Court File and Parties

CITATION: Naeini v. Air Canada, 2019 ONSC 1213

DIVISIONAL COURT FILE NO.: DC-18-00000425-0000

DATE: 20190220

SUPERIOR COURT OF JUSTICE – ONTARIO

DIVISIONAL COURT

RE: Seyed Nader Emamian Naeini aka Nader Naeini, Maria Delpilar Martinez, Monique Martinez Naeini and Nicole Naeini, Plaintiffs/Respondents

AND:

Air Canada, Defendant/Appellant

BEFORE: Mr. Justice H.J. Wilton-Siegel

COUNSEL: Clay S. Hunter, for the Defendant/Appellant Air Canada

Seyed Nader Emamian Naeini and Maria Delpilar Martinez, Self-Represented Plaintiffs /Respondents

HEARD: January 15, 2019

ENDORSEMENT

[1] The appellant Air Canada (the “appellant” or “Air Canada”) appeals the judgment dated June 7, 2018 of Deputy Judge Ferranti of the Toronto Small Claims Court (the “Judgment”). In the Judgment, the Deputy Judge awarded each of the respondents $2,160, or alternatively, awarded the respondent Seyed Nader Emamian Naeini (“Naeini”) $8,460, of which $6,480 is held in trust for the other three respondents in respect of the loss of one piece of luggage each.

Factual Background

[2] The respondents were booked a flight from Bogota, Columbia to Toronto, with a stop-over in Miami on August 16, 2016. On that day, Naeini says he checked eight pieces of luggage at the counter in Miami. He has produced luggage tags in his name for seven pieces of luggage.

[3] When the family arrived at Pearson Airport in Toronto, five pieces of luggage were missing. According to tracking records, four of the remaining five bags arrived at Pearson Airport on August 19, 2016. The appellant’s records indicate that three bags were delivered to its contractor for delivery to the respondents. According to the contractor, it received only one bag from the appellant. In any event, only one bag was delivered to the respondents. The four remaining bags were never delivered.

[4] The respondents subsequently filed a baggage declaration of loss form totaling $6,800 for the loss of four pieces of luggage and contents, representing one piece of luggage for each of them. They also claimed their costs of attempting to track down the lost baggage as well as punitive damages.

[5] At trial, the respondents accepted that the provisions of the international Convention for the Unification of Certain Rules for International Carriage by Air, signed at Montreal on May 28, 1999, referred to as the “Montreal Convention, 1999” (the “Convention”), applied to their claim. The Convention governs the rights and obligations of parties to a contract for international carriage by air. The Convention is incorporated into Canadian law by s. 2 of the Carriage by Air Act, R.S.C. 1985, c. C-26. It is also incorporated into the General Conditions of Carriage and Tariffs of the appellant, including in particular the liability limitations set out therein.

The Relevant Provisions of the Convention

[6] The following provisions of the Convention are relevant to the issues in this proceeding:

Article 17 - Death and Injury to Passengers – Damage to Baggage

2. The carrier is liable for damage sustained in case of destruction or loss of, or of damage to, checked baggage upon condition only that the event which caused the destruction, loss or damage took place on board the aircraft or during any period within which the checked baggage was in the charge of the carrier. However, the carrier is not liable if and to the extent that the damage resulted from the inherent defect, quality or vice of the baggage. In the case of unchecked baggage, including personal items, the carrier is liable if the damage resulted from its fault or that of its servants or agents.

3. If the carrier admits the loss of the checked baggage, or if the checked baggage has not arrived at the expiration of twenty-one days after the date on which it ought to have arrived, the passenger is entitled to enforce against the carrier the rights which flow from the contract of carriage.

4. Unless otherwise specified, in this Convention the term “baggage” means both checked baggage and unchecked baggage.

Article 22 – Limits of Liability in Relation to Delay, Baggage and Cargo

2. In the carriage of baggage, the liability of the carrier in the case of destruction, loss, damage or delay is limited to 1 000 [subsequently increased to 1,131] Special Drawing Rights for each passenger unless the passenger has made, at the time when the checked baggage was handed over to the carrier, a special declaration of interest in delivery at destination and has paid a supplementary sum if the case so requires. In that case the carrier will be liable to pay a sum not exceeding the declared sum, unless it proves that the sum is greater than the passenger’s actual interest in delivery at destination.

Article 29 – Basis of Claims

In the carriage of passengers, baggage and cargo, any action for damages, however founded, whether under this Convention or in contract or in tort or otherwise, can only be brought subject to the conditions and such limits of liability as are set out in this Convention without prejudice to the question as to who are the persons who have the right to bring suit and what are their respective rights. In any such action, exemplary or any other non-compensatory damages shall not be recoverable.

The Judgment

[7] The Deputy Judge began the Judgment by reciting the factual background to the respondents’ claim, as set out above. He then set out the relevant provisions of the Convention and the fact that the respondents accepted that the loss limitation provisions of Art. 22(2) of the Convention applied to their claim.

[8] The Deputy Judge held that the loss occurred while the baggage was in the charge of the appellant for the purposes of Art. 17(2) of the Convention and that the time period in Art. 17(3) had expired. He also held that the limits imposed by the Convention applied to the contract of carriage between the appellant and the respondents.

[9] The Deputy Judge defined the issue as whether limit in Art. 22(2) “applies only to the passenger holding checked baggage tags irrespective of whether the checked pieces belong to him or others or a combination of both, … or applies to each passenger with baggage whether checked by him or her in his/her name or not, or unchecked…”

[10] The Deputy Judge held that both a textual and a contextual reading of the Convention and of the appellant’s contract of carriage required the conclusion that the loss limitation “applies to each owner of baggage, whether checked by him/her or not, or unchecked.” The Deputy Judge also held that, even if the right of reimbursement for loss in Art. 17(2) applies only to the passenger holding the checked baggage tags, as the appellant argued, he would hold that the respondents, other than Naeini, held baggage tags beneficially in their own names “as beneficiaries of the claims held by [Naeini] in trust for them.”

[11] The Deputy Judge then awarded each respondent the sum of U.S. $1,663 (or $2,160) for the loss of one piece of luggage each, or alternatively awarded four Special Drawing Right (an “SDR”) allotments of $2,160 each to Naeini, three of which are held in trust for the other respondents.

Issues on Appeal

[12] The appellant raised two principal grounds of appeal. First, it says the Deputy Judge erred in finding the respondents, other than Naeini, were each entitled to recover damages when they were not the passenger who checked the pieces of baggage that were lost based on the baggage tags issued in Miami. Second, it says that the Deputy Judge awarded each respondent the maximum amount of compensation based on a global list of all of the contents of their checked baggage without considering the damages that were actually incurred by each respondent.

The Standard of Review

[13] The appeal is brought pursuant to section 31 of the Courts of Justice Act, R.S.O. 1990, c. C.43. The standard of review is set out in Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235 at paras. 6-10 and 36-37. On a pure question of law, the standard of review is correctness. The standard of review for findings of fact is that such findings are not to be reversed unless it can be established that the trial judge made a “palpable and overriding error”. Questions of mixed fact and law are subject to the “palpable and overriding error” standard, unless it is clear that the trial judge made an error of law or principle that can be identified independently in the judge’s application of the law to the facts of the case.

Analysis and Conclusions

[14] I will address the two principal grounds of appeal separately.

The Operation of Article 22(2)

[15] The determination of whether each of the respondents was a passenger who checked baggage which was lost and therefore was entitled to claim for such loss is a question of mixed fact and law. However, in this case, the material facts are not in dispute. The appellant argues that the Deputy Judge erred in his application of the law to these facts.

[16] The appellant makes a number of arguments that are different facets of the same issue, namely the application of the limitation of loss in Art. 22(2) of the Convention. The appellant argues that, in this case, there was only one passenger who checked luggage. The appellant’s position is essentially that, as a matter of law, the passenger in whose name a baggage tag is issued is the passenger who checked that baggage and therefore the only passenger who is entitled to claim for any loss of that baggage. Given the undisputed fact that Naeini was the only passenger who received baggage tags in his name for the four bags that were lost, the appellant says that the Deputy Judge erred in finding that all four respondents were passengers who checked baggage and were therefore entitled to claim for the loss of such baggage. I will address each of the appellant’s arguments in turn.

[17] First, the appellant suggests that the Deputy Judge never addressed Art. 22(2) of the Convention. It suggests that the Deputy Judge made his determination under Art. 17(2) and/or Art. 17(3). I think that this is clearly wrong. As discussed further below, Art. 17(2) addresses the carrier’s liability while Art. 22(2) provides for a limitation of that liability. While the Deputy Judge did not specifically refer to Art. 22(2), it is clear from his articulation of the issue before him in paragraph 19 of the Judgment, and from the conclusion expressed in paragraph 20, that the Deputy Judge properly addressed the issue of the operation of the limitation of liability in Art. 22(2) in respect of the respondents’ claims. Moreover, the references of the Deputy Judge to Art. 17(3) in succeeding paragraphs are almost all in the context of the use of the term “passenger” under the Convention as a whole for the purposes of the interpretation of Art. 22(2).

[18] Second, the appellant argues that the Deputy Judge failed to interpret Art. 22(2) correctly and therefore committed an error of law in reaching his determination that Art. 22(2) did not restrict the claims for lost baggage in the present circumstances to the claim of Naeini. I do not agree for the following reason.

[19] Art. 17(2) and Art. 22(2) collectively provide a scheme for compensation for lost baggage. Art. 17(2) removes the need to prove a carrier’s liability for loss of a bag that was checked by a passenger provided the passenger can demonstrate that the loss occurred while the checked baggage was in the charge of the carrier. Art. 22(2) limits the damage claim of any such passenger.

[20] However, neither Art. 17(2) nor Art. 22(2) defines a passenger who has checked luggage for the purposes of these provisions. In particular, the Convention does not stipulate that a passenger must physically hand over his or her bag, being the bag in which his or her personal effects are packed, in order to assert a claim. Nor does the Convention provide that a passenger must obtain a luggage tag in the passenger’s name in order to qualify as a passenger who checked baggage. In short, a passenger having a claim for lost baggage for the purposes of these sections is simply a passenger who can establish as a factual matter that he or she checked a bag containing his or her belongings which was lost while under the control of the carrier.

[21] The Deputy Judge effectively found that Art. 17(2) and Art. 22(2) applied to each passenger who could establish that he or she checked a bag which contained their personal belongings. In reaching that interpretation, the Deputy Judge conducted both a textual and a contextual analysis of the Convention, in particular of Art. 17(2) and Art. 22(2). He concluded that both approaches supported his interpretation. I agree with that analysis and adopt it.

[22] There is nothing in the language of the Convention or the context in which such claims arise that militates against a plain reading of Art. 17(2) and Art. 22(2). Further, far from opening up the prospect of unlimited or indeterminate liability as the appellant suggests, such an interpretation establishes a fixed maximum liability of a carrier on the basis of the number of passengers on any given flight. Accordingly, in my opinion, the Deputy Judge correctly concluded that Art. 22(2) effectively permitted a claim by each passenger who could demonstrate that his or her bag was handed to the carrier and was checked by the carrier, regardless of whose name was set out on the baggage tag pertaining to such bag.

[23] Third, the appellant says that the Deputy Judge erred in finding that the loss limitation in Art. 22(2) applied to each “owner of baggage”. I accept that this language is not reflected in Art. 22(2). However, for the reasons discussed above, I am satisfied that the reference to “owner” was an inelegant reference to a passenger who checked “his” or “her” bag, that is, checked the particular bag which contained their personal belongings. It does not indicate that the Deputy Judge applied the wrong legal principle in reaching his decision.

[24] Fourth, the appellant says that the Deputy Judge was bound by, and therefore erred in failing to follow, the decision of Low J. in Holden v. ACE Aviation Holdings Inc. (2008), 2008 40223 (ON SCDC), 296 D.L.R. (4th) 233 (Ont. Div. Ct.) [Holden]. I do not agree for a number of reasons.

[25] The circumstances in Holden involved a claim for loss of property by a passenger who had not checked a bag. His lost property was packed in his wife’s bag. It was acknowledged that the wife was a passenger who had checked the bag and was entitled to a claim in her own right. In short, the ratio in Holden is simply that two passengers cannot check the same bag. These are very different circumstances from the present where the respondents say that they are each passengers who have separately checked baggage. Further, the finding in Holden, and the principle upon which it was determined, was that the word “passenger” in Art. 22(2) means “an individual who is a passenger and who has checked the piece of baggage that is lost” rather than “an individual who is on the flight without regard to whether he or she has checked a piece of baggage.” That is not the issue in the present case. Lastly, Holden says nothing at all with regard to the significance of baggage tags nor does it address the concept of “checking” baggage.

[26] Fifth, the appellant says that the Deputy Judge erred in reaching his alternative finding that Naeini held the baggage tags in trust for the other beneficiaries. This ground of appeal is rejected for two reasons. First, the reasons discussed above, this alternative ground is not required for the decision of the Deputy Judge. Second, the issue of whether the other respondents were passengers who handed baggage to the appellant to be checked is a factual finding. The Deputy Judge had ample evidence to conclude, as a matter of law, that each of the other respondents checked their own bags when Naeini handed them to the appellant’s representative at the counter. It is not necessary to go further to characterize the manner in which Naeini received the baggage tags for the reason that the tags themselves are not dispositive of the foregoing issue. As an evidentiary matter, it is far more significant that the appellant’s representative did not treat all of the bags as belonging to Naeini, as evidenced by the fact that he was not charged extra baggage fees.

[27] Based on the foregoing, I therefore find that the Deputy Judge did not err in law in finding that, as a matter of mixed fact and law, each of the respondents was a passenger who checked luggage with the appellant that was lost while under the control of the appellant.

The Respondents’ Loss

[28] The appellant’s second ground of appeal is that the respondents have failed to establish their loss. In this respect, there are two separate issues.

[29] First, the appellant says that the evidence indicates that many of the items having a material value were included in the bag that was delivered to the respondents by the appellant’s contractor. It suggests that this also casts doubt on the credibility of the respondents’ loss claim more generally. There are, however, two problems with this argument.

[30] The respondents say that the bag that was delivered to them was a black bag. There is no evidence to the contrary. On that ground alone, the appellant cannot establish that the items alleged to have been in the brown bag were, in fact, delivered.

[31] Moreover, the evidence establishes only that the respondents advised the appellant that certain personal effects were in a brown bag. The respondents did not, and could not, state that the brown bag was the bag which the appellant denoted as bag “TNI” in its records. The denotation of the brown bag as bag “TNI” was made by the appellant when it created, or populated, the particular records with details of lost items in each of the bags. The appellant arbitrarily described bag “TNI” as the brown bag and, importantly, arbitrarily associated “TNI” with the first of the baggage tags. Therefore, while the appellant has demonstrated that bag “TNI” was delivered because of the baggage tag on it, the appellant cannot establish that the bag that was delivered was the brown bag rather than a black bag as the respondents assert.

[32] Accordingly, this ground of appeal is rejected.

[33] The second element of this issue is the alleged error of the Deputy Judge in awarding the full damages compensable pursuant to Art. 22(2). I accept this ground of appeal. The respondents claimed only $6,800 on the baggage declaration form filed with the appellant in respect of the lost luggage and personal effects. As the Deputy Judge noted, none of the other expenses claimed by the respondents are compensable under Art. 29 of the Convention. While the respondents asserted at the hearing of this appeal that they understated the value of the lost personal effects, the Deputy Judge had no evidence before him to support this assertion.

[34] Accordingly, the Deputy Judge had no basis for awarding damages in excess of $6,800.

[35] I note as well that the appellant says that the value of 1,131 SDRs used by the Deputy Judge in the Judgment is incorrect. It seeks a correction of the amount, although it has not provided the Court with the corrected value. The dollar value of $2,040 used by the Deputy Judge was, in fact, provided at the hearing by the appellant’s own counsel. The appellant has also advised on this appeal that the difference is not material. Given the Court’s findings above regarding the compensable damages of the respondents, the alleged error is immaterial and, therefore, has been disregarded.

Conclusion

[36] Based on the foregoing, the appeal is denied except insofar as the award of the Deputy Judge in favour of the respondents is reduced to $6,800, collectively.

Costs

[37] The respondents were substantially successful on this appeal. However, they did not file any materials on this appeal and have not incurred any reimbursable costs. Accordingly, no costs are awarded in respect of this appeal.

Wilton-Siegel J.

Date: February 20, 2019