The Quebec Superior Court recently allowed a class action to proceed against Sunwing Airlines and its tour operator, Sunwing Vacations.(1) The central allegation was that Sunwing offered passengers travel credits rather than refunds for flights cancelled due to the covid-19 pandemic.
In the same decision, the Court did not allow the claim to proceed against:
- Air Canada;
- Air Canada Vacations;
- Air Transat;
- Transat Tours;
- WestJet; or
- WestJet Vacations.
Like Sunwing, these air carriers had initially offered some passengers travel credits instead of refunds. However, after legal proceedings were commenced, all but Sunwing implemented refund programmes for passengers.
The representative plaintiffs, Alain Lachaine and Grégory Bonnier, sought to bring a class action on behalf of passengers who had received no refund for their cancelled tickets or packages or had been reimbursed only by a third party (rather than the airline) after some delay. The proposed classes were defined as follows:
- individuals who had purchased, in Canada, an air ticket or travel package issued directly or indirectly by Air Transat or Air Canada;
- individuals who had purchased online, outside of Canada, an air ticket or travel package issued directly or indirectly by Air Transat or Air Canada; and
- individuals who had purchased, in Quebec, an air ticket or travel package issued directly or indirectly by Sunwing or WestJet.(2)
In Quebec, the certification process for class actions is known as the "authorisation" stage. Under article 575 of the Code of Civil Procedure of Quebec, a class action will be authorised if the following four criteria are met:
- The claims of the class members raise identical, similar or related issues of law or fact (ie, common issues).
- The facts alleged appear to justify the conclusions sought (ie, existence of an arguable case).
- The composition of the class makes it difficult or impracticable to apply the rules for joinder or representative proceedings.
- The representative plaintiffs are in a position to properly represent the class members.
Each of the four airlines had its own set of tariffs with different provisions. The terms and conditions applicable to a given air ticket or travel package also varied according to diverse factors, such as:
- the booking method used by the class member;
- the class of service purchased; and
- the price of that service.
Faced with numerous contractual documents that differed from one another in content, scope and effect, Justice Tremblay concluded that there were no common issues of law or fact among the claims of the class members.
Tremblay noted that he might have come to a different conclusion if the representative plaintiffs had brought separate proceedings against each of the airlines.
Although Air Canada, Air Transat and WestJet had already implemented reimbursement programmes for their passengers, the representative plaintiffs argued that they nonetheless had a viable claim against those airlines for:
- additional indemnity under the Civil Code of Quebec;(3) and
- moral and punitive damages.
Tremblay rejected this argument. In the absence of a judgment against the airlines, class members did not have a standalone claim for interest and additional indemnity. Although the representative plaintiffs had claimed punitive damages under the Quebec Consumer Protection Act (CPA), they had failed to point to a breach of any provision of the CPA that would justify punitive damages in these circumstances. Similarly, moral damages were not warranted to compensate the plaintiffs for the time and stress associated with bringing a lawsuit against the airlines. The airlines could not be faulted for opposing the application for authorisation as they had always maintained that they had no legal obligation to issue refunds to class members.
Tremblay therefore concluded that there was no arguable case against Air Canada, Air Transat or WestJet.
However, he did find that there was an arguable case against Sunwing. Unlike the other airlines, it had not established a reimbursement programme for passengers.
Sunwing's tariffs consistently characterised an epidemic as a force majeure event and excluded refunds if flights were cancelled due to a force majeure event. The representative plaintiffs argued that the Court should treat Sunwing's force majeure provisions as null and void. Those provisions, class counsel asserted, were "abusive" clauses in a consumer contract or contract of adhesion as defined in article 1437 of the Civil Code. The representative plaintiffs also argued that even if force majeure relieved Sunwing of its contractual obligation to provide flights to class members, the airline still had a duty to refund passengers by virtue of article 1694 of the Civil Code. That article requires debtors to make restitution even where performance of a contract is impossible.
Tremblay preferred to leave the interpretation of articles 1437 and 1694 to a hearing on the merits, when the court would have a full evidentiary record. For the purposes of the authorisation hearing, he was satisfied that Sunwing's tariffs and force majeure clauses gave rise to common issues of fact and law among class members.
The airlines did not argue that the composition of the class made it difficult or impractical to deal with the claims of the class members using the procedure for joinder or representative proceedings.
Adequate representation by representative plaintiffs
The representative plaintiffs had purchased air tickets issued by Air Transat and Air Canada. However, Tremblay ultimately declined to authorise class actions against Air Transat or Air Canada because there was no arguable case against these airlines. There was an arguable case only against Sunwing.
Since Lachaine and Bonnier had no dealings with Sunwing, they could not adequately represent class members in an action against that airline. However, Tremblay ruled that it would be contrary to the interests of justice to deny authorisation on this sole basis. He therefore authorised the class action against Sunwing and ordered that Lachaine and Bonnier be replaced as representative plaintiffs by individuals who had claims against Sunwing.
Limits to class action against Sunwing
The class action against Sunwing was limited to individuals who had purchased their now-cancelled air tickets or travel packages in Quebec. Although class counsel sought to include all individuals who had purchased flights or packages issued "directly or indirectly" by Sunwing, Justice Tremblay chose to limit the class to individuals who had purchased tickets or packages directly from Sunwing.
Justice Tremblay also refused to authorise the claim for punitive damages against Sunwing, finding no legal basis for this claim.
For further information on this topic please contact Carlos P Martins or Agatha Wong at WeirFoulds LLP by telephone (+1 416 365 1110) or email ([email protected] or [email protected]). The WeirFoulds LLP website can be accessed at www.weirfoulds.com.
(1) Lachaine c Air Transat AT inc, 2021 QCCS 2305.
(2) The Sunwing and WestJet class was limited to individuals in Quebec because these airlines do not have registered offices in the province. It is likely that class counsel wanted to avoid a jurisdictional challenge. Had class counsel proposed a worldwide class, the airlines might have argued that a Quebec court had no jurisdiction to hear disputes between parties that did not contract or reside in Quebec.
(3) Article 1619 of the Civil Code of Quebec allows a plaintiff to seek indemnity on top of its award of damages:
An indemnity may be added to the amount of damages awarded for any reason, which is fixed by applying to the amount of the damages, from either of the dates used in computing the interest on them, a percentage equal to the excess of the rate of interest fixed for claims of the State under section 28 of the Tax Administration Act (chapter A-6.002) over the rate of interest agreed by the parties or, in the absence of agreement, over the legal rate.