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T-3000-83
Airport Taxicab (Malton) Association (Plaintiff)
v.
Minister of Transport (Defendant)
Trial Division, Reed J.—Toronto, April 22; Ottawa, April 26, 1985.
Judicial review — Equitable remedies — Injunctions — Application enjoining defendant from instituting common dis patch service at airport — Dismissal of motion to strike under R. 419(1)(a) not meaning "serious question to be tried" — Claim airport management's practices discriminatory weak — Balance of convenience — Irreparable harm — Plaintiff's damage arising from inability to pursue activities prohibited by s. 7 Regulations — Damages award not adequately com pensating defendant for injury due to pestering of public resulting in complaints — Application dismissed — Federal Court Rules, C.R.C., c. 663, R. 419(1)(a) — Government Airport Concession Operations Regulations, SOR/79-373, ss. 4(1),(2),(3), 6(1),(2)(b), 7(a),(b) — Aeronautics Act, R.S.C. 1970, c. A-3.
Aeronautics — Taxicab association seeking injunction restraining Transport Minister from instituting common dis patch service for taxis and limousines at Pearson International Airport — Chaos on platform due to competition for business — Industry failing to co-operate in operating joint dispatch system — Whether airport manager exercising discretion re permits and platform space allocation in non-discriminatory way — Whether taxi dispatching at airports within federal or provincial jurisdiction — Minister's injury if travellers com plain about pestering for business not compensable by dam ages award — Interlocutory injunction denied — Government Airport Concession Operations Regulations, SOR/79-373, ss. 4(1),(2),(3), 6(1),(2)(b), 7(a),(b) — Aeronautics Act, R.S.C. 1970, c. A-3.
Constitutional law — Distribution of powers — Whether dispatching of limousines and taxis from airport integral part of limousine and taxi operations and therefore under provin cial jurisdiction — Federal jurisdiction to regulate not ousted if regulation necessarily incidental to airport regulation.
This is an application by the plaintiff for an interlocutory injunction to prevent the defendant from instituting a common dispatch service for the taxicabs and limousines operating out of Pearson International Airport. The taxicab and limousine owners operated their own separate dispatch systems. They not only accepted incoming orders but actively solicited customers
on behalf of their respective services. Following complaints by the public as to the competing dispatchers' conduct, an agree ment to provide a common service was reached. The situation deteriorated, however, and the system of having two dispatch ers reinstated.
Held, the application should be dismissed.
It is well established that in order to grant an interlocutory injunction (1) the court must be satisfied that there is a serious question to be tried and (2) the balance of convenience must weigh in the applicant's favour.
The dismissal by Muldoon J. of a motion brought under Rule 419(1)(a) to strike out the statement of claim as disclosing no reasonable cause of action did not automatically give rise to there being a "serious question to be tried". The plaintiff argues that the airport manager's discretion as to the allocation of platform space and the issuing of permits to vehicle opera tors must be exercised in a non-discriminatory manner. Never theless, as pointed out by Muldoon J., "by virtue of the provisions of the Aeronautics Act ... the defendant is thor oughly 'in charge' of airports". The airport manager's absolute discretion is also evidenced by the Government Airport Conces sion Operations Regulations. Thus, while the plaintiffs claim is not one to be struck out under Rule 419(1)(a), it does not appear strong.
The plaintiffs second argument is that the dispatching of limousines and taxicabs forms an integral part of the limousine and taxicab operations and that these are matters under exclu sive provincial jurisdiction. A finding that "dispatching" is an integral part of the taxicab business would not oust federal jurisdiction to regulate that activity if such regulation were necessarily incidental to the regulation of the airport. In any event, the Court did not make any finding as to whether the plaintiff had met the test of a serious question to be tried.
With respect to the balance of convenience and the consider ations of irreparable harm, the plaintiffs loss of profits could be adequately compensated by an award of damages. Although the calculation and eventual allocation of any reimbursement of the profits could be difficult given the number of taxicab operators and the loose form of organization, that would not be impossible.
The crucial factor is that the damage that the plaintiff will suffer will arise from it not being able to engage in activities expressly prohibited by section 7 of the Regulations. That section prohibits persons from soliciting business at airports except with the authorization of the Minister.
It was clear that the defendant would suffer damage in having to tolerate pestering of the public by dispatchers and consequent complaints to the airport management. This is not an injury which can be compensated by an award of damages. The defendant is responsible for the orderly administration of the airport and its ability to fulfil that responsibility would be diminished if an injunction is granted.
CASES JUDICIALLY CONSIDERED
DISTINGUISHED:
Fraser v. U-Need-A Cab Ltd.; Great American Insur ance Co., Third Party (1983), 43 O.R. (2d) 389 (Ont. H.C.).
CONSIDERED:
American Cyanamid Co. v. Ethicon Ltd., [1975] A.C. 396 (H.L.).
REFERRED TO:
Johannesson v. West St. Paul, [1952] 1 S.C.R. 292. COUNSEL:
Charles C. Roach for plaintiff.
Alan S. Davis and Peter A. Vita for
defendant.
SOLICITORS:
Roach-Smith, Toronto, for plaintiff.
Deputy Attorney General of Canada for defendant.
The following are the reasons for order ren dered in English by
REED J.: This is an application by the plaintiff for an interlocutory injunction to prevent the defendant from instituting a common dispatch ser vice for the taxicabs and limousines operating out of Pearson International Airport. In addition, it seeks to prevent the defendant from inviting ten ders from persons, independent of both the taxicab and limousine owners, to provide that service.
In December 1983, the plaintiff commenced an action for a declaration that the defendant (1) had no lawful right to tender out the dispatch service;
(2) that the defendant's present practice of main taining separate queues for the taxicab and limou sine services at the airport was discriminatory; and
(3) for an interlocutory injunction to prevent the tendering out of the dispatch service until final disposition of the issues at trial. Although the declaration of December 1983 set out a request for an interlocutory injunction no action was taken by the plaintiff to obtain such injunction prior to the present time (April 1985). This was not, however,
delay sufficient to bar the plaintiff from now pursuing its claim for an interlocutory injunction. The delay was explained as having occurred because the defendant had not before now taken action to implement its intention with respect to the tendering process and independent dispatch service.
The situation of December 1983 must be put in perspective. From 1979 to February 1982 the taxi cab and limousine owners operated their own sepa rate dispatch systems. While these are called dis patch systems the dispatchers in fact did more than is usually contemplated by that term. They did more than merely accept incoming orders for their respective services and allocate such requests among the available taxicab or limousine drivers. The "dispatchers" actively solicited customers for their respective services presumably from those members of the travelling public who sought ground transportation but were uncommitted as to the type of service they sought and, perhaps even from others.
The dispatchers were located at the exits of the airport terminal, at curbside in the vicinity of the respective vehicle queues. I quote from the cross- examination of Mr. Mann whose affidavit was filed in support of the plaintiff's claim in this case:
A. The problems were that the limousine dispatchers trying to grab as many people as possible for the limousines, and the taxi dispatchers were trying to grab as many people as possible for the taxis.
Q. Okay, so would you agree with me that a bit of chaos was taking place on the platform?
A. That's right.
Q. Well, were there in fact occasions where both dispatchers were fighting over the same customers?
A. It happened, yes.
Consequently, in March 1982, the airport manager wrote to all taxicab and limousine operators:
Transport Canada has. during the past year, experienced an increasing number of complaints from the travelling public regarding the conduct of platform dispatchers. The fights and arguments between competing dispatchers and, periodically, drivers plus the hassle accorded the travelling public is no longer tolerable.
The letter went on to advise the industry that they had one final chance to co-operate and create a joint dispatch system or Transport Canada would implement one of its own. This led in February 1983 to an agreement on a common service to be run by the taxicab and limousine operators jointly. One of the terms of that agreement was that the dispatch supervisor was:
1. To ensure that Dispatchers provide passengers direction to the mode of transportation requested and that there is no favouritism shown for either taxicabs or limousines.
The dispatchers themselves had an obligation to:
... provide impartial information between taxis and limousines when requested by a passenger.
and not to:
... yell or shout, nor hawk ground transportation services while on duty.
Despite this agreement to provide a common service the situation again deteriorated. I quote again from the cross-examination of Mr. Mann:
Q. All right, what did in fact happen?
A. It was happening because it depends who can really have more friendship with the dispatchers, and they can provide him with more business.
Q. Okay, what you're saying to me is that dispatchers, although independent, were being influenced by either limousine or taxi drivers?
A. That's right, yes.
Q. And so in fact they were actively steering people to— depending on who was out on the platform—to either the taxi or the limousine?
A. That's right, yes.
Q. All right, what did that do? Did that then cause disruption on the platform?
A. Yes it did, many times.
It was in the light of this deterioration that the airport manager notified the industry in October 1983 that an independent dispatch service would be instituted and tenders called for the provision of
that service. This expression of intention gave rise to the plaintiff commencing action in December 1983, for the remedies sought in this suit. The defendant did not, however, move to implement its intention to establish an independent dispatch ser vice immediately. Discussion with the industry continued. Then, in May 1984 the limousine oper ators pulled out of the joint dispatch service and reinstituted their own service. Thus, since May 1984, the pre-February 1983 system of two dis patchers (one employed by the taxicab operators the other by the limousine operators) has pre vailed. The defendant recently reactivated its plan to set up an independent dispatch service and the defendant filed this motion for an interlocutory injunction.
The requirements that an applicant must meet in order to obtain an interlocutory injunction are well known: (1) the court must be satisfied that there is a serious question to be tried; (2) the balance of convenience must weigh in the appli cant's favour. The decision in American Cyanamid Co. v. Ethicon Ltd., [1975] A.C. 396 (H.L.) has been accepted as setting forth the appropriate tests.
With respect to the first requirement, the plain tiff argues that a decision given by my colleague Muldoon J. in June 1984 [T-3000-83, Federal Court, Trial Division, June 18, 1984, not yet reported], in an earlier interlocutory proceeding between the parties demonstrates that that requirement has been met. Mr. Justice Muldoon's decision was in response to a motion brought by the defendant seeking to strike out the plaintiff's statement of claim under Rule 419(1)(a) as dis closing no reasonable cause of action. That motion was dismissed by Mr. Justice Muldoon.
I do not think that merely because a plaintiff has successfully resisted a defendant's motion to strike pursuant to Rule 419(1)(a) that it can automatically be assumed that there exists "a serious question to be tried" for purposes of obtaining an interlocutory injunction. In the first place a Rule 419(1)(a) motion must be heard in the absence of any evidence. Secondly, everything
set out in the declaration (statement of claim) must be assumed to be true. Thirdly, the strength of case required to be proved by the plaintiff is not high—it is minimal at best. Fourthly, the burden of proof is on the party bringing the motion not the party resisting it.
While the plaintiff's claim is not one to be struck out under Rule 419(1)(a), it is not strong. One ground of the plaintiffs claim is that the airport manager's present practice of providing two queues, one for limousines and one for taxi cabs is discriminatory since both vehicles provide the same service to the public. The plaintiff also asserts that the practice of alloting equal platform space to the two queues is discriminatory because there are 300 taxicab permit holders but only 200 limousine permit holders.
The plaintiff concedes that the airport manager had discretion both as to the allocation of platform space and the issuing of permits to vehicle opera tors; but, it argues that that discretion must be exercised in a non-discriminatory way. Neverthe less, as Muldoon J. pointed out at page 4 of his decision of June 18, 1984:
... by virtue of the provisions of the Aeronautics Act (R.S.C. 1970, c. A-3) the defendant is thoroughly "in charge" of airports, aerodromes, airport services and, indeed, virtually every commercial activity which is conducted within the territo rial boundaries of an airport. The Act provides:
3. It is the duty of the Minister
(a) to supervise all matters connected with aeronautics;
(c) to construct and maintain all government aerodromes and air stations ...
(e) to operate such services as the Governor in Council may approve;
(m) to perform such other duties as the Governor in Council may from time to time impose.
5. The Governor in Council may make regulations, or, subject to and in accordance with such terms and conditions as may be specified by him, authorize the Minister to make regulations prescribing charges for the use of
(b) any facility or service ... provided by the Minister or on his behalf at any airport.
By virtue of the Ministerial Regulations Authorization Order (C.R.C., c. 126) the immediately above-cited statutory provisions are invoked to accord to the Minister the authoriza tion which may lawfully be accorded thereunder.
The Government Airport Concession Operations Regulations, SOR/79-373, 27 April, 1979 provide:
7. Subject to section 8, except as authorized in writing by the Minister, no person shall
(a) conduct any business or undertaking, commercial or otherwise, at an airport;
(b) advertise or solicit at an airport on his own behalf or on behalf of any person; or
6. (1) An airport manager may, by means of a sign or surface marking, describe or delineate any area at the airport as an open taxicab station, open limousine station or general vehicle station.
(2) Where an area has been described or delineated pursuant to subsection (1)
(b) as an open taxicab station or open limousine station, an operator of a taxicab or limousine shall not pick up or unload a passenger or goods at that airport except at that open taxicab station or open limousine station, as the case may be.
4. (1) The Minister may designate any airport at which a permit is required to operate a commercial passenger vehicle or a courtesy vehicle.
(2) Where the Minister designates an airport pursuant to subsection (1), he may specify the class or classes of commer cial passenger vehicles or courtesy vehicles that require the operator of those vehicles to be issued a permit before operating those vehicles at that airport.
(3) A designation referred to in subsection (1) or a specifica tion referred to in subsection (2) may be revoked by the Minister.
The plaintiff's second basis for its claim is that the defendant is constitutionally incompetent to regulate the dispatching of limousines and taxicabs from the airport because such activity is an inte gral part of the limousine and taxicab operations; it is alleged these are matters under exclusive provincial jurisdiction. While it is true that the decision of the Ontario High Court in Fraser v. U-Need-A Cab Ltd.; Great American Insurance Co., Third Party (1983), 43 O.R. (2d) 389 implic itly carries with it a finding that dispatchers (in that case called "taxi-brokers") are an integral part of the taxi business several additional factors
must be noted. That case dealt with the liability in tort of a "taxi-broker" for damage caused to a passenger by a defective taxicab; it did not deal with the constitutional issue. The "dispatchers" at the Pearson International Airport are performing a vastly different function from the dispatchers (taxi-brokers) in the Fraser case. (Would the "dis- patchers" at the airport be liable in tort for damage caused to a passenger as a result of a defective airport taxi?) A finding that "dispatch- ing" is an integral part of the taxicab business still would not oust federal jurisdiction to regulate that activity if such regulation were necessarily inciden tal to the regulation of the airport. See the discus sion of Johannesson v. West St. Paul, [1952] 1 S.C.R. 292 and related cases, in Hogg, Constitu tional Law of Canada (1977) at page 335.
In any event, without making any finding as to whether I think the plaintiff has met the test of "a serious question to be tried", I will pass to a discussion of the second requirement: whether the balance of convenience and considerations of irreparable harm argue in favour of the granting of the injunction to the plaintiff. This requirement is described in the American Cyanamid case, (supra) at page 406:
The object of the interlocutory injunction is to protect the plaintiff against injury by violation of his right for which he could not be adequately compensated in damages recoverable in the action if the uncertainty were resolved in his favour at the trial; but the plaintiffs need for such protection must be weighed against the corresponding need of the defendant to be protected against injury resulting from his having been prevent ed from exercising his own legal rights for which he could not be adequately compensated under the plaintiffs undertaking in damages if the uncertainty were resolved in the defendant's favour at the trial. The court must weigh one need against another and determine where "the balance of convenience" lies.
In this case what is the harm the plaintiff alleges it will suffer? As I understand it, it is the loss of business which will occur as a result of dispatchers employed by it not being able to solicit
customers. It is a loss of profits claim and as such one that is usually seen as adequately compensated by a monetary award in damages. In this case the calculation of, and eventual allocation of any reim bursement of that profit might be difficult given the numbers of taxicab operators involved and the loose form of organization. However, it would not be impossible. In addition, the crucial factor in this case is the fact that from the evidence set out above, it is clear that the damage which the plain tiff will suffer will arise from it not being able to engage in activities, or encourage others to engage in activities which it has no right to do. By section 7 of the Government Airport Concession Opera tions Regulations (supra, page 399) persons are prohibited from soliciting business at the airport except with the authorization of the Minister. It is clear that the Minister has given the curbside "dispatchers" no such authorization and indeed the airport manager has been trying to stop this unauthorized activity. I would underline that it is not merely the members of the plaintiff association that have been engaging in such activity; the limousine operators have equally been engaging in this prohibited conduct.
What then is the harm that the defendant will suffer if the injunction is granted? Counsel indicated that there might be monetary loss as a result of actions already taken by it to implement the independent dispatch service (e.g.: as a result of contracts which have already been signed?) I do not find any evidence on the file attesting to this fact. However, it is clear that the defendant will suffer damage in the sense of having to tolerate "chaos on the platform" as it was put in the cross-examination of Mr. Mann. The damage which will occur will be the hassling of the travel ling public and consequent complaints by members thereof to the airport management. The defendant is responsible for the orderly administration of the airport. Its ability to fulfil that responsibility will be diminished if an injunction is granted. It is clear, this is not an injury which can be compen sated by a monetary award in damages.
For the reasons which appear above, I do not think the plaintiff has demonstrated that the bal ance of convenience lies in its favour. Accordingly, the application for an interlocutory injunction will be dismissed.
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