Decision No. 389-A-2015

December 16, 2015

DETERMINATION by the Canadian Transportation Agency of whether to continue its own motion investigation into whether SkyGreece Airlines, S.A. failed to apply the terms and conditions of carriage set out in its tariff, contrary to subsection 110(4) of the Air Transportation Regulations, SOR/88-50, as amended.

Case number: 
15-03972

BACKGROUND

[1] On August 28, 2015, SkyGreece Airlines, S.A. (SkyGreece) announced that it would temporarily cease all operations.

[2] On September 2, 2015, the Canadian Transportation Agency (Agency) issued Decision No. LET‑A‑55‑2015 (Decision), noting the following:

  • there had been a temporary cessation of operations by SkyGreece;
  • there had been widespread media coverage and expressions of concern for passengers affected by the cessation;
  • fifteen persons had filed air travel complaints forms through the Agency’s Web site; and,
  • a dispute proceeding had been commenced concerning related matters.

[3] To avoid a multitude of proceedings, and given the seriousness and urgency of the situation, the Agency decided to examine, of its own motion, whether SkyGreece had failed to apply the terms and conditions set out in its tariff.

[4] In the Decision, the Agency found, on a preliminary basis, that SkyGreece had failed to properly apply the terms and conditions set out in its tariff. The Decision provided SkyGreece with the opportunity to show cause by September 3, 2015 why the Agency should not order SkyGreece to:

  1. immediately inform passengers of their options under its tariff;
  2. implement the options chosen by passengers;
  3. establish a help line for passengers; and,
  4. update its Web site to fully explain the measures in place to address the situation.

[5] On September 3, 2015, SkyGreece informed the Agency that it had filed a Notice of Intention to Make a Proposal (Notice) with the office of the Official Receiver at Toronto under the Bankruptcy and Insolvency Act, R.S.C., 1985, c. B-3 (BIA).

[6] On September 8, 2015, the Ontario Superior Court of Justice stayed the Agency proceedings. The Court eventually extended the stay until November 17, 2015.

[7] On December 4, 2015, the Agency received a Certificate of Assignment, pursuant to paragraph 50.4(8)(b.1) of the BIA, from Ernst & Young Inc., the trustee of SkyGreece (Trustee). The Certificate confirms that SkyGreece has made a deemed assignment into bankruptcy. The Trustee also sent a copy of the Notice of First Meeting of Creditors under paragraph 155 (d.1) of the BIA. The meeting was scheduled for December 8, 2015.

ISSUE

[8] Given that SkyGreece is now bankrupt, should the Agency resume its own motion investigation into whether SkyGreece failed to apply the terms and conditions set out in its tariff?

ANALYSIS

[9] Section 71 of the BIA provides as follows:

On a bankruptcy order being made or an assignment being filed with an official receiver, a bankrupt ceases to have any capacity to dispose of or otherwise deal with their property, which shall, subject to this Act and to the rights of secured creditors, immediately pass to and vest in the trustee named in the bankruptcy order or assignment, and in any case of change of trustee the property shall pass from trustee to trustee without any assignment or transfer.

[10] Accordingly, SkyGreece no longer has control of its property, can no longer operate an air service, and is incapable of either fulfilling the terms and conditions of its tariff or providing passengers with compensation for its alleged failure to do so. As a result, any remedial measures that could be ordered by the Agency as a result of its own motion investigation would be of no practical value to the passengers affected by the cessation of SkyGreece’s service. Therefore, this case is now moot.

[11] Furthermore, there are no special circumstances, such as broader questions of law, that would justify the Agency exercising its discretion to hear this matter despite its mootness.

[12] The Trustee, rather than the Agency, is now in the best position to deliver a remedy to the claims of passengers. It is the Trustee who is vested with all of SkyGreece’s assets and charged with a specific legislative mandate to distribute those assets among all of SkyGreece’s debtors, including passengers, in accordance with the scheme in the BIA.

CONCLUSION

[13] In light of the foregoing, the Agency finds that the proceedings initiated in Decision No. LET‑A‑55-2015 have become moot and they will therefore be discontinued.

Member(s)

Scott Streiner
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