Licence Appeal Tribunal File Number: 15140/TIA

In the matter of an appeal from a denied claim for reimbursement in accordance with s. 57 of Ontario Regulation 26/05, under the Travel Industry Act, 2002.

Between:

Sylwia Ysidron

Appellant

and

Travel Industry Council of Ontario

Respondent

DECISION and ORDER

ADJUDICATORS:

Rebecca Hines

Bruce Stanton

APPEARANCES:

For the Appellant:

Sylwia Ysidron (Self-Represented)

For the Respondent:

Karan Sharma, Counsel

Husein Panju, Co-Counsel

Heard by videoconference

November 17, 2023

OVERVIEW

1Sylwia Ysidron, the appellant, appeals from the denial of her claim for reimbursement from the Travel Industry Compensation Fund (“Fund”) which is administered by the Travel Industry Council of Ontario (“TICO”) pursuant to Ontario Regulation 26/05 (the “Regulation”), under the Travel Industry Act, 2002 (the “Act”).

2The appellant dropped off from the videoconference approximately 60 minutes after the hearing began. The Tribunal reached out to the appellant to find out her status and was advised that she was at work dealing with a customer. The Tribunal stood the matter down for a half-hour, yet the appellant did not rejoin or respond to the Tribunal’s communication advising of her status.

3Rule 3.7.2 of the Licence Appeal Tribunal’s Rules of Practice and Procedure provides that where a party is unable to attend part of the hearing that they provide the Tribunal with reasons why they are unable to continue to attend. In this case, the appellant did not advise the Tribunal that she was unable to attend the hearing despite the fact that she was aware that the hearing would take approximately three hours to complete. Nor did the appellant communicate that she might have to disconnect because she was at work or respond promptly to the Tribunal’s attempts to reach her. Pursuant to Rule 3.7.2 a. we decided to proceed with the hearing in the appellant’s absence. In this case, the appellant’s case had concluded. She had the opportunity to present her evidence and the respondent completed its cross-examination of her. Therefore, we determined that any prejudice to her non-attendance for the remainder of the hearing would be minimal.

ISSUES

4The issue in dispute is:

i. Is the appellant entitled to reimbursement from the Fund for unredeemed travel vouchers/credits, pursuant to s. 57 of the Regulation?

RESULT

5We find the appellant is not entitled to reimbursement from the Fund and her claim is disallowed.

ANALYSIS

6The appellant sought reimbursement in the amount of $1,393.08, the value of three airline tickets to Cancun, departing Toronto March 21, 2020 and returning March 27, 2020. The tickets were purchased from a registered Ontario travel agency. The appellant could not travel on March 21, 2020 due to the COVID-19 pandemic and the airline suspended all flights effective March 24, 2020 for the same reason. The airline did not refund the value of the tickets, but rather issued her vouchers (credits) for future flights in consideration of the flights not provided.

7The appellant testified that the vouchers she received from the airline were useless because the airline did not resume operations after it suspended flights in March 2020, and subsequently went bankrupt on April 10, 2023. Since she paid for the flights that were not provided and was unable to redeem the vouchers because the airline ceased to operate and eventually went bankrupt, the appellant submitted a claim to TICO for the value of the travel services not provided.

8The respondent denied the claim because it regards unredeemed vouchers issued by an airline for future travel to not be eligible for reimbursement from the Fund. It directed us to s. 57(5) of the Regulation, which it describes as a new provision relating to the COVID-19 pandemic, whereby holders of a voucher or coupons issued by a TICO registrant, a registered Ontario retail travel agent or tour wholesaler (“registrant”), may be compensated by the Fund in cases where the registrant became bankrupt, insolvent or ceased to carry on business because of the pandemic. The respondent submits that s. 57(5) thereby excludes claimants being reimbursed from the Fund for unredeemed vouchers issued by airlines.

9A witness for the respondent, Lori Furlan, who is a claims administrator for TICO, reiterated the respondent’s position in testifying that since the unredeemed vouchers held by the appellant were issued to her by the airline and not by a registrant of TICO, they were not eligible to be compensated from the Fund.

10In its closing statement, the respondent submitted that the intention of the legislature in passing s. 57(5) was to open the Fund to reimburse unredeemed vouchers issued to customers from registrants that had ceased to operate because of the impact of the pandemic on travel, but the legislature’s intention was to limit such compensation to registrants. Unredeemed vouchers issued by end suppliers such as airlines were not to be reimbursed in these circumstances.

Unredeemed travel vouchers issued by airlines or cruise lines are ineligible to be reimbursed from the Fund

11We find that unredeemed travel vouchers are not reimbursable from the Fund except through the provision of s. 57(5) of the Regulation.

12At their core, the Act and the Regulation serve to support the integrity of and confidence in Ontario’s travel industry. They do so by protecting consumers against deceptive or unethical practices of retail travel agents or tour wholesalers and by providing a travel compensation fund to backstop the loss of travel services paid for, but not provided, because of the cessation of business or bankruptcy of registrants or an end supplier airline or cruise line a registrant contracted on behalf of their customer.

13As described by the respondent, in light of pandemic travel restrictions, the Government of Ontario amended the Regulation effective March 30, 2020, and section 57(5) was added. It states that the Fund will allow the reimbursement of unredeemed travel vouchers if, a) they were issued by a registrant, b) the vouchers were unredeemable because the registrant ceased to carry on business or went bankrupt, and c) that the cessation of business or bankruptcy was in relation to the pandemic. This time-limited provision is in effect through March 31, 2024.

14In other words, due to consequences of the pandemic, the Fund was expanded to allow the reimbursement of unredeemed vouchers, but only for a limited time, and only when the vouchers were issued by a registrant that had subsequently gone out of business because of the pandemic. We take notice that prior to s. 57(5) being added to the Regulation, there was no provision for unredeemed travel vouchers to be reimbursed from the Fund under any circumstance and the legislative provision which created s. 57(5), Ontario Regulation 101/20, effective March 30, 2020, also clarified provisions of the Regulation in respect to the eligibility of vouchers and credits to be reimbursed from the Fund.

15The respondent did not direct us to the provisions of the Regulation that, apart from s. 57(5), disallow claims for the reimbursement of unredeemed vouchers given to customers in consideration of travel services not provided. However, the Tribunal has found that section 57(3)5 disallows such claims. In Thomasson v. Travel Industry Council of Ontario, 2023 CanLII 81807 (ON LAT) (“Thomasson”), the Tribunal found that the customer is not entitled to be reimbursed for travel services that were to be received as a goodwill gesture, including travel services that were to be received because of the redemption of a voucher, certificate, or similar document that was itself received as a goodwill gesture.

16We find the Tribunal’s reasoning in Thomasson also applies to the appellant’s circumstances. Since the airline issued the appellant vouchers for future travel as a goodwill consideration for the flights not provided, and the appellant accepted these vouchers in consideration for the flights not provided, they are not reimbursable from the Fund, pursuant to s. 57(3)5.

17In addition, we agree with the respondent. Since the unredeemed vouchers were not issued by a registrant, they cannot be reimbursed under the provisions of s. 57(5).

Conclusion

18For the reasons discussed above we refuse to allow the appellant’s claim pursuant to section 71(6) of the Regulation.

ORDER

19We order the following:

i. The appellant’s claim is refused pursuant to s. 71(6) of the Regulation.