Court Overturns Decision to Strike Airline Claim: Why Appeals Matter

When a Lower Court Gets It Wrong

Not every court decision is correct. Trial judges and motion judges can make legal errors — misinterpreting statutes, applying the wrong legal test, or failing to consider relevant evidence. When that happens, an appeal may be the only avenue for correcting the error and ensuring justice is done.

The recent decision in Singh v. Air Canada, 2026 ONSC 2983, is an instructive example. The Ontario Divisional Court found that a Small Claims Court motion judge had committed multiple legal errors in striking a passenger's claim against Air Canada. The appeal was allowed, the lower court's order was set aside, and the case was sent back for a proper hearing on its merits.

The Standard of Review

Appeals from Small Claims Court go to the Divisional Court under section 31 of the Courts of Justice Act. The standard of review for questions of law is correctness, meaning the appellate court owes no deference to the lower court's legal conclusions. For questions of fact or mixed fact and law, the standard is palpable and overriding error. In Singh, the errors were primarily legal in nature, which meant the Divisional Court reviewed them on a correctness standard — and found the motion judge had got the law wrong on several fronts.

Error 1: Misinterpreting the Scope of the CLPA

The motion judge concluded that Ontario's Conveyancing and Law of Property Act only applied to real property, and therefore could not authorize the assignment of a contractual claim arising from airline tickets. This was incorrect. Section 53(1) of the CLPA provides for the assignment of "any debt or other legal thing in action." The Divisional Court confirmed this language is broad enough to encompass personal property and contractual claims. Notably, Air Canada's own counsel conceded this point at the appeal hearing.

Error 2: Misapplying the Doctrine of Champerty

The doctrine of champerty and maintenance prohibits officious intermeddling in litigation by strangers who have no legitimate interest in the outcome. The motion judge found that the assignment of claims from the passengers to Ms. Singh constituted champerty. The Divisional Court disagreed.

Ms. Singh had purchased the airline tickets and was seeking to recover her own financial losses. She was not a stranger to the transaction — she was the person who had paid. The court cited Fredrickson v. Insurance Corporation of British Columbia, [1986] 3 W.W.R. 63, for the principle that familial relationships may constitute a valid motive or excuse for supporting litigation. A motion to strike was not the appropriate forum for making findings about the appellant's motive.

Error 3: Finding Abuse of Process

The motion judge characterized the claim as a waste of time and an abuse of process. The Divisional Court found this characterization was not supported by the record. While the court expressed no opinion on the ultimate likelihood of success, it held that the claim was manifestly not frivolous or vexatious — the threshold required for striking under the Small Claims Court Rules.

Error 4: Refusing to Consider Amendments

Perhaps the most procedurally significant error was the motion judge's refusal to consider Ms. Singh's request to amend her pleadings before striking them. The Divisional Court cited the Court of Appeal's decision in PMC York Properties v. Siudak, 2022 ONCA 635, which held that pleadings should be read generously, courts should accommodate drafting deficiencies, and leave to amend should be denied only in the clearest of cases. The motion judge should have considered whether the deficiencies could be cured by amendment before resorting to the drastic remedy of striking the claim entirely.

The Costs Award as a Signal

The costs award in Singh is also worth noting. The Divisional Court fixed costs at $7,000, payable by Air Canada. In doing so, Justice Schreck specifically referenced Air Canada's "aggressive and unforgiving stance" on costs at the lower court level, where it had claimed entitlement to $7,655 — far above the presumptive $100 award under Rule 15.07. This language suggests that appellate courts may take a dim view of respondents who pursue disproportionate costs awards against self-represented or modestly resourced litigants in Small Claims Court.

When Is an Appeal Worth Pursuing?

Not every unfavourable decision warrants an appeal. But certain categories of error are particularly strong candidates for appellate review. These include misinterpretation of a statute, application of the wrong legal test, failure to consider a request to amend before striking, findings of fact unsupported by the evidence, and procedural unfairness. Singh v. Air Canada involved errors in the first four categories — making it a compelling illustration of why the appellate process exists and how it functions to correct lower court mistakes.