Federal Court justice rules he has no jurisdiction to hear lawsuit filed in COVID refund dispute.

Proposed class action lawsuit targeted Westjet, Swoop, Air Canada, Sunwing, and Air Transat for offering travel vouchers instead of refunds for cancelled flights

A Federal Court judge has rejected a proposed class action lawsuit over flights cancelled due to COVID because he has no jurisdiction to hear the case.

Janet Donaldson sued after her Westjet flight was cancelled due to COVID-19. The airline offered her a travel voucher, but she wanted her money back. Thousands of Canadians have found themselves in a similar situation. Donaldson’s class action proposed to represent them all in a single lawsuit.

There was no real dispute over the facts of the case. The pandemic has decimated air travel. Canada’s major airlines have cancelled thousands of flights since March. Their revenues have collapsed in the worst downturn in living memory. Tens of thousands of people in the aviation industry have lost their jobs, and recovery has been slow to materialize.

So Thursday’s decision boiled down to a dispute over definition and interpretation. Was the lawsuit about airline regulation – a federal jurisdiction? Or was it really a case of contract law? If so, then it would be more appropriately heard in provincial courts.

Donaldson brought the case in Federal Court. Her lawyers argued that since airlines are federally regulated, that court should decide the case.

Lawyers representing Westjet, Swoop, Air Canada, Sunwing, and Air Transat argued it was a contractural dispute. Therefore, the dispute belonged in provincial courts.

In a 26-page decision, Justice Michael Manson came down squarely on the side of airlines.

A question of jursdiction

To decide if he had jurisdiction, Justice Manson looked at three questions:

1. Does the law give him jurisdiction?
2. Is there a body of federal law on the subject?
3. Is the law constitutional?

Justice Manson’s answer? No. The law “does not give this Court jurisdiction over the contractual dispute between the parties, which is the core of the Plaintiff’s claim,” he ruled.

The judge dismissed the proposed class action.

That is not the end of the airlines’ legal worries, however. Thousands of passengers have filed complaints with the Canadian Transportation Agency – the airline regulator.

And provincial courts in British Columbia and Quebec are each hearing proposed class actions of their own. A suit against Air Canada, Air Transat, Sunwing, and Westjet in Quebec Superior Court is proceeding. Lawyers are expected to present their arguments about certifying the class action on March 29.

Westjet has since changed its refund policy. The airline began contacting affected passengers earlier this month, offering to refund the fares of most people whose flights were cancelled. The process could take up to nine months.

Other airlines have not yet followed suit. However, federal Transport Minister Marc Garneau has said he would make some form of refunds a condition of federal relief for airlines.

Discussions are ongoing.