Damages Claims
Article 17 of the Warsaw Convention, while stating that the carrier "is liable for damage sustained" in the circumstances specified therein, does not specify to whom the carrier is liable. Moreover, art 17 does not specify for what damage sustained ("dommage survenu") the carrier is liable. Paragraph 2 of art 24 applies par 1 "[i]n the cases covered by Article 17", but does so
"without prejudice to the question as to who are the persons who have the right to bring suit and what are their respective rights".
A series of decisions in the United States, arising out of the Lockerbie air disaster of 1988 and the 1983 shooting down of a Korean Air Lines flight after it strayed into Soviet Union air space, has considered the operation of arts 17 and 24. In Zicherman v Korean Air Lines Co Ltd 133 L Ed 2d 596 (1996), the Supreme Court of the United States held that, in an action brought under art 17, the law of the Warsaw Convention does not affect the substantive questions of who may bring suit and what they may be compensated for. Those questions are to be answered by the domestic law selected by the courts of contracting states (at 605). In
some cases this will require the forums to apply choice of law rules. However, in Zicherman the parties agreed that the law of the United States applied. The relevant rules for a death occurring in an airplane crash on the high seas were provided by the Death on the High Seas Act. Since that Act permitted only compensation for pecuniary loss, loss of society damages were not available to surviving relatives.
Notwithstanding Zicherman, it seems that art 17 limits the kinds of damages recoverable by a plaintiff. In particular, American courts have held that art 17 excludes the possibility of an award of punitive damages where the carrier has acted intentionally or recklessly within the meaning of art 25. The expression "damage sustained" (the translation of "dommage survenu") has been held to contemplate compensatory damages only: In re Air Disaster at Lockerbie, Scotland on December 21, 1988 928 F 2d 1267 (2nd Cir, 1991), at 1281; In re Korean Air Lines Disaster of September 1, 1983 932 F 2d 1475 (DC Cir, 1991), at 1486. The courts have taken into account that to allow punitive damages would "severely hobble most of the aims the Convention sought to establish": Lockerbie, at 1286; Korean Disaster, at 1489-1490.
An Exclusive Cause of Action?
A further issue that arises under the Warsaw Convention is whether it provides the exclusive cause of action and sole remedy for a passenger who claims against the carrier for loss, injury and damage sustained in the course of, or arising out of, international air transportation. While this is a matter of fundamental importance to the operation of the Warsaw Convention, it is not explicitly addressed in the text. It is true that art 24 provides that in "the cases covered by Article 17" any action for damages can only be brought subject to the conditions and limits set out in the Convention. But that does not provide clear guidance in the case where a passenger sustaining injury in the course of a flight has no remedy under the Warsaw Convention, and seeks to rely on a cause of action under domestic law. The issue has proved a difficult one to resolve.
In Sidhu v British Airways, the appellants had been passengers on a British Airways ("BA") flight from the United Kingdom to Malaysia, via Kuwait. The flight landed in Kuwait a few hours after Iraqi forces had invaded that country in 1991. The appellants claimed damages
for personal injury under the general law of negligence and contract, by reason of their detention by the invading Iraqi forces. They alleged that BA knew, or ought to have known, of the hostile situation between Iraq and Kuwait, and of the possibility of an imminent invasion. Their particulars of damage included allegations of both physical injury and psychological harm. Some of the appellants issued proceedings outside the two year time limit imposed by art 29 of the Warsaw Convention.
Lord Hope, who delivered the principal judgment of the House of Lords, accepted that by reason of the adoption of the Warsaw Convention by the Carriage by Air Act 1961 (UK), the solution to the problem depended on the terms of the Warsaw Convention itself. His Lordship outlined the provisions of the Warsaw Convention, particularly noting arts 17 and 24. He continued (at 447):
"The structure of these two provisions seems to me therefore to be this. On the one hand the carrier surrenders his freedom to exclude or to limit his liability. On the other hand the passenger or other party to the contract is restricted in the claims which he can bring in an action of damages by the conditions and limits set out in the Convention. The idea that an action of damages may be brought by a passenger against the carrier outside the Convention in the cases covered by article 17 - which is the issue in the present case - seems to be entirely contrary to the system which these two articles were designed to create.
The reference in the opening words of article 24(2) to 'the cases covered by article 17' does, of course, invite the question whether article 17 was intended to cover only those cases for which the carrier is liable in damages under that article. The answer to that question may indeed be said to lie at the heart of this case. In my opinion the answer to it is to be found not by an exact analysis of the particular words used but by a consideration of the whole purpose of the article. In its context the purpose seems to me to be to prescribe the circumstances - that is to say, the only circumstances - in which a carrier will be liable in damages to the passenger for claims arising out of his international carriage by air.
The phrase 'the cases covered by article 17' extends therefore to all claims made by the passenger against the carrier arising out of international carriage by air, other than claims for damage to his registered baggage which must be dealt with under article 18 and claims for delay which must be dealt with under article 19. The words 'however founded' which appear in article 24(1) and are applied to passenger's claims by article 24(2) support this approach. The intention seems to be to provide a secure regime, within which the restriction on the carrier's freedom of contract is to operate. Benefits are given to the passenger in return, but only in clearly defined circumstances to which the limits of liability set out by the Convention are to apply. To permit exceptions, whereby a passenger could sue outside the Convention for losses sustained in the course of international carriage by air, would distort the whole system, even in cases for which the Convention did not create any liability on the part of the carrier. Thus the purpose is to ensure that, in all questions relating to the carrier's liability, it is the provisions of the Convention which apply and that the passenger does not have access to any other remedies, whether under the common law or otherwise, which may be available within the particular country where he chooses to raise his action. The carrier does not need to make provision for the risk of being subjected to such remedies, because the whole matter is regulated by the Convention.
Later, he said this (at 453):
"I believe that the answer to the question raised in the present case is to be found in the objects and structure of the Convention. The language used and the subject matter with which it deals demonstrate that what was sought to be achieved was a uniform international code, which could be applied by the courts of all the high contracting parties without reference to the rules of their own domestic law. The Convention does not purport to deal with all matters relating to contracts of international carriage by air. But in those areas with which it deals - and the liability of the carrier is one of them - the code is intended to be uniform and to be exclusive also of any resort to the rules of domestic law.
An answer to the question which leaves claimants without a remedy is not at first sight attractive. It is tempting to give way to the argument that where there is a wrong there must be a remedy....
Alongside these principles, however, there lies another great principle, which is that of freedom of contract. Any person is free, unless restrained by statute, to enter into a contract with another on the basis that his liability in damages is excluded or limited if he is in breach of contract. Exclusion and limitation clauses are a common feature of commercial contracts, and contracts of carriage are no exception. It is against that background, rather than a desire to provide remedies to enable all losses to be compensated, that the Convention must be judged. It was not designed to provide remedies against the carrier to enable all losses to be compensated. It was designed instead to define those situations in which compensation was to be available. So it set out the limits of liability and the conditions under which claims to establish that liability, if disputed, were to be made. A balance was struck, in the interests of certainty and uniformity."
Lord Hope referred to cases from other jurisdictions, particularly the United States, dealing
with the same issue. He concluded that the point was not settled in the United States, having regard to conflicting decisions and the fact that the Supreme Court in Floyd (at 553) had specifically refrained from considering the question.
The pattern of conflicting decisions has continued in the United States. In Potter v Delta Air Lines Inc 98 F 3d 881 (5th Cir, 1996), the Court of Appeals for the 5th Circuit held that the provisions of the Warsaw Convention governing personal injury created the exclusive cause of action and remedy for personal injury sustained in the course of international transportation by aircraft for hire. Thus, a passenger who sustained personal injury in the course of a flight, but not by reason of an "accident" within the meaning of art 17 of the Convention, had no cause of action against the airline under State law, notwithstanding that she had no remedy under the Convention. Smith, Circuit Judge, speaking for the Court, said this (at 885):
"A primary function of the Warsaw Convention is to foster uniformity in the laws governing international air carrier liability. Uniformity with respect to liability is required in order to allow airlines to raise the capital needed to expand operations and to provide a definite basis upon which their insurance rates can be calculated.
The Convention's goals of uniformity and certainty would be frustrated were we to allow Ms Potter to assert her state law claims, even where the Convention does not provide her a remedy." [Citations omitted.]
More recently, however, the Court of Appeals for the 2nd Circuit reached a contrary conclusion: Tseng v El Al Israel Airlines Ltd 122 F 3d 99 (2nd Cir, 1997). The Court permitted a claim under State law to proceed where a passenger alleged that she had suffered psychological harm as the result of an intrusive body search conducted by an airline. The Court specifically rejected the approach taken in Sidhu and held that the Warsaw Convention only bars a cause of action under State law where a claim is available under the Convention. The Supreme Court has granted certiorari in Tseng, (140 L Ed 2d 935) but has not yet determined the appeal.
Tseng should be compared with Fishman v Delta Air Lines Inc 132 F 3d 138 (2nd Cir, 1998). In that case, a passenger allegedly suffered nervous shock when her daughter was accidentally injured by a stewardess. It was held that the mother's claim was within art 17 of the Warsaw Convention since it arose from an accident. However, it followed from Floyd that a claim for purely emotional distress was not compensable. Tseng was distinguished on the ground that the invasive body search in that case was not an "accident" and was thus not within art 17.
SUBMISSIONS
The Appellants' Contentions
The appellants contended that Sidhu established that the Warsaw Convention constitutes an exclusive code for the liability of carriers in respect of carriage by air. By applying the same regime to domestic air travel (excluding intra-State air carriage), through Part IV of the CA Act, Parliament intended the legislation to constitute an exclusive code for the liability of domestic carriers. For this reason Parliament chose the broad expression "personal injury" in Part IV, rather than the narrower term "bodily injury" in the English text of art 17 of the Convention. The broader expression should therefore be given its ordinary meaning, which includes purely psychological harm.
The appellants' primary contention was that Parliament had chosen the expression "personal injury" because it had a well-known meaning in Anglo-Australian law and was intended to encompass psychological harm, an accepted category of personal injury by 1959. However, the appellants put forward an alternative argument if (contrary to their primary contention) the expression "personal injury" was adopted in Part IV of the CA Act because it appeared in the Hague Protocol. It will be recalled that art 3 of the Warsaw Convention, as amended by the Hague Protocol, uses the words "personal injury' in the English text as the equivalent of the French "lésion corporelle". Mr Hutley submitted that the broader expression was adopted in the English text because in 1955 (when the Hague Protocol was opened for signature) there was uncertainty about the proper translation of "lésion corporelle". He argued that the broader expression had been deliberately adopted.
The appellants further submitted that s 36 of the CA Act bars any action by a non-passenger for psychological harm sustained in consequence of an airline accident except in accordance with the Act, at least where, at the time of the accident, there was an appropriate "nexus" between the passenger and the non-passenger. Mr Hutley contended that s 28 of the CA Act
conferred a right to compensation on a non-passenger for such harm, where the harm flowed from knowledge that a passenger (for example, a child of the non-passenger) had been injured. He accepted that s 28 (which provides that "the carrier is liable for damage sustained by reason of...any personal injury suffered by the passenger...") would not confer a right to compensation on a non-passenger suffering psychological harm independently of any injury to a passenger. However, he submitted that s 36 should be read as precluding any actions by a non-passenger for psychological harm, where the harm occurred because of the relationship between the passenger and the non-passenger. This conclusion would give effect to the policy of providing certainty to the airlines.
Respondents' Submissions
The respondents' submissions followed very closely the reasoning of the primary Judge. They emphasised that the expression "bodily injury" ("lésion corporelle") in art 17 of the Warsaw Convention had been construed in Floyd and Kotsambasis as excluding psychological harm. The CA Act was intended to apply the principles of the Warsaw Convention to domestic air carriage. There was nothing to suggest that "personal injury", as used in ss 28, 34 and 36 of the CA Act, was to have any wider meaning than "bodily injury". Thus, the CA Act, in terms, did not purport to bar a passenger from bringing a claim under the general law in respect of psychological harm arising out of an aircraft accident.
Nor did Sidhu lead to the conclusion that such a claim was barred. Section 36 of the CA Act was framed differently from art 24 of the Warsaw Convention. Section 36 did not speak of "cases covered by" another provision, but of "liability...in respect of personal injury". If "personal injury" was limited to bodily injury as distinct from psychological harm, the exclusion in s 36 was similarly confined to actions in respect of bodily injury. Nothing in Sidhu compelled a different result.
Non-passengers' claims for psychological harm were also outside ss 28, 34 and 36 of the CA Act. The liability of a wrongdoer to a person who suffers psychological harm because another person is injured or put in peril does not depend on the wrongdoer being liable to the person injured or put in peril. The wrongdoer owes an independent duty of care to the first person. Section 28 of the CA Act does not impose a liability on the air carrier to a non-
passenger who suffers psychological harm because of knowledge or a belief that a passenger has been injured or is in peril. Such harm is not "damage sustained by reason of...any personal injury suffered by the passenger". Since s 28 does not impose liability on the carrier to the non-passenger, s 36 does not exclude liability to a non-passenger under any other law and s 34 imposes no relevant time limit.