Court File and Parties
CITATION: Travel Industry Council of Ontario v. Cordeiro, 2011 ONSC 80
DIVISIONAL COURT FILE NO.: 625/09
DATE: 2011-01-14
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
THEN R.S.J., MATLOW and SWINTON JJ.
BETWEEN:
TRAVEL INDUSTRY COUNCIL OF ONTARIO Appellant
– and –
MARIA CORDEIRO Respondent
COUNSEL:
Soussanna S. Karas, for the Appellant
Marina Brito, as agent for the Respondent (with leave)
HEARD: September 22, 2010 at Toronto
Reasons for Judgment
MATLOW J. (concurring):
[1] Judgment is to issue allowing this appeal and setting aside the decision of the Licence Appeal Tribunal (the “Tribunal”), made on November 30, 2009, allowing an appeal by the respondent, Maria Cordeiro, from the decision of the Board of the Travel Industry Council of Ontario (the “Board”) under the Travel Industry Act, 2002, S.O. 2002, c. 30, Sch. D (the “Act”). The decision of the Board, made on June 13, 2009, denied the respondent’s claim from the Travel Industry Compensation Fund (the “Fund”) administered by the Board for reimbursement for the cost of travel and the Tribunal, on appeal, allowed the claim.
[2] The Board’s decision is, therefore, to be restored. The parties both agreed that there would be no claim for costs and, therefore, no costs are awarded.
[3] The appellant’s right of appeal to this Court is set out in s. 11 of the Licence Appeal Tribunal Act, 1999, S.O. 1999, c. 12, Sch. G, which reads, in part, as follows:
- A party to a proceeding before the Tribunal relating to a matter under any of the following Acts may appeal from its decision or order to the Divisional Court in accordance with the rules of court:
[4] The significant facts and statutory provisions underlying this appeal are as follows.
[5] The appellant is a non-profit corporation that administers the Act which governs travel retailers and travel wholesalers registered in Ontario. Its Board also administers the Fund which is financed by the registered retailers and wholesalers. The function of the Fund is to provide, in accordance with the Regulation made under the Act, O. Reg. 26/05 (the “Regulation”), reimbursement for monies paid by a consumer to a registered travel agent for travel services that are paid for but not provided.
[6] Subsection 57(1) of the Regulation sets out the conditions for reimbursement. A customer will be entitled to reimbursement if he or she
- paid for travel services to or through a registered travel agent
- made a demand for payment from the travel agent
- has not been reimbursed by either a travel agent or a travel wholesaler because either one or both of them
- is unable to pay by reason of bankruptcy or insolvency;
- has ceased to carry on business and is unwilling to pay; or
- has ceased to carry on business and cannot be located.
[7] Of particular importance in this case is s. 57(3) 3, which sets out exceptions to a customer’s entitlement to reimbursement. It states, in part,
Despite subsection (1), a customer is not entitled to be reimbursed for:
- A payment for travel services that were available, but were not received because of an act or a failure to act on the part of the customer or of another person for whom the travel services were purchased.
[8] On March 28, 2007, the respondent purchased from a registered travel agent two air and land packages for her husband and herself to travel to Brazil, commencing in November, 2007, for which she paid the agent a sum which included the purchase of cancellation insurance.
[9] In October, 2007, the respondent, because of her husband’s illness, cancelled the trip by notifying the agent who, in turn, acting on the respondent’s instructions, notified the wholesaler of the cancellation.
[10] The respondent then proceeded to request the repayment of the money that she had paid for the trip from the wholesaler and the insurance company from which she had purchased the cancellation insurance. Despite her efforts, she met with no success for the reasons given by the various companies from which she sought the repayment. The following is a brief description of those reasons:
- The wholesaler advised that, because the cancellation was made less than ninety days before the scheduled departure, the non-refundable portion of the payment was $868.
- The wholesaler then advised that the repayment would be made after funds were received from the Brazilian tour operator but the tour operator’s business had been closed.
- The wholesaler then ceased operations and voluntarily surrendered its registration.
- The wholesaler then advised that the full amount of the respondent’s payment was non-refundable as disclosed on its website but it would still, as a goodwill gesture, continue to seek repayment from the Brazilian tour operator.
- The travel insurance company advised that, because the cancellation was made because of a pre-existing health condition, the claim for the non-refundable portion was denied.
[11] Faced with her inability to obtain any repayment, the respondent applied for reimbursement from the Fund as a last resort.
[12] In its decision denying the respondent’s claim, the Board held that her claim was not eligible for reimbursement because the cancellation of the respondent’s trip was attributable to her, referring to s. 57(3) 3 of the Regulation.
[13] The respondent appealed the Board’s decision to the Tribunal and another hearing was held before the Tribunal. The Tribunal examined the history of the transaction giving rise to the respondent’s claim, allowed the appeal and ordered that reimbursement be paid to the respondent. In arriving at that result, the Tribunal rested its decision on its own interpretation of the contractual relationships and obligations of the various parties involved. However, without explanation, the Tribunal failed entirely to address the application of s. 57(3) 3 of the Regulation.
[14] The undisputed evidence before the Board and before the Tribunal clearly established that the respondent’s trip to Brazil was available at the time that it was to take place but was not received solely because of the respondent’s decision to cancel it. On a plain reading of the wording of s. 57(3) 3 of the Regulation, the respondent fell squarely within its scope.
[15] It is clear from a reading of the entirety of s. 57 of the Regulation that compensation from the Fund is available only if travel services were paid for “but not provided” to the consumer. These words are used in both s. 57(1) and (2). Section 57(3) 3 then creates an exception and makes it clear that a consumer is not entitled to compensation if the travel services, although available, were not received because of the consumer’s own actions or failure to act.
[16] In most appeals to this Court from decisions of the Tribunal under various statutes the standard of review applied is reasonableness and deference is shown to the Tribunal. For example, in Prestige Toys Ltd. v. Ontario (Motor Vehicle Dealers Act, Registrar), 2009 ONSC 43657 (Div. Ct.), [2009] O.J. No. 3437, this Court held that the standard of reasonableness applied to the Tribunal’s decision respecting the revocation of registration for a licence where the Tribunal was interpreting the Motor Vehicle Dealers Act, one of a number of statutes with which it deals. In the more recent decision of Capmare v. Travel Industry Council of Ontario, [2010] O.J. No. 2053, this Court applied the standard of reasonableness in a case where the Tribunal was making a finding of mixed fact and law under the present legislation.
[17] The appellant, however, submitted that the appropriate standard of review ought to be correctness because the appeal involves an important question of law and the Tribunal does not have specific expertise with respect to the issue that arises. The respondent, who was unrepresented by counsel, took no position on this issue. I agree that the central issue in this appeal is a question of law to which the appropriate standard of review should be correctness.
[18] My colleagues on this panel take a different view on what the appropriate standard of review ought to be and have concluded that it is reasonableness. Further reasons written by them addressing their view follow below. Despite our disagreement with respect to the appropriate standard of review, we are in unanimous agreement with respect to the outcome of this appeal.
[19] There are several factors that have persuaded me to adopt correctness as the appropriate standard of review.
[20] This appeal is a statutory appeal brought as of right rather than an application for judicial review and there is no privative provision in the applicable legislation that shields the decision in appeal or restricts how this Court is entitled to dispose of the appeal.
[21] As stated above, this appeal turns on a question of law. The relevant facts as found by the Board and later by the Tribunal were never in issue and the only real question before both was whether s. 57(3) 3 of the Regulation applied so as to bar the respondent’s claim. As stated above, the Board held that it did.
[22] The Tribunal, however, failed entirely to consider the application of s. 57(3) 3 of the Regulation and gave no reasons for not applying it. Instead, the Tribunal focused its attention entirely on matters involving the respondent and the providers of the trip that had no relevance to the central issue before it. As a result, we are unaided by the Tribunal and we cannot give serious and careful consideration to any analysis which may have led the Tribunal to the disposition that it made. It follows that this is not a case in which this Court is required to show, or could reasonably show, deference to the Tribunal.
[23] In Dunsmuir v New Brunswick, 2008 SCC 9, 1 S.C.R. 190 at paragraph 47, the Supreme Court of Canada explained the concept of reasonableness as a standard of review as follows;
Reasonableness is a deferential standard animated by the principle that underlies the development of the two previous standards of reasonableness: certain questions that come before administrative tribunals do not lend themselves to one specific, particular result. Instead, they may give rise to a number of possible, reasonable conclusions. Tribunals have a margin of appreciation within the range of acceptable and rational solutions. A court conducting a review for reasonableness inquires into the qualities that make a decision reasonable, referring both to the process of articulating the reasons and to outcomes. In judicial review, reasonableness is concerned mostly with the existence of justification, transparency and intelligibility within the decision-making process. But it is also concerned with whether the decision falls within a range of possible, acceptable outcomes which are defensible in respect of the facts and law.
[24] And, at paragraph 48 of Dunsmuir, the Supreme Court went on to explain the meaning of deference in the context of what was an appeal of a decision made in an application for judicial review as follows:
What does deference mean in this context? Deference is both an attitude of the court and a requirement of the law of judicial review. It does not mean that courts are subservient to the determinations of decision makers, or that courts must show blind reverence to their interpretations, or that they may be content to pay lip service to the concept of reasonableness review while in fact imposing their own view. Rather, deference imports respect for the decision-making process of adjudicative bodies with regard to both the facts and the law. The notion of deference "is rooted in part in a respect for governmental decisions to create administrative bodies with delegated powers" (Canada (Attorney General) v. Mossop, 1993 SCC 164, [1993] 1 S.C.R. 554, at p. 596, per L'Heureux-Dubé J., dissenting). We agree with David Dyzenhaus where he states that the concept of "deference as respect" requires of the courts "not submission but a respectful attention to the reasons offered or which could be offered in support of a decision": "The Politics of Deference: Judicial Review and Democracy", in M. Taggart, ed., The Province of Administrative Law (1997), 279, at p. 286 (quoted with approval in Baker, at para. 65, per L'Heureux-Dubé J.; Ryan, at para. 49).
[25] If this Court were to determine that the appropriate standard of review is reasonableness, it would follow, as a matter of logic, that the Tribunal’s decision not to apply s. 57(3) 3 was one of several that it could reasonably have made. However, in my view there was no reasonable alternative open to the Tribunal other than to apply s. 57(3) 3 and deny the respondent’s claim for compensation. There was only one right decision, the decision that was correct, and the Tribunal failed to make it for reasons that remain a mystery. This Court must, therefore, intervene.
[26] Given this conclusion, it is not necessary for us to decide whether the question of law in this case is, as described in paragraph 55 of Dunsmuir, a question of law “that is of central importance to the legal system and outside the specialized area of expertise of the administrative decision maker”. To such a question the standard of review is now directed to be that of correctness. However, having regard to the failure of the Tribunal to address the question of law that was central to the appeal and the serious potential consequences of its decision to the travel industry if it were upheld on this appeal, it may well be that the question does fall into this category and, for that reason alone, the appropriate standard would still be correctness.
[27] As well, having regard to what the question of law that arises in this case is, there is no need to address the second argument raised by the appellant respecting the misapplication of the trust fund provisions in s. 27 of the Regulation.
[28] Although one might reasonably have sympathy for the plight of the respondent because of her husband’s illness and the subsequent frustration in her efforts to obtain reimbursement, it is not open to the Board, the Tribunal or this Court to grant relief to her in the face of s. 57(3) 3 of the Regulation.
Matlow J.
THEN R.S.J. and SWINTON J.:
[29] We agree with Matlow J. that the appeal should be allowed. However, we reach that conclusion after having applied a standard of review of reasonableness.
[30] In Prestige Toys Ltd. v. Ontario (Motor Vehicle Dealers Act, Registrar), 2009 ONSC 43657 (Div. Ct.), [2009] O.J. No. 3437, the Divisional Court held that a standard of reasonableness applied to the Tribunal’s decision respecting the revocation of registration for a licence where the Tribunal was interpreting the Motor Vehicle Dealers Act, one of a number of statutes with which it deals.
[31] In the more recent decision of Capmare v. Travel Industry Council of Ontario, [2010] O.J. No. 2053, this Court applied the standard of reasonableness in a case where the Tribunal was making a finding of mixed fact and law under the present legislation.
[32] In our view, the standard of review in this case is also reasonableness, given that the Tribunal was determining a matter of mixed fact and law – namely, the entitlement of the respondent to compensation from the Fund. As well, it was applying one of the statutes with which it deals regularly (see Dunsmuir v. New Brunswick, 2008 SCC 9, [2008] 1 S.C.R. 190 at para. 54). Therefore, the Tribunal is entitled to deference.
[33] In its decision denying the respondent’s claim, the Board held that her claim was not eligible for reimbursement because the cancellation of the respondent’s trip was attributable to her, and it made reference to s. 57(3) 3 of the Regulation, quoted above. It described the effort of the travel wholesaler to obtain a refund as a “goodwill gesture.”
[34] The respondent appealed the Board’s decision to the Tribunal, and another hearing was held before the Tribunal. The Tribunal summarized the Board’s reasons for refusing the claim, as set out above, and then said that there were a number of problems with the Board’s position in this case. In setting out these problems, the Tribunal made no further reference to the exception in s. 57(3) 3 of the Regulation.
[35] Instead, the Tribunal examined the history of the transaction giving rise to the respondent’s claim and ultimately based its decision to allow the appeal and to order that reimbursement be paid to the respondent on its own interpretation of the contractual relationships and obligations of the various parties involved. Specifically, it concluded that the respondent was entitled to a refund.
[36] As the Supreme Court of Canada stated in Dunsmuir, above (at para. 47),
... reasonableness is concerned mostly with the existence of justification, transparency and intelligibility within the decision-making process. But it is also concerned with whether the decision falls within a range of possible, acceptable outcomes which are defensible in respect of the facts and law.
[37] In this case, the Tribunal was aware of s. 57(3) 3 of the Regulation and referred to past cases interpreting it. It also referred to the Board’s reasons relying on that provision. As the Tribunal found there were problems with the Board’s decision, it must have implicitly rejected the Board’s reliance on the Regulation. However, it gave no reason for doing so. Nowhere in the section of the Tribunal’s reasons entitled “application of the law to the facts” does it address the application of s. 57(3) 3 of the Regulation to the facts of this case.
[38] It may be that in other circumstances there could be plausible differing interpretations of whether travel services were “available” or whether travel services were “not received because of an act or a failure to act on the part of the customer”. In such a case, deference by this Court could be extended to the Tribunal.
[39] However, the undisputed evidence before the Board and before the Tribunal clearly established that the respondent’s trip to Brazil was available at the time that it was to take place, but the trip was not received solely because of the respondent’s decision to cancel it. On a plain reading of the Regulation’s language, the respondent fell within the scope of the exception in s. 57(3) 3 on the facts of this case.
[40] Moreover, it is clear, when s. 57 is read as a whole, that compensation from the Fund is only available if travel services were paid for “but not provided” to the customer. These words are used in both s. 57(1) and (2). Then s. 57(3) 3 makes it clear that a customer is not entitled to compensation if the travel services, although available, were not received because of the customer’s actions or failure to act.
[41] Regardless of the other matters addressed by the Tribunal and the findings made by it, s. 57(3) 3 was and continues to stand as a total bar to the respondent’s right to obtain reimbursement from the Fund. The Tribunal’s failure to apply the exception in the circumstances of this case takes its decision outside of the range of possible, acceptable outcomes. Moreover, the Tribunal provides no chain of reasoning to explain why it concluded that the provision does not apply. Therefore, the decision of the Tribunal is unreasonable, and the appeal must be allowed and the decision of the Tribunal must be set aside.
Then R.S.J.
Swinton J.
Released: January 14, 2011
CITATION: Travel Industry Council of Ontario v. Cordeiro, 2011 ONSC 80
DIVISIONAL COURT FILE NO.: 625/09
DATE: 2011-01-14
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
THEN R.S.J., MATLOW and SWINTON JJ.
BETWEEN:
TRAVEL INDUSTRY COUNCIL OF ONTARIO Appellant
– and –
MARIA CORDEIRO Respondent
REASONS FOR JUDGMENT
THEN R.S.J. and SWINTON J., MATLOW J. concurring
Released: January 14, 2011