Court File and Parties

CITATION: Garofoli et al. v. Air Canada Vacations, 2012 ONSC 4698

COURT FILE NO.: DC-11-00000362-0000

DATE: August 20, 2012

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Jean Garofoli and Carol Garofoli, Plaintiffs/Respondents

AND:

Air Canada Vacation, Defendant/Appellant

BEFORE: Justice S.E. Healey

COUNSEL: Plaintiffs /Respondents – self-represented

Clay S. Hunter, for the Defendant/Appellant

HEARD: August 8, 2012

JUDGMENT

[1] The appellant Air Canada Vacations appeals from the judgment of Deputy Judge Robinson of the Newmarket Small Claims Court dated November 23, 2011, granting the respondents' claim and awarding damages for a ruined vacation.

[2] There is no dispute as to the truth of the facts testified to by the respondents at trial. They arrived at the Gran Caribe Club Kawama Resort (the “Kawama resort”) in Varadero, Cuba on Christmas day in 2010 to discover that their room was not available, and thereafter received inhospitable treatment from staff at the Kawama resort. Ultimately, they felt compelled to leave the resort on the same day and caught the next flight back to Toronto. The Kawama resort was part of an all-inclusive Air Canada Vacations tour package booked online by the respondents through the website of their travel agent, Sell Off Vacations.com. The action as against the travel agent was dismissed at trial. The Kawama resort was not joined as a party to the action.

[3] This appeal is based on what the appellant submits was an error by the Deputy Judge in determining that the common law duty of care of a tour operator is to supervise its third party suppliers. The Deputy Judge further found that the evidence at trial established that the appellant breached this duty of care, and that it could not rely on a clause in the contract that excluded liability for the acts or omissions of the third-party resort. For the reasons that follow, the appeal is granted. The granting of this appeal does not mean that this court disbelieves that the respondents experienced unacceptable service at the Kawama resort, but simply that it is contrary to the established law to hold the appellant liable for their unfortunate experience.

[4] The crux of the Deputy Judge's decision is found at page 9 of his Reasons, where he wrote:

I find that Air Canada Vacations failed in its duty of care to the Plaintiffs. This included a failure to supervise its supplier the Kawama Resort adequately or at all and a failure to take adequate steps to ensure that procedures were in place to permit the Plaintiffs to contact its local representative (a) without the intercession or obstruction of this Defendant's suppliers and (b) without the necessity to take extraordinary measures. Such extraordinary measures, urged by the Defendant at trial, would have required the Plaintiff Mr. Garafoli, who was in extremis from fatigue and ill health, to wait a night and a day for a representative of the Defendant to become available or for an orientation meeting to be convened to deal with the "incident".

[5] At trial the appellant relied on two cases that, it submits, establish the common law duty of care of a tour operator: Craven v. Strand Holidays (Canada) Ltd. (1982), 1982 1859 (ON CA), 142 D.L.R. (3d) 31 (Ont. C.A.) [“Craven”] and Eltaib v. Touram Limited Partnership (c.o.b. Air Canada Vacations), [2010] O.J. No. 995 (S.C.J.) [“Eltaib”]. Neither of these cases was referenced by the Deputy Judge in his Reasons. The case under appeal is on all fours with the relationship between the parties in Craven, which is binding authority that sets out the duty of care governing the behaviour of tour operators. In Craven, the tour operator, Strand Holidays (Canada) Ltd. ("Strand") was sued by the plaintiffs when a bus operated by a Colombian company, with whom Strand had contracted to provide transportation services for its clients, overturned while driving the plaintiff from the airport. The contract created between Strand and the plaintiffs contained a disclaimer of liability clause that read as follows:

The Strand Companies make arrangements with airlines, cruise lines, coach companies, transfer operators, shore excursion operators, hotels, and other independent parties, to provide you with the travel services and other services you purchase. Although the Strand Companies take care in selecting the suppliers, the Strand Companies are unable and do not have any control over them and therefore cannot be responsible for their acts or omissions. The travel services and other services provided are subject to the conditions imposed by the suppliers and their liability is limited by their terms, conditions of carriage, tickets and vouchers and international conventions and agreements.

[6] The Court of Appeal allowed Strand's appeal, finding that it had no liability. At page 36 of the decision, Lacourciere, J.A., delivering the judgment for the court, wrote:

If a person agrees to perform some work or services, he cannot escape contractual liability by delegating the performance to another. It is his contract. But if the contract is only to provide or arrange for the performance of services then he has fulfilled his contract if he has exercised due care in the selection of a competent contractor. He is not responsible if that contractor is negligent in the performance of the actual work or service, for the performance is not part of his contract.

There can be no question that the bus company, Expresso Brasilia, was an independent contractor employed by Strand to effect the necessary and promised transfers by road. It was not a servant or agent of Strand or in any way under its control. The suggestion that Strand exercise the requisite degree of control over the operation of the bus transfers or over the manner of driving the buses so as to create a relationship of master and servant is unsupported by the evidence.

[7] After stating that it was clear on the evidence that Strand never undertook to perform the bus transfers but merely to arrange for this service by a third party, the Court of Appeal held at page 41 that the appellant's duty was to make reasonable efforts to ensure that a competent carrier was selected for the transportation of the respondents and other passengers. There being no evidence to suggest the breach of this duty, the appeal was allowed. With respect to the disclaimer, the court wrote, at page 38:

The relationship of the bus company to the appellant being that of independent contractor precludes any liability, either in tort or contract, unless the appellant itself was guilty of negligence. By the brochure containing the essential terms of the contract, Strand agreed to supply the respondents with a Colombian tour including transportation, hotels and certain meals, but did not ensure the safety of the travellers. The disclaimer in the brochure quoted is inconsistent with an agreement or its intent to assume any implied obligation for the safety of the transportation.

[8] In Eltaib, and the plaintiff sought damages from Air Canada Vacations as the tour operator for breach of contract and/or misrepresentation arising from their "disappointing and abbreviated vacation" in Barbados. The court in Eltaib, relying on Snucins v. Conquest Tours (Toronto) Ltd. (1990), 1990 6967 (ON SC), 74 O.R. (2d) 781 (Div. Ct.), reiterated that the duty of care owed to the plaintiffs by the tour operator is to exercise due care in the selection of a competent supplier of accommodation.

[9] Accordingly, there is no common law duty for a tour operator to supervise a third party supplier and its employees. By imposing such a duty, the Deputy Judge erred at law. In this case many of the plaintiffs’ complaints and difficulties arose as a result of the conduct of Kawana resorts’ employees. To impose the very onerous duty on a tour operator to have day-to-day supervision of a resorts’ operations is impractical and ignores the legal reality that the resort is an independent contractor and the appellant therefore not liable for its negligence, unless it failed to exercise due care in the selection of that supplier. There was no evidence at trial to suggest that the appellant had failed to exercise due care in selecting the Kawana Resort to be on its roster of resorts. The evidence led by the appellant at trial on this issue was that a) it has a representative at the resort on a regular basis and every week; it has its product buyer as well as its staff from Toronto and Montreal on site at the resort on a regular basis and who had been at this resort in November 2010; b) this resort had been listed as an Air Canada Vacations "3 star" resort in Cuba for some 20 years prior to the respondents' stay; and was included as a Cuban resort primarily because it attracts a repeat clientele and because of its beach property; and c) the star rating of the appellant's resort selections is dependent on its assessment of the resort relative to general standards at the destination, in this case Cuba. The respondents also testified that they had stayed at this resort on at least three previous occasions.

[10] The limitation of liability clause contained in the contract between the parties in this case reads:

Air Canada Vacations will not assume responsibility for any claims, losses, damages, costs or expenses arising out of… inconvenience, loss of enjoyment, upset, disappointment, distress or frustration, whether physical or mental, resulting from any of the following: ‘the act or omission of any party other than Air Canada Vacations or its employees…’

[11] On page 7 of his Reasons, the Deputy Judge reasoned that it is inconsistent for the appellant to be permitted to rely on the exclusionary clause while at the same time advancing that the respondents had a duty to mitigate their damages by following the “Reporting of Incidents” protocol contained in the contract. This latter clause in the contract, prefaced by the words "regardless of Air Canada Vacations liability", required the respondents to report incidents to the appellant during the event or as soon as possible, in order to allow Air Canada Vacations an opportunity to provide assistance. The Deputy Judge referred to the doctrine of contra proferentem, determining that any ambiguity in the terms of the contract must be construed against the appellant. There is nothing ambiguous or contradictory about these completely separate terms of the contract. The exclusionary clause limits the appellant's exposure to acts or omissions of individuals other than the appellant or its employees. The "Reporting of Incidents" clause deals with the acts or omissions of the appellant or its employees.

[12] As was the holding in Eltaib, I also find that the Deputy Judge erred in not permitting the appellant to rely upon the exclusionary clause. At para. 30 of Eltaib, the court noted that in order for a defendant to be able to rely on the disclaimer and limitation of liability clauses, the court must be satisfied that reasonable measures have been taken to draw those provisions to the attention of the customer: Tilden Rent-A-Car Co. v. Clendenning, [1978] O.J. No. 3268 (C.A.); 1560032 Ontario Ltd. v. Arcuri, [2006] O.J. No. 2383 (C.A.); Linter v. Delta Charters Inc., 1997 Carswell BC 693 (S.C.). At page 7 of his Reasons the Deputy Judge found that the plaintiffs were bound by the terms and conditions of the contract. At the time they selected the vacation they had to "click through" the acceptance screen of the website, by which the terms and conditions were brought to their attention.

[13] The standard of review for questions of law is "correctness", while the standard of review for questions of fact, inferences drawn from facts, and questions of mixed fact and law, is one of "palpable and overriding error": Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235. Both by imposing a duty of care on the appellant that does not exist at law, and by interpreting the terms of the contract so as to disallow the appellant from relying on the applicable exclusionary clause on the basis of contra proferentem, the Deputy Judge was not correct in his ruling and committed a palpable and overriding error.

[14] Accordingly, this court orders that the appeal is allowed and the judgment of the Honourable Deputy Judge Robinson be set aside, and in its stead judgment shall issue dismissing the plaintiffs’ claims against Air Canada Vacations.

[15] If the parties are unable to agree to the costs of the appeal and in the Small Claims Court, they may contact the trial co-ordinator in Newmarket to arrange a date to speak to the issue.

Justice S.E. Healey

Date Released: August 20, 2012