COURT OF APPEAL FOR ONTARIO

CITATION:
Eastern
    Power Limited v. Ontario Electricity Financial Corporation, 2012
    ONCA 366

DATE: 20120531

DOCKET: C49598

Laskin, Armstrong and Lang JJ.A.

BETWEEN

Eastern Power Limited

Plaintiff (Appellant)

and

Ontario Electricity Financial Corporation

Defendant (Respondent)

R. Nairn Waterman and Bruce W. Cameron, for the
    appellant

Timothy Pinos and Emily Larose, for the respondent

Heard: October 26, 2009

On appeal from the judgment of Justice Denise E. Bellamy
    of the Superior Court of Justice, dated September 26, 2008, with reasons
    reported at 2008 CanLII 48132 (ON S.C.).

COSTS ENDORSEMENT

A.

background

(1)

The Trial

[1]

In 1994 the appellant, Eastern Power, an independent producer of
    electrical power, entered into a 20-year power purchase agreement with Ontario
    Hydro, the predecessor of the respondent, Ontario Electrical Financial
    Corporation (OEFC).  Under the agreement, Eastern Power agreed to sell to
    Ontario Hydro, at specified rates, electricity generated from its landfill site
    in the Keele Valley in Vaughn, just north of the city of Toronto.

[2]

In 1998, Eastern Power sued Ontario Hydro claiming numerous breaches of
    the power purchase agreement.  It sought damages of $121 million.  After a
    23-day trial, Bellamy J. dismissed all of Eastern Powers claims but one: a
    claim for an inter-area transmission credit.  However, she declined to award
    any damages for this breach of contract because she concluded that there was no
    reliable and credible evidence from which to calculate those damages.

[3]

The trial judge awarded OEFC its costs of the action in the amount of
    $1,072,525.47 for fees and disbursements, exclusive of GST.

(2)

The Appeal

[4]

Eastern Power appealed the trial judgment on one ground:  The trial
    judge erred in not awarding damages for Ontario Hydros failure to include an
    inter-area transmission credit in the rates paid to Eastern Power.  Eastern
    Power sought damages of $8.5 million or a new trial on damages.

[5]

We agreed with Eastern Powers position, and ordered a new trial on
    damages.

(3)

Costs Submissions

[6]

The parties filed lengthy written submissions on both the costs of the
    appeal and the costs of the trial.

B.

costs of the appeal

[7]

Eastern Power seeks its costs of the appeal on a partial indemnity basis
    in the amount of $128,305.65.  This amount consists of fees of $100,000,
    disbursements of $21,774.91 and GST of $6,530.74.  OEFC submits that Eastern
    Power should be awarded no costs of the appeal or, at most, $50,000 in costs.

[8]

Eastern Power was successful on the appeal and is therefore entitled to its
    costs on a partial indemnity basis.  However, the amount it seeks in fees is
    excessive.  This was a one-day appeal on a narrow issue.

[9]

We accept that the issue was factually complex, that Eastern Power had
    to respond to OEFCs argument on liability, and that each party was represented
    by an experienced senior counsel and a junior counsel.  Nonetheless, we think
    that a fair and reasonable costs award is the amount proposed by OEFC, $50,000
    inclusive of disbursements and applicable taxes.

C.

costs of the trial

(1)

The trial judges award

[10]

The
    trial judges costs award of $1,072,525.47 accounted for a Rule 49 offer to
    settle made by OEFC four years before trial.  OEFC proposed a dismissal of the
    action without costs, which Eastern Power declined to accept.  The trial judge,
    therefore, held that OEFC was entitled to its costs of the action on a partial
    indemnity basis up to the date of the offer, and on a substantial indemnity
    basis after the date of the offer.

[11]

To
    calculate the counsel fees portion of her costs award, the trial judge
    essentially took the actual fees billed by OEFCs law firm.  She then applied a
    60 per cent rate to its partial indemnity award and a 90 per cent rate to its
    substantial indemnity award.  Those rates produced fees of $165,216.17 and $680,000,
    or a total counsel fee of $845,216.17.  She awarded disbursements of
    $227,309.30.  Her total costs award of $1,072,525.47 was exclusive of GST.

[12]

In
    this court, Eastern Power submits that the trial judges costs order should be
    set aside because it was premised on a result overturned by our decision.
    Eastern Power points out that the two considerations the trial judge relied on
     Eastern Power was entirely unsuccessful at trial, and OEFCs offer to settle
     no longer apply.

[13]

Thus,
    Eastern Power asks that we reverse the trial judges costs order and make an
    award in its favour, consistent with the principle that the successful party is
    entitled to costs.  Eastern Power asks that we fix its trial costs on a partial
    indemnity basis in the amount of $845,000 for fees, $328,227.96 for
    disbursements and $56,695.85 for GST, for a total of $1,229,923.81.

[14]

OEFC
    takes the position that we ought to maintain the costs order of the trial judge
    or decline to award trial costs.  It argues that despite Eastern Powers
    success on appeal, it was predominantly unsuccessful at trial. OEFC contends
    that if we are not inclined to make either of these dispositions, then we
    should remit the matter to the trial judge hearing the damages action.

[15]

We
    do not agree with the position of either party. In the light of the outcome of
    this appeal, neither position produces a fair and reasonable outcome. Having
    regard to the guidance in rule 57.01(1) and the overriding principle of
    fairness and reasonableness, we prefer a third alternative. We decline to order
    trial costs in favour of Eastern Power.  Instead, we maintain a trial costs
    order in favour of OEFC - but not the order made by the trial judge. In its
    place, we substitute a lesser award in favour of OEFC to reflect the reality of
    the situation that would have been before the trial judge given Eastern Powers
    success on appeal.

(2)

Analysis

(a)

Costs follow the cause

[16]

Traditionally,
    costs will be awarded to the successful party.  Thus when a party succeeds on
    appeal, that success ordinarily must be imputed as success at trial. However,
    on the particular facts of this case, Eastern Powers success on appeal does
    not transform it into the successful party at trial. Eastern Power advanced six
    claims worth a total of approximately $121 million. Five of those six claims
    were dismissed, and its successful claim is worth, at most, $8.5 million.
[1]
Despite Eastern Powers argument to the contrary, OEFC was the overwhelmingly
    successful party at trial.

[17]

Costs
    should flow from OEFCs success. In our view, Eastern Powers success on the
    narrow issue of the inter-area transmission credit does not detract from that
    entitlement.  Nor does it entitle Eastern Power to an award of costs.  It does,
    however, merit some consideration.

[18]

Eastern
    Powers limited success should be reflected in the quantum of the award to
    OEFC. However, this does not mean we are making a distributive costs award.
    This court has restricted the use of distributive costs awards to the rarest of
    cases and has noted that [i]ndividual issues can be dealt with more
    appropriately under the general discretion and explicit guidance set forth in
    rule 57.01(1): see
Armak Chemicals Ltd. v. Canadian National Railway Co.
(1991), 5 O.R. (3d) 1, at pp. 8-9;
Murphy v. Alexander
(2004), 236
    D.L.R. (4th) 302.

[19]

Thus,
    the unavailability of a distributive costs award does not preclude the court
    from considering Eastern Powers limited success. Indeed, the general
    principles that govern costs decisions require us to consider the peculiar
    features of a given case. Therefore, although we would award trial costs to
    OEFC and decline to award costs to Eastern Power, in doing so, and in arriving
    at our ultimate order, we have considered Eastern Powers success on the narrow
    inter-area transmission credit issue.

(b)

Relevant rule 57.01 factors

[20]

Three
    of the factors listed in r. 57.01 support a reduced trial costs award in favour
    of OEFC:

·

The amount of costs that an unsuccessful party could reasonably
    expect to pay in relation to the steps in the proceedings for which costs are
    being fixed;

·

The amount claimed and the amount recovered in the proceedings;
    and

·

The conduct of any party that tended to shorten or to lengthen
    unnecessarily the duration of the proceedings.

(i)

Reasonable expectations

[21]

Even
    though Eastern Powers success on appeal does not change OEFCs status as the successful
    party, it does change the expectations of the parties on the amount of the
    award to which OEFC ought to be entitled.  One would reasonably expect that a
    party who succeeds on five of six issues would be entitled to a smaller costs
    award than a party who succeeds on all six issues.

(ii)

The amount claimed and the amount recovered

[22]

As
    we previously mentioned, Eastern Power claimed an aggregate amount of $121
    million in damages; the inter-area transmission credit is valued at $8.5
    million.  Awarding Eastern Powers trial costs based on success on
    approximately seven per cent of its total claim would be unreasonable.  At the
    same time, however, an award to OEFC should reflect that it was not wholly
    successful at trial.

(iii)

Unnecessary lengthening of the proceedings

[23]

Eastern
    Power sued OEFC for breach of confidentiality and alleged interference with
    contractual relations.  It abandoned those claims before trial, but after
    discoveries.

[24]

Eastern
    Power also sued OEFC for negligent misrepresentation.  It maintained that claim
    throughout the trial only to abandon it in closing submissions.  The trial
    judge found that at least 50%, if not more, of the entire trial and trial
    preparation was devoted to negligent misrepresentation issues.  Thus, by
    proceeding with this claim Eastern Power forced OEFC to expend significant time
    and expense that it otherwise would not have incurred.

[25]

These
    three factors support the exercise of this courts discretion to make a reduced
    trial costs award in favour of OEFC, while declining to award costs to Eastern
    Power. Beyond these specific factors, the overriding principle in assessing
    costs is that the award must be fair and reasonable:
Boucher v. Public
    Accountants Council for the Province of Ontario
(2004), 71 O.R. (3d) 291
    (C.A.), at para. 24. And a fair and reasonable result in this case is a reduced
    trial costs award to OEFC.  The remaining question is the amount of that award.

(c)

The amount of trial costs

[26]

To
    arrive at an appropriate amount we have reduced the trial judges award in two
    ways. The first change is to the scale of the award. The trial judges award
    included a substantial indemnity component to reflect that Eastern Power had
    declined an offer to settle that was more favourable than the outcome it
    ultimately achieved. This portion of the award is no longer justified in the
    light of Eastern Powers success on appeal. We have therefore converted the
    substantial indemnity portion of her award to a partial indemnity figure. The
    trial judges substantial indemnity award of $680,000 in counsel fees (at a 90
    per cent rate) is reduced to a partial indemnity figure of $453,333.33 (at a 60
    per cent rate) for a total fee award of $618,549.50.

[27]

Second,
    we have further reduced the fee portion of the trial judges costs award by 15
    per cent, resulting in an amount for counsel fees of $525,767.07. This
    reduction reflects the effect of the various cost factors discussed above, including
    Eastern Powers success on the single issue argued in this court:  damages
    relating to the inter-area transmission credit. OEFC is, therefore, entitled to
    trial costs of $525,767.07 in counsel fees and $227,309.30 in disbursements,
    for a total of $753,076.37.

D.

conclusion

[28]

Eastern
    Power is entitled to its costs of the appeal in the amount of $50,000,
    inclusive of disbursements and applicable taxes.

[29]

OEFC
    is entitled to the costs of the trial in the amount of $753,076.37 exclusive of
    applicable taxes.

[30]

We
    apologize to both parties for our delay in issuing this costs endorsement.

John Laskin J.A.

Robert P.
    Armstrong J.A.

S.E. Lang J.A.

[1]
Damages for Eastern Powers claim regarding the inter-area transmission credit
    are yet to be assessed. The figure of $8.5 million is the amount of damages
    claimed by Eastern Power on this appeal.


COURT OF APPEAL FOR ONTARIO

CITATION:

Greater Toronto Airports
    Authority v. IAI V, Inc., 2012 ONCA 283

DATE: 20120502

DOCKET: C53721

OConnor A.C.J.O., LaForme J.A. and Cunningham
    A.C.J. (
ad hoc
)

IN THE MATTER OF THE RECEIVERSHIP OF SKYSERVICE AIRLINES INC.,
    of the City of Toronto, in the Province of Ontario

AND IN THE MATTER OF AN APPLICATION pursuant to Section 9 of
    the

Airport Transfer (Miscellaneous Matters) Act
, S.C.
    1992, c. 5 (Application by the Greater Toronto Airports Authority)

AND IN THE MATTER OF AN APPLICATION pursuant to Section 9 of
    the
Airport Transfer (Miscellaneous Matters) Act
, S.C. 1992, c. 5
    (Application by the Ottawa MacDonald-Cartier International Airport Authority)

AND IN THE MATTER OF AN APPLICATION pursuant to Section 56 of
    the
Civil Air Navigation Services Commercialization Act
, S.C. 1996, c.
    20, as amended (Application by NAV Canada)

BETWEEN

Greater Toronto Airports Authority, Ottawa MacDonald-Cartier International Airport Authority and NAV Canada

Applicants/Responding Parties (Respondents)

and

IAI V, Inc.
,
MCAP Europe Limited
,
Celestial
    Aviation Trading 23 Limited,
Thomson Airways Limited, Sunwing Tours Inc., International
    Lease Finance Corporation,

and CIT Leasing Corporation

Respondents/Moving Parties (
Appellants
)

Donald Gray, Auriol Marasco and Victoria Allsopp, for
    the appellants

Clifton P. Prophet, E. Patrick Shea and Frank Lamie, for
    the respondent, NAV Canada

Allan D. Coleman and Shawn T. Irving, for the
    respondents, Greater Toronto
Airports Authority and Ottawa MacDonald-Cartier International Airport Authority

Heard: November 7, 2011

On appeal from the order of Justice Geoffrey B. Morawetz
    of the Superior Court of Justice dated April 6, 2011, with reasons reported at
    2011 ONSC 703, 78 C.B.R. (5th) 193.

H.S. LaForme J.A.:

[1]

Skyservice Airlines Inc. collapsed in March 2010
    leaving over $1.5 million in unpaid bills for airport charges and air
    navigation services.  The question before this court is, who must bear this
    financial loss: the authorities who were obliged to and did provide those
    services, or the ultimate owners of the aircraft that were leased to Skyservice?

[2]

A similar question was answered by the Supreme
    Court of Canada
in
Canada
    3000 Inc. (Re); Inter-Canadian (1991) Inc. (Trustee of)
, 2006
SCC 24, [2006] 1 S.C.R. 865, in the context of the collapse of the
    Canada 3000 and Inter-Canadian airlines.

In
Canada
3000
, the Supreme Court held that the
    authorities were entitled to seize and detain aircraft to recover amounts owed
    to them by the collapsed airlines without regard to the property interests of
    the aircraft owners.

[3]

The application judge held that this case is
    indistinguishable from
Canada
3000
in any relevant respect.
    Consequently, the application judge concluded that the respondent authorities
    were entitled to seize and detain aircraft to recover amounts owed to them by
    Skyservice without regard to the property interests of the appellant aircraft
    owners.

[4]

For the reasons that follow, I find that the
    application judge made no reversible error and would dismiss this appeal.

A.

Factual Background

[5]

Skyservice was a Canadian airline, headquartered
    in Toronto and incorporated under the laws of Canada.  It offered domestic and
    international charter flight air service, and flew in and out of the Toronto Pearson  International Airport and the Ottawa MacDonald-Cartier International Airport on a regular basis.

[6]

Skyservice operated a fleet of twenty aircraft,
    which it leased from various lessors.  Three of the aircraft were leased from
    the appellants, IAI V, Inc., MCAP Europe Limited, and Celestial Aviation
    Trading 23 Limited.

[7]

Ten of the aircraft it had operated were
    returned to the lessors of those aircraft shortly before Skyservice went into
    receivership on March 31, 2010.  The other ten aircraft, including the three
    leased from the appellants, were the subject of seizure and detention
    applications made by the respondents, the Greater Toronto Airports Authority
    (the GTAA), the Ottawa MacDonald-Cartier International Airport Authority (the
    OMCIAA and, together with the GTAA, the Airport Authorities), and NAV
    Canada.
[1]

[8]

The events relevant to the seizure and detention
    applications took place as follows.

[9]

On March 30, 2010, at around 5:30 p.m., all of
    Skyservices officers and directors resigned.  The officers and directors caused
    Skyservice to pay all of its statutory priority payables because of concern
    that it would not continue to operate after March 30.

(1)

March 31, 2010

(a)

Receivership

[10]

On March 31, 2010, Skyservice went into
    receivership.  At approximately 11:00 a.m., Gans J. granted a receivership
    order pursuant to the
Bankruptcy and Insolvency Act
,

R.S.C. 1985,
    c. B-3 (
BIA
), s. 243(1),

and the
Courts of Justice Act,
R.S.O.
    1990, c. C.43, s. 101
.
Among other things, the Receivership Order
    appointed a receiver over the assets, undertakings and properties of
    Skyservice.  The receiver was authorized to wind down Skyservices business,
    but not to operate it.

[11]

The Receivership Order also imposed a stay of
    proceedings in respect of Skyservice.  Paragraph 9 of the Receivership Order
    reads in part: all rights and remedies against [Skyservice], the Receiver, or
    affecting [the assets, undertakings and properties of Skyservice], are hereby
    stayed and suspended except with the written consent of the Receiver or leave
    of this Court.

(b)

Suspension of licenses

[12]

At approximately the time of the Receivership
    Order, Transport Canada (the airlines regulator) suspended the air operator
    certificate and aircraft maintenance organization licenses and authorities held
    by Skyservice under s. 103.07(d) of

the
Canadian Aviation Regulations
, SOR
/96-433 (the
CARs
),
    and s. 7.1(1)(b) of the
Aeronautics
    Act
, R
.S.C. 1985, c. A-2.  This was done because Skyservice ceased
    business and could no longer meet the requirements of its air operator certificate,
    including possessing or having the authority or capacity to maintain or operate
    aircraft.

(c)

Termination of leases

[13]

Skyservices cessation of business and the
    appointment of the receiver constituted events of default under the various
    aircraft leases between the lessors and Skyservice.  Subject to the provisions of
    the Receivership Order, the events of default would have permitted the lessors
    to exercise remedies under the applicable leases.

[14]

After the Receivership Order was granted, MCAP
    and IAI purported to terminate their leases with Skyservice, but did not take
    physical possession or control of their aircraft.  None of the other lessors took
    physical possession of their aircraft.

(d)

Seizure and detention
    applications

[15]

At approximately 3:00 p.m., the GTAA commenced
    an
ex parte
application for an order under s. 9 of the
Airport
    Transfer (Miscellaneous Matters) Act
, S.C. 1992, c. 5 (
Airports Act
)
    authorizing it to seize and detain aircraft until the amount Skyservice owed
    the GTAA was paid.

[16]

At around 5:00 p.m., the application was initially
    heard and solicitors for the lessors of the aircraft were in attendance and
    made submissions.

[17]

NAV Canada verbally requested similar relief to
    that sought by the GTAA and later, on April 6, 2010, formally brought its
    application under s. 56 of the
Civil Air Navigation Services
    Commercialization Act
, S.C. 1996, c. 20 (
CANSCA
).  Also on April
    6, 2010, the OMCIAA brought its application for an aircraft seizure and
    detention order under s. 9 of the
Airports Act
.

(e)

Status quo order

[18]

The application judge granted a status quo order
    effective as of 6:30 p.m.  The Status Quo Order provided, among other things,
    that no person, including the receiver, was permitted to take, or cause any
    steps to be taken, to possess, repossess, or to dispossess Skyservice of any aircraft
    owned or operated by Skyservice, pending the hearing and determination of the
    GTAAs and NAV Canadas applications.  The lessors were permitted to take
    certain steps to relocate, inspect, protect and preserve the aircraft, provided
    that those steps were deemed not to constitute the exercise of custody, control
    or possession of the aircraft.

(2)

After March 31, 2010

(a)

Release protocol

[19]

Following the Status Quo Order, the parties
    negotiated a release protocol.  The lessors were to post cash security with the
    receiver for the amounts that the Airport Authorities and NAV Canada claimed
    were owed to them by Skyservice.  In exchange, the Airport Authorities and NAV
    Canada were to release their claims against the ten aircraft that were the
    subject of the seizure and detention applications.

[20]

The release protocol was approved by the
    application judge pursuant to an order dated April 9, 2010, which specified
    that the seizure and detention applications were to be determined based on
    facts and legal circumstances as they existed at 6:30 p.m. (Toronto time) on
    March 31, 2010, being the effective date of the
Status Quo
Order.

(b)

Aircraft return agreements

[21]

On April 15, 2010, the receiver obtained court
    approval to enter into a series of agreements specifying the terms upon which
    possession, custody and control of the aircraft would be transferred from
    Skyservice to the lessors.  The lessors subsequently obtained possession and
    control of the aircraft.

(c)

Hearing of the seizure
    and detention applications

[22]

On June 1 and 16, 2010, the application judge
    heard the three aircraft seizure and detention applications, that is: (1) the
    GTAAs application under s. 9 of the
Airports Act
to recover unpaid fees
    and charges related to Skyservices use of Toronto Pearson International Airport;
    (2) the OMCIAAs application under s. 9 of the
Airports Act
to recover
    unpaid fees and charges related to Skyservices use of the Ottawa
    MacDonald-Cartier International Airport; and (3) NAV Canadas application under
    s. 56 of
CANSCA
to recover unpaid charges related to Skyservices use
    of air navigation services.

[23]

The lessors of the ten aircraft that were the
    subject of the applications disputed priority to the aircraft.  The lessors
    took the position that the Airport Authorities and NAV Canada did not have the
    right to seize and detain their aircraft for any amounts Skyservice owed them.
    The lessors brought motions requesting, among other things, declarations to
    this effect.

(d)

The application
    judges decision

[24]

By order
    dated April 6, 2011, the
application judge granted
    the three aircraft seizure and detention applications.  The application judge
    ordered and declared that the applications were not affected by the stay, and were
    enforceable up to the full amount owing to the GTAA, the OMCIAA and NAV Canada.
    The lessors motions were dismissed.

[25]

The appellants now
    appeal the application judges order with respect to their three aircraf
t.

[26]

Before turning to the substance of the
    application judges decision, I will explain the statutory requirements that must
    be met in order to grant a seizure and detention order under s. 9 of the
Airports
    Act
and s. 56 of
CANSCA
, as well as the interpretation of those
    requirements in the relevant cases.

B.

Statutory requirements for a seizure and detention order

[27]

As mentioned, the Airport Authorities brought
    their aircraft seizure and detention applications under s. 9 of the
Airports
    Act
, and NAV Canada brought its application under s. 56 of
CANSCA
.
    These provisions are to the same effect.

[28]

Both s. 9 and s. 56 allow an applicant to bring
    an application to the superior court of the province in which any aircraft
    owned or operated by a person liable to pay an amount or charge is situated for
    an order authorizing the applicant to seize and detain aircraft until the
    amount or charge is paid.

[29]

Section 9 of the
Airports Act
reads:

Seizure and detention for fees and
    charges

9. (1) Where the amount of any
    landing fees, general terminal fees or other charges related to the use of an
    airport, and interest thereon, set by a designated airport authority[, which
    includes the GTAA and OMCIAA,] in respect of an airport operated by the
    authority has not been paid, the authority may, in addition to any other remedy
    available for the collection of the amount and whether or not a judgment for the
    collection of the amount has been obtained, on application to the superior
    court of the province in which any aircraft owned or operated by the person
    liable to pay the amount is situated, obtain an order of the court, issued on
    such terms as the court considers necessary, authorizing the authority to seize
    and detain aircraft.

[Application may be
ex parte
]

(2) Where the amount of any fees, charges and
    interest referred to in subsection (1) has not been paid and the designated
    airport authority has reason to believe that the person liable to pay the
    amount is about to leave Canada or take from Canada any aircraft owned or
    operated by the person, the authority may, in addition to any other remedy
    available for the collection of the amount and whether or not a judgment for
    the collection of the amount has been obtained, on
ex parte
application to the superior court of the province in which any aircraft owned
    or operated by the person is situated, obtain an order of the court, issued on
    such terms as the court considers necessary, authorizing the authority to seize
    and detain aircraft.

Release on payment

(3) Subject to subsection (4), except where otherwise
    directed by an order of a court, a designated airport authority is not required
    to release from detention an aircraft seized under subsection (1) or (2) unless
    the amount in respect of which the seizure was made is paid.

Release on security

(4) A designated airport authority shall release from
    detention an aircraft seized under subsection (1) or (2) if a bond, suretyship
    or other security in a form satisfactory to the authority for the amount in
    respect of which the aircraft was seized is deposited with the authority.

Same meaning

(5) Words and expressions used in this section and
    section 10 have the same meaning as in the
Aeronautics Act
.

[30]

Section 56 of
CANSCA
reads:

Seizure and detention of aircraft

56. (1) In addition to any other remedy available for
    the collection of an unpaid and overdue charge imposed by the Corporation[, NAV
    Canada,] for air navigation services, and whether or not a judgment for the
    collection of the charge has been obtained, the Corporation may apply to the
    superior court of the province in which any aircraft owned or operated by the
    person liable to pay the charge is situated for an order, issued on such terms
    as the court considers appropriate, authorizing the Corporation to seize and
    detain any such aircraft until the charge is paid or a bond or other security
    for the unpaid and overdue amount in a form satisfactory to the Corporation is
    deposited with the Corporation.

Application may be
ex parte

(2) An application for an order referred to in
    subsection (1) may be made
ex parte
if the Corporation has reason to
    believe that the person liable to pay the charge is about to leave Canada or take
    from Canada any aircraft owned or operated by the person.

Release

(3) The Corporation shall release from detention an
    aircraft seized under this section if

(a) the amount in respect of which the seizure was
    made is paid;

(b) a bond or other security in a form
    satisfactory to the Corporation for the amount in respect of which the seizure
    was made is deposited with the Corporation; or

(c) an order of a court directs the Corporation to
    do so.

[31]

It is sufficient for our purposes to say that,
    to obtain a seizure and detention order under either s. 9 or s. 56, two
    requirements must be satisfied.

[32]

First, Skyservice must owe the Airport
    Authorities amounts related to the use of the airport it operates for purposes
    of s. 9, and must owe NAV Canada charges related to air navigation services for
    purposes of s. 56.  This requirement is clearly established in this case for
    all of the respondents.

[33]

Second, Skyservice must have owned or operated
    the aircraft that are to be subject to the seizure and detention order.  The
    issues in this case are grounded in this second requirement.

C.

Interpretation of the statutory requirements

[34]

The Supreme Court of Canadas decision in
Canada
    3000
and the Alberta Court of Appeals decision in
Calgary Airport
    Authority v. AerCap Group Services Inc.
, 2009 ABCA 306, 460 A.R. 341 (
Zoom
),
are central to this proceeding.  Both cases
    addressed
the issue before this
    court (namely,
whether aircraft to which the lessors held legal
    title should be subject to seizure and detention orders to answer for the
    unpaid amounts owed by a collapsed airline).
I
    will set out the facts and decision in both cases to illustrate how these cases
    have interpreted the statutory requirement that the debtor airline must have
owned
    or operated the aircraft that are to be subject to the seizure and detention
    order
.

(a)

Canada
3000

i.

Factual background: the collapse of Canada 3000 in 2001

[35]

On November 8, 2001, Canada 3000 Airlines Ltd.
    and Royal Aviation Inc. (collectively, Canada 3000) filed for protection
    under the
Companies Creditors Arrangement Act
, R.S.C., 1985, c. C-36 (
CCAA
).
    An initial order was granted on that date staying all proceedings by creditors
    pending the filing of a plan of arrangement.  The stay contemplated that
    operations would continue, but Canada 3000 issued a press release five hours
    later declaring that the airlines had ceased operations.

[36]

A further order issued the next day grounded Canada 3000s fleet and provided for the return of aircraft to Canada.  The day after that, November
    10, 2001, the directors and officers of Canada 3000 resigned and Canada 3000 was put into bankruptcy.

[37]

Some of the various aircraft leases were
    terminated and the lessors became entitled to repossession by the granting of
    the
CCAA
order, by cessation of operations, or by the assignment in
    bankruptcy.  However, the
CCAA
stay operated, in effect, as an interim
    bar to repossession.

[38]

Despite that the lessors retained legal title to
    the aircraft; Canada 3000 was registered as owner of all of the aircraft under
    the
Aeronautics Act
.

[39]

T
he various airport
    authorities and
NAV Canada
applied
    for seizure and detention orders over the relevant aircraft under s. 9 of the
Airports
    Act
and s. 56 of
CANSCA
, respectively.  NAV Canada brought its
    application on November 9, 2001, and was followed by the GTAA on November 12
    and the other airport authorities on November 23.  Cross-motions were brought
    by the various aircraft lessors seeking, among other relief, interim release of
    the aircraft and declarations that the airport authorities and NAV Canada were
    not entitled to seize and detain the aircraft.
In other
    words, the various forms of relief sought by the parties in
Canada 3000
are the
    same as those sought in our case.

ii.

Factual background: the collapse of Inter-Canadian in 1999

[40]

Canada
3000
also dealt with the collapse of Inter-Canadian (1991) Inc. Airline
    in 1999.

[41]

On November 27, 1999, Inter-Canadian ceased
    operations and laid off 90 percent of its employees.  The airport authorities
    and NAV Canada moved to seize and detain a number of the aircraft through early
    December 1999 in order to recover approximately $5 million owed to them by
    Inter-Canadian.  The seizure motions were granted by the Quebec Superior Court.

[42]

One of the lessors had purported to terminate
    its lease with Inter-Canadian prior to the seizure motions, but the aircraft
    remained on the airport tarmac.

[43]

Inter-Canadian filed a notice of intention to
    make a proposal to its creditors pursuant to the
BIA
on January 5,
    2000
.  In March, the airlines creditors rejected the
    proposal and
Inter-Canadian
was
    deeme
d to have retroactively made an assignment in
    bankruptcy as of January 5.

[44]

In response to the legal titleholders claims
    that they were entitled to repossession of the aircraft, the trustee in
    bankruptcy applied to the Superior Court for directions on the validity of the
    detention and the liability of the legal titleholders liable for the amounts
    owing.

iii.

The Supreme Courts Decision

[45]

For a unanimous court,
Binnie
    J. held that the
authorities were entitled to the seizure
    and detention orders, holding that the statutory requirements of s. 9 of the
Airports
    Act
and s. 56 of
CANSCA
were met with respect to both Canada 3000
    and Inter-Canadian.

[46]

The detention remedy, Binnie J. specified, is
    available against an aircraft either owned or operated by a person liable to
    pay, with the exception of any aircraft already repossessed by the legal
    titleholder.  At para. 74, he approved the conclusion of Juriansz J.  who was
    sitting
ad hoc
and dissented in part in the Court of Appeal decision under
    appeal  that the statutory remedy takes priority to the property interests of
    the lessors:

74      the wording of the Detention
    Provisions makes apparent that aircraft may be seized and detained without
    regard to the property interests of persons who are neither the registered
    owners nor the operators of the aircraft under the legislation.  As long as the
    aircraft is owned or operated by a person liable to pay the outstanding
    charges, it may be the subject of an application to seize and detain it.  The
    fact that there may be other persons, who are not liable to pay the outstanding
    charges but have property interests in the aircraft, is of no consequence

[47]

Binnie J. discussed the meaning of owner in
    the legislative framework of aeronautics in Canada at paras. 54-56.  Binnie J. found
    that the policy and practice of Canadas regulatory aeronautics scheme is to
    use the term owner to refer to those in legal custody and control of the
    aircraft, and that a person who is the registered owner of an aircraft
    constitutes an owner:

55      The policy and practice throughout the federal
    regulatory scheme is to use the term owner to refer to the person in legal
    custody and control of the aircraft, not the legal titleholder.  The
CARs
,
    for example, define owner as the person who has legal custody and control of
    the aircraft (s. 101.01(1)).  The
Aeronautics Act
refers only to
    registered owners and, under s. 4.4(5), only the operator or
registered
owner may face liability for charges imposed under that Act.  Section 3(1)
    defines a registered owner as the person to whom a certificate of registration
    has been issued and the
CARs
make clear that an aircraft may only be
    registered by an owner who, again, must have legal custody and control of the
    aircraft; see ss. 202.15 to 202.17.  Section 2(2) of
CANSCA
itself
    states that [u]nless a contrary intention appears, words and expressions used
    in this Act have the same meaning as in subsection 3(1) of the
Aeronautics
    Act
.  I appreciate that arguments are available to counter these points
    but in my view the legal titleholders have the better side of the debate.

56      Internationally, the
Convention on International
    Civil Aviation
, December 7, 1944, Can. T.S. 1944 No. 36 (the Chicago
    Convention), does not require legal title to correspond with registered
    ownership.  Article 19 states that registration shall be in accordance with the
    laws of the contracting State.  It is common ground that, by virtue of ss.
    202.15, 202.16 and 202.17 of the
CARs
, an aircraft may only be
    registered in the Canadian Civil Aircraft Register by the owner of the
    aircraft as that term is defined under s. 101.01(1) of the
CARs
, and
    that that person is the entity having legal custody and control of the
    aircraft.  Thus an airline operating aircraft in Canada under a long-term lease
    is named on the Certificate of Registration as owner of the aircraft,
    notwithstanding that title is actually held by the lessor; see D. H. Bunker,
Canadian
    Aviation Finance Legislation
(1989), at p. 764.  We have been given no
    reason why the privatization legislation should be held to depart so strikingly
    from Canadian regulatory practice.

[48]

At para. 70, Binnie J. addressed the meaning of
    operator and concluded that Canada 3000 and Inter-Canadian owned or
    operated the relevant aircraft at the dates of the applications
for seizure and detention orders:

70      The
CARs
, adopted pursuant to
the
    Aeronautics Act
, provide that an operator in respect of an aircraft
    means the person that has possession of the aircraft as owner, lessee or
    otherwise (s. 101.01(1)).  At the dates of the applications for seizure and
    detention orders, Canada 3000 and Inter-Canadian were still the
registered
owners of the aircraft.  Accordingly, if the Court is to read the words of the
    detention remedy in the context of the realities of this industry previously
    discussed, it seems to me that those remedies must be available against the
    aircraft of Canada 3000 (except any aircraft already repossessed by the
    titleholder prior to the
CCAA
application on November 8, 2001) and Inter-Canadian.
    (Once a titleholder reclaims possession, it becomes an operator in possession
    within s. 55(1) of
CANSCA
. However, as its possession post-dates the
    charges, no personal liability is incurred on that account.)

[49]

The exception for any aircraft already
    repossessed by the titleholder contemplated by Binnie J. in para. 70 was
    picked up on by the Alberta Court of Appeal in
Zoom
.

(b)

Zoom

i.

Factual background: the collapse of Zoom Airlines in 2008

[50]

Zoom Airlines Incorporated was in default under
    an aircraft lease.  The lessor,
AerCap Group Services
    Inc.,
faxed a notice of default to Zoom on August 25, 2008
    at 3:05 p.m. indicating its intention to terminate the lease and repossess its
    aircraft if the default was not remedied.

[51]

The default was not remedied and, on August 26,
    2008 at 5:02 p.m.,
AerCap
gave
    written notice of termination to Zoom, Zooms insurer, and Transport Canada.  The lease provided that
AerCap
was
    entitled to take possession of the aircraft upon termination.

[52]

Early the next day, Zoom and AerCap exchanged a
    series of emails in which Zoom requested reinstatement of the lease upon
    payment.  AerCap refused the request, confirming termination of the lease and
    advising that it required possession of the aircraft and payment of arrears and
    then would provide a new lease.

[53]

AerCap
hired an agent to
    repossess its aircraft.  At about 2:23 p.m. on August 27, 2008, an employee of the
    agent met the aircraft as it arrived at the Calgary airport, boarded the
    aircraft and advised the pilot that he was taking possession of the aircraft.
    He then collected the certificate of airworthiness, the certificate of
    registration and the logbooks.  The agent surrendered the two certificates to
    Transport Canada at about 4:30 p.m. and notified Transport Canada that the lease between Zoom and AerCap had been terminated.  At about 5:00 p.m.,
    Zoom filed a notice of intention under the
BIA
.

[54]

Meanwhile, at about 4 p.m., the Calgary Airport
    Authority obtained an
ex parte
seizure and detention order under s. 9
    the
Airports Act
.  At this point, Zoom was still listed in the Canadian
    Civil Aircraft Register as the owner of the aircraft.

[55]

On August 29, 2008, AerCap brought a motion to
    set the detention order aside, which raised the question of whether Zoom still
    owned or operated the aircraft at the time the detention order was made.

ii.

The Alberta Court of Appeals decision

[56]

The Court of Appeal, in a majority decision,
    held that Zoom did not own or operate the aircraft at the time of the detention
    order and, accordingly, affirmed the motion judges decision to set aside the
    detention order.

[57]

The majority reasoned, at para. 31, that once AerCaps
    agent boarded the aircraft and took the certificate of airworthiness,
    certificate of registration and the logbooks, Zoom, as registered owner,
    transferred legal custody and control of the aircraft to AerCap pursuant to s.
    202.35 of the
CARs
.  AerCap became the owner of the aircraft because
    the transfer of legal custody and control cancelled Zooms registered ownership
    status and allowed AerCap to take complete responsibility for the operation and
    maintenance of the aircraft.  AerCap also became the operator of the aircraft
    when it was repossessed by the agent.

[58]

Canada
3000
was distinguished on the basis that, in
Zoom
,
at the time of the detention order, the lessor had already taken
    active steps to obtain legal custody and control, and in fact had repossessed
    the aircraft.  Consequently,
Zoom
fell within the exception contemplated
    by Binnie J. at para. 70.

D.

The application judges Reasons

[59]

The application judge stated that the priority
    issue in this case is, in many respects, the same issue addressed in
Canada
3000
and
Zoom
.  Accordingly, he characterized the issues as:
    (1) Can the case at bar be distinguished from
Canada
3000
? (2) If
Canada
3000
cannot be distinguished, it becomes the controlling
    authority, and the sole question is whether any of the lessors repossessed the
    aircraft prior to the Receivership Order and thus regained their status as
    owners and operators, as was the case in
Zoom
.

[60]

After reviewing both
Canada
3000
and
Zoom
, the application judge held that (1)
the case at bar cannot be distinguished from
Canada
3000
, and (2)
no repossession of the aircraft had occurred
prior to the Receivership Order.  He
concluded, at para. 102:
The
    period following the granting of the
Status Quo

Order was, in
    my view, equivalent to the position of the parties that were before the court
    in
Canada
3000
. I must follow the same result.

[61]

The application judges
principal findings are set out in paras. 95 and 96 of his
    reasons:

[95]    The outcome is, in my view, clear.  There was no
    repossession of Aircraft prior to the Receivership Order.  Repossession could
    not occur after the granting of the Receivership Order, absent consent of the
    Receiver or leave of the court, neither of which occurred.  Therefore, at the
    time that the
Status Quo
Order was granted, no lessor had completed
    repossession in the manner set out in
Zoom
.  In fact, no repossession
    took place until the order of April 15, 2010.

[96]    At the time of the Receivership Order
    and the
Status Quo
Order, Skyservice was in
    possession of the airplanes.  It was still the registered owner.  It may not
    have had the ability to operate the Aircraft but, within the context of the
    principles set out in
Canada
3000
, it
    was, in my view, the owner or operator of the Aircraft. It remained owner
    or operator of the Aircraft as of April 6, 2010, by which time GTAA had
    amended its application, OMCIAA had formally commenced its application and NAV
    Canada had formally commenced its application. The priority dispute that then
    evolved with the Airport Authorities and NAV Canada was identical to that in
Canada
3000
.

[62]

The application judge rejected the lessors
    argument that
Canada
3000
and
Zoom
should be
    distinguished on the basis that a stay in the receivership context (as in this
    case) cannot be equated with stays under the
CCAA
or Part III of the
BIA
(as in
Canada
3000
and
Zoom
).  The application judge
    disposed of this submission by pointing out that the parameters of the stay are
    defined by the language of the Receivership Order, not the receivership context
    generally.

[63]

The application judge also rejected the lessors
    assertion that the steps taken by the lessors to terminate their leases with
    Skyservice affected the availability of the detention remedy.  He found, at
    para. 93, that the fundamental difficulty and fatal flaw with this position
    was that proceedings to enforce any remedy as against Skyservice were stayed
    by the Receivership Order, and explained this finding, at para. 89:

[89]    Any action taken to terminate an
    Aircraft lease with Skyservice after the granting of the Receivership Order is
    the enforcement of a remedy against Skyservice, which, absent the written
    consent of the Receiver or leave of the Court, is expressly prohibited under
    paragraph 9 of the Receivership Order. No written consent of the Receiver was
    provided and no leave of the Court was granted.

[64]

In the result, at para. 94,
the application judge
concluded that
Canada
3000
addresses all of the
    arguments put forth by the aircraft lessors and it is a complete answer to the
    position put forth by the aircraft lessors
.

E.

NATURE OF THE APPEAL

[65]

The appellants submit that the sole issue on
    appeal is whether the application judge erred in holding that the respondents
    are entitled to the seizure and detention orders.

[66]

Broadly speaking, the appellants position is
    that the application judge erred in holding that Skyservice owned or operated
    aircraft for the purposes of s. 9 of the
Airports Act
and s. 56 of
CANSCA
.
    The appellants attempt to distinguish this case from
Canada
3000
and

submit that the principles in
Zoom
assist them.  They also raise
    several sub-issues based on the timing and content of the Airport Authorities
    applications.

[67]

The respondents submit that this is not a
    complicated case.  The application judge was asked to follow the principles of
    statutory interpretation as applied to s. 9 and s. 56 by Binnie J. in
Canada
3000
, and made no error in doing so.  The respondents submit that
Canada
3000
is not distinguishable from this case in any manner that resulted
    in Skyservice relinquishing or transferring its status as owner or operator
    of the relevant aircraft.

[68]

I agree with the application judge that a number
    of the lessors submissions in this proceeding are misplaced and need not be
    fully addressed.  Much of the written and oral argument in this appeal dealt
    with the correct interpretation of s. 9 of the
Airports Act
and s. 56
    of
CANSCA
.
I would reinforce
    the point that the proper interpretation of these provisions was determined by
    the Supreme Court in
Canada
3000
.  This appeal concerns the application
    judges decision to grant the seizure and detention orders given the Supreme
    Courts decision in
Canada
3000
, not a reinterpretation of the
    statutory requirements for a detention remedy.

[69]

My analysis will proceed as follows.  First, I
    will address the appellants submission that the application judge applied the
    wrong test for an aircraft seizure and detention order.  Second, I will address
    whether the application judge erred in concluding that
Canada
3000
provides a complete answer to this case.  If
Canada 3000
is not distinguishable from this case in a manner that affects the availability
    of the detention remedy, then there is no basis on which to interfere with the
    trial judges conclusion that
Canada 3000
provides a complete answer to
    this case and that the statutory requirements for the detention remedy were
    satisfied.  Third, I will address the sub-issues raised by the appellants.

F.

ANALYSIS

(1)

Did the application
    judge apply the wrong test for a detention order?

[70]

The appellants argue that the application judge misapplied
    the test for a detention order by holding that the lessors had to show that
    they regained physical possession of the aircraft prior to the Receivership
    Order.  They submit that the statutory language is clear that the test is that the
    Airport Authorities and NAV Canada must show that Skyservice owned or operated
    the leased aircraft at the time the Status Quo Order was granted.

[71]

In my view, the application judge made no error
    of law in applying the test for a detention order.
T
he
    application judge considered the proper statutes, determined how
s. 9
    and s. 56
were interpreted by the Supreme Court in
Canada
    3000
and, subsequently, by the Alberta Court of Appeal in
Zoom
,
    and applied the law to the facts at issue.

[72]

In stating that the lessors had to show
that
    they regained physical possession of the aircraft, the application judge was
    merely applying the exception to the detention remedy articulated by Binnie J.
    at para. 70 of
Canada
3000
, namely; that the detention remedy is
    not available against any aircraft already repossessed by the titleholder
    prior to the
CCAA
application.  The application judge was clear that
    he considered this case indistinguishable from
Canada 3000
, and thus identified the critical
    issue to be addressed in this case as whether the lessors could show that this
    case fell within the exception.

[73]

The application judge analyzed whether the
lessors
    had completed a repossession and found
this case did not fall within the exception.  He concluded
,
    a
t paras. 95-96 of his reasons, that
Skyservice was the
    owner or operator of the aircraft at the time of the Status Quo Order on
    the basis that Skyservice was the registered owner, was in possession of the
    airplanes, and none of the lessors had completed a repossession in the manner
    set out in
Zoom
.

[74]

I see no reversible error in the manner that the
    application judge applied the test for a detention order.

(2)

Does
Canada
3000
provide a complete answer
    to this case?

[75]

The appellants argue that, unlike Canada 3000
    and Inter-Canadian, Skyservice no longer owned or operated the aircraft at
    the time the Airport Authorities and NAV Canada brought their seizure and
    detention applications.  This is because of four distinguishing features: (a) Skyservice
    went into receivership with no intention to continue operating, whereas Canada
    3000 shut down with a view to temporarily cease operations and restart with new
    financing; (b) Transport Canada suspended Skyservices air operator certificate
    and aircraft maintenance organization licenses, whereas there is no evidence
    that this occurred in
Canada 3000
; (c) the active steps taken by the
    lessors in purporting to terminate their leases with Skyservice were sufficient
    to come within the exception contemplated by Binnie J., as that exception was
    applied in
Zoom
; and (d) policy considerations have changed since
Canada
    3000
was decided such that it is no longer appropriate to rely on
Canada
    3000
.

[76]

In my view, and for the following reasons, none
    of these factors affected whether Skyservice owned or operated the aircraft
    in this case.

(a)

Cessation of business

[77]

The appellants argue that Skyservice could not
    have been the owner or operator at the time of the Status Quo Order because
    Skyservice shut down with no intention to continue operating.  In support of
    this argument, the appellants point to the following facts: (i) all of the
    officers and directors of Skyservice resigned before the Receivership Order; (ii)
    Skyservice decided to cease all business; and (iii) Skyservice consented to the
    appointment of a receiver for the purpose of liquidating the companys assets.

[78]

The appellants arguments are without merit.
    The facts that the appellants point to were also present in
Canada
3000
and the Supreme Court nevertheless found that Canada 3000 and Inter-Canadian were the owners or operators of the relevant aircraft.

[79]

Canada
3000
is clear that intention to continue operating is irrelevant to an
    airlines status as owner or operator.

[80]

Before the airport authorities brought their
    applications to seize and detain the aircraft of Canada 3000, (i) the directors
    and officers of Canada 3000 had resigned, (ii) Canada 3000 had ceased
    operations and the entire fleet of aircraft had been grounded, and (iii) a
    trustee-in-bankruptcy had been appointed:
Canada
3000
, at
    paras. 13, 15.

[81]

Similarly, Inter-Canadian ceased operations and
    laid off 90 percent of its employees before the authorities brought their
    seizure and detention applications:
Canada
3000
, at paras.
    19-20.

[82]

Yet, despite the presence of these facts in
Canada
    3000
, the Supreme Court did not consider the debtor airlines lack of
    intention to continue operating in determining whether Canada 3000 and
    Inter-Canadian owned or operated the relevant aircraft.

(b)

Suspension of air operator certificate

[83]

The appellants argued that Skyservice could not
    have owned or operated the aircraft at the time of the Status Quo Order
    because Skyservice shut down without the legal capacity to continue operating,
    as Transport Canada suspended Skyservices air operator certificate and
    aircraft maintenance organization licenses at approximately the time of the Receivership
    Order.  The appellants place considerable significance on the cancellation of
    the air operator certificate.

[84]

In support of this argument, the appellants
    submitted that operator should be interpreted as meaning a person who can
    legally operate an aircraft.  In the case of a large aircraft, this could only
    be the holder of an aircraft operator certificate or a private operate
    certificate, and Skyservice had neither.  The appellants submitted that an
    owner is virtually always an operator, except in limited circumstances that
    do not apply in this case.

[85]

I reject the appellants position.  This court
    is bound by the interpretation of the phrase owned and operated set out by
    the Supreme Court in
Canada
3000
.
Transport Canadas suspension of Skyservices air
    operator certificate and licenses does not impact whether Skyservice owned or
    operated the aircraft as these terms were interpreted in
Canada
3000
.

i.

owned

[86]

Canada
3000
indicates that the meaning of owned in s. 9 of the
Airports
    Act
and s. 56 of
CANSCA
is consistent with the definition of
    owner in s. 101.01(1) of the
CARs
.  Under the
CARs
, owner
    is defined as the person who has legal custody and control of the aircraft.  The
    Supreme Court found that owner includes a registered owner since the
CARs
are clear that an owner must have legal custody and control in order to register
    the aircraft:
Canada
3000
, at paras. 55-56.

[87]

Relying on this interpretation, the application
    judge held, at para.
96, that
    Skyservice was the owner of the aircraft as it was the registered owner.
    This finding is supported by the records of the Canadian Civil Aircraft
    Register, which identified Skyservice as the registered owner of all the
    aircraft as of March 31, 2010, and the fact that Skyservice was in possession
    of the certificates of registration for each of the aircraft at the time the Status
    Quo Order was issued.

[88]

Given the applicable definition of owned, there
    is no basis on which to find that the application judge erred in concluding
    that Skyservice owned the aircraft in spite of Transport Canada suspending the air operator certificate and aircraft maintenance organization
    licenses.

[89]

The appellants provide
    no support for the proposition that suspension of the
air operator certificate or aircraft maintenance organization licenses in any
    way affects an airlines status as registered owner of an aircraft.
In my view, the suspensions have no such
    affect.  Under the
CARs
, an air operator certificate is required for a
    person to operate a commercial air service (s. 101.01(1)), not for it to be
    the registered owner of an aircraft.  Further, in the Joint Request to
Admit and Admission of March 31, 2010, the parties agreed that
    Transport Canadas suspension of the air operator certificate did not, in and
    of itself, cause the cancellation of the certificates of registration for the
    relevant aircraft.

ii.

operated

[90]

Canada
3000
specifies that the meaning of operated in s. 9 of the
Airports
    Act
and s. 56 of
CANSCA
is consistent with the definition of
    operator in s. 101.01(1) of the
CAR
s:
Canada
3000
,
    at para. 70.  Under the
CARs
, operator is defined as the person
    that has possession of the aircraft as owner, lessee or otherwise.

[91]

Relying on this interpretation, the application
    judge held, at para. 96, that Skyservice was in possession of the aircraft and thus
    was the operator, despite that it may not have had the ability to operate
    the [aircraft].
This finding
    is supported by the
uncontested evidence that
    Skyservice remained in physical possession of the aircraft.

[92]

Contrary to
    the appellants submissions, operator in this context is not restricted to mean
    the holder of either an
aircraft operator
    certificate or a private operate certificate.  To find otherwise would fly in
    the face of Binnie J.s finding that the relevant definition of operator is
    the broader definition of operator found in the
CARs
.

[93]

Whether Skyservice had an air operator
    certificate is relevant only to whether Skyservice was an air operator and
    thus could continue to operate a commercial air service, not to whether
    Skyservice was the operator of the aircraft for the purposes of the detention
    remedy.  This is evident from the definitions of the
terms air operator, air operator certificate and the
    separate definition of operator set out in
s. 101.01(1) of the
CARs
:

air operator means the holder of an air operator
    certificate;

air operator certificate means a certificate issued
    under Part VII that authorizes the holder of the certificate to operate a
    commercial air service;

operator, in respect of an aircraft, means the
    person that has possession of the aircraft as owner, lessee or otherwise;

[94]

Termination
    of Skyservices air operator certificate is not relevant to its status as
    operator; it is relevant to its status as air operator.  As long as
    Skyservice had possession of the aircraft, it remained the operator.

[95]

Given the
    applicable definition of operator, there is no basis

on which to find
    that the application judge erred in concluding that Skyservice operated the
    aircraft in spite of Transport Canada suspending the air operator certificate
    and aircraft maintenance organization licenses.

(c)

Termination of leases

[96]

The appellants submit that
Zoom
broadens
    the exception to the detention remedy contemplated in
Canada
3000
to circumstances where a lessor took active steps to obtain
    legal control and custody, and not just where repossession has actually
    occurred.  The appellants contend that, although they may not have completed
    repossession of their aircraft, the active steps they did take to attempt to
    terminate their leases were sufficient to come within the exception to the
    detention remedy.

[97]

The appellants also submit that a valid lease
    termination is a separate exception to the detention remedy.

[98]

The problem with the appellants arguments is
    that the appellants agree with the application judges finding, at paras.
    89-93, that their purported lease terminations could not have deprived
    Skyservice of its owner or operator statuses because the Receivership Order
    stayed the enforcement of any remedy against Skyservice.  While I appreciate
    the appellants desire for clarity with respect to the impact of a valid lease
    termination on the availability of the detention remedy, given the application
    judges unchallenged finding that the stay rendered the appellants purported
    terminations ineffective, these arguments are irrelevant to this appeal.

(d)

Policy

[99]

The appellants argue that the application judge
    erred in relying on Binnie J.s finding in
Canada 3000
that aircraft
    lessors are in a better position than the Airport Authorities and NAV Canada to
    protect themselves from the default of an airline.  The appellants submit that
    the application judge erred in failing to consider that airport authorities now
    have the legal right to obtain prior security to protect their positions, and
    can now withdraw the provision of their services to defaulting airline
    customers.  These authorities, the appellants submit, also have a panoply of
    remedies available to secure payment from airlines, and are better posed than
    the lessors to assess and protect themselves against risk.

[100]

I cannot accept that
Canada
3000
is not to be
    considered controlling authority on this basis for several reasons.

[101]

First, findings in this regard by the application judge, if any,
    were
obiter
.  The application judge did not rely on policy grounds as
    a free-standing basis for determining whether the Airport Authorities and NAV
    Canada were entitled to the detention remedy in this case.

[102]

Second, there is no evidence that the legal position of airport
    authorities was any different at the time
Canada
3000
was
    decided.  None of the parties were able to confirm that any changes to airport
    authorities legal rights were made
after

Canada
3000
was decided in 2006.

[103]

Third, s. 9(1) of the
Airports Act
and s. 56(1) of
CANSCA
are clear that the seizure and detention remedy is available to the Airport
    Authorities and NAV Canada in addition to any other remedy available for the
    collection of the amounts owing.

[104]

Fourth,
Canada
3000
clearly confirms, at para. 74,
    that aircraft may be seized and detained without regard to the property
    interests of people who are not the registered owners or operators of the
    aircraft.

(e)

Conclusion

[105]

For all of the above reasons, I see no basis on which to interfere
    with the trial judges conclusion that
Canada
3000
provides a
    complete answer this case.
Canada
3000
is factually indistinguishable from this case in any
    relevant respect and,
accordingly,
the application judge did not err in finding
that the
    statutory requirements for the detention remedy were satisfied.

(3)

Sub-issues

(a)

Was the GTAAs
ex
    parte
application valid?

[106]

The appellants submit that the GTAA was not entitled to bring its
    seizure and detention application on an
ex parte
basis because the
    criteria for bringing an
ex parte
application, as set out in s. 9(2)
    of the
Airports Act
, were not met.

[107]

Section 9(2) of the
Airports Act
specifies that an
ex
    parte
application may be brought where the airport authority has reason
    to believe that the person liable to pay the amount is about to leave Canada or take from Canada any aircraft owned or operated by the person.  The appellants point out
    that there is no evidence suggesting that Skyservice was about to leave or take
    any of the aircraft out Canada.

[108]

This ground of appeal is misguided.  Although the GTAA commenced its
    application on an
ex parte
basis at approximately 3:00 p.m. on March
    31, 2010, by 5:00 p.m. the parties had been given notice and counsel for the
    lessors, NAV Canada and the receiver were in attendance before the application
    judge prior to the granting of the Status Quo Order.  Various counsel made
    submissions before the application judge, yet none of the parties objected to
    the GTAAs application on these grounds at that time.

[109]

Further, the very purpose of the Status Quo Order was to allow the
    various applications for seizure and detention orders to be heard on notice and
    the applications were heard on notice in June 2010.  All parties filed evidence
    and were granted their procedural rights, including the right to make written
    and oral submissions and the right to cross-examine.

[110]

Given the way the proceedings transpired, I do not accept the
    appellants position that the GTAAs application should now be rendered
    invalid.  I would dismiss this ground of appeal.

(b)

Was the OMCIAA entitled to bring its claim after the Status Quo Order?

[111]

The
    appellants submit that the OMCIAA is not entitled to the seizure and detention
    order as it did not bring its application until after the Status Quo Order was
    granted.  The OMCIAA was not present or even mentioned at the hearing on March
    31, 2010 so, the appellants contend, the OMCIAA should not be entitled to
    retroactively obtain any rights that the GTAA and NAV Canada may have as of the
    Status Quo Order.

[112]

The appellants acknowledge that this argument was specifically
    raised by the appellants at the hearing of the seizure and detention
    applications, and rejected by the application judge.

[113]

The application judge was well aware of the timing of the OMCIAAs
    application, yet did not consider it contrary to the Status Quo Order to allow
    the OMCIAA to bring its application in the circumstances.  This is clear as the
    application judge granted the Status Quo Order on March 31, 2010  prior to the
    OMCIAA bringing its application on April 6, 2010  and then approved the
    release protocol on April 9, 2010, which included the OMCIAA as one of the
    airport authorities whose application was pending determination.

[114]

I see no basis on which to
    interfere with the application judges decision.  I read the Status Quo Order as
    intending to
prevent the parties from changing the
    circumstances on the ground in a way that would affect the success of the
    GTAAs and NAV Canadas applications.  I do not read the order as being
    designed to strip the OMCIAA of its legal rights without notice.  Accordingly,
    I would not give effect to this ground of appeal.

(c)

Can IAIs aircraft be the subject of the detention order when it was not
    identified in the GTAAs initial notice of application?

[115]

The appellants submit that the aircraft leased by Skyservice from
    IAI was not identified in the initial notice of application issued by GTAA on
    March 31, 2010, so should not be subject to the seizure and detention order.
    The appellants argue that the Status Quo Order should not be used to distort
    rights, but that is exactly what would occur if the Airport Authorities are allowed
    to pile additional aircraft into their applications in the face of a Status Quo
    Order preventing the lessors from taking steps to become the owner or operator
    of those aircraft.

[116]

This submission is without merit.  While the IAI aircraft was not
    listed in the GTAAs initial notice of application, there is no dispute that
    this aircraft was subject to the Status Quo Order.  The order preserved the
    status quo with respect to the aircraft specifically listed in the GTAAs
    initial notice of application as well as any other aircraft owned or operated
    by [Skyservice], so unquestionably captures more aircraft than the aircraft
    specifically identified in the initial notice of application.  The inclusion of
    the IAI aircraft thus cannot be characterized as a distortion of rights.

[117]

Further, before the hearing of the applications, on April 5, 2010,
    the GTAA amended its notice of application to expressly refer to the IAI
    aircraft.  Accordingly, the application judge did not err in including the IAI
    aircraft within the scope of the seizure and detention order.

(d)

Was the detention
    remedy affected by the stay?

[118]

The appellants did not press this issue in oral argument.  In any
    event, I will deal with it briefly.

[119]

In their factum, the appellants submitted that the application judge
    correctly found, at para. 61 of his reasons, that an important principle of
Canada
3000
is that the right to the detention remedy is subject to any stay
    that is in place, but misapplied this principle when finding, at para. 99,
    that the detention remedy in this case was unaffected by the stay.  As such,
    they contend that the stay should apply to the detention order.

[120]

I reject this submission.  The application judges findings are
    consistent with the parameters of the stay.

[121]

The stay set out in the Receivership Order reads, in part: all
    rights and remedies against [Skyservice], the Receiver, or affecting [the
    assets, undertakings and properties of Skyservice], are hereby stayed and
    suspended except with the written consent of the Receiver or leave of this
    Court.

[122]

The detention remedy is not a remedy against Skyservice.
Canada
    3000
, at paras. 9 and 68, is clear that the seizure and detention remedy in
    s. 9 of the
Airports Act
and s. 56 of
CANSCA
is a remedy
    against the aircraft, not against the debtor airline.

[123]

The detention remedy is also not a remedy affecting the assets,
    undertakings and properties of Skyservice.  Since the aircraft were all the
    subject of true leases, at no time did the aircraft form part of the assets,
    undertakings and properties of Skyservice.  Skyservice had the ability to use
    and operate the aircraft, but not legal title to them.  Legal title to the
    aircraft remained with the lessors.

[124]

Thus, the application judge did not err in finding that such remedy
    was unaffected by the stay. I would not give effect to this ground of appeal.

G.

DISPOSITION

[125]

For all of the reasons given, I would dismiss the appeal.  I would
    award each of the Airport Authorities and NAV Canada their costs of the appeal
    fixed in the amount of $27,000 inclusive of disbursements and HST.

Released:

MAY -2 2012                          H.S. LaForme J.A.

DOC                                      I agree D.
    OConnor A.C.J.O.

I agree
    J.D. Cunningham A.C.J. S.C.J.

[1]
NAV Canada is a private, not-for-profit corporation, operating under the
Civil
    Air Navigation Services Commercialization Act
, S.C. 1996, c. 20.  NAV
    Canada owns and operates Canadas civil air navigation service and charges fees
    to the users of its air navigation services, including Skyservice.


COURT OF APPEAL FOR ONTARIO

CITATION:
Greenhalgh v. Douro-Dummer
    (Township), 2012 ONCA 299

DATE: 20120508

DOCKET: C51534

Blair, Lang and Hoy JJ.A.

BETWEEN

Jessica Darlene  Greenhalgh, Gary Greenhalgh, Eileen Greenhalgh
, and Robyn LaDuke, Lee LaDuke, Diane LaDuke and Aaron LaDuke

Plaintiffs (Appellants)

and

The Corporation for  the Township of Douro-Dummer
and Henry Weidner

Defendants (Respondent)

Paul J. Pape and Nicolas M. Rouleau, for the appellants

David G. Boghosian, Sachin Persaud, Avril Allen and Shaneka Taylor, for the respondent

Heard and released orally: April 27, 2012

On appeal from the judgment of Justice Peter Lauwers of
    the Superior Court of Justice, dated December 17, 2009.

ENDORSEMENT

[1]

Jessica Greenhalgh and her parents, Gary Greenhalgh and Eileen Greenhalgh,
    appeal from the judgment of Lauwers J. of December 17, 2009, which dismissed
    the appellants claims for damages arising from the events that befell the
    appellant, Jessica Greenhalgh, on January 14, 2000.

[2]

On that evening, Ms. Greenhalgh, then 18, and her friend, Robyn LaDuke,
    then 20, went on what the trial judge referred as a form of back road tour by
    car, in the rural area in which they lived, in minus 20 degree weather.  They
    frequently went on those back road adventures.  They headed down Rusaw Lane, a
    little used public road, which dead-ends after 1.4 km at a wide, turnaround
    area.  They had been on Rusaw Lane before. Indeed, on a prior back-road
    adventure, Ms.Greenhalgh, Ms. LaDuke and two of their friends, went all the
    way down Rusaw [Lane] and ended up gettin stuck on a boulder on one of the pathways
    running off of the turnaround.

[3]

On the evening of January 14, 2000, Ms. Greenhalgh and Ms. LaDuke proceeded
    along a narrow, lane running off the turnaround area.  They made a sharp right
    turn onto another laneway known as Weidner Lane.  Ultimately, their car became
    stuck on a hydro right-of-way which they accessed from Weidner Lane.

[4]

Sometime later, they abandoned the car and set off by foot, leaving
    empty alcohol bottles behind. Ms. Greenhalgh wore no coat, mittens or hat.
    There were blankets and other warm clothing in the car. She lost her unlaced boots
    and proceeded bare foot. By the time that they were discovered the next
    morning, Ms. Greenhalgh and Ms. LaDuke had suffered severe injuries from
    frostbite.  Ms. Greenhalgh eventually lost both legs at mid-calf and parts of
    four fingers on each hand.

[5]

The respondent Township had jurisdiction over Rusaw Lane and was under a
    statutory duty of care to keep it in a reasonable state of repair.  Signage is
    an element of repair.

[6]

The appellants argue that the trial judge made three errors in
    dismissing their claims.

(i)      First, he
    erred in  concluding that the Townships failure to post No Exit signs at the
    entry to Rusaw Lane and a checkerboard sign, signifying that Rusaw Lane
    ended, at the turnaround point did not breach the standard of care;

(ii)      Second,
    he erred in finding that, in any event, the failure to post these signs did not
    cause the injuries sustained by Ms. Greenhalgh; and

(iii)     Third, he
    erred in his application of the discount rate in the calculation of damages he
    undertook in the event he was found to have erred in finding that the Township
    had no liability to the appellants.

[7]

In our view, the appeal fails on the issues of the breach of standard of
    care and causation.

[8]

The trial judge conducted a thorough and rigorous review of the
    evidence.  He made a clear finding that there were no conditions upon or
    adjacent to the highway that are potentially dangerous to the road users at
    the end of, or immediately beyond the end, of Rusaw Lane that would not have
    been apparent to a reasonable driver (whether or not experienced) and
    accordingly required an advance warning.

[9]

There was ample evidence on the record to support this finding and we
    see no palpable or overriding error on the part of the trial judge in arriving
    at it.  The turnaround was obviously designed to permit a driver to turn around
    at the roads end with ease. The appellants own expert noted the sharp turn
    that Ms. Greenhalgh and Ms. LaDuke had to make to access Weidner Lane, and the
    changes in the roads surface. The narrow, bumpy, single-lane laneway that Ms.
    Greenhalgh and Ms. LaDuke proceeded down clearly differed from the
    well-maintained, two-lane Rusaw Lane.

[10]

The
    trial judge also made a clear finding that Ms. Greenhalgh and Ms. LaDuke would
    have paid no heed to No Exit signs posted at the intersection of Rusaw Lane
    and County Road 40 or to a checkerboard sign at the end of Rusaw Lane.  They
    would have continued on their adventure in any event.  Again, there was ample
    evidence on the record to support this inference, which underpins the trial
    judges conclusion on the causation issue.  There was no palpable and
    overriding error.

[11]

In
    the result, the appeal must be dismissed.  Given the foregoing, it is not
    necessary for us to address the third issue of the discount rate raised by the
    appellants.

[12]

The
    respondent Township shall be entitled to its costs of the appeal fixed in the
    total amount of $40,000, inclusive of disbursements and taxes, payable as to
    $38,750 by the appellant, Jessica Greenhalgh, and as to $1,250, jointly and
    severely, by the appellants Gary and Eileen Greenhalgh.

R.A. Blair J.A.

S.E. Lang J.A.

Alexandra Hoy
    J.A.


COURT OF APPEAL FOR ONTARIO

CITATION:
Halliwell v. Lazarus, 2012
    ONCA 348

DATE:  20120524

DOCKET: C53309

Simmons, Armstrong and Pepall JJ.A.

BETWEEN

Glenda Halliwell and Jenifer Halliwell

Plaintiffs

(Appellants/Respondents by Cross-Appeal)

and

Joel Lazarus and Coldwell Banker Terrequity
    Realty

Defendants

(Respondents/Appellants by Cross-Appeal)

AND BETWEEN

Glenda Halliwell and Jenifer Halliwell

Plaintiffs (Appellants)

and

Westbrook
    Building Inspection Ltd.

Defendant (Respondent)

AND BETWEEN

Glenda Halliwell and
    Jenifer Halliwell

Plaintiffs

and

Westbrook Building
    Inspection Ltd.

aka Westbrook Building
    Inspections Service Ltd.

Defendants

and

Joel Lazarus and Coldwell Banker Terrequity
    Realty and Dung Ngoc Tran

Third
    Parties

AND BETWEEN

Glenda Halliwell and Jenifer Halliwell

Plaintiffs

and

Dung Ngoc Tran

Defendant

David A. Morin and Joyce M. Chun, for the appellants

Frank Csathy, for the respondent Westbrook

Sandy Robinson and Eric Sherkin, for the respondent
    Lazarus

Heard and released orally: May 4, 2012

On appeal from the judgment of Justice Margaret P.
    Eberhard of the Superior Court of Justice, dated January 18, 2011, with reasons
    reported at 2011 ONSC 390, 2 R.P.R (5
th
) 284.

ENDORSEMENT

[1]

The issues on this appeal and cross-appeal arise out of the purchase of a
    home and a home inspection conducted in preparation for the purchase.

[2]

The appellant purchaser made it clear to her real estate agent and to the
    home inspector, whom her agent recommended, that she was allergic to mould and
    wanted a dry house. The agent ensured that a condition was inserted in the offer
    to purchase allowing the appellant to abort the transaction if she was not
    satisfied with the report from the home inspector.

[3]

The inspection was conducted on March 12, 2006. The purchase closed on
    May 1, 2006 and, by July 2006, the appellant was experiencing an allergic
    reaction to mould. The parties agreed on damages of $90,000 prior to trial.

[4]

After a trial, the trial judge apportioned liability as follows: (i) the
    inspector at 50 percent; (ii) the real estate agent at 25 percent; and (iii) the
    appellant at 25 percent contributory negligence.

[5]

The appellant appeals the finding of contributory negligence and submits
    that the agent should be found 50 percent responsible. Further, the appellant
    claims her costs award should not have been reduced. The agent cross-appeals,
    arguing that he is not liable.

[6]

The trial judge found the appellant 25 percent contributorily negligent
    because the appellant failed to read the inspection report carefully and in its
    entirety. The appellant submits the trial judge erred in doing so because the
    trial judge also found that the appellant did not have the knowledge or
    experience to appreciate the warning signs for moisture problems that were contained
    in the inspection report.

[7]

We accept this submission. At para. 83 of her reasons, the trial judge
    effectively concluded that the appellant did not have the knowledge or
    experience to be able to discern the existence of a moisture problem by reading
    the inspection report. This conclusion is fully supported by the evidence at
    trial. However, the decision to hold the appellant contributorily negligent
    cannot be reconciled with this finding.

[8]

The inspector argues that the trial judges finding of contributory
    negligence was premised on the appellants failure to read the report and the
    appellants failure to recognize the need for major repairs disclosed by the
    report. The inspector submits that, in addition to potential moisture problems,
    the appellant was also concerned about obtaining a house that did not require
    repairs. Thus, he suggests, had she fully read the report, she would not have
    purchased the house.

[9]

We do not accept this submission. If the appellants desire to avoid any
    repairs was the basis for the trial judges conclusions, she neither identified
    it as such nor explained how she reached that conclusion. Moreover, had the
    trial judge reached her conclusion on this basis, in our view, on the record
    before her, it would have been a speculative conclusion.

[10]

Turning
    to the agents liability, we agree with the agents submission that the trial
    judge erred in finding the agent liable based on a failure to read the
    inspection report, review it with the appellant, and bring to the appellants
    attention the potential for moisture problems arising from the findings in the
    report.

[11]

The
    appellant did not plead the agents failure to read and review the report. More
    importantly, however, the appellant did not call expert evidence concerning the
    standard of care expected of an agent in these circumstances.

[12]

It
    was the inspectors responsibility to discover the potential moisture problem. In
    the absence of expert evidence, it was an error in law to find the real estate
    agent liable for failing to read the report, and failing to pick up indicators
    of moisture problems from the report, when the inspector, himself, failed to
    pick up on them.

[13]

In
    the result, the appeal is allowed and the finding of contributory negligence
    and the resulting reduction in the appellants costs award are set aside. Further,
    the cross-appeal is allowed and the finding of negligence against the agent is
    set aside. In the result, the inspector is 100 percent liable for the damages.

[14]

Costs
    of the appeal are to the appellant on a partial indemnity scale, fixed in the
    amount of $20,000, inclusive of applicable taxes and disbursements of $5,000,
    payable by Westbrook. Costs of the cross-appeal are to the cross-appellants in
    the amount of $10,000, inclusive of disbursements and applicable taxes, payable
    $5,000 by Westbrook
and $5,000 by the appellant.

Signed:        Janet Simmons J.A.

Robert P. Armstrong J.A.

S. E. Pepall J.A.