Executive Summary: Key Legal and Evidentiary Issues

• Allocation of responsibility between Lufthansa and its affiliate Swiss for performance of a consumer contract of air transport and application of Quebec consumer protection law
• Interpretation of Swiss’s Conditions of Carriage clause 3.3.1 on coupon sequence and fare recalculation, including ambiguity and how it is resolved in favour of the consumer
• Scope of the air carrier’s duty of information and good-faith performance, particularly the obligation to proactively inform the passenger of cancellation and revised fare after a missed segment
• Causation and proof of loss, including whether a lost opportunity to obtain a cheaper return fare constitutes a compensable “perte de chance”
• Assessment and limits of compensable non-pecuniary damages (stress, inconvenience) in the context of an international flight and last-minute cancellation
• Applicability (and non-application) of the Montreal Convention to purely contractual information failures and non-material harm not tied to bodily injury, baggage loss or delay

Facts of the case

In January 2022, Pascale Malo purchased a discounted, non-refundable round-trip ticket from Montreal to Lisbon on Lufthansa’s website, priced at $321.35. The outbound flight to Lisbon was operated by Swiss International Air Lines, an affiliate of Lufthansa, with a stopover in Zurich, while Lufthansa was responsible for the return leg from Lisbon to Montreal via Frankfurt. Before paying online, Malo accepted the respective conditions of carriage of both Swiss and Lufthansa. During the outbound journey on 6 April 2022, Malo had a four-hour layover in Zurich. She left the airport to visit the city, returned too late, and missed her connecting Swiss flight to Lisbon. She later consulted the Swiss General Conditions of Carriage and understood from them that, because segments had not been flown in sequence, the fare would have to be recalculated and that she would be informed of the new fare for the return portion of the trip, which she expected to pay as an additional amount. Malo received no communication from Lufthansa before her scheduled return date. On the day of her return, she presented herself at the Lufthansa counter in Lisbon and was informed that her Lisbon–Montreal return flight had been cancelled after she failed to take the Zurich–Lisbon segment. Relying on clause 3.3 of the Swiss Conditions, Lufthansa treated the ticket as no longer valid for the original itinerary. Lufthansa offered Malo a seat on the originally planned Lufthansa return flight, but only at a new price of 616 euros. Malo refused this option and instead purchased a ticket with United Airlines, with a connection in the United States, for 473 euros plus fees, totalling $883.50. She later described additional inconvenience arising from having to transit through the U.S. during Covid-19, including restrictive public health measures. Malo then brought a small-claims action in the Civil Division, Small Claims Division, of the Quebec Court against Lufthansa. She claimed $3,000 in compensatory damages, arguing mainly that Lufthansa failed to inform her that her return flight had been cancelled and failed to provide timely information about the recalculated fare and revised itinerary. Lufthansa argued it had complied with its obligations and relied on Swiss’s Conditions, especially clause 3.3 on the order and use of coupons, to justify cancellation of the return flight.

Contractual and consumer protection framework

The court characterised the arrangement as a contract of carriage under the Civil Code of Québec, but also one that is subject to Quebec’s consumer protection legislation because Malo, as a consumer, purchased an air transport service from a professional merchant. Lufthansa was held responsible for the full performance of the contract, even though some segments were operated by Swiss as an affiliate. In other words, Lufthansa could not avoid contractual responsibility toward Malo by pointing to Swiss’s operational role. The judge relied on provisions of the Loi sur la protection du consommateur (L.p.c.) and on Civil Code rules governing contracts of service and obligations, noting that a distance contract required clear, intelligible disclosure of significant restrictions and conditions. Importantly, the court applied the consumer-law principle that any doubt or ambiguity in a contract must be interpreted in favour of the consumer. This interpretive approach became central in analysing the contested fare-recalculation clause and Lufthansa’s information duties.

Policy terms and clause 3.3.1 of Swiss Conditions

The key policy terms at issue were found in clause 3.3 (“Ordre et utilisation des coupons” / “Coupon sequence and use”) of Swiss’s General Conditions of Carriage, which formed part of the contract. Clause 3.3.1 provided that the ticket is valid only for the itinerary shown, from the departure point via any agreed stopovers to the final destination, and that the fare paid is based on the carrier’s tariff and is only valid if all flights are fully flown in the booked sequence. If segments are not flown in order, the fare is to be recalculated based on the actual routing, and the passenger must pay any difference between the amount already paid and the total applicable price for the new journey. The clause did not, however, specify when this recalculation and communication of the new fare must occur. Clause 3.3.2 provided that when a passenger wishes to change any aspect of transportation, the passenger must contact the carrier in advance, at which point the new fare will be calculated and the passenger may accept it or maintain the original itinerary. The judge contrasted these two provisions. For clause 3.3.2, the text explicitly required a positive act by the passenger to request changes. By comparison, clause 3.3.1 did not expressly require the passenger to contact the carrier after missing a segment; rather, it provided that the carrier would recalculate the fare based on the new routing. The omission of a clear timing requirement or an express obligation on the passenger created ambiguity. Malo’s understanding—that Lufthansa or Swiss would communicate the new fare and itinerary to her—was found reasonable in light of this wording, especially under the protective interpretive rules of consumer law. The judge further emphasised that, because this was a distance contract, Lufthansa bore a heightened duty to present such restrictions and conditions in an evident and intelligible way and to bring them expressly to the consumer’s attention. The absence of a clear timeframe for fare recalculation and notification was considered problematic.

Good faith, duty to inform and Lufthansa’s inaction

Beyond strict textual interpretation, the court anchored its reasoning in the overarching civil-law duty of good faith in the performance of contracts. Lufthansa was expected to execute the contract of carriage in good faith, which includes duties of loyalty, cooperation and information. The judge considered that Lufthansa, holding all relevant operational and pricing information, had a responsibility to act proactively after learning that Malo had missed the Zurich–Lisbon segment. At a minimum, Lufthansa should have informed Malo, as soon as reasonably possible, of the envisaged changes to her return journey and the revised fare so that she could assess her options calmly rather than at the last minute at the airport. Malo had legitimately placed her trust in the carrier to manage the consequences of the missed flight within the contract’s framework. By waiting until Malo showed up for check-in in Lisbon to tell her the original ticket had been cancelled and that the new price to return on Lufthansa would be 616 euros, Lufthansa created unnecessary shock, stress and time pressure. The court viewed this as a failure to act with due care and with the level of transparency owed to a consumer-passenger. The combination of contractual ambiguity in clause 3.3.1 and Lufthansa’s inaction in notifying Malo of the cancellation and recalculated fare constituted a contractual fault, opening the door to damages.

Causation, proof of loss and loss of chance

Malo sought primarily to recover the cost of the last-minute United Airlines ticket, totalling $883.50, asserting that she would not have incurred that expense had Lufthansa not cancelled her original return flight without notice and delayed communicating a new fare. The court first recognised that Malo’s own fault—missing the Zurich–Lisbon flight—meant that, under clause 3.3.1, she was always going to have to pay an additional amount for the return leg. Malo admitted she expected some extra cost. The question then became whether Lufthansa’s breach of its duty to inform caused her a financial loss beyond what she would in any event have had to pay. The judge held that the evidence did not establish, on a balance of probabilities, that Malo would have been able to secure a cheaper fare than the $883.50 United ticket if Lufthansa had informed her earlier. Her alleged financial loss was therefore hypothetical: she claimed to have been deprived of the chance to explore alternatives in advance and thereby reduce the cost of the return trip, but she could not prove that a lower price would in fact have been available or chosen. The court framed this as an alleged “perte de chance” (loss of chance) and recalled that such a loss is not compensable unless the lost chance is serious and real, not merely speculative. On the record, the lost chance remained conjectural. Accordingly, no pecuniary damages were awarded for the airfare itself. The court also refused to award any amounts for legal fees relating to the demand letter and preparation of the file, in the absence of abuse of process and specific proof of such fees, noting that counsel fees in this context are not recoverable as a general head of damages.

Assessment of non-pecuniary damages and rejection of Montreal Convention defence

Despite rejecting most of the claimed pecuniary damages, the court accepted that Malo suffered real non-pecuniary harm from Lufthansa’s fault. Learning, at the last minute at the airport, that her return flight was cancelled and that she would need to pay more than $1,000 for an alternative itinerary caused her a significant shock and stress. She had to make urgent arrangements “in catimini,” quickly compare alternatives and ultimately choose a different route through the United States, all under pressure. These immediate troubles and inconveniences were foreseeable at the time of contracting and were the direct and immediate consequence of Lufthansa’s contractual breach. The judge, however, declined to compensate several of the broader inconveniences Malo described, such as the inconvenience of transiting via the U.S. and the Covid-19–related restrictions imposed by American authorities. Those harms were considered indirect and, in any event, linked to a route she chose herself (the United Airlines itinerary), not to the option Lufthansa had offered. In line with Quebec civil law principles on causation and compensable damage, such indirect and self-selected consequences could not be recovered. Lufthansa argued that the Montreal Convention (the Convention for the Unification of Certain Rules for International Carriage by Air) barred recovery of “moral damages” or non-compensatory damages under Article 29. The judge rejected this defence. Both Canada and Portugal are parties to the Convention and, in principle, Malo’s international carriage fell within its scope. However, the court held that the specific harm at issue—non-pecuniary inconvenience caused by a failure to inform and by cancellation of a return flight following a missed segment—did not fall within the Convention’s exclusive heads of damage, which relate to death or bodily injury, loss or destruction of baggage, and delay of passengers or baggage. As a result, the claim was not governed or barred by the Convention’s liability limitations, and domestic contract and consumer law principles applied to the non-pecuniary loss.

Outcome and amount awarded

In light of the limited, but genuine, non-pecuniary harm suffered, and bearing in mind the need to avoid unjust enrichment, the court fixed a modest compensatory sum of $100 as a fair and reasonable award for Malo’s real, direct, non-pecuniary losses attributable to Lufthansa’s contractual fault. It expressly declined to award any additional sum for airfare, speculative loss of chance, or legal fees connected to the demand letter. The claim was therefore only partially successful. In addition to the $100, the court ordered Lufthansa to pay Malo judicial costs of $108, and granted legal interest at the statutory rate of 5% per year plus the additional indemnity under article 1619 of the Civil Code of Québec, running from 21 August 2022 (the day after the demand letter’s deadline expired) until full payment. Overall, the successful party was the plaintiff, Pascale Malo, who obtained a fixed monetary award totalling $208 in damages and costs, plus accruing legal interest and statutory additional indemnity that could not be expressed as a fixed amount at the time of judgment.