Question:

1) Explain the issue:

The issues are two:Was the flight from Nanaimo to Vancouver the subject of "international carriage" as that term is used in the schedule to the Carriage By Air Act, R.S.C. 1985, c. 26, which contains the articles of the Warsaw Convention, 1929, as amended by the Hague Protocol, 1955?If so, are insurance benefits to be taken into account in making a compensatory award under that Act?

CASE STUDY:

IN THE SUPREME COURT OF BRITISH COLUMBIA

BETWEEN:

(STEVEN HUXLEY, ANNE HUXLEY,)

JANET HUXLEY-FLINN, JEANE)

HUXLEY-SHAW, JAMES HUXLEY,)

JACQUELINE HUXLEY, AND JANET )REASONS FOR JUDGMENT

HUXLEY-FLINN IN HER CAPACITY )

AS ADMINISTRATRIX OF THE)

ESTATE OF EDGAR LEROY HUXLEY )OF THE HONOURABLE

)

PLAINTIFFS)

)MR. JUSTICE LOWRY

AND:)

)

AQUILA AIR LTD.)(IN CHAMBERS)

)

DEFENDANT)

Counsel for the Plaintiffs:J. Fiorante

S. Matthews

Counsel for the Defendant:R. Allen

D. Burns

Heard at Vancouver, B.C.:February 7, l995

1Edgar Huxley died in the crash of a commercial aircraft operated by Aquila Air Ltd. on a flight from Nanaimo to Vancouver where he was to board a United Airlines flight to St. Louis, Missouri.The plaintiffs, who are his children, seek compensatory awards against Aquila.They rely on provincial fatal accidents legislation which, if applicable, would not limit Aquila's liability and would preclude any consideration of insurance benefits received in respect of any compensation awarded.Aquila maintains that its liability is very substantially limited by the federal legislation governing liability in respect of international carriage and, it contends, that under that legislation, insurance benefits are to be deducted from any compensation that would otherwise be awarded.Aquila applies for a summary determination of this aspect of the action.

The Issues

2The issues are two:Was the flight from Nanaimo to Vancouver the subject of "international carriage" as that term is used in the schedule to theCarriage By Air Act, R.S.C. 1985, c. 26, which contains the articles of the Warsaw Convention, 1929, as amended by the Hague Protocol, 1955?If so, are insurance benefits to be taken into account in making a compensatory award under thatAct?

International Carriage

3The schedule to theActprovides that it applies to all international carriage which, for present purposes, is defined as meaning any carriage in which, "according to the agreement between the parties", the place of departure and the place of destination, regardless of any break in the carriage, are situated in two countries.Carriage which is to be performed by several air carriers is deemed to be "one undivided carriage if it has beenregarded by the parties as a single operation", whether it has been agreed upon under one or a series of contracts.

4Mr. Huxley held two tickets.The first, was written onCanadian Airlines ticket stock for two Aquila flights: Nanaimo - Vancouver and return seven days later.The second was a United Airlines round-trip ticket: Vancouver - Seattle - Denver - St. Louis, one day; St. Louis - Dallas three days later (on American Airlines); and Dallas - Seattle - Vancouver four days after that.There were then separate contracts of carriage with Aquila and United.The question of whether theActapplies becomes one of determining whether the carriage from Nanaimo to the American cities and back to Nanaimo was regarded by the parties as one single operation and was, accordingly, one undivided carriage.

The Operation

5Mr. Huxley booked his carriage through McFarlane Travel Ltd., the arrangements being made by Denise Munn.He first went to her office to arrange flights from Vancouver to St. Louis and Dallas.He was not then certain how he would travel to and from Vancouver.She booked the flights for him by telephone.The next day he called to say he had decided to fly to Vancouver on Aquila to support the local air carrier and she booked the Aquila flights by computer.Two days later Mr. Huxley called again to give Ms. Munn his credit card number.She then issued both tickets, as she was authorized by the airlines to do, and processed payment for each.The tickets were issued at the same time and Mr. Huxley picked them up shortly before he was to leave on his trip.

6Ms. Munn says she could not have used one ticket because the large American carriers do not handle billing for small Canadian carriers; two tickets were essential.However, tracking the language of the legislation precisely, she does say she regarded all of the flights as "a single operation" and she says it was her impression that Mr. Huxley regarded them in the same way.She does not say how she was able to form this impression except that he gave her no indication to the contrary.It is apparent that Mr. Huxley was travelling to Vancouver for no other purpose than to board the United flight which was to depart less than two hours after he arrived.

Discussion

7At the outset, the case is to be distinguished from those where the carriage has involved only one airline, and from those involving more than one carrier but where there has been only one ticket issued on the face of which it has been evident that the carriage was international.In this case it is common ground that Aquila knew nothing of the United carriage and United knew nothing about the Aquila carriage.

8The plaintiffs contend that it cannot be said that either Mr. Huxley or the two carriers considered the whole of the carriage to be a single operation.They say, specifically, that, without any knowledge, or any means of knowledge, about each others' contracts of carriage, Aquila and United could not possibly have regarded all of Mr. Huxley's carriage to be a single operation and that, unlessbothdid, it cannot be deemed to have been an undivided carriage.

9They rely onStratton (Stratton Estate) v. Trans-Canada Air Lines et al(1962),1962 CanLII 389 (BC CA),37 W.W.R. 577, a unanimous (five member bench) decision of the Court of Appeal of this province.There, as here, the passenger involved was killed on a domestic flight.It was held that the contract for that flight (Vancouver - Calgary return), which was on a separate ticket arranged by an agent but purchased by the passenger from the carrier directly, was not part of what was an interrupted international carriage (Los Angeles through many American cities to Vancouver and back to Los Angeles). It was rather a separate and distinct contract for domestic carriage.Four judgments were given.Davey J.A. (pp. 582-83) attached particular significance to the fact that the international carrier knew nothing of the domestic flight.

10The plaintiffs rely as well onIn Re Air Crash Disaster at Warsaw, Poland, on March 14,1980,748 F.2d 94(1984), a decision of the Court of Appeals, Second Circuit.There it was held that carriage of members of a boxing team from various American cities to New York, to connect with the subject overseas flight (New York - Warsaw) was not part of the international carriage such that the overseas carrier could not rely on the terms of carriage printed on the domestic tickets to take the protection of the Convention when the terms printed on its own ticket stock were inadequate for that purpose.The domestic and the international tickets were issued separately, although they were arranged and purchased through the same travel agent, said to have been the agent of the passengers.It did not issue the tickets; the carriers did.The domestic tickets were issued to each member of the team by the airline involved at the place where his carriage began.The international tickets were issued in a block by the overseas carrier and picked up by the agent's representative in New York.The court relied, in part, on the fact that the domestic carriers did not know about the overseas carriage and the overseas carrier did not know about the domestic carriage.It said, in effect (pp. 96-97), that, a finding of an undivided contract requires thatallof the carriers as well as the passenger involved regard the carriage to be one operation and that, without the requisite knowledge, none of the carriers could have considered it in that way.

11There is, then, in both cases support for the plaintiffs' contention, but both are distinguishable in one respect.Unlike Mr. Huxley's tickets, the tickets in those cases were not issued by an agent but by the carriers directly.

12Aquila advances a two-fold argument.It first says that the carriers' knowledge need not be considered at all; it is enough if the passenger alone regarded the carriage as a single operation as, it says, Mr. Huxley must have done.It relies solely onStratis v. Eastern Air Lines Inc.,682 F. 2d 406(1982), also a decision of the Court of Appeals for the Second Circuit.There it was held that, even though two tickets had been purchased, and the second had not been issued, the carriage of a passenger who was injured on a domestic flight (New Orleans - New York) while travelling to connect with an overseas flight (New York - Athens), was international carriage.The passenger contended that because he had not received the ticket which was to be issued for the overseas flight, the domestic flight could not be part of an international carriage.But it was decided that, because he knew that for immigration purposes he was required to travel on the overseas flight, the fact that he had not received the ticket did not render the entire carriage divided.

13However, the case does not assist Aquila.It contains no statement that the carriers' knowledge is irrelevant; that was simply not considered.The focus of the decision is on whether the ticket delivery requirements of the Convention were satisfied.The decision was specifically limited to its facts (p. 414) and the same court has twice recognized that it does not stand for the proposition for which it is cited by Aquila:In re Air Crash Disaster at Warsaw, supra, andLemly v. Trans World Airlines, Inc.20 Avi. 17,520 (1986).On the plain meaning of the words "regarded by the parties", Aquila's first argument is without merit.

14Aquila then says that, if the carriers' knowledge of the whole carriage from Nanaimo to the American cities and back to Nanaimo is essential to the parties having regarded such as a single operation, the requirement was fulfilled by the fact that both tickets were issued by the carriers' agent, McFarlane Travel.Aquila says that Ms. Munn knew about both the United and the Aquila contracts and it follows that because she was acting as the agent of both carriers her knowledge is to be imputed to them.While they had no actual knowledge of each other's contracts of carriage, they had constructive knowledge; Ms. Munn's knowledge was their knowledge.Aquila would say that, if Mr. Huxley had purchased his return ticket to Vancouver directly from the carrier or through another agent, it would not have been a part of the international carriage but, because Ms. Munn issued both tickets, it was.

15However, no authority is cited to support this proposition except perhapsFriesen v. Air Canada and British Airways(1981),30 A.R. 527 (Q.B.), a single ticket case where it was accepted a travel agent was acting as the agent of the two airlines involved when it issued tickets for them.No issue of constructive knowledge arose.Imputed knowledge is a function of the scope of an agency.Lord Halsbury's statement on this aspect of the law of agency inBlackburn, Low & Co. v. Thomas Vigors(1887),12 A.C. 531at 537,a marine insurance case, is, in my view, particularly germane:

Some agents so far represent the principal that in all respects their acts and intentions and their knowledge may truly be said to be the acts, intentions, and knowledge of the principal.Other agents may have so limited and narrow an authority both in fact and in the common understanding of their form of employment that it would be quite inaccurate to say that such an agent's knowledge or intentions are the knowledge or intentions of his principal; and whether his acts are the acts of his principal depends upon the specific authority he has received.

...

Where the employment of the agent is such that in respect of the particular matter in question he really does represent the principal, the formula that the knowledge of the agent is his knowledge is I think correct, but it is obvious that the formula can only be applied when the words "agent" and "principal" are limited in their application.

To lay down as an abstract proposition of law that every agent, no matter how limited the scope of his agency, would bind every principal even by his acts, is obviously and upon the face of it absurd; and yet it is by the fallacious use of the word "agent" that plausibility is given to reasoning which requires the assumption of some such proposition.

16Here, McFarlane Travel was acting primarily as Mr. Huxley's agent in making arrangements for him to get to St. Louis and Dallas.The extent of its agency for each carrier was limited to issuing tickets and processing payment for that carrier.It was certainly not a general agent for either.Its authority was very limited indeed.There is, on the evidence, nothing to suggest that McFarlane Travel was required or expected to provide United with any information beyond the details of the sales and issuance of its tickets.The scope of the United agency did not include the provision of information concerning a passenger's other travel arrangements whether related or not to the sale of a United ticket.Ms. Munn's knowledge of the Aquila carriage, and her perception of there being a single operation, cannot be imputed to United.And, for the same reasons, her knowledge of the United carriage cannot be imputed to Aquila.

17No case based on constructive knowledge attributable to either carrier has been made out.It cannot be said that either regarded Mr. Huxley's carriage from Nanaimo to the American cities and back to Nanaimo as a single operation because neither knew, nor had the means of knowing, that there were two tickets containing separate contracts of carriage.It may, of course, have been a much different case had both contracts been written and evident on one ticket, or book of tickets, that Mr. Huxley would have been expected to present when boarding each carrier's flights.

Conclusion

18I conclude that while, as indicated, this case is to some extent distinguishable from bothStrattonandIn re Air Crash Disaster at Warsawupon which the plaintiffs' rely, the distinction is not, for present purposes, material.Where, as here, two tickets containing completely separate and distinct contracts of carriage have been issued, the carriers cannot be said to have regarded the carriage as a single operation merely because both tickets were issued by the same travel agent.It follows that Mr. Huxley's contract with Aquila for carriage (Nanaimo - Vancouver return) was not part of an international carriage and was not governed by theCarriage By Air Act.

19This conclusion renders my addressing the second issue raised on this application unnecessary.

Disposition

20There will be a declaration that any liability Aquila may have to the plaintiffs is not limited by theCarriage By Air Act.

21The plaintiffs will be entitled to their costs of the application in any event of the cause.

"Lowry, J."

February 17, l995

Vancouver, B.C.