Executive Summary: Key Legal and Evidentiary Issues

• Air Passenger Rights appealed a British Columbia Supreme Court decision dismissing its judicial review of a Civil Resolution Tribunal ruling on flight-delay compensation.
   
• WestJet cancelled a flight to Rome after its pilots' union delivered a 72-hour strike notice, prompting a dispute over standardized compensation under the Air Passenger Protection Regulations.
   
• The chambers judge found the passengers' assignment of their claim to the Association invalid, ruled the Association lacked standing, and held the Civil Resolution Tribunal lacked jurisdiction over the claim.
   
• Central to the appeal was whether a strike notice, without an actual strike occurring, qualifies as a "labour disruption" beyond an airline's control.
   
• The Court of Appeal examined whether standardized compensation claims are assignable debts and whether the tribunal's small-claims jurisdiction over debt or damages extends to such claims.
   
• Ultimately, the panel had to decide whether the Canadian Transportation Agency holds exclusive jurisdiction over standardized compensation disputes, displacing the tribunal's authority.
   

Facts of the case

The Boyds purchased WestJet tickets to fly from Kelowna to Rome, with a stopover in Calgary, departing May 18, 2023 and scheduled to arrive in Rome on May 19. On May 15, "the Air Line Pilot's Associate (ALPA)" [as stated in the source document, likely a typographical error for "Air Line Pilots Association"] issued a 72-hour strike notice authorizing WestJet's pilots to strike beginning 3:00 a.m. MDT on May 19, and WestJet issued a corresponding lockout notice effective the same time. The union and WestJet reached a tentative agreement around 1:00 a.m. ET on May 19, averting the strike and lockout. The Boyds had already flown to Calgary when they were advised, the morning of May 18, that their onward flight to Rome had been cancelled. WestJet arranged alternate flights, and the Boyds arrived in Rome on May 20, more than 24 hours after their intended arrival. As a result of the delay, they incurred $92 for dinner and $185.25 for a hotel in Calgary.

The Boyds sought standardized compensation of $1,000 per passenger under the Air Passenger Protection Regulations, plus reimbursement of their $277.25 in out-of-pocket expenses, through the Civil Resolution Tribunal ("CRT"). WestJet maintained the flight was cancelled due to a labour disruption outside its control. A tribunal member dismissed the standardized compensation claim, agreeing that the strike notice constituted a "labour disruption," but allowed the out-of-pocket expense claim, awarding $277.25 plus $15.78 in pre-judgment interest and $62.50 representing half the Boyds' CRT fees.

Following the CRT decision, the Boyds assigned their entire claim, including the right to seek judicial review, to Air Passenger Rights (the "Association"), an advocacy group for air travellers. The Association petitioned the Supreme Court of British Columbia for judicial review of the CRT's dismissal of the standardized compensation claim. The chambers judge dismissed the petition, concluding that the assignment was invalid, that the Association lacked standing, and that the CRT itself had lacked jurisdiction to decide the standardized compensation claim because such claims fell within the exclusive jurisdiction of the Canadian Transportation Agency ("CTA"). The judge went on to quash the CRT's decision on that jurisdictional basis, without addressing the merits of whether the strike notice actually amounted to a labour disruption.

Policy and legislative provisions at issue

The dispute turned on several interlocking provisions. Section 10(1)(j) of the Air Passenger Protection Regulations lists "a labour disruption within the carrier or within an essential service provider" as a situation outside a carrier's control, relieving the carrier of the obligation to pay standardized compensation. Section 19(1)(a) sets fixed compensation amounts for large carriers such as WestJet, ranging from $400 to $1,000 depending on delay length, payable only where the disruption was within the carrier's control. Section 118(1)(a) of the Civil Resolution Tribunal Act gives the CRT jurisdiction over small claims for "debt or damages," a category the Association argued encompassed the Boyds' claim; alternatively, the Association invoked section 118(1)(c), covering claims for "specific performance of an agreement relating to personal property or services."

Section 36(1) of the Law and Equity Act, which permits assignment of a "debt or other legal chose in action" on written notice to the debtor, was central to the assignment issue, as was the common law rule against maintenance and champerty discussed in Fredrickson v. I.C.B.C. On the jurisdictional ouster question, the panel applied the three-factor framework from Pleau v. Canada (Attorney General), considering the dispute-resolution process set out in the Canada Transportation Act, the essential character of the dispute, and the CTA scheme's capacity to provide effective redress. The Montreal Convention's exclusivity principle, and the Supreme Court of Canada's treatment of standardized compensation as a statutory entitlement rather than "damages" in International Air Transport Association v. Canada (Transportation Agency), also framed the analysis.

Reasoning and analysis

Writing for the Court of Appeal, Justice Riley found that the chambers judge erred on each of the three preliminary grounds for dismissal. On assignment, the Court held that the Boyds' claim — whether characterized as debt, contractual damages, or specific performance of an obligation to pay — was a liquidated claim arising from an executed contract, transferable under section 36(1) of the Law and Equity Act, and did not savour of maintenance or champerty given the Association's pre-existing involvement in supporting the Boyds' claim. On standing, the Court reasoned that the assignment itself gave the Association a direct interest sufficient to pursue judicial review, since an assignee of a chose in action must bring enforcement proceedings in its own name.

On jurisdiction, the Court first found it procedurally unfair for the judge to decide the CRT's jurisdiction without inviting further submissions, since both parties had told her at the hearing that jurisdiction was not in dispute. Turning to the substantive question, the Court agreed with the CRT's own post-IATA reasoning in Reshaur v. WestJet Airlines Ltd. and Pansegrau v. Air Canada that a passenger's claim for standardized compensation, grounded in terms incorporated into a carrier's international tariff, is a claim in contract that qualifies as a "debt" within section 118(1)(a) of the CRT Act, adopting a broad definition of "debt" consistent with the CRT's mandate to resolve claims informally and inexpensively. Applying the Pleau factors, the Court also concluded that nothing in the Canada Transportation Act or the Passenger Regulations evinced a clear legislative intent to give the CTA exclusive jurisdiction over such claims, noting the absence of a privative clause and the practical inefficiency of forcing passengers to pursue standardized compensation and out-of-pocket damages in separate forums.

On the merits, the Court disagreed with the Association's position that a strike notice, absent an actual strike, cannot constitute a "labour disruption" under section 10(1)(j). Relying on the ordinary meaning of "disruption" and the legal significance of a 72-hour strike notice under the Canada Labour Code as the final step before a lawful strike, the Court held that delivery of such a notice can qualify as a labour disruption where it materially intrudes on a carrier's labour supply. Because the Boyds' flight was scheduled to be airborne when the notice period expired, and WestJet had no control over whether the union would act on it, the Court found the necessary causal link between the labour disruption and the cancellation was established.

Ruling and overall outcome

The Court of Appeal for British Columbia allowed the appeal in part. It found that the chambers judge erred in ruling the assignment invalid, in finding the Association lacked standing, and in concluding the CRT lacked jurisdiction over the standardized compensation claim; the order quashing the CRT's decision on jurisdictional grounds was set aside. However, the Court agreed with the CRT's ultimate conclusion that the Boyds' flight cancellation was due to a "labour disruption" within the meaning of the Passenger Regulations, meaning WestJet was not required to pay standardized compensation. The Court therefore affirmed the judge's order dismissing the petition for judicial review, though on different reasoning than the judge had applied. The Association's application to strike portions of WestJet's factum, and its post-hearing application to file fresh evidence regarding a later strike notice involving WestJet's flight attendants, were both dismissed. The CRT's earlier award to the Boyds of $277.25 in out-of-pocket expenses, $15.78 in pre-judgment interest, and $62.50 in CRT fee reimbursement was not disturbed by the appeal; the $2,000 standardized compensation claim ($1,000 per passenger) remained denied.