The Federal Court of Canada recently upheld a Transportation Appeal Tribunal of Canada (TATC) decision which had found that the TATC did not have jurisdiction to accept submissions regarding the legal costs of an air carrier's application for a review of an administrative monetary penalty issued by the Canadian Transportation Agency.(1)
The court held that as the penalty had been unilaterally withdrawn by the agency prior to the TATC hearing, the TATC did not have jurisdiction to deal with the question of costs.
On 21 December 2016 a plane operated by Saudi Arabian Airlines was scheduled to fly from Toronto to Jeddah. The airport's ground-handling workers began to push the plane back from the gate before the flight's commander had given his instructions to do so, resulting in the plane's engine cowling and the plane striking a stationary Air Canada service vehicle. A passenger on board filed a complaint.
On 21 September 2017 the agency found the air carrier liable to the passenger for C$610, which the carrier paid. However, on 20 December 2017 the agency issued a notice of violation against the carrier. It is unclear why the agency issued the notice of violation, given that the carrier had made the required payment.
On 22 February 2018 the carrier filed a request for a review of the notice of violation with the TATC. The TATC scheduled a hearing for 19 September 2018. On 17 September 2018 the agency withdrew the underlying notice of violation.
On 18 September 2018 the carrier sent a letter to the TATC seeking direction as to how submissions might be made to recover costs as a result of the withdrawal. Further, on the same day, the TATC sent a letter to the carrier stating that because the notice of violation had been withdrawn, the TATC was no longer seized of the matter. Therefore, it would not accept submissions about costs.
On 24 September 2018 the carrier sent a letter to the TATC contesting the determination that it was no longer seized of the matter as a result of the withdrawal.
On 27 September 2018 the TATC chair sent a follow-up letter confirming the TATC's position that it was no longer seized of the matter.
The carrier then brought the matter before the Federal Court of Canada, requesting a declaration that the TATC:
- had unlawfully or improperly refused to exercise its jurisdiction;
- had failed to observe a principle of natural justice and procedural fairness; and
- remained seized of the matter.
The carrier, Saudi Arabian Airlines, took the position that the TATC's determination that it could not order costs because it was no longer seized of the matter due to the withdrawal was legally incorrect and procedurally unfair.
The carrier argued that Section 180.3(3) of the Transportation Act (SC 1996, c 10) obliges members of the TATC and – by extension, the TATC itself – to observe procedural fairness and natural justice in conducting reviews.
With respect to the TATC's authority to award costs, the carrier argued that Section 19 of the Transportation Appeal Tribunal of Canada Act (SC 2001, c 29) empowers the TATC to award costs.
The carrier noted that if the power to award costs was interpreted in a manner which resulted in the TATC losing jurisdiction only as a result of a withdrawal, applicants would be left with no avenue to recover costs from the agency. The carrier emphasised that this would be procedurally unfair and a denial of natural justice.
The TATC, assisted by counsel for the agency, argued that the existence of a notice of violation before the TATC is a condition precedent to its jurisdiction to act.
The TATC argued that the power to award costs would apply only if it had jurisdiction to hear the underlying matter.
The statutory scheme gives the TATC the power to review "appeals in connection with administrative monetary penalties provided for under sections 177 to 181 of the Canada Transportation Act".
In this case, the relevant section of the Transportation Act concerning notice of violation reviews was Section 180.3(1), which provides as follows:
A person who is served with a notice of violation that sets out a penalty and who wishes to have the facts of the alleged contravention or the amount of the penalty reviewed shall, on or before the date specified in the notice or within any further time that the Tribunal on application may allow, file a written request for a review with the Tribunal at the address set out in the notice.
Therefore, the TATC argued that it was unable to address the question of costs when there was no longer an underlying notice of violation to review in respect of the facts alleged or the amount of the penalty.
The TATC noted that it had addressed the issue of whether it could award costs without an underlying administrative monetary penalty to review in a previous case (Guardian Eagle) and had come to the same conclusion.
The TATC noted that its usual practice in the case of a withdrawal is to issue a notice of cancellation of the hearing and not to consider the question of costs.
The Federal Court accepted the TATC's position wholesale and held that, based on the statutory scheme, the agency may withdraw a notice of violation that is part of a proceeding before the TATC without providing notice. On doing so, an applicant that has contested the notice of violation has no right of recourse to the TATC, as the TATC no longer has jurisdiction over the matter.
While surely frustrating for carriers facing unfounded or mistaken administrative monetary penalties from the agency, this decision clarifies that the agency can withdraw an underlying notice of violation and thereby avoid an adverse costs award at a review hearing.
Endnotes
(1) Saudi Arabian Airlines Corp v Canada (Transportation Appeal Tribunal) (2019 FC 1378).
