International Air Transport Association v. Canadian Transportation Agency 2022 FCA 211
Federal Court of Appeal, Canada
Facts
[2] In May 2018, Parliament adopted the Transportation Modernization Act, S.C. 2018, c. 10 (the TMA), which amended the Canada Transportation Act, S.C. 1996, c. 10 (the CTA) by creating the new section 86.11. This new provision requires the Agency, after consulting with the Minister of Transport (the Minister), to make regulations imposing certain obligations on air carriers, notably in relation to flight delays, flight cancellations, denial of boarding, and loss of or damage to baggage. In April 2019, pursuant to subsection 86.11(2) of the CTA, the Minister issued the Direction Respecting Tarmac Delays of Three Hours or Less, S.O.R./2019-110 (the Direction) requiring the Agency to adopt regulations imposing obligations on air carriers to provide timely information and assistance to passengers in cases of tarmac delays of three hours or less.
[3] Around the same time, the Agency adopted the Air Passenger Protection Regulations, S.O.R./2019-150 (the Regulations), imposing obligations – including liability – on air carriers with respect to tarmac delays, flight cancellations, flight delays, denial of boarding and damage or loss of baggage in the context of domestic and international air travel. For ease of reference, the text of the Regulations can be found in the Annex to these reasons.
[4] The appellants challenge numerous provisions of the new Regulations on the basis that they exceed the Agency’s authority under the CTA. They claim that the regulations contravene Canada’s international obligations under the Convention for the Unification of Certain Rules Relating to International Carriage by Air, 12 October 1929, 137 L.N.T.S. 11 (the Warsaw Convention), its successor the Convention for the Unification of Certain Rules for International Carriage by Air, 28 May 1999, 2242 U.N.T.S. 309 (the Montreal Convention), and the Carriage by Air Act, R.S.C. 1985, c. C-26 (the CAA). […]
Issue(s)
Were the Air Passenger Protection Regulations invalid as a result of Article 29 of the Montreal Convention?
Discussion
See paragraph [118] and onwards:
[118] In conformity with the rules for treaty interpretation set out in the Vienna Convention, one must start with the text of Article 29 and with the Montreal Convention as a whole to understand the scope of the exclusivity principle. Article 29 speaks of “any action for damages, however founded, whether under this Convention or in contract or in tort or otherwise”, and uses language that pertains to judicial proceedings such as by referring to the persons “who have the right to bring suit”, and to “any such action”. Article 33(1) similarly refers to “[a]n action for damages must be brought…before the court of the domicile of the carrier […] or before the court at the place of destination”. Article 35(1) specifies that the right to damages shall be extinguished “if an action is not brought within a period of two years”, and Article 35(2) goes on to state that the method of calculating limitation periods “shall be determined by the law of the court seised of the case”. Finally, Article 22(6) indicates that the prescribed limits “shall not prevent the court from awarding […] court costs and of the other expenses of the litigation”.
[119] There is no doubt that the expression “action for damages” in Article 29 of the Montreal Convention must be understood in a broad sense. The notion of damages, in particular, cannot be left to the vagaries of domestic law; as noted by the Supreme Court in Thibodeau, “the scope of the exclusivity principle in the Montreal Convention cannot be modeled on national definitions of damages” (at para. 77). This is also why the Supreme Court reiterated that the focus of the inquiry must be the factual circumstances giving rise to the claim, not the alleged legal foundation of the claim (Thibodeau at paras. 66, 71 and 75). This is precisely why the Court rejected the Thibodeaus’ argument that there was a distinction between public law and private law damages. As a result, the Court rejected their claim for breaches of quasi-constitutional statutes because it did not fall within the purview of the Montreal Convention.
[120] As much as we must strive to give Article 29 its fullest meaning, consistent with the broad language in which it is couched, and thereby avoid “artful pleading to define the scope of the Montreal Convention” (Thibodeau at para. 64), the Attorney General submits that the Convention was meant only to regulate actions in courts. The Attorney General argues that the use of the words “action” and “damages” in the Convention must still be accounted for and relies on the definitions in Black’s Law Dictionary (Brian A. Garner, ed., Black’s Law Dictionary, 11th ed. (St Paul (Minn): Thomson Reuters, 2019), and in particular on its definition of “action” (defined as “any judicial proceeding, which, if conducted to a determination, will result in a judgment or decree”) and of “damages” (defined as “money claimed by, or ordered to be paid to, a person as compensation for loss or injury”).
[121] This understanding of Article 29 appears to be borne out by the Travaux Préparatoires leading to the Montreal Convention. When asked to clarify the scope of that provision by the Delegate from Sri Lanka, the Chairman indicated that “the scope of the Convention would govern the regulation of the types of actions which could be brought before the Courts”. He went on to say:
The purpose behind Article 28 [renumbered 29 in the final version] was to ensure that, in circumstances in which the Convention applied, it was not possible to circumvent its provisions by bringing an action for damages in the carriage of passengers, baggage and cargo in contract or in tort or otherwise. Once the Convention applied, its conditions and limits of liability were applicable. (emphasis added)
ICAO, International Conference on Air Law, Montreal, 10-28 May 1999, Vol. 1, Minutes, 9775-DC/2, at p. 235
[122] It may be that in some legal systems, an action for damage may not necessarily involve judicial proceedings at the behest of a litigant. Indeed, Article 33(4) seems to leave questions of procedure to domestic law. In the common law world and in the civil law tradition, however, courts are traditionally called upon to rule on such remedies. Be that as it may, and whether judicial proceedings are an essential component of Article 29, the proper focus must be on what the claim aims to achieve, or what it seeks to redress, not on its legal foundation or how it is brought. It is at this juncture, in my view, that the scheme of the CTA and the Regulations part with the action for damages envisioned by the Montreal Convention.
[123] The scheme of the Regulations with regards to air carrier liability is of an entirely different nature than what was contemplated by the Montreal Convention. First, and most importantly, the carrier’s liability for delay, as contemplated by Article 19 of the Convention, is meant to address individualized damages. Even if a passenger does not bear the burden of proving fault or causation to establish the air carrier’s liability under the Montreal Convention, individualized damages must still be established before an air carrier can be held liable for compensation. Under the Regulations, the amount of compensation to which a passenger is entitled is fixed by the Regulations and is the same for all the passengers on a particular flight, and it is payable as soon as certain objective conditions are met. It is meant to compensate for the inconvenience that delay causes, in and of itself and independently of any demonstrable loss due to a particular situation. Contrary to the Convention, which is concerned with the period of time after the delayed arrival, the Regulations cover the time period before the delayed arrival.
[124] It is telling, that the amount of compensation fixed by the Regulations is not linked to the price of the ticket purchased, nor does it depend on the passenger’s travel purposes (business or personal). To that extent, it is closer to a consumer protection scheme than to an action in damage. Indeed, the RIAS makes it clear that the objective of the Regulations is “to normalize the minimum standard across all carriers operating in Canada to ensure that the obligations on carriers are clear, concise and easily understood by carriers and passengers” (RIAS at 4893).
[125] Prior to the coming into force of the Regulations, the Air Transportation Regulations (S.O.R./88-58) prescribed the topics that carriers had to address in their terms and conditions pursuant to paragraph 86(1)(h) of the CTA, but did not describe the content of these provisions. The mandate to review the content of the terms and conditions was left to the Agency. The review of these provisions therefore proceeded on a carrier-by-carrier and tariff-by-tariff basis.
[126] With the advent of the Regulations, the content of the terms and conditions that have to be covered by the tariffs of all carriers are uniform and standardized. Instead of leaving it to each carrier to determine the compensation for flight disruption within the carrier’s control based on criteria described in a carrier’s tariff or at the discretion of a carrier, the Regulations establish minimum levels of compensation with a view to enhance clarity and to better protect passengers. These minimal obligations pertain not only to delays, but also to denied boarding, lost or damaged baggage, transportation of musical instruments, seating of children under the age of 14 years, and unaccompanied minors.
[127] The other important characteristic of the Regulations that sets them apart from an action for damages is their enforcement mechanism. The minimum compensation required by the Regulations is meant to be enforced by the Agency through administrative measures. It is noteworthy that even before the advent of standardized minimum tariff introduced by the Regulations, the Agency was empowered to review individual carriers’ terms and conditions of carriage, primarily on the basis of individual complaints, to ensure that they were clear, just, and reasonable (s. 111 of the Air Transportation Regulations).
[128] Pursuant to section 85.1 of the CTA, the Agency shall review any complaint made by a person with respect to any issue dealt with in that part of the CTA (which obviously includes the terms and conditions set out in tariffs). If an air carrier refuses to compensate a passenger in accordance with the Regulations, for example, the Agency may attempt to resolve the complaint. Air travel complaints typically first follow an alternative dispute resolution process, whereby Agency staff will try to resolve the complaint through facilitation or mediation.
[129] If this informal process does not work to the complainant’s satisfaction, the complainant may then ask for adjudication before a panel of Agency Members (ss. 37 and 85.1(3) of the CTA). This power is consistent, and indeed rooted, in the Agency’s jurisdiction to determine whether a carrier has applied the terms and conditions set out in its tariff (see s. 67.1 of the CTA for domestic services and s. 113.1 for international services). It must be remembered that Parliament has deemed the obligations established by the Regulations made under subsection 86.11(1) to form part of the terms and conditions set out in the carrier’s tariffs (ss. 86.11(4)), and that the Regulations were so promulgated (see also s. 122 of the Air Transportation Regulations).
[130] If the Agency finds that a carrier has failed to apply its tariff, it can order the carrier to take the corrective measures that the Agency considers appropriate, which could include the payment of the applicable amount set out in the Regulations, and compensation for any expense incurred by the passenger (s. 113.1 of the Air Transportation Regulations and subpara. 86(1)(h)(iii) of the CTA). Interestingly, the Agency has also been granted discretion to make its decisions applicable to some or all passengers affected by a flight that is the subject of a complaint concerning the delay, cancellation and denied boarding provisions of the Regulations (subpara. 86(1)(h)(iii.1).
[131] Aside from its oversight role with respect to the application of tariff provisions, the Agency may also enforce the Regulations through administrative monetary penalties. Pursuant to subsection 117(1) of the CTA, the Agency may designate any provisions of the CTA or any regulation as a provision, which if contravened, is a violation under the CTA. The Agency exercised this power at section 32 of the Regulations by designating significant portions, including the compensation provisions at issue in this appeal, as subject to administrative monetary penalties (see Schedule to the Regulations). Administrative monetary penalties are issued by designated enforcement officers named under the CTA (s. 178), and notices of violation are reviewable before the Transportation Appeal Tribunal of Canada (ss. 180.3 to 180.6).
[132] It appears to me, therefore, that the minimum compensation scheme set out in the CTA and the Regulations is markedly different from an action for damages. Not only is it based on a form of standardized and uniform compensation with a view to providing passengers with clear and transparent information and protection, and to avoiding the haphazard application of the various tariffs applicable to the carriers, but it is also enforced through an administrative mechanism rather than through an action for damages: see, by way of analogy, Brake v. PJ-M2R Restaurant Inc., 2017 ONCA 402, 413 D.L.R. (4th) 284 at paras. 109-119. Such a scheme provides benefits to certain persons subject to objective conditions which are independent of any cause of action a person may have. Those benefits are not intended to diminish an injured person’s damage claim, to which the usual principles of causation, remoteness and mitigation will apply.
[133] Even though the possibility of filing an action in court to recover the amount set out in the Regulations is not excluded by the CTA, the fact remains that in most instances the Regulations will be implemented through an administrative process for obvious reasons (costs, delay, simplicity of the proceedings). In any case, even in those rare instances where a passenger might want to institute an action in court, it would still not be an action for damages since the compensation is fixed and bears no relationship to the actual damage incurred but rather hinges on certain conditions being met.
Useful for
Local consumer law with standardised compensation not an action for damages under Article 29 MC99
