A-239-74
In the matter of applications by Worldways Air
lines Ltd. under section 28 of the Federal Court
Act to review and set aside Order No. 1974-A-422
and Order No. 1974-A-423 of the Canadian
Transport Commission and appeals by World-
ways Airlines Ltd. under section 64(2) of the
National Transportation Act from the same
Orders
Court of Appeal, Jackett C.J., Pratte and
Mahoney JJ.—Ottawa, September 20 and Octo-
ber 15,1974.
Judicial review—Appeals—Aeronautics—Domestic and
international licences—Issued in 1956 to predecessor of
applicant—Licences partially amended in 1974—Cancella-
tion of certain services—Opinion of Court that orders should
be repealed by Commission—Aeronautics Act, R.S.C. 1952,
c. 2, ss. 6(1), 15(1),(3)—Commercial Air Services Regula
tions, P.C. 1954-2032—Aeronautics Act, R.S.C. 1970, c.
A-3, ss. 9(1), 16(1),(2),(8),(9)—Air Carriers Regulations,
SOR/72-145—National Transportation Act, R.S.C. 1970, c.
N-17, ss. 24(3), 64(2), 65(4)—Federal Court Act, s. 28.
Licences for the carriage of domestic and international
traffic were issued to Kenting Aviation Limited in 1956 by
the Air Transport Board under the Aeronautics Act, R.S.C.
1952, c. 2, s. 15(1),(3). The licences were amended in 1974
by the Air Transport Committee, within its power to act on
behalf of the Canadian Transport Commission, under the
National Transportation Act, R.S.C. 1970, c. N-17, s. 24(3).
The amendment cancelled, in part, the groups of service for
both licences as a case "where the public convenience and
necessity so requires" under section 16(8) of the Aeronau
tics Act, R.S.C. 1970, c. A-3. Proceedings to review, and
appeal from, these orders were instituted by Worldways
Airlines Limited as successor to Kenting Aviation Limited.
Held, it was admitted by the Commission that the basis of
the cancellation order was that the licensee, Kenting, had
not provided service in the suspended groups, and had not
provided evidence that it was ready, willing and able to
provide such service, and that there had been no complaints
by the public concerning the lack of service, and hence the
Committee concluded the groupings were no longer required
by the public convenience and necessity. In law, a finding
by the stated process was not in conformity with the express
terms of section 16(8). When the licences were issued in
1956, the licensing authority was obliged to determine affir
matively that the proposed service "is and will be required
by the present and future public convenience and necessi
ty". The same obligation was imposed on the Air Transport
Committee by the present Act. However, the authority to
cancel the licences, in whole or part, did not depend upon a
simple reversal of that decision, namely a determination that
the service licensed and proposed to be cancelled was no
longer required by public convenience and necessity. That is
what the Committee did decide. Rather, what it must decide
and, in this case did not, was that the cancellation was itself
required by public convenience and necessity. The determi
nation required to be made under section 16(8) was not the
negative finding that present and future public convenience
and necessity no longer required the particular licence to
subsist, but the positive finding that the public convenience
and necessity required the cancellation. The orders were
voidable and should be repealed and it should be so certified
to the Commission, pursuant to section 64(5) of the Nation
al Transportation Act.
In re North Coast Air Services Limited [1972] F.C. 390,
applied.
JUDICIAL review and appeal.
COUNSEL:
B. Crane for applicant and appellant.
G. St. John for respondent.
SOLICITORS:
Gowling & Henderson, Ottawa, for appli
cant and appellant.
Legal Services, Canadian Transport Com
mission, Ottawa, for respondent.
The following are the reasons for judgment
delivered in English by
MAHONEY J.: The orders in respect of which
the appeals and applications herein have been
brought were both made May 31, 1974 and had
the effect of cancelling, in part, Air Transport
Board Licences Nos. A.T.B. 793/56(C) and
A.T.B. 233 /56(CF). The separate proceedings in
respect of each order were joined and the two
joined proceedings were heard together on a
single record. For convenience, Licence No.
A.T.B. 793/56(C) will sometimes be referred to
as the "domestic licence" and No. A.T.B. 233/
56(CF) as the "international licence".
Both licences were issued July 22, 1956 to
Kenting Aviation Limited. At the time, the per
tinent provisions of the Commercial Air Ser
vices Regulations' were:
3. (1) Air carriers are classified as follows:
(a) Domestic Air Carriers:
P.C. 1954-2032 [1955 Consolidated Regulations, p. 28].
Class 4—Charter Air Carriers
Air Carriers who offer public transportation of persons
or goods by aircraft from a designated base, at a toll per
mile or per hour for the charter of the entire aircraft, or
at such other tolls as may be permitted by the Board.
Class 9—International Non-Scheduled Air Carriers
Domestic and foreign air carriers who operate between
Canada and any other State, any commercial air service
authorized to be performed by domestic air carriers in
Classes 2, 3, 4, 5 and 7; such air carriers shall be
designated as Classes 9-2, 9-3, 9-4, 9-5 and 9-7 air
carriers.
4. The Board may establish groups of air carriers within
any or all of the Classes of Air Carriers set out in section 3
on the basis of the loads or weights of aircraft to be
employed by air carriers in each group so established, or on
such other basis as in the opinion of the Board may be
required and may allocate or re-allocate any air carrier to
such group as the Board may deem appropriate.
5. (1) Commercial air services shall be classified in
classes corresponding to the services operated by air carri
ers classified under section 3, and where the Board has
established groups of air carriers within all or any of the
classes of air carriers in pursuance of section 4, such
commercial air services shall be established in the groups
corresponding to the services operated by the air carriers so
grouped.
7. (1) No air carrier shall operate a commercial air ser
vice in any class for which it is not authorized; ...
(2) No air carrier shall operate a commercial air service in
any group for which it is not authorized if the Board has
established such groups; ... .
Pursuant to the authority given it by section 4
of the Commercial Air Services Regulations, the
Air Transport Board had established groups 2 as
follows:
1. THAT for the purposes of this General Order, disposable
load means gross weight of the aircraft minus operational
weight empty.
2 A.T.B. General Order 6/52, 50R/52-280.
2. THAT Class 4 Charter air carriers be and the same are
hereby divided into three groups as follows:
2.1 Group A:—Class 4 air carriers who operate one or more
aircraft each of which has a disposable load in excess of
6,000 pounds.
2.2 Group B:—Class 4 air carriers who operate one or more
aircraft each of which has a disposable load in excess of
1,100 pounds but not greater than 6,000 pounds.
2.3 Group C:—Class 4 air carriers who operate one or more
aircraft each of which has a disposable load not greater
than 1,100 pounds.
The domestic licence issued to Kenting herein
authorized Kenting Aviation Limited to operate
a Class 4, Groups A and B service within
Canada from a base at Toronto. The internation
al licence authorized the operation of a Class
9-4 service from a base at Toronto and con
tained the following provision, not contained in
the domestic licence:
7. The licensee is restricted to the operation of aircraft
having a maximum authorized take-off weight on wheels in
excess of 2,500 pounds.
Thus, initially Kenting Aviation Limited was
licensed to operate a domestic charter service
with aircraft having a disposable load in excess
of 1,100 pounds and an international charter
service with aircraft having a maximum author
ized take-off weight in excess of 2,500 pounds.
On March 22, 1963 General Order No. 36/63
revoked General Order No. 6/52 and substituted
the following groups for Class 4 Charter air
carriers:
Group A:—Class 4 air carriers who operate one or more
aircraft each of which has a maximum authorized take-off
weight on wheels in excess of 18,000 pounds.
Group B:— ... in excess of 2,500 pounds but not greater
than 18,000 pounds.
Group C:— ... not greater than 2,500 pounds.
This Order appears not to have been published
in the Canada Gazette.
On August 6, 1965 new Commercial Air Ser
vices Regulations' were adopted. The revoked
sections 3, 4 and 5 were re-enacted without
change and section 7 was re-enacted as section
3 SOR/65-369.
12 but not otherwise changed. These new regu
lations appear not to have had any material
effect on either licence in any relevant
particular.
On June 11, 1969, the Commercial Air Ser
vices Regulations were extensively amended 4 .
General Order 36/63 was not rescinded but the
new Regulations provided:
4A. The groups for commercial air services based on the
weight of the aircraft used in the operation of the service are
as follows:
(a) Group AA, being commercial air services operated
with fixed or rotating wing aircraft having a maximum
authorized take-off weight on wheels in excess of 35,000
pounds;
(b) Group A, being commercial air services operated with
fixed or rotating wing aircraft having a maximum author
ized take-off weight on wheels in excess of 18,000 pounds
but not greater than 35,000 pounds;
(c) Group B, being commercial air services operated with
fixed wing aircraft having a maximum authorized take-off
weight on wheels in excess of 2,500 pounds but not
greater than 18,000 pounds;
(e) Group C, being commercial air services operated with
fixed wing aircraft having a maximum authorized take-off
weight on wheels not greater than 2,500 pounds; and
Paragraphs (d) and () established Groups BRW
and CRW, being rotating wing aircraft in the
3,500 to 18,000 pound range and under 3,500
pounds respectively.
There is nothing in the material before us
indicating any specific amendment to the
licences ensuing upon either General Order
36/63 or SOR/69-265; however, it would
appear, from later events that the domestic
licence was now regarded as covering Groups
AA and C as well as the Groups A and B
expressed to be covered in it. The international
licence contained the express provision that
coincidentally excluded Group C but it, too,
appears to have been regarded as covering
Group AA as well as Groups A and B.
4 SOR/69-265.
On May 5, 1972 the Canadian Transport
Commission made new regulations, entitled the
Air Carrier Regulations 5 , which, inter alia,
rescinded General Order 36/63 and provided:
3. (1) The following classes of commercial air services
are established for the purposes of these Regulations:
(d) Class 4: Charter commercial air service, being a ser
vice that is operated wholly within Canada and that offers
public transportation, on reasonable demand, of persons
or goods from the base specified in the licence issued for
that commercial air service or the base declared by the
Committee to be the protected base for that commercial
air service at a toll per mile or per hour for the charter of
an entire aircraft, or at such other tolls as may be allowed
by the Committee, and includes recreational flying;
(k) Class 9-4: International Charter commercial air ser
vice, being a service that is operated by an air carrier
using
a) Group A, B or C aircraft, or
b) subject to obtaining a permit as required by Part IV,
Group D, E, F, G or H aircraft,
from the base specified in the licence issued for that
commercial air service and that offers public transporta
tion, on reasonable demand of persons or goods between
places in Canada and places in any other country, at a toll
per mile or per hour for the charter of the entire aircraft,
or at such other tolls as may be allowed by the
Committee;
(2) An air carrier licensed to operate a commercial air
service of a class established by subsection (1) is allocated
the same class as that commercial air service.
4. (1) Each class of commercial air service established by
subsection 3(1) is divided, on the basis of the weight of the
aircraft authorized to be operated, into the following groups:
(a) commercial air services operated with fixed wing
aircraft,
(i) Group A, having a maximum authorized take-off
weight on wheels not greater than 4,300 pounds,
(ii) Group B, having a maximum authorized take-off
weight on wheels greater than 4,300 pounds but not
greater than 7,000 pounds,
(iii) Group C, having a maximum authorized take-off
weight on wheels greater than 7,000 pounds but not
greater than 18,000 pounds,
3 SOR/72-145.
(iv) Group D, having a maximum authorized take-off
weight on wheels greater than 18,000 pounds but not
greater than 35,000 pounds,
(v) Group E, having a maximum authorized take-off
weight on wheels greater than 35,000 pounds but not
greater than 75,000 pounds,
(vi) Group F, having a maximum authorized take-off
weight on wheels greater than 75,000 pounds but not
greater than 150,000 pounds,
(vii) Group G, having a maximum ) authorized take-off
weight on wheels greater than 150,000 pounds but not
greater than 350,000 pounds, and
(viii) Group H, having a maximum authorized take-off
weight on wheels greater than 350,000 pounds, and
(2) An air carrier licensed to operate a commercial air
service of a group referred to in subsection (1) is allocated
to the same group as that commercial air service.
By a series of amendments both licences had
been duly endorsed to substitute Kenting Air
craft Ltd. (hereinafter called "Kenting") as lic
ensee. On September 8, 1972 the secretary of
the Air Transport Committee of the Canadian
Transport Commission wrote to Kenting Air
craft Ltd., in respect of the domestic licence
only, as follows:
As you are aware, Section 4 of the Air Carrier Regula
tions, dated May 5, 1972 Registration No. SOR/72-145,
establishes new groups for aircraft based on their maximum
authorized take-off weight on wheels for commercial air
service operations.
It is now proposed to amend all Class 4 charter licences to
reflect the new grouping(s). The new grouping(s) to be
authorized by the above licence is (are) intended to cover all
the aircraft now operated under its authority, based on your
current charter tariff on file with the Canadian Transport
Commission. On the reverse of this letter there is a table
showing the aircraft types listed in your charter tariff and
the new groups to which they belong.
You are required to indicate in the third column on the
reverse of this letter by an "O" if you own an aircraft of the
type shown, and by the letter "L" if all aircraft shown are
leased. The duplicate of this letter must be signed by an
authorized signing officer of the licensee and returned to
this Committee not later than October 9, 1972 and concur
rently, you may make representation with respect to this
proposal.
The following reply, dated October 6, 1972, was
made on behalf of Kenting, by Edwin T. Nobbs,
Q.C. It was accompanied by the return of the
duplicate letter showing that Kenting owned or
had under lease aircraft in Groups B, C, D and
E.
We act as solicitors for Kenting Aviation Ltd. (hereinafter
referred to as "Kenting Aviation").
We are enclosing herewith a copy of your letter of Sep-
tember 8th to Kenting Aviation duly completed and execu
ted by the Company.
Pursuant to the last paragraph of your said letter, we wish
to make the following representations on behalf of Kenting
Aviation, namely:
I —Proposed Groupings
It would appear that the Air Transport Committee pro
poses to allot Groups B, C, D and E to Kenting Aviation
under the new groupings of aircraft established by the Air
Carrier Regulations. Kenting Aviation submits that it is
entitled to be allotted Groups A, B, C, D, E, F, G and H, and
in support thereof, states as follows:
1. Kenting Aviation is not at the present time restricted in
regard to the type or size of aircraft which it may operate.
The said authority includes aircraft in the new Groups A, B,
C, D, E, F, G and H.
2. On September 24th, 1971, Kenting Aviation received a
letter from the Air Transport Committee wherein the Com
pany was allocated Groups A, B, C, D, E, F, G and H under
the proposed new groupings of aircraft.
3. Kenting Aviation has operated substantial charter com
mercial air services from its base at Toronto since 1956.
In particular, the operation of "large" aircraft has formed an
intregal [sic] part of the charter operations of Kenting
Aviation since their inception.
4. In 1961, Kenting Aviation acquired Douglas DC-4 type
aircraft and has operated these type of aircraft since that
time.
5. Kenting Aviation has been studying the acquisition of
aircraft larger than the Douglas DC-4 for the past several
years. During the past twenty months these studies have
been intensified. A special task force headed by the General
Manager of Kenting Aviation has devoted substantial time
and money relating to large aircraft projects.
As an example of such studies, at the time Kenting tendered
to continue to provide services to the Federal Government
under the Ice Reconnaissance Contract, (November, 1971),
Kenting Aviation proposed to operate Lockheed Electra
type aircraft. In conjunction with such operation, Kenting
Aviation also had planned to operate Lockheed Electra type
aircraft in its general charter service.
Kenting Aviation acquired options to purchase Lockheed
Electra aircraft in conjunction with this project. Due to the
fact that Kenting Aviation was unsuccessful in its bid to
continue to provide the said Ice Reconnaissance services,
Kenting Aviation was forced to delay the institution of the
Lockheed Electra general charter services. However, Kent-
ing Aviation does intend to provide general charter services
using Lockheed Electra or similar type aircraft within the
reasonable foreseeable future.
Kenting Aviation has also been studying the use of Lock-
heed Hercules 130 type aircraft and this study is in its final
stages. At the present time, the said study indicates a
requirement for Kenting Aviation's contemplated use of
such aircraft.
6. Kenting Aviation is a large and diversified commercial air
service Company with substantial assets allocated and avail
able for the expansion of its existing "large" aircraft charter
operations. The development of Kenting Aviation has at all
times been prefaced upon its authority to operate "large"
aircraft, particularly during the past 20 months.
7. In addition to the preservation of the "large" aircraft
groupings, Kenting Aviation also wishes to preserve the A
grouping. Although Kenting Aviation neither owns nor
leases Group A aircraft at the present time, Kenting Avia
tion has operated such aircraft in the past.
Kenting Aviation intends to acquire a Cessna ;180 type
aircraft (Group A) within the next two months.
8. It is submitted that having regard to the facts set out
above:
(a) It would be improper and inequitable to now alter the
groupings allocated pursuant to paragraph 2 above.
(b) Kenting Aviation is one of the initial charter commer
cial air services in Canada to operate four engine aircraft.
(c) The present and future development of Kenting Avia
tion relates directly to its authority to operate aircraft in
Groups F, G and H.
(d) In denying Kenting Aviation the right to operate
Groups F, G and H aircraft, the Air Transport Committee
would be arbitrarily reducing the existing authorities of
Kenting Aviation causing irreparable damage to Kenting
Aviation without providing any corresponding benefit to
the public. Indeed, the public will be deprived of commer
cial air services which are now at their disposal.
The amendment of the licence of Kenting Aviation in
regard to the groupings proposed by the Air Transport
Committee would clearly be contrary to the public interest
and would not be required by the public convenience and
necessity. On the other hand, the additional allocation of
Groups A, F, G and H aircraft to such licence would clearly
be in the public interest and is required by the public
convenience and necessity.
II—Ownership of Group C Aircraft
III —Ownership or Lease of Groups A, F, G and H
Aircraft
Kenting Aviation neither owns nor leases Groups A, F, G
and H type aircraft at the present time.
As stated above, it would be in the public interest to
allocate the A, F, G and H groupings to Kenting Aviation.
Due to the fact that under its existing authority, Kenting
Aviation is not required to own or lease a Group A type
aircraft, and for the additional reasons set out in Part I
above, it is submitted that Kenting Aviation should not be
required to own or lease Group A type aircraft in order to
maintain its A grouping.
In addition to the above, it is submitted that Kenting
Aviation should not be required to own or lease aircraft of
Groups F, G and H in order to maintain its allocation of the
said groupings for the following reasons:
(a) Kenting Aviation is not required to own or lease
Groups F, G and H type aircraft under its existing
authority.
(b) Due to the nature of the market for aircraft of the size
of Groups F, G and H, together with the cost of such
aircraft, it would not be economically sound to establish
artificial time perimeters [sic] within which Kenting Avia
tion would have to acquire such aircraft. On the other
hand, the fact that Kenting Aviation has been a partici
pant in the "large" aircraft charter market for over fifteen
years, and is basing its development upon such market is
clear from the evidence set out in Part I above.
In regard to the method of acquiring aircraft of Groups F,
G and H, Kenting Aviation repeats its submission set out in
Part II above and requests that it be permitted to lease such
aircraft at the relevant time should the circumstances so
dictate.
If you should require any further or additional informa
tion in regard to any of the above representations, please do
not hesitate to contact me.
Yours very truly,
ETN:lgr Edwin T. Nobbs, Q.C.
End.
On April 30, 1973 the Air Transport Commit
tee made Order No. 1973-A-371 with respect to
the domestic licence only. The operative provi
sions were:
IT IS ORDERED THAT:
a) Licence No. A.T.B. 793/56(C) is hereby amended by
deleting therefrom Groups A and B aircraft (old grouping)
and substituting therefor Groups A,B,C,D,E,F,G and H air
craft (new grouping);
b) Groups A,F,G and H of the said Licence are suspended
for a period of one year or until such time as the Licensee
provides evidence that it is ready, willing and able to pro
vide service in these suspended groups, whichever is the
lesser.
c) Failure by the Licensee to comply with b) above within
one year from the date of this Order will result in the
immediate cancellation of the authority without further
notice.
This Order shall form part of Licence No. A.T.B. 793/56(C)
and shall remain attached thereto.
On November 20, 1973, Kenting entered into
an agreement with Roy T. Moore to sell its
commercial air service business to a company to
be incorporated. Notice of this agreement was
sent to the Commission under cover of a letter
dated December 4, 1973, reading as follows:
Pursuant to Section 20(1) of the Air Carrier Regulations
and the Guidelines issued by the Air Transport Committee
we are enclosing herewith six copies of a Notice of the
above proposed transaction.
We have only enclosed one copy of each of the schedules
and financial documentation. If you should require addition
al copies, please do not hesitate to contact me.
The purchasing company is now in the process of being
incorporated and we will advice [sic] you within the next 10
days as to the name of the said company. The details of
incorporation have already been set out in the Application
together with the undertaking to file copies of the actual
incorporation documents with you.
On November 30, 1973 the Commission
wrote Kenting raising, for the first time, the new
groupings in respect of the international licence,
as follows:
As you are aware, Section 4 of the Air Carrier Regula
tions, dated May 5, 1972, Registration No. SOR/72-145,
established new groups for aircraft based on their maximum
authorized take-off weight on wheels for commercial air
service operations. By this time your Class 4 Charter
licence(s) has been or is in the process of being amended to
reflect the new groupings.
It is now proposed to amend your complementary Class
9-4 International Charter licence to correspond to the new
groupings authorized by your Class 4 Charter licence from
the same base. However, before doing so, the Committee
would appreciate your comments on this proposal. You are
requested to reply on or before January 7, 1974.
No reply was made to this letter.
On April 18, 1974 Kenting's solicitor, by
telex, requested a six month extension of the
period of suspension of Groups A,F,G and H in
respect of the domestic licence in view of the
fact that the Air Transport Committee had not
yet rendered a decision of the application for
approval of the proposed sale to Moore's com
pany. This request was refused. On April 30,
Mr. Nobbs, signed as "solicitor for Kenting
Aircraft Limited and Roy T. Moore" dispatched
the following telex to the Commission 6 :
PURSUANT TO ORDER 1973-A-371 GROUPS A F G AND H OF
LICENCE 79 3 / 5 6(C) WERE SUSPENDED UNTIL APRIL 30/74 OR
UNTIL LICENCES PROVIDED ATC WITH EVIDENCE IT WAS READY,
READY AND WILLING TO PROVIDE SERVICES IN THESE SUSPEND
ED GROUPS. ATC ADVISED BY KENTING AIRCRAFT LIMITED
(KENTING) IN ITS LETTER OF OCT 6/72 THAT IT INTENDED TO
OPERATE LARGER MORE SOPHISTICATED TYPE AIRCRAFT THAN
ITS CURRENT DC4 TYPE AIRCRAFT. DURING DEC /73 KENTING
AND A COMPANY TO BE INCORPORATED IN WHICH KENTING AND
ROY T MOORE WOULD EACH HAVE A SHARE INTEREST (THE
COMPANY) SERVED NOTICE UPON THE ATC THAT RENTING
INTENDED TO SELL ITS TORONTO BASE ASSETS AND TRANSFER
ITS TORONTO CHARTER LICENCES TO THE COMPANY ON APRIL
30/74. IN THE NOTICE RENTING AND THE COMPANY ALSO
ADVISED THE ATC THAT THE COMPANY `PROPOSES TO MODERN
IZE AND UP DATE THE HEAVY AIRCRAFT DIVISION'.
DUE TO THE FACT THAT NEITHER RENTING NOR THE COM
PANY HAD RECEIVED ANY ADVICE FRM THE ATC IN REGARD TO
ITS NOTICE, ON APRIL 18/74 RENTING APPLIED BY TLX TO ATC
FOR AN EXTENSION OF THE SUSPENDED OF THE ABOVE
REFERRED TO GROUPINGS. ON APRIL 24 THE ATC DENIED THIS
REQUEST WITHOUT GIVING ANY REASON FOR THE SAME
ALTHOUGH THE ATC AWARE OF ALL OF THE ABOVE
CIRCUMSTANCES.
AS A RESULT OF ATC DENIAL OF THE ABOVE REQUEST
RENTING TLX ATC ON APRIL 25 REQUESTING ADVICE AS TO THE
STATUS OF NOTICE TO ATC AND REQUESTING REPLY BY TLX.
ATC HAS NOT REPLIED TO SUCH REQUEST ALTHOUGH IT IS
FULLY AWARE OF ALL OF THE ABOVE FACTS AND IN PARTICU
LAR THE RENTING PROPOSALS AND TIMING FOR SUCH PRO
POSALS. THE COMPANY HEREBY ADVISES THE ATC THAT:
1) THE COMPANY HAS BEEN CARRYING ON NEGOTIATIONS WITH
UNITED AIRLINES SINCE THE FILING OF THE NOTICE WITH A
VIEW TO PURCHASING A DC8 TYPE AIRCRAFT TO MODERNIZE
AND UP DATE THE HEAVY AIRCRAFT DIVISION. THE COMPANY
HAS BEEN READY, WILLING AND ABLE TO PURCHASE A DC8
AIRCRAFT FROM UNITED AIRLINES FOR SOME TIME, HOWEVER IT
REFRAINED FROM SO DOING PENDING NOTICE FROM THE ATC IN
REGARD TO THE NOTICE REFERRED TO ABOVE. AS STATED
PREVIOUSLY NO NOTICE OR ADVICE HAS BEEN FORTHCOMING
FROM THE ATC NOTWITHSTANDING THE REQUESTS OUTLINED
ABOVE.
2) THE COMPANY HAS PURCHASED A DC8 AIRCRAFT FROM
UNITED AIRLINES SERIAL NO 45260 EFFECTIVE APRIL 29/74
AND HAS LEGAL TITLE TO SUCH AIRCRAFT.
3) THE. PURCHASE OF THE SAID DC8 AIRCRAFT COMPLIES WITH
ALL OF THE REQUESTMENTS OF THE ATC IN REGARD TO AIR
CRAFT OWNERSHIP AND EQUITY.
6 Deletions, gibberish and corrected errors appearing in
the originals have been omitted from this and other telexes
quoted. Other mistakes are quoted as they appear.
4) ONGOING MAINTENANCE, CREW TRAINING AND SPARES AXX
FOR THE AIRCRAFT HAVE BEEN ARRANGED.
5) THE COMPANY HAS ARRANGED FOR THE NECESSARY PERSON
NEL TO OPERATE THE SAID DC8 AIRCRAFT.
6) THE COMPANY IS READY, WILLING AND ABLE TO OBTAIN THE
NECESSARY OPERATING CERTIFICATE FROM MOT AND FILE
NECESSARY TARIFFS WITH ATC UPON THE. SUSPENSION OF
GROUP G AIRCRAFT UNDER LICENCE 793/56(C) BEING
VACATED.
7) ARRANGEMENTS HAVE BEEN MADE FOR THE NECESSARY
GROUND FACILITIES IN REGARD TO THE SAID DC8 AIRCRAFT.
8) THE COMPANY HAS THE FINANCIAL RESOURCES TO FINANCE
THE PURCHASE OF SAID DC8 AIRCRAFT AND TO SUPPORT THE
OPERATION OF SUCH AIRCRAFT TOGETHER WITH THE OTHER
KENTING SERVICES.
9) THE COMPANY IS READY, WILLING AND ABLE TO COMPLETE
THE TRANSACTION AS DESCRIBED IN THE ABOVE NOTICE TODAY.
KENTING IS READY, WILLING AND ABLE TO COMPLETE THE
SAID TRANSACTION AS DESCRIBED IN THE ABOVE NOTICE
TODAY.
AS A RESULT OF THE ABOVE FACTS KENTING AND THE
COMPANY ARE READY, WILLING AND ABLE, AS OF TODAY, TO
PROVIDE CHARTER COMMERCIAL AIR SERVICES UTILIZING
GROUP G TYPE AIRCRAFT.
PLEASE ADVISE AS TO DOCUMENTATION REQUIRED AND WILL
FORWARD SAME AS SOON AS POSTAL SITUATION ALLOWS. THIS
ADVICE FORWARDED TO YOU BY TLX IN LIEU OF POST BECAUSE
OF TIME FACTOR AND CONTINUED POSTAL DEPOSIT FREEZE IN
TORONTO.
On May 16, 1974, a letter was sent on behalf
of the Air Transport Committee to Mr. Nobbs
reading as follows:
In reference to your letter of December 4,- 1973, the
Committee requests information regarding the existence of
the new Company, its name and the date of incorporation.
By letter dated May 23, Mr. Nobbs replied that
the company, Worldways Airlines Ltd. (herein
called "Worldways") had been incorporated
April 25, 1974 under the laws of Alberta. On
May 28 he sent the following telex to the
Committee:
RE: KENTING AIRCRAFT LTD
SALE TO MOORE
TORONTO CHARTER SERVICES
AS YOU ARE AWARE NOTICE OF THE PROPOSED TRANSACTION
REFERRED TO ABOVE WAS FILED WITH COMMITTEE ON DEC
4/73. DOCUMENTATION ATTACHED TO NOTICE CONFIRMING
CLOSING DATE OF APRIL 30/74. DUE TO THE FACT APPLI
CANTS WERE UNABLE TO OBTAIN ANY ADVISE AS TO STATUS OF
NOTICE PRIOR TO APRIL 30, IN SPITE OF REPEATED REQUESTS,
PARTIES AGREED TO EXTEND CLOSING DATE TO MAY 31. CLOS
ING DATE OF MAY 31 CRITICAL TO PARTIES. NOTICE HAS BEEN
WITH THE COMMITTEE FOR ALMOST SIX MONTHS. DURING MAY
FURTHER REQUESTS MADE TO COMMITTEE RE DECISION RELAT
ING TO NOTICE WITHOUT REPLY. IMPERATIVE THAT PARTIES
RECEIVE DECISION OF COMMITTEE ON OR BEFORE MAY
31. PLEASE ADVISE BY TLX.
On May 31, Mr. Nobbs was advised by telex of
the substance of three orders made that day by
the Air Transport Committee. All were dated
May 31, 1974.
1. Order Noe 1974-A-422 provided, with
respect to the domestic licence, after reciting
Order No. 1973-A-371 and the refusal to extend
the period of suspension to September 30, 1974,
as follows:
WHEREAS by telex dated April 30th, 1974, the Licensee
made further representations to the Committee;
WHEREAS the Committee has considered the representa
tions of the Licensee and finds that the public convenience
and necessity requires amendment of Licence No. A.T.B.
793/56(C) by cancelling authority to operate Groups A, F,
G, and H aircraft under the said Licence.
IT IS ORDERED THAT:
Licence No. A.T.B. 793/56(C) is hereby amended by
cancelling authority to operate Groups A, F, G and H
aircraft under the said Licence.
This Order shall form part of Licence No. A.T.B. 793/
56(C) and shall remain attached thereto.
2. Order No. 1974-A-423 provided, with
respect to the international licence, after recit
ing the letter of November 30, 1973 and the
invitation to make representations and the fact
that none were made, as follows:
WHEREAS by Licence No. A.T.B. 793/56(C), the Class 4
and Class 7 Licence of Kenting Aircraft Ltd. at Toronto,
Ontario, as amended by Order No. 1974-A-422, the Licen
see is authorized to operate Groups B, C, D and E aircraft;
WHEREAS the Committee has considered all matters rele
vant to the proposed amendment, and finds that the public
convenience and necessity requires amendment of Licence
No. A.T.B. 233/56(CF) by cancelling Condition No. 7 and
substituting therefor the following:
The Licensee is restricted in its operation to Groups B,
C, D and E aircraft.
IT IS ORDERED THAT:
Condition No. 7 of Licence No. A.T.B. 233/56(CF) is
hereby cancelled and the following substituted therefor:
The Licensee is restricted in its operation to Groups B,
C, D and E aircraft.
This Order shall form part of Licence No. A.T.B. 233/
56(CF) and shall remain attached thereto.
(It is convenient to note here that the Class 7
authorization, which had been added to the
domestic licence by endorsement dated Septem-
ber 27, 1968, was not embraced in the transac
tion with Worldways and hence is not the sub
ject of these proceedings.)
3. Order No. 1974-A-424, ordered that:
The Transfer from Kenting Aircraft Ltd. to Worldways
Airlines Ltd. of the Class 4 Charter commercial air services
under Licence No. A.T.B. 793/56(C) as amended by Order
No. 1974-A-422 and the Class 9-4 International Charter
commercial air services under Licence No. A.T.B. 233/
56(CF) as amended by Order No. 1974-A-423 is not disal
lowed. This Order shall form part of Licences Nos. A.T.B.
793/56(C) and A.T.B. 233/56(CF) and shall remain attached
thereto.
A new document of Licence will issue to Kenting Aircraft
Ltd. regarding the Class 7 Specialty—Aerial Photography
and Survey—Aerial Control—commercial air service from a
base at Toronto, Ontario, using Groups B, C, D and E
aircraft.
These proceedings are in respect of the first two
of these orders, the cancellation of the Groups
A, F, G and H authorization from both the
domestic and international licences.
When the licences were issued in 1956, the
material provisions of the Aeronautics Act 7
were:
6. (1) In this Part,
(c) "Board" means the Air Transport Board;
15. (1) Subject to the approval of the Minister, the Board
may issue to any person applying therefor a licence to
operate a commercial air service.
(3) The Board shall not issue any such licence unless it is
satisfied that the proposed commercial air service is and will
be required by the present and future public convenience
and necessity.
The present authority of the Air Transport
Committee of the Canadian Transport Commis
sion to issue and cancel such licences is found
R.S.C. 1952, c. 2.
in Part II of the Aeronautics Acts. By its Gener
al Order 1967-1, the Commission assigned to
the Air Transport Committee all of the Commis
sion's functions under the Aeronautics Act. By
virtue of section 24 of the National Transporta
tion Act 9 and General Order 1967-1, the Air
Transport Committee has all the powers and
duties of the Commission under the Aeronautics
Act and the Committee's orders have the same
effect as if made by the Commission.
The pertinent provisions of the Aeronautics
Act are:
9. (1) In this Part
"Commission" means the Canadian Transport Commission;
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 ser
vice is and will be required by the present and future public
convenience and necessity.
(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.
(9) Where in the opinion of the Commission, an air carrier
has violated any of the conditions attached to his licence the
Commission may cancel or suspend the licence.
The Committee did not purport to act under
section 16(9); the cancellations were effected
under authority of section 16(8).
Order 1974-A-422 recites that the Committee
found that "the public convenience and necessi
ty requires" the cancellation of the Groups A,
F, G and H authority from the domestic licence.
Order 1974-A-423 recites a finding to the same
effect. Counsel for the Commission acknowl
edged that the basis of that finding was that the
licensee, Kenting, had not provided service in
the suspended groups, had not provided evi-
8 R.S.C. 1970, c. A-3.
9 R.S.C. 1970, c. N-17.
dence that it was ready, willing and able to
provide such service and that there had been no
complaints by the public concerning the lack of
service and, hence, the Committee concluded
the groupings were no longer required by the
public convenience and necessity and ordered
the cancellation. Leaving aside the question of
whether the Committee could properly find that
there was no evidence that the licensee was
ready, willing and able to provide such service,
at least in respect of Group G, I am of the
opinion that, in law, a finding by the stated
process is not in conformity with the express
terms of section 16(8).
When the licences were issued in 1956, the
licensing authority was obliged to determine
affirmatively that the proposed service "is and
will be required by the present and future public
convenience and necessity". The same obliga
tion is imposed on the Air Transport Committee
by the present Act. However, the authority to
cancel the licences, in whole or part, does not
depend upon a simple reversal of that decision,
namely a determination that the service licensed
and proposed to be cancelled is no longer
required by public convenience and necessity.
That is what the Committee did decide. Rather,
what it must decide and, in this case did not, is,
that the cancellation is itself required by public
convenience and necessity. The determination
required to be made under section 16(8) is not
the negative finding that present and future
public convenience and necessity no longer
require the particular licence to subsist but the
positive finding that the public convenience and
necessity require the cancellation. 10
10 For example, the licensing authority may have decided,
at an earlier date and in the absence of competition, that a
proposed commercial air service operating out of a particu
lar base is required by the present (at that date) and future
public convenience and necessity. Having reached that con
clusion, the authority issued a licence permitting the use of a
number of groups of aircraft in such service. Later, the
licensee either has not provided, or has abandoned provision
of, the service with aircraft in one or more of the authorized
groups. Another applicant comes forward ready, willing and
able to provide the class of service with aircraft of the
particular group or groups but only if it can have an effec
tive monopoly for such service from such base. In that
event, the authority could very well form the affirmative
opinion that the cancellation of the original licence as to
service with the aircraft the second applicant proposed to
(Continued on next page)
Counsel for the Commission asserted that the
Air Transport Committee had the right to ignore
the evidence before it with respect to the Group
G service proposed to be provided inasmuch as
the demand for such evidence had been directed
to Kenting while the evidence had been pro
vided by or on behalf of Worldways. The adop
tion of such a technical position by the Commit
tee in these circumstances cannot be sustained.
The evidence was supplied by Mr. Nobbs who,
to the Committee's knowledge, was then repre
senting both Kenting and Worldways. The Com
mittee had under active consideration the
application for approval of the transfer of the
licensed services from Kenting to Worldways
and, in fact, dealt with that application at the
same time as it cancelled the licences to provide
service with Group G aircraft.
For these reasons, it is my opinion that
Orders Nos. 1974-A-422 and 423 are voidable
and should be repealed and I would so certify to
the Commission pursuant to section 64(5) of the
National Transportation Act. If, as and when
the Committee again considers the partial can
cellation of these licences it will no doubt bear
in mind the nature of the finding of public
convenience and necessity prerequisite to such
cancellation. It will also bear in mind that the
licensee is entitled not only to notice of the
proposed action but to notice of the perceived
facts and other reasons on which the proposed
action will be based so that the licensee is put in
the position to make out its case, if any, in
answer to such facts and reasons.
(Continued from previous page)
use is required by public convenience and necessity.
In the event the licensing authority considers that there may
be circumstances where the public convenience and necessi
ty require cancellation of a licence, in whole or in part, the
authority ought, to comply with the requirements of natural
justice, to give the licensee notice of the circumstances as it
sees them and of the action it contemplates in consequence
thereof and afford the licensee a fair opportunity to con
tradict or correct any perceived circumstances detrimental
to its position. The principles were fully enunciated by the
majority of this Court in In re North Coast Air Services
Limited [1972] F.C. 390.
JACKETr C.J.: I concur.
* * *
PRATTE J.: I concur.
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.