A Federal Court judge has overturned a Canadian Transportation Agency (CTA) decision, siding with Air Canada in a dispute over compensation for a delayed bag, stating the regulator's order lacked "common sense."
The Case: A Delayed Bag from Toronto to Vancouver
The legal dispute stems from an incident involving two passengers on an Air Canada flight from Toronto to Vancouver on May 25, 2022. While the travellers arrived as scheduled, one of their bags did not. The airline delivered the delayed luggage to their hotel the following morning, May 26, 2022.
Following the delay, the passengers filed a claim with Air Canada for $3,561.26. The airline initially refunded them $250. Unsatisfied, the passengers, one identified in court documents as Alaa Badia Tannous, escalated the complaint to the CTA, submitting receipts totalling $3,435.99.
Court Finds CTA Decision "Unreasonable"
In a decision released last week, Federal Court Justice Michael Manson focused on a critical flaw in the CTA officer's November 2024 ruling. The officer had ordered Air Canada to pay an additional $2,079.72, bringing the total compensation to the Montreal Convention limit of $2,329.72 (1,288 Special Drawing Rights).
Justice Manson took issue with the fact that the CTA included receipts for items purchased after the bag was delivered. Notably, this included a $1,310.40 luggage purchase made on May 28, 2022—two days after the delayed bag was returned.
"The Officer’s reasons do not address, nor show any common sense on why post-delivery purchases were causally linked to the delay," Justice Manson wrote in his decision. He calculated that the receipts for items bought before the bag's delivery amounted to only $1,691.98, which was below the liability cap.
This omission, the judge concluded, rendered the CTA's decision unreasonable, leading him to grant Air Canada's application for judicial review and set aside the order.
Implications for Passenger Rights and Airline Liability
The ruling clarifies the application of the Montreal Convention, the international treaty governing airline liability. It underscores that compensation for delayed baggage must be directly and reasonably linked to the period of the delay itself.
Gábor Lukács, president of the advocacy group Air Passenger Rights, agreed with the court's assessment in this specific instance. The decision serves as a reminder to passengers to keep claims reasonable and directly related to the inconvenience caused during the delay period.
For airlines, the Federal Court's intervention highlights the importance of scrutinizing compensation claims and challenging rulings that may extend liability beyond what is established by international agreement and common sense.
