Decision No. 116-C-A-2005

March 3, 2005

File No. M4370/T173/03-2

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APPLICATION

[1] On September 4, 2003, Teresa Torres filed with the Air Travel Complaints Commissioner (hereinafter the ATCC) the complaint set out in the title. However, due to the regulatory nature of the complaint, it was referred to the Canadian Transportation Agency (hereinafter the Agency).

[2] In a letter dated November 18, 2004, Agency staff advised the parties of the Agency's jurisdiction in this matter. In addition, Agency staff sought Ms. Torres' confirmation that she wished to pursue this matter formally before the Agency. As the comments regarding Ms. Torres' complaint were filed by both parties with the ATCC, Agency staff also sought the parties' agreement to have the comments they filed with the ATCC considered as pleadings before the Agency.

[3] On November 19, 2004, Ms. Torres advised the Agency that she wished to pursue the matter formally before the Agency, and accepted that the Agency consider the comments she filed with the ATCC as pleadings before the Agency. On November 22, 2004, TACA International Airlines, S.A. carrying on business as TACA Airlines (hereinafter TACA) advised the Agency that it accepted that the Agency consider the comments the carrier filed with the ATCC as pleadings before the Agency. Additional submissions were filed by parties in response to Agency staff enquiries.

ISSUE

[4] The issue to be addressed is whether TACA applied the terms and conditions relating to limitation of liability for checked baggage set out in the carrier's International Passenger Rules and Fares Tariff No. TA-1, C.T.C.(A) No. 345 (hereinafter TACA's international tariff), as required by subsection 110(4) of the Air Transportation Regulations, SOR/88-58, as amended (hereinafter the ATR).

FACTS

[5] On August 8, 2003, Ms. Torres travelled with TACA from San Salvador to Toronto. In San Salvador, while assisting her mother who was in a wheelchair, Ms. Torres was required by a TACA employee to check-in her carry-on baggage. When she arrived in Toronto, Ms. Torres noticed that her digital camera (Sony DSC-P50), one bottle of perfume and three compact discs were missing from the baggage that she had intended to carry on the aircraft. Ms. Torres submits that she reported the loss immediately to TACA and was verbally promised a reimbursement for the missing items. Ms. Torres claims that the value of her lost items is as follows:

• Digital camera: US$50
• Perfume: US$50
• Three compact discs: US$30

[6] On October 26, 2003, TACA sent Ms. Torres a cheque for US$47 as compensation for the lost items. This amount was calculated on the basis of the estimated weight of the lost items multiplied by the limit of liability assumed by TACA, i.e., an approximate weight of 2.35 kilograms multiplied by US$20 per kilogram.

POSITIONS OF THE PARTIES

[7] Ms. Torres states that she is seeking reimbursement for her lost items on the basis of their value.

[8] In its submission dated July 30, 2004, TACA argues that pursuant to the conditions of contract provided to passengers with tickets and the carrier's international tariff, TACA assumes no liability for fragile, valuable or perishable articles.

[9] On December 16, 2004, Agency staff requested TACA to indicate whether a baggage check was issued to Ms. Torres for the baggage that contained the digital camera, the bottle of perfume and the three compact discs, and if so, to provide the Agency with evidence that this document was issued. Agency staff also requested TACA to indicate the weight of the said baggage as registered by TACA.

[10] In its response, TACA states that when there is no space left in the cabin for carry-on baggage, it is standard industry procedure to carry this baggage as checked baggage in the baggage compartment of the aircraft. In the case involving Ms. Torres, TACA submits that "a baggage check must have been given to Ms. Torres, unfortunately this [sic] checks are not registered on our system because carry-on baggage is never left behind. ... This situation happens when the plane is about to leave, therefore there is no time to perform a standard baggage check for carry-on baggage." TACA was unable to file any evidence demonstrating that a baggage check was issued to Ms. Torres.

[11] With respect to the weight of Ms. Torres' bag, TACA explains that it has no such information as there is no time to perform a standard baggage check in situations such as that experienced by Ms. Torres.

[12] In her submission, Ms. Torres maintains that she was not given a baggage check for the carry-on baggage that was checked in by TACA's personnel.

[13] TACA argues that Ms. Torres' complaint should be rejected as it was not submitted in writing to TACA within seven days of the incident.

[14] In response to this argument, Ms. Torres submits that in the days following her arrival in Toronto, she left several unanswered messages with the head of TACA's baggage department at the Toronto - Lester B. Pearson International Airport, and that when she finally heard from this official, he offered her an extra "luggage voucher", which she declined. Ms. Torres also indicates that she contacted TACA's 1-800 number, where she was told to contact the carrier's office in Toronto.

ANALYSIS AND FINDINGS

[15] In making its findings, the Agency has carefully considered all of the evidence submitted by the parties. The Agency has also examined TACA's limitations of liability applicable to the carriage of baggage between points in Canada and points outside Canada, as set out in TACA's international tariff.

[16] The Agency's jurisdiction over complaints with respect to terms and conditions of carriage established and applied by an air carrier operating an international service is set out in subsection 110(4) and section 113.1 of the ATR, which state that:

110(4) Where a tariff is filed containing the date of publication and the effective date and is consistent with these Regulations and any orders of the Agency, the tolls and terms and conditions of carriage in the tariff shall, unless they are rejected, disallowed or suspended by the Agency or unless they are replaced by a new tariff, take effect on the date stated in the tariff, and the air carrier shall on and after that date charge the tolls and apply the terms and conditions of carriage specified in the tariff.

113.1 Where a licensee fails to apply the fares, rates, charges, terms or conditions of carriage applicable to the international service it offers that were set out in its tariffs, the Agency may

(a) direct the licensee to take corrective measures that the Agency considers appropriate; and

(b) direct the licensee to pay compensation for any expense incurred by a person adversely affected by the licensee's failure to apply the fares, rates, charges, terms or conditions of carriage applicable to the international service it offers that were set out in its tariffs.

Notice to carrier within seven days

[17] In its submission, TACA argues that Ms. Torres' complaint to the Agency should be dismissed as she failed to file a written complaint with TACA within the time prescribed by the Convention for the Unification of Certain Rules Relating to International Carriage by Air, as amended (hereinafter the Warsaw Convention), i.e., within seven days of the incident. The Warsaw Convention is incorporated into Canadian law by the Carriage by Air Act, R.S.C., 1985, c. C-26.

[18] The Agency notes that the time limitation provision found in Article 26 of the Warsaw Convention, and on which TACA apparently relies, only applies in cases of damage to or delay of baggage. Unlike other provisions of the Warsaw Convention which deal with loss or destruction of, and damage to baggage (for example Article 18), Article 26 does not apply in cases of loss.

[19] Article 26 states, in part that:

...

(2) In the case of damage, the person entitled to delivery must complain to the carrier forthwith after the discovery of the damage, and, at the latest, within three days from the date of receipt in the case of baggage and seven days from the date of receipt in the case of cargo. In the case of delay the complaint must be made at the latest within fourteen days from the date on which the baggage or cargo has been placed at his disposal. [Emphasis added]

(3) Every complaint must be made in writing upon the document of carriage or by separate notice in writing despatched within the times aforesaid.

(4) Failing complaint within the times aforesaid, no action shall lie against the carrier, save in the case of fraud on his part.

[20] In light of the above considerations and, in the absence of a time limit for filing claims of loss, the Agency is satisfied that Ms. Torres properly notified TACA of her claim in due course, and concludes that TACA's argument on time limitation must be dismissed.

Rule 55(C)(9)(a), Limitation of liability

[21] In its submission, TACA argues that it is not liable for fragile, valuable or perishable articles. This statement, which is reflected on TACA's passenger tickets, flows from Rule 55(C)(9)(a) of TACA's international tariff. This Rule, entitled "Liability for Fragile, Irreplaceable or Perishable Articles", states that:

Carrier is not liable for loss, damage or delay in the delivery of fragile or perishable articles, money, jewelry, silverware, negotiable papers, securities or other valuables, business documents or samples which are included in the passenger's checked baggage, whether with or without the knowledge of the carrier. [Emphasis added]

[22] The Merriam-Webster Dictionary defines the word "fragile" as meaning "easily broken or destroyed; constitutionally delicate; lacking in physical vigor", and the word "perishable" as meaning "liable to perish; liable to spoil or decay".

[23] With respect to the matter of fragile articles, the Agency is of the opinion that the construction of the items lost by TACA is sufficiently robust as to not be susceptible to easy breakage or destruction. With reference to the lost camera, while the Agency recognizes that some types of cameras can be considered fragile items, the Agency is of the opinion that this is not the case for standard cameras, like Ms. Torres' Sony DSC-P50. The Agency also notes that Ms. Torres submits that her camera was in its original box, which would reduce the likelihood of easy breakage or destruction.

[24] In addition, while it does not affect its interpretation of Rule 55(C)(9)(a) of TACA's international tariff, the Agency notes that the items that TACA implicitly alleged to be "fragile" were not damaged, but lost.

[25] With respect to the matter of perishable articles, it is clear that none of the articles reported lost are liable to spoil or decay.

[26] After careful examination of all the facts and circumstances of this case, and based on its specialized knowledge and expertise in matters relating to the regulation of air transportation, and particularly in matters of tariff interpretation, the Agency is of the opinion that in the circumstances of this case, Ms. Torres' lost items cannot reasonably be considered as being fragile or perishable within the meaning of Rule 55(C)(9)(a) of TACA's international tariff. A reasonable person cannot be expected to understand, when reading Rule 55(C)(9)(a) of TACA's international tariff, that articles, such as those belonging to Ms. Torres that were lost by TACA, are "fragile" or "perishable".

Valuables

[27] To the extent that TACA's argument concerning the carrier's limitation of liability under Rule 55(C)(9)(a) of TACA's international tariff could have been raised in the context of TACA's limitation of liability for "valuable" articles, the Agency is also of the opinion that this argument must be dismissed.

[28] Rule 55(C)(9)(a) of TACA's international tariff makes reference to "money, jewelry, silverware, negotiable papers, securities, or other valuables, ....". The words that precede the expression "or other valuables" establish the context in which such an expression must be interpreted, and help the reader to determine the scope of the limitation of liability. In the present case, the Agency is of the opinion that Ms. Torres' lost items cannot reasonably be considered as articles that rightly belong to the type of valuables to which this Rule refers (i.e., money, jewelry, silverware, negotiable papers, securities).

[29] In light of the foregoing, and based on its specialized knowledge and expertise in matters relating to the regulation of air transportation, and particularly in matters of tariff interpretation, the Agency is of the opinion that in the circumstances of this case, Ms. Torres' lost items cannot reasonably be considered valuable within the meaning of Rule 55(C)(9)(a) of TACA's international tariff.

Issuance of a baggage check

[30] In its submission, TACA stated that if there is no space in the cabin for carry-on baggage, such baggage will be placed in the baggage compartment of the aircraft, and be considered as checked baggage. TACA maintained that this is standard industry procedure. When asked whether Ms. Torres was issued a baggage check when she surrendered her carry-on baggage to TACA personnel, TACA submitted that "a baggage check must have been given to Ms. Torres, unfortunately this [sic] checks are not registered on our system because carry-on baggage is never left behind. ... This situation happens when the plane is about to leave, therefore there is no time to perform a standard baggage-check for carry-on baggage."

[31] Ms. Torres maintained that she was not given a baggage check for the carry-on baggage that was checked in by TACA's employees.

[32] After considering all the facts and circumstances of this case, the Agency is satisfied that immediately prior to the departure of the flight, Ms. Torres' carry-on baggage was forwarded by TACA personnel to the baggage compartment of the aircraft on which Ms. Torres travelled. In this context, TACA personnel had no time to issue a standard baggage check for carry-on baggage. As a result, the Agency is of the opinion that no baggage check was issued and given to Ms. Torres for her carry-on baggage.

[33] Rule 55(B)(1) of TACA's international tariff states that "Carriage hereunder is subject to the rules and limitations relating to liability established by the Convention". By way of this provision, TACA incorporated by reference the provisions of the Warsaw Convention and made it part of its international tariff.

[34] Article 4, paragraph 2 of the Warsaw Convention states that:

(2) The baggage check shall constitute prima facie evidence of the registration of the baggage and of the conditions of the contract of carriage. The absence, irregularity or loss of the baggage check does not affect the existence or the validity of the contract of carriage which shall, none the less, be subject to the rules of this Convention. Nevertheless, if the carrier takes charge of the baggage without a baggage check having been delivered or if the baggage check (unless combined with or incorporated in the passenger ticket which complies with the provisions of Article 3, paragraph (1)(c)) does not include the notice required by paragraph (1)(c) of this Article, he shall not be entitled to avail himself of the provisions of Article 22, paragraph (2). [Emphasis added]

[35] Article 22, paragraph 2, notably states that:

... the liability of the carrier is limited to a sum of 250 francs per kilogram ...

[36] The Agency, as noted previously, has determined as a question of fact, that no baggage check was issued to Ms. Torres. Accordingly, pursuant to this provision of the Warsaw Convention, which is incorporated by reference in Rule 55(B)(1) of TACA's international tariff, TACA cannot avail itself of the limit of liability authorized under the Convention as it did in the present case.

[37] By limiting its liability in accordance with the provisions of Article 22, paragraph 2 of the Warsaw Convention (250 French gold francs per kg, or 20$ US per kg as per TACA's international tariff), TACA contravened Rule 55(B)(1) of its international tariff, which states that "Carriage hereunder is subject to the rules and limitations relating to liability established by the Convention". In doing so, TACA contravened subsection 110(4) of the ATR.

Value of the lost articles

[38] In light of the evidence filed, the Agency is satisfied that Ms. Torres' baggage contained a digital camera valued at US$500, perfume valued at US$50, and compact discs valued at US$30, for a total value of US$580.

CONCLUSION

[39] With respect to TACA's argument that Ms. Torres' complaint should be rejected because it was not made in writing and given or dispatched to TACA within seven days of the incident, the Agency concludes that Article 26 of the Warsaw Convention, on which TACA relies, only applies in cases of damage or delay; it does not apply to loss as is the case in the present circumstance.

[40] As to whether a baggage check was issued to Ms. Torres when she surrendered her bag to TACA's personnel, the Agency is of the opinion that TACA's personnel did not issue a baggage check to Ms. Torres when they checked in her carry-on baggage. Accordingly, pursuant to Article 4, paragraph 2 of the Warsaw Convention, TACA was not entitled to avail itself of the limitation of liability provided in the Convention. By limiting its liability contrary to Article 4, paragraph 2 of the Warsaw Convention, TACA contravened Rule 55(B)(1) of its international tariff, which states that "Carriage hereunder is subject to the rules and limitations relating to liability established by the Convention", and thereby contravened subsection 110(4) of the ATR.

[41] The Agency is satisfied that the articles lost by TACA have a total value of US$580.

[42] Accordingly, the Agency, pursuant to section 113.1 of the ATR, hereby directs TACA, within thirty (30) days from the date of this Decision, to pay Ms. Torres an additional amount of US$533, which represents the difference between the value of the lost items, i.e., US$580, and the reimbursement of US$47 that TACA has already paid.