International Air Transport Association v. Canada (Transportation Agency)

International Air Transport Association v. Canada (Transportation Agency)
Collection
Supreme Court Judgments
Date
2024-10-04
Neutral citation
2024 SCC 30
Case number
40614
Judges
Wagner, Richard; Karakatsanis, Andromache; Côté, Suzanne; Rowe, Malcolm; Martin, Sheilah; Kasirer, Nicholas; Jamal, Mahmud; O’Bonsawin, Michelle; Moreau, Mary
On appeal from
Federal Court of Appeal
Subjects
Evidence
Notes
Case in Brief SCC Case Information
Decision Content
SUPREME COURT OF CANADA
Citation: International Air Transport Association v. Canada (Transportation Agency), 2024 SCC 30
Appeal Heard: March 25, 2024 Judgment Rendered: October 4, 2024 Docket: 40614
Between:
International Air Transport Association, Air Transportation Association of America doing business as Airlines for America, Deutsche Lufthansa AG, Air France, British Airways PLC, Air China Limited, All Nippon Airways Co., Ltd., Cathay Pacific Airways Limited, Swiss International Airlines Ltd., Qatar Airways Group Q.C.S.C., Air Canada, Porter Airlines Inc., American Airlines Inc., United Airlines Inc., Delta Air Lines Inc., Alaska Airlines Inc., Hawaiian Airlines, Inc. and Jetblue Airways Corporation Appellants
and
Canadian Transportation Agency and Attorney General of Canada Respondents
- and -
Gábor Lukács, Council of Canadians with Disabilities, National Pensioners Federation, Public Interest Advocacy Centre and Société québécoise de droit international Interveners
Coram: Wagner C.J. and Karakatsanis, Côté, Rowe, Martin, Kasirer, Jamal, O’Bonsawin and Moreau JJ.
Reasons for Judgment: (paras. 1 to 104)
Rowe J. (Wagner C.J. and Karakatsanis, Côté, Martin, Kasirer, Jamal, O’Bonsawin and Moreau JJ. concurring)
Note: This document is subject to editorial revision before its reproduction in final form in the Canada Supreme Court Reports.
International Air Transport Association,
Air Transportation Association of America doing
business as Airlines for America,
Deutsche Lufthansa AG, Air France, British Airways PLC,
Air China Limited, All Nippon Airways Co., Ltd.,
Cathay Pacific Airways Limited, Swiss International Airlines Ltd.,
Qatar Airways Group Q.C.S.C., Air Canada, Porter Airlines Inc.,
American Airlines Inc., United Airlines Inc., Delta Air Lines Inc.,
Alaska Airlines Inc., Hawaiian Airlines, Inc. and
Jetblue Airways Corporation Appellants
v.
Canadian Transportation Agency and
Attorney General of Canada Respondents
and
Gábor Lukács, Council of Canadians with Disabilities,
National Pensioners Federation, Public Interest Advocacy Centre
and Société québécoise de droit international Interveners
Indexed as: International Air Transport Association v. Canada (Transportation Agency)
2024 SCC 30
File No.: 40614.
2024: March 25; 2024: October 4.
Present: Wagner C.J. and Karakatsanis, Côté, Rowe, Martin, Kasirer, Jamal, O’Bonsawin and Moreau JJ.
on appeal from the federal court of appeal
Transportation law — Air transport — Passenger compensation — Federal transportation agency adopting regulations providing for minimum compensation to passengers on flights to and from Canada in case of delay, cancellation, denial of boarding and lost or damaged baggage — Provisions challenged by air carriers on basis that they conflict with exclusivity principle of international convention implemented in Canadian law governing damages liability of international air carriers — Whether impugned provisions of regulations ultra vires agency — Convention for the Unification of Certain Rules for International Carriage by Air, 2242 U.N.T.S. 309, Article 29 — Air Passenger Protection Regulations, SOR/2019-150.
Evidence — Admissibility — Expert evidence — International law — Airlines challenging regulations adopted by federal agency on basis of conflict with international convention implemented in Canadian law — Parties seeking to rely on expert affidavits on questions of international law — Framework governing admissibility of expert evidence in context of international law.
In 2018, the Canada Transportation Act (“CTA”) was amended to allow the Canadian Transportation Agency (“Agency”) to make regulations in relation to flights to and from Canada with respect to a number of areas. The Agency thereafter adopted the Air Passenger Protection Regulations (“Regulations”), which came into force in 2019. The Regulations include provisions dealing with standardized amounts of compensation for international flight delays, cancellations and denial of boarding when the disruption occurs for reasons within a carrier’s control and is not required for safety purposes (ss. 12(2)(d), (3)(d) and (4)(d), 19 and 20), and refunds of baggage fees paid by passengers when the carrier has lost or damaged their baggage on international flights (s. 23).
In a statutory appeal to the Federal Court of Appeal, the International Air Transport Association, the Air Transportation Association of America, and several air carriers serving Canadian and international airports (collectively, “airlines”) challenged those provisions. The airlines alleged that the Regulations conflict with the exclusivity principle of the Convention for the Unification of Certain Rules for International Carriage by Air (“Montreal Convention”) and are ultra vires the Agency’s regulation-making authority under the CTA. Canada signed the Montreal Convention in 2001, and it was implemented into Canadian law by amendments to the Carriage by Air Act (“CAA”). Article 29 of the Montreal Convention codifies its exclusivity, by stating that “any action for damages” is subject to the conditions and limits of liability that it sets out.
The Federal Court of Appeal dismissed the challenge brought by the airlines, with the exception of the provisions relating to the temporary loss of baggage. The court considered the compatibility of the Regulations with the Montreal Convention, and held that the compensation provided for under the Regulations is not an action for damages, and that cancellation, denial of boarding, and delay are factual and legal concepts that do not fall within the scope of the exclusivity principle. The court also addressed the admissibility of expert affidavits on questions of international law.
Held: The appeal should be dismissed.
The Montreal Convention is exclusive within the scope of the matters that it addresses, but does not deal comprehensively with all aspects of international carriage by air. Pursuant to the text of its Article 29, there must be an “action” that leads to “damages” for the exclusivity principle to apply. The Regulations do not provide for an “action for damages” because they do not provide for individualized compensation; rather, they create a consumer protection scheme that operates in parallel with the Montreal Convention, without trenching on its liability limitation provisions. Accordingly, they do not fall within the scope of the Montreal Convention’s exclusivity principle. Since the Regulations do not give rise to liability that is pre-empted by Article 29, they do not conflict with the Montreal Convention as implemented by the CAA and there is no basis to conclude that they exceed the jurisdiction of the Agency, as conferred by the CTA.
The Vienna Convention is the starting point for determining the scope of the Montreal Convention and the exclusivity principle. Article 31 of the Vienna Convention directs that the Montreal Convention, like all treaties, should be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in light of its object and purpose. Therefore, the analysis begins with the words chosen by the state parties to the Montreal Convention. Article 29, in explaining the exclusivity principle, states that it applies to “any action for damages, however founded”. The ordinary meaning of an “action for damages” points towards an action that shares the characteristics of a judicial proceeding and that seeks individualized compensation that is tied to an injury caused by another. Damages awards are individualized in that they seek to compensate the plaintiff for the loss suffered as a result of an injury caused by another. An action for damages is distinct from standardized compensation, which may be owed identically to all claimants irrespective of the harm (if any) they have suffered. The broader context of the Montreal Convention supports an understanding of the words “action” and “damages” consonant with their “ordinary meaning” in Canadian law: the relevant articles of the Montreal Convention are framed in a way that plainly envisages actions which share the characteristics of judicial proceedings in a court of law. The object and purpose of the Montreal Convention, including the history of its development, support this conclusion, as does foreign jurisprudence and state practice. Article 29 should therefore be understood as precluding actions for damages that share the characteristics of judicial proceedings in courts of law, and that seek individualized compensation for death or bodily injury, damage or loss of baggage and cargo, and for delay in international carriage.
The Regulations are best understood as providing for statutory entitlements under a consumer protection scheme. Passengers claiming under the Regulations need not show what harm, if any, they have suffered in order to claim compensation. The Regulations do not tie compensation to harm or inconvenience: they mandate compensation for delay, cancellation or denial of boarding based on the time by which a passenger’s arrival at their ultimate destination is delayed, and compensation owed for lost or damaged baggage is tied to the baggage fees charged by the carrier, not to the harm. Unlike the Montreal Convention, the Regulations do not enable a carrier to avoid having to pay compensation otherwise due to a passenger by invoking a due diligence defence or pointing to contributory negligence. As long as the disruption in question occurred for a reason within the carrier’s control and was not required for safety purposes, the compensation is fixed. Moreover, the Agency is empowered to extend a finding that compensation is owed to one passenger to other passengers similarly situated.
To find a conflict between the Montreal Convention and the impugned Regulations, the latter must be so inconsistent with the former that they are incapable of standing together. As the Montreal Convention has been implemented in Canadian law, the established test for statutory conflicts applies and there is no need to have regard to the presumption that Parliament legislates in conformity with international law. 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 actual 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: passengers continue to enjoy certain evidentiary presumptions on proof of damage, while 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. In signing on to the Montreal Convention, 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.
Finally, clarification is needed as to the treatment of expert evidence on questions of international law. The test from R. v. Mohan, [1994] 2 S.C.R. 9, should be applied in the context of international law as it is in other circumstances where expert evidence is sought to be admitted. The appropriate framework is the following: where expert evidence satisfies Mohan’s criteria, it may be considered. Otherwise, judges should proceed as they would for any other question of law — that is, on the basis of the submissions of the parties before the court and authorities on which they rely. In applying Mohan, the admissibility of expert evidence is within the court’s discretion so long as the threshold requirements of admissibility are satisfied. Given the variety of contexts in which expert evidence is sought to be adduced on questions of international law, the admissibility of such evidence is best left as a matter of judicial discretion rather than being subject to a fixed and invariable rule.
Cases Cited
Applied: R. v. Mohan, [1994] 2 S.C.R. 9; considered: Thibodeau v. Air Canada, 2014 SCC 67, [2014] 3 S.C.R. 340; International Air Transport Association v. Department for Transport, C-344/04, [2006] E.C.R. I-403; Zicherman v. Korean Air Lines Co., 516 U.S. 217 (1996); El Al Israel Airlines, Ltd. v. Tsui Yuan Tseng, 525 U.S. 155 (1999); King v. American Airlines, Inc., 284 F.3d 352 (2d Cir. 2002); Brake v. PJ-M2R Restaurant Inc., 2017 ONCA 402, 135 O.R. (3d) 561; referred to: Council of Canadians with Disabilities v. VIA Rail Canada Inc., 2007 SCC 15, [2007] 1 S.C.R. 650; Canadian National Railway Company v. Emerson Milling Inc., 2017 FCA 79, [2018] 2 F.C.R. 573; Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235; Thibodeau v. Air Canada, 2011 FC 876, [2013] 2 F.C.R. 83; Pushpanathan v. Canada (Minister of Citizenship and Immigration), [1998] 1 S.C.R. 982; Thomson v. Thomson, [1994] 3 S.C.R. 551; Febles v. Canada (Citizenship and Immigration), 2014 SCC 68, [2014] 3 S.C.R. 431; Sullivan v. Old Colony St. Ry. Co., 83 N.E. 1091 (Mass. 1908); Nelson v. Deutsche Lufthansa AG, C-581/10 and C-629/10, [2013] 1 C.M.L.R. 42 (p. 1191); R. v. McGregor, 2023 SCC 4; Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, [2019] 4 S.C.R. 653; R. v. Kirkpatrick, 2022 SCC 33; Yugraneft Corp. v. Rexx Management Corp., 2010 SCC 19, [2010] 1 S.C.R. 649; Kasikili/Sedudu Island (Botswana/Namibia), Judgment, I.C.J. Reports 1999, p. 1045; Hunt v. T&N plc, [1993] 4 S.C.R. 289; Nevsun Resources Ltd. v. Araya, 2020 SCC 5, [2020] 1 S.C.R. 166; Turp v. Canada (Foreign Affairs), 2018 FCA 133, [2019] 1 F.C.R. 198; Suresh v. Canada (Minister of Citizenship and Immigration), 2002 SCC 1, [2002] 1 S.C.R. 3; Holding Tusculum B.V. v. S.A. Louis Dreyfus & Cie, 2006 QCCS 2827; Fédération des travailleurs du Québec (FTQ - Construction) v. Procureure générale du Québec, 2018 QCCS 4548; R. v. Abbey, [1982] 2 S.C.R. 24; White Burgess Langille Inman v. Abbott and Haliburton Co., 2015 SCC 23, [2015] 2 S.C.R. 182; Masterpiece Inc. v. Alavida Lifestyles Inc., 2011 SCC 27, [2011] 2 S.C.R. 387; Clayson-Martin v. Martin, 2015 ONCA 596, 127 O.R. (3d) 1; R. v. Abdullahi, 2021 ONCA 82, 399 C.C.C. (3d) 397; Quebec (Attorney General) v. Canada, 2008 FC 713, 359 F.T.R. 1, aff’d 2009 FCA 361, 400 N.R. 323, aff’d 2011 SCC 11, [2011] 1 S.C.R. 368; Surrey Credit Union v. Willson (1990), 45 B.C.L.R. (2d) 310; Daniels v. White, [1968] S.C.R. 517; R. v. Hape, 2007 SCC 26, [2007] 2 S.C.R. 292; Boland v. APV Canada Inc. (2005), 250 D.L.R. (4th) 376.
Statutes and Regulations Cited
Act to amend the Carriage by Air Act, S.C. 2001, c. 31.
Air Passenger Protection Regulations, SOR/2019‑150, ss. 5 to 8, 10(3), 11, 12(2) to (4), 13 to 18, 19, 20, 23, 24.
Air Transportation Regulations, SOR/88-58, ss. 113.1, 122(c)(xxi).
Canada Transportation Act, S.C. 1996, c. 10, ss. 41, 85.04(1)(a), (c), 85.05(1), 85.06, 85.07(1), (3), 85.08, 85.14, 86(1)(h)(iii.1), 86.11 [ad. 2018, c. 10, s. 19], 177(1).
Carriage by Air Act, R.S.C. 1985, c. C‑26, Sch. VI.
Direction Respecting Tarmac Delays of Three Hours or Less, SOR/2019‑110.
Federal Courts Rules, SOR/98‑106, r. 369.
Transportation Modernization Act, S.C. 2018, c. 10.
Treaties and Other International Instruments
Convention for the Unification of Certain Rules for International Carriage by Air, 2242 U.N.T.S. 309 [Montreal Convention], preamble, Arts. 1, 17 to 19, 20, 21, 22, 26, 27, 29, 33(1), 35(2).
Vienna Convention on the Law of Treaties, Can. T.S. 1980 No. 37, Arts. 31, 32.
Authors Cited
Black’s Law Dictionary, 11th ed., by Bryan A. Garner. St. Paul, Minn.: Thomson Reuters, 2019, “action”, “damages”.
Canada. Library of Parliament. Parliamentary Information, Education and Research Services. Canada’s Approach to the Treaty-Making Process, Hill Studies 2008-45‑E, by Laura Barnett, Legal and Social Affairs Division, April 1, 2021.
Canadian Law Dictionary, 7th ed., by Steve Coughlan, John A. Yogis and Catherine Cotter. New York: Barron’s Educational Series, 2013, “action at law”, “damages”.
Currie, John H., et al. International Law: Doctrine, Practice, and Theory, 3rd ed. Toronto: Irwin Law, 2022.
Dempsey, Paul Stephen. Aviation Liability Law, 2nd ed. Markham, Ont.: LexisNexis, 2013.
International Civil Aviation Organization. International Conference on Air Law, vol. I, Minutes, Doc. 9775-DC/2. Montréal, 2001.
van Ert, Gib. Recent Federal Courts decisions on expert evidence of international law, December 31, 2018 (online: https://gibvanert.com/2018/12/31/recent-federal-courts-decisions-on-expert-evidence-of-international-law/; archived version: https://www.scc-csc.ca/cso-dce/2024SCC-CSC30_1_eng.pdf).
van Ert, Gib. Using International Law in Canadian Courts, 2nd ed. Toronto: Irwin Law, 2008.
van Ert, Gibran. “The Admissibility of International Legal Evidence” (2005), 84 Can. Bar Rev. 31.
APPEAL from a judgment of the Federal Court of Appeal (Pelletier, de Montigny and Locke JJ.A.), 2022 FCA 211, [2022] F.C.J. No. 1702 (Lexis), 2022 CarswellNat 5115 (WL), dismissing in part a challenge to the validity of regulations adopted by the Canadian Transportation Agency. Appeal dismissed.
Pierre Bienvenu, Clay Hunter, Virginie Blanchette‑Séguin, Jean-Simon Schoenholz and Jiwan Son, for the appellants.
Barbara Cuber, for the respondent the Canadian Transportation Agency.
Bernard Letarte and Lindy Rouillard‑Labbé, for the respondent the Attorney General of Canada.
Gábor Lukács, on his own behalf.
Katrine Dilay and Marina Pavlovic, for the interveners the Council of Canadians with Disabilities, the National Pensioners Federation and the Public Interest Advocacy Centre.
Charles‑Emmanuel Côté and Bruno Gélinas-Faucher, for the intervener Société québécoise de droit international.
The judgment of the Court was delivered by
Rowe J. —
TABLE OF CONTENTS
Paragraph
I. Facts
5
A. The Parties
5
B. The Montreal Convention Under Canadian Law
8
C. The Development and Content of the Regulations
10
II. Federal Court of Appeal, 2022 FCA 211 (de Montigny J.A., Pelletier and Locke JJ.A. Concurring)
13
III. Issues
21
IV. Standard of Review
25
V. Analysis
27
A. What Is the Scope of the Montreal Convention and the Exclusivity Principle?
33
(1) Thibodeau Does Not Resolve the Question
36
(2) The Ordinary Meaning of the Words Chosen by the State Parties When Read in Their Context
39
(3) The Object and Purpose of the Montreal Convention
46
(4) Foreign Jurisprudence
50
(5) Consideration of State Practice
58
(6) The Exclusivity Principle Precludes Actions for Individualized Damages
63
B. The Test for Expert Evidence on Questions of International Law
65
(1) Mohan Governs Expert Evidence on Questions of International Law
70
C. What Is the Scope of the Regulations?
80
(1) Compensation
81
(2) Enforcement
86
(3) The Regulations Operate as a Consumer Protection Scheme
89
D. The Regulations Do Not Conflict With the Montreal Convention and Thus Are Not Ultra Vires the CTA
91
(1) What Constitutes a Conflict?
92
(2) The Regulations Do Not Provide for an “Action for Damages” and, as a Consequence, There Is No Conflict
94
E. It Is Unnecessary To Deal With Alternative Arguments in Favour of Validity of the Regulations
100
VI. Conclusion and Disposition
103
[1] This appeal addresses the vires of the Air Passenger Protection Regulations, SOR/2019-150 (“Regulations”), 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, 2242 U.N.T.S. 309 (“Montreal Convention”).
[2] The appellants submit that, because the Regulations require that air carriers compensate passengers on international flights when their flights are delayed or cancelled, or when passengers are denied boarding or their baggage is lost or damaged, the Regulations conflict with the Montreal Convention’s exclusivity principle. In light of this purported conflict, and because the Montreal Convention has been implemented by way of the Carriage by Air Act, R.S.C. 1985, c. C-26 (“CAA”), the appellants assert that the Regulations are ultra vires the regulation-making authority given to the Canadian Transportation Agency (“Agency”) by the Canada Transportation Act, S.C. 1996, c. 10 (“CTA”). I will hereafter refer to the issue of whether the Regulations are within the jurisdiction of the Agency, as conferred by the CTA, as the Regulations being “ultra vires the CTA” or “intra vires the CTA”.
[3] The parties also disagree concerning the admissibility of expert affidavits on questions of international law; such affidavits were introduced in the proceedings below regarding state practice. The law relating to the admissibility of expert evidence, as I explain below, has been settled since this Court’s decision in R. v. Mohan, [1994] 2 S.C.R. 9.
[4] This Court examined the scope of the exclusivity principle under the Montreal Convention in Thibodeau v. Air Canada, 2014 SCC 67, [2014] 3 S.C.R. 340 (“Thibodeau”), and in that case affirmed that the Montreal Convention is exclusive within the scope of the matters that it addresses, but that the Montreal Convention does not deal comprehensively with all aspects of international carriage by air (para. 47). The same conclusion guides the result in this case. The exclusivity principle in Article 29 of the Montreal Convention applies to any “action for damages”. However, the Regulations do not provide for an “action for damages” because they do not provide for individualized compensation. The entitlements provided for are not tied to harm suffered by the claimant as a result of injury caused by another. Rather, the Regulations create statutory entitlements as part of a consumer protection scheme that operates irrespective of the harm (if any) suffered by the claimant. Thus, the Regulations do not give rise to liability that is pre-empted by Article 29 and so do not conflict with the Montreal Convention as implemented by the CAA. Accordingly, the appeal is dismissed.
I. Facts
A. The Parties
[5] The appellant International Air Transport Association (“IATA”) is a trade association whose members include 290 airlines from 120 countries, which carry approximately 82 percent of the world’s air traffic. The appellant Air Transportation Association of America (doing business as Airlines for America) is a trade association which brings together passenger and cargo airlines based in the United States. The remaining 16 appellants are air carriers serving Canadian and international airports.
[6] The respondent Agency is a quasi-judicial tribunal and an economic regulator with a mandate to deal with transportation matters under Parliament’s legislative authority, including aviation. The Agency performs two functions. First, it applies rules that establish rights and responsibilities of transportation service providers and users and that level the playing field among competitors. As part of its regulatory function, the Agency makes determinations as to the issuance of licences and permits. It is empowered to enforce, through administrative monetary penalties, the CTA and regulations made thereunder. Second, it adjudicates commercial and consumer transportation-related disputes and accessibility issues.
[7] This Court in Council of Canadians with Disabilities v. VIA Rail Canada Inc., 2007 SCC 15, [2007] 1 S.C.R. 650, described the CTA as “highly specialized regulatory legislation with a strong policy focus” (para. 98) and the Agency as “responsible for interpreting its own legislation, including what that statutory responsibility includes” (para. 100).
B. The Montreal Convention Under Canadian Law
[8] As this Court explained in Thibodeau (at para. 47), the Montreal Convention, like its predecessor, the Convention for the Unification of Certain Rules Relating to International Carriage by Air, 137 L.N.T.S. 11 (“Warsaw Convention”), was designed to achieve a number of objectives, including but not limited to the following:
. . . achieve a uniform set of rules governing damages liability of international air carriers and to provide limitation of carrier liability. These purposes can only be achieved by the Montreal Convention if it provides the exclusive set of rules in relation to the matters that it covers. The Montreal Convention of course does not deal with all aspects of international carriage by air: it is not comprehensive. But within the scope of the matters which it does address, it is exclusive in that it bars resort to other bases for liability in those areas: M. Clarke, Contracts of Carriage by Air (2nd ed. 2010), at pp. 8 and 160-62; G. N. Tompkins, Jr., “The Continuing Development of Montreal Convention 1999 Jurisprudence” (2010), 35 Air & Space L. 433, at pp. 433-36.
I return to the purpose of the Montreal Convention and the role of the exclusivity principle referenced in Thibodeau later in these reasons. For now, it suffices to note that this Court has recognized three central objectives of the Montreal Convention: first, it limits carrier liability related to claims for damages for death or bodily injury, damage to or loss of baggage and cargo, and for delay; second, it protects the interests of passengers and shippers by creating presumptive liability for carriers with respect to those claims; and third, it seeks “to create uniform rules governing claims arising from international air transportation” (paras. 41-42 and 44-46).
[9] Canada signed the Montreal Convention on October 1, 2001, and deposited its instrument of ratification on November 19, 2002. The Montreal Convention was implemented into Canadian law by amendments to the CAA (An Act to amend the Carriage by Air Act, S.C. 2001, c. 31); these incorporated the Montreal Convention in its entirety by reference (CAA, Sch. VI; Library of Parliament, Canada’s Approach to the Treaty-Making Process, Hill Studies 2008-45-E, April 1, 2021, at pp. 2-5).
C. The Development and Content of the Regulations
[10] In 2014, the Minister of Transport (“Minister”) launched a review of the CTA. Following this review, Parliament enacted the Transportation Modernization Act, S.C. 2018, c. 10, in 2018; this amended the CTA to add s. 86.11, which stated that “[t]he Agency shall, after consulting with the Minister, make regulations in relation to flights to, from and within Canada, including connecting flights” with respect to a number of areas, notably including carriers’ obligations in case of flight delay, flight cancellation or denial of boarding, and lost and damaged baggage. The Agency published draft regulations thereafter; these came into force in 2019.
[11] As mandated by the addition of s. 86.11 to the CTA, the Regulations establish minimum air carrier obligations towards passengers when flights are delayed, cancelled, when a passenger is denied boarding, or when baggage is lost or damaged. This appeal concerns the provisions of the Regulations dealing with:
(a) standardized amounts of compensation for international flight delays, cancellations and denial of boarding when the disruption occurs for reasons within a carrier’s control and is not required for safety purposes (ss. 12(2)(d), (3)(d) and (4)(d), 19 and 20); and
(b) refunds of baggage fees paid by passengers when the carrier has lost or damaged their baggage on international flights (s. 23).
[12] The Regulations also establish air carrier obligations to passengers with respect to other topics not at issue in this appeal including: tarmac delays, seating assignment of children, and the transportation of musical instruments.
II. Federal Court of Appeal, 2022 FCA 211 (de Montigny J.A., Pelletier and Locke JJ.A. Concurring)
[13] The appellants brought their challenge to the Regulations in a statutory appeal to the Federal Court of Appeal, which hears appeals from decisions of the Canadian Transportation Agency on questions of law or jurisdiction, per s. 41 of the CTA.
[14] Preliminary motions addressed the admissibility of expert evidence. First, the Attorney General of Canada sought leave to present expert evidence on the state practice with respect to air passenger rights under the Montreal Convention. Justice Rennie granted the motion and both parties submitted affidavits by experts (No. A-311-19, January 27, 2020, reproduced in A.R., vol. I, at p. 139).
[15] Second, the Attorney General moved to strike the appellants’ expert affidavits, to the extent that they “purported to opine on the interpretation of the Montreal Convention and the compatibility of foreign regimes with the Convention” (R.F., at para. 18). In an interim order by Justice Mactavish, the motion was dismissed to allow the panel hearing the appeal on the merits to determine the admissibility of the evidence (2020 FCA 172).
[16] In the merits hearing, Justice de Montigny (as he then was), for a unanimous court, dismissed the challenge brought by the airlines, with the exception of the provisions relating to the “temporary loss” of baggage. In arriving at this conclusion, he identified three principal issues:
1. Is the minimum compensation to passengers required by the Regulations in the case of delay, cancellation, denial of boarding and lost or damaged baggage, when applied to international carriage by air, authorized by s. 86.11(1)(b)(i) of the CTA and compatible with the Montreal Convention?
2. Are any of ss. 5 to 8, 10(3), 11(3) to (5), 12(2) to (4), 13 to 18, 23 or 24 of the Regulations ultra vires the CTA insofar as they apply to international service because of an impermissible extraterritorial application?
3. Is the Direction Respecting Tarmac Delays of Three Hours or Less, SOR/2019-110, issued by the Minister in April 2019 intra vires of the authority of the Minister under s. 86.11(2) of the CTA?
[17] In reaching that decision, Justice de Montigny agreed that portions of the expert affidavits adduced by the appellants should be struck.
[18] Turning to the substance of the arguments advanced by the appellants, the court considered the compatibility of the Regulations with the Montreal Convention, and held that the compensation provided for under the Regulations is not an action for damages, and that cancellation, denial of boarding, and delay are factual and legal concepts that do not fall within the scope of the exclusivity principle.
[19] Although the Court of Appeal held that the baggage fee provisions of the Regulations did not contravene the Montreal Convention, it concluded that s. 23(2) of the Regulations was ultra vires the CTA under s. 86.11. It held that s. 86.11 did not provide authority to the Agency to make regulations with respect to the “temporary loss” of baggage. The Agency and Attorney General have not appealed this aspect of the ruling.
[20] The Court of Appeal also rejected the appellants’ submission that the Regulations were ultra vires the CTA because they had impermissible extraterritorial application insofar as they apply to flights operating outside of Canada and connecting two foreign states. The appellants have not appealed this aspect of the ruling.
III. Issues
[21] The principal issue on appeal is whether the provisions of the Regulations that mandate minimum compensation to passengers on international flights in the case of delay, cancellation, denial of boarding and lost or damaged baggage are ultra vires the CTA.
[22] The appellants submit that the Regulations are ultra vires because the impugned provisions run afoul of the exclusivity principle codified in Article 29 of the Montreal Convention, and incorporated in the CAA. They submit that the Federal Court of Appeal erred by circumventing the exclusivity principle in the Montreal Convention, and rely on this Court’s decision in Thibodeau for the proposition that Articles 17 to 19 of the Montreal Convention exhaustively set out the types of air carrier liability that are available in international carriage. The appellants also seek to overturn the decision of the Federal Court of Appeal with respect to the admissibility of portions of the expert affidavits that they rely on to support their arguments with respect to state practice.
[23] The Attorney General and the Agency respond that the Regulations are not ultra vires the CTA, because the Regulations do not provide for actions for damages; rather, they address matters outside the scope of the Montreal Convention, including circumstances relating to non-performance of the contract of carriage. They point to foreign jurisprudence, notably from the European Union and the United States, that has interpreted the exclusivity principle in a manner that does not prohibit standardized compensation under passenger protection schemes. They further submit that state practice confirms that the Regulations are compatible with the Montreal Convention as a majority of the state parties to the Montreal Convention have established passenger compensation schemes comparable to Canada’s.
[24] The Attorney General argues in the alternative that, even if the Regulations are inconsistent with the Montreal Convention, they are not ultra vires the CTA as s. 86.11 of the CTA overrides any conflicting provisions of the Montreal Convention.
IV. Standard of Review
[25] Section 41(1) of the CTA provides for a statutory appeal from the Agency to the Federal Court of Appeal, with leave of that court, on questions of law or a question of jurisdiction (Canadian National Railway Company v. Emerson Milling Inc., 2017 FCA 79, [2018] 2 F.C.R. 573, at paras. 7 and 11). A statutory right of appeal indicates Parliament’s intention for appellate standards of review to apply. As the challenge to the Regulations is on a question of law, the correctness standard applies (Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235, at para. 8).
[26] That said, findings of fact by the Court of Appeal, including those related to questions of foreign law, are reviewable on the standard of palpable and overriding error (Housen, at paras. 10, 19 and 26-37).
V. Analysis
[27] As I will explain, the disposition of this appeal turns on the vires question, which I answer in the negative. Because the Regulations do not provide for an “action for damages”, they do not fall within the scope of the Montreal Convention’s exclusivity principle. Instead, the Regulations are better understood as creating a consumer protection scheme that operates in parallel with the Montreal Convention, without trenching on its liability limitation provisions. Because the Regulations do not conflict with the Montreal Convention as implemented by the CAA, there is no basis to conclude that they are ultra vires the CTA. For that reason, it is not necessary to consider the alternative arguments by the Attorney General and the Agency regarding: first, whether denial of boarding and cancellation qualify as “delays” for the purposes of Article 19; and, second, whether Parliament has directed the Agency to regulate in a manner that is inconsistent with Canada’s obligations under the Montreal Convention.
[28] My analysis proceeds in three parts.
[29] First, I consider the scope of the Montreal Convention and the exclusivity principle. In this, I am guided by this Court’s consideration of the Montreal Convention in Thibodeau.
[30] As I explain below, while state practice is not dispositive in giving meaning to the Montreal Convention and resolving this appeal, it still plays a role under the approach to treaty interpretation set out in the Vienna Convention on the Law of Treaties, Can. T.S. 1980 No. 37 (“Vienna Convention”). Thus, I also address the evidentiary issue raised by the appellants, and deal with the circumstances in which expert evidence concerning state practice, and international law more broadly, is and is not admissible.
[31] Second, I consider the scope of the Regulations, and explain how they function as a consumer protection scheme that provides for statutory entitlements that are not contingent on showing harm to the claimants suffered as a result of an injury caused by another.
[32] Third, I examine what constitutes a legislative conflict and conclude that, because the Regulations fall outside the scope of Article 29, no conflict exists between the Regulations and the Montreal Convention (as implemented by the CAA). As a result, I conclude that the Regulations are not ultra vires the CTA.
A. What Is the Scope of the Montreal Convention and the Exclusivity Principle?
[33] The Montreal Convention “applies to all international carriage of persons, baggage or cargo performed by aircraft for reward” (Article 1). Article 17 deals with death and bodily injury that occurs between embarkation and disembarkation and destruction, loss, and damage to baggage while the baggage was on board the aircraft or in the charge of the carrier. Carriers are presumptively liable for “damage sustained” in relation to these sorts of incidents. Similarly, Article 18 provides that a carrier is presumptively liable for “damage sustained in the event of the destruction or loss of, or damage to, cargo upon condition only that the event which caused the damage so sustained took place during the carriage by air”. Article 19 states that a carrier is liable for “damage occasioned by delay in the carriage by air of passengers, baggage or cargo”. A carrier can exonerate itself from presumptive liability under Article 19 “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 20 additionally enables carriers to obtain whole or partial exoneration from liability if the carrier is able to prove that the damage was caused or contributed to by the negligence or other wrongful act or omission of the person claiming compensation.
[34] The Montreal Convention also regulates the amount of compensation owed in relation to claims for death or bodily injury, damage or loss of baggage and cargo, and for delay (Articles 21 and 22). Article 26 prevents a carrier from entering into a contract which relieves it of liability or fixes a lower limit for compensation than that set out in the Montreal Convention. Article 27 expressly permits carriers to contractually waive defences available under the Montreal Convention. Finally, Article 29 codifies the “exclusivity principle” which reads:
In the carriage of passengers, baggage and cargo, any action for damages, however founded, whether under this Convention or in contract or in tort or otherwise, can only be brought subject to the conditions and such limits of liability as are set out in this Convention without prejudice to the question as to who are the persons who have the right to bring suit and what are their respective rights. In any such action, punitive, exemplary or any other non-compensatory damages shall not be recoverable.
[35] This appeal requires the Court to resolve what falls within the scope of an “action for damages”. In so doing, I am guided by Thibodeau’s instruction that “the terms ‘action’ and ‘damages’ must be understood in a broad sense” (para. 60) and “cannot be modeled on national definitions of damages” (para. 77).
(1) Thibodeau Does Not Resolve the Question
[36] The scope of the exclusivity principle codified at Article 29 was left open in Thibodeau. In that case, passengers on an international flight operated by Air Canada brough