Air Canada v. Tannous, 2025 FC 1872

Does this apply to you?

This case applies if your checked bag was delayed on a domestic flight, you bought things to get by, and you took the claim to the Canadian Transportation Agency's complaint process. It shows what the airline can attack: purchases you made after the bag came back, and a decision that does not explain the link between each receipt and the delay. It also confirms that the Federal Court can review a complaint officer's order.

What happened

Two passengers flew Air Canada from Toronto to Vancouver on 25 May 2022, with a return planned for 28 May 2022. One checked bag did not arrive. Air Canada delivered it to their hotel the next morning, 26 May 2022, at 9:15 am.

The passengers sent Air Canada a claim for $3,561.26. Air Canada paid $250.00. The passengers then complained to the Canadian Transportation Agency and filed receipts totalling $3,435.99 for interim purchases. They claimed $3,561.26. Some receipts were dated after the bag arrived. One was a luggage purchase of $1,310.40 on 28 May 2022. Air Canada told the Agency the purchases were excessive, included luxury items, and in part came after the bag was delivered.

What the complaint officer decided

A Complaint Resolution Officer, appointed under the Canada Transportation Act, decided the complaint on 15 November 2024. The officer found that Air Canada's tariff applied and that it incorporated the Montreal Convention baggage delay limit of 1,288 Special Drawing Rights (SDR) per passenger. The officer found the passengers had shown a baggage delay and had complained in time. Because the trip was outbound and the passengers had no luggage, the officer found the purchases were necessary. The receipts exceeded the cap, and no special declaration of higher value had been made. So the officer converted the cap to $2,329.72, subtracted the $250.00 already paid, and ordered Air Canada to pay $2,079.72 by 15 December 2024.

Air Canada applied to the Federal Court for judicial review. Alaa Badia Tannous, the respondent, represented himself.

What Air Canada argued

Air Canada said the officer failed to interpret and apply the Montreal Convention. It said its tariff includes the Air Passenger Protection Regulations (APPR) but does not incorporate the Montreal Convention. It said the Convention, for delayed checked bags, requires passengers to prove intention or recklessness by the carrier, requires proof of loss with limits that are not fixed or automatic, and leaves the standard of proof for the contents of a bag to national courts.

Air Canada also said the officer should have listed the "essential" items, excluded items Air Canada called "luxury", and obtained a list of what was in the bag. It said the decision was unreasonable because the officer did not find that much or all of the claim was vexatious or made in bad faith.

What the court decided

The Federal Court can review a complaint officer's order. The court said no previous case in the Federal Court appeared to address the point. The court read sections 85.02 to 85.12 of the Canada Transportation Act. A proceeding before a complaint officer is not a proceeding before the Agency, and an officer's order is not an Agency order, even though it can be filed with the Agency and enforced like one. So section 28(1)(k) of the Federal Courts Act, which sends Agency decisions to the Federal Court of Appeal, did not apply. The officer is an "other tribunal" under section 2(1), and the Federal Court had jurisdiction under sections 18 and 18.1.

The test was reasonableness. Following Vavilov, the court asked whether the decision was justified, transparent and intelligible. The burden was on Air Canada, and any flaw had to be central enough to make the whole decision unreasonable.

The Montreal Convention label did not matter. The trip was purely domestic. Rule 105(J)(1) of Air Canada's tariff sets the baggage liability limit for domestic travel at 1,288 SDR on its own. Section 23(2) of the APPR, which would have linked domestic baggage delay to the Montreal Convention, was struck down by the Federal Court of Appeal in the IATA case, and that ruling was not appealed. So the tariff does not bring in the Convention through the APPR. But the cap was the same either way. Calling the Convention "incorporated" was at most a minor misstep, not a reason to overturn the decision.

Ignoring the post-delivery purchases was the fatal flaw. The tariff requires proof of loss and a causal link to an act or omission by Air Canada. The officer's reasons said nothing about why purchases made after the bag arrived were linked to the delay, including the $1,310.40 luggage purchase on 28 May 2022. The record showed $1,744.01 in post-delivery purchases and $1,691.98 in pre-delivery receipts. If the officer had excluded the post-delivery purchases, the total would have been $1,691.98, below the cap of $2,329.72. That gap made the decision unreasonable.

The currency conversion added to the problem. The officer converted 1,288 SDR using a Bank of Canada rate from 17 January 2020 for a May 2022 trip, with no explanation. The court thought 2020 was likely a typo, but said it further detracted from a careful approach.

The court went no further. It declined to rule on "essential" or "luxury" items or on whether the officer needed a list of the bag's contents. A different officer must now decide the whole claim. The court also rejected Air Canada's claim that the passengers acted vexatiously or in bad faith. The record did not support that finding.

The application was granted. The decision was set aside and sent back to a different Complaint Resolution Officer for reconsideration. No costs were sought and none were awarded.

Why this matters

• The Federal Court can review a Complaint Resolution Officer's order. Air Canada used that route here, and the court said no earlier Federal Court case appeared to address the point.
• Receipts dated after your bag came back are the weak point of a delayed baggage claim. The officer must be able to link each purchase to the delay, so be ready to explain that link.
• On a domestic flight, the baggage cap comes from the airline's tariff, not the Montreal Convention. For Air Canada it is 1,288 SDR. APPR section 23(2) no longer applies.
• Winning before a complaint officer is not always the end. The court set aside the award, but it did not decide what the passengers should get. A new officer will.
• Air Canada asked the court to call the claim vexatious or in bad faith. The court said no.

The details