Eades v Qantas Airways Limited

NCAT Appeal Panel|2023-09-11

Summary

This Tribunal has no jurisdiction to exercise judicial power over a matter within federal jurisdiction. That is because it is not a court and, more precisely, not a Court of a State endowed with jurisdiction under Chapter III of the Constitution: Burns v Corbett (2018) 265 CLR 304; [2018] HCA 15 (Burns).
The Tribunal does, however, have incidental (or anterior) jurisdiction to decide whether proceedings brought before it are within its limited jurisdiction: State of New South Wales v Kable (2013) 252 CLR 118; [2013] HCA 26; Wilson v Chan & Naylor Parramatta Pty Ltd (2023) 103 NSWLR 140; [2020] NSWCA 213; Citta Hobart Pty Ltd v Cawthorn [2022] HCA 16 (Citta). Indeed, determining its jurisdiction where it is in doubt is the Tribunal's "first duty": Hazeldell Ltd v The Commonwealth (1924) 34 CLR 442 at 446; [1924] HCA 36.
Relevantly, a matter falls within federal jurisdiction where a right or duty owes its existence to federal law (Re McJannet; Ex parte Australian Workers' Union of Employees (Qld) (1997) 189 CLR 654 at 656-7 (per curiam); [1997] HCA 40); or a defence reliant on a federal law is "genuinely raised and not incapable on its face of legal argument": Citta at [35]. However, it is not sufficient that a defence requires the Tribunal to interpret or construe a federal law Felton v Mulligan (1971) 124 CLR 367; [1971] HCA 39. Nor is it sufficient where a defence is raised simply to "fabricate jurisdiction": Burgundy Royale Investments Pty Ltd v Westpac Banking Corporation (1987) 18 FCR 212 at 219.

The Convention

The Montreal Convention is given the force of law in Australia by s 9B of the CACL. It was introduced into the CACL by the Civil Aviation Legislation Amendment (1999 Montreal Convention and Other Measures) Act 2008 (Cth). The Explanatory Memorandum to the Civil Aviation Legislation Amendment (1999 Montreal Convention and Other Measures) Bill 2008 (Cth) explains that the Montreal Convention provides "a modern and consolidated framework for the liability of air carriers for injury or death of a passenger, loss or damage to cargo and baggage, and damage caused by a delay in the scheduled arrival of a passenger, baggage and freight, which occurs in the course of international air carriage."
Where the Convention is applicable, it governs all claims for damage to which it applies: the Convention, Article 29.

Factual background

Mr Eades booked travel through Qantas for international flights.
The history of that process was uncontroversial and set out by the Tribunal in its reasons: "6 The applicant is resident in Thailand. On the 07 September 2022 he booked two tickets for himself and his partner for travel from Bangkok to Brisbane via Kuala Lumpur using 150,000 Qantas frequent flyer points. The departure date was the 20 May 2023. The sector between Bangkok and Kuala Lumpur was in economy class and the sector from Kuala Lumpur to Brisbane was in business. The tickets were booked on a Malaysian Airlines flight. 7 The purpose of the travel was to attend medical appointments. 8 On the 24 November 2022 Malaysian Airlines informed the applicant that the flight between Kuala Lumpur and Brisbane had been cancelled. It was re-booked for departure on the 20 May 2023 with the applicant in business class on the flight from Kuala Lumpur to Sydney and a business class transfer flight from Sydney to Brisbane. 9 On the 01 December 2022 Qantas Bangkok informed the applicant that there was a further schedule change and the flights (sic). 10 On the 03 December 2022 Qantas re-booked the applicant on flights departing on 21 May 2023 from Bangkok to Brisbane via Kuala Lumpur in economy class all the way. 11 Later that day (03.12.22) Qantas informed the applicant the flights were changed again with seats in business class from Bangkok to Sydney and economy seats from Sydney to Brisbane on a flight that departed on the 22 May 2023. The applicant would be liable for taxes on the changeover. The applicant declined to accept this booking as the departure date was two days after his original booking date and did not meet his needs. 12 On the 08 December 2022 the respondent contacted Malaysian Airlines in an attempt to have it re-book the applicant on the flights it changed on the 24 November 2022. Malaysian Airlines were unable to reinstate the booking on those flights. 13 On the 11 February 2023 the applicant purchased two tickets on a Singapore Airlines flight departing on the 20 May 2023, flying to Brisbane via Singapore for $7,616 inclusive of tax.
Arising from this, the appellant sought damages particularised as: 1. $7,616 as reimbursement for two airline tickets 2. $216.08 as reimbursement of taxes 3. $2,170 for medical expenses incurred for a heart condition caused by the stress of having to rearrange the flights.

Tribunal's reasons for decision

On the issue of jurisdiction, the Tribunal found: "32 The Tribunal accepts the respondent's submission that the applicant's claim for compensation arises from international carriage by air, which engages the Montreal Convention 1999, which operates in Australia in accordance with s 9B Civil Aviation (Carriers Liability) Act 1959 (Cth), which is in the following terms: Subject to this Part, 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. 33 The applicant's ticket was for carriage by aircraft for reward from Bangkok to Brisbane via Kuala Lumpur, and this engages Article 1(1) of the Convention. 34 The respondent relies on 29 [scil Article 19] of the Montreal Convention which is as follows: The carrier is liable for damage occasioned by delay in the carriage by air of passengers, baggage or cargo. Nevertheless, the carrier shall not be liable for damage occasioned by delay if it proves that it and its servants and agents took all measures that could possibly be required to avoid the damage or that it was impossible for it or them to take such measures. 35 The respondent submitted that it took all possible measures to re-book the applicant's tickets. The applicant disagreed, and hence these proceedings were filed. The respondent relies on a defence, which is open to it, that involves a determination under the Montreal Convention and a Commonwealth Act. For the reasons set out above the determination of such a dispute involves a court exercising Federal jurisdiction. And as set out above the Tribunal is not a "court" and cannot exercise federal jurisdiction."

Scope and nature of internal appeals

An appeal of this nature may proceed without leave on a question of law: Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act), s 80(2).
The question of whether the Tribunal had jurisdiction to hear the matter meets that criterion.
Leave to appeal is also sought by the appellant. The principles governing an application for leave to appeal under the NCAT Act are well-established and are repeated in many decisions of the Appeal Panel, often quoting Collins v Urban [2014] NSWCATAP 17. They are the same principles applied by the courts. It is enough as a summary to refer to Secretary, Department of Family and Community Services v Smith [2017] NSWCA 206, where the Court said at [28] (citations omitted): "Only if the decision is attended with sufficient doubt to warrant its reconsideration on appeal will leave be granted. Ordinarily, it is only appropriate to grant leave where there is an issue of principle, a question of general public importance, or an injustice which is reasonably clear, in the sense of going beyond what is merely arguable. It is well established that it is not sufficient merely to show that the trial judge was arguably wrong."
Further, as Basten JA said (White JA agreeing) in Hungry Jack's Pty Ltd v Fourtounas [2020] NSWCA 325 at [9], cited with approval in Amirbeaggi v Matrix Group Co Pty Ltd [2021] NSWCA 21: "... more is required than identification of error on the part of the trial judge, even if it can be said that the error is reasonably clear. Generally, the court will also need to be satisfied that there is a matter of some public importance engaged and that the costs of further litigation are not disproportionate to the amount in issue. Further, it should be established that, to leave any putative error uncorrected, would give rise to a substantial miscarriage of justice."
Where the appeal is from a decision made in the Consumer and Commercial Division (other than in respect of interlocutory decisions), there is a further qualification to the possible grant of leave in that we may go on to consider a grant of leave in the broader sense only if we are first satisfied that the elements of cl 12(1) of Sch 4 to the NCAT Act are made out, in that the appellant may have suffered a substantial miscarriage of justice on the basis that: 1. the decision of the Tribunal under appeal was not fair and equitable; or 2. the decision of the Tribunal under appeal was against the weight of evidence; or 3. significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with).
We agree with the Appeal Panel in Collins v Urban where it said, at [76], that a substantial miscarriage of justice for the purposes of cl 12(1) of Sch 4 of the NCAT Act may have been suffered where: ... [T]here was a "significant possibility" or a "chance which was fairly open" that a different and more favourable result would have been achieved for the appellant had the relevant circumstance in para (a) or (b) not occurred or if the fresh evidence under para (c) had been before the Tribunal at first instance."

The Tribunal's jurisdiction

It is trite to say that the Tribunal may only operate within its constrained jurisdictional limits. That means, firstly, that a claim must be within the Tribunal's jurisdiction when it is brought, or it must be dismissed. However, a claim that is within the Tribunal's jurisdiction when it is brought can be taken outside that jurisdiction if a respondent genuinely raises a defence that invokes federal jurisdiction, which the Tribunal does not have.
Where such a defence is genuinely raised, it is not the Tribunal's role to consider whether it is likely to succeed in order to determine whether federal jurisdiction is invoked. Rather, once the question of whether there is a matter within federal jurisdiction that is "genuinely in controversy" the issue is whether "it give[s] rise to an issue capable of judicial determination". That is to say, it is enough that the claim or defence be genuinely raised and not incapable on its face of legal argument.": Citta at [35].
That test sets a low threshold as to whether federal jurisdiction is engaged when a party raises a defence reliant on a federal law. Federal jurisdiction has been found to remain engaged even where the relevant defence has, after analysis, been found to be "foredoomed to fail" (Walton v Gardiner (1993) 177 CLR 378 at 393) or "so clearly untenable that it cannot possibly succeed." (General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 130; Spencer v The Commonwealth (2010) 241 CLR 118 at 140 [55]): cited in Citta, at [40]. Federal jurisdiction is not invoked by a defence that is raised simply to deprive the Tribunal of jurisdiction or that is "legal nonsense", "[b]ut examination of what the prospects of success of a legally coherent claim or defence might be, were that claim or defence to be judicially determined on its merits, forms no part of the requisite assessment: Citta at [37].
The appellant raises two substantive arguments in relation to the question of the Tribunal's jurisdiction: 1. Firstly, the appellant submits that the Tribunal erred by focussing on the delay in his travel, an issue potentially within the scope of the Montreal Convention, at Article 19, rather than his claim for damage in respect of the initial decision to downgrade him from business class to economy flights, which he submits the Convention does not govern, and the failure by Qantas, as booking agent, to confirm other replacement flights that Malaysian Airlines offered on 24 November 2022 as a replacement, and which he would have accepted. 2. Secondly, the appellant says the Convention could not be genuinely raised or have reasonably arguable application because Qantas booked his tickets though Malaysian Airlines only as an "agent" and not as a "carrier" as that term is used in the Convention. He relies on Qantas' terms of its agreement which provide, relevantly, that: 2.9 Additional Services or Other Forms of Transportation (a) If we make arrangements for you with any third party to provide any service other than carriage by air on a QF Airline Designator Code, or if we issue a Ticket or voucher relating to transportation or services (other than carriage by air) provided by a third party, such as hotel reservations or car rental, in doing so we act only as agent. The terms and conditions of the third party service provider will apply. … 6.6 Ticket Issued for Carriage on Another Carrier If we issue a Ticket for you to be carried on another Carrier's Airline Designator Code or check in Baggage for carriage on another Carrier's Airline Designator Code, we do so only as agent for that Carrier. The conditions of carriage of the other Carrier will apply…

Resolution of the jurisdictional issue

It is convenient to deal with the second issue raised by the appellant first.
Article 30 of the Convention extends the protections of a carrier to its "servants and agents". It states at subpart 1: If an action is brought against a servant or agent of the carrier arising out of damage to which the Convention relates, such servant or agent, if they prove that they acted within the scope of their employment, shall be entitled to avail themselves of the conditions and limits of liability which the carrier itself is entitled to invoke under this Convention.
Therefore, without needing to determine how reliance by Qantas on the Convention would be resolved, it is clear that the fact that it may only have contracted with the appellant as agent for Malaysian Airlines does not render the application of the Convention incapable, on its face, of legal argument. In that regard, it could also be said to have been genuinely raised.
Consideration of the appellant's primary point reveals that the Tribunal may not have fully explained how the Convention applies. Because it establishes a code that is intended to be exclusive of resort to the rules of domestic law, if the Convention applied to the appellant's claim then it applied to the claim from the beginning, and even before reliance on the Convention as a defence was raised by Qantas: The Convention, Article 29.
In that regard, it is important to consider Article 33 of the Convention, which states at subpart 1: An action for damages must be brought, at the option of the plaintiff, in the territory of one of the States Parties, either before the court of the domicile of the carrier or of its principal place of business, or where it has a place of business through which the contract has been made or before the court at the place of destination. (emphasis added)
As a result, if the appellant's claim fell within the operation of the Convention the Tribunal lacked jurisdiction to hear it from the outset, because the Tribunal is not a court: Rosengarten v American Airlines Inc (ARBN 000 775 753) (Civil Claims) [2011] VCAT 1535; Koskinas v Qantas [2016] VCAT 2024 at [20].
Qantas' subsequent reliance on the Convention as a defence is unnecessary to deprive the Tribunal of jurisdiction.
We agree with the appellant's basal contentions in respect of this issue. It is apparent from his initiating application that the source of the appellant's claim was the failure by Qantas to advise him of the substituted flights proposed by Malaysian Airlines in a timely way, so that he could confirm them. Those proposed flights not only met the appellant's travel timetable but represented an advantage to him because both legs, as opposed to one leg of the journey were booked in Business Class, and the flights represented a minimal delay to his initial travel plans.
We cannot see, and Qantas has not sought to demonstrate in any reasoned way, how a claim for loss caused by that conduct can be arguably construed as a claim for "delay in the carriage by air" under Article 19 of the Convention. Nor was it asserted that any other provision of the Convention relevantly governed the appellant's claim. If it was not a claim for delay in the carriage by air, the Tribunal may not have been deprived of jurisdiction by operation of the Convention. We note that a similar conclusion was reached in Eigner v Jetstar Airways Pty Limited (Civil Claims) [2019] VCAT 172 at [10].
As to the Tribunal's finding that the defence raised by Qantas was "open to it", that does not, even allowing for infelicity of expression in a high volume environment, equate to a finding that the defence was genuinely raised, or capable of legal argument. It is not apparent that Qantas had genuinely raised the operation of the Convention as a defence. On the material before us, it has made no serious attempt to demonstrate how the Convention has any application. Without that assistance, it is also not apparent that reliance on the defence is, on its face, "legally coherent" (as described in Citta, at [37]) so as to deprive the Tribunal of jurisdiction. Simply citing the Convention as a defence because international carriage by air was involved, without attempting to link the claim actually made to the operation of the Convention, may not be sufficient. At its highest, Qantas' submission on this point (at [6]] of its submissions) was that "…any claim by the [appellant] is subject to the conditions and limitations set out in the Montreal Convention and not otherwise. This submission forms the basis for Qantas' defence in this matter".
The question of whether the defence was genuinely raised is, in our view, a finding of fact. We are not in a position to make a finding on this issue because the parties have not put all of the material that would be relevant to that determination, including the transcript of the hearing at first instance, before us. That raises the question of whether the appeal should be allowed on the basis that the Tribunal asked itself the wrong question, and the matter remitted to the Division for re-determination.
However, even if the Tribunal had jurisdiction the appellant's claim against Qantas may not have been made out. Further, for the reasons we will come to in respect of leave to appeal, there is also no appropriate remedial order to be made as the appellant has failed to demonstrate quantifiable loss.
In that regard, we agree with the reasoning of the Appeal Panel in Sydney RV Group Pty Ltd v Mark Anthony Vallender [2021] NSWCATAP 125 at [85] - [92] as to whether it is appropriate to allow an appeal where no different outcome can be achieved by the appellant: See also Hijazi v Commissioner of Police, NSW Police Force [2015] NSWCATAP 82 at [23] and the authorities cited, including Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321.

Leave to appeal?

In his material lodged in support of the appeal the appellant acknowledges that, in his view belatedly, the respondent has refunded the frequent flyer points he used to acquire the original flights and has paid him the amount he expended on taxes in changing his flights. In its decision, apparently in case it was wrong in finding that it lacked jurisdiction, the Tribunal had made findings as to the losses claimed. In respect of the cost of flights claimed, the Tribunal had held at first instance that: 28 The applicant had the benefit of the Singapore Airlines flight and therefore has not suffered a loss in relation to those flights. I am satisfied the only loss he suffered was confined to the taxes of $216.08 he paid on the initial tickets.
In respect of his claim for damages for medical expenses at first instance, the Tribunal recorded at [17] that: "The applicant alleges that as a result of his anxiety surrounding the ticket changes he suffered a hypertensive medical episode which required treatment as an in-patient at the Buddhachinaraj Heart Centre. A copy of what appears to be a discharge summary is before the Tribunal. The applicant claims the sum of $2,170.89."
It found at [29] that: "I am not satisfied the respondent is liable for the reimbursement of the medical expenses. There is no expert evidence before the Tribunal that would support a finding that the applicant's medical condition was in any way referrable to the changing of airline flights either by Malaysian Airlines or the respondent."
That remains the position in the appeal, despite the appellant being directed to lodge and serve the evidence provided at first instance that remains relevant and having the opportunity to lodge and serve new evidence and seek leave to rely upon it. The appellant also confirmed that, in the event the appeal was to succeed, he sought to have us redetermine the application on the material before us.
A final aspect of damage claimed by the appellant before us was the devaluation, as he perceived it, between the value of 150,000 frequent flyer points when he purchased the relevant tickets and the value, or purchasing power, of those points now they have subsequently been refunded to him.
However, there is no evidence before us that would allow us to assess the value of such a claim if we were to grant leave. The appellant provided evidence to show that certain similar bookings, if made recently, would require the expenditure of a greater number of frequent flyer points, but failed to provide evidence that the theoretical bookings he relied upon were made on a like-for-like basis, such that a direct comparison could be made. The initial tickets were purchased through the respondent's "Classic Rewards" scheme, where limited seats on certain flights may be booked using a reduced number of frequent flyer points, whereas there was no evidence that the proposed flights relied upon by the appellant had seat availability of that kind. The appellant also failed to provide any evidence from which we could calculate the dollar value of the frequent flyer points at the relevant time so that a calculation could be made as to how much in excess of that figure it cost the appellant to book the Singapore Air flight he travelled on, even if we had been satisfied such a claim should be allowed. Finally, as to this issue, we cannot be satisfied that any claim relating to the value of the points was raised before the member, such that we should entertain it at all in the appeal: Suttor v Gundowda Pty Ltd (1950) 81 CLR 418 at 438. It is clearly an issue on which evidence in reply could have been led by the respondent at first instance. The appellant was directed to provide the sound recording and relevant partial transcript if he relied on what occurred at the hearing at first instance but failed to do so.
In those circumstances, no grant of leave to appeal is warranted and the appeal should be dismissed. The appellant has had the benefit of compensation for all of the provable loss he claimed to have suffered at the hands of the respondent. He has not demonstrated the potential for a substantial miscarriage of justice to arise from the Tribunal's decision.

Orders

Our Orders are as follows: 1. Leave to appeal is refused. 2. The appeal is dismissed.

I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar 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: 08 March 2024

Constitution Civil Aviation (Carriers Liability) Act 1959(Cth)

Civil Aviation (Carriers Liability) Act 1959(Cth)

Montreal Convention and Other Measures) Act 2008(Cth)

(2023) 103 NSWLR 140

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Cases Cited (28)