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Newsletters 2012 > January 2012

In this issue:
1. Firm and Industry News
2. Shipments of Poultry Meet with Foul Play: Playing Chicken with Identify Theft
3. Negligent Misrepresentation Found in Aviation Contract
4. Court of Appeal Recognizes "New" Cause of Action for Invasion of Privacy
5. Buhlman v. Buckley, 2012 FCA 9 - Case Comment
6. Air Canada and French Language
7. Halsbury's Laws of Canada - Transportation

 

1. Firm and Industry News

  • February 8-9, 2012, Miami: Trucking Industry Defence Association Advanced Seminar
  • February 21, 2012, Woodbridge, Ontario: Supply Chain & Logistics Association of Canada seminar "Understanding Limits of Liability"
  • April 19 - 22, 2012, London U.K.: McGill University / PEOPIL Conference on Aviation Law and Insurance
  • April 23-25, 2012, Transportation & Logistics Council, Inc. Annual Conference, Orlando, FL
  • April 25 - 29, 2012, New Delhi, India: Workshop & International Conference on Law & Regulation of Air Transport & Law of Space Applications
  • May 1-5, 2012 Transportation Lawyers Association Annual Conference and Canadian Transport Lawyers Association Mid-Year Meeting, Naples, FL
  • May 8-9, 2012, Toronto: Supply Chain & Logistics Association of Canada Annual Conference
  • May 23 & 24, 2012, Banff Springs: Semi-Annual Meeting Canadian Board of Marine Underwriters

The Federal Court of Appeal released its decision on January 11, 2012 in Buckley v. Buhlman. Rui Fernandes and Martin Abadi were successful - see the commentary in this newsletter.

Gordon Hearn represented the firm at the Conference of Freight Counsel semi-annual meeting held on January 15-16 at New Orleans, LA.

Kim Stoll represented the firm at the Transportation Lawyer's Association Chicago Regional Seminar held on January 20th.

Gordon Hearn will be presenting a paper on "Identity Theft in the Surface Transportation of Cargo" at the Canadian International Freight Forwarders Association "Breakfast with the Board" meeting on February 9th.

Chris Afonso will be presenting a seminar to the Supply Chain & Logistics Association of Canada on February 21st on "Understanding Limits of Liability".

Halsbury's Laws of Canada has just published its Transportation - Carriage of Goods and its Transportation - Railways titles in one text. Rui Fernandes is the author for both of these works. See the summary of the works below in item 7.


 

2. Shipments of Poultry Meet with Foul Play: Playing Chicken with Identify Theft

"Identity theft" conjures images of the expropriation of or theft of confidential consumer information. Credit card numbers might be "borrowed". There might be the illicit use of another's social insurance number (if you are in Canada) or social security number (in the United States). Unfortunately criminal elements also frequently appear with their own brand in the surface transportation of goods. We are not talking about the 'highwayman'(*1) of the days of yore. The theft is not in a "lonely wood" or on a "dark path" but with surprising brazenness right at and from the shipper's loading dock, under the very eye of the person tendering freight for carriage. Somehow, a 'rogue' carrier misappropriates the identity of a legitimate trucking company when intercepting a load at origin. The "driver" attends at origin announcing with confidence that he or she is there to pick up a specific load and things appear to be "business as usual" to the shipper, who wants the freight moved from its dock. The truck then leaves the loading dock area and the shipment is never heard of again.

This article is not about exactly how such incidents occur. Somehow the "rogue" driver has learned about the details of a shipment so as to be able to credibly announce his or her arrival and the readiness to take on freight. Obviously, something in the equation of normal checks and balances has fallen apart. Information about the shipment has either gotten into the wrong hands, or the person who otherwise legitimately received such information puts it to an illicit purpose. At the same time, no doubt, the persons on the loading dock may not have been duly diligent regarding inquiries as to the identity of those into whose care the cargo is received.

The dynamics of the surface transportation industry in many ways render freight susceptible to this form of "highway robbery". Dispatchers may come and go. Relationships between the various players may be of the "one-off" variety, the parties having met over the internet. Shippers may employ intermediaries to locate third party carriers to pick up cargo. Shippers might hire an intermediary understanding that it would be the performing [pick-up] carrier with the latter 'brokering out' the load to a third party. Sometimes the potential disconnect continues, with a "double brokering". With so much emphasis on efficiency, proper checks and balances as to who is actually picking up the cargo are often overlooked.

There is a surprising lack of caselaw, as to what is expected of the parties to such delegation arrangements. Are shippers expected to "screen" carriers? Are carriers who sub-contract other carriers or "broker out" shipments expected to "screen"? What about the expectations of a freight intermediary who brings the shipper and a carrier together? What in turn is expected of the shipper, in terms of which questions he is to ask of the driver waiting to the carry the cargo away from the loading dock?

A recent case of the Ontario Superior Court raises some of these questions. The plaintiff wanted theses issues dealt with by way of a motion for "summary judgment". The court ruled that a full trial was necessary, as evidence should be heard from witnesses.

While the issues were reserved for a formal trial to be heard this June, we wanted to report on these developments and the need to "stay tuned" for some important judicial pronouncements.

Perfect Poultry v. Keltic Transportation (*2)

Perfect Poultry approached Keltic Transportation ["Keltic"] to arrange for the delivery of two loads of frozen poultry to a certain destination. Perfect Poultry maintained that Keltic was to be the carrier, being accountable for the safe delivery to destination. Keltic, in fact, had "brokered out" the loads to a third party. Keltic took the position that, in accordance with past dealings between the parties, it had the freedom to "broker out" the loads. Keltic conceded that there was no explicit agreement that these shipments could be assigned to a third party carrier.

As a testament to just how casual such dealings can be, upon receiving word from Perfect Poultry that these loads needed to be shipped, Keltic's point of contact replied with the perfectly ambiguous phrase, "I accept all these loads". There were limited further written communications between the prior to the pick-up of the cargo and which did not clarify on any objective level whether Keltic was free to broker out the loads or whether it had committed to carry the loads itself.

Perfect Poultry, in turn, generated its own form of bill of lading, which was signed by each of the drivers picking up the two shipments. The drivers simply attended at origin, and, upon identifying themselves as "Keltic" drivers, received the shipments for transportation. The shipments were never.

The Application for Summary Judgment

Perfect Poultry took the position that Keltic Transportation was liable as a carrier. As the goods were picked up for carriage, but not delivered to destination, Perfect Poultry argued that Keltic should be held liable consistent with the strict liability standard imposed on carriers. As mentioned above, the trial judge refused to grant summary judgment, directing that a trial take place in part on the basis that there were genuine issues of fact requiring a formal trial. The judge wanted the benefit of witness evidence to delve into an analysis on the nature of the relationships involved, the respective mandates, and what might have been reasonably expected on the part of the participants to have avoided the losses. On the motion for summary judgment, Keltic seemed to have accepted that it had a carriage mandate whereby it sub-contracted the actual pick-up carrier, as opposed to asserting that it had merely acted as an agent for Perfect Poultry in arranging the carriage. Keltic took the position that it, in fact, had "screened" the third party carrier whose 'rogue' drivers had picked up the cargo for shipment. In effect, Keltic argued that it was permitted to assign the loads to the third party carrier and, by subjecting the assigned carrier to a basic level of "screening", it had discharged any duty it may have had to Perfect Poultry.

Keltic also raised a standard defence that any purported carrier in its position would argue; that is, a carriage mandate had not yet been activated as at the time of the theft because it, Keltic, never had custody or possession of the goods. In this respect, Keltic Transportation pointed to the fact that its drivers had not attended to sign the bill of lading, the bills of lading being the usual "receipt" document crystallizing or finalizing a contract of carriage. Rather, delivery to Keltic (or to the intended sub-contracted carrier) had not been effected because the "heist" was by an unknown party through no fault of Keltic's or anyone for whom Keltic might have been responsible.

Perfect Poultry, in turn, adopted the clever argument on the motion that the bills of lading issued at the point of pick-up by the "rogue" drivers were merely receipts as opposed to being the essence of the contract of carriage. In other words, by having earlier confirmed acceptance of the mandate (recall the perfectly ambiguous phrase that Keltic had earlier accepted all the loads), Keltic had already assumed a carriage mandate and was, it would follow, responsible for events not just following but during the pick-up process.

Another interesting issue concerns whether Keltic could limit any liability as a carrier to $2 per pound based on the standard limitation of liability provisions of the "uniform bill of lading". Both bills of lading did not contain a declaration of value. Keltic asserted that, as Perfect Poultry prepared the bills of lading in question, it had the opportunity to have declared values for the cargo, but failed to do so. Perfect Poultry, in turn, argued that Keltic should not be able to limit any liability that it may have had as a carrier as it brokered out the loads without Perfect Poultry's consent.

The Disposition by the Court

The Court cited various reasons as to why a trial was necessary in the interests of justice:

1) A full evidentiary record was needed to be able to determine the respective duties and obligations of the parties and if those duties and obligations were satisfied.

2) The factual record was too limited for determination of whether the shipper was contributorily negligent, having tendered the freight to the 'rogue' drivers in question;

3) There were questions involving the application of the law to the facts of the case requiring a better record achievable only through witness testimony at a trial, e.g.

i) The parties differed as to whether the e-mails that passed between regarding arrangements to pick-up of the loads and the two bills of lading constituted "contracts of carriage" for the purposes of the governing Carriage of Goods Regulation (*3). The question, in particular, was raised as to whether Ontario law imposes an obligation on the carrier to present a contract of carriage to a shipper with the result that a bill of lading created by the shipper, and not the carrier, cannot constitute a contract of carriage for the purposes of the said Regulation.

ii) Was the conduct of Keltic such that it was deprived of the ability to rely on the statutory limitations of liability contained in the Regulation?

iii) This case involved more than simply an interpretation of a private contract between the parties, but engaged issues of statutory interpretation, the determination of which might affect the manner in which a large number of those in the transportation industry arrange their affairs in order to allocate the risk of lost cargo.

Conclusion

What is important for the reader to take away is that there are specific genuine issues of interest bound for determination at the trial of this matter in June. As mentioned, some of these issues are those of "first impression" that have not yet been ruled upon by our courts:

1. What is expected of a carrier in "screening" a sub-contracted or "double-brokered" carrier? [Presumably, this will weigh heavily on any analysis as to what is expected on the part of an intermediary selecting a carrier];

2. What, in turn, is expected of a shipper in respect of any "screening" performed or that might have performed at the loading dock?

The outcome of this case in June of this year is awaited with much anticipation.

Gordon Hearn

Endnotes

*1 A highwayman was a thief and brigand who preyed on travelers from the Elizabethan era until the early 19th century, most famously epitomized in the poem "The Highwayman" by Alfred Noyes.
*2 2011 ONSC 7098 (CanLII)
*3 O. Reg. 643/05



3. Negligent Misrepresentation Found in Aviation Contract

The Ontario Court of Appeal decision in Oz Optics Ltd. v. Timbercon, Inc. (*1) raises some novel and interesting issues regarding representations made during contract negotiations and the concomitant duty of good faith.

Timbercon Inc. approached Oz Optics Ltd. to design and manufacture a fibre-optic product know as a manual attenuator, which Timbercon Inc. intended to supply to Lockheed Martin for use in the construction of jet fighter planes. Oz manufactured and delivered ten attenuators and Timbercon paid for them. Timbercon and Oz were also involved in the design and production of an automated attenuator.

In furtherance of this automated attenuator project, Oz and Timbercon entered into a non-disclosure agreement in order to protect their respective proprietary and confidential information.
From the outset, Timbercon represented that Oz would be the sole supplier of the automated attenuator. In an e-mail of January 3, 2003, Timbercon advised Oz that: "there is no competition."

Timbercon contacted a competitor of Oz, Di-Con Fibreoptics Inc., with a view to involving Di-Con as a potential supplier of the automated attenuators. Timbercon ultimately sent Oz's bid and Di-Con's bid to Lockheed Martin. Timbercon 'rigged' the bids so that Di-Con's bid was clearly preferential. Di-Con received the order for the attenuators.

Oz sued Timbercon for negligent misrepresentation for breach of good faith in bargaining. The trial judge dismissed the action, finding that the elements of negligent misrepresentation were not made out and that Timbercon was not liable for a breach of a duty of good faith. The trial judge held that there was no duty to bargain in good faith and that Timbercon had no obligation to treat Oz fairly in the tendering of the bids because there was no contract governing their relationship.

Oz appealed to the Ontario Court of Appeal.

The Court of Appeal noted the following important facts:

  • Throughout the spring and early summer of 2003, Timbercon made a number of e-mail representations indicating that an order for the automated attenuators for Lockheed Martin was imminent.

  • Lockheed Martin requested a meeting at Timbercon's facilities in order to conduct a technical audit of the product. Timbercon asked Oz to send an engineer to Timbercon's Portland, Oregon facilities for the meeting to answer technical questions raised by Lockheed Martin. In preparation, a conference telephone call was arranged between Oz and Timbercon to discuss the details of the Lockheed Martin visit.

  • After the telephone call, Timbercon adopted a completely different stance toward Oz and the FiberStar Project. However, Oz was not advised of this change in position until several weeks later.

  • The day after the telephone call, Timbercon contacted DiCon Fiberoptics, Inc. ("DiCon"), a competitor of Oz, with a view to involving DiCon as a potential supplier of the automated attenuators.

  • Unaware of this turn of events, Oz continued to prepare for the meeting in Portland. These preparations included answering technical questions posed by Timbercon in advance of the meeting, preparing a block diagram of an automated attenuator and providing draft specifications.

  • Oz's lead engineer, Mr. Kane, attended the meeting in Portland and answered Lockheed Martin's questions. While at the Portland meeting, Mr. Meslow of Timbercon confirmed to Mr. Kane that they were expecting a purchase order soon from Lockheed Martin. In addition, Mr. Lizardo advised that there was no other bidder or competitor involved in the project. The evidence regarding Mr. Lizardo's statement was uncontradicted at trial.

  • On August 28, 2003, Mr. Davies of Timbercon sent an e-mail to An Thuan Triew of DiCon, which said:

    We are very excited about this opportunity. You have instilled a high level of confidence in this project being successful now that we understand DiCon's delivery time and product capabilities. We are looking forward to working with your team and on future opportunities.

  • Oz was still in the dark about Timbercon's new initiative to involve DiCon. It is significant that this e-mail was not included in Timbercon's affidavit of documents in the action. The email only surfaced as a result of an order requiring DiCon to produce its documents. [emphasis noted]

Negligent Misrepresentation

The Court of Appeal noted that the trial judge began her analysis of the issue by reference to the oft-cited case of Queen v. Cognos Inc. ("Cognos"), which established that the following elements are required to make out a case for negligent misrepresentation:

(1) there must be a duty of care based on a "special relationship" between the representor and the representee;

(2) the representation in question must be untrue, inaccurate or misleading;

(3) the representor must have acted negligently in making said misrepresentations;

(4) the representee must have relied, in a reasonable manner, on said negligent misrepresentation; and

(5) the reliance must have been detrimental to the representee in the sense that damages resulted.

The Court of Appeal disagreed with the analysis of the trial judge in the application of Cognos to this case, stating:

In my view, the trial judge erred in her analysis of the negligent misrepresentation claim. She correctly concluded that there was a "special relationship" between Timbercon and Oz thereby satisfying the first requirement of the test set out in Cognos. I part company with the trial judge, however, on the remainder of her analysis in respect of the Cognos criteria. In particular, the trial judge erred in failing to consider that the central misrepresentation by Timbercon was that Oz remained the sole potential supplier for the production of the attenuators. In my view, it is immaterial that the other representations referred to by the trial judge were "mostly accurate". From the initiation of the project until its conclusion, Timbercon represented to Oz that the latter was the sole supplier. Oz accepted this representation and proceeded on that basis. Once Timbercon began discussing a potential proposal with DiCon, the representation that Oz was the sole automated attenuator supplier for its bid was no longer accurate.

The Court of Appeal then found that, with respect to the remaining three elements of the test in Cognos, Timbercon acted negligently, if not nearly fraudulently, in its continuing representation that Oz remained the sole supplier under consideration. Oz, in its reliance upon the representation, acted reasonably and to its detriment. The trial judge, in her analysis of the good faith obligation, recognized that Oz was disadvantaged by virtue of not being informed of the competing bid. The Trial Judge stated (*3):

Sezerman indicated that if he had been told that there was competition, and there was a risk they might lose the order, then he might have made changes to the quote to satisfy Timbercon's concerns. I accept this latter statement. Sezerman was clearly frustrated with the pace of negotiations and he was legitimately concerned about whether the units could be produced on time. He thought that he was the only supplier and could manipulate the process. Had he known otherwise, he would undoubtedly have acted differently.
...
Sezerman indicated that if there is no competitor involved in a project, the company can charge a higher price and have a higher profit margin. Oz Optics will generally ask if they are bidding against other suppliers, so that they know how competitive their quote has to be. There was no dispute that this approach is a common custom or usage in this type of bidding situation. Therefore, Oz Optics was disadvantaged by the fact that they did not receive the information that after August 4, 2003 a competitor was involved in the bidding process.

The Court of Appeal found that the reliance on this representation was detrimental to Oz's bid. Oz's belief that it was the sole possible supplier caused it to stand firmly behind the terms of its proposal - including the proposed timeline - when it "would undoubtedly have acted differently" if aware of the existence of a competing bid.

Breach of Obligation of Good Faith

The Court of Appeal commented on the nature of good faith in contract negotiations, stating (*4):

The obligation to act in good faith has been the subject of considerable discussion both by the judiciary and the legal academy. As things currently stand, it is difficult to ascertain in what circumstances it will be applied.

The common law has not recognized a free standing duty of good faith based in tort.

Likewise, the law has not recognized a general duty to bargain in good faith in contract. However, in specific circumstances, a duty to enforce or perform a contract in good faith has been recognized.

The Court of Appeal then reviewed the cases in Canada on breach of good faith in contract bargaining situations, noting in particular that the Supreme Court of Canada in Martel Building Ltd. v. Canada ("Martel") (*5), had held that "a duty to bargain in good faith has not been recognized to date in Canadian law."

In Martel, the cause of action at issue concerned negligence by a party during contract negotiations; the court rejected the recognition of duty of care in that context. Significantly, the duty of good faith was not raised as an issue on appeal, and thus, the Supreme Court of Canada emphasized, the analysis in that case did not directly address the question of whether such a duty exists. However, the policy considerations raised by the Supreme Court of Canada, in Martel, in its dismissal of the existence of a duty of care in negligence between parties to contractual negotiations are, nonetheless, instructive on the question of whether a duty to bargain in good faith should be recognized. Amongst the various policy considerations the Supreme Court of Canada relied upon in this regard, it observed that other causes of action already provide appropriate remedies. Amongst these, the Court noted, that the doctrines of undue influence, economic duress and unconscionability "provide redress against bargains obtained as a result of improper negotiation." In addition, negligent misrepresentation, fraud and the tort of deceit cover much of the wrongful conduct committed during negotiations where an agreement is ultimately not concluded.

The Court of Appeal left the door open for judges in the future to recognize a duty to bargain in good faith; however, in this case, it found that it did not have to consider this issue any further since it had already found that Oz could recover for losses on the basis of negligent misrepresentation.

Rui Fernandes

Endnotes

(*1) (2011) 107 O.R. (3d) 509
(*2) 1993 CanLII 146 (SCC), [1993] 1 S.C.R. 87, at p. 110
(*3) paragraphs 119 and 136
(*4) paragraphs 61 to 63.
(*5) 2000 SCC 60, [2000] 2 S.C.R. 860


 

4. Court of Appeal Recognizes "New" Cause of Action for Invasion of Privacy

In Jones v Tsige, 2012 ONCA 32, the Court of Appeal for Ontario has recently confirmed that individuals have the right to bring civil actions for damages for invasion of their personal privacy (specifically, for intrusion on their "right to seclusion"). In doing so, the Court held that the plaintiff Ms. Jones was entitled to $10,000 in damages.

Facts

Sandra Jones and Winnie Tsige both worked at different branches of the Bank of Montreal ("BMO"). Ms. Tsige was in a relationship with Ms. Jones' ex-husband, although the two women did not know each other. Over a four-year period, Ms. Tsige accessed Ms. Jones' personal bank accounts at BMO almost 200 times.

When Ms. Jones became suspicious and complained to BMO, Ms. Tsige admitted to accessing Ms. Jones' account and explained she was in a financial dispute with Ms. Jones' ex-husband and she wanted to confirm he was paying child support. Ms. Tsige apologized and BMO disciplined her. Ms. Jones claimed for damages of $70,000 for invasion of privacy and breach of fiduciary duty, and punitive damages of $20,000.

History of the Tort of Invasion of Privacy

Prior to the Court of Appeal's decision in this case, the cause of action for breach of privacy was uncertain. Canadian, U.S., and English courts typically refer to two seminal articles in this field: "The Right to Privacy" written by S.D. Warren and L.D. Brandeis in the 1890 Harvard Law Review; and "Privacy", a 1960 article by William Prosser.

Warren and Brandeis argued that courts should recognize a right to privacy in the civil law to "meet the problems posed by technological and social change" given their conception of a "general right of the individual to be let alone". Prosser argued that a right to privacy actually encompassed four elements:

1. intrusion on a person's right to seclusion or solitude or into a person's private affairs;
2. public disclosure of embarrassing private facts;
3. publicity that places a person in a false light in the public eye; and
4. appropriation, for the defendant's advantage, of a person's name or likeness.

Sharpe J.A. for the Court held that Ms. Jones' right of action fell into Prosser's first category of "intrusion on seclusion" and, as such, the Court's analysis focussed on that category. The Court accepted Prosser's interpretation that the right to privacy encompasses "four distinct torts, each with its own considerations and rules". It did not provide any guidance with respect to the other three categories as it "should restrict [itself] to the particular issues posed by the facts of the case before [it]".

In reviewing the historical case law in Ontario, the Court concluded that Ontario "has already accepted the existence of a tort claim for appropriation of personality and, at the very least, remains open to the proposition that a tort action will lie for an intrusion upon seclusion".

Related Support for the Tort of Invasion of Privacy

The Court also referred to the Canadian Charter of Rights and Freedoms (*1) for the proposition that privacy is "worth of constitutional protection" and that it is "integral to an individual's relationship with the rest of society and the state" (although noting that the Charter does not apply between two private parties). In particular, privacy is the underlying right to the section 8 protection against unreasonable search and seizure.

Sharpe J.A. also noted that the treatment of the right to privacy under the Charter accords with international law, namely article 12 of the Universal Declaration of Human Rights (*2) and article 17 of the International Covenant on Civil and Political Rights (*3).

Finally, Sharpe J.A. referred to various Canadian and Ontario legislation regarding privacy interests: the Personal Information Protection and Electronic Documents Act, 2000 (*4), the Personal Health Information Protection Act, 2004 (*5), the Freedom of Information and Protection of Privacy Act (*6), the Municipal Freedom of Information and Protection of Privacy Act (*7), and the Consumer Reporting Act (*8).

Ms. Tsige argued that the court should not expand the common law to create a common law tort of invasion of privacy because the plethora of federal and provincial legislation governing privacy rights "reflects carefully considered economic and policy choices" and any such expansion should be done by parliament and the provincial legislatures. The Court held that it would require a "strained interpretation" of the existing legislation to conclude that there was a "legislative intent to supplant or halt the development of the common law in this area", and concluded that the federal and Ontario legislation "essentially deals with freedom of information and the protection of certain private information with respect to government and other public institutions" that have "nothing to do with private rights of action between individuals".

Sharpe J.A. looked to legislation in British Columbia, Manitoba, Saskatchewan, and Newfoundland that creates a limited right of action for invasion of privacy and to legislation in Quebec that creates an explicit right to privacy. However, none of these provinces define what constitutes an invasion of privacy, so those provinces with legislation are in virtually the same situation as those without.

The Court also reviewed the approach taken regarding a right of action for invasion of privacy by courts in the U.S., England, Australia, and New Zealand.

Ontarians Now Have a Cause of Action for "Intrusion on Seclusion"

Sharpe J.A. for the Court concluded that it was "appropriate" to "confirm the existence of a right of action for intrusion upon seclusion", representing an "incremental step" consistent with the court's role in developing the common law:

It is within the capacity of the common law to evolve to respond to the problem posed by the routine collection and aggregation of highly personal information that is readily accessible in electronic form. Technological change poses a novel threat to a right of privacy that has been protected for hundreds of years by the common law under various guises and that, since 1982 and the Charter, has been recognized as a right that is integral to our social and political order (*9).

The Court adopted the elements for the cause of action for intrusion on seclusion as stated by the U.S. Restatement (Second) of Torts (2010):

One who intentionally intrudes, physically or otherwise, upon the seclusion of another or his private affairs or concerns, is subject to liability to the other for invasion of his privacy, if the invasion would be highly offensive to a reasonable person.

There are therefore three key features to the tort of "intrusion on seclusion" as an aspect of an individual's right to privacy:

1. the defendant's conduct must be intentional or reckless;
2. the defendant must have invaded, without lawful justification, the plaintiff's private affairs or concerns; and
3. a reasonable person would regard the invasion as highly offensive causing distress, humiliation or anguish.

The Court specifically pointed out that harm to an economic interest "is not an element of the cause of action" and that the damages awarded will "ordinarily be measured by a modest conventional sum".

The Court also provided some guidance as to what intrusions can be considered "highly offensive":

… it is only intrusions into matters such as one's financial or health records, sexual practices and orientation, employment, diary or private correspondence that, viewed objectively on the reasonable person standard, can be described as highly offensive (*10).

Sharpe J.A. for the Court noted a concern that claims for protection of privacy can conflict with claims for the protection of freedom of expression and freedom of the press. As the issue was not before the Court, the issue was not considered in detail but it was noted that "no right to privacy can be absolute", and that privacy claims "will have to be reconciled with, and even yield to" competing claims of freedom of expression and freedom of the press. This will be an area to monitor new cases to see how courts deal with these competing interests.

A plaintiff does not have to prove actual loss, as damages for "intrusion on seclusion" fall into the category of "symbolic" damages that are typically awarded to "vindicate rights or symbolize recognition of their infringement".

The Court concluded that damages for intrusion on seclusion where the plaintiff has suffered no pecuniary loss "should be modest but sufficient to mark the wrong that has been done", and that the upper range of these damages is $20,000. The factors a court should consider are:

1. the nature, incidence and occasion of the defendant's wrongful act;
2. the effect of the wrong on the plaintiff's health, welfare, social, business or financial position;
3. any relationship, whether domestic or otherwise, between the parties;
4. any distress, annoyance or embarrassment suffered by the plaintiff arising from the wrong; and
5. the conduct of the parties, both before and after the wrong, including any apology or offer of amends made by the defendant.

The Court also made a point of "neither exclud[ing] nor encourag[ing] awards of aggravated and punitive damages". There may be "exceptional cases calling for exceptional remedies", but in most cases "predictability and consistency are paramount values" and should not be awarded "absent truly exceptional circumstances".

For the particular circumstances of this case, the Court concluded that Ms. Tsige committed the tort of intrusion on seclusion in that her acts were intentional, amounted to an unlawful invasion of Ms. Jones' private affairs, and would be highly offensive to a reasonable person. In awarding damages of $10,000, the Court noted that Ms. Tsige's actions were "deliberate and repeated and arose from a complex web of domestic arrangements likely to provoke strong feelings and animosity", but conversely that Ms. Jones suffered no public embarrassment or harm and that Ms. Tsige had apologized.

Conclusion

The Court of Appeal has elucidated on an individual's right to privacy in Ontario, providing that the unlawful invasion of a person's private affairs that is intentional or reckless and highly offensive will result in an award of damages. We are unlikely to see much stand-alone litigation as a result of this decision, as the damages awarded are relatively low; however, we may see litigation on "principle" or the cause of action included with others in a claim.

It will be interesting to see how the courts will deal with the likely increase in claims for invasion of privacy given the highly connected and business and social environment we live in.

Kimberly Newton

Endnotes

*1 Part I of the Constitution Act, 1982, being Schedule B to the Canada Act 1982 (U.K.), 1982, c. 11.
*2 G.A. Res. 271(III), UNGAOR, 3d Sess., Supp. No. 13, U.N. Doc. A/810 (1948) 71.
*3 19 December 1966, 999 U.N.T.S. 171.
*4 S.C. 2000, c. 5.
*5 S.O. 2004, c. 3.
*6 R.S.O. 1990, c. F.31.
*7 R.S.O. 1990, c. M.56.
*8 R.S.O. 1990, c. C.33.
*9 Jones v. Tsige, 2012 ONCA 32 at para. 68.
*10 Ibid. at para. 72.


 

5. Buhlman v. Buckley, 2012 FCA 9 - Case Comment

This matter concerned an appeal before the Federal Court of Appeal from a summary judgment decision by Justice Heneghan (Buhlman v. Buckley, 2011 FC 73). The Court unanimously upheld the decision reached by the judge at first instance.

At issue in the summary judgment at first instance was the interpretation, construction, and effect of sections 28 and 29 of Part III of the Marine Liability Act, S.C. 2001 c.6 s.28 (the "MLA"), as in force on July 22, 2006 ("Former Section 28" and "Former Section 29 " - as the MLA has been amended since the incident). To avoid confusion, please note that the wording of Former Section 28 is mostly contained in current Section 29 of the MLA and that the wording of Former Section 29 is mostly contained in current Section 28 of the MLA ).

Specifically, the principal issue on summary judgment was whether certain claims asserted in a parallel Ontario Superior Court action were, in the circumstances of this case, subject to the limitation of liability regime specified in Former Section 28 of the MLA or whether such claims would fall within the higher limitation of liability regime contained in Former Subsection 29(2) of the MLA having regard to the exceptions to that subsection as listed in Former Subsection 29(3).

Former Sections 28 and 29 stated:

Liability for ships under 300 tons

28. (1) The maximum liability for maritime claims that arise on any distinct occasion involving a ship with a gross tonnage of less than 300 tons, other than claims mentioned in section 29, is
(a) $1,000,000 in respect of claims for loss of life or personal injury; and
(b) $500,000 in respect of any other claims.

Passenger claims, no certificate
29. (1) The maximum liability for maritime claims that arise on any distinct occasion for loss of life or personal injury to passengers of a ship for which no certificate is required under Part V of the Canada Shipping Act is the greater of

(a) 2,000,000 units of account; and
(b) the number of units of account calculated by multiplying 175,000 units of account by the number of passengers on board the ship.

Passenger claims, no contract of carriage
(2) Notwithstanding Article 6 of the Convention, the maximum liability for maritime claims that arise on any distinct occasion for loss of life or personal injury to persons carried on a ship otherwise than under a contract of passenger carriage is the greater of

(a) 2,000,000 units of account, and
(b) 175,000 units of account multiplied by (i) the number of passengers that the ship is authorized to carry according to its certificate under Part V of the Canada Shipping Act, or (ii) if no certificate is required under that Part, the number of persons on board the ship.

Exception
(3) Subsection (2) does not apply in respect of

(a) the master of a ship, a member of a ship's crew or any other person employed or engaged in any capacity on board a ship on the business of a ship; or

(b) a person carried on board a ship other than a ship operated for a commercial or public purpose.

Definition of "passenger"

(4) In subsection (1), "passenger" means a person carried on a ship in circumstances described in paragraph 2(a) or (b) of Article 7 of the Convention.

Definition of "unit of account"

(5) In subsections (1) and (2), "unit of account" means a special drawing right issued by the International Monetary Fund.

The action arises out of a boating collision involving two vessels. The Buhlmans, operated a fishing lodge where the Buckleys, were staying as vacationing guests. The Buckleys' holiday package included the use of a small boat. In the course of the Buckleys' stay, the boat operated by the Buckleys collided with the boat operated by the Buhlmans.

The Buhlmans' brought a summary judgment motion. They argued that there are different limitations of liability under the MLA that would apply depending, among other things, on whether the injured party was being carried under a contract of carriage (Part 4 of the MLA) or on a vessel operated for a commercial purpose but without a contract of carriage (Part 3 of the MLA, Former Section 29), and where a plaintiff is a gratuitous passenger (in the ordinary sense of the word) on a vessel being operated for other than a commercial (or public) purpose (Part 3, Former Section 28).

The judge hearing the summary judgment motion determined that it is not the purpose of a voyage that is subject of the enumerated sections, but the role of the vessel. Accordingly, to engage the (potentially higher) limitation of liability provision in Former Subsection 29(2), a person must be a passenger (in the defined or ordinary / extended sense of the term) or on board the vessel in respect of which the suit is brought. The Court found that the injured parties were not on board the vessel operated by the Buhlmanns and thus could not avail themselves of the limitation of liability contained in Former Section 29 (as that section only applies in respect of the vessel upon which the injured party is on board) and that the applicable limitation of liability provision in the circumstances was the one contained in Former Section 28; that is, the $1,000,000 limit. The Buckleys appealed.

The principal issue on appeal of the decision rendered at the summary judgment motion was whether the Buckleys' claims were subject to the limitation of liability regime specified in Former Section 28 of the MLA or whether, as raised by the Buckleys, such claims would fall within the higher limitation of liability regime contained in Former Subsection 29(2) having regard to certain exceptions, amongst other things, boats used for a commercial or public purpose (*1). Specifically, Madame Justice Trudel, writing for the unanimous Court, provided a categorical and laconic one-word answer of "No" to the question of whether Justice Heneghan had erred in her application of Former Section 28.

The Buckleys maintained at appeal that the maximum liability available pursuant to Former Subsection 29(2) of the MLA applied to their claim for damages having regard to the exceptions set out in paragraph 29(3)(b) of Former Section 29 of the MLA. The Buhlmans maintained that Justice Heneghan was correct in her finding that Former Subsection 29(2) was inapplicable to the Buckleys' claim on the basis that "in order to engage [former] subsection 29(2), the injured persons must be claiming against the vessel on which they were on board" [brackets added] (*2). The Buckleys were not on board such vessel, i.e. they were not on board the "Buhlman" Vessel.

The Buckleys' principal submission in this regard appeared to be that Justice Heneghan erred when she "substituted the phrase 'the ship', inferring the ship seeking to limit liability, for injury to persons carried on a ship" in respect of the text of Former Subsection 29(2). (*3) Accordingly, it is the use of the indefinite article "a", as opposed to the definite article "the" that ostensibly informed the Buckleys' position in this regard.

In its decision, the Court summarily disposed of preliminary considerations concerning distinctions between commercial and public purpose of the vessel as inapplicable to the elucidation of the issue under scrutiny and moved on to focus the analysis on the issue respecting the definite versus indefinite use of the articles "the" and "a" in respect of the word "ship" in the legislation in question.

In this regard, the Court adopted the submissions of the Buhlmans as follows:

"By enacting the MLA, Parliament intended to set limits of liability and establish uniformity by balancing the interests of shipowners and other parties. In that vein, I agree with the respondents that section 29 affords certainty regarding limits of potential liability and enables the owners of the ships and their concomitant insurers to set a global limit of potential liability limits arising from claims advanced by their passengers or by those that they transport or carry for commercial or public purposes (respondents' memorandum of fact and law at paragraph 21). Shipowners and insurers have a clearer indication of what they could be liable for, and to what degree."

It was submitted that the foregoing rationale is unmistakably crystallized in sections 1 and 2 of Article 7 of the 1976 Convention on Limitation of Liability for Maritime Claims as amended by its 1996 Protocol (the "Convention"). Accordingly, whether the meaning of the indefinite article "a" is meant to interchangeably signify the definite article "the", it would be of assistance to look at the language that inspired Former Section 29 and the entire Part 3 of the MLA, namely the aforementioned provisions contained in the Convention, which is incorporated into the MLA as Schedule 1, relying on the principle that the interpretation put upon like words used elsewhere in the same statute is the safest, most pertinent guide to interpretation of words in the section under consideration:

Article 7

The limit for passenger claims

1. In respect of claims arising on any distinct occasion for loss of life or personal injury to passengers of a ship, the limit of liability of the shipowner thereof shall be an amount of 175,000 Units of Account multiplied by the number of passengers which the ship is authorized to carry according to the ship's certificate.

2. For the purpose of this Article "claims for loss of life or personal injury to passengers of a ship" shall mean any such claims brought by or on behalf of any person carried in that ship:

(a) under a contract of passenger carriage, or

(b) who, with the consent of the carrier, is accompanying a vehicle or live animals which are covered by a contract for the carriage of goods.

[Emphasis added]

It was further submitted that in the same conceptual vein, the amount of liability, expressed as Units of Account, is stipulated in clauses 29 (2)(b)(i) and (ii) of Former Subsection 29 (see above) by reference to, and as a function of, either the number of passengers which the ship is authorized to carry in accordance with the requisite certificate or of the number of persons on board the ship at the time of the incident. The foregoing clauses, it was submitted, necessarily imply that the associated maximum liability amounts are in respect of claims by those on board the vessel in question at the material time.

The maximum amounts of potential liability as set out in Former Subsection 29(2) set a formula for certainty for shipowners in respect of the potential liability that they would face from their passengers (in the defined sense of the term) or from those whom they carry for a commercial or public purpose. For all other claims, shipowners have the certainty of the fixed amounts prescribed in Former Subsection 28.

Accordingly, it was submitted, that this use of the definite article "the" can only reasonably mean the ship upon which the "passenger" making the claim is on board or located at the time of the incident Further, it was submitted, this language is congruent with and deliberately chosen to buttress the objective of achieving greater certainty in specifying global, aggregate potential liability to shipowners in respect of claims advanced by those they carry on board their vessels for commercial or public purposes. To find otherwise, it was submitted, would expose shipowners to uncertain and fluctuating limits of liability for which they would not be able to adequately or reasonably insure against, thus defeating one of the objects and purposes of these provisions in the MLA.

Furthermore, it was also submitted that the above submission tendered as reflection of the meaning and intent of the legislative provisions in question, is further echoed in Article 2 of the Convention, the provision that specifies the various grounds/bases for liability, alluded to by Justice Heneghan at paragraph 17 of her decision:

Subject to Articles 3 and 4 the following claims, whatever the basis of liability may be, shall be subject to limitation of liability:

(a) claims in respect of loss of life or personal injury or loss of or damage to property (including damage to harbour works, basins and waterways and aids to navigation), occurring on board or in direct connexion [sic] with the operation of the ship or with salvage operations, and consequential loss resulting therefrom;..

[Brackets and emphasis added]

The Court of Appeal echoed these considerations in its decision, citing the preceding statutory sections and effectively reaching the same conclusions in this respect. As stated by Madame Justice Trudel at paragraphs 44-47 of the Judgment on appeal:

"[i]n my view, a combined reading of Article 7 of the Convention and of section 29 of the MLA favours the Judge's interpretation that subsection 29(2) of the MLA refers to persons on the ship seeking to limit liability.

[45] Although found to be inapplicable to this case, subsection 29(1) of the MLA concerns passengers on a ship, therefore persons carried on that ship, who are under a contract of carriage. Subsection 29(2) applies to persons carried on that ship for a commercial or public purpose without such a contract.

[46] Together, subsections 29(1) and (2) of the MLA provide for the class of persons on board the vessel, either as passengers or as persons carried on a ship otherwise than under a contract of carriage. Also, the formulae for determining the maximum amount of potential liability, as stipulated in subparagraphs 29(2)(b)(i) and (ii) considers [sic] either the number of passengers which the ship is authorized to carry under its certificate or the number of persons on board the ship at the time of the incident.

[47] All this leads me to the conclusion reached by the Judge: subsection 29(2) does not apply to the maritime claims at issue. Accordingly, the Judge committed no error of law or of principle warranting our intervention."
[brackets added] [emphasis in original]

As an aside, it is instructive to note that the Buckleys' position discloses an inchoate public policy argument that the Court did not ultimately explicitly address in this case (it did not need to, as it decided the case on a straightforward application of the definitions and meanings furnished in the relevant statutory sections within the context of the purpose and object underlying such legislation).

As characterized by the Court, the Buckleys' "further allege that the Judge's interpretation "creates an incongruous result" as injured passengers would be treated differently whether they were on board the "striking ship" [i.e. the "offending" vessel] or the "struck ship" at the time of the collision." [brackets added]

The underlying public policy thought (which could be distilled in the question: "what is the rationale for subjecting passengers in general and a subset of passengers (in the defined senses contemplated in the MLA) in particular to higher limitations of liability in the circumstances?") is nonetheless an interesting one, at least from a doctrinal perspective.

The answer might be that the higher limit of liability vis-à-vis Former Section 28 (current section 29) of the MLA results from the benefit that vessel owners / carriers derive from either (a) the passage fee payable to them by virtue of the contract of carriage or (b) in the absence of such contract of carriage, by fiscal gain to the owner of the offending vessel associated with the commercial purpose under which the vessel is operated and the persons carried. Conversely, the limitation of liability under section 28 does not depend on the number of passengers but only on the tonnage of the ship. It was and continues, thus, to be worded as a residual section and, as such, most address the circumstances of this matter.

In any event, the Court ultimately dismissed the appeal, with costs, holding that the judge at first instance Justice Heneghan was correct in that that "[Former] Section 29 of the MLA did not apply to the Buckleys, who were neither passengers nor persons being carried on board the Crestliner [the "Buhlman" vessel that came in contact with the boat upon which the Buckleys were on board] and that the broader language of subsection 28(1) governed their maritime claims" [brackets added]. The Court dismissed the cross-appeal, which sought a reversal of Justice Henehan's ruling on costs relating to the summary judgment motion. (*4)

Martin Abadi

Endnotes

*1 The difference between applicable limits (between Former Subsection 28 and 29) can be very significant.
*2 Justice Heneghan's Reasons for Order, para. 37.
*3 Marine Liability Act, 2001, S.C. 2001, c.6, ss. 28 and 29 as they read on July 22, 2006, i.e. at the date of the incident subject of this proceeding.
*4 Fernandes Hearn lawyers Rui Fernandes and Martin Abadi represented the successful Respondents, Buhlman et al., in this appeal.



6. Implications of the Thibodeau case: A French Language Lesson that Air Canada Will Never Forget

Introduction

One of the few Canadian cases relating to aviation law, and in particular the Montreal Convention (*1) that was decided in 2011 was Thibodeau v. Air Canada, [2011] F.C.J. No. 1030 ("Thibodeau"), before the Federal Court of Canada ("Federal Court"). The analysis in this case and the reasons why the Court decided the way it did are interesting and noteworthy in light of the constant clash between the Montreal Convention and national legislation of signatory states, in terms of when the former preempts the application of the latter.

In general, it has been successfully asserted that the Warsaw Convention (*2) and later the Montreal Convention, are the only relevant documents regarding the liability of air carriers in relation to passengers, baggage and cargo in the international carriage by air (*3), and that national laws cannot modify, alter or substitute the liability scheme of the those Conventions. The success rate such assertion depended upon the factual background of each case; the attitude of the air carrier in its response to the events triggering air carrier liability; the legal issues involved and, sometimes, upon the legal system of the country where the cases were decided.

As it has been noted in Balogun v. Air Canada, [2010] O.J. No. 663 ("Balogun") at para. 34, the cases decided by the U.S., U.K. and Canadian courts offer two different approaches regarding the applicability and exclusivity of the Montreal Convention. One approach holds that the Montreal Convention provides specific grounds and limits for the carrier's strict liability to the exclusion of any other possible grounds or limits of liability that national laws may provide. (*4) The other approach holds that the Convention is exclusive only in regard to those claims for which it provides a remedy. (*5) That is, "if no remedy is provided by the Convention, it does not 'bind' the plaintiff and he is then at liberty to pursue domestic causes of action without reference to the Convention." (*6) The Court in Balogun preferred the second approach and found that, as the remedy was provided by the Convention, it was applicable.

Thibodeau landed right in the middle of this "clash of approaches" and brought in a new spin to to the debate. Although this time the Montreal Convention was defeated by the Canadian federal legislation, Thibodeau does not resolve many uncertainties surrounding the issue of the exclusivity of the Convention and the stated objective for it to achieve the uniform application of and interpretation of the Convention. In fact, the Thibodeau case can potentially open the floodgate for claims in other signatory countries of the Montreal Convention.

Brief Facts

The Thibodeaus, a husband and a wife, made two return trips in 2009 from Canada to the United States and from Canada to St. Maarten on Air Canada flights. The first trip was a return trip from Ottawa to Atlanta with a connecting flight in Toronto (Ottawa - Toronto - Atlanta/Atlanta - Toronto - Ottawa). The second trip was a return trip from Toronto to St. Maarten with a connecting flight in Philadelphia and returning via Charlotte, North Carolina (Toronto - Philadelphia - St. Maarten and St. Maarten - Charlotte - Toronto).

The Thibodeaus claimed that, during certain segments of these trips, Air Canada breached its duties to provide services in the French language as imposed on the airline by the Official Languages Act, R.S.C. 1985, c. 31 (4th Supp.) ("OLA"). Even after privatization, by virtue of a special provision in the legislation, Air Canada continued to be bound by such linguistic duties. (*7) Consequently, the Thibodeaus sought damages.

The mass media has been quick to label this matter as a "$12,000 Sprite drink" case (*8), because referring to one of the Applicants' allegations that Mr. Thibodeau's was served a Sprite drink by the Air Canada flight attendant when, in fact, he had ordered a 7UP drink, another lemon-lime beverage, in the French language.

Nevertheless, the case was not concerned with damages suffered from drinking 7UP instead of Sprite at high altitudes, but, in fact, the main issue was whether Canadian federal law requiring federal institutions to serve the public in both official languages could apply as a basis to award damages during international carriage by air, for which the Montreal Convention claims to have exclusive application.

Arguments

After a lengthy discussion of the facts and constitutional issues and in finding that Air Canada had indeed breached its obligations under the OLA, the Court focused on the issue of whether the Montreal Convention, with its exclusive liability scheme, was the sole document that was relevant when deciding upon damages.

To assert the exclusive application of the Montreal Convention, Air Canada proffered a classic line of argument Air Canada submitted that:

1. The Montreal Convention provided for a complete international liability regime that totally displaced the signatory countries' domestic law when an event, giving rise to liability, occurred during international carriage. Accordingly, if a cause of action related to an incident or event which occurred during international carriage and which cause of action was not set out in the Convention, the claim simply cannot give rise to compensation by damages (*9);

2. Article 29 of the Montreal Convention, which provided that "any action for damages, however founded, whether under this Convention or in contract or in tort or otherwise", had clarified the scope of the Convention and excluded any other claim for damages, whatever the cause of the damage (*10);

3. Such interpretation of Article 29 (which has been upheld by Canadian and international case law), was the only one consistent with the purpose of the Convention, that is the protection of both carriers and passengers and to strike a balance or a compromise, between their respective rights and liabilities (*11);

4. There is a presumption that Parliament is deemed, unless it clearly expresses itself otherwise, to have intended to comply with the treaty obligations of the Crown. There was nothing in the OLA that indicated that Parliament intended to avoid the terms of the Montreal Convention. This meant that Parliament did not intend to give overriding status to the Court's remedial power under the OLA(*12).

The Commissioner of Official Languages, who participated as an intervenor in this case, and supported the position of the Thibodeaus, submitted three main arguments:

1. The Montreal Convention in no way limited the Court's remedial power under subsection 77(4) (*13) of the OLA(*14);

2. There was no conflict between the Montreal Convention and the OLA, because their respective ambits were completely different (*15);

3. If there is a conflict between the Montreal Convention and the OLA, the latter must prevail because the OLA has a quasi-constitutional status. Otherwise, this would mean that Parliament wanted to impose the primacy of language rights without ensuring that those rights could be enforced by effective remedies (*16).

The Court's Analysis

The Court held that breaches of linguistic duties occurred during "international carriage by air" as set out in the Montreal Convention (*17). It was also clear that the damages sought by the Thibodeaus could not be related to any categories of compensable damages set out in Articles 17, 18 and 19 of the Convention (*18).

According to the Court, the Montreal Convention was an international agreement and, as such, it should be interpreted in light of the case law developed in the countries signatory to the Convention in accordance with the principles of interpretation of international agreements. The Court, emphasizing the uniformity of application as the main objective of the Convention, cited several cases that have found the Convention's liability scheme to be exclusive (*19).

The Court recognized that the ambit of the two "documents" was different. Clearly, "the Montreal Convention did not impose linguistic duties." (*20) However, the Court found that there was a conflict between the OLA and the Montreal Convention, because if the latter was not to be regarded as the sole and exclusive source of remedy, it would automatically mean that damages could be awarded under the OLA. This, according to the Court, would disregard the body of case law on the exclusivity of the Convention on any liability arising in international carriage by air. Accordingly, the issue was narrowed to which of these documents should prevail, the Canadian quasi-constitutional law or the Montreal Convention.

This was a very delicate issue for the Federal Court, because, on the one hand, if the Court were to hold that the OLA could not award damages when breaches of linguistic duties occur during an international flight, this would weaken the OLA considerably. On the other hand, if the Court were to hold that the Montreal Convention allowed compensation on the basis of a cause of action which is not contemplated by the Convention, such an interpretation would be a departure from the Canadian and international case law (*21)

Caught between a "rock and a hard place" and seeking a safe way out, the Court focused on the characterization of the OLA. The Court considered the issues of legislative intent and hierarchy of laws in Canada and found that Canadian legislation had not expressly enacted a formal hierarchy of laws. Therefore, the Court decided that the usual rules of interpretation should be employed to determine which laws have precedence.

There were two principles of interpretation at issue: (1) the presumption of conformity with international law and (2) the primacy of quasi-constitutional enactments (*22). The governing principle in such situations, according to the Court, should be that the presumption of conformity should be accepted and an interpretation, which does not contradict Canada's international obligations, should be preferred. (*23)

The Court then emphasized the special status of human rights legislation which has been elevated since the Supreme Court of Canada's decision in Insurance Corporation of British Columbia c. Heerspink, [1982] 2 S.C.R. ("Heerspink"). 145. The Court noted that, since Heerspink, the legislation enacted to protect human rights has been recognized as having a quasi-constitutional status. Hence, "[i]n case of conflict or inconsistency with other types of legislation, the human rights legislation prevails regardless of which was enacted first." (*24)

Ultimately, the Court held that sub-section 77(4) of the OLA must prevail over the Montreal Convention, on two main grounds:

1. Parliament implicitly gave precedence to the remedial provisions of the OLA by means of which breaches of the duties under the Act may be enforced. There was no need for the Parliament to expressly provide for the primacy of the remedy set out at subsection 77(1) because this flows from its incidental nature in respect of the rights it aims to enforce (*25);

2. Giving precedence to subsection 77(4) of the OLA over the Montreal, Convention would give effect to the quasi-constitutional status of the OLA without violating Canada's international obligations. Since the main objective of the Convention is the uniformity in application in all signatory states, this objective is not frustrated because OLA applies only to Air Canada and not to other carriers subject to the Convention. This is so because Air Canada is a federal institution of Canada, and, as such, the duties of Air Canada as to the official languages are not of interest or concern to any other signatory country of the Convention (*26).

The implications of this decision may, however, be significant. Other signatory countries may follow the same logic as the Thibodeau Court. Acceptance of the Court's reasoning by foreign courts could potentially result in the frustration of the objectives of the Convention on a global level. When deciding a matter relating to an international treaty and, specifically, decisions related to the widely accepted Montreal Convention, careful consideration must be given as to the implications of such decisions.

Possible implications of the Thibodeau Decision

Thibodeau seems to have opened a new chapter of air carriers' liability under the Montreal Convention. It has provided a way to possibly circumvent the liability scheme set out in the Convention. In practical terms, the Court has provided a recipe regarding how to avoid the liability limitations of the Convention and start a full-fledged damages claim based solely on national laws.

Canada is not the only country in the world with more than one official language. Switzerland has three official languages: German, French, and Italian. South Africa has eleven official languages. While not all countries are officially the idea of passengers in other signatory countries bringing similar claims against national air carriers may be imminent.

As the Thibodeau Court referred to the U.S. and U.K. case law, the courts of other signatory countries may now refer to the Thibodeau decision.

Further, at the federal level, the Canadian Bill of Rights and in Quebec, the Charter of the French Language and the Quebec Charter of Human Rights and Freedoms have been given quasi-constitutional status. The sky may indeed have become the only limit for possible future claims.

Rakhmadjon Sobirov

End Notes

(*1) Convention for the Unification of Certain Rules for International Carriage by Air, signed in Montreal on May 28, 1999, entered into force on November 04, 2003, became a Canadian law through Carriage by Air Act, R.S.C., 1985, c. C-26.
(*2) The Warsaw Convention is the predecessor of the Montreal Convention that has also become a Canadian law through Carriage by Air Act. Ibid.
(*3) What constitutes "international carriage by air" is a hugely debated issue in itself. Basically, it includes the actual time inside the airplane, embarking and disembarking onto and from the airplane, and the period during which the passenger, baggage or cargo is in possession of an air carrier.
(*4) See for example, Sidhu v. British Airways, [1997] 2 Lloyd's Rep. 76 (HL) & the Quebec Superior Court case Simard v. Air Canada, [2007] Q.J. no 11145.
(*5) See for example, Connaught Laboratories Ltd. v. British Airways, (2002) 61 O.R. (3rd) 204
(*6) Balogun, para. 34.
(*7) Air Canada Public Participation Act, RSC 1985, c 35 (4th Supp), s. 10(1).
(*8) Ian MacLoed, "French Language crusader pops Air Canada for $12,000" Postmedia News (July 13, 2011).
(*9) Thibodeau, para. 53.
(*10) Ibid., para. 54.
(*11) Ibid., para. 55
(*12) Ibid., para. 56
(*13) Under this sub-section of the OLA, the Court is allowed to grant such remedy as it considers appropriate and just in the circumstances when the Court concludes that a federal institution has failed to comply with the OLA.
(*14) Thibodeau, para. 58.
(*15) Ibid., para. 59.
(*16) Ibid., para. 60.
(*17) Ibid., para. 52.
(*18) Ibid., para. 52.
(*19) Ibid., para. 68, referring to an English case of Sidhu v. British Airways, [1997] 1 All ER 193; para. 69, referring to an American case of El Al Israel Airlines, Ltd., Petitioner v. Tsui Yuan Tseng (1999), 525 US 155, 119 S Ct 662.
(*20) Thibodeau, para. 70.
(*21) Thibodeau, para. 77.
(*22) Ibid., para. 79.
(*23) Ibid., para. 80, citing from Ruth Sullivan, Sullivan on the Construction of Statutes, 5th ed., (Lexis Nexis, 2008) ("Sullivan"), p. 538.
(*24) Ibid., para. 80, citing Sullivan, p. 497.
(*25) Ibid., para. 82.
(*26) Ibid., para. 83.

 

 

7. Halsbury's Laws of Canada - Transportation Law

Transportation - Carriage of Goods
Rui M. Fernandes, B.Sc., J.D., LL.M.

With carriage of goods law often at the forefront of commercial transactions, Halsbury's Transportation - Carriage of Goods title offers the ideal resource for lawyers who require a concise explanation of how this specialized area of law operates.[1] Timely and accessible, and written by one of Canada's leading transportation lawyers, this valuable reference delivers a clear narrative of the legislative framework and identifies the relevant case law that practitioners need to be aware of. It contains useful answers to questions on a wide range of topics, including:

  • Federal and provincial powers and areas of responsibility
  • Carriage of goods by road
    • Federal legislation regulating extra-provincial trucking
    • Provincial licensing of carriers
    • Powers and procedures of transport authorities
    • Equipment and personnel
    • Duties and responsibilities of carriers
    • Passenger and luggage liability issues
    • Hazardous goods
  • Carriage of goods by rail
    • Contractual arrangements
    • Loss, damage or delay
    • Accommodation for goods
    • Connecting carriers
  • Carriage of goods by water
    • Formation and interpretation of Charter parties
    • Loading and discharge of goods
    • Frustration of contracts
    • Hague-Visby rules regarding bills of lading
    • Responsibilities, liabilities, rights and immunities of carrier
      Arbitration clauses, letters of indemnity

Transportation - Railways
Rui M. Fernandes, B.Sc., J.D., LL.M.

Once at the very heart of commercial activity and the Canadian Dream, railways still play an important part in the transport of passengers and goods, and rail lines are omnipresent in virtually every populated region in Canada. Transportation - Railways provides a comprehensive and national treatment of the law governing the construction, operation, safety and oversight of federal and provincial railways, including matters such as:

  • The legislative framework
  • Role and powers of the Canadian Transportation Agency
    • Orders, enforcement and appeals
    • Mediation and arbitration
    • Violations and offences under the legislation
  • Regulation of railway construction
    • Expropriation of land
    • Location, re-location and approval procedures
    • Construction and maintenance costs
  • Safety standards and regulation
    • Duty of care, rights of way and railway crossings
    • Environmental protection
    • Passenger car safety requirements
  • Powers, responsibilities and management of railway companies
  • Traffic operations and rules
  • Carriage of passengers
    • Service requirements, persons with disabilities and personnel training
    • Baggage issues
  • Tariffs, rates and freight

 

 

 

 


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