether BFEL had been issued one.

Law[18]

Subsection 700.02(1) of the CARs:

700.02 (1) 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.

Discussion

The Minister must prove each element of the alleged offence. In this case it must be proved:

  1. on the dates, times and places alleged,
  2. BFEL operated an ATS,
  3. when it did not hold or comply with the provisions of an AOC.

It is through a combination of definitions that one can discern what constitutes an ATS. An ATS has two facets. It means:

  1. a commercial air service,
  2. which is operated for the purposes of transporting persons and/or other items between two points.

To be a commercial air service means using the aircraft for hire or reward. "Hire or reward" is defined as payment . . . directly or indirectly charged, demanded, received or collected by any person for the use of an aircraft.

The evidence of the journey log books of both aircraft shows that they were operated on the dates, times and places as alleged in the Notice. BFEL was both the owner and registered owner of both aircraft. The evidence shows that persons/goods were transported in an aircraft between two points.

To be a commercial aircraft service, the aircraft must be used for hire or reward. Exhibits M-12 and M-13 are invoices sent by CIL to Burlington Resources Canada Ltd. and Devon Canada Corporation FSJ charging for the use of the aircraft. The exhibits also contain payment information from the companies to CIL.

The Minister produced a Secretary's Certificate (Exhibit M-18) which stipulated that no AOC was issued to BFEL authorizing the operation of an ATS between January 1, 2004 and July 31, 2004. That does not preclude the possibility that there was an existing AOC prior to the time stipulated in the certificate.

Exhibit M-19 is a statement given by Mr. Billings to Mr. Woolridge of the CTA on September 26, 2004 during the course of the investigation. Mr. Woolridge asked Mr. Billings if he held an AOC issued by Transport Canada. He replied no. That evidence was accepted in the P-3115-02 file as it was relevant to the allegation that Mr. Billings had operated an ATS with no AOC. Here it is alleged that BFEL operated an ATS with no AOC. No questions were posed to Mr. Billings regarding BFEL. The statement is of no assistance in establishing whether BFEL possessed an AOC.

I find that BFEL did not possess an AOC during the pertinent time. I come to that conclusion based on an assessment of Mr. Billings' evidence as a whole. I have found him to be an honest forthright witness. In questioning by Inspector Bryant, he conceded that he had stepped over the line. I believe that if BFEL had an AOC, he would simply have produced it to preclude these proceedings. I am aware that he is not required to have done so as the onus is on the Minister to prove that he did not have one, but given my assessment of Mr. Billings, I feel that is an appropriate conclusion.

Issue

The foregoing analysis shows that an ATS was being operated when there was no AOC in place. The issue to be decided is who operated the ATS?

Mr. Villemure submits that BFEL did. As both aircraft were owned by BFEL, it had legal custody and control of them. There was no evidence suggesting any change of custody and control between BFEL and CIL. Mr. Billings was a director and officer of both companies. That provided the link between the two companies and hence BFEL was rewarded indirectly.

Mr. Dellow says that the wrong party is charged. He stated that one must adhere to corporate law principles which would allow that BFEL and CIL are separate legal entities. As it was CIL which received the hire and reward, it must be the entity that operated the ATS. There were no circumstances which would allow the trier of fact to pierce the corporate veil, nor was there any evidence that BFEL received any benefit directly or indirectly.

Held

I dismiss the charges against BFEL. The evidence does not show that BFEL operated an ATS as there is no evidence that it received any payment or benefit whether directly or indirectly.

Four entities are at play in this circumstance:

  1. BFEL which owned and to which the aircraft were registered;
  2. CIL which charged and received payment for the flights;
  3. Mr. Billings who was one of the directors and officers of BFEL;
  4. CHL of which CIL is a division.

Mr. Billings was a director and officer of each of the above-noted companies. Evidence shows him to have been the sole owner/operator of CIL. There is no evidence on record of ownership of the other companies, nor is there evidence of any legal relationship between CIL and BFEL.

TATC jurisprudence[19] has recognized the basic precept of corporate law enunciated in the Salomon case[20] which states that the legal persona created by incorporation is an entity distinct from its shareholders and directors and that even in the case of a one man company, the company is not an alias for the owner.

The Minister relies upon the definition of "hire or reward" to be broad enough to encompass the circumstance. The definition is very broad, designed to capture any number of scenarios where some form of remuneration changes hands for the use of an aircraft.

There is evidence that CIL directly charged and collected payment for the use of the aircraft. The Minister suggests that some benefit must have been derived by BFEL as it operated the aircraft and those aircraft were in its legal custody and control. But in substantially the same type of circumstance in file # P-3115-02, the Minister says that it was Mr. Billings who received the indirect benefit, again in reliance upon the definition.

In that file, the evidence established Mr. Billings as the sole owner of the company. The only link between CIL and BFEL in evidence here is that the companies share common directors and officers. There is no evidence of a more direct link between them as there was between CIL and Mr. Billings. I cannot conclude that BFEL obtained a benefit on what is before me.

The charges are dismissed.

CONCLUSION

TATC File No. P-3113-33

Brant Paul Billings

CAR 605.84(1)(c)(i)

The charge is dismissed.

TATC File No. P-3114-41

Billings Family Enterprises Ltd.

CAR 605.84(1)(c)(i) - 10 counts

The Minister has proven each element of the offence. In light of the mitigating circumstances, I reduce the penalty from $5,000.00 to $4,000.00 per count for a total amount of $40,000.00.

CAR 605.86(1)(a) - 16 counts

Fire Extinguisher

I dismiss the 7 counts alleging that the aircraft was not maintained in accordance with a maintenance schedule that conformed to standards.

Emergency Locator Transmitter

I uphold the 7 allegations alleging that the aircraft was not maintained in accordance with a maintenance schedule that conformed to standards. I reduce the penalty for each violation from $1,250.00 to $1,000.00 for a total amount of $7,000.00.

Annual Compass Swing

The Minister has proven that the compass was overdue for calibration. However, I find that these two allegations are not separate violations but are particularizations that the aircraft was not maintained in accordance with the standard when take-offs were conducted on April 5 and 8, 2005. They are subsumed into the charges regarding the ELT. Therefore, the penalty is cancelled.

CAR 700.02(1) - 6 counts

I dismiss the charges against BFEL. The evidence does not show that BFEL operated an ATS as there is no evidence that it received any payment or benefit whether directly or indirectly.

TATC File No. P-3115-02

Brant Paul Billings

CAR 700.02(1) - 3 counts

I uphold the charges against Mr. Billings. The evidence shows that he operated an ATS as he derived an indirect benefit for the use of the aircraft. I uphold the 14-day suspension of Mr. Billings' commercial pilot licence for each of the three counts for a total suspension of 42 days.

January 16, 2006

Allister Ogilvie
Vice-Chairperson
Transportation Appeal Tribunal of Canada


nd Administrative Law in Canada, Sara Blake, 2 ed., [1997], p. 51.

Minister of Transport v. Arctic Wings Ltd., review determination [2004], W-2902-41.

[2] R. v. Henri [1972] 9 CCC (2d) (British Columbia Court of Appeal).

R. v. O'Brien [1964] 50 DLR (2d) (Saskatchewan District Court).

[3] Minister of Transport v. Bruno Tomassini [2003], review determination, Q-2520-33.

[4] R. v. Biller [1999] S.J. No. 202, dated 31 March 1999; R. v. Laserich [1977] 4 W.W.R. 703 (N.W.T.C.A.).;

R. v. Race (1974) 14 C.C.C. (2d) 165 (Ont. Dis. Ct.).

[5] R. v. Race, supra note 4.

[6] R. v. Biller, supra note 4.

[7] Tomassini, supra note 3.

[8] Minister of Transport v. Stage Air South Ltd. [2004], appeal decision, P-2585-41.

[9] Salomon v. Salomon & Co. Ltd. [1897] A.C. 22.

[10] Stage Air South Ltd., supra, note 8.

[11] Salomon v. Salomon & Co. Ltd., supra, note 9.

[12] See law previously discussed at pages 12 and 16.

[13] See law previously discussed at pages 12 and 16.

[14] Edmundo R. Sanchez v. Minister of Transport, appeal decision [1989], O-0104-02.

Delco Aviation Limited v. Minister of Transport, appeal decision [2001], O-1918-41.

Delco Aviation Limited v. Minister of Transport [2005] FCA 7.

[15] Minister of Transport v. James Edgar Darwin, review determination [2003], P-2794-37.

[16] See Exhibit M-4.

[17] Kurt William M. Wyer v. Minister of Transport, appeal determination, [1988], O-0075-33.

[18] See law previously discussed at pages 12 and 16.

[19] Stage Air South Ltd., supra, note 8.

[20] Salomon v. Solomon & Co. Ltd., supra, note 9.


Appeal decision
Faye H. Smith, Sandra Lloyd, William Thornton Tweed


Decision: November 14, 2006

Subparagraph 605.84(1)(c)(i) of the CARs - The panel upholds the member's determination as to the 10 counts. However, the panel reduces the penalty to $500 for each of the 10 breaches for a total penalty of $5 000. Accordingly, we allow the appeal of BFEL as to penalty.

Paragraph 605.86(1)(a) of the CARs – Emergency Locator Transmitter – The panel allows the appeal of BFEL respecting the seven counts. The allegations are dismissed.

Subsection 700.02(1) of the CARs – The Minister's appeal is allowed for these six counts. There is no reason to interfere with the Minister's original assessment of $5 000 per occurrence for a total penalty of $30 000.

The amount of $35 000 is to be made payable to the Receiver General for Canada and received by the Tribunal within fifteen days following service of this decision.

[1]     An appeal hearing in the above matters was held Thursday, September 7, 2006, at 9:00 a.m. at the Court House, Law Courts Building, in Fort St. John, British Columbia.

BACKGROUND

[2]     On January 13, 2005, administrative monetary penalties were issued by the Minister of Transport against Brant Paul Billings and Billings Family Enterprises Ltd. (BFEL) (TATC file nos. P-3113-33 and P-3114-41). Also on January 13, 2005, a notice of suspension was issued to Mr. Billings suspending his commercial pilot licence (TATC file no. P-3115-02).

[3]     A short summary of the allegations taken from the review determination follows.

[4]     TATC File No. P-3115-02 — On various dates and places, Mr. Billings operated an air transport service (ATS) when he did not hold and comply with the provisions of an air operator certificate (AOC) authorizing the service, thereby contravening subsection 700.02(1) of the Canadian Aviation Regulations (CARs) - four counts. The Minister of Transport withdrew count 4 at the commencement of the hearing. Total suspension assessed at 56 days.

[5]     TATC File No. P-3113-33 — On June 15, 2004, at or near Charlie Lake, British Columbia, Mr. Billings conducted a take-off in an aircraft that was in his legal custody and control when the aircraft did not meet the requirements of an airworthiness directive (AD), thereby contravening subparagraph 605.84(1)(c)(i) of the CARs – one count. Total monetary penalty assessed at $1 000.

[6]     TATC File No. P-3114-41 — On various dates and places, BFEL permitted take-offs to be conducted in an aircraft that was in its legal custody and control when the aircraft did not meet the requirements of an AD, thereby contravening subparagraph 605.84(1)(c)(i) of the CARs - 10 counts. Monetary penalty assessed at $5 000 per count for a total of $50 000.

[7]     On various dates and places, BFEL conducted take-offs in an aircraft that was in its legal custody and control when the aircraft was not maintained in accordance with a maintenance schedule that conformed to the required maintenance standards in that the fire extinguisher and the emergency locator transmitter (ELT) were overdue for inspection and the compass was overdue for calibration, thereby contravening paragraph 605.86(1)(a) of the CARs – 16 counts. Monetary penalty assessed at $1 250 per count for a total of $20 000.

[8]     On various dates and places, BFEL operated helicopters in an AT without holding an AOC, thereby contravening subsection 700.02(1) of the CARs – six counts. Monetary penalty assessed at $5 000 per count for a total of $30 000.

[9]     A review hearing of the matters took place in Dawson Creek, British Columbia from September 12 to 15, 2005 before Allister Ogilvie, Vice-Chairperson of the Tribunal. Mr. Ogilvie's determinations were issued on January 16, 2006 as follows:

1. TATC File No. P-3113-33 / Brant Paul Billings

Subparagraph 605.84(1)(c)(i) of the CARs

The charge is dismissed.

2. TATC File No. P-3114-41 / Billings Family Enterprises Ltd.

Subparagraph 605.84(1)(c)(i) of the CARs - 10 counts

The Minister has proven each element of the offence. In light of the mitigating circumstances, I reduce the penalty from $5 000 to $4 000 per count for a total amount of $40 000.

Paragraph 605.86(1)(a) of the CARs – 16 counts

Fire Extinguisher — I dismiss the seven counts alleging that the aircraft was not maintained in accordance with a maintenance schedule that conformed to standards.

Emergency Locator Transmitter — I uphold the seven allegations that the aircraft was not maintained in accordance with a maintenance schedule that conformed to standards. I reduce the penalty for each violation from $1 250 to $1 000 for a total amount of $7 000.

Annual Compass Swing — The Minister has proven that the compass was overdue for calibration. However, I find that these two allegations are not separate violations but are particularizations that the aircraft was not maintained in accordance with the standard when take-offs were conducted on April 5 and 8, 2005. They are subsumed into the charges regarding the ELT. Therefore, the penalty is cancelled.

Subsection 700.02(1) of the CARs - six counts

I dismiss the charges against BFEL. The evidence does not show that BFEL operated an ATS as there is no evidence that it received any payment or benefit whether directly or indirectly.

3. TATC File No. P-3115-02 / Brant Paul Billings

Subsection 700.02(1) of the CARs - three counts

I uphold the charges against Mr. Billings. The evidence shows that he operated an ATS as he derived an indirect benefit for the use of the aircraft. I uphold the 14-day suspension of Mr. Billings' commercial pilot licence for each of the three counts for a total suspension of 42 days.

[10]     BFEL appealed the determination with respect to TATC file no. P-3114-41. Mr. Billings appealed the determination with respect to TATC file no. P-3115-02. The Minister of Transport appealed the determination with respect to TATC file no. P-3113-33 and cross-appealed the determination with respect to TATC file no. P-3114-41.

FACTS

[11]    

  1. BFEL was at all times duly incorporated as a British Columbia corporation.
  2. Mr. Billings was at all relevant times an officer and director of BFEL.
  3. BFEL was at all relevant times the registered owner of a Robinson R22 helicopter bearing Canadian registration C-FNNE and a Robinson R44 helicopter bearing Canadian registration C-GZXA.
  4. Mr. Billings was at all relevant times a licensed commercial helicopter pilot.
  5. Helicopter C-FNNE was flown in the summer of 2004 when AD 2003-04-04 had not been complied with.

TATC File No. P-3113-33

[12]     We uphold the member's determination in this matter.

[13]     Subsection 101.01(1) of the CARs defines "owner" as follows:

"owner" - in respect of an aircraft, means the person who has legal custody and control of the aircraft;

[14]     Custody and control of an aircraft rests with the registered owner. The legal "person" that had custody and control of helicopter C-FNNE at all relevant times was BFEL not Mr. Billings. (See exhibits M-5 and M-6.)

[15]     The Minister of Transport's appeal is therefore dismissed.

TATC File No. P-3114-41

Subparagraph 605.84(1)(c)(i) of the CARs - 10 counts

[16]     We uphold the member's determination as to the findings of facts that on 10 occasions, BFEL permitted aircraft C-FNNE to take off when said aircraft was not in compliance with AD 2003-04-04, thereby contravening subparagraph 605.84(1)(c)(i) of the CARs.

[17]     Exhibit M-5 is a copy of a document taken from the Official Canadian Civil Aircraft Register database. It identifies C-FNNE as a Robinson R22 model helicopter, serial no. 1284. The country of manufacture is the USA. Mr. Billings stated that the company BFEL had purchased it in 2000. It was registered to that company (exhibit M-6), which as owner had legal custody and control (see ¶14 above).

[18]     The journey log book for C-FNNE (exhibit M-2) reveals that the AD was accomplished on March 28, 2003. A review of the log shows that it was not accomplished again within the next 12-month period. Mr. Haab, the AME who had worked on the aircraft, stated that AD had been overlooked. The log book also shows that the aircraft flew on the dates stipulated in the notice.

[19]     Regarding penalty, the member at review considered the aggravating and mitigating factors and reduced the $5 000 penalty for each count to $4 000 for each of the 10 counts for a total penalty of $40 000. Counsel for BFEL suggested that the AD was not critical as it was just an inspection to see whether a tail rotor pitch control bearing was rough or binding and that upon inspection it was found to be fine. He further advised that upon issuing the notices, the Transport Canada communications section in its Vancouver office issued a press release (exhibit A-1) which stated in part:

Transport Canada today announced Billings Family Enterprises Ltd., of Charlie Lake, B.C., was fined $100,000 for violating the Canadian Aviation Regulations by carrying passengers and goods without an air operator certificate and the required approvals and equipment.

This aviation enforcement action was taken following a Transport Canada investigation of the company. The investigation revealed the company was operating a commercial air service without an air operator certificate and flying a helicopter without an approved fire extinguisher, emergency locator transmitter, and compass. In addition, the department's investigation found the company had not replaced a bearing in the helicopter's tail rotor, in accordance with an airworthiness directive issued by the helicopter's manufacturer. In total, the company was charged with 32 violations of Canadian Aviation Regulations.

A pilot who flew for Billings Family Enterprises Ltd. was also fined $1,000 and had his commercial helicopter pilot's license suspended for 56 days.

[20]     Counsel for the company reiterated that the AD was a directive to inspect and to replace the tail rotor bearing if necessary, whereas the press release misstated the directive by saying that the company failed to replace a tail rotor bearing as required. He urged the Tribunal to take this into account as Mr. Billings had already been punished by the press release's misstatement of the facts and that he had received a number of calls from his friends and clients because of it.

[21]     We concur that any maintenance-related item must be taken very seriously. A strong message must accompany confirmed breaches of the regulations for missed ADs. This AD was intended to detect corrosion of a bearing and to prevent bearing failure and subsequent loss of directional control of the helicopter — a possible disastrous consequence. The essence of an AD is to ensure the safety of the aircraft, and the enforcement of breaches gives assurance to the public and to all users of the system that these issues are viewed very seriously.

[22]     Mr. Haab's evidence was that he missed the 12-month requirement for performance of the work required by AD 2003-04-04 because he did not note the 12-month limit. He had mistakenly categorized it as a 300-hour recurring AD. In his experience with the other Robinson helicopters he worked on, all of them flew 300 hours within any 12-month period. Therefore, the 12-month limit was of no practical concern to Mr. Haab in his work with those other helicopters. He further explained his failure to note the 12-month limitation this way:

I guess in my mind it was due to the fact of my familiarity with the AD. Having performed it so many times, I wouldn't necessarily read the AD every time I performed the inspection on the aircraft and I basically didn't see that there was a 12 month interval as well as a 300 hour interval and I never signed it off as a 12 month interval prior to this investigation.

Transcript at 324-25.

[23]     Although the AD was missed, there were no immediate safety consequences for the aircraft in that the inspection revealed no requirement to replace the tail rotor pitch control bearing. We agree with the member at review that there is no need for specific deterrence as Mr. Billings, an officer and director of the company, had satisfied the member at review that he was remorseful and he was at all times cooperative with the regulatory authorities.

[24]     We differ from the member at review regarding general deterrence in this case. We consider it a message of general deterrence that a penalty of $5 000 can be assessed for each alleged violation of subparagraph 605.84(1)(c)(i) of the CARs. However, there are multiple counts because there were 10 take-offs following Mr. Haab's one error of missing the 12-month AD. Considering that fact and taking into account the unfortunate wording of the press release and possible consequences to the company, we consider it fair to further mitigate the penalty that would normally be assessed for general deterrence. In doing so, we restrict this consideration to the stated facts of this case. We accordingly reduce the penalty to $500 for each of the 10 breaches for a total penalty of $5 000.

[25]     Accordingly, we allow the appeal of BFEL as to the penalty.

TATC File No. P-3114-41

Paragraph 605.86(1)(a) of the CARs - 16 counts

[26]     This file contains allegations that BFEL did conduct 16 take-offs in an aircraft in its legal custody and control when the aircraft was not maintained in accordance with a maintenance schedule that conformed to the Aircraft Equipment and Maintenance Standards.

Counts 1 to 7: the fire extinguisher was overdue for inspection;

Counts 1 to 7: the ELT was overdue for inspection;

Counts 1 and 2: the compass was overdue for calibration.

[27]     The member at review dismissed the charges regarding the fire extinguisher on the basis that no evidence was produced as to the manufacturer's recommended times for overhaul. The Minister did not appeal this decision.

[28]     The member confirmed the charges related to the ELT. This decision was appealed by counsel for BFEL. The member cancelled the penalty assessed for the two allegations that the compass was overdue for calibration on the basis that they were not separate violations. The Minister did not appeal this decision.

[29]     We have concerns as to the wording of all of the above charges. The wording of paragraph 605.86(1)(a) of the CARs states:

605.86 (1) Subject to subsection (3), no person shall conduct a take-off in an aircraft, or permit a take-off to be conducted in an aircraft that is in the person's legal custody and control, unless the aircraft is maintained in accordance with

(a) a maintenance schedule that conforms to the Aircraft Equipment and Maintenance Standards...

[30]     The wording of all 16 charges, in so far as it concerns this panel, is the same as the first charge relating to the ELT which reads:

On or about April 05, 2004, at approximately 08:30 hours local time, at or near Charlie Lake, in the Province of British Columbia, Billings Family Enterprises Ltd. did conduct a take-off in an aircraft bearing Canadian registration C-FNNE, that was in your legal custody and control, when the aircraft was not maintained in accordance with a maintenance schedule, that conformed to the Aircraft Equipment and Maintenance Standards. To wit: the Emergency Locator Transmitter was overdue for inspection, thereby contravening section 605.86(1)(a) of the Canadian Aviation Regulations. Monetary Penalty Assessed: $1,250.00

[31]     The wording of the charges states that "Billings Family Enterprises Ltd. did conduct a take-off in an aircraft" and omits the words "or permit a take-off to be conducted" which are found in the text of the regulation. It is the view of the panel that the wording of the charge is too restrictive in the circumstances since the company BFEL cannot itself conduct a take-off. As owner of the aircraft, the company could have been pursued using the wording "or permit a take-off to be conducted".

[32]     An alternative to using the expanded wording of the regulation itself would have been to charge the company as owner under section 8.4 of the Aeronautics Act which holds the owner of an aircraft responsible through vicarious liability. The issue of whether this panel could infer its application in the absence of any reference to it in the notice does not arise, as the Minister's representative specifically acknowledges at pages 493-94 of the transcript that the Minister is not proceeding on vicarious liability, but that they proceeded on the regulation.

[33]     In that submission, the Minister's representative is pointing out the difference between the current case and that of Canada (Minister of Transport) v. Canadian Helicopters Ltd. [1992], review determination, C.A.T. file no. W-0134-37, [1992] C.A.T.D. no. 3 (QL), in which Canadian Helicopters Ltd. was charged under vicarious liability for the actions of its pilots.

[34]     Hence, we would dismiss the charges on the basis that the wording contained in the notice is too restrictive in the circumstances of this case. That is to say, we allow the appeal of BFEL respecting the seven counts of paragraph 605.86(1)(a) regarding the ELT. For the reasons set out above, had it been necessary we would have dismissed all 16 charges on the basis of the wording of the charges which was more restrictive than the actual wording of the regulation itself.

TATC File No. P-3114-41

Subsection 700.02(1) of the CARs – six counts

[35]     We overturn the member's determination to dismiss the charges against BFEL for the operation of an ATS without holding an AOC in contravention of subsection 700.02(1) of the CARs – six counts.

[36]     We agree with the member's statement that BFEL did not have an AOC authorizing the operation of a commercial air service.

[37]     Subsection 700.02(1) of the CARs reads as follows:

700.02 (1) 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.

[38]     It is our decision that the offence of operating an ATS without an AOC was committed by BFEL, the registered owner of the aircraft, the legal entity that had custody and control of the aircraft. Challenger Inspections Ltd. (CIL), an operation that shares some of the same directors as BFEL, demanded and received payment for flights of the aircraft that were in the custody and control of BFEL. Although there was no agreement in evidence between the owner of the aircraft, BFEL, and CIL, there was a corporate relationship between the two entities.

[39]     Given BFEL had custody and control of the subject aircraft, it is incumbent upon them to ensure that the aircraft is operated in compliance with the CARs. CIL was charging for the flights carried out by BFEL aircraft. Although there is no direct proof that any of the funds flowed from CIL to BFEL for a direct benefit, to suggest that BFEL operated its aircraft and received no benefit is not believable. It is our decision that BFEL, the registered owner having custody and control of the subject aircraft, received indirect benefit for the operation of its aircraft.

[40]     We reject the argument of counsel for Mr. Billings and BFEL that the poorly worded secretary's certificate has prejudiced their interests. We do not accept that the reverse onus of proof it placed on the document holder is unreasonable. We were referred to case law dealing with offences under the Criminal Code. The courts place a very high onus on the Crown providing proof in the manner permitted by statute.

[41]     In this circumstance, not dealing with proof as prescribed in the Criminal Code, we are dealing with an authority granted by the Minister of Transport; the authority, in this case, an AOC, which is a public document authorizing the operation of a particular ATS. The onus of having to produce the AOC to prove that the Minister made a mistake and that BFEL was, in fact, the holder of the appropriate authority, was not prejudicial to the interests of BFEL.

[42]     The operation of an ATS without a licence is a serious offence. The issuance of an AOC is a fundamental procedure the Minister imposed to ensure the operation of commercial aircraft is carried out in a manner that is safe for the travelling public. There is no reason to interfere with the Minister's original assessment of $5 000 per occurrence for a total fine of $30 000. The Minister's appeal is allowed.

TATC File No. P-3115-02 - three counts

[43]     We overturn the member's determination that Mr. Billings operated an ATS without an AOC authorizing the service.

[44]     Mr. Billings was not the owner of the aircraft. Therefore, he did not have custody and control of the subject aircraft, notwithstanding that he was the pilot of the aircraft at that time. It is trite law that an individual in a small closely held corporation is capable of wearing many hats. In this case, his role as pilot of the aircraft was that of an employee.

[45]     The role of a pilot and employee does not carry with a requirement to be licensed to operate an ATS. The requirement for the licence rests with the registered owner who has custody and control of the aircraft.

[46]     We set aside the finding of the member at review regarding this matter and cancel the suspension of Mr. Billings' licence. Mr. Billings' appeal is allowed.

CONCLUSION

TATC File No. P-3113-33

Subparagraph 605.84(1)(c)(i) of the CARs

[47]     The panel upholds the member's determination in this matter. The Minister's appeal is dismissed.

TATC File No. P-3114-41

Subparagraph 605.84(1)(c)(i) of the CARS

[48]     The panel upholds the member's determination as to the 10 counts of permitting aircraft C-FNNE to take off when said aircraft was not in compliance with AD 2003-04-04, thereby contravening subparagraph 605.84(1)(c)(i) of the CARs. However, the panel reduces the penalty to $500 for each of the 10 breaches for a total penalty of $5 000. We allow the appeal of BFEL as to penalty.

Paragraph 605.86(1)(a) of the CARs

[49]     Emergency Locator Transmitter – The panel allows the appeal of BFEL respecting the seven counts.

Subsection 700.02(1) of the CARs

[50]     The Minister's appeal is allowed for these six counts. There is no reason to interfere with the Minister's original assessment of $5 000 per occurrence for a total fine of $30 000.

TATC File No. P-3115-02

Subsection 700.02(1) of the CARs

[51]     We set aside the finding of the member at review regarding this matter and cancel the suspension of Mr. Billings' licence. Mr. Billings' appeal respecting the three counts is allowed.

November 14, 2006

Reasons for appeal decision by:

William T. Tweed, Member
Faye Smith, Chairperson

Concurred:

Sandra K. Lloyd, Member


Federal Court of Canada (T)


Decision:

Date: 20080107

Dockets: T-2272-06

T-2295-06

T-2297-06

Citation: 2008 FC 17

Docket: T-2272-06

BETWEEN:

BILLINGS FAMILY ENTERPRISES LTD.

Applicant

and

THE MINISTER OF TRANSPORT

Respondent

Docket: T-2295-06

AND BETWEEN:

THE ATTORNEY GENERAL OF CANADA

Applicant

and

BRANT PAUL BILLINGS

Respondent

Docket: T-2297-06

AND BETWEEN:

THE ATTORNEY GENERAL OF CANADA

Applicant

and

CHALLENGER INSPECTIONS (2006) LTD. formerly

BILLINGS FAMILY ENTERPRISES LTD.

Respondent

REASONS FOR ORDERS

HARRINGTON J.

[1] These three intertwined judicial reviews concern one man, two helicopters, three corporations and nineteen alleged contraventions of the Canadian Aviation Regulations under the Aeronautics Act. It is common ground that 13 of the 19 contraventions occurred. The defence on those 13 belongs more to corporate law than it does to aeronautics. The defence is that the contraventions were committed by someone else, a related corporation which, for the flights in question, was operating the helicopters which were then in its possession, legal custody and control. This defence succeeded for the individual who was an officer and director as well as the alter ego of the corporations. It did not succeed for the corporation which was listed as the registered owner of the helicopters. There are three groups of alleged contraventions which must be segregated, and analyzed.
Airworthiness Directive

[2] The Minister of Transport was of the view that Billings Family Enterprises Ltd. (BFEL), the registered owner of the two helicopters, authorized 10 flights while the helicopters were in its "legal custody and control", at a time when a required maintenance inspection of a tail rotor pitch control bearing was overdue, the whole in contravention of section 605.84 of the Canadian Aviation Regulations (CARs). He imposed a penalty of $5,000 for each of the 10 flights. On review, the Transportation Appeal Tribunal of Canada (TATC) agreed that it was BFEL, now known as Challenger Inspections (2006) Ltd., which committed the contraventions, but reduced the penalty to $4,000 for each of the 10 flights. On appeal therefrom, the TATC's three-person Appeal Panel upheld the finding on the contraventions, but further reduced the penalty to $500 for each of the 10 flights.

[3] This has led to two judicial reviews. In T-2272-06, BFEL seeks to set aside the finding that it was in legal custody and control of the two helicopters. In T-2297-06, the Minister seeks judicial review of the $500 penalty. He submits that the $4,000 penalty for each of the 10 flights should be reinstated.

Air Transport Service/BFEL

[4] The Minister was further of the view that BFEL operated an air transport service on six occasions without holding the air operator certificate required by CAR 700.02. He imposed a penalty of $5,000 for each of the six flights.

[5] On first review, which took the form of a hearing de novo, the TATC quashed the Minister's decision on the ground that it was not BFEL which operated the air transport service. However, the TATC's Appeal Panel maintained the Minister's appeal and reinstated his decision both on liability and penalty.

[6] BFEL seeks a judicial review under court docket number T-2272-06. It denies it was operating an air transport service. In the alternative, its position is that nobody was operating an air transport service on the flights in question. In any event, it submits the penalty is too high.

Air Transport Service/Brant Paul Billings

[7] Finally, the Minister took the position that Brant Paul Billings, the man behind BFEL, had personally on three occasions operated an air transport service without holding the required air operator certificate. His pilot's licence was suspended for 14 days for each of the three contraventions. On review, the Minister's decision was upheld. Mr. Billings appealed that decision and succeeded before the TATC's Appeal Panel, which dismissed the charges against him. The Minister seeks a judicial review of that decision under docket T-2295-06.

[8] Mr. Billings and BFEL complain about the conduct of the review hearing.  Certificates were allowed in as evidence without their being given an opportunity to cross-examine the maker thereof, and the member failed to take proper account of a motion made at the close of the Minister's case to dismiss on the grounds of no evidence.  They add that their liberty rights under section 7 of the Charter were violated.

The Corporate Structure

[9] The tactics of the parties were driven to some extent by their perception of the burden of proof, and so the record is not as complete as it could have been. Records from the British Columbia registry were filed with respect to the three "Challenger" corporations.

[10]   The registered owner of the two helicopters is now known as Challenger Inspections (2006) Ltd.  To avoid confusion, I will refer to it under its name at the time the events in question took place in 2004; Billings Family Enterprise Ltd. or BFEL. Brant Paul Billings is the president and a director thereof. The British Columbia registry does not give shareholding details.

[11]   The second company is Challenger Helicopters Ltd. Mr. Billings is also the president and director of that corporation. The third is Challenger Inspections Ltd. Mr. Billings is its president, secretary and director.

[12]   Mr. Billings, who was considered to be an honest and forthright witness, readily called the companies his own. Of course he was speaking as a layman, not as a corporate lawyer. There is no doubt, however, that he was the directing mind behind the three corporations.

[13]   As Viscount Haldane said in Lennard's Carrying Company, Limited v. Asiatic Petroleum Company, Limited, [1915] A.C. 705 at page 713

My Lords, a corporation is an abstraction. It has no mind of its own any more than it has a body of its own; its active and directing will must consequently be sought in the person of somebody who for some purposes may be called an agent, but who is really the directing mind and will of the corporation, the very ego and centre of the personality of the corporation.

[14]   Nevertheless, a corporation is a person in law, distinct from its officers, directors and shareholders (Salomon v. Salomon & Co., [1897] A.C. 22 (H.L.), Kosmopoulos v. Constitution Insurance Co. of Canada, [1987] 1 S.C.R. 2, 34 D.L.R. (4th) 208).

[15]   The defence of BFEL and Mr. Billings is that at the relevant times the two helicopters were in the legal custody, possession and control, and operated by Challenger Inspections Ltd. It was Challenger Inspections Ltd. which issued commercial invoices and which received payment. Although it is a separate and distinct corporation, in some correspondence it stated it was a division of Challenger Helicopters Ltd. Challenger Helicopters Ltd. in turn advertized itself as being specialized in oil field aviation. The helicopters were simply one way of getting to remote well sites. Land vehicles were also used. Be that as it may, neither Challenger Inspections Ltd. nor Challenger Helicopters Ltd. was charged with the contraventions in issue.

Offences under the Aeronautics Act

[16]   The Minister considers that BFEL contravened subsection 605.84 (1)(c)(i), and that on separate occasions both BFEL and Mr. Billing contravened subsection 700.02 (1) of the CARs issued pursuant to the Aeronautics Act.

[17]   Paragraph 605.84(1)(c) of the CARs provides:

605.84 (1) […] no person shall conduct a take-off or permit a take-off to be conducted in an aircraft that is in the legal custody and control of the person […], unless the aircraft

(c) […] meets the requirements of any notices that are equivalent to airworthiness directives and that are issued by

(i) the competent authority of the foreign state that, at the time the notice was issued, is responsible for the type certification of the aircraft, engine, propeller or appliance […]

605.84 (1) […] il est interdit à toute personne d'effectuer […] le décollage d'un aéronef dont elle a la garde et la responsabilité légales ou de permettre à toute personne d'effectuer le décollage d'un tel aéronef, à moins que l'aéronef ne réponde aux conditions suivantes :

[…]

il est conforme aux exigences relatives aux avis qui sont des équivalents des consignes de navigabilité, le cas échéant, et qui sont délivrés par :

(i) l'autorité compétente de l'État étranger qui était, au moment où les avis ont été délivrés, responsable de la délivrance du certificat de type de l'aéronef, des moteurs, des hélices ou des appareillages […]

[18]   Subsection 700.02(1) of the CARs reads :

700.02 (1) 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.

700.02 (1) Il est interdit d'exploiter un service de transport aérien à moins d'être titulaire d'un certificat d'exploitation aérienne qui autorise l'exploitation d'un tel service et de se conformer à ses dispositions.

[19]   Section 605 is in the division of the CARs dealing with aircraft maintenance requirements. In essence, the person with legal custody and control of the helicopters is prohibited from permitting a take-off when a maintenance inspection is overdue.

[20]   The two helicopters were American built. There was a requirement of Air Direction 2003-04-04 issued by the (U.S.) Federal Aviation Administration which applied to Robinson R22 Helicopters, one of the two helicopter models in question. In order to detect possible corrosion of a tail rotor pitch control bearing, an inspection was to be carried out within 20 hours time-in-service and thereafter at intervals not to exceed 300 hours time-in-service or 12 months, whichever came first. At the time of the contraventions more than 12 months, but less than 300 hours in-service, had elapsed since the last inspection. When finally carried out, the inspection revealed no corrosion.

[21]   Turning to the air transport service contraventions, CAR 700.02(1), subsection 101.01(1) of the CARs defines "air transport service" as meaning "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".  According to subsection 3(1) of the Aeronautics Act, "commercial air service" is defined as meaning "any use of aircraft for hire or reward", and "hire or reward" is defined as meaning "any payment, consideration, gratuity or benefit, directly or indirectly charged, demanded, received or collected by any person for the use of an aircraft".

[22]   CAR 703.07 deals with the issuance of Air Operator Certificates. Among other things, the applicant must demonstrate to the Minister the ability to maintain an adequate organizational structure, an operational control system, meet the Commercial Air Service Standards for the operation and have in place an appropriate training program.  The applicant must have legal custody and control of at least one aircraft of each category of aircraft that is to be operated.

[23]   The Act establishes various offences, some of which are indictable (s. 7.3(1)(ii)). However the contraventions in this case are of a different order all together. They are strict liability administrative infractions, with the burden of proof falling upon the Minister on the balance of probabilities. However, the person charged with the contravention is not a compellable witness. Subsection 7.6(1) of the Act permits the Governor in Council, by regulation, to treat certain regulations as a "designated provision" the contravention of which may be dealt with in accordance with the procedures set out in subsections 7.7 to 8.2. CAR 605.84 (1)(c)(i) and CAR 700.02 (1) are designated provisions.

[24]   The "designated provision" procedure has four phases. Initially, if the Minister believes on reasonable grounds that a person contravened a designated provision he may decide to assess a penalty. The person affected may seek a review by a member of the Transportation Appeal Tribunal of Canada (TATC), which was established under the Transportation Appeal Tribunal of Canada Act, R.S. 2001, c. 29.  As aforesaid, the review is a hearing de novo with the burden of proof resting with the Minister. Thereafter either the Minister or the person may appeal to a three-person appeal panel of the TATC. Leaving aside medical issues, which are not relevant here, the member, and the review panel (members sometimes sit in first instance and sometimes in appeal), must have expertise in the transportation sector involved. The reviewing member and the three members of the appeal panel were all pilots, and lawyers. The norm, which was followed in this case, is that the appeal is on the record which was before the reviewing member. Thereafter the appeal decision is subject to judicial review by this Court in accordance with section 18 and following of the Federal Courts Act. An appeal from the decision on judicial review may be taken to the Court of Appeal.

Standard of Review

[25]   Two issues arise. The first is the deference this Court owes the Appeal Panel of the TATC. The second is the deference, if any, the Appeal Panel owed its member who reviewed the Minister's decision. As stated by Chief Justice McLachlin in Dr. Q v. College of Physicians and Surgeons, 2003 SCC 19, [2003] 1 S.C.R. 226 at paragraphs 22 and 26:

22. To determine standard of review on the pragmatic and functional approach, it is not enough for a reviewing court to interpret an isolated statutory provision relating to judicial review.  Nor is it sufficient merely to identify a categorical or nominate error, such as bad faith, error on collateral or preliminary matters, ulterior or improper purpose, no evidence, or the consideration of an irrelevant factor.  Rather, the pragmatic and functional approach calls upon the court to weigh a series of factors in an effort to discern whether a particular issue before the administrative body should receive exacting review by a court, undergo "significant searching or testing" ([Canada (Director of Investigation and Research) v. Southam Inc., [1997] 1 S.C.R. 748], at para. 57), or be left to the near exclusive determination of the decision-maker.  These various postures of deference correspond, respectively, to the standards of correctness, reasonableness simpliciter, and patent unreasonableness.

[…]

26. In the pragmatic and functional approach, the standard of review is determined by considering four contextual factors -- the presence or absence of a privative clause or statutory right of appeal; the expertise of the tribunal relative to that of the reviewing court on the issue in question; the purposes of the legislation and the provision in particular; and, the nature of the question -- law, fact, or mixed law and fact. The factors may overlap. The overall aim is to discern legislative intent, keeping in mind the constitutional role of the courts in maintaining the rule of law. […]

[26]   There have been decisions of this Court dealing with the TATC, or one of its predecessors, the Civil Aviation Tribunal, but most either deal with issues of law on which the standard of review is correctness or procedural fairness which is beyond the scope of the functional and pragmatic approach (See: Air Nunavut v. Canada (Minister of Transport), [2001] 1 F.C. 138, [200] F.C.J. No. 1115; Canada (Attorney General) v. Woods, [2002] F.C.T. 928, [2002] F.C.J. No. 1267; Canada (Attorney General) v. Yukon, 2006 FC 1326, [2006] F.C.J. No. 1671; and Sierra Fox Inc. v. Canada (Minister of Transport), 2007 FC 129, [2007] F.C.J. No. 166). Nevertheless, these cases are helpful in putting the legislation in context.

[27]   One must take into account both the relevant provisions of the Aeronautics Act, as well as the Transportation Appeal Tribunal of Canada Act as well as the pertinent regulations. The decision of the Appeal Panel is final, without right of appeal, but subject to judicial review. The Tribunal has greater expertise than the Court with respect to aeronautics in general, and air safety in particular. Safety is paramount in this case. One of the Minister`s responsibilities under section 4.2 of the Act is to "investigate matters concerning aviation safety". In my view, Parliament intended that upholdings of fact of the Appeal Panel not be disturbed unless patently unreasonable, that mixed questions of fact and law are to be reviewed on a reasonableness simpliciter standard and no deference is owed on questions of law.

[28]   As to the deference the Appeal Panel owed the member, Mr. Ogilvie, who first reviewed the Minister's decision, Dr. Q. is again helpful. In that case, the relevant legislation authorized an appeal from a decision of the Inquiry Committee of the College of Physicians and Surgeons of British Columbia to the British Columbia Supreme Court. Drawing on paragraph 18 thereof, I hold the findings of fact or credibility made by Mr. Ogilvie were entitled to considerable deference. The Appeal Panel was entitled to its own view of the law.

[29]   The issue of deference, according to the Minister, lies in the Appeal Panel's apparent willingness to consider de novo the amount of the penalty imposed on BFEL for operating an air transport service. I am of the view that the TATC Appeal Panel was explicitly authorized by Statute to advance its own opinion as subsection 8.1(3) of the Aeronautics Act provides that the Appeal Panel "…may dispose of the appeal by dismissing it or allowing and, in allowing the appeal, the panel may substitute its decision for the determination appealed against."

[30]   Indeed, I think this position is consistent with what was said by the Supreme Court in Paul v. British Columbia (Forest Appeals Commission), 2003 SCC 55, [2003] 2 S.C.R. 585 at paragraphs 43 and 44. That was an appeal within an administrative scheme to a specialized appeal panel, a panel one would think would be expected to use the expertise its members were required to have.

The Case against Mr. Billings – Air Transport Service: T-2295-06

[31]   To repeat, CAR 700.02(1) reads:

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.

Il est interdit d'exploiter un service de transport aérien à moins d'être titulaire d'un certificat d'exploitation aérienne qui autorise l'exploitation d'un tel service et de se conformer à ses dispositions.

[32]   Although Mr. Billings was the pilot in charge of the helicopters for the three flights in question, it is not in that capacity that he was charged with the contravention. The reviewing member of the TATC, Mr. Ogilvie, its vice-chair, was of the view that although the payments were demanded and received by Challenger Inspections Ltd., Mr. Billings was the sole owner and operator thereof and therefore personally fell within the definition of "hire or reward".

[33]   The Appeal Panel did not share that legal opinion. As Mr. Billings was not the owner of the helicopters and did not have custody and control in his own name, notwithstanding he was the pilot, he in effect was acting as an employee. As a pilot and employee, there was no requirement that he be personally licensed to operate an air transport service.

[34]   The role of the registered owner is quite contentious in the Billings Family Enterprise matters. However, whether the operator was BFEL or Challenger Helicopters Ltd. or Challenger Inspection Ltd., the result is the same as far as the case against Mr. Billings is concerned. Although he undoubtedly indirectly benefited from the service, be it as a director, officer or shareholder of whichever corporation or corporations were operating the service, as well as through his employment as pilot on the flights in question, he was not personally operating an air transport service. The corporations were not a mere front, or sham. The Appeal Panel of the TATC was correct. This judicial review shall be dismissed.

[35]   If anyone knew the corporate structure it was Mr. Billings. Perhaps he could have been charged under subsection 8.4 (3) of the Act which provides:

8.4 (3) The pilot-in-command of an aircraft may be proceeded against in respect of and found to have committed an offence under this Part in relation to the aircraft for which another person is subject to be proceeded against unless the offence was committed without the consent of the pilot-in-command and, where found to have committed the offence, the pilot-in-command is liable to the penalty provided as punishment therefor.

8.4 (3) Lorsqu'une personne peut être poursuivie en raison d'une infraction à la présente partie ou à ses textes d'application relative à un aéronef, le commandant de bord de celui-ci peut être poursuivi et encourir la peine prévue, à moins que l'infraction n'ait été commise sans le consentement du commandant.

However, he was not.

The Case against BFEL - Air Transport Service: T-2272-06

[36]   It now becomes necessary to determine whether BFEL, or either of the two Challenger corporations, or indeed if all three were operating an air transport service. Distinctions have to be drawn among different concepts: registered ownership of as opposed to legal title to the helicopters; ownership as opposed to legal custody and control; and operation of an air transport service as opposed to operation of the helicopters themselves.

[37]   BFEL holds title to and is the registered owner of the two helicopters. In aeronautics, where many aircraft are leased, the two concepts are quite distinct. Section 3 of the Act identifies a "registered owner" as a "…person to whom a certificate of registration for the aircraft has been issued by the Minister". The registered owner may or may not have title to the aircraft, but is supposed to have legal custody and control thereof (See: CAR 202.35). This distinction is borne out by the decision of the Supreme Court in Canada 3000 Inc., Re; Inter-Canadian (1991) Inc. (Trustee of), 2006 SCC 24, [2006] 1 S.C.R. 865) particularly at paragraph 55.

[38]   It is the registered owner of the aircraft who receives Air Directives and other matters pertaining to the safe operation and maintenance of the aircraft. In this case, Mr. Billings received Air Directives in his capacity as a director of BFEL.

[39]   CAR 202.35 (2) requires the registered owner of a Canadian aircraft who transfers any part of the legal custody and control of the aircraft to notify the Minister in writing within seven days thereof.  The then current Certificate of Registration is cancelled. No such notice is in the record.

[40]   Having undertaken a contextual and purposive analysis of the Act and the CARs, particularly the safety aspects thereof, as required by such cases as Bell ExpressVu Limited Partnership v. Rex, 2002 SCC 42, [2002] 2 S.C.R. 559, I conclude that even if BFEL had transferred custody and control to either of the Challenger companies it does not lie in its mouth to say so. The transfer was not legal as no notification was given. It cannot invoke its own breach of one regulation to avoid liability under another.

[41]   However, should I have misinterpreted the Act and the CARs, I am of the view that the evidence as a whole shows that the Minister discharged the burden of proof. Once it was established that BFEL was the registered owner of the helicopters, the burden shifted to it. The only evidence in the record is that invoices were issued by Challenger Inspections Ltd., called at times a division of Challenger Helicopters Ltd., and that the latter advertised in trade journals. No evidence whatsoever was led as to the contractual arrangements which may, or may not, have been in place among the three corporations. This was information within the exclusive knowledge of Mr. Billings, and the corporations. It was not information within the knowledge of the Minister, who is entitled to rely upon public records. Speculation is not called for. This is not to say that "Challenger" could not also have been charged.

[42]   Counsel for BFEL argued that the evidence that no air operator certificate was in place was insufficient. Certificates had been issued by the Secretary of the Department of Transport pursuant to section 27 of the Aeronautics Act stating that during the period between 1 January 2004 and 31 August 2004 no AOC was issued either to Brant Paul Billings or to Billings Family Enterprises Ltd. authorizing the operation of an air transport service. These certificates are deficient in that they do not preclude the possibility that a certificate may have been issued prior to 1 January 2004, or that certificates may have been issued to either of the two Challenger corporations. However, Mr. Ogilvie, who was upheld in his finding that BFEL operated an air transport service without an AOC in place, was alert to the shortcomings of the certificates, and did not rely upon them. I am satisfied that it was reasonably open to Mr. Ogilvie to make the findings he did. Mr. Billings testified with respect to a safety audit from one of the customers. It was not patently unreasonable for Mr. Ogilvie to conclude that neither Mr. Billings nor BFEL nor either Challenger corporation held an AOC:

We had a safety audit from one of my customers. So, it's an independent auditor came in and took a look at what we did and how we operated and they found that we had a very good reporting system, a very good program, trip following program, and so on. We weren't perfect, but we – she was very impressed with the fact that we had – and felt that there was some things that we were doing tht the larger – those with AOC's, those larger companies, could go ahead and benefit from. [Emphasis added]

Was anybody operating an Air Transport Service?

[43]   In its written submissions, BFEL only disputed four of the six flights. It was given leave to file supplemental written argument, and took advantage of that leave to attempt to bring all six flights into issue. I hold that there was absolutely no evidence of a contravention on one of the four flights originally contested. There was sufficient evidence on all the others.

[44]   There is no doubt that BFEL was operating a commercial air service. However, that service is only an air transport service if operated for the purpose of "transporting persons, personal belongings, baggage, goods or cargo in an aircraft between two points."

[45]   The basis of counts 1 and 2 was the log book for the helicopter in question together with an invoice to a customer.  The invoice states "sign installed".  The overall evidence of Mr. Billings, including pre-hearing statements, certainly led to the implication that the signs which were installed at well sites were signs belonging to the customers, and carried to the sites by helicopter.  Vice-Chairman Ogilvie's conclusion that signs were carried on these flights were not patently unreasonable, nor was the decision of the Appeal panel to uphold him.  Counts 3, 5 and 6 relate to "brush cutting of leaves".  Again it was not patently unreasonable for Mr. Ogilvie to conclude on the basis of the record that the necessary equipment was carried to the site by helicopter.  Whether the equipment could be considered as personal belongings, goods or cargo, the activity fell within the definition of an "air transport service".

[46]   Count 4 was that on 10 July 2004 a passenger was carried on helicopter C-FNNE.  The basis for Mr. Ogilvie's conclusion that the regulations were contravened was "the log book for aircraft C-FNNE indicates a flight of July 10, 2004, by Mr. Billings from Challenger base for 1.6 hours. It indicates the carriage of a passenger." However, I must say that that finding was patently unreasonable, as was the Appeal panel's decision to uphold him.  The log book indicates that the person carried was a Mr. Brint, a member of the flight crew. Mr. Brint is shown in the log as the pilot on other occasions. A "passenger" is defined in CAR 101.01 as meaning "a person other than a crew member, who is carried onboard an aircraft". Consequently, this contravention, and the penalty, must be quashed.

Natural Justice

[47]     It had been agreed at the outset of the review hearing that the Minister would put in his evidence on all alleged contraventions of the regulations, before Mr. Billings and BFEL were called upon to reply.  The record shows that they were aware that they were not compellable witnesses.  At the close of the Minister's case, counsel for Mr. Billings and BFEL moved for dismissal on the basis of no evidence.  The essence of the submission was that if anyone had contravened the regulations it was Challenger Inspections Ltd.  Counsel argued that at the very least Mr. Ogilvie should take the motion under advisement.  The effect would be that if Mr. Billings testified, then Mr. Ogilvie was required to make a double analysis. If satisfied that the Minister had not made out a case he could not take into account Mr. Billings' testimony. Only if the Minister made out a case, would it become necessary to consider that testimony.

[48]   Mr. Ogilvie pointed out that the TATC was an administrative tribunal and not bound by the rules of evidence (except as regards privileged information). He said the motion was:

"--- denied because I think there may be some evidence. So, I will disagree.  There may be some evidence. I have to look. So, they're denied. So, I am not going to do, I'm having a hard time characterizing this, bifurcating it, if you will, or whatever. I mean, I think everything you've said I can hear in final argument about the whole case. So, no.  If you go on and give evidence, or just to warn you on the procedure, if you give evidence, I'll be looking at the evidence as a whole. Does that make it clear?"

[49]    In his reasons Mr. Ogilvie expressed the view that the Minister had made out a prima facie case.  I agree that the Minister had shifted the burden of proof and that had Mr. Billings not testified, it would still have been open to Mr. Ogilvie to find that the contraventions had occurred.

[50]   As stated by Mr. Justice Sopinka in Prassad v. Canada (Minister of Employment and Immigration), [1989] 1 S.C.R. 560, [1989] S.C.J. No. 25 at paragraph 16:

"16. We are dealing here with the powers of an administrative tribunal in relation to its procedures.  As a general rule, these tribunals are considered to be masters in their own house.  In the absence of specific rules laid down by statute or regulation, they control their own procedures subject to the proviso that they comply with the rules of fairness and, where they exercise judicial or quasi-judicial functions, the rules of natural justice."

[51]   Although not argued before him, section 7 of the Charter has been raised before me.  It reads:

7.   Everyone has the right to life, liberty and security of the person and the right not to be deprived thereof except in accordance with the principles of fundamental justice.

7.   Chacun a droit à la vie, à la liberté et à la sécurité de sa personne; il ne peut être porté atteinte à ce droit qu'en conformité avec les principes de justice fondamentale.

[52]   Reliance was placed on the decision of the Supreme Court in R. v. Wholesale Travel Group Inc. [1991] 3 S.C.R. 154, [1991] S.C.J. No. 79.  However that reliance was misplaced.  That case dealt with criminal offences, not administrative offences.  As noted by the Federal Court of Appeal in Main Rehabilitation Co. Ltd. v. Canada, 2004 FCA 403, [2004] F.C.J. No. 2030, the general principle is that only human beings can enjoy the right to life, liberty and security of the person guaranteed by section 7 of the Charter.  The exception is the ability of a corporation charged with a criminal offence to challenge the constitutionality of the statute as part of its defence.  The charges in this case are administrative, not criminal.

The Case Against BFEL/Airworthiness Directive: T-2272-06 and T-2297-06

[53]   For reasons already given, I am satisfied based on the limited evidence in the record that the Minister discharged the initial burden upon him to show that the two helicopters were in the legal custody and control of BFEL. Either it did not lie in its mouth to invoke its own turpitude as a defence or it did not shift the burden back by providing evidence that legal custody and control had been transferred to one or the other of the two Challenger corporations.

[54]   The Minister first imposed a penalty of $5,000 for each of the 10 flights taken while the maintenance inspection was overdue. On review, Mr. Ogilvie reduced that penalty to $4,000 per flight. In turn, that penalty was reduced by the Appeal Panel to $500 per flight.

[55]   It is common ground that, pursuant to section 8 of the Act, the reviewing member in this case, Mr. Ogilvie, was entitled to determine the amount payable in respect of the contraventions.

[56]   In fixing an appropriate penalty, he set out the circumstances in which the contraventions occurred. Quite rightly, he took into account the importance of following air directives to ensure that an aircraft is in condition for safe operation. The Air Directive was intended to detect corrosion of a bearing and to prevent bearing failure and "subsequent loss of directional control of the helicopter." As Mr. Ogilvie said, the consequences could have been disastrous. He referred to an appeal determination of TATC's predecessor in Wyer v. Minister of Transport, [1988] O-0075-33. The principles there summarized include denunciation, deterrence, both specific and general, rehabilitation, and enforcement recommendations. Both aggravating and mitigating factors are to be considered.

[57]   He was of the view that denunciation and general deterrence needed strong emphasis. He did not consider specific deterrence as important, especially as there was an honest misinterpretation of the Air Directive, and no previous offences. As far as denunciation is concerned, he pointed out that Transport Canada distributed a misleading press release which declared that BFEL had failed to replace a tail rotor pitch control bearing. Mr. Billings testified to having received numerous calls from clients on this point. The directive was only to inspect and to replace if necessary.

[58]   The Minister had imposed a penalty of $5,000 for each of the 10 flights. The maximum penalty could have been $25,000. However, it should also be kept in mind that there was only one missed inspection. Mr. Ogilvie decided to reduce the penalty to $4,000 per contravention, which he was entitled to do.

[59]   The Appeal Panel justified the further reduction to $500 per contravention as follows:

[23] Although the AD was missed, there were no immediate safety consequences for the aircraft in that the inspection revealed no requirement to replace the tail rotor pitch control bearing. We agree with the member at review that there is no need for specific deterrence as Mr. Billings, an officer and director of the company, had satisfied the member at review that he was remorseful and he was at all times cooperative with the regulatory authorities.

[24]   We differ from the member at review regarding general deterrence in this case. We consider it a message of general deterrence that a penalty of $5 000 can be assessed for each alleged violation of subparagraph 605.84(1)(c)(i) of the CARs. However, there are multiple counts because there were 10 take-offs following Mr. Haab's one error of missing the 12-month AD. Considering that fact and taking into account the unfortunate wording of the press release and possible consequences to the company, we consider it fair to further mitigate the penalty that would normally be assessed for general deterrence. In going so, we restrict this consideration to the stated facts of this case. We accordingly reduce the penalty to $500 for each of the 10 breaches for a total penalty of $5 000.

[60]   As stated earlier in these reasons, subsection 8.1(3) of the Act provides that the appeal panel "may dispose of the appeal by dismissing it or allowing it, and, in allowing the appeal, the panel may substitute its decision for the determination appeal against."

[61]   However broad the discretion a decision-maker may have in determining the amount of a penalty, that discretion can be no wider than that given to a Minister of the Crown in administrative matters. An administrative discretionary policy decision is not subject to judicial review unless it was made in bad faith, does not conform with the principles of natural justice or relies upon considerations that are irrelevant or extraneous (Maple Lodge Farms  Limited v. Canada, [1982] 2 S.C.R. 2, 137 D.L.R. (3d) 558). Under the modern pragmatic and functional approach to judicial review, this usually translates into patent unreasonableness (C.U.P.E. v. Ontario (Minister of Labour), 2003 SCC 29, [2003] 1 S.C.R. 539).

[62]   The Appeal Panel did not put Mr. Ogilvie's findings of fact, and credibility, in issue. It decided to reduce the penalty because of its view regarding general deterrence, and "…taking into account the unfortunate wording of the press release and possible consequences to the company."

[63]   It had the expertise, and the Court will not interfere with its view that the overall penalty should be reduced because there was only a single error in misinterpreting the AD. However, neither Mr. Ogilvie nor the Appeal Panel should have taken into account the Minister's misleading press release. That was quite a different matter, irrelevant or extraneous to the penalty. Perhaps BFEL has a cause of action against the Minister, perhaps not. My only comment is that the press release is not a factor to be taken into consideration when fixing a penalty for contraventions of Regulations under the Aeronautics Act, the purpose of which is to promote air safety.

[64]   BFEL submitted that the penalties were grossly unfair compared to other decisions of the TATC or its predecessor, both in terms of the number of charges laid and the penalties imposed.  Perhaps one might conclude that the treatment by the Minister of contraventions in the past, and the review thereof by the TATC, were woefully inadequate given the importance of air safety.  The penalties imposed were nowhere near the maximum, and charges could have been made with respect to other flights but were not.  I see no legal reason to interfere.

[65]   Consequently, the matter of the penalty, but not liability, is to be referred back to an Appeal Panel of the TATC, the same panel if practicable.

Costs

[66]   As success has been divided, as Mr. Billings and BFEL were represented by the same counsel and as the three dockets were heard together, I shall make no order as to costs.

[67]   In summary:

(a) The application by the Attorney General of Canada for judicial review of the decision of the appeal panel of the Transportation Appeal Tribunal of Canada dismissing as against Brant Paul Billings the contraventions of section 700.02(1) (air transport service) is dismissed (T-2295-06).

(b) The application by Billings Family Enterprises Ltd. for judicial review of the decision that it operated an air transport service on six occasions without holding an air operator certificate is maintained with respect to one flight.  The decision with respect to count 4 is quashed.  The application with respect to the other five flights is dismissed, and the $5,000.00 penalty with respect to each of the said five flights remains in place (T-2272-06).

(c) The application by Billings Family Enterprises Ltd. for judicial review of the decision that it had on ten occasions permitted take-offs when the aircraft did not meet the requirements of an Airworthiness Directive (CAR 605.84(1)(c)(i)) is dismissed (T-2272-06).

(d) The application by the Attorney General of Canada for judicial review of the decision reducing the penalty from $4,000.00 to $500.00 for each of the said ten contraventions of an Airworthiness Directive (CAR 605.84(1)(c)(i)) is granted, and the matter of the penalty is referred back for re-determination in accordance with these reasons (T-2297-06).

"Sean Harrington"

Judge

FEDERAL COURT

NAMES OF COUNSEL AND SOLICITORS OF RECORD

DOCKET: T-2272-06

STYLE OF CAUSE:   BILLINGS FAMILY ENTERPRISES LTD. v. THE MINISTER OF TRANSPORT

PLACE OF HEARING:   VANCOUVER, B.C.

DATE OF HEARING: November 15 & 16, 2007

REASONS FOR ORDER BY: HARRINGTON J.

DATED: JANUARY 7, 2008

APPEARANCES:

Mr. Leslie G. Dellow

FOR THE APPLICANT

Mr. Steven C. Postman

FOR THE RESPONDENT

   

SOLICITORS OF RECORD:

Leslie G. Dellow

Barrister and Solicitor

Dawson Creek, B.C.

FOR THE APPLICANT

John H. Sims, Q.C.

Deputy Attorney General of Canada

FOR THE RESPONDENT

FEDERAL COURT

NAMES OF COUNSEL AND SOLICITORS OF RECORD

DOCKET: T-2295-06

STYLE OF CAUSE:   THE ATTORNEY GENERAL OF CANADA v. BRANT PAUL BILLINGS

PLACE OF HEARING:   VANCOUVER, B.C.

DATE OF HEARING: November 15 & 16, 2007

REASONS FOR ORDER BY: HARRINGTON J.

DATED: JANUARY 7, 2008

APPEARANCES:

Mr. Steven C. Postman

FOR THE APPLICANT

Mr. Leslie G. Dellow

FOR THE RESPONDENT

   

SOLICITORS OF RECORD:

John H. Sims, Q.C.

Deputy Attorney General of Canada

FOR THE APPLICANT

Leslie G. Dellow

Barrister and Solicitor

Dawson Creek, B.C.

FOR THE RESPONDENT

FEDERAL COURT

NAMES OF COUNSEL AND SOLICITORS OF RECORD

DOCKET: T-2297-06

STYLE OF CAUSE:   THE ATTORNEY GENERAL OF CANADA v. CHALLENGER INSPECTIONS (2006) LTD. formerly BILLINGS FAMILY ENTERPRISES LTD.

PLACE OF HEARING:   VANCOUVER, B.C.

DATE OF HEARING: November 15 & 16, 2007

REASONS FOR ORDER BY: HARRINGTON J.

DATED: JANUARY 7, 2008

APPEARANCES:

Mr. Steven C. Postman

FOR THE APPLICANT

Mr. Leslie G. Dellow

FOR THE RESPONDENT

   

SOLICITORS OF RECORD:

John H. Sims, Q.C.

Deputy Attorney General of Canada

FOR THE APPLICANT

Leslie G. Dellow

Barrister and Solicitor

Dawson Creek, B.C.

FOR THE RESPONDENT




Appeal decision (2)
Faye H. Smith, Sandra Lloyd


Decision: January 30, 2009

Citation: Challenger Inspections (2006) Ltd., formerly Billings Family Enterprises Ltd. v.
Canada (Minister of Transport), 2009 TATCE 3 (appeal)

AMENDMENT AND REASONS TO THE APPEAL DECISION

DATED NOVEMBER 14, 2006

Held: With respect to section 605.84(1)(c)(i) of the Canadian Aviation Regulations, the penalty of $4000 as to each of the 10 counts of permitting aircraft C‑FNNE to take off when the aircraft was not in compliance with the airworthiness directive 2003-04-04 is upheld for a total of $40 000. This amount is payable to the Receiver General for Canada and must be received by the Tribunal within 35 days of service of this decision.

I. BACKGROUND

[1] The application for judicial review by Billings Family Enterprises Ltd. (BFEL) of the Tribunal appeal decision that it had on 10 occasions permitted take‑offs when the aircraft did not meet the requirements of an airworthiness directive (AD) was dismissed in respect to section 605.84(1)(c)(i) of the Canadian Aviation Regulations (CARs) (docket T-2272-06, Billings Family Enterprises Ltd. v. Minister of Transport, 2008 FC 17).

[2] A notice of appeal to the Federal Court of Appeal was filed by BFEL but dismissed due to the failure to prosecute diligently (docket A-60-08).

[3] The application by the Minister of Transport for judicial review of the decision reducing the penalty from $4000 to $500 for each of the 10 contraventions of an AD (section 605.84(1)(c)(i) of the CARs) was granted, and the matter of the penalty was referred back to the Tribunal appeal panel for re‑determination (docket T-2297-06, The Attorney General of Canada v. Challenger Inspections (2006) Ltd., formerly Billings Family Enterprises Ltd., 2008 FC 17).

II. DISCUSSION OF PENALTY ON RE‑DETERMINATION

[4] The Federal Court Justice opined that however broad the discretion a decision‑maker may have in determining the amount of penalty, that discretion can be no wider than that given to a Minister of the Crown in administrative matters.

[5] The appeal panel accepts the direction of the Federal Court and concurs with the finding that the fact of the press release and consequences, if any, constituted an entirely different matter and was irrelevant or extraneous to the determination of the quantum of the penalty regarding the 10 contraventions of section 605.84(1)(c)(i) of the CARs. Accordingly, we have reviewed sanction considerations as follows.

[6] The Tribunal member at review considered mitigating circumstances and reduced the penalty from $5000 to $4000 for each of the 10 counts for a total of $40 000, taking into account the negative consequences of the press release. Two other mitigating factors were taken into account at the review level, that the company had no previous offences and had cooperated with authorities. These factors may have been considered by the Minister when he made his assessment of a minimum penalty for each offence.

[7] Upon review of the guidance principles in the Wyer appeal determination (Canada (Minister of Transport) v. Wyer, [1988], appeal determination, CAT file no. O-0075-33, [1988] C.A.T.D. no. 123 (QL), we concur with the Tribunal member at review that given the mitigating factors which he considered above, specific deterrence is less important in this case than is general deterrence. We accept the submissions of the Minister's representative regarding the seriousness of accomplishing an AD in a timely manner. By definition, an AD is in part an instruction that mandates a maintenance action to ensure that the aircraft is in condition for safe operation. This AD was intended to detect corrosion of a bearing and to prevent bearing failure and "subsequent loss of directional control of the helicopter", that is a possible disastrous consequence (exhibit M‑4).

[8] Accordingly, ignoring the weight placed on the press release by the Tribunal member at review, we look to the number of incidents of flight which the company representative has asked to be considered. We conclude that the multiple counts due to the 10 take‑offs following Mr. Haab's one error of missing the 12-month AD is the sole factor relating to the mitigation of penalty for general deterrence.

[9] There were multiple counts, and the maximum penalty for breach of section 605.84(1)(c)(i) of the CARs is $25 000 for each offence. While the facts do not support any aggravating factors justifying a maximum penalty for each offence, in the light of section 7.31 of the Aeronautics Act, we believe that the assessment of the minimum recommended penalty of $5000 for each offence is therefore reasonable. As the Minister's representative did not file a cross‑appeal from the review determination, it is beyond the ambit of the appeal panel's ability to reinstate the original penalty. Accordingly, and in the light of the mitigation discussed above, we see no reason to disturb the reduced penalty of $4000 for each count being the assessment established by the Tribunal member at review.

III. DECISION

[10] With respect to section 605.84(1)(c)(i) of the CARs, the penalty of $4000 as to each of the 10 counts of permitting aircraft C‑FNNE to take off when the aircraft was not in compliance with AD 2003-04-04 is upheld for a total of $40 000.

January 30, 2009

Reasons for decision: Faye Smith, Chairperson

Concurred by: Sandra K. Lloyd, Member