Gibson v Malaysian Airline System Berhad

1. Paragraph [7] of the Applicant's statement of claim dated 1 July 2016 be struck out.
2. The Applicant file any application to amend within six weeks hereof.
3. The Applicant pay the Respondent's costs of the strike out application.
4. The matter be listed for further directions on 28 March 2017. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

PERRAM J: 1 This is a procedural determination in a class action proceeding arising out of the MH17 disaster in the Ukraine. On 17 July 2014, all 283 passengers and the crew on board a Boeing 777-200 aircraft operated by the Respondent airline were killed when it was shot down by a warhead deployed by persons presently unknown. The flight was en route from Amsterdam to Kuala Lumpur. 2 One of the passengers on board was Liliane Derden. According to paragraph [3] of the statement of claim which has been filed, the Applicant is her daughter and personal representative, which I take to mean either that she is the executrix of the estate under a grant of probate or an administratrix under letters of administration. 3 The Applicant has commenced this proceeding on her own behalf, but her originating application is explicit that the claim is also a class action. It states that the 'Applicant sues in a representative capacity', and that she does so 'on behalf of the representatives of the deceased passengers'. This is further explained in paragraph [7] of her statement of claim, which is in these terms: 7. The group members are : a) residents of Australia who are the legal representatives of a passenger who was killed on MH17; or b) not being resident in Australia, who are the legal representatives of a passenger who was killed on MH17 and express the desire to take the benefit of the action (Civil Aviation (Carrier's Liability) Act 1959 (Cth), Section 9D(6)(b)). (Errors in original.) 4 In relation to her own claim, the Applicant alleges that her mother was being carried on MH17 from Amsterdam to Perth. As will be seen, this is an important jurisdictional matter. It will be observed that the class definition in paragraph [7] contains no such allegation linking the passengers involved to Australia. 5 The claim which is made is one for compensation under the Civil Aviation (Carriers' Liability) Act 1959 (Cth) ('the CACLA'). So much is apparent from prayer 1 of the originating application, which states that the Applicant claims 'Compensation under the Civil Aviation (Carrier's (sic) Liability) Act 1959 (Cth), Part 1A and IIIC and Schedule 1A to the Act (Montreal Convention)'. 6 The liability of the Respondent is therefore governed by the provisions of the Convention for the Unification of Certain Rules for International Carriage by Air done at Montreal on 28 May 1999 ('the Montreal Convention'). Australia is a State Party to the Montreal Convention which, subject to certain presently immaterial qualifications, has the force of Commonwealth law in Australia by reason of s 9B of the CACLA ('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.') 7 The Montreal Convention specifies in detail the jurisdictions in which a claim for damages under it may be brought. This is done by Art. 33, to which I will shortly return. The Respondent's argument on this application is that the way in which the Applicant has defined the class whom she represents has the consequence that the claim does not fall within Art. 33, and hence that her claim does not disclose a reasonable cause of action. The Applicant by her counsel denies that this is so, submits that she is not obliged to plead the jurisdiction of the Court under ordinary principles of pleading and says, in effect, that the issues generated by Art. 33 should be worked out at trial. 8 The principal issue on the application is therefore whether the Respondent is correct that the Applicant's claim does not disclose a cause of action. There are subsidiary issues arising from variants of the Respondent's principal argument, and there is also an issue as to whether, if the Respondent be correct, there should be a grant of leave to the Applicant to replead the class definition, or whether instead I should order that the proceeding cease to be a class action and become an ordinary proceeding brought only on the Applicant's own behalf. 9 For the reasons which follow, the Applicant's pleading of her class definition gives rise to claims which are not cognisable under the Montreal Convention by this Court. The relevant parts of the statement of claim will be struck out. The Applicant should, however, be given a further opportunity to rework the class definition so that it meets the requirements of Art. 33. She will also need to demonstrate on that application for leave to amend that the class definition does not result in claims which are inevitably statute barred. 10 The Montreal Convention makes a carrier liable for the death of a passenger. This liability requires no proof of fault where the claim does not exceed what it in its original text refers to as 100,000 'Special Drawing Rights' ('SDRs'). An SDR is an international reserve asset created by the International Monetary Fund. An SDR is presently worth around $A1.80. There are indexation provisions in the Montreal Convention which have increased the figure to 113,100 SDR. The no-fault cap is therefore presently around $A205,000. Above that cap, an airline may be held liable if it fails to prove that the death of the passenger was not the result of its negligence or wrongful act or omission. 11 The relevant provisions of the Montreal Convention which achieve this outcome are Arts. 17(1) and 21(1)-(2). These provide: Article 17--Death and Injury of Passengers--Damage to Baggage 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. ... 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. 12 The scheme of compensation in the case of a deceased passenger has, therefore, two levels: a lower tier, which comprises a no-fault regime, and an upper tier having a fault component with a reverse onus of proof resting on the airline. 13 Art. 17(1) creates a cause of action rather than recognising a cause of action which exists independently: United Airlines Inc v Sercel Australia Pty Ltd (2012) 260 FLR 37 at 51 [47] per Allsop P ('It is important to appreciate that it is Art 17 that creates the relevant cause of action…'). 14 So far as Australian law is concerned, there is no other cause of action available beyond that conferred by Art. 17(1). Subject to presently immaterial exceptions, s 9D(2) of the CACLA provides that '…the liability under the Convention is in substitution for any civil liability of the carrier under any other law in respect of the death of the passenger…'). Thus, whilst various State statutes erect schemes of compensation for the relatives of persons killed by tortious conduct (based generally on Lord Campbell's Act), the effect of s 9D(2) is to eliminate those causes of action. 15 The Montreal Convention also regulates in which Courts a claim under, inter alia, Art. 17 may be brought. This it does by Art. 33, which is in these terms: Article 33--Jurisdiction 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. 2. In respect of damage resulting from the death or injury of a passenger, an action may be brought before one of the courts mentioned in paragraph 1 of this Article, or in the territory of a State Party in which at the time of the accident the passenger has his or her principal and permanent residence and to or from which the carrier operates services for the carriage of passengers by air, either on its own aircraft, or on another carrier's aircraft pursuant to a commercial agreement, and in which that carrier conducts its business of carriage of passengers by air from premises leased or owned by the carrier itself or by another carrier with which it has a commercial agreement. 3. For the purposes of paragraph 2, (a) "commercial agreement" means an agreement, other than an agency agreement, made between carriers and relating to the provision of their joint services for carriage of passengers by air; (b) "principal and permanent residence" means the one fixed and permanent abode of the passenger at the time of the accident. The nationality of the passenger shall not be the determining factor in this regard. 4. Questions of procedure shall be governed by the law of the court seised of the case. 16 Unpicked, Art. 33 therefore specifies five different jurisdictions in which a claim in respect of a deceased passenger may be brought. These are: (a) the State where the carrier is domiciled; (b) the State where the carrier has its principal place of business; (c) the State where the carrier has a place of business through which the contract of carriage was made; (d) the State which is the place of destination; and (e) the State where the passenger had his or her principal and permanent residence at the time of the accident and to or from which the carrier operated services on its own or using another carrier's aircraft by commercial agreement and from which the carrier conducts its business of carriage of passengers from premises leased or owned by the carrier (or other carrier). 17 The Applicant's claim on her own behalf includes, as has already been noted, an allegation that the carriage of the deceased was to be from Amsterdam to Perth. This brings the Applicant's own claim within Art 33(1). 18 The Respondent's point is that the class members who the Applicant represents are defined in paragraph [7] of the statement of clam in a way which appears to have no necessary connexion with Art. 33. 19 Paragraph 7(a), it is true, refers to the Australian residency of the legal representatives, but this is not what Art. 33 operates upon. It is concerned with the residency of the deceased passenger, not the residency of the passenger's legal representative. 20 Paragraph 7(b) invokes s 9D(6)(b) of the CACLA. Subsections 9D(5) and (6) provide: SECT 9D Liability in respect of death … Action (5) An action to enforce the liability may be brought by: (a) the personal representative of the passenger; or (b) by a person for whose benefit the liability is, under this section, enforceable; but only one action may be brought in Australia in respect of the death of any one passenger. (6) The action to enforce the liability must be for the benefit of all people for whose benefit the liability is enforceable who: (a) are resident in Australia; or (b) not being resident in Australia, express the desire to take the benefit of the action. 21 The pleading in paragraph [7] is misconceived. Section 9D regulates an already existing cause of action created by Art. 17. Indeed, s 9D(1) begins with the words 'This section applies in relation to a liability imposed by the Convention…', which shows that s 9D does not begin to do any work until there already exists a liability under the Montreal Convention. 22 The persons referred to in s 9D(6) (and, probably more accurately, those referred to in s 9D(5)) are merely nominated individuals who can bring a claim otherwise authorised under the Montreal Convention. The nominated individuals are the personal representative or 'the person for whose benefit the liability is … enforceable'. It is clear from s 9D(3) that the latter is a reference to the passenger's family members. But neither of these nominations has any effect on the requirements of Art. 33. 23 Nor do I think that it can plausibly be argued that Art. 33 is a provision of a procedural kind which might be waived. On its face, Art. 33 is concerned with the topic of jurisdiction. This jurisdictional provision may not be waived because, unlike the situation which obtains in the case of arbitration, jurisdiction does not derive from the consent of the parties. 24 Consequently, even if the Respondent purported to waive Art. 33 and agreed that this Court had jurisdiction, this would not have the effect of clothing the Court with jurisdiction that it simply does not have: cf. Rothmans of Pall Mall (Overseas) Ltd. and Others v Saudi Arabian Airlines Corporation [1981] Q.B. 368 at 376. 25 As drawn, paragraph [7] of the statement of claim defines the class in a way which does not have the effect of ensuring that Art. 33 is engaged. The class is therefore defined in a way which means that group members need not have rights which this Court has jurisdiction to enforce. It is no answer to this that members of the class might fortuitously turn out at trial to be within jurisdiction because, for example, a contract of carriage had been made in Australia with Australian residents (see Art. 33(1)). If this is to be said, it is to be pleaded as a matter of class definition. 26 Section 33C(1) of the Federal Court of Australia Act 1976 (Cth) provides: 33C Commencement of proceeding (1) Subject to this Part, where: (a) 7 or more persons have claims against the same person; and (b) the claims of all those persons are in respect of, or arise out of, the same, similar or related circumstances; and (c) the claims of all those persons give rise to a substantial common issue of law or fact; a proceeding may be commenced by one or more of those persons as representing some or all of them. 27 Subsection (1)(a) has been held to refer to claims recognised by the law: Australian Competition and Consumer Commission v Giraffe World Australia Pty Ltd (1998) 84 FCR 512. This was an obiter dictum but any other result would be absurd. Of course, the present difficulty is not concerned with the viability of the claims which the personal representatives or family members have arising from the death of a passenger per se in some court. Here the issue is only one of the jurisdiction of this Court. But I do not think that 'claims' should be read as including claims in respect of which the Court has no jurisdiction. I so hold. This is not to require that an applicant needs to plead facts establishing jurisdiction. Rather, it is to recognise that what the Applicant has in fact pleaded in this case reveals a lack of jurisdiction to hear the claims of the class as defined. 28 Consequently, s 33C(1) has not been complied with. The class is not properly defined. Paragraph [7] will be struck out. 29 Ordinarily, I would grant leave to replead, as the problem with the class definition which has arisen appears as if it may well be soluble. However, there is a difficulty because any claim under the Montreal Convention needs to be brought within two years of the accident, that is to say, by 17 July 2016. Art. 35 of the Convention provides: Article 35--Limitation of Actions 1. The right to damages shall be extinguished if an action is not brought within a period of two years, reckoned from the date of arrival at the destination, or from the date on which the aircraft ought to have arrived, or from the date on which the carriage stopped. 2. The method of calculating that period shall be determined by the law of the court seised of the case. 30 In this case, a change in the class definition would require amendments to paragraph [7] of the statement of claim, and possibly to the originating application. Power certainly exists to amend both of these documents. Noting that a change in class definition does not effect a joinder of a new party, in the case of the originating application the power is to be found in r 8.21(1)(a) of the Federal Court Rules 2011 (Cth), which provides: 8.21 Amendment generally (1) An applicant may apply to the Court for leave to amend an originating application for any reason, including: (a) to correct a defect or error that would otherwise prevent the Court from determining the real questions raised by the proceeding; or… 31 I am satisfied that a suitable change to the class definition consequent upon a striking out of the previous class definition would be an amendment whose end was the identification of the real questions in the proceeding within the meaning of this rule. However, the Federal Court Rules do not presently specify when such an amendment takes effect. There is a rule specifying when an amendment substituting a party takes effect, r 8.22: 8.22 Date on which amendment takes effect If an originating application is amended with the effect that another person is substituted as a party to the proceeding, the proceeding is to be taken to have started for that person on the day the originating application is amended. 32 But a change to the class definition does not have the effect of substituting a party and hence this rule does not apply. 33 A similar problem arises in relation to the statement of claim. The relevant rule is r 16.53: 16.53 Application for leave to amend Unless rule 16.51 applies, a party must apply for the leave of the Court to amend a pleading. (Rule 16.51 is concerned with situations where leave is not necessary and does not apply). As to when an amendment takes effect, r 16.54 provides: 16.54 Date on which amendment takes effect An amendment of a pleading that is made under rule 16.51 takes effect on the date the amendment is made. 34 Again, there is no rule explicitly specifying when an amendment under r 16.53 takes effect. This was not the case under the former rules. Previously the issue had been dealt with by the former Order 13 rule 3A, which provided that unless the Court otherwise ordered, an amendment to a document generally took effect on the date that it was filed. 35 There is a question as to whether the new rules were intended to change the operation of the old rules. There is a respectable argument that they did not, in which case it may be that any proposed amendments will date from the original filing date: cf. Australian Securities and Investments Commission v Australian Property Custodian Holdings (No 2) [2013] FCA 409 at [8]-[19]. A similar situation obtains under r 8.21 in relation to amendments to the originating process. 36 The Respondent submitted that I should apply by analogy the reasoning of Jacobson J in Brisbane Broncos Leagues Club v Alleasing Finance Australia Pty Ltd [2011] FCA 106. There his Honour concluded under the former Order 13 rule 3A that a change in class definition in a class action took effect from the date of the amendment. However, rule 3A is materially different to the current rule. 37 In the case of the claims currently under consideration there is a two year limitation period. Whilst I can see an argument that the notional claims of any new class members will be statute barred, I am not presently prepared to say that this is an inevitable result. 38 The proper result is therefore that I will strike out paragraph [7] of the pleading. I will not direct, at this stage, that the matter no longer proceed as a class action. The Applicant should have an opportunity to reformulate her class definition and to make submissions about when any amendment might take effect. Such an application to amend should be filed within six weeks hereof. In the meantime, the Applicant must bear the Respondent's costs of the application to dismiss. I certify that the preceding thirty-eight (38) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Perram.