[2005] HCA 39
Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99
[1973] HCA 36
Bradshaw v Emirates [2021] FCA 1407
[2021] WASCA 193
CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384
[1997] HCA 2
Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337
Source
Original judgment source is linked above.
Catchwords
[2005] HCA 39
Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99[1973] HCA 36
Bradshaw v Emirates [2021] FCA 1407[2021] WASCA 193
CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384[1997] HCA 2
Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337[1982] HCA 24
Cohen v American Airlines, Inc 13 F 4th 240 (2021)
Dyczynski v Gibson (2020) 280 FCR 583[1956] HCA 53
GIO General Ltd v Centennial Newstan Pty Ltd [2014] NSWCA 1318 ANZ Ins Cas 62-005
Great China Metal Industries Co Ltd v Malaysian International Shipping Corporation Berhad (1998) 196 CLR 161[1998] HCA 65
Grein v Imperial Airways Ltd [1937] 1 KB 50
Grueff v Virgin Australia Airlines Pty Ltd [2021] FCA 501395 ALR 249
Gulf Air Company GSC v Fattouh [2008] NSWCA 225251 ALR 183
Holmes v Bangladesh Biman Corporation [1989] 1 AC 1112
Johnson v Miller (1937) 59 CLR 467[2015] HCA 37
Page v Sydney Seaplanes Pty Ltd (2020) 277 FCR 658[2020] FCA 537
Parkes Shire Council v South West Helicopters Pty Ltd (2019) 266 CLR 212[2019] HCA 14
Povey v Qantas Airways Ltd (2005) 223 CLR 189[1998] HCA 28
R v Halton
Ex parte AUS Student Travel Pty Ltd (1978) 138 CLR 201
[1978] HCA 26
Re Minister for Immigration and Multicultural and Indigenous Affairs
[2019] HCA 13
Shipping Corporation of India Ltd v Gamlen Chemical Co (A/Asia) Pty Ltd (1980) 147 CLR 142
[1980] HCA 51
South West Helicopters Pty Ltd v Stephenson (2017) 98 NSWLR 1
[2017] NSWCA 312
Studorp Ltd v Robinson
Robinson v Studorp Ltd [2012] NSWCA 382
United Airlines Inc v Sercel Australia Pty Ltd [2012] NSWCA 24
Judgment (19 paragraphs)
[1]
HCA 65
Grein v Imperial Airways Ltd [1937] 1 KB 50
Grueff v Virgin Australia Airlines Pty Ltd [2021] FCA 501; 395 ALR 249
Gulf Air Company GSC v Fattouh [2008] NSWCA 225; 251 ALR 183
Holmes v Bangladesh Biman Corporation [1989] 1 AC 1112
Johnson v Miller (1937) 59 CLR 467; [1937] HCA 77
Lahey Constructions Pty Ltd v The State of New South Wales [2021] NSWCA 69
Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104; [2015] HCA 37
Page v Sydney Seaplanes Pty Ltd (2020) 277 FCR 658; [2020] FCA 537
Parkes Shire Council v South West Helicopters Pty Ltd (2019) 266 CLR 212; [2019] HCA 14
Povey v Qantas Airways Ltd (2005) 223 CLR 189; [2005] HCA 33
Price v KLM-Royal Dutch Airlines 107 F Supp 2d 1365 (2000)
Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28
R v Halton; Ex parte AUS Student Travel Pty Ltd (1978) 138 CLR 201; [1978] HCA 26
Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam (2003) 214 CLR 1; [2003] HCA 6
Rinehart v Hancock Prospecting Pty Ltd (2019) 267 CLR 514; [2019] HCA 13
Shipping Corporation of India Ltd v Gamlen Chemical Co (A/Asia) Pty Ltd (1980) 147 CLR 142; [1980] HCA 51
South West Helicopters Pty Ltd v Stephenson (2017) 98 NSWLR 1; [2017] NSWCA 312
Studorp Ltd v Robinson; Robinson v Studorp Ltd [2012] NSWCA 382
United Airlines Inc v Sercel Australia Pty Ltd [2012] NSWCA 24; 289 ALR 682
Texts Cited: B Cheng, "A New Era in the Law of International Carriage by Air: From Warsaw (1929) to Montreal (1999)" (2004) 53 International and Comparative Law Quarterly 833
M Clarke, Contracts of Carriage by Air (Lloyd's List Law, 2nd ed, 2010)
PS Dempsey and M Milde, International Air Carrier Liability: The Montreal Convention of 1999 (McGill University, 2005)
LB Goldhirsch, The Warsaw Convention Annotated: A Legal Handbook (Kluwer Law International, 2000)
B Havel and G Sanchez, The Principles and Practice of International Aviation Law (Cambridge University Press, 2014)
P Herzfeld and T Prince, Interpretation (Thomson Reuters, 2nd ed 2020)
Shawcross & Beaumont: Air Law (LexisNexis)
Category: Principal judgment
Parties: Air Canada (Applicant)
Renae Evans (First Respondent)
Stephanie Evans (Second Respondent)
Representation: Counsel:
J T Gleeson SC, G O'Mahoney, D Habashy (Applicant)
R S McIlwaine SC, R E Quickenden (Respondents)
[2]
Solicitors:
Norton White (Applicant)
Shine Lawyers (Respondents)
File Number(s): 2023/465441
Publication restriction: Nil
Decision under appeal Court or tribunal: Supreme Court
Jurisdiction: Common Law
Citation: [2023] NSWSC 1535
Date of Decision: 12 December 2023
Before: Rothman J
File Number(s): 2021/185107
[3]
[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]
[4]
HEADNOTE
[This headnote is not to be read as part of the judgment]
The respondents, Ms Renae Evans and her daughter Stephanie, commenced proceedings against the applicant, Air Canada, in the Common Law Division on 28 June 2021. Their statement of claim sought damages for injuries allegedly suffered from turbulence experienced on an Air Canada flight travelling from Vancouver to Sydney on 11 July 2019.
The respondents sought damages for bodily injuries pursuant to Art 17 of the Montreal Convention 1999, which is incorporated into Australian law by s 9B of the Civil Aviation (Carriers' Liability) Act 1959 (Cth). In its defence, Air Canada pleaded that it was not liable for any damages which might be recovered by either respondent to the extent the amount exceeds 113,100 Special Drawing Rights, in accordance with Art 21 of the Montreal Convention. In reply, the respondents alleged that r 105(C)(1)(a) of Air Canada's International Tariff General Rules stipulated that there were to be no financial limits on the compensatory damages recoverable in respect of bodily injuries sustained by the respondents. That provision provides that "[w]here the Montreal Convention applies … [t]here are no financial limits in respect of death or bodily injury".
Each party sought and obtained orders pursuant to r 28.2 of the Uniform Civil Procedure Rules 2005 (NSW) for questions to be determined separately from the other issues in the proceeding and prior to the trial of the respondents' underlying claims. The first question, raised by the respondents, was:
Does Rule 105(C) [of Air Canada's tariff] provide and have the effect that if this Court assess each plaintiff's compensatory damages in Australian dollars in an amount in excess of [113,100] Special Drawing Rights (SDR), each is entitled to recover that sum from the defendant even if the defendant can prove that the damages were not due to the negligence or other wrongful act or omission of the carrier or its servants or agents or such damage was solely due to the negligence or other wrongful act or omission of a third party?
The primary judge answered the first separate question affirmatively. Air Canada sought leave to appeal from the primary judge's determination of that question.
The Court (Leeming JA, Payne JA and Griffiths AJA agreeing) held, granting leave to appeal and allowing the appeal:
(1) To construe r 105(C)(1)(a), Air Canada's tariff must be read as a whole, in light of its purpose and object, and having regard to the history of the Montreal Convention which the tariff expressly incorporates: at [24]-[28].
Fitzgerald v Masters (1956) 95 CLR 420; [1956] HCA 53, Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99; [1973] HCA 36, Lahey Constructions Pty Ltd v The State of New South Wales [2021] NSWCA 69, applied.
(2) A variety of textual considerations suggest that r 105(C)(1)(a) did not have the effect of waiving the partial defence created by Art 21(2) of the Montreal Convention, because when Air Canada did waive defences available to it under international conventions, it did so with different language, in a different section of its tariff (r 105(B)), and with reference to the provision of the international convention which authorised waiver: at [29(3)], [77]-[80].
(3) A consideration of the history of the Montreal Convention, and the Warsaw regime which predates it, confirmed that r 105(C)(1)(a) did not alter rights and obligations. The purpose of r 105(B) of the tariff was to ensure that (a) the existing relaxation or waiver of Air Canada's entitlements under the Warsaw regime remained in place, in particular the waiver of the cap upon liability for death or personal injury, while (b) ensuring the Montreal Convention applied in terms, which of itself exposed a carrier to uncapped liability for death or personal injury: at [29(4)], [69], [72]. The purpose of r 105(C) was to comply with notification requirements under regulatory regimes, including that imposed by the Federal Government of Canada: at [29(5)], [75]-[76], [84].
(4) Discussion by Leeming JA of the scheme of liability governing personal injury arising from international carriage by air: at [30]-[57].
(5) Discussion by Leeming JA of how different international conventions may apply to different contracts of carriage on the same flight: at [58]-[63].
Gulf Air Company GSC v Fattouh [2008] NSWCA 225; 251 ALR 183, United Airlines Inc v Sercel Australia Pty Ltd [2012] NSWCA 24; 289 ALR 682, Grein v Imperial Airways Ltd [1937] 1 KB 50, Holmes v Bangladesh Biman Corporation [1989] 1 AC 1112.
[5]
JUDGMENT
LEEMING JA: The respondent passengers claim to have been injured in July 2019 on a flight operated by the applicant, Air Canada, travelling from Vancouver to Sydney. It was accepted that the Montreal Convention 1999 applied. Article 21(2) of that convention gives a partial defence to a carrier: speaking generally, the carrier's liability is limited to 113,100 Special Drawing Rights (or SDRs) per passenger (around $224,000) if it establishes that any additional damage was not due to the carrier's own negligence. The primary judge determined, by way of answering a separate question in advance of trial, that Air Canada was not able to rely on that defence, because of a rule in its international tariff: Evans v Air Canada [2023] NSWSC 1535.
If the decision of the primary judge is correct, then it potentially affects thousands of passengers who travel on Air Canada flights to or from Australia. Further, Air Canada adduced evidence, bearing on the grant of leave to appeal, to the effect that other carriers which fly to Australia have similar or identical provisions in their tariffs (for they reflect the language of an IATA resolution). As will be seen, the proposed appeal also involves important questions of principle concerning the construction of the terms of a contract of carriage by air. In short, this is a clear case for the grant of leave required pursuant to s 103 of the Supreme Court Act 1970 (NSW), and, to be fair, after hearing what Air Canada advanced in support of a grant of leave, Mr McIlwaine SC, who appeared in this Court and at first instance for the respondents, did not seek to be heard against that course.
For the reasons which follow, the appeal should be allowed. Air Canada's tariff does not disentitle it from relying on a partial defence to the claims insofar as they exceed 113,100 SDRs if it proves that damage was not caused by Air Canada's negligence. It should also be said at the outset, in fairness to the primary judge, that this Court received submissions from Mr Gleeson SC, who had not appeared below, which he acknowledged were, at least in part, materially different from those made at first instance.
[6]
Factual background, nature of claim and procedural history
Ms Renae Evans and her daughter Stephanie commenced proceedings against Air Canada in the Common Law Division of this Court on 28 June 2021. Their statement of claim sought damages for injuries allegedly suffered from turbulence experienced on flight AC033 from Vancouver to Sydney on 11 July 2019.
Each respondent alleged that she sustained personal injury as a result of the incident. Renae alleged that she sustained a discogenic injury to two levels of her cervical spine, necessitating a disc replacement at C5-6 and a fusion of C6-7, as well as psychological injuries. Stephanie alleged that she sustained soft-tissue injuries to the whole of her spine as well as psychological injuries.
The statement of claim sought "damages for bodily injuries against the Defendant pursuant to Article 17 of the Montreal Convention". Article 17 imposes liability on the carrier for damage for, inter alia, bodily injury for accidents on board the aircraft. However, the pleading correctly proceeded on the basis that the plaintiffs' claim was under s 9B of the Civil Aviation (Carriers' Liability) Act 1959 (Cth), in accordance with what was said (in respect of international carriage governed by the Warsaw regime) by the joint judgment in Povey v Qantas Airways Ltd (2005) 223 CLR 189; [2005] HCA 33 at [12]. In this country, an unincorporated treaty is generally regarded as not creating rights or imposing liabilities (for exceptions, such as the change of status of enemy aliens brought about by a peace treaty, see Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam (2003) 214 CLR 1; [2003] HCA 6 at [100]). The mere ratification of the Montreal Convention by the executive government of the Commonwealth of Australia in 2008 of itself created no rights upon which the respondents could rely. Instead, the source of the right on which the respondents' claims are based is s 9B which provides that "the 1999 Montreal Convention has the force of law in Australia in relation to any carriage by air to which the 1999 Montreal Convention applies, irrespective of the nationality of the aircraft performing that carriage".
That said, it is important to appreciate that while s 9B gives force of law to the Montreal Convention, the Convention itself is to be construed in accordance with the Vienna Convention on the Law of Treaties 1969: Povey at [24] and [60]. The point was captured by McHugh J in Povey at [60] in terms apposite to the present case (although the reference by McHugh J to "Article 17" is a reference to Art 17 of the Warsaw Convention as modified by the Hague Protocol and the Montreal Protocol No 4, which (not accidentally) closely resembles Art 17(1) of the Montreal Convention):
Article 17 must be construed in the context of an international agreement that constitutes a Code governing the liability of air carriers from many countries. So, although this Court is concerned with rights and liabilities created by an Australian statute, Australian courts should not take an insular approach to the construction of Art 17. Nor should it be interpreted by reference to presumptions and technical rules of interpretation applied in construing domestic statutes or contracts. Instead, an Australian court should apply the rules of interpretation of international treaties that the Vienna Convention on the Law of Treaties has codified. (Footnotes omitted.)
[7]
The reasons of the primary judge
It is convenient to address the relevant portion of the reasons of the primary judge immediately. They are short, and they place no weight on much of the contextual material bearing on the Montreal Convention or the decisions in this area or the commercial and regulatory context in which Air Canada's tariff came to be made.
As mentioned above, Art 17 imposes liability on the carrier and Art 21 creates two tiers of liability: liability below 113,100 SDRs (at the time of the carriage) which is strict subject to the damage being caused or contributed to by the passenger's own negligent or wrongful act or omission, and liability in amounts above that threshold, which is uncapped but subject to a defence if the carrier can establish that the damage was not due to its own negligence or wrongful act or omission. Article 25 provides that "[a] carrier may stipulate that the contract of carriage shall be subject to higher limits of liability than those provided for in the Convention or to no limits of liability whatsoever".
After summarising those provisions of the Montreal Convention, the primary judge referred to rr 105(B)(5) and 105(C)(1)(a) of the tariff, which were agreed to form part of the contract of carriage between the parties. Those sub-rules provide as follows (I shall return below to the balance of those rules, which were not reproduced or analysed in the primary judge's reasons):
RULE 105 - LIABILITY OF CARRIERS
…
(B) Laws and provisions applicable
…
(5) For the purpose of international carriage governed by the Montreal Convention, the liability rules set out in the Montreal Convention are fully incorporated herein and shall supersede and prevail over any provisions of this tariff which may be inconsistent with those rules.
(C) Limitation of liability
(1) Where the Montreal Convention applies, the limits of liability are as follows:
(a) There are no financial limits in respect of death or bodily injury.
His Honour summarised the evidence of a leading aviation expert, Professor Paul Stephen Dempsey, which was admitted over objection, accepting it as "uncontradicted evidence as to the operation of the international law", but nonetheless held that his conclusions about the meaning of r 105(C)(1)(a) were not probative: at [40]. I shall return to Professor Dempsey's evidence. I agree that his ultimate opinion on the legal meaning of the rules does not help the Court: see Studorp Ltd v Robinson; Robinson v Studorp Ltd [2012] NSWCA 382 at [16] and [28]. However, his authoritative and uncontroversial account of the context and object of the Convention and the tariff are invaluable.
[8]
Summary of reasoning
This appeal cannot be resolved merely by an examination of the provisions relied on by the respondents and nothing else. The reasons which follow develop this in some detail. The following summary may assist.
1. Under the Warsaw regime, liability for personal injury is, for practical purposes, subject to limits, however, those limits have been waived by most carriers (including Air Canada) pursuant to the IATA Intercarrier Agreements of 1995 and 1996. Air Canada's obligations under those agreements are directly reflected in r 105(B) of its tariff.
2. Air Canada's tariff had to accommodate the reality that it would apply to some passengers whose carriage was governed by the Warsaw regime and others whose carriage was governed by the Montreal Convention. It also had to comply with a range of international regulatory requirements.
3. A variety of textual considerations, most notably the absence of the language of waiver ("shall not invoke", "shall not avail itself of" and "liability will be waived") which are elsewhere found in the tariff, and the wording in r 105(C)(1)(a) of financial limits suggest that sub-para (a) does not have the effect of waiving the partial defence created by Art 21(2) of the Montreal Convention. This is also confirmed by the absence of any reference to the provisions in the Montreal Convention which authorise waiver, and the placement of the sub-paragraph. In short, many considerations suggest that r 105(C)(1)(a) does not have the effect attributed to it by the respondents, because when Air Canada did waive defences available to it under international conventions, it did so with different language, in a different section of its tariff, and explained with words of utmost clarity that that was what was being done.
4. The purpose of r 105(B) was to ensure that (a) the existing relaxation or waiver of Air Canada's entitlements under the Warsaw regime remained in place, in particular the waiver of the cap upon liability for death or personal injury, while (b) ensuring the Montreal Convention applied in terms, which of itself exposed a carrier to uncapped liability for death or personal injury.
5. The purpose of r 105(C) was quite different. It was to comply with notification requirements under regulatory regimes including that imposed by the Federal Government of Canada. That is why its provisions are expressed differently, including references "to your journey" and "in most cases" in r 105(C)(1) itself; those are words which summarise a complex regime, rather than themselves creating or qualifying the rights and obligations of the parties. That is also why, unlike the provisions in r 105(B)(1) which waive entitlements under the Warsaw regime doing so explicitly pursuant to Art 22(1), there is no mention of Art 25 of the Montreal Convention in r 105(C)(1). That is also why there is no conflict between rr 105(B)(5) and 105(C)(1) (noting that if there were a conflict, the former which "fully incorporates" the Montreal Convention is expressed to prevail).
[9]
Conventions governing international carriage by air
Claims for damages for personal injury arising from international carriage by air are governed by a series of international conventions. Since the Warsaw Convention was done on 12 October 1929, various further international agreements have been made to regulate carriage by air and modify the rules relating to carriers' liability, including the Hague Protocol in 1955, the Guadalajara Convention in 1961 and the Montreal Protocol No 4 in 1975. All of these were modifications of the Warsaw Convention, and it will be convenient to refer generically to "the Warsaw regime". (I am adopting the terminology in PS Dempsey and M Milde, International Air Carrier Liability: The Montreal Convention of 1999 (McGill University, 2005) at 2.)
The convention applicable to the carriage by Air Canada which gives rise to this appeal is the Montreal Convention of 1999. This represents a departure from the Warsaw regime, both by reason of its being a self-standing regime, rather than a further amendment to the Warsaw Convention, and also substantively, especially because instead of there being, for practical purposes, an upper limit to a carrier's liability in respect of the death or injury of a passenger, there is strict liability to a limit, above which the carrier's liability is presumptive but subject to defences. The position is well captured in the title of Professor Bin Cheng's article, "A New Era in the Law of International Carriage by Air: From Warsaw (1929) to Montreal (1999)" (2004) 53 International and Comparative Law Quarterly 833. The Second Circuit Court of Appeals has also said that the Montreal Convention was promulgated in order to "reform the Warsaw Convention so as to 'harmonize the hodgepodge of supplementary amendments and intercarrier agreements' of which the Warsaw Convention system of liability consists": Ehrlich v American Airlines, Inc 360 F 3d 366 at 371 (2d Cir 2004). As will be seen below, that "hodgepodge" of intercarrier agreements is material to an understanding of Air Canada's tariff.
[10]
The Warsaw regime
The "cardinal purpose" of the Warsaw Convention and its successors, was to "achieve uniformity in the law relating to liability of air carriers, so that, in those areas with which the Convention deals, it contemplates a uniform code that excludes resort to domestic law": Parkes Shire Council v South West Helicopters Pty Ltd (2019) 266 CLR 212; [2019] HCA 14 at [36]; see also at [54].
These conventions have been incorporated into domestic legislation by Australia across the years, beginning with the Warsaw Convention being given the force of law by the now repealed Carriage by Air Act 1935 (Cth). That statute was replaced with the Civil Aviation (Carriers' Liability) Act 1959. On 24 January 2009, the Montreal Convention was incorporated into domestic law by amendments to the Civil Aviation (Carriers' Liability) Act 1959: see Civil Aviation Legislation Amendment (1999 Montreal Convention and Other Measures) Act 2008 (Cth). The Montreal Convention is contained in Sch 1A of the Civil Aviation (Carriers' Liability) Act 1959.
That said, the Montreal Convention is closely informed by the Warsaw regime, and it is trite that to the extent that it employs language and concepts taken from the Warsaw regime, decisions on that regime are directly relevant to interpreting the Montreal Convention. As much was recognised by Allsop P in Gulf Air Company GSC v Fattouh [2008] NSWCA 225; 251 ALR 183 at [60] and [73]; many decisions of Circuit and District courts to that effect are collected in the Second Circuit's decision in Cohen v American Airlines, Inc 13 F 4th 240 at 244-245 (2021). As Professor Dempsey put it:
To understand the Montreal Convention of 1999, it is important to understand the Warsaw Convention of 1929 and its progeny (ie the "Warsaw regime"), and the legal, economic and technological environment in which they were promulgated and evolved, because many of the provisions of the Montreal Convention are nearly identical to that earlier multilateral treaty and its Protocol amendments. (Footnotes omitted.)
[11]
Warsaw Convention
Chapter III of the Warsaw Convention deals with the liability of carriers. The first three provisions impose strict liability on a carrier for death or wounding of or any other bodily injury to a passenger (Art 17), for destruction or loss of damage to registered baggage (Art 18), and for damage occasioned by delay (Art 19). Relevant to this appeal is Art 17, which is substantially unchanged (and is replicated in the Montreal Convention) and which provides as follows:
The carrier is liable for damage sustained in the event of the death or wounding of a passenger or any other bodily injury suffered by a passenger, if the accident which caused the damage so sustained took place on board the aircraft or in the course of any of the operations of embarking or disembarking.
Liability under the Warsaw regime in respect of personal injury suffered by a passenger that has not resulted in death is in substitution for any civil liability of the carrier under any other law in respect of the injury. Thus, as Allsop P said in the context of the Warsaw regime in a passage which is equally true of the Montreal Convention: "[The Warsaw Convention] can be taken to prescribe the circumstances, being 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. No other action [is] available to the passenger": United Airlines Inc v Sercel Australia Pty Ltd [2012] NSWCA 24; 289 ALR 682 at [96].
The next three provisions qualify the liabilities created by Arts 17-19. Relevant to this appeal is Art 22(1), which provides:
In the carriage of passengers the liability of the carrier for each passenger is limited to the sum of 125,000 francs. Where, in accordance with the law of the Court seised of the case, damages may be awarded in the form of periodical payments, the equivalent capital value of the said payments shall not exceed 125,000 francs. Nevertheless, by special contract, the carrier and the passenger may agree to a higher limit of liability.
In 1955, the Hague Protocol amended the Warsaw Convention, which amendments included increasing the limit of liability to 250,000 francs: see Art 22(1). The Convention was further amended by Montreal Protocol No 4 in 1975, but there was no change to the limit of liability in Art 22(1), which remained at 250,000 francs.
[12]
Dissatisfaction with the Warsaw regime
As explained in Professor Cheng's article at 835-842, the monetary limit for passenger death or bodily injury under the Warsaw regime was seen to be too low. After the Second World War, inflation and rapid rises in the cost of living rendered the official Warsaw limit "more and more unacceptable". This was especially so in the United States, where the official price of gold was fixed, such that 125,000 gold francs amount to only US$8,292 from 1934 to 1971, although it was raised slightly thereafter. The monetary limit was doubled under the Hague Protocol, but the United States was far from satisfied and came close to denouncing the Warsaw Convention in 1965. Thereafter ensued a period of instability, leading to several other attempts to increase the monetary limit, while at the same time various countries began requiring their carriers to introduce higher limits than that set out in the convention to circumvent the low thresholds. "The Warsaw System was in crisis", ultimately leading to the introduction of the modernised Montreal Convention.
[13]
Intercarrier Agreements
Under the heading "The Dykes Are Open" at 842 of Professor Cheng's article, that author stated:
In 1992 Japanese international airlines stunned the aviation world by accepting, in respect of passenger death or injury in Warsaw/Warsaw-Hague carriage, absolute liability up to SDR 100,000 and unlimited liability on the basis of rebuttable presumed fault, subject always to the defence of contributory negligence. (Footnote omitted.)
Shawcross & Beaumont: Air Law described this development:
The effect is that the plaintiff can recover the full amount of proven loss, with no arbitrary financial limit; issues as to intentional or reckless misconduct under art 25 become irrelevant in cases covered by these conditions. In so far as the claim is for less than the equivalent of 100,000 SDRs, the art 20 defence (ie that all necessary measures have been taken to avoid the damage) is waived [note that the art 21 defence of contributory negligence is not waived]; but in respect of potential liability in excess of 100,000 SDRs the carrier may still rely on the art 20 defence.
Although relatively few airlines took individual action to follow this lead, the initiative was profoundly influential and is reflected in the end-result of the discussions which took place under the aegis of IATA in 1995 and 1996: Shawcross & Beaumont: Air Law (LexisNexis), Chapter 33, section J "The IATA Intercarrier Agreement of 1995" at [187].
The results in the short term were (a) anti-trust approval for airlines to discuss limits on liability, (b) the IATA Intercarrier Agreement of 1996 and (c) the Agreement on Measures to Implement the IATA Intercarrier Agreement in 1996. The following more detailed account is taken from Professor Dempsey's unchallenged evidence.
In 1995, the United States Department of Transportation gave IATA anti-trust immunity to discuss modernisation of the liability regime in international aviation. At its Annual General Meeting, IATA endorsed a new "Washington Intercarrier Agreement" which provided for "full compensatory recoverable damages". The substantive clauses of that agreement commenced as follows:
The undersigned carriers agree
1. To take action to waive the limitation of liability on recoverable compensatory damages in Articles 22, paragraph 1 of the Warsaw Convention as to claims for death, wounding or other bodily injury of a passenger within the meaning of Article 17 of the Convention, so that recoverable compensatory damages may be determined and awarded by reference to the law of the domicile of the passenger.
2. To reserve all available defenses pursuant to the provision of the Convention; nevertheless, any carrier may waive any defense, including the waiver of any defense up to a specified monetary amount of recoverable compensatory damages, as circumstances may warrant.
[14]
Montreal Convention
The Montreal Convention is a departure from the successive amendments of the Warsaw Convention. It also departs from its predecessors substantively, particularly in respect of the limits of liability in respect of death and injury of a passenger.
While Art 17(1) of the Montreal Convention is in materially the same terms as Art 17 of the Warsaw Convention, there has been substantial change to the provisions that follow. Relevant to this appeal is Art 21, which provides:
Article 21 - Compensation in Case of Death or Injury of Passengers
1. For damages arising under paragraph 1 of Article 17 not exceeding 100,000 Special Drawing Rights for each passenger, the carrier shall not be able to exclude or limit its liability.
2. The carrier shall not be liable for damages arising under paragraph 1 of Article 17 to the extent that they exceed for each passenger 100,000 Special Drawing Rights if the carrier proves that:
(a) such damage was not due to the negligence or other wrongful act or omission of the carrier or its servants or agents; or
(b) such damage was solely due to the negligence or other wrongful act or omission of a third party.
Article 21 of the Montreal Convention differs in substance from Art 22 of the Warsaw regime. Article 22 of the Warsaw regime mandates an upper limit of a carrier's strict liability; whereas Art 21 of the Montreal Convention provides strict liability up to a specific limit, above which limit the carrier's liability is presumptive: see South West Helicopters Pty Ltd v Stephenson (2017) 98 NSWLR 1; [2017] NSWCA 312 at [297]; Dyczynski v Gibson (2020) 280 FCR 583; [2020] FCAFC 120 at [34]; Bradshaw v Emirates at [116]. This is commonly referred to as a "two-tier liability system": Bradshaw v Emirates at [116], [171]; Professor Cheng at 843, 849; Shawcross & Beaumont, Chapter 33 at [222]; Professor Malcolm Clarke, Contracts of Carriage by Air (Lloyd's List Law, 2nd ed, 2010) at 19 [3.3.1].
Other provisions of the Montreal Convention retain an upper limit on a carrier's liability. Examples may be seen in Art 22(1)-(3) concerning limits of liability in relation to delay, baggage and cargo:
Article 22 - Limits of Liability in Relation to Delay, Baggage and Cargo
1. In the case of damage caused by delay as specified in Article 19 in the carriage of persons, the liability of the carrier for each passenger is limited to 4,150 Special Drawing Rights.
2. In the carriage of baggage, the liability of the carrier in the case of destruction, loss, damage or delay is limited to 1,000 Special Drawing Rights for each passenger unless the passenger has made, at the time when the checked baggage was handed over to the carrier, a special declaration of interest in delivery at destination and has paid a supplementary sum if the case so requires. In that case the carrier will be liable to pay a sum not exceeding the declared sum, unless it proves that the sum is greater than the passenger's actual interest in delivery at destination.
3. In the carriage of cargo, the liability of the carrier in the case of destruction, loss, damage or delay is limited to a sum of 17 Special Drawing Rights per kilogramme, unless the consignor has made, at the time when the package was handed over to the carrier, a special declaration of interest in delivery at destination and has paid a supplementary sum if the case so requires. In that case the carrier will be liable to pay a sum not exceeding the declared sum, unless it proves that the sum is greater than the consignor's actual interest in delivery at destination.
[15]
Different conventions may apply to different contracts of carriage on the same flight
It is important to appreciate that the liability in relation to passengers and cargo on the same flight may be governed by different conventions. As Allsop P observed in Fattouh at [28] and United Airlines v Sercel at [14(a) and (b)], the fundamental approach taken in all of the conventions is to identify the contract for international carriage and to ask by reference to the place of departure and the place of destination what conventions apply. That follows from Art 1(2) of each convention, which provides that a convention applies to "any carriage in which, according to the agreement between the parties, the place of departure and place of destination … are situated … within the territories of two State Parties". Thus, if the State of the place of departure has ratified the Montreal Convention as well as the various conventions constituting the Warsaw regime, but the State of the place of destination has only ratified the Warsaw Convention, the carriage will be governed by the unamended Warsaw Convention. If, however, multiple conventions apply, then the Montreal Convention prevails over the other conventions: see Montreal Convention, Art 55(1).
The possibility for complexity, particularly in the case of carriage of passengers, is increased by the provisions of Art 1(2), to the effect that there is a single contract for international carriage, even if there is a break in the carriage and even if there is an agreed stopping place within the territory of a State which is not a party to the Convention. Thus in Grein v Imperial Airways Ltd [1937] 1 KB 50, where a passenger was killed in a crash on the return leg of a return flight from London to Antwerp at a time when the United Kingdom had ratified the Warsaw Convention but Belgium had not, the claim was governed by that convention. In Holmes v Bangladesh Biman Corporation [1989] 1 AC 1112 at 1131, Lord Bridge of Harwich said:
But it was decided in Grein v Imperial Airways Ltd and appears never to have been doubted since that carriage of a passenger pursuant to the single contract embodied in a return ticket from a place of departure in a Convention country to a destination in a non-Convention country and back to the original place of departure is "international carriage" within the Convention definition. Thus, if Thai Airways carry a passenger on a return ticket London-Bangkok-London, this is "international carriage" subject to the Hague Convention.
[16]
Air Canada's submissions on appeal
Air Canada contended that the first separate question before the primary judge should have been answered in the negative for two separate, yet interrelated, reasons.
1. First, Air Canada submitted that Art 25 of the Montreal Convention, which permits a carrier to stipulate higher limits of liability or "no limits of liability whatsoever", has no application to Art 21. Article 25 only applied to financial limits. "One of our core submissions of construction is going to be that, when you see limits of liability used throughout Montreal or Warsaw, it is speaking of limits in the financial or monetary sense, and it is not speaking of matters of mere defence". On that basis, Air Canada contended that r 105(C)(1)(a) of the tariff could not, pursuant to Art 25, remove Air Canada's entitlement to make out a defence that it was not negligent.
2. Secondly, Air Canada submitted that, on its proper construction, properly informed by text and context, r 105(C)(1)(a) of the tariff did not stipulate that there were to be no limits of liability under Art 21.
Air Canada candidly acknowledged that the first question of construction had not been argued before the primary judge. No objection was taken during the hearing by the respondents to Air Canada arguing this issue on appeal. In brief submissions supplied pursuant to leave after judgment was reserved, some opposition to the new stance was expressed. I am unpersuaded by the belated opposition. "Because a question of construction is one of law, there is only one true construction, and the task of this [C]ourt in an appeal on a question of construction is to determine for itself the proper construction of the instrument": Chevron (TAPL) Pty Ltd v Pilbara Iron Company (Services) Pty Ltd (2021) 58 WAR 102; [2021] WASCA 193 at [126]. However, it is convenient to address the second question, which was addressed by both the primary judge and the respondents, at the outset.
[17]
Does r 105(C)(1)(a) of Air Canada's tariff stipulate that there is to be no limit of liability under Art 21?
It is trite that Air Canada's tariff, no differently from any other written legal instrument, must be "read as a whole". That said, the tariff is a long document occupying 117 pages, dealing with a wide range of topics. The adage that a contract (or a statute: see Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28 at [69]) must be "read as a whole" does not bear its literal meaning - otherwise it would be much more time-consuming to construe provisions of many lengthy contracts (or provisions of the Corporations Act 2001 (Cth) or Income Tax Assessment Act 1997 (Cth) or much modern legislation). But the fundamental approach of reading a legal document as a whole does require at the least an examination of the provisions which deal with the same topic. The starting point is to consider the entirety of the two sub-rules in issue, rr 105(B) and 105(C).
Rule 105, which is titled "Liability of carriers", is divided into eight sub-rules ("A" to "H"). Each deals with a discrete topic in relation to the liability of the carrier, in the context of the Montreal Convention as well as the various iterations of the Warsaw Convention. It was not suggested that sub-rules "(A)" or "(D)"-"(H)", which deal with carriage by successive carriers, declarations of higher value cargo, times limits on claims, claims for delays, cancellations or delayed boarding, modification or waiver, and severability) were relevant. Relevant to this appeal are sub-rule "(B)" which deals with "Laws and provisions applicable" and sub-rule "(C)" which deals with "Limitation of liability".
Sub-rule (B) contains five paragraphs. Each paragraph identifies the different sources of liability rules. For example, r 105(B)(1) provides:
(B) Laws and provisions applicable
(1) The carrier agrees in accordance with article 22(1) of the convention for the unification of certain rules relating to international transportation by air signed at Warsaw, October 12, 1929 or, where applicable, that convention as amended by the protocol signed at the Hague on September 28, 1955 (the "convention") that, as to all international carriage or transportation hereunder as defined in the convention:
(a) The carrier shall not invoke the limitation of liability in article 22(1) of the convention as to any claim for recoverable damages arising under article 17 the convention.
(b) The carrier shall not avail itself of any defense under article 20(1) of the convention with respect to that portion of such claim which does not exceed 113,100 Special Drawing Rights.
(c) Except as otherwise provided herein, the carrier reserves all defenses available under the convention to any such claim. With respect to third parties, the carrier reserves all rights of recourse against any other person, including without limitation, rights of contribution and indemnity.
[18]
Conclusions and orders
For those reasons, the primary judge's answer to the first separate question was incorrect. The appeal must be allowed, and the question answered affirmatively.
I return to Air Canada's first submission, which was that the power to stipulate higher limits or no limits at all under Art 25 was confined to financial limits, and did not extend to the waiver of a partial defence such as that in Art 21(2).
It is unnecessary to determine that question, and the answer will have no consequence to the litigation. Because the submission was raised for the first time on appeal, this Court lacks the advantage of reasons at first instance. Further, the respondents made no submission to the contrary, so this Court lacks the benefit of any argument on the point. In consequence, anything said in answer to it will be both unnecessary and of doubtful precedential value.
In addition to the foregoing, the point is especially arid. It is quite plain that a carrier can waive a non-financial aspect of the liability imposed by the Warsaw regime, and as much occurred for many years pursuant to the IATA Intercarrier Agreements, and may be seen in the promise not to invoke the "all necessary measures" defence in Art 20(1) of the Warsaw regime in r 105(B)(1)(a) of Air Canada's tariff. Article 27 of the Montreal Convention explicitly states that nothing in the Convention "shall prevent the carrier from … waiving any defence available under the Convention". Even if Air Canada's submission is sound and Art 25 does not authorise a provision of a tariff which waives its partial defence under Art 21(2), Art 27 authorises that course. In such a case, although the primary judge would have been wrong to conclude that Art 25 authorised r 105(C)(1)(a), Art 27 would have authorised it, and had there been a notice of contention on this new issue, then the point would be wholly arid. Air Canada's written submissions, supplied well in advance of the hearing, made this point and stated that "the primary judge made no finding of waiver under Art 27; there is no Notice of Contention; and the appeal should be allowed without further enquiry into the construction of the Tariff". Even so, the respondents did not see fit to serve a notice of contention. Accordingly, acceptance of Air Canada's submission would result in a decision of limited or no precedential value. I find it difficult to contemplate circumstances in other litigation when anything would turn on the limitation to Art 25 for which Air Canada contends, assuming that Art 27 was also available. For those reasons, I refrain from resolving Air Canada's first submission.
[19]
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Decision last updated: 21 June 2024
Parties
Applicant/Plaintiff:
Air Canada
Respondent/Defendant:
Evans
Legislation Cited (10)
Air Act 1935(Cth)
Montreal Convention and Other Measures) Act 2008(Cth)
The source of the rights sought to be enforced by the respondents is the federal statute giving the treaty the force of law, but the metes and bounds of those rights are determined by reference to the treaty. The distinction may be a fine one, but it is not without consequence in this appeal, because it affects the way in which disputes about the content of those rights are determined.
International treaties should be interpreted uniformly by contracting States: Shipping Corporation of India Ltd v Gamlen Chemical Co (A/Asia) Pty Ltd (1980) 147 CLR 142 at 159-160; [1980] HCA 51; Great China Metal Industries Co Ltd v Malaysian International Shipping Corporation Berhad (1998) 196 CLR 161; [1998] HCA 65 at [38], [71], [137]; Povey at [25], [60], [128] and [134]. One consequence in a case such as this is that decisions of foreign courts on the Montreal Convention have greater persuasive weight than they would otherwise have.
The liability imposed by Art 17 as incorporated into Australian domestic law is subject to various qualifications, including (a) if the damage was caused or contributed to by the passenger's negligence or wrongful act (Art 20), and (b) insofar as the liability exceeds 100,000 SDRs, if the carrier can show that the damage was not due to the negligence or other wrongful act or omission of the carrier or its servants or agents, or was solely due to the negligence or other wrongful act or omission of a third party (Art 21(2)). The latter defence is no answer to a claim which does not exceed 100,000 SDRs, but the former is an answer to the entirety of a passenger's claim. Article 24 makes provision for review of the 100,000 SDRs limit, and indeed in December 2009 it was increased to 113,100, and in December 2019 to 128,821: see the two documents titled "Notice Pursuant to Civil Aviation (Carriers' Liability) Act 1959" gazetted on 23 December 2009 and 6 December 2019.
In its defence, Air Canada resisted the respondents' claims, including by advancing two partial defences. First, it said that the quantum of the respondents' claims was governed by the Civil Liability Act 2002 (NSW). Secondly, it pleaded that "the Defendant is not liable for any damages which might be recovered by either Plaintiff to the extent the amount exceeds the sum of 128,821 SDRs, in accordance with Art 21 of the Montreal Convention 1999". (Air Canada subsequently advised that the reference to 128,821 SDRs was erroneous, and anticipated an amendment to 113,100 SDRs, the limit in place in July 2019; in what follows I shall refer to 113,100 SDRs.) Air Canada's allegation based on Art 21 can only sensibly be understood as an allegation that any harm sustained by the respondents was not caused by Air Canada's negligence, and indeed, by dint of r 14.11 of the Uniform Civil Procedure Rules 2005 (NSW) there was taken to be implied in Air Canda's defence a statement to the effect that the preconditions to its being entitled to avail itself of the limited liability in Art 21(1) had been satisfied. The decisions and provisions summarised in Cappello v Hammond & Simonds NSW Pty Ltd [2021] NSWCA 57 at [18]-[25] explain that the effect of the rule is that such an allegation leaves it to the other side to raise non-satisfaction of any conditions precedent. That course was taken, very properly, by the respondents' reply, which resisted the applicability of the Civil Liability Act and alleged:
Rule 105(C)(1)(a) of the Defendant's International Tariff General Rules, applicable to the transportation of the Plaintiffs by the Defendant on flight AC 033 on 11 July 2019 to which the Montreal Convention applies, provides that there are no financial limits on the compensatory damages recoverable in respect of bodily injuries sustained by the Plaintiffs.
Each party sought and obtained orders pursuant to UCPR r 28.2 for questions to be determined separately from the other issues in the proceeding and prior to the trial of the respondents' underlying claim. The first question, raised by the respondents, was:
Does Rule 105(C) [of Air Canada's tariff] provide and have the effect that if this Court assess each plaintiff's compensatory damages in Australian dollars in an amount in excess of 128,281 Special Drawing Rights (SDR), each is entitled to recover that sum from the defendant even if the defendant can prove that the damages were not due to the negligence or other wrongful act or omission of the carrier or its servants or agents or such damage was solely due to the negligence or other wrongful act or omission of a third party?
The second, raised by Air Canada, was:
Does Part 2 of the Civil Liability Act 2002 (NSW) apply to the determination of the quantum of any damages recoverable by the plaintiffs?
Those separate questions were set down for hearing on 14 September 2023, following which the primary judge handed down judgment on 12 December 2023. The primary judge answered both questions affirmatively.
Air Canada seeks leave to appeal from the primary judge's determination of the first separate question. There was a concurrent hearing of the application for leave to appeal as if it were an appeal. As noted above, nothing was said by the respondents against a grant of leave.
The second separate question raises complex issues of general application relating to the applicable State law in federal jurisdiction, as to which conflicting first instance authority exists: see Grueff v Virgin Australia Airlines Pty Ltd [2021] FCA 501; 395 ALR 249 and Bradshaw v Emirates [2021] FCA 1407; 395 ALR 97. However, that question was answered in Air Canada's favour, and no cross-appeal has been filed by the respondents challenging that part of the primary judge's decision. Accordingly, those issues do not arise.
The primary judge's reasons are at [48]-[61], following synopses of the parties' submissions, and, together with Air Canada's criticism of them, may be summarised as follows.
1. Invoking decisions on the principle of contractual construction, the primary judge said that it was "crucial" to have "objective regard to the actual words used, while taking into account the context and commercial purpose of the contract": at [48]. Air Canada said that this was wrong ("Respectfully we would say that to treat the issue as simply the proper construction of the rule is not the correct entry point; one first needs to understand the Convention and what work has been done by articles 21 and 25").
2. His Honour observed that r 105(C)(1)(a) of the tariff was "prima facie unambiguous", and noted that Art 25 allowed a carrier to stipulate that its contract of carriage shall be subject to "no limits of liability whatsoever": at [51]. Air Canada pointed to difficulties in the application of sub-rules (B) and (C) of r 105 on that approach.
3. The primary judge said that there was "force in the plaintiffs' submission that this is a straightforward matter of reading and interpreting the words of the contract by giving them their ordinary and natural meaning, and that those words can only mean that r 105(C)(1)(a) removes the limit on Air Canada's liability imposed by Art 21 of the Montreal Convention in the manner allowed by Art 25": at [52].
4. His Honour pointed to "a significant congruence" between Art 25 and r 105(C)(1)(a), with both referring to "limits", and said that "On an initial reading, it would appear that there is no ambiguity arising which would necessitate the use of extrinsic material to interpret the Rule": at [53].
5. The primary judge accepted Professor Dempsey's view that the Montreal Convention created a second tier of liability with no financial limits, subject to the carrier failing to prove that it was not at fault, and said that he had regard to the extrinsic material describing the Montreal Convention as "removing limits" of liability: at [55]. However, his Honour rejected the reasons given by Professor Dempsey for concluding that the rules in Air Canada's tariff did not waive its entitlement to the partial defence under Art 21(2), giving three reasons.
1. "Firstly, the Court is interpreting the meaning of r 105(C)(1)(a), and not the Montreal Convention itself. Whatever courts, politicians, or academics may have to say about the effect of the Montreal Convention is not definitive of what a reasonable person would understand by the language used in r 105(C)(1)(a), nor the mutual intention of the parties derived from the words used": at [56]. As noted above, Air Canada maintained this was the wrong starting point, and further said that r 105(B)(5) required one to have regard to the Montreal Convention, because it was explicitly incorporated into the contract of carriage.
2. Secondly, "[i]f Rule 105(C)(1)(a) was merely a reference to the second unlimited tier of Art 21, it would be perplexing that the draftsperson failed to specify to which tier the rule was said to apply, or that the application of the rule was subject to the fault-component present in Art 21": at [57]. Air Canada said that this collapsed Air Canada's argument into a submission about the second tier, rather than about the effect of Art 21 as a whole.
3. Thirdly, the primary judge said at [58]:
Further, such an interpretation does not explain why r 105(c)(1)(a) [sic] would be present in the Tariff at all, given that r 105(B)(5), to which reference has been made, already acknowledges the binding and primary operation of the entire Montreal Convention. If it were the case that it was for some reason necessary to go beyond that acknowledgement to reproduce or to reflect aspects of the Montreal Convention in the Tariff, no explanation is proffered as to why r 105(C)(1)(a) is silent on the other aspect of that tier, namely the fault-component which allows carriers to limit their liability.
Air Canada said this was wrong, and that there was a clear explanation for the presence of the rule in the tariff, which was to give notice to passengers and to comply with United States and Canadian laws. However, relying on what his Honour regarded as the absence of purpose, the primary judge said that "If Air Canada were correct, then there would not have been a need to include r 105(C)(1)(a) in the tariff at all", and concluded that it should be given work to do, by reference to its natural and ordinary meaning.
1. The primary judge concluded at [61]:
The language employed in r 105(C)(1)(a) is so clear and unambiguous that to afford it the interpretation that Air Canada propounds would be to detract from the contract's synergy and commercial sense.
1. Air Canada said this repeated the error of taking a purely contractual approach.
The respondents' written submissions in this Court were even more succinct (fewer than five pages). That is not intended by way of criticism; prolixity tends to dilute a submission's force. They supported the reasons of the primary judge. They maintained that the relevant rules were clear and unambiguous, and asserted that "It is clear that the purpose of Rule 105(C)(1)(a) was to give effect to the operation of Article 25".
The respondents' oral submissions followed the same approach (fewer than six pages of transcript). They were fairly summarised by Payne JA:
PAYNE JA: So your case, you say, is a simple one. You support his Honour in all respects, and when his Honour put aside all of the travaux about Montreal, and the cases we were taken to, you say is completely correct and we just focus on the words of this tariff, which you say mean that they've abandoned their defences. That's in a nutshell your case.
MCILWAINE: Yes, your Honour, that is our case …
The approach propounded by the respondents and adopted by the primary judge involved an analysis of two provisions, taken out of context, which when considered alone were characterised as unambiguous, thereby leading to a disregard of other material, both within and extrinsic to the tariff. This was incorrect, for a number of overlapping reasons.
1. First, r 105(B)(5) of the tariff explicitly incorporates the Montreal Convention and provides that it prevails over any provision of the tariff inconsistent with the liability rules in that convention. One cannot apply r 105(B)(5) without first identifying the liability rules in the Convention.
2. Secondly, even if (as the respondents and the primary judge repeatedly said) the issue were one of construing the contract of carriage, it is necessary to read the contract as a whole, and "the words of every clause must if possible be construed so as to render them all harmonious one with another"; this is the "trite law" to which McTiernan, Webb and Taylor JJ referred in Fitzgerald v Masters (1956) 95 CLR 420 at 437; [1956] HCA 53 and to which Gibbs J referred in Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99 at 109; [1973] HCA 36 (cited by the primary judge at [48]). It is also necessary to have regard to the commercial purpose or objects of that contract. Indeed, Lahey Constructions Pty Ltd v The State of New South Wales [2021] NSWCA 69 at [35] (the paragraph cited by the primary judge) states:
The clause of the contract is to be construed objectively by reference to its text, context, and commercial purpose, asking what a reasonable person would have understood it to mean. This requires an examination of the language used, the surrounding circumstances known to the parties, and the commercial purposes or objects to be secured by the contract: Electricity Generation at [35]; Mount Bruce Mining at [46]-[49].
1. Thirdly, this is not a case of merely construing a contract. The tariff regulates liability created by various international conventions. Further, the tariff was required to come into existence as part of the regulatory regimes in a number of countries governing international commercial aviation.
There is a fourth and more general point. One cannot conclude that a provision is "unambiguous" or has a "plain meaning" without first having regard to contextual considerations. This is axiomatic in the case of the construction of statutes; thus the joint judgment in CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 408; [1997] HCA 2 stated that context is "considered in the first instance, not merely at some later stage when ambiguity might be thought to arise", making it plain that their Honours were speaking of context "in its widest sense", including the identification of external matters such as "the existing state of the law and the mischief which ... the statute was intended to remedy". Substantially the same is true of a provision in a treaty: Art 31 of the Vienna Convention on the Law of Treaties requires a treaty to be interpreted "in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose". The cause of action on which the respondents sued, and the partial defence invoked by Air Canada, derived from a treaty to which federal statute gives the force of law. It was necessary to have regard to context in the first instance.
The need to have regard to context is also true of contracts, at least in that category of cases described as "latent ambiguity"; hence Mason J's exception for latent ambiguity in Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337 at 347; [1982] HCA 24. It is a general characteristic of language; hence Dixon J's observation in Johnson v Miller (1937) 59 CLR 467 at 486; [1937] HCA 77 that the facts disclosed a latent ambiguity in a superficially regular criminal complaint. It reflects the facts that "ambiguity is necessarily the result of some process of interpretation" and "[t]he statement that 'clause X' is ambiguous' is necessarily an implicit statement about the materials considered and the process adopted to assess clause X's meaning": P Herzfeld and T Prince, Interpretation (Thomson Reuters, 2nd ed 2020) at 458. I respectfully agree with the proposition in Rinehart v Hancock Prospecting Pty Ltd (2019) 267 CLR 514; [2019] HCA 13 at [83]:
Every clause in a contract, no less arbitration clauses, must be construed in context. No meaningful words, whether in a contract, a statute, a will, a trust, or a conversation, are ever acontextual.
It is unnecessary for present purposes to consider the question, which is controversial in this country, whether there are rules limiting the role of latent ambiguity and which preclude regard to extrinsic materials in order to assess the legal meaning of contracts which are wholly written.
When the tariff is read as a whole, and in light of its purpose and object, and when the Montreal Convention which it incorporates is understood in accordance with the principles summarised above, the meaning of r 105(C)(1)(a) is tolerably clear.
Thus, under the Warsaw regime, a carrier's liability for bodily injury to a passenger is limited to a specific monetary amount, subject to two further qualifications. First, the limit in Art 22 does not apply if the damage is caused by the carrier's wilful conduct or recklessness: see Art 25. This means that it is possible for damages to exceed the monetary limit in Art 22, although the onus rests on the passenger to establish wilful conduct or recklessness. Secondly, the reference to "special contract" in the last sentence of Art 22(1) contemplates that contract may impose a higher limit of liability, but it cannot fix a lower amount: see Art 23.
Professor Dempsey stated that by 2005, 131 airlines including all IATA members airlines had signed the agreement. He also emphasised that the mechanism for waiving the limits in the Warsaw regime which was deployed was the "special contract" provision in Art 22(1).
There was a second Agreement on Measures to Implement the IATA Intercarrier Agreement of 1996, motivated by the risk of the United States denouncing the Warsaw regime, which would give rise to "unpredictable conflicts of law and conflicts of jurisdiction, unpredictable damage awards, and accelerated insurance premiums". That agreement commenced as follows:
The Agreement on Measures to Implement the IATA Intercarrier Agreement ("MIA")
I. Pursuant to the IATA Intercarrier Agreement of 31 October 1995, the undersigned carriers agree to implement said Agreement by incorporating in their conditions of carriage and tariffs, where necessary, the following:
1. {CARRIER} shall not invoke the limitation of liability in Article 22(1) of the Convention as to any claim for recoverable compensatory damages arising under Article 17 of the Convention.
2. {CARRIER} shall not avail itself of any defence under Article 20(1) of the Convention with respect to that portion of such claim which does not exceed 100,000 SDRs…
3. Except as otherwise provided in paragraphs 1 and 2 hereof, {CARRIER} reserves all defences available under the Convention to any such claim…
Once again, it will be noticed that (a) the mechanism for removing the limitation of liability was, explicitly, Art 22(1), and (b) the way in which this was to occur was by incorporating provisions into airlines' conditions of carriage and tariffs.
However, according to Professor Dempsey, the increase in liability to 100,000 SDRs and removal of the carrier's defence under Art 20 that it had taken all necessary measures, or that it was impossible to take such measures, was insufficient to satisfy United States negotiators. A Diplomatic Conference was convened in Montreal in May 1999 which adopted the Montreal Convention, which commenced on 4 November 2003, 60 days after its 30th ratification, being, significantly, that by the United States.
Article 23(2) provides alternative limits on liability for those nation States which are not members of the International Monetary Fund and whose law does not permit the conversion of SDRs into national currency. Article 24 provides that the limits of liability may be amended by way of review.
Two other provisions were at the forefront of Air Canada's submissions in this Court. The first was Art 25, which provides:
Article 25 - Stipulation on Limits
A carrier may stipulate that the contract of carriage shall be subject to higher limits of liability than those provided for in this Convention or to no limits of liability whatsoever.
Article 25 thus preserves the facility to vary by contract which was found in the last sentence of Art 22(1) of the Warsaw regime, but goes further by providing that a contract of carriage my stipulate that there are "no limits of liability whatsoever".
The second was Art 27, which is directed to "defences":
Article 27 - Freedom to Contract
Nothing contained in this Convention shall prevent the carrier from refusing to enter into any contract of carriage, from waiving any defences available under the Convention, or from laying down conditions which do not conflict with the provisions of this Convention.
Thus, a carrier may, by contract of carriage, waive: the defence to liability for damage to baggage based on the inherent defect, quality or vice of the baggage (Art 17(2)); the various defences to liability for damage to cargo including due to its inherent defect, quality or vice (Art 18(2)); the defence to liability for delay if the carrier proves that it and its servants took all measures that could reasonably be required to avoid the damage or that it was impossible for it or them to take such measures (Art 19), and the whole or partial defence of contributory negligence (Art 20).
The point of Lord Bridge's example is that, famously, Thailand never ratified any of the conventions comprising the Warsaw regime, and at the time Holmes was decided, it was not a party to the Hague Convention. But the carriage of a passenger on a one-way ticket on the same flight would not, in 1989, have been governed by the Warsaw regime. Grein, Holmes and many other decisions are reviewed by Allsop P in Fattouh at [56]-[74] (where the carriage was a return flight from Beirut to Bahrain to Sydney to Bahrain to Beirut, with a 3 month break in Sydney, and it was held that the place of departure and the place of destination were Beirut).
Formerly, the fact that many countries were parties to the Hague Protocol and the Guadalajara Convention, but not the United States, gave rise to considerable complexity. The widespread ratification of the Montreal Convention has reduced these problems (until relatively recently, the Philippines (2015), Indonesia (2017), the Russian Federation (2017), Vietnam (2018) and Sri Lanka (2019) had not ratified the Montreal Convention). Nonetheless, they still exist. For example, a one-way Air Canada flight from Toronto to Grenada is governed by the Warsaw Convention as amended by the Hague Protocol, although the carriage of passengers on a return ticket on the same flight will be governed by the Montreal Convention. Closer to Australia, Nauru and Papua New Guinea have only ratified the Warsaw Convention and the Hague Protocol, and passengers on the same flight from Sydney to Port Moresby will be subject to the Warsaw regime if travelling one-way, but to the Montreal Convention if they are travelling on a return ticket. Similar examples are given in B Havel and G Sanchez, The Principles and Practice of International Aviation Law (Cambridge University Press, 2014) at 277 and 309 and LB Goldhirsch, The Warsaw Convention Annotated: A Legal Handbook (Kluwer Law International, 2000) at 185-187.
The significance of the places of departure and destination in the contract for carriage also plays out in domestic aviation, by reason of State and Commonwealth laws which substantially replicate the international conventions. For example, in Air Link Pty Ltd v Paterson (2005) 223 CLR 283; [2005] HCA 39, Mr Paterson was injured while disembarking a flight from Cobar to Dubbo (both in central New South Wales). Because his ticket was for onward travel from Dubbo to Sydney and thence to the Gold Coast in Queensland, his carriage was governed by a different regime (and indeed, by federal law) than passengers on the same flight who were travelling just from Cobar to Dubbo. Likewise the reason for the decision in Page v Sydney Seaplanes Pty Ltd (2020) 277 FCR 658; [2020] FCA 537 was that wholly intra-State carriage was not governed by federal law.
To anticipate what follows, this is why the Air Canada tariff deals separately and in the alternative with carriage governed by the Warsaw regime and carriage governed by Montreal Convention. As will be seen below, rr 105(B)(1) and (2) and 105(C)(2), (6) and (8) applied to carriage governed by the Warsaw regime. In construing the rules on which the primary judge relied, which applied to carriage governed by the Montreal Convention, it is necessary to have regard to the counterpart rules dealing with carriage to which the Warsaw Convention applied, bearing in mind not merely that they are sub-rules within the same rules, but also that different rules may govern the carriage of passengers on the same flight.
It will immediately be apparent that that sub-rule accommodates the possibility that the Warsaw regime will apply to some of the contracts of carriage to which the tariff applies, and fulfils Air Canada's obligations under the IATA Intercarrier Agreement 1995 and the Agreement on Measures to Implement the IATA Intercarrier Agreement 1996, to waive the carrier's entitlement under the Warsaw regime to capped liability in Art 22, and to renounce any reliance on the "all necessary measures" defence in Art 20(1), but at the same time to preserve other defences (such as contributory negligence). It will also be noted that the sub-rule explicitly invokes Art 22(1) of the Warsaw regime, which permitted a carrier "by special contract" to agree to a higher limit of liability. It may be noted that if r 105(C)(1)(a) has the construction upheld by the primary judge, the drafter chose not to identify the provision of the Montreal Convention upon which reliance was placed.
Rule 105(B)(2) deals with the language of the ticket. Sub-rule (B)(3) provides that all carriage is subject to applicable laws, the provisions on the ticket and "[t]his tariff, general conditions of carriage and applicable fare rules". Sub-rule 105(B)(4) deals, elaborately, with a waiver of "normal carrier liability" for loss or damage or delay in delivery of mobility aids such as wheelchairs.
Sub-rule (B)(5) deals with the applicability of the Montreal Convention:
(5) For the purpose of international carriage governed by the Montreal Convention, the liability rules set out in the Montreal Convention are fully incorporated herein and shall supersede and prevail over any provisions of this tariff which may be inconsistent with those rules.
In contrast with sub-rule (B)(1), there is no waiver or renunciation of any of the provisions in the Montreal Convention, to the extent that that convention is applicable to carriage. Further, the sub-rule addresses explicitly the possibility that some other provision of the tariff might be inconsistent with the Montreal Convention, in which case the Convention is to prevail.
Sub-rule (C) of r 105 is the longest sub-rule by far. Paragraphs (1)-(5) apply to liability for death or bodily injury to passengers, and then paragraphs (6)-(10) relate to cargo and other property, while paragraphs (11)-(15) deal with general topics. The first five paragraphs are as follows:
(C) Limitation of liability
(1) Where the Montreal Convention applies, the limits of liability are as follows:
(a) There are no financial limits in respect of death or bodily injury.
(b) In respect of destruction, loss of, or damage or delay to baggage, 1,288 Special Drawing Rights per passenger in most cases.
(c) For damage occasioned by delay to your journey, 5,346 Special Drawing Rights per passenger in most cases.
(2) Where the Warsaw Convention system applies, the following limits of liability may apply:
(a) 16,600 Special Drawing Rights in respect of death or bodily injury if the Hague protocol to the convention applies, or 8,300 Special Drawing Rights if only the Warsaw Convention applies. US regulations require that, for journeys to, from or with an agreed stopping place in the US, the limit may not be less than US $75,000.
(b) 17 Special Drawing Rights per kg for loss of or damage or delay to checked baggage and 332 Special Drawing Rights for unchecked baggage.
(c) The carrier may also be liable for damage occasioned by delay.
(3) Where neither the Montreal Convention nor the Warsaw Convention system applies the liability limit for loss or delay of, or damage to baggage is 1,288 Special Drawing Rights per passenger in most cases.
(4) Except as provided herein, or in other applicable law:
(a) Carrier is not liable for any death, injury, delay, loss, or other damage of whatsoever nature (hereinafter in this tariff collectively referred to as "damage") to passengers or unchecked baggage arising out of or in connection with carriage or other services performed by carrier incidental thereto, unless such damage is caused by the negligence of carrier.
(b) Carrier is not liable for any damage directly and solely arising out of its compliance with any laws, government regulations, orders, or requirements or from failure of passenger to comply with same.
(5) The aforementioned limits of liability apply unless a higher value is declared in advance and additional charges are paid as set out below. In that event the liability of the carrier shall be limited to such higher declared value. In no case shall the carrier's liability exceed the actual loss suffered by the passenger.
The following textual matters are immediately apparent.
First, in r 105(C)(1) itself in sub-paras (b) and (c) there are references to "in most cases". That cannot be the language of a provision which alters the parties' rights and obligations, for it is self-evidently uncertain. It is the language of a provision which is intended concisely to notify passengers of the limits to which their contract of carriage by air is subject. It is not uncommon for laws regulating aviation to require carriers to lodge their tariffs for approval: see Pt 4 of the Air Navigation Regulation 2016 (Cth) and for an example of the disputes to which that requirement may give rise, see R v Halton; Ex parte AUS Student Travel Pty Ltd (1978) 138 CLR 201; [1978] HCA 26; see also Price v KLM-Royal Dutch Airlines 107 F Supp 2d 1365 (2000). Relevantly for present purposes, reg 122 of the Canadian Air Transportation Regulations, SOR/88-58, provided:
Every tariff shall contain
(a) the terms and conditions governing the tariff generally, stated in such a way that it is clear as to how the terms and conditions apply to the tolls named in the tariff;
…
(c) the terms and conditions of carriage, clearly stating the air carrier's policy in respect of at least the following matters, namely,
…
(xviii) limits of liability respecting passengers and goods,
(xix) exclusion from liability respecting passengers and goods,
(xx) procedures to be followed, and time limitations, respecting claims …
By supplementary submissions provided pursuant to leave granted for this purpose, the respondents objected to Air Canada's tender of that regulation, and to various other documents on which Air Canada relied. They said that the regulation had not been relied on before the primary judge, but did not point to any prejudice. There was no dispute as to the authenticity of the regulation, which is readily available from an official Canadian government website (https://laws-lois.justice.gc.ca/eng/regulations/sor-88-58/index.html). The copy tendered is admissible pursuant to s 174(1)(b) of the Evidence Act 1995 (NSW). The respondents also contended that the regulation (and other materials upon which Air Canada sought to rely) did not assist in the construction of the tariff. To the contrary, a regulation requiring certain matters to be included in the tariff is part of the "history, background and context and the market in which the parties were operating" when Air Canada flew the respondents to and from Vancouver: cf Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104; [2015] HCA 37 at [50]. I cannot accept the respondents' position (in support of the reasoning of the primary judge), including that there was no explanation for the inclusion of r 105(C)(1)(a) (which is found under the heading "Limits of liability"), if it did not waive the defence in Art 21(2), and simultaneously to deny the relevance of the Canadian regulation which required the tariff to clearly state Air Canada's policy in respect of "limits of liability respecting passengers and goods". To the contrary, I accept Mr Gleeson SC's submission that the "core explanation" for the presence of the "limits of liability" in r 105(C)(1) was compliance with the obligation in reg 122(c)(xviii) of the Canadian Air Transportation Regulations that the tariff contain a clear statement of the "limits of liability" to which the carriage was subject.
Secondly, no reference is made to any exercise of the power under Art 25 to stipulate that there is to be no limits of liability. That contrasts with the express invocation in sub-rule (B) of Art 22(1) in order to remove the limits of liability if the Warsaw regime applied.
Thirdly, if the effect of the tariff were to enhance the entitlements of passengers to whose carriage the Montreal Convention applied, it would be rational for the provisions with that effect to appear in the same sub-rule as the provision which performed the same task in relation to carriage to which the Warsaw regime applied. But rather than sub-rule (B) containing some provision which pursuant to Art 25 of the Montreal Convention increased the airline's liability, there is instead in sub-rule (B)(5) an explicit confirmation that the Montreal Convention applies in full, and indeed that if any other provision of the tariff were inconsistent with the Montreal Convention, the Convention prevails.
Fourthly, there are other textual differences. The provisions in sub-rule (B) which involve departures from the Warsaw regime use the terminology of "shall not invoke" (r 105(B)(1)(a)), "shall not avail itself" (r 105(B)(1)(b)) and "liability will be waived" (r 105(B)(4)(a)). If the carrier were taking the same course and departing from the Montreal Convention favourably to passengers in r 105(C)(1)(a), then it might be expected that similar language would be used, rather than the descriptive language which has been deployed.
Fifthly, there is the explicit text of r 105(C)(1)(a). The sub-paragraph refers to "financial limits", not "liability limits". To reiterate, the Montreal Convention imposes two tiers of liability for death or bodily injury (strict liability below 113,100 SDRs and unlimited higher liability, subject to the carrier making out an absence of negligence), all of which is subject to a defence of contributory negligence. It is natural to treat the liability of a carrier to a passenger for death or bodily injury as not being subject to any financial limits, notwithstanding that contributory negligence may be a complete defence, and if the carrier can establish an absence of negligence on its part, that will be a partial defence insofar as the claim exceeds 113,100 SDRs. In contrast, it is decidedly not natural to construe the "financial limits" in r 105(C)(1)(a) as a removal of the carrier's entitlement to rely on a partial defence of absence of negligence on its part. Once again, the way that has been done in Air Canada's tariff may be seen in r 105(B)(1)(b) which provides that it "shall not avail itself of any defense under article 20(1) …".
Sixthly, the construction asserted by the respondents and upheld by the primary judge presents a problem. If r 105(C)(1)(a) disentitles Air Canada from relying on the partial defence in Art 21(2), does it also disentitle Air Canada from relying on the defence (which may be partial or complete) in Art 20 of contributory negligence? It is no answer to say, as was said in answer to the Court's question during the hearing, that no contributory negligence had been alleged. The question is one of construction, and the carrier and any passenger (not to mention any insurer of either) should know whether the carrier is liable for the passenger's death or bodily injury caused by or contributed to by the negligence or wrongful act of the passenger. The respondents ultimately contended that contributory negligence was not waived (see supplementary submissions dated 12 June 2024 paragraph 17) but did not explain how that defence was preserved but the defence in Art 21(2) was waived, or otherwise provide any reasoning in support of their contention.
Seventhly, Air Canada's construction also avoids internal inconsistency between consecutive provisions of the tariff. Why ever would r 105(C)(1)(a) be construed so as to take away the partial defence in Art 21(2) when the immediately preceding sub-paragraph of the tariff preserves the entirety of the Montreal Convention?
Finally, it is necessary to deal with what the primary judge saw as the "flaw" in Air Canada's construction. His Honour noted that Air Canada's construction would render r 105(C)(1)(a) otiose, given that sub-rule (B)(5) already acknowledges the binding and primary operation of the entire Montreal Convention. The primary judge concluded at [59]:
Herein lies the flaw in Air Canada's argument. If Air Canada were correct, then there would not have been a need to include r 105(C)(1)(a) in the Tariff at all. The inclusion of r 105(C)(1)(a) was for a purpose and should be given a meaning and operation. The purpose is to be derived from that which the parties would understand by the language in which they have expressed their agreement, as well as the surrounding circumstances known to the parties, and the purpose and object of the transaction.
True it is that "[a] court will strain against interpreting a contract so that a particular clause in it is nugatory or ineffective": Chapmans Ltd v Australian Stock Exchange Ltd (1996) 67 FCR 402 at 411; GIO General Ltd v Centennial Newstan Pty Ltd [2014] NSWCA 13; 18 ANZ Ins Cas 62-005 at [115]. But on the primary judge's view, there would also be no need to include r 105(C)(1)(b) or (c) either, as those sub-paragraphs merely record the position under Art 22(1)-(2) of the Montreal Convention. This suggests the argument is unsound. But as is plain from both the text of sub-rule (C)(1) in terms (notably the references to "your journey" and "in most cases") and the extrinsic materials which required the filing of tariffs which complied with various laws, the answer to the question posed by the primary judge is that sub-rule (C) of r 105 serves an entirely different purpose, namely, of notifying in general terms the conditions of carriage, which does not detract from the provisions in sub-rule (B) which confirm or depart from the rights and obligations stated in the relevant international conventions.
Technically, unlimited liability existed under the Warsaw regime. But under that regime, to exceed the monetary limit the passenger had to prove that there was "wilful misconduct" by the carrier, and this was notoriously difficult. The key difference between the Warsaw regime and the Montreal Convention was twofold: (a) the standard for exceeding the monetary limit changed from "wilful misconduct" to "negligence or other wrongful act or omission", and (b) the burden of proof shifted from the claimant to the carrier. The effect of these changes was to make the recovery of damages over the monetary limit less difficult for passengers than it was under the Warsaw regime. Nonetheless, the "two-tier liability system" is fundamental. This "history, background and context and the market in which the parties were operating" may inform the construction of r 105(C)(1)(a): Mount Bruce Mining at [50]. Rule 105(C)(1)(a) should not be construed as undoing a central element of the shift represented by the Montreal Convention from the Warsaw regime which preceded it. Nor should it be construed so as to detract from the unequivocal incorporation of the Montreal Convention effected by r 105(B)(5).
The primary judge concluded his reasons with the proposition that the respondents' construction did not "detract from the contract's synergy and commercial sense". I cannot agree. It makes no commercial sense for Air Canada to volunteer to accept unlimited liability for death or bodily injury or death on a no-fault basis, something which, so far as I am aware, is unprecedented in a century of international commercial aviation.
Costs in this Court should follow the event. Turning to the costs at first instance, the primary judge ordered that the parties' costs of and incidental to the motions were to be costs in the cause. That order reflected the measure of success each side had enjoyed in respect of each separate question. In this Court, at least part of Air Canada's submissions were different from those advanced at trial. Precisely to what extent that was so cannot be determined from the materials supplied on appeal (which do not include the written submissions below or the transcript). Insofar as Air Canada has succeeded in this Court based on submissions not advanced below, there would appear to be a proper basis for not disturbing the costs ordered below, because it would not be just for Air Canada to obtain two favourable costs orders in circumstances where its ultimate success turned materially on submissions not advanced before the primary judge. Whether that is so cannot presently be determined by this Court. Accordingly, there is no basis to interfere with the order made at first instance that the parties' costs be their costs in the cause. However, if either party seeks a different order as to costs, application may be made by motion within the time specified by UCPR r 36.16.
In accordance with the respondents' request, the Court reserved on Air Canada's application to read one affidavit and tender various documents which had not been before the primary judge. Some of the materials were provided to the respondents at, or only immediately before, the hearing in this Court. By their submissions supplied on 12 June 2024, in accordance with the leave granted to them, the respondents opposed the tender of most of that material save for the ticket governing their carriage. For the reasons given above, the opposition to the tender of the Canadian regulations which obliged Air Canada to file a tariff addressing certain matters is rejected. The material sought to be tendered included documents sourced from IATA which tended to explain the wording provided to passengers, and materials from the United States and Europe. In light of the conclusions reached above, none of that material will affect the outcome of this appeal, and it follows that the tender to the extent it is opposed is rejected.
I propose the following orders:
1. Grant leave to appeal.
2. Appeal allowed.
3. Set aside the answer to question (1)(a) given by Rothman J on 12 December 2023, and in lieu thereof answer that question "No".
4. The respondents to pay Air Canada's costs of the appeal (including the application for leave to appeal).
5. Save in relation to the documents replicating the tickets on which the respondents travelled, and the extracts from reg 122 of the Canadian Air Transportation Regulations, SOR/88-58, reject Air Canada's application to tender further evidence.