Case information

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Case summaries are prepared by the Office of the Registrar of the Supreme Court of Canada (Law Branch). Please note that summaries are not provided to the Judges of the Court. They are placed on the Court file and website for information purposes only.

Civil procedure – Stay – Courts – Jurisdiction – Forum non conveniens – Canadian and American plaintiffs commencing proposed class action against Air Canada for allegedly charging United States transportation taxes on Air Canada ticket purchases – Air Canada moving to dismiss or permanently stay action on basis Ontario court not having jurisdiction over dispute and forum non conveniens – Whether principle of comity requires a Canadian court to decline to exercise its jurisdiction in favour of foreign state when the issue is extraterritorial application of foreign taxes in Canada? – Whether Court of Appeal erred in applying forum non conveniens test by failing to properly apply the principles of efficiency and fairness as set out in Van Breda?

The plaintiffs brought a proposed class action in Ontario in 2008 that alleged that Air Canada had unlawfully charged them United States transportation taxes on Air Canada tickets that they had purchased. Ms. Prince is a U.S. resident who claimed that on several occasions she purchased tickets on the Air Canada website for travel exclusively within Canada. Whether she was located in the U.S. or Canada at the time of purchase, Air Canada charged her a “U.S.A. Transportation Tax” and a “U.S. Flight Segment Tax” on the basis that she was a U.S. resident. The other proposed plaintiff, Mr. Walach, is a Canadian citizen who claims that he purchased a ticket from Air Canada for a flight between Los Angeles and Calgary while in Canada at the time of purchase. He was charged with an “International Travel Facilities” tax. All charges for both plaintiffs were levied pursuant to the United States Internal Revenue Code, USC: Title 26 (the “Code”) on “taxable transportation”. At issue was whether Air Canada had in some cases improperly collected the U.S. taxes and whether it gave extra-territorial effect to U.S. tax laws in Canada. The plaintiffs sought various declarations against Air Canada and orders for, inter alia, restitution, accounting and damages for negligent misrepresentation. A preliminary question was whether the Canadian court had jurisdiction to adjudicate the dispute, raised in Air Canada’s motion to dismiss or stay the action.