Students sue for $350,000 after Calgary-Okotoks Flying School closes

A flight school south of Calgary has been grounded, leaving students without the training they paid for and triggering a series of legal actions including a claim for $350,000 and the seizure of three aircraft used for training.

Eight students are suing the Calgary-Okotoks Flying School Inc. and its directors for nearly $270,000 in tuition fees and are seeking an additional $10,000 each in damages.

The students are also seeking an injunction that would prevent the school from selling its three planes even though the two Cherokee Pipers and a Cessna have already been seized by an aircraft maintenance company for unpaid repair work.

Tim Ulmer,CEO of the schooland one of the defendants in the claim, says he has filed his own lawsuit against the owners of the Okotoks Air Ranch, seeking damages for ending fixed-wing operations at the airport, which he says effectively doomed the school.

"The students are out money. There's no doubt about that. It's unfortunate that that happened," said Ulmer.

It's a turbulent end for a school that started training would-be pilots less than three years ago and was based at a unique community airport that featured a 922-metre asphalt runway nestled in among single family homes south of Calgary.

Students allege breach of agreement

The students say the flight school's decision to close without delivering their training programs is a breach of their agreement with the school under the Consumer Protection Act.

Their statement of claim alleges that up until Aug. 3, the defendants, either individually or collectively, indicated that the training would be "carried out to completion."

However, the students claim the defendants "abandoned" the program earlier than that.

"On or before July 29, 2021, the defendant, the flying school, abandoned the provision of vocational training under its licence issued to the flying school under the Private Vocational Training Act, by ceasing to provide the vocational training before it was complete for all the plaintiffs," the claim alleges.

The students say they were unable to cancel their enrolment or withdraw from the program.

The students say in their claim that the school is legally required to refund all tuition fees that have been paid.

The student with the largest individual claim is for $68,250, while the smallest is for $5,000.

School sues airport

Tim Ulmer says the school is suing the Okotoks Air Ranch for $3.5 million, claiming the airport's decision in June to terminate fixed-wing operations this fall prompted one of his creditors to place liens on the school's aircraft and ultimately seize the planes altogether.

They were flown from Okotoks to the Springbank Airport under a bailiff's enforcement order, says Ulmer.

"[It was a] sad day when you see all these aircraftleave the hangar and go into custody, so to speak," he said in an interview with CBCNews.

According to court documents filed by the students, AVWorks Aerospace Inc.has a lien on the planes under the Garage Keepers' Lien Act for unpaid maintenance work.

Ulmer confirms that information but could not say how much is owed to AVWorks.

He says the company refused to do any more work on the planes following the airport's announcement and took action to recover the money it is owed.

The flight school's statement of claim against Okotoks Air Ranch Limited Partnership states that following the airport's announcement, the school reduced hours, laid off instructors, tried to complete training for students, unsuccessfully tried to find a new location and then ultimately notified Transport Canada that it was suspending its operating licence.

"The airport announced that it was closing, we could not continue on our business, we had to find a new location in order to continue our business, and there are no other locations for us to move to," Ulmer said.

"The defendants' actions and statement clearly and unambiguously communicated an intention to not abide by its obligations under the rental agreement," the claim states.

Ulmer says the school signed a 10-year lease agreement with the airport in July2018.

Airport close to new deal

A representative for the airport owners says he received the statement of claim from the flight school on Tuesday and wanted time to review it before commenting. He did say the closure of the school should not be linked to the announcement regarding the future of fixed-wing aircraft at the airport.

"Fixed wing did not end and is not expected to end," said spokesperson Bill Pringle, who noted that since the announcement in June, a potential buyer for the airport has been found.

"We're quite hopeful that we're going to keep the airport open."

Pringle says the owners are "likely close" to coming up with a long-term solution that would see small planes continue to fly in and out of the airport.

"Tim Ulmer and the flight school made their own choices and they've chosen to close the school," he said.

Refunds for students

Ulmer says it's unfortunate the closure of the school has resulted in at least two lawsuits. However, he says the students could see their tuition refunded if the airport agrees to compensate the school.

"The only path that we really have at our disposal is if the airport is able to come up with some sort of compensation to compensate the students for their losses. Our ability to provide the training is a direct result of their announcement on June 8th," he said.

Ulmer says he is working with his lawyer on a statement of defence in response to the students' claim.

Bryan Labby is an enterprise reporter with CBC Calgary. If you have a good story idea or tip, you can reach him at bryan.labby@cbc.ca or on Twitter at @CBCBryan.