Decision No. 319-C-A-2007

June 21, 2007

File No. M4120-3/07-00897

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COMPLAINT

[1] On March 15, 2006, Shahid Saleem filed with the Complaint Investigations Division (hereinafter the CID) the complaint set out in the title. Given that the parties had been unable to reach a satisfactory agreement despite the intervention of the CID and following Mr. Saleem's request that the matter be referred to the Canadian Transportation Agency's (hereinafter the Agency) formal process, the matter was referred to the Agency for its consideration on February 6, 2007.

[2] On February 14, 2007, both Mr. Saleem and Air Canada were advised of the Agency's jurisdiction in this matter. The parties were also requested to advise whether they agreed to have the comments and documents they had filed with the CID considered as pleadings before the Agency. On the same date, Mr. Saleem agreed to have the documents and comments he had previously filed with the CID considered as pleadings before the Agency.

[3] On February 19, 2007, Air Canada advised that it wished to file additional comments and/or documents in response to Mr. Saleem's complaint. Furthermore, Air Canada stated that it did not agree that the comments previously filed with the CID regarding this complaint be considered as pleadings before the Agency and requested that the Agency officially open pleadings in this matter.

[4] Pleadings were opened on February 27, 2007. On March 23, 2007, Air Canada filed its answer to the complaint and Mr. Saleem filed additional comments. On March 29, 2007, Mr. Saleem filed his reply.

[5] Pursuant to subsection 29(1) of the Canada Transportation Act, S.C., 1996, c. 10 (hereinafter the CTA), the Agency is required to make its decision no later than 120 days after the application is received unless the parties agree to an extension. In this case, the parties have agreed to an extension of the deadline until June 21, 2007.

PRELIMINARY MATTER

[6] In his complaint, Mr. Saleem raises some customer service issues, such as the way he and his complaint were handled by Air Canada's staff, and he requests an apology from Air Canada.

[7] The Agency cannot rule on these aspects of his complaint as it does not have jurisdiction over the quality of service offered by an air carrier nor is it empowered by law to order any air carrier to apologize to its passengers.

ISSUE

[8] The issue to be addressed is whether Mr. Saleem is entitled to compensation for the loss of his baggage and if so, in what amount.

[9] The Agency must determine whether Air Canada properly applied the terms and conditions relating to the liability of baggage as set out in the carrier's Domestic Passenger General Rules Tariff No. CDGR-1 (hereinafter the Tariff), as required by the CTA.

FACTS

[10] On January 18, 2006, Mr. Saleem travelled on Air Canada Flight No. AC239 from Edmonton to Vancouver to attend a wedding. Prior to boarding, Mr. Saleem checked in his baggage at the Air Canada counter at the Edmonton International Airport.

[11] Upon arrival at the Vancouver International Airport, Mr. Saleem was not able to retrieve his checked baggage as it did not arrive with his flight. He immediately reported the loss of his baggage at the Air Canada counter at the Vancouver International Airport and a few days later, he filed a baggage declaration form with Air Canada.

[12] During the ensuing discussions and negotiations between Mr. Saleem and Air Canada, no agreement was reached between the parties. Mr. Saleem is dissatisfied with Air Canada's compensation offers and wants the Agency to rule on his complaint.

POSITIONS OF THE PARTIES

[13] Mr. Saleem submits that the content of his baggage consisted of clothing items totalling $821, a DVD player worth $275, DVDs worth $185, miscellaneous items worth $60 and the suitcase worth $225. His total claim amounts to $1,566.

[14] In support of his complaint, Mr. Saleem provided copies of his boarding card, the baggage declaration he filed with Air Canada, and a notarized Itemized List and Description of Bags and Contents which was also submitted to the carrier.

[15] Air Canada maintains that it is not liable for Mr. Saleem's loss of baggage for two main reasons. First, pursuant to Air Canada's Tariff, it is exempt from liability for electronic equipment, such as a DVD player and DVDs and second, Mr. Saleem is not entitled to any compensation for his lost baggage given that he failed to prove his loss as required under the carrier's Tariff.

[16] Nevertheless, Air Canada states that the air carrier is willing to provide Mr. Saleem with $553 on a compromise basis, representing 50 percent of his admissible claim, as the "settlement may not exceed the depreciated value of the missing property". In addition, Air Canada notes that it credited Mr. Saleem's Aeroplan account with 4,000 Aeroplan points as a gesture of goodwill.

APPLICABLE LEGISLATIVE AND REGULATORY PROVISIONS

[17] The Agency's jurisdiction concerning domestic tariffs is set out in sections 67 and 67.1 of the CTA.

[18] Section 67 of the CTA provides, in part, that:

(3) The holder of a domestic licence shall not apply any fare, rate, charge or term or condition of carriage applicable to the domestic service it offers unless the fare, rate, charge, term or condition is set out in a tariff that has been published or displayed under subsection (1) and is in effect.

[19] Section 67.1 of the CTA provides, in part, that:

If, on complaint in writing to the Agency by any person or on its own motion, the Agency finds that, contrary to subsection 67(3), the holder of a domestic licence has applied a fare, rate, charge or term or condition of carriage applicable to the domestic service it offers that is not set out in its tariffs, the Agency may order the licensee to

(a) apply a fare, rate, charge or term or condition of carriage that is set out in its tariffs;

(b) compensate any person adversely affected for any expenses they incurred as a result of the licensee's failure to apply a fare, rate, charge or term or condition of carriage that was set out in its tariffs; and

(c) take any appropriate corrective measures.

[20] Carriers operating domestic air services are free to establish their own terms and conditions of carriage provided that they are set out in a tariff as required by subsection 67(1) of the CTA. Pursuant to paragraph 107(1)(n) of the Air Transportation Regulations, SOR/88-58, as amended (hereinafter the ATR), tariffs shall contain the terms and conditions of carriage clearly stating the air carrier's policy in respect of, among other things:

• refusal to transport passengers or goods;
• limits of liability respecting passengers and goods;
• and exclusions from liability respecting passengers and goods.

[21] Section 55 of the CTA defines a tariff as a schedule of fares, rates, charges and terms and conditions of carriage applicable to the provision of an air service and other incidental services.

Air Canada's Tariff provisions

[22] The following are excerpts from Air Canada's Tariff in effect at the time of the incident.

Rule 190AC - ACCEPTANCE OF BAGGAGE - GENERAL

CONDITIONS OF ACCEPTANCE

(A) General Conditions of Acceptance

AC will accept for transportation as baggage, such personal property as is necessary or appropriate for the wear, use, comfort or convenience of the passenger for the purpose of the trip, subject to the following conditions:

[...]

(3)

[...]

(b) AC does not agree to carry money, jewelry, silverware, negotiable papers, securities or other valuables, computers, cameras, cellular phones, business documents, samples, liquids, perishables or prescription drugs.

Rule 195AC CONDITIONS AND CHARGES FOR ACCEPTANCE OF SPECIAL ITEMS

(H)(1) FRAGILE ITEMS

[...]

(b) AC does not agree to carry fragile items as checked baggage, or when otherwise placed in the care of the carrier, unless they are appropriately packaged in the original factory-sealed carton, a cardboard mailing tube, or a container or case specifically designed for shipping items. Carrier agrees to accept such items without the appropriate packaging upon execution by the passenger of a Limited Release tag at time of check-in (see below for form of Limited Release tag applicable). Unsuitably or inadequately packed items will be carried but only upon completion of a Limited Release tag at time of check-in (see paragraph (3) below).

(H)(2) Classes and Examples of Fragile and/or Perishable Items

The classes of items listed below are deemed by carrier to be fragile or perishable or otherwise unsuitable as checked baggage and are subject to the conditions of acceptance set forth in paragraph (1) above.

[...]

(c) Electronic and Mechanical Items (See also Precision Items)

Typewriters, sewing machines, watches, clocks, sensitive calibrated tools and instruments, televisions, radios (including citizen band), calculators, audio and video equipment, electron microscopes, electrographs, and electronic medical equipment that includes tubes and glass.

[...]

RULE 230AC LIABILITY - BAGGAGE

(A)(1) (Applicable for transportation solely within Canada only and not in conjunction with any international travel.) Liability for the loss of, damage to, or the delay in delivery of baggage or other personal property (CANCELLED) shall not be more than 1500.00 dollars per passenger unless a higher value is declared in advance and charges are paid pursuant to the carrier's regulations as defined in paragraph (c). In the event, the liability of the carrier shall be limited to such higher declared value. In no case shall the carrier's liability exceed the actual loss suffered by the passenger. All claims are subject to proof of amount of loss. These limitations shall also apply to baggage or other personal property (as previously defined in Rule 195) accepted by the carrier for temporary storage at a city or airport office or elsewhere before or after the passenger's trip.

(B) Exclusions from Liability

[...]

(2) Carrier shall not be liable for loss, damage, or delay in the delivery of items the carrier has not agreed to carry pursuant to Rule 190(A)(3)(b) when such items are contained in checked baggage with or without the knowledge of the carrier. Carrier shall not be liable for damage to fragile or unsuitably packed items or for damage or delay to perishable items or for loss of unsuitably or inadequately packed items when such damage, delay or loss occurs after completion of a Limited Release Tag as set forth in Rule 196(L)(4).

ANALYSIS AND FINDINGS

[23] In making its findings, the Agency has considered all of the evidence submitted by the parties during the pleadings. The Agency has also examined Air Canada's terms and conditions of carriage concerning the liability for checked baggage and limitations of liability specified in Air Canada's Tariff in effect at the time of the incident.

Proof of amount of loss

[24] It is Air Canada's position that the requirement for a passenger to prove the amount of his/her loss is a well-established legal principle and that it has been recognized by the Agency in previous decisions involving the Montreal Convention.

[25] Air Canada argued that as Mr. Saleem did not provide any evidence to substantiate his loss as required by Rule 230AC(A)(1) of its Tariff, he is not entitled to any compensation.

[26] The Agency is of the opinion that the party who is to prove any fact must do it by the best evidence available in light of the nature and circumstances of the case. However, under the so-called "Rule of best evidence", some matters may be reduced to sworn statements. This is often the situation in claims involving lost items where circumstances may dictate that it is unreasonable to require other forms of proof, such as receipts, or that it is unreasonable to expect that such a proof is still in an applicant's possession.

[27] The Agency has reviewed the evidence provided by Mr. Saleem and notes that: (a) Mr. Saleem reported his loss in a timely manner; (b) he provided a sworn statement in support of his claim; (c) the sworn statement provided a description of the lost items, the quantities as well as their values; (d) the described lost items are in keeping with the purpose of the trip; and, (e) the baggage content is not disputed by Air Canada.

[28] In light of the circumstances and the specifics of this case, the Agency is satisfied that Mr. Saleem provided the best evidence available to him and finds that the notarized Itemized List and Description of Bags and Contents constitutes an adequate proof of loss.

Fragile items exempt from liability

[29] Air Canada argued that Rule 195AC of its Tariff exempts the carrier from liability for electronic equipment, such as a DVD player and DVDs.

[30] The Agency will now consider whether Air Canada's interpretation is supported by the wording of its Tariff.

DVD player

[31] The Agency has carefully reviewed Rule 195AC of the Tariff and notes that paragraph (H)(1)(b) of Rule 195AC provides that Air Canada will accept fragile items if they are appropriately packaged in the original factory-sealed carton, a cardboard mailing tube, or a container or case specifically designed for shipping items. The Agency further notes that Air Canada agrees to accept such items without the appropriate packaging upon execution by the passenger of a Limited Release tag at the time of check-in, and that unsuitably or inadequately packed items will be carried but only upon completion of the Limited Release tag at time of check-in.

[32] The Agency has reviewed the documents on file and finds that there is no evidence to support a conclusion that Air Canada agreed to carry Mr. Saleem's DVD player in the sense that no evidence supported the fact that the DVD player was appropriately packaged. Further, there is no evidence that Mr. Saleem declared the DVD player to Air Canada's agents at the check-in counter and completed a Limited Release tag for this item.

[33] In these circumstances, the Agency finds that Air Canada properly applied the terms and conditions of carriage as set out in its Tariff regarding the DVD player and that Mr. Saleem cannot be compensated for the loss of the DVD Player worth $275.

DVDs

[34] With respect to the loss of Mr. Saleem's DVDs, Air Canada relied on Rule 195(H)(2)(c) of its Tariff to state that DVDs are electronic equipment. Air Canada argued that this interpretation is supported by correspondence issued by the Agency. The Agency notes that the correspondence upon which Air Canada is relying its interpretation was issued in the course of the informal process before the CID. The Agency notes that the test to be used to determine if an item is excluded from a carrier's liability is whether such item is listed in the carrier's Tariff provisions.

[35] In this case, the Agency has reviewed Rule 195AC of the Tariff, and rejects Air Canada's argument that DVDs are electronic equipment. For an air carrier to be exempt from liability for the loss of an item, that exclusion must be clearly stated in its Tariff as required by section 107 of the ATR.

[36] The Agency notes that DVDs are not listed in Air Canada's Tariff provisions and as such, the air carrier cannot be exempt from liability for the loss of DVDs.

[37] In light of the foregoing, the Agency finds that Air Canada is liable for the loss of the DVDs in Mr. Saleem's checked baggage, worth $185.

Liability of Air Canada pursuant to the Tariff

[38] The Agency notes that Tariff Rule 230AC, which sets out Air Canada's liability for baggage, provides that liability for loss of, damage to, or the delay in delivery of baggage shall not be more than $1,500 unless a higher value is declared in advance and the applicable charges are paid. In this case, Mr, Saleem did not declare a higher value.

[39] Mr. Saleem submitted a claim totalling $1,566 which includes the loss of a DVD player worth $275. Given the Agency's finding that Air Canada is exempt from liability for the loss of the DVD player, the Agency finds that, pursuant to Rule 230AC of the Tariff, Air Canada's liability in the present case is $1,291, the amount of Mr. Saleem's claim (i.e., $1,566) minus the amount of the DVD player (i.e., $275). Furthermore, the Agency does not accept Air Canada's unsubstantiated depreciation argument.

[40] In light of the foregoing, the Agency finds that in failing to compensate Mr. Saleem in accordance with Rule 230AC, Liability - Baggage of the Tariff, Air Canada has contravened subsection 67(3) of the CTA.

Clarity of the Tariff

[41] The Agency is of the opinion that Air Canada's Tariff provisions relating to liability governing the carriage of baggage are unclear and not easily understood. The Agency recommends that Air Canada revise its Tariff to make it clear and concise and ensure that terms and conditions set out therein are expressed in plain language so that interested persons may clearly understand the Tariff.

CONCLUSION

[42] Based on the above findings, the Agency concludes that, with the exception of audio and video equipment listed under the fragile items exclusions, Air Canada did not apply the terms and conditions of carriage governing liability for loss of baggage set out in its Tariff, which is contrary to subsection 67(3) of the CTA.

[43] Accordingly, the Agency, pursuant to section 67.1 of the CTA, hereby orders Air Canada to compensate Mr. Saleem, within thirty (30) days from the date of this Decision, an amount of $1,291 for the loss of his checked baggage, in accordance with Rule 230AC of its Tariff. Air Canada is also directed to advise the Agency when the carrier has compensated Mr. Saleem.

Members

• Geoffrey C. Hare
• Beaton Tulk