Earlier in 2015, the Federal Court heard two days of submissions
from Canadian company Rotor Maxx Support Ltd. and the Minister of
Transport (click here for link). The issue: whether the
Minister of Transport should be subject to a confidentiality order
and injunction preventing the Minister from disclosing that Rotor
Maxx had improperly certified helicopter engine and drive train
At the time of the hearing, a temporary confidentiality order
was already in place, but Rotor Maxx sought a further, prospective
injunction. To succeed in its injunction application, Rotor
Maxx had to demonstrate to the court that there would be
irreparable harm to its business that outweighed the Canadian
public's interest in the security of the "flying
public". In the court's own words, the question to
be decided was whether "grave risk to human life should weigh
much higher than any commercial interests".
The timeline leading up to the application can be succinctly set
out as follows. In or about early 2013, the Minister
undertook a Civil Aviation Safety Inspection of Rotor Maxx.
The inspection was in connection with parts certified by
Rotor Maxx between June 2011 and April 2014. By July
2014, Rotor Maxx was aware that a Civil Aviation Safety Alert
("CASA") may be issued against it, due to the
Minister's findings from the 2013 inspection. A draft
CASA was provided to Rotor Maxx by November 2014, and the actual
CASA was provided in late February 2015, three weeks prior to its
Rotor Maxx argued that if the CASA was released, its commercial
interests would be jeopardized. The injunction would have
given the company more time to take further corrective action, as
the steps they had taken by the date of the hearing had been
rejected by Transport Canada.
The court's decision, though brief, was definitive. Mr.
Justice Shore reasoned first that there was no serious issue raised
by Rotor Maxx that put the reasonableness of the CASA to test.
Second, he noted that when a party seeks to silence the government
entity responsible for aviation safety, the court must balance the
party's interests against those of the public. The
judge's reasoning points to a very high bar for parties seeking
to argue that their interests, commercial or otherwise, should
outweigh the Minister's duty to Canadians who fly.
Finally, the judge concluded that there was a possibility of
irreparable harm to public aviation safety that outweighed any
commercial interest held by Rotor Maxx. The injunction
application was dismissed, and the temporary confidentiality order
The Rotor Maxx decision reaffirms previous decisions by
Canadian courts that the Minister of Transport, along with public
oversight bodies such as Transport Canada, are required to place
public safety ahead of the economic interests of individuals or
companies that they oversee. Our courts have recognized that
inspection, regulation and enforcement of aviation safety is a
"heavy responsibility" borne by the Minister.
See, for example, Sierra Fox Inc. v. Canada (Transport),
2007 FC 129 at para. 6. Cases such as Rotor Maxx
and the case of Gill v. Canada (Minister of Transport),
2014 BCSC 582, cited by Justice Shore, emphasize that the
Minister must be free to fulfil his or her responsibilities without
consideration of economic consequences.
That being said, the Minister and those working for oversight
bodies such as Transport Canada do not have free rein to completely
ignore the rights and interests of those they regulate. On the
contrary, individuals and companies subject to regulation are
entitled to certain procedural rights. This can include, for
example, a right to proper notice of decisions made by the
Minister, or a right to a written or oral hearing. The
Minister also has an obligation to act in good faith when taking
any action against an individual or company under the
Minister's oversight. In other words, the Minister cannot
act arbitrarily, or without having sufficient evidence to support
his or her actions.
One matter that is most interesting in the Rotor Maxx
decision is the length of time between the Minister's
inspection and the issue date for the CASA, a period of
approximately two years. Although the court emphasized that the
consequences of a failure of the non-conforming parts could be
catastrophic, there was no criticism of the Minister's decision
to wait to release the CASA. Though not expressly stated by
the court, one can infer that the Minister's actions in this
case were in line with the obligation to treat Rotor Maxx fairly
and act in good faith.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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