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MOTION RECORD of the MOVING PARTY (Urgent Motion for an Interlocutory Injunction/Stay Pending Appeal)

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Court File No.: A-242-16 FEDERAL COURT OF APPEAL BETWEEN: DR. GÁBOR LUKÁCS Appellant – and – CANADIAN TRANSPORTATION AGENCY and NEWLEAF TRAVEL COMPANY INC. Respondents MOTION RECORD OF THE MOVING PARTY (Urgent Motion for an Interlocutory Injunction/Stay Pending Appeal) DR. GÁBOR LUKÁCS Halifax, NS [email protected] Appellant TO: CANADIAN TRANSPORTATION AGENCY 15 Eddy Street Gatineau, Quebec J8X 4B3 Allan Matte Tel: (819) 994 2226 Fax: (819) 953 9269 Email: [email protected] Solicitor for the Respondent, Canadian Transportation Agency AND TO: D’ARCY & DEACON LLP 1 Lombard Place, Suite 2200 Winnipeg, MB R3B 0X7 Brian J. Meronek, Q.C. Tel: (204) 942-2271 Fax: (204) 943-4242 Email: [email protected] Ian S. McIvor Tel: (403) 541-5290 Email: [email protected] Solicitors for the Respondent, Newleaf Travel Company Inc. TABLE OF CONTENTS 1 Notice of Motion 1 2 Undertaking for Damages 11 3 Affidavit of Dr. Gábor Lukács, affirmed on July 21, 2016 12 A Order of the Federal Court of Appeal granting Leave to Appeal, dated June 9, 2016 23 B Reasons for Order of the Federal Court of Appeal, dated June 9, 2016 26 C Federal corporation information of NewLeaf Travel Company Inc. [NewLeaf], retrieved on July 18, 2016 33 D Corporate profile report of 1919183 Ontario Ltd. [NewLeaf Airways] 38 E Legacy Partners Wealth Strategies Inc., “Newleaf Airways - Initiating Coverage,” January 14, 2015 43 F Federal corporation information of NewLeaf, retrieved on January 13, 2016 74 G Domain registration for newleafcorp.ca, retrieved on July 9, 2016 77 H Affidavit of Ms. Carole Girard, sworn on February 24, 2016, Federal Court of Appeal File No. A-39-16 79 I Decision No. 100-A-2016 of the Canadian Transportation Agency, dated March 29, 2016 [Decision Under Appeal] 129 J Notice of Appeal, filed on June 28, 2016 143 K Letter of Mr. Brian J. Meronek, Q.C., counsel for NewLeaf, dated July 13, 2016 152 L Email of Mr. Allan Matte, counsel for the Agency, dated July 13, 2016 154 M NewLeaf’s press release, dated June 23, 2016 157 N NewLeaf’s “Routes and Schedules” page, retrieved on July 18, 2016 160 O Flair’s “Fleet” page, retrieved on July 18, 2016 165 P Decision No. CONF-6-2016 of the Canadian Transportation Agency, dated May 12, 2016 167 Q Email of Mr. Jim Young, CEO of NewLeaf, dated December 19, 2015 170 R Email of Mr. Jim Young, CEO of NewLeaf, dated January 24, 2016 173 S Letter of demand of Mr. Norman LeCavalier to Mr. Young, dated June 23, 2016 (with attachments) 176 T Email of Mr. Robert Jones, Chief Operating Officer of NewLeaf, to Ms. Hessie Jones, CEO of ArCompany, dated April 6, 2016, acknowledging unpaid invoice (with attachments) 184 U Statement of Claim in ArCompany v. NewLeaf et al., issued on July 19,2016 194 V Kelowna International Airport, Air Carrier Airport Use Agreement 205 W Email of Mr. Sam Samaddar, Director of the Kelowna Airport, dated July 20, 2016 223 X Email of Mr. Jim Rogers, president of Flair Airlines Ltd., dated July 6, 2016 226 Y Letter of Dr. Lukács to Mr. Rogers, dated July 8, 2016 229 Z Email of Mr. Rogers to Dr. Lukács, dated July 17, 2016 (with attachment) 232 AA Letter of Dr. Lukács to Mr. Rogers, dated July 17, 2016 235 AB “NewLeaf Travel Sets New Launch Date For Low-Fare Service In Canada,” published on June 23, 2016, Travelmarket 238 4 Memorandum of Fact and Law of the Moving Party 241 PART I STATEMENT OF FACTS 241 A. Overview 241 (i) The present appeal 241 (ii) The present motion 243 B. The financial fitness requirement (s. 61(1)(iv)) 245 C. NewLeaf’s finances and strategy 247 (i) First Launch (January 2016) 247 (ii) Second Launch (June 2016) 248 (iii) Unpaid bills of NewLeaf and/or affiliate com- pany 248 (iv) Kelowna airport: no deposit nor insurance 249 D. Flair will not protect stranded NewLeaf passengers 249 PART II STATEMENT OF THE POINTS IN ISSUE 251 PART III STATEMENT OF SUBMISSIONS 252 A. Abridging timelines for the motion 252 B. Interlocutory injunction and stay pending appeal 253 (i) Serious issue 254 (ii) Irreparable harm 254 (iii) Balance of convenience 256 (a) Status quo 256 (b) Public interest 256 (c) Leaving the door open for NewLeaf 257 C. Costs 258 PART IV ORDER SOUGHT 259 PART V LIST OF AUTHORITIES 260 A Appendix A – Statutes and Regulations 261 Air Transportation Regulations, SOR/88-58 262 — section 2 (interpretation) 263 — section 7 (liability insurance) 269 — section 8.1 (financial requirements) 271 — section 8.2 (provision of aircraft with flight crew) 273 — section 8.5 (public disclosure) 276 — section 107 (contents of domestic tariff) 278 Canada Transportation Act, S.C. 1996, c. 10 281 — section 41 (leave to appeal) 282 — section 53 (review of Act) 283 — section 55 (definitions) 284 — sections 57-60 (prohibitions) 288 — section 61 (license for domestic service) 289 — section 64 (discontinuance or redaction of certain services) 290 — section 66 (unreasonable fares or rates) 291 — section 67 (domestic tariff requirements) 294 — section 67.2 (unreasonable conditions) 295 — section 80 (exemption) 302 — section 81 (inquiry) 303 — subsection 86(1) (regulatons) 304 — subsection 86(2) (exclusion not to provide certain relief) 306 — section 174 (offence) 307 Federal Courts Act, R.S.C. 1985, c. F-7 308 — section 44 309 — section 50 310 Federal Courts Rules, S.O.R./98-106 311 — Rule 8 312 — Rule 369 313 — Rule 373 315 National Transportation Act, 1987 [Repealed], R.S.C. 1985, Chap. 28 (3rd Supp.) 316 — section 67 (definitions) 317 — section 71 (prohibition) 320 — section 72 (licensing conditions) 321 — section 76 (discontinuance or reduction) 322 — section 80 (fare regulation) 324 — sections 83-84 (tariffs) 325 B Appendix B – Case Law 326 5 Association des Compagnies de Téléphone du Québec Inc. v. Canada (Attorney General), 2012 FCA 203 327 — paragraph 19 332 — paragraph 30 335 6 Confidential Decision of the National Transportation Agency, dated April 16, 1996 [Greyhound Decision] (redacted version, on public record in File No. A-39-16) 338 7 Determination of whether Duke Jets Ltd. requires a licence pursuant to Part II of the Canada Transportation Act, Canadian Transportation Agency, Decision No. 222-A-2010 346 — page 2 347 8 Determination of application by Air Transat on behalf of itself and Flair, Canadian Transportation Agency, Decision No. 112-A-2016 348 9 Fednav Ltd. v. Fortunair Canada Inc., [1994] F.C.J. No. 1969 350 — paragraph 16 355 10 Lukács v. Canada (Transportation Agency), 2014 FCA 76 357 — paragraph 62 372 11 RJR-MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311 373 — paragraph 50 391 — paragraph 59 394 1 Court File No.: A-242-16 FEDERAL COURT OF APPEAL BETWEEN: DR. GÁBOR LUKÁCS Appellant – and – CANADIAN TRANSPORTATION AGENCY and NEWLEAF TRAVEL COMPANY INC. Respondents NOTICE OF MOTION TAKE NOTICE THAT THE APPELLANT will make a motion in writing to the Court under Rule 369 of the Federal Courts Rules, S.O.R./98-106. THE MOTION IS FOR: 1. An Order pursuant to Rule 8, abridging the timelines for the filing of the responding motion record and the reply in the present motion; 2. An Order pursuant to ss. 44 and 50 of the Federal Courts Act, R.S.C. 1985, c. F-7, and Rule 373: (a) staying the decision of the Canadian Transportation Agency dated March 29, 2016 and bearing Decision No. 100-A-2016 pending disposition of the appeal; and (b) enjoining NewLeaf Travel Company Inc. from operating as an In- direct Air Service Provider [IASP or reseller], unless it posts a per- formance bond and/or security and/or guarantee in the amount of $3,744,000 for the claims of stranded passengers; 2 3. Costs and/or reasonable out-of-pocket expenses of this motion in any event of the cause; and 4. Such further and other relief or directions as the Appellant may request and this Honourable Court deems just. THE GROUNDS FOR THE MOTION ARE: 1. On June 23, 2016, NewLeaf Travel Company Inc. [NewLeaf] began (again) selling tickets to the public for flights within Canada. 2. On July 25, 2016, NewLeaf will begin to transport passengers on 60 non-stop flight segments per week, for a total of up to 9,360 passengers per week. 3. NewLeaf has no license to operate any air service under the Canada Transportation Act [the CTA]. 4. NewLeaf is a shell company, without significant assets. It rents aircraft and crew from Flair Airlines Ltd. [Flair], a licensed airline, to transport passengers by air, but NewLeaf bears the full financial risk and liabil- ity to passengers, because Flair has no contractual relationship with NewLeaf’s passengers. Thus, Flair assumes no risk. 5. NewLeaf is a fledgling, financially unstable company that is unlikely to be able to deliver the services that it has sold or pay compensation to passengers whom it may strand as a result of non-performance. 3 6. The present motion, brought in the public interest, seeks to offer passen- gers who purchased tickets from NewLeaf a somewhat similar protection that was contemplated by Parliament in enacting s. 61(1)(iv) of the CTA. 7. The purpose of the motion is not to shut down NewLeaf, but to ensure that it is NewLeaf and its investors that bear the financial risk rather than the travelling public. In other words, the purpose of the motion is to ensure that NewLeaf puts its money where its mouth is. 8. The amount of financial guarantee of $3,744,000 sought from NewLeaf will allow compensating one week’s load of stranded passengers carried by NewLeaf from their homes to another destination, and is based on the following conservative calculation: (a) NewLeaf carrying 7,488 passengers per week (80% load factor); (b) one half (3,744) of these passengers are travelling from their homes to another destination; and (c) an average repatriation cost of $1,000 per stranded passenger in excess of the amounts paid to NewLeaf.
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    Office Address: Room C4408, YVRInternational Terminal Bldg., 3211 Grant McConachie Way, Richmond BC, V7B OA4 Mailing Address: PO Box #32382, YVR Domestic Terminal, R.P.O., Richmond BC V7B 1W2 January 14, 2016 SENT ELECTRON/CALLY CANADIAN TRANSPORTAT ION AGENCY ENFORCEMENT DIVISION c/o Jeannette Anderson Ottawa, Ontario K1AON9 [email protected] RE: COMPLAINT - UNLICENCED AIR CARRIER OPERATIONS- NEWLEAF TRAVEL COMPANY INC. REFERENCES: A. CTA- Industry Guidance -Air - licences and Charter Permits - https://www.otc­ cta.gc.ca/eng/lice nces-and-cha rte r-perm its B. CTA- Complaints and Disputes - Complaints by Subject - Air Complaints - https://services.otc­ cta.gc.ca/eng/air-complaints C. CTA - Publications - Is your air carrier licenced? - https://www.otc­ cta.gc .ca/eng/pu bl icatio n/your-a i r-ca rrier-licensed OVERVIEW Newleaf Travel Company Inc. ("Newleaf) is an attempt to circumvent the Canadian Transportation Agency ("CTA") financial fitness test, and the Canadian ownership and control requirements of the domestic licensing process. An airline is considerably more than the sum of its inanimate aircraft; it is rather the sum total of the human and financial capital required to promote, market and ultimately sell seat inventory and cargo capacity on the aircraft. Although Flair intends to physically operate the aircraft, it is Newleaf that is transforming those aircraft into an airline with the activities of controlling all marketing efforts, advertising, selling to the public, reservations systems, inventory management, payload control, route selection, determining if flights will actual be operated, scheduling and other key elements. As a result, without Newleaf there would be no air service offered to the public and the control of this air service lies with Newleaf.