When Canada 3000 (“C3”) failed in late 2001, it owed CDN$34m. to various Canadian Airport Authorities and to NAV Canada (“Authorities”). Its planes were leased from a variety of legal titleholders (“Owners”). The Authorities exercised statutory powers to seize the C3 aircraft on account of the debts. The Owners went to Court to recover “their” planes. The Authorities sued the Owners, contending they were jointly and severally liable with C3 for the debts. The Supreme Court ruled on June 9 that: a) The Owners were not jointly and severally liable for the debts; b) The Authorities’ rights take priority and they CAN look to the aircraft (or the security that was posted to allow for their release) to satisfy the debts. The Court found the Owners to be sophisticated business people quite able to assess (and bear) risk. Conversely, the Authorities are obliged by law to provide services to all carriers, regardless of their solvency.See http://scc.lexum.umontreal.ca/en/2006/2006scc24/2006scc24.html
