On appeal from the judgment of the Federal Court of Appeal (Pelletier, Gauthier and Trudel JJ.A.), 2012 FCA 246 pronounced September 25, 2012.

In 2009, on three international flights operated by the airline and in an airport, the passengers did not receive services in the French language. They filed several complaints with the Office of the Commissioner of Official Languages against the airline, four of which were upheld. There is no dispute that the airline breached its obligations to supply services in French under s. 22 of the Official Languages Act (the “OLA”) on the occasions giving rise to those four complaints. The passengers applied to the Federal Court under s. 77 of the OLA for damages and for structural orders in relation to the airline’s breaches of their right to services in French. The airline defended against the claims for damages by relying on the limitation on damages liability set out in the Convention for the Unification of Certain Rules for International Carriage by Air (the “Montreal Convention”), which restricts the types and the amount of claims for damages that may be made against international air carriers. The Federal Court found that the passengers were entitled to both damages and a structural order, holding that although there was a conflict between the limitation on damages in the Montreal Convention and the power under the OLA to award damages, the latter prevailed. The Federal Court of Appeal set aside the award of damages for the three complaints about events that took place on board the flights as well as the structural order. It held that theMontreal Convention precluded the damages remedy and that a structural order was not appropriate.

 

Held (5:2): The appeal should be dismissed.

 

Per McLachlin C.J. and LeBel, Rothstein, Cromwell and Karakatsanis JJ.:

The Montreal Convention’s uniform and exclusive scheme of damages liability for international air carriers does not permit an award of damages for breach of language rights during international carriage by air. To hold otherwise would do violence to the text and purpose of the Montreal Convention, depart from Canada’s international obligations under it and put Canada off-side a strong international consensus concerning its scope and effect. The general remedial power under the OLA to award appropriate and just remedies cannot — and should not — be read as authorizing Canadian courts to depart from Canada’s international obligations under the Montreal Convention.

The claims before this Court fall squarely within the exclusion established by the Montreal Convention. 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”. Articles 17 to 19 of the Montreal Convention establish that the carrier is liable for damage sustained: in case of an accident causing the death or bodily injury of a passenger on board the aircraft or in the course of embarking or disembarking (Article 17); in case of destruction or loss of, or of damage to, baggage while in the charge of the carrier (Article 17); in the event of the destruction or loss of, or damage to, cargo during carriage (Article 18); and for damage occasioned by delay (Article 19).

Two of the main purposes of the Montreal Convention are to achieve a uniform set of rules governing damages liability of international air carriers and to provide limitation of carrier liability. These purposes can only be achieved by the Montreal Convention if it provides the exclusive set of rules in relation to the matters that it covers. The Montreal Convention does not deal with all aspects of international carriage by air, but within the scope of the matters which it does address, it is exclusive in that it bars resort to other bases for liability in those areas. The Montreal Convention’s text and purpose as well as a strong current of jurisprudence make it clear that the exclusivity of the liability scheme established under the Montreal Convention extends at least to excluding actions arising from injuries suffered by passengers during flight or embarkation and debarkation when those actions do not otherwise fall within the scheme of permitted claims.

The passengers’ argument that the Montreal Convention does not limit claims for damages sought in relation to public law claims or breaches of quasi-constitutional statutes has no support in the text or purpose of the Montreal Convention or in the international jurisprudence. The limitation in Article 29 of the Montreal Convention applies to “any action” in the carriage of passengers, baggage or cargo, “for damages, however founded, whether under this Convention or in contract or in tort or otherwise”. There is no hint in this language that there is any intention to exempt any “action for damages” in the carriage of passengers, baggage or cargo depending on its legal foundation, such as when a plaintiff brings forward a statutory monetary claim of a public law nature based on the breach of quasi-constitutional rights. The passengers’ claims are an “action for damages” within the meaning of Article 29, as they claim damages for injuries, namely moral prejudice, pain and suffering and loss of enjoyment of their vacation, suffered in the course of an international flight. Permitting an action in damages to compensate for moral prejudice, pain and suffering and loss of enjoyment of a passenger’s vacation that does not otherwise fulfill the conditions of Article 17 of the Montreal Convention (because the action does not relate to death or bodily injury) would fly in the face of Article 29. It would also undermine one of the main purposes of theMontreal Convention, which is to bring uniformity across jurisdictions to the types and upper limits of claims for damages that may be made against international carriers for damages sustained in the course of carriage of passengers, baggage and cargo. The application of the Montreal Convention focuses on the factual circumstances surrounding the monetary claim, not the legal foundation of it.

The passengers’ argument that the substantive scope of the Montreal Convention does not extend to barring claims for “standardized damages” and that their claims are of that nature must also be rejected. Even if this Court were to adopt the distinction between “individual damages” and “standardized damages” relied on in jurisprudence from the European Court of Justice, the damages sought by the passengers in this case were for damages on an individual basis, as they were geared to and depended upon the impact on the passengers of the particular breaches.

The passengers’ submission that, even if their claims fall within the substantive scope of the Montreal Convention, they fall outside its temporal scope for cases involving personal injuries since the assignments of non-bilingual flight attendants on the relevant flights were decisions made long before the embarkation process is not well founded. The passengers were clearly within the temporal limits of theMontreal Convention when they suffered the breach of their language rights. Courts must focus their application of the exclusivity principle on the location or activity of the passenger when the accident or occurrence directly causing the particular injury giving rise to the claim occurred, not on some antecedent fault.

When the OLA and the Montreal Convention are properly interpreted, there is no conflict between the general remedial powers under the OLA and the exclusion of damages under the Montreal Convention and, therefore, there is no need to consider which would prevail if there were. Courts presume that legislation passed by Parliament does not contain contradictions or inconsistencies and only find that they exist when provisions are so inconsistent that they are incapable of standing together. Even when provisions overlap in the sense that they address aspects of the same subject, they are interpreted so as to avoid conflict wherever this is possible. The provisions in issue here overlap but do not conflict. They have markedly different purposes and touch on distinct subject matters. The remedial provisions of the OLA are part of a larger scheme of obligations and mechanisms the object of which is to preserve and strengthen the vitality of Canada’s official languages in our federal institutions. The Montreal Convention, in contrast, is part of an internationally agreed upon uniform and exclusive scheme addressing the damages claims in the field of international carriage by air. The remedial provisions in the OLA cannot be understood to be an exhaustive code that requires damages to be available in all settings and without regard to all other relevant laws. The OLA does not provide that damages should be granted in every case, but authorizes courts to grant “appropriate and just” remedies. The power to grant an “appropriate and just” remedy may easily be reconciled with the specific and limited exclusion of damages in the context of international air travel. A remedy is not “appropriate and just” if awarding it would constitute a breach of Canada’s international obligations under the Montreal Convention. Accordingly, in fashioning an appropriate and just remedy under the OLA in a case of international carriage by air, the Federal Court must apply the limitation on damages set out in Article 29 of the Montreal Convention

The passengers’ submission that the quasi-constitutional status of the OLA prevents a harmonious interpretation of s. 77(4) of the OLA and of Article 29 of the Montreal Convention must be rejected. Section 77(4) of the OLA, which confers a wide remedial authority, is certainly part of a quasi‑constitutional statutory scheme designed to both reflect and actualize the equality of status of English and French as the official languages of Canada and the equal rights and privileges as to their use in the institutions of Parliament and government of Canada as declared in s. 16(1) of the Canadian Charter of Rights and Freedoms, and it should be interpreted generously to achieve its purpose. These factors, however, do not alter the correct approach to statutory interpretation which requires that the words of a statute be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme and object of the statute and the intention of Parliament. The OLA, read in its full context, demonstrates that Parliament did not intend to prevent s. 77(4) from being read harmoniously with Canada’s international obligations given effect by another federal statute. The proposition that Parliament, through s. 77(4), intended that courts should be able to grant damages even though doing so would be in violation of Canada’s international undertakings as incorporated into federal statute law runs afoul of the principle of interpretation that Parliament is presumed not to intend to legislate in breach of Canada’s international law obligations. Section 77(4) should be understood as having been enacted into an existing legal framework which includes statutory limits, procedural requirements and a background of general legal principles — including Canada’s international undertakings incorporated into Canadian statute law — which guide the court in deciding what remedy is “appropriate and just”.

The Federal Court of Appeal was correct to set aside the structural order. Structural orders are treated with special care because of two potential and related problems: first, insufficient clarity, which in turn may result in the second, namely the need for ongoing judicial supervision. Orders must be sufficiently clear so that they give the parties bound by them fair guidance on what must be done to comply and to prevent a potentially endless round of further applications to determine whether the parties have complied. Ongoing judicial supervision will be appropriate in some cases, but absent compelling circumstances, the courts generally should not make orders that have the almost inevitable effect of creating ongoing litigation about whether the order is being complied with. In this case, the order is too imprecise, risks ongoing litigation and court supervision in relation to whether it is being complied with, and is inappropriate particularly in light of the Commissioner’s statutory powers and expertise in relation to monitoring compliance with the OLA.

Per Abella and Wagner JJ. (dissenting): The Montreal Convention does not bar a damage award for breach of language rights during international carriage by air.

The Thibodeaus seek damages for violations of a statute that reifies constitutionally protected rights. The Montreal Convention should be interpreted in a way that is respectful of the protections given to fundamental rights, including language rights, in domestic legislation. There is no evidence in the Parliamentary record or the legislative history of the Convention to suggest that Canada, as a state party, intended to extinguish domestic language rights protection by ratifying or implementing the Montreal Convention. Given the significance of the rights protected by the Official Languages Act and their constitutional and historic antecedents, the Montreal Convention ought to be interpreted in a way that respects Canada’s express commitment to these fundamental rights, rather than as reflecting an intention to subvert them. This Court has often said that domestic law should be generously interpreted in alignment with international law and its human rights values. It has never said that international law should be interpreted in a way that diminishes human rights protected by domestic law.

The process of treaty interpretation is a process of discernment. The literal meaning of the words is rarely reliably able to yield a clear and unequivocal answer. The intention of state parties must therefore be discerned by using a good faith approach not only to the words at issue, but also to the context, history, object and purpose of the treaty as a whole. In this case, this exercise leads to the conclusion that Article 29 of the Montreal Convention does not exclusively govern the universe of damages for which carriers are liable during international carriage by air. The first words of Article 29 are words that restrict its scope by declaring that any action for damages “in the carriage of passengers, baggage and cargo” must be brought subject to the conditions set out in the Montreal Convention. The phrase that immediately follows — “however founded, whether under this Convention or in contract or in tort or otherwise” — is a clause dependant for its meaning on the preceding opening words; thus, “action” refers only to an action for damages “in the carriage of passengers, baggage and cargo”. It is, therefore, only an action for damages incurred “in the carriage of passengers, baggage and cargo” that must be brought “subject to the conditions and such limits of liability as are set out” in the Montreal Convention

Other provisions of the Montreal Convention, and, in particular, of Chapter III in which Article 29 is found, provide interpretive assistance to assess the meaning of an action for damages “in the carriage of passengers, baggage and cargo”. Chapter III sets out the limited liability of carriers in the carriage of passengers, baggage and cargo. Articles 17, 18 and 19 refer to death or bodily injury of a passenger, destruction or loss of, or damage to, baggage, destruction or loss of, or damage to, cargo, and delay in the carriage of persons, baggage or cargo. Together with Article 29, these provisions confirm that the Montreal Convention exclusively governs only actions for damages in respect of these subjects.

The predecessor Warsaw Convention came into being in 1929 to assist the fledgling airline industry take flight. At that time, aviation technology was in its initial stages. Accidents were common, and many pilots and passengers were injured or died as a result. The relative frequency of accidents exposed carriers to unpredictable and significant losses. This made it difficult to secure investment capital or insurance protection. Airlines responded by requiring passengers to sign waivers relieving carriers of any and all liability in the event of an injury. When accidents happened, those passengers were left with no remedy for their injuries or losses. As safety in the industry improved, governments turned their attention from protecting the financial viability of airlines to introducing a more passenger-friendly legal regime. The focus tilted towards increasing the exceptionally low limits on carrier liability established in the Warsaw Convention and states subsequently signed on to different international efforts to expand carrier liability.

Notwithstanding the increasing recognition that compensation for passengers was too low, a single international instrument increasing ceilings on carrier liability proved elusive. Out of concern that this fractured response could lead to the demise of a unified system of international air law, the industry took action. The Montreal Agreement of 1966, a private arrangement between airlines, increased carrier liability under the Warsaw Convention for personal injury.

Having been “upstaged” by industry initiatives to address the low ceilings on carrier liability, States began to work towards updating the Warsaw Convention. The Montreal Convention came into being in 1999, adopting a two-tier liability scheme for passenger injury or death. The Montreal Convention sought to replace the patchwork system that had attempted to expand the limits on liability set by the Warsaw Convention in 1929. The drafters of the Montreal Convention continued to maintain a uniform liability scheme, as had the Warsaw Convention, but while the primary goal of the Warsaw Convention had been to limit the liability of carriers in order to foster the growth of the nascent commercial aviation industry, the state parties to the Montreal Convention were more focused on the importance of ensuring protection of the interests of consumers in international carriage by air and the need for equitable compensation based on the principle of restitution.

Interpreting Article 29 of the Montreal Convention in a way that narrows protection for consumers and expands it for carriers, is therefore both counter-intuitive and historically anomalous. At no time was there ever any suggestion that the new Convention was designed to reduce the ability of passengers to sue carriers.

The absence of any reference in the Parliamentary record to the changes in language between the Warsaw Convention and the Montreal Convention is also revealing. Dramatic changes in law tend to attract dramatic reactions. This purported change attracted none. The most logical explanation for the silence, therefore, is that there was no change in law. In fact, it is hard to imagine such a drastic domestic intrusion without either express language or Parliamentary disclosure. The silence about such consequences suggests that no such consequence was either contemplated or intended.

The meaning of Article 29, considered in context and in light of the object and purpose of the Montreal Convention, therefore, points to a limited scope of exclusivity, and should be interpreted as directing that the Montreal Convention governs only those actions brought for damages incurred “[i]n the carriage of passengers, baggage and cargo”, namely, actions covered by Articles 17, 18 and 19.  

The Thibodeaus action for damages does not fall within the actions covered by Articles 17, 18 and 19 of the Montreal Convention. The language of Article 17(1) makes it clear that the provision does not apply to all events that take place on board an aircraft or in the course of the operations of embarking or disembarking. Rather, Article 17(1) imposes the requirements that: (1) there must have been an accident; (2) which caused; (3) death or bodily injury; (4) while the passenger was on board the aircraft or was in the course of embarking or disembarking. In this case, there is no complaint of an accident. That is dispositive since Article 17(1) talks of “death or bodily injury” caused by an accident. The T’s have not suffered any bodily injury. The fact that the breaches of their language rights occurred on board the aircraft is irrelevant since those circumstances are only pertinent if there was an accident.

Abella J would have allowed the appeals with respect to the claims for damages and would have restored the damages awarded by the application judge.

Neutral Citation: 2014 SCC 67. Docket No. 35100

http://scc-csc.lexum.com/scc-csc/scc-csc/en/item/14418/index.do