Licence Appeal Tribunal
FILE: 7743/TIA
CASE NAME: 7743 v. Registrar, Travel Industry Act, 2002
An Appeal from a Notice of Proposal by the Registrar, Travel Industry Act, 2002, S.O. 2002, c. 30, Sch. D to Revoke Registration and from the Order of Temporary Suspension and the Director’s Order of November 8, 2012
EZjet Airways Corp Applicant
-and-
Registrar, Travel Industry Act 2002 Respondent
CONSENT ORDER
ADJUDICATOR: Patricia McQuaid, Vice-Chair
APPEARANCES:
For the Applicant: Nadira Persaud, Agent
For the Respondent: Soussanna Karas, Counsel
Heard in Toronto: November 29, 2012
CONSENT ORDER
A hearing convened before the Licence Appeal Tribunal (the “Tribunal”) arising out of a Notice of Proposal issued by the Registrar, Travel Industry Act, 2002 (the “Registrar” and the “Act” respectively.) The Notice of Proposal dated November 9, 2012 proposed to revoke the registration of EZjet Airways Corp (the “Applicant”), as travel agent and travel wholesaler under the Act. In addition, the Registrar issued an Order of Temporary Suspension of the Applicant, and, November 8, 2012, the Director, under the Act, issued an Order freezing the funds in the general and trust accounts of the Applicant.
Ms Persaud, a Director of the Applicant, attended the hearing on its behalf and waived its right to legal representation.
Ms Karas and Ms Persaud advised the Tribunal that following lengthy discussions to resolve the issues, Minutes of Settlement had been agreed upon.
Having reviewed the Minutes of Settlement signed by the Applicant and the Respondent as to the disposition of this proceeding which is filed and attached hereto as Schedule “A”, and hearing submissions from the parties in respect of the settlement;
The Tribunal therefore orders, on consent of the parties, that the proceedings in this matter are concluded and disposed of without a hearing on the basis of the terms set out in Schedule”A”, which are incorporated into and made part of this Order
LICENCE APPEAL TRIBUNAL
Patricia McQuaid, Vice-Chair
Released: November 29, 2012
Schedule "A"
Licence Appeal Tribunal
EZJET AIRWAYS CORP Applicant
AND
REGISTRAR, TRAVEL INDUSTRY ACT, 2002 Respondent
MINUTES OF SETTLEMENT
WHEREAS EZJet Airways Corp located at 3701 Chesswood Drive, Suite 310, is a travel agent (Registration No. 50020220), registered on August 20, 2012 and a travel wholesaler (Registration 50020124) registered on July 26, 2012, under the Travel Industry Act, 2002 ("the Act") and Ontario Regulation 26/05 made under the Act (the “Regulation”);
AND WHEREAS the Registrar, Travel Industry Act, 2002 (the “Registrar”) issued the Notice of Proposal to Revoke Registration and the Order of Temporary Suspension of EZJet Airways Corp on November 9, 2012 (“NOP”), for the reason EZJet Airways Corp is and has been carrying on activities that are in contravention of the Act and the Regulation;
AND WHEREAS on November 8, 2012, pursuant to section 23 of the Act, the Director, Travel Industry Act, 2002, issued a Director’s Order freezing the funds in General and Trust Accounts of EZJet Airways Corp in order to ensure protection of the consumer funds (“Freeze Order”).
AND WHEREAS EZJet Airways Corp appealed the NOP to the Licence Appeal Tribunal;
AND WHEREAS the NOP was issued as a result of Swift Air LLC, the air carrier with whom the Registrant had a “risk contract”, terminating the said contract and cancelling all future flights citing failure of the Registrant to comply with its financial obligations under the contract, as a reason for termination.
AND WHEREAS such termination has been communicated by the Swift Air LLC to the EZJet Air Services Inc., the Registrant’s partner, which is also a party to the Charter program. EZJet Air Services Inc. is located in Guyana.
AND WHEREAS TICO was advised by the counsel for Swift Air LLC that the termination of contract affects the Canadian leg of the program.
AND WHEREAS TICO understands that no notification was provided by Swift Air LLC to EZJet Airways Corp of the termination of the contract and cancelation of the charter program.
AND WHEREAS the parties agreed to settle all of the issues outstanding in the appeal on the following terms and conditions:
The parties consent to an Order of the Licence Appeal Tribunal incorporating the terms of these Minutes of Settlement and disposing of these proceedings without a hearing.
The Terms and Conditions for the wholesale and retail registration of EZJet Airways Corp dated July 20, 2012 and August 20, 2012, respectively, continue in force with necessary amendments.
The Freeze Order will be revoked in whole on the date when the Tribunal’s Order incorporating these Minutes is issued.
The Registrar enters into these Minutes on basis that the information provided by the Registrant, including trust reconciliations as of November 26, 2012, is correct and reliable.
Upon the revocation of the Freeze Order, the Registrant shall start refunding customers who paid EZJet Airways Corp for travel services not provided. During the refund process, the Registrant undertakes to comply with the following conditions:
a. The Registrant shall not release/withdraw any funds from its Trust Account other than to issue a refund to customers who paid for the travel services not provided. Without limiting generality of the foregoing, the Registrant shall not pay its rent, payroll, taxes or any other overhead expenses from the trust account.
b. Any shortfall in the trust account arising as a result of reimbursing EZJet Airways Corp customers is a responsibility of the Registrant. Due to the recent practice of depositing customer funds into General Account of the Registrant, any shortfall will have to be corrected from the General Account or from additional working capital and will have a priority over other expenses of the Registrant.
c. The Registrant is to provide weekly reports to TICO of the payments made to customers under this section. The reports shall list the refunds by booking number or confirmation number, providing the payment date, amount and payee. The reports shall be provided no later than the Friday of the week following the reporting week.
d. In order to avoid double payment, prior to issuing a refund, the Registrant shall ensure that the customers who paid by credit cards, have not requested/received chargebacks from the credit card companies.
For all customers who purchased travel services from the Registrant and have commenced their travel but were forced to purchase alternate travel services due to the termination of the Registrant’s contract with Swift Air LLC, the Registrant is responsible to reimburse any shortfall resulting from the difference between the refund and the actual cost of the return ticket paid by the customer.
Until all of the customers are satisfactorily refunded under para 4 above, the Registrant shall not sell or offer to sell any travel services to consumers or travel wholesalers/retailers.
Once the Registrant fulfils its obligation under para 5 and 6 above, should the Registrant decide to sell any travel services, it should advise the Registrar accordingly, at least 15 days prior to commencing new sales or advertising new travel services.
The Registrant shall not engage a new air carrier and/or enter any “risk contracts” with scheduled or non-scheduled air carriers or with any suppliers of travel services without first obtaining written approval from the Registrar.
Upon the review of the proposed arrangement referred to in para 9 above, the Registrant may be required to provide additional security to the Registrar, equivalent to the two (2) full flight rotations. The amount of such security will be determined upon receipt of the proposed risk contract with the air carrier.
The Registrar reserves the right to withhold the approval of the arrangement proposed under para 8 above, if the Registrant fails to comply with any of the Terms and Conditions outlined in these Minutes of Settlement.
EZJet Airways Corp and the undersigned, acknowledge that we have read, understand and will comply with the terms of these Minutes of Settlement.
EZJet Airways Corp further acknowledges that it has obtained or has had full opportunity to obtain independent legal advice with respect to the terms of these Minutes of Settlement and their legal effect and impact and further undertakes to comply with them.
SIGNED THIS DAY OF , 2012
Ms. Nadira Persaud, Director
Mr. Michael Pepper
EZJet Airways Corp
Registrar, Travel Industry Act, 2002
I have the authority to bind the corporation