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22 January 2014
On June 16 2010 an Embraer 145, operated by Trans States Airlines on behalf of United Airlines Express, inbound from Washington, DC, landed on Runway 7 at Ottawa Macdonald-Cartier International Airport. Due to the wet surface, the aircraft overran the runway, resulting in a crash, which cost Allianz Global Risks US Insurance Company, Trans States Airlines' liability insurer, nearly US$5.5 million. There had been at least three prior overruns on Runway 7 since 2000 that occurred when the runway was wet or otherwise contaminated.
After paying out for the loss, Allianz commenced legal proceedings, claiming contribution and indemnity from NAV Canada and Transport Canada, the regulator of aeronautics in Canada.
The claim against Transport Canada was founded in negligence, broadly characterised as follows:
After receiving the statement of claim, Transport Canada brought a motion to strike out the third negligence allegation.
As stated in Transport Canada's factum, the issue on the motion was as follows:
"The central question to be answered in this motion is whether Transport Canada, as a statutory regulator, owes a private law duty of care to an individual airline (and/or its insurers) for alleged negligence in failing to properly oversee the conduct of an airport certified by the regulator."
In support of its position, Transport Canada relied on Cooper v Hobart ( 3 SCR 537) for the proposition that governmental authorities do not owe a duty of care for licensing or policy-based regulatory issues.
In response, Allianz argued that, in this particular case, the three types of negligence pleaded amounted to an indivisible factual matrix and, therefore, were "closely integrated components of the negligence claim". As such, it was inappropriate at the pleadings stage to extract a portion of the negligence claim and seek that it be struck out, while not challenging the rest of the allegations of negligence.
In addition, Allianz argued that the more recent case of Chadwick v Canada (2010 BCSC 1744) (for further details please see "Finding of regulatory negligence is possible against Transport Canada") demonstrated that, at least at the pleadings stage, it may not be proper to make a determination that no duty of care exists on the part of a regulator.
In Chadwick the plaintiff alleged that the crash of an aircraft was caused by the negligence of an aircraft maintenance engineer (licensed by Transport Canada). The plaintiff alleged that Transport Canada should also bear responsibility for the crash because it knew or ought to have known that the maintenance company and the aircraft maintenance engineer had not complied with the applicable policies and practices, and therefore should not have been licensed. On a similar motion brought in Chadwick, the court chose not to dismiss the claim at the pleadings stage as it was "not plain and obvious that no such duty of care existed… leaving the adjudication on the merits to trial".
The court accepted Allianz's arguments in the matter at hand. It found that Transport Canada's motion was premature and held that a full factual record would be required in order for the court to determine whether:
Transport Canada's motion was dismissed.
For further information on this topic please contact Carlos P Martins at Bersenas Jacobsen Chouest Thomson Blackburn LLP by telephone (+1 416 982 3800), fax (+1 416 982 3801) or email (firstname.lastname@example.org). The Bersenas Jacobsen Chouest Thomson Blackburn website can be accessed at www.lexcanada.com.
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