McKenzie & McKenzie v Air Tahiti Nui Pty Ltd

Civil Aviation (Carriers' Liability) Act 1959 LEGISLATION CITED: Civil Procedure Act 2005 Warsaw Convention as amended at the Hague Convention and as amended by the Montreal Protocol

Charles Kapar v Kuwait Airways Corporation 269 US App. D.C. 355 Commonwealth of Australia v Verwayen (1990) 170 CLR 394 Grundt v Great Boulder Pty Ltd Gold Mines Pty Ltd (1937) 59 CLR 641 Johnson v Allied Eastern States Maintenance Corp, 48 CASES CITED: Katsambasis v Singapore Airlines Ltd (1997) 42 NSWLR 110 Lathigra v British Airways PLC 41 F.3d 535 Lear v New York Helicopter Corporation (NYHC) (1993) 597 NYS 2d 411 Nowlan v Marson Transport Pty Ltd (2001) NSWCA 346 White v Overland [2001] FCA 1333 Young Jewelry Mfg. Co. v Delta Air Lines 67 A.D.2d 148

TEXTS CITED: Shawcross and Beaumont Air Law, Volume 1 Spencer Bower, Estoppel by Representation, 4th Edition,

PARTIES: Robert James McKenzie and Diana May McKenzie (formerly Harsh) Air Tahiti Nui Pty Limited

COUNSEL: Plaintiff: Mr RH Taperell Defendant: Mr C Withers

SOLICITORS: Plaintiff: Beverley Cantle, Cantle Carmichael Lawyers Defendant: Michael Wytcherley, Norton White

1 On the face of it these proceedings are relatively straightforward. Mr and Mrs McKenzie flew from New York to Papeete on 19 November 2005. During the course of that flight the aircraft struck turbulence and as a result of that each of the plaintiffs assert that he and she was injured and as a result suffered and will suffer loss. Each makes a claim against the defendant.

2 There is no dispute that the carriage of each of the plaintiffs was governed in part by the Warsaw Convention as amended at the Hague Convention and as amended by the Montreal Protocol ("The Convention"). The Convention was incorporated into the law of Australia by the Civil Aviation (Carriers' Liability) Act 1959 ("the Act").

3 The nominated defendant is Air Tahiti Nui Pty Ltd and at all material times that company was the registered proprietor of the business name "Air Tahiti Nui".

4 The flight upon which the plaintiffs were injured was designated as "TN3".

5 As I understand it the matters relating to the sale of the ticket to the plaintiffs are uncontroversial. I take this history from the affidavit of the second plaintiff of 2 April 2008. The tickets were purchased through a travel agency, the Flight Centre at Gosford. The airline nominated within the Flight Centre's documentation, which is Exhibit B to her affidavit, is "Air Tahiti Nui". The plaintiffs were issued with a paper ticket, which is in evidence before me. The ticket is said to be issued by "Air Tahiti Nui". The relevant flight on that ticket is designated as "TN3". The airline code is revealed as "244". There is nothing else on the face of the ticket which would otherwise describe the contracting airline.

6 The two issues that I am asked to decide as preliminary matters are: - (a) Is the defendant the "carrier" made liable pursuant to the Convention and the Act; and (b) If the answer to question (a) is No, is the defendant estopped from denying its liability?

7 It is uncontroversial that the defendant is wholly owned by Air Tahiti Nui (Société Anonyme) ("SA"), a company incorporated under French law and having its head office at Papeete, French Polynesia. Nowhere in the documentation issued to the plaintiffs was SA identified.

9 Article 1 of the Convention reads: - This Convention applies to all international carriage of persons, baggage or cargo performed by aircraft for reward. It applies equally to gratuitous carriage by aircraft performed by an air transport undertaking.

10 There is no dispute that the plaintiffs were injured during the course of an "international carriage". However, its definition may be relevant and Article 2 of the Convention reads: For the purposes of this Convention, the expression international carriage means any carriage in which, according to the agreement between the parties, the place of departure and the place of destination, whether or not there be a break in the carriage or a transhipment, are situated either within the territories of two High Contracting Parties….

11 Chapter 2 of the Convention is headed "Documents of Carriage" and the first section is headed "Passenger Ticket". Article 3 mandates the requirements of the Convention as to what is to be included in the carriage of passenger's ticket and it is notable that it does not require the identity of the "carrier" be included.

12 Article 17 of the Convention imposes a strict liability on the carrier 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.

13 Article 22 limits the amount of money for which the carrier is liable.

14 Article 25A of the Convention reads as follows: - 1. If an action is brought against a servant or agent of the carrier arising out of damage to which this Convention relates, such servant or agent, if he proves that he acted within the scope of his employment, shall be entitled to avail himself of the limits of liability which that carrier himself is entitled to invoke under Article 22.

2. The aggregate of the amounts recoverable from the carrier, his servants and agents, in that case, shall not exceed the said limits.

3. In the carriage of passengers and baggage, the provisions of paragraphs 1 and 2 of this Article shall not apply if it is proved that the damage resulted from an act or omission of the servant or agent done with intent to cause damage or recklessly and with knowledge that damage would probably result.

16 Article 29 relevantly imposes a limitation period and reads as follows: 1. The right to damages shall be extinguished if an action is not brought within 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 the period of limitation shall be determined by the law of the Court seised of the case.

17 Notably the Convention does not define "carrier".

18 The Act does however define "carrier" as follows: Carrier means a person engaged, or offering to engage in an air transport operation for the carriage of passengers to which Parts (ii) (iii) or (iv) applies.

19 Condition 1 of the ticket itself under "Conditions of Contract" reads: - As used in this contract "ticket" means this passenger ticket and baggage check, or this itinerary/receipt if applicable, in the case of an electronic ticket, of which these conditions and the notices form part, "carriage" is equivalent to "transportation", "carrier" means all air carriers that carry or undertake to carry the passenger or his baggage hereunder or perform any other service incidental to such air carriage, "electronic ticket" means the Itinerary/Receipt issued by or on behalf of Carrier, the Electronic Coupons and, if applicable, a boarding document. "Warsaw Convention" means the Convention for the Unification of Certain Rules Relating to International Carriage by Air signed at Warsaw, 12th October 1929, or that Convention as amended at the Hague, 28th September 1955, whichever may be applicable.

20 Condition 4 of the ticket reads as follows: Carrier's name may be abbreviated in the ticket, the full name and its abbreviation being set forth in carrier's tariffs, conditions of carriage, regulations or timetables; carrier's address shall be the airport of departure shown opposite the first abbreviation of carrier's name in the ticket; the agreed stopping places are those places set forth in this ticket or as shown in carrier's timetables as scheduled stopping places on the passenger's route; carriage to be performed hereunder by several successive carriers is regarded as a single operation.

21 Condition 6 reads:- Any exclusion or limitation of liability of carrier shall apply to and be for the benefit of agents, servants and representatives of carrier and any person whose aircraft is used by carrier for carriage and its agents, servants and representatives.

22 Craig Lee gave evidence before me. He swore an affidavit dated 1 December 2008. He is the sole director of the defendant. His affidavit annexed copies of the tickets issued to the plaintiffs. Annexure C to his affidavit of 1 December 2008 is a letter from the International Air Transport Association ("IATA"). The letter is addressed to the Director General of "Air Tahiti Nui". It designated the assignment "TN" to that airline. The first paragraph of that letter reads: In response to your application for a designator, your company has been assigned the above mentioned code in accordance with IATA Resolution 762. Under controlled circumstances IATA may also assign this designator to other qualifying companies. You will be notified if this occurs.

23 It is notable that in that letter there is no reference at all to the SA company.

24 I note that in his affidavit he says at paragraph 5: Annexed hereto and marked 'B' is a copy of a letter from IATA confirming the assignment of the code 244 Air Tahiti Nui SA, of French Polynesia.

25 The letter does not say that. There is no reference to the "SA" company at all. The letter is addressed to Air Tahiti Nui.

26 Both in his affidavit and in his oral evidence he described the way in which the defendant dealt with the various travel agents, including the Flight Centre which was the agent which issued the tickets in this case. It is notable that the agreement between the Flight Centre and the defendant abbreviated the defendant as "TN" as the short form of describing it throughout the agreement. In other words the defendant knew itself as "TN" in a colloquial commercial sense.

27 Additionally, albeit that the ticketing system employed by the defendant was operated through a global system described in paragraph 11 of Mr Lee's affidavit, nonetheless the proceeds of sales of the airline's tickets passed through a bank account in the name of the defendant. Further, monies used for the day-to-day operations of the defendant were taken from that account, albeit that the amounts taken were in accordance with the budget established by SA.

28 What precedes demonstrates that for all intents and purposes all the indicia show that the airline was Air Tahiti Nui, which, inter alia, is the business name of which the defendant is the registered proprietor.

29 In passing I should also note that Annexure D to Mr Lee's affidavit again discloses the airline name as only Air Tahiti Nui and no mention at all is made of the SA company.

30 One could conclude therefore that an inquiry made to IATA would disclose the designation of "TN" and the three digit code ascribed by IATA to the airline, namely 244, would reveal "Air Tahiti Nui" as the airline which is consistent with the business name again of which the defendant was the registered proprietor in Australia.

31 The defendant suggests that in fact all this information is trumped by the material contained on the internet website as opposed to what would be revealed by conventional searches with the corporate regulatory authorities in Australia or with for that matter the body apparently charged with the task of representing member airlines and designating prefix codes and designated codes, namely IATA.

32 It would seem that if the defendant is right it brings to a new level of obscurity the steps which are required by a reasonably diligent lawyer to obtain the proper identity of a contracting party he or she proposes to sue on behalf of a client.

33 I turn to the principles for the interpretation of an international convention such as the Warsaw Convention. The defendant submitted as the Convention imposed a regime of strict liability I should adopt what was said by Meagher AJ in Katsambasis v Singapore Airlines Ltd (1997) 42 NSWLR 110 at 119(d) where he said of Article 17 of the Convention: - I would stress that regard has to be directed to the intention of the contracting parties to the convention and that intention was to impose absolute liability and certain, very narrow, circumstances.

34 Far be it from me to disagree. A further construction of the Convention would include the proposition that it also significantly limits the damages available to those injured in circumstances where strict liability applies. Thus, it drastically limits damages available to those who are severely injured where in the normal course of events applying common law principles, for instance, damages could run into the millions of dollars, where as the Convention limits the liability of airlines to a maximum amount elsewhere described in these reasons.

35 In other words the way in which the convention ought to be construed narrowly, namely in favour of either the plaintiff or airline in circumstances such as this, is two way traffic.

36 This proposition becomes starkly relevant when looking at the American cases referred to by the parties.

37 In the light of the evidence before me it is fair to characterise the relationship between the defendant and SA as a seamless interdependent operation. The activities of each were conducted in the name of "Air Tahiti Nui". No distinction was drawn between the two entities in any of the documentation relevant to the plaintiffs' travel.

38 Clearly the defendant in entering into marketing arrangements with travel agents or dealing directly with the public was "… offering to engage in an air transport operation for the carriage of passengers …"

39 It is surprising that there is such a dearth of authority on this question. It is further surprising that "carrier" is not more specifically defined given that its meaning is at the heart of the operation of the Convention and the Act giving effect to it as Australian law.

40 In Lear v New York Helicopter Corporation (NYHC) (1993) 597 NYS 2d 411 the Court said at page 4: - The plaintiffs herein contend that since NYHC was the actual air carrier at the time of the accident, the related corporate defendants, Transleisure, IHC and IHI should not be permitted to invoke the benefits of the Warsaw Convention because they are not 'carriers' under the terms of the treaty. Conversely, Transleisure, IHC and IHI maintain that they are interrelated corporations and perform activities which constitute carrier functions, thereby entitling them to the protection of the treaty by virtue of their status as agents of NYHC. The relevant decisional law supports the Supreme Court's broad interpretation of the term 'carrier' so as to include these defendants.

41 The Court also alluded to Young Jewelry Mfg. Co. v Delta Air Lines 67 A.D.2d 148 and said at page 4: - An independent contractor engaged by Delta Air Lines to provide interline baggage transfer services was found to be entitled to the protection afforded by the Warsaw Convention because it was 'an air carrier's agent performing functions the carrier could or would …. Otherwise perform itself'. The court there reasoned that '[t]o allow an agent … which is performing services in furtherance of the contract of carriage, and in place of the carriers themselves, to be liable without limit would circumvent the Conventions …415 purposes of provided uniform worldwide liability rules and definite limits to the carrier's obligations'. (Young Jewelry Mfg. Co. V Delta Airlines, supra at 151, 414, NYS 2d 528).

42 Similarly, it dealt with Johnson v Allied Eastern States Maintenance Corp, 488 A.2d 1341 and said at page 5:- … 'the purposes underlying the Convention would best be served by a construction which brings under its aegis not only the carrier's employees … but also those agents who perform services in furtherance of the contract of carriage. This will ensure that the rules governing international aviation remain uniform and that the liability limitations remain intact, regardless of whom a plaintiff may choose to name as a defendant in a particular case' (at 1345) Other decisions also support the expansion of the term 'carrier' as used in the Warsaw Convention to include employees and agents of carriers (see eg, In re Air disaster at Lockerbie, Scotland on Dec 21, 1988, 776 F.Supp. 710; In re Air Crash Disaster at Gander, Newfoundland on Dec 12, 1985, 660 F.Supp. 1202; Baker v Lansdell Protective Agency, Inc., 590 F.Supp. 165).

43 Further on page 5 the Court said the following: - In the instant case, the record demonstrates that Transleisure, IHC and IHI are the interrelated sister and parent corporations of NYHC and were obligated to perform services (eg., inspection, maintenance, and repair of the helicopter and its components) for NYHC which were in furtherance of the contract of carriage.

44 I also have regard to what was said in Lathigra v British Airways PLC 41 F.3d 535 which is distinguishable from Lear on its facts alone.

45 See generally: Shawcross and Beaumont Air Law, Volume 1, paragraphs 1076-1078.

46 The defendant took me to Charles Kapar v Kuwait Airways Corporation 269 US App. D.C. 355.

47 That case involved a claim by Mr Kapar who had been a passenger on board a Kuwait airlines aircraft which was hijacked over Iran. What happened to him is irrelevant for present considerations. The case turned on his claim against Pan Am which was one of the defendants to the proceedings. The ticket on which he was flying was issued on Pan Am's stock but was for travel on a KAC flight from Kuwait City to Karachi. The ticket had been sold by Pan Am, in effect as agent for KAC. Pan Am was paid a commission pursuant to the provisions of a Pan Am-KAC Interline Agreement.

48 On the ticket itself Pan Am was shown as the carrier but there was no dispute that in fact the aircraft on which the plaintiff was being carried was a KAC aircraft.

49 In paragraph 10 of their reasons the Court said: - Our understanding of the term "carrier," as utilized in the Convention, comports with the well-settled principle that an airline that issues a ticket for carriage on another airline acts only as the agent for the actual carrier. See, e.g., Block v. Compagnie Nationale Air France, 386 F.2d 323, 332-34 (5th Cir.1967), cert. denied, 392 U.S. 905, 88 S.Ct. 2053, 20 L.Ed.2d 1363 (1968); Eck, 360 F.2d at 814. This precedent reflects the longstanding practice and understanding of the world's international air carriers, whose standard IATA interline agreement provides that an issuing airline "shall be deemed to act only as an Agent of the carrying airline(s)." Art. VII, Interline Traffic Agreement--Passenger, reprinted in Appendix for Appellee KAC at 25. Kapar's ticket, moreover, expressly states that the "carrier issuing a ticket for carriage over the lines of another air carrier does so only as its agent." Reprinted in Appendix of Appellee KAC at 15. n That the Convention's drafters did not account for these agency arrangements is due to the simple fact that, in 1929, the commercial airline industry was in its infancy and only a few interline agreements were in place. Eck, 360 F.2d at 812-13. We note that an agency relationship would likely exist between the issuing airline and the actual carrier even in the absence of a formal interline agreement. See Eck, 360 F.2d at 814 n. 23 We reject Kapar's argument that Pan Am, whose name and address allegedly appear on the ticket, must be considered a "carrier" because Article 3(1)(d) requires the "carrier" to include such information on its ticket. For these reasons, the term "contract," as used in the Convention, refers to a passenger's travel arrangements on an actual carrier, not the insignificant relationship between the passenger and an issuing airline. See Block, 386 F.2d at 334 ("the airline-passenger contract exists [between the passenger and the actual carrier] when the negotiator is only a nominal party, acting on behalf of the passenger [ ]"); Orent v. Sabena Belgian World Airlines, 8 Av.Cas. (CCH) 17,273 (E.D.N.Y.1962); Riediger v. Trans World Airlines, 6 Av.Cas. (CCH) 17,315 (N.Y.Sup.Ct.1959); cf. Seguros Banvenez, S.A. v. S/S Oliver Drescher, 761 F.2d 855, 860 (2d Cir.1985) ("When an agent makes a contract for a disclosed principal, it becomes neither a party to the contract nor liable for the performance of the contract.")

50 That case is distinguishable from this for reasons which I have set out above, namely that there was no question of agency arising here. The defendant was part of the same enterprise and fulfilled an intrinsic part of the processes of "carriage" of the plaintiffs in this case.

51 Thus, I conclude that the defendant is the "carrier" for the purposes of the operation of the Warsaw Convention as adopted into Australian law by operation of the Civil Aviation (Carriers' Liability) Act 1959

52 This conclusion is consistent with and also relies upon the definition of "carrier" in the Act. It is also consistent with the definition of "carrier" on the ticket.

53 If I am wrong in terms of my conclusion that the defendant is "the carrier" then I am of the view that in any event this defendant is estopped from denying its liability to the plaintiffs as alleged in the Statement of Claim. That leaves to one side, of course, whether it has any liability to the plaintiffs based upon whether they have suffered any injury or loss consequent upon the incident that occurred during the course of carriage and the Trade Practices claim.

54 Section 56 of the Civil Procedure Act 2005 reads as follows: (1) The overriding purpose of this Act and of rules of court, in their application to civil proceedings, is to facilitate the just, quick and cheap resolution of the real issues in the proceedings. (2) The court must seek to give effect to the overriding purpose when it exercises any power given to it by this Act or by rules of court and when it interprets any provision of this Act or of any such rule. (3) A party to civil proceedings is under a duty to assist the court to further the overriding purpose and, to that effect, to participate in the processes of the court and to comply with directions and orders of the court. (4) A solicitor or barrister must not, by his or her conduct, cause his or her client to be put in breach of the duty identified in subsection (3). (5) The court may take into account any failure to comply with subsection (3) or (4) in exercising a discretion with respect to costs."

55 In White v Overland [2001] FCA 1333 at paragraph 4 Justice Allsop as he then was said the following: However, by way of general principle I would simply like to make perfectly plain my view that in the efficient and proper conduct of civil litigation, even civil litigation hard fought between parties, it should always be recognised that in the propounding of issues for trial the parties should take steps to ensure that all relevant parties to the dispute are cognisant of what the issues are. Any practice of quietly leaving footprints in correspondence or directions hearings to be uncovered some time later in an attempt to reveal that a matter was always in issue should be discouraged firmly. Even if something has been said, where it is evident, or indeed suspected, that the other side is proceeding on the basis of a misconception or has not appreciated something, as a general rule, efficiency, common sense and an appreciation of the costs and resources (both public and private) likely to be wasted by confusion in litigation will mandate that a party through his or her representative ensure that the other is not proceeding on a misconception or that the other does appreciate something that has been said. Litigation is not a game. It is a costly and stressful, though necessary, evil. To paraphrase Roscoe Pound from "The Causes of Popular Dissatisfaction with the Administration of Justice" (1906) 29 ABA Rep 395, 404-406, the "sporting theory of justice" and any behavioural manifestation of it should be seen as a survival, or better, a relic, of the days when a lawsuit was a fight between two clans: cf Jackamara v Krakouer (1998) 195 CLR 516 at 526-527 per Gummow and Hayne JJ. Representatives do not owe duties to the other side's client. They owe duties to their own client. But no one's interests are advanced by litigation proceeding on assumptions which are seen or suspected to be false. This is very much the case when an issue, if it is to be propounded, might endanger the instructions of those acting for the other side. In saying this I need make no reference to the well-known responsibility of the Crown and emanations of the Crown to act at all times as model litigants beyond referring to what was said by the Full Court of this Court in Scott v Handley [1999] FCA 404 at [43] ff. I would expect no less than that which I have indicated of bitterly competitive commercial parties in the hardest fought of cases. In the long run, the only consequence of keeping issues hidden or not clearly identifying them is to disrupt the business of the court leading to the waste of valuable public resources and to lead to the incurring of unnecessary costs by the parties, costs which ultimately have to be borne by someone. 56 In Nowlan v Marson Transport Pty Ltd (2001) NSWCA 346 Heydon JA as his Honour then was said between paragraphs 29 through to 31 the following: - 29. The same approach operates in commercial and equity litigation in this Court. In that activity it is common for counsel to volunteer to each other what points will be argued and what authorities will be relied on. If one counsel requests that type of information from another, it is usually given. If it is not given, a speedy approach to the court is usually possible in which the difficulty will speedily be remedied. Even as long ago as the time when Mr H H Glass QC and Mr J W Smythe QC had their celebrated conversation about exchanging notes for argument in the course of a murder trial, Mr Smythe may have been right about criminal trials, but Mr Glass was right about equity suits. 30. Indeed, even in personal injury litigation the ambush theory of life has been abandoned in District Court trials as much as in Supreme Court trials. Matters are readied for reasonably expeditious hearing by a series of interlocutory appearances. Detailed particulars must be supplied under, for example, Pt9 of the District Court Rules. Pleadings are expected to be clear and to be adhered to. Expert reports cannot be relied on unless served well in advance. 31. If the ambush theory of litigation is permitted to survive in the specific area of time-extension proceedings, it will do no party any good, least of all the potential defendants. In the first place, it will have the effect of imposing on all applicants in this type of litigation a duty to file evidence which is adequate to deal with every conceivable point which might be taken against them. This would generate undue expense, would tend to consume court time unnecessarily, and would produce the undesirable result that applications to extend time would become mini-trials of the contemplated action. Even if the first application failed because the applicant had been surprised, it would be possible for a second application to be made: Nominal Defendant v Manning (2000) 50 NSWLR 139. That is an undesirable waste of scarce and valuable judicial time in the District Court, but the court might well hold that the second application is not an abuse of process and should proceed if it was necessitated by the fact that the applicant was ambushed in the course of the first application. Alternatively, an ambushed applicant might decide to do what the present appellant did, and apply to this Court seeking leave to appear and tendering further evidence. Fascinating though the Court finds this type of work, that too is undesirable, since the time of three judges is consumed and not just one, but it may be necessary if justice is to be done to an applicant. It is simpler, cheaper, more efficient and fairer for [sic] resort to these manoeuvres to be avoided and for appropriate notice to be given by respondents to applicants before the application to extend time is first heard.

57 It is useful to set out a broad chronology in relation to the progress of this dispute.

58 The plaintiffs' solicitors first wrote on 22 December 2005. The letter was addressed to the General Manager, Air Tahiti Nui at 43 George Street, Sydney.

59 The first paragraph of that letter is as follows: We act for Robert McKenzie and his wife Diana Harsh who were passengers on your above flight which departed New York on 19 November 2005.

60 The header for the letter reads:- Air Tahiti Nui - Flight TN3, 19-20 November 2005 New York to Papeete.

61 The letter sets out the incident which occurred during the course of that flight and the nature of the injuries suffered by each of the plaintiffs.

62 The tenor of the claim made within the letter suggests a prospective claim for negligence, however the last paragraph simply reads:- Our clients are seeking compensation for the effective loss of their eight night holiday, which was absolutely ruined by the circumstances of this incident and we would appreciate hearing from you as to what compensation you are prepared to offer in the circumstances.

63 The response to it is dated 4 January 2006 on letterhead which says only "Air Tahiti Nui" and reads: - Dear Tony,

Thank you for your letter regarding your client Robert McKenzie and Diana Harsh detailing their experiences on board TN3 19 November from New York to Papeete. Please accept this letter as an interim reply, pending a full investigation into the matters raised.

64 It is signed Craig Lee, who describes himself as Regional Director Australia.

65 Presumably that title refers to his job with "Air Tahiti Nui".

66 The next letter is from the plaintiffs' solicitors again to Mr Lee designated as General Manager, Air Tahiti Nui and dated 25 October 2006. The letter sought various documents, manuals and the like from Air Tahiti Nui in the context that Mr Carmichael said that the plaintiffs' medical condition had deteriorated and stating that they had suffered financial loss as a result of their incapacity to return to work following the incident.

67 No reply was received to that letter. On 1 December 2006 Mr Carmichael, on behalf of the plaintiffs, wrote again seeking an answer to his letter.

68 A email was received dated 8 December 2006 signed again by Craig Lee, identifying himself as Regional Director Australia, Air Tahiti Nui, acknowledging the letters just referred to and saying: - There are questions being forwarded to our head office legal department in Papeete and I have been informed they will be in contact with you in the near future.

69 On 8 January 2007 the solicitors for the defendant, Norton White, wrote to Mr Carmichael. The topic of the letter is "Air Tahiti Nui - Flight TN3 19-20 November 2005". It referred to the earlier letters sent by Mr Carmichael on behalf of his clients to Air Tahiti Nui dated 22 December 2005 and 25 October 2006. It also said:- We act for Air Tahiti Nui in respect of this matter….

70 It continued in part:- So that we can better assess your clients' claims …

71 It then went on to request certain medical reports and, in particular, copies of the tickets on which Mr Carmichael's clients were travelling.

72 On 26 March 2007 Mr Carmichael pressed Norton White for a response to the request made by letter of 23 February 2007. On 3 April 2007 Norton White wrote to Mr Carmichael, again heading the letter "Air Tahiti Nui - Flight TN3 - 19-20 November 2005 - Claims by McKenzie and Harsh" and sought particulars of the prospective economic loss claims being made by each of them.

73 On 4 April 2007 Mr Carmichael again wrote to Norton White seeking a response to the particulars that he had originally sought in his letter to the defendant on 25 October 2006 and said: - If we are unable to receive these particulars within the next fourteen days then we will have no alternative than to commence proceedings for discovery before suit at your clients risk as to costs.

74 That letter was responded to, or at least the letter of 26 March 2007 was responded to, by Norton White on 11 April 2007. The heading of the letter was in broadly identical terms to that contained in its previous correspondence.

75 It says in part: - The material you have requested is not made available to passengers as a matter of course and we are not presently aware how much of that material is available at all, but we will find out. Certainly some of the items you have nominated are not held by our client.

76 The letter continued: - In this matter, we have requested details of the passengers' claims and when the further material is provided, we anticipate that we will receive instructions to put a proposal, albeit on a without prejudice basis.

77 Subsequently the plaintiffs commenced proceedings for preliminary discovery and a copy of the Notice of Motion together with an affidavit in support was served upon the defendant and as a matter of courtesy it was also sent to Norton White under cover of a letter dated 17 May 2007. Included within the attachments was the affidavit of Mr Carmichael sworn 8 May 2007. Amongst other things the first paragraph deposed to the fact that Mr Carmichael was the solicitor for the applicants. It also said: - I am the solicitor for the applicants in relation to the Notice of Motion for Discovery filed herein by way of application for discovery of documents from the prospective defendant, Air Tahiti Nui Pty Ltd , pursuant to Part 5, Rule 5.3 of the Uniform Civil Procedure Rules 2005. (emphasis added)

78 Paragraph 3 read as follows: - On 19 November 2005 the applicants were passengers on a Air Tahiti Nui flight from New York to Papeete, Tahiti on the prospective defendant's aircraft . The prospective defendant is an Australian company …. (emphasis added)

79 Paragraph 5 of that affidavit read: - During the flight the prospective defendant's aircraft had an incident with air turbulence as a result of which the applicant suffered injury, loss and damage. (emphasis added)

80 There can be no doubt that what was being asserted by that affidavit was that the aircraft in which the applicants were at the time they were hurt was that of the defendant in these proceedings.

81 Upon receipt of that letter enclosing the Notice of Motion together with the Affidavit of Support, Norton White wrote to Mr Carmichael on 23 May 2007, again with the same headings. The heading to the letter was the same as that employed previously. What was sought in that letter were medical reports and particulars in relation to the claim being made by Mr Carmichael's clients.

82 Importantly, at page 2 of that letter the following appears: - Turning to Notice of Motion, it is apparent from paragraph 10 of the affidavit of Mr Carmichael that the Motion has been filed to ascertain if the evidence will prove negligence on the part of the carrier. Negligence will not be at issue in any claim which may be brought by your clients. The effect of the Civil Aviation (Carriers' Liability) Act is that the claimants are not required to establish negligence on the part of the carrier in any proceedings they may bring. As your clients will not be required to prove negligence in any proceeding they may elect to bring there is no basis for an application for preliminary discovery and we invite you to withdraw the Notice of Motion. If it is pressed, we will oppose the making of the order and will seek indemnity costs of the Notice of Motion."

83 On 25 May 2007 Mr Carmichael wrote to Norton White. In part that letter says as follows: - We note your comments concerning the application of the Civil Aviation (Carriers' Liability) Act and your concession that our clients will not be required to prove negligence in any potential proceedings on the basis that the Act applies. We note however that there are potentially a number of defences that may be available to your client. The rules for discovery before suit Part 5 Rule 5.3 facilitate discovery not just of material that enables a potential defendant (sic) to determine whether or not he or she has a course of action but to enable the potential plaintiff whether or not to commence proceedings. In our respectful view an element of such decision is the likelihood of the defendant being able to invoke a defence. … We note that when we first requested the information you responded on your client's behalf by saying that in effect your are unsure of how much of the material is available but you would find out. To date we still do not have your advice about this. There was no suggestion from you at the time that the information was, in effect, irrelevant. It is in the light of the absence of any further information from you, and the impending expiry of the limitation period that we have brought this application. The exercise can of course be obviated if your client admits liability under the Act. If it does not then might we inquire as to what the basis for any defence may be in which case we may be able to limit the scope of the discovery."

84 It then canvassed the prospect of settling the case.

85 On 1 June 2007 Norton White wrote to Mr Carmichael. It commenced with the by now conventional description of the topic of the letter and said: - We refer to your letter of 25 May 2007. Our client has been from the outset and remains willing to attempt to resolve this matter to avoid litigation.

86 It then discussed aspects of the plaintiffs' proposed claim.

87 It then went on to say: - However, the application for the order sought in the Notice of Motion listed for 6 June is groundless. The suggestion that the affidavit might have been more clearly articulated is a euphemistic way of saying that it was based on entirely erroneous assumptions. We do not see any point in simply adjourning it and we are not prepared to leave it unresolved.

88 It should be noted that the request in Mr Carmichael's letter of 25 May 2007 seems to have been assiduously ignored. It was clearly an opportunity at that stage for the defendant to say that it denied liability on the basis that it was not the proper defendant in any proceedings based on a claim made by the plaintiffs pursuant to the provisions of the Warsaw Convention which governed, according at least to the defendant in these proceedings, the plaintiffs' prospective claims, in that it was not the carrier.

89 The limitation period expired on 19 or possibly 20 November 2007. The defendant as a prospective defendant filed an unconditional appearance to the Notice of Motion seeking preliminary discovery.

90 On 5 June 2007 Michael Charles Wytcherley swore an affidavit on behalf of the prospective defendant in relation to the preliminary discovery application.

91 He said at paragraph 3 of that affidavit: - After receiving a copy of the letter which is annexed marked N to the affidavit of Mr Carmichael I spoke with Mr Craig Lee, the Regional Director of the prospective defendant, regarding the existence and whereabouts of the material sought in the Schedule to the Notice of Motion. Mr Lee informed me that none of the material was held in Australia and that, if it was in existence, it would have to be obtained from overseas. He said that he would make further enquiries within the prospective defendant.

92 In paragraph 4 it read: - I am informed and verily believe that Mr Lee has made such enquiries but as at this date no material has been provided to us.

93 Clearly there was no mention at all that the material was not that of the prospective defendant, namely the defendant in these proceedings, but really was in the possession of the SA company, nor was there any assertion made that there was no prospect of the prospective defendant being liable because, as the solicitor for the defendant saw it, of the operation of the Warsaw Convention as amended by the various protocols.

94 An order for preliminary discovery was in fact made and an order for costs made against the prospective defendant. The defendant was represented by counsel at that application determined on 6 June 2006 and no submission was made to the Registrar that there was no obligation on the prospective defendant to provide the documents sought in the application as they were not the proper defendant to these proceedings.

95 A list of documents was subsequently provided and was verified by the affidavit of Mr Craig Lee and certified by Mr Mark William Mackrell, solicitor for the prospective defendant. The certificate is dated 2 August 2007 and the affidavit bears the same date.

96 The documents which were discovered were in part at least an answer to the original request for documentation made make on 25 October 2007 and included "an extract from the aircraft technical log book" and similar documentation which clearly related to the operation of the aircraft on which the accident occurred. The documents which were said by Mr Lee by his affidavit to fall in the classes specified in the order, that is documents held from at least within the last six months before the commencement of the proceedings for preliminary discovery against the prospective defendant.

98 The plaintiffs filed a Statement of Claim on 15 November 2007 and served it in late November 2007. Proceedings were commenced within the two-year limitation period prescribed by the Warsaw Convention. The defence to the claim was filed on 18 December 2007 after the expiration of the limitation period prescribed by the Convention. It is notable that there is no provision within the mechanisms of the Convention for an extension of the limitation period.

99 Paragraph 6 of the Defence was the first time that the defendant had denied that it was the carrier for the purposes of the Convention. By then it was too late for the plaintiffs if the defendant's assertion was correct.

100 There is no doubt that up until that point the solicitors acting for the defendant had not merely ample opportunity to deny that its client, namely Air Tahiti Nui Pty Ltd., was not the party liable as "carrier" but had specifically ignored invitations to reveal the true nature of its response to the demands being made of it by the plaintiffs as previously described in the correspondence set out above. There can be no doubt in my mind that the solicitor for the plaintiffs had acted reasonably and competently in determining who to his mind was the proper defendant to these proceedings. The searches and enquiries made by him and the application made by him on behalf of the plaintiffs were proper in the circumstances and both the conduct and correspondence of those acting on behalf of the defendant in these proceedings in my opinion and in fact lured him into a belief reasonably held that he was correct in identifying this defendant as the proper defendant to the proceedings.

101 The application for preliminary discovery identified the propriety limited company as the prospective defendant and the affidavit in support of that application sworn by Mr Carmichael clearly identified it as the prospective defendant and why he held that view. There was absolutely nothing in the documentation which was readily available or sensibly available on enquiry to Mr Carmichael which would suggest that the SA company was the proper defendant.

102 As previously noted, the SA company does not rate any mention at all within the IATA documentation or on the tickets of carriage.

103 The TN designation and the identification number of the airline issued by IATA both relate to Air Tahiti Nui which was, of course, a registered business name in this country, the registered proprietor of which was the defendant. The plaintiffs seek an order against the defendant that it be estopped. In effect that it be denied the ability to maintain that it was not the "carrier". It is said that this estoppel arises in consequence of the conduct of the defendant and those acting on its behalf and the reliance placed upon that conduct by Mr Carmichael in proceeding as he did.

104 The principles guiding the doctrine of estoppel by conduct are set out in the judgment of Justice Deane in the Commonwealth of Australia v Verwayen (1990) 170 CLR 394 at 24. At page 433ff: - The content and operation of the general doctrine of estoppel by conduct It is undesirable to seek to define exhaustively and in the abstract the content or operation of any general legal doctrine. Inevitably, there will be unforeseen and exceptional cases. Ordinarily, there will be borderline areas in which the interaction of the doctrine with other doctrines will be uncertain. Most important, it is part of the genius of the common law that development on a case-by-case basis enables its adaptation to meet changing circumstances and demands. On the other hand, the conceptual foundations of a legal doctrine constitute an essential basis of judicial decision in a borderline case such as the present. Those conceptual foundations can only be identified by reference to the essential content and operation of the doctrine. It is, for that reason, desirable that I identify in a general way what I see as the conceptual foundation and essential operation of the doctrine of estoppel by conduct which has, during this century, emerged as a coherent body of substantive and consistent principle. To a significant extent, I do so in words taken (without specific acknowledgment) from the judgments of others in earlier cases (see, in particular, Thompson v Palmer, at 547 Grundt, at 674-7; Moorgate, at 241-2; Taylors Fashions at 144-57; Texas Bank, at 101- 7; Waltons Stores (CLR) at 404, 458). For ease of subsequent reference (in this judgment) I shall use numbered paragraphs. 1. While the ordinary operation of estoppel by conduct is between parties to litigation, it is a doctrine of substantive law the factual ingredients of which fall to be pleaded and resolved like other factual issues in a case. The persons who may be bound by or who may take the benefit of such an estoppel extend beyond the immediate parties to it, to their privies, whether by blood, by estate or by contract. That being so, an estoppel by conduct can be the origin of primary rights of property and of contract. 2. The central principle of the doctrine is that the law will not permit an unconscionable - or, more accurately, unconscientious - departure by one party from the subject matter of an assumption which has been adopted by the other party as the basis of some relationship, course of conduct, act or omission which would operate to that other party's detriment if the assumption be not adhered to for the purposes of the litigation. 3. Since an estoppel will not arise unless the party claiming the benefit of it has adopted the assumption as the basis of action or inaction and thereby placed himself in a position of significant disadvantage if departure from the assumption be permitted, the resolution of an issue of estoppel by conduct will involve an examination of the relevant belief, actions and position of that party. 4. The question whether such a departure would be unconscionable relates to the conduct of the allegedly estopped party in all the circumstances. That party must have played such a part in the adoption of, or persistence in, the assumption that he would be guilty of unjust and oppressive conduct if he were now to depart from it. The cases indicate four main, but not exhaustive, categories in which an affirmative answer to that question may be justified, namely, where that party: (a) has induced the assumption by express or implied representation; (b) has entered into contractual or other material relations with the other party on the conventional basis of the assumption; (c) has exercised against the other party rights which would exist only if the assumption were correct; (d) knew that the other party laboured under the assumption and refrained from correcting him when it was his duty in conscience to do so. Ultimately, however, the question whether departure from the assumption would be unconscionable must be resolved not by reference to some preconceived formula framed to serve as a universal yardstick but by reference to all the circumstances of the case, including the reasonableness of the conduct of the other party in acting upon the assumption and the nature and extent of the detriment which he would sustain by acting upon the assumption if departure from the assumed state of affairs were permitted. In cases falling within category (a), a critical consideration will commonly be that the allegedly estopped party knew or intended or clearly ought to have known that the other party would be induced by his conduct to adopt, and act on the basis of, the assumption. Particularly in cases falling within category (b), actual belief in the correctness of the fact or state of affairs assumed may not be necessary. Obviously, the facts of a particular case may be such that it falls within more than one of the above categories. 5. The assumption may be of fact or law, present or future. That is to say it may be about the present or future existence of a fact or state of affairs (including the state of the law or the existence of a legal right, interest or relationship or the content of future conduct). 6. The doctrine should be seen as a unified one which operates consistently in both law and equity. In that regard, "equitable estoppel" should not be seen as a separate or distinct doctrine which operates only in equity or as restricted to certain defined categories (eg acquiescence, encouragement, promissory estoppel or proprietary estoppel). 7. Estoppel by conduct does not of itself constitute an independent cause of action. The assumed fact or state of affairs (which one party is estopped from denying) may be relied upon defensively or it may be used aggressively as the factual foundation of an action arising under ordinary principles with the entitlement to ultimate relief being determined on the basis of the existence of that fact or state of affairs. In some cases, the estoppel may operate to fashion an assumed state of affairs which will found relief (under ordinary principles) which gives effect to the assumption itself (eg where the defendant in an action for a declaration of trust is estopped from denying the existence of the trust). 8. The recognition of estoppel by conduct as a doctrine operating consistently in law and equity and the prevalence of equity in a Judicature Act system combine to give the whole doctrine a degree of flexibility which it might lack if it were an exclusively common law doctrine. In particular, the prima facie entitlement to relief based upon the assumed state of affairs will be qualified in a case where such relief would exceed what could be justified by the requirements of good conscience and would be unjust to the estopped party. In such a case, relief framed on the basis of the assumed state of affairs represents the outer limits within which the relief appropriate to do justice between the parties should be framed.

105 To my mind, this case clearly falls within category (d).

106 Classically, Justice Dixon, as he then was, said in Grundt v Great Boulder Pty Ltd Gold Mines Pty Ltd (1937) 59 CLR 641 at 674 as follows:- The principle upon which estoppel in pais is founded is that the law should not permit an unjust departure by a party from an assumption of fact which he has caused another party to adopt or accept for the purpose of their legal relations. This is, of course, a very general statement. But it is the basis of the rules governing estoppel. Those rules work out the more precise grounds upon which the law holds a party disentitled to depart from an assumption in the assertion of rights against another. One condition appears always to be indispensable. That other must have so acted or abstained from acting upon the footing of the state of affairs assumed that he would suffer a detriment if the opposite party were afterwards allowed to set up rights against him inconsistent with the assumption. In stating this essential condition, particularly where the estoppel flows from representation, it is often said simply that the party asserting the estoppel must have been induced to act to his detriment. Although substantially such a statement is correct and leads to no misunderstanding, it does not bring out clearly the basal purpose of the doctrine. That purpose is to avoid or prevent a detriment to the party asserting the estoppel by compelling the opposite party to adhere to the assumption upon which the former acted or abstained from acting. This means that the real detriment or harm from which the law seeks to give protection is that which would flow from the change of position if the assumption were deserted that led to it. So long as the assumption is adhered to, the party who altered his situation upon the faith of it cannot complain. His complaint is that when afterwards the other party makes a different state of affairs the basis of an assertion of right against him then, if it is allowed, his own original change of position will operate as a detriment. His action or inaction must be such that, if the assumption upon which he proceeded were shown to be wrong and an inconsistent state of affairs were accepted as the foundation of the rights and duties of himself and the opposite party, the consequence would be to make his original act or failure to act a source of prejudice. … Fulfilment of the condition which so far I have discussed is not enough to make it just to preclude a party from setting up a state of facts. The justice of an estoppel is not established by the fact in itself that a state of affairs has been assumed as the basis of action or inaction and that a departure from the assumption would turn the action or inaction into a detrimental change of position. It depends also on the manner in which the assumption has been occasioned or induced. Before anyone can be estopped, he must have played such a part in the adoption of the assumption that it would be unfair or unjust if he were left free to ignore it. But the law does not leave such a question of fairness or justice at large. It defines with more or less completeness the kinds of participation in the making or acceptance of the assumption that will suffice to preclude the party if the other requirements for an estoppel are satisfied. A brief statement of the recognized grounds of preclusion is contained in the reasons I gave in Thompson v. Palmer, and it is convenient to repeat it: --"Whether a departure by a party from the assumption should be considered unjust and inadmissible depends on the part taken by him in occasioning its adoption by the other party. He may be required to abide by the assumption because it formed the conventional basis upon which the parties entered into contractual or other mutual relations, such as bailment; or because he has exercised against the other party rights which would exist only if the assumption were correct, as in Yorkshire Insurance Co. v. Craine at pp. 30, 31; cp. Cave v. Mills at pp. 746, 747; Smith v. Baker; Verschures Creameries Ltd. v. Hull and Netherlands Steamship Co.; and Ambu Nair v. Kelu Nair at p. 271; or because knowing the mistake the other laboured under, he refrained from correcting him when it was his duty to do so; or because his imprudence, where care was required of him, was a proximate cause of the other party's adopting and acting upon the faith of the assumption; or because he directly made representations upon which the other party founded the assumption.

107 See also Moorgate Ltd v Twitchings [1976] QB 255 per Lord Denning MR at 241 to 242.

108 In Spencer Bower Estoppel by Representation, 4th Edition, the learned authors say at paragraph 111.43: - On the other hand, Bingham J in The Lutetian regarded Lord Wilberforce in Moorgate Mercantile Co Ltd v Twitchings as providing 'persuasive authority for the proposition that the duty necessary to found an estoppel by silence or acquiescence arises where a reasonable man would expect the person against whom the estoppel is raised, acting honestly and responsibly, to bring the true facts to the attention of the other party known by him to be under a mistake as to their respective rights and obligations and this has been approved as 'the general principle underlying estoppel by acquiescence' by the House of Lords. There is an element of circularity in the reference to honesty and responsibility, since the question whether the silent party can honestly remain silent depends on whether he is responsible to the mistaken party, or, put another way, whether he is under a duty to speak. The issue remains one of determining the ambit and onus of responsibility, by reference to whether a mistaken party could reasonably have expected to be corrected: that is, whether the court decides that the silent party should have spoken.

109 At 111.4.4 the authors continued: A duty to speak, such as to found an estoppel on silence (which duty, it is submitted, is a duty to take such steps as are reasonable in the circumstances to communicate the truth to the mistaken party) has been held to arise from knowledge of another party's mistake in the following circumstances. And under "Mistake as to Contractual and Other Rights" included:- (5) Where the mistake is as to the identity of the silent party, which the silent party knows to be material to the mistaken party. Presumptive knowledge as to the mistake (because the silent party should have realised the mistake) here, it seems, is sufficient."

110 Mr Wytcherley was solicitor for the defendant. He gave evidence and at T.27:34 on 11 December 2008 and was asked: - Q. When you received the application for preliminary discovery, why didn't you write back to Mr Carmichael or file an opposition in court to the effect that "We're the wrong entity because we were not the carrier"? A. I didn't notice that it was Proprietary Limited that was being named as the prospective defendant.

111 Between pages T.28:45 ff he was asked and answered as follows: - Q. Well, have a look at this document. That's the notice of motion seeking a preliminary discovery, is it not? A. It is.

Q. Were you acting on behalf of the defendant in that application? A. We were.

Q. The prospective defendant there is described as the proprietary limited company, is it not? A. It is.

Q. Then if you look towards the back of the document where the parties are again nominated, it's shown as the proprietary limited company, is it not? A. That's correct.

Q. And you filed a notice of appearance on behalf of the proprietary limited company, did you not? A. We did, your Honour.

Q. In the preliminary discovery application? A. I can't recall whether that was a notice of appearance but I assume it was. We did - we did act for the proprietary limited company in the preliminary discovery application.

Q. I understand that but I think you told me a moment ago - I'll show you this document, which is the notice of appearance filed in the preliminary discovery application. Who signed that? A. My partner, Mark Mackerel.

Q. He's the solicitor on the record, is that right? A. He is.

Q. And do you see that that notice of appearance is that you appear for the prospective defendant, the proprietary limited company? A. That's correct.

Q. So it must have been apparent, I suppose, by the time that you filed the notice of appearance that the party that was being proceeded against, at least as the prospective defendant, was the proprietary limited company? A. It was not something that I'd consciously turned my mind to, your Honour.

Q. The notice of appearance, of course, is it prepared in your office, is it not? A. It is.

Q. Somebody's had to type it up? A. Yes, someone would have typed it up. Q. So that the description of the prospective defendant is something that was typed in at your office, is that right? A. That's correct. Q. And what's typed in there is the proprietary limited company as the prospective defendant? A. That's correct.

112 He gave further evidence at T.33 in cross-examination where he was shown the affidavit of Mr Carmichael sworn on 8 May 2007. His evidence was as follows: - Q. You've seen that document before? A. I have seen it. Q. Could you go to page 2, paragraph 3, "On 19 November 2005, the applicants were passengers on an Air Tahiti Nui flight from New York, USA to Papeete, Tahiti on the prospective defendant's aircraft. A. Yes, I see that. Q. The prospective defendant was Air Tahiti Nui Pty Ltd? A. Yes. Q. Were you present on 6 June 2007 when the application for a preliminary discovery came before the registrar? A. No, I was not. Q. Do you know that your counsel permitted that affidavit to be read without objection? A. I'd have to check his report but I - I'll take-- Q. Did you file any documents to suggest that that was incorrect? That paragraph 3 of the affidavit of Mr Carmichael? A. No, we did not. Q. But it was incorrect, wasn't it, according to your contentions now? A. It - it is factually incorrect, that's right. HIS HONOUR Q. .Well, it's the very point of this case at this stage, is it not? It's the very point that we're talking about at the moment, you understand that? A. I understand - I understand what we're discussing at the moment, your Honour, yes. TAPERELL Q. You were aware that in the application before the registrar, the present plaintiffs obtained an order? A. Yes. Q. And they obtained an order for costs? A. Yes, I think that's right. Q. Was it your understanding that regardless of who held the documents in its possession, your client, that is Air Tahiti Nui Pty Ltd, had to provide documents whether they were in its possession or not? A. It had to provide documents that were in its possession, custody and control and if that meant it had to make enquiries with another entity, then it would be obliged to do so. Q. Within its possession, custody or control? A. Yes. Q. It would have been a short answer to the application that there were no documents held by Air Tahiti Nui Pty Ltd, wouldn't it have been? A. There were no documents in Air Tahiti Nui Pty Ltd's physical possession but I don't know that that relieves it from the responsibility of making reasonable enquiries to obtain the documents. Q. It would have been a short answer to the application that there were no such documents in the prospective defendant's possession? A. It would have been short but misleading, I think. Q. It would have been a short but correct answer, wouldn't it, according to your contentions now? A. Well, not wholly correct. It - if - if the question is only whether or not in its physical possession then yes but in terms of complying with the order for preliminary discovery, I don't think it would have been a correct response. TAPERELL: Could the witness be shown the list of documents in the preliminary discovery proceedings? I don't have the date stamp of it but they were verified by an affidavit of 2 August 2007. HIS HONOUR: Whose affidavit? TAPERELL: Mr Craig Lee. The document is simply headed "List Of Documents." Your Honour, I'm not sure if that's been filed. HIS HONOUR: Well, maybe not, I don't know. We'll soon find out. Was there a requirement to file? TAPERELL: I thought there was but perhaps there's not, your Honour. Perhaps I'd better ask the witness to look at this document. HIS HONOUR: Yes, very well. TAPERELL

Q. Did you prepare that document? A. The footer at the bottom of the page suggests that one of my colleagues prepared it but I couldn't tell you exactly how it came into existence. Q. On the second page, at the bases, there's a durat clause for an affidavit and it appears to be your signature, is that correct? A. I've signed as the witness, yes. Q. You signed it as the attesting witness? A. Yes. Q. The affidavit is by Mr Craig Lee and it provides "On 2 August 2007 ..(not transcribable).. I am the regional director, Australia of the prospective defendant", does it say that? A. Yes, it does say that. Q. I believe that the information contained in this list of documents is true? A. Yes. Q. I have made reasonable enquiries as to the existence and location of the documents referred to in the order? A. Yes. Q. I believe as a result of those enquiries, there are no documents other than excluded documents falling within any of the classes specified in the order or that within the last six months before the commencement of the proceedings have been in the possession of the prospective defendant? A. That's correct.

113 He was further questioned at T.37:4:- Q. From your answers, do I take it that you simply proceeded in acting in the matter without turning your attention as to whether you were acting for the proprietary company or the SA company one way or the other, is that right? A. The task that we were given to handle the claim didn't give me cause to - to make that distinction, your Honour. Q. So you didn't? A. I didn't. Q. Is it fair to say that because of that, there was nothing in your correspondence with the plaintiffs' solicitors, amongst other things, that caused you to distinguish between the SA company or the proprietary company, is that right? A. That's right. Q. So is it fair to say that nobody at your office made the distinction as far as you knew? A. As far as I know, yes, that's right. Q. So is it also fair to say that a person could be left with the impression that it could have been either that you were acting for? A. I - I think that - that may be an impression that was open, yes."

114 It seems to me that it must have been patently clear to those acting for the defendant that at least by the time of the service of the Notice of Motion for preliminary discovery and Mr Carmichael's affidavit in support of 8 May 2007 that what was being asserted by the plaintiffs was that the proper defendant was the proprietary limited company, namely the defendant in these proceedings.

115 The defendant's solicitor knew or ought to have known this was Mr Carmichael's view. They said nothing, or worse obfuscated, in their failure to answer clear questions which would have revealed what they say is the true position. Mr Carmichael was not disabused and proceeded accordingly to his clients' detriment.

116 None of this rests easily at all with what was said by Justice Allsop in the passage cited earlier and to my mind satisfies the test for estoppel by conduct identified by Justice Deane in Verwayen and on the basal principles described by Justice Dixon in Grundt.

117 The defendant is estopped from denying its liability based on denying it was the carrier.

118 I direct the parties to bring in Short Minutes consistent with these reasons.

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