Berenguer v. SATA Internacional – Azores Airlines, S.A., 2021 FC 394
Federal Court of Canada
Facts
[3] The Plaintiff is an Alberta resident. She commenced the within proposed class proceeding by way of a Statement of Claim issued August 14, 2018.
[4] The Defendant is a company incorporated pursuant to the laws of Portugal, with a principal place of business in Portugal. It operates as a commercial airline that schedules flights to and from various cities in Canada.
[…]
[6] The Plaintiff’s claim, as amended on January 14, 2019, relates to the alleged failure by the Defendant to pay compensation in accordance with European Union Regulation (EC) No. 261/2004 [EU 261] to passengers who experienced delays on flights operated by the Defendant to and/or from Canada and arrived at the final destination more than three hours after the scheduled arrival time. EU 261 is a consumer protection measure adopted by the European Parliament and the Council of the European Union in 2004 that establishes common rules on compensation and assistance to passengers in the event of denied boarding and of cancellation or long delay of flights.
[7] The Plaintiff seeks a declaration that the Defendant breached the express and/or implied terms of its contract of carriage to pay cash compensation in accordance with EU 261 and an order that the Defendants pay compensation to each Class Member.
[8] The Plaintiff defines the proposed class as follows:
This Action is brought on behalf of members of a class consisting of the Plaintiff and all individuals anywhere in the world who, from August 14, 2012, have travelled on an aircraft (or two aircrafts in the case of direct connections) operated by a Defendant (including those where the Defendant maintains commercial control) to and/or from Canada and arrived at the final destination more than three hours after the scheduled arrival time, but excluding individuals who already received full cash compensation from the respective Defendant in accordance with EU 261/2004.
Issue(s)
The plaintiff wished to certify her class action. The question was whether it was “plain and obvious” that the Federal Court did not have jurisdiction. See [39]. A key issue in that respect was whether the plaintiff’s cause of action arose from contract, the Montreal Convention – by Article 27 – or by EU Regulation 261/2004.
Discussion
The Federal Court found it “plain and obvious” that it not have jurisdiction. This was because the plaintiff’s claim was based on contract, upon an argument that EU Regulation 261 of 2004 was incorporated into the contract, and that this could not create a basis for jurisdiction. The Court also found that Article 27 of the Montreal Convention could not create a cause of action to assist the plaintiff’s claim.
[35] The Supreme Court of Canada set out in ITO – International Terminal Operators Ltd. v. Miida Electronics Inc., 1986 CanLII 91 (SCC), [1986] 1 SCR 752 [ITO] the seminal test establishing the essential requirements to support a finding of jurisdiction in the Federal Court. For this Court to have jurisdiction to hear a matter, three conditions must be met:
(1) There must be a statutory grant of jurisdiction by the federal Parliament.
(2) There must be an existing body of federal law which is essential to the disposition of the case and which nourishes the statutory grant of jurisdiction.
(3) The law on which the case is based must be “a law of Canada” as the phrase is used in s. 101 of the Constitution Act, 1867 (ITO, at para 11).
[…]
[37] The Plaintiff has framed her pleadings as a claim for breach of contract. She alleges that the Defendant, within its own contract of carriage, contractually incorporated and agreed to comply with the flight delay/cancellation rules under EU 261. The action seeks to enforce the Defendant’s contractual obligation to pay compensation. The Defendant agrees with this view.
[…]
[52] The Plaintiff submits that Article 27 of the Montreal Convention specifically recognizes the principle of freedom to contract, permitting air carriers and passengers to enter into further contractual remedies that do not conflict with the Montreal Convention.
[53] The theory and basis of the Plaintiff’s proposed class proceeding is that the Defendant has voluntarily incorporated EU 261 into its contract of carriage applicable to its international commercial air services to and from Canada, as permitted under Article 27 of the Montreal Convention. The Plaintiff intends to argue at trial that the Montreal Convention is merely a federal statute that is super-imposed on a body of common law in relation to common carriers, including contracts.
[54] This is at best a tautological argument that has no merit. The simple fact is that this Court’s jurisdiction is engaged only if the right to seek relief is created or recognized by Canadian federal law. No matter how the Plaintiff frames, labels or dresses up her claim, it remains that the compensation regime upon which she relies to support her claim is created under European law.
[55] On its face, the parameters and meaning of Article 27 are clear: it allows the carrier to refuse to contract, to waive any of its Convention defences, or to impose conditions or requirements on passengers or shippers so long as these conditions do not conflict with any rule in the Montreal Convention. It says nothing about whether a carrier can contractually agree to apply provisions of an instrument like EU 261, nor does it allow parties to contract out of fundamental precepts of the Montreal Convention, such as Articles 19 and 29.
[56] Even if it is assumed that the alleged contractual agreement to apply EU 261/2004 is permitted by Article 27, this does not mean that the source of the Plaintiff’s claim is the Canadian law. Whatever might be said about it, Article 27 does not create a right of action.
[…]
[60] Beyond the provisions of Article 27 of the Montreal Convention, the Plaintiff intends to argue that her cause of action is recognized under the Air Transportation Regulations, SOR/88-58 [ATR]. She contends that the Defendant’s tariff is a contract contemplated and recognized under section 110 of the ATR, which is part of a detailed statutory framework. However, the very same arguments were rejected by Mr. Justice Michael Manson in Donaldson at paras 42 to 52. While the Donaldson decision is not binding on me, reasons of judicial comity invite me to follow the decision given that no material facts are shown to be distinguishable and the Plaintiff has not demonstrated that it is manifestly wrong.
[61] In the end, it is the source of the claim that matters here. It is plain and obvious that the source of the Defendant’s alleged liability in this case is not the Carriage by Air Act or any other Canadian law. The Plaintiff has chosen to make a claim sourced in contract law and EU 261/2004, not federal law.
[62] The arguable issue test for jurisdiction is a low threshold to meet; however, it is nevertheless a threshold. In my view, this is one of those cases where the Plaintiff has failed to meet the threshold. Simply stating that there is an arguable case that this Court has jurisdiction to entertain the Plaintiff’s claim does not make it so.
[63] The Plaintiff’s assertion that the Federal Court has jurisdiction over her claim does not pass the first stage of analysis under s. 23 of the FCA and the ITO test. It is not sufficient if the Federal Court may have to consider some federal law as a necessary component of the disposition of the Plaintiff’s case. Given that no body of federal law “essential to the disposition of the case and which nourishes the statutory grant of jurisdiction” has been pleaded, it is plain and obvious that no tenable cause of action is possible. Since there is no reason to suppose that the Plaintiff could improve her case by any amendment to the pleadings, I would grant the Defendant’s motion to strike.
The Federal Court then went on to identify another reason why it would be plain and obvious that the plaintiff’s claim had no chance of success:
[64] I should add that even if I am incorrect in this finding, I am nonetheless of the view that it is plain and obvious that the claim has no prospect of success.
[65] As was held by the Supreme Court of Canada in Thibodeau, the key provision at the core of the Montreal Convention’s exclusive set of rules for liability is Article 29. This provision makes clear that the Montreal Convention provides the exclusive recourse against airlines for various types of claims arising in the course of international carriage by air. Article 29 establishes that in relation to claims falling within the scope of the Montreal Convention, “any action for damages, however founded” may only be brought “subject to the conditions and such limits of liability as are set out in this Convention”.
[66] Article 19 of the Montreal Convention establishes that the carrier is liable for damage occasioned by delay. The Plaintiff has not alleged that she has sustained any damages, let alone damage occasioned by delay. In light of Article 29, which states that non-compensatory damages shall not be recoverable, it follows that the only relief available under the Montreal Convention are those damages that have been actually sustained. In my view, Article 27 does not allow parties to contract out of fundamental precepts of the Convention, including Articles 19 and 29, which would require the claimant to prove their damages.
[67] For the above reasons, the Defendant’s motion to strike the proceeding for failing to disclose a reasonable cause of action is granted.
Useful for
No remedy when none available under the Convention
