Federal Court Rejects Cash Refunds For Cancelled Travel

Anna Kroupina, Open Jaw


Please click here to view the most recent version of this article. 


AMENDMENT: 

Open Jaw would like to clarify that despite the challenge by the Air Passenger Rights group, spearheaded by Gabor Lukacs, Justice Mactavish has deferred a decision on the airlines’ obligations to customers during COVID-19.

For reference, here is point [39] in the court order: "Because it says that APR’s application for judicial review does not relate to a matter that is amenable to judicial review, the CTA argues in its memorandum of fact and law that the application should be dismissed. There is, however, no motion currently before this Court seeking such relief, and any such motion would, in any event, have to be decided by a panel of judges, rather than a single judge. Consequently, I decline to make the order sought."

Open Jaw regrets any confusion as to the Justice’s ruling.

Open Jaw would also like to confirm that, as we previously published, according to the official court documents, these statements are attributed to Justice Mactavish [1]: "The airline industry and airline passengers have been seriously affected by the Covid-19 pandemic. International borders have been closed, travel advisories and bans have been instituted, people are not travelling for non-essential reasons and airlines have cancelled numerous flights.”

Finally, the comment by the Court has been attributed to the Canadian Transportation Agency. 

The court order in its entirety can be found here.



Canada's Federal Court of Appeal has dismissed a consumer group's lawsuit demanding that airlines refund travellers whose flights were cancelled due to the COVID-19 pandemic. 

“The airline industry and airline passengers have been seriously affected by the Covid-19 pandemic,” wrote Justice Mactavish. “International borders have been closed, travel advisories and bans have been instituted, people are not travelling for non-essential reasons and airlines have cancelled numerous flights.”

The group Air Passenger Rights of Halifax challenged the Canadian Transportation Agency's statement on 25MAR that airlines “should not be expected to take steps that could threaten their economic viability”, and allowed carriers to refund pre-paid tickets through travel vouchers. On 24APR, Canada’s aviation regulator clarified its earlier statement, saying airlines' right to issue travel credits instead of a refund for cancelled trips is "not a binding decision” but would not say that refunds were encouraged. 

Quoting the Canadian Transportation Agency, the Court stated: “Having airlines provide affected passengers with vouchers or credits for future travel ‘could be’ an appropriate approach in the present context as long as these vouchers or credits do not expire in an unreasonably short period of time."

Parliament in 2018 passed Bill C-49 An Act To Amend The Canada Transportation Act that mandated cash compensation of up to $1,000 for cancelled flights, but only in circumstances within an airline’s control.

In 2019, the CTA said it favoured cash refunds under normal circumstances, but waived the rule as a pandemic measure.

“The proposal reflects consumer views that it is important to be offered compensation in the form of cash,” staff wrote in a regulatory notice at the time. “It also provides the flexibility, supported by carriers and consumers, to offer other forms of compensation, e.g. travel vouchers, seat upgrades and points towards loyalty programs.”

Anna Kroupina

Anna Kroupina Journalist

Anna is OJ's newest member and she joins the team as a writer/reporter. She co-writes the daily news and covers events. Although she's new to the industry, pursuing a career path in travel/tourism has been a goal since her first family road trip to the Florida Keys sparked a desire to discover the world and this exhilarating, fast-paced industry.


Comments

Gabor Lukacs - May 27, 2020 @ 00:21
The report misrepresents the Federal Court of Appeal's decision, which is actually found here:
https://decisions.fca-caf.gc.ca/fca-caf/decisions/en/item/479531/index.do


A. The judge REFUSED to dismiss the case:

[39] Because it says that APR’s application for judicial review does not relate to a matter that is amenable to judicial review, the CTA argues in its memorandum of fact and law that the application should be dismissed. There is, however, no motion currently before this Court seeking such relief, and any such motion would, in any event, have to be decided by a panel of judges, rather than a single judge. Consequently, I ***decline*** to make the order sought.


2. The article erroneously attributes to the judge the statements of the CTA. For example:

[25] [...] the statements simply suggest that having airlines provide affected passengers with vouchers or credits for future travel "could be" an appropriate approach in the present context, as long as these vouchers or credits do not expire in an unreasonably short period of time.

The judge did not agree or disagree with this statement, but summarized what the CTA stated.


3. For a balanced and factual report, check City News:
https://toronto.citynews.ca/2020/05/22/airline-passenger-refund-feud-reaches-new-heights/

Teodor Tanase - May 26, 2020 @ 22:15
The new AC "goodwill policy" is a bit more flexible. Hopefully from now on they'll consider travel agencies and travel consultants as a bussiness partners. By the way, no offence, Mr Pelletier, are you really holding an OPC permit ? Mr Clark , chapeau !

DAVID CHIN - May 26, 2020 @ 20:38
In a force majeure (unforeseeable circumstance that prevents someone form fulfilling a contract) neither party bears any liability.
If carriers are allowed to maintain current ruling then passengers bear the liability of not having access to their funds
A compromise should be offered
1. Refund or
2. Carriage to contracted destination with no additional cost within 1 year or
3. A Transportation credit to be used within 2 years

ray - May 26, 2020 @ 17:34
When u purchase a ticket. It's in the contract of carriage that you will receive a refund to the original form of payment if your flight is cancelled. This has nothing to do with the passenger bill of rights that was thrown out the window. This has to do with the contract originally made by the passenger and the airline at the time of purchase.

Bill Clark - May 26, 2020 @ 17:31
Pelletier’s comment is equally incorrect. Airlines, being federally regulated, do not operate under any of the three provincial travel industry acts-which is where trust funding is required to ensure the travel agent pays the end supplier.

Steve Pelletier - May 26, 2020 @ 17:09
This is a ridiculous decision from someone who does not know hot it works. The money of customer ( in Quebec and else ) is put in a trust account to be used only for the travel not other airline expenses according to the law of travel !!! Steve Pelletier, president Voyages Culturels Plus 514-842-4139

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