T-1637-85
Sally Margaret Swanson, Administratrix of the
Estate of Terrance Albert Swanson, also known as
Terry Swanson, Deceased, Sally Margaret Swan-
son, in her own personal capacity and Sally Mar-
garet Swanson in her capacity as Next Friend of
Caitlin Jessica Swanson, Alison Ann Swanson and
William Terrance Swanson, all infants (Plaintiffs)
v.
Her Majesty the Queen (Defendant)
T-2271-86
Virginia Peever, Administratix of the Estate of
Gordon Donald Peever, Deceased, Virginia Peever
in her own personal capacity and Virginia Peever,
in her capacity as Next Friend of Gordon Chad
Peever and Shirlene Frances Peever, both infants
(Plaintiffs)
v.
Her Majesty the Queen (Defendant)
INDEXED AS: SWANSON v. CANADA (T.D.)
Trial Division, Walsh D.J.—Edmonton, October
31, 1989; Ottawa, February 6, 1990.
Crown — Torts — Action for damages arising from fatal
airplane crash — Duty of care of public authority — Trans
port Canada aware of infractions of regulations by carrier —
Giving warnings, not more severe sanctions — Distinction
between "policy" and "operational" decisions — Foreseeabili-
ty of crash — Relationship between parties — Attribution of
liability to particular Crown servant unnecessary to engage
Crown Liability Act.
Air law — Actions for damages against Crown — Fatal
airplane crash — Airline repeatedly violating aviation regula
tions — Pressuring pilots to break rules — Transport Canada
aware of this but giving warnings, not more severe sanctions —
Department, on policy grounds, deciding not to act — Crown
held one-third to blame — Department having difficult task
of protecting public without putting small carriers out of
business.
Practice — Counsel learning of Supreme Court of Canada
decisions released after trial completed — Whether Court
should consider additional submissions based on these cases
— S.C.C. decisions considered to avoid erroneous judgment as
possibly decisive of outcome.
These were actions against the Crown for damages arising
out of a fatal airplane crash. The plane was owned by Wapiti
Aviation Ltd. The pilot admitted responsibility, but neither he
nor the company was named as a defendant in this action. The
plaintiffs' position was that the Crown was liable because of its
failure to conduct adequate inspections, enforce aviation regu
lations and appropriately respond to complaints concerning
operation of the airline. The airline pressured its pilots to break
the aviation rules by flying at night under Visual Flight Rules.
Transport Canada was aware of the various infractions for
some time prior to the crash, but chose to rely on warnings
rather than more severe sanctions which could force the airline
out of business to the detriment of the travelling public. The
plaintiffs argued that the crash was reasonably foreseeable. The
defendant relied on the distinction between "policy" decisions
(where there is a discretion in a public body whether to
regulate conduct) and "operational" decisions (where there is a
duty to enforce regulatory provisions). It argued that there is
no common law duty of care until it is shown that the action
taken was not within the limits of a bona fide exercise of
discretion. It also argued that as the crash was not reasonably
foreseeable, there was no duty of care. Finally, the defendant
argued that the damage suffered must be caused by the defend
ant's conduct, which must be a proximate cause of the loss and
not too remote. Therefore, the plaintiffs had to establish that
Transport Canada was negligent with respect to the steps it
failed to take before the crash.
After completion of argument, the plaintiffs learned of three
Supreme Court of Canada cases in which judgments were
rendered after the trial of the actions at bar. They indicated a
tendency to increase the responsibility of those charged with
enforcement of Regulations. It was held in these cases that the
duty of care applies to a public authority unless there is a valid
basis for its exclusion. A true policy decision constitutes such a
basis for exclusion. The appropriateness of considering addi
tional submissions based on these recent cases had to be
considered.
Held, the plaintiffs should have judgment.
Although the making of additional submissions after comple
tion of a trial was a practice not normally encouraged, it was
justified in this case. It could be that a Supreme Court decision
not yet rendered at the time of a trial would be decisive of the
outcome, and provided that judgment has not yet been written,
the Supreme Court decision should be considered to avoid
rendering a judgment which would be erroneous.
Where there is a duty to act or to make a conscious decision
not to act on policy grounds, there is little distinction between
non-feasance and misfeasance. The fact that action had been
considered against Wapiti and a few steps had been taken, but
in place of decisive action the defendant's employees had been
satisfied with promises to do better in future, constituted a
conscious decision not to act, on policy grounds. Any airline
passenger must be in contemplation of the Department as
someone who might be injured by any breach of duty to enforce
the Regulations.
In determining whether a duty of care exists the first ques
tion is whether the parties are in a relationship of sufficient
proximity to warrant the imposition of such a duty. Transport
Canada was inspecting Wapiti as it was required to do under
the Aeronautics Act and Regulations. The Act and Regulations
impose at least an implied duty of care to the general public. Its
expressed policy is to enforce the Regulations, but when the
extent and manner of enforcement is insufficient and inade
quate to provide the necessary protection, then it becomes more
than a matter of policy but one of operation and must not be
carried out negligently or inadequately. While there may be no
contractual duty of care owed to the public, this does not of
itself protect defendant from liability in tort. The inspections
revealed the danger of allowing Wapiti to continue single pilot
IFR operation despite previous infractions and there was plenty
of time to remedy this by withdrawing this permission.
Although it is necessary under the Crown Liability Act that
there be a tortious act or omission by a servant of the Crown
which would engage his liability to engage Crown liability in
tort, the liability does not have to be attributed to one or more
specific Crown servants. There can be a shared liability of
servants of an entire department which if it results in actionable
negligence can engage the responsibility of the Crown.
The crash was not too remote or unforeseeable. Although
aware of the problems, the Department chose to simply monitor
the situation. While the direct cause of the crash was pilot
error, the plane was not in perfect condition. The pressure put
on pilots to undertake flights in contravention of Regulations
despite defects in equipment was known to defendant as a
result of complaints by the pilots. This pressure was a con
tributing causal link.
The defendant should be held one-third to blame. A higher
degree of liability should not be assigned to Transport Canada
which had the difficult task of strictly enforcing the Regula
tions in the interest of public safety while not interfering
unduly with commercial aviation. A fine balance had to be
maintained but, when in doubt, emphasis must be placed on
public safety. Too much reliance is placed on promises by
airlines , to improve when numerous violations have been
reported.
STATUTES AND REGULATIONS JUDICIALLY
CONSIDERED
Aeronautics Act, R.S.C. 1970, c. A-3.
Air Regulations, C.R.C., c. 2.
Canada Evidence Act, R.S.C., 1985, c. C-5.
Crown Liability Act, R.S.C., 1985, c. C-50.
Tort-Feasors Act, R.S.A. 1980, c. T-6, s. 3(1)(b).
Worker's Compensation Act, S.A. 1981, c. W-16, s. 16.
CASES JUDICIALLY CONSIDERED
APPLIED:
Just v. British Columbia, [1989] 2 S.C.R. 1228; (1989),
64 D.L.R. (4th) 689; [1990] 1 W.W.R. 385; 103 N.R. 1;
Rothfield v. Manolakos, [1989] 2 S.C.R. 1259; (1989),
63 D.L.R. (4th) 449; [1990] 1 W.W.R. 408; 102 N.R.
249.
DISTINGUISHED:
Adams Estate v. Decock, [1987] 5 W.W.R. 148; 49 Man.
R. (2d) 261 (Q.B.).
CONSIDERED:
Home Office v Dorset Yacht Co Ltd, [1970] 2 All ER
294 (H.L.); Anns v London Borough of Merton, [1977] 2
All ER 492 (H.L.); Kamloops (City of) v. Neilson et al.,
[1984] 2 S.C.R. 2; (1984), 10 D.L.R. (4th) 641; [1984] 5
W.W.R. l; 29 C.C.L.T. 97; Tock v. St. John's Met
ropolitan Area Board, [1989] 2 S.C.R. 1181; (1989), 64
D.L.R. (4th) 620; 104 N.R. 241; R. in right of Canada v.
Saskatchewan Wheat Pool, [1983] 1 S.C.R. 205; (1983),
143 D.L.R. (3d) 9; [1983] 3 W.W.R. 97; 23 C.C.L.T.
121; 45 N.R. 425; Governors of the Peabody Donation
Fund v. Sir Lindsay Parkinson & Co. Ltd., [1985] A.C.
210 (H.L.); Yuen Kun-yeu v A-G of Hong Kong, [1987]
2 All ER 705 (P.C.); Stuart v. Canada, [1989] 2 F.C. 3;
(1988), 19 F.T.R. 59; 45 C.C.L.T. 290; 61 Alta. L.R.
(2d) 81; [1988] 6 W.W.R. 211 (T.D.); Smith v. Leurs
(1945), 70 C.L.R. 256 (Aust. H.C.).
REFERRED TO:
MacAlpine v. Hardy (T.), judgment dated November 18,
1988, doc. no Victoria 1814/84 (B.C.S.C.), not reported.
COUNSEL:
Leighton Decore and Marla S. Miller for
plaintiffs.
D. B. Logan and Barbara Ritzen for
defendant.
SOLICITORS:
Decore & Company, Edmonton, for plaintiffs.
Deputy Attorney General of Canada for
defendant.
The following are the reasons for judgment
rendered in English by
WALSH D.J.:
EDITOR'S NOTE
The Executive Editor has made a determination
that the reasons for judgment herein be published
as abridged. The initial 31 pages of the reasons
have been omitted and a note prepared to explain
the nature of the action, positions taken by the
parties and the essential facts. His Lordship's
discussion of the legal issues is unabridged.
This case is of interest for its review of the
distinction drawn between the "operational" and
policy ("discretion") areas in deciding whether a
public body is fixed with a common law duty of
care. Also of interest are the Trial Judge's com
ments concerning the propriety of taking into
account decisions of the Supreme Court of
Canada handed down subsequent to a case
being argued but prior to the judgment being
written.
These two actions, tried together, arose out of
a fatal airplane crash which took place near High
Prairie, Alberta. The plane, a Piper Chieftain, was
owned and operated by Wapiti Aviation Ltd. The
pilot, Vogel, survived and was a witness at trial.
Testifying under protection of the Canada Evi
dence Act, he admitted responsibility for the
crash. For undisclosed reasons, neither the com
pany nor the pilot were named as defendants but
the plaintiffs—the victims' widows and infant
dependants—sued the Crown to recover dam
ages.
The plaintiffs' case was that the Minister of
Transport had made rules and regulations under
the Aeronautics Act but that the aircraft in ques
tion had been operated by an inadequately
trained or experienced pilot, the airline forced its
pilots to contravene rules made under the Act and
that these circumstances were known to and
tolerated by the Crown. The plaintiffs said that the
Crown's liability was based on its failure to con
duct adequate inspections, enforce the aviation
regulations and appropriately respond to com
plaints concerning the operation of the airline.
The defendant's position was that the accident
was due entirely to the pilot's negligence and
violation of flight rules made by the Minister. The
Crown contended that should plaintiffs neverthe
less succeed, any amount which had been
obtained by judgment or settlement with the pilot
or airline or under the provincial Worker's Com
pensation Act should be deducted from the
award. Plaintiffs conceded that, were they suc
cessful, one-third of the agreed damages would
constitute a proper award.
At trial, the introduction into evidence of the
Aviation Safety Board's Occurrence Report was
objected to. His Lordship distinguished on its
facts the case of Adams Estate v. Decock,
[1987] 5 W.W.R. 148; 49 Man. R. (2d) 261 (Q.B.),
in which such a report was not allowed in.
The evidence established that the airline press
ured its pilots to fly by night under Visual Flight
Rules (VFR) when the weather was such that the
flights should have been undertaken under Instru
ment Flight Rules (IFR). The latter involved flying
at higher altitudes and required more fuel. Pilots
who declined to break the aviation rules or fly
planes they considered unsafe were punished by
relegation for a time to doing maintenance work
instead of flights or by dismissal. A social psy
chologist, called as an expert witness, gave evi-
dence that the pressure on the pilots was such
that they would more likely comply with manage-
ment's unreasonable demands, even if that
endangered their lives and those of the passen
gers, than obey Transport Canada safety regula
tions. Had the airline been a defendant herein, it
would have been found at fault.
Transport Canada had, for some time prior to
this crash, been aware that the carrier was fre
quently contravening various aviation safety rules.
Two months before the accident, a government
inspector wrote a memorandum emphasizing the
necessity for closely monitoring Wapiti and secur
ing irrefutable evidence since the carrier could be
expected to "go political" once enforcement was
begun. By "go political", it was meant that local
mayors and other leaders intervene when sanc
tions are imposed on the small airlines upon
which their remote communities depend. The
position description for Regional Director; Aviation
Regulation dealt with the importance of ensuring
the safety of the travelling public while allowing
the regional aviation industry to remain operation
ally viable. The duties of the job were described
as presenting "an onerous challenge perhaps
unequalled in any other official position" in that
"inequitable application of regulations can result
in financial collapse of aviation companies on the
one hand or catastrophic accidents on the other".
A test pilot who had worked for the Dubin
Inquiry into Aviation Safety testified as an expert
witness. Reference was made to studies indicat
ing longstanding deficiencies in the supervision of
airlines and pilots. Dubin had called for the adop
tion of a new policy whereby "in the interests of
aviation safety the laws enacted to ensure the
safe navigation of aircraft will be more vigorously
enforced ...".
The previously mentioned memorandum con
cerning Wapiti spoke of a "total disregard for
regulations, rights of others and safety of passen
gers" and warned that if this manner of operation
persisted, "we are virtually certain to be faced
with a fatality".
There are four levels of action open to Trans
port Canada to deal with air carrier violations: (1)
warning; (2) suspension; (3) prosecution and (4)
cancellation. Defendant's practice was to rely on
warnings and threats of suspension. The policy
was to use persuasion rather than coercion. The
enforcement officers were in a difficult position.
While safety had to be given priority in all deci
sions, if they were too rigid the small airlines
could be forced out of business to the great
inconvenience of the travelling public.
Following the accident giving rise to this litiga
tion, Wapiti was prohibited from operating single
pilot Instrument Flight Rules flights and conditions
were given for the removal of night Visual Flight
Rules restrictions.
Turning now to the jurisprudence, plaintiffs rely
heavily on the House of Lords decision in the case
of Home Office y Dorset Yacht Co Ltd, [1970]
2 All ER 294 (H.L.) and Anns y London Borough
of Merton, [1977] 2 All ER 492 (H.L.), as well as
the Supreme Court of Canada case of Kamloops
(City of) v. Neilson et al., [1984] 2 S.C.R. 2, and
also the British Columbia case (not reported) of
MacAlpine v. Hardy (T.), in the Victoria Registry
No. 1814/84, judgment dated November 18, 1988.
After the completion of argument following the
conclusion of the trial, plaintiffs located three
other cases in the Supreme Court of Canada in
which judgments were rendered after the trial of
the present proceedings. These cases are those of
Just v. British Columbia, [1989] 2 S.C.R. 1228;
Rothfield v. Manolakos, [1989] 2 S.C.R. 1259;
and Tock v. St. John's Metropolitan Area Board,
[1989] 2 S.C.R. 1181. Judgments in all of these
cases were rendered on December 7, 1989 after the
trial of the present case had been completed in
November. While the practice of submitting addi
tional submissions after argument has been com
pleted is not one which would normally be
encouraged, I believe that the situation in the
present case justifies these additional submissions
which could not have been made at the time of the
trial. Hypothetically, a situation might arise in
some case whereby a Supreme Court decision
which had not yet been rendered at the time of the
trial might well be decisive on the outcome, and
provided judgment has not yet been written should
be considered by the trial judge to avoid the
possibility of rendering a decision which would be
erroneous on the basis of the new and decisive
jurisprudence which he had not taken into con
sideration. While I do not say that is the situation
here, I believe that the additional argument should
be permitted. I agreed to do so, giving counsel for
defendant an opportunity to reply to same in writ
ing, which he has now done.
Defendant's counsel in argument discussed the
Home Office v Dorset Yacht; Anns v London
Borough of Merton; and Kamloops (City of) v.
Neilson et al. cases as well as the lower court
decision in the Just case, and referred to a number
of other authorities including the Supreme Court
case of R. in right of Canada v. Saskatchewan
Wheat Pool, [1983] 1 S.C.R. 205; Governors of
the Peabody Donation Fund v. Sir Lindsay Par-
kinson & Co. Ltd., [1985] A.C. 210 (H.L.); Yuen
Kun-yeu v A-G of Hong Kong, [1987] 2 All ER
705 (P.C.).
Resuming briefly some of the findings of the
Home Office v Dorset Yacht Co case it concerned
ten prisoners in custody and control of government
officers who were working on an island in the
harbour. During the night they were left to fend
for themselves inadequately guarded. Seven of
them boarded a yacht off the island and set it in
motion colliding with another yacht causing con
siderable damage. The yacht owner sued the
Home Office alleging that it owed a duty of care
to owners of the yacht. The House of Lords found
that the damages caused were foreseeable. It was
likely to occur if proper control or supervision
owed to the prisoners was not maintained.
This case was referred to in the leading case of
Anns y London Borough of Merton which con
cerned the Public Health Act which imposed
duties on local authorities for the safeguarding of
health of the public including by-laws to supervise
the construction of buildings and in particular the
foundations. The Council had such a by-law and
approved plans; Council had the power to inspect
the work of the contractor but was not under an
obligation to do so. It was held by the House of
Lords that by failing to carry out an inspection the
Council had not properly exercised its discretion or
used reasonable care to assure that the by-law was
properly complied with. At page 501 Lord Wilber-
force said:
... local authorities are public bodies operating under statute
with a clear responsibility for public health in their area. They
must, and in fact do, make their discretionary decisions
responsibly and for reasons which accord with the statutory
purpose.
Referring to the necessity for reasonable care in
carrying out the inspections he states [at page
501]:
... this duty, heavily operational though it may be, is still a
duty arising out of the statute. There may be a discretionary
element in this exercise, discretionary as to the time and
manner of inspection, and the techniques to be used. A plaintiff
complaining of negligence must prove, the burden being on
him, that action taken was not within the limits of a discretion
bona fide exercised, before he can begin to rely on a common
law duty of care. But if he can do this, he should, in principle,
be able to sue.
The Supreme Court City of Kamloops case was
another one dealing with failure of building inspec
tors to properly enforce a building by-law. The
City's failure to act should not be considered as a
policy decision taken in a bona fide exercise of
discretion. In rendering judgment Madame Justice
Wilson states, at pages 12-13:
It seems to me that, applying the principle in Anns, it is fair
to say that the City of Kamloops had a statutory power to
regulate construction by by-law. It did not have to do so. It was
in its discretion whether to do so or not. It was, in other words,
a "policy" decision. However, not only did it make the policy
decision in favour of regulating construction by by-law, it also
imposed on the city's building inspector a duty to enforce the
provisions of the By-law. This would be Lord Wilberforce's
"operational" duty. Is the City not then in the position where in
discharging its operational duty it must take care not to injure
persons such as the plaintiff whose relationship to the City was
sufficiently close that the City ought reasonably to have him in
contemplation?
Twenty-five per cent liability was attributed to
the city of Kamloops although the contractor was
the chief author of the poor construction.
Commenting on these decisions, defendant
refers to the statement of Lord Morris in the
Home Office y Dorset Yacht Co Ltd, at page 307:
The events that are said to have happened could reasonably
have been foreseen. The possibility that the property of the
respondents might be damaged was not a remote one. A duty
arose. It was a duty owed to the respondents.
While defendant argues that the crash in this
case could not reasonably have been foreseen, I do
not agree on the facts. In fact one of its own
employees, Inspector Griffiths, foresaw the possi
bility unless tighter inspection and enforcement
was insisted on.
Earlier, at page 307 Lord Morris quotes from
Dixon J. in Smith v. Leurs (1945), 70 C.L.R. 256,
at pages 261-262 who stated:
But apart from vicarious responsibility, one man may be
responsible to another for the harm done to the latter by a third
person. He may be responsible on the ground that the act of the
third person could not have taken place but for his own fault or
breach of duty. There is more than one description of duty the
breach of which may produce this consequence. For instance, it
may be a duty of care in reference to things involving special
danger. It may even be a duty of care with reference to the
control of actions or conduct of the third person. It is, however,
exceptional to find in the law a duty to control another's actions
to prevent harm to strangers. The general rule is that one man
is under no duty of controlling another man to prevent his
doing damage to a third. There are, however, special relations
which are the source of a duty of this nature. [Emphasis mine.]
In the Anns case, at page 500 (paragraph f)
Lord Wilberforce stated:
... the local authority is a public body, discharging functions
under statute: its powers and duties are definable in terms of
public not private law. The problem which this type of action
creates, is to define the circumstances in which the law should
impose, over and above, or perhaps alongside, these public law
powers and duties, a duty in private law towards individuals
such that they may sue for damages in a civil court. It is in this
context that the distinction sought to be drawn between duties
and mere powers has to be examined.
Most, indeed probably all, statutes relating to public authori
ties or public bodies, contain in them a large area of policy. The
courts call this (discretion), meaning that the decision is one for
the authority or body to make, and not for the courts. Many
statutes, also, prescribe or at least presuppose the practical
execution of policy decisions: a convenient description of this is
to say that in addition to the area of policy or discretion there is
an operational area. Although this distinction between the
policy area and the operational area is convenient, and
illuminating, it is probably a distinction of degree; many opera
tional powers or duties have in them some element of discre
tion. It can safely be said that the more operational a power or
duty may be, the easier it is to superimpose on it a common law
duty of care.
At page 24 of the Supreme Court Report in the
Kamloops case Madame Justice Wilson states:
Having regard to the fact that we are here concerned with a
statutory duty and that the plaintiff was clearly a person who
should have been in the contemplation of the City as someone
who might be injured by any breach of that duty, I think this is
an appropriate case for the application of the principle in Anns.
I do not think the appellant can take any comfort from the
distinction between non-feasance and misfeasance where there
is a duty to act or, at the very least, to make a conscious
decision not to act on policy grounds. In my view, inaction for
no reason or inaction for an improper reason cannot be a policy
decision taken in the bona fide exercise of discretion. Where
the question whether the requisite action should be taken has
not even been considered by the public authority, or at least has
not been considered in good faith, it seems clear that for that
very reason the authority has not acted with reasonable care. I
conclude therefore that the conditions for liability of the City to
the plaintiff have been met.
In the present case, it is true that action was
considered against Wapiti and a few steps had
been taken during the preceding year but in place
of decisive action defendant's employees had been
satisfied with Wapiti's promises to do better in
future. This constituted a conscious decision not to
act, on policy grounds. Any airline passenger must
be in contemplation of the Department of Trans
port as someone who might be injured by any
breach of duty to enforce the Regulations.
With respect to the trilogy of cases rendered in
the Supreme Court after the argument in this case
was completed, namely the cases of Just v. British
Columbia; Rothfield v. Manolakos; and Tock v.
St. John's Metropolitan Area Board (all referred
to supra), they appear to indicate a tendency to
increase the responsibility of those charged with
enforcement of Regulations. In the Just case, Mr.
Justice Cory, at page 1239 has the following to
say:
Often government agencies were and continue to be the best
suited entities and indeed the only organizations which could
protect the public in the diverse and difficult situations arising
in so many fields. They may encompass such matters as the
manufacture and distribution of food and drug products, energy
production, environmental protection, transportation and tour
ism, fire prevention and building developments. The increasing
complexities of life involve agencies of government in almost
every aspect of daily living. Over the passage of time, the
increased government activities gave rise to incidents that
would have led to tortious liability if they had occurred between
private citizens. The early governmental immunity from tor-
tious liability became intolerable. This led to the enactement of
legislation which in general imposed liability on the Crown for
its acts as though it were a person. However, the Crown is not a
person and must be free to govern and make true policy
decisions without becoming subject to tort liability as a result
of those decisions. On the other hand, complete Crown immuni
ty should not be restored by having every government decision
designated as one of "policy". Thus the dilemma giving rise to
the continuing judicial struggle to differentiate between "poli-
cy" and "operation". Particularly difficult decisions will arise
in situations where governmental inspections may be expected.
At pages 1241-1242 quoting from an Australian
case [Sutherland Shire Council v. Heyman
(1985), 60 A.L.R. 1 (H.C.)] dealing with the Anns
case and American jurisprudence he states with
approval:
The distinction between policy and operational factors is not
easy to formulate, but the dividing line between them will be
observed if we recognize that a public authority is under no
duty of care in relation to decisions which involve or are
dictated by financial, economic, social or political factors or
constraints. Thus budgetary allocations and the constraints
which they entail in terms of allocation of resources cannot be
made the subject of a duty of care. But it may be otherwise
when the courts are called upon to apply a standard of care to
action or inaction that is merely the product of administrative
direction, expert or professional opinion, technical standards or
general standards of reasonableness. [Emphasis added.]
Justice Cory continues [at pages 1242-1243]:
The duty of care should apply to a public authority unless
there is a valid basis for its exclusion. A true policy decision
undertaken by a government agency constitutes such a valid
basis for exclusion. What constitutes a policy decision may vary
infinitely and may be made at different levels although usually
at a high level.
The decisions in Anns v. Merton London Borough Council
and City of Kamloops v. Nielsen, supra, indicate that a govern
ment agency in reaching a decision pertaining to inspection
must act in a reasonable manner which constitutes a bona fide
exercise of discretion. to do so they must specifically consider
whether to inspect and if so, the system of inspection must be a
reasonable one in all the circumstances.
For example, at a high level there may be a policy decision
made concerning the inspection of lighthouses. If the policy
decision is made that there is such a pressing need to maintain
air safety by the construction of additional airport facilities
with the result that no funds can be made available for
lighthouse inspection, then this would constitute a bona fide
exercise of discretion that would be unassailable. Should then a
lighthouse beacon be extinguished as a result of the lack of
inspection and a shipwreck ensue no liability can be placed
upon the government agency. The result would be the same if a
policy decision were made to increase the funds for job retrain
ing and reduce the funds for lighthouse inspection so that a
beacon could only be inspected every second year and as a
result the light was extinguished. Once again this would consti
tute the bona fide exercise of discretion. Thus a decision either
not to inspect at all or to reduce the number of inspections may
be an unassailable policy decision. This is so provided it consti
tutes a reasonable exercise of bona fide discretion based, for
example, upon the availability of funds.
On the other hand, if a decision is made to inspect lighthouse
facilities the system of inspections must be reasonable and they
must be made properly.
At page 1244 he states:
As a general rule, the traditional tort law duty of care will
apply to a government agency in the same way that it will apply
to an individual. In determining whether a duty of care exists
the first question to be resolved is whether the parties are in a
relationship of sufficient proximity to warrant the imposition of
such a duty.
In applying this to the present case, Transport
Canada was inspecting Wapiti as in fact it was
obliged to do by virtue of the Aeronautics Act and
Regulations made thereunder. It had authorized
IFR [Instrument Flight Rules] privileges for the
airline and subsequently single pilot IFR author
ity. It had, if not explicitly, at least implicitly
accepted Delbert Wells as Operations Manager of
the company, a function which he had been occu
pying for several years without his qualifications
for it ever having been verified. It had allowed
Dale Wells to occupy several important positions
at the same time which, while not actually prohib
ited by the Regulations, imposed on him more
responsibilities than one person could reasonably
be expected to adequately perform. Defendant
contends that the Aeronautics Act does not impose
on the Crown the same kind of obligation that the
Highways Act did on the province of British
Columbia in the Just case, where the claim result
ed from a large rock falling on the highway caus
ing the injury complained of, the allegation being
that the Act imposed an obligation on the Province
to sufficiently inspect the cliffs beside the highway
and take necessary steps to minimize this danger.
The Supreme Court decision was not a hearing on
the merits after trial but ordered a new trial to
determine whether the respondent had met the
standard of care that should reasonably be
imposed upon it with regard to the frequency and
manner of inspections of the rock cut and to the
cutting and sealing operations carried out upon it.
These matters had not been considered at the
initial hearing and therefore no findings of fact
had been made on issues bearing on the standard
of care. The Supreme Court judgment found that
the matter was one of operation rather than policy
as the Trial Judge had found and that respondent
was therefore not immune from suit.
I do not believe that the distinction between the
two statutes sought by defendant can be made
however. The Aeronautics Act and Regulations
made thereunder if not explicity imposing a duty
of care to the general public, at least do so by
implication in that this is the very reason for their
existence. The flying public has no protection
against avaricious airlines, irresponsible or inade
quately trained pilots, and defective aircraft if not
the Department of Transport and must rely on it
for enforcement of the law and regulations in the
interest of public safety. Its expressed policy is, as
it must be, to enforce these Regulations, but when
the extent and manner of the enforcement is insuf
ficient and inadequate to provide the necessary
protection, then it becomes more than a matter of
policy, but one of operation and must not be
carried out negligently or inadequately. While
there may be no contractual duty of care owed to
the public, as plaintiff suggests, this does not of
itself protect defendant from liability in tort.
The Rothfield v. Manolakos case was another
case arising out of a city by-law in which the
Court found that the owners were entitled to rely
on the municipality's property inspection to see
that a building's foundations conformed to the
standards set out in the municipal building by-law.
The city inspector made a late inspection and
found a crack, but decided to wait and see what
happened instead of immediately ordering cessa
tion of work and corrective measures.
While defendant's counsel states that inspec
tions by Transport Canada revealed no such simi
lar dangers I cannot agree with this. Among other
matters, a danger of allowing Wapiti to continue
single pilot IFR operation despite previous infrac
tions was apparent and there was plenty of time to
remedy this by withdrawing this permission.
Among other cases, defendant referred to the
case of Yuen Kun-yeu y A-G of Hong Kong,
[1987] 2 All ER 705 (P.C.) in the Privy Council,
in which the plaintiff lost money placed in a
deposit-taking company; the claim was that the
defendant should have known that the affairs of
the company were not being conducted properly.
The action was dismissed however. The question
arose as to whether in the discharge of his supervi
sory powers the Commissioner had to exercise
reasonable care to see that depositors did not
suffer a loss due to the affairs of the company
being carried on in a fraudulent or speculative
fashion. At page 713, the judgment of Lord Keith
states:
But the discretion given to the commissioner to register or
deregister such companies, so as effectively to confer or remove
the right to do business, was also an important part of the
protection afforded. No doubt it was reasonably foreseeable by
the commissioner that, if an uncreditworthy company were
placed on or allowed to remain on the register, persons who
might in the future deposit money with it would be at risk of
losing that money. But mere foreseeability of harm does not
create a duty, and future would-be depositors cannot be regard
ed as the only persons who the commissioner should properly
have in contemplation. In considering the question of removal
from the register, the immediate and probably disastrous effect
on existing depositors would be a very relevant factor. It might
be a very delicate choice whether the best course was to
deregister a company forthwith or to allow it to continue in
business with some hope that, after appropriate measures by
the management, its financial position would improve. It must
not be overlooked that the power to refuse registration, and to
revoke or suspend it is quasi-judicial in character, as is demon
strated by the right of appeal to the Governor in Council
conferred on companies by s. 34 of the ordinance, and the right
to be heard by the commissioner conferred by s. 47. The
commissioner did not have any power to control the day-to-day
management of any company, and such a task would require
immense resources. His power was limited to putting it out of
business or allowing it to continue .... In these circumstances
their Lordships are unable to discern any intention on the part
of the legislature that in considering whether to register or
deregister a company the comissioner should owe any statutory
duty to potential depositors. It would be strange that a common
law duty of care should be superimposed on such a statutory
framework.
Plaintiffs distinguish this judgment as air safety
certainly requires a higher standard of care than
commercial safety in enforcing the Regulations
and does not involve meddling into the manage
ment of the company in the same way that would
apply to supervising the bank's business.
Defendant points out that to engage Crown
liability in tort it is necessary under the provisions
of the Crown Liability Act [R.S.C., 1985, c. C-50]
that there be a tortious act or omission by a
servant of the Crown which would engage his or
her liability. While this is true, recent interpreta
tions of the Act do not indicate that the liability
must be attributed to one or more specific servants
of the Crown, but rather that there can be a
shared liability of servants of an entire department
or perhaps even of more than one department,
which if this cumulatively results in actionable
negligence can then engage the responsibility of
the Crown. In other words, by virtue of the Crown
Liability Act the Crown is liable in much the same
way as a private corporation would be liable for
acts or omissions of one or more of its employees
in the performance of their duties.
An example of this interpretation appears in the
case of Stuart v. Canada, [1989] 2 F.C. 3 (T.D.)
in which Madame Justice Reed of this Court
stated at page 17, in commenting on the section 3
of the Crown Liability Act:
The plain meaning of the text of the statute would lead the
reader to conclude that Parliament intended, in enacting that
section, to make the Crown federal subject to the same law of
tort as that to which a private person is subject.
In contemporary conditions and considering the
complexity of the internal organization of various
government departments, such as the Department
of Transport, charged with enforcing Regulations,
it would make a mockery of the Crown Liability
Act to hold that liability in tort cannot be engaged
unless fault can be attributed to a specific
employee who could himself or herself be sued. In
the present case for example, the Regional Direc
tor of Aviation Regulation has six managers
reporting to him being the Regional Superintend
ent of Enforcement, the Regional Aviation Medi
cal Officer, the Regional Aviation Safety Officer,
the Regional Superintendent of Airworthiness, the
Regional Superintendent of Air Carrier Opera
tions, and the Regional Superintendent of Licens
ing. He in turn reports to the Regional Adminis
trator, who, in addition to the Regional Director of
Air Navigation has seven other positions reporting
to him. Various witnesses occupying these posi
tions were heard from including Richard Lidstone,
Civil Aviation Inspector, Manager of Air Carrier
Operations for Western Region at the time,
George Kile, Air Worthiness Inspector of Trans
port Canada in 1984, Donald Davidson, Regional
Director of Air Navigation for Western Region.
Some decisions have to be made at even higher
levels. It is not surprising that considerable delays
are involved before any action is taken with respect
to serious infractions of the Regulations.
Defendant argues that in order to succeed plain
tiffs must establish that the damage suffered was
caused by the conduct of defendant which must be
a proximate cause of the loss and not too remote.
Plaintiffs therefore has to establish that Transport
Canada was negligent with respect to the steps it
did not take before the crash. What happened
however was not too remote or unforeseeable.
Inspector Lidstone's very strong memorandum of
May 4, 1984 resulted merely in a notation that he
discussed these problems with Dale Wells, and he
promised better communication and direction to
pilots. There is a note in the letter that surveillance
will be maintained at a high level. On August 17,
1984 after the visit of various pilots indicating that
the same problems were continuing, Air Carrier
Inspector Griffiths again merely recommends close
monitoring to obtain enforceable evidence since
the carrier may be expected to go "political" and
therefore irrefutable evidence must be obtained. It
is suggested that monitoring at Grand Prairie and
Edmonton terminals in respect of single pilot IFR
operations should be carried out "particularly in
November" when Edmonton regularly has low
ceilings. There was plenty of time to take stronger
action in May and again in August before the
crash took place in October.
Moreover, with respect to causation while the
direct cause was pilot error it is not entirely accu
rate to say that the plane was in perfect condition
and its condition in no way contributed to the
accident. For single pilot IFR operation two work
ing air direction finders are required so that an
intersection of beams can be obtained assisting in
verification of the plane's position. In the present
case, the plane either had only one such direction
finder or if it had two the other was not working.
While icing did not contribute to the crash, the
de-icer on one wing was not working. The pressure
put on pilots to undertake flights in contravention
of Regulations despite some defects in equipment
was known to defendant some time before the
crash as a result of the complaints of the various
pilots. This pressure as it affected Vogel would be
a contributing causal link.
I conclude therefore that, on the facts, and on
the basis of the most recent interpretations of the
law defendant must be held partially to blame for
what took place. During argument, counsel for
plaintiffs conceded that he would be satisfied with
assigning one-third of the responsibility to defend
ant on the basis that the pilot Vogel and Wapiti
Airline were each also one-third responsible,
although they are not parties to the present pro
ceedings. Subsequently, on the basis of the Roth-
field v. Manolakos case which assigned seventy
percent of the blame to the City of Vernon for
negligent inspection of the foundation of the build
ing which they were required to inspect, he sug
gested that a higher degree of liability might be
assigned to Transport Canada in the present case.
I do not agree. Transport Canada has a very
difficult task to enforce the Regulations strictly in
the interest of public safety without at the time
interfering unduly with commercial aviation which
often has to be carried out under difficult condi
tions. A fine balance must be maintained, but if
there is any doubt emphasis must be placed on
public safety as the Dubin inquiry clearly indicat
ed. While no doubt some of its recommendations
have been carried out, and the Regulations amend
ed and tightened somewhat subsequently, the gen
eral attitude of delay apparent in the Department
and use of persuasion rather than draconian meas
ures in enforcement of the regulations still
remains. Clearly too much reliance is placed on
promises by airlines, and specifically Wapiti in this
case, to do better in future after a series of viola
tions have been reported. I do not believe that the
quantification of the blame however should be
punitive in nature and therefore attributing one-
third responsibility would appear to be justified by
the facts of this case. Judgment will therefore be
rendered in favour of plaintiffs Sally Margaret
Swanson et al for $243,333.33 and costs and in
favour of plaintiffs Virginia Peever et al for
$200,000 and costs.
Since the discoveries, documents produced and
trial of both actions together included the same
proof, only one set of counsel fees will be allowed,
divided between the two actions, save for separate
disbursements attributable to each.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.