The Quebec Superior Court recently declined to certify a class action based on the application of certain sections of the Consumer Protection Act or its Alberta equivalent to the sale of flight passes sold by Air Canada.
The representative plaintiff, Joseph Benamor, claimed that he had purchased a flight pass from Air Canada for C$2,562 in March 2015, equivalent to eight flights to and from Florida. It was valid for one year.
This flight pass could be used by Benamor or a guest, whose identity could be changed for a supplemental fee, which Benamor claimed that he had paid.
In February 2016 Benamor alleged that Air Canada had required that he pay an additional C$250 to extend the pass for three months.
Benamor claimed that the expiry date, the additional fees to add a guest and the fee to extend the pass had violated Quebec's consumer protection laws or their Albertan equivalent.
Benamor relied specifically on Sections 187.1 through 187.5 of Quebec's Consumer Protection Act, which relates to prepaid cards and gift cards.
Benamor sought to certify a class action for:
all consumers worldwide (subsidiarily in Canada or in the province of Québec) who from August 16, 2013, purchased, received, and/or acquired one or more Air Canada Consumer Flight Pass(es) with a specified number of flight credits.
Quebec's class proceedings legislation requires a court to certify a proceeding as a class proceeding if the following criteria are met:
- The claims of the class members must raise identical, similar or related issues of law or fact.
- The facts alleged must appear to justify the conclusions sought.
- The class composition makes it difficult or impracticable to apply the rules regarding other forms of representative actions or consolidation of proceedings.
- The class member appointed as the representative plaintiff must be in a position to properly represent the class members.
In this case, Air Canada challenged certification on the basis that the facts alleged did not justify the conclusions sought (ie, there was no reasonable cause of action). Air Canada also challenged Benamor's ability to properly represent the class members.
The plaintiff (Benamor) took the position that the flight passes were prepaid cards within the meaning of Sections 187.1 through 187.5 of Quebec's Consumer Protection Act. He argued that the flight passes met the definition of a 'prepaid card' in the legislation because:
- there was a payment in advance;
- it involved a card or other instrument of exchange; and
- it permitted the consumer to procure a service from Air Canada.
Quebec's consumer protection legislation prohibits:
- prepaid cards from expiring; and
- additional charges for using prepaid cards.
Therefore, Benamor argued that Air Canada should be required to provide compensation for the damages sustained as a result of failing to abide by its obligations under the legislation.
The defendant (Air Canada) took the position that the flight passes were more akin to public transit passes.
Air Canada's evidence was that the flight passes carried no monetary value, but rather that they were comprised of a fixed number of flight credits for one-way trips which could fluctuate in value over time. Applicable taxes and fees were included in the total cost of the flight pass.
Air Canada argued that when a consumer purchases a flight pass, Air Canada also assumes the risk of fluctuations in ticket prices and any governmental or airport fees associated with operating the flights.
Air Canada also noted that it sold gift cards with a fixed monetary value. For gift cards, the taxes and fees were not included in the price. These cards did not expire.
Air Canada also argued that Benamor had no personal action because he had bought the flight pass using a business credit card, suffering no personal damages. Therefore, he could not properly represent the class members.
The Quebec Superior Court declined to certify the proposed class action, holding that the prepaid card provisions in the consumer protection legislation did not apply to Air Canada's flight passes.
The court also considered whether Benamor would qualify as an adequate representative plaintiff. It held that he qualified at this stage of the action.
In dealing with the first issue, the court considered the nature and function of the flight passes.
It held that prepaid cards are generally a substitute for cash, whereas flight passes do not represent a fixed amount of money.
In particular, the court noted the fact that taxes and fees are included in the price of the flight passes, while taxes are generally charged at the time of use for prepaid cards.
The court held that the flight passes could be understood as an immediate purchase of a service to be rendered within a specified territory and period of time.
The court held that the same reasoning applied to the Alberta consumer protection legislation.
Although it was unnecessary to decide the second issue, the court held that Benamor could not be disqualified as an adequate representative plaintiff at this stage for two reasons:
- Although he had charged the flight pass in question to his company credit card, there was inadequate evidence to decide whether the damages alleged had been suffered solely by the business, rather than Benamor personally.
- Benamor met the low threshold of having an interest in the claim, being competent and having no conflict with the other class members.
This decision is notable for carriers selling flight passes, as it provides clarity on the types of transaction which are subject to consumer protection laws.
Carriers that are selling gift cards representing a fixed monetary value should be aware of their obligations under consumer protection laws.
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.
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