Compensation Air Canada ordered to pay for delayed bag lacks 'common sense': federal court

Air Canada has prevailed in the Federal Court against a recent Canadian Transportation Agency decision that the judge said lacked “common sense.”  

The case involves two passengers travelling on an Air Canada flight from Toronto to Vancouver on May 25, 2022, planning to return three days later. However, a bag didn’t arrive in Vancouver when they did. Instead, Air Canada delivered it to their hotel the following morning, on May 26. (The name of the case indicates that the respondent-passenger involved was Alaa Badia Tannous, but no other details about “the passengers” are provided.)

The passengers initiated a delayed bag complaint with Air Canada, submitting a $3,561.26 claim. The airline responded with a refund of $250. T he passengers pushed back, submitting a complaint to the CTA, with receipts totalling $3,435.99.

However, some of their receipts were for purchases made after the delayed bag was delivered to them, such as luggage worth $1,310.40, bought on May 28. The court decision does not provide any details about why the passengers purchased the additional luggage two days after Air Canada delivered their delayed bag. 

The compensation limit for a delayed bag is determined under the Montreal Convention, an international treaty governing airline liability and passenger compensation. When was the complaint filed, compensation for a delayed bag was limited to 1,288 “Special Drawing Rights,” (a currency unit set by the International Monetary Fund, then calculated in the national currency involved), which in this case amounted to $2,329.72, as determined by the CTA officer who reviewed the complaint.

Since Air Canada had already paid $250, the officer deemed the amount left for Air Canada to pay would be $2,079.72. In his November 2024 decision, he ordered it be paid by Dec. 15 of that year.

In his decision, released by the Federal Court last week, Justice Michael Manson focused on the CTA officer awarding compensation for the purchases made after the bag was delivered.  

“The Officer’s reasons do not address, nor show any common sense on why post-delivery purchases were causally linked to the delay, including the inclusion of the May 28, 2022 luggage purchase of $1,310.40,” Manson wrote.   

He noted that the receipts for items the passengers bought before the bag was delivered amounted to $1,691.98, a “compensable total … below the … cap.”

This “makes the (CTA officer’s) decision unreasonable,” he added. 

Gábor Lukács, president and founder of Air Passenger Rights, an independent nonprofit organization that advocates for the rights of the travelling public, agrees with the court’s assessment.

“Purchases made after the bag was delivered are, indeed, as a matter of common sense not something the airline should be paying for. That is a no-brainer, and I agree with the judge that the (CTA officer’s) decision was unreasonable,” Lukács  said in an email to National Post.

Manson also noted that Air Canada argued the CTA officer should have looked at the value of the “essential,” rather than “luxury,” items.” However, he did not provide any detail about what would differentiate essential from luxury. The decision also doesn’t set out what items were purchased before and after the bag was delivered. 

Instead, he simply stated “it is now incumbent on a different (officer) to provide a more reasoned, logical decision in respect of the entire claim.”  

Lukács said Air Canada’s arguments about essential versus luxury don’t “hold (any) water,” based on past case law. Ultimately, he said, what matters is reimbursement for expenses incurred before a delayed bag is delivered into a passenger’s hands.

According to Lukács, the limit for damages owed for a delayed bag has increased to approximately $3,000.

The case has been referred back to the CTA for reconsideration by a different officer.

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