Ontario Court Dismisses Seizure and Detention Claims

On May 7, 2002, Justice Ground of the Ontario Superior Court of Justice dismissed motions by NAV CANADA and the airport authorities of Greater Toronto, Vancouver, Calgary, Edmonton, Winnipeg, Ottawa, Montreal, Halifax and St. John’s for the seizure and detention of the aircraft that were either leased by Canada 3000, or, where not leased, were subject to claims of secured creditors of Canada 3000. The aircraft lessors had brought cross-motions for the release of the aircraft or of the security posted in their place and for reimbursement for all costs associated with the detention of the aircraft and the posting of security. These cross-motions were granted. Among other things, the court found the language of the legislation governing NAV CANADA and the airport authorities insufficiently clear to grant NAV CANADA and the airport authorities rights of seizure and detention in priority to the third-party property rights of aircraft lessors and secured creditors. In addition, the court determined that the lessors were not “owners” under the relevant legislation and therefore did not have any personal liability to NAV CANADA for unpaid charges. NAV CANADA and the airport authorities have appealed this decision.

Acting for International Lease Finance Corporation, a lessor of 14 of Canada 3000’s 38 aircraft, was Torys LLP, with a team composed of Richard Conway and Linda Plumpton (litigation) and Scott Bomhof, Libbie Evans and Jamie Feehely (insolvency). Acting for US Airways, a lessor of 11 aircraft, was also Torys, with a team comprising David Chernos (litigation) and Michael Rotsztain and Marc Lavigne (insolvency). Michael Feldman of Torys provided advice to both Torys teams.
Barbara Grossman and John Russo of Fraser Milner Casgrain LLP acted for Ansett Worldwide Aviation, U.S.A. and MSA V. Christopher Besant and Donald Gray of Cassels Brock & Blackwell LLP acted GECAS. Pamela Huff and Jill Lawrie of Blake, Cassels & Graydon LLP acted for C.I.T. Leasing Corporation and NBB-Royal Lease Partnership One. Craig Hill of Borden Ladner Gervais LLP acted for GATX Corporation. Elizabeth Pillon acted for AMTEC Corporation.

Osler, Hoskin & Harcourt LLP represented the Greater Toronto Airports Authority, with a team including Lyndon Barnes, Frederick Myers and Donald Hanna. The airport authorities of Vancouver, Calgary, Edmonton, Winnipeg, Ottawa, Montreal and Halifax were represented by John Porter, Mario Forte and Allan Mersky of Ogilvy Renault. Clifford Prophet and Eric Redenhagen of Gowling Lafleur Henderson LLP acted for NAV CANADA.

Robert Thornton and Kyla Mahar of ThorntonGroutFinniganLLP acted for Royal Bank of Canada. Lincoln Rogers of Blake, Cassels & Graydon acted for CIBC. Daniel Dowdall of Fraser Milner Casgrain LLP acted for Bank of Montreal. George Karayannides of Heenan Blaikie LLP acted for RRPF Engine Leasing Limited. Ross Morrison and David Bleiwas of Goodman and Carr LLP acted for Flight Logistics. Reid Lester of Poss & Halfnight acted for Guarantee Company of North America, and Daniel MacDonald and Neil Saxe of McMillan Binch acted for Deloitte & Touche.