Federal Court Lacks Jurisdiction Over Class Action On COVID-19 Airfare Refunds

• Published date: 30 November 2020
• Subject Matter: Litigation, Mediation & Arbitration, Coronavirus (COVID-19), Class Actions, Litigation, Contracts and Force Majeure
• Law Firm: Alexander Holburn Beaudin + Lang LLP
• Author: Mr Scott Ashbourne, Shaun Foster and Michael Dery

This blog post discusses the Federal Court's lack of jurisdiction in the recent decision Donaldson v Swoop Inc. et al, 2020 FC 1089 for the proposed class action against Canadian airlines for cancelled flights due to the COVID-19 pandemic.

Overview

The Federal Court of Canada decided this week that it lacks jurisdiction over a proposed class action on COVID-19 airfare refunds.

This news came on Thursday, November 26, 2020, when the Federal Court of Canada released the decision of Donaldson v Swoop Inc. et al, 2020 FC 1089. In this proposed class action, passengers sought refunds as a result of having their flights cancelled (or voluntarily cancelling their flights) due to the COVID-19 pandemic.

The Plaintiff sought to certify a global class action against Swoop, WestJet, Air Canada, Air Transat, and Sunwing. The heart of the Plaintiff's claim was that the Defendant airlines breached their contracts with the proposed class members, or that those contracts were "frustrated" due to the pandemic.

Before deciding whether the case ought to be certified as a class proceeding, the Court considered a motion by the Defendant airlines to dismiss the case on the basis that the Federal Court lacked jurisdiction over the subject-matter of the dispute.

The Court confirmed that since the Federal Court is a statutory court, it only has jurisdiction to hear such claims as are specifically set out in the Federal Courts Act (the "Act"). Section 23 of the Act provides that the Federal Court has jurisdiction where a claim is made "under an Act of Parliament or otherwise" in relation to any matter coming under certain classes of subjects, which include aeronautics.

Conditions for the Federal Court to have jurisdiction:

The court held that:

1. There must be a statutory grant of jurisdiction by the federal Parliament.
2. There must be an existing body of federal law which is essential to the disposition of the case and which nourishes the statutory grant of jurisdiction.
3. The law on which the case is based must be "a law of Canada" as the phrase is used in s. 101 of the Constitution Act, 1867.

A recent Supreme Court of Canada decision (Windsor (City) v Canadian Transit Co.) confirmed that the "cause of action, or the right to seek relief, must be created or recognized by a federal statute, a federal regulation or a rule of the common law dealing with a subject matter of federal legislative...