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Damages - Statutory Compensation. International Air Transport Association v. Canada (Transportation Agency)
In International Air Transport Association v. Canada (Transportation Agency) (SCC, 2024) the Supreme Court of Canada dismissed an appeal, here involving "the vires of the Air Passenger Protection Regulations, SOR/2019-150 (“Regulations”) [SS: under the 'Canada Transportation Act'], and the nature and scope of the “exclusivity principle” set out in Article 29 of the 1999 Convention for the Unification of Certain Rules for International Carriage by Air" [SS: the 'Montreal Convention'].
Here the court considers the difference between civil damages and statutory compensation:(2) The Regulations Do Not Provide for an “Action for Damages” and, as a Consequence, There Is No Conflict
[94] Because the Regulations do not provide for an action for damages, but instead create an entitlement to standardized compensation that does not seek to measure a passenger’s loss, they fall outside the scope of Article 29 and do not conflict with the Montreal Convention. The two forms of passenger compensation envisaged by the Regulations and the Montreal Convention are capable of “standing together”. The bargain at the centre of the Montreal Convention remains undisturbed. In actions for damages, passengers continue to enjoy certain evidentiary presumptions “on proof of damage” (Thibodeau, at para. 42) which address “the need for equitable compensation based on the principle of restitution” (Montreal Convention, preamble). Carriers remain shielded from unlimited liability arising from actions for damages related to claims for death or bodily injury, damage or loss of baggage and cargo, and for delay.
[95] It is helpful to look beyond the context of the Montreal Convention to other instances in which courts have considered whether a statutory entitlement is an award of damages. In Brake v. PJ-M2R Restaurant Inc., 2017 ONCA 402, 135 O.R. (3d) 561, the Court of Appeal dealt with whether a plaintiff was entitled to statutory entitlements (termination and severance pay) under the Employment Standards Act, 2000, S.O. 2000, c. 41, in addition to damages, or whether this would result in double recovery. In concluding that the compensation owed under the Employment Standards Act was not an award of damages and there was no double recovery, the court characterized the compensation payable under the Employment Standards Act as “minimum entitlements” that “are not linked to any actual loss suffered by the employee, but are payable in any event” (para. 116, quoting Boland v. APV Canada Inc. (2005), 2005 CanLII 3384 (ON SCDC), 250 D.L.R. (4th) 376 (Ont. Div. Ct.), at para. 22). The entitlements could be contrasted with damages in the employment context, which seek to correct the loss suffered by a plaintiff through monetary compensation, having regard to factors such as “the age of the employee, the likely length of time to find another position, the actual finding of another position etc.” (para. 117, quoting Boland, at para. 23). Concluding that no conflict exists between the statutory entitlements provided for under the Regulations and the damages limitations under the Montreal Convention is consistent with the approach in Brake and a correct interpretation of the Regulations.
[96] The appellants raise two further arguments with respect to the purported incompatibility of the Regulations with the Montreal Convention, neither of which changes the outcome. First, they submit that the compensation provided for under the Regulations amounts to “non-compensatory damages” under the meaning of Article 29. This argument does not get off the ground. The meaning of “damages” examined above also applies to preclude a finding that the compensation provided for by the Regulations amounts to “non-compensatory damages”. Furthermore, the text of Article 29 places “non-compensatory damages” alongside “punitive” and “exemplary” damages deriving from “any such action”, i.e., any such “action for damages”. This construction establishes that the non-compensatory damages in question are a subset of the damages precluded by Article 29’s exclusivity principle and not a standalone category. I therefore do not accept that this wording in Article 29 serves to broaden the exclusivity principle.
[97] Second, the appellants submit that, because claims for compensation under the Regulations can be vindicated in court, the Regulations do in fact give rise to “actions for damages” despite the primacy of the administrative enforcement mechanism under the CTA. But the fact that claims payable pursuant to the Regulations can be vindicated by way of an action in court does not change the nature of the compensation or the Regulations themselves. The Regulations make no provision for claims to be filed in court. And even assuming, without deciding, that judicial proceedings that seek to vindicate a claim under the Regulations amount to an “action” for the purposes of the Montreal Convention, the claim would not be for “damages”. Where such claims are filed in courts of law, the claim is not in the nature of one for damages, because the claim is not tied to any harm suffered by the claimant and does not require any “case-by-case assessment” or relate to “compensation for harm incurred” (International Air Transport Association v. Department for Transport, at para. 43; Zicherman, at p. 227). Instead, the claim is for payment of an amount that is already owed as a matter of standardized entitlements provided for under a consumer protection scheme.
[98] The Regulations impose additional costs on carriers by incorporating certain terms in their tariffs, but these costs are simply a condition of licensure for domestic and international carriers to access the Canadian air carriage market. In signing on to the Convention and the “protective reconciliation” between the interests of passengers and carriers that it engendered (Thibodeau, at para. 153, per Abella J., dissenting), there is no indication that Canada (or any other state party) agreed to forego its ability to provide for minimum standards of treatment for passengers within its jurisdiction.
[99] This conclusion is consistent with this Court’s holding, in Thibodeau, that the Convention is “not comprehensive” but is exclusive “in relation to the matters that it covers”, those being “rules governing damages liability of international air carriers” (para. 47). In the absence of any conflict between the Montreal Convention (as implemented by the CAA) and the Regulations, there is no basis to find that the Regulations are ultra vires the CTA.
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