TRANSPORTATION REPORT
e-News from Alexander Holburn Beaudin & Lang LLP
On the Radar
There have been a number of recent
Canadian Court decisions, particularly
in Quebec, that have considered and/
or applied the Montreal Convention (an
international convention that governs the
international carriage by air of passengers,
baggage and cargo). The following is a
brief summary of three recent decisions
that caught our eye.
whether the Montreal Convention applies
to the proceeding by virtue of a European
Community Regulation (EC Regulation
889/2002). The European Community
Regulation implements the Montreal
Convention for all EU air carriers. The
Court has allowed the plaintiffs’ motion
and has re-opened Air France’s motion.
Accordingly, further materials and written
arguments will be filed and the motion
will be heard soon, with a full argument
on the applicability of the Warsaw
Convention, the Montreal Convention
and EC Regulation.
Inside this issue:
Page 1
On the Radar
Page 2
Update on Bill C-310 -
An Act to Provide Certain
Rights to Air Passengers
Page 3
From passenger rights to
animal rights?
Strugarova v. Kissiov
This proceeding was commenced in the
Ontario Superior Court by passengers
who allegedly suffered injuries when
an Air France passenger jet failed to
stop on the runway and plunged into a
shallow ravine near the Toronto Pearson
International Airport. In February 2009,
the Court dismissed a motion brought
by Air France that sought a permanent
stay or dismissal of the plaintiffs’ action,
on the grounds that the Court had no
jurisdiction (based on an argument
that the Warsaw Convention governed
the plaintiffs’ claim and that Article 28
of the Warsaw Convention precluded
jurisdiction). The Court ruled that the Air
France defendants had, through their
own actions, submitted to the jurisdiction
of the Court. On June 26, 2009, the
Court granted a motion brought by
the plaintiffs that sought to “re-open”
Air France’s motion. The plaintiffs
are seeking to determine the issue of
September 2009
Coopersmith v. Air Canada
Page 4
Dr. Henry Coopersmith brought an action
in Quebec Small Claims Court against
Air Canada seeking compensation for
medical services he provided to a fellow
passenger. Dr. Coopersmith was a
passenger on a flight from Montreal to
Paris when he responded to a request
made over the public address system for
a doctor to assist passengers in need of
medical attention. He took care of two
passengers, of whom only one required
attention. A third passenger also needed
help and was attended to by another
physician travelling on the aircraft.
Dr. Coopersmith then returned to his
seat to sleep. He was then awoken by
a flight attendant, who insisted that he
intervene in a situation where the other
physician was preparing to give an
injection of valium to the third passenger,
Compliance with the CARs is
not necessarily enough
Marine credit alert - Get
security for marine claims
Page 5
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life take off and soar
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who was stricken with a panic attack. Reluctantly, Dr.
Coopersmith agreed to help and was able to relieve the
patient from her anxiety without the use of medication.
Because of his interrupted sleep and the fact that he was
required to work while on vacation, Dr. Coopersmith asked
Air Canada for compensation. He was not satisfied with
Air Canada’s offer of 15,000 Aeroplan miles. Interestingly,
the Quebec Small Claims Court hearing this matter found
that Air Canada was obligated by the Quebec Civil Code
to compensate the doctor. The Code provides that when
a person manages the business of another, he or she
is entitled to reimbursement for all necessary or useful
expenses that he or she has incurred. The Court ruled that
a fair fee for Dr. Coopersmith’s intervention was $500. The
Court also awarded $500 for the inconvenience and the
loss of enjoyment of the flight and the holiday. Even more
interestingly, the Court ruled that the Montreal Convention
did not apply, as this was a claim for “necessary and useful
expenses” and not a claim for “damages”, and therefore
not subject to the restrictions of the Montreal Convention.
The Court also relied on Air Canada’s assertion that a
contract had been formed with Dr. Coopersmith by ruling
that Air Canada could not assert the existence of the
contract and then at the same time argue that the Montreal
Convention would preclude contractual recourse. The
Court found that the fact the incident occurred “during the
flight” did not signify that it was an action in respect of the
“carriage of passengers, baggage and cargo”, which would
be covered by the Montreal Convention.
Lukacs v. United Airlines Inc.
This action was commenced in the Manitoba Court of
Queen’s Bench by Mr. Lukacs, who sought compensation
for flight delays which caused him to miss an academic
conference. Mr. Lukacs argued that he was entitled to
seek compensation for inconvenience, mental anguish,
loss of academic research and/or learning opportunities.
He calculated the loss of academic research and learning
opportunities by multiplying two-and-a-half months of
time x 40% of the total time dedicated to his work x his
gross salary. Based on this formula, he claimed $5,000.
The Court accepted that Mr. Lukacs’ damages were
occasioned by delay and that the carrier did not take all
measures that could reasonably be required to avoid the
damages sustained by the plaintiff. The Court confirmed
that the Montreal Convention does not allow for recovery of
damages for inconvenience, anxiety and “mental anguish”.
The Court also confirmed that the Montreal Convention
does not permit claims against a carrier based on domestic
law. The plaintiff’s claim for missed academic and learning
opportunities was found by the Court to constitute a claim
for general damages which was not recoverable under the
Montreal Convention. The plaintiff was awarded $80 for
the cost of ground transportation, which the Court found
was a direct expense suffered as a result of the delay.
Update on Bill C-310 - An Act
to Provide Certain Rights to
Air Passengers
Bill-310, (An Act to Provide Certain Rights to Air
Passengers) is a Private Member’s Bill tabled by
NDP MP Jim Maloway, proposing a legislated air
passengers’ bill of rights. On May 13, 2009, the Bill
passed second reading by a vote of 139 – 131 and
has now been referred to the House of Commons
Standing Committee on Transport, Infrastructure and
Communities for study.
Bill C-310 has been criticized for imposing severe penalties
on airlines while failing to take into account factors outside
of an airline’s control, including operational, security, safety
and regulatory elements involved in flights. For example,
under Bill C-310, passengers bumped from a flight longer
than 3,500 km will be entitled to $1,200 in compensation.
It has been suggested that the possibility of penalties
for delay could actually lower passenger safety by
encouraging more risk taking. Further, if the bill passes into
law, the price of air travel may increase while the risk of a
negative travel experience may not necessarily decrease.
The National Airlines Council of Canada (“NACC”), made
up of Air Canada, Air Transat, WestJet and Jazz Air LP,
-3-
is calling for MPs to vote against Bill C-310. In doing
so, NACC has the support of a coalition of business
organizations, such as the Canadian Chamber of
Commerce, the International Air Transport Association
(IATA) and the Canadian Airports Council (CAC).
As an alternative measure to providing passengers with
additional protection, the members of the NACC amended
their tariffs on April 24, 2009, to include a passenger
service commitment. These amendments incorporate the
provisions and obligations outlined in the code of conduct
under Flight Rights Canada, the Government of Canada’s
air travel consumer protection initiative. The amended
sections of the international tariffs took effect following
approval by the Canadian Transportation Agency.
As a result, NACC members now have enhanced legal
obligations with respect to:
• re-booking or refunding passengers for cancelled or
overbooked flights;
• providing meal vouchers for delays that exceed 4
hours;
• providing hotel accommodation and airport transfers
for overnight delays of more than 8 hours for
passengers who did not start their travel at that
airport;
• offering the option of disembarkation for delays that
exceed 90 minutes when circumstances permit;
• informing passengers of luggage status, delivering
delayed luggage in a timely fashion and providing
overnight kits as required; and
• providing snacks and drinks during delays when it is
safe, practical and timely to do so.
Despite these changes to the NACC members’ tariffs, Bill
C-310 passed second reading. Whether it will advance
further remains to be seen.
From passenger rights to
animal rights?
Air Canada recently announced that it would allow
cats and small dogs to ride in the passenger cabin
of its aircraft. While many pet owners are delighted
about Air Canada’s recent announcement, not
ever yone has responded positively. Even though
cats, dogs, birds and rabbits have been allowed on
WestJet flights for some time, there has been renewed
opposition by allergy and asthma sufferers about
the health hazards associated with having pets in an
aircraft cabin. The Canadian Lung Association has
commenced a “Say No to Pets on Planes!” campaign
in an effort to urge the House of Commons Standing
Committee on Health to take action. According to a
Lung Association spokesperson,
”In an age where we don’t allow smoking
on airplanes and we don’t allow peanut
products on airplanes, why on earth would
you put animals in a passenger cabin at
40,000 feet in the air?”
In order to meet the needs of passengers with allergies,
Air Canada has limited the number of small pets accepted
in the cabin to a maximum of two or four depending
on aircraft type. In addition, the airline will ensure that
passengers with allergies are seated as far away from
animals as possible.
The controversy over animals in aircraft cabins is not
new. In 2002, the Canadian Transportation Agency
(the “Agency”) considered a number of complaints by
passengers who had experienced allergic reactions
during their flights, which they attributed to the presence
of animals in the passenger cabin. The Agency ruled that
while an allergy per se is not a “disability”, there may be
some individuals whose allergies do constitute a disability.
The Agency indicated that it would proceed on a caseby-case basis. If a passenger’s allergy is a disability and
pets in the cabin constitute an “undue obstacle” to the
passenger’s mobility, then the Agency may order a carrier
-4-
to accommodate the passenger. In 2007 and 2008, the
Agency found that a woman with chemical sensitivities
and allergies was a person with a disability and ordered
the carrier to take corrective measures. The Agency is
currently investigating three cases regarding allergies and
one regarding multiple chemical sensitivities.
As soon as we started musing about pet spas, doggie
daycares and a future “Pet Bill of Rights” (which would
guarantee bowls of water, packets of Purina and access
to fire hydrants if aircraft are delayed over two hours),
we happened upon the website of a new pets-only airline
that refuses to fly humans (Pet Airways of Delray Beach,
Florida). To avoid conflict and perhaps to cater to pets
with allergies, Pet Airways seats cats, dogs and other
animals in separate areas of the aircraft cabin. We wish
them the best of luck.
Compliance with the CARs is
not necessarily enough
The Canadian Aviation Regulations (“CARs”), as
prescribed by Transport Canada, set out regulator y
standards applicable to air operators. Breach of
the CARs leaves an air operator open to liability for
regulator y fines and/or penalties, some of which can
be ver y severe. However, in addition to their duty
to comply with the CARs, air operators also owe a
duty of care at common law to conduct their aviation
operations within a reasonable standard of care.
Breach of that duty of care leaves an air operator
open to liability for negligence.
In its 1999 decision in Ryan v. Victoria, the Supreme
Court of Canada considered whether compliance with
regulations governing railways abrogated or superseded
the obligation to comply with the common law standard of
care. The Court concluded that statutory and common law
standards of care are distinct yet concurrent. However,
the Court noted that in appropriate circumstances,
compliance with the statutory standard may entirely satisfy
the common law standard of care, and thereby absolve
the defendant of liability in negligence.
Whether compliance with the CARs will absolve an air
operator from liability in negligence in a particular case, is
dependent on the specific facts and section of the CARs
at issue. Lower court decisions have ruled that the CARs
generally represent a reasonable common law standard
of care. However, there are few decisions dealing with the
CARs specifically, and any Court before whom the issue
is raised would defer to the Supreme Court of Canada
decision in Ryan v. Victoria.
As a result, it cannot be assumed that compliance with
the CARs is enough to protect air operators from liability
in negligence. To determine whether an air operator has
satisfied the common law standard of care, courts will
consider whether the operator has complied with the
CARs, but will also consider other factors, including the
extent to which the operator has complied with industry
standards and best practices.
With this in mind, the Helicopter Association of Canada
has recently been seeking to engage in discussion with
helicopter operators to develop and agree upon a due
diligence standard that is representative of its industry
(see Transport Canada ASL 2/2009). The issue being
that in the absence of an agreed upon standard, the Court
must rely more heavily upon the opinions of individual
experts, whose opinions may not be representative.
Industry consensus on a representative due diligence
standard would assist both courts and operators in
evaluating the common law standard of care.
Marine credit alert Get security for marine claims
The recent financial crises have greatly increased
the amount of all types of unpaid marine claims. As
cheques bounce around the world for cargo damage,
charter hire, and goods and ser vices provided to
ships, this difficult phase of the economic cycle
sharply raises the question of how creditors can
collect unpaid marine claims.
Any creditor with doubt about whether a marine claim
-5-
will be paid should consider early ship arrest, including
sisterships, or even cargo on a ship, to obtain security
in appropriate jurisdictions. In debt collection, the early
bird gets the worm.
One-ship companies often become insolvent, raising
the question of whether unsecured, unpaid claims
against them can be collected from the Protection and
Indemnity Clubs which insure many of their members’
liabilities. Non-marine claimants are familiar with
legislation governing third party rights against insurers
in Canada and other jurisdictions, including the UK,
in which insurers of a defendant liable for an insured
claim may be sued directly by a judgment creditor, even
if the insured judgment debtor is insolvent. However,
in marine claims, particularly involving P&I Clubs, this
remedy is probably useless for creditors. It is important
to recall the decision of the House of Lords in 1990 in
Fanti and Padre Island, holding that the UK legislation
does not overcome the “pay to be paid” clause in most
P&I Club rules. In that case, insolvent shipowners could
not pay claims to a creditor to satisfy the “pay to be
paid” condition precedent to P&I Club indemnification,
so the claims went unpaid.
The principle in Fanti and Padre Island was approved
in 2002 by the Canadian Federal Court of Appeal
in Conohan v. Cooperators. Any marine creditor
attempting to challenge the effect of Fanti and Padre
Island in any jurisdiction should expect the P&I Clubs to
strongly resist that effort.
In order to best attempt to overcome the problem of
collection, security should be obtained by arresting, or
threatening to arrest, a ship, or cargo, and obtaining,
if possible, a reputable P&I Club letter of undertaking
to pay the claim, regardless of any defences the P&I
Club has to a claim by its shipowner-member. Less
common, in some circumstances, security for some
types of marine claims might also be posted by non-P&I
Club marine liability insurers. With this security in place,
the claimant may then be assured that funds will exist
to pay a future judgment when obtained.
Hope Air Helping someone’s life
take off and soar
The Alexander Holburn Aviation
Group is pleased to announce
our new partnership with Hope
Air.
Hope Air is a national charity that
helps Canadians access medical
treatment when they cannot afford
the cost of airfare. Since 1986,
Hope Air has arranged more than 56,000 flights for
people in need through the generous support of many
of Canada’s national and regional airlines, who donate
seats, plus hundreds of volunteer pilots who donate
their time and aircraft.
To help cover taxes, security and airport improvement
fees, fuel levees and administration costs, Hope Air has
created the Adopt a Flight Program. For $125 per flight,
individual and corporate donors can be a part of helping
a child or adult receive the medical care they deserve.
In support of this program, Alexander Holburn is proud
to sponsor a total of 24 flights this year.
To find out more about Hope Air, the Adopt a Flight
Program or to get involved, please visit
www.hopeair.org.
Alexander Holburn Beaudin & Lang LLP’s Transportation Practice provides
clients with comprehensive services on a broad range of transportation law
issues. Our team acts on matters relating to all aspects of cargo, passengers,
equipment and property, and regularly represents clients in all four major
transportation modes (aviation, trucking, rail, and maritime).
For more information about these articles or the Transportation Practice, please
contact:
Aviation: Patrick Saul, [email protected]
Maritime: David McEwen, Q.C. [email protected]
Rail: Robert Pakrul, [email protected]
Trucking: Doug Schmit, [email protected]
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