To Whom Does Transport Canada Owe a Duty of Care? Canadian Aviation Law in the Context of NAFTA

On August 3, 2008, a twin-engine Beechcraft King Air A90 that was being used in a skydiving operation made a crash landing in a cranberry field in Pitt Meadows, B.C., with 7 passengers on board. Although none of them were killed, J.P. Forest (a skydiver who was hired to take photographs of other skydivers during their planned jump) was seriously injured. The court found that the crash was caused by the failure of the aircraft’s left engine, which lost power due to excessive wear on the fuel pump’s drive splines. Further, the court found that the pilot shut the wrong engine down because he initially thought that the right engine had failed and shut that engine down instead of the left engine. As a result, the aircraft was left with no power and the pilot was unable to restart either engine. The court also found as a fact that the engine had not been overhauled at the manufacturer’s suggested intervals.

The sole issue in the lawsuit, a subrogated claim brought by the Workers’ Compensation Board of BC, was liability for the crash. The airplane mechanic, Gary Wendell Johnson, did not file a response to the claim and did not participate in the litigation. Default judgment was entered against him.

The Claim Against Transport Canada

A number of parties were initially sued in the action, including the pilot, the aircraft maintenance organization, the mechanic, and the manufacturers of the engine and its fuel pump. While most of the claims were resolved, the claim against the Attorney General of Canada proceeded to trial in order to determine whether Transport Canada was liable in negligence for knowingly permitting the operation of an unsafe aircraft by an unsafe operator. The plaintiff relied on the fact that Transport Canada became aware, in 2000, of maintenance concerns with respect to a second aircraft of the same model being used by the same operator. The plaintiff alleged that Transport Canada was negligent in continuing to issue operating certificates in respect of both aircraft without adequately addressing those concerns.

The wrinkle in this case was that the aircraft at issue was registered in the US and operated in Canada under NAFTA. As such, the regulatory bodies in the US and Canada each had oversight over limited aspects of the aircraft’s operation and maintenance. In issuing an operating certificate to the US-registered aircraft under NAFTA, Transport Canada relied on the US Federal Aviation Administration’s (the “FAA”) Certificate of Authorization to confirm that the operator was qualified to conduct its operations in accordance with NAFTA requirements. The plaintiff alleged that, knowing of the maintenance concerns with the second aircraft, Transport Canada could not have reasonably relied on the FAA’s Certificate of Authorization in respect of the subject aircraft.

In reviewing the regulatory framework of NAFTA as it applied to Transport Canada’s oversight of the aircraft operator in question, the court found that “Transport Canada employed a risk-based program, ensuring that its limited resources were allocated to provide the fullest oversight of the highest-risk activities and operators.” Transport Canada considered Specialty Air Services (“SAS”) such as those conducting skydiving operations to be low risk operators due to the fact that they carried relatively few passengers, primarily in a recreational setting. Moreover, Transport Canada deemed a NAFTA SAS operator such as a skydiving operator to be of an even lower priority because the FAA had inspected the aircraft and certified the aircraft itself as being airworthy, and the pilot and the operations as being safe. Thus, without a complaint or an occurrence to trigger an inspection by Transport Canada, no such inspection was performed by that entity.

In this case, the plaintiff conceded that Transport Canada’s decision to accept FAA certification as an indication of an equivalent level of safety having been accepted in the US was an unassailable policy decision that was not open to challenge by way of a negligence claim. However, the plaintiff argued that after the year 2000, when Transport Canada became aware of the safety issues with respect to the second aircraft, the issue was no longer a matter of policy but a matter that required Transport Canada to act with reasonable care. The issue was thus whether Transport Canada had a duty of care to take action in response to the information that came to light in 2000 in respect of the second aircraft.

Did Transport Canada Owe a Duty of Care?

After finding that the operator had not failed to abide by the FAA’s maintenance requirements, the court went on to consider whether, as the plaintiff alleged, Transport Canada had a duty to investigate both aircraft that were being operated in Canada to determine whether they were being operated in unsafe conditions. This issue was to be answered based on the court’s finding of fact that the operator failed to overhaul the left engine within the manufacturer’s recommended overhaul time and failed to remove and inspect the fuel pump.

The question facing the court was whether Transport Canada owed a duty of care to private citizens, namely to members of the flying public such as Mr. Forest. The allegation was that Transport Canada was liable for failing to prevent the consequences of the acts or omissions of the others whose negligence were the direct causes of the crash: the pilot, the mechanic, and the aircraft maintenance organization that installed the left engine.

The court reviewed the authorities to determine whether the facts fall within an established category that gives rise to a duty of care. Finding no such category, the court went on to examine the relationship between the plaintiff and Transport Canada to determine whether it revealed sufficient foreseeability and proximity to establish a prima facie duty of care. Transport Canada conceded that foreseeability was established. In particular, had Transport Canada become aware that the subject aircraft was being operated in an unsafe manner and had it failed to intervene, it would have been reasonably foreseeable that a member of the flying public was likely to have been injured.

The consideration of proximity required the court to consider the facts and determine whether they showed that the relationship between the plaintiff and Transport Canada was “close and direct” enough so as to give rise to a duty of care. The court noted that, contrary to the cases in which proximity was found between plaintiffs and government inspectors/regulators, in this case Transport Canada was “one further step removed, in that as a matter of core policy, achieved through the NAFTA implementation process, the primary obligation to ensure compliance was on the FAA” rather than Transport Canada. On the facts of this case (particularly because the regulatory scheme was aimed at regulating an industry instead of particular individuals), it would be difficult to find sufficient proximity absent a special relationship between Transport Canada and the plaintiff.

The court considered three factors to determine whether the regulatory scheme created proximity, as set out in the Supreme Court of Canada’s decision in Fullowka v. Pinkerton’s of Canada Limited, 2010 SCC 5 and found that the factors in this case did not support a finding of proximity. The first factor, the size of the group to whom the duty was alleged to be owed, did not support a finding of proximity because the group at issue, the flying public, was too large and ill-defined. The second factor, the extent to which the relationship was a direct and personal one, also did not support a finding of proximity because the relationship between Transport Canada and the flying public was not direct and personal. Further, there was no relationship at all between Transport Canada and any of the passengers on the aircraft. The third factor related to the relationship between Transport Canada’s inspectors’ statutory duties and the conduct of the people that it was tasked with inspecting. In this case, there was no allegation that Transport Canada had negligently inspected the aircraft (and, in fact, Transport Canada had no duty to inspect it at all) and therefore there could be no proximity arising from any such inspection. The court commented that the situation might have been different if Transport Canada had actually inspected the aircraft and had done so negligently.

In the result, while the court found that Transport Canada had a duty to ground the aircraft had it considered it to be unsafe, the trial judge held that Transport Canada had no statutory duty to inspect the aircraft. The court was satisfied that Transport Canada had discharged its duties appropriately by taking steps to respond to the issues with the second aircraft and found that there was no basis for Transport Canada to have any continuing concerns about the aircraft at issue. Having found this to be the case, Transport Canada’s duties did not give rise to a sufficiently proximate relationship with the flying public, in general, or with Mr. Forest, specifically. Rather, Transport Canada owed its duties to the public at large. Thus, Transport Canada had no prima facie duty of care and the claim against the Attorney General of Canada was dismissed.

Conclusion

Having found no liability on the part of Transport Canada, the court apportioned liability in negligence between the pilot and the mechanic who failed to do a proper inspection of the fuel pump.

The decision is currently under appeal. Workers’ Compensation Board of British Columbia v. Flanagan Enterprises (Nevada) Inc., 2017 BCSC 99