Ken Wise Wins Appeal Against Air Canada at Ontario Divisional Court

Case Background

In Singh v. Air Canada, 2026 ONSC 2983, the Ontario Divisional Court allowed an appeal from a Small Claims Court decision that had struck a passenger's claim against Air Canada. The court found that the motion judge had committed multiple legal errors, set aside the order striking the pleadings, and ordered Air Canada to pay $7,000 in costs.

The Facts

In December 2023, Alka Singh purchased Air Canada tickets for her sister and niece to fly from Winnipeg to New Delhi for a family wedding. Due to a snowstorm closure at Munich airport, Air Canada rerouted the flight to St. John's, Newfoundland. The passengers missed their connections, were stranded, incurred hotel and meal costs, and their luggage was delayed for nine days — forcing them to purchase replacement clothing and essentials upon finally arriving in India.

When Air Canada denied all compensation, blaming the weather, Ms. Singh's sister and niece assigned their claims to her — since she was the one who had paid for the tickets and incurred the financial loss. Ms. Singh then filed a claim in Small Claims Court seeking damages for the delayed flights, lost luggage, and out-of-pocket expenses.

The Lower Court's Errors

A motion judge in Small Claims Court struck the entire claim on the basis that the assignment of claims was invalid, that the lawsuit constituted champerty and maintenance, and that it was an abuse of process. The motion judge also refused to let Ms. Singh amend her pleadings.

The Divisional Court's Analysis

On appeal, Justice Schreck identified several significant errors in the lower court's reasoning.

First, the motion judge had incorrectly concluded that Ontario's Conveyancing and Law of Property Act (CLPA) only applied to real property. Section 53(1) of the CLPA permits the assignment of "any debt or other legal thing in action." The Divisional Court confirmed that this language encompasses contractual claims, including claims arising from airline ticket purchases. Air Canada's own counsel conceded this point at the appeal hearing.

Second, the motion judge had wrongly found champerty and maintenance. The doctrine of champerty prohibits a stranger to litigation from supporting it in exchange for a share of the proceeds. But as the court explained, Ms. Singh was no stranger — she had paid for the tickets and was seeking to recover her own financial losses. The familial relationship between the parties was a justifying reason for the assignment, not evidence of improper motive. 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.

Third, the claim was manifestly not a waste of time or an abuse of process. The motion was not the appropriate forum for making findings about the appellant's motive, and the court expressly declined to comment on the likelihood of success on the merits.

Fourth, the motion judge erred by refusing to consider Ms. Singh's request to amend her pleadings before deciding to strike them. Citing PMC York Properties v. Siudak, 2022 ONCA 635, the court emphasized that pleadings should be read generously, deficiencies should be accommodated, and leave to amend should be denied only in the clearest of cases.

Disposition

The appeal was allowed, the order striking the pleadings was set aside, and the matter was remitted to Small Claims Court. Ms. Singh was granted leave to amend her statement of claim to focus on damages relating to the delay of the flights and expenses incurred directly due to the delay of the flights and the delay of the baggage.

Costs

The court fixed costs at $7,000 inclusive of taxes and disbursements, payable by Air Canada within 30 days. In arriving at this figure, Justice Schreck noted Air Canada's "aggressive and unforgiving stance" on costs at the lower court level, where it had sought $7,655 — far exceeding the presumptive $100 costs award under Rule 15.07 of the Small Claims Court Rules.

Key Takeaways

This decision clarifies several important points of Ontario law. It confirms that the CLPA's assignment provisions apply to personal property and contractual claims, not just real property. It reaffirms the limits of the champerty doctrine where an assignee has a genuine financial interest in the claim. And it reinforces the principle that courts should consider amendments before striking pleadings — a fundamental aspect of access to justice in Ontario's courts.