Ludecke v. Canadian Pacific Airlines Ltd., [1979] 2 SCR 63

Supreme Court of Canada

Ludecke v. Canadian Pacific Airlines Ltd., [1979] 2 S.C.R. 63

Date: 1979-03-20

Dame Rita Hildegard Aranka Ludecke (Plaintiff) Appellant;

and

Canadian Pacific Airlines Limited (Defendant) Respondent.

1979: January 31; 1979: March 20.

Present: Martland, Ritchie, Pigeon, Estey and Mclntyre JJ.

ON APPEAL FROM THE COURT OF APPEAL FOR QUEBEC

Air law—Death of a passenger and loss of baggage—Limitation of liability of carrier—Applicability of the Warsaw Convention—Carriage by Air Act, R.S.C. 1952, c. 45, Schedule I (Warsaw Convention), Arts. 3, 4, 22—An Act to Amend the Carriage by Air Act, 1963 (Can.), c. 33, Schedule III (Hague Protocol), Art. 3.

The appellant sued the respondent (“the carrier”) in the Superior Court of Quebec for damages resulting from the death of her husband in an aircraft crash. The ticket was issued in England and the respondent was a successive carrier to BOAC within the meaning of the Canadian Carriage by Air Act and the British Carriage by Air Act. These statutes introduced into the law of the two countries the Warsaw Convention of 1924. The carrier, while admitting liability, contended that its liability was limited in accordance with the terms of the Convention. Two questions, submitted pursuant to art. 448 C.C.P., arose for determination:

(1) Did the limitation of liability of the Warsaw Convention apply to the claim based on the death of the appellant’s husband (Art. 3)?

(2) Did the limitation apply to the claim for loss of baggage (Art. 4)?

The Superior Court answered the first question “yes” and the second question “no”. But the Court of Appeal held that the carrier was entitled to the limitation of liability provided by the Convention on both death and baggage claims. Hence the appeal to this Court.

Held: The appeal should be dismissed.

The words of Art. 3(2) are plain and can admit of no misunderstanding. The absence, irregularity, or loss of a passenger ticket will not affect the existence or the validity of the contract of carriage. The benefit of the

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limitation will be lost only where no ticket is delivered. It is clear in this case that the carrier delivered a ticket and thus preserved its right to limitation.

As to the second question, it is recognized that unlike Art. 3, Art. 4, which governs baggage claims, did provide a sanction. However the print of the ticket was of such type and arrangement as to be legible by the ordinary person using ordinary diligence and the content of the ticket was adequate to meet the requirements of the Convention. As the ticket complied with Art. 4 of the Convention, the limitation should be accorded to the carrier.

The case of Montreal Trust Company and Stampleman v. Canadian Pacific Airlines Ltd., [1977] 2 S.C.R. 793, which arose out of the same crash as did the case at bar, does not afford any assistance to the appellant. In that case, the deceased had purchased a ticket in Canada and his trip began and was to end in Canada. The question there was governed by the Warsaw Convention, as modified by the Hague Protocol.

Lisi v. Alitalia (1966), 9 Avi. 18,120 (S.D.N.Y.), aff’d (1966), 9 Avi. 18,374 (2d Cir.); Warren v. Flying Tiger Line (1964), 9 Avi. 17,621 (S.D. Cal.), rev’d and rem’d (1965), 9 Avi. 17,848 (9th Cir.); Mertens v. Flying Tiger Line (1963), 9 Avi. 17,187 (S.D.N.Y), aff’d and rem’d (1965), 9 Avi. 17,475 (2d Cir.), referred to; Montreal Trust Company and Sampleman v. Canadian Pacific Airlines Ltd., [1977] 2 S.C.R. 793, distinguished.

APPEAL from a judgment of the Court of Appeal of Quebec[1] reversing in part a judgment of the Superior Court. Appeal dismissed.

Peter R. Lack, for the appellant.

W.S. Tyndale, Q.C., for the respondent.

The judgment of the Court was delivered by

MCINTYRE J.—This is an appeal from the Court of Appeal for Quebec which allowed, in part, an appeal from the judgment of the Superior Court of that province. The appellant, as widow of the deceased and next friend of her two infant children, sued the respondent in the Superior Court for damages resulting from the death of her husband, one G.T. Hodge, in a crash in Tokyo on March 4, 1966, of a commercial aircraft owned and operated by the respondent, who will hereafter

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be referred to as the carrier. The deceased, a passenger on the aircraft, had a ticket, which also served as a baggage ticket, issued in England by a travel agent acting for British Overseas Airways Corporation. His trip commenced in London, took him to Delhi, Hong Kong and finally to Tokyo. The passage from Hong Kong to Tokyo was by the carrier on its aircraft. It was a successive carrier to British Overseas Airways Corporation within the meaning of the Carriage by Air Act, 1939 (Can.), c. 12 (R.S.C. 1952, c. 45), and the Carriage by Air Act, 1932 (U.K.), c. 36. These statutes introduced into the law of the two countries the Warsaw Convention of 1924, an international convention governing international carriage by air. This appeal involves consideration of Art. 3 and 4 of the Convention reproduced hereunder in an English translation of the original French text.

ARTICLE 3

(1) For the carriage of passengers the carrier must deliver a passenger ticket which shall contain the following particulars:—

a) the place and date of issue;

b) the place of departure and of destination;

c) the agreed stopping places, provided that the carrier may reserve the right to alter the stopping places in case of necessity, and that if he exercised that right, the alteration shall not have the effect of depriving the carriage of its international character;

d) the name and address of the carrier or carriers;

e) a statement that the carriage is subject to the rules relating to liability established by this Convention.

(2) The absence, irregularity or loss of the passenger ticket does not affect the existence or the validity of the contract of carriage, which shall none the less be subject to the rules of this Convention. Nevertheless, if the carrier accepts a passenger without a passenger ticket having been delivered he shall not be entitled to avail himself of those provisions of this Convention which exclude or limit the liability.

ARTICLE 4

(1) For the carriage of luggage other than small personal objects of which the passenger takes charge himself, the carrier must deliver a luggage ticket.

(2) The luggage ticket shall be made out in duplicate, one part for the passenger and the other part for the carrier.

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(3) The luggage ticket shall contain the following particulars:-

a) the place and date of issue;

b) the place of departure and of destination;

c) the name and address of the carrier or carriers;

d) the number of the passenger ticket;

e) a statement that delivery of the luggage will be made to the bearer of the luggage ticket;

f) the number and weight of the packages;

g) the amount of the value declared in accordance with Article 22(2);

h) a statement that the carriage is subject to the rules relating to liability established by this Convention.

(4) The absence, irregularity or loss of the luggage ticket does not affect the existence or the validity of the contract of carriage, which shall none the less be subject to the rules of this Convention. Nevertheless, if the carrier accepts luggage without a luggage ticket having been delivered, or if the luggage ticket does not contain the particulars set out at (d), (f) and (h) above, the carrier shall not be entitled to avail himself of those provisions of the Convention which exclude or limit his liability.

The limitations of liability were provided for in Art. 22 of the Convention. Liability for each passenger was, in the absence of any special contract with the carrier, fixed at a maximum of 125,000 francs and for loss of baggage at 250 francs per kilogram.

The appellant advanced two claims—one based upon the death of her husband and the other upon the loss of his baggage. The carrier, while admitting liability, contended that its liability was limited in accordance with the terms of the Convention. Two questions thus arose for determination:

(1) Did the limitation of liability of the Warsaw Convention apply to the claim based on the death of her husband? and

(2) Did the limitation of the Convention apply to the claim for loss of baggage?

The actual ticket issued to the deceased was destroyed in the crash. For evidentiary purposes, Exhibit P-2 was introduced at trial. The agreed statement of facts provided in paragraph 7:

7. THAT BOAC Passenger Ticket and Baggage Check No. 0614-0000-0000, marked “Specimen Ticket”, pro-

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duced herewith as Exhibit P-2, and to avail as though herein full reproduced, is identical as to cover, size and number of pages as well as printed material and size of print as the BOAC airline ticket that had been issued to the late Gerard T. Hodge and used by him at the times and in respect to the flights referred to above.

References to the ticket in this judgment are references to Exhibit P-2.

Immediately below where the name of the deceased appeared on each of the flight coupons, or pages of the ticket, reference was made to the Convention in the following terms in 4½ point type:

If the passenger’s journey involves an ultimate destination or stop in a country other than the country of departure the Warsaw Convention may be applicable and the Convention covers and in most cases limits the liability of carrier for death or personal injury and in receipt of loss of or damage to baggage.

On each flight coupon appeared the words “issued by British Overseas Airways Corporation subject to conditions of contract inside the front cover”. The words “issued by” and the words referring to the conditions of contract were in type somewhat larger than 4½ point but smaller than the type used for “British Overseas Airways Corporation”. The conditions of contract were in 4½ point type and paragraph 2(a); as far as it is relevant for these purposes, was in the following terms:

2. (a) Carriage hereunder is subject to the rules and limitations relating to liability established by the Convention unless such carriage is not international carriage as defined by the Convention.

Inside the back cover of the ticket, in type somewhat larger than 4½ point, appeared the following words:

Liability of carrier in respect of baggage and other personal property is limited in respect of its declared value which shall not exceed $16.50 (U.S. currency) or its equivalent per kilogram for checked baggage and $330.00 (U.S. currency) or its equivalent per passenger for unchecked baggage, unless a higher valuation is declared in advance and additional charges are paid pursuant to carrier’s tariffs.

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Upon an agreed statement of facts, the essentials of which have been recited above, the parties, pursuant to art. 448 of the C.C.P., submitted a question of law with a joint factum in these terms:

Question of Law

THAT this submission relates and applies solely and exclusively to the question of law as to whether, based upon the facts hereinabove set forth and the contents of the Exhibits forming part of the said facts, the Defendant is entitled to avail itself of those provisions of the First Schedule to the Canadian and U.K. Carriage by Air Acts (Warsaw Convention) referred to above, which limit the liability of Defendant towards Plaintiff for damages claimed by the latter as a result of the crash of Defendant’s aircraft at Tokyo International Airport, Tokyo, Japan, on March 4th, 1966.

To understand the judgments in the Superior Court and the Court of Appeal, it may be helpful to explain the differing views which have been expressed on the construction of Art. 3 of the Convention. American courts, dissatisfied with the harsh provisions of the Convention on the question of limitation of liability, have construed Art. 3(2) to require not only the delivery of a ticket but of one which, in accordance with Art. 3(1), contains in legible form a statement that the carriage is subject to the rules relating to liability established by the Convention. They have also held that delivery must allow reasonable time for examination. They have considered that delivery of a ticket not meeting such conditions amounts to no delivery and therefore the provisions of Art. 3(2), depriving the carrier of the benefit of the limitation where a passenger is accepted without a ticket, would apply. Several American cases are conveniently collected and discussed by Georgette Miller in her book Liability in International Air Transport at pp. 82 to 85. They include Lisi v. Alitalia[2], Warren v. Flying Tiger Line[3], Mertens v. Flying Tiger Line[4].

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Another view which appears to have been accepted in most jurisdictions outside of the United States is that Art. 3 fails to provide any sanction for its breach except in a case where a passenger has been accepted with no ticket. Therefore a ticket bearing an illegible statement or no statement at all would not result in a loss of the limitation to the carrier.

The trial judge dealt with the formal question of law by answering the two questions set out earlier. He answered the first question dealing with the death claim “yes” thus according the limitation to the carrier. In this, it is clear that he did not apply the American test. He read Art. 3 literally and adopted the view that no sanction could be applied where a ticket was delivered. He answered question 2 dealing with the baggage claim “no” thus denying the carrier the benefit of the limitation essentially for the reason that Art. 4, unlike Art. 3, contained a sanction for its breach and anything printed on the ticket purporting to be in compliance with Art. 4 was so illegible as to amount to non-compliance.

The appellant appealed against the holding that the carrier was entitled to the benefit of the limitation of liability on the death claim. The carrier, by incidental appeal, sought a reversal of the holding that it was not entitled to the benefit of the limitation on the baggage claim.

The Court of Appeal, while rejecting the trial judge’s view that Art. 3 contains no sanction for compliance, dismissed the death claim. Casey J.A. said:

This reasoning is not acceptable. The limitation contemplated by the Convention must be earned: the carrier must deliver a ticket which satisfies the mandatory requirements of 3(1) which article is in effect, a definition. If the ticket delivered does not satisfy these requirements it is not a ticket within the meaning of that article and the sanction of Art. 3(2) will apply

However appellant has two other hurdles; she must establish either that the ticket does not contain

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a statement that the carriage is subject to the rules relating to liability established by this Convention

or that the statement, if there is one, is not legible.

He then went on to hold that the words printed on the ticket were legible and sufficient in content to satisfy the requirements of the Convention and he dismissed the appeal. For the same reason, he allowed the incidental appeal holding, in the result, that the carrier was entitled to the limitation of liability provided by the Convention on both death and baggage claims. In this he applied the American test.

In my opinion, the words of Art. 3(2) are plain and can admit of no misunderstanding. The absence, irregularity, or loss of a passenger ticket will not affect the existence or the validity of the contract of carriage. The benefit of the limitation will be lost only where no ticket is delivered. The American cases referred to above which hold that delivery of a ticket with an irregularity, that is, a statement as required by Art. 1(e) which is illegible, amounts to no delivery of a ticket, ignore this plain language and fail to give effect to a precise statement of the law. I am unable, however harsh and unreasonable I may consider the limitation, to adopt the American test. It is clear in this case that the carrier delivered a ticket and thus preserved its right to the limitation. For these reasons, it is my opinion that the trial judge correctly answered question 1 and in so doing he properly construed Art. 3. In view of the fact that the Court of Appeal reached, though for different reasons, the same conclusion, I would dismiss the appeal in respect of question 1.

As to the second question, the trial judge recognized that, unlike Art. 3, Art. 4, which governed baggage claims, did provide a sanction. Because, in, his opinion, the print was illegible on the ticket, he considered it did not contain the particulars set out in paras. (d),(f) and (h) of Art. 4(1). He therefore applied the sanction and denied the limitation to the carrier.

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Casey J.A., in the Court of Appeal, reversed this finding and I find myself in agreement with him on this question. An examination of the ticket satisfies me that the print was of such type and arrangement as to be legible by the ordinary person using ordinary diligence and the content of the ticket was adequate to meet the requirements of the Convention. I consider the ticket complied with Art. 4 and, therefore, would dismiss the appeal on question 2 and accord the limitation to the carrier.

In argument in this Court, the case of Montreal Trust Company and Stampleman v. Canadian Pacific Airlines Limited[5] was fully discussed. Counsel for the appellant argued that it should lead to an allowance of this appeal. In my view, however, the Stampleman case does not afford assistance to the appellant. It arose out of the same crash as did the case at bar. The deceased, Stampleman, had purchased an Air Canada ticket in Canada and his trip began and was to end in Canada. The present respondent was a successive carrier to Air Canada on that portion of the trip from Hong Kong to Tokyo where he perished. In that case, the Warsaw Convention, as modified by the Hague Protocol, governed the question because Canada had become a party to the Protocol through the enactment of An Act to Amend the Carriage by Air Act, 1963 (Can.), c. 33. The same question arose in each of the Stampleman and Ludecke cases but different provisions must govern the answer.

Article 3 of the Hague Protocol provides:

ARTICLE 3

(1) In respect of the carriage of passenger a ticket shall be delivered containing:

…

(c) a notice to the effect that, if the passenger’s journey involves an ultimate destination or stop in a country other than the country of departure, the Warsaw Convention may be applicable and that the Convention governs and in most cases limits the liability of carriers for death or personal injury and in respect of loss of or damage to baggage.

(2) The passenger ticket shall constitute prima facie evidence of the Conclusion and conditions of the con-

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tract of carriage. The absence, irregularity or loss of the passenger ticket does not affect the existence or the validity of the contract of carriage which shall, none the less, be subject to the rules of this Convention. Nevertheless, if, with the consent of the carrier, the passenger embarks without a passenger ticket having been delivered, or if the ticket does not include the notice required by paragraph (c) of this article, the carrier shall not be entitled to avail himself of the provisions of Article 22.

It will be seen that a Notice is required in place of a Statement and failure to comply will deprive the carrier of the benefit of the limitation under Art. 22. Article 4 also uses the word “Notice” instead of “Statement”.

Ritchie J., speaking for the majority of this Court, said at p. 802:

… In relation to a claim for loss of life, Art. 3(1) of the Convention, as I have said, merely required “a statement” and furthermore under that Article the absence of that “statement” did not preclude the carrier from limiting its liability provided that the ticket was “delivered”. The amended Article as contained in the Protocol not only requires a “notice” but the absence of such “notice” denies the carrier the benefit of Art. 22. The “notice” required by the Protocol and the statement required by the Convention are therefore two completely different requirements with radically different effect and with the greatest respect I think that the Court of Appeal erred in applying the reasoning which had been used in the Ludecke case in interpreting the Convention to the interpretation of the Protocol in the present case.

I am of the opinion that with these words he effectively distinguished between the two cases. Whether a different result would have followed in the case at bar if the Hague Protocol had been the governing statutory provision does not arise in this case.

I would dismiss the appeal. In the circumstances of this case, I would direct that the parties pay their own costs.

Appeal dismissed.

Solicitor for the appellant: David M. Lack, Montreal.

Solicitors for the respondent: Ogilvy, Montgomery, Renault, Clarke, Kirkpatrick, Hannon & Howard, Montreal.