Ontario Court of Appeal confirms that US General Aviation Revitalization Act of 1994 does not apply to claims filed in Canadian courts

The Ontario Court of Appeal recently released its decision in Thorne v. Hudson Estate, 2017 ONCA 208, which arose out of the crash of a twin-engine Beech aircraft in New York State. The plane, carrying two pilots and one passenger, went down after experiencing a loss of power to one of its engines. The estates of the pilots brought claims in the Ontario Superior Court of Justice against the companies that inspected and maintained the engine (“ATC” and “CAR”), as well as its manufacturer, Continental Motors Inc. ATC and CAR brought third party claims against Continental, alleging negligent manufacture of the engine, misleading repair instructions, and the failure to warn them about certain engine failures.

Continental applied to have the action dismissed on the basis that the claims against it were barred by a US federal statute, the General Aviation Revitalization Act of 1994 (“GARA”). GARA bars civil actions against a manufacturer for death, injury, or property damage arising out of an accident involving an aircraft or component from being brought more than 18 years after the date of delivery of the product to its first purchaser. In this case, the engine had been originally delivered in 1968. Continental therefore argued that, as the crash occurred in the US, GARA applied and barred the claims against it.

The Court of Appeal disagreed, upholding the decision of the lower court judge. First, the “crux” of the claims by the other defendants against Continental was found not to be the negligent manufacture of the engine, but, rather, negligent misrepresentation and failure to warn. The “situs”, or location, of the alleged tort was therefore not New York, but Ontario, where ATC and CAR had received and acted upon Continental’s instructions in maintaining and overhauling the engine. Given the legal principle that the substantive law to be applied to a tort claim is that of the jurisdiction where the tortious activity occurred, Ontario law, rather than New York law, applied. GARA, as a US statute, could therefore have no application.

Second, the Court reasoned that even if the tort were considered to have occurred in New York, GARA would be inapplicable because the claim had been brought in a Canadian court. It cited a decision of the US Ninth Circuit Court of Appeals stating that GARA only regulates the ability of a party to seek compensation from aviation manufacturers in US courts. This is because GARA is procedural, rather than substantive, legislation. Its effect is to start the running of the limitation period for a claim against the manufacturer at the time of delivery of the aircraft or component (rather than the date of the accident, as is typically the case in tort law), but it does not affect the substantive law of torts. Consequently, because the procedural law that applies to a claim is determined by the jurisdiction in which the claim has been brought, not the jurisdiction where the tort occurred, Ontario rules of procedure applied and GARA did not.

Continental is seeking to appeal this decision to the Supreme Court of Canada. However, even if the Supreme Court agrees to hear the appeal, Continental will have an uphill battle to convince the Court of its position. In this author’s view, the decision of the Court of Appeal, and the law on which it relies, are correct, and the result is unlikely to be overturned.

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