The Civil Resolution Tribunal ruled there had been a “frustration of contract” because the COVID pandemic made it impossible for the B.C. family to fly home on their original return flights almost a year ago.
A B.C. couple stranded for two months in India at the beginning of the COVID pandemic by Air Canada were shocked when their travel agent sued them for $5,000 for the unused flights.
“I was shocked the way he said he was suing us,” said Harman (Harry) Waraich.
Their legal defence — called frustration of contract — is a rare occurrence in protecting consumer rights because “frustration is very hard to reach,” said Vancouver lawyer Flora Griffiths. “For a consumer, it will be of limited help.”
But for the Waraichs, it was successful. Harman, who drives truck on the night shift, and his wife, Sandeep, flew with their two teenagers to Punjab in February, before international travel bans were announced.
They paid Sohi Vacations of Surrey almost $6,600 for the four return trip flights, on Feb. 19, 2020, returning March 28, 2020.
But two days after a global pandemic was declared, on March 11, 2020, Air Canada cancelled the return flight. Sohi Vacations charged the family $1,700 to rebook a May 4, 2020, flight. That was rescheduled to May 18, 2020, before being cancelled outright.
“It was very stressful,” said Waraich. “We just wanted to get home.”
India didn’t allow Air Canada to fly from India and the family paid $6,600 to get on a KLM “rescue flight” to Toronto, on May 19, 2020, then paid more to fly to Vancouver.
The Cloverdale couple called the travel agency “so many times” when they returned to request a refund for the return flights and the $1,700 rebooking fee, totalling $5,000.
In July, the Waraichs’ credit card company agreed to a $5,000 refund because they had not received the services — the return part of the flight.
Waraich offered to split the cost of the flights with Sohi Vacations, and accept a $2,500 travel voucher “because I didn’t want the stress.”
But Sohi owner Sunil Sharman, refused, demanding the full $5,000. Sharman took the Waraichs to small claims court.
B.C.’s Frustration of Contract Act deals with a contract that can’t be carried out because of “an unforeseen event for which neither party was at fault,” wrote the Civil Resolution Tribunal’s Julia K. Gibson in dismissing the Sohi claim . Both “parties are relieved of their obligations under the contract.”
That frustration of contract would also “discharge Sohi’s obligations to provide return flights,” she wrote.
Sohi Vacations said the couple was offered a flight voucher but there was no evidence of one and “there was no certainty as to when such travel could occur,” wrote Gibson.
During COVID, a couple who planned to marry at Chilliwack Golf and Country Club, sued for return of their deposit under frustration of contract, but because the club offered an alternative date, the contract wasn’t frustrated, Gibson wrote.
Sohi owner Sunil Sharman said, “We’re not satisfied with it (the decision). We are still following this up with authorities.” He would not comment further.
An online article by Lawson Lundell lawyers, including Griffiths, says contractual obligations need to be “permanent and not just temporary or transient” for the frustration argument to be successful.
They noted “most effects of the COVID-19, such as illness, quarantine, travel restrictions, shuttering of businesses or schools, or working from home, seem temporary.”
An exception would be “if time is of the essence for the performance of a fundamental term in a contract.”
“It’s good news for passengers,” said Gabor Lukacs, president of Air Passenger Rights . “They have to keep developing the jurisprudence. It adds an additional layer of defence for passengers.”
He said in the European Union, if a flight is cancelled, everyone gets a refund, and that’s what should be happening in Canada.
Air Canada is not a party to the action and it would be a separate issue if Sohi Vacations were to request a refund from the airline. Sohi could also file a notice of objection and have the case against the Waraichs heard in provincial court.
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