Canada’s Federal Court: Public Safety Trumps Aviation Commercial Interests

Earlier in 2015, the Federal Court heard two days of submissions from Canadian company Rotor Maxx Support Ltd. and the Minister of Transport (click here for link).  The issue: whether the Minister of Transport should be subject to a confidentiality order and injunction preventing the Minister from disclosing that Rotor Maxx had improperly certified helicopter engine and drive train parts.

At the time of the hearing, a temporary confidentiality order was already in place, but Rotor Maxx sought a further, prospective injunction.  To succeed in its injunction application, Rotor Maxx had to demonstrate to the court that there would be irreparable harm to its business that outweighed the Canadian public’s interest in the security of the “flying public”.  In the court’s own words, the question to be decided was whether “grave risk to human life should weigh much higher than any commercial interests”.

The timeline leading up to the application can be succinctly set out as follows.  In or about early 2013, the Minister undertook a Civil Aviation Safety Inspection of Rotor Maxx.  The inspection was in connection with parts certified by Rotor Maxx between June 2011 and April 2014.  By July 2014, Rotor Maxx was aware that a Civil Aviation Safety Alert (“CASA”) may be issued against it, due to the Minister’s findings from the 2013 inspection.  A draft CASA was provided to Rotor Maxx by November 2014, and the actual CASA was provided in late February 2015, three weeks prior to its issue date.

Rotor Maxx argued that if the CASA was released, its commercial interests would be jeopardized.  The injunction would have given the company more time to take further corrective action, as the steps they had taken by the date of the hearing had been rejected by Transport Canada.

The court’s decision, though brief, was definitive. Mr. Justice Shore reasoned first that there was no serious issue raised by Rotor Maxx that put the reasonableness of the CASA to test. Second, he noted that when a party seeks to silence the government entity responsible for aviation safety, the court must balance the party’s interests against those of the public.  The judge’s reasoning points to a very high bar for parties seeking to argue that their interests, commercial or otherwise, should outweigh the Minister’s duty to Canadians who fly.  Finally, the judge concluded that there was a possibility of irreparable harm to public aviation safety that outweighed any commercial interest held by Rotor Maxx.  The injunction application was dismissed, and the temporary confidentiality order discontinued.

The Rotor Maxx decision reaffirms previous decisions by Canadian courts that the Minister of Transport, along with public oversight bodies such as Transport Canada, are required to place public safety ahead of the economic interests of individuals or companies that they oversee.  Our courts have recognized that inspection, regulation and enforcement of aviation safety is a “heavy responsibility” borne by the Minister.  See, for example, Sierra Fox Inc. v. Canada (Transport), 2007 FC 129 at para. 6.  Cases such as Rotor Maxx and the case of Gill v. Canada (Minister of Transport), 2014 BCSC 582, cited by Justice Shore, emphasize that the Minister must be free to fulfil his or her responsibilities without consideration of economic consequences.

That being said, the Minister and those working for oversight bodies such as Transport Canada do not have free rein to completely ignore the rights and interests of those they regulate. On the contrary, individuals and companies subject to regulation are entitled to certain procedural rights.  This can include, for example, a right to proper notice of decisions made by the Minister, or a right to a written or oral hearing.  The Minister also has an obligation to act in good faith when taking any action against an individual or company under the Minister’s oversight.  In other words, the Minister cannot act arbitrarily, or without having sufficient evidence to support his or her actions.

One matter that is most interesting in the Rotor Maxx decision is the length of time between the Minister’s inspection and the issue date for the CASA, a period of approximately two years. Although the court emphasized that the consequences of a failure of the non-conforming parts could be catastrophic, there was no criticism of the Minister’s decision to wait to release the CASA.  Though not expressly stated by the court, one can infer that the Minister’s actions in this case were in line with the obligation to treat Rotor Maxx fairly and act in good faith.