Decision No. 16-C-A-2013

January 16, 2013

COMPLAINT by Gábor Lukács against Porter Airlines Inc.

 

File No.: 
M 4120-3/12-02317

INTRODUCTION

[1] Gábor Lukács filed a complaint with the Canadian Transportation Agency (Agency), alleging that certain provisions appearing in Rule 18 (Existing Tariff Rules), Responsibility for Schedules and Operations, of the international scheduled services tariff applied by Porter Airlines Inc. (Porter) are:

  1. inconsistent with the legal principles of the Convention for the Unification of Certain Rules for International Carriage by Air – Montreal Convention (Convention), and are not just and reasonable, contrary to section 111 of the Air Transportation Regulations, SOR/88-58, as amended (ATR), and should therefore be disallowed; and
  2. unclear, contrary to section 122 of the ATR.

[2] In answer to the complaint, Porter proposed certain tariff revisions (Proposed Tariff Rules) in an effort to respond to Mr. Lukács’ complaint. In his reply, Mr. Lukács asserted that some of these Proposed Tariff Rules lack clarity, and are inconsistent with the Convention, and are not just and reasonable, and therefore, they should be disallowed.

[3] In this Decision, the Agency will address both Porter’s Existing Tariff Rules and the Proposed Tariff Rules.

ISSUES

[4] The Agency will address the following issues:

With respect to the Existing Tariff Rules:

  1. Do Existing Tariff Rules 18(a) and 18(c) relieve Porter from liability in a manner that is inconsistent with Article 19 of the Convention, and are the provisions reasonable within the meaning of subsection 111(1) of the ATR?
  2. Does Existing Tariff Rule 18(d) relieve Porter from liability for delay in the delivery of checked baggage in a manner that is inconsistent with Article 19 of the Convention?
  3. Does the phrase “Subject to the Warsaw Convention or the Montreal Convention” appearing in Existing Tariff Rule 18(e), render the application of that Rule unclear, contrary to section 122 of the ATR?
  4. Does Existing Tariff Rule 18(e) relieve Porter from liability for damages suffered by passengers occasioned by delay and/or cancellation of flights, contrary to Article 19 of the Convention?
  5. Does Existing Tariff Rule 18(b) retain its meaning following the severing of defective portions from Existing Tariff Rule 18?

With respect to the Proposed Tariff Rules:

  1. Is Proposed Tariff Rule 18(a) worded in a manner that is inconsistent with Article 19 of the Convention? If not, is that Rule unreasonable, contrary to subsection 111(1) of the ATR?
  2. Is Proposed Tariff Rule 18(a) unreasonable, contrary to subsection 111(1) of the ATR, given that the Rule provides that schedules may be changed without notice?
  3. Is Proposed Tariff Rule 18(c) worded in a manner that is inconsistent with Article 19 of the Convention?
  4. Does the use of the term “employees and agents” in Proposed Tariff Rules 18.1(1) and 18.2(b)(i) render those Rules inconsistent with Article 19 of the Convention?
  5. Is the deadline for providing a notice of claim for expenses arising from a delay prescribed in Proposed Tariff Rules 18.1(ii) and 18.1(iii)(A) null and void pursuant to Article 26 of the Convention?
  6. Does the phrase “as determined by the Carrier,” appearing in Proposed Tariff Rules 18.1 and 18.2, render those Rules inconsistent with Article 19 of the Convention?
  7. Does the term “expenses,” appearing in Proposed Tariff Rules 18.1 and 18.2, render those Rules inconsistent with Article 19 of the Convention?
  8. Are Proposed Tariff Rules 18.2(b)(iii), 18.2(b)(iv) and 18.2(d)(i) worded in a manner that is inconsistent with Article 31 of the Convention?
  9. Is Proposed Tariff Rule18.2(c)(i) worded in a manner that is inconsistent with Article 22 of the Convention?

RELEVANT TARIFF AND STATUTORY EXTRACTS

[5] The provisions of the Convention, Existing Tariff Rules, Proposed Tariff Rules and legislation relevant to this matter are set out in the Appendix.

CLARITY AND REASONABLENESS OF TARIFF PROVISIONS

Clarity

[6] The Agency’s jurisdiction in matters respecting international tariffs is set out in Part V, Division II, International Tariffs of the ATR.

[7] Subsection 110(4) of the ATR requires that tariffs must be consistent with the provisions of the ATR, which includes section 122.

[8] Section 122 requires that the terms and conditions of carriage contained in the carrier’s tariff clearly state the carrier’s policy in respect of, at a minimum, specified matters.

[9] More specifically, paragraph 122(a) of the ATR provides that:

Every tariff shall contain

  • (a) the terms and conditions governing the tariff generally, stated in such a way that it is clear as to how the terms and conditions apply to the tolls named in the tariff;

[10] More specifically, subparagraphs 122(c)(v), (x), (xi) and (xii) provide that:

Every tariff shall contain

  • (c) the terms and conditions of carriage, clearly stating the air carrier’s policy in respect of at least the following matters, namely,

[...]

  • (v) failure to operate the service or failure to operate on schedule,

[...]

  • (x) limits of liability respecting passengers and goods,
  • (xi) exclusions from liability respecting passengers and goods, and
  • (xii) procedures to be followed, and time limitations, respecting claims.

[11] The Agency found in Decision No. 249-C-A-2012 (Lukács v. WestJet) that an air carrier meets its tariff obligation of clarity when the rights and obligations of both the carrier and the passenger are stated in such a way as to exclude any reasonable doubt, ambiguity or uncertain meaning.

Reasonableness and conformity with the Convention

[12]  A carrier is required not only to set out its policies in the carrier’s tariff, but also to ensure that with respect to international flights, its tariff is just and reasonable within the meaning of subsection 111(1) of the ATR.

[13]  Subsection 111(1) states:

All tolls and terms and conditions of carriage, including free and reduced rate transportation, that are established by an air carrier shall be just and reasonable and shall, under substantially similar circumstances and conditions and with respect to all traffic of the same description, be applied equally to all that traffic.

[14]  The Agency has stated in previous decisions, such as in Decision No. 249-C-A-2012, that in order to determine whether a term or condition of carriage applied by a carrier is “reasonable” within the meaning of subsection 111(1) of the ATR, a balance must be struck between the rights of passengers to be subject to reasonable terms and conditions of carriage and the particular air carrier’s statutory, commercial and operational obligations.

[15]  The terms and conditions of carriage are set by an air carrier unilaterally without any input from passengers. The air carrier establishes its terms and conditions of carriage in the carrier’s own interests, which may have their basis in purely commercial requirements. There is no presumption that a tariff is reasonable.

[16]  When balancing the passengers’ rights against the carrier’s obligations, the Agency must consider the whole of the evidence and the submissions presented by both parties, and make a determination on the reasonableness or unreasonableness of the term or condition of carriage based on which party has presented the more compelling and persuasive case.

[17]  In his submissions, Mr. Lukács, in addition to setting out concerns regarding the reasonableness and clarity of Porter’s existing and proposed tariff provisions, provides submissions as to whether the provisions conform with the Convention. In keeping with past Agency decisions, where the Agency has determined that a tariff provision that is contrary to the Convention is unreasonable, the Agency will consider the submissions of the parties on the issue of conformity with the Convention.

EXISTING TARIFF RULES

Issue 1: Do Existing Tariff Rules 18(a) and 18(c) relieve Porter from liability in a manner that is inconsistent with Article 19 of the Convention, and are the provisions reasonable within the meaning of subsection 111(1) of the ATR?

Positions of the parties

Mr. Lukács

[18]  Mr. Lukács submits that Article 19 of the Convention imposes strict liability on carriers for delay of passengers and their baggage, creates a presumption of liability, and places the burden of proof of the presence of extenuating circumstances on the carrier.

[19]  He maintains that Porter’s Existing Tariff Rules 18(a) and 18(c) reproduce, to a great extent, “Condition 9,” which used to be printed on the back of tickets of many carriers, and has been held to be invalid by many courts. “Condition 9” provided that:

Carrier undertakes to use its best efforts to carry the passenger and baggage with reasonable dispatch. Times shown in timetables or elsewhere are not guaranteed and form no part of this contract. Carrier may without notice substitute alternate carriers or aircraft, and may alter or omit stopping places shown on the ticket in case of necessity. Schedules are subject to change without notice. Carrier assumes no responsibility for making connections.

[20] Mr. Lukács points out that this provision has attracted judicial scrutiny several times in the past, not only in Canada, but also in the United Kingdom. He submits that in Jones v. Britannia Airways Limited (Chester County Ct, 5th November 1998), the County Court overturned the dismissal of a passenger’s claim for damages for delay. The claim was dismissed by a lower court based on “Condition 9.” On appeal, the County Court held, referring to the Convention for the Unification of Certain Rules Relating to International Carriage by Air signed in Warsaw on 12 October 1929 (Warsaw Convention), that “[...] the provisions contained in the ticket, and the provisions contained within the General Conditions of Carriage for Passengers and Baggage cannot, in my judgment, in any way seek to limit or narrow the rights conferred upon the passenger by virtue of, inter alia, the provisions of Article 19[....]”

[21] Mr. Lukács also points out that, in Canada, the Court of Québec, Small Claims Division reached the same conclusion in Assaf v. Air Transat A.T. Inc., [2002] J.Q. no 8391, and held that “Condition 9” was null and void according to Article 23 of the Warsaw Convention (which is identical in its effect to Article 26 of the Convention). He notes that the conclusion that “Condition 9” is invalid was reaffirmed in Zikovsky v. Air France, 2006 QCCQ 948, where it was held that “Condition 9” both contravenes the Convention and tends to relieve the carrier from performing the essence of the contract.

[22]  Mr. Lukács argues that the effect of Existing Tariff Rules 18(a) and 18(c), that reproduce, to a great extent “Condition 9,” is to pre-empt passengers’ legitimate claims for delay by rendering the notion of “delay” meaningless. He maintains that as delay is the period within which something is postponed or slowed, the notion of delay is meaningful only with respect to a clear deadline and/or schedule for performance of an act. Mr. Lukács asserts that it is impossible to interpret “delay” in the absence of a guaranteed time and/or schedule for performance.

[23] Mr. Lukács submits that the importance of time as part of a contract of carriage has also been recognized by the American courts, for instance in Daniel v. Virgin Atl. Airways Ltd., 59 F. Supp. 2d 986.

[24]  Mr. Lukács claims that the entire purpose of Article 19 of the Convention is to hold carriers accountable for delays, that is, deviation from the times provided in their timetables and/or on tickets, and that in the absence of a clearly defined schedule for performance, the right to compensation for delay conferred upon passengers by Article 19 becomes illusory and unenforceable.

[25]  He submits, therefore, that Existing Tariff Rules 18(a) and 18(c) tend to relieve Porter from liability for delay, and as such, they are inconsistent with the legal principles of the Convention.

Porter

[26]  Porter denies that either Existing Tariff Rule 18(a) or 18(c) purports to exempt Porter from liability for delays in flights or in the delivery of baggage. Porter maintains that these Rules simply provide passengers with notice of the potential for variances in scheduled operations. Porter maintains that these Rules do not state that Porter will never be liable for passengers’ losses resulting from delays.

[27] Porter points out that in Decision No. 252-C-A-2012 (Lukács v. WestJet), the Agency had occasion to consider tariff provisions proposed by WestJet, which were identical in substance to Porter’s Existing Tariff Rules 18(a), 18(b) and 18(d), and did not find any of them to be unreasonable. Porter submits that Mr. Lukács advanced similar arguments in Decision No. 252-C-A-2012 as to the supposed unreasonableness of these provisions, and relied on the same decisions of the Court of Québec, Small Claims Division and the 1998 decisions of the Chester County Court and the U.S. District Court of California in support of those arguments. Porter states that based on the Agency’s analysis of these arguments and this jurisprudence, the Agency rejected the proposition that WestJet’s provisions purported to relieve the carrier from liability.

[28]  Porter argues that the substantive issues before the Agency are identical to those in Decision No. 252-C-A-2012, and that the Agency declined to find any of the proposed provisions unreasonable, and in the case of WestJet’s proposed rules, expressly found that they would be reasonable if filed with the Agency.

[29]  Porter maintains that in light of the Agency’s prior determinations and the law relied on by Mr. Lukács in support with respect to WestJet’s identical provisions, Porter’s tariff provisions are necessarily also reasonable. Porter submits that further, or in the alternative, Mr. Lukács overstates or misstates the effect of the case law on which he relies.

[30] In this regard, Porter submits that in citing the U.S. District Court of California’s consideration of delays under the Warsaw Convention in Daniel, Mr. Lukács stated the extrapolated principle that “[t]he entire purpose of Article 19 of the Convention is to hold carriers accountable for delays, that is, deviation from the times provided in their timetables and/or in the tickets.” Porter argues, however, that it is the incurrence by passengers of damages resulting from avoidable delays that gives rise to liability.

[31]  Porter maintains that there is nothing in the Convention requiring that precise departure and arrival times be included as part of the contract of carriage, nor suggesting that liability ought to result from a carrier’s mere deviation from scheduled times, however minor. Thus, provisions that provide notice of potential deviations from the schedule do not conflict with the Convention and cannot be said to be unreasonable on that basis.

[32]  Porter maintains that the decisions of the Court of Québec, Small Claims Division are similarly unhelpful to Mr. Lukács.

[33] Porter submits that in Decision No. 252-C-A-2012, the Agency noted that “the presence of an outright exclusion from liability for delay in the tariff in Assaf is significant enough to distinguish it” from WestJet’s proposed Rule 12.10, the contents of which mirror Existing Tariff Rule 18(a) and the first sentence of Existing Tariff Rule 18(c). Porter states that while Existing Tariff Rule 18 contains an exclusion in the latter portion of Existing Tariff Rule 18(c), Porter does not propose to maintain this language, such that following its deletion that Rule would be reasonable per the Agency’s analysis in Decision No. 252-C-A-2012.

[34] Porter submits that while Mr. Lukács states that the Court of Québec, Small Claims Division found the “Condition 9” at issue in Zikovsky to be “invalid,” an examination of the Court’s reasons demonstrates otherwise. While the Court states in passing (and in obiter), that the condition under review contradicts [translation] the Convention, this is not properly construed as a holding that the impugned condition was invalid thereunder. Porter maintains that the Court did not engage in any meaningful analysis of the condition’s compliance, or lack thereof, with the Convention. Rather, the Court held that the condition was not binding upon the passenger because its inclusion on the back of the ticket in illegible text did not constitute sufficient notice to bind the passenger. Porter submits that the Court stated that any determination as to the substantive validity of the provision would be governed by Article 1437 of the Civil Code of Québec rather than the Convention and that, as such, no determination in that case has any bearing on this matter.

[35] Porter submits that the Agency is not bound by the determinations of these civil courts, noting that the Agency stated in Decision No. 251-C-A-2012 (Lukács v. Air Canada), that:

Unlike a civil court, the Agency has a mandate to consider the impugned domestic Tariff provisions in the context of the Agency’s enabling legislation which, in the context of this complaint, requires a consideration of the reasonableness of the subject domestic Tariff provisions which might be quite different from a civil court’s consideration of a case. As has been discussed above, the Agency has clearly been given the mandate to review the terms and conditions of carriage established by a carrier from a variety of perspectives, a mandate which may differ from the approach taken by courts in evaluating damage claims.

[36]  Porter concedes that the Existing Tariff Rules require revision, and filed Proposed Tariff Rules in an effort to respect the Convention, and improve the clarity of the Existing Tariff Rules.

Mr. Lukács

[37]  Mr. Lukács submits that Porter purports to quote from its Existing Tariff Rule 18, but that the quote is grossly misleading in that it omits provisions which exclude Porter from liability in a manner that is inconsistent with the Convention. Specifically, Porter has omitted the following provisions:

The carrier is not responsible or liable for failure to make connections or for failure to operate any flight according to schedule, or for a change to the schedule of any flight. The Carrier is not liable for any special, incidental or consequential damages arising from the foregoing (including the carriage of baggage) whether or not the Carrier had knowledge that such damages might be incurred.

[38]  Mr. Lukács maintains that these provisions constitute a substantial difference from the provisions that the Agency considered in Decision No. 252-C-A-2012, and that, as opposed to that Decision, the entire context of Proposed Tariff Rule 18 strongly suggests that Porter will never be liable for delay, or at least leaves such an impression.

Analysis and findings

[39]  Mr. Lukács asserts that Existing Tariff Rules 18(a) and (c), which largely reproduce “Condition 9,” effectively pre-empt passengers’ legitimate claims for delay by rendering the notion of “delay” meaningless. He maintains that the entire purpose of Article 19 of the Convention is to hold carriers accountable for delays, that is, deviation from times set out in the carriers’ timetables and/or on tickets, and that in the absence of a clearly defined schedule for performance, the right to compensation for delay established under Article 19 of the Convention becomes illusory and unenforceable. In support of his position, Mr. Lukács cites various cases that, in his opinion, have held the conditions appearing in Existing Tariff Rules 18(a) and (c) to be invalid, or which have highlighted the importance of time as part of a contract of carriage.

[40]  Porter submits that Existing Tariff Rules 18(a) and (c) simply provide passengers with notice of the possibility that scheduled operations may change, that schedules are not guaranteed, and that nothing in those Rules exempts Porter from liability for delays. Porter argues that the substantive issues in the present case are the same as those in Decision No. 252-C-A-2012, and that, in that Decision, the Agency found that WestJet’s proposed tariff provisions would be reasonable if they were to be filed with the Agency. Porter maintains that the Convention does not require that precise departure and arrival times form part of the contract of carriage.

[41]  Mr. Lukács submits that Porter neglected to mention that part of Existing Tariff Rule 18(c) excludes Porter from liability for failure to make connections, to operate according to schedule, or for changing the schedule of any flight. According to Mr. Lukács, this exclusion constitutes a contravention of the Convention.

Existing Tariff Rule 18(a) and the portion of Existing Tariff Rule 18(c) providing that schedules are subject to change without notice.

[42]  In Decision No. 252-C-A-2012, the Agency addressed the same provision as in the present matter. In that Decision, the Agency found that Mr. Lukács had failed to explain why the failure to include departure and arrival times as part of WestJet’s contract of carriage is contrary to the principles of the Convention. The Agency also found that Mr. Lukács had not explained how the Convention could be read to compel carriers to assume the onerous obligation of guaranteeing precise departure and arrival times as part of the contract of carriage.

[43]  The Agency finds that the cases cited by Mr. Lukács are not persuasive, and that he has not demonstrated why the Agency should find that Existing Tariff Rule 18(a) and the portion of Existing Tariff Rule 18(c), providing that schedules are subject to change without notice, are unreasonable. The Agency finds that Mr. Lukács has not explained how the Convention could be read to compel carriers to assume the onerous obligation of guaranteeing precise departure and arrival times as part of the contract of carriage. The Agency finds that the Existing Tariff Rules at issue are not inconsistent with the Convention, and are therefore not unreasonable.

[44]  With respect to Mr. Lukács’ assertion that the Existing Tariff Rules at issue are otherwise unreasonable, and contrary to subsection 111(1) of the ATR, the Agency finds that Mr. Lukács’ submissions are not compelling. The Agency is of the opinion that carriers should have the latitude required to amend flight schedules based on commercial and operational obligations, including the management of the air carrier’s fleet so as to achieve optimal results, which may benefit both the carrier and passengers, in order to conduct business in a dynamic environment.

[45]  The language in a tariff must be viewed in the light of its function. The Agency views tariffs as having an important consumer protection purpose. For this reason, it has insisted that air carriers make them available not only at their physical places of business, but also online. Recently, the Agency posted on its Web site a sample tariff for air carriers to consider when they create or review a tariff, which serves as a concrete example that a clear, simplified and understandable tariff is achievable. While this sample tariff is only a guide, it contains simplified language and an orderly structure covering provisions before, during and after travel. The desirability of legal precision has to be balanced against the requirement that the tariff be understandable to readers. Overuse of archaic and formal legal language therefore defeats its consumer protection purpose.

[46]  When the Agency interprets tariffs, however, it does so in the context of Canada’s international obligations, including the provisions of the Convention, which are binding on the carriers.

[47]  The Agency, or any court faced with a complaint, will examine the specific facts and the reasonableness of the claim before it. It is simply impractical to write a tariff so precise that it addresses every conceivable situation. The Agency notes that, in the absence of the precise tariff language Mr. Lukács argues for, there is little evidence that passengers have been unwilling to pursue disputes or that courts and tribunals have been unable to render decisions based on the obligations in the Convention.

[48]  The Agency therefore finds that the Existing Tariff Rules at issue are reasonable.

The portion of Existing Tariff Rule 18(c) disclaiming liability for failure to make connections, to operate any flight according to schedule, or for changing the schedule of any flight.

[49]  As noted by Mr. Lukács in his submission, Porter neglected to mention that a provision appearing in Existing Tariff Rule 18(c) exempts Porter from liability for failure to make connections, to operate any flight according to schedule, or for changing the schedule of any flight.

[50]  Article 19 of the Convention provides that:

The carrier is liable for damage occasioned by delay in the carriage by air of passengers, baggage or cargo. Nevertheless, the carrier shall not be liable for damage occasioned by delay if it proves that it and its servants and agents took all measures that could reasonably be required to avoid the damage or that it was impossible for it or them to take such measures.

[51]  Existing Tariff Rule 18(c) is silent on the matter of the liability assumed by Porter should a flight be delayed, and Porter is unable to provide the proof required by Article 19 of the Convention to relieve itself from such liability. The Agency finds that the absence of a provision to this effect renders Existing Tariff Rule 18(c) inconsistent with Article 19 of the Convention, and that Rule is therefore unreasonable.

Issue 2: Does Existing Tariff Rule 18(d) relieve Porter from liability for delay in the delivery of checked baggage in a manner that is inconsistent with Article 19 of the Convention?

Positions of the parties

Mr. Lukács

[52]  Mr. Lukács maintains that Existing Tariff Rule 18(d): relieves Porter from the duty to transport passengers’ baggage on the same flight as the passenger if sufficient space is not available; purports to permit Porter to delay a passenger’s baggage if sufficient space is not available; and, relieves Porter from all liability for the delay. He maintains that this provision is absurd, and a colourable attempt to circumvent Article 19 of the Convention.

[53] Mr. Lukács submits that, with respect to a carrier’s duties in relation to checked baggage, it was held in Cohen v. Varig Airlines, 380 N.Y.S.2d 450 (aff’d 405 N.Y.S.2d 44) that:

[…] The rights of the traveling public “includes the right to stop and receive their baggage at any regular station or stopping place for the (vehicle) on which they may be traveling. Any regulation that deprives them of that right is necessarily arbitrary, unreasonable, and illegal […]

[54]  Mr. Lukács argues that the legal principles of Article 19 of the Convention require a carrier to take all necessary measures reasonably required to avoid a situation in which a passenger’s baggage is delayed. He submits that one of these measures is to control the weight and volume of checked baggage that a carrier accepts and the number of seats sold. In other words, no carrier should sell more seats than passengers (and their luggage) than it can carry. Mr. Lukács maintains that if a carrier nevertheless does so, then it is liable for the damages arising from the delay pursuant to Article 19 of the Convention.

[55]  Mr. Lukács concludes that Existing Tariff Rule 18(d) is a provision that tends to relieve Porter from liability for delay of checked baggage, and as such, it is inconsistent with the legal principles of the Convention.

Porter

[56]  Porter denies that Existing Tariff Rule 18(d) purports to exempt Porter from liability for a delay in the delivery of baggage, and maintains that the Rule simply notifies passengers of the possibility of variances in scheduled operations. Porter asserts that Existing Tariff Rule 18(d) does not state that Porter will never be liable for losses resulting from a delay.

Analysis and findings

[57]  In Decision No. 252-C-A-2012, the Agency, in considering a provision identical to that of Existing Tariff Rule 18(d), stated that:

[109] Proposed Tariff Rule 12.12 recognizes that situations may arise where, because of insufficient space on the aircraft, WestJet is unable to carry a passenger’s baggage on the flight on which the passenger is being transported. The Agency does not agree with Mr. Lukács’ submission that the Rule represents an exemption from liability. The Agency finds that, in accordance with the principles of the Convention, WestJet would remain liable for any damages incurred by a passenger to whom this provision may apply.

[58]  The Agency is of the opinion that Mr. Lukács has not introduced any submissions in the present matter that would persuade the Agency to reach a finding different from that rendered in Decision No. 252-C-A-2012. The Agency does not agree that Existing Tariff Rule 18(d) represents an exemption from liability under Article 19 of the Convention, and finds that Porter would remain liable for any damages incurred by a passenger to whom this provision may apply. The Agency therefore finds that Existing Tariff Rule 18(d) is reasonable.

Issue 3: Does the phrase “Subject to the Warsaw Convention or the Montreal Convention,” appearing in Existing Tariff Rule 18(e), render that Rule unclear, contrary to section 122 of the ATR?

Positions of the parties

Mr. Lukács

[59] Mr. Lukács points out that the Agency considered the phrase “Subject to the Warsaw Convention or the Montreal Convention,” appearing in Air Canada’s international tariff, and in its Decision No. LET-C-A-29-2011 (Lukács v. Air Canada) held that:

...The substantive wording of Rule 55(C)(7), on its face, indicates that Air Canada has no liability for loss, damage or delay of baggage and only in exceptional situations (i.e., “Subject to the Convention”). In fact, it is the reverse which applies, namely Air Canada does have liability for loss, damage or delay of baggage and only in exceptional circumstances is Air Canada able to raise a defence to a claim for liability or invoke damage limitations. The wording of the existing and proposed Rule 55(C)(7) is more likely to confuse passengers, rather than clearly inform passengers, regarding the applicability of Air Canada’s limit of liability. Accordingly, the Agency finds Rule 55(C)(7) in itself is unclear and that the phrase “Subject to the Convention, where applicable” renders the application of Rule 55(C)(7) unclear. ...

[60]  Mr. Lukács submits that these findings of the Agency apply equally to Existing Tariff Rule 18(e).

Porter

[61]  Porter submits that any deficiencies in the clarity of Existing Tariff Rule 18(e) are addressed in Porter’s proposed revision to that Rule.

Analysis and findings

[62]  The Agency is of the opinion that the wording appearing in Existing Tariff Rule 18(e) is likely to confuse passengers, rather than clearly inform them of the applicability of Porter’s limit of liability. As such, that Rule fails to satisfy the clarity test set out earlier in this Decision that provides that an air carrier meets its tariff obligation of clarity when the rights and obligations of both the carrier and the passenger are stated in such a way as to exclude any reasonable doubt, ambiguity or uncertain meaning. Accordingly, the Agency finds Existing Tariff Rule 18(e) to be unclear, contrary to section 122 of the ATR.

Issue 4: Does Existing Tariff Rule 18(e) relieve Porter from liability for damages suffered by passengers occasioned by delay and/or cancellation of flights, contrary to Article 19 of the Convention?

Positions of the parties

Mr. Lukács

[63]  Mr. Lukács submits that Existing Tariff Rule 18(e) is worded in a way that appears to exclude itineraries that are subject to the Convention or the Warsaw Convention, and that the Rule constitutes a blanket exclusion of liability that relieves Porter from any and all liability for damages to its passengers occasioned by delay and/or cancellation of flights. He asserts that this is inconsistent with the legal principles of Article 19, which permit a carrier to relieve itself from liability for delay only in very specific circumstances, and places the burden of proof to show the presence of exonerating circumstances on the carrier.

Porter

[64]  Porter maintains that any deficiencies in the reasonableness of Existing Tariff Rule 18 are addressed in Porter’s Proposed Tariff Rules.

Analysis and findings

[65] In Decision No. 291-C-A-2011 (Lukács v. Air Canada), the Agency considered whether a baggage liability provision appearing in Air Canada’s international tariff was inconsistent with the Convention and the Warsaw Convention. In that Decision, the Agency noted that the effect of the provision was to create a blanket exclusion of liability which relieves Air Canada from all liability regarding loss, damage and delay of baggage containing certain items. The Agency concluded that the provision was inconsistent with the principles of the Convention, and as a result, disallowed that provision.

[66]  Given the foregoing, the Agency finds that Existing Tariff Rule 18(e) is inconsistent with the Convention, and that the Rule is therefore unreasonable.

Issue 5: Does Existing Tariff Rule 18(b) retain its meaning following the severing of defective portions from Existing Tariff Rule 18?

Positions of the parties

Mr. Lukács

[67] Mr. Lukács points out that, in Decision No. 208-C-A-2009 (Lukács v. Air Canada), the Agency held that:

When portions of a section of a contract are determined to be null and void, consideration has to be given as to whether the defective portions can be severed from the section and leave meaning to the remaining wording of the section.

[68]  Mr. Lukács submits that although Existing Tariff Rule 18(b) has not been challenged in this complaint, it is part and parcel of Existing Tariff Rule 18, whose majority is inconsistent with the principles of the Convention, and that this circumstance very strongly militates in favour of disallowing Existing Tariff Rule 18 in its entirety as not being just and reasonable.

Porter

[69]  Porter submits that in seeking to have the entire Existing Tariff Rule disallowed, Mr. Lukács requests the disallowance of a provision, Existing Tariff Rule 18(b), which he acknowledges “has not been challenged in the present complaint,” and which he does not suggest is unclear or unreasonable. Porter therefore contests Mr. Lukács’ submission that Existing Tariff Rule 18 must be disallowed in its entirety.

Analysis and findings

[70]  Mr. Lukács maintains that because Existing Tariff Rule 18(b) is part and parcel of Existing Tariff Rule 18, most of which is inconsistent with the Convention, it should be disallowed. Porter asserts that given that Mr. Lukács has not challenged the reasonableness of Existing Tariff Rule 18(b), such Rule should not be disallowed.

[71]  As noted by Mr. Lukács, in Decision No. 208-C-A-2009, the Agency established the approach to be taken when considering the totality of a tariff rule when some provisions of that rule are disallowed. This approach requires that, when portions of a tariff are determined to be null and void, the Agency consider whether the defective portions of the tariff can be severed from the remaining tariff and leave meaning to that tariff. Applying that approach to the present matter, the Agency finds that Existing Tariff Rule 18(b) retains meaning, despite the disallowance of certain provisions appearing in Existing Tariff Rule 18.

PROPOSED TARIFF RULES

Issue 1: Is Proposed Tariff Rule 18(a) worded in a manner that is inconsistent with Article 19 of the Convention? If not, is that Rule unreasonable, contrary to subsection 111(1) of the ATR?

Positions of the parties

Porter

[72]  Porter submits that Proposed Tariff Rules 18(a) and 18(b) precisely mirror the wording of WestJet’s proposed Rules 12.10 and 12.11, which were addressed in Decision No. 252-C-A-2012. Porter points out that, in that Decision, the Agency found that the proposed Rules were consistent with the Convention, and were therefore not unreasonable.

Mr. Lukács

[73]  Mr. Lukács submits that he is challenging Proposed Tariff Rule 18(a) not only based on Articles 19 and 26 of the Convention, but also based on subsection 111(1) of the ATR. He submits that there are three distinct options for treating timetables and schedules in the tariff of a carrier:

  1. Timetables are not guaranteed, and schedules are subject to change without notice.
  2. Timetables are guaranteed, and schedules cannot be changed without notice and/or consent of the passengers.
  3. Silence: determination of what constitutes a delay is left to the court or tribunal based on the circumstances of each case.

[74] Mr. Lukács asserts that Option 1 deprives and/or purports to deprive and/or leaves the impression of depriving a court or tribunal seized with a case from making its own determinations about whether the facts amount to a delay within the meaning of Article 19 of the Convention by effectively allowing Porter to argue “oh, that was not an 8-hour-delay, but rather a schedule change.” He submits that the cases cited in his complaint clearly demonstrate that this is not a remote possibility, but rather a common response of air carriers to complaints of passengers in relation to delay (see Jones, Assaf and Zikovsky.)

[75]  Mr. Lukács maintains that all courts that have considered Article 19 of the Convention used the scheduled departure and arrival times as a point of reference for determining whether a delay took place and the length of that delay. He indicates that this does not mean that carriers are required to honour precise departure and arrival times as part of their contract, but that it demonstrates that timetables are an important tool in the hands of a court or tribunal seized with a matter to make the required case-by-case assessment.

[76]  Mr. Lukács submits that the absence of clear language from Proposed Tariff Rule 18 to the effect that “schedule change” and “delay” are not exclusive of each other, but can coexist in some situations, leaves the impression that one excludes the other: either an incident is a “schedule change” (and not a “delay”) or it is a “delay” (and not a “schedule change”). He notes that the shortcoming of Proposed Tariff Rule 18(a) is not that the Convention requires adhering to precise departure and arrival times, but rather that it pre-empts and/or leaves the impression of pre-empting the meaning of “delay,” or in other words, Proposed Tariff Rule 18(a) makes it impossible for a passenger to establish that a delay took place, because it allows the carrier to argue that it was not a “delay” but rather a “schedule change.”

[77]  Mr. Lukács maintains that Proposed Tariff Rule 18(a) also allows the carrier to avoid liability and compensating passengers under Proposed Tariff Rules 18.1 and 18.2 by giving a different name to an incident, namely, calling it a “schedule change” and denying that it is a “delay.” He asserts that the effect of Proposed Tariff Rule 18(a) is that passengers may be denied their rights for compensation under Article 19 of the Convention by the carrier renaming a “delay” to a “schedule change.” Mr. Lukács argues that, as such, based on the principles of Decision No. 252-C-A-2012, Proposed Tariff Rule 18(a) ought to be disallowed.

[78]  According to Mr. Lukács, he has no issue with Porter making changes to its timetables and schedules before any seats are sold on the affected flights, but does take issue with changes affecting flights on which at least one seat was sold. He indicates that, currently, there is no evidence on the record to explain why making post-sale changes to Porter’s schedule is necessary in order for Porter to meet its statutory, commercial and operational obligations. Mr. Lukács states that he is prepared to accept that certain operational obligations (related to changes in weather, airport facilities, airways, runway conditions, etc.) may require some very minor adjustments of a carrier’s schedule, on the scale of five to ten minutes. He argues that, at the same time, once seats have been sold on a particular flight, the carrier is expected to operate the flight at the times displayed on the tickets that were sold.

[79]  Mr. Lukács points out that many passengers pay their fares well in advance, and often at a lower, but non-refundable and non-changeable fare. Mr. Lukács contends that if a “schedule change” takes place a few days or weeks before the departure date, passengers will no longer be able to purchase a similarly discounted fare from a competitor, even if they are given a full refund by Porter.

[80]  Mr. Lukács submits that while very minor adjustments to the schedule, on the scale of five to ten minutes, may be reasonable, it is unreasonable for a carrier to be allowed to make substantial changes to its schedule after it sold seats on the flights affected by the schedule. He therefore maintains that Proposed Tariff Rule 18(a) ought to be disallowed in its present form.

Analysis and findings

[81]  Mr. Lukács submits that the absence of clear language from Proposed Tariff Rule 18 to the effect that “schedule change” and “delay” are not exclusive of each other, but can coexist in some situations, leaves the impression that one excludes the other: either an incident is a “schedule change” (and not a “delay”) or it is a “delay” (and not a “schedule change”). He maintains that Proposed Tariff Rule 18(a) makes it impossible for a passenger to establish that a delay took place, because it allows the carrier to argue that it was not a “delay” but rather a “schedule change”, and that the effect of that Rule may be to deny passengers their rights for compensation under Article 19 of the Convention. Mr. Lukács also argues that it is unreasonable for carriers to make substantive changes to its schedules after it has sold seats on the flights affected by the schedule changes.

[82]  The Agency does not find Mr. Lukács submissions relating to the application of Article 19 of the Convention to this particular matter to be compelling, nor the case law helpful.

[83]  As noted above respecting the reasonableness of Porter’s Existing Tariff Rules relating to revisions of schedules, the Agency is of the opinion that carriers should have the latitude required to amend flight schedules based on commercial and operational obligations, including the management of the air carrier’s fleet so as to achieve optimal results, which may benefit both the carrier and passengers, in order to conduct business in a dynamic environment. The Agency therefore finds that the wording in Proposed Tariff Rule 18(a) would be found to be reasonable, if filed with the Agency.

Issue 2: Is Proposed Tariff Rule 18(a) unreasonable, contrary to subsection 111(1) of the ATR, given that the Rule provides that schedules may be changed without notice?

Positions of the parties

Mr. Lukács

[84]  Mr. Lukács disputes the notion that a carrier owes no duty to give notice to affected passengers of a change in the carrier’s schedules, even for flights on which the carrier has already sold tickets. He maintains that transportation by air, as opposed to travelling by bus, requires significant preparations for the passenger: travelling to an airport that is located some distance from the passenger’s residence, checking in, clearing security, and then boarding the flight. Due to natural and fully justifiable operational considerations, carriers set deadlines for completing each of these steps. Mr. Lukács submits that, typically, the consequence of missing those deadlines is a loss of the assigned seat at the very least, and possibly cancellation of the passenger’s reservation. He notes that, in the case of Porter, the deadlines are found in Existing Tariff Rule 21:

Rule 21 Check-in Requirements

In addition to any other check in requirements set out in this tariff, the following check-in requirements must be complied with:

  1. a passenger must have obtained his/her boarding pass and checked any baggage by the check-in deadline below and must be available for boarding at the boarding gate by the deadline shown below. Failure to meet these deadlines may result in the loss of the passenger’s assigned seat or the cancellation of the passenger’s reservation.

[85]  Mr. Lukács submits that the deadlines provided in Existing Tariff Rule 21 are all relative to the published departure time of the flights, and if the departure time of a flight changes, the respective deadlines change accordingly. He asserts that passengers have a vital interest in being informed about changes to the departure times of their flights, especially if a flight is rescheduled to an earlier time.

[86]  Mr. Lukács claims that there is no evidence on the record demonstrating how not giving notice of schedule changes, or doing so without notice, affects a carrier’s statutory, commercial and operational obligations. He therefore submits that the portion of Proposed Tariff Rule 18(a) that relieves Porter from the obligation to provide timely notice to its passengers of schedule changes, when considered together with Existing Tariff Rule 21, is unreasonable.

Analysis and findings

[87]  Mr. Lukács maintains that it is unreasonable for a carrier to not provide notice of schedule changes to affected passengers. The Agency, for the most part, agrees with Mr. Lukács’ submission. In this regard, the Agency notes that some Canadian carriers, including Air Canada, have tariff provisions that provide that passengers have a right to information on flight times and schedule changes, and that carriers must make reasonable efforts to inform passengers of delays and schedule changes, and the reasons for them. The Agency finds that such provisions are reasonable, and that, in this regard, the rights of passengers to be subject to reasonable terms and conditions of carriage outweigh any of the carrier’s statutory, commercial or operational obligations. The Agency therefore finds that the absence of similar provisions in Porter’s Existing Tariff Rules would render Proposed Tariff Rule 18(a) unreasonable, if filed with the Agency.

Issue 3: Is Proposed Tariff Rule 18(c) worded in a manner that is inconsistent with Article 19 of the Convention?

Positions of the parties

Porter

[88]  Porter submits that the inclusion of Proposed Tariff Rule 18(c) expressly indicates that passengers have remedies under the tariff for delays in certain circumstances.

Mr. Lukács

[89]  Mr. Lukács submits that it is unclear what remedies Porter refers to, as the delivery of delayed baggage to the passenger [Proposed Tariff Rule 18.2(c)(iii)] is not an additional remedy, but rather a late performance of the contract of carriage. He contends that, in particular, the disjunctive “or” found in Proposed Tariff Rule 18(c) is misleading, and leaves the impression that in some situations, accepting “other remedies” excludes monetary compensation.

[90]  Mr. Lukács maintains that the phrase “in certain circumstances” in Proposed Tariff Rule 18(c) leaves the impression that Porter is liable for damage occasioned by delay only in exceptional cases, and not as the general rule. According to Mr. Lukács, this is the complete opposite of the strict liability regime imposed by Article 19 of the Convention, which holds Porter liable for delay in general, and permits it to exonerate itself from liability only in certain circumstances (the presence of which it has to demonstrate.) Mr. Lukács claims that, as a result, the phrase “in certain circumstances” is misleading. Mr. Lukács submits that the entire Proposed Tariff Rule 18(c) ought to be reworded, or alternatively, the phrase “in certain circumstances” ought to be deleted, and the word “or” ought to be replaced with “and.”

Analysis and findings

[91]  Mr. Lukács argues that the inclusion of the words “or other remedies” in Proposed Tariff Rule 18(c) renders its application unclear, and that the phrase “in certain circumstances” seems to restrict Porter’s liability in a manner that is inconsistent with Article 19 of the Convention.

[92]  Article 19 of the Convention provides that:

The carrier is liable for damage occasioned by delay in the carriage by air of passengers, baggage or cargo. Nevertheless, the carrier shall not be liable for damage occasioned by delay if it proves that it and its servants and agents took all measures that could reasonably be required to avoid the damage or that it was impossible for it or them to take such measures.

[93]  The Agency is of the opinion that Proposed Tariff Rule 18(c) is worded in such a fashion as to suggest that remedies, other than compensation, may be provided if the delivery of baggage is delayed. Article 19 of the Convention, however, clearly stipulates that the carrier is liable for damage arising from such a delay. Any provision proposing the contrary is inconsistent with Article 19 of the Convention.

[94]  With respect to the phrase “in certain circumstances,” the Agency is of the opinion that this phrase qualifies the liability assumed by Porter in a manner that is inconsistent with Article 19 of the Convention. Article 19 allows an air carrier to relieve itself from liability only if that carrier can demonstrate that “it and its servants and agents took all measures that could reasonably be required to avoid the damage or that it was impossible for it or them to take such measures.” Proposed Tariff Rule 18(c) seems to broaden the conditions, beyond the condition set out in Article 19, under which a carrier can relieve itself from liability. The Agency finds that Proposed Tariff Rule 18(c) is inconsistent with Article 19 of the Convention, and would be found to be unreasonable if filed with the Agency.

Issue 4: Does the use of the term “employees and agents” in Proposed Tariff Rules 18.1(1) and 18.2(b)(i) render those Rules inconsistent with Article 19 of the Convention?

Positions of the parties

Mr. Lukács

[95]  Mr. Lukács submits that the terms “servants” and “agents” in Article 19 of the Convention have a well-established history and meaning in case law, and that the meaning is not identical to the phrase “employees and/or agents” appearing in Proposed Tariff Rules 18.1 and 18.2. He contends that the terms “servants” and “agents” play a central role in the Warsaw Convention, its various amendments, and the Convention.

[96]  Mr. Lukács maintains that the well-established criterion for who are “servants and/or agents” of a carrier for the purpose of the Conventions is the “furtherance of the contract of carriage” test, which provides that:

Agents and servants within the scope of the Conventions are those performing services in furtherance of the contract of carriage. They can act independently, and they can be employed or self-employed, provided that they act in execution of a duty which was assigned to them by the carrier.

[97]  He submits that, according to this principle, the following are generally considered “servants or agents” of a carrier: the flight service manager and the technical service manager of an air traffic business, as well as security officers on the flight (if any); the handling agents of another air carrier who carry out tasks for this carrier; the airport operator (and in particular also insofar as it operates the boarding equipment); the passenger movement area transporter; the fuel supplier who is established at the airport; the air traffic controllers (so long as they carry out duties of airport safety); the air cargo forwarding company; the charterer of the aircraft, and the cargo receiving office.

[98]  Mr. Lukács states that, in the opinion of the U.S. District Courts, a private business which performs security checks of passengers and baggage is also considered a “servant or agent” of the air carrier. He submits that, similarly, if security measures are carried out by government bodies or by the airport authorities at the request of individual air carriers, they are considered to be “servants or agents” of the carrier while carrying out their tasks, notwithstanding the fact that they are obviously not under the direction or control of the carrier.

[99]  Mr. Lukács concludes that the meaning of “employees” is not the same, but narrower than the meaning of “servants” in the context of the interpretation of the Convention, and that, as such, the Proposed Tariff Rules tend to relieve Porter from liability under Article 19 of the Convention.

[100]  He therefore submits that the word “employees” ought to be substituted with “servants” in Proposed Tariff Rules 18.1(i) and 18.2(b)(i), in order to match the language of Article 19 of the Convention.

Analysis and findings

[101]  Mr. Lukács maintains that the use of the term “employees” in Proposed Tariff Rules 18.1(i) and 18.2(b)(i), rather than the term “servants,” narrows the scope of Porter’s liability for damages arising from flight delays and the delay in delivery of baggage, and fails to reflect Article 19 of the Convention. He sets out a list of parties that he submits are servants or agents of an air carrier.

[102]  The Agency does not agree with Mr. Lukács’ claim, and finds that the use of the term “employees” in the Proposed Tariff Rules, rather than the term “servants,” does not narrow the scope of Porter’s liability for damages arising from flight delays and the delay in delivery of baggage.

[103]  More importantly, and to avoid a largely sterile debate over who is or is not a servant or agent, the Agency directs the parties to the phrasing in the first sentence of Article 19: “The carrier is liable for damage occasioned by delay in the carriage by air of passengers, baggage or cargo.”

[104] Contrary to the competing assertions of Mr. Lukács and Porter, there is no need to focus on delay caused by servants, employees and/or agents or to winnow in minute detail who is or is not a servant, an employee or agent. In short, the first sentence of Article 19 states clearly that the carrier is liable for delay. Article 19 only brings the carrier’s servants and agents into play in terms of avoidance of liability when it has proved that these personnel took all measures that could reasonably be required to avoid the damage or that it was impossible for it or them to take such measures.

[105] Accordingly, what is at issue, in terms of avoiding liability for delay, is not who caused the delay but, rather, how the carrier reacts to a delay. In short, did the carrier’s servants and agents do everything they reasonably could in the face of air traffic control delays, security delays on releasing baggage, delays caused by late delivery of catered supplies or fuel to the aircraft and so forth, even though these may have been caused by third parties who are not directed by the carrier?

[106]  Also, Mr. Lukács’ list of who is generally considered a servant or an agent is not helpful as the Agency is of the opinion that the issue of who is a servant or agent of the air carrier can only be determined on a case-by-case basis after an examination as to whether such servant or agent was used to fulfill the carrier’s obligations and out of a contract for air carriage.

[107]  The Agency finds that if Proposed Tariff Rules 18.1(i) and 18.2(b)(i) were filed with the Agency, they would be found to be reasonable.

Issue 5: Is the deadline for providing a notice of claim for expenses arising from a delay prescribed in Proposed Tariff Rules 18.1(ii) and 18.1(iii)(A) null and void pursuant to Article 26 of the Convention?

Positions of the parties

Mr. Lukács

[108]  Mr. Lukács states that Proposed Tariff Rule 18.1(ii) requires passengers not only to provide notice of their claim, but also to provide evidence substantiating the claim within 72 hours. He argues that this requirement is not only void under Article 26 of the Convention, but is also contrary to common sense to expect passengers to act in such a short time frame.

[109] Mr. Lukács submits that Proposed Tariff Rule 18.1(iii)(A) has the same effect as Rule 55(D)(7), which was considered in Decision No. 99-C-A-2011 (Kouznetchik v. American Airlines), Mr. Lukács points out that, in that Decision, the Agency determined that the tariff provision at issue was in contravention of the Convention, in that the provision purported to relieve American Airlines of any liability if the passenger failed to file a claim for delay (of the passenger) within a prescribed time limit.

[110]  Mr. Lukács contends that, as the drafters of the Convention chose not to prescribe any time frame for notifying the carrier about claims in the case of delay of passengers, the only applicable limitation is the one found in Article 35 of the Convention, which provides two years for commencing an action.

[111]  He concludes that, as Proposed Tariff Rule 18.1(iii)(A) purports to extinguish passengers’ rights for damages after 72 hours, it is a provision tending to relieve Porter from liability under the Convention, and that, as such, the Proposed Tariff Rule is null and void by Article 26 of the Convention. Mr. Lukács maintains that Proposed Tariff Rules 18.1(ii) and 18.1(iii)(A) ought to be disallowed for being unreasonable.

Analysis and findings

[112]  Mr. Lukács submits that the requirement, appearing in Proposed Tariff Rule 18.1(ii), that passengers seeking compensation for expenses arising from a flight delay provide, within 72 hours of that delay, a written notice of the claim, supported by particulars of the expenses incurred, and relevant receipts or documents, is null and void pursuant to Article 26 of the Convention.

[113]  As noted by Mr. Lukács, the Convention is silent on the specific matter of time frames for filing of claims relating to flight delays.

[114]  Article 35 of the Convention provides that:

The right to damages shall be extinguished if an action is not brought within a period of two years, reckoned from the date of arrival at the destination, or from the date on which the aircraft ought to have arrived, or from the date on which the carriage stopped.

[115]  The Agency is of the opinion that, in imposing a deadline of 72 hours within which to file a claim, and possibly disqualifying a claim, pursuant to Proposed Tariff Rule 18.1(iii)(A), which fails to satisfy that deadline, Proposed Tariff Rule 18.1(ii) establishes a deadline which is inconsistent with that prescribed by Article 35 of the Convention. The Agency therefore finds that Proposed Tariff Rules 18.1(iii)(A) and 18.1(ii) would be found to be unreasonable if filed with the Agency.

Issue 6: Does the phrase “as determined by the Carrier,” appearing in Proposed Tariff Rules 18.1 and 18.2, render those Rules inconsistent with Article 19 of the Convention?

Positions of the parties

Mr. Lukács

[116]  According to Mr. Lukács, Proposed Tariff Rules 18.1 and 18.2 contain several references to the discretion that Porter purports to have in determining compensation in the case of delay of baggage and passengers. He submits that there is no doubt that a carrier is entitled to reasonable proof of damages before it compensates passengers, but that Proposed Tariff Rules 18.1 and 18.2 go beyond that, and place the carrier in the position of a judge or adjudicator who is entitled to determine, in a conclusive way, the rights of passengers, and whose decision is to attract deference (as suggested by reference to reasonableness).

[117]  Mr. Lukács maintains that Proposed Tariff Rules 18.1(iii)(C) and 18.2(d)(iii) purport to subject the rights of passengers to the carrier’s discretion, or at least leave the impression that the carrier has such discretion. He submits that the problem with these Proposed Tariff Rules is that they not only confer an obligation on the carrier to pay compensation, but they go further, and purport to release the carrier from that obligation based on the carrier’s own determination of “acting reasonably.”

[118]  Mr. Lukács argues that there is nothing in the Convention to allow a carrier to limit its liability based on its own determination of which expenses are reasonable, and that the Agency or court seized with a claim of a passenger that comes within the scope of Proposed Tariff Rules 18.1 and 18.2 should consider the amount of reimbursement paid to passengers on the basis of correctness (i.e., compliance with the Convention) and not reasonableness (i.e., whether the carrier acted reasonably in assessing the claim.)

[119]  Mr. Lukács points out that a similar question was considered by the Agency in Decision No. 249-C-A-2012, in which the Agency stated:

[150] In addition, although WestJet might, in appropriate circumstances, in situations of delay give the passenger the option to choose among one or more remedies, this does not necessarily mean that the carrier will have met the requirements of Article 19. In effect, WestJet’s Proposed Tariff Rule 15.6 is a predetermination by WestJet that the alternative measures offered by it are reasonable measures pursuant to Article 19, and that offering these measures relieves WestJet from liability under that Article.

[151] The Agency is of the opinion that WestJet is depriving the passenger of their rights under the law through a contract of adhesion which it has unilaterally developed and imposed on the passenger.

[152] The Proposed Tariff Rule leaves to WestJet the determination as to what is a reasonable remedy for delay, which might be appropriate for circumstance-focussed determinations pursuant to that Proposed Tariff Rule, but might not be appropriate for the purposes of Article 19.

[120]  Mr. Lukács submits that the references to the carrier’s discretion and determination in Proposed Tariff Rules 18.1 and 18.2 are provisions tending to relieve Porter from liability under Article 19 of the Convention, and as such they are void by Article 26. He further submits that these Proposed Tariff Rules could be saved by simply deleting the phrase “as determined by the Carrier, acting reasonably.”

Analysis and findings

[121]  Mr. Lukács maintains that the inclusion of the phrase “as determined by the Carrier” in several instances under Proposed Tariff Rules 18.1 and 18.2, purports to release Porter from the obligation to tender compensation based on Porter’s own determination, that there are no provisions in the Convention which allow a carrier to limit its liability based on its own determination as to which expenses are reasonable, and that, in Decision No. 249-C-A-2012, the Agency has already addressed this particular matter.

[122]  With respect to Mr. Lukács’ submission regarding the application of Decision No. 249-C-A-2012, to this matter, the Agency’s determination in that Decision related to a proposed tariff provision by WestJet which provided that should a passenger accept alternative remedies, that acceptance shall be in full and final satisfaction of all claims by the passenger. The Agency expressed the opinion that the tariff provision at issue would deprive the passenger of their rights under the law through a contract of adhesion which WestJet has unilaterally developed and imposed on the passenger. The Agency is of the opinion that Proposed Tariff Rules 18.1 and 18.2 are not related to the specific provision which was addressed in Decision No. 249-C-A-2012, and that the determination made by the Agency in that Decision respecting that provision, is not relevant to this matter.

[123]  With respect to Mr. Lukács’ assertion that the use of the term “as determined by the Carrier” relieves Porter from the obligation to compensate a passenger based on Porter’s own determination, the Agency does not agree with that assertion. In this regard, it is understood that, when presented with a claim for compensation, the carrier itself must first determine whether that claim is legitimate, including whether the carrier is, in fact, liable under the Convention, with reference to, for example, Articles 19 and 20. The disposition by the carrier of that claim is then subject to complaint, for example, to the Agency, which will determine whether the carrier has acted in a manner that is consistent with the carrier’s tariff and the Convention. The Agency does not accept Mr. Lukács’ submission, therefore, that the inclusion of the phrase “as determined by the Carrier” allows Porter to relieve itself from liability for a delay in a flight or in the delivery of baggage.

[124]  The Agency finds that the phrase “as determined by the Carrier” in Proposed Tariff Rules 18.1 and Rule 18.2 would be found to be reasonable if filed with the Agency.

Issue 7: Does the term “expenses”, appearing in Proposed Tariff Rules 18.1 and 18.2, render those Rules inconsistent with Article 19 of the Convention?

Positions of the parties

Porter

[125]  Porter submits that, consistent with the Agency’s ruling in Decision No. 291-C-A-2011, Proposed Tariff Rule 18.1 plainly states that Porter will be liable to reimburse passengers in the circumstances set out therein. Porter maintains that there is no suggestion that liability will only apply in exceptional circumstances, and that, consistent with Article 19 of the Convention, the circumstances where liability will not adhere are specifically presented as the exception [Proposed Tariff Rule 18.1(i)]. Porter states that Proposed Tariff Rule 18.1 proceeds to set out, in clear and understandable terms, the process passengers must follow in order to pursue their claims for reimbursement [Proposed Tariff Rules 18.1 (ii to iii)].

[126] Porter maintains that, in Decision Nos. 291-C-A-2011 and 418-C-A-2011 (Lukács v. WestJet), the Agency expressly acknowledged that a carrier may, in tariff provisions relating to claims arising from delay, add provisions addressing such matters as time limits, notification obligations and the necessity of providing supporting documents. Porter submits that the prescribed process governing claims arising from flight delays is reasonable.

[127]  Porter points out that, in Proposed Tariff Rule 18.1, Porter does not confer upon itself any discretion to deny claims outside the parameters of the Convention, as applied by the Agency, and that provided that passengers follow the reasonable process described in Proposed Tariff Rule 18.1, the reasonableness of the expenses for which reimbursement is claimed will govern.

[128]  Porter also states that the final paragraph of Proposed Tariff Rule 18.1 puts passengers on notice that Porter may offer specific compensation such as meal and/or hotel vouchers in certain instances, at its discretion. Porter submits that nothing in Proposed Tariff Rule 18.1, or Proposed Tariff Rule 18 as a whole, purports to exclude or limit passengers’ recourse to any other remedies they may have as against Porter at law or in equity.

Mr. Lukács

[129]  Mr. Lukács asserts that Article 19 of the Convention imposes strict liability upon the carrier in the case of delay, not only for out-of-pocket expenses incurred as a result of a delay, as the case law demonstrates, but also, a far greater range of damages. He notes that while the debate on the precise range and type of damages that are recoverable under Article 19 of the Convention is ongoing in Canada, case law in other jurisdictions agree that “damages” are not confined to out-of-pocket expenses, but may also include other types of damages.

[130]  Mr. Lukács submits that, in spite of the debate in Canada about whether moral damages are recoverable under Article 19, it is clear that the majority of the world does interpret the Convention in a manner that allows for such damages under Article 19.

[131]  Mr. Lukács states that both Proposed Tariff Rules 18.1 and 18.2 refer only to reimbursement of “expenses,” and entirely ignore the vast amount of case law where damages for loss of income, loss of a portion of a cruise trip and inconvenience were awarded. He maintains that by referring only to “expenses,” Proposed Tariff Rules 18.1 and 18.2 purport to relieve Porter from liability for other types of damages in the case of delay of baggage and passengers.

[132]  Mr. Lukács submits that while Porter may prefer a particular interpretation of Article 19 of the Convention, it cannot contractually force a particular interpretation upon its passengers, and that the power to interpret Article 19 is reserved for the court or tribunal seized with a case.

[133]  He concludes that referring only to “expenses” in Proposed Tariff Rules 18.1 and 18.2 is misleading concerning Porter’s obligations under the Convention, and those Rules purport to relieve Porter from liability under Article 19.

[134]  Mr. Lukács contends that the reference to “expenses” in Porter’s Proposed Tariff Rules 18.1 and 18.2 is distinguished from the provisions of WestJet considered by the Agency in Decision No. 249-C-A-2012, because WestJet used the permissive language of “including any expenses” in its tariff provision.

[135]  Mr. Lukács therefore submits that all references to “expenses” in Proposed Tariff Rule 18 ought to be disallowed, and substituted with language that reflects the breadth of the term “damages” in Article 19 of the Convention.

Analysis and findings

[136]  Mr. Lukács submits that Proposed Tariff Rules 18.1 and 18.2 provide only for reimbursement of “expenses”, and ignore the vast amount of case law where damages for loss of income, loss of a portion of a cruise trip, and inconvenience were awarded. He maintains that by referring only to “expenses,” Proposed Tariff Rules 18.1 and 18.2 purport to relieve Porter from liability for other types of damages arising from delays in flights and delivery of baggage.

[137]  The Agency is of the opinion that the use of the word “expenses” in the Proposed Tariff Rules is appropriate and consistent with Article 19 of the Convention. The Agency does not agree with Mr. Lukács that the use of the term “expenses” in Porter’s Proposed Tariff Rules may tend to restrict the extent of the liability assumed by Porter in a manner which is inconsistent with the Convention.

[138]  The Agency is of the opinion that, ultimately, it is left to the Agency or the courts to determine whether an air carrier has compensated passengers who are affected by a delay in a flight or in the delivery of baggage in a manner that is consistent with Article 19 of the Convention. The Agency therefore finds that if the term “expenses” were to be used in Proposed Tariff Rules 18.1 and Rule 18.2, those Rules would be found to be reasonable if filed with the Agency.

Issue 8: Are Proposed Tariff Rules 18.2(b)(iii), 18.2(b)(iv) and 18.2(d)(i) worded in a manner that is inconsistent with Article 31 of the Convention?

Positions of the parties

Porter

[139]  Porter points out that Proposed Tariff Rule 18.2(b) positively states that, notwithstanding that concurrent baggage delivery is not guaranteed, Porter will be liable for delays in the carriage of baggage except in the circumstances set out therein. Porter submits that, as with Proposed Tariff Rule 18.1(i), this structure accords with the Agency’s ruling in Decision No. LET-C-A-29-2011, as to the required degree of clarity in such provisions. Porter adds that Proposed Tariff Rule 18.2(b) reproduces the exception to liability contained in Article 19 of the Convention, and sets out a reasonable process by which passengers may submit claims for compensation to Porter.

[140]  With respect to Proposed Tariff Rule 18.2(c), Porter points out that, in Decision No. 418-C-A-2011, the Agency previously found similar provisions, including as to clarity, limits of liability and requirement of proof of value, to be reasonable.

[141]  Porter submits that, as with Proposed Tariff Rule 18.1, Proposed Tariff Rule 18.2 permits Porter to deny otherwise eligible claims only where the passenger has failed to follow the reasonable process set out therein, or where the expenses claimed are not reasonable.

[142]  Porter maintains that nothing in Proposed Tariff Rule 18.2 purports to foreclose any other claims passengers may have against Porter in connection with delayed delivery of baggage.

Mr. Lukács

[143]  Mr. Lukács asserts that Proposed Tariff Rules 18.2(b)(iii) and 18.2(d)(i) are identical in content and effect to Rules 55(D)(4) and 55(D)(7) that the Agency disallowed in Decision No. 99-C-A-2011.

[144]  He argues that Proposed Tariff Rule 18.2(b)(iii) purports to reduce the time limit for filing of claims for delay of baggage, and Proposed Tariff Rule 18.2(d)(i) purports to extinguish the rights of passengers, contrary to Articles 31(2) and 31(4) of the Convention.

[145]  Mr. Lukács submits that Proposed Tariff Rule 18.2(b)(iv) purports to prescribe a particular form of the notice of complaint, even though Article 31(3) requires only a notice in writing, which may take the form of a registered letter, a facsimile, or an e-mail. He concludes that Proposed Tariff Rule 18.2(b)(iv) tends to limit Porter’s liability in that the Rule relieves Porter from the obligation to pay compensation if passengers provide a written notice within the appropriate time frame, but do not provide it in the form prescribed by Porter.

[146]  Mr. Lukács also submits that the phrase “form prescribed by the Carrier” is vague and fails to be clear within the meaning of the ATR.

[147]  Mr. Lukács asserts that, in Proposed Tariff Rule 18.2(b)(iii), the phrase “within 4 hours of the completion of the flight” ought to be replaced with “within 21 days from the date on which the baggage was returned to the passenger.”

Analysis and findings

[148]  Mr. Lukács asserts that Proposed Tariff Rule 18.2(b)(iii) establishes a deadline for reporting delayed baggage which is inconsistent with Article 31(2) of the Convention, and that Proposed Tariff Rule 18.2(b)(iv), in requiring that a written report respecting delayed baggage be in the form prescribed by Porter, is inconsistent with Article 31(3) of the Convention.

[149]  As noted by Mr. Lukács, Article 31 (2) of the Convention provides that, with respect to delays in the delivery of baggage, “the complaint must be made at the latest within twenty-one days from the date on which the baggage or cargo have been placed at his or her disposal.” The Agency finds that Porter’s Proposed Tariff Rule 18.2(b)(iii) is inconsistent with Article 31(2) of the Convention as that Proposed Tariff Rule prescribes a shorter period than that set out in the Convention. The Proposed Tariff Rule would therefore be found to be unreasonable, if filed with the Agency.

[150]  With respect to Proposed Tariff Rule 18.2(b)(iv), Article 31(3) of the Convention provides that “[e]very complaint must be made in writing and given or dispatched within the times aforesaid.” This particular Article does not bestow on a carrier the right to determine in which form the complaint may be made, failing which the complaint may be rejected. As suggested by Mr. Lukács, the complaint may be filed in the form of a registered letter, a facsimile, or an e-mail. The Agency finds that, by restricting the form of the complaint, Proposed Tariff Rule 18.2(b)(iv) is inconsistent with Article 31(3) of the Convention, and that the Proposed Tariff Rule would be found to be unreasonable, if filed with the Agency.

Issue 9: Is Proposed Tariff Rule18.2(c)(i) worded in a manner that is inconsistent with Article 22 of the Convention?

Positions of the parties

Mr. Lukács

[151]  Mr. Lukács submits that the effect of Proposed Tariff Rule 18.2(c)(i) is to limit Porter’s liability in the case of delay of checked baggage to nil during the first 24 hours of the delay, to $25.00 for a delay of between 24 and 48 hours, and up to $125.00 for a delay of between 5 and 21 days.

[152] He points out that in Decision No. 107-C-A-2007 (Dandoy v. Corsair), the Agency rejected a Corsair policy that limited liability in the case of delay to 24 EUR per day, up to a maximum of seven days:

[22] The Agency notes that Corsair indicated that its maximum liability in cases of delayed delivery is EUR 24 per day per late suitcase, up to a maximum of seven days, and that this maximum applies only to the replacement of essential items. The Agency also notes that Corsair indicated that pursuant to the Montreal Convention, a carrier can compensate a passenger between 0 and 1000 SDR.

[23] After reviewing Corsair’s tariff, the Agency notes that the tariff does not support Corsair’s arguments relating to the limits of its liability. In fact, Corsair’s tariff refers to the provisions of the Montreal Convention, which states that the carrier is liable for damages occasioned by delay in the carriage by air of baggage, up to a maximum of 1000 SDR per passenger. The Agency notes that the Montreal Convention does not set out a maximum of EUR 24 per day per late baggage or a restriction requiring a passenger to purchase only “essential” items.”

[153] Mr. Lukács submits that in Decision No. 328-C-A-2007 (Balakrishnan v. Aeroflot), the Agency also rejected an attempt by Aeroflot to reduce the amount of compensation payable to a passenger in relation to delay for certain items:

[28] The Agency is of the opinion that Articles 19, 22(2) and 26 of the Montreal Convention do not support Aeroflot’s position. These Articles provide that the carrier is liable for the damage incurred in the delay of baggage up to 1,000 Special Drawing Rights for each passenger, and that the carrier cannot diminish the liability set out in the Montreal Convention. The Agency is therefore of the opinion that according to the Montreal Convention, Aeroflot is fully liable for damage incurred by the Balakrishnan family, and cannot offer any form of discount to reduce this liability.

[154]  Mr. Lukács states that there is a very good reason for the decision of the drafters not to include such a “per day” provision in the Convention as passengers often incur the greatest expenses in the first 24 to 48 hours of a delay in the delivery of baggage.

[155]  He maintains that the provision at issue tends to set a lower limit for Porter’s liability than provided by Article 22(2) of the Convention, and further, that the language of Proposed Tariff Rule 18.2(c) is contrary to Article 22(5), which removes the liability cap in the case of wilful misconduct.

[156]  Mr. Lukács concludes that Proposed Tariff Rule 18.2(c)(i) ought to be disallowed, and be substituted with provisions that fully reflect Porter’s obligations under the Convention.

Analysis and findings

[157]  Mr. Lukács submits that Proposed Tariff Rule 18.2(c)(i) establishes a lower limit of liability than that prescribed by Article 22(2) of the Convention, and that Proposed Tariff Rule 18.2(c)(iv), which sets Porter’s maximum liability, is not reflective of Article 22(5) of the Convention, which removes the liability cap in situations of wilful misconduct.

[158]  The Agency agrees with Mr. Lukács’ submissions respecting Proposed Tariff Rule 18.2(c)(i), and finds that this Proposed Tariff Rule is inconsistent with Articles 22(2) and (5) of the Convention, and would be found to be unreasonable, if filed with the Agency.

SUMMARY OF CONCLUSIONS

[159]  In light of the foregoing, the Agency concludes the following:

[160]  With respect to Porter’s Existing Tariff Rules:

Issue 1:

The Agency has determined that Existing Tariff Rule 18(a) and the portion of Existing Tariff Rule 18(c) providing that schedules are subject to change without notice are reasonable.

The Agency has determined that the portion of Existing Tariff Rule 18(c), disclaiming liability for failure to make connections, to operate any flight according to schedule, or for changing the schedule for any flight is unreasonable.

Issue 2:

The Agency has determined that Existing Tariff Rule 18(d) is reasonable.

Issue 3:

The Agency has determined that Existing Tariff Rule 18(e) is unclear.

Issue 4:

The Agency has determined that Existing Tariff Rule 18(e) is unreasonable.

Issue 5:

The Agency has determined that Existing Tariff Rule 18(b) retains its meaning, despite the disallowance of certain provisions appearing in Existing Tariff Rule 18.

[161]  With respect to Porter’s Proposed Tariff Rules:

Issue 1:

The Agency has determined that the wording in Proposed Tariff Rule 18(a) would be found to be reasonable if filed with the Agency.

Issue 2:

The Agency has determined that the absence of similar provisions in Porter’s Existing Tariff Rules would render Proposed Tariff Rule 18(a) unreasonable if filed with the Agency.

Issue 3:

The Agency has determined that Proposed Tariff Rule 18(c) is inconsistent with Article 19 of the Convention and would be found to be unreasonable if filed with the Agency.

Issue 4:

The Agency has determined that Proposed Tariff Rules 18.1(1) and 18.2(b)(i) would be found to be reasonable if filed with the Agency.

Issue 5:

The Agency has determined that Proposed Tariff Rules 18.1(ii) and 18.1(iii)(A) and would be found to be unreasonable if filed with the Agency.

Issue 6:

The Agency has determined that the phrase “as determined by the Carrier,” in Proposed Tariff Rules 18.1 and 18.2, would be found to be reasonable if filed with the Agency.

Issue 7:

The Agency has determined that if the term “expenses”were to be used in  Proposed Tariff Rules 18.1 and 18.2, those Rules would be found to be reasonable if filed with the Agency.

Issue 8:

The Agency has determined that Proposed Tariff Rules 18.2(b)(iii), 18.2(b)(iv) and 18.2(d)(i) would be found to be unreasonable if filed with the Agency.

Issue 9:

The Agency has determined that Proposed Rule 18.2(c)(i) would  be found to be unreasonable if filed with the Agency.

ORDER

[162]  The Agency, pursuant to section 113 of the ATR, disallows the following provisions in Porter’s existing tariff:

  • The portion of Rule 18(c), disclaiming liability for failure to make connections, to operate any flight according to schedule, or for changing the schedule for any flight, and
  • Rule 18(e).

[163] The Agency orders Porter, within 20 days from the date of this Decision, to amend its tariff to conform with this Order and the Agency’s findings set out in the Decision.


APPENDIX TO DECISION NO. 16-C-A-2013

Existing Tariff Rules

Rule 18. Responsibility for Schedules and Operations

  1. The carrier will endeavor to transport the passenger and baggage with reasonable dispatch, but times shown in timetables or elsewhere are not guaranteed and form no part of this contract.
  2. The agreed stopping places are those places shown in the carrier’s timetable as scheduled stopping places on the route. The carrier may, without notice, substitute alternative carriers or aircraft and, if necessary, may alter or omit stopping places shown in the timetable.
  3. Schedules are subject to change without notice. The carrier is not responsible or liable for failure to make connections, or for failure to operate any flight according to schedule, or for a change to the schedule of any flight. The Carrier is not liable for any special, incidental or consequential damages arising from the foregoing (including the carriage of baggage) whether or not the Carrier had knowledge that such damages might be incurred.
  4. Without limiting the generality of the foregoing, the carrier cannot guarantee that the passenger’s baggage will be carried on the flight if sufficient space is not available as determined by the carrier.
  5. Subject to the Warsaw Convention, or the Montreal Convention, as the case may be, the carrier will not provide or reimburse passengers for expenses incurred due to delays or cancellations of flights.

Proposed Tariff Rules

Rule 18. Responsibility for Schedules and Operations

  1. The carrier will endeavor to transport the passenger and baggage with reasonable dispatch, but times shown in timetables or elsewhere are not guaranteed. Schedules are subject to change without notice.
  2. The agreed stopping places are those places shown in the carrier’s timetable as scheduled stopping places on the route. The carrier may, without notice, substitute alternative carriers or aircraft and, if necessary, may alter or omit stopping places shown in the timetable.
  3. Notwithstanding the foregoing, passengers will be entitled to compensation or other remedies for delays, including delays in the delivery of baggage, in certain circumstances as set out below.

18.1 Passenger Expenses Resulting from Delays

Passengers will be entitled to reimbursement from the Carrier for reasonable expenses incurred as a result of a delay,subject to the following conditions:

  1. The Carrier shall not be liable for any damages, costs, losses or expenses occasioned by delays if it, and its employees and agents, took all measures that could reasonably be required to avoid the damage or if it was impossible for the Carrier and its employees or agents to take such measures;
  2. Any passenger seeking reimbursement for expenses resulting from delays must, within 72 hours of the completion of the delayed flight, provide the Carrier with (a) written notice of his or her claim, (b) particulars of the expenses for which reimbursement is sought and (c) receipts or other documents establishing to the reasonable satisfaction of the Carrier that the expenses were incurred; and
  3. The Carrier may refuse or decline any claim, in whole or in part, if:
    1. the passenger failed to provide notice of his or her claim within the time period prescribed in subsection 18.1(ii) above;
    2. the passenger has failed or declined to provide proof or particulars establishing, to the reasonable satisfaction of the Carrier, that the expenses claimed were incurred by the passenger and resulted from a delay for which compensation is available under this Rule 18; or
    3. the expenses for which reimbursement is claimed, or any portion thereof, are not reasonable or did not result from the delay, as determined by the Carrier, acting reasonably.

In any case, the Carrier may, in its sole discretion, issue meal vouchers and/or travel vouchers to passengers affected by a delay.

18.2 Baggage Delays

  1. The carrier cannot guarantee that the passenger’s baggage will be carried on the flight if sufficient space is not available as determined by the Carrier.
  2. Notwithstanding the foregoing, passengers whose baggage does not arrive on the same flight as the passenger will be entitled to one or more of the remedies set out in subsection (c) below, as indicated therein,subject to the following conditions:
    1. The Carrier shall not be liable for any damages, costs, losses or expenses occasioned by delays in the delivery of baggage if the Carrier, and its employees and agents, took all measures that could reasonably be required to avoid the damage or if it was impossible for the Carrier and its employees or agents to take such measures;
    2. The passenger must have complied with the check-in requirements set out in Rule 21 of this tariff;
    3. The passenger must report the delayed baggage to the Carrier within 4 hours of the completion of the flight; and
    4. The passenger must complete and file a written report in relation to the delayed baggage in the form prescribed by the Carrier.
  3. Where the conditions set out in subsection 18.2(b) above have been met, and subject to subsection 18.2(d) below, the Carrier will:
    1. After the initial 24 hours following completion of the flight, authorize incidental expenses up to CAD $25 per day for up to a maximum of 5 days, to be reimbursed by the Carrier subject to the passenger’s submission of receipts or other documents establishing to the reasonable satisfaction of the Carrier that the expenses were incurred and arose from the delay;
    2. Contact the passenger upon locating his or her baggage;
    3. Deliver located baggage to the passenger at their residence/hotel;
    4. After a 21 day delay, provide a settlement in accordance with the following rules:
      1. if no value is declared per Rule 11(c), the settlement will be for the value of the delayed baggage or 1131 SDR (the “basic carrier liability” which is the approximate Canadian dollar equivalent of CAD$1,800), whichever is the lesser, and
      2. if value is declared per Rule 11(c), the settlement will be for the value of the delayed baggage or the declared sum (per Rule 11(c)) up to a maximum of $3,000, whichever is the lesser.
    5. In connection with any settlement under subsection (vi) above, the passenger shall be required to furnish proof of the value of the delayed baggage which establishes such value to the satisfaction of the Carrier, acting reasonably.
  4. The Carrier may refuse or decline any claim relating to delayed baggage, in whole or in part, if:
    1. the passenger failed to provide notice of his or her claim within the time period prescribed in Rule 8(c)(ii) above; 
    2. the passenger has failed or declined to provide proof or particulars establishing, to the reasonable satisfaction of the Carrier, that the expenses claimed were incurred by the passenger and resulted from a delay for which compensation is available under this Rule 18; or
    3. the expenses for which reimbursement is claimed, or any portion thereof, are not reasonable or did not result from the delay, as determined by the Carrier, acting reasonably.

Air Transportation Regulations, SOR/88-58, as amended

111. (1) All tolls and terms and conditions of carriage, including free and reduced rate transportation, that are established by an air carrier shall be just and reasonable and shall, under substantially similar circumstances and conditions and with respect to all traffic of the same description, be applied equally to all that traffic.

113. The Agency may

  1. suspend any tariff or portion of a tariff that appears not to conform with subsections 110(3) to (5) or section 111 or 112, or disallow any tariff or portion of a tariff that does not conform with any of those provisions; and
  2. establish and substitute another tariff or portion thereof for any tariff or portion thereof disallowed under paragraph (a).

122. Every tariff shall contain

  1. the terms and conditions governing the tariff generally, stated in such a way that it is clear as to how the terms and conditions apply to the tolls named in the tariff;
  2. the tolls, together with the names of the points from and to which or between which the tolls apply, arranged in a simple and systematic manner with, in the case of commodity tolls, goods clearly identified; and
  3. the terms and conditions of carriage, clearly stating the air carrier’s policy in respect of at least the following matters, namely,
    1. the carriage of persons with disabilities,
    2. acceptance of children for travel,
    3. compensation for denial of boarding as a result of overbooking,
    4. passenger re-routing,
    5. failure to operate the service or failure to operate on schedule,
    6. refunds for services purchased but not used, whether in whole or in part, either as a result of the client’s unwillingness or inability to continue or the air carrier’s inability to provide the service for any reason,
    7. ticket reservation, cancellation, confirmation, validity and loss,
    8. refusal to transport passengers or goods,
    9. method of calculation of charges not specifically set out in the tariff,
    10. limits of liability respecting passengers and goods,
    11. exclusions from liability respecting passengers and goods, and
    12. procedures to be followed, and time limitations, respecting claims.

Montreal Convention

Article 19 - Delay

The carrier is liable for damage occasioned by delay in the carriage by air of passengers, baggage or cargo. Nevertheless, the carrier shall not be liable for damage occasioned by delay if it proves that it and its servants and agents took all measures that could reasonably be required to avoid the damage or that it was impossible for it or them to take such measures.

Article 22 – Limits of Liability in Relation to Delay, Baggage and Cargo
  1. In the case of damage caused by delay as specified in Article 19 in the carriage of persons, the liability of the carrier for each passenger is limited to 4,150 Special Drawing Rights.
  2. In the carriage of baggage, the liability of the carrier in the case of destruction, loss, damage or delay is limited to 1 000 Special Drawing Rights for each passenger unless the passenger has made, at the time when the checked baggage was handed over to the carrier, a special declaration of interest in delivery at destination and has paid a supplementary sum if the case so requires. In that case the carrier will be liable to pay a sum not exceeding the declared sum, unless it proves that the sum is greater than the passenger’s actual interest in delivery at destination.
  3. In the carriage of cargo, the liability of the carrier in the case of destruction, loss, damage or delay is limited to a sum of 17 Special Drawing Rights per kilogram, unless the consignor has made, at the time when the package was handed over to the carrier, a special declaration of interest in delivery at destination and has paid a supplementary sum if the case so requires. In that case the carrier will be liable to pay a sum not exceeding the declared sum, unless it proves that the sum is greater than the consignor’s actual interest in delivery at destination.
  4. In the case of destruction, loss, damage or delay of part of the cargo, or of any object contained therein, the weight to be taken into consideration in determining the amount to which the carrier’s liability is limited shall be only the total weight of the package or packages concerned. Nevertheless, when the destruction, loss, damage or delay of a part of the cargo, or of an object contained therein, affects the value of other packages covered by the same air waybill, or the same receipt or, if they were not issued, by the same record preserved by the other means referred to in paragraph 2 of Article 4, the total weight of such package or packages shall also be taken into consideration in determining the limit of liability.
  5. The foregoing provisions of paragraphs 1 and 2 of this Article shall not apply if it is proved that the damage resulted from an act or omission of the carrier, its servants or agents, done with intent to cause damage or recklessly and with knowledge that damage would probably result; provided that, in the case of such act or omission of a servant or agent, it is also proved that such servant or agent was acting within the scope of its employment.
  6. The limits prescribed in Article 21 and in this Article shall not prevent the court from awarding, in accordance with its own law, in addition, the whole or part of the court costs and of the other expenses of the litigation incurred by the plaintiff, including interest. The foregoing provision shall not apply if the amount of the damages awarded, excluding court costs and other expenses of the litigation, does not exceed the sum which the carrier has offered in writing to the plaintiff within a period of six months from the date of the occurrence causing the damage, or before the commencement of the action, if that is later.
Article 26 – Invalidity of Contractual Provisions

Any provision tending to relieve the carrier of liability or to fix a lower limit than that which is laid down in this Convention shall be null and void, but the nullity of any such provision does not involve the nullity of the whole contract, which shall remain subject to the provisions of this Convention.

Article 31 – Timely Notice of complaints
  1. Receipt by the person entitled to delivery of checked baggage or cargo without complaint is prima facie evidence that the same has been delivered in good condition and in accordance with the document of carriage or with the record preserved by the other means referred to in paragraph 2 of Article 3 and paragraph 2 of Article 4.
  2. In the case of damage, the person entitled to delivery must complain to the carrier forthwith after the discovery of the damage, and, at the latest, within seven days from the date of receipt in the case of checked baggage and fourteen days from the date of receipt in the case of cargo. In the case of delay, the complaint must be made at the latest within twenty-one days from the date on which the baggage or cargo have been placed at his or her disposal.
  3. Every complaint must be made in writing and given or dispatched within the times aforesaid.
  4. If no complaint is made within the times aforesaid, no action shall lie against the carrier, save in the case of fraud on its part.
Article 35 – Limitation of Actions
  1. The right to damages shall be extinguished if an action is not brought within a period of two years, reckoned from the date of arrival at the destination, or from the date on which the aircraft ought to have arrived, or from the date on which the carriage stopped.
  2. The method of calculating that period shall be determined by the law of the court seized of the case.

Member(s)

Geoffrey C. Hare
Raymon J. Kaduck
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