T-1250-80
Aerlinte Eireann Teoranta (carrying on business
under the name and style of "Aer Lingus")
and
Alitalia Linee Aeree Italiane S.p.A. (carrying on
business under the name and style of "Alitalia")
and
British Airways (carrying on business under the
name and style of "British Airways")
and
Canadian Pacific Air Lines, Limited (carrying on
business under the name and style of "CP Air")
and
Compagnie Nationale Air France (carrying on
business under the name and style of "Air
France")
and
El Al Israel Airlines Limited (carrying on busi
ness under the name and style of "El Al")
and
Iberia, Lineas Aereas de Espana, S.A. (carrying
on business under the name and style of "Iberia")
and
Koninklijke Luchtvaart Maatschappij N.V.
(carrying on business under the name and style of
"KLM Royal Dutch Airlines")
and
Christopher Morris, Liquidator of Laker Airways
Limited (in dissolution)
and
Deutsche Lufthansa AG (carrying on business
under the name and style of "Lufthansa")
and
Société Anonyme Belge d'Exploitation de la Navi
gation Aérienne (carrying on business under the
name and style of "Sabena")
and
Scandinavian Airlines of North America Inc.
(carrying on business under the name and style of
"Scandinavian Airlines System" or "SAS")
and
Swiss Air Transport Co., Ltd. (carrying on busi
ness under the name and style of "Swissair")
and
Wardair Canada Inc. (carrying on business under
the name and style of "Wardair") (Plaintiffs)
v.
The Queen in right of Canada and the Minister of
Transport of Canada (Defendants)
INDEXED AS: AERLINTE EIREANN TEORANTA V. CANADA
Trial Division, Muldoon J.—Ottawa, January 20
to February 27, 1986 and February 20, 1987.
Air law — Air services fees — Validity of regulations
establishing landing fees with respect to trans-oceanic flights
— Whether ultra vires Governor in Council or Minister —
Whether discriminatory and illegal — Air Services Fees
Regulations, C.R.C., c. 5 — Aeronautics Act, R.S.C. 1970, c.
A-3, s. 5 — Ministerial Regulations Authorization Order,
C.R.C., c. 126 — Financial Administration Act, S.C. 1951
(2nd Session), c. 12, s. 18 — An Act to amend the Aeronautics
Act, S.C. 1966-67, c. 10, s. 1 — Official Languages Act,
R.S.C. 1970, c. O-2, s. 8(2)(a),(d) — Canadian Charter of
Rights and Freedoms, being Part I of the Constitution Act,
1982, Schedule B, Canada Act 1982, 1982, c. 11 (U.K.), s. 15
— Federal Court Rules, C.R.C., c. 663, RR. 338(2), '487 —
Convention on International Civil Aviation, Dec. 7, 1944,
[19441 Can. T.S. No. 36, art. 15 — Air Transport agreement
between the government of Canada and the government of the
Kingdom of the Netherlands, June 17, 1974, [1975] Can. T.S.
No. 19.
Restitution — Allegedly discriminatory and illegal airport
landing fees — No recovery if payment made under mistake of
law — Recoverable if paid under compulsion or if transaction
illegal — In Quebec, Civil Code applies — Civil Code of
Lower Canada, art. 1047, 1140.
The Air Services Fees Regulations in effect up to September
1985 prescribed landing fees for trans-oceanic flights at rates
greater than those for international and domestic flights. The
plaintiffs seek to have the Regulations declared ultra vires the
Governor in Council or the Minister, or null and void because
they were discriminatory. The plaintiffs also seek restitution in
respect of the overcharge.
Held, the action should be dismissed.
The Regulations were infra vires. The discretion with respect
to landing fees conferred upon the Governor in Council by the
Aeronautics Act and, in turn, upon the Minister of Transport
by the Ministerial Regulations Authorization Order, is broad,
profound and virtually unfettered. Even though the charges
were related to the costs incurred in the provision of the
facilities and services by the Minister, they did not have to be.
Although the two official versions of section 5 of the
Aeronautics Act may appear to be different, they are not if
reconciled according to the Official Languages Act. The
French singular indefinite object "un" can mean the same as
the English "any". Thus "at any airport" in section 5 includes,
among others, the meaning "at each and every, or whichever,
airport" at which the Minister provides "every and all, or
whichever" facilities and services.
While the trans-oceanic landing fees were indeed discrimina
tory in that they were higher than international and domestic
landing fees, they were not null and void because of that. The
power to make regulations prescribing charges for use of
facilities and services without further fetters is the power to
establish categories of users. If such categories discriminate as
between classes of users on the basis of flight origins and
destinations, such discrimination does not rob the regulation of
its validity. There is no evidence of malice or bad faith and the
chosen basis of classification was not unreasonable and did not
include irrelevant, illogical or illegal considerations. Further
more, the plaintiffs cannot invoke the Charter or the Bill of
Rights in this respect because their equality and anti-discrimi
nation provisions are human rights which apply to individuals,
but not to corporations.
Domestic tribunals and courts have no jurisdiction to enforce
treaties which, as here, are not incorporated into the municipal
law by legislative power. In any event, the trans-oceanic land
ing charges did not violate Canada's adherence to the Chicago
Convention or disgrace Canada's membership in the ICAO:
there was no discrimination based on nationality. Furthermore,
the trans-oceanic landing fees prescribed by the Minister did
not materially depart from ICAO's suggested pricing princi
ples. The pricing methodology, which utilizes a "catch-all" or
"residual" fee, is the system employed at most foreign airports.
And according to the evidence, none of the plaintiffs had been
overcharged for landing fees.
However, if the Court is mistaken and it should later be held
that the regulations were ultra vires on the basis that the costs
of unvisited or seldom visited airports ought not to be charged
to the plaintiffs, then each plaintiff would be entitled to a
pro-rated deduction from the landing fees paid since 1974 in
regard to landings in the common law provinces and since 1975
in regard to landings in Quebec. However, the next lower fee,
domestic or international, would be payable.
In Quebec, there is no distinction to be drawn between
money paid under mutual mistake of law or mistake of fact.
Restitution would be governed by articles 1047 and 1140 of the
Civil Code. In the common law provinces, the plaintiffs are
entitled to be considered as having paid under protest from the
commencement of the action, or earlier, provided that there
was a provable, serious protest. Payments made under a mis
take of law are not recoverable except in cases of compulsion or
of illegal transactions.
CASES JUDICIALLY CONSIDERED
APPLIED:
Pan American World Airways Inc. v. The Queen et al.,
[1981] 2 S.C.R. 565, confirming (1981), 120 D.L.R. (3d)
574 (F.C.A.) and [1979] 2 F.C. 34 (T.D.); Gravel v. City
of St -Léonard, [1978] 1 S.C.R. 660; Procureur Général
du Canada v. La Compagnie de Publication La Presse,
Ltée, [1967] S.C.R. 60; Cardinal et al. v. Directeur of
Kent Institution, [1985] 2 S.C.R. 643; (1986), 63 N.R.
353; Hydro-Electric Commission of Nepean v. Ontario
Hydro, [1982] 1 S.C.R. 347.
DISTINGUISHED:
Alaska Trainship Corporation v. Pacific Pilotage Au
thority, [1978] 1 F.C. 411 (T.D.); Kruse v. Johnson,
[1898] 2 Q.B. 91 (Div. Ct.).
REFERRED TO:
Attorney General of Canada v. Inuit Tapirisat of Canada
et al., [1980] 2 S.C.R. 735; Roncarelli v. Duplessis,
[1959] S.C.R. 121; Kiriri Cotton Co. Ltd. v. Dewani,
[1960] A.C. 192 (H.L.); Eadie v. Township of Brantford,
[1967] S.C.R. 573.
COUNSEL:
Raymond D. LeMoyne and Peter Richardson
for plaintiffs.
W. Ian C. Binnie, Q.C. and David T. Sgayias
for defendants.
SOLICITORS:
Doheny, MacKenzie, Montréal, for plaintiffs.
Deputy Attorney General of Canada for
defendants.
The following are the reasons for judgment
rendered in English by
MULDOON J.: The plaintiffs herein can be
appropriately referred to in and by the well-known
names of the airlines which they operate: Aer
Lingus, Alitalia, British Airways, CP Air, Air
France, El Al, Iberia, KLM, the liquidator of
Laker Airways, Lufthansa, Sabena, SAS, Swissair
and Wardair. In their re-amended statement of
claim, filed on February 13, 1984, the plaintiffs
assert that they are subjected to discrimination
and illegal overcharging for landing fees in regard
to every trans-oceanic flight, which the defendants,
by certain Air Services Fees Regulations [C.R.C.,
c. 5], define to be a flight which crosses an imagi
nary line described (approximately) as a line
which passes through or near Cape Spear, New-
foundland and, to the south, passes through the
equator at 45° West Longitude.
The basis of the plaintiffs' complaint is their
allegation that the regulations are ultra vires and
null and void ab initio with respect to landing fees.
Each plaintiff airline claims a refund and such
claimed refunds range in sum from just over
$800,000 plus interest on the part of Aer Lingus,
to over $12 million plus interest on the part of
British Airways.
A pre-trial conference was held at Ottawa on
September 18, 1985. The parties' respective solici
tors' joint statement of agreed facts was filed on
October 4, 1985. They have also jointly prepared 9
books of exhibits about which the parties agree
that each exhibit is admissible in evidence and true
in content. Each side additionally tenders its own
"10th" book of exhibits about which they each
concede the admissibility of the other's exhibits,
but reserve their rights to question the accuracy,
weight or interpretation of the other side's docu
ments exhibited therein. The public trial of this
action commenced on January 20, 1986 and closed
on Feburary 27, 1986, but the last written argu
ment was received only on July 14, 1986.
The parties' joint statement of agreed facts runs
thus:
The Parties are agreed as follows:
The Parties
I. Each of the Plaintiffs operates or has operated airline ser
vices between various countries of the world including services
to and from Canada.
2. The Defendant, the Minister of Transport, is charged with
various public duties pursuant to the Aeronautics Act, R.S.C.
1970, c. A-3, including the construction and administration of
all government aerodromes and air stations.
3. The Plaintiffs in the course of carrying out their airline
activities at times relevant to these proceedings have used and
use airports administered by the Minister.
Aeronautics Act
4. Pursuant to section 5 of the Aeronautics Act, R.S.C. 1970,
c. A-3, the Governor in Council, or the Minister upon the
former's authorization, may make regulations prescribing
charges for the use of:
(a) any facility or service provided by the Minister or on his
behalf for or in respect of any aircraft; and
(b) any facility or service not coming within paragraph (a)
provided by the Minister or on his behalf at any airport.
5. By Ministerial Regulations Authorization Order,
SOR/70-409, the Minister was authorized by the Governor in
Council to make regulations prescribing such charges. That
Order is now C.R.C. 1978, c. 126.
Air Services Fees Regulations
6. Pursuant to section 5 of the Aeronautics Act and to the
Ministerial Regulations Authorization Order the Minister has
made and from time to time amended the Air Services Fees
Regulations:
SOR/70-410, effective September 9, 1970
SOR/72-487, effective November 22, 1972
C.R.C. 1978, c. 5, effective January 1, 1980
SOR/82-469, effective April 30, 1982.
7. The types of fees prescribed by the Fees Regulations include
or have included, inter alia, various landing fees, general
terminal fees, passenger processing fees, loading bridge fees,
passenger transporting fees, passenger security services fees,
telecommunication services fees, en route facilities and services
fees, aircraft parking fees, hangar aircraft storage fees, and
goods storage fees.
8. Up to September 1, 1985 to Fees Regulations prescribed,
inter alia, a domestic landing fee, an international landing fee
and a trans-oceanic landing fee in respect of the following
categories of flights:
(a) "domestic flight"—a flight between points in Canada;
(b) "international flight"—a flight between a point in
Canada and a point outside Canada that is not a trans
oceanic flight; and
(c) "trans-oceanic flight"—a flight between a point in
Canada a point outside Canada that passes over the
Atlantic Ocean, except a flight between a point in
Canada and any point outside Canada lying West of a
line running from the most easterly point in Canada to
the point of intersection of 45° West Longitude with O°
Latitude.
9. Up to April 30, 1981, the Air Services Fees Regulations
provided that the trans-oceanic landing fee was payable for the
landing at a Canadian airport of an aircraft where such airport
was
(a) the last point of landing prior to a trans-oceanic flight,
or
(b) the first point of landing after a trans-oceanic flight;
and from May 1, 1981 through August 31, 1985, the Regula
tions provided that the trans-oceanic landing fee was payable
for each landing of an aircraft where that landing concluded a
trans-oceanic flight.
10. During the times relevant to these proceedings the trans
oceanic landing fee was payable at a rate greater than that of
the international landing fee,; and the trans-oceanic landing fee
and the international landing fee were payable at rates greater
than that of the domestic landing fee.
International Agreements
11. Canada is a signatory to the Convention on International
Civil Aviation signed at Chicago on December 7, 1944, and
commonly known as the Chicago Convention.
12. Canada is a signatory to bilateral agreements for air
services with Ireland, Israel, Italy, United Kingdom, France,
Netherlands, Federal Republic of Germany, Belgium, Den-
mark, Norway, Sweden and Switzerland, all respectively coun
tries of domicile of the Plaintiffs.
Fees Paid
13. Each of the Plaintiffs has at relevant times conducted
trans-oceanic flights within the meaning of the Regulations,
and has paid trans-oceanic landing fees in respect thereof.
14. The Plaintiffs have paid to the Defendant, Her Majesty
The Queen, trans-oceanic landing fees in the amounts shown on
Schedule A hereto.
Domestic Revenue Passengers
15. None of the Plaintiffs having a foreign domicile has at any
time during the period covered by the present action enjoyed
the right to embark domestic revenue passengers at one
Canadian airport for their disembarkation at another Canadian
airport.
Facilities and Services
16. At the airports used by Plaintiffs during the period covered
by the present action, all-cargo flights did not and do not use
the passenger terminals and their incidence had and has no
influence on the facilities provided by the Minister in passenger
terminals.
17. At the passenger terminals of the airports used by Plain
tiffs during the period covered by the present action, there were
and are no separate areas or facilities provided specifically and
exclusively for the well-wishers of any particular category of
departing international passengers, nor for the greeters of any
specific category of arriving international passengers.
18. The words "the airports used by the Plaintiffs" in the
admissions of facts contained in paragraphs 16 and 17 refer to
Gander, Halifax, Montreal Dorval, Montreal Mirabel, Toronto,
Ottawa, Winnipeg, Calgary, Edmonton and Vancouver air
ports, but do not imply that all such airports were used by all or
any of the Plaintiffs during or throughout the period in
question.
This action was commenced on March 10, 1980,
and each amended statement of claim has
expressed the sums of trans-oceanic landing fees
paid from and after 1974 by each plaintiff and
claimed therein, and now expressed in Schedule A
to the above recited statement of agreed facts.
Whatever the outcome as to liabilities, the parties
are agreed on Schedule A. The official record of
pleadings, prepared pursuant to Rule 487 [Federal
Court Ru/es, C.R.C., c. 663], was filed on
March 4, 1985, and it discloses the final formula
tion of the plaintiffs' claims. They urge that this
Court:
RESERVE Plaintiffs' rights in respect of landing fees paid
since the dates indicated hereinafter, or to be paid during the
pendency of the present cause;
DECLARE the Air Services Fees Regulations ultra vires and
null and void ab initio with respect to landing fees;
ORDER first Defendant to pay each of the Plaintiffs the
following sum respectively:
[This schedule is now subsumed into Schedule A to the
parties' statement of agreed facts.]
ORDER the payment of interest at the legal rate on the
foregoing amounts in accordance with law;
GRANT such further and other relief as ... may seem just;
THE WHOLE with the costs of this action.
The plaintiffs' action raises a variety of issues,
each of which must be considered separately and
in sequence. In the result, however, the plaintiffs'
action will be dismissed for the reasons which are
now hereinafter expressed, with party and party
costs to be paid in favour of the defendants.
THE VALIDITY OF THE REGULATIONS
The plaintiffs attack the Regulations whereby
the impugned landing fees were levied on two
bases. They assert that those Regulations were
beyond the powers delegated by Parliament to the
Governor in Council or to the Minister upon the
former's authorization; and they assert that, even
if technically intra vires, those Regulations are
nevertheless still null and void because they are
unlawfully discriminatory. One speaks of the
impugned Regulations in the past tense because, as
of September 1, 1985, the trans-oceanic landing
fee was revoked by a new regulation promulgated
as SOR/85-861. As of that date the trans-oceanic
fee was replaced with a new international landing
fee to accord with a new definition of "internation-
al flight".
Are the impugned regulations null and void by
reason of being ultra vires?
The answer to this threshold question is nega
tive. The regulations are intra vires.
The pertinent provisions of section 5 of the
Aeronautics Act [R.S.C. 1970, c. A-3] are recited
in paragraph 4 of the parties' statement of facts.
The Governor in Council has exercised the power
therein conferred by authorizing the Minister to
make regulations pursuant to the Ministerial
Regulations Authorization Order, C.R.C., c. 126.
It is a very brief order which directly authorizes
the Minister to make regulations in precisely the
same terms as expressed in section 5 of the Act,
including specifically paragraphs 5(a) and (b).
Section 5 of the Aeronautics Act, and the regu
lations prescribed pursuant to it, have been earlier
judicially noticed in the case of Pan American
World Airways Inc. v. The Queen et al., [1981] 2
S.C.R. 565. There the appellant airlines, all based
in the U.S.A., challenged the legality of fees exact
ed by the Minister of Transport for telecommuni
cation and en route navigation services provided at
their request by and from facilities within Canada.
None of their flights landed in Canada, although
some of them passed through Canadian airspace.
There was no suggestion in that case of any dis
criminatory charges and so, from that aspect, the
Pan American case differs from the case at bar.
On the other hand, the Supreme Court of Canada
confirming the conclusion of Mr. Justice
Mahoney, then of this Court's Trial Division, held
that the expression of section 5 of the Act author
izing the "prescribing" of charges connotes not
only the fixing of quantum, but also the imposition
of liability to pay those charges.
The discretion conferred upon the Governor in
Council and, in turn, upon the Minister of Trans-
port, is broad, profound and virtually unfettered.
The discretion to prescribe charges for the use of
any facility or service provided by the Minister or
on his behalf, at any airport, or for or in respect of
any aircraft accords power to charge or not for any
facility or service, or not, or for some and not
others.
The charges, as will be seen, have been related
to the costs incurred in the provision of the facili
ties and services by the Minister. They do not need
to be so related, but they are. The costs and
revenues generated by each particular facility and
service provided at each airport are not identified
separately. Rather, the "catch-all" method, which
accumulates and averages all costs incurred
throughout the "system" of this country's interna
tional airports (identified in paragraph 18 of the
parties statement of facts, above) is used as the
basis for the fixing of charges or fees. An average
cost related to the weight of each aircraft or the
number of passengers is then calculated. Ideally,
the landing charges would be fixed at a rate
sufficient to recoup all related costs. Whether the
fees charged to the trans-oceanic sector do recover,
or over-recover the full costs related to that sec
tor's use, is a question of fact to which reference
will be made.
The plaintiffs note that their trans-oceanic
flights do not directly engage the facilities and
services of every Canadian airport. They do how
ever pay fees charged on the "catch-all" method.
This, the plaintiffs argue, renders that method of
imposition of fees beyond the powers conferred by
the Act. The plaintiffs focus on the emphasized
noun in the phrase "charges for the use of any
facility or service provided" in section 5. They
argue that they have been charged for airport
facilities and services which they did not specifical
ly use. The plaintiffs submit that unless an aircraft
has, in fact, landed at an airport and/or, in fact,
engaged a particular facility or service, any charge
relating to the cost of providing that particular
service or facility is surely prescribed outside of
the power conferred by the statute. According to
the plaintiffs' argument, factual use is the sole
statutory criterion for the imposition of charges;
any and all other criteria render the imposition of
charges invalid.
Further, the plaintiffs submit that the prescrib
ing of differential charges is ultra vires the statu
tory enabling power. They urge that since there
appears to be no explicit authority to prescribe
charges in relation to trans-oceanic, or any other
differentiated class of flights, doing so is in breach
of the power conferred by Parliament.
The defendants contend that the method,
manner or basis of prescribing charges, including
the trans-oceanic landing fees, is and always has
been quite within the powers of the Governor-in-
Council or the Minister, which Parliament has
conferred upon them in section 5 of the Aeronau
tics Act. The parties are in basic agreement that
the only criterion for charging is "for the use of
any facility or service provided by the Minister ...
in respect of any aircraft; and . .. at any airport".
The defendants argue that the Minister's almost
global discretion is operable in and referable to use
of facilities and services of whatever part of the
system of Canadian international airports; and
therefore the prescribing of charges would be ultra
vires only if the defendants purported to levy them
against some or all plaintiffs (or indeed other
airlines) which had not used any services or facili
ties at any of the system's airports.
In this new era of a constitutional description of
Canada which is more specific than ever before in
articulating "the rule of law" as one of the princi
pal foundations and founding principles of
Canada, the courts are required not to be so abject
in their reverence for the authority of either
secondary or primary legislation as they were in
previous times. That, of course, does not and never
should mean that the judiciary may be cavalier or
insouciant about quashing regulations even when
urged to quash by highly competent, articulate and
perceptive counsel, such as have been engaged by
the plaintiffs in the case at bar. It is the duty of
the Court to find, and to accord, an interpretation
of the statutory provision, which, without straining
the words or perverting their meaning, vivifies the
impugned regulation. If the impugned regulation
cannot be saved pursuant to the, or even an,
ordinary meaning of the statutory prose, so be it
The Official Languages Act, R.S.C. 1970, c.
O-2, by section 8 thereof exacts that in construing
an enactment, both its versions in the official
languages are equally authentic. Subsection 8(2)
prescribes the means of avoiding chaos in the event
that the parliamentary drafters and translators, as
well as the parliamentarians themselves, produce
disaccord in those presumably equally authentic
versions. Paragraphs 8(2)(b) and (c) although of
great interest in a bilingual, bijural federal state
are not engaged by the issues at bar. The remain
ing two paragraphs are pertinent:
8. (2) ...
(a) where it is alleged or appears that the two versions of the
enactment differ in their meaning, regard shall be had to
both its versions so that, subject to paragrah (c), the like
effect is given to the enactment in every part of Canada in
which the enactment is intended to apply, unless a contrary
intent is explicitly or implicitly evident;
(d) if the two versions of the enactment differ in a manner
not coming within paragraph (c), preference shall be given to
the version thereof that, according to the true spirit, intent
and meaning of the enactment, best ensures the attainment
of its objects.
It is helpful to place the two versions of the
pertinent provision of the Aeronautics Act side by
side in order to see if the regulation prescribing
trans-oceanic landing fees can be invoked under
one or both versions against plaintiffs who use
some, but sometimes not all, of the airports of the
system for which the Minister has levied landing
charges.
5. The Governor in Council may make regulations, or,
subject to and in accordance with such terms and conditions as
may be specified by him, authorize the Minister to make
regulations prescribing charges for the use of
(a) any facility or service provided by the Minister or on
his behalf for or in respect of any aircraft; and
(b) any facility or service not coming within paragraph (a)
provided by the Minister or on his behalf at any airport.
The two versions are not quite the same, for if
they were the English language version, to con
form more precisely with the other version, might
well speak of "a facility or service ... an aircraft;
and ... an airport". Alternatively, the French
language version, to conform more precisely with
the other version, might well speak of "toute
installation ... tout service" or perhaps "un
aéronef quelconque ... un aéroport quelconque",
or either of such formulations. Despite being not
quite the same, are the two official versions
materially different? Not necessarily, and not at
all, if reconciled according to the Official Lan
guages Act.
The singular indefinite object un (or une) in
French can be utilized to carry the connotation of
any in English. In the Pan American case, cited
above, it is said (at page 570): "L'article 5, dans
son al. a) emploie les mots 'un aéronef' au sens
large". Clearly, also, the object of section 5 of the
Aeronautics Act is to accord a virtually unfettered,
almost globally discretionary power to make regu
lations prescribing charges for the use of the facili
ties or services at any airport. That emphasized
word is to be given its ordinary meaning, which in
both versions of the statute carries a wide sense or
meaning.
The Shorter Oxford English Dictionary, (3rd
Ed., 1983) defines "any": 1. gen. In sing. = A—no
matter which, or what. In pl. = Some—no matter
which, of what kind, or how many.. .. c. In affirm.
sentences: = (constructively) Every one of the sort
named ME. 2. Quantitative: = A quantity or
number however great or small 1526. 3. Qualita
tive: Of any kind or sort whatever; ...
Black's Law Dictionary, 5th ed., 1979, expresses
the following principle meanings of "any": "Some,
one out of many; an indefinite number. One indis
criminately of whatever kind or quantity....
Word 'any' has a diversity of meaning and may be
employed to indicate 'all' or `every' as well as
`some' or 'one' and its meaning in a given statute
depends upon the context and the subject matter
of the statute."
The Dictionnaire Juridique/Legal Dictionary—
The New Th. A. Quemner Dictionary, 1977—
Editions de Navarre, Paris, defines "any" to be:
"un quelconque, quiconque, tout .... [Eg.] any
twelve jurors—douze jurés quelconques."
The above-cited foreign authorities confirm, (if
confirmation were needed) this Court's entirely
Canadian understanding and interpretation of the
word "any" in section 5 of the Aeronautics Act to
mean "all", "each and every", or "whichever",
among and including the meanings already can
vassed. Thus "at any airport" in section 5 includes
among others the meaning "at each and every, or
whichever, airport" at which the Minister provides
every and all, or whichever, facilities and services.
If the drafters who formulate, and the legisla
tors who enact the laws were clairvoyant, they
could foresee the precise exigencies of future liti
gation and they could meet those exigencies, or
reject them out of hand. They did neither regard
to in these circumstances, necessitating a judicial
interpretation of their handiwork. The broad
extent of the power to prescribe trans-oceanic
landing fees is a judicial interpretation enlightened
by the decisions at first instance and upon ultimate
appeal in the Pan American case. The initial rea
sons for judgment of Mr. Justice Mahoney (now of
the Appeal Division of this Court) ([1979] 2 F.C.
34 (T.D.)) were directly adopted and ratified by
the unanimous appeal panel of this Court ((1981),
120 D.L.R. (3d) 574) and referred to with approv
al by the Supreme Court of Canada. The late
Chief Justice Laskin wrote the unanimous decision
of the Supreme Court, in which (at page 572)
appears the following passage:
Mahoney J., after reference to dictionary meaning of the term
"prescribe" concluded that s.5 gave authority not only to fix the
charges, but also to impose a legal obligation to pay them. I
find no reason to differ from him on this issue and would,
accordingly, reject the submission that s.5 is deficient in its
formulation to lay an obligation of payment upon the
appellants.
In response to the plaintiffs' contention that the
catch-all cost-averaging method of fee-determina
tion is inappropriate, if not unlawful, the defend-
ants submit that such a criticism is irrelevant to
the issue of the vires of the regulation by which the
charges are imposed. Noting that section 5 of the
Act does not express an ulterior purpose or object,
such as (for example) "to recover the costs
incurred in the provision of airport facilities and
services", they assert that the Minister has virtual
ly complete discretion to base the charges on
almost anything within reason and outside malice,
mischief or despotism, which he wants to utilize.
Indeed, upon the true construction of section 5, the
Minister is not obliged to try to recover costs or
even to establish a cost base. Rather, section 5
confers simply and solely a power to prescribe
charges. It is a pricing provision, not a cost-recov
ery provision. As a result, the criticism of the
particular, not unreasonable cost base chosen by
the Minister as a method of determining charges is
quite immaterial in the premises.
The defendants have related at length the legis
lative history of the powers which have come to be
focussed and formulated in the actual section 5 of
the Aeronautics Act. They claim that this history
supports their interpretation. Prior to 1966, air
services fees regulations were enacted pursuant to
the Financial Administration Act, S.C. 1951 (2nd
Session), c. 12, which provided:
18. Where a service is provided by His Majesty to any
person and the Governor in Council is of the opinion that the
whole or any part of the cost of the service should be borne by
the person to whom it is provided, the Governor in Council
may, subject to the provisions of any Act relating to that
service, by regulation prescribe the fee that may be charged for
the service. [Emphasis added.]
Regulations made pursuant to the above recited
statutory provisions are restricted by the cost-
recovery object in the first emphasized expression.
A fee could be charged only if its purpose were to
recover all or some part of the costs of providing
the service, and consequently the Governor in
Council would reasonably have had to establish
the cost base.
In 1966, Parliament shifted the authority to
make air service fee regulations and accordingly,
to prescribe charges, out of the Financial
Administration Act and into the Aeronautics Act.
In so doing the expression concerning "the whole
or any part of the cost" was simply deleted, (by
S.C. 1966-67, c. 10, s. 1). Once this direct refer
ence to the recovery of costs was abandoned, the
sole criterion for prescribing charges became the
use of any facility or service at any airport. The
Governor, or the Minister, was thereupon not
required to consider anything else. (Since 1966,
two further amendments have been enacted, but
neither affects the issue at bar.) So, the defendants
correctly submit, Parliament clearly evinced a
legislative intent to grant a discretionary pricing
power which requires no relating to the costs of
providing any facilities and services.
This interpretation shuns the narrow meaning of
section 5 of the Act which the plaintiffs advance.
That the legislative history of an enactment can
serve as a useful aid to its intrepretation was noted
by Mr. Justice Pigeon, writing for himself and
three other judges of the Supreme Court of
Canada in the case of Gravel v. City of St -Léon-
ard, [1978] 1 S.C.R. 660, at page 667:
Legislative history may be used to interpret a statute because
prior enactments may throw some light on the intention of the
legislature in repealing, amending, replacing or adding to it.
(The above passage is cited as an example in
Driedger, Construction of Statutes, 2nd ed., 1983,
page 160.)
That the cost-recovery provision was not carried
forward into the Aeronautics Act indicates the
legislative intention to unshackle the delegated
power to prescribe charges for the use of any
services and facilities at any airport. That the
international airports of Canada have been treated
at all material times as a system, indicates that
fee-attracting use needs only to be of some part of
the airport system, but not necessarily the use of
all of the airport system's facilities and services,—
just those at any airport.
The Court therefore holds that the impugned
Regulations, whereby the trans-oceanic landing
fees were prescribed by the Minister, were in fact
and law, and would be again, quite within the
powers delegated by Parliament in section 5 of the
Aeronautics Act.
Are the impugned trans-oceanic landing fees null
and void because they are discriminatory?
The answer to this secondary question is nega
tive. The trans-oceanic landing fees prescribed
pursuant to the specified Air Services Fees Regu
lations are not null and void on the basis of being
discriminatory.
It is quite true, of course, that the trans-oceanic
landing fees prescribed in the various Air Services
Fees Regulations in force up to September 1,
1985, are indeed discriminatory. They are dis
criminatory in that those regulations discriminated
as between domestic flights, international flights
and trans-oceanic flights, with an increasing scale
of quantum of fees prescribed respectively for each
category of flights. This is illustrated in para
graphs 8, 9 and 10 of the parties' statement of
agreed facts, recited above.
On this basis, too, the plaintiffs assert that, since
they have had to pay the highest discriminatory
landing fees prescribed by the Regulations, then
those Regulations are null and void ab initio and
ultra vires to the extent that they levy fees in
excess of the regular landing fees for international
flights. Their statement of claim asks the Court to
declare the above described annulments of the
Regulations "with respect to landing fees". In view
of the earlier conclusion herein about the clear
validity of the Regulations prescribing landing fees
vis-Ã -vis section 5 of the Act, the prescribing of
landing fees per se cannot be "ultra vires and null
and void ab initio". The plaintiffs' complaint must
accordingly reside in and against the differential
between the higher trans-oceanic landing fee and
the lower international landing fee and the even
lower domestic landing fee.
There is no need to go into matters of legislating
for extra-territorial effect, even although one of
the two co-ordinates of the imaginary line
described in the Regulations is the intersection of
45 degrees West Longitude with the equator.
Despite the fact that the latter co-ordinate is out
side of Canada and Canadian territorial waters,
the salient fact is the charging of landing fees at
any airport in Canada. The Pan American deci
sion, above cited, amply confirms the power to
prescribe charges in regard to use of facilities and
services by flights crossing the Atlantic Ocean.
The impugned Air Services Fees Regulations
are part of the domestic law of Canada. The
parties, in paragraphs 11 and 12 of their above
recited statement of agreed facts, have referred to
the Chicago Convention [Convention on Interna
tional Civil Aviation, Dec. 7, 1944, [ 1944] Can.
T.S. No. 36] of December 7, 1944, and to bilateral
agreements with countries which are the corporate
domiciles of most of the plaintiffs. The relevance
of international law and practice will be considered
later herein. At this juncture however, since Cana-
da's domestic law does not recognize a treaty,
which is not implemented by competent legisla
tion, the plaintiffs' complaint presents the issue of
discriminatory charges wholly in the context of the
laws of Canada. It remains to be seen whether
these laws ought to be interpreted, if possible, so as
to comply with the treaty, or with the ICAO
statements/déclarations d'OACI (exhibits 19(a),
(b) and (c), jointly submitted).
In support of their position, the plaintiffs cite a
number of judgments, almost all of which reveal a
context of municipal law. The few which are not
grounded upon the construction of by-laws enacted
by municipalities may have been correctly decided,
but have been wrongly interpreted by the plain
tiffs. As an example, a passage from the headnote
of the report of Alaska Trainship Corporation v.
Pacific Pilotage Authority, [1978] 1 F.C. 411
(T.D.) illustrates its inapplicability, thus [at page
412]:
Held, judgment is issued in both actions that the inclusion of
the words "registered in Canada" and "registered in the United
States" in sections 9 and 10 of the Regulations is ultra vires the
power of the Pacific Pilotage Authority as delegated to it by
section 14 of the Pilotage Act. Judgment also issues in both
actions for further declarations that: (1) the pilot members of
the Authority had a conflict of interest in the true equitable
sense when they participated in drafting and passing the Regu
lation and did not purge themselves of such conflict of interest
at any relevant time; (2) the Authority, in prescribing the flag
of the ship in sections 9 and 10, was not motivated for the
public purpose of safety within the meaning and objects of
section 12 of the Pilotage Act, but rather to obtain personal
pecuniary benefit for the pilot members of the Authority; (3)
the S.S. Alaska in the area it ran without a pilot, posed no
threat to safety within the meaning of section 12 of the
Pilotage Act; (4) the Authority, by including those words in the
subject regulations, frustrated the intent of Parliament that
certain ships, posing no safety threat within the meaning of
section 12, should be excused from compulsory pilotage by
exemption or waiver prescribed in the Pilotage Act. [Emphasis
added.]
In the above referred to judgment of Mr. Justice
Gibson, the status of the regulation-making Pacific
Pilotage Authority, the finding of conflict of inter
est on the part of its members and the element of
the frustration of the will of Parliament all abun
dantly distinguish that case from the case at bar.
This is not to say that the wielding of statutory
powers delegated to the Governor in Council, or a
Minister, is beyond judicial review. As was unani
mously held by the Supreme Court of Canada
through the words of Mr. Justice Estey in that
pre-Charter case of Attorney General of Canada v.
Inuit Tapirisat of Canada et al., [1980] 2 S.C.R.
735, at page 748:
Let it be said at the outset that the mere fact that a statutory
power is vested in the Governor in Council does not mean that
it is beyond review. If that body has failed to observe a
condition precedent to the exercise of that power, the court can
declare that such purported exercise is a nullity.
Since that is so in regard to the Governor in
Council, it is a fortiori so in regard to a Minister,
and was so prior to September 1, 1981. However,
failure to observe a condition precedent to the
exercise of quasi-judicial power is a far remove
from the circumstances of the Alaska Trainship
case, which, on its facts, is simply inapplicable
here, even though the delegated power was legisla
tive in nature, as it is here.
Ever since, if not before, the judgment of Lord
Russell of Killowen in Kruse v. Johnson, [1898] 2
Q.B. 91 (Div. Ct.), it has been generally accepted
that discrimination is a basis upon which the valid
ity of a municipal school board or other local
government by-law can be challenged. An ample
jurisprudence reveals, however, that this principle
is confined to "by-laws", that is subordinate legis
lation enacted by creatures of statute (e.g. munici
palities and universities, and the like). The princi
ple does not apply to certain "regulations", that
kind of subordinate legislation enacted by the
executive branch of government (e.g. the Governor
in Council, the Lieutenant Governor, a Minister of
the Crown) pursuant to statutory delegation. As
was noted by Professor Elmer A. Driedger in
"Subordinate Legislation" (1960), 38 C.B.R. 1,
neither discrimination nor even unreasonableness
is a ground for quashing regulations enacted by
the executive. Unfair proceedings where the execu
tive itself is constituted to be a review tribunal are
indeed reviewable as noted in the Inuit Tapirisat
case, but not differential pricing or charges as
here. The power to make regulations prescribing
charges for use of facilities and services without
further fetter, is the power to establish categories
of users. If or when, as here, such categories
discriminate as between classes of users on the
basis of flight origins and destinations, such dis
crimination does not rob the regulation of its
validity.
Mr. Justice Abbott wrote for the majority in the
case of Procureur Général du Canada v. La Com-
pagnie de Publication La Presse, Ltée, [1967]
S.C.R. 60. In the circumstances of that case the
plaintiff, having paid its broadcasting licence fee
for the period April 1, 1960 to March 31, 1961,
was confronted with an order in council whose
effect was to increase the plaintiff's fee for the
then current year. The plaintiff paid under protest
and, by its petition of right, complained that the
order in council was invalid and ultra vires in this,
among other respects [at page 73].
2. That it is unjust and discriminatory between the [plaintiff,
La Presse] and other private commercial broadcasting stations
and also between a group of private commercial radio broad-
casting stations, the Canadian Broadcasting Corporation and
other categories of broadcasting stations.
The pertinent words of Abbott J. are reported at
page 75, thus:
As to the alleged discriminatory character of the regulation, I
am not satisfied that it is in fact discriminatory. In any event s.
3 of the Act puts no limitation upon the powers of the Governor
in Council to prescribe licence fees. That such fees may in fact
be discriminatory, in my opinion, affords no legal ground of
attack upon the validity of the Order.
Yet another insight into what, if any, sorts of
discrimination can stand with impunity is evinced
in the unanimous judgment of the Supreme Court
of Canada written by Mr. Justice Le Dain in
Cardinal et al. v. Director of Kent Institution,
[1985] 2 S.C.R. 643, at page 653; (1986), 63 N.R.
353, at page 358:
This court has affirmed that there is, as a general common law
principle, a duty of procedural fairness lying on every public
authority making an administrative decision which is not of a
legislative nature and which affects the rights, privileges or
interests of an individual . [Emphasis not in original.]
This notion of reviewing the validity of adminis
trative decisions which are not of a legislative
nature is important to the integrity of legislative
power under the Constitution of Canada. Like the
provincial legislatures, Parliament is sui generis
and is not to be blocked in its intended constitu
tional regulation of corporate enterprises in mat
ters of trade and commerce, and aeronautics. Dis
crimination as between classes of enterprises is
essential to the wielding of such constitutional
powers of legislative regulation, licensing and pric
ing of the use of facilities.
Of course, such regulation must not offend the
rule of law, especially since the promulgation of
the Canadian Charter of Rights and Freedoms
[being Part I of the Constitution Act, 1982,
Schedule B, Canada Act 1982, 1982, c. 11
(U.K.)]. Here the discrimination between classes
of flights, with equal application of the prescribed
charges within each class, leaves the plaintiffs at
least technically, if not also practically, free to do
business in Canada and to submit to the charges,
or not. In these circumstances the law is clear that
such discrimination per se is not a ground for
annulling the regulation. There is no scent of
egregiousness, malice or bad faith upon the evi
dence here. Arguably such elements could render
the regulation null and void. The case of Ron-
carelli v. Duplessis, [1959] S.C.R. 121, stood, long
before the enactment of the Charter as an illustra
tion of the abuse of authority based on irrelevant
considerations.
That which is literally discrimination between
categories of flights here has nothing pejorative
about it. It may be said equally to be the mere
classification of enterprises for the purpose of levy
ing landing fees. The presence of Canadian corpo
rations among the plaintiffs, and the acknowl
edged fact that Air Canada, although not a
plaintiff, was at all material times as subject to the
trans-oceanic landing fee as were the plaintiffs,
demonstrates the equal, non-discriminatory
application of the regulation. As will be noted, the
chosen basis of classification was not unreasonable
and did not include irrelevant, illogical or illegal
considerations.
It seems quite probable that the kind of classifi
cation of flights in the impugned Regulations
would survive an application to quash even if such
kind of classification were evinced in a municipal
by-law. It is not unreasonable and not discrimina
tory in the pejorative sense of defeating true equal
ity rights. Because the enabling legislation had no
objective other than prescribing charges for use of
facilities and services, the Minister was not obliged
by law to define the differential in prices upon
anything other than use of the facilities and ser
vices. Nor was he, (as the developing jurisprudence
on individual discrimination under section 15 of
the Charter amply discloses), obliged to adjust the
differential with arithmetic accuracy. It may be
noted that the equality and anti-discrimination
provisions of the Canadian Bill of Rights, R.S.C.
1970, Appendix III, and of the Charter are human
rights which apply to individuals, but not to corpo
rations. The constitutional legislative power to
regulate corporate enterprises remains plenary on
the part of Parliament and the provincial legisla-
tures in their respective spheres, and it is virtually
unfettered, subject to the narrow exceptions
already herein discussed. In any event, the ma
terial times in the case at bar pre-date the Charter.
The Court therefore holds that the impugned
trans-oceanic landing fees were and are not null
and void because they are discriminatory. They are
not discriminatory, in any event, in the pejorative
sense of oppressing the plaintiffs or of confiscating
their profit. If the plaintiffs regard the trans
oceanic landing fees as too great a charge on their
cost of doing business in Canada, or as an indica
tion of lack of business sense on the part of the
Minister, neither of which is objectively proved,
they must accept that such complaints are not
justiciable.
THE RELEVANCE OF THE INTERNATIONAL
AGREEMENTS
In Droit constitutionnel, Chevrette and Marx,
Presses de l'Université de Montréal, 1982, the
authors state at pages 1196 and 1197:
[TRANSLATION] International law and domestic law .. .
a treaty is only part of domestic law if it is incorporated into
the latter by legislation. The rules applicable to international
customary law differ in this regard: a national judge admits it
after he has ascertained that the custom exists and that Canada
adheres to it. Domestically, however, even though in some cases
the international law rule may not have been formally incorpo
rated, it functions as a general rule of interpretation, in the
sense that a contrary national law may override it if it does so
in clear terms, but otherwise the law will be construed as being
consistent with the international rule, or at least an effort will
be made to reconcile the two rules, national and international.
In Constitutional Law of Canada, Hogg, 2nd
ed., Carswell, Toronto, 1985, at pages 245 and
246, the author states:
Canada's constitutional law, derived in this respect from the
United Kingdom, does not recognize a treaty as part of the
internal (or "municipal") law of Canada. Accordingly, a treaty
which requires a change in the internal law of Canada can only
be implemented by the enactment of a statute which makes the
required change in the law. Many treaties do not require a
change in the internal law of the states which are parties. This
is true of treaties which do not impinge on individual rights, nor
contravene existing laws, nor require action outside the execu
tive powers of the government which made the treaty. For
example, treaties between Canada and other states relating to
defence, foreign aid, the high seas, the air, research, weather
stations, diplomatic relations and many other matters, may be
able to be implemented simply by the executive action of the
Canadian government which made the treaty. But many trea
ties cannot be implemented without an alteration in the internal
law of Canada. For example, treaties between Canada and
other states relating to patents, copyrights, taxation of foreign
ers, extradition, and many other matters, can often be imple
mented only by the enactment of legislation to alter the internal
law of Canada.
But in Canada, where there is no constitutional requirement of
parliamentary approval prior to the making of a treaty, it
would offend against the basic principle of parliamentary
supremacy if the executive could alter the law of the land
merely by making a treaty.
The veracity of the above two quoted statements
is confirmed by jurisprudence including the deci
sion of the Supreme Court of Canada in the Pan
American case, earlier above cited. There, in
[1981] 2 S.C.R. 565, Chief Justice Laskin spoke of
the airlines' argument to the effect that they were
not required by alleged customary international
law to acknowledge Canada's exercise of sover
eignty in the airspace above the high seas. Laskin
C.J. dealt with that argument at pages 567 and
568 in this way:
There is no occasion here to apply a principle of construction
favouring the compatibility of domestic law with international
law. Either international law invoked in this case is effective
because expressly incorporated into Canadian law or the exac-
tions are not, in any event, authorized under Canadian law;
there is no other challenge that the appellants can mount.
Thus, where the international law, either cus
tomary or under treaty, is expressly incorporated
into domestic law it will operate just as cogently
and enforceably as Canadian law. Otherwise, the
"exactions" if authorized by Canadian law, as are
the trans-oceanic landing fees, must be paid. If the
executive do not seek legislative incorporation of
treaties bearing on the legislative jurisdiction of
Parliament under the Constitution, Canada could
be seen to acquire a poor reputation among
nations. Any such complaints brought before the
domestic tribunals and courts of Canada are not
justiciable, for judicial power alone is incapable of
enforcing treaties which are not incorporated into
the law by legislative power. There is, however, no
cogent evidence which is persuasive on a balance
of probabilities to demonstrate that the prescribing
of the impugned trans-oceanic landing charges
violated Canada's adherence to the Chicago Con
vention, or disgraced Canada's membership in
ICAO/OACI.
The pertinent provisions of Article 15 of the
Chicago Convention (exhibit 1) are as follows:
ARTICLE 15
Every airport in a contracting State which is open to public
use by its national aircraft shall likewise, subject to the provi
sions of Article 68, be open under uniform conditions to the
aircraft of all the other contracting States. The like uniform
conditions shall apply to the use, by aircraft of every contract
ing State, of all air navigation facilities, including radio and
meteorological services, which may be provided for public use
for the safety and expedition of air navigation.
Any charges that may be imposed or permitted to be imposed
by a contracting State for the use of such airports and air
navigation facilities by the aircraft of any other contracting
State shall not be higher,
(b) as to aircraft engaged in scheduled international air
services, than those that would be paid by its national
aircraft engaged in similar international air services.
The essence of Article 15 is non-discrimination on
the basis of the nationality of foreign aircraft
vis-Ã -vis the contracting State's own national air
craft. No evidence was adduced to indicate even
the slightest degree of discrimination between any
of the plaintiffs and Air Canada, or as between the
Canadian plaintiffs and the foreign plaintiffs. In
promulgating the impugned Air Services Fees
Regulations, the defendants have behaved legally
and honourably in contemplation of Article 15 of
the Chicago Convention.
From time to time the Council of ICAO has
issued statements on charges for airports and route
air navigation facilities (exhibit 19). In 1974, the
Council expressed such a statement (exhibit
19(B)), which contained these pertinent proposed
principles:
10. Charging systems at international airports should be
chosen in accordance with the following principles:
(iii) The charges must be non-discriminatory both between
foreign users and those having the nationality of the
State of the airport and engaged in similar interna
tional operations, and between two or more foreign
users.
Again, the plaintiffs have no valid complaint about
the landing fees in contemplation of the above
recited passage from exhibit 19(B). The expres
sions "similar international air services" placed in
Article 15 of the Convention, and "similar interna
tional operations" most certainly bespeak the real
ity of dissimilar ones, and do not taint the Canadi-
an differential between charges for "international
flights" and for "trans-oceanic" flights.
The bilateral agreements mentioned in para
graph 12 of the parties' statement of agreed facts
are exhibited in Book II, exhibits 3 through 14.
Exhibit A from the plaintiffs shows certain refer
ences to those agreements in regard to non-compli
ance with the other contracting party's laws and
regulations, and in regard to preferential treat
ment concerning customs, immigration, quarantine
and use of facilities. Non preference on the basis
of nationality is convenanted by Canada with
other countries, in these provisions:
Denmark: article 4(1) — (exhibit 4)
France: article 7(1) — (exhibit 5)
Germany: article 8(1) — (exhibit 6)
Israel: article VIII(1) — (exhibit 8)
Netherlands: article VIII 1. — (exhibit 10)
Norway: article 3(1) (exhibit 11)
Sweden: article 3(1) — (exhibit 12)
Switzerland: article VIII 1. — (exhibit 13)
An example of such a non-discrimination provi
sion is that of the 1974 treaty with the Nether-
lands [Air Transport agreement between the gov
ernment of Canada and the government of the
Kingdom of the Netherlands, June 17, 1974,
[1975] Can. T.S. No. 19] which came in force
definitively on July 15, 1975, (exhibit 10) and
which happens to be expressed in both of Canada's
official languages, and legibly:
ARTICLE VIII
1. The charges imposed in the territory of either Contracting
Party for the use of airports and other aviation facilities on the
aircraft of a designated airline of the other Contracting Party
shall not be higher than those imposed on aircraft of a national
airline engaged in similar international air services.
In regard to the impugned trans-oceanic landing
charges, it is plain that the plaintiff KLM adduced
no evidence upon which to support any complaint
herein pursuant to article VIII 1. of the above
mentioned agreement between Canada and the
Kingdom of the Netherlands, assuming this Court
to be an appropriate forum, which it is not.
Moreover, the ICAO statement of 1974, jointly
tendered as exhibit 19(B), to which much refer
ence was made by the parties, appears to counte
nance a certain degree of real preferential treat
ment, no less. Among the principles enunciated in
section S9 there appears:
(vii) Where any preferential charges, special rebates, or
other kinds of reduction in the charges normally
payable in respect of airport facilities are extended to
particular users [that which is not repudiated herein],
governments should ensure as far as practicable that
any resultant under-recovery of costs properly allo-
cable to the users concerned is not shouldered onto
other users.
Now this edifying but non-binding principle
whereby preferential charges, rebates or other
reductions may truly be countenanced, according
to ICAO, is probably the basis of the plethora of
expert evidence and testimony on accounts,
accounting, accounting principles and time-and-
motion observations which were submitted in
detail to the Court.
It must be remembered that the Minister's
statutory authority to prescribe charges for the use
of any facility or service at whatever airports is a
pricing authority which is not fettered by cost
considerations. In the event of incompatible princi
ples being enunciated by ICAO and the Chicago
Convention on one side, and by the Aeronautics
Act with its wholly intra vires regulations on the
other side, the Court would be bound to respect
the Act and the regulations, since the international
involvements are not specifically incorporated into
Canadian law. But, although not obliged to apply
the civil aviation association's principles slavishly,
or with mathematical precision, or at all, the Min
ister has managed to abide pretty closely by them.
Indeed ICAO's stated principles are so general
and qualified as to be serviceable only as guide
lines, but hardly as legislation. The gravamen of
these principles is cost, as distinct from Parlia
ment's emphasis on pricing exclusively. In addition
to principle (vii) set forth is section S9 of exhibit
19(B), the others (with emphasis added) are:
(i) The cost to be shared is the full economic cost to the
community of providing the airport and its essential
ancillary services, including appropriate amounts for
interest on capital investment and depreciation of
assets, as well as the cost of maintenance and opera
tion and management and administration expenses,
but allowing for all revenues, aeronautical or non-
aeronautical, accruing from the operation of the air
port to its operators.
(ii) An allocation of costs should be considered in respect
of space or facilities utilized by government
authorities.
(iii) The proportion of costs allocable to various categories
of users, including State aircraft, should be deter
mined on an equitable basis, so that no users shall be
burdened with costs not properly allocable to them
according to sound accounting principles.
(iv) In general aircraft operators and other airport users
should not be charged for facilities and services they
do not use, other than those provided for and imple
mented under the Regional Plan.
(v) Under favourable circumstances airports may produce
sufficient revenues to exceed by a reasonable margin
all direct and indirect costs (including general
administration, etc.) and so provide for retirement of
debt and for reserves for future capital improvements.
(vi) The users' capacity to pay should not be taken into
account until all costs are fully assessed and distribut
ed on an objective basis. At that stage the contribut
ing capability of states and communities concerned
should be taken into consideration, it being under
stood that any State or charging authority may recov-
er less than its full costs in recognition of local,
regional, or national benefits received.
(vii) [previously recited]
(viii) Airport charges levied on international general avia
tion, although needing to respect Article 15 of the
Chicago Convention should be assessed in a reason
able manner, having regard to the cost of the facilities
needed and used and the goal of encouraging the
growth of international general aviation.
The weight and preponderance of credible evi
dence indicates that although Parliament con
ferred a broad pricing authority upon the Minister
to prescribe charges for use of facilities and ser
vices, the trans-oceanic landing fees prescribed by
him evince negligible, if any, departure from
ICAO's suggested principles. So, even if the
defendants' adherence, or not, to those principles
were justiciable in this Court, the evidence dis
closes that the Minister's effort in prescribing the
impugned landing fees is good enough. It did not
violate the principles. Strict arithmetical accuracy
is not necessary in this regard, despite the parties'
counter-fulminations of reams of contradictory
expert accounting postulations.
WERE THE PLAINTIFFS "OVERCHARGED"?
In view of the initial findings herein to the effect
that the impugned Air Services Fees Regulations
are quite intra vires of section 5 of the Aeronautics
Act and not null and void for being allegedly
discriminatory, the brutal truth is that whether or
not the plaintiffs have been "overcharged" is of no
legal consequence. In prescribing the charges, the
Minister bears a responsibility for the risk that if
he charges too much he could drive away the
plaintiffs' business and precipitate retaliation by
the airport authorities of their countries of origin.
He could drive the Canadian plaintiffs out of
business. Since the plaintiffs continued to pay the
landing charges their continued use of Canadian
airports was their own voluntary act based on
business decisions. They paid under protest from
about the time they commenced this action.
Successive Ministers have been responsible to Par
liament, to their cabinet colleagues and to the
government caucus. The plaintiffs, all corporate
entities, are managed and directed by persons who
are responsible to their shareholders or their State
owners.
In the normal course of events the Minister of
the day, controlled no doubt by his particular
responsibilities, had regard to costs when prescrib
ing landing charges. He has not been obliged to do
so in terms of the power conferred by Parliament
in section 5 of the Act; but in the normal course of
events the Minister would, and did, have regard to
cost. That, indeed, is indicated strongly by the
evidence which also discloses by exhibit 218, the
Auditor General's report, that the system of the
eight international airports have lost a great deal
of money. That is another way of describing non-
recovery of costs. Whatever that "full economic
cost to the community of providing the airport and
its ancillary services" might be, it seems apparent
that the community of Canadian taxpayers has
borne the far greater part of the burden.
The witness whose documentary and oral evi
dence was most cogent and credible on this issue is
Gordon Clare Wilson. Mr. Wilson, since August,
1978, has been the financial adviser in the rate
economics branch of the Canadian Air Transpor
tation Administration (CATA). After graduating
in 1973 with an Honours Bachelor of Commerce
degree from Carleton University, he joined the
Canadian Transport Commission's staff for a short
time, working as a research assistant in a project
on airline operating costs. In October, 1973, he
became employed by Statistics Canada, the avia
tion statistics branch where he acquired valuable
experience for his present employment and his
credibility in this case. At the time of his testimo
ny, Mr. Wilson had participated in all of the
activities of the rate economics branch which is
responsible for the cost recovery program of
CATA. He has been involved in the preparation of
financial information used, and to be used, in the
development of fee proposals to the industry.
The record of Mr. Wilson's viva voce testimony
extends from page 2584 (vol. 13) of the transcript
to page 2843 (vol. 14). This knowledgeable witness
described in simple historic terms the development
of the landing fees from years before the institu
tion of the international landing fees in 1957, to
their merger with the trans-oceanic landing fees in
1985, and the consequent elimination of the latter
on September 1 of that year. (Transcript: pages
2610 to 2621). Those developments are shown also
in exhibits 220 through 223.
CATA's methodology brought about a reduc
tion of the trans-oceanic fee on May 1, 1982, and
Mr. Wilson explained the matter thus:
A. Well, the methodology that we had adopted is one that in
looking at the costs and revenues of the international airport
system would come to an amount that we call the "break-even
landing fee," and that as long as everyone is being charged less
than that break-even landing fee, it was our position that no
one was paying for the full costs.
As a result of major changes in the revenue picture of these
airports, other than through landing fees, and some changes on
the costs side, the situation was such that without reducing the
trans-oceanic landing fee that fee would have exceeded the
break-even landing fee. And consistent with our methodology,
we took the step of reducing that fee.
(Transcript: vol. 13, page 2618)
Over the time span from 1976, when the fees
increased by 30%, to September, 1985, when the
trans-oceanic landing fee was eliminated, the
domestic and international fees grew at a greater
rate than the trans-oceanic fee. Mr. Wilson
testified:
If I remember the figures correctly, over a 10-year period,
culminating in the September, 1985, increases, the domestic
was increased something like 272 per cent; the international,
240 per cent, and the trans-oceanic was 14 per cent higher than
it had been 10 years earlier.
(Transcript: vol. 13, page 2620)
The methodology utilizes a "catch-all' or
"residual" fee, and is the system employed at
several, if not all, foreign airports throughout the
world. The plaintiffs' witness Cornelius Lakeman,
retired head of the international affairs depart
ment, Flight Operation Division at KLM, testified,
thus:
Q. Some airports attempt to segregate landside and airside
to some extent?
A. Some airports do.
Q. Many do not?
A. Many do not.
Q. All right. And you would agree with me that with respect
to methodology there is a wide range of practices right across
the world as to how he gets to those final fees?
A. Yes
Q. Yes. But that for the most part, the fee which winds up
being charged as the balanced costs and revenues is the landing
fee?
A. Yes.
(Transcript: vol. 2, pages 288 and 289)
Mr. Wilson, on cross-examination, re-iterated
the technique of discovering the break-even land
ing fee and his explanation is recorded at page
2791 of the transcript (vol. 14). The trans-oceanic
and other carriers have the benefit of the revenues
from the concessions and rental enterprises which
fall into the "catch-all" thereby reducing the costs
otherwise chargeable against the airlines. This
technique is in sweet accord with ICAO's principle
S9(i), above recited, as revealed in exhibit 19(B).
Exhibit 223, produced by Mr. Wilson (Tran-
script: vol. 14 pages 2662 et seq. demonstrates the
calculation of the break-even landing fee in the
international airport system. The source of the
sums in the first part of exhibit 223 is the cost and
revenue statements, for the year 1982-83, which
appear on page 10 of exhibit 185. Exhibit 223
indicates that in order to achieve full cost recovery
in the international airport system, all categories
of flights would have had to be charged a landing
fee of $2.25 per 1,000 pounds. In fact, the landing
fees, effective May 1, 1982, per 1,000 lbs. were:
trans-oceanic, $1.62; international, $1.38; and
domestic, $0.91.
So, the defendants argue, even after the subsidy
from the air transportation tax, the defendants
were providing a subsidy of $0.63 per 1,000 lbs. to
the trans-oceanic sector, $0.87 to the international
sector and $1.34 to the domestic sector. A subsidy
of $0.63 per 1,000 lbs., the defendants assert,
represents a subsidy of $485.00 for each landing of
a Boeing 747's trans-oceanic flight. Exhibit 266
indicates a break-even landing fee of $2.80 per
1,000 lbs. in 1978-1979, when the rate of the
trans-oceanic landing fee was $2.06.
It must be noted that the air transportation tax
is not an airport revenue. It is levied on the price of
transportation by aeroplane, but the fare paid is
not always for departure from an airport. It could
be for departure from a lake or river or an open
field. This tax is on the air fare alone. It is not an
airport user charge. Accordingly if the government
gives some of this tax revenue as a subsidy for the
airports, that fact alone does not make the whole
tax revenue accountable in and with revenues such
as duty-free sales, general terminal fees, or landing
fees. Although the plaintiffs may gain benefit from
such subsidy using tax revenues, that process is
truly res inter alios acta insofar as the plaintiffs
are concerned.
CATA calculated the break-even landing fee in
the same manner in every year. In 1981, the
forecast indicated that the trans-oceanic fee would
exceed the break-even landing fee and the trans
oceanic landing fee was significantly reduced in
order to avoid overcharging the affected carriers.
This is established by Mr. Wilson's testimony,
recorded at pages 2805 and 2806 of the transcript
(vol. 14).
The experts, evincing all the usual strengths and
weaknesses of their genre, have tried to show how
the plaintiffs were overcharged, or not, depending
upon which side sought and bought their expertise.
The Court, after assessing the witnesses in person
and after reviewing the transcript of their volumi
nous testimony and the voluminous exhibits, comes
to certain conclusions.
The Court prefers the evidence of Steven O.
Gunders over that of Alan S. Cunningham. Mr.
Cunningham asserts that the statements of the
airports revolving fund (ARF) fairly represent the
operations of the airports from time to time includ
ed in the ARF system. His report (exhibit 211)
presents his analysis of the over or under recovery
by sector on the basis of the unadjusted ARF cost
base. This is manifestly erroneous and renders his
analysis unreliable. The Auditor General of
Canada expressed an unfavourable opinion (exhib-
it 212) about the ARF financial statements for
several reasons, notably (page 27.25) that "an
amount representing the Government's interest
expense associated with the capital invested in the
fund" is not considered. So said David Lawrence
Meyers, Deputy Auditor General in his testimony
recorded at page 2468 of the transcript (vol. 13).
The passages on cross-examination of Mr. Cun-
ningham recorded on pages 2175 through 2177
(vol. 11) are significant elements in discounting his
evidence. Another aspect of this witness' evidence
which creates grave doubt about his and its objec
tivity is the anomolous "technique" of allocating
all revenue generated by the duty-free shops
concession to the international sector and then
assuming that all other sources allocated in pro
portion to passenger volume. Again, at pages 2280
and 2281 (vol. 12) Mr. Cunningham is recorded,
and he did testify, to the effect of abdicating his
professional role in favour of Mr. Hart, another
witness, and the plaintiffs' representations, "and it
was more or less a committee decision that the
allocation of costs and revenues on a passenger
basis was indeed fair". These examples of the
witness' approach to the issues drain all confidence
in his professionalism and objectivity. They,
among others, scuttle his credibility.
On the other hand, Mr. Keith Boocock stood out
in experience, expertise and credibility. The Court
accepts this witness' evidence as well as that of
Philip Beinhaker wherever they might face con
flicting evidence.
The Court is amply persuaded on a positive
preponderance of probabilities that none of the
plaintiffs has been overcharged in paying the
trans-oceanic landing fees.
RESTITUTION
If the earlier findings of this Court, to the effect
that the impugned Air Services Fees Regulations
are valid and wholly intra vires be held subse
quently to be incorrect, the plaintiffs claim that
they would be entitled to restitution. The defend
ants contend that the plaintiffs are not entitled to
the return of trans-oceanic landing fees paid prior
to the commencement of this litigation on March
10, 1980, because they say, those fees were paid
under mutual mistake of law and not under any
compulsion from the defendants.
Because the Court accepts the evidence and
testimony of Steven O. Gunders and the defend
ants' other witnesses, it finds that the differing
gradations of flights defined to be "domestic",
"international" and "trans-oceanic" were justified
and not unreasonable in regard to allocation and
generation of costs of and for the international
airports. It follows that if the Regulations were
ultra vires on the basis that the costs of unvisited
or seldom visited airports ought not to be charged
to the plaintiffs, then each plaintiff would be
entitled to a pro-rated deduction from the landing
fees factually paid since 1974 in regard to landings
in the common law provinces and since 1975 in
regard to landings in Quebec. It also follows that if
the differential discrimination in the very gradua
tions or categories of flights be a basis for holding
the impugned Regulations null and void and inop
erative in regard to the so-called discriminatory
categorizations, then the Regulations are severable
in regard thereto and the plaintiff having com
plained specifically of the trans-oceanic fee, cannot
escape paying the next lower fee, domestic or
international, from time to time emplaced.
In regard to fees paid for landings in Quebec,
there is no distinction to be drawn between money
paid under mutual mistake of law or mistake of
fact. If the Regulations were ultra vires or to the
extent they are severable and somewhat inoper
able, in those regards the plaintiffs were never
indebted to the defendants. In any such event,
articles 1047 and 1140 of the Civil Code of
Quebec will govern the matter of restitution.
In regard to restitution of money paid in regard
to landings in the common law provinces, the same
considerations about the effect and non-effect of
the Regulations applies as between whether they
be ultra vires or null, void and inoperable but
severable.
The plaintiffs' case involves the same kind of
mistake as those found in:
Kiriri Cotton Co. Ltd. v. Dewani, [ 1960] A.C. 192
(H.L.); Eadie v. Township of Brantford, [ 1967]
S.C.R. 573; and Hydro-Electric Commission of
Nepean v. Ontario Hydro, [1982] 1 S.C.R. 347.
In the Nepean Hydro case above cited, Mr.
Justice Estey, writing for the majority of the
Supreme Court, at pages 398 and 399, adopted the
finding of the Trial Judge, who said:
In my view the payments were made without protest in the
sense that it intended to preserve legal rights. Nepean did voice
its objections from time to time; but in my view the circum
stances do not go beyond what can be described as quibbling
and grumbling. It cannot be inferred from the circumstances
that the payments were involuntary in the legal sense.
In this case, although the action was commenced
on March 10, 1980, the plaintiffs' declaration was
amended up to February 9, 1984, and they are
entitled to be considered as having paid under
protest from at least the commencement of the
action until the respective dates shown in the
annex to their statement of agreed facts. If any
plaintiff did separately assert a provable, serious
protest—apart from grumbling and quibbling—
prior to commencing this action, such plaintiff
shall be absolved of having made voluntary pay
ments as of such earlier date. Such payments
would be made under compulsion. All of the rest
of the plaintiffs did not pay under compulsion.
Further in the Nepean Hydro case, Estey J.
summarized his decision (page 411) and the effect
of his judgment highlights the foregoing observa
tion. Estey J. reiterated that generally, a payment
made under a mistake of law is not recoverable.
Recovery may be permitted, however, in two kinds
of cases: cases involving compulsion and cases of
illegal transactions. In the former, "recovery is
allowed as the payment is not made voluntarily
and there is no reason to suppose, only because of
the fact of payment, that the plaintiff had surren
dered his right to recover his moneys paid under
practical compulsion." In the latter (i.e. cases of
illegal transactions), recovery is permitted if the
parties were not "in pari delicto". In the absence
of either of those elements, as in the case at hand,
the mutual mistake of law rule operates to deny
recovery under the common law.
There was a strong dissent by Mr. Justice Dick-
son, now Chief Justice, with the concurrence of
Laskin C.J. in the Nepean Hydro case. However,
it is not for this Court to prefer the minority
opinion over the majority opinion.
Clearly if any restitution is, in fact, to be made,
a reference will have to be formulated and under
taken either according to the above terms or those
imposed by an appellate Court.
In the final result, however, the plaintiffs' action
is dismissed, effectively under Rule 338(2) as of
February 24, 1987, with party and party costs of
the defendants to be paid, after taxation thereof,
by the plaintiffs.
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.