Allianz Global Risks US Insurance Company et al v. Canada (Attorney General), 2013 ONSC 7005
COURT FILE NO.: 12-54674A2
DATE: 20131118
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Allianz Global Risks US Insurance Company et al, Plaintiffs
AND:
The Attorney General of Canada et al, Defendants
BEFORE: Hackland R.S.J. on September 4, 2013
COUNSEL:
Sharon Johnston and Peter Nostbakken, for the Attorney General (moving party)
Timothy Trembley, for the Plaintiffs
Robert J. Fenn, for NAV Canada
ENDORSEMENT
[1] The defendant, The Attorney General of Canada, representing and hereafter referred to as “Transport Canada” brings this motion under Rule 25 of the Rules of Civil Procedure for the determination of a question of law to the effect that Transport Canada, as regulator of aeronautics in Canada, does not owe a duty of care to the plaintiffs, and seeks an order striking out paragraphs in the Amended Amended Statement of Claim that make reference to a duty of care owed to the plaintiffs by Transport Canada.
[2] This action arises out of an aircraft “overrun” incident at the Ottawa Macdonald-Cartier International Airport (the “Airport”) on June 16, 2010. The aircraft landed on Runway 07 but was unable to decelerate and stop before the end of the runway in circumstances where the runway was wet. Runway 07 was designed and constructed by Transport Canada. Transport Canada was also the owner of the Airport when the runway was constructed, prior to it being taken over by the Ottawa International Airport Authority.
[3] It should be noted that the plaintiffs make allegations of negligence against Transport Canada in the design and construction of the runway and these are not challenged in this motion. The challenge relates only to the allegations of negligence against Transport Canada as regulator of the aeronautics industry in Canada.
[4] Transport Canada’s Factum states the issue on this motion, as follows:
The central question to be answered in this motion is whether Transport Canada, as a statutory regulator, owes a private law duty of care to an individual airline (and/or its insurers) for alleged negligence in failing to properly oversee the conduct of an airport certified by the regulator.
[5] The plaintiffs are the insurers of the Embraer 145 aircraft that was damaged in this overrun incident. The crash resulted in losses amounting to $5,473,344.32 USD which these insurers were required to pay and now seek to recover from the defendants, Transport Canada, the Ottawa International Airport Authority and NAV Canada.
[6] The plaintiffs allege, as noted, that Transport Canada designed and constructed Runway 07 in a negligent manner and Transport Canada was also the owner of the airport at the time the runway was built. Those allegations will be determined at trial.
[7] The plaintiffs argue, and I agree, that their claim against Transport Canada as pleaded can be separated into three components, as follows:
(a) It negligently designed and constructed Runway 07;
(b) As owner of the Airport it negligently permitted the Airport to be used in an unsafe condition; and
(c) Transport Canada was negligent in certifying the Airport as safe by granting and continuing an Airport Certificate, when it knew or ought to have known the Airport, and in particular Runway 07, was unsafe, and in failing to take steps to mitigate the known risks associated with Runway 07.
[8] This motion relates only to the allegations in component (c). For clarity, I quote the relevant sections of the Amended Amended Statement of Claim.
Negligence of Transport Canada
At all times material hereto with respect to the claims of the Plaintiffs, Transport Canada, was responsible for developing and implementing safety standards, policies and criteria to ensure that the runways at Ottawa International Airport were safe for use by all operators and passengers.
After transferring operational control of Ottawa International Airport to the OIAA, Transport Canada failed to ensure that runways were constructed and maintained in accordance with Canadian and international standards for runways. Transport Canada was aware from prior incidents involving the condition of runways at Ottawa International Airport that its runways did not comply with Canadian and international standards. Transport Canada was also aware from its own oversight of Ottawa International Airport, including periodic inspections and audits thereof, that the runways at Ottawa International Airport failed to comply with Canadian and international standards. Notwithstanding its knowledge, Transport Canada failed to take action to ensure compliance with Canadian and international standards.
Transport Canada issued and periodically renewed an airport operator certificate to the OIAA after determining the Ottawa International Airport was safe when it knew or ought to have known that the airport did not adhere to Canadian and international standards for runway safety.
Further particulars of the negligence of Transport Canada, include but are not limited to:
(b) it failed to ensure that the OIAA complied with Canadian and international standards for runway safety, when it knew that such standards were not complied with;
(c) it failed to properly inspect and audit Ottawa International Airport to ensure compliance with Canadian and international standards for runway safety; and
(d) it failed to follow up on recommendations of the Transportation Safety Board concerning improvement of runway safety generally, and specifically with respect to the Ottawa International Airport.
[9] The plaintiffs submit that their one and only pleaded cause of action against Transport Canada is negligence. They say that the three under laying factual aspects of the negligence claim, (deficiencies in the design and construction, neglect as (previous) owner in permitting the runway to be used in a dangerous condition and negligence in granting and continuing to grant an Airport Certificate knowing the runway to be unsafe), are closely integrated components of the negligence claim. They argue that the factual matrix pleaded is “indivisible”. They contend that “all allegations of fact in the statement of claim inform the duty of care of not only Transport Canada, but also the Ottawa International Airport Authority and NAV Canada”.
[10] I am persuaded that there is considerable merit in that submission, at least in so far as matters can be determined at the pleadings stage of this action.
[11] There exists a compelling body of case law applying the principles in Cooper v. Hobart, 2001 SCC 79, [2001] 3 S.C.R. 537 which was canvassed in argument, to suggest that as a general proposition Transport Canada in its capacity as regulator of aeronautics in Canada would owe no private law duty of care to airlines for property damage occurring in crashes or similar incidents or in respect of licensing or policy based regulatory issues.[^1] Nevertheless it is my opinion that it is not plain and obvious that it would not be open to a trial judge to conclude that special circumstances exist in this case that could give rise to a duty of care, in respect of this runway at this airport in this overrun incident.
[12] A recent case in which a duty of care, similar to that alleged to exist in the present case, was asserted against Transport Canada, is Chadwick v. Canada, 2010 BCSC 1744. This case arose out of an airplane crash allegedly attributable to faulty maintenance by a company and individual licensed by Transport Canada under the Aeronautics Act and Regulations. It was alleged that in the particular circumstances of the case, Transport Canada knew or ought to have known that the maintenance company and its employee were not in compliance with applicable policies and practices, and should not have been licensed. It was pleaded that Transport Canada actually knew that the individual performed work incompetently and dishonestly and should not have been approved to perform maintenance functions on aircraft. The court ruled that it was not plain and obvious that no such duty of care existed and permitted amendments containing such allegations, leaving the adjudication on the merits to trial.
[13] Does Transport Canada have any different obligations in relation to granting or renewing an Airport Certificate to an airport with runways which to Transport Canada’s knowledge as designer builder and previous owner was unsafe (accepting the pleadings as true for the purposes of this motion)? As noted, this is a question which in my opinion a trial judge should be entitled to address on a full factual record. It cannot be said that it is plain and obvious that such a duty could not exist at this stage of the action.
[14] There is also a contested issue of statutory interpretation and possible operational practice as to whether the decision to issue Airport Certificates by the Minister of Transport is properly characterized as discretionary or mandatory. This involves an interpretation of provisions of the Aeronautics Act and the Canadian Aviation Regulations and possibly a consideration of operational practice. This pertains to the issue of whether the Minister’s decision is properly characterized as a policy decision or an operational decision, the former being unlikely to give rise to a private law right of action. Again, I view this as an issue best dealt with at trial on a full evidentiary record.
[15] In summary for the reasons stated, I regard this motion as premature and I exercise my discretion not to strike any part of the Amended Amended Statement of Claim at this time.
[16] There is a subsidiary issue raised by Transport Canada. Transport Canada requests the court to strike paragraph 49 of the Amended Amended Statement of Claim because it refers to three previous airplane overrun incidents on Runway 07, the submission being that this is an improper pleading of evidence.
- Since 2000 there have been at least three (3) other overruns of Runway 07/25 when the runway was wet or contaminated. The incidents of which the plaintiffs are aware are:
a) A Miami Air Boeing 727-200A incident on September 20, 2000;
b) A US Airways Express Embraer 145 incident on July 14, 2004; and
c) A WestJet Boeing 737-700 incident on February 17, 2008.
[17] It is sometimes difficult to distinguish between what constitutes material facts, which are properly pleaded, and evidence which is not. Doubt on that point should normally be resolved in favour of the party pleading. I choose to view this reference to prior overrun incidents on the same runway as a pleading of material facts going to the issue of forseeability, which is an important issue in this case. The motion to dismiss this paragraph of the pleading is also dismissed.
[18] The plaintiffs acknowledge having pleaded several erroneous statements as identified in paragraphs 103 to 106 of Transport Canada’s factum and have undertaken to amend their pleading to correct these errors. The plaintiffs are permitted to do so as are the defendants with respect to any responding amendments.
[19] If the plaintiffs wish to seek costs of this motion, a concise written submission should be provided within 14 days of the release of this endorsement and Transport Canada may respond then 14 days after receiving the plaintiffs’ submission.
Mr. Justice Charles T. Hackland
Released: November 18, 2013
COURT FILE NO.: 12-54674A2
DATE: 20131118
BETWEEN:
Allianz Global Risks US Insurance Company et al
and
The Attorney General of Canada et al
ENDORSEMENT
HACKLAND R.S.J.
Released: November 18, 2013
[^1]: Williams v. Ontario, 2009 ONCA 378
River Valley Poultry Farm Ltd. v. Canada (Attorney General), 2009 ONCA 326
Drady v. Canada (Health), 2008 ONCA 659
Eliopoulos (Litigation Trustee of) v. Ontario (Minister of Health and Long-Term Care), (2006), 2006 37121 (ON CA), 82 O.R. (3d) 321 (ON CA)
The Los Angeles Salad Company Inc. v. Canadian Food Inspection Agency, 2011 BCSC 779