In re North Coast Air Services Limited
Court of Appeal, Jackett C.J., Walsh J. and
Sheppard D.J.—Prince Rupert, B.C., February
28, 29 and March 1; Ottawa, March 13, 1972.
Judicial review—Air Transport Committee of Canadian
Transport Commission—Air carrier's licence—Amendment
of, by attaching condition prohibiting carriage between cer
tain points in the routes of scheduled carrier—Representa-
tions invited before amendment made—Whether rules of
natural justice govern—No hearing provided for—Aeronau-
tics Act, R.S.C. 1970, c. A-3, s. 16(6) and (8).
Carriage by Air—Air Transport Committee—Air Carri-
ers—Amendment of licences after issue—Restrictions placed
on routes—Right to restrict routes by amendment of
licence—Aeronautics Act, R.S.C. 1970, c. A-3, s. 16(6) and
(8).
In 1968 the Supreme Court of Canada held invalid a
general order made in 1951 by the Air Transport Board
providing that no commercial air carrier might carry traffic
between points named in a licence of a Class 1 or Class 2
carrier. In 1970 the Air Transport Committee of the Canadi-
an Transport Commission wrote each of some 450 commer
cial air carriers that public convenience and necessity
required the protection of routes served by Class 1 and
Class 2 carriers against the operations of Class 4 carriers,
and that it proposed to amend each of their licences by
attaching thereto the condition formerly contained in the
general order. Each of the 450 licensees was however
invited to make representations as to why such condition
should not be attached to its licence. Only 58 licensees
made representations, but the Committee attached the con
dition to all Class 4 licences. Appellant, a Class 4 carrier
since 1959, applied under section 28 of the Federal Court
Act to set aside the Committee's decision and simultaneous
ly appealed therefrom under section 64(2) of the National
Transportation Act, R.S.C. 1970, c. N-17.
Held, the appeal and application must be dismissed.
Per Jackett C.J. and Walsh J.: The rules of natural justice
applied and the Commission could only amend an air carri
er's licence under section 16(8) of the Aeronautics Act after
affording the licensee a fair opportunity for correcting or
contradicting any relevant statement prejudicial to the licen
see's view. The Commission had done so because (1) appel
lant had been invited to make representations against the
policy announced by the Commission before it finally decid
ed to attach the condition to appellant's licence, and (2)
although the Commission in its letter did not set out the
factual situation upon which its policy decision was based,
appellant as an experienced air carrier knew what it was, viz
the obligation of scheduled air carriers to maintain regu ar
service on routes without regard to traffic volume. The Kin
v. Port of London Authority [1919] 1 K.B. 176, per-Bit-ties
L. J. at p. 184, applied; Board of Education v. Rice [1911]
A.C. 179, referred to.
Per Sheppard D.J.: The only condition attached by Parlia
ment to the exercise of the Commission's power to amend a
licence under section 16(8) of the Aeronautics Act is that
public çonvenience and necessity so require; and that power
has been expressly made a matter for the Commission's
opinion, which the Commission may form without a hearing
and without observing the. principles of natural justice.
Liversidge v. Anderson [1942] A.C. 206, applied.
Held also (per Jackett C.J. and Walsh J.), under section
16(8) of the Aeronautics Act the Commission can attach a
condition to a licence by amendment as freely as under
section 16(6) when issuing the licence.
APPEAL from decision of Air Transport
Committee of Canadian Transport Commission
and application to set the decision aside.
A. A. W. MacDonnell, Q.C. for North Coast
Air Services Limited.
J. M. Fortier, Q.C. and N. Norton for Air
Transport Committee.
John B. Hamilton, Q.C. for Canadian Pacific
Airlines.
F. Lemieux for Pacific Western Airlines.
A. Garneau for Attorney General of Canada.
M. R. Robertson for Trans-Provincial
Airlines.
JACKETT C.J. (orally)—This is an application
under section 28 of the Federal Court Act to
review and set aside a decision of the Air
Transport Committee of the Canadian Trans
port Commission dated October 20, 1971,
adding conditions to the appellant's Commercial
Air Services Licence No. A.T.C. 1016/59(C)
and an appeal from the same decision under
section 64(2) of the National Transportation
Act, R.S.C. 1970, c. N-17, as amended by the
Federal Court Act read with section 10 of the
Revised Statutes Act, c. 48 of the Statutes of
1964-65. The application and the appeal were
joined, by order of the Court, into one
proceeding.
It is not without interest to review chronolog
ically a series of events leading up to this
proceeding.
In 1959 a licence was granted to the appellant
under Part II of the Aeronautics Act to operate,
inter alia, a charter commercial air service from
a base at Prince Rupert, British Columbia. This
licence was expressed to remain in effect until
suspended or cancelled. It was replaced by the
then new Canadian Transport Commission on
August 6, 1968 by Licence No. A.T.C.
1016/59(C). When the original licence was
issued in 1959, there was in existence an order
known as General Order 5/51, made by the Air
Transport Board on October 23, 1951, whereby
it was ordered that no commercial air carrier
should carry traffic between points named on
the same licence of inter alia any Class 1 sched
uled commercial air carrier or between points
named on the same licence of any Class 2
non-scheduled commercial air carrier except in
certain defined circumstances.
In 1967, the appellant having been convicted
of breaches of General Order 5/51, the British
Columbia Court of Appeal, on appeal from such
convictions, held that Order No. 5/51 was ultra
vires (Regina v. North Coast Air Services Ltd.
65 D.L.R. (2d) 334).
The next step was that, the National Trans
portation Act, c. 69 of 1966-67, having come
into force, the Air Transport Committee of the
Canadian Transport Commission, on January
17, 1968, enacted an order No. 1968-A-5 pur
porting to make General Order No. 5/51, and
others, orders of the Air Transport Committee.
In North Air Services Ltd. v. Canadian Trans
port Commission [1968] S.C.R. 940, General
Order No. 5/51 and the other orders referred to
in No. 1968-A-5 were declared invalid by the
Supreme Court of Canada.
By an order of the Air Transport Committee
dated October 20, 1971, Order No. 1971-A
331, a condition was added to the appellant's
licence No. A.T.C. 1016/59(C) prohibiting the
appellant, as licensee, from carrying traffic
between points on a route served by a Class 1
or Class 2 carrier except in certain defined
circumstances.
This proceeding is an attack on the validity of
the aforesaid Order No. 1971-A-331 of October
20, 1971.
The atta - A on the validity of the order in
question falls into two parts, viz:
(a) the first position taken by the appellant is
that the Canadian Transport Commission has
no authority to impose any limitation on the
sphere of operations of one carrier designed
to give protection to another carrier, or to
create monopolies, and, in any event, cannot
do so by way of an amendment to a licence,
and
(b) in the alternative, the appellant takes the
position that, even if the Commission had
power to attach the conditions on its licence
in question here, it did not validly do so.
The provisions of the Aeronautics Act,
R.S.C. 1970, c. A-3, that bear directly on the
Commission's powers to make the order here in
question are:
9. (1) In this Part
"commercial air service" means any use of aircraft in or
over Canada for hire or reward;
16. (1) The Commission may issue to any person apply
ing therefor a licence to operate a commercial air service in
the form of licence applied for or in any other form.
(3) The Commission shall not issue any such licence
unless it is satisfied that the proposed commercial air serv
ice is and will be required by the present and future public
convenience and necessity.
(6) In issuing any licence, the Commission may prescribe
the routes that may be followed or the areas to be served
and may attach to the licence such conditions as the Com
mission may consider necessary or desirable in the public
interest, and, without limiting the generality of the forego
ing, the Commission may impose conditions respecting
schedules, places of call, carriage of passengers and freight,
insurance, and, subject to the Post Office Act, the carriage
of mail.
(8) The Commission may suspend, cancel or amend any
licence or any part thereof where, in the opinion of the
Commission, the public convenience and necessity so
requires.
17. (1) No person shall operate a commercial air service
unless he holds a valid and subsisting licence issued under
section 16.
These provisions follow the traditional formula
for creating monopolies and quasi-monopolies
in the transportation field for the purpose of
ensuring that, to the extent possible, the service
required by the public is supplied by persons
operating in the private sphere. Certainly, when
subsection (1) of section 16 is read with section
17, it would seem that, if a licence is issued to
one person to operate on a particular route, and
there are no other licensees, that person will
have a monopoly in respect of that route. Fur
thermore, it is obviously a possibility that the
Commission will have satisfied itself that the
only basis on which it can ensure a scheduled
service over a particular route is by granting a
licence for that route to a person on terms that
he service the route—it being understood that
he can only be expected to service it if he is
protected from all competition. In such a case,
it is apparent that the Commission might con
clude that public convenience and necessity
requires that charter licences granted to third
persons be so framed as to protect the operator
of such a scheduled route from competition. In
my view, therefore, the condition that is the
subject of the order under attack is one that the
Commission may attach to a licence as neces
sary or desirable in the public interest and I find
nothing in Part I of the Aeronautics Act incon
sistent with that conclusion. Nor do I find any
thing inconsistent with that conclusion in the
decisions of the British Columbia Court of
Appeal and the Supreme Court of Canada to
which I have referred. Tysoe J.A. expressly
said that "It may be that the Board had the
power to attach to the appellant's licence a
condition prohibiting it from carrying traffic
between two or more of the points named in the
licence of B.C. Airlines Limited" and he
referred in that connection to the then section
15(1) and (6) of the Aeronautics Act (now sec
tion 16(1) and (6)). He said that that, however,
was not the question before the Court at that
time because General Order 5/51 was "a blan
ket order of general application to the entire
body of air carriers in Canada who are within
the class of commercial carriers". In the
Supreme Court of Canada, Martland J., deliver
ing the judgment of the Court, agreed with the
reasoning of Tysoe J.A. for holding that section
15, as it then was, could not be used to support
General Order 5/51.
In my view, therefore, the condition under
attack is one that can be attached to a charter
licence, under section 16(6), when it is being
issued, if the Commission considers it neces
sary or desirable in the public interest to do so.
Furthermore, in my opinion, if the condition
is one that can be attached to a licence when it
is being issued, it may be attached to the licence
by amendment, in the exercise of the Commis
sion's powers under section 16(8), "where, in
the opinion of the Commission, the public con
venience and necessity so requires". I can find
nothing in the words used in the statute, or in
the scheme of the statute, that makes the result
that can be achieved by amendment under sec
tion 16(8) something less than what could have
been done when the licence was being issued,
assuming the opinion of the Commission that it
is required by the public convenience and
necessity.
The appellant contends, however, that this is
not a simple case of amending the appellant's
licence because the Commission at the same
time took steps to attach the same condition to
the appellant's licence and to every other exist
ing charter licence and that this was, therefore,
an attempt to do indirectly what the Supreme
Court of Canada held that the Commission
could not do directly, namely, to make a general
order prohibiting all charter licensees from
operating between points on a Class 1 or Class
2 route with specified exceptions. I cannot
agree that it follows from the lack of authority
to enact a prohibition by way of general order
that there is no authority to attach a condition
to every licence having the same prohibitory
effect. If the Commission had authority to enact
a general prohibitory order, it would have creat
ed a legal prohibition regardless of the circum
stances existing in any particular case. It had no
authority to enact any such regulation.' On the
other hand, the Commission has express
authority to attach to an individual licence a
condition that would impose such a prohibition
on the particular licensee, if the Commission
considers it "necessary or desirable in the
public interest" (s. 16(6)) or "where, in the
opinion of the Commission, the public conveni
ence and necessity se requires" (s. 16(8)). This
involves the Commission addressing itself to
the requirements of thé particular situation in
respect of each licence in the light of such
general policy principles as it may have adopt
ed. If, having done so, the Commission reaches,
by a proper process of reasoning, the same
result in every case, the final result is a valid
exercise of its powers even though, in effect, it
is the same as the result it tried, at an earlier
stage, to achieve by an exercise of a regulation
making power that it did not have. In the one
case it will have done what Parliament author
ized it do so. In the other case it tried to do
what it was not authorized to do.
That brings me to the second branch of the
case which is the appellant's contention that, in
its case, there has been a failure by the Com
mission to comply with the requirements of
natural justice before making the order under
attack so that the order was not a valid exercise
of the power conferred on the Commission by
section 16(8).
The attack from this point of view is summa
rized by the appellant's memorandum as
follows:
If the Court should consider that the Commission had the
lawful authority under the "Aeronautics Act" to pass the
Order that it did, which it is submitted cannot be found,
then the manner in which the licence was amended amount
ed to a decision founded on an erroneous finding made
without regard to the material before the Commission.
It is submitted that the file the Commission produced,
which is the material in the possession of the Commission,
that it considered before it issued the Order in question,
does not disclose any material that could remotely allow the
Commission to properly conclude there were any merits in
amending the applicant's licence. There were no studies of
any matters economic or otherwise before it nor any other
material that would justify any carrier being restricted in its
routes and in particular none to justify restricting North
Coast Air Services Ltd. in its routes either in its immediate
area or elsewhere. In addition there were cogent reasons put
forward by North Coast Air Services Ltd. for not amending
its licence.
It is submitted that to conclude that route protection
should be imposed upon licensees the Commission must
have considered extraneous matters beyond the material
filed and if so in not communicating any other material
considered to the licence it offends against the principles of
natural justice.
Board of Education v. Rice et al (1911) 80 L.J.K.B. 796
(HL) [[1911] A.C. 179.]
It is submitted that the course of conduct of the Commis
sion right from the first appeal of North Coast Air Services
Ltd. to the Supreme Court of Canada was to reinstitute
route protection regardless of need or otherwise and having
failed to succeed by regulations now attempts to do indi
rectly that which it cannot do directly.
It is submitted that the Commission acted in a capricious
and arbitrary manner in purporting to amend the licence of
North Coast Air Services Ltd. along with 417 other licences
according to a predetermined decision made on August
10th, 1970 or earlier that "public convenience and necessity
requires that routes served by Class 1 and Class 2 Air
Carriers should be protected against the operations by Class
4 Air Carriers". This despite cogent reasons put forward by
North Coast Air Services Ltd. and other carriers against
imposing route protection and no evidence in the material
before it to the contrary.
To appreciate what weight if any there is in
these objections, it is necessary first to review
chronologically the relevant material to be
found in the record. The following is what, as it
seems to me, requires to be considered in this
connection:
1. General Order No. 5/51, which was adopt
ed on October 23, 1951, read, in part, as
follows: 2
AND WHEREAS the Board is satisfied that Class 1
and Class 8 scheduled commercial air carriers who are
required by Board regulations to maintain service at regu
lar intervals according to a published schedule regardless
of whether or not the traffic offered is sufficient to
provide a profitable flight, ought, in order to ensure
maximum loads, to receive protection from undue compe
tition by carriers who are not so required;
AND WHEREAS the Board is satisfied that Class 2
and Class 9-2 non-scheduled commercial air carriers who
are required by Board regulations to serve with some
degree of regularity the points authorized to be served
under their respective licences, and who are required to
serve such points in accordance with a route pattern,
ought also to receive some degree of protection against
undue competition.
IT IS THEREFORE HEREBY ORDERED:
1. THAT no commercial air carrier may carry traffic
between points named on the same licence of any Class 1
or Class 8 scheduled commercial air carriers or between
points named on the same licence of any Class 2 or Class
9-2 non-scheduled commercial air carriers except in the
following circumstances:
(While this order was subsequently found to
be invalid, its validity had not been ques
tioned when the appellant's Class 4 licence
was issued in 1959 and it reveals the view of
the Air Transport Board as to the conditions
on which scheduled commercial air carriers
and other commercial air carriers were to
operate and gives some indications as to the
reasons for that view.)
2. In 1968, General Order No. 5/51 was
finally determined by the Supreme Court of
Canada to be invalid.
3. On August 10, 1970, the Air Transport
Committee of the Canadian Transport Com
mission wrote to the appellant and to all other
charter commercial air carriers as follows:
The Committee is considering the effect that the opera
tion of each Class 4 air carrier has upon Class 1 and Class
2 air carriers in respect of traffic carried between points
named in any one licence of such Class 1 and Class 2 air
carriers. Each Class 4 licence under consideration is
being dealt with on its own merits.
Public convenience and necessity requires that routes
served by Class 1 and Class 2 air carriers should be
protected against the operation by Class 4 air carriers of
charters between points named in any one licence of such
Class 1 and Class 2 air carriers except as set out in the
attached Schedule.
The Committee proposes to issue an Order amending
your above-noted Class 4 licence accordingly by attach
ing thereto the conditions set out in the Schedule to this
letter.
Would you kindly acknowledge receipt of this letter not
later than (September 24, 1970) by signing the copy
thereof where indicated and returning the same to the
undersigned with your representations, if any, as to why
such conditions should not be attached to your licence.
(Attached to this letter as a result of a subse
quent correcting letter was a schedule setting
out the conditions that were subsequently set
out in the order under attack in this
proceeding.)
4. On August 25, 1970, the solicitor for the
appellant wrote to the Air Transport Commit
tee challenging the course of action set out in
the Committee's letter of August 10, as he
understood it, and, on October 19, 1970, the
Committee replied to that letter in part as
follows:
There would appear to be some misunderstanding on
your part as to the intent and purpose of the Committee's
letter of August 10, 1970. Briefly, the letter expresses the
Committee's intent to examine on its merits the Class 4
licence of your client with a view to ascertain whether the
licence, which issued in 1959 pursuant to section 15 of
the Act, still meet the requirements of the Aeronautics
Act as they exist today. The examination is not initiated
for the purpose of singling out your client, as all Class 4
licences are being examined.
The purpose of our sending to all Class 4 carriers our
letter dated August 10th was to obtain their views on our
proposal, canvass their submissions with a view to deter
mine if there was reason to alter our proposal—not with a
view to introduce nor approve regulations respecting
route and base protection.
5. Under cover of a letter dated September
22, 1970, the solicitor for the appellant sub
mitted to the Air Transport Committee the
appellant's submissions with respect to the
"determination by the Board" contained in
the letter of August 10. This document made
detailed submissions, which it summarized as
follows:
In summary, therefore, North Coast submits firstly that
the Air Transport Committee of Canadian Transport
Commission is without jurisdiction to re-institute route
protection in any manner, which issue was raised in an
application for leave to appeal taken to the Supreme
Court of Canada in 1969 and which application was
withdrawn upon the agreement of the Committee to state
a case to the Supreme Court of Canada to determine the
issue once and for all, consequently the Committee
should not deal with the question of route protection and
base protection in any manner until the stated case has
been heard.
Secondly, that since 1968 until now when free competi
tion prevailed there has been no deterioration in service
and in fact the air service has improved and the traffic
increased.
Thirdly, that by re-instituting route protection and base
protection North Coast would be put out of business.
Fourthly, that the re-institution of route protection
would cause a deterioration rather than an improvement
of air service.
6. On September 23, 1970, one of the Com
missioners wrote to an official of the Depart
ment of Transport, in part, as follows:
In accordance with our telephone conversation I am
enclosing herewith the following:
1. Copy of a letter dated 10th August, 1970 to which I
have attached schedules which I have marked "A" and
"B" which was forwarded to all Class 4 licensees.
Licensees whose base had been designated a protected
base received schedule "A". Licensees who did not
have a protected base received schedule "B".
2. Copy of a letter dated 10th August, 1970 respecting
route protection which went forward to all Class 4
licensees to which I have attached a schedule which
accompanied the aforementioned letter.
The purpose of amending the licences in the manner
indicated was to take care of the situation that developed
upon the Supreme Court finding that the Board's relevant
General Orders were ultra vires. You will note in each
case it is made clear that the Committee proposes to
amend the licences as indicated but that the licensee is
afforded an opportunity to make representations in that
regard.
7. On July 2, 1971, the President of the
Canadian Transport Commission wrote to the
President of the Air Transport Association of
Canada as follows:
Immediately on its receipt, Mr. Belcher sent me a copy
of your letter of June 29th regarding base and route
protection. I can assure you that the Air Transport Com
mittee and I as President of the Canadian Transport
Commission have been at least as much concerned as
your Association about the uncertainties in this situation.
It should, however, be recalled that over a year ago the
Air Transport Committee reached the conclusion that,
short of an amendment of the law by Parliament, the most
effective way in which the problem could be met was by
the amendment, where appropriate, of licences of
individual carriers and that your Association and others in
the industry were invited to comment on the proposed
action of the Committee.
I met with the Air Transport Committee today and the
Committee has decided to proceed without delay to
follow the course we first proposed more than a year ago
with respect to the amendment of individual licences.
While it will, of course, be necessary to take account of
the replies to letters sent out last, August to all Class 4
carriers, we intend to proceed progressively on a sys
tematic basis to deal with these licences. We welcome the
assurance in your letter of June 29th of the active support
of the Air Transport Association of Canada in the course
we are taking.
8. On October 20, 1971, the Air Transport
Committee made the order under attack in
these proceedings, which reads as follows:
WHEREAS by Licence No. A.T.C. 1016/59(C), North
Coast Air Services Ltd. is authorized to operate a Class 4
Charter commercial air service from a base at Prince
Rupert, B.C., in accordance with the Conditions of the
said Licence;
WHEREAS by registered letter dated August 10, 1970,
in the matter of carriage of traffic by the Licensee
between any points on a route served under any one
Class 1 or Class 2 Licence, the Committee advised the
Licensee that it proposed for the reasons stated therein,
to issue an Order amending the aforesaid Licence by
attaching thereto the Conditions set out in the Schedule to
the said letter, and required the filing not later than
September 24, 1970 of representations, if any, by the
Licensee as to why such conditions should not be
attached to the said Licence;
WHEREAS the Licensee filed a representation with
the Committee by letter dated September 22, 1970.
AND WHEREAS the Committee has considered the
said representation and all matters relevant to the pro-
posed amendment and is of the opinion that the public
convenience and necessity requires that the said Licence
be amended to carry out effectively the intent and pur
pose of Part II of the Aeronautics Act;
IT IS ORDERED THAT:
(1) For the purpose of this Order, "route" in respect of a
commercial air service means the route served by a Class
1 or Class 2 Canadian air carrier between points named in
any one licence when providing a transportation service
described in the carrier's service schedule or service
pattern filed with the Commission and in effect;
(2) For the purpose of this Order, "point" in respect of a
unit toll commercial air service means a city, town or
place named in a licence which a carrier is authorized to
serve by such licence, and identified where necessary by
reference to latitude and longitude and
(a) in respect of a point in Class 1 Licence, comprises
an area 25 miles in radius measured from the main post
office of such point or from the latitude and longitude
of such point; and
(b) in respect of a point in a Class 2 Licence, com
prises an area 10 miles in radius measured from the
main post office of such point or from the latitude and
longitude of such point;
(3) Licence No. A.T.C. 1016/59(C) be and is hereby
amended by adding the following Conditions:
The Licensee is prohibited from carrying traffic between
any points on a route except in any of the following
circumstances:
(a) where the Licensee holds a Class 1 or Class 2
licence in respect of the points affected;
(b) where, in respect of a route, the distance between
any two points on the route as served and between
which the charter flight is intended, is greater than one
and one-half times the direct distance between such
points;
(c) where the Class 4 Charter flight originates or termi
nates at a point not included on a route if no local
traffic is carried by the Licensee between any two
points on such route;
(d) where, in respect of a route, no scheduled or regu
lar unit toll service is offered on the day of the charter
flight and the route carrier is not in a position to
provide the required transportation on a comparable
basis;
(e) where, in respect of the Class 4 Charter service, the
Licensee uses aircraft having a maximum authorized
take-off weight on wheels of 2,500 pounds or less, and
where;
(i) the largest aircraft operated on the route by the
Class 1 or Class 2 air carrier as indicated in his
service schedule or service pattern is an aircraft
having a maximum authorized take-off weight on
wheels of less than 25,000 pounds, and
(ii) the Class 1 or Class 2 air carrier is not licensed to
provide charter service with aircraft having a max
imum authorized take-off weight on wheels of 2,500
pounds or less, or if so licensed is unable to provide
service with comparable aircraft, within three hours
of a request therefor;
(f) where, in respect of the Class 4 Charter service, the
Licensee uses aircraft having a maximum authorized
take-off weight on wheels of 7,000 pounds or less, and
where;
(i) the largest aircraft operated on the route by the
Class 1 or Class 2 air carrier as indicated in his
service schedule or service pattern is an aircraft
having a maximum authorized take-off weight on
wheels of 25,000 pounds or more but less than
50,000 pounds, and
(ii) the Class 1 or Class 2 air carrier is not licensed to
provide charter service with aircraft having a max
imum authorized take-off weight on wheels of 7,000
pounds or less, if so licensed is unable to provide
service with comparable aircraft, within three hours
of a request therefor;
(g) where, in respect of the Class 4 Charter service, the
Licensee uses aircraft having a maximum authorized
take-off weight on wheels of 18,000 pounds or less,
and where;
(i) the largest aircraft operated on the route by the
Class 1 or Class 2 air carrier as indicated in his
service schedule or service pattern is an aircraft
having a maximum authorized take-off weight on
wheels of 50,000 pounds or more, and
(ii) the Class 1 or Class 2 air carrier is not licensed to
provide charter service with aircraft having a max
imum authorized take-off weight on wheels of 18,000
pounds or less, or if so licensed is unable to provide
service with comparable aircraft, within three hours
of a request therefor;
(h) where the Class 4 Charter flight is operated for
reasons of public health or safety;
(i) where the Class 4 charter service is operated for a
limited period with the written concurrence of the
affected Class 1 or Class 2 air carrier;
(j) where the Committee specifically authorizes the
Licensee, in writing, to perform a charter service over a
route.
(k) The charter flights permitted herein shall not be
offered or operated with any degree of regularity or
frequency.
This Order shall form part of Licence No. A.T.C.
1016/59(C) and shall remain attached thereto.
In so far as I have appreciated the argument
before us, that is all the material in the "case"
on which this proceeding is to be determined
that has been said to bear on the question
whether Order No. 1971-A-331 was validly
made by the Air Transport Committee.
In the first place I should say that I have no
doubt that, when a commercial air service
licence has been granted under section 16(1) of
the Aeronautics Act and the licensee has gone
into business in accordance with the authority
so granted to it, the Commission can only exer
cise its power under section 16(8) to suspend,
cancel or amend that licence when it has
formed its opinion that the public convenience
and necessity so requires after it has afforded
the licensee "a fair opportunity for correcting
or contradicting any relevant statement prejudi
cial to (his) view". (Compare Board of Educa
tion v. Rice [1911] A.C. 179 per Lord Loreburn
L. C at p. 182.) It was not seriously contended
before us to the contrary. I have not in mind
any decision which applies this principle to a
case such as is now under consideration when
there is no statutory provision for a "hearing";
and I am aware of no authoritative general rule
for deciding when the principle applies and
when it does not. (Compare Durayappah v.
Fernando [1967] 2 A.C. 337 per Lord Upjohn
at pp. 348 and following.) Nevertheless, having
regard to the realities of modern commercial
life, it seems to me that the requirements of
natural justice are just as applicable to the
cancellation or amendment of a licence of
indefinite duration for the operation of a sub
stantial transportation undertaking as they are
to the deprivation of property in the traditional
sense.
There are two serious questions in this case
that have to be faced, as I appreciate the
matter, in considering whether it can be said
that the Commission did afford to the appellant
a fair opportunity for correcting or contradict
ing any relevant statement prejudicial to the
appellant's position before reaching its decision
that the public convenience and necessity
required that the conditions in question be
attached to the appellant's licence. These ques
tions are:
(a) Did the Commission make a final decision
that public convenience and necessity
required that the conditions be attached to
the appellant's licence before writing the
letter of August 10, 1970, giving the appellant
an opportunity to make representations? and
(b) Did the appellant, at the time that it was
given an opportunity to make representations,
know what the statements prejudicial to its
position were, so that it had an opportunity to
correct or contradict them?
With reference to the first question—i.e.
whether the Commission had finally decided
that public convenience and necessity required
that the conditions be attached to the appel
lant's licence before writing the letter of August
10, 1970—it is necessary to look at the letter of
August 10. That letter stated, without qualifica
tion, "Public convenience and necessity
requires that routes served by Class 1 and Class
2 air carriers should be protected against the
operation by Class 4 carriers of charters
between points named in any one licence of
such Class 1 and Class 2 air carriers except as
set out in the attached Schedule". It is true that
it also says that "Each Class 4 licence under
consideration is being dealt with on its own
merits" and that it concludes by inviting "re-
presentations, if any, as to why such conditions
should not be attached to your licence". Never
theless, the statement of the previously deter
mined requirement of public convenience and
necessity is so categorical as to appear to leave
no possible room for any meaningful represen
tations. If the matter had been left there, I
doubt that I should have been able to escape the
view that the Commission had taken its final
decision without giving any opportunity for
representations. However, the Commission did
subsequently clarify its intention when it wrote
to the appellant's solicitors on October 19, 1970
and said:
There would appear to be some misunderstanding on your
part as to the intent and purpose of the Committee's letter
of August 10, 1970. Briefly, the letter expresses the Com
mittee's intent to examine on its merits the Class 4 licence
of your client with a view to ascertain whether the licence,
which issued in 1959 pursuant to section 15 of the Act, still
meet the requirements of the Aeronautics Act as they exist
today. The examination is not initiated for the purpose of
singling out your client, as all Class 4 licences are being
examined.
The purpose of our sending to all Class 4 carriers our
letter dated August 10th was to obtain their views on our
proposal, canvass their submissions with a view to deter
mine if there was reason to alter our proposal—not with a
view to introduce nor approve regulations respecting route
and base protection.
While the appellant had in the meantime filed
its representations, there was plenty of time
after this letter for it to have made further
representations before the order was finally
made on October 20, 1971, if it had been misled
by the dogmatic way in which the letter of
August 10, 1970 had been framed. In the cir
cumstances, it appears to me that the course
taken by the Commission falls on the right side
of the line drawn by Bankes L.J. in The King v.
Port of London Authority [1919] 1 K.B. 176,
where he said at p. 184:
There are on the one hand cases where a tribunal in the
honest exercise of its discretion has adopted a policy, and,
without refusing to hear an applicant, intimates to him what
its policy is, and that after hearing him it will in accordance
with its policy decide against him, unless there is something
exceptional in his case. I think counsel for the applicants
would admit that, if the policy has been adopted for reasons
which the tribunal may legitimately entertain, no objection
could be taken to such a course. On the other hand there are
cases where a tribunal has passed a rule, or come to a
determination, not to hear any application of a particular
character by whomsoever made. There is a wide distinction
to be drawn between these two classes....
This approach was referred to with approval in
Re Hopedale Developments Ltd. and Town of
Oakville (1964) 47 D.L.R. (2d) 482 by McGilliv-
ray J.A. giving the judgment of the Ontario
Court of Appeal, at pp. 486-7, where he refers
to other cases applying the same principle.
I might add on this aspect of the matter that I
do not find it too surprising that, of over 400
charter carriers affected, only some 58 filed
representations and that none of them persuad
ed the Commission to change its policy. We
must assume that the Commission had given
care to working out a policy that met all
problems.
I turn now to the second question to which I
have referred, namely: Did the appellant, at the
time that it was given an opportunity to make
representations, know what the statements pre
judicial to its position were, so that it had an
opportunity to correct or contradict them?
In this connection, when reference is made to
the letter of August 10, 1970, it appears that the
only relevant statement is the one to which I
have already referred, namely, that "Public con
venience and necessity requires that routes
served by Class 1 and Class 2 air carriers
should be protected against the operation of
Class 4 air carriers ... as set out in the attached
Schedule". This is no more and no less than a
statement of the matter which, under section
16(8), is exclusively a matter for the opinion of
the Commission. Such an opinion, however,
must, I should have thought, be based on a
factual situation and it is the statement of that
factual situation which, in my view, the appel
lant should have had an opportunity to correct
or contradict.
The question is, therefore, whether the appel
lant was in the dark as to the factual basis for
the proposed attachment of conditions to its
licence. On the face of the proposal, it was clear
that this was not something special to the appel
lant's licence. It was a general conclusion by the
Commission that routes served by all Class 1
and Class 2 air carriers should be protected
against the operations of all Class 4 air carriers
to the extent contemplated by the proposed
conditions. The probable, if not obvious, factual
basis for such a conclusion that jumps to mind
is that that appears from the recital in General
Order 5/51 where reference is made, for exam
ple, to scheduled commercial air carriers "who
are required by Board regulations to maintain
service at regular intervals according to a pub
lished schedule regardless of whether or not the
traffic offered is sufficient to provide a profit
able flight". I do not find that the appellant
showed any sign of having been at a loss as to
what possible basis there could have been for
such a general rule as that with which it was
being faced. If it had had any doubt as to the
factual basis, it was well represented and I am
sure would have taken steps to ascertain what
the facts were. Indeed, I think that the balance
of probability is that any person involved in, or
familiar with, this type of regulated transporta
tion industry knows, without being told, of the
factual situation that gives rise to the necessity
of considering some form of route protection
for scheduled operators.
With considerable doubt, having regard to the
manner in which the matter was put to the
appellant by the Commission, I have concluded
that the essentials of natural justice were com
plied with.
In my, view the appeal and the application
must be dismissed.
Before leaving the case, I deem it important
to say that I do not accept the view that, if the
result were otherwise and the decision of this
Court were to set aside the order imposing the
conditions on the appellant's licence on the
ground that there had been a failure to comply
with the principles of natural justice, the result
would be a fatal blow to the Commission's
scheme of regulation. Once it is established that
the Commission has authority to attach the con
ditions if it does so properly, a decision to
exercise that authority without giving a fair
hearing is not a nullity but is merely voidable at
the option of the person directly concerned (see
Durayappah v. Fernando [1967] 2 A.C. 337 per
Lord Upjohn at pp. 352-3). In the case of an
order that has been successfully attacked by
way of appeal on that ground, the matter would
presumably be sent back to the Commission for
determination in accordance with such direc
tions as the Court deems appropriate. (Section
52(1)(c) of the Federal Court Act.) In the case
of an order that had not been attacked within
the time limit fixed by section 64(2) of the
National Transportation Act, it would presum
ably be too late to launch an attack except
where there are "special circumstances" that
warrant extending the time for applying for
leave to appeal.
WALSH J. (orally)—The facts giving rise to
these proceedings are set out succinctly in the
reasons for judgment of the Chief Justice so it
would be superfluous to repeat them in full
here.
After the Supreme Court judgment in the
case of North Coast Air Services Ltd. v.
Canadian Transport Commission [1968] S.C.R.
940 declaring invalid inter alia order 5/51 of the
Air Transport Board since it had not been
approved by the Governor in Council as
required by the Act, the Act was amended and
section 14(1)(b) provided that the Commission
might make regulations "prescribing the terms
and conditions to which licences issued under
this Part shall be subject". On June 11, 1969,
the Air Transport Committee of the Canadian
Transport Commission amended the Commer
cial Air Service Regulations to provide prohibi
tions or restrictions in the nature of the old
general order 5/51 which had been declared
invalid. North Coast Air Services Ltd. brought
an application for leave to appeal to the
Supreme Court of Canada questioning the juris
diction of the Committee to pass regulations
dealing with route protection, inter alia. After
some discussion between counsel it was agreed,
as confirmed by letter of September 5, 1969,
from J. M. Fortier, Q.C., on behalf of the
Canadian Transport Commission that a stated
case would be presented to the Supreme Court
on the jurisdiction of the Committee to pass
regulations on the subject of base protection
and route protection; that meanwhile the regula
tions complained of on this subject would be
rescinded, that the Air Transport Committee
would not introduce or approve any regulations
on the said subjects until the stated case had
been disposed of by the Supreme Court, and
that on these conditions North Coast Air Serv
ices Ltd. would discontinue its application for
leave to appeal.
No stated case was ever presented to the
Supreme Court but, as the Air Transport Com
mittee did not introduce any further regulations
on the said subjects, it complied with the
express terms of the agreement. Appellant,
North Coast Air Services Ltd., contends, how
ever, that while it did not re-introduce any such
regulations of general application under section
14 of the Aeronautics Act, it did accomplish the
same result by applying section 16(8) of the Act
so as to amend the licences of all Class 4
carriers of which appellant is one by including
restrictions and prohibitions having substantial
ly the same effect (save for certain special
clauses lessening to some extent the scope of
these restrictions), thus accomplishing indirect
ly what it could not do directly. To accept this
contention it would be necessary to conclude
that the Commission could not have passed a
regulation of general application under section
14 of the Act, and the Commission does not
admit this. In the absence of a decision on a
stated case to the Supreme Court which was
never presented, the most that can be said is
that its right to do so had been challenged by
appellant. Since no such regulation is in issue
before us it would be idle to speculate as to why
the stated case was never presented by the Air
Transport Commission but I cannot conclude
that in proceeding instead to amend the licences
of all Class 4 carriers by virtue of the provi
sions of section 16(8) of the Act, the Commis
sion was accomplishing indirectly what it could
not do directly. The power to make regulations
under section 14 of the Act is, in my mind,
entirely separate and distinct from the licensing
powers under section 16, and in the present
case we are only concerned with the action
which the Commission took under section 16.
Counsel for appellant contended that the
Commission may only prescribe the routes to
be followed or the areas to be served at the time
a licence is first issued, since section 16(6) of
the Act commences with the words "In issuing
any licence", whereas section 16(8) merely
states:
The Commission may suspend, cancel or amend any
licence or any part thereof where, in the opinion of the
Commission, the public convenience and necessity so
requires.
He would therefore limit amendments to mat
ters other than routes to be followed or areas to
be served. I do not believe that a reading of
section 16 as a whole justifies this interpreta
tion. The section deals with licensing generally
and indicates in subsection (6) the sort of condi
tions which may be put in a licence when the
Commission decides to issue same. I do not
believe the words "In issuing a licence" relate
specifically to the time at which these condi
tions can be imposed and are intended to pre
vent their being imposed at a later date by
amendment. Subsection (8) permits not only the
amendment but also the suspension or cancella
tion of a licence at any time where, in the
opinion of the Commission, the public conveni
ence and necessity so requires. Clearly the
requirements of public convenience and neces
sity may vary from time to time and conditions
which might be attached to a licence at the time
of its issue because the Commission at that time
considered them "necessary or desirable in the
public interest", to use the wording of subsec
tion (6), might well have to be amended at a
later date by the application of subsection (8)
because "public convenience and necessity" so
requires.
There is no limit to the number of licences
which the Commission may amend by the
application of section 16(8) and in this case it
chose to individually amend the licences of all
Class 4 carriers, some 450 in all, in identical
terms, and at the same time'. In using section
16(8), however, it is essential that in each
individual case the Commission must be of the
opinion that "public convenience and necessi
ty" requires the amendment of that specific
licence; otherwise it would, in effect, be issuing
a regulation of general application which cannot
be done under section 16(8). In the case of
North Coast Air Services Ltd. v. Canadian
Transport Commission (supra) Martland J., in
rendering the judgment of the Court, says in
reference to section 15(6) (now section 16(6)) at
page 945:
With respect to this provision I agree with what was said
by Tysoe J.A., in the North Coast Air Services Ltd. case, at
p. 337 ((1968) 65 D.L.R. (2d) 334):
Section 15 appears to me to have no relation to licen
sees as a group or class but to individual applicants for
licences and licences issued to specific individuals. The
General Order cannot be supported under that section.
Appellant contended that to amend the
licence of a licensee so as to restrict his opera
tions after he has invested substantial sums for
planes and equipment is to deprive him of
acquired rights, but I do not find that this argu
ment can stand up against the unrestricted right
to amend given in section 16(8) when, in the
opinion of the Commission, "public conveni
ence and necessity" so requires. Considerations
of public convenience and necessity may, in
some circumstances, prejudicially affect the
rights of any individual but this cannot prevent
the Commission from applying section 16(8).
Moreover, in the present case appellant had
been operating under regulation 5/51 which had
been in effect for some eight years before
appellant was licensed in 1959. Its licence was
subject to this regulation which was only found
to be invalid by the Supreme Court judgment of
1968. The amendment to its licence which is
now being attacked is more liberal in its provi
sions than the restrictions imposed under the
said regulation. From the practical point of
view, therefore, it only realized it had an unre
stricted licence following the Supreme Court
judgment and it is these rights of relatively
short duration which are again being curtailed
by the amendment to its licence.
In proceeding to make the amendments to the
licences of all Class 4 licensees holding licences
as of August 10, 1970, the Air Transport Com
mittee wrote each of them a letter which in its
first paragraph indicates that it is considering
the effect of the operation of each Class 4 air
carrier on Class 1 and Class 2 air carriers in
respect of traffic carried between points named
in any one licence of each Class 1 and Class 2
air carrier and that each Class 4 licence is being
dealt with on its own merits. The next para
graph indicates (which appears to be a conclu
sion already reached by the Committee) that
public convenience and necessity requires that
routes served by Class 1 and Class 2 air carriers
should be protected against the operation by
Class 4 air carriers between such points (sub-
ject to exceptions set out in a Schedule). The
third paragraph indicates that the Committee
proposes to issue an order to amend the addres
see's Class 4 licence by attaching the conditions
as set out in the Schedule. The final paragraph
invites representations, if any, as to why these
conditions should not be attached to the licence
of the addressee.
It is clear that the conclusion of the Commit
tee that public convenience and necessity
required the protection of Class 1 and Class 2
air carriers as indicated had already been
reached and the terms and conditions of the
amendment to the licence decided upon before
this letter was sent, but there is no indication as
to the nature of the evidence or facts on which
these decisions had been made. There was
therefore no confrontation of any of the licen
sees in general or appellant in particular with
the facts on which the Committee had reached
its conclusions relating to public convenience
and necessity or the terms of the proposed
amendments to the licence such as to enable the
licensees to dispute the validity of same, meet
them with other evidence, or make any
representations before these conclusions were
reached. Instead, each licensee was merely
invited to make representations as to why these
conditions should not be attached to his licence.
There was no opportunity given to any individu
al licensee to seek modification of the condi
tions themselves. Either he had to accept the
conditions which were to be included in the
licence of each Class 4 licensee as drawn, or
seek to be exempted from these modifications
entirely 2 . In the event, no one was so exempted
although 58 licensees made representations pre
sumably as to why such conditions should not
be attached to their licences.
In due course, on October 20, 1971, order
No. 1971-A-331 was issued amending appel
lant's licence 1016/59 (and on the same date
identical orders were issued to the other 450
odd Class 4 licensees, whether or not they had
made representations requesting that they be
exempted from application of the order) which
order refers to the representations made by
appellant, goes on to say "Whereas the Com
mittee has considered the said representation
and all matters relevant to the proposed amend
ment and is of the opinion that the public con
venience and necessity requires that the said
Licence be amended" and then issues the
amendment without any changes from the
proposal set out in its letter of August 10, 1970.
Of interest in this connection are two letters.
The first is one from J. W. Pickersgill, Presi
dent, Canadian Transport Commission to A. C.
Morrison, President, Air Transport Association
of Canada, dated July 2, 1971 which reads in
part:
... over a year ago the Air Transport Committee reached
the conclusion that, short of an amendment of the law by
Parliament, the most effective way in which the problem
could be met was by the amendment, where appropriate, of
licences of individual carriers ...
and again
I met with the Air Transport Committee today and the
Committee has decided to proceed without delay to follow
the course we first proposed more than a year ago with
respect to the amendment of individual licences.
While it will, of course, be necessary to take account of
the replies to letters sent out last August to all Class 4
carriers, we intend to proceed progressively on a systematic
basis to deal with these licences ...
The second letter is an internal letter dated
September 23, 1970 from J. F. Clark, one of the
Commissioners, to John T. Gray, Counsel for
the Department of Transport, the second para
graph of which reads:
The purpose of amending the licences in the manner
indicated was to take care of the situation that developed
upon the Supreme Court finding that the Board's relevant
General Orders were ultra vires. You will note in each case
it is made clear that the Committee proposes to amend the
licences as indicated but that the licensee is afforded an
opportunity to make representations in that regard.
The important question to be decided is
whether the decision made with respect to the
amendment to appellant's licence was made in a
manner contrary to principles of natural justice.
It is common ground that this question can be
dealt with on the appeal and it is therefore not
necessary to go into the difficult question as to
whether the Court has a right to review the
order under section 28 of the Federal Court
Act.
As has been stated in many cases the require
ment of natural justice is really equivalent to
"fair play" and is complied with if the appellant
has been confronted with all the facts on which
the finding against him has been based, has
been given an opportunity of answering them,
and an opportunity to make submissions him
self, and have them listened to and considered.
The mere fact that a general rule is enunciat
ed or a general principle formulated before the
appellant is heard as to why an exception
should be made in his case is not in itself
objectionable, provided he is given an oppor
tunity to be heard. This was clearly stated by
Bankes L.J. in The King v. Port of London
Authority [1919] 1 K.B. 176 at p. 184, (referred
to in Re Hopedale Developments Ltd. and Town
of Oakville 47 D.L.R. (2d) at page 486) where
he states:
There are on the one hand cases where a tribunal in the
honest exercise of its discretion has adopted a policy, and,
without refusing to hear an applicant, intimates to him what
its policy is, and that after hearing him it will in accordance
with its policy decide against him, unless there is something
exceptional in his case. I think counsel for the applicants
would admit that, if the policy has been adopted for reasons
which the tribunal may legitimately entertain, no objection
could be taken to such a course. On the other hand there are
cases where a tribunal has passed a rule, or come to a
determination, not to hear any application of a particular
character by whomsoever made. There is a wide distinction
to be drawn between these two classes... .
In the present case, aside from the finding of
the Commission that public convenience and
necessity requires some route protection of
Class 1 and Class 2 carriers from Class 4 carri
ers, it is evident that consideration was given to
a series of exceptions to be inserted in the
amended licences relating to weight of aircraft
to be used, distance between points, frequency
of service, availability of comparable transpor
tation from the route carrier and so forth. To
merely invite submissions from all Class 4 carri
ers without first formulating some such pro
posed exceptions and submitting them as a
basis of discussion might well have resulted in a
chaotic situation with every such carrier sub
mitting different suggestions. I can find no fault
therefore in the method adopted of setting out
these proposed amendments in detail in the
letter of August 10, 1970 and then inviting
submissions as to why these conditions should
not be attached to the licence (although it might
have been preferable to also invite submissions
as to the nature of these proposed
amendments).
The findings of the Commission on "public
convenience and necessity" are not subject to
review on the merits by this Court, being within
the sole jurisdiction of the Commission, but the
principle of natural justice entitles the Court to
enquire whether it appears that there was any
evidence on which the conclusions of the Com
mission could have been reached.
In the present case two decisions were
involved:
(1) The decision of the Commission that
public convenience and necessity requires
protection from Class 4 carriers of routes
served by Class 1 and Class 2 carriers; and
(2) The decision of the Air Transport Com
mittee that no exception should be made in
the case of the appellant from the application
to its licence of the conditions proposed to be
attached to each individual Class 4 licensee.
Appellant may well have had knowledge of
the facts relied on by the Commission to reach
the first decision which results from policy
statements going back to a period long before
appellant obtained its licence. However, even
the Commission concedes that this policy is not
so absolute as not to admit of any exceptions,
and in fact insists that each individual licence
amendment was considered individually to
decide if an exception should be made. More-
over, it is apparent that if a Class 1 carrier such
as Air Canada does not have protection from
Canadian Pacific Airways on the trans-Canada
route, some exceptions are made and some
competition allowed on certain routes. In a
country such as Canada with widely different
conditions in different regions it is certainly not
inconceivable that in certain areas it might not
be a requirement of public convenience and
necessity that a Class 4 carrier be prohibited
from competing with a Class 1 or Class 2 carri
er on certain routes. While the Commission
remains the sole judge of this it must make the
determination on the basis of the evidence
before it in a fair manner or it will have
infringed the requirements of natural justice.
With respect to the first decision, I believe that
appellant as an experienced air carrier must be
deemed to have had knowledge of the reasons
for the general policy decision that some pro
tection must be given to Class 1 and Class 2
carriers from competition from Class 4 carriers
on the basis of public convenience and necessi
ty, and if it wished to attack this, the case which
it would have to meet, and it would be superflu
ous to require the Commission to disclose in its
letter to each Class 4 air carrier the voluminous
evidence which it had undoubtedly acquired
over the years as a result of its investigations
which would justify this conclusion. In fact,
appellant did not raise this issue in its submis
sions to the Commission or request a hearing on
the question of policy, but confined itself to an
attack on the method adopted to re-institute
route protection, and submissions as to why in
any event this should not be applied in the area
served by it. The decision by the Commission
on the question of general policy was presum
ably based on studies made over a period of
many years going back to the early days of
commercial aviation in Canada, and would fall
within the dictum of Lord Loreburn, L.C. in
Board of Education v. Rice [1911] A.C. 179
where he states at page 182 in commenting on
the duties of Boards in general:
They can obtain information in any way they think best,
always giving a fair opportunity to those who are parties in
the controversy for correcting or contradicting any relevant
statement prejudicial to their view.
I do not believe that in the present case it can
be said that the appellant was not given an
opportunity to be heard. On the contrary, it
made submissions as to why the proposed
amendment to its licence should not be made.
The more difficult question is the second one,
namely, whether due consideration was given to
its representations before it was decided that no
such exception should be made.
This is the decision which appellant is really
seeking to have set aside. It made serious
representations indicating that despite its activi
ties its Class 1 and Class 2 competitors had
prospered and expanded their business greatly
in the preceding three years, that if base protec
tion were imposed there would be very few
places to which it could fly since all main points
in its area were already assigned to its competi
tors, that the services it was providing were not
really competitive with those of the Class 1 and
Class 2 carriers in the area, and so forth. The
validity of these arguments is something to be
determined by the Commission alone but it
appears to me that they would have to be con
sidered on the basis of an examination of the
economic situation of air carriers and the traffic
in appellant's immediate area, and not on the
basis of the establishment of fixed uniform
restrictions imposed as a matter of public con
venience and necessity on all Class 4 carriers in
Canada. If the sole reason for imposing the
same amendment to appellant's licence as were
imposed on all other Class 4 carriers in Canada
was that it is a Class 4 carrier, then due consid
eration would not have been given to its licence
as an individual case to determine whether an
exception should be made or not.
The Committee states that it has considered
appellant's representations and there is certain
ly no reason to doubt that this is so, but neither
the appellant nor the Court is given any indica
tion of the nature of the other evidence before
it, if any, relating to the specific economic situa-
Lion of appellant's competitors in the area, of
any traffic studies made there, or anything to
indicate that the decision was made otherwise
than on the basis of general policy applicable to
all Class 4 licensees in Canada. The wording of
the order amending appellant's licence is identi
cal with the wording of the orders relating to all
other Class 4 licences.
The wording of the letter of August 10, 1970
setting out the reasons for and terms of the
proposed amendments, the wording of Mr.
Pickersgill's letter and the wording of Commis
sioner Clark's letter all indicate an intention to
amend the licences as indicated, although refer
ring to the opportunity to be given to the licen
see to make representations. The fact that no
exceptions were made in favour of any of the
58 licensees who made representations might
seem to indicate, as appellant contends, the
application of a general policy to all Class 4
licensees in the interest of public convenience
and necessity rather than an individual separate
examination of the case of each licensee such
as is required by section 16(8).
Nevertheless, the order eventually issued on
October 20, 1971 amending appellant's licence
states: "Whereas the Committee has considered
the said representation and all matters relevant
to the proposed amendment" (italics mine) and
there is no evidence to dispute this nor to
indicate that the Committee did not have in its
possession economic and traffic studies and
reports relating to the region where appellant
operates and give due consideration to them,
before rejecting appellant's application to be
excepted from the amended regulations. While
the jurisprudence requires that a party must be
faced with the facts on which a decision affect
ing him is to be made and given an opportunity
of answering them, it appears doubtful whether
it goes so far as to say that when he has made
submissions or representations he must then be
confronted with whatever facts have been pre
sented in rebuttal of what he has alleged and be
given a further opportunity to answer such evi
dence. In order to conclude that the Commis
sion, in deciding to amend appellant's licence,
did not consider any evidence relating specifi-
cally to it as opposed to. evidence relating to
Class 4 air carriers generally, it would be neces
sary to base this on an assumption that this
must be deduced from the fact that no .excep-
tions have been made to date for any Class 4
licensees. I do not believe such an assumption
can be made in face of the positive statement in
the order that "all matters relevant to the pro
posed amendment" (i.e. the amendment to
appellant's licence) have been considered.
It appears that the Commission considered
that the exceptions made in the amendment
were sufficiently flexible to be applicable on
grounds of "public convenience and necessity"
to all Class 4 licensees and that despite submis
sions made by 58 of them they could all be
fitted within the framework of the amendment.
While I have reached this conclusion not
without considerable hesitation, it would appear
that the Commission did not infringe the rules
of natural justice in the decision made with
respect to appellant's licence, since there is no
positive evidence on which a finding can be
made that due consideration was not given to its
submissions. I believe that the judgment of
Bankes L.J. in The King v. Port of London
Authority (supra) is directly in point. The Com
mittee cannot be said to have refused to hear
appellant's submissions, but it has merely decid
ed against it on the basis that there is nothing
exceptional in its case to justify a departure
from the policy of inserting an amendment in its
licence on the same terms as that inserted in the
licences of all other Class 4 carriers. This is a
decision which the Committee was entitled to
make.
Appellant could have applied to the Review
Committee of the Commission to review the
decision, pursuant to Rule 770 of the Canadian
Transport Commission's General Rules, it could
have appealed to the Minister under section
25(2) of the National Transportation Act, it
could have applied to the Committee for an
amendment to the order, it could have appealed
to the Governor in Council under section 64 of
the National Transportation Act, or finally with
leave of the Court it could have appealed to the
Court of Appeal on a question of law or juris
diction under section 64 of the said Act, as it
has done.
The fact that it adopted the present procedure
does not in any way affect its rights but the fact
that these various remedies existed indicates
the extent to which the statutes have provided
protection for licensees against unjust cancella
tions of or amendments to their licences.
I would dismiss the present appeal, without
costs.
* * *
SHEPPARD D.J.—I agree with the result in the
reasons for judgment of the Chief Justice and
with his reasoning, assuming that duty in
respect of natural justice held by the Chief
Justice should be on the Commission. Assuming
that duty to be on the Commission, then I agree
that the results obtained by the Chief Justice
would follow. I differ with the learned Chief
Justice only in holding that no such duty is on
the Commission.
As to the duty, by reason that the Commis
sion is a statutory body, it is for Parliament by
statute to declare under what circumstances the
power of amending a licence then issued, has
been conferred on the Commission. Section
16(8) of the Aeronautics Act (R.S.C. 1970, c.
A-3) confers that power "Where in the opinion
of the Commission, the public convenience and
necessity so requires." Hence there is only one
condition, namely that which the public con
venience and necessity so requires and that is
the only condition of the exercise of the power
to amend. Further, section 16(8) states that
such convenience and necessity may be "in the
opinion of the Commission". As the conveni
ence and necessity may be in the opinion of the
Commission, then such opinion is within Liver-
sidge v. Anderson [1942] A.C. 206, and may be
acquired by the expert opinion of the members
of the Commission without any hearing, par
ticularly having regard to section 11 which per
mits the Commission to regulate its proceedings
or may be acquired by any hearing arranged as
the Commission may choose, pursuant to sec-
tion 1 1. In any event, there is no legal obligation
on the Commission to give any specific kind of
notice or to hear any representation by anyone
or even to proceed in a judicial manner within
United Engineering Workers Union v.
Devanayagam [1967] 2 All E.R. 367, [1968]
A.C. 356.
The appeal is therefore dismissed.
JACKETT C.J.:
I am not overlooking that, under section 14(1)(b), the
Commission may make regulations "prescribing the terms
and conditions to which licences issued under this Part shall
be subject". There is no attempt to exercise this power
before us and, in any event, I doubt that such a regulation
would apply to a licence that was issued before the regula
tion was made. Compare Chappelle v. The King [1904]A.C.
127, and Attorney General of Alberta v. Haggard Assets
Ltd. (P.C.) [1953] 2 All E.R. 951.
2 This order was not included in the "case" as fixed by
the order of November 23, 1971, but counsel agreed during
argument that the order as found in Regina v. North Coast
Air Services Ltd. 65 D.L.R. (2d) 334 at pp. 335-6 should be
treated as part of the "case".
* * *
WALSH J.:
The only Class 4 carriers whose licences have not yet
been so amended are those whose licences were issued after
August 10, 1970 on which date a form letter was written to
all Class 4 carriers indicating the intention to amend their
licences in the manner indicated and inviting representa
tions as to why the conditions should not be attached to the
licence of each particular licensee, and it is conceded that
these other licences will, in due course, be amended on the
same terms.
2 In the case of appellant it might perhaps be said that this
was somewhat modified by a letter dated October 19, 1970
to its attorney from the Secretary of the Air Transport
Committee, the third paragraph of which reads: "The pur
pose of our sending to all Class 4 carriers our letter dated
August 10th was to obtain their views on our proposal,
canvass their submissions with a view to determine if there
was reason to alter our proposal—not with a view to
introduce nor approve regulations respecting route and base
protection".
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.