Decision No. 211-C-A-2004
April 26, 2004
IN THE MATTER OF a complaint by Berni Zimmermann against Skyservice Airlines Inc. carrying on business as Skyservice concerning the loss of one of his suitcases following a flight from Vancouver, British Columbia, Canada to Las Vegas, Nevada, United States of America on March 17, 2002.
File No. M4370/R177/02-13
 On March 28, 2002, Berni Zimmermann filed with the Air Travel Complaints Commissioner (hereinafter the Commissioner) the complaint set out in the title.
 On July 14, 2003, the complaint was referred to the Canadian Transportation Agency (hereinafter the Agency) for its consideration as the complaint raised a tariff issue that falls within the jurisdiction of the Agency.
 By Decision No. LET-C-A-178-2003 dated September 3, 2003, the Agency advised the parties of the Agency's jurisdiction in this matter. The Agency also sought Mr. Zimmermann's confirmation that he wished to pursue this matter formally before the Agency. As the comments regarding Mr. Zimmermann's complaint were filed by both parties with the Commissioner, the Agency also sought the parties' agreement to have the comments they filed with the Commissioner considered as pleadings before the Agency.
 On September 4, 2003, Mr. Zimmermann advised the Agency that he wished to pursue the matter formally before the Agency, and accepted that the Agency consider the comments he filed with the Commissioner as pleadings before the Agency.
 On September 9, 2003, Skyservice Airlines Inc. carrying on business as Skyservice (hereinafter Skyservice) filed an answer to Mr. Zimmermann's letter. On September 16, 2003, Mr. Zimmermann replied to Skyservice's answer dated September 9, 2003. On September 17, 2003, Skyservice advised the Agency that it agreed to the proceedings as described in Decision No. LET-C-A-178-2003 and accepted that the Agency consider the comments it filed with the Commissioner as pleadings before the Agency.
 Pursuant to subsection 29(1) of the Canada Transportation Act, S.C., 1996, c. 10 (hereinafter the CTA), the Agency is required to make its decision no later than 120 days after the application is received unless the parties agree to an extension. In this case, Skyservice agreed to an indefinite extension of the deadline and Mr. Zimmermann agreed to an extension of the deadline until April 30, 2004.
 The issue to be addressed is whether Skyservice applied the terms and conditions relating to limitations of liability for checked baggage specified in its international charter tariff, as required by subsection 110(4) of the Air Transportation Regulations, SOR/88-58, as amended (hereinafter the ATR).
 Mr. Zimmermann travelled with a group of family members on Skyservice's Flight No. SV020 from Vancouver to Las Vegas on March 17, 2002, and returned to Vancouver on Skyservice's Flight No. SV021 on March 21, 2002. Mr. Zimmermann had purchased an all-inclusive package utilizing the services of a charter carrier, which included baggage delivery service to passengers' hotels, arranged by the tour operator, Conquest Vacations. On his arrival in Las Vegas, Mr. Zimmermann received only one of his two suitcases at his hotel room.
POSITIONS OF THE PARTIES
 Mr. Zimmermann submits that, in addition to clothes and personal items, the missing suitcase contained his ring, keys, cellular telephone and directory, and video camera. Mr. Zimmermann states that he disagrees with the practice of having baggage delivered directly to one's hotels room and suggests that this practice be discontinued.
 Skyservice states that it has completed an investigation of this matter and has contacted the tour operator, Conquest Vacations, to obtain information. Skyservice advises that Mr. Zimmermann's group consisted of seven people who checked in ten bags and that according to the baggage records for the flight, all bags belonging to Mr. Zimmermann and his party were successfully transported to the airport in Las Vegas. The carrier explains that the services offered by the tour operator to passengers who have purchased an all-inclusive package include baggage delivery to the hotel. The carrier adds that the tour operator provides passengers with specific tags, which identify the bags that are to be sent to hotels. Upon arrival at destination, these bags are offloaded and transported to the designated hotels by a local company that is contracted by the tour operator. If a bag destined to a hotel is left at the airport, a report is prepared and the bag is handed over to the passenger as soon as the bag is identified/claimed. Skyservice submits that according to its reports for the subject flight, "no bags were reported missing or left unclaimed". Skyservice adds that it is unable to assist Mr. Zimmermann any further and that, as it is the tour operator that provides the baggage delivery service to passengers' hotels, it cannot address Mr. Zimmermann's concerns in this regard.
 Mr. Zimmermann states that, although the tour operator may have contracted out the delivery of the baggage to the hotel to a local company, he "bought a ticket on Skyservice to deliver both [him] and [his] luggage to and from Las Vegas, and that this service remains incomplete". He adds that he expects from the carrier either a full refund of his vacation package, or the sum of $4,900, i.e., the value of the items that were lost.
 Skyservice submits that Rule 16 (Ground Transportation) of its international charter tariff, CTA (A) No. 3, provides that:
The tolls published in this tariff do not include ground transportation. Carrier does not maintain, operate or provide ground transportation between airports or between airports and city centres. Any such services are performed by independent contractors who are not and shall not be deemed to be the agents or employees of carrier. Carrier shall not be liable for the acts or omissions of such independent contractors or anything done by an employee, agent or a representative of carrier in making arrangements for such ground transportation. The costs of ground transportation shall be payable by charterer.
 Skyservice also refers to the definition of "transportation" as set out in Rule 1 (Definitions) of its international charter tariff, CTA (A) No. 3, which states:
"Transportation", for an ITC, means the transport of the tour participants and their personal baggage by air or other modes between:
a) All points in the tour itinerary, and
b) Airports or the surface terminals and the location where accommodation is provided in the tour itinerary other than the point of origin.
 Skyservice contends that, based on the above, it has respected the terms and conditions set out in its tariff on file with the Agency, and is unable to offer any further consideration with respect to Mr. Zimmermann's claim for lost baggage.
 In its response to Decision No. LET-C-A-178-2003, Skyservice advises that it was willing to offer Mr. Zimmermann compensation, as a gesture of goodwill, even though it felt that it has provided evidence to support its claim that Mr. Zimmermann's bag was delivered to Las Vegas.
 Skyservice adds that its liability is limited to CAD $31.49 per kilogram and that, according to its records, Mr. Zimmermann checked in two bags. As the maximum allowable weight allowance per passenger is two (2) bags totalling 20 kilograms, Skyservice was prepared to offer Mr. Zimmermann a cheque in the amount of CAD $314.90, based on a bag weight of 10 kilograms.
 Mr. Zimmermann refused the carrier's offer and maintains that he has not received any evidence that Skyservice delivered his lost bag to Las Vegas.
ANALYSIS AND FINDINGS
 In making its findings, the Agency has considered all of the evidence submitted by the parties during the pleadings. The Agency has also examined Skyservice's limitations of liability applicable to the carriage of baggage between points in Canada and points outside of Canada, as set out in paragraphs a), b) and c) of Rule 10 (Limitation of Liability for Baggage and/or Goods, Excess Valuation Charges) of the carrier's international charter tariff, CTA (A) No. 3, in effect at the time of Mr. Zimmermann's complaint. These paragraphs provide that:
a) Subject to sub[s]ection 10 b, the liability of Skyservice, for any loss, damage, or delay is limited to CA $25.00 per kilogram in the case of checked baggage and to CA $500.00 for unchecked baggage per passenger unless a higher value is declared and paid for in advance.
b) The liability of the Carrier is limited to the declared value of baggage when the passenger:
i) has declared a value of baggage in an amount exceeding CA $100.00; and
ii) has declared, at the time of presenting such property for transportation, a higher value and paid an additional transportation charge at the rate of CA $0.50 for each CA $100.00 fraction thereof for the excess amount.
c) In no case shall the carrier's liability exceed the actual loss suffered by the passenger. All claims are subject to proof of amount of loss.
 The Agency has also reviewed Skyservice's free baggage allowance limits, as set out in paragraph h) of Rule 7 (Acceptance of Baggage or Goods) of the carrier's international charter tariff, CTA (A) No. 3, which provides:
h) Charge for excess baggage weight:
Baggage will be carried without payment of additional charges up to:
A-320-200: 20 kgs per passenger occupying a seat
A-330-300: 20 kgs per passenger occupying a seat except for the Italian destinations where 50 kgs will be allowed.
Baggage in excess of the free baggage allowance will be charged as follows:
A-320-200: CA $5.00 per kilogram
A-330-300: CA $5.00 per kilogram
 The Agency's jurisdiction in this matter is set out in subsection 110(4) of the ATR, which provides that:
Where a tariff is filed containing the date of publication and the effective date and is consistent with these Regulations and any orders of the Agency, the tolls and terms and conditions of carriage in the tariff shall, unless they are rejected, disallowed or suspended by the Agency or unless they are replaced by a new tariff, take effect on the date stated in the tariff, and the air carrier shall on and after that date charge the tolls and apply the terms and conditions of carriage specified in the tariff.
 If a carrier fails to apply the fares, rates, charges, terms or conditions of carriage specified in its tariff, the Agency, pursuant to paragraphs 113.1(a) and (b) of the ATR, may:
(a) direct the licensee to take corrective measures that the Agency considers appropriate; and
(b) direct the licensee to pay compensation for any expense incurred by a person adversely affected by the licensee's failure to apply the fares, rates, charges, terms or conditions of carriage applicable to the international service it offers that were set out in its tariffs.
 With respect to Skyservice's responsibility for baggage, the Agency notes that, at the time of the incident, liability limitations for damage, delay or loss of baggage applicable to international carriage by air were governed by the Convention for the Unification of Certain Rules Relating to International Carriage by Air, as amended (hereinafter the Warsaw Convention). The provisions of the Warsaw Convention had the force of law in Canada by virtue of the Carriage by Air Act, R.S.C., 1985, c. C-26. More particularly, Article 18 of the Carriage by Air Act provided, in part, as follows:
(1) The carrier is liable for damage sustained in the event of the destruction or loss of, or damage to, any registered baggage, if the occurrence which caused the damage so sustained took place during the carriage by air.
(4) The carriage by air within the meaning of the preceding paragraphs of this Article comprises the period during which the baggage or cargo is in the charge of the carrier, whether in an airport or on board an aircraft, or, in the case of a landing outside an airport, in any place whatsoever.
(5) The period of the carriage by air does not extend to any carriage by land, by sea or by river performed outside an airport. If, however, such carriage takes place in the performance of a contract for carriage by air, for the purpose of loading, delivery or transhipment, any damage is presumed, subject to proof to the contrary, to have been the result of an event which took place during the carriage by air.
 Pursuant to Article 18(1) of the Carriage by Air Act, the carrier is liable for damage sustained in the event of the destruction or loss of, or damage to, any registered baggage, if the damaging event has occurred "during the carriage by air". In contrast to the other provisions of transportation law, the beginning and ending of this period of liability are not marked by the acceptance and delivery of the baggage in question but by the duration of the "carriage by air", which concept is defined in Article 18(4) of the Carriage by Air Act as the period during which "...the baggage...is in the charge of the carrier, whether in an airport or on board an aircraft, ...". Thus, the loading and the unloading of the baggage always take place within the period of liability.
 The mere arrival of the checked baggage at the place of destination does not constitute delivery, nor does the period of liability end with the unloading of the goods from the aircraft. Liability also extends to the period during which the carrier stores the baggage until delivery to the passenger. Loss must be assumed if the carrier is not able to carry out its contractual obligation of putting the passenger in possession of his baggage. Not only does the carrier undertake to transport the baggage, it also takes charge of the baggage in order to prevent it from being damaged or lost. The Carriage by Air Act does not define the term "charge". As in other fields of transportation law, the liability of the carrier is based on this duty to exercise due care.
 The passenger checking in baggage must prove that the checked baggage was handed over to the carrier in good order and condition. At most international airports, baggage is received and weighed by the carrier at the check-in counters. For this reason, it appears reasonable to define the start of the carriage of baggage as the moment when the baggage is put on the scales either by the passenger himself or by the carrier's representative. In the present case, Mr. Zimmermann has proven that he checked his baggage with Skyservice in Vancouver.
 It is more difficult to determine the end of the transportation of baggage. The carrier's charge does not end just because the baggage is handed over to a third party (i.e., airport ground handlers). This does not free the carrier from its obligations vis-à-vis the entitled claimant. This means that the period after the landing, during which the baggage is stored with a third party (within the airport's boundaries) until delivery to the passenger, is still part of the carriage by air (Elmar Giermulla et al., Warsaw Convention - Commentary, The Hague, The Netherlands, Kluwer Law International, 1998, Art. 18, at page 25 [Suppl. 15 (January 2002)], para. 35 [Reference to footnote No. 2 OLG Cologne, 1982, TranspR 43 and 1982 ZLW 167]).
 At large international airports, the arriving passenger must go to the baggage claim area. After retrieving his or her baggage, the passenger departs the baggage claim area through an exit which, at international airports, leads directly to the customs area. In Berman v. TWA (Elmar Giermulla et al., Warsaw Convention - Commentary, The Hague, The Netherlands, Kluwer Law International, 1998, Art. 18, at page 30 [Suppl. 15 (January 2002)], Footnote No. 6 : 15 Avi 17,775 (NY City Civil Court - NY County)), the Court ruled that the carriage by air had already come to an end when the baggage was picked up by the passenger prior to undergoing Customs clearance. Leaving the baggage claim area following acceptance of the baggage constitutes the definite end of the carriage by air.
 In the case at hand, Skyservice has proven that it transported Mr. Zimmermann's baggage on board its aircraft from Vancouver to Las Vegas, but has not proven to the Agency's satisfaction that the loss of Mr. Zimmermann's bag did not occur during the period in which Mr. Zimmermann's baggage was in the charge of Skyservice. Based on the above, the Agency is of the opinion that Skyservice cannot relieve itself of its contractual obligation of putting Mr. Zimmermann in possession of his checked baggage.
 As for the amount for which Skyservice is liable under its tariff, the Agency notes that Skyservice failed to provide any evidence indicating the weight of the lost baggage. In this regard, Skyservice offered compensation to Mr. Zimmermann based on an estimated weight of 10 kilograms only, even though its tariff provides for compensation up to a maximum weight of 20 kilograms. The Agency is of the opinion that Skyservice can not simply speculate as to the weight of the lost baggage, but must in fact offer compensation based on the maximum weight allowed under its tariff, that is 20 kilograms.
 In light of the foregoing, the Agency finds that in refusing to compensate Mr. Zimmermann up to the maximum amount specified in Skyservice's tariff, the carrier has failed to apply the terms and conditions of carriage set out in its tariff, contrary to subsection 110(4) of the ATR. The maximum payment is still much less than Mr. Zimmermann's claim, but the carrier has chosen to limit its liability through provisions of its tariff consistent with the Carriage by Air Act.
 With respect to Mr. Zimmermann's request for compensation for expenses incurred, the Agency has determined that there is no evidence before it to suggest that expenses were incurred as a result of Skyservice's failure to apply the terms and conditions of carriage as set out in the carrier's tariff.
 Based on the above findings, the Agency, pursuant to paragraph 113.1(a) of the ATR, hereby orders Skyservice to provide compensation to Mr. Zimmermann based on the free baggage allowance set at 20 kilograms per passenger, within thirty (30) days of the date of this Decision.
 The Agency has also determined that, in this case, the payment of compensation pursuant to paragraph 113.1(b) of the ATR is not warranted.