Judgments

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Decision Content

A-313-82
Nordair Ltd. (Appellant) v.
Canadian Transport Commission (Air Transport Committee) (Respondent)
Court of Appeal, Heald, Ryan JJ. and Cowan D.J.—Ottawa, June 1 and 2, 1983.
Aeronautics Appeal from CTC order that airline cease offering passengers coupons for limousine and rent-a-car ser vice CTC having jurisdiction under s. 10(2) Aeronautics Act to decide whether particular promotional practice proscribed and order cessation S. 112(10) of Regulations infringed since coupons constituted rebate resulting in transportation at toll different from tariff Coupon having value though not all would use Offer of right to ground transport being "in respect of transportation by air Aeronautics Act, R.S.C. 1970, c. A-3, ss. 10, 14(1)(m), 15 Air Carrier Regulations, C.R.C., c. 3, ss. 2, 23, 112(10) National Transportation Act, R.S.C. 1970, c. N-17, s. 64(5) (rep. and sub. R.S.C. 1970 (2nd Supp.), c. 10, s. 65 (Item 32)).
In November of 1981, the Air Transport Committee of the Canadian Transport Commission ordered Nordair to terminate certain promotional car-rental programmes. The Committee considered the programmes to be in violation of subsection 112(10) of the Air Carrier Regulations, in that they involved the giving of rebates, which resulted in transportation at a toll different from that in Nordair's tariff. Subsequent to the date for compliance stipulated in the order, Nordair ran an adver tisement in a Montreal newspaper and, in accordance there with, offered coupons entitling its passengers to limousine service and rent-a-car service. It continued, however, to collect the amounts that had been approved as tolls and were specified in its tariffs. The Committee advised Nordair that this offer apparently contravened the Committee's earlier rulings. Then, pursuant to subsection 10(2) of the Aeronautics Act, it issued the order in question, which required Nordair to cease and desist from making such offers.
Nordair posed two questions in this appeal. First, did the Commission have jurisdiction to make the order? Secondly, did the Commission err in law when it found the limousine and rent-a-car programmes to be infringements of subsection 112(10)?
Held (Heald J. dissenting), the appeal should be dismissed.
Per Cowan D.J. (Ryan J. concurring): In subsection 10(2) of the Act, the Commission is clearly invested with jurisdiction to order an air carrier, such as Nordair, to cease and desist from any promotional practice which contravenes Part II of the Act, a regulation, or an order of the Commission. The same provi sion also gives the Commission "full jurisdiction to hear and determine all matters ... of law or fact", for the purposes of
section 10; and therefore, the Commission is empowered to decide whether a contravention has indeed occurred. It follows that the Commission did have jurisdiction to make the order appealed from.
Furthermore, the Committee did not err when it concluded that the programmes offered were contrary to subsection 112(10). Under those schemes, every passenger who purchased a ticket for air transportation could claim a promotional coupon. Although it was not expected that every passenger would use his coupon, the coupon was, nonetheless, of some value to him. In the result, the passenger paid less for his air transportation than he would have if, upon payment of the approved toll, he had received nothing of value other than the air transportation itself.
The fact that the benefit offered was a right to ground— rather than air—transportation does not remove the case from the ambit of subsection 112(10): the offer was one made in respect of the transportation of passengers by air, and that is the kind of offer prohibited by the subsection.
Per Heald J. (dissenting): The Committee was authorized, by section 10 of the Act, to inquire into the matter with which the order was concerned. In this narrow sense, the Committee had jurisdiction to make that order. However, its ruling that Nordair's programmes violated subsection 112(10) was incorrect.
The terms "tariff' and "toll" are both defined, in section 2 of the Regulations, with reference to "traffic". This in turn is defined as "any persons ... that are transported by air". Consequently, when these three expressions are used in subsec tion 112(10), they must be understood as referring only to transportation by air. In the case of the word "toll", this is true notwithstanding that its definition refers not only to charges for the transportation of traffic, but also to charges "in respect of any service incidental thereto".
The subsection is therefore to be construed as prohibiting an offer only if the proposed rebate or concession would affect the price of the airline ticket itself. The reference to a rebate or concession "in respect of the transportation" of any traffic (emphasis added) is concerned with ticket price and nothing else. In contrast, the programmes in the instant case relate to ground transportation, which is something quite different and which is outside the scope of subsection 112(10).
The respondent nevertheless argues that the expression "in respect of the transportation" does comprehend benefits such as those offered by Nordair, because their net effect is to change the passenger's net cost of air transportation. However, the French version of this phrase supports the more restrictive construction of subsection 112(10) just set forth. Speaking as it does of a benefit "qui permettrait le transport", the French version plainly signifies that, if a rebate plan is to be enjoined by subsection 112(10), the plan must be directly related to, and an integral component of, the cost of air transportation. Else where in the Regulations, clear and unambiguous language was employed to indicate that "transportation" was intended to include more than transportation by air, and in the absence of similar language, subsection (10) should not be ascribed a correspondingly comprehensive meaning.
It is unlikely that all Nordair passengers will utilize the coupons offered them. For those who choose not to do so, the coupons have no monetary value. The net effect for those who do use the coupons is the reduction of their cost of travelling from one point to another by air, but this does not change the nature of the incentive offered. According to the interpretation advocated by the respondent, any offer of a discount or other benefit made by an airline in conjunction with the purchase of an airline ticket would be caught by the prohibition of subsec tion 112(10), no matter how remote from airline flight it might be. Without words expressly proscribing any plan the net effect of which might be the transportation of persons by air for an amount different from that specified in the applicable tariff, such an interpretation cannot be endorsed.
CASES JUDICIALLY CONSIDERED
APPLIED:
Service Employees' International Union, Local No. 333 v. Nipawin District Staff Nurses Association, et al., [1975] 1 S.C.R. 382; Canadian Union of Public Employees Local 963 v. New Brunswick Liquor Corpo ration, [1979] 2 S.C.R. 227; 26 N.R. 341.
COUNSEL:
J. R. Laffoley and P. Habib for appellant. D. J. E. Scott for respondent.
SOLICITORS:
Campbell, Pepper, Laffoley, Montreal, for appellant.
Legal Services, Canadian Transport Com mission, Ottawa, for respondent.
The following are the reasons for judgment rendered in English by
HEALD J. (dissenting): Two questions are raised by this appeal. The first question is whether the Canadian Transport Commission (Air Transport Committee) had jurisdiction to make the order herein impugned. In my view, the Committee did have jurisdiction, in the narrow sense of authority to enter into this inquiry, pursuant to the powers given to it by section 10 of the Aeronautics Act [R.S.C. 1970, c. A-3].' I think the Committee "decided a matter which was plainly confided to it,
' Compare: Service Employees' International Union, Local No. 333 v. Nipawin District Staff Nurses Association, et al., [1975] 1 S.C.R. 382, at page 389.
for it alone to decide within its jurisdiction". 2 Accordingly, I would answer the jurisdictional question in the affirmative.
The second question is whether the Committee erred in law when it ruled that the appellant's programme offering free limousine service to and from Nordair flights at Montreal (Dorval), Toronto and Hamilton airports contravened the provisions of subsection 112(10) of the Air Carrier Regulations [C.R.C., c. 3]. Section 112 is [in Part VI, which is] headed "TARIFFS AND TOLLS". Sub section (10) thereof reads as follows:
112. ...
(10) No air carrier, or any officer or agent thereof, shall offer, grant, give, solicit, accept or receive any rebate, conces sion or discrimination in respect of the transportation of any traffic by the air carrier whereby such traffic is, by any device whatever, transported at a toll that differs from that named in the tariffs then in force or under terms or conditions of carriage other than those set out in such tariffs, unless with the prior approval of the Committee.
Section 2 of the Air Carrier Regulations contains the following definitions:
2. In these Regulations and in licences issued under the Act,
"tariff' means a publication containing terms and conditions of carriage, tolls, rules, regulations and practices applicable to the carriage of traffic by an air carrier, and includes an amendment or a supplement to a tariff or a page of a loose-leaf tariff;
"toll" means any charge, classification, fare, rate or allowance made by an air carrier in respect of the carriage, shipment, transportation, care, handling or delivery of traffic, or in respect of any service incidental thereto;
"traffic" means any persons, goods or mail that are transported by air;
"Tariff' as defined supra, is restricted to the carriage of traffic by an air carrier. Likewise, "toll" as above defined, is confined to "charges" etc., made by an air carrier "in respect of the carriage ... of traffic, or in respect of any service
2 This is the language used by Dickson J. in the case of: Canadian Union of Public Employees Local 963 v. New Bruns- wick Liquor Corporation, [1979] 2 S.C.R. 227, at page 237; 26 N.R. 341, at page 350.
incidental thereto", while "traffic" means "any persons ... that are transported by air".
Accordingly, I think that the interpretation of subsection (10) of section 112 must be approached on the basis that when the words "tariff", "toll" and "traffic" are used therein, they must be con strued so as to apply only to transportation by air.
Approached from this perspective, it is my view that the prohibition contained in subsection (10) against the "offer" of "any rebate, concession or discrimination in respect of the transportation of any traffic by the air carrier whereby such traffic is, by any device whatever, transported at a toll that differs from that named in the tariffs ..." , is restricted to any offer of a rebate, etc., relating to the price of the airline ticket for air transportation whereby an airline passenger is carried on the airline for a dollar figure which is different from that set by the subsisting tariff for that particular flight. In my opinion, the words "in respect of" as used in subsection (10) relate only to the cost of the airline ticket. In the case at bar, the "rebate" or "concession" offered relates to something quite different from and outside the parameters of sub section (10), namely, ground transportation. How ever, counsel for the respondent submitted that the words "in respect of the transportation" were wide enough to include a plan such as this because the net effect thereof would be to affect and change the net cost to the passenger of the air transporta tion. I do not agree with that interpretation. I think subsection (10) speaks only to the cost of air transportation. The French version of subsection (10) is, in my view, supportive of the interpretation which I favour. The French version of "in respect of the transportation" reads "qui permettrait le transport". In my opinion, those words make it abundantly clear that the rebate plan must be directly related to and an integral component of the cost of air transportation. It is of interest to observe that when the legislators wished to give the word "transportation" a wider meaning than air transportation, they were careful to do so in clear and unambiguous language. I refer to Part IV of the Air Carrier Regulations dealing with "Inter- national Charters". In that Part, section 23 defines "transportation" in respect of an inclusive tour as "the transport of the tour participants and their
personal baggage by air or other modes between (a) all points in the tour itinerary, and (b) airports or surface terminals and the location where accommodation is provided in the tour itinerary other than the point of origin". [Emphasis added.]
In the absence of words of similar import in subsection (10), I am not prepared to interpret that subsection in the way suggested by respond ent's counsel. Counsel also stressed the fact that in the definition of "toll" supra, the following words "or in respect of any service incidental thereto" have the effect of widening that definition so as to include ground-transportation services. I do not agree. For the reasons expressed supra, I think that since "toll" applies to traffic and since "traf- fic" relates to transportation by air, as a conse quence, "toll" as used in subsection (10) must also, of necessity, relate and apply only to transporta tion by air.
Accordingly, and for the above reasons, I con- chide that the appellant's programme does not offend the provisions of subsection 112(10) supra. The fact that those Nordair passengers who utilize the ground-transportation coupons receive a ben efit, the net effect of which is to lessen their cost of travelling from one point to another by air, does not change the nature of the incentive offered. It is unlikely that all Nordair passengers will utilize the coupons. Some may be met at the airport by friends or relatives, others may live within walking distance or have their own car parked at the airport. For passengers in this category, the free transportation coupon has no monetary value. I am not persuaded that subsection 112(10) is capable of such a wide interpretation. Respondent's coun sel conceded in argument that the interpretation advanced by him would also bring within the Committee's jurisdiction, for example, an offer by the airline to its passengers of a post-flight compli mentary beverage or a shoe-shine in the airport terminal or reduced rates at a hotel. Other possible examples of incentives and discounts quite far- removed from airline flights can be visualized. If the respondent is right, any offer of a discount by an airline, no matter how remote from airline flight it may be, so long as the offer is made in conjunction with the purchase of an airline ticket,
would be within the sweep of the prohibitions of subsection 112(10). In the absence of express words in the section prohibiting any plan, the net effect or result of which could be the carriage by air of persons for a different monetary amount than that permitted by the authorized tariff, I do not accept the construction of subsection 112(10) urged on us by counsel for the respondent.
For these reasons, and pursuant to subsection 64(5) of the National Transportation Act [R.S.C. 1970, c. N-17, rep. and sub. R.S.C. 1970 (2nd Supp.), c. 10, s. 65 (Item 32)], I would certify to the Commission the opinion of the Court that:
(1) the Canadian Transport Commission (Air Transport Committee) had jurisdiction by virtue of section 10 of the Aeronautics Act to make the order herein impugned, and
(2) that the Air Transport Committee of the Canadian Transport Commission erred in law when it ruled that the appellant's programme of offering free ground transportation to its air- carrier traffic was contrary to subsection 112(10) of the Air Carrier Regulations.
* * *
The following are the reasons for judgment rendered in English by
COWAN D.J.: The questions in respect of which leave to appeal was granted are as follows:
1) Did the Canadian Transport Commission (Air Transport Committee) have the jurisdiction by virtue of Section 10 of the Aeronautics Act to order Applicant to cease and desist from offering Luxury Limousine and Tilden Convenience Programs;
2) If the answer to the above question is in the affirmative, did the Canadian Transport Commission err in law when it ruled that such programs were "contrary to subsection 112(10) of the Air Carrier Regulations".
By letter dated November 20, 1981, the Air Transport Committee of the Canadian Transport Commission issued a ruling that Nordair's Tilden Car Rental Programs were contrary to subsection 112(10) of the Air Carrier Regulations on the ground that such programs involved devices by
which rebates were given resulting in transporta tion at a toll that differed from that named in the company's tariffs in force and without prior approval of the Committee. The Committee ordered Nordair to cease and desist from offering such programs as of December 31, 1981.
On January 7, 1982, Nordair inserted in the Montreal Gazette an advertisement offering "GIFTS" to anyone who flew Nordair full economy return fare Monday through Friday between Mon- treal, Toronto or Hamilton any time from January 11 through March 18, 1982.
The advertisement read as follows:
Nordair 'GIFTS' you the choice
Limousine Luxury With Nor- dair, you travel in style all the way! Catch our Bluebird for top-flight service in the air ... and door-to-door. Take the limousine to and from the airport. The lift's on us! Just pick up your special voucher at the Nordair gate—and enjoy ... Economy never looked (or felt) so good!
Tilden Convenience A Tilden car for 24 hours upon arriv- al—with unlimited kilo- metrage. That's what you want? Fine! We'll take care of the rental charge. All you pay is your gas, and the sales tax on the regular posted rate. Simply pick up your special voucher at the Nordair Gate. Of course, there are a few "rules and regulations"—for instance, you have to be at least 21 years of age—but don't worry! This is one great deal. After all, gifts have rib bons, not strings!
Way to Go! (And we go often ...) With our schedule, you've got 101 opportunities each week to enjoy your gift package! 34 Nordair flights a week from Montreal to Toronto ... 33 a week from Toronto to Montreal. Hamil- ton to Montreal? 17 flights a week—and 17 a week from Montreal to Hamilton. 101 flights in all—so take your pick ... and pick up your gift voucher. Call your travel agent for details, or call us!
The Air Transport Committee sent a telex to Nordair January 14, 1982, pointing out that the offer made by Nordair appeared to be in defiance of the previous rulings of the Committee, directing Nordair to cease and desist from offering such promotions immediately and stating that the order was being made an order of the Federal Court. The Committee then issued the order #1982-A-29,
pursuant to subsection 10(2) of the Aeronautics Act, 3 requiring Nordair to cease and desist from offering such programs.
Subsection 10(2) of the Aeronautics Act
provides:
1o. ...
(2) The Commission may order and require any person to do, forthwith, or within or at any specified time and in any manner prescribed by the Commission so far as it is not inconsistent with this Act, any act, matter or thing that such person is or may be required to do under this Part, or any regulation, licence, permit, order or direction made thereunder by the Commission and may forbid the doing or continuing of any act, matter or thing that is contrary to this Part or any such regulation, licence, permit, order or direction and, for the purposes of this section, has full jurisdiction to hear and determine all matters, whether of law or fact.
Paragraph 14(1)(m) of the Aeronautics Act authorizes the Commission to make regulations,
14. (1) ...
(m) respecting traffic, tolls and tariffs and providing for
(i) the disallowance or suspension of any tariff or toll by the Commission,
(ii) the substitution of a tariff or toll satisfactory to the Commission, or
(iii) the prescription by the Commission of other tariffs or tolls in lieu of the tariffs or tolls so disallowed;
Pursuant to the authority given by the Aeronau tics Act the Commission made Air Carrier Regu lations including subsection 112(10) which reads:
112. .. .
(10) No air carrier, or any officer or agent thereof, shall offer, grant, give, solicit, accept or receive any rebate, conces sion or discrimination in respect of the transportation of any traffic by the air carrier whereby such traffic is, by any device whatever, transported at a toll that differs from that named in the tariffs then in force or under terms or conditions of carriage other than those set out in such tariffs, unless with the prior approval of the Committee.
Section 15 of the Aeronautics Act provides:
15. Notwithstanding any previous contract or commitment or any other general or special Act or provision, no air carrier shall issue free or reduced rate transportation except with the approval in writing of the Commission and under such terms, conditions and forms as the Commission may direct.
It is clear from a reading of subsection 10(2) of the Aeronautics Act that the Commission has jurisdiction to order an air carrier, such as
3 R.S.C. 1970, c. A-3.
Nordair, to cease and desist from a promotional practice where that practice is contrary to Part II of the Aeronautics Act, a regulation, a carrier's licence or permit, or an order or direction of the Commission. The subsection also states that a decision as to whether or not such a violation has occurred is within the jurisdiction of the Commis sion which is given full jurisdiction to hear and determine all matters of law or of fact for the purposes of subsection 10(2).
In my opinion the Canadian Transport Commis sion (Air Transport Committee) did have jurisdic tion by virtue of section 10 of the Aeronautics Act to order the appellant, Nordair, to cease and desist from offering Luxury Limousine and Tilden Con venience programs. The first question posed should therefore be answered in the affirmative.
The second question is as to whether or not the Commission, through its Air Transport Commit tee, erred in law when it ruled that the programs offered by Nordair were "contrary to subsection 112(10) of the Air Carrier Regulations".
That subsection provides that no air carrier shall offer, grant or give "any rebate, concession or discrimination in respect of the transportation of any traffic by the air carrier whereby such traffic is, by any device whatever, transported at a toll that differs from that named in the tariffs then in force or under terms or conditions of carriage other than those set out in such tariffs, unless with the prior approval of the Committee."
The words "tariff" and "toll" are defined in section 2 of the Regulations as follows:
2. ...
"tariff' means a publication containing terms and conditions of carriage, tolls, rules, regulations and practices applicable to the carriage of traffic by an air carrier, and includes an amendment or a supplement to a tariff or a page of a loose-leaf tariff;
"toll" means any charge, classification, fare, rate or allowance made by an air carrier in respect of the carriage, shipment, transportation, care, handling or delivery of traffic, or in respect of any service incidental thereto;
The appellant submitted that the limousine and car-rental programs offered by it did not constitute
matters of tariff, and that subsection 112(10) of the Regulations could only apply to the amount payable for the transportation by air furnished by the appellant. It was admitted that the appellant collected from all passengers as fares the dollar amounts provided for as tolls in the tariffs appli cable to its service. The appellant submitted that nothing offered by it to its passengers by way of limousine service or car rental amounted to any rebate, concession or discrimination in the tolls in respect of its transportation of such passengers.
In my opinion there is no merit in the submis sions of the appellant on this point. The evidence on which the Committee based its order was that the appellant collected the approved tolls from passengers and offered to such passengers coupons entitling such passengers to free limousine service or to one day's free car rental. Not all passengers were expected to use the coupons, but it is clear that they had a value to the passenger, and that every passenger who purchased a ticket for air transportation at the approved toll had the right to receive such a coupon.
The fact that what was offered to passengers was a right to certain kinds of ground transporta tion does not, in my opinion, prevent the operation of subsection 112(10) of the Regulations. The action which is prohibited by the subsection is the offer by the air carrier "in respect of the transpor tation of any traffic by the air carrier" of any rebate, concession or discrimination, whereby such traffic—i.e. in this case, the transportation of pas sengers by air—is by any device whatever, trans ported at a toll that differs from that named in the relevant tariffs. Having paid the approved toll the passenger is offered a coupon of some value with the result that he pays less for his transportation by air by the appellant than if he had paid the approved toll and received nothing of value, apart from the air transportation to which payment of the approved toll entitled him.
There was evidence before the Committee that the offer of ground-transportation coupons was made by the appellant in respect of the transporta tion of traffic, i.e. the transportation by air of the passengers to whom the offer was directed, that the coupons had a value to the passengers, and that such action amounted to an offer of a rebate
or concession whereby traffic was transported at a toll that differed from the approved toll.
In my opinion the Commission, through its Air Transport Committee, did not err in law when it ruled that the programs offered by Nordair were "contrary to subsection 112(10) of the Air Carrier Regulations".
I would therefore, in accordance with subsection 64(5) of the National Transportation Act, 4 certify to the Commission the opinion of the Court, that
1. the Canadian Transport Commission (Air Transport Committee) did have the jurisdiction by virtue of section 10 of the Aeronautics Act to order appellant, Nordair Ltd., to cease and desist from offering Luxury Limousine and Tilden Convenience programs;
2. the Canadian Transport Commission did not err in law when it ruled that such programs were "contrary to subsection 112(10) of the Air Car rier Regulations".
RYAN J.: I concur.
° R.S.C. 1970, c. N-17, [as am. by R.S.C. 1970] (1st Supp.), c. 44, s. 10 (Item 7), [and by R.S.C. 1970] (2nd Supp.), c. 10, s. 65 (Item 32).
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