GORDON J. Parkes Shire Council engaged South West Helicopters Pty Limited to undertake an aerial survey to determine the presence of noxious weeds. On 2 February 2006, a helicopter piloted by an employee of South West Helicopters took off from an aerodrome in Parkes, New South Wales, with two council employees - Ian Stephenson and Malcolm Buerckner - to conduct the survey. Whilst in flight, the helicopter struck an overhead power line, exploded and crashed. All three persons on board were killed.
The Civil Aviation (Carriers' Liability) Act 1959 (Cth) ("the Carriers' Liability Act (Cth)") regulates the civil liability of an air carrier for damage by reason of the death of a passenger, or personal injury suffered by a passenger, resulting from an accident which took place on board an aircraft or in the course of embarking or disembarking.
There was no dispute that the helicopter flight was regulated by Pt IV of the Carriers' Liability Act (Cth), as applied to air carriage within New South Wales by the Civil Aviation (Carriers' Liability) Act 1967 (NSW) ("the Carriers' Liability Act (NSW)"). Section 35(2), in Pt IV of the Carriers' Liability Act (Cth), relevantly provides that liability of a carrier under that Part "is in substitution for any civil liability of the carrier under any other law in respect of the death of the passenger or in respect of the injury that has resulted in the death of the passenger" (emphasis added).
Proceedings were commenced in 2009 in the Supreme Court of New South Wales by Mr Stephenson's widow, daughter and son, against Parkes Shire Council and South West Helicopters. Mr Stephenson's widow, daughter and son each brought a claim for psychiatric injury resulting from Mr Stephenson's death. Mrs Stephenson also brought a claim on her own behalf and on behalf of her children under the Compensation to Relatives Act 1897 (NSW). Mrs Stephenson and her children did not make a claim against the owner of the power lines, Essential Energy, but Essential Energy was joined by South West Helicopters. There were, relevantly, cross-claims brought by South West Helicopters and Essential Energy as well as related proceedings between these corporate entities.
The complexity of the proceedings led to a number of judgments. The trial judge - Bellew J - relevantly held that all three defendants and cross‑defendants were negligent and apportioned responsibility between South West Helicopters (70 per cent), Parkes Shire Council (20 per cent) and Essential Energy (10 per cent).
In relation to the claims for psychiatric injury resulting from Mr Stephenson's death, Bellew J found that s 35(2) of the Carriers' Liability Act (Cth) did not preclude Mr Stephenson's widow and children claiming - separately to the Carriers' Liability Act (Cth) - against South West Helicopters. A majority of the Court of Appeal of the Supreme Court of New South Wales (Basten JA, with whom Payne JA agreed) disagreed and allowed an appeal on that issue. Leeming JA dissented.
The question in this appeal is whether s 35(2) of the Carriers' Liability Act (Cth) precluded Mrs Stephenson and her children from pursuing their tortious claims against South West Helicopters because the claim was not instituted within the two-year limitation period in s 34 in Pt IV of the Carriers' Liability Act (Cth).
That question is raised by Parkes Shire Council because Mrs Stephenson and her children obtained judgment against the Council for nervous shock under the common law of tort as affected by the Civil Liability Act 2002 (NSW). Mrs Stephenson also obtained judgment against Parkes Shire Council under the Compensation to Relatives Act. Parkes Shire Council obtained judgment against South West Helicopters, as a co‑tortfeasor, under s 37(b) of the Carriers' Liability Act (Cth), up to the statutory limit of $500,000.
Parkes Shire Council contends that s 35(2) of the Carriers' Liability Act (Cth) should be construed as permitting Mrs Stephenson and her children to bring tortious claims against South West Helicopters, contrary to the conditions and limits of the Carriers' Liability Act (Cth), with the result that the Council would be entitled to a greater level of contribution from South West Helicopters as a co‑tortfeasor.
As the majority of the Court of Appeal of New South Wales correctly concluded, the contentions of Parkes Shire Council should be rejected. Where damage is sustained by reason of the death of a passenger in the course of air carriage (including claims by non‑passengers for nervous shock flowing from the death of the passenger), the civil liability of an air carrier is imposed exclusively by, and is subject to the conditions and limits of, the Carriers' Liability Act (Cth). Any right Mrs Stephenson and her children had to damages for nervous shock against South West Helicopters under the Carriers' Liability Act (Cth) had been extinguished because their claims were not brought within the prescribed two-year limitation period.
The scheme
The Carriers' Liability Act (Cth) provides that the following conventions have the force of law in Australia in relation to international carriage by air to which the relevant convention applies: the Convention for the Unification of Certain Rules Relating to International Carriage by Air (1929) ("the Warsaw Convention") (Pt III); the Warsaw Convention as amended at The Hague, 1955 (Pt II); the Guadalajara Convention (Pt IIIA); and the Montreal No 4 Convention (Pt IIIC) (together, "the Conventions"). The text of the Conventions is set out in separate schedules to the Carriers' Liability Act (Cth).
Part IV of the Carriers' Liability Act (Cth), headed "Other carriage to which this Act applies", extends the carriers' liability for air carriage established by the Conventions to Australian domestic, inter-State carriage through the enactment of provisions that are in similar, but not identical, terms to the articles of the Conventions given effect by Pts II, III, IIIA and IIIC.
Unlike Pts II, III, IIIA and IIIC, Pt IV does not give effect to Australia's international obligations under the Warsaw Convention and its successors. Instead, it "extends the principles of the amended convention[] to all domestic carriage by air within Federal competence but with certain modifications which are considered more appropriate for domestic purposes". Certain provisions of Pt IV are then applied to the carriage by air of a passenger within a given State (not being carriage to which the Conventions or Pt IV of the Carriers' Liability Act (Cth) applies) by the operation of State legislation. In New South Wales that is achieved by the Carriers' Liability Act (NSW).
As with the introduction of Pt IV of the Carriers' Liability Act (Cth) and its application to domestic air carriage within the competence of the federal Parliament, the introduction of the Carriers' Liability Act (NSW) was to "make the carrier absolutely liable for damage sustained by reason of the death ... or injury" up to a fixed limit "or a higher sum which might be mutually agreed upon in the contract of carriage". Those provisions applied through the Carriers' Liability Act (NSW) are administered and enforced as if they were provisions applying as laws of the Commonwealth instead of as laws of the State.
Thus, the scheme by which the Conventions are given effect in Australian municipal law has three inter-connected limbs: the Conventions are given the force of law in Australia with respect to international air carriage; elements of the Conventions are restated as separate provisions in the Carriers' Liability Act (Cth), including in Pt IV with respect to domestic, inter-State air carriage; and Pt IV is then applied to intra-State air carriage by State legislation.
The Conventions
The "cardinal purpose" of the Warsaw Convention (and its successors) is to "achiev[e] uniformity of rules governing claims arising from international air transportation" of persons, baggage and goods. It responds to the prospect of a "jungle-like chaos": concerns about a lack of predictability with respect to carrier liability or the rights of passengers, as a consequence of multiple legal regimes potentially applying simultaneously to international air carriage and related conflict of laws issues. The rules laid down are, in effect, an "international code". In the areas with which it deals, the code is "intended to be uniform and to be exclusive also of any resort to the rules of domestic law" (emphasis added).
Article 17 in Ch III of the Warsaw Convention imposes a form of liability on air carriers which is not dependent on proof of negligence. That Article establishes the conditions of liability for death or personal injury to a passenger. The official version of the Warsaw Convention is in French. The English translation set out in the Schedules to the Carriers' Liability Act (Cth) reads:
"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." (emphasis added)
Article 17, as it appears in each of the successive Conventions, has the force of law in Australia in respect of carriage to which Pts II, III and IIIC apply and, in Pt IV, was translated into s 28, headed "Liability of the carrier for death or injury". That section imposes "strict" liability on carriers and provides:
"Subject to this Part, where this Part applies to the carriage of a passenger, the carrier is liable for damage sustained by reason of the death of the passenger or any personal injury suffered by the passenger resulting from an accident which took place on board the aircraft or in the course of any of the operations of embarking or disembarking." (emphasis added)
Article 22 of the Warsaw Convention provides a cap on the liability of the carrier "for each passenger". That cap has the force of law in Australia in respect of international carriage and a cap is also prescribed, for carriage to which Pt IV applies, in s 31 of the Carriers' Liability Act (Cth). At the time of the accident, the prescribed cap was $500,000. Article 23 contains a prohibition on carriers contracting out of, or seeking to reduce, that cap. A similar prohibition is included in s 32 in Pt IV of the Carriers' Liability Act (Cth).
The scheme also contains a limitation on the period in which an action can be brought against a carrier. Article 29 of the Warsaw Convention as amended at The Hague, 1955, provides that the right to damages is extinguished if the action is not brought within two years. The method of calculating the limitation period is left to be determined by the law "of the Court seised of the case". Again, that Article is given the force of law in Australia in respect of international carriage and has its equivalent in s 34 of the Carriers' Liability Act (Cth) for carriage to which Pt IV applies. It also prescribes the method of calculation of the limitation period.
Although the Conventions are intended to be, and are, construed as an international code for air carriage, the code is not absolute. The Conventions recognise that there are matters which are not to be unified but are left to the domestic law of a signatory. Aspects of Art 24 of the Warsaw Convention were of that kind.
Article 24, in the English translation, originally read as follows:
"1. In the cases covered by Articles 18 and 19 any action for damages, however founded, can only be brought subject to the conditions and limits set out in this Convention.
2. In the cases covered by Article 17 the provisions of the preceding paragraph also apply, without prejudice to the questions as to who are the persons who have the right to bring suit and what are their respective rights." (emphasis added)
The first part of Art 24(2) ("[i]n the cases covered by Article 17 the provisions of the preceding paragraph also apply"), when read with Art 24(1), operates to impose the conditions and limits in the Warsaw Convention on any action for damages however founded arising out of the death, wounding or bodily injury of a passenger in the course of carriage. Article 24(2) then goes on to provide that, in those events, the auxiliary questions about who has the right to bring suit (the identity of the plaintiffs) and what are their respective rights (the heads of damage for which they may sue and the legal basis on which they may sue for that damage) are left for determination by domestic law (the local law identified by the law of the forum under its choice-of-law rules).
The effect of Art 24(1) is to ensure that actions covered by Arts 18 and 19, as well as Art 17 subject to Art 24(2), are only able to be brought against a carrier in accordance with the Conventions - that is, subject to the conditions and limitations in the Conventions - and not otherwise.
That limitation in Art 24(1), and the first part of Art 24(2), is implemented in Pts II and IV (and applied in Pts III and IIIC) of the Carriers' Liability Act (Cth). In Pt IV, in respect of the death of a passenger, it is implemented in s 35(2).
It is necessary to set out the full text of s 35, headed "Liability in respect of death", which provides:
"(1) The provisions of this section apply in relation to liability imposed by this Part on a carrier in respect of the death of a passenger (including the injury that resulted in the death).
(2) Subject to section 37, the liability under this Part is in substitution for any civil liability of the carrier under any other law in respect of the death of the passenger or in respect of the injury that has resulted in the death of the passenger.
(3) Subject to the next succeeding subsection, the liability is enforceable for the benefit of such of the members of the passenger's family as sustained damage by reason of his death.
(4) To the extent that the damages recoverable include loss of earnings or profits up to the date of death, or funeral, medical or hospital expenses paid or incurred by the passenger before his death or by his personal representative, the liability is enforceable for the benefit of the personal representative of the passenger in his capacity as personal representative.
(5) For the purposes of subsection (3), the members of the passenger's family shall be deemed to be the wife or husband, de facto spouse, parents, step‑parents, grandparents, brothers, sisters, half‑brothers, half-sisters, children, step-children and grandchildren of the passenger, and, in ascertaining the members of the passenger's family, an illegitimate person or an adopted person shall be treated as being, or as having been, the legitimate child of his mother and reputed father or, as the case may be, of his adoptors.
(6) The action to enforce the liability may be brought by the personal representative of the passenger or by a person for whose benefit the liability is, under the preceding provisions of this section, enforceable, but only one action shall be brought in respect of the death of any one passenger, and such an action, by whomsoever brought, shall be for the benefit of all persons for whose benefit the liability is so enforceable who are resident in Australia or, not being resident in Australia, express the desire to take the benefit of the action.
(7) The damages recoverable in the action include loss of earnings or profits up to the date of death and the reasonable expenses of the funeral of the passenger and medical and hospital expenses reasonably incurred in relation to the injury that resulted in the death of the passenger.
(8) In awarding damages, the court or jury is not limited to the financial loss resulting from the death of the passenger.
(9) Subject to the next succeeding subsection, the amount recovered in the action, after deducting any costs not recovered from the defendant, shall be divided amongst the persons entitled in such proportions as the court (or, where the action is tried with a jury, the jury) directs.
(10) The court may at any stage of the proceedings make any such order as appears to the court to be just and equitable in view of the provisions of this Part limiting the liability of the carrier and of any proceedings which have been, or are likely to be, commenced against the carrier, whether in or outside Australia." (emphasis added)
As will be self-evident, s 35(2), similarly to Art 24(1), expressly provides that the liability under Pt IV is in substitution for any civil liability of the carrier under any other law in respect of the death of the passenger or in respect of the injury that has resulted in the death of the passenger.
The balance of s 12 (Pt II) and s 35 (Pt IV) then provides the answers to what have been earlier described as the auxiliary questions. For carriage to which the Conventions apply, this is necessary, through s 12, to fill the gap that is left by the second part of Art 24(2). Although Pt IV does not apply the Conventions but rather extends the substance of the Conventions to domestic, inter-State carriage, the purpose behind the provisions can be taken to be the same. That is, the balance of ss 12 and 35 responds to the fact that the Conventions provide no guidance on who may sue or their respective rights. Those sections are an answer to, rather than a translation or implementation of, the balance of Art 24(2).
Indeed, during the Second Reading Speech for the Civil Aviation (Carriers' Liability) Bill 1959 (Cth), the then Minister for Defence, in addressing Pt IV and, in particular, s 35, not only recognised that "[t]he convention is completely silent on the matters to be taken into account in assessing damages resulting from death … so that the assessment of damages is governed by domestic law" but also went on to note that the Bill dealt with aspects of problems arising from common law principles, through parts of s 35. One of the examples given by the Minister was that s 35(8) makes it clear that a court in assessing damages is free to include compensation for matters not involving direct pecuniary loss such as loss of consortium where a spouse is killed, or, in the case of a claim on behalf of infants, additional compensation for loss of a parent's care and guidance.
Finally, s 35(2) is subject to s 37, which provides that:
"Nothing in this Part shall be deemed to exclude any liability of a carrier:
(a) to indemnify an employer of a passenger or any other person in respect of any liability of, or payments made by, that employer or other person under a law of the Commonwealth or of a State or Territory providing for compensation, however described, in the nature of workers' compensation; or
(b) to pay contribution to a tort-feasor who is liable in respect of the death of, or injury to, the passenger;
but this section does not operate so as to increase the limit of liability of a carrier in respect of a passenger beyond the amount fixed by or in accordance with this Part."
As Basten JA explained in the Court of Appeal, although the provisions in Pt IV might suggest a degree of independence from the Conventions, when the sections are read in the context of their counterpart provisions in the Conventions there is a degree of uniformity. Section 35 has a similar counterpart in Pt II, and both ss 28 and 35 are drawn from the Conventions in the manner just described. The matters left to Australian domestic law do not affect the uniform operation of the code in defining international carriers' liability. Indeed, the most important objective in applying the principles of the Conventions to domestic air carriage, it was said, was to "deprive the domestic carriers of their present [common law] right to contract out of all liability for damage howsoever caused".
The primary focus for the purposes of this appeal is the intention of the Commonwealth and New South Wales Parliaments, not just the intentions of the framers of the Conventions. However, there was no dispute that ss 28 and 35 in Pt IV should be given a construction harmonious with other substantively similar sections in different Parts of the Carriers' Liability Act (Cth) and the Conventions, which have the force of law in Australia and which were the basis on which ss 28 and 35 were included in the Carriers' Liability Act (Cth).
Exclusivity principle
Article 24 of the Warsaw Convention gives effect to what has been described as the "exclusivity principle" - that a claim falling within, relevantly, Art 17 "can only be brought subject to the conditions and limits set out in [the] Convention". That, in turn, directs attention to the scope of Art 17.
The scope of Art 17 does not depend on the qualitative nature of the act or omission that gives rise to the claim but when and where the "event" took place. The essential element of a claim within Art 17 is an event - relevantly, the death of a passenger, in an accident on board a flight (or in the course of embarking or disembarking).
If the basis of the claim satisfies the terms of Art 17, the liability of the carrier is limited to that provided by the terms of the applicable convention. On the other hand, if there is no claim within the terms of Art 17, there is no remedy. As Lord Hope of Craighead explained in Sidhu v British Airways Plc, the whole purpose of Art 17, read in context, was to prescribe the only circumstances in which a carrier would be liable to the passenger for claims arising out of that person's international carriage by air. That principle has been applied in the United States, Hong Kong, Canada and New Zealand, amongst other jurisdictions.
As has been seen, s 28 of the Carriers' Liability Act (Cth) was drawn from Art 17, although the text of Art 17 and s 28 differs. Putting those differences aside, which are not presently relevant, it is apparent that Art 17, as well as s 28, draws on three different concepts - damage, the death of the passenger and the accident which caused the damage.
Thus, Art 17 and s 28 relevantly impose liability on a carrier where (1) there has been a death of a passenger; (2) that death resulted from an accident which took place in the course of a flight; and (3) there is "damage sustained by reason of the death" of the passenger (s 28) or "in the event of the death" of the passenger (Art 17). The distinctions between these three concepts are important. The damage sustained is distinct from the accident, and both the damage and the accident are distinct from the death. The damage is sustained by reason of the death of the passenger if it is factually caused by it. Damage can be sustained by a non‑passenger. And the damage can be physical, mental or pecuniary.
Put in different terms, liability under Art 17 and s 28 depends on when and where the event - relevantly, the death of the passenger - took place. That Art 17 and s 28 are in that form is unsurprising. Each was intended to, and does, resolve complex conflict of laws questions that could arise where air travel crosses borders. What the scheme imposes is a single, unified, indivisible form of strict liability on the carrier upon a defined event - relevantly, the death of a passenger during carriage by air.
The subsequent changes made to Art 24 do not detract in any way from the exclusivity principle. As Ginsburg J (delivering the opinion of the Supreme Court of the United States) stated in El Al Israel Airlines Ltd v Tseng, the Montreal Protocol No 4 clarified, but did not change, the domain of exclusivity.
That leaves the second part of Art 24(2), which provides that the exclusivity principle applies, insofar as liability under Art 17 is concerned, "without prejudice to the questions as to who are the persons who have the right to bring suit and what are their respective rights". As Ginsburg J explained in Tseng, the drafters of Art 24 of the Warsaw Convention intended to resolve whether the air carrier was liable but to leave to the domestic law determination of compensation.
Thus, by the express terms of Art 24(2), the Warsaw Convention provides no "unified rule" as to who has a right to bring a suit against a carrier in the event of the death, wounding or other bodily injury suffered by a passenger or what rights that person might have, including what damages they might recover. The effect is to leave those matters to domestic law, including matters to be taken into account in the assessment of damages.
What the international code does prescribe is that: first, in the event of, relevantly, death, the carrier is liable; second, the extent of that carrier's liability is capped; and, third, any claim sounding in damages from that liability will be extinguished if not commenced within the two-year limitation period.
The Conventions are also limited to "international carriage". They were intended to supersede domestic laws only insofar as they covered international carriage, leaving domestic law "applicable only to the internal flights" of each of the signatory countries.
With respect to claims against carriers arising from international carriage, domestic courts "are not free to provide a remedy according to their own law, because to do this would be to undermine the Convention. It would lead to the setting alongside the Convention of an entirely different set of rules which would distort the operation of the whole scheme".
That the Conventions, and Art 24 in particular, operate in that manner is illustrated by the facts in Zicherman v Korean Airlines Co Ltd, a decision of the Supreme Court of the United States. A Korean Air Lines flight (KE007) was shot down over the Sea of Japan, killing everyone on board. Two non‑passengers, the mother and sister of a passenger on board the flight, sought to recover damages for "grief and mental anguish, for the loss of the decedent's society and companionship, and for the decedent's conscious pain and suffering". Scalia J, writing for the Court, after reviewing the relevant preparatory work for the Warsaw Convention and the post-ratification conduct of the signatories to the Warsaw Convention, held that the liability imposed by Art 17, and then capped by the Warsaw Convention, was exclusive but subject to the conditions and limits in subsequent articles. Scalia J also recognised that Art 17 could extend carriers' liability to liability for harm including purely psychological harm done to third parties but did not affect the substantive questions of who may bring suit and what they may be compensated for: these questions are to be answered by the domestic law selected by the courts of the contracting states. That is, the question whether any person could recover damages for certain harm, and if so what kind of damages, was left to the domestic law.
In Zicherman, the applicable domestic law, the Death on the High Seas Act, only permitted recovery of pecuniary losses and, accordingly, damages for grief and mental anguish could not be recovered by the non-passenger plaintiffs. Had the domestic law permitted the non-passengers to recover damages for grief and mental anguish, the Court would have permitted recovery. This is because, as the Court recognised, Arts 17 and 24(2) of the Warsaw Convention permitted compensation only for legally cognisable harm, as a result of the death of the passenger in the course of the flight, but left the specification of what harm was legally cognisable to the applicable domestic law.
Zicherman was followed by the Supreme Court of the United States in Tseng. The issue in Tseng was whether a passenger was able to recover damages for purely psychological injury when Art 17 relevantly imposed liability on a carrier only where there was "bodily injury" caused by an accident on board an aircraft (or embarking or disembarking). Relevantly for this appeal, the Court considered Arts 17 and 24(2) and, in particular, held that Art 17 applied to all personal injury claims stemming from an accident on board an aircraft (or embarking or disembarking) - if recovery was not allowed under the Conventions, it was not available at all. The Court held that Art 17 was concerned with an event - the accident. That construction did not refer to the identity or capacity of the plaintiff to sue: it was event-based. The Court considered that its decision was to the same effect as the decision of the House of Lords in Sidhu.
Since Tseng, a number of courts have adopted the reasoning in that decision, namely, that Art 17 directs attention to "when and where an event takes place in evaluating whether a claim for an injury to a passenger is preempted" so that "the scope of the Convention is not dependent on the legal theory pled nor on the nature of the harm suffered".
Section 35(2) of the Carriers' Liability Act (Cth)
The question which arises then is how, if at all, those two aspects of Art 24 are reflected in Pt IV of the Carriers' Liability Act (Cth). Part IV does not give effect to Australia's international obligations under the Conventions. Instead, it "extends the principles of the amended convention to all domestic carriage by air within Federal competence but with certain modifications which are considered more appropriate for domestic purposes".
Those modifications are, first, that domestic carriers are not given a defence for taking all necessary measures to avoid damage and, second, that even if the damage results from an act or omission done with intent to cause it, the limitation on liability will still apply. The modifications were aimed at greater certainty surrounding the extent of the liability of carriers in the domestic sphere.
The matters left to Australian domestic law do not affect the uniform operation of the code in defining international carriers' liability. However, Pt IV is still to be given a construction which is harmonious with that which applies to the international carriage dealt with under the Conventions, as is any State Act applying those provisions to intra-State carriage.
The qualification that those international rules are applied to domestic airline operators only insofar as the federal Parliament is competent to do so is important. Regulation of domestic operators engaged in purely intra-State carriage was recognised, at the time the Bill was before Parliament, as a matter for the States. It was recognised that it was "very desirable" to have uniform rules applying to all classes of domestic carriage and that, in the long run, such uniform rules could be achieved by a number of methods. As already noted, some of the provisions of Pt IV - excluding ss 27, 40 and 41 - apply to intra‑New South Wales carriage by operation of s 5 of the Carriers' Liability Act (NSW).
The effect of the introduction of the Carriers' Liability Act (NSW) was to "make the carrier absolutely liable for damage sustained by reason of the death ... or injury" up to a fixed limit "or a higher sum which might be mutually agreed upon in the contract of carriage". It was observed during the Second Reading Speech for the Bill for the introduction of the Carriers' Liability Act (NSW) that, at the time, the liability of operators in relation to purely intra-State carriage was covered by common law principles. The necessity to prove negligence meant that "the passenger's right to sue for damages [was] thus of little value in many cases, because in serious aircraft accidents, it [was] usually extremely difficult, if not impossible, to prove negligence".
It is necessary to turn to the text of s 35 of the Carriers' Liability Act (Cth) and, in particular, s 35(2).
As has been seen, s 35(2) relevantly provides that "the liability under [Pt IV] is in substitution for any civil liability of the carrier under any other law in respect of the death of the passenger or in respect of the injury that has resulted in the death of the passenger" (emphasis added). The liability under Pt IV is to be found in, and is created by, s 28.
Section 35(2) states that the liability in s 28 is in substitution for any civil liability of the carrier under any other law in respect of the death of the passenger. The phrase "in respect of" is a phrase of the widest import. In its terms, s 35(2) refers to, and requires there to be, some discernible and rational link or connection between the two matters identified: the basis of the liability - carriage by air - and the death of the passenger. Liability, as has been seen, is event-based.
Section 35(2) does not expressly address who may have sustained the damage. That is left to s 35(3)-(10). For example, it is apparent that s 35(2) is not limited to damage sustained by the deceased passenger: s 35(3) expressly provides that "the liability is enforceable for the benefit of such of the members of the passenger's family as sustained damage by reason of his death" (emphasis added).
Moreover, "damage" is not defined in the Carriers' Liability Act (Cth), the Carriers' Liability Act (NSW) or the Conventions. And "damage" cannot be limited to economic or financial loss. Not only is the word "damage" used in s 28 in relation to both the death of a passenger and the personal injury of a passenger, but s 35(8) provides that "[i]n awarding damages, the court … is not limited to the financial loss resulting from the death of the passenger".
The question which then arises is the manner in which Australia has implemented the second part of Art 24(2). As has been seen, s 35(3)-(10) of the Carriers' Liability Act (Cth) address some of those questions. In other respects, the applicable law is addressed by the States.
Thus, given that the connection sought to be made is between the civil liability of the carrier and, in this case, the death of the passenger, the liabilities caught by s 35(2) are intended to, and do, extend to liabilities to non-passengers including a claim by them under the Compensation to Relatives Act, for loss of consortium and for solatium. In addition, a claim by an employer for loss of an employee's services, a Lord Campbell's Act claim, and a claim for nervous shock suffered on learning of the death of the passenger under the Civil Liability Act would fall within s 35(2), with the central element in each claim being the death of the passenger.
That is, like its counterpart in Art 24(1) from which it is drawn, the field of exclusivity in s 35(2) is greater than the scope of liability under s 28 (and its counterpart, Art 17).
That construction of s 35(2) is reinforced by other sections in Pt IV of the Carriers' Liability Act (Cth). Section 31 contains a cap on liability, in respect of each passenger, by reason of the injury or death of that passenger from an accident; s 32 contains a prohibition on carriers contracting out or seeking to reduce that cap; s 33 addresses the liability of servants and agents of a carrier and, where that servant or agent proves that they acted within the scope of their employment and authority, provides that the servant or agent is entitled to avail themselves of the cap; and s 34 contains a limitation on the period in which an action can be brought against a carrier.
Next, s 37 expressly removes or carves out from the field of exclusivity claims for contribution and indemnity against the carrier in two distinct fields. It provides that "[n]othing in this Part shall be deemed to exclude any liability of a carrier" (a) to indemnify an employer of a passenger for workers' compensation payments or (b) to pay contribution to a tortfeasor who is liable in respect of the death of, or injury to, the passenger.
That construction of s 35(2) - that it is to be construed consistently with the exclusivity principle of the Conventions - is further reinforced by the last few lines of s 37: that "this section does not operate so as to increase the limit of liability of a carrier in respect of a passenger" beyond the cap in s 31. These carve outs would be unnecessary if s 35(2) were construed as not recognising, and then creating in the Act, the exclusivity principle in Art 24.
Thus, s 35(2) leaves no room for an action to sue under domestic law other than within the conditions and limits in Pt IV on an action for damages arising out of the death of a passenger in the course of air carriage. And one of the conditions and limits is, as has been noted, the two-year limitation period.
Centrality of the contract
Parkes Shire Council emphasised the contractual relationship between passenger and carrier, and the need for close connection between plaintiff and passenger, for liability to be caught by s 35(2) of the Carriers' Liability Act (Cth).
As Leeming JA said in the Court of Appeal, in dissent, "[t]he fundamental approach taken in all of the conventions is to identify the contract for international carriage and to ask by reference to the place of departure and the place of destination what conventions apply". Article 1(2) of the Warsaw Convention makes that clear. It provides:
"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, or within the territory of a single High Contracting Party, if there is an agreed stopping place within a territory subject to the sovereignty, suzerainty, mandate or authority of another Power, even though that Power is not a party to this Convention. A carriage without such an agreed stopping place between territories subject to the sovereignty, suzerainty, mandate or authority of the same High Contracting Party is not deemed to be international for the purposes of this Convention."
That is to say, for carriage with multiple stops and layovers, the interim stops do not matter. The terms of Art 1(2) are unsurprising. They are consistent with the purpose underpinning the Warsaw Convention and its successors: to avoid the "jungle-like chaos" that could result if questions of liability in respect of international carriage were left to domestic laws to resolve.
The origin and destination of air carriage are just as important with respect to Australian domestic travel. In Air Link Pty Ltd v Paterson, this Court considered an accident alleged to have occurred during a stopover within Australia. Mr Paterson, a passenger, claimed to have been injured while disembarking a flight from Cobar (NSW) to Dubbo (NSW) but, because his ticket was for travel from Cobar to the Gold Coast (via Dubbo and Sydney), his travel was within the scope of the Carriers' Liability Act (Cth) (rather than the Carriers' Liability Act (NSW)).
Thus, a passenger's contract of carriage will determine whether the uniform rules apply in respect of the death of a particular passenger, and by which of the various methods the uniform rules apply. But that is not the same as saying that the absence of a contract between a non-passenger plaintiff and a carrier means that liability of the carrier to that non-passenger in respect of the death of a passenger falls outside the Conventions or Pt IV. As has been seen, liability covered by the Conventions and Pt IV is event-based.
Aspects of the Conventions, including the manner in which the uniform rules are given effect under Australian law, support the conclusion that they are intended to be broadly applicable and wholly exclusive in respect of all liability, not just that which would arise from a contractual relationship between carrier and passenger. One of the core principles underpinning the Warsaw Convention was the idea of a compromise for the purpose of achieving uniformity. Carriers previously had the ability to contract out of all liability. In return for giving up that right and, perhaps more fundamentally, for having imposed upon them a provision that removes the need for proof of negligence, both the extent of carriers' liability (in monetary terms) and the period during which claims could be brought were strictly limited under the Warsaw Convention.
It would go against the spirit of the negotiated compromise and the concept of an exclusive, uniform, international code for convention signatories to conclude that carriers would still be "on the hook" for claims arising out of, or in relation to, damage resulting from a death for which they were not otherwise liable simply because there was no direct contractual relationship between the plaintiff and the carrier.
Moreover, such a contention is inconsistent with the manner in which the uniform rules are given effect in Australia. For example, s 42 of the Carriers' Liability Act (Cth) imposes the limits of the carriers' liability on stowaways - persons without any contractual arrangement with the carrier.
Finally, the combined effect of s 35(2) and s 37 is to ensure that carriers are liable to indemnify an employer of a passenger or to pay contribution to a tortfeasor who is liable in respect of death or injury to a passenger. Those are the only matters to which the exclusivity in s 35(2) is to be read as subject.
The agreement or arrangement between the passenger and the carrier is important for establishing whether (and through which part of the framework) the uniform rules apply. But the absence of a direct contractual relationship between a non-passenger plaintiff and a carrier does not prevent a claim by that non‑passenger plaintiff from being caught by the uniform rules.
To the extent that the decision of the Full Court of the Federal Court in South Pacific Air Motive Pty Ltd v Magnus holds to the contrary, that part of the decision should not be followed. The Full Court held, by majority (Hill J and Sackville J, Beaumont J dissenting), that claims by non-passengers for psychological injury are not governed by the Carriers' Liability Act (Cth). A core step in the reasoning of each of the majority judges was the absence of a contractual relationship (a ticket) between the carrier and a non‑passenger, with the result that the parents of the passengers in that case were permitted to bring claims for nervous shock after all claims under Pt IV had been extinguished. The majority's reasoning is contrary to the cardinal purpose of the Conventions and misstates the significance of the contract or arrangement between passenger and carrier to questions of liability.
No separate treatment of non-passengers
Parkes Shire Council submitted that the negotiating history of the Warsaw Convention supported a construction of Art 17 which drew a distinction between the liability of the carrier for passengers and freight, on the one hand, and liability to third parties, on the other hand. Parkes Shire Council submitted that the former were covered by the Conventions, whereas the latter were not. That contention should be rejected. As the analysis of the scheme, the Conventions and the exclusivity principle makes clear, such a contention is contrary to the terms of Art 17 and the way in which that Article has been interpreted in Australia and internationally.
The second basis on which Parkes Shire Council contended that non‑passengers were to be treated separately to passengers under the Carriers' Liability Act (Cth) was that their claims are "derivative". That contention needs some unpacking.
The Court of Appeal, including Leeming JA, correctly concluded that claims under the Compensation to Relatives Act are caught by s 35(2) of the Carriers' Liability Act (Cth). As Leeming JA explained, claims under the Compensation to Relatives Act are "very closely connected with the passenger's death". His Honour described those claims as derivative. That description, or division, of claims as derivative or non‑derivative is distracting and should not be adopted.
As has been explained, the exclusivity principle, and the liability imposed on a carrier, is event-based - any action for damages however founded arising out of the death, wounding or bodily injury of a passenger in the course of carriage. The exclusivity principle is not concerned with the identity of the plaintiff. It is concerned with whether there is an event - relevantly, the death of a passenger in an accident in the course of carriage.
Claims by Mrs Stephenson and her children for pure mental harm under the Civil Liability Act arise out of the death of a passenger (Mr Stephenson) in the course of carriage. Section 30 of the Civil Liability Act limits recovery for pure mental harm arising "wholly or partly from mental or nervous shock in connection with another person (the victim) being killed, injured or put in peril by the act or omission of the defendant" to witnesses at the scene or "close member[s] of the family" of the victim. In setting the scope of the duty of care, s 32(1) provides that "[a] person (the defendant) does not owe a duty of care to another person (the plaintiff) to take care not to cause the plaintiff mental harm unless the defendant ought to have foreseen that a person of normal fortitude might, in the circumstances of the case, suffer a recognised psychiatric illness if reasonable care were not taken" (emphasis added).
Those circumstances are described in s 32(2) as including:
"(a) whether or not the mental harm was suffered as the result of a sudden shock,
(b) whether the plaintiff witnessed, at the scene, a person being killed, injured or put in peril,
(c) the nature of the relationship between the plaintiff and any person killed, injured or put in peril,
(d) whether or not there was a pre-existing relationship between the plaintiff and the defendant."
In addition, and perhaps most relevantly, s 30(4) provides:
"No damages are to be awarded to the plaintiff for pure mental harm if the recovery of damages from the defendant by or through the victim in respect of the act or omission would be prevented by any provision of this Act or any other written or unwritten law." (emphasis added)
On any view, liability of a carrier under the Civil Liability Act for pure mental harm suffered by a passenger's family members in the event of their death is "civil liability of the carrier under any other law in respect of the death of the passenger" under s 35(2) of the Carriers' Liability Act (Cth). The question, and the answer, are directed to the occurrence of an event. They are not concerned with whether the claim is derivative or non-derivative. And even if the Civil Liability Act did not contain a provision to the effect of s 30(4), the result would be the same.
Conclusion
The literal words of s 28 are broad, capturing "damage sustained by reason of the death of the passenger". No basis has been identified for giving those words a narrower construction than their literal meaning, which meaning extends to psychiatric injury sustained by family members of a passenger after the passenger's death.
And s 35(2) is equally broad. With two very limited exceptions, it applies to make liability under s 28 (and related limitations) a substitute for any civil liability of the carrier under any other law in respect of the death of the passenger. Any liability to Mr Stephenson's family that might have been found to exist under the Civil Liability Act for psychiatric injury resulting from the sudden shock of Mr Stephenson's death was liability under "any other law" in respect of the death of Mr Stephenson.
Section 35(2) therefore operated to preclude the Stephenson family from bringing a claim in respect of that psychiatric injury other than in accordance with Pt IV of the Carriers' Liability Act (Cth), namely within the two-year limitation period prescribed in s 34 of the Carriers' Liability Act (Cth).
Orders
The appeal should be dismissed with costs.