Ottawa, Ontario, November 2, 2006
PRESENT: The Honourable Mr. Justice Barnes
BETWEEN:
and
(WHITEHORSE INTERNATIONAL AIRPORT)
REASONS FOR JUDGMENT AND JUDGMENT
[1] The Whitehorse International Airport (WIA) is owned and operated by the Yukon Government. The Government of Canada, through Transport Canada, is responsible for regulating aviation security in Canada, including the safety and certification of airports. It carries out that responsibility through the enforcement of the Aeronautics Act (Act), R.S., 1985, c. A-2 and related Regulations. The WIA is a facility named by the Minister of Transport (Minister) in a Civil Aviation Airport Certificate issued on January 5, 2001 authorizing the Yukon Government, through its Department of Highways and Public Works, to operate the airport.
[2] It is undisputed that the WIA is not a legal entity and that only the named operator of the airport (ie. the Yukon Government) and its servants and agents are subject to the security obligations created by the Act and Regulations. However, on April 14, 2004 the Minister issued four Notices of Assessment of Monetary Penalty (Notices) under section 7.7 of the Act against the WIA totalling $7,500.00. Those Notices named the WIA as a party which had contravened certain stipulated airport security measures, including a failure to obtain security clearances for two individuals who had been issued airport restricted area passes.
[3] The Yukon Government challenged the Minister’s Notices before the Transportation Appeal Tribunal of Canada (Tribunal). At no time did the Yukon Government take issue with the Minister’s determinations of responsibility on the merits. The Yukon Government argued, instead, that by incorrectly naming the WIA as a legal person or entity subject to regulatory control, the Minister’s Notices were legal nullities which could not be saved by amendment. Nevertheless, the Tribunal allowed the Minister’s motion to amend the Notices to add the Yukon Government as a party. Because the Yukon Government did not mount a substantive defence to the Minister’s case against it, the contraventions were confirmed by the Tribunal in a decision rendered on April 6, 2005.
[4] The Yukon Government challenged the Tribunal’s ruling by way of an appeal to a three-member panel of the Tribunal (Appeal Panel). That appeal was allowed on two grounds:
1. that the Notices of Assessment were legal nullities which could not be cured by an amendment; and
2. that the Yukon Government was prejudiced by having to proceed through a hearing on the merits before knowing whether it was a party to the proceeding.
It is from the above appeal determinations that the Minister seeks relief.
The Tribunal Decision
[5] The Tribunal was faced with several preliminary motions which it chose to decide in its final decision after hearing all of the evidence.
[6] The Yukon Government brought two preliminary motions. The first of these was a motion to compel the Minister to disclose evidence “that the Whitehorse International Airport is a legal person subject to Ministerial Penalties”. Its second and related motion was to have the case against the WIA summarily dismissed because it was not a legal person subject to the imposition of a penalty. In the face of these motions, the Minister asked the Tribunal to amend the Notices to add the Yukon Government as the party named.
[7] Although counsel for the Yukon Government repeatedly asked the Tribunal to rule on its motions before hearing evidence and rendering its final decision, the Tribunal declined to do so. This was not altogether surprising because counsel for the Yukon Government stated on the record on four separate occasions that his client did not intend to contest the merits of the case and was prepared to admit the essential facts of the Minister’s allegations.
Appeal Panel Decision
[8] The Appeal Panel held that the Tribunal had exceeded its jurisdiction by allowing an amendment to the Notices. It concluded, on the strength of Regina v. AFC Soccer, [2004] M.J. No. 194, 2004 MBCA 73, that the Notices were legal nullities because the proper identification of the party named was a material averment. On that basis, it distinguished its own decisions in Canada (Minister of Transport) v. Fosberg, [1988] C.A.T.D. No. 35 and in Matiushyk v. Canada (Minister of Transport), [1994] C.A.T.D. No. 7 where amendments, respectively to a Notice of Assessment of Monetary Penalty and to a Notice of Suspension, had been allowed.
[9] The Appeal Panel also ruled that the Tribunal had breached the rules of natural justice by requiring the Yukon Government to go through the proceeding on the merits without knowing whether it was a party. Its conclusion on that point is set out in the following brief passages:
The identity of the “person” believed to have contravened a provision was not established until after the hearing was concluded. The identity of the “person” was put in issue by both the applicant and respondent. Neither motion was answered prior to or during the hearing. The answer only came with the issuance of the determination some months after the hearing when the Tribunal granted the motion to amend and made no mention of the applicant’s motion.
The result is that the applicant was forced to go through the proceeding without knowing if he was a party. Prejudice results. The applicant is forced to go through the evidentiary portion of the proceeding still not sure if he is a party. How can that be done effectively? We think that to be a breach of natural justice.
Both motions were made pursuant to Rule 10. That Rule does not impose a time constraint on the Tribunal to reply to a motion. Many situations are amenable to hearing or considering the motion and replying to it later in the proceeding or in the determination. However, the determination of the identity of the party to the proceeding must be done early enough to allow the effective participation of the party. Here we think that it was essential for the ruling(s) to be made at the outset and certainly before the calling of the Minister’s case.
Statutory Framework
[10] To properly address the jurisdictional ruling made by the Appeal Panel by which the Notices were declared to be legal nullities and thus not subject to amendment, it is useful to examine the regulatory process by which these matters were adjudicated.
[11] The Act authorizes the Governor in Council to enact Regulations in which certain statutory provisions are designated for enforcement by means of an administrative penalty and not by way of summary prosecution. Although the contravention of these designated provisions is, by section 7.6(2) of the Act, deemed to be an offence, the stipulated enforcement procedure is not in the nature of a prosecution. Instead, the Act permits the Minister, on reasonable and probable grounds, to assess a monetary penalty against a person or corporation for an alleged contravention. The Designated Provisions Regulations, S.O.R./2000-112 establish maximum penalty amounts and in no case can the penalty exceed $5,000.00 for an individual or $25,000.00 for a corporation.
[12] Written notice of the Minister’s decision is required to be given to the person or corporation named. That notice must include the identification of the designated provision believed to have been contravened and the amount of penalty to be paid in settlement. The person or corporation named has the choice of either paying the penalty or requesting a review of the alleged contravention or the amount of the penalty, or both. If the person or corporation chooses the settlement option, section 7.9 of the Act bars any further proceedings in respect of that contravention.
[13] Where the person or corporation named elects to have the alleged contravention or penalty reviewed, a written request for review is required to be sent to the Tribunal. In conducting a review hearing, the Tribunal must observe the rules of procedural fairness and natural justice including the right of the parties to present evidence and to make representations (see section 7.91(3) of the Act). The Act also stipulates that the burden of proof in such a review rests with the Minister and is on a balance of probabilities (see the Act at section 7.91(4) and also see Transportation Appeal Tribunal of Canada Act, S.C. 2001, c. 29, at section 15(5)).
[14] The parties are entitled to notice of the Tribunal’s findings and either of them can appeal that determination to an appeal panel of the Tribunal. Where the appeal panel allows the appeal, it may substitute its decision for the original determination. (see section 7.2(3) of the Act.)
[15] Under section 15(1) of the Transportation Appeal Tribunal of Canada Act, the Tribunal is not bound by any legal or technical rules of evidence and is directed to deal with its cases as informally and expeditiously as the circumstances and considerations of fairness and natural justice permit. Nevertheless, the Tribunal’s Rules provide for testimony to be given under oath with a right of examination and cross-examination. The Tribunal is also required to render its determinations in writing including the determination of applications brought before it. While the authority to adjourn a proceeding is expressly granted by the Tribunal Rules, many other procedural matters are left to be determined in accordance with Rule 4 which states:
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Where a procedural matter not provided for by the Act or by these Rules arises during the course of any proceeding, the Tribunal may take any action it considers necessary to enable it to settle the matter effectively, completely and fairly.
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Le Tribunal peut prendre les mesures qu'il juge nécessaires pour trancher efficacement, complètement et équitablement, au cours d'une instance, toute question de procédure non prévue par la Loi ou les présentes règles.
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[16] The federal legislative framework providing for the adjudication of many alleged violations of aviation security measures was quite obviously designed as an administrative and not as a prosecutorial process. While that process is adversarial, it is also couched in language which discourages formality and technicality. An adjudication is required to conform to the dictates of fairness and natural justice, but otherwise the scheme avoids the more rigorous procedural requirements commonly associated with criminal or quasi-criminal prosecutions. It also imposes upper limits on the amount of penalty the Minister can impose and uses a civil burden of proof. A Notice is a form of charging document but it initiates an administrative process which can result in either an acceptance of the Minister’s penalty or an administrative adjudication. In short, the process is limited to the adjudication of certain stipulated provisions, is controlled by monetary caps and is reserved to a Tribunal with expertise in matters of aviation safety and security. It is also a process controlled by principles of natural justice with a view to efficiency and a reasonable degree of procedural informality.
Analysis
Standard of Review
[17] The Appeal Panel allowed the Yukon Government’s appeal by holding that the Tribunal exceeded its jurisdiction by granting the amendments and that it breached the rules of natural justice by failing to deal with the amendment and summary dismissal motions in advance of hearing the case on the merits.
[18] The jurisdictional ruling was based on a point of law going to the root of the Tribunal’s authority. As such, the standard of review for that part of the Appeal Panel’s decision is correctness. This was accepted by both parties but, in any event, I would adopt the analysis by Justice Eleanor Dawson on this point in Canada (Attorney General) v. Woods, [2002] F.C.J. No. 1267; 2002 FCT 928, where she held at paragraphs 10 to 12 as follows:
10 Relying upon the decision of Justice Tremblay-Lamer in Air Nunavut v. Canada (Minister of Transport), [2001] 1 F.C. 138 (T.D.) and upon the pragmatic and functional approach, the Minister says that the standard of review to be applied to the Appeal Panel's decision on the jurisdiction of the Civil Aviation Tribunal to hear these offences is correctness. Counsel for Mr. Woods agrees.
11 I am satisfied that by application of the factors articulated in Pushpanathan v. Canada (Minister of Citizenship and Immigration), [1998] 1 S.C.R. 982, the standard of review is correctness. In particular, I have considered the importance of the question and its applicability to numerous future cases, and the relative lack of expertise of the Appeal Panel on questions of statutory interpretation.
12 The Tribunal must make a correct interpretation of the Act on this issue and so, in this sense, the question goes to the jurisdiction of the Civil Aviation Tribunal. Therefore, the question must be answered correctly in order for the Tribunal to be acting intra vires. See: Pushpanathan, supra, at paragraph 28.
[19] With respect to the Appeal Panel’s procedural fairness ruling, no functional and pragmatic assessment is required. The Appeal Panel was required to be correct in its treatment of the Tribunal’s approach to the procedural motions. That is so because there can only be one correct answer as to whether the Tribunal breached the rules of natural justice by conducting itself as it did: see Ellis-Don Ltd. v. Ontario (Labour Relations Board), [2001] S.C.J. No. 5, [2001] 1 S.C.R. 221, 2001 SCC 4 at para. 65.
Did the Tribunal have the authority to amend the Notices?
[20] The Tribunal has previously held that it has the authority to amend a charging document. In Fosberg, above, an Appeal Panel of the Tribunal allowed an amendment based on the following test:
Has the Respondent been reasonably informed of the charge against him so that he has an opportunity to present a full defence and obtain a fair trial. If the Respondent has not been misled, the Tribunal ought to allow an application to amend and proceed with the hearing. If on the other hand there is any possibility that the Respondent has not been reasonably informed of the charge and may not be able to present a full defence and obtain a fair trial, the Tribunal ought to allow an amendment only if a sufficient adjournment is granted to enable the Respondent to prepare a full and complete defence and obtain a fair trial.
To the same effect is the Tribunal’s decision in Matiushyk, above, where it held:
I find that the amendment is technical, and the Applicant has, in my view, not been misled or prejudiced in his defence by the variance. In addition, having regard to the merits of the case, the proposed amendment can be made without injustice being done. Further, Mr. Matiushyk had ample opportunity to put forward arguments that he did not have a reasonable time to present a full defence, and he presented none. I therefore allow the amendment.
The above-noted passages clearly adopt the administrative law standard for the giving of proper notice to a party subject to regulatory sanction under the Act.
[21] In this case, however, the Appeal Panel found the common defect in the Notices to be so fundamental that they could not be amended. In coming to that conclusion, it relied upon the reasons given by the Manitoba Court of Appeal in AFC Soccer, above. That case involved a Criminal Code indictment with a similar defect. Although the AFC Soccer case did result in the Court declaring the indictment to be a nullity, it is important to recognize that the decision arose in the context of a criminal prosecution where the strict rules of pleading have had a long and distinctive history. It is also of some interest that the Court’s comments about the power to amend were obiter because the accused had pleaded guilty and no request for an amendment had been entertained.
[22] In the administrative law context, form ordinarily gives way to substance. In that context, the obligation to give effective notice is driven by the ultimate consideration of fairness and not by technical formalities. Even in the realm of criminal and quasi-criminal proceedings, the historical justification for quashing indictments and informations has been largely eroded. This point was made by the Supreme Court of Canada in The Queen v. Sault Ste. Marie, [1978] 2 S.C.R. 1299 at page 1307 in the following passage:
Each of these tests is helpful as far as it goes, but each is too general to provide a clear demarcation in concrete instances. This is shown by the variety of cases and the diversity of opinion in this case itself. To resolve the matter one must recall, I think, the policy basis of the rule against multiplicity and duplicity. The rule developed during a period of extreme formality and technicality in the preferring of indictments and laying of informations. It grew from the humane desire of judges to alleviate the severity of the law in an age when many crimes were still classified as felonies, for which the punishment was death by the gallows. The slightest defect made an indictment a nullity. That age passed. Parliament has made it abundantly clear in those sections of the Criminal Code having to do with the form of indictments and informations that the punctilio of an earlier age is no longer to bind us. We must look for substance and not petty formalities.
[23] In Sault Ste. Marie, the Court went on to observe that in examining the validity of a charging document, a court should consider whether the accused has been actually prejudiced by an ambiguity in the language used.
[24] The application of criminal law doctrine to the regulatory regime created under the Act was previously considered by the Federal Court of Appeal in Boyd v. Canada (Minister of Transport), [2004] F.C.J. No. 2080; 2004 FCA 422. There the issue was whether the principle of double jeopardy ought to be applied to a regulatory charge brought by the Minister for negligent operation of an aircraft. The Court held that the principle was only applicable to criminal or truly penal proceedings. The Court went on to examine the issue of proper notice and it clearly applied the administrative standard in the following passage at paragraph 7:
Further on the notice issue, while the particulars of the charge were not set out in the charge, Mr. Boyd in fact received notice of all of the factual allegations being made against him. He was given full disclosure and he knew which of his acts were being challenged. He cross-examined witnesses on each of the allegations made against him. He called witnesses to contradict each allegation. There were no surprises at all. He had sufficient notice so as to preclude any holding of a lack of natural justice.
[25] In this case, by applying criminal law principles to an administrative law issue, the Appeal Panel erred. While there can be problems with the form of a Notice issued under the Act and the Designated Provisions Regulations such that the validity of a Notice may be open to challenge (see Air Nunavut Ltd. v. Canada (Minister of Transport), [2001] 1 F.C. 138, [2000] F.C.J. No. 1115), the Tribunal also has the authority to amend a Notice or to order further disclosure. Where the granting of an amendment would disadvantage a party, the Tribunal’s authority to adjourn a hearing will usually be an adequate remedy. The question is always to be resolved by determining whether the affected party knows the case it has to meet and then has a meaningful opportunity to be heard.
[26] Here the defect in the Notice was obvious to all concerned. The Yukon Government knew full well that it was the legal operator of the WIA and that it was the intended target of the Minister’s Notices. The Yukon Government sent its legal representative to the Tribunal hearing and he spoke on its behalf. The Yukon Government was aware of the Minister’s motion to amend to correct the defects in the Notices and it argued against that motion. Its counsel entered further into the fray by cross-examining one of the Minister’s key witnesses. Counsel for the Yukon Government readily conceded that it did not intend to mount a substantive defence to the allegations. Not surprisingly, no request for an adjournment was made on behalf of the Yukon Government at the close of the Minister’s case.
[27] In short, the actions of the Yukon Government before the Tribunal belie any argument that it was disadvantaged by a deficient notice or was otherwise uncertain of its potential legal jeopardy. It clearly was aware of the Minister’s allegations and was given the opportunity to respond and, up to a point, took it.
[28] While there were others who perhaps could have been named in the Notices, there was no confusion here that any person or party other than the Yukon Government was at risk in the proceeding. Indeed, the amendment motion was not brought to substitute one party for another but only to supplement the Notices to formally describe the owner and operator of the WIA.
[29] It should also be remembered that the Tribunal was entitled to considerable deference with respect to its procedural rulings. So long as it remained within its jurisdiction and complied with the rules of fairness, the Appeal Panel could only interfere where such a ruling was patently unreasonable: see McNaught v. Toronto Transit Commission (2005), 74 O.R. (3rd) 278, [2005] O.J. No. 224 (C.A.).
[30] In the result, I have concluded that the Tribunal did not exceed its jurisdiction by allowing the Notices to be amended and, in the above-described circumstances, the decision to do so was reasonable. On this issue the Appeal Panel erred in law by setting aside the Tribunal’s decision to allow the Notices to be amended.
Did the Tribunal Breach the Rules of Natural Justice?
[31] Within the bounds of fairness, the Tribunal had a broad discretion to conduct its hearing as it saw fit, including the right to hear evidence before ruling on the preliminary motions before it: see McNaught, above. The Tribunal concluded that it could be potentially advantageous and more efficient to hear the evidence before ruling on the Minister’s motion to amend and the Yukon Government’s opposite motion for summary dismissal. This is an accepted approach in an appropriate case to motions of this type where a procedural determination may be aided by evidence adduced during the hearing on the merits. That was the conclusion reached in Regina v. Arnold, [2002] O.J. No. 3835 (C.J.) where it was held that, before ruling on a motion to declare an information to be a nullity, it is preferable to “wait until the evidence has been heard and to then decide whether an amendment can cure any technical problems”.
[32] There were, after all, only two possible outcomes to the competing preliminary motions – either the Minister’s amendment would be granted and the Yukon Government formally added, or that motion would be denied and the proceeding dismissed. There was nothing about the reservation of these procedural decisions by the Tribunal which prevented the Yukon Government from defending the case on the merits on the assumption that the Minister’s request for an amendment would be granted. Indeed, there was no doubt in the mind of anyone involved that the Yukon Government was the operator of the WIA and that it was the intended target of the Minister’s allegations.
[33] There is nothing inherently unfair about the approach taken here on these facts. Although the Yukon Government claimed that it did not know whether it was in jeopardy during the hearing, its counsel, nevertheless, participated in the proceeding. In addition, counsel for the Yukon Government repeatedly stated that it did not intend to challenge the Minister’s allegations on the merits and it obviously had no intention of presenting a substantive defence. If it had any real concern that it was put at a disadvantage, it could and should have requested an adjournment at the close of the Minister’s case. It failed to do so.
[34] I agree with counsel for the Minister that the Appeal Panel based its fairness conclusion upon a presumption of prejudice. Certainly no evidence of actual prejudice was offered and none is referenced in the appeal decision. The Appeal Panel’s conclusion that the Yukon Government was denied the opportunity to effectively participate in the hearing is completely inconsistent with its stated intention not to do so and, thus, the concern is purely hypothetical.
[35] In conclusion, the Appeal Panel erred in law by holding that the approach adopted by the Tribunal to the preliminary motions resulted in a breach of the rules of natural justice. The Appeal Panel decision is, therefore, set aside with the matter to be remitted to the Appeal Panel for a redetermination in accordance with this decision. Costs are awarded to the Applicant in the amount of $2,500.00 inclusive of disbursements.
JUDGMENT
THIS COURT ADJUDGES that this application is allowed with the matter to be remitted to the Appeal Panel for a redetermination in accordance with this decision.
THIS COURT FURTHER ADJUDGES that costs are payable to the Applicant in the amount of $2,500.00 inclusive of disbursements.
FEDERAL COURT
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-1708-05
STYLE OF CAUSE: Attorney General of Canada v. Government of Yukon (Whitehorse International Airport)
PLACE OF HEARING: Whitehorse, Y.T.
DATE OF HEARING: October 11, 2006
REASONS FOR JUDGMENT
AND JUDGMENT: The Honourable Mr. Justice Barnes
APPEARANCES:
Ms. Suzanne Duncan FOR APPLICANT
Ms. Kimberly Sova FOR RESPONDENT
Mr. Tom Ullyett
SOLICITORS OF RECORD:
Mr. John H. Sims, Q.C. FOR APPLICANT
Deputy Attorney General of Canada
Legal Services Branch, Department of Justice FOR RESPONDENT
Government of Yukon