Library:
Opposition to Airport Closure Requires a Full Trial
Published in the June 2010 issue of Transportation Notes - View Article
In Airco Aircraft Charters Ltd. v. Edmonton Regional Airports Authority, Airco Aircraft Charters Ltd. (“Airco”) lost its bid to compel the Edmonton Regional Airports Authority (“ERAA”) to continue operating one of its runways and to cease from proceeding with the gradual closure of the Edmonton City Centre Airport (“the Airport”) in accordance with a motion passed by Edmonton City Council. The Alberta Court of Queen’s Bench found that the issues raised by Airco were too complex to be addressed by way of the short-cut procedure of a summary judgment. The findings in this case also illustrate how a court may approach litigation surrounding the closing or operation of airports with respect to what is considered to be “efficient” or in the “public interest.”
The Airport has a long history, having been designated Canada’s first “air harbour” in 1927. However, questions surrounding its existence have been debated by the local community for at least 50 years. In a 1995 plebiscite, voters approved the use of the Airport for general aviation services and consolidation of scheduled traffic at the Edmonton International Airport (“EIA”). Subsequently, the City of Edmonton entered into a 56 year “Head Lease” with the ERAA pursuant to which the ERAA agreed to use the Airport as “a public airport offering general aviation services for private aircraft, small charter companies, and air ambulances.” In exchange, the ERAA “assumed control and operation of the Airport” and accepted assignments of existing leases and could enter into new sub-leases with aviation and non-aviation tenants.
Such a sublease was entered into with Airco in 1998 (“the Sublease”) for a duration of 25 years, with the option to renew for another 25.
Airco offers scheduled air services to Grand Prairie, Alberta from the Airport, as well as charter services from the EIA.
In 2002, the issue of the closure of the Airport was discussed at public hearings, where Airco voiced its opposition. In 2009, the ERAA’s Board of Directors passed a resolution regarding steps that the ERAA would take in the event of closure. Subsequently, the Edmonton City Council passed a motion approving the phased closure of the Airport. The first step of this would be the immediate closure of one of the Airport’s two runways. The ERAA provided notice to its tenants regarding the runway closure, and also devised a “closure strategy” targeting a complete closure of the Airport by 2015.
Airco launched a legal challenge raising three issues: (1) whether the ERAA’s plans constituted an anticipatory breach of the Sublease; (2) whether the ERAA exceeded its statutory powers; and (3) whether a permanent injunction requiring the ERAA to continue to operate the Airport, including both of its runways. Airco raised these issues by way of a summary judgment motion, relying on evidence in affidavits by the parties.
With respect to the anticipatory breach of the Sublease, Airco relied on the basic right of a tenant to “quiet enjoyment” of the property, including its use for the purpose for which it was let. The Court, however, was not convinced that the issue of anticipatory breach could be resolved by way of summary judgment. First, for lack of further evidence, the Court rejected Airco’s argument that the runway which remained open (unlike that which would be closed) could not be used to land in winds or inclement weather, and that its traffic would thereby be affected.
Second, the Court found that, despite the fact that a closure of the Airport would almost certainly result in the breach of the Sublease, it was not persuaded that it had sufficient evidence to determine that such a closure was inevitable, and indeed whether Airco will still be in the same business and the Sublease will be in effect when the Airport closure occurs. For instance, Airco could, in the interim, change the nature of the services that it offers.
Airco’s second argument was that the ERAA was “afoul” of its empowering legislation by failing to: (1) take steps to keep one of the airports under its mandate open; (2) promote the aviation industry; (3) consider the interests of the public in its region. The mandate of the ERAA is determined by Alberta’s Regional Airport Authorities Act, the Alberta Airport Authorities Regulations, and its By-laws enacted pursuant to the Act. The key issue was the purpose and mandate of the ERAA which is identically set out in the By-laws and in the Act as being to “manage and operate” the airports for which it is responsible. Airco argued that to manage and operate excludes the authority to close the Airport, but the Court did not agree. The Court was persuaded by the absence of a statutory prohibition to that effect, and by the fact that questions as to the efficiency of continuing to run the Airport remained an open matter of public debate. The related but separate issue of whether the ERAA’s directors exercised their discretion responsibly in agreeing to close the runway and ultimately the Airport would require a full trial.
Likewise, the question of whether the ERAA acted ultra vires of the legislation in failing to promote the aviation industry for the “general benefit of the public in the region” would require a full trial; some stakeholders would always be disadvantaged by such a decision and in the absence of an alternative that is clearly more beneficial the directors were not liable. Further, the alleged competitive disadvantage to Airco if it were to relocate to the EIA was not sufficient to reach a conclusion on whether the closure of the Airport would be contrary to its mandate to promote “an expanded aviation industry”; the Court could not speculate on the commercial effects of a closure on Airco without further evidence.
Finally, the Court also contemplated whether the remedy of a mandatory injunction would be appropriate in the circumstances. A mandatory injunction can be granted in cases of anticipated harm. However, a party asking for this remedy mush show a “very strong probability” that “grave damages” will occur, that monetary damages will not be sufficient, and the cost to the defendant of being prevented from doing a certain act does not outweigh the benefit of a plaintiff being able to obtain a remedy before a wrong has occurred. If a mandatory injunction is granted, it must be in the clearest of terms.
In this case, the Court found that the criteria were not met. Business losses to Airco as a result of the Airport and the runway’s closure were speculative. Further, any damages as to a potential loss of business could be monetarily quantified “with a reasonable degree of accuracy.”
Finally, the “balance of convenience” did not lie with Airco, insofar as Airco could use the remaining runway and ultimately relocate to the EIA. The issue of whether the closure of the Airport was in the public interest was a “neutral” factor insofar as arguments could be made both ways.
It remains to be seen whether, in light of the findings of the Court, Airco will pursue the case to trial.
Airco Aircraft Charters Ltd. v. Edmonton Regional
Airports Authority, 2010 ABQB 397