Judgments

Decision Information

Decision Content

T-1250-80
Aerlinte Eireann Teoranta (carrying on business under the name and style of "Aer Lingus")
and
Alitalia Linee Aeree Italiane S.p.A. (carrying on business under the name and style of "Alitalia")
and
British Airways (carrying on business under the name and style of "British Airways")
and
Canadian Pacific Air Lines, Limited (carrying on business under the name and style of "CP Air")
and
Compagnie Nationale Air France (carrying on business under the name and style of "Air France")
and
El Al Israel Airlines Limited (carrying on busi ness under the name and style of "El Al")
and
Iberia, Lineas Aereas de Espana, S.A. (carrying on business under the name and style of "Iberia")
and
Koninklijke Luchtvaart Maatschappij N.V. (carrying on business under the name and style of "KLM Royal Dutch Airlines")
and
Christopher Morris, Liquidator of Laker Airways Limited (in dissolution)
and
Deutsche Lufthansa AG (carrying on business under the name and style of "Lufthansa")
and
Société Anonyme Belge d'Exploitation de la Navi gation Aérienne (carrying on business under the name and style of "Sabena")
and
Scandinavian Airlines of North America Inc. (carrying on business under the name and style of "Scandinavian Airlines System" or "SAS")
and
Swiss Air Transport Co., Ltd. (carrying on busi ness under the name and style of "Swissair")
and
Wardair Canada Inc. (carrying on business under the name and style of "Wardair") (Plaintiffs)
v.
The Queen in right of Canada and the Minister of Transport of Canada (Defendants)
INDEXED AS: AERLINTE EIREANN TEORANTA V. CANADA
Trial Division, Muldoon J.—Ottawa, January 20 to February 27, 1986 and February 20, 1987.
Air law — Air services fees — Validity of regulations establishing landing fees with respect to trans-oceanic flights
— Whether ultra vires Governor in Council or Minister — Whether discriminatory and illegal — Air Services Fees Regulations, C.R.C., c. 5 — Aeronautics Act, R.S.C. 1970, c. A-3, s. 5 — Ministerial Regulations Authorization Order, C.R.C., c. 126 — Financial Administration Act, S.C. 1951 (2nd Session), c. 12, s. 18 — An Act to amend the Aeronautics Act, S.C. 1966-67, c. 10, s. 1 — Official Languages Act, R.S.C. 1970, c. O-2, s. 8(2)(a),(d) — Canadian Charter of Rights and Freedoms, being Part I of the Constitution Act, 1982, Schedule B, Canada Act 1982, 1982, c. 11 (U.K.), s. 15
— Federal Court Rules, C.R.C., c. 663, RR. 338(2), '487 — Convention on International Civil Aviation, Dec. 7, 1944, [19441 Can. T.S. No. 36, art. 15 — Air Transport agreement between the government of Canada and the government of the Kingdom of the Netherlands, June 17, 1974, [1975] Can. T.S. No. 19.
Restitution — Allegedly discriminatory and illegal airport landing fees — No recovery if payment made under mistake of law — Recoverable if paid under compulsion or if transaction illegal — In Quebec, Civil Code applies — Civil Code of Lower Canada, art. 1047, 1140.
The Air Services Fees Regulations in effect up to September 1985 prescribed landing fees for trans-oceanic flights at rates greater than those for international and domestic flights. The plaintiffs seek to have the Regulations declared ultra vires the Governor in Council or the Minister, or null and void because they were discriminatory. The plaintiffs also seek restitution in respect of the overcharge.
Held, the action should be dismissed.
The Regulations were infra vires. The discretion with respect to landing fees conferred upon the Governor in Council by the Aeronautics Act and, in turn, upon the Minister of Transport by the Ministerial Regulations Authorization Order, is broad, profound and virtually unfettered. Even though the charges were related to the costs incurred in the provision of the facilities and services by the Minister, they did not have to be.
Although the two official versions of section 5 of the Aeronautics Act may appear to be different, they are not if reconciled according to the Official Languages Act. The French singular indefinite object "un" can mean the same as the English "any". Thus "at any airport" in section 5 includes, among others, the meaning "at each and every, or whichever, airport" at which the Minister provides "every and all, or whichever" facilities and services.
While the trans-oceanic landing fees were indeed discrimina tory in that they were higher than international and domestic landing fees, they were not null and void because of that. The power to make regulations prescribing charges for use of facilities and services without further fetters is the power to establish categories of users. If such categories discriminate as between classes of users on the basis of flight origins and destinations, such discrimination does not rob the regulation of its validity. There is no evidence of malice or bad faith and the chosen basis of classification was not unreasonable and did not include irrelevant, illogical or illegal considerations. Further more, the plaintiffs cannot invoke the Charter or the Bill of Rights in this respect because their equality and anti-discrimi nation provisions are human rights which apply to individuals, but not to corporations.
Domestic tribunals and courts have no jurisdiction to enforce treaties which, as here, are not incorporated into the municipal law by legislative power. In any event, the trans-oceanic land ing charges did not violate Canada's adherence to the Chicago Convention or disgrace Canada's membership in the ICAO: there was no discrimination based on nationality. Furthermore, the trans-oceanic landing fees prescribed by the Minister did not materially depart from ICAO's suggested pricing princi ples. The pricing methodology, which utilizes a "catch-all" or "residual" fee, is the system employed at most foreign airports. And according to the evidence, none of the plaintiffs had been overcharged for landing fees.
However, if the Court is mistaken and it should later be held that the regulations were ultra vires on the basis that the costs of unvisited or seldom visited airports ought not to be charged to the plaintiffs, then each plaintiff would be entitled to a pro-rated deduction from the landing fees paid since 1974 in regard to landings in the common law provinces and since 1975 in regard to landings in Quebec. However, the next lower fee, domestic or international, would be payable.
In Quebec, there is no distinction to be drawn between money paid under mutual mistake of law or mistake of fact. Restitution would be governed by articles 1047 and 1140 of the Civil Code. In the common law provinces, the plaintiffs are entitled to be considered as having paid under protest from the commencement of the action, or earlier, provided that there was a provable, serious protest. Payments made under a mis take of law are not recoverable except in cases of compulsion or of illegal transactions.
CASES JUDICIALLY CONSIDERED
APPLIED:
Pan American World Airways Inc. v. The Queen et al., [1981] 2 S.C.R. 565, confirming (1981), 120 D.L.R. (3d) 574 (F.C.A.) and [1979] 2 F.C. 34 (T.D.); Gravel v. City of St -Léonard, [1978] 1 S.C.R. 660; Procureur Général du Canada v. La Compagnie de Publication La Presse, Ltée, [1967] S.C.R. 60; Cardinal et al. v. Directeur of Kent Institution, [1985] 2 S.C.R. 643; (1986), 63 N.R. 353; Hydro-Electric Commission of Nepean v. Ontario Hydro, [1982] 1 S.C.R. 347.
DISTINGUISHED:
Alaska Trainship Corporation v. Pacific Pilotage Au thority, [1978] 1 F.C. 411 (T.D.); Kruse v. Johnson, [1898] 2 Q.B. 91 (Div. Ct.).
REFERRED TO:
Attorney General of Canada v. Inuit Tapirisat of Canada et al., [1980] 2 S.C.R. 735; Roncarelli v. Duplessis, [1959] S.C.R. 121; Kiriri Cotton Co. Ltd. v. Dewani, [1960] A.C. 192 (H.L.); Eadie v. Township of Brantford, [1967] S.C.R. 573.
COUNSEL:
Raymond D. LeMoyne and Peter Richardson for plaintiffs.
W. Ian C. Binnie, Q.C. and David T. Sgayias for defendants.
SOLICITORS:
Doheny, MacKenzie, Montréal, for plaintiffs.
Deputy Attorney General of Canada for defendants.
The following are the reasons for judgment rendered in English by
MULDOON J.: The plaintiffs herein can be appropriately referred to in and by the well-known names of the airlines which they operate: Aer Lingus, Alitalia, British Airways, CP Air, Air France, El Al, Iberia, KLM, the liquidator of Laker Airways, Lufthansa, Sabena, SAS, Swissair and Wardair. In their re-amended statement of claim, filed on February 13, 1984, the plaintiffs assert that they are subjected to discrimination and illegal overcharging for landing fees in regard to every trans-oceanic flight, which the defendants, by certain Air Services Fees Regulations [C.R.C., c. 5], define to be a flight which crosses an imagi nary line described (approximately) as a line which passes through or near Cape Spear, New- foundland and, to the south, passes through the equator at 45° West Longitude.
The basis of the plaintiffs' complaint is their allegation that the regulations are ultra vires and null and void ab initio with respect to landing fees. Each plaintiff airline claims a refund and such claimed refunds range in sum from just over $800,000 plus interest on the part of Aer Lingus, to over $12 million plus interest on the part of British Airways.
A pre-trial conference was held at Ottawa on September 18, 1985. The parties' respective solici tors' joint statement of agreed facts was filed on October 4, 1985. They have also jointly prepared 9 books of exhibits about which the parties agree that each exhibit is admissible in evidence and true in content. Each side additionally tenders its own "10th" book of exhibits about which they each concede the admissibility of the other's exhibits, but reserve their rights to question the accuracy, weight or interpretation of the other side's docu ments exhibited therein. The public trial of this action commenced on January 20, 1986 and closed on Feburary 27, 1986, but the last written argu ment was received only on July 14, 1986.
The parties' joint statement of agreed facts runs thus:
The Parties are agreed as follows: The Parties
I. Each of the Plaintiffs operates or has operated airline ser vices between various countries of the world including services to and from Canada.
2. The Defendant, the Minister of Transport, is charged with various public duties pursuant to the Aeronautics Act, R.S.C. 1970, c. A-3, including the construction and administration of all government aerodromes and air stations.
3. The Plaintiffs in the course of carrying out their airline activities at times relevant to these proceedings have used and use airports administered by the Minister.
Aeronautics Act
4. Pursuant to section 5 of the Aeronautics Act, R.S.C. 1970, c. A-3, the Governor in Council, or the Minister upon the former's authorization, may make regulations prescribing charges for the use of:
(a) any facility or service provided by the Minister or on his behalf for or in respect of any aircraft; and
(b) any facility or service not coming within paragraph (a) provided by the Minister or on his behalf at any airport.
5. By Ministerial Regulations Authorization Order, SOR/70-409, the Minister was authorized by the Governor in Council to make regulations prescribing such charges. That Order is now C.R.C. 1978, c. 126.
Air Services Fees Regulations
6. Pursuant to section 5 of the Aeronautics Act and to the
Ministerial Regulations Authorization Order the Minister has
made and from time to time amended the Air Services Fees
Regulations:
SOR/70-410, effective September 9, 1970
SOR/72-487, effective November 22, 1972
C.R.C. 1978, c. 5, effective January 1, 1980
SOR/82-469, effective April 30, 1982.
7. The types of fees prescribed by the Fees Regulations include or have included, inter alia, various landing fees, general terminal fees, passenger processing fees, loading bridge fees, passenger transporting fees, passenger security services fees, telecommunication services fees, en route facilities and services fees, aircraft parking fees, hangar aircraft storage fees, and goods storage fees.
8. Up to September 1, 1985 to Fees Regulations prescribed, inter alia, a domestic landing fee, an international landing fee and a trans-oceanic landing fee in respect of the following categories of flights:
(a) "domestic flight"—a flight between points in Canada;
(b) "international flight"—a flight between a point in Canada and a point outside Canada that is not a trans oceanic flight; and
(c) "trans-oceanic flight"—a flight between a point in Canada a point outside Canada that passes over the Atlantic Ocean, except a flight between a point in Canada and any point outside Canada lying West of a line running from the most easterly point in Canada to the point of intersection of 45° West Longitude with O° Latitude.
9. Up to April 30, 1981, the Air Services Fees Regulations provided that the trans-oceanic landing fee was payable for the landing at a Canadian airport of an aircraft where such airport was
(a) the last point of landing prior to a trans-oceanic flight, or
(b) the first point of landing after a trans-oceanic flight;
and from May 1, 1981 through August 31, 1985, the Regula tions provided that the trans-oceanic landing fee was payable for each landing of an aircraft where that landing concluded a trans-oceanic flight.
10. During the times relevant to these proceedings the trans oceanic landing fee was payable at a rate greater than that of the international landing fee,; and the trans-oceanic landing fee and the international landing fee were payable at rates greater than that of the domestic landing fee.
International Agreements
11. Canada is a signatory to the Convention on International Civil Aviation signed at Chicago on December 7, 1944, and commonly known as the Chicago Convention.
12. Canada is a signatory to bilateral agreements for air services with Ireland, Israel, Italy, United Kingdom, France, Netherlands, Federal Republic of Germany, Belgium, Den- mark, Norway, Sweden and Switzerland, all respectively coun tries of domicile of the Plaintiffs.
Fees Paid
13. Each of the Plaintiffs has at relevant times conducted trans-oceanic flights within the meaning of the Regulations, and has paid trans-oceanic landing fees in respect thereof.
14. The Plaintiffs have paid to the Defendant, Her Majesty The Queen, trans-oceanic landing fees in the amounts shown on Schedule A hereto.
Domestic Revenue Passengers
15. None of the Plaintiffs having a foreign domicile has at any time during the period covered by the present action enjoyed the right to embark domestic revenue passengers at one Canadian airport for their disembarkation at another Canadian airport.
Facilities and Services
16. At the airports used by Plaintiffs during the period covered by the present action, all-cargo flights did not and do not use the passenger terminals and their incidence had and has no influence on the facilities provided by the Minister in passenger terminals.
17. At the passenger terminals of the airports used by Plain tiffs during the period covered by the present action, there were and are no separate areas or facilities provided specifically and exclusively for the well-wishers of any particular category of departing international passengers, nor for the greeters of any specific category of arriving international passengers.
18. The words "the airports used by the Plaintiffs" in the admissions of facts contained in paragraphs 16 and 17 refer to Gander, Halifax, Montreal Dorval, Montreal Mirabel, Toronto, Ottawa, Winnipeg, Calgary, Edmonton and Vancouver air ports, but do not imply that all such airports were used by all or
any of the Plaintiffs during or throughout the period in question.
This action was commenced on March 10, 1980, and each amended statement of claim has expressed the sums of trans-oceanic landing fees paid from and after 1974 by each plaintiff and claimed therein, and now expressed in Schedule A to the above recited statement of agreed facts. Whatever the outcome as to liabilities, the parties are agreed on Schedule A. The official record of pleadings, prepared pursuant to Rule 487 [Federal Court Ru/es, C.R.C., c. 663], was filed on March 4, 1985, and it discloses the final formula tion of the plaintiffs' claims. They urge that this Court:
RESERVE Plaintiffs' rights in respect of landing fees paid since the dates indicated hereinafter, or to be paid during the pendency of the present cause;
DECLARE the Air Services Fees Regulations ultra vires and null and void ab initio with respect to landing fees;
ORDER first Defendant to pay each of the Plaintiffs the following sum respectively:
[This schedule is now subsumed into Schedule A to the parties' statement of agreed facts.]
ORDER the payment of interest at the legal rate on the foregoing amounts in accordance with law;
GRANT such further and other relief as ... may seem just; THE WHOLE with the costs of this action.
The plaintiffs' action raises a variety of issues, each of which must be considered separately and in sequence. In the result, however, the plaintiffs' action will be dismissed for the reasons which are now hereinafter expressed, with party and party costs to be paid in favour of the defendants.
THE VALIDITY OF THE REGULATIONS
The plaintiffs attack the Regulations whereby the impugned landing fees were levied on two bases. They assert that those Regulations were beyond the powers delegated by Parliament to the Governor in Council or to the Minister upon the former's authorization; and they assert that, even if technically intra vires, those Regulations are nevertheless still null and void because they are unlawfully discriminatory. One speaks of the impugned Regulations in the past tense because, as
of September 1, 1985, the trans-oceanic landing fee was revoked by a new regulation promulgated as SOR/85-861. As of that date the trans-oceanic fee was replaced with a new international landing fee to accord with a new definition of "internation- al flight".
Are the impugned regulations null and void by reason of being ultra vires?
The answer to this threshold question is nega tive. The regulations are intra vires.
The pertinent provisions of section 5 of the Aeronautics Act [R.S.C. 1970, c. A-3] are recited in paragraph 4 of the parties' statement of facts. The Governor in Council has exercised the power therein conferred by authorizing the Minister to make regulations pursuant to the Ministerial Regulations Authorization Order, C.R.C., c. 126. It is a very brief order which directly authorizes the Minister to make regulations in precisely the same terms as expressed in section 5 of the Act, including specifically paragraphs 5(a) and (b).
Section 5 of the Aeronautics Act, and the regu lations prescribed pursuant to it, have been earlier judicially noticed in the case of Pan American World Airways Inc. v. The Queen et al., [1981] 2 S.C.R. 565. There the appellant airlines, all based in the U.S.A., challenged the legality of fees exact ed by the Minister of Transport for telecommuni cation and en route navigation services provided at their request by and from facilities within Canada. None of their flights landed in Canada, although some of them passed through Canadian airspace. There was no suggestion in that case of any dis criminatory charges and so, from that aspect, the Pan American case differs from the case at bar. On the other hand, the Supreme Court of Canada confirming the conclusion of Mr. Justice Mahoney, then of this Court's Trial Division, held that the expression of section 5 of the Act author izing the "prescribing" of charges connotes not only the fixing of quantum, but also the imposition of liability to pay those charges.
The discretion conferred upon the Governor in Council and, in turn, upon the Minister of Trans-
port, is broad, profound and virtually unfettered. The discretion to prescribe charges for the use of any facility or service provided by the Minister or on his behalf, at any airport, or for or in respect of any aircraft accords power to charge or not for any facility or service, or not, or for some and not others.
The charges, as will be seen, have been related to the costs incurred in the provision of the facili ties and services by the Minister. They do not need to be so related, but they are. The costs and revenues generated by each particular facility and service provided at each airport are not identified separately. Rather, the "catch-all" method, which accumulates and averages all costs incurred throughout the "system" of this country's interna tional airports (identified in paragraph 18 of the parties statement of facts, above) is used as the basis for the fixing of charges or fees. An average cost related to the weight of each aircraft or the number of passengers is then calculated. Ideally, the landing charges would be fixed at a rate sufficient to recoup all related costs. Whether the fees charged to the trans-oceanic sector do recover, or over-recover the full costs related to that sec tor's use, is a question of fact to which reference will be made.
The plaintiffs note that their trans-oceanic flights do not directly engage the facilities and services of every Canadian airport. They do how ever pay fees charged on the "catch-all" method. This, the plaintiffs argue, renders that method of imposition of fees beyond the powers conferred by the Act. The plaintiffs focus on the emphasized noun in the phrase "charges for the use of any facility or service provided" in section 5. They argue that they have been charged for airport facilities and services which they did not specifical ly use. The plaintiffs submit that unless an aircraft has, in fact, landed at an airport and/or, in fact, engaged a particular facility or service, any charge relating to the cost of providing that particular service or facility is surely prescribed outside of the power conferred by the statute. According to the plaintiffs' argument, factual use is the sole statutory criterion for the imposition of charges;
any and all other criteria render the imposition of charges invalid.
Further, the plaintiffs submit that the prescrib ing of differential charges is ultra vires the statu tory enabling power. They urge that since there appears to be no explicit authority to prescribe charges in relation to trans-oceanic, or any other differentiated class of flights, doing so is in breach of the power conferred by Parliament.
The defendants contend that the method, manner or basis of prescribing charges, including the trans-oceanic landing fees, is and always has been quite within the powers of the Governor-in- Council or the Minister, which Parliament has conferred upon them in section 5 of the Aeronau tics Act. The parties are in basic agreement that the only criterion for charging is "for the use of any facility or service provided by the Minister ... in respect of any aircraft; and . .. at any airport". The defendants argue that the Minister's almost global discretion is operable in and referable to use of facilities and services of whatever part of the system of Canadian international airports; and therefore the prescribing of charges would be ultra vires only if the defendants purported to levy them against some or all plaintiffs (or indeed other airlines) which had not used any services or facili ties at any of the system's airports.
In this new era of a constitutional description of Canada which is more specific than ever before in articulating "the rule of law" as one of the princi pal foundations and founding principles of Canada, the courts are required not to be so abject in their reverence for the authority of either secondary or primary legislation as they were in previous times. That, of course, does not and never should mean that the judiciary may be cavalier or insouciant about quashing regulations even when urged to quash by highly competent, articulate and perceptive counsel, such as have been engaged by the plaintiffs in the case at bar. It is the duty of the Court to find, and to accord, an interpretation of the statutory provision, which, without straining the words or perverting their meaning, vivifies the
impugned regulation. If the impugned regulation cannot be saved pursuant to the, or even an, ordinary meaning of the statutory prose, so be it
The Official Languages Act, R.S.C. 1970, c. O-2, by section 8 thereof exacts that in construing an enactment, both its versions in the official languages are equally authentic. Subsection 8(2) prescribes the means of avoiding chaos in the event that the parliamentary drafters and translators, as well as the parliamentarians themselves, produce disaccord in those presumably equally authentic versions. Paragraphs 8(2)(b) and (c) although of great interest in a bilingual, bijural federal state are not engaged by the issues at bar. The remain ing two paragraphs are pertinent:
8. (2) ...
(a) where it is alleged or appears that the two versions of the enactment differ in their meaning, regard shall be had to both its versions so that, subject to paragrah (c), the like effect is given to the enactment in every part of Canada in which the enactment is intended to apply, unless a contrary intent is explicitly or implicitly evident;
(d) if the two versions of the enactment differ in a manner not coming within paragraph (c), preference shall be given to the version thereof that, according to the true spirit, intent and meaning of the enactment, best ensures the attainment of its objects.
It is helpful to place the two versions of the pertinent provision of the Aeronautics Act side by side in order to see if the regulation prescribing trans-oceanic landing fees can be invoked under one or both versions against plaintiffs who use some, but sometimes not all, of the airports of the system for which the Minister has levied landing
charges.
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
(a) any facility or service provided by the Minister or on his behalf for or in respect of any aircraft; and
(b) any facility or service not coming within paragraph (a) provided by the Minister or on his behalf at any airport.
The two versions are not quite the same, for if they were the English language version, to con form more precisely with the other version, might well speak of "a facility or service ... an aircraft; and ... an airport". Alternatively, the French language version, to conform more precisely with the other version, might well speak of "toute installation ... tout service" or perhaps "un aéronef quelconque ... un aéroport quelconque", or either of such formulations. Despite being not quite the same, are the two official versions materially different? Not necessarily, and not at all, if reconciled according to the Official Lan guages Act.
The singular indefinite object un (or une) in French can be utilized to carry the connotation of any in English. In the Pan American case, cited above, it is said (at page 570): "L'article 5, dans son al. a) emploie les mots 'un aéronef' au sens large". Clearly, also, the object of section 5 of the Aeronautics Act is to accord a virtually unfettered, almost globally discretionary power to make regu lations prescribing charges for the use of the facili ties or services at any airport. That emphasized word is to be given its ordinary meaning, which in both versions of the statute carries a wide sense or meaning.
The Shorter Oxford English Dictionary, (3rd Ed., 1983) defines "any": 1. gen. In sing. = A—no matter which, or what. In pl. = Some—no matter which, of what kind, or how many.. .. c. In affirm. sentences: = (constructively) Every one of the sort named ME. 2. Quantitative: = A quantity or number however great or small 1526. 3. Qualita tive: Of any kind or sort whatever; ...
Black's Law Dictionary, 5th ed., 1979, expresses the following principle meanings of "any": "Some, one out of many; an indefinite number. One indis criminately of whatever kind or quantity.... Word 'any' has a diversity of meaning and may be employed to indicate 'all' or `every' as well as `some' or 'one' and its meaning in a given statute depends upon the context and the subject matter of the statute."
The Dictionnaire Juridique/Legal Dictionary— The New Th. A. Quemner Dictionary, 1977— Editions de Navarre, Paris, defines "any" to be: "un quelconque, quiconque, tout .... [Eg.] any twelve jurors—douze jurés quelconques."
The above-cited foreign authorities confirm, (if confirmation were needed) this Court's entirely Canadian understanding and interpretation of the word "any" in section 5 of the Aeronautics Act to mean "all", "each and every", or "whichever", among and including the meanings already can vassed. Thus "at any airport" in section 5 includes among others the meaning "at each and every, or whichever, airport" at which the Minister provides every and all, or whichever, facilities and services.
If the drafters who formulate, and the legisla tors who enact the laws were clairvoyant, they could foresee the precise exigencies of future liti gation and they could meet those exigencies, or reject them out of hand. They did neither regard to in these circumstances, necessitating a judicial interpretation of their handiwork. The broad extent of the power to prescribe trans-oceanic landing fees is a judicial interpretation enlightened by the decisions at first instance and upon ultimate appeal in the Pan American case. The initial rea sons for judgment of Mr. Justice Mahoney (now of the Appeal Division of this Court) ([1979] 2 F.C. 34 (T.D.)) were directly adopted and ratified by the unanimous appeal panel of this Court ((1981), 120 D.L.R. (3d) 574) and referred to with approv al by the Supreme Court of Canada. The late Chief Justice Laskin wrote the unanimous decision of the Supreme Court, in which (at page 572) appears the following passage:
Mahoney J., after reference to dictionary meaning of the term "prescribe" concluded that s.5 gave authority not only to fix the charges, but also to impose a legal obligation to pay them. I find no reason to differ from him on this issue and would, accordingly, reject the submission that s.5 is deficient in its formulation to lay an obligation of payment upon the appellants.
In response to the plaintiffs' contention that the catch-all cost-averaging method of fee-determina tion is inappropriate, if not unlawful, the defend-
ants submit that such a criticism is irrelevant to the issue of the vires of the regulation by which the charges are imposed. Noting that section 5 of the Act does not express an ulterior purpose or object, such as (for example) "to recover the costs incurred in the provision of airport facilities and services", they assert that the Minister has virtual ly complete discretion to base the charges on almost anything within reason and outside malice, mischief or despotism, which he wants to utilize. Indeed, upon the true construction of section 5, the Minister is not obliged to try to recover costs or even to establish a cost base. Rather, section 5 confers simply and solely a power to prescribe charges. It is a pricing provision, not a cost-recov ery provision. As a result, the criticism of the particular, not unreasonable cost base chosen by the Minister as a method of determining charges is quite immaterial in the premises.
The defendants have related at length the legis lative history of the powers which have come to be focussed and formulated in the actual section 5 of the Aeronautics Act. They claim that this history supports their interpretation. Prior to 1966, air services fees regulations were enacted pursuant to the Financial Administration Act, S.C. 1951 (2nd Session), c. 12, which provided:
18. Where a service is provided by His Majesty to any person and the Governor in Council is of the opinion that the whole or any part of the cost of the service should be borne by the person to whom it is provided, the Governor in Council may, subject to the provisions of any Act relating to that service, by regulation prescribe the fee that may be charged for the service. [Emphasis added.]
Regulations made pursuant to the above recited statutory provisions are restricted by the cost- recovery object in the first emphasized expression. A fee could be charged only if its purpose were to recover all or some part of the costs of providing the service, and consequently the Governor in Council would reasonably have had to establish the cost base.
In 1966, Parliament shifted the authority to make air service fee regulations and accordingly, to prescribe charges, out of the Financial Administration Act and into the Aeronautics Act.
In so doing the expression concerning "the whole or any part of the cost" was simply deleted, (by S.C. 1966-67, c. 10, s. 1). Once this direct refer ence to the recovery of costs was abandoned, the sole criterion for prescribing charges became the use of any facility or service at any airport. The Governor, or the Minister, was thereupon not required to consider anything else. (Since 1966, two further amendments have been enacted, but neither affects the issue at bar.) So, the defendants correctly submit, Parliament clearly evinced a legislative intent to grant a discretionary pricing power which requires no relating to the costs of providing any facilities and services.
This interpretation shuns the narrow meaning of section 5 of the Act which the plaintiffs advance. That the legislative history of an enactment can serve as a useful aid to its intrepretation was noted by Mr. Justice Pigeon, writing for himself and three other judges of the Supreme Court of Canada in the case of Gravel v. City of St -Léon- ard, [1978] 1 S.C.R. 660, at page 667:
Legislative history may be used to interpret a statute because prior enactments may throw some light on the intention of the legislature in repealing, amending, replacing or adding to it.
(The above passage is cited as an example in Driedger, Construction of Statutes, 2nd ed., 1983, page 160.)
That the cost-recovery provision was not carried forward into the Aeronautics Act indicates the legislative intention to unshackle the delegated power to prescribe charges for the use of any services and facilities at any airport. That the international airports of Canada have been treated at all material times as a system, indicates that fee-attracting use needs only to be of some part of the airport system, but not necessarily the use of all of the airport system's facilities and services,— just those at any airport.
The Court therefore holds that the impugned Regulations, whereby the trans-oceanic landing fees were prescribed by the Minister, were in fact
and law, and would be again, quite within the powers delegated by Parliament in section 5 of the Aeronautics Act.
Are the impugned trans-oceanic landing fees null and void because they are discriminatory?
The answer to this secondary question is nega tive. The trans-oceanic landing fees prescribed pursuant to the specified Air Services Fees Regu lations are not null and void on the basis of being discriminatory.
It is quite true, of course, that the trans-oceanic landing fees prescribed in the various Air Services Fees Regulations in force up to September 1, 1985, are indeed discriminatory. They are dis criminatory in that those regulations discriminated as between domestic flights, international flights and trans-oceanic flights, with an increasing scale of quantum of fees prescribed respectively for each category of flights. This is illustrated in para graphs 8, 9 and 10 of the parties' statement of agreed facts, recited above.
On this basis, too, the plaintiffs assert that, since they have had to pay the highest discriminatory landing fees prescribed by the Regulations, then those Regulations are null and void ab initio and ultra vires to the extent that they levy fees in excess of the regular landing fees for international flights. Their statement of claim asks the Court to declare the above described annulments of the Regulations "with respect to landing fees". In view of the earlier conclusion herein about the clear validity of the Regulations prescribing landing fees vis-à-vis section 5 of the Act, the prescribing of landing fees per se cannot be "ultra vires and null and void ab initio". The plaintiffs' complaint must accordingly reside in and against the differential between the higher trans-oceanic landing fee and the lower international landing fee and the even lower domestic landing fee.
There is no need to go into matters of legislating for extra-territorial effect, even although one of
the two co-ordinates of the imaginary line described in the Regulations is the intersection of 45 degrees West Longitude with the equator. Despite the fact that the latter co-ordinate is out side of Canada and Canadian territorial waters, the salient fact is the charging of landing fees at any airport in Canada. The Pan American deci sion, above cited, amply confirms the power to prescribe charges in regard to use of facilities and services by flights crossing the Atlantic Ocean.
The impugned Air Services Fees Regulations are part of the domestic law of Canada. The parties, in paragraphs 11 and 12 of their above recited statement of agreed facts, have referred to the Chicago Convention [Convention on Interna tional Civil Aviation, Dec. 7, 1944, [ 1944] Can. T.S. No. 36] of December 7, 1944, and to bilateral agreements with countries which are the corporate domiciles of most of the plaintiffs. The relevance of international law and practice will be considered later herein. At this juncture however, since Cana- da's domestic law does not recognize a treaty, which is not implemented by competent legisla tion, the plaintiffs' complaint presents the issue of discriminatory charges wholly in the context of the laws of Canada. It remains to be seen whether these laws ought to be interpreted, if possible, so as to comply with the treaty, or with the ICAO statements/déclarations d'OACI (exhibits 19(a), (b) and (c), jointly submitted).
In support of their position, the plaintiffs cite a number of judgments, almost all of which reveal a context of municipal law. The few which are not grounded upon the construction of by-laws enacted by municipalities may have been correctly decided, but have been wrongly interpreted by the plain tiffs. As an example, a passage from the headnote of the report of Alaska Trainship Corporation v. Pacific Pilotage Authority, [1978] 1 F.C. 411 (T.D.) illustrates its inapplicability, thus [at page 412]:
Held, judgment is issued in both actions that the inclusion of the words "registered in Canada" and "registered in the United States" in sections 9 and 10 of the Regulations is ultra vires the power of the Pacific Pilotage Authority as delegated to it by section 14 of the Pilotage Act. Judgment also issues in both actions for further declarations that: (1) the pilot members of
the Authority had a conflict of interest in the true equitable sense when they participated in drafting and passing the Regu lation and did not purge themselves of such conflict of interest at any relevant time; (2) the Authority, in prescribing the flag of the ship in sections 9 and 10, was not motivated for the public purpose of safety within the meaning and objects of section 12 of the Pilotage Act, but rather to obtain personal pecuniary benefit for the pilot members of the Authority; (3) the S.S. Alaska in the area it ran without a pilot, posed no threat to safety within the meaning of section 12 of the Pilotage Act; (4) the Authority, by including those words in the subject regulations, frustrated the intent of Parliament that certain ships, posing no safety threat within the meaning of section 12, should be excused from compulsory pilotage by exemption or waiver prescribed in the Pilotage Act. [Emphasis added.]
In the above referred to judgment of Mr. Justice Gibson, the status of the regulation-making Pacific Pilotage Authority, the finding of conflict of inter est on the part of its members and the element of the frustration of the will of Parliament all abun dantly distinguish that case from the case at bar.
This is not to say that the wielding of statutory powers delegated to the Governor in Council, or a Minister, is beyond judicial review. As was unani mously held by the Supreme Court of Canada through the words of Mr. Justice Estey in that pre-Charter case of Attorney General of Canada v. Inuit Tapirisat of Canada et al., [1980] 2 S.C.R. 735, at page 748:
Let it be said at the outset that the mere fact that a statutory power is vested in the Governor in Council does not mean that it is beyond review. If that body has failed to observe a condition precedent to the exercise of that power, the court can declare that such purported exercise is a nullity.
Since that is so in regard to the Governor in Council, it is a fortiori so in regard to a Minister, and was so prior to September 1, 1981. However, failure to observe a condition precedent to the exercise of quasi-judicial power is a far remove from the circumstances of the Alaska Trainship case, which, on its facts, is simply inapplicable here, even though the delegated power was legisla tive in nature, as it is here.
Ever since, if not before, the judgment of Lord Russell of Killowen in Kruse v. Johnson, [1898] 2
Q.B. 91 (Div. Ct.), it has been generally accepted that discrimination is a basis upon which the valid ity of a municipal school board or other local government by-law can be challenged. An ample jurisprudence reveals, however, that this principle is confined to "by-laws", that is subordinate legis lation enacted by creatures of statute (e.g. munici palities and universities, and the like). The princi ple does not apply to certain "regulations", that kind of subordinate legislation enacted by the executive branch of government (e.g. the Governor in Council, the Lieutenant Governor, a Minister of the Crown) pursuant to statutory delegation. As was noted by Professor Elmer A. Driedger in "Subordinate Legislation" (1960), 38 C.B.R. 1, neither discrimination nor even unreasonableness is a ground for quashing regulations enacted by the executive. Unfair proceedings where the execu tive itself is constituted to be a review tribunal are indeed reviewable as noted in the Inuit Tapirisat case, but not differential pricing or charges as here. The power to make regulations prescribing charges for use of facilities and services without further fetter, is the power to establish categories of users. If or when, as here, such categories discriminate as between classes of users on the basis of flight origins and destinations, such dis crimination does not rob the regulation of its validity.
Mr. Justice Abbott wrote for the majority in the case of Procureur Général du Canada v. La Com- pagnie de Publication La Presse, Ltée, [1967] S.C.R. 60. In the circumstances of that case the plaintiff, having paid its broadcasting licence fee for the period April 1, 1960 to March 31, 1961, was confronted with an order in council whose effect was to increase the plaintiff's fee for the then current year. The plaintiff paid under protest and, by its petition of right, complained that the order in council was invalid and ultra vires in this, among other respects [at page 73].
2. That it is unjust and discriminatory between the [plaintiff, La Presse] and other private commercial broadcasting stations and also between a group of private commercial radio broad-
casting stations, the Canadian Broadcasting Corporation and other categories of broadcasting stations.
The pertinent words of Abbott J. are reported at page 75, thus:
As to the alleged discriminatory character of the regulation, I am not satisfied that it is in fact discriminatory. In any event s. 3 of the Act puts no limitation upon the powers of the Governor in Council to prescribe licence fees. That such fees may in fact be discriminatory, in my opinion, affords no legal ground of attack upon the validity of the Order.
Yet another insight into what, if any, sorts of discrimination can stand with impunity is evinced in the unanimous judgment of the Supreme Court of Canada written by Mr. Justice Le Dain in Cardinal et al. v. Director of Kent Institution, [1985] 2 S.C.R. 643, at page 653; (1986), 63 N.R. 353, at page 358:
This court has affirmed that there is, as a general common law principle, a duty of procedural fairness lying on every public authority making an administrative decision which is not of a legislative nature and which affects the rights, privileges or
interests of an individual . [Emphasis not in original.]
This notion of reviewing the validity of adminis trative decisions which are not of a legislative nature is important to the integrity of legislative power under the Constitution of Canada. Like the provincial legislatures, Parliament is sui generis and is not to be blocked in its intended constitu tional regulation of corporate enterprises in mat ters of trade and commerce, and aeronautics. Dis crimination as between classes of enterprises is essential to the wielding of such constitutional powers of legislative regulation, licensing and pric ing of the use of facilities.
Of course, such regulation must not offend the rule of law, especially since the promulgation of the Canadian Charter of Rights and Freedoms [being Part I of the Constitution Act, 1982, Schedule B, Canada Act 1982, 1982, c. 11 (U.K.)]. Here the discrimination between classes of flights, with equal application of the prescribed charges within each class, leaves the plaintiffs at least technically, if not also practically, free to do business in Canada and to submit to the charges, or not. In these circumstances the law is clear that such discrimination per se is not a ground for
annulling the regulation. There is no scent of egregiousness, malice or bad faith upon the evi dence here. Arguably such elements could render the regulation null and void. The case of Ron- carelli v. Duplessis, [1959] S.C.R. 121, stood, long before the enactment of the Charter as an illustra tion of the abuse of authority based on irrelevant considerations.
That which is literally discrimination between categories of flights here has nothing pejorative about it. It may be said equally to be the mere classification of enterprises for the purpose of levy ing landing fees. The presence of Canadian corpo rations among the plaintiffs, and the acknowl edged fact that Air Canada, although not a plaintiff, was at all material times as subject to the trans-oceanic landing fee as were the plaintiffs, demonstrates the equal, non-discriminatory application of the regulation. As will be noted, the chosen basis of classification was not unreasonable and did not include irrelevant, illogical or illegal considerations.
It seems quite probable that the kind of classifi cation of flights in the impugned Regulations would survive an application to quash even if such kind of classification were evinced in a municipal by-law. It is not unreasonable and not discrimina tory in the pejorative sense of defeating true equal ity rights. Because the enabling legislation had no objective other than prescribing charges for use of facilities and services, the Minister was not obliged by law to define the differential in prices upon anything other than use of the facilities and ser vices. Nor was he, (as the developing jurisprudence on individual discrimination under section 15 of the Charter amply discloses), obliged to adjust the differential with arithmetic accuracy. It may be noted that the equality and anti-discrimination provisions of the Canadian Bill of Rights, R.S.C. 1970, Appendix III, and of the Charter are human rights which apply to individuals, but not to corpo rations. The constitutional legislative power to regulate corporate enterprises remains plenary on the part of Parliament and the provincial legisla-
tures in their respective spheres, and it is virtually unfettered, subject to the narrow exceptions already herein discussed. In any event, the ma terial times in the case at bar pre-date the Charter.
The Court therefore holds that the impugned trans-oceanic landing fees were and are not null and void because they are discriminatory. They are not discriminatory, in any event, in the pejorative sense of oppressing the plaintiffs or of confiscating their profit. If the plaintiffs regard the trans oceanic landing fees as too great a charge on their cost of doing business in Canada, or as an indica tion of lack of business sense on the part of the Minister, neither of which is objectively proved, they must accept that such complaints are not justiciable.
THE RELEVANCE OF THE INTERNATIONAL AGREEMENTS
In Droit constitutionnel, Chevrette and Marx, Presses de l'Université de Montréal, 1982, the authors state at pages 1196 and 1197:
[TRANSLATION] International law and domestic law .. .
a treaty is only part of domestic law if it is incorporated into the latter by legislation. The rules applicable to international customary law differ in this regard: a national judge admits it after he has ascertained that the custom exists and that Canada adheres to it. Domestically, however, even though in some cases the international law rule may not have been formally incorpo rated, it functions as a general rule of interpretation, in the sense that a contrary national law may override it if it does so in clear terms, but otherwise the law will be construed as being consistent with the international rule, or at least an effort will be made to reconcile the two rules, national and international.
In Constitutional Law of Canada, Hogg, 2nd ed., Carswell, Toronto, 1985, at pages 245 and 246, the author states:
Canada's constitutional law, derived in this respect from the United Kingdom, does not recognize a treaty as part of the internal (or "municipal") law of Canada. Accordingly, a treaty which requires a change in the internal law of Canada can only be implemented by the enactment of a statute which makes the required change in the law. Many treaties do not require a
change in the internal law of the states which are parties. This is true of treaties which do not impinge on individual rights, nor contravene existing laws, nor require action outside the execu tive powers of the government which made the treaty. For example, treaties between Canada and other states relating to defence, foreign aid, the high seas, the air, research, weather stations, diplomatic relations and many other matters, may be able to be implemented simply by the executive action of the Canadian government which made the treaty. But many trea ties cannot be implemented without an alteration in the internal law of Canada. For example, treaties between Canada and other states relating to patents, copyrights, taxation of foreign ers, extradition, and many other matters, can often be imple mented only by the enactment of legislation to alter the internal law of Canada.
But in Canada, where there is no constitutional requirement of parliamentary approval prior to the making of a treaty, it would offend against the basic principle of parliamentary supremacy if the executive could alter the law of the land merely by making a treaty.
The veracity of the above two quoted statements is confirmed by jurisprudence including the deci sion of the Supreme Court of Canada in the Pan American case, earlier above cited. There, in [1981] 2 S.C.R. 565, Chief Justice Laskin spoke of the airlines' argument to the effect that they were not required by alleged customary international law to acknowledge Canada's exercise of sover eignty in the airspace above the high seas. Laskin C.J. dealt with that argument at pages 567 and 568 in this way:
There is no occasion here to apply a principle of construction favouring the compatibility of domestic law with international law. Either international law invoked in this case is effective because expressly incorporated into Canadian law or the exac- tions are not, in any event, authorized under Canadian law; there is no other challenge that the appellants can mount.
Thus, where the international law, either cus tomary or under treaty, is expressly incorporated into domestic law it will operate just as cogently and enforceably as Canadian law. Otherwise, the "exactions" if authorized by Canadian law, as are the trans-oceanic landing fees, must be paid. If the executive do not seek legislative incorporation of treaties bearing on the legislative jurisdiction of Parliament under the Constitution, Canada could be seen to acquire a poor reputation among nations. Any such complaints brought before the
domestic tribunals and courts of Canada are not justiciable, for judicial power alone is incapable of enforcing treaties which are not incorporated into the law by legislative power. There is, however, no cogent evidence which is persuasive on a balance of probabilities to demonstrate that the prescribing of the impugned trans-oceanic landing charges violated Canada's adherence to the Chicago Con vention, or disgraced Canada's membership in ICAO/OACI.
The pertinent provisions of Article 15 of the Chicago Convention (exhibit 1) are as follows:
ARTICLE 15
Every airport in a contracting State which is open to public use by its national aircraft shall likewise, subject to the provi sions of Article 68, be open under uniform conditions to the aircraft of all the other contracting States. The like uniform conditions shall apply to the use, by aircraft of every contract ing State, of all air navigation facilities, including radio and meteorological services, which may be provided for public use for the safety and expedition of air navigation.
Any charges that may be imposed or permitted to be imposed by a contracting State for the use of such airports and air navigation facilities by the aircraft of any other contracting State shall not be higher,
(b) as to aircraft engaged in scheduled international air services, than those that would be paid by its national aircraft engaged in similar international air services.
The essence of Article 15 is non-discrimination on the basis of the nationality of foreign aircraft vis-à-vis the contracting State's own national air craft. No evidence was adduced to indicate even the slightest degree of discrimination between any of the plaintiffs and Air Canada, or as between the Canadian plaintiffs and the foreign plaintiffs. In promulgating the impugned Air Services Fees Regulations, the defendants have behaved legally and honourably in contemplation of Article 15 of the Chicago Convention.
From time to time the Council of ICAO has issued statements on charges for airports and route air navigation facilities (exhibit 19). In 1974, the
Council expressed such a statement (exhibit 19(B)), which contained these pertinent proposed principles:
10. Charging systems at international airports should be chosen in accordance with the following principles:
(iii) The charges must be non-discriminatory both between foreign users and those having the nationality of the State of the airport and engaged in similar interna tional operations, and between two or more foreign users.
Again, the plaintiffs have no valid complaint about the landing fees in contemplation of the above recited passage from exhibit 19(B). The expres sions "similar international air services" placed in Article 15 of the Convention, and "similar interna tional operations" most certainly bespeak the real ity of dissimilar ones, and do not taint the Canadi- an differential between charges for "international flights" and for "trans-oceanic" flights.
The bilateral agreements mentioned in para graph 12 of the parties' statement of agreed facts are exhibited in Book II, exhibits 3 through 14. Exhibit A from the plaintiffs shows certain refer ences to those agreements in regard to non-compli ance with the other contracting party's laws and regulations, and in regard to preferential treat ment concerning customs, immigration, quarantine and use of facilities. Non preference on the basis of nationality is convenanted by Canada with other countries, in these provisions:
Denmark: article 4(1) — (exhibit 4)
France: article 7(1) — (exhibit 5)
Germany: article 8(1) — (exhibit 6)
Israel: article VIII(1) — (exhibit 8)
Netherlands: article VIII 1. — (exhibit 10)
Norway: article 3(1) (exhibit 11)
Sweden: article 3(1) — (exhibit 12)
Switzerland: article VIII 1. — (exhibit 13)
An example of such a non-discrimination provi sion is that of the 1974 treaty with the Nether- lands [Air Transport agreement between the gov ernment of Canada and the government of the Kingdom of the Netherlands, June 17, 1974, [1975] Can. T.S. No. 19] which came in force definitively on July 15, 1975, (exhibit 10) and
which happens to be expressed in both of Canada's official languages, and legibly:
ARTICLE VIII
1. The charges imposed in the territory of either Contracting Party for the use of airports and other aviation facilities on the aircraft of a designated airline of the other Contracting Party shall not be higher than those imposed on aircraft of a national airline engaged in similar international air services.
In regard to the impugned trans-oceanic landing charges, it is plain that the plaintiff KLM adduced no evidence upon which to support any complaint herein pursuant to article VIII 1. of the above mentioned agreement between Canada and the Kingdom of the Netherlands, assuming this Court to be an appropriate forum, which it is not.
Moreover, the ICAO statement of 1974, jointly tendered as exhibit 19(B), to which much refer ence was made by the parties, appears to counte nance a certain degree of real preferential treat ment, no less. Among the principles enunciated in section S9 there appears:
(vii) Where any preferential charges, special rebates, or other kinds of reduction in the charges normally payable in respect of airport facilities are extended to particular users [that which is not repudiated herein], governments should ensure as far as practicable that any resultant under-recovery of costs properly allo- cable to the users concerned is not shouldered onto other users.
Now this edifying but non-binding principle whereby preferential charges, rebates or other reductions may truly be countenanced, according to ICAO, is probably the basis of the plethora of expert evidence and testimony on accounts, accounting, accounting principles and time-and- motion observations which were submitted in detail to the Court.
It must be remembered that the Minister's statutory authority to prescribe charges for the use of any facility or service at whatever airports is a pricing authority which is not fettered by cost considerations. In the event of incompatible princi ples being enunciated by ICAO and the Chicago Convention on one side, and by the Aeronautics Act with its wholly intra vires regulations on the
other side, the Court would be bound to respect the Act and the regulations, since the international involvements are not specifically incorporated into Canadian law. But, although not obliged to apply the civil aviation association's principles slavishly, or with mathematical precision, or at all, the Min ister has managed to abide pretty closely by them.
Indeed ICAO's stated principles are so general and qualified as to be serviceable only as guide lines, but hardly as legislation. The gravamen of these principles is cost, as distinct from Parlia ment's emphasis on pricing exclusively. In addition to principle (vii) set forth is section S9 of exhibit 19(B), the others (with emphasis added) are:
(i) The cost to be shared is the full economic cost to the community of providing the airport and its essential ancillary services, including appropriate amounts for interest on capital investment and depreciation of assets, as well as the cost of maintenance and opera tion and management and administration expenses, but allowing for all revenues, aeronautical or non- aeronautical, accruing from the operation of the air port to its operators.
(ii) An allocation of costs should be considered in respect of space or facilities utilized by government authorities.
(iii) The proportion of costs allocable to various categories of users, including State aircraft, should be deter mined on an equitable basis, so that no users shall be burdened with costs not properly allocable to them according to sound accounting principles.
(iv) In general aircraft operators and other airport users should not be charged for facilities and services they do not use, other than those provided for and imple mented under the Regional Plan.
(v) Under favourable circumstances airports may produce sufficient revenues to exceed by a reasonable margin all direct and indirect costs (including general administration, etc.) and so provide for retirement of debt and for reserves for future capital improvements.
(vi) The users' capacity to pay should not be taken into account until all costs are fully assessed and distribut ed on an objective basis. At that stage the contribut ing capability of states and communities concerned should be taken into consideration, it being under stood that any State or charging authority may recov-
er less than its full costs in recognition of local, regional, or national benefits received.
(vii) [previously recited]
(viii) Airport charges levied on international general avia tion, although needing to respect Article 15 of the Chicago Convention should be assessed in a reason able manner, having regard to the cost of the facilities needed and used and the goal of encouraging the growth of international general aviation.
The weight and preponderance of credible evi dence indicates that although Parliament con ferred a broad pricing authority upon the Minister to prescribe charges for use of facilities and ser vices, the trans-oceanic landing fees prescribed by him evince negligible, if any, departure from ICAO's suggested principles. So, even if the defendants' adherence, or not, to those principles were justiciable in this Court, the evidence dis closes that the Minister's effort in prescribing the impugned landing fees is good enough. It did not violate the principles. Strict arithmetical accuracy is not necessary in this regard, despite the parties' counter-fulminations of reams of contradictory expert accounting postulations.
WERE THE PLAINTIFFS "OVERCHARGED"?
In view of the initial findings herein to the effect that the impugned Air Services Fees Regulations are quite intra vires of section 5 of the Aeronautics Act and not null and void for being allegedly discriminatory, the brutal truth is that whether or not the plaintiffs have been "overcharged" is of no legal consequence. In prescribing the charges, the Minister bears a responsibility for the risk that if he charges too much he could drive away the plaintiffs' business and precipitate retaliation by the airport authorities of their countries of origin. He could drive the Canadian plaintiffs out of business. Since the plaintiffs continued to pay the landing charges their continued use of Canadian airports was their own voluntary act based on business decisions. They paid under protest from about the time they commenced this action. Successive Ministers have been responsible to Par liament, to their cabinet colleagues and to the government caucus. The plaintiffs, all corporate
entities, are managed and directed by persons who are responsible to their shareholders or their State owners.
In the normal course of events the Minister of the day, controlled no doubt by his particular responsibilities, had regard to costs when prescrib ing landing charges. He has not been obliged to do so in terms of the power conferred by Parliament in section 5 of the Act; but in the normal course of events the Minister would, and did, have regard to cost. That, indeed, is indicated strongly by the evidence which also discloses by exhibit 218, the Auditor General's report, that the system of the eight international airports have lost a great deal of money. That is another way of describing non- recovery of costs. Whatever that "full economic cost to the community of providing the airport and its ancillary services" might be, it seems apparent that the community of Canadian taxpayers has borne the far greater part of the burden.
The witness whose documentary and oral evi dence was most cogent and credible on this issue is Gordon Clare Wilson. Mr. Wilson, since August, 1978, has been the financial adviser in the rate economics branch of the Canadian Air Transpor tation Administration (CATA). After graduating in 1973 with an Honours Bachelor of Commerce degree from Carleton University, he joined the Canadian Transport Commission's staff for a short time, working as a research assistant in a project on airline operating costs. In October, 1973, he became employed by Statistics Canada, the avia tion statistics branch where he acquired valuable experience for his present employment and his credibility in this case. At the time of his testimo ny, Mr. Wilson had participated in all of the activities of the rate economics branch which is responsible for the cost recovery program of CATA. He has been involved in the preparation of financial information used, and to be used, in the development of fee proposals to the industry.
The record of Mr. Wilson's viva voce testimony extends from page 2584 (vol. 13) of the transcript to page 2843 (vol. 14). This knowledgeable witness described in simple historic terms the development of the landing fees from years before the institu tion of the international landing fees in 1957, to their merger with the trans-oceanic landing fees in 1985, and the consequent elimination of the latter on September 1 of that year. (Transcript: pages 2610 to 2621). Those developments are shown also in exhibits 220 through 223.
CATA's methodology brought about a reduc tion of the trans-oceanic fee on May 1, 1982, and Mr. Wilson explained the matter thus:
A. Well, the methodology that we had adopted is one that in looking at the costs and revenues of the international airport system would come to an amount that we call the "break-even landing fee," and that as long as everyone is being charged less than that break-even landing fee, it was our position that no one was paying for the full costs.
As a result of major changes in the revenue picture of these airports, other than through landing fees, and some changes on the costs side, the situation was such that without reducing the trans-oceanic landing fee that fee would have exceeded the break-even landing fee. And consistent with our methodology, we took the step of reducing that fee.
(Transcript: vol. 13, page 2618)
Over the time span from 1976, when the fees increased by 30%, to September, 1985, when the trans-oceanic landing fee was eliminated, the domestic and international fees grew at a greater rate than the trans-oceanic fee. Mr. Wilson testified:
If I remember the figures correctly, over a 10-year period, culminating in the September, 1985, increases, the domestic was increased something like 272 per cent; the international, 240 per cent, and the trans-oceanic was 14 per cent higher than it had been 10 years earlier.
(Transcript: vol. 13, page 2620)
The methodology utilizes a "catch-all' or "residual" fee, and is the system employed at several, if not all, foreign airports throughout the world. The plaintiffs' witness Cornelius Lakeman,
retired head of the international affairs depart ment, Flight Operation Division at KLM, testified, thus:
Q. Some airports attempt to segregate landside and airside to some extent?
A. Some airports do.
Q. Many do not? A. Many do not.
Q. All right. And you would agree with me that with respect to methodology there is a wide range of practices right across the world as to how he gets to those final fees?
A. Yes
Q. Yes. But that for the most part, the fee which winds up being charged as the balanced costs and revenues is the landing fee?
A. Yes.
(Transcript: vol. 2, pages 288 and 289)
Mr. Wilson, on cross-examination, re-iterated the technique of discovering the break-even land ing fee and his explanation is recorded at page 2791 of the transcript (vol. 14). The trans-oceanic and other carriers have the benefit of the revenues from the concessions and rental enterprises which fall into the "catch-all" thereby reducing the costs otherwise chargeable against the airlines. This technique is in sweet accord with ICAO's principle S9(i), above recited, as revealed in exhibit 19(B).
Exhibit 223, produced by Mr. Wilson (Tran- script: vol. 14 pages 2662 et seq. demonstrates the calculation of the break-even landing fee in the international airport system. The source of the sums in the first part of exhibit 223 is the cost and revenue statements, for the year 1982-83, which appear on page 10 of exhibit 185. Exhibit 223 indicates that in order to achieve full cost recovery in the international airport system, all categories of flights would have had to be charged a landing fee of $2.25 per 1,000 pounds. In fact, the landing fees, effective May 1, 1982, per 1,000 lbs. were: trans-oceanic, $1.62; international, $1.38; and domestic, $0.91.
So, the defendants argue, even after the subsidy from the air transportation tax, the defendants were providing a subsidy of $0.63 per 1,000 lbs. to the trans-oceanic sector, $0.87 to the international sector and $1.34 to the domestic sector. A subsidy of $0.63 per 1,000 lbs., the defendants assert, represents a subsidy of $485.00 for each landing of a Boeing 747's trans-oceanic flight. Exhibit 266 indicates a break-even landing fee of $2.80 per 1,000 lbs. in 1978-1979, when the rate of the trans-oceanic landing fee was $2.06.
It must be noted that the air transportation tax is not an airport revenue. It is levied on the price of transportation by aeroplane, but the fare paid is not always for departure from an airport. It could be for departure from a lake or river or an open field. This tax is on the air fare alone. It is not an airport user charge. Accordingly if the government gives some of this tax revenue as a subsidy for the airports, that fact alone does not make the whole tax revenue accountable in and with revenues such as duty-free sales, general terminal fees, or landing fees. Although the plaintiffs may gain benefit from such subsidy using tax revenues, that process is truly res inter alios acta insofar as the plaintiffs are concerned.
CATA calculated the break-even landing fee in the same manner in every year. In 1981, the forecast indicated that the trans-oceanic fee would exceed the break-even landing fee and the trans oceanic landing fee was significantly reduced in order to avoid overcharging the affected carriers. This is established by Mr. Wilson's testimony, recorded at pages 2805 and 2806 of the transcript (vol. 14).
The experts, evincing all the usual strengths and weaknesses of their genre, have tried to show how the plaintiffs were overcharged, or not, depending upon which side sought and bought their expertise. The Court, after assessing the witnesses in person and after reviewing the transcript of their volumi nous testimony and the voluminous exhibits, comes to certain conclusions.
The Court prefers the evidence of Steven O. Gunders over that of Alan S. Cunningham. Mr. Cunningham asserts that the statements of the airports revolving fund (ARF) fairly represent the operations of the airports from time to time includ ed in the ARF system. His report (exhibit 211) presents his analysis of the over or under recovery by sector on the basis of the unadjusted ARF cost base. This is manifestly erroneous and renders his analysis unreliable. The Auditor General of Canada expressed an unfavourable opinion (exhib- it 212) about the ARF financial statements for several reasons, notably (page 27.25) that "an amount representing the Government's interest expense associated with the capital invested in the fund" is not considered. So said David Lawrence Meyers, Deputy Auditor General in his testimony recorded at page 2468 of the transcript (vol. 13). The passages on cross-examination of Mr. Cun- ningham recorded on pages 2175 through 2177 (vol. 11) are significant elements in discounting his evidence. Another aspect of this witness' evidence which creates grave doubt about his and its objec tivity is the anomolous "technique" of allocating all revenue generated by the duty-free shops concession to the international sector and then assuming that all other sources allocated in pro portion to passenger volume. Again, at pages 2280 and 2281 (vol. 12) Mr. Cunningham is recorded, and he did testify, to the effect of abdicating his professional role in favour of Mr. Hart, another witness, and the plaintiffs' representations, "and it was more or less a committee decision that the allocation of costs and revenues on a passenger basis was indeed fair". These examples of the witness' approach to the issues drain all confidence in his professionalism and objectivity. They, among others, scuttle his credibility.
On the other hand, Mr. Keith Boocock stood out in experience, expertise and credibility. The Court accepts this witness' evidence as well as that of Philip Beinhaker wherever they might face con flicting evidence.
The Court is amply persuaded on a positive preponderance of probabilities that none of the plaintiffs has been overcharged in paying the trans-oceanic landing fees.
RESTITUTION
If the earlier findings of this Court, to the effect that the impugned Air Services Fees Regulations are valid and wholly intra vires be held subse quently to be incorrect, the plaintiffs claim that they would be entitled to restitution. The defend ants contend that the plaintiffs are not entitled to the return of trans-oceanic landing fees paid prior to the commencement of this litigation on March 10, 1980, because they say, those fees were paid under mutual mistake of law and not under any compulsion from the defendants.
Because the Court accepts the evidence and testimony of Steven O. Gunders and the defend ants' other witnesses, it finds that the differing gradations of flights defined to be "domestic", "international" and "trans-oceanic" were justified and not unreasonable in regard to allocation and generation of costs of and for the international airports. It follows that if the Regulations were ultra vires on the basis that the costs of unvisited or seldom visited airports ought not to be charged to the plaintiffs, then each plaintiff would be entitled to a pro-rated deduction from the landing fees factually paid since 1974 in regard to landings in the common law provinces and since 1975 in regard to landings in Quebec. It also follows that if the differential discrimination in the very gradua tions or categories of flights be a basis for holding the impugned Regulations null and void and inop erative in regard to the so-called discriminatory categorizations, then the Regulations are severable in regard thereto and the plaintiff having com plained specifically of the trans-oceanic fee, cannot escape paying the next lower fee, domestic or international, from time to time emplaced.
In regard to fees paid for landings in Quebec, there is no distinction to be drawn between money paid under mutual mistake of law or mistake of
fact. If the Regulations were ultra vires or to the extent they are severable and somewhat inoper able, in those regards the plaintiffs were never indebted to the defendants. In any such event, articles 1047 and 1140 of the Civil Code of Quebec will govern the matter of restitution.
In regard to restitution of money paid in regard to landings in the common law provinces, the same considerations about the effect and non-effect of the Regulations applies as between whether they be ultra vires or null, void and inoperable but severable.
The plaintiffs' case involves the same kind of mistake as those found in:
Kiriri Cotton Co. Ltd. v. Dewani, [ 1960] A.C. 192 (H.L.); Eadie v. Township of Brantford, [ 1967] S.C.R. 573; and Hydro-Electric Commission of Nepean v. Ontario Hydro, [1982] 1 S.C.R. 347.
In the Nepean Hydro case above cited, Mr. Justice Estey, writing for the majority of the Supreme Court, at pages 398 and 399, adopted the finding of the Trial Judge, who said:
In my view the payments were made without protest in the sense that it intended to preserve legal rights. Nepean did voice its objections from time to time; but in my view the circum stances do not go beyond what can be described as quibbling and grumbling. It cannot be inferred from the circumstances that the payments were involuntary in the legal sense.
In this case, although the action was commenced on March 10, 1980, the plaintiffs' declaration was amended up to February 9, 1984, and they are entitled to be considered as having paid under protest from at least the commencement of the action until the respective dates shown in the annex to their statement of agreed facts. If any plaintiff did separately assert a provable, serious protest—apart from grumbling and quibbling— prior to commencing this action, such plaintiff shall be absolved of having made voluntary pay ments as of such earlier date. Such payments would be made under compulsion. All of the rest of the plaintiffs did not pay under compulsion.
Further in the Nepean Hydro case, Estey J. summarized his decision (page 411) and the effect of his judgment highlights the foregoing observa tion. Estey J. reiterated that generally, a payment
made under a mistake of law is not recoverable. Recovery may be permitted, however, in two kinds of cases: cases involving compulsion and cases of illegal transactions. In the former, "recovery is allowed as the payment is not made voluntarily and there is no reason to suppose, only because of the fact of payment, that the plaintiff had surren dered his right to recover his moneys paid under practical compulsion." In the latter (i.e. cases of illegal transactions), recovery is permitted if the parties were not "in pari delicto". In the absence of either of those elements, as in the case at hand, the mutual mistake of law rule operates to deny recovery under the common law.
There was a strong dissent by Mr. Justice Dick- son, now Chief Justice, with the concurrence of Laskin C.J. in the Nepean Hydro case. However, it is not for this Court to prefer the minority opinion over the majority opinion.
Clearly if any restitution is, in fact, to be made, a reference will have to be formulated and under taken either according to the above terms or those imposed by an appellate Court.
In the final result, however, the plaintiffs' action is dismissed, effectively under Rule 338(2) as of February 24, 1987, with party and party costs of the defendants to be paid, after taxation thereof, by the plaintiffs.
 You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.