Evans v AIR CANADA

(1987) 11 NSWLR 404 Lahey Constructions Pty Ltd v The State of New South Wales [2021] NSWCA 69 Mannai Investments v Eagle Star Life Assurance Co Ltd [1997] A.C. 749 Minister for Urban Affairs and Planning v Rosemount Estates Pty Ltd (1996) 91 LGERA 31 Motorcycling Events Group Australia Pty Ltd v Kelly (2013) 86 NSWLR 55; [2013] NSWCA 361 National Mutual Holdings Pty Ltd v The Sentry Corporation (1989) 22 FCR 209; [1988] FCA 133 Parkes Shire Council v South West Helicopters Pty Ltd (2019) 266 CLR 212; [2019] HCA 14 Pel-Air Aviation Pty Ltd v Casey (2017) 93 NSWLR 438; [2017] NSWCA 32 Pitt, Son & Badgery Ltd v Sydney Municipal Council (1908) 24 WN (NSW) 203 Povey v Qantas Airways Ltd (2005) 223 CLR 189; [2005] HCA 33 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28 QBE Insurance Australia Ltd v Vasic [2010] NSWCA 166 Schuler v Wickman Machine Tool Sales Ltd [1974] A.C. 235 Tannous v New South Wales (2020) 103 NSWLR 183; [2020] NSWCA 261 Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165; [2004] HCA 52 Zicherman v Korean Air Lines Co (1996) 516 US 217; 116 U.S. 217 Category: Procedural rulings Parties: Renae Evans (First Plaintiff) Stephanie Evans by her Tutor Renae Evans (Second Plaintiff) AIR CANADA (Defendant) Representation: Counsel: R McIwaine SC/R Quickenden (Plaintiffs) G O'Mahoney/A E Flick (Defendant)

Solicitors: Shine Lawyers (Plaintiffs) Norton White (Defendant) File Number(s): 2021/185107

JUDGMENT

1. HIS HONOUR: Pursuant to two Notices of Motion filed respectively on 15 November 2022 and 6 June 2023, and orders of the Court, this matter was heard on 14 September 2023 for the ventilation of two separate questions.
2. The first separate question, referred to hereinafter as the "Plaintiffs' Question", was as follows: "Does Rule 105(C) [of the defendant's Tariff rules] provide and have the effect that if this Court assesses each plaintiff's compensatory damages in Australian dollars in an amount in excess of 128,821 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?" [1]
3. The other separate question, referred to hereinafter as the "Defendant's Question", 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?"

Factual Background

1. The plaintiffs in this proceeding, Renae and Stephanie Evans, are mother and daughter. Without any disrespect and for the sake of clarity, when necessary to differentiate between them, I will refer to the first and second plaintiff as Renae and Stephanie.
2. The proceedings relate to an incident which occurred on 11 July 2019. The plaintiffs were on an Air Canada flight travelling to Sydney. Approximately 8 hours into the flight, the plane encountered turbulence, which caused the plane to drop ("the incident").
3. Each plaintiff alleges that she sustained personal injury as a result of the incident. Renae alleges 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 alleges that she sustained soft-tissue injuries to the whole of the spine as well as psychological injuries.

Pleadings

1. The proceedings in this Court were commenced against Air Canada on 28 June 2021 by way of a Statement of Claim and pursuant to the provisions of the Civil Aviation (Carrier' Liability) Act 1959 (Cth) (referred to herein as the "Aviation Act") and the applicable articles of the Montreal Convention 1999 (the "Montreal Convention") now contained in Sch 1A of the Aviation Act.
2. Air Canada filed its Defence to the Statement of Claim on 2 August 2021. While Air Canada admitted that the Aviation Act and the Montreal Convention applied to the claims brought against it by the plaintiffs, it pleaded that the quantum of the plaintiff's claims ought to be determined in accordance with the Civil Liability Act 2002 (NSW). Air Canada also pleaded that the cap on personal injury damages contained in Article 21 of the Montreal Convention applied to the claims.
3. To Air Canada's Defence, the plaintiffs filed a Reply on 18 February 2022, in which the plaintiffs did not admit that the quantum of their claims ought to be determined under the Civil Liability Act. The plaintiffs also pleaded that the cap on damages in Article 21 of the Montreal Convention did not apply to their claims, on the basis that Air Canada's International Tariff General Rules (the "Tariff") provided that there would be no limits on compensatory damages in respect of bodily injury.
4. It is against this background that the two separate questions posed by the parties came to be referred to the Court for separate determination.

Applicable Law and Contract

1. It is useful at this point to say a little about the statutes and the contract which bear upon the plaintiffs' claims.

Montreal Convention

1. It is accepted by the parties that the liability scheme applicable to the plaintiffs' claims is contained in the Montreal Convention. The Montreal Convention has been given force of law in Australia by s 9B of the Aviation Act and is recited in Sch 1A thereto.
2. Article 17 of Montreal Convention imposes liability upon air carriers for bodily injury sustained by passengers on a strict liability basis, provided that the event causing such injury took place either on board the aircraft, or during the process of embarkation or disembarkation. [2] Pursuant to Art 21, the carrier is prohibited from excluding or limiting its liability for such claims, provided that the total value of the claim does not exceed 100,000 special drawing rights (SDR) for each passenger. [3]
3. If the value of the claim per passenger does exceed 100,000 SDR, the carrier may be able to limit its liability by excluding any damages in excess of that threshold level, if it proves that the damage was not due to its negligence or other wrongful act or omission, or that the damage was solely due to the negligence or other wrongful act or omission of a third party. [4]
4. Article 25 of Montreal Convention also equips carriers with a discretion to offer contracts of carriage which are subject to higher limits of liability than those provided for in the convention, or to remove the limits of liability entirely. [5]
5. The limit of 100,000 SDR was increased to 113,100 SDR by the International Civil Aviation Organisation on 30 December 2009, and to 128,821 SDR on 28 December 2019, in accordance with Art 24 of the Montreal Convention. At the time of the incident, the relevant limit was 113,100 SDR.

Air Canada Tariff

1. The parties are agreed that the Tariff as in force at 11 July 2019 formed part of the contract of carriage between the plaintiffs and Air Canada.
2. The relevant aspects of the Tariff for the purpose of the Plaintiffs' Question are as follows: "Rule 105(B) 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. Rule 105(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."

Overview

1. Each party led documentary evidence at the separate question hearing. Most of that evidence goes directly to the Plaintiffs' Question and is appropriate to address at this point.
2. The plaintiffs relied on an Affidavit of solicitor Sara Kaurin dated 15 November 2022, which outlined the facts relevant to the procedural history of the matter and the dispute between the parties.
3. Air Canada relied upon an Affidavit of solicitor Keira Nelson dated 22 November 2022, which is similarly procedural in nature.
4. Air Canada further relied upon an Affidavit of Helen Senecal dated 9 June 2023. Ms Senecal is the Vice President and General Counsel-Litigation of Air Canada. She has worked for Air Canada since 1989. Ms Senecal's Affidavit provides a history of Air Canada's engagement with and adoption of the Montreal Convention, as well as its predecessor, known as the Warsaw Convention.
5. Ms Senecal deposed that to her knowledge, Air Canada has not resolved to stipulate that a higher limit on damages should apply than is contained in Art 21 of the Montreal Convention. She stated that she did not consider that Air Canada would resolve to do so without consulting with its insurers, which has not occurred. She was also not aware of any other litigation involving Air Canada which involved an argument that the Tariff extended the limit of Air Canada's liability for bodily injury in accordance with Art 25.
6. Finally, Air Canada relied upon an expert report of Paul Stephen Dempsey dated 26 May 2023. Mr Dempsey is an expert in the area of Air and Space Law at McGill University in Montreal, Canada. Mr Dempsey's report canvasses in some detail the history of the Montreal Convention as well as his opinion on whether the Tariff "raises the liability ceiling" imposed by the Montreal Convention. His view was that it did not.
7. Mr Dempsey, in his report, explained that the liability of air carriers for passenger losses has, over the years, been governed by several international conventions, beginning with the Warsaw Convention in the 1920's and continuing until the introduction of the Montreal Convention which is currently in force. Mr Dempsey explained that one of the main criticisms of the Warsaw Convention, after it was introduced, was that it did not provide adequate compensation to passengers, particularly as the liability limit of 125,000 francs was not adjusted for inflation over the course of the convention's tenure.

Admissibility

1. Objection was taken by the plaintiffs to much of Air Canada's evidence. The plaintiffs submitted that in accordance with the High Court's reasoning in Toll v Alphapharm [6] and Codelfa Constructions, [7] the actual subjective intentions of parties to contracts are irrelevant to the construction of a clause thereof, and should not be given weight in the interpretation exercise at the expense of the language of the contract.
2. Broadly speaking, the plaintiffs submitted that the evidence of Ms Nelson, Ms Senecal (except for the terms of the Tariff), and Mr Dempsey should be excluded, on the basis that the evidence was irrelevant and thus inadmissible.
3. Air Canada submitted that the evidence was relevant as it revealed the commercial purpose, context, background, and circumstances against which the Tariff must be understood, as opposed to merely the subjective intentions of the parties. Air Canada called on the authority in International Air Transport Association v Ansett Australia Holdings Ltd, [8] where the High Court held that the context of a transaction assists the Court in affording a commercial contract an appropriately businesslike or commercial interpretation. [9]
4. Air Canada also submitted that since the plaintiffs had put in issue the matter of whether Air Canada, by its Tariff, had removed the limits of liability under its contract of carriage, evidence going to whether such an intention may be objectively imputed is clearly relevant. Air Canada said that the evidence of Ms Senecal and Mr Dempsey is accordingly admissible and useful in elucidating the history and genesis of the Montreal Convention and the context and purpose of the Tariff. Air Canada confirmed that the Affidavit of Ms Nelson is relied upon for the purposes of costs only.
5. In considering this issue I have had regard to the comments of the High Court in Toll v Alphapharm [10] as follows: "[40] This court, in Pacific Carriers Ltd v BNP Paribas, has recently reaffirmed the principle of objectivity by which the rights and liabilities of the parties to a contract are determined. It is not the subjective beliefs or understandings of the parties about their rights and liabilities that govern their contractual relations. What matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe. References to the common intention of the parties to a contract are to be understood as referring to what a reasonable person would understand by the language in which the parties have expressed their agreement. The meaning of the terms of a contractual document is to be determined by what a reasonable person would have understood them to mean. That, normally, requires consideration not only of the text, but also of the surrounding circumstances known to the parties, and the purpose and object of the transaction."(Footnotes omitted.)

Submissions

1. The plaintiffs submitted that r 105(C)(1)(a) of the Tariff is a provision of the contract of carriage that Air Canada entered into with the plaintiffs, which removed the limits of liability imposed by Art 21 of the Montreal Convention as allowed by Art 25.
2. Air Canada submitted that the plaintiffs' proposed construction of the Montreal Convention and the Tariff is predicated on a failure to view the Montreal Convention in the context of its full operation and historical context. Air Canada submitted that Art 21, relevant to the limits on liability, must be read in the context of its two-tiered approach, as outlined by Mr Dempsey. Air Canada submitted that this scheme forms the background and context within which r 105(C)(1)(a) of the Tariff lies. Air Canada submitted that this rule cannot be read as waiving the two-tiered test in Art 21.
3. In support of that contention, Air Canada submitted that the wording of r 105(C)(1)(a) is merely an adoption of an expression imposed by the Montreal Convention. As detailed in the expert report of Mr Dempsey, unlike the prior Warsaw Convention, the Montreal Convention introduced the two-tier test to eliminate limits on liability in respect of the second tier. Air Canada cited several texts which describe the Montreal Convention as "eliminating limits on air carrier liability" when compared to the Warsaw Convention. [18]
4. In addition, Air Canada submitted that there are further factors weighing against the conclusion contended for by the plaintiffs. These factors include that r 105(C)(1)(a) does not purport to "increase" limits for liability under Art 21 (which is the wording in Art 25 which permits such a practice). Air Canada also relies on r 105(B) which acknowledges the binding and primary operation of the Montreal Convention in the event of any discrepancy between the Tariff and the Convention.
5. Finally, Air Canada submitted that Ms Senecal's evidence should be afforded weight on this issue, in particular her evidence that she has never been aware of any other claim where a construction such as the one put forward in the Plaintiffs' Question has been argued in the 20 years since the Montreal Convention came into operation. Further, numerous other airlines have similar Tariff terms and no searches have identified reported cases of those clauses being used in this way. As such, Air Canada submits that the Court should comfortably answer the Plaintiffs' Question in the negative.

Consideration

1. The Plaintiffs' Question requires the Court to determine the proper construction of r 105(C)(1)(a) of the Tariff. Accordingly, it is crucial that the Court have objective regard to the actual words used, [19] while taking into account the context and commercial purpose of the contract. [20]
2. The parties are in agreement that the Tariff forms part of the contract for carriage between them. In full, it encompasses some 177 pages and deals with numerous matters, issues, and aspects of the carriage of passengers which are irrelevant to the Court's current exercise.
3. The wording of r 105(C)(1)(a) is prima facie unambiguous. For ease of reference, the words used are as follows: "Rule 105(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."
4. The Rule explicitly refers to the Montreal Convention, and states that there is to be no financial limit for bodily injury for claims to which the Montreal Convention applies. As earlier stated, Art 25 of the Montreal Convention allows a carrier to stipulate that its contract of carriage shall be subject to "no limits of liability whatsoever" and in so doing, remove the limits on its liability conferred by the convention itself. There is no indication, in the words used, that the rule is only to apply to claims in the "second tier" of Art 21.
5. There is 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.
6. There is a significant congruence between Art 25 on the one hand, and r 105(C)(1)(a) on the other, by reference to the plain language used and the ordinary meaning of that language. Both texts refer to "limits" applicable to claims in respect of bodily injury. 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.
7. Air Canada's primary submission is that when viewed in their total context, the words "no financial limits" should be taken as a reference to the introduction by the Montreal Convention of the two-tier test which eliminates limits on liability in respect of the second tier. The report of Mr Dempsey, relied upon by Air Canada, evidences the historical background and extrinsic references upon which Air Canada seeks to make good its submission.

Conclusion as to Plaintiffs' Question

1. For the foregoing reasons, the answer to the Plaintiffs' Question is: yes.

The Civil Liability Act

1. The Defendant's Question relates to the applicability of the Civil Liability Act to the plaintiffs' claims.
2. Part 2 of the Civil Liability Act applies to personal injury damages (except where those damages arise from a type of civil liability which is excluded from the Civil Liability Act as a whole) [21] and applies regardless of whether the claim for the damages is brought in tort, in contract, under statute or otherwise. [22]
3. It is uncontroversial that the provisions of Part 2 restrict the availability of personal injury damages compared to what might otherwise be available under common law. Thresholds and caps apply to damages for economic and non-economic loss, [23] domestic assistance, [24] and loss of capacity to provide domestic services. [25] Exemplary, punitive, and aggravated damages are also excluded. [26]

Submissions

1. Air Canada submitted that the Defendant's Question turns on whether the Civil Liability Act, as a State Act, should be picked up by the Judiciary Act 1903 (Cth) and applied to these claims as a surrogate Federal law.
2. Air Canada's position is that as the Aviation Act, which is the legislation which gives effect to the Montreal Convention in Australia, does not provide a mechanism by which the quantum of claims are to be determined, the Civil Liability Act may be "picked up" by either s 79 or s 80 of the Judiciary Act, which provides that State laws are binding on courts exercising Federal jurisdiction, so long as the law sought to be applied is not otherwise provided for by the laws of the Commonwealth, or where the laws of the Commonwealth are insufficient or inapplicable.
3. Air Canada has identified two instances where this question has been considered in recent years by the Federal Court: 1. In Grueff v Virgin Australia [27] ("Grueff"), Griffiths J held that Pt 2 of the Civil Liability Act may be applicable as a result of ss 79 or 80 to a claim made pursuant to the Aviation Act. 2. In Bradshaw v Emirates, [28] ("Bradshaw") Stewart J found to the opposite effect. Both cases were decided in 2021, with Bradshaw being decided after Grueff.
4. Air Canada contends for the decision in Grueff to be followed by this Court because, in Air Canada's submission, Grueff aligns with the High Court's reasoning and with international authority. Gordon J in Parkes Shire Council v South West Helicopters Pty Ltd [29] held that because the Warsaw Convention (the precursor to the Montreal Convention) was silent on how quantum was to be calculated, then that is a matter left to the domestic law. This reasoning was followed by Griffiths J in Grueff.
5. Air Canada also referred the Court to the decision in Pel-Air Aviation Pty Ltd v Casey, [30] where the New South Wales Court of Appeal applied the Civil Liability Act to a claim made pursuant to the Montreal Convention. In that case, the basis of the application of the Civil Liability Act was not disputed by either litigant, and was not specifically considered by the Court.
6. The thrust of Air Canada's submission is that the decision is Grueff was correct and ought to be followed. The decision in Grueff is analysed in greater detail below.
7. The plaintiffs submitted that the Court should follow the decision in Bradshaw instead of the decision in Grueff, and thus that the Court should conclude that the Judiciary Act does not pick up Pt 2 of the Civil Liability Act for the purpose of determining quantum under the Montreal Convention or the Aviation Act. The plaintiffs pointed to the following factors in support of this proposition: 1. The comments of Griffith J in Grueff relied on by Air Canada were obiter; 2. Pel-Air Aviation Pty Ltd v Casey did not actually consider the basis of the application of the Civil Liability Act to a claim under the Montreal Convention, as it was not put in issue by the parties to that litigation; 3. The decision in Bradshaw was delivered after, and with full knowledge of, the decision in Grueff; and 4. The Court's decision in Bradshaw was carefully reasoned and correct, and this Court should accept that reasoning.

Consideration

1. It is necessary to set out in some detail the different paths of reasoning employed by the Federal Court in Grueff and Bradshaw on this issue.

The Decision in Grueff

1. The facts giving rise to the proceedings before Griffiths J in the matter of Grueff were straightforward. A claim for damages had been made by passengers who had been aboard a Virgin Australia flight from Indonesia to Sydney. The passengers claimed that they had sustained illness after consuming perfumed water on board. The passengers brought a claim against the carrier pursuant to Art 17 of the Montreal Convention, and the issue arose as to whether the provisions of the Civil Liability Act were "picked up" by virtue of either ss 79 or 80 of the Judiciary Act.
2. Griffiths J found that there were two main issues to be decided, namely: 1. Is the Montreal Convention "insufficient" to carry itself into effect with respect to the heads and assessment of damages for causes of action under Art 17(1) concerning "bodily injury", or alternatively fails to "provide adequate remedies"; and 2. Whether the Civil Liability Act is "inconsistent" with the Montreal Convention.
3. His Honour considered the obiter comments of Gordon J in Parkes Shire Council(to which reference has already been made), which concerned the Warsaw Convention, being the predecessor to the Montreal Convention. In that case, her Honour noted that Warsaw Convention left the matter of the "parties respective rights" to the domestic law, which her Honour took to mean that the heads of damage available to an injured passenger were to be determined in accordance with domestic law, as determined by choice of law rules.
4. Applying this reasoning, Griffiths J found that the applicable law with respect to the assessment of damages under the Montreal Convention would need to be identified with reference to ss 79 and 80 of the Judiciary Act. Griffiths J found that the statute law of the Commonwealth, being the Montreal Convention, was "insufficient", as it did not provide for the heads of damage available for bodily injury or "adequate remedies" in this respect. On that basis his Honour found that it was necessary to refer to the common law on damages as modified by the statute in the State in which the court was exercising jurisdiction, namely the Civil Liability Act.
5. His Honour also noted that if the heads and assessment of damage were intentionally left to the domestic law, as reasoned by Gordon J with respect to the Warsaw Convention, this would suggest that the Civil Liability Act, as a domestic statute governing the assessment of personal injury damages, cannot be said to be "inconsistent" with the Montreal Convention.

The Decision in Bradshaw

1. Bradshaw was decided not long after the decision in Grueff. In Bradshaw, the passenger sought damages arising from personal injury sustained when a suitcase fell out of an overhead luggage bin and struck him on the head during a flight from Dublin to Dubai. The carrier accepted that some form of injury had been sustained but sought to apply the Civil Liability Act to the determination of any quantum that the passenger may be entitled to.
2. Stewart J considered in some detail the decision in Grueff. In contrast to that decision, his Honour did not find there to be a "gap" in the Montreal Convention such as to require recourse to the common law under s 80 of the Judiciary Act.
3. While his Honour accepted that the Montreal Convention is silent on the details of what can be claimed for bodily injury, his Honour stated the following at [163]: "… the right of action is given by the Carriers' Act, and the Montreal Convention as enacted itself provides that damages recoverable are for "damage sustained in case of … bodily injury" and that such damages are compensatory. There is no need here for application of the common law to carry those provisions into effect. The principles to be applied may be derived from the common law by analogy, but the damages are not common law damages; they are damages under Convention (or statute) as interpreted and implemented by domestic courts."
4. His Honour considered the decision in Henville v Walker, [32] which considered what heads of damage were available in an action for damages for misleading and deceptive conduct in contravention of s 52 of the Trade Practices Act 1974 (Cth). Gleeson CJ in that case found that: "The principles of the common law, relevant to assessing damages in contract or tort, are not directly on point. They may provide useful guidance, for the reason that they have had to respond to problems of the same nature as the problems which arise in the application of the Act. They are not controlling, but they represent an accumulation of valuable insight and experience which may well be useful in applying the Act."
5. His Honour also considered the judgments in Motorcycling Events Group Australia Pty Ltd v Kelly [33] and in Blunden v Commonwealth. [34] In each of those cases, the cause of action relied upon was not a statutory civil cause of action, and the court proceeded to have regard to the common law as modified by the statutes of the relevant State to fill any gaps in the applicable federal law. Stewart J drew a distinction on the basis that claims under the Aviation Act are founded in a statutory civil cause of action, and not the common law, and so it is not necessary to have recourse to the common law through s 80 of the Judiciary Act.

Identification of the Law

1. The Court is being asked to determine the applicable law for the quantification of damages in these claims. It is helpful, in that process, to clarify the basis of the right to damages being exercised by the plaintiffs and how that right attracts Federal jurisdiction as exercised by a State Court.
2. As explained by the High Court in Agtrack (NT) Pty Ltd t/as Spring Air v Hatfield, [35] the rights of litigants whose claims are governed the Aviation Act derive exclusively from that Act, and do not stem from the common law of tort, contract, or otherwise. [36]
3. This distinction takes on significance given that the incident precipitating these claims took place outside of the jurisdiction. While common law choice of law rules which apply to torts committed in a foreign jurisdiction are capable of being picked up as surrogate Federal legislation pursuant to ss 79 and 80, there are no common law choice of law rules applicable to claims under the Aviation Act, which, as stated, are claims pursuant to neither tort nor contract. [37]
4. The effect of the foregoing is that claims pursuant to the Aviation Act invoke only the Federal jurisdiction, which is a single, national law area. [38] The Court, therefore, is required to identify the applicable law only in accordance with ss 79 and 80 of the Judiciary Act. [39]
5. Griffith and Stewart JJ were each in agreement that the Montreal Convention should be construed as leaving compensatory damages to be determined in accordance with domestic law. The controversy lies in whether the domestic law requires recourse to any laws of the State, by utilising ss 70 and 80 of the Judiciary Act.

Section 80

1. The Court must first undertake the two-step test provided for by s 80, namely: is the Montreal Convention "insufficient" to carry itself into effect with respect to the heads and assessment of damages for causes of action under Art 17(1) concerning "bodily injury", or alternatively fails to "provide adequate remedies"; and is the Civil Liability Act "inconsistent" with the Montreal Convention.

Is There a "Gap" in the Aviation Act?

1. The difference in the approaches taken by Griffith and Stewart JJ largely stems from how their Honours interpreted Art 17 of the Montreal Convention, and the conclusions accordingly reached as to whether that provision is sufficient to bring into effect its purpose.
2. As with any statutory construction, the Court is to obtain the intention of the legislature and the purpose of the legislation from the words of the statute. [40] Art 17, as relevant to bodily injury, reads as follows: "1. The carrier is liable for damage sustained in case of death or bodily injury of a passenger upon condition only that the accident which caused the death or injury took place on board the aircraft or in the course of any of the operations of embarking or disembarking."
3. In addition to Art 17, Arts 21 and 25 (as discussed in relation to the Plaintiffs' Question above) provide further rules relevant to the liability limits applicable to claims for bodily injury under Art 17, and the mechanism by which carriers may extend or remove those limits of liability.
4. As stated in s 9E of the Aviation Act, liability of carriers pursuant to the Montreal Convention in respect of personal injury suffered by a passenger is in substitution for any civil liability of the carrier under any other law in respect of the injury.
5. In Bradshaw, Stewart J reasoned that, consistent with the rights of claimants flowing "purely and solely from [the Aviation Act]", [41] the right provided by the Montreal Convention to recover damages sustained in the case of bodily injury should be carried into effect by the Court without the statutory overlay of a particular State or Territory being applied. [42]
6. With the greatest of respect, and for the reasons that follow, I am unable to agree with that construction.
7. Article 29 of the Montreal Convention provides that: "In the carriage of passengers, baggage and cargo, any action for damages, however founded, whether under this Convention or in contract or in tort or otherwise, can only be brought subject to the conditions and such limits of liability as are set out in this Convention without prejudice to the question as to who are the persons who have the right to bring suit and what are their respective rights. In any such action, punitive, exemplary or any other non-compensatory damages shall not be recoverable."

Is the Civil Liability Act Inconsistent with the Aviation Act?

1. Having found that the Montreal Convention is insufficient to carry itself into effect with respect to the heads and assessment of damages, the next question to be considered is whether Pt 2 of the Civil Liability Act is inconsistent with the Montreal Convention, such as to preclude its adoption as a surrogate Federal law in this case.
2. The two main factors relevant to this question have been identified by Griffith and Stewart JJ and may be summarised as follows: 1. Whether the limits and thresholds imposed on awards of personal injury damages by the Civil Liability Act are incompatible with the scheme under the Montreal Convention; and 2. Whether the definition of "injury" under the Civil Liability Act can be reconciled with the definition of "bodily injury" under the Montreal Convention.
3. In relation to the first issue, I have already reasoned that the Montreal Convention intentionally leaves the quantification and availability of damages to the domestic law. As such, I am minded to agree with Griffith J that applying the correctly identified domestic law cannot be said to be inconsistent with the Convention.
4. Again, a helpful example may be found in the judgment of Scalia J in Zicherman. In that case, an applicable statute of the United States, being the Death on the High Seas Act ("DOHS Act"), precluded the recovery of compensation for non-pecuniary losses by people who were not passengers. [47] The Court accordingly held that the non-passenger claimant had no entitlement for loss-of-society damages (being the loss of the companionship of the deceased passenger) purely on the basis of the DOHS Act. [48]
5. The Court was also not convinced that the application of the DOHS Act created an unintended "double cap" on damages, when combined with the liability limits contained in the Convention. The Court held that given the Convention unquestionably envisages the application of domestic law, it is the function of Congress, and not the Court, to craft the domestic law to operate alone or in combination with the Convention. [49]
6. While I accept that a judgment of an international Court is not a binding precedent within this country, and that the judgment in Zicherman is no doubt at least partly reflective of the legal landscape of the United States, the High Court has held that international treaties should be interpreted uniformly by contracting states. [50] Further, the way that the U.S. Supreme Court approached the application of the DOHS Act to a claim under the Warsaw Convention says something about how the Warsaw Convention, and in turn the Montreal Convention, may be understood to "govern" damages.

Section 79

1. Given my findings above, it is not necessary for me to consider whether s 79 would, in the alternative, render Pt 2 of the Civil Liability Act applicable.

Does the Civil Liability Act Apply?

1. One final matter requires comment. It is accepted in these proceedings that the incident giving rise to the plaintiffs' injuries was not caused by the negligence or other act or omission of Air Canada. So much has been formally conceded following the issue of Notices to Admit in the proceedings.
2. The decisions in Grueff and Bradshaw raise the question of whether the Civil Liability Act is applicable to such a situation. The Civil Liability Act, when first enacted, defined "personal injury damages" as being caused by the fault of a person. After the Civil Liability Act was amended, the reference to fault was removed from that definition but remained referenced in the Act's long title. This has created some uncertainty as to the scope of the Civil Liability Act in relation to no-fault claims.
3. The starting point is for the Court to consider the ordinary meaning of the words in the Civil Liability Act given their context and legislative purpose. [53] As stated by McHugh JA (as his Honour then was) in Kingston v Keprose: [54] "Once the object or purpose of the legislation is delineated, the duty of the Court is to give effect to it in so far as, by addition or omission or clarification, the relevant provision is capable of achieving that purpose or object."
4. The application of Pt 2 of the Civil Liability Act, as amended, is provided for by s 11A: "11A Application of Part (1) This Part applies to and in respect of an award of personal injury damages, except an award that is excluded from the operation of this Part by section 3B. (2) This Part applies regardless of whether the claim for the damages is brought in tort, in contract, under statute or otherwise. (3) A court cannot award damages, or interest on damages, contrary to this Part. (4) In the case of an award of damages to which Part 2A (Special provisions for offenders in custody) applies, this Part applies subject to Part 2A."
5. The exclusions pursuant to s 3B are not relevant to the present question.
6. Personal injury damages, pursuant to s 11, are now defined as damages that relate to the death of or injury to a person, without any reference to fault.
7. The long title of the Act, in full, reads as follows: "An Act to make provision in relation to the recovery of damages for death or personal injury caused by the fault of a person; to amend the Legal Profession Act 1987 in relation to costs in civil claims; and for other purposes."

Conclusion as to Defendant's Question

1. For the foregoing reasons, the answer to the Defendant's Question is: yes.

Orders

1. The Court makes the following orders: 1. The Court answers the following questions in the manner indicated: 1. Does Rule 105(C) [of the defendant's Tariff rules] provide and have the effect that if this Court assesses each plaintiff's compensatory damages in Australian dollars in an amount in excess of 128,821 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? Answer: Yes. 1. Does Part 2 of the Civil Liability Act 2002 (NSW) apply to the determination of the quantum of any damages recoverable by the plaintiffs? Answer: Yes. 1. The parties' costs of and incidental to these Motions shall be costs in the cause. 2. The parties have liberty, by 31 January 2024, to make application for a different or special order as to costs by submission of no more than three pages in length, accompanied by any document upon which the application relies that is not otherwise in evidence. Any party affected by such application may respond within a further seven days by submission of no more than three pages in length, accompanied by any other document not otherwise in evidence.

Endnotes

1. While the Plaintiff's Question, as originally framed, referred to the applicable limit of SDR as being 128,821 SDR, the limit in force at the relevant time was 113,100 SDR; see [16] of these reasons.
2. Civil Aviation (Carriers' Liability) Act 1959 (Cth), Sch 1A, Art 17.
3. Civil Aviation (Carriers' Liability) Act 1959 (Cth), Sch 1A, Art 21, s 1.
4. Civil Aviation (Carriers' Liability) Act 1959 (Cth), Sch 1A, Art 21, s 2.
5. Civil Aviation (Carriers' Liability) Act 1959 (Cth), Sch 1A, Art 25.
6. Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165; [2004] HCA 52.
7. Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337; [1982] HCA 24.
8. International Air Transport Association v Ansett Australia Holdings Ltd (2008) 234 CLR 151; [2008] HCA 3.
9. Ibid at [8].
10. Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd, supra,at [40] (Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ).
11. See Mannai Investments v Eagle Star Life Assurance Co Ltd [1997] A.C. 749 at 771, where Lord Steyn prefers "commercial" to "purposive".
12. Goldsborough Mort & Co Ltd v Carter (1914) 19 CLR 429 at 447; [1914] HCA 80; Codelfa Constructions v State Rail, supra at CLR 352; Hospital Products Ltd v United States Surgical Corp (1984) 156 CLR 41 at 62; [1984] HCA 6462; Schuler v Wickman Machine Tool Sales Ltd [1974] A.C. 235 at 263.F.
13. HDI Global Speciality SE v Wonkana No 3 Pty Ltd (2020) 104 NSWLR 634 at [25]-[26] (Meagher JA and Ball J, Bathurst CJ and Bell P agreeing); [2020] NSWCA 296.
14. QBE Insurance Australia Ltd v Vasic [2010] NSWCA 166 at [35] (Allsop P, Giles and Macfarlan JJA agreeing).
15. Applicant A v Minister for Immigration and Ethnic Affairs (1997) 190 CLR 225; [1997] HCA 4.
16. James Hardie & Co v Hall (1998) 43 NSWLR 554 at 572 (Sheller JA Beazley JA & Stein JA agreeing).
17. National Mutual Holdings Pty Ltd v The Sentry Corporation (1989) 22 FCR 209 at 226 (Gummow J); [1988] FCA 133.
18. Report of Mr Dempsey, at s III.
19. Australian Broadcasting Commission v Australasian Performing Right Association (1973) 129 CLR 99; [1973] HCA 36.

Amendments 12 December 2023 - Cover sheet - Typographical error. 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: 12 December 2023