HOW TO CALCULATE THE LIMITATION OF LIABILITY IN CASES OF BAGGAGE LOSS UNDER THE MONTREAL CONVENTION 1999

In the Canadian case of Naeini v Air Canada [2019] O.J. No. 838 the Ontario Superior Court of Justice shed light on how to calculate the limitation of liability in cases of baggage loss under Art 22(2) of the Montreal Convention 1999 (MC). This is an important issue, as Art 22(2)MC provides that the airline’s liability in the case of loss, damage, destruction or delay (LDDD) of a baggage is currently limited to 1,288 SDRs (1,131 SDRs at the time of the loss) per passenger (rather than on a per baggage basis). Furthermore, the MC does not identify who is a passenger for the purposes of Art 22(2), leaving two (not necessarily conflicting) options available: the passenger whose name is in the baggage tag or the passenger who hands over the baggage to the airline and whose personal effects are packed therein.

A family of four was travelling from Bogota to Toronto via Miami with several pieces of baggage and with the baggage tags issued in the name of Mr Naeini, the father of the family. Four pieces of baggage were never delivered to them and all four members of the family brought a claim (one claim per person) for CAD$6,800 (plus tracing expenses and punitive damages for which the Court did not permit recovery). The claimed amount was within the total limit of the four passengers (4 passengers x 1,131SDRs/CAD$2,040=CAD$8,160), but well exceeded the allocation to Mr Naeini on whose name the tags were issued (1 passenger x 1,131SDRs/CAD$2,040).

The Superior Court of Ontario, on appeal, permitted recovery of the full amount, giving a literal interpretation of the term passenger in Art 22(2)MC:  it permits “a claim by each passenger who could demonstrate that his or her bag was handed to the carrier and was checked by the carrier, regardless of whose name was set out on the baggage tag pertaining to such bag”. It further agreed with the Deputy Judge that Air Canada treated the set of baggage as checked in by all four passengers on the basis that it did not charge Mr Naeini extra baggage fees.

Furthermore, the Court distinguished its earlier decision in the case of Holden v. ACE Aviation Holdings (2008), 296 D.L.R. (4th) 233 where Mrs Holden checked one baggage containing items of hers and her husband (who was travelling with her). The baggage was lost and the Holdens unsuccessfully argued that both qualified as passengers under Art 22(2)MC so that each could take advantage of the limit (that was set at 1,000SDRs at the time of the loss). In rejecting their claim, the Court held that the term passenger “denotes an individual who is a passenger and who has checked the piece of baggage that is lost”. This interpretation prevents the carrier from facing unquantified liability, while not compromising the position of the passenger as “he or she is at liberty to check his or her own bag and/or make the special declaration contemplated in the Article”.

The Court in Naeini distinguished the Holden decision on the basis that it applies to a different situation, namely where two or more passengers check in the same baggage. It also held that the ratio of Holden does not address the term “checking” baggage and its relation to the issuance of baggage tags. Responding, also, to the unquantified liability implication, the Court argued that the Naeini interpretation has the opposite result, as it “establishes a fixed maximum liability of a carrier on the basis of the number of passengers on any given flight”.

The decision of the Superior Court of Ontario is not surprising as it follows the judicial trend to opt for the consumer-protective interpretation of the Convention’s provisions in cases of ambiguity. At the same time, it puts into perspective the practice in multi-party bookings to issue tags in the name of one of the passengers which happens for reasons of convenience and to facilitate their tracing. There is nothing in the decision to cast doubt on the legitimacy of this practice under the MC, yet it prevents its use as a way of interpreting Art 22(2)MC.

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