Introduction
Facts
Tariff rule
Issues and arguments

Supreme Court of Nova Scotia's decision
Comment


Introduction

The Supreme Court of Nova Scotia recently ruled in favour of Air Canada, dismissing a passenger's appeal from the province's small claims court, interpreting the air carrier's tariff provision which pertained to denied boarding compensation (DBC).

The Supreme Court of Nova Scotia agreed with the lower court's finding that Air Canada's DBC rule related strictly to the denial of boarding as a result of overbooking and not as a result of other forms of delay.

Notably, the Supreme Court of Nova Scotia held that the tariff provision in question required that an aggrieved passenger must prove that a flight was overbooked, which the claimants were unable to do in this case.

Facts

Three passengers held tickets to travel on a domestic Air Canada flight from Vancouver, British Columbia to Sydney, Nova Scotia.

On arriving at Vancouver International Airport, the passengers joined the check-in queue within the time that Air Canada recommended. Although the line at the check-in counter was long, all but one of the Air Canada check-in agents left their stations to attend a meeting.

When the complainants finally reached the check-in counter, they were advised that their flight was closed. Although airline staff attempted to check-in the passengers to a flight departing about an hour later than their original flight, this was not convenient and, as a result, they were rebooked to travel the next day.

The plaintiffs commenced an action in the Nova Scotia Small Claims Court, each seeking C$800 in DBC, citing Rule 245AC of the Air Canada Domestic Tariff as the basis for their claim.

This rule provides that DBC is payable to passengers when Air Canada fails "to provide previously confirmed space due to there being more passengers holding confirmed reservations and tickets than for which there are available seats on a flight". Where applied, the amount of compensation depends on the length of the consequent delay in the passenger's travel plans (eg, for delays of six hours or more, C$800 is owed).

The small claims court dismissed the claim (Paine v Air Canada 2017 NSSM 7), finding that Rule 245AC did not apply because the passengers had not proven that they were denied boarding as a result of overbooking.

The passengers appealed this decision to the Supreme Court of Nova Scotia, arguing that the small claims court adjudicator erred in his interpretation of the tariff and that the onus to prove that the flight was not overbooked rested with Air Canada.

Tariff rule

The tariff rule in issue read as follows:

Rule 245AC Denied Boarding Compensation
When [Air Canada] is unable to provide previously confirmed space to there being more passengers holding confirmed reservations and tickets than for which there are available seats on a flight, shall implement the provisions of this rule.

(A) Definitions

(5) Oversold is that condition which is the result of there being more passengers with confirmed reservations and tickets that there are seats available on a flight….

(E) Compensation for Involuntary Denied Boarding

Unless passenger chooses option (D)(3) above, in addition to providing transportation in accordance with (D)(1) or (2), a passenger who has been denied boarding will be compensated by [Air Canada] as follows:

(1) Conditions for payment

(a) passenger must present himself for carriage in accordance with this tariff, having complied fully with [Air Canada's] applicable reservation, ticketing, reconfirmation, check-in and boarding requirements with the time limits and the location set out in Rule 135.

(b) it must not have been possible to accommodate the passenger on the flight to which he held confirmed reservations and the flight must have departed without him.

(2) Amount of Compensation

Subject to the provisions of (E) (1), [Air Canada] will tender liquidated damages in cash/bank/draft in the amounts as follows:

Delay Cash

over 6 hours CAD$800

Issues and arguments

The Supreme Court of Nova Scotia framed the issues as follows:

  • Issue one – did the adjudicator err in his interpretation of Rule 245AC?
  • Issue two – did the adjudicator err in finding that the appellants had the onus of proving that the denial of boarding was based on overbooking?

With respect to the first issue, the plaintiffs argued that Rule 245AC(E) provides for compensation where a passenger has been involuntarily denied boarding, independently of whether the flight has been overbooked.

Moreover, the plaintiffs argued that the tariff should be interpreted "generously in favour of consumers".

Regarding the second issue, the plaintiffs argued that because the information was in Air Canada's control, the airline should be responsible for proving that the flight was not overbooked.

Supreme Court of Nova Scotia's decision

On the first issue, the Supreme Court of Nova Scotia found that the language of the tariff made it clear that Air Canada would only compensate passengers that had been denied boarding if the reason for the denial was overbooking. The rule did not purport to apply to passengers that had been denied boarding due to a delay at the check-in counter. The Supreme Court of Nova Scotia was unwilling to interpret the tariff in favour of the claimants in the face of clear wording.

With respect to the second issue, namely which party was responsible for proving or disproving that a flight was overbooked, the Supreme Court of Nova Scotia agreed with the small claims court adjudicator that the passengers had the onus of proving that the flight was overbooked in order to be eligible for compensation under the rule.

The Supreme Court of Nova Scotia found that the passengers could have subpoenaed Air Canada's records to prove that their flight was overbooked. However, the claimant passengers instead relied on ambiguous notations on electronic records and equally ambiguous statements that had been made by Air Canada's service personnel.

As a result, the evidence presented did not satisfy the small claims court adjudicator that the flight was overbooked – the Supreme Court of Nova Scotia upheld that finding.

Comment

Despite humble beginnings in the small claims court, Paine v Air Canada provides some insight into how Canadian courts may interpret air carrier tariffs and the evidence that claimants are expected to adduce to succeed in securing compensation in overbooking cases.

For further information on this topic please contact Carlos P Martins or Emma Romano at Bersenas Jacobsen Chouest Thomson Blackburn LLP by telephone (+1 416 982 3800) or email ([email protected] or [email protected]). The Bersenas Jacobsen Chouest Thomson Blackburn website can be accessed at www.lexcanada.com.