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Court Finds in Favour of Air Canada in Denied Boarding Compensation Case

View PDF: 2018-05 (Nov 6-18)

The Supreme Court of Nova Scotia (the “NSSC”) recently ruled in favour of Air Canada, dismissing a passenger’s appeal from the province’s Small Claims Court, interpreting that air carrier’s tariff provision pertaining to  denied boarding compensation (“DBC”).

The NSSC agreed with the lower court’s finding that Air Canada’s DBC rule related strictly to denial of boarding as a result of overbooking – and not as a result of other forms of delay.

Also, and just as notably, the NSSC held that the tariff provision in question required an the aggrieved passenger 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 recommended by Air Canada. 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 the passengers on to a flight departing about an hour later than their original flight, this was not convenient and, as a result, they were rebooked for travel the next day.

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

This Rule provided that DBC was payable to a passenger when Air Canada was “unable 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 the Rule applied, the amount of compensation depended upon the length of the consequent delay in the passenger’s travel plans. For delays of six hours or more, CAD$800 was 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 NSSC, arguing the Small Claims Court adjudicator erred in his interpretation of the Tariff and that the onus to prove the flight was not overbooked rested with Air Canada.

The Tariff Rule

The Tariff Rule in issue read as follows:

Rule 245AC Denied Boarding Compensation

When AC is unable 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, AC 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 AC as follows:

(1) Conditions for payment

(a) passenger must present himself for carriage in accordance with this tariff, having complied fully with AC’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), AC will tender liquidated damages in cash/bank/draft in the amounts as follows:

Delay                          Cash

over 6 hours                 CAD$800

 

The Issues and Arguments

The NSSC framed the issues as follows:

Issue 1: Did the adjudicator err in his interpretation of Rule 245AC?

Issue 2: Did the adjudicator err in finding that the appellants had the onus of proving that denial of boarding was based on “overbooking”?

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

The plaintiffs argued that, moreover,  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 the flight was not overbooked.

 

The NSSC’s Decision

On the first issue, the NSSC found that on its face, the language of the Tariff was clear that Air Canada would only compensate passengers denied boarding if the reason for the denial was overbooking. The Rule did not purport to apply to passengers denied boarding due to a delay at the check-in counter. The NSSC 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 NSSC 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 NSSC found that the passengers could have subpoenaed Air Canada’s records in order to prove their flight was indeed overbooked. However, the claimant passengers relied on ambiguous notations on electronic records and equally ambiguous statements made by Air Canada service personnel.

As a result, the evidence presented did not satisfy the Small Claims Court adjudicator that the flight was overbooked. The NSSC upheld that finding.

Comment

Despite humble beginnings in Small Claims Court, Paine v. Air Canada provides some insight into how Canadian courts may interpret air carrier Tariffs and the evidence claimants are expected to adduce in order to succeed in securing compensation in overbooking cases.

Paine v. Air Canada, 2018 NSSC 215