Montreal Trust Co. et al. v. Canadian Pacific Airlines Ltd., [1977] 2 SCR 793

Supreme Court of Canada

Montreal Trust Co. et al. v. Canadian Pacific Airlines Ltd., [1977] 2 S.C.R. 793

Date: 1976-12-20

Montreal Trust Company, Robert Jack Stampleman and Arthur Howard Stampleman ès qual, et al. (Plaintiffs) Appellants;

and

Canadian Pacific Airlines Ltd. (Defendant) Respondent,

and

Dora Eileen Hallam et al. Intervenants.

1976: June 10 and 11; 1976: December 20.

Present: Laskin C.J. and Martland, Judson, Ritchie, Spence, Pigeon and Dickson JJ.

ON APPEAL FROM THE COURT OF APPEAL FOR QUEBEC

Air law—Death of a passenger and loss of baggage—Clause limiting the liability of the carrier—Notice not in accordance with the requirements of the Hague Protocol—Carriage by Air Act, R.S.C. 1970, c. C-14, Schedule I (Warsaw Convention), Arts. 3 and 4 and Schedule III (Hague Protocol), Arts. 3(l)(c), 3(2), 4(1)(c) and 22.

As a result of the death of Joseph Irving Stampleman and the loss or destruction of his baggage in the crash of a Canadian Pacific Airlines Limited aircraft at Tokyo International Airport, appellants, the executor and the two sons of Stampleman, had commenced an action for damages. The Hague Protocol is recognized as the document governing the rights and liabilities of the parties since the round trip began and ended in Canada. The Superior Court held that the carrier was not entitled to limit its liability in case of death or loss of baggage. The Court of Appeal reversed this judgment, concluding that the ticket contained the notice required by Arts. 3 and 4 of the Protocol and that this notice was reasonably readable and comprehensible. Appellants therefore submit to the Court the following question of law: was defendant entitled to avail itself of the provisions of Art. 22 of the Hague Protocol, which limits its liability in case of death or loss of baggage?

Held (Judson, Martland and Pigeon JJ. dissenting): The appeal should be allowed.

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Per Laskin C.J. and Ritchie, Spence and Dickson JJ.: The Court of Appeal was not justified in applying to the Hague Protocol the interpretation it had given to Arts. 3 and 4 of the Warsaw Convention in Ludecke v. Canadian Pacific Airlines Limited, [1974] C.A. 363. In so far as they concern the limitation of the carrier’s liability, the Hague amendments are notable. The Convention simply required that the ticket carry a “statement” regarding this subject, whereas the Protocol provides that such a statement should take the form of a “notice”. Moreover, in the absence of such a “notice” the carrier cannot avail himself of the limitation provisions in respect of either death or loss of baggage, whereas the Convention contained no such sanction in case of death except in the case of no passenger ticket having been delivered to the claimant.

The limitation on the liability of the carrier must be strictly construed and can only be invoked when the requirements of the law have been complied with. The Court of Appeal held in the Ludecke case that the requirement for a “statement” contained in Art. 3(2) of the Convention was met even if the statement was printed in four and a half point type and inconspicuously placed. When the amendments were made by the Hague Protocol, an entirely new Article was promulgated in which the carrier was required to print on the passenger ticket a “notice” the terms of which are expressly provided for. We are therefore dealing with two different requirements. The four and one half point type reproduction of the material required to be inscribed by Art. 3.(1)(c) of the Protocol is not a “notice” within the meaning of that Article. The carrier was accordingly not entitled to avail itself of the provisions limiting its liability.

Per Judson, Martland and Pigeon JJ., dissenting: The Court of Appeal was justified in dismissing the action since the ticket complied with the requirements of the Warsaw Convention as amended by the Hague Protocol and the notice that it contained was reasonably legible and comprehensible.

Ludecke v. Canadian Pacific Airlines Limited, [1974] C.A. 363; 53 D.L.R. (3d) 636, distinguished; Mertens v. Flying Tiger Line Inc. (1965), 341 Fed. Rep. (2d) 851; Lisi v. Alitalia‑Linee Aeree Italiene (1966), 370 Fed. Rep. (2d) 508, referred to.

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APPEAL from a judgment of the Court of Appeal of Quebec reversing the judgment of Challies J. of the Superior Court. Appeal allowed.

Peter Lack, for the appellants.

W.S. Tyndaken, Q.C., and Alastair Paterson, Q.C., for the respondent.

D.H. Jack, for the intervenor Dora Hallam.

The judgment of Laskin C.J. and Ritchie, Spence and Dickson JJ. was delivered by

RITCHIE J.—This is an appeal from a judgment of the Court of Appeal of the Province of Quebec allowing an appeal from the judgment rendered at trial by Challies A.C.J., and declaring that Canadian Pacific Airlines Limited was entitled to limit its liability in accordance with the provisions of Art. 22 of the First Schedule of the Act to Amend the Carriage by Air Act (The Hague Protocol), 1963 (Can.) c. 33 with respect both to the death of the late Irving Joseph Stampleman and to the loss of his baggage as a result of the crash of one of the respondent’s aircraft at Tokyo on March 4, 1966.

The appellants being the executor and the two surviving sons of the late Stampleman, commenced this action by writ of Summons and Declaration dated February 24, 1967 and submitted the following question of law for the decision of the Court in accordance with a joint statement of law and fact filed pursuant to art. 448 of the Code of Civil Procedure:

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 the provisions of Art. 22 of the First Schedule of the aforesaid “Act to amend the Carriage by Air Act” (the Hague Protocol) which limits the liability of the Defendant

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towards Plaintiffs as to the amount of damages payable by Defendant to Plaintiffs as a result of the death of Joseph Irving Stampleman in the crash of Defendant’s aircraft at Tokyo International Airport, Tokyo, Japan on March 4, 1966 and as a result of the loss or destruction of the registered baggage of the late Mr. Stampleman.

The rights and liabilities of the parties are governed by the Carriage by Air Act, R.S.C. 1970, c. C-14 which incorporates in the law of Canada the French text of the Warsaw Convention as amended at the Hague in 1955 (hereinafter referred to as “The Hague Protocol”).

At the time of the crash Joseph Stampleman was travelling under a ticket issued by Air Canada on its own behalf and on behalf of successive carriers including the respondent. The ticket served as both passenger ticket and baggage check and the contemplated voyage was from Montreal to Vancouver to Hong Kong to Tokyo and return to Montreal. At the relevant time Canada, unlike the United Kingdom and Japan, was one of the high contracting parties to the Hague Protocol and it is the fact that the round trip began and ended in Canada which makes that the governing document.

The air ticket and baggage check in question are attached as exhibits to the agreed statement of facts and their contents are well summarized in the reasons for judgment of Mr. Justice Challies where he says:

The ticket and baggage check Exhibits P-1 and P-2 (ticket No. 014491120008) issued to the deceased by Air Canada contains near the top “Subject to conditions of contract on page 2” which is readable with the naked eye and also in four and a half point type across the bottom the following reference to the Warsaw Convention: ‘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 governs and in most cases limits the liability of carriers for death or personal injury and in

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respect of loss of or damage to baggage’.

Less than a month before rendering judgment in the present case (i.e. December 31, 1971) Challies A.C.J., had decided the case of Ludecke v. Canadian Pacific Airlines Limited, S.C.M. 746 832, in the Superior Court. That case arose out of the death of a passenger in the same air crash as Stampleman and the agreed question of law there posed under art. 448 C.C.P. was similar in all respects to the question here at issue except that in the case of Ludecke it related to the defendant’s right to limit its liability in accordance with the provisions of the Warsaw Convention whereas the present question is directed to the rights under the Hague Protocol amending that Convention.

In the Ludecke case Challies A.C.J. held that the statement in the air ticket in question that “carriage is subject to the rules and limitation in relation to liability established by the Convention” printed as it was in four and a half point type was not a “Statement” as required by Art. 4 of the Convention and that the carrier was therefore not entitled to limit its liability as to baggage but that it was covered by the limitation provision with respect to the limitation provision for loss of life because of the wording of Art. 3 of the Convention.

In the same case, Casey J.A., speaking for the Court of Appeal[1], found that the “statements” in four and a half point type in the ticket were reasonably readable and constituted compliance with the requirements of Arts. 3 and 4 of the Convention so as to entitle the carrier to limit its liability as to any baggage claim and the claim for loss of life.

This judgment was not rendered until 23 December, 1974. In the meantime, (i.e. 31 Decem-

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ber 1971) Challies C.J.A., rendered a judgment for the Superior Court in the present case in which he recognized the difference in wording between Arts. 3 and 4 of the Convention which governed the Ludecke case and those articles as they had been amended by the Hague Protocol which governed here, but nevertheless stated that “for the reasons given by the undersigned in Ludecke v. C.P.A.”, the carrier was not entitled to limit its liability as to either loss of life or loss of baggage.

In reversing this judgment, Casey J.A. speaking on behalf of the Court of Appeal, concluded by saying of the Hague Protocol:

There are only two questions involved—did the ticket include the notice required by articles 3.1(c) and 4.1(c) and was this notice reasonably legible and comprehensible. As in the case of Ludecke my answer to both questions is yes and for this reason I would maintain this appeal.

In my view the answer to the question raised by this appeal must depend upon whether or not the Court of Appeal was justified in relying upon its own interpretation of Art. 3 and 4 of the Convention in deciding a case which is governed by the same articles as amended by the Hague Protocol. The determination of this issue requires a consideration of the terms of these articles which provide:

WARSAW CONVENTION	HAGUE PROTOCOL
Article 3		Article 3
(1) For the carriage of passengers the carrier must deliver a passenger ticket which shall contain the following particulars:		(1) In respect of the carriage of passengers a ticket shall be delivered containing: …
(e) a statement that the carriage is subject to the rules relating to liability established by this Convention.		(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

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(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 his liability. Article 4 (1) For the carriage of baggage, other than small personal objects of which the passenger takes charge himself, the carrier must deliver a baggage check. … (3) The baggage check shall contain the following particulars: … (h) a statement that the carriage is subject to the rules relating to liability established by this Convention.

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 contract 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.

(4) The absence, irregularity or loss of the baggage does not affect the existence or the validity of the contract of carriage, which shall nonetheless be subject to the rules of the Convention. Nevertheless if the carrier accepts baggage without a baggage check having been delivered, or if the check does not contain the particulars set out in … and (h) above, the carrier shall not be entitled to avail itself

Article 4 (the relevant portions of which read): (1) In respect of the carriage of registered baggage, a baggage check shall be delivered, which, unless combined with or incorporated in a passenger ticket which complies with the provisions of Article 3, paragraph (1) shall contain:… (c) a notice to the effect that if the carriage involves an ultimate destination or

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of those provisions of the Convention which exclude or limit its liability.

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 in respect of loss of or damage to baggage.

(The underlined is my own).

The Hague amendments, insofar as they affect the present issue, are notable for the fact that (1) the Convention simply required the inclusion in the ticket of “a statement” relating to the limitation of the liability of the carrier as established by the Convention, whereas the amendment provided that such a statement should take the form of a “notice” and (2) that the amendment provided that in the absence of a “notice” the carrier is not entitled to avail himself of the limitation provisions in respect either of death or loss of baggage, whereas the Convention contains no such sanction with respect to claims for loss of life except in the case of no passenger ticket “having been delivered” to the claimant.

In holding that the company was not entitled to limit its liability for loss of the baggage in the Ludecke case, Challies A.C.J. relied heavily on a number of American authorities to the effect that the “statement” in the ticket required by the Convention must be in such form as to afford the passenger “a reasonable opportunity to take self-protective” measures to compensate himself for the limitation on his rights which Art. 22 creates in favour of the carrier.

The cases of Mertens v. Flying Tiger Line Inc.[2], and Lisi v. Alitalia-Linee Aeree Italiene[3] are cited with approval by Mr. Justice Challies. In the latter case, McMahon D.J., speaking of a ticket containing the required “statement” in the same print as that in the present case, described it as “virtually

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invisible” and also as “diminutively sized and unemphasized by bold face type, contrasting colour, or anything else”.

In allowing the appeal in the Ludecke case, Casey J.A., declined to follow the American authorities, saying:

What I cannot concede is that we must accept the decisions cited by Appellant as establishing the standards by which the legibility of this ‘statement’ must be judged. My view is that on this matter of fact the Convention should contain its own criteria. Since it doesn’t I see no reason why we should treat this case differently from the others that come before this Court. Proceeding from this premise and having examined the relevant documents I conclude that the Carrier did print these ‘statements’ in reasonably readable type.

I think it must be understood that limitation on the liability of the carrier created by Art. 22 of the Convention in both its original and its amended form constitutes an encroachment on the rights of the individual passenger and as such it is to be strictly construed and can only be invoked when the requirements of the Article have been exactly complied with.

The effect of Art. 3(2) of the Convention was to empower carriers to limit their liability to passengers by the simple process of delivering a ticket containing a “statement that the carriage is subject to the rules relating to liability established by the Convention” and the Court of Appeal has held in the Ludecke case that this requirement is met even when the “statement” is inconspicuously placed and in four and a half point type. When the amendments were made by the Hague Protocol of 1955, an entirely new Art. 3(2) was promulgated in which the requirement of a mere “statement” was deleted and the more elaborate provisions of the Protocol were substituted therefor. Under the amended Art. 3(1)(c), the carrier is not only required to insert a “notice” but the terms of the notice are expressly provided for.

I do not think it can be assumed that the draftsmen of the Hague Protocol made the extensive changes which they did in Art. 3 without

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weighing the words which they employed with some care and I cannot accept the suggestion that the substitution of the word “notice” for “statement” in Arts. 3 and 4 was meaningless or ineffective. The French text of the Protocol governs its construction in case of any doubt and it was argued that the word “avis” bears a somewhat stronger meaning than “notice”, but I do not need to base any conclusion on that argument as I am satisfied that both “a notice” or “un avis” mean at least something which is in a form calculated to attract attention.

As I have pointed out, Mr. Justice Casey in the course of his reasons for judgment in the Ludecke case, indicated his view “that on the matters of fact as to whether the ‘statement’ was sufficiently legible the Convention should contain its own criteria” and he considered that it did not do so. Had he been considering Art. 3(1)(c) of the Protocol, the learned judge might have reached a different conclusion as it appears to me that that Article does contain its own criteria, namely that the statement shall be in such form as to constitute a “notice”. Even if it were accepted that the four and one half point type in which the requisite notice is reproduced at the foot of the first page of the ticket is reasonably readable it cannot, in my view, be described as noticeable and it is not in a form which would attract the attention of the passenger in contradistinction to all the other material printed in the same type on the ticket. 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.

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As I have indicated, I am of opinion that the four and one half point type reproduction of the material required to be inscribed by Art. 3(1)(c) of the Protocol was not a “notice” within the meaning of the Article and accordingly the carrier is not entitled to avail itself of the provisions of Art. 22.

For all these reasons I would allow this appeal, set aside the judgment of the Court of Appeal and direct that the question here submitted for determination be answered in the negative and that the respondent is not entitled to avail itself of the provisions of Art. 22 of the First Schedule to the Hague Protocol so as to limit its liability to the appellants as to the amount of damages payable as a result of the death of the late Joseph Irving Stampleman at Tokyo International Airport on March 4th, 1966, and as a result of the loss or destruction of the registered baggage of the said Mr. Stampleman, the check for which was incorporated in his ticket.

The appellants will have their costs both here and in the Court of Appeal.

The judgment of Martland, Judson and Pigeon JJ. was delivered by

JUDSON J. (dissenting)—The Quebec Court of Appeal has stated the issues in this appeal in clear and simple terms. First, did the ticket which was issued to the deceased passenger comply with the requirements of the Warsaw Convention, as amended by the Hague Protocol, so as to limit the carrier’s liability? Second, was this notice reasonably legible and comprehensible? Their answer to both questions was “Yes” and they allowed the appeal and dismissed the action.

I agree entirely with their reasons for judgment and I would dismiss this appeal.

Appeal allowed with costs.

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

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Solicitors for the respondent: Ogilvy, Cope, Porteous, Hansard, Montgomery, Renault, Clarke & Kirkpatrick, Montreal.

Solicitors for the intervenant Dora Eileen Hallam: Fraser & Beatty, Toronto.