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A-39-75
Okanagan Helicopters Ltd. (Applicant) v.
Canadian Transport Commission and Erickson Air-Crane Company (Respondents)
Court of Appeal, Jackett C.J., Pratte and Ryan JJ.—Ottawa, March 17 and 20, 1975.
Judicial review—Appeal—Canadian Transport Commission granting respondent temporary authority to operate air ser- vice—Whether Commission erred in not giving applicant notice of respondent's application and opportunity to be heard— National Transportation Act, R.S.C. 1970, c. N-17 as am., s. 64(2) and (5)—Aeronautics Act, R.S.C. 1970, c. A-3 as am., s. 16(1), (3) and (4)—Federal Court Act, ss. 28 and 29—Air Carrier Regs., SOR/72-145, ss. 3(1)(g)(ii), 8(6) and 9(d).
Apprehending possible application by respondent Erickson for permission to import Skycrane aircraft for use in connection with the "topping off" of the C.N. Tower in Toronto, Okana- gan, a Canadian firm, informed the Commission that it had the "capability and resources" for the task. Subsequently, Okana- gan was granted a one-year authority to provide Skycrane air service. On becoming aware that Erickson was endeavouring to obtain authority, applicant asked the Commission that it be informed of such applications, and that it be provided an opportunity to make representations. Eventually, Erickson was selected by Canron Limited, the Company responsible for erecting the topmost part of the tower, and applied for a licence. In view of the preference of C.N. Tower Ltd. and Canron for Erickson, the Air Transport Committee granted it the temporary authority. Okanagan maintained that in not providing it with an opportunity to be heard in connection with the Erickson application, the Committee breached the princi ples of natural justice.
Held, dismissing the application and appeal, there is no statutory or regulatory provision requiring the giving of notice or an opportunity to be heard. Okanagan was not denied a licence, nor was its one-year licence revoked or modified. It had made no significant investment in reliance on its licence which might, in the public interest, warrant protection. The facts do not establish sufficient interest to confer the rights claimed. The Committee did not err in law in considering the contract bids, and the preference of the contractor for Erickson. Section 64(2) of the National Transportation Act provides for a right of appeal to this Court regarding matters raised in the section 28 application. Because of section 29 of the Federal Court Act, a section 28 application is not available. Under section 64(5) of the National Transportation Act, the Court certifies to the Commission that the appeal from the decision of the Commit tee lacked merit.
JUDICIAL review and appeal.
COUNSEL:
F. Lemieux and M. Phelan for applicant.
W. G. St. John for respondent Canadian
Transport Commission.
D. I. Brenner for respondent Erickson Air-
Crane Company.
SOLICITORS:
Herridge, Tolmie, Gray, Coyne and Blair, Ottawa, for applicant.
Legal Department, Canadian Transport Commission for respondent Canadian Trans port Commission.
Brenner, Abraham, Maxwell & Company, Vancouver, for respondent Erickson Air- Crane Company.
The following are the reasons for judgment delivered orally in English by
RYAN J.: This is a section 28 application by Okanagan Helicopters Ltd. (referred to in these Reasons as "Okanagan") to review and set aside the decision of the Air Transport Committee of the Canadian Transport Commission, dated January 21, 1975, granting the respondent, Erickson Air- Crane Company (referred to as "Erickson"), tem porary authority to operate a Class 7 Specialty— Aerial Construction—commercial air service 1 in order to provide an S64E helicopter as required in the construction of the C.N. Tower Building in Toronto. It is also an appeal from the same deci sion under subsection 64(2) of the National Transportation Act 2 . The application and the appeal were joined into one proceeding by order of the Court.
Both Okanagan and Erickson had been aware for some time prior to January 1974 of the C.N. Tower project and were conscious of the capability of the Sikorsky Skycrane helicopter for the work involved. Canron Limited had been selected to erect the topmost part of the tower structure,
Class 7 specialty aerial construction commercial air service is a class of commercial air service established by subparagraph 3(1)(g)(ii) of the Air Carrier Regulations, SOR/72-145. It relates to "the use of rotating wing aircraft in construction work, including aerial hoisting, mountain tram line construc tion, aerial pole setting and aerial power line construction".
2 R.S.C. 1970, c. N-17, as amended.
consisting of a 300-foot high steel mast weighing about 300 tons. In connection with this project, negotiations and technical discussions with Erick- son had been proceeding at least since the summer of 1973.
In November 1973, the solicitors for Okanagan wrote to the Air Transport Committee with respect to a possible application by Erickson for permission to import S64E Skycrane aircraft for use in the erection of the tower antenna. The solicitors requested that there should be no allow ance for importation of an S64 aircraft "as our clients have the capability and resources and are willing and able to provide this service".
The Secretary of the Air Transport Committee replied on November 27, 1973:
We may say that it has been the Committee's policy to require foreign carriers seeking to complete contracts for flying services in Canada whenever possible to do so under the authority of an appropriately licensed Canadian carrier.
It should be noted however that a Canadian carrier would of necessity have to have the appropriate licensed authority before any consideration could be given to the question of importing aircraft even if only of a temporary nature.
By an order dated January 31, 1974, the Air Transport Committee authorized Okanagan to provide a Class 7 Specialty—Aerial construc- tion—commercial air service using one Sikorsky S64E (Skycrane) aircraft in Group E-RW under its previously issued licence No. A.T.B. 512/ 50(H). The authority was valid for one year, ter minating January 31, 1975. Okanagan was required by the order to apprise the Committee of its future intentions on or before October 31, 1974.
A letter, dated January 22, 1974, from Ever green Helicopters, Inc., McMinnville, Oregon, to Okanagan has obvious relevance to the January 31, 1974, licence to Okanagan. The letter reads:
This letter coAfirms our intent to enter into a one year agree ment with Okanagan Helicopters Ltd. for the lease of our S-64 to Okanagan for intermittent periods of time during the term of the agreement.
In addition to providing the S-64 helicopter Evergreen Heli copters is prepared to furnish as required qualified pilots,
qualified mechanics, maintenance to M.O.T. standards, support equipment, spares and parts. Hull and full liability insurance tailored to the requirements of each active time period the aircraft operates in Canada will be provided to the extent required by mutual agreement of the Parties hereto.
Okanagan will provide necessary Canadian clearance for entry of the aircraft, crews, support gear and/or what may be required to undertake each specific project during the term of the agreement.
It is recognized that since each specific helicopter construction project must be costed on its own merit and will involve varying operational approaches, payment to Evergreen by Okanagan for each project must be determined for each project. In view of this fact lease payments will be calculated and mutually agreed upon prior to the commencement of each project during the term of the agreement.
By letter dated May 17, 1974, to the Secretary of the Committee, the solicitors for Okanagan stated that they were aware that another helicop ter company was attempting to obtain Group E authority to use larger aircraft in the rotating wing field. They asked to be informed of such applica tions and expressed an intention to intervene and to make representations to the effect that the granting of any additional Group E authority in Canada could not be justified and would be detri mental to the authority of Okanagan to provide Group E aircraft in the aerial construction field. In reply, the Secretary of the Committee wrote:
As you know, Class 7 Specialty Aerial Construction does not require the giving of public notice, nor a showing of public convenience and necessity. By reason of this, intervention is not invited concerning particular applications.
On June 5, 1974, Okanagan through their solici tors again wrote to the Committee indicating their understanding that another person had applied for either a Class 4 licence or a Class 7, Group E-RW rotating wing licence. Again they requested an opportunity to make submissions. This time the reply was that applications for Class 4 would be given public notice and that some sub-classifica tions of Class 7 are given public notice: "In any event, it is noted that you were asking for an opportunity to make submissions in respect of such applications and in this respect your request will be given consideration and you will be informed of the direction of the Committee as soon as such
direction is known." Presumably the direction in mind would be a direction, if any, that the Com mittee might give under subsection 8(6) of the Air Carrier Regulations 3 .
By letter dated October 31, 1974, written pursu ant to the terms of the Committee order of Janu- ary 31, 1974, Okanagan requested continuation of its licence to use a Sikorsky S64E (Skycrane) aircraft in Group E-RW for a further one-year period; it supported its request with particulars of its future intentions: one circumstance mentioned in the letter was that Okanagan "has become engaged in dealing with Canron and advising them of its efforts to provide the most economic S-64 service".
The Secretary of the Air Transport Committee acknowledged this letter on December 13, 1974. The Secretary's letter referred to a possible con tract between Okanagan and Canron Limited:
I am directed to inform you that before the Committee can reach a decision on the application for the extension of author ity for a further one year period, the Committee requires information in respect of contract figures from Okanagan in respect of a possible contract with Canron Limited.
This letter also confirms the visit from Mr. K. W. Steele of Okanagan Helicopters Ltd. in our offices last Wednesday, December 11th, at which time Mr. Steele made mention of the discussions which had been held with Canron Limited. It would be helpful if you could provide the Committee with written information concerning the progress which has been made and which I believe may be related to a possible contract. I believe it would also be helpful if some mention was made as to the manner of arrangements proposed to be negotiated with respect to the possible use of the Sky Crane in Canada under the licence authority held by the Company.
The letter also acknowledged receipt of copies of communications between Okanagan and Erickson relating to possible arrangements between the companies regarding the use of an Erickson Sky- crane in Canada.
On December 30, 1974, Okanagan replied in detail to the Committee letter of December 13,
Subsection 8(6) of the Air Carrier Regulations, SOR/72- 145, reads:
(6) The Committee may direct that such public or other notice of an application as it deems reasonable be given by and at the expense of the applicant.
1974. The reply stated that the company was assembling data for the purpose of making a spe cific proposal to Canron by January 15, 1975. It also outlined possibilities and plans for developing the helicopter market in the area of construction.
By letter dated December 5, 1974, Mr. Eccles, Operations Manager of Canron Limited, Eastern Structural Division, wroted to the solicitors for Erickson. I quote from this letter:
After lengthy discussions with Erikson Air-Crane and Okana- gan Helicopters Ltd., we have selected Erikson as the Company best suited to provide us with helicopter service for this project. However, we are advised by the Air Transport Committee, Ottawa that Erikson has not applied for or obtained a license. We therefore request that you expedite this application so that, once obtained, we can finalize a contract with Erikson for the performance of the work.
The application of Erickson, dated January 8, 1975, was sent to the Air Transport Committee by Erickson's solicitors by letter dated January 13, 1975. The application was for temporary authority to operate a Class 7 Specialty—commercial air service—aerial construction using Group E-RW aircraft; specifically it was for permission to pro vide helicopter service to assist Canron Limited in supplying and erecting the antenna mast structure for the C.N. Tower project in Toronto.
The Erickson application made reference to Okanagan and to support for the application from Canron and C.N. Tower Limited in the following passages:
Erickson Air-Crane Company submits that there is no operator presently licenced in Canada who has either the trained person nel or the technical expertise required to perform the proposed service. It is further submitted that Erickson Air-Crane Com pany is the only operator in the world presently capable of providing the unique and specialized service that is required to erect the antenna mass structure on the CN tower project.
This application is made with the full knowledge and support of both Canron Limited and CN Tower Limited as indicated by the attached exhibits.
The applicant is aware of the Committee's guide lines respect ing the licencing of foreign air carriers; however, in this case, for the purpose of completing the steel erection on the CN Tower site the applicant respectfully submits that there is no operator in Canada qualified to provide the proposed service.
To the best of the applicant's knowledge, only one Canadian air carrier is presently licenced to operate S-64E aircraft in Canada. This operator, Okanagan Helicopters Ltd. obtained a temporary one (1) year authority in January or February in 1974 and entered into a lease agreement with Evergreen Heli copters Ltd. of Oregon. Notwithstanding this Okanagan/Ever- green "arrangement", neither of these Companies have ever operated a S-64E in Canada either before or after this author ity was obtained.
While Okanagan Helicopters Ltd. was invited by Canron Lim ited to bid on the CN Tower erection project, as of January 3, 1975, Canron had received no adequate proposals from Okana- gan. In any event however, Canron does not consider that either Okanagan Helicopters Ltd. or Evergreen Helicopters Ltd. has the technical expertise required to perform the service that the applicant proposes to provided.
5. PRESENT TRANSPORTATION FACILITIES
As outlined herein, there are no S-64E aircraft based in Canada and available for hire. The one Canadian licencee, Okanagan Helicopters Ltd., has never operated a S-64E in Canada since it obtained a one year temporary operating authority, which authority is almost due to expire.
By letter dated January 15, 1975, Okanagan made a detailed proposal in respect of helicopter services to Canron Limited. A copy of this pro posal, with a breakdown of the pricing, was sent to the Air Transport Committee. By telex of January 17, 1975, Canron Limited informed the Commis sion of the figures for lump sums and extras submitted by Okanagan and Erickson in their bids to provide helicopter services for the tower antenna.
Okanagan also sent a message to the Commis sion that was marked as having been received on January 20, 1975, asking to be informed of any applications for special permission to operate Group E aircraft in Canada and requesting the opportunity of attending on the Committee before a decision was taken.
I would add that immediately before the Erick- son application was heard by the Air Transport Committee, Malachy Grant, Director of Design and Construction, C.N. Tower Ltd., sent a telex message to the Commission in which he said that his company had analyzed the alternatives and was concerned that "... it would not be wise to use any crew other than the Erickson pilots on this project. Other firms have experience in locating hydro or microwave lines but we feel that the Erickson firm is much more experienced in construction type
operations which are more delicate and vulnerable. We would not feel confident using a less experienced crew." He also gave a comparison of the Okanagan and Erickson bids, showing that that of Okanagan was $197,000 over that of Erick- son. He emphasized the urgency of the matter: the helicopter operation was expected to begin as early as March 1, 1975.
On January 21, 1975, the Secretary of the Air Transport Committee sent a telex message to the solicitors of Erickson informing them of the deci sion of the Committee on the Erickson application. A confirming letter reads:
Reference is hereby made to an application under cover of a letter dated January 13th on behalf of Erickson Air-Crane Company in the matter of temporary authority to operate a Class 7 Specialty—Aerial Construction—commercial air ser vice, to provide an S64E helicopter as required in the construc tion of the C.N. Tower Building.
I am directed to inform you that the Committee has con sidered the said application and has noted that to this date no Canadian commercial air carrier owns or has operated a Sikorsky S64E in Canada. In view of the unique nature of the erection operations requiring the use of an S64E (Skycrane) helicopter, the weights and elevations involved, the imminent scheduling of the said work to be performed in erecting the antenna atop the C.N. Tower Building on behalf of C.N. Tower Ltd. and its contractor for this purpose—Canron Ltd., Eastern Structural Division, and further in view of the clearly expressed preference of C.N. Tower Ltd. and Canron Ltd. to engage the expertise of Erickson Air-Crane Company for this work, the Committee is satisfied that it would be in the public interest to permit Erickson Air-Crane Company to enter Canada to pro vide the required services in this case only—subject to it being awarded the contract for the provision of S64E aircraft in this connection, and further, subject to meeting the requirements of Ministry of Transport and other government departments concerned.
The foregoing serves to confirm Committee telex of January 21, 1975, which provided advance notice in the subject matter. With respect to Ministry of Transport, its regional offices in Toronto should be contacted as early as possible and in any event prior to an S64E entering Canadian airspace. A copy of this authority must be immediately available to Canadian authorities during operations with the said machine in Canada.
In support of its application and appeal, Okana- gan submitted that "... by not providing the applicant [Okanagan] with an opportunity to make representations in connection with the
application by Erickson Air-Crane to operate a Skycrane helicopter in Canada, the Air Transport Committee breached the principles of natural justice."
The decision to permit Erickson to provide the required helicopter service for construction of the antenna on the C.N. tower was made under sub section 16(1) of the Aeronautics Act', which reads`:
16. (1) The Commission may issue to any person applying therefor a licence to operate a commercial air service in the form of licence applied for or in any other form.
Subsections 16(3) and 16(4) provide:
(3) The Commission shall not issue any such licence unless it is satisfied that the proposed commercial air service is and will be required by the present and future public convenience and necessity.
(4) The Commission may exempt from the operation of the whole or any part of subsection (3), any air carrier or commer cial air service or any class or group thereof, except a scheduled commercial air service operating wholly within Canada or the operator thereof either generally or for a limited period or in respect of a limited area, if in the opinion of the Commission such exemption is in the public interest.
By virtue of paragraph 9(d) of the Air Carrier Regulations, a person who applies for a licence to operate a Class 7 Specialty commercial air service for aerial construction is excluded from the opera tion of subsection 16(3) of the Act.
There is no specific statutory or regulatory provision that would require the giving of notice to Okanagan of the Erickson application or affording Okanagan the opportunity to be heard in respect of it. The question remains, however, whether, apart from specific statutory or regulatory man date, the principles of natural justice would exact notice to Okanagan and some opportunity to make submissions.
This is not a case in which Okanagan was denied a licence, nor is it one in which its one-year licence, granted January 31, 1974, in respect of the use of a Sikorsky S64E (Skycrane) aircraft was either revoked or modified. The January 31, 1974
4 R.S.C. 1970, c. A-3, as amended.
order did not purport to place Okanagan in a position of monopoly. Actually, the period stipulat ed in that order had almost come to an end when the Erickson permit was granted. During the one- year experimental period Okanagan had not acquired an S64E aircraft; at most, it had Ever green's statement of intent to lease such an air craft to it and to provide the crew. There is not here a situation in which a licensee, in justifiable reliance on its licence or on an expectation of renewal, had made a significant investment which might in the public interest arguably warrant pro tection, at least for a time, against a competitor. The hard, central fact of this case is that Okana- gan and Erickson had competed for a specific job, the Toronto tower antenna contract, and subject to getting the licence in question, Erickson had obvi ously won. Okanagan would itself have had to get its licence renewed had it been the winner. Okana- gan's interest in making submissions to the Com mittee was its interest in seeing that Erickson was not given the permission that would enable it to take up the contract. Just possibly, I suppose, if Erickson's application had been denied and Okanagan's own licence were renewed, Okanagan might have succeeded in getting the antenna con tract by default, and just possibly, if it had secured the contract, Okanagan's position in respect of its application for renewal might have been somewhat improved. This, however, is all so very speculative and does not, in my view, establish a sufficient interest to warrant conferring on Okanagan a natural justice right to be given notice of and to participate in a proceeding having to do with Erickson's application for a one-job permit.
Actually, I am more concerned over the effect of the adverse assertions respecting Okanagan in Erickson's application. But I do not believe that, in the circumstances of this case, the fact they were made is enough to confer on Okanagan the right to notice and hearing where, apart from the allega tions, there was no such right.
In a case such as this, determination of status to participate requires a careful weighing of the facts in respect of the interests asserted, and a practical judgment on whether in the circumstances fairness requires notice and an opportunity to make sub missions. I have decided that in this case it does not.
Okanagan also submitted that the Air Transport Committee erred in law by taking into account the contract bids for the antenna job and the prefer ence of the contractor for Erickson. This submis sion is not sustainable.
Under subsection 64(2) of the National Trans portation Act there is a right of appeal to this Court in respect of matters raised in the section 28 application to review and set aside. Because of section 29 of the Federal Court Act, it follows that in this case a section 28 application is not available to the applicant. The section 28 application should therefore be dismissed.
I would also dismiss the appeal brought under subsection 64(2) of the National Transportation Act, and under subsection 64(5) I would certify to the Canadian Transport Commission our opinion that the appeal from the decision of the Air Trans port Committee, dated January 21, 1975, granting Erickson Air-Crane Company temporary authority to operate a Class 7 Specialty—aerial construc- tion—commercial air service in order to provide an S64E helicopter as required in the construction of the C.N. Tower building in Toronto lacked merit.
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JACKETT C.J. concurred.
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PRATTE J. concurred.
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