PORT HAWKESBURY: The operators of the Allan J. MacEachen Regional Airport are embroiled in a legal battle.
David Morgan and Celtic Air Services Limited are seeking an injunction in Nova Scotia Supreme Court against Christopher Neville, Axair Aviation Inc., Ava K. Holdings Ltd., and Gateway Facilities ULC.
On Monday in Halifax, Justice Ann Smith adjourned to the case to April 14.
According to court documents provided to The Reporter by the Nova Scotia Judiciary, Morgan is trying to prevent the respondents from exercising security over assets owned by Morgan and by Celtic Air, including a 1979 Cessna 441 Conquest II airplane owned by Axair Aviation.
“Most fundamentally, the motion sees to turn the clock back to the late January/early February, 2022 period when Neville and Ava, and their legal counsel commenced with a series of actions and related conduct which interfered with the normal business operations of Axair and Celtic air,” the applicant brief reads. “This period was immediately prior to aggressive attempts by Neville and Ava to take over Axair for themselves, and to seize all of the assets owned by Morgan personally, and the assets owned by both Celtic Air, and Axair.”
According to the Statement of Claim, Morgan received a text message from Neville on or about Sept. 21, 2021, suggesting that he was prepared to make an investment in Axair since it “required a lager and faster airplane than the one it had available at the time.”
“The seminal event was a new airplane, the Cessna, which would be larger, more luxurious, faster, and with a greater range than anything which Axair and Celtic Air then had to charter,” the brief states.
Among the terms and conditions of Neville’s investment in Axair was the purchase of the Cessna, financed by Ava though a shareholder loan, and sourced by Morgan, the statement said. The statement said the loan was secured by Ava in November, 2021 in the sum of $1,258,207.80.
“As a result of Ava’s investment in Axair, it was ultimately agreed by Morgan and Neville that Axair’s shares, which had been solely owned by Morgan, would be divided between Morgan and Ava, on a 50/50 basis,” the statement reads.
From that time on, the statement of claim states that Axair began the process of importing the aircraft to add it to its chartered fleet.
Three weeks after a series of formal agreements were executed on Jan. 12, 2022, the brief says, “Neville began to act in an aggressive, offensive and erratic manner regarding Morgan and the operations at Axair and Celtic Air. By this time, Neville had also run up a $171,00 account at Axair with respect to his own flights aboard the Cessna, an account which Neville was at the time refusing to pay.”
At this time, the statement charged that Neville started “texting and harassing Cessna’s pilots until late at night,” resulting in the pilots refusing to fly.
After Neville wrote to Gateway that they were exercising their security over the Cessna, Gateway “unilaterally” detained the plane, according to the statement of claim.
Neville next alleged that Axair was in default of the terms of the shareholder agreement, specifically that Morgan refused to provide a third party with a list of confidential and proprietary financial information from Axair and Celtic Air, the brief states.
The brief says that Neville and Ava then attempted “to seize the assets of both Axair and Celtic Air, and to demand that Gateway retain possession of the Cessna,” and Neville “attempted to remove Celtic Air as the manager and operator” of the Allan J. MacEachen Regional Airport.
On or about March 11, the statement contends that Neville and three other people went to the airport “equipped with bolt cutters, with the intention to break into and enter those offices and to seize assets belonging to Axair and Celtic Air. The (RCMP) were summoned and they sent Neville and the others away.”
Nova Scotia RCMP Cpl. Chris Marshall confirmed to The Reporter that on March 11, at approximately 2:50 p.m., Port Hawkesbury RCMP responded to a report of a disturbance on Hector MacInnis Road in Port Hastings.
“Police learned that a group of five people were at the Allan J. MacEachen Regional Airport and they were involved in an ongoing property/legal dispute,” he said via email. “Police attended to keep the peace and no offences were committed. The matter was determined to be a civil issue between the parties and there was no requirement for further police involvement.”
On this same date, the statement of claim says that Neville and the other people then went immediately to the home of one of Axair’s pilots to “threaten and harass the pilot’s pregnant wife” and seize the log books from the Cessna.
The statement states that during this time, Neville was in communication with several creditors , including the Atlantic Canada Opportunities Agency and the Town of Port Hawkesbury to “falsely and maliciously” allege that they took over Celtic Air and Axair.
As a result, the brief asserts that Morgan, Axair, and Celtic Air “have been subjected to significant and serious financial insecurity. And that the business reputations of Morgan, Axair, and Celtic Air have been severely damaged in the marketplace. Axair, in particular, has lost significant new air chartering and related business opportunities…”
The brief then details how Celtic Air and Axair were Morgan’s companies, “he conceived them, incorporated them, operated them, and grew them. It was the opportunity, he thought, to grow them some more, which linked Morgan to Neville, and later Ava, to the acquisition of the Cessna 441 Conquest II airplane.”
After that airplane was acquired in November, 2021, the brief said Neville, “has been bent on the takeover of the Axair for himself, to the exclusion of Morgan and Celtic Air.”
“…The results of Neville’s actions regarding Morgan, Axair, and Celtic Ari have the likely potential to destroy them all financially,” according to the brief.
The brief says that Morgan’s “ability to carry on business has been severely compromised. This in turn has an effect on Morgan’s own finances, as he has effectively been required to prop up both Axair and Celtic Air.”
In the brief, lawyers for Morgan and Celtic Air claim the damages from this could be irreparable as Axair “is having the carpet torn out from under it by a zealous financier whose motives appear to be not in good faith.”
“Without the injunction they seek, they will potentially be eliminated,” the brief said. “Morgan will be left without a source of livelihood, and Axair and Celtic Air will be insolvent.”
And while the damage to Morgan and Axair could be severe, the brief said the same cannot be said for Neville, or Ava, who “stand to lose nothing if the injunction is granted.”
None of these allegations have been proven in court. Legal counsel for Morgan and Celtic Air appeared in court on March 16 and the documents were filed last week in Halifax prior to the hearing on Monday.
The Town of Port Hawkesbury owns the deed to the airport, and it is governed by a committee that also includes the Municipality of the County of Inverness and the Municipality of the County of Richmond. Celtic Air services was contracted to operate the airport.
Port Hawkesbury Mayor Brenda Chisholm-Beaton told The Reporter the town can’t provide much comment since this is a “confidential legal issue.”
“We have been advised of a shareholder dispute at Axair, a company related to Celtic Air, our airport operator,” the mayor said in a statement. “The other shareholder of Axair is attempting to take over Celtic Air. We will be guided by the terms of the airport operators’ agreement relating to any changes in ownership that may occur in the future.”