TATC Decisions

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