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Application of GARA Rejected in Canadian General Aviation Case

View PDF: 2016-06-oct-31-16

On May 17, 2007, a Canadian registered Beech BE-55 (the “Aircraft”) took off from Oshawa Airport (CYOO), bound for Wilmington, Delaware. Approximately 45 minutes after departure, the pilot reported a rough running left engine and requested a diversion to the Chautauqua County Airport (KDKK) in Dunkirk, New York. The Aircraft crashed while attempting a single-engine landing. The pilot and two passengers suffered fatal injuries.

The families of the deceased commenced legal proceedings to recover losses relating to the passing of their relatives as well as for the value of the Aircraft.

The National Transportation Safety Board (along with representatives of the Canadian Transportation Safety Board) conducted a teardown of the left engine (TCM IO-470L)in Alabama approximately three months later and found that there was a left engine failure just before the crash, whereby a counterweight (designed to dampen vibration produced by the engine) separated at one of its attachment points, causing the loose end to strike the crankcase repeatedly, ultimately leading to a breach in the crankcase. Some of the evidence suggested that this process had been going on for sometime and, allegedly, could have been detected earlier at when the Aircraft was being serviced.

Four years prior, in 2003, the Aircraft was involved in a gear-up landing, which required the disassembly of both engines. The repair work was undertaken in Canada by Aviation Technical Consultants (“ATC”) in accordance with the maintenance manuals published by the engine’s manufacturer, Teledyne Continental Motors (“TCM”).

One of the allegations in the legal proceeding in issue here was that ATC had improperly installed the counterweights when carrying out the repairs on the Aircraft in 2003. In its defence, ATC alleges that it relied upon the service bulletins and overhaul manual published by TCM. In the legal proceeding, ATC claimed contribution from TCM for any damages awarded as against it.

The plaintiff also alleged that the defendant, Corporate Aircraft Restorations Inc. and its employees (“CAR”), were also to blame for the engine failure, as they had conducted the regular maintenance on the Aircraft prior to the accident.

In the course of the legal proceedings,  TCM brought a motion to  resolve two issues on a summary judgment basis, namely whether:

  • the US federal legislation General Aviation Revitalization Act, 1994 (“GARA”)statute barred all claims against TCM; and
  • US law, more generally, applied to this action.

On the issue of whether GARA applied to the dispute, TCM led expert testimony by Ann Thornton Field, an experienced US aviation lawyer. Ms. Field’s testified that, according to US law, if the engine in question (which was originally purchased in 1968) had been out of TCM’s possession and TCM had not suppled any new parts or components to the engine since for more than 18 years, the action against TCM is statute barred. Her expert report stated:

GARA’s eighteen-year statute of repose begins to run on the date the general aviation aircraft or component is delivered to its first purchaser. If more than eighteen years elapse between the date of delivery and the date of the accident, the claim is barred unless one of the exceptions to GARA applies. [It was common ground that the exceptions did not apply to this case].

Ms. Field also opined that, on her reading of GARA, the finality of the long-tail liability assumed by aircraft manufacturers would apply regardless of which jurisdiction their aircraft end up in.

ATC produced an expert on this point as well. In this regard, an equally experienced US aviation lawyer, Christopher Barth, testified that, in the absence of clear statutory language to the contrary, US legislation is presumed to apply only within the territorial limits of the United States. Mr. Barth argued that, since GARA was passed to regulate US domestic litigation, it had no force in disputes outside that jurisdiction.

Justice Morgan found that both experts were right. On one hand, Ms. Field is correct in stating that aircraft manufactures may avail themselves of the protections afforded by GARA regardless of where their products are deployed. However, Mr. Barth was also correct in stating that the protections of GARA apply only to disputes being litigated in the United States.

On this point, Justice Morgan referred to the US case of Blazevska v. Raytheon Aircraft Co., 522 F. 3d 948 (9th Cir, 2008) where the court held that:

Congress has no power to tell courts of foreign countries whether they could entertain a suit against an American defendant. It would be up to any foreign court to determine whether it wanted to apply GARA to litigation occurring within its borders.

Justice Morgan then considered the matter from the perspective of conflict of law rules in Canada which have been determined to be “national rather than international in character”. He ruled that the decision of whether Canadian courts choose to apply US law to a particular dispute is a matter for Canadian courts “[j]ust as a Court in Canada can decide to apply New York contract law or Michigan tort law in the appropriate case notwithstanding that those bodies of American law are silent on extra-territoriality…”

In short, Justice Morgan accepted the proposition that “judges always apply domestic rules of law, but sometimes create these in accordance with foreign law.”

Having determined this approach, Justice Morgan embarked on a choice of law analysis, referring primarily to the seminal case of Tolofsen v. Jensen; Lucas v. Gagnon [1994] 2 SCR 1022.

In that case, the Supreme Court of Canada adopted a lex loci delicti rule for choice of law actions founded in tort. In its essence, this rule stands for the proposition that the law of the place where the wrong occurred is the substantive law (which includes limitation periods) that governs the adjudication of tort actions — unless this result would cause an injustice “beyond ordinary differences between the laws of the forums”.

It was, therefore, the Court’s role on the motion to decide which law to apply.

Justice Morgan noted that the “crux of the claims … against [TCM] is not negligence”. In support of this, he noted that the engine left TCM’s control 39 years before the accident and had operated for that amount of time without difficulty.

He also noted that, instead, the basis of the claim against TCM was for alleged negligent misrepresentations made by TCM about how to properly service the engine in its service bulletins and overhaul manuals.

Justice Morgan then turned to the case of Air Canada v. McDonnell Douglas Corp., [1989] 1 SCR 1554, where the Supreme Court of Canada held that an obligation to warn exists at the place where the warning would be effective.

In applying these principles to the matter at hand, Justice Morgan found that:

The same thing applies to ATC’s reliance on the repair bulletins and overhaul manuals in re-installing the crankshaft and counterweight after the 2003 engine inspection. The reception and reliance took place in Ontario. To the extent that the materials disseminated by [TCM] contained negligent misrepresentations, the place of these misrepresentations, and thus the law applicable to them, was Ontario.

Having drawn this conclusion, the Court held that, since the failure to warn occurred on Ontario, the substantive law of Ontario would govern the claim, thereby resulting in GARA having no application to the resolution of this dispute.

Justice Morgan ordered that the action was to proceed with all allegations made against TCM intact.

TCM was ordered to pay each of ATC and CAR (the responding parties on the motion) CAD$24,000 in costs for the motion.

Thorne v. Hudson,
2016 ONSC 5507