Lessors Win Canada 3000 Appeal

Justice Eleanore Cronk, Justice Russell Juriansz (ad hoc) (dissenting in part), and Justice Rosalie Abella of the Court of Appeal for Ontario ruled on January 20, 2004 that the lessors of Canada 3000’s fleet of 38 aircraft are not liable to NAV Canada for unpaid charges that the operators of Canada’s former second largest airline accumulated prior to its 2001 bankruptcy.

The court also ruled that neither NAV Canada nor the operators of nine airport authorities, including Greater Toronto Airports Authority, could use the seizure and detention remedies contained in the federal Civil Air Navigation Services Commercialization Act and the federal Airport Transfer (Miscellaneous Matters) Act to seize and detain the airline’s leased fleet to compel payment of approximately $30 million owed to NAV Canada and the airport authorities by Canada 3000.

The appeal, which was heard in June 2003, upheld the May 2002 decision of Justice John Ground of the Superior Court of Justice.

NAV Canada was represented on the appeal by Clifton Prophet and Eric Wredenhagen of Gowling Lafleur Henderson LLP in Toronto. The Greater Toronto Airports Authority was represented by Lyndon Barnes and Donald Hanna of Osler, Hoskin & Harcourt LLP with the remaining airport authorities represented by John Porter and Alan Merskey of Ogilvy Renault in Toronto.

Multiple firms, reflecting the airline’s complex leasing arrangements, represented the successful respondents. International Lease Finance Corp. was represented by Richard Conway and Linda Plumpton of Torys LLP. US Airways, Inc. was represented by David Chernos of Torys. GE Capital Aviation Services, Inc. and Pegasus Aviation, Inc. were represented by Christopher Besant and Joseph Bellissimo of Cassels Brock & Blackwell LLP. Ansett Worldwide Aviation, USA was represented by Barbara Grossman, and assisted by Christopher Woodbury, both of Fraser Milner Casgrain LLP. CIT Leasing Corp. and NBB-Royal Lease Partnership One were represented by Pamela Huff and Jill Lawrie of Blake, Cassels & Graydon LLP. GATX/CL Air Leasing Cooperative Association was represented by Craig Hill and Roger Jaipargas of Borden Ladner Gervais LLP. RRPF Engine Leasing Ltd. was represented by Kenneth Kraft and George Karayannides of Heenan Blaikie LLP.

Flight Logistics Inc. was represented by Ross Morrison and David Bleiwas of Morrison Brown Sosnovitch LLP and CIBC was represented by Steven Weisz of Blake, Cassels & Graydon.