Decision No. 2-C-A-2021

SUMMARY

[1] Krzysztof Medrzecki filed an application with the Canadian Transportation Agency (Agency) against Air Canada regarding its refusal to compensate him for his lost baggage.

[2] He seeks compensation in the amount of CAD 3,612.79 for the value of the contents of his lost baggage.

[3] The Agency will address the following issues:

• Did Air Canada properly apply the terms and conditions set out in its International Passenger Rules and Fares Tariff No. AC-2 Containing Local and Joint Rules, Regulations, Fares and Charges on Behalf of Air Canada applicable to the Transportation of Passengers and Baggage Between Points in Canada/USA and Points in Areas 1/2/3 and Between the USA and Canada, NTA(A) No. 458 (Tariff), with regards to the liability of carriers respecting baggage, as required by subsection 110(4) of the ATR?
•  If Air Canada did not properly apply the terms and conditions set out in its Tariff, what remedy, if any, should be ordered?

[4] For the reasons set out below, the Agency finds that Air Canada did not properly apply the terms and conditions set out in Rules 105(C)(14) and 105(B)(5) of its Tariff. Therefore, pursuant to section 113.1 of the ATR, the Agency orders Air Canada to compensate Mr. Medrzecki in the amount of CAD 2,085. Air Canada is to pay this amount to Mr. Medrzecki as soon as possible and no later than February 4, 2021.

BACKGROUND

[5] Mr. Medrzecki booked a flight from Warsaw, Poland, to Ottawa, Ontario, via Munich, Germany, and Montréal, Quebec. His itinerary was comprised of flights operated by Lufthansa for the Warsaw, Munich and Montréal segments. Air Canada operated the flight from Montréal to Ottawa. On April 5, 2018, upon his arrival in Ottawa, Mr. Medrzecki did not find his baggage and he filed a delayed baggage report. His baggage was never retrieved.

[6] On April 25, 2018, Mr. Medrzecki filed a Missing/Delayed Bag Web Request Form and Air Canada’s Customer Care confirmed by email that a claim had been opened. On May 17, 2018, Air Canada advised him by email that the claim had been approved and that a cheque in the amount of CAD 1,048.47 would be issued. On June 28, 2018, Air Canada advised Mr. Medrzecki by email that the claim had been rejected based on his failure to disclose that he made a previous claim with Air Canada. Air Canada referred to Rule 105(C)(14) of its Tariff which allows it to disallow any claim for loss or damage which contains misrepresentations with respect to the nature or amount of such loss or damage.

[7] On January 14, 2020, Air Canada filed questions for Mr. Medrzecki pursuant to section 24 of the Canadian Transportation Agency Rules (Dispute Proceedings and Certain Rules Applicable to All Proceedings), SOR/2014-104 (Rules). Mr. Medrzecki filed an objection to the questions. On February 7, 2020, Air Canada filed a request pursuant to section 32 of the Rules asking the Agency to require the applicant to respond in full to the written questions or to provide Air Canada with the permission to request the information from other air carriers.

[8] On July 6, 2020, the Agency issued Decision No. LET-C-A-46-2020 whereby it denied Air Canada’s request.

THE LAW AND RELEVANT TARIFF PROVISIONS

[9] Subsection 110(4) of the ATR requires that an air carrier operating an international service apply the terms and conditions of carriage set out in its tariff.

[10] If the Agency finds that an air carrier has failed to properly apply its tariff, section 113.1 of the ATR empowers the Agency to direct the carrier to:

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

(b) pay compensation for any expense incurred by a person adversely affected by its failure to apply the fares, rates, charges or terms and conditions set out in the tariff.

[11] The relevant provisions of the Montreal Convention and Air Canada’s Tariff are set out in the Appendix.

POSITIONS OF THE PARTIES AND FINDINGS OF FACT

Mr. Medrzecki

[12] Mr. Medrzecki claims that Air Canada’s refusal to compensate him for his lost baggage is unreasonable and unjust. He filed a baggage tag issued by Lufthansa, which lists all the flight numbers on his itinerary, including the last segment that was operated by Air Canada. He argues that Air Canada had an obligation pursuant to Rule 25 of its Tariff to transport him to his destination and to deliver his baggage to him when he arrived at his destination.

[13] Mr. Medrzecki claims that Air Canada’s reason for refusing to compensate him is based on a technicality and is an excuse to avoid responsibility. He argues that it is unfair to reject his claim because he did not remember the events that occurred in 2013. He states that his age and health issues may be affecting his memory. Mr. Medrzecki submits that each ticket is a new contract between a passenger and the carrier and that Air Canada’s interpretation of its Tariff is unjust, unreasonable and discriminatory. He claims specifically that Rule 105(C)(14) is open to interpretation.

[14] Finally, Mr. Medrzecki refers to Decision No. LET-C-A-46-2020 and maintains that Air Canada cannot use misrepresentation as an excuse to deny his baggage claim.

Air Canada

[15] Air Canada maintains that it correctly applied the terms and conditions set out in its Tariff and in the Montreal Convention.

[16] Air Canada claims that although Mr. Medrzecki attested on his Missing/Delayed Bag Web Request Form that he had never filed a baggage claim with it or any other air carrier, its records show otherwise. Air Canada states that in 2013, Mr. Medrzecki filed a claim for lost baggage and that it compensated him in the amount of CAD 854.49. Air Canada challenges Mr. Medrzecki’s claim that he does not remember this previous claim, given the length of such processes.

[17] Air Canada argues that Mr. Medrzecki’s failure to disclose his previous claim with it constitutes false information and a misrepresentation which is prohibited by Rule 105(C)(14) of its Tariff. It adds that this Rule allows Air Canada to disallow any claim for loss or damage which contains misrepresentations with respect to the nature or amount of the loss or damage.

[18] Air Canada states that Mr. Medrzecki’s baggage was not recorded with Air Canada as it was never detected on any of Air Canada’s scanners while it was in transit to his final destination. Air Canada argues that Mr. Medrzecki’s claim should be rejected because it is excessive. It also submits that, if the Agency finds that compensation is owed, the Montreal Convention limits the amount of damage to which a passenger may be entitled to 1 131 Special Drawing Rights (SDR).

Findings of fact

[19] The Agency finds that Mr. Medrzecki’s baggage was lost and that Air Canada did not compensate him for his lost baggage.

ANALYSIS AND DETERMINATIONS

Did Air Canada properly apply the terms and conditions set out in its Tariff, with regards to the liability of carriers respecting baggage, as required by subsection 110(4) of the ATR?

[20] The onus is on the applicant to establish, on a balance of probabilities, that the carrier has failed to properly apply the terms and conditions of carriage set out in its tariff.

LIABILITY RESPECTING THE LOSS OF BAGGAGE

[21] Mr. Medrzecki’s baggage tag reflects his itinerary, which was comprised of flights operated by Lufthansa for the Warsaw, Munich and Montréal segments and a flight operated by Air Canada for the Montréal to Ottawa segment. Rule 105(B)(5) of Air Canada’s Tariff incorporates by reference the Montreal Convention. Article 36(3) of the Montreal Convention provides that, in the event of lost baggage, a passenger is entitled to take action against the first or the last carrier. Mr. Medrzecki is therefore entitled to take action against Air Canada, and its argument that his baggage was not part of its record because it was not detected by its scanners is irrelevant.

[22] Article 17(2) of the Montreal Convention states that an air carrier is liable for the loss of baggage that was in its care and control. Given that the baggage was in the care and control of Air Canada during the last segment of the itinerary, and as per Article 36(3) of the Montreal Convention, the Agency therefore finds that Air Canada is liable for the loss of Mr. Medrzecki’s baggage.

MISREPRESENTATIONS WITH REGARDS TO CLAIMS

[23] Air Canada denied compensation to Mr. Medrzecki on the basis that he failed to disclose correct information when he filed his Missing/Delayed Bag Web Request Form. Rule 105(C)(14) of Air Canada’s Tariff states that claims from passengers are subject to proof of the amount of loss and that the carrier may disallow any claim for loss or damage which contains misrepresentations with respect to the nature or amount of the loss or damage.

[24] In this case, Air Canada alleges that Mr. Medrzecki made “misrepresentations” with regard to the existence of a previous undisclosed claim. In Decision No. LET‑C‑A‑46‑2020, the Agency found that the alleged misrepresentation was not related to the current claim for lost baggage. The Agency notes that the alleged misrepresentation does not relate to either the nature or the amount of his claim, and therefore finds that, in denying Mr. Medrzecki’s claim for compensation, Air Canada did not properly apply the terms and conditions set out in Rule 105(C)(14) of its Tariff; and therefore did not properly apply the terms and conditions set out in Rule 105(B)(5) of its Tariff, which incorporates by reference the Montreal Convention.

If Air Canada did not properly apply the terms and conditions set out in its Tariff, what remedy, if any, should be ordered?

[25] At the time of the incident, section 113.1 of the ATR stated that the Agency may direct an air carrier to take the corrective measures that it considers appropriate and to pay compensation for any expense incurred by a person affected by the carrier’s failure to apply its tariff.

[26] Although proof of loss in the form of receipts is not required, the reasonableness of an applicant’s claim for compensation must be considered. In this case, Mr. Medrzecki provided Air Canada with a description of his baggage and a list of the lost items with their values in either Canadian dollars or Polish zloty (PLN). The receipts that he provided totalled CAD 2,509 (PLN 2,869 + CAD 1,447.46). Mr. Medrzecki seeks compensation in the amount of CAD 3,612.79 for the value of the contents of his lost baggage. However, he did not explain why the amount of CAD 3,612.79 is reasonable as compensation.

[27] The amount supported by the receipts exceeds the limit of liability under Article 22(2) of the Montreal Convention, which limits the carrier’s liability, in case of destruction, loss or delay of, or of damage to, baggage, to 1 131 SDR (approximately CAD 2,100). As a result, the Agency finds that Mr. Medrzecki is entitled to this maximum amount.

CONCLUSION

[28] The Agency finds that Mr. Medrzecki has established, on a balance of probabilities, that by failing to compensate him for the damage caused by the loss of the contents of his baggage, Air Canada did not properly apply the terms and conditions set out in Rules 105(C)(14) and 105(B)(5) of its Tariff, with regards to the liability of carriers respecting baggage, as required by subsection 110(4) of the ATR.

ORDER

[29] Therefore, pursuant to section 113.1 of the ATR, the Agency orders Air Canada to compensate Mr. Medrzecki in the amount of 1 131 SDR, which amounts to CAD 2,085. Air Canada is to pay this amount to Mr. Medrzecki as soon as possible and no later than February 4, 2021.

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APPENDIX TO DECISION NO. 2-C-A-2021

Convention for the Unification of Certain Rules for International Carriage by Air ‑ Montreal Convention (Montreal Convention)

Article 17(2) of the Montreal Convention establishes the liability rules for damage incurred as a result of destruction or loss of, or of damage to, baggage as follows:

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.

Article 19 of theMontreal Convention sets out the carrier’s liability in case of delay, and provides the following:

The carrier is liable for damage occasioned by delay in the carriage by air of passengers, baggage or cargo. Nevertheless, the carrier shall not be liable for damage occasioned by delay if it proves that it and its servants and agents took all measures that could reasonably be required to avoid the damage or that it was impossible for it or them to take such measures.

Article 22(2) of the Montreal Convention sets out the limits of liability in relation to delay, baggage and cargo, and provides the following:

In the carriage of baggage, the liability of the carrier in the case of destruction, loss, damage or delay is limited 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 36(3) of the Montreal Convention addresses the liability when the carriage is performed by various successive air carriers, and provides the following:

As regards baggage or cargo, the passenger or consignor will have a right of action against the first carrier, and the passenger or consignee who is entitled to delivery will have a right of action against the last carrier, and further, each may take action against the carrier which performed the carriage during which the destruction, loss, damage or delay took place. These carriers will be jointly and severally liable to the passenger or to the consignor or consignee.

Air Canada’s International Passenger Rules and Fares Tariff No. AC-2 Containing Local and Joint Rules, Regulations, Fares and Charges on Behalf of Air Canada Applicable to the Transportation of Passengers and Baggage Between Points in Canada/USA and Points in Areas 1/2/3 and Between the USA and Canada, NTA(A) No. 458.

RULE 105 – LIABILTY OF CARRIERS

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(B) Laws and provisions applicable

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(5) For the purpose of international carriage governed by the Montreal Convention, the liability rules set out in the Montreal Convention are fully incorporated herein shall supersede and prevail over any provisions of this tariff which may be inconsistent with those rules.

(C) Limitation of liability

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(14) All claims are subject to proof of amount of loss. Carrier may disallow any claim for loss or damage which contains misrepresentations with respect to the nature or amount of such loss or damage, Carrier may also disallow claims when the passenger fails to provide proof of loss in the form of receipts of purchase unless sufficient proof of loss is provided.

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(E) Time limitations on claims and actions

(1) No action shall lie in the case of loss of or any delay in the delivery of baggage unless the person entitled to delivery notifies the carrier forthwith after the discovery of the delay or loss and complains at the latest within 21 days from the date on which the baggage has been placed at his disposal (in the case of delay), or should have been placed at his disposal (in the case of loss). In the case of damage, complaint must be made to carrier forthwith after discovery of the damage and at the latest within 7 days from receipt of baggage. Every complaint must be made in writing and dispatched within the time aforesaid.
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