Victorian Civil and Administrative Tribunal|2011-08-11

Rosengarten v American Airlines Inc (ARBN 000 775 753) (Civil Claims) [2011] VCAT 1535 (11 August 2011)

Jurisdiction - loss of baggage on flight in USA - around-the-world ticket from Melbourne to Melbourne - 1999 Montreal Convention - meaning of "international carriage" - whether the Tribunal is a "court" within the meaning of the Convention - Civil Aviation (Carriers' Liability) Act 1959 (Commonwealth) s9B.

The proceeding is struck out for want of jurisdiction

On 12 June 2010 the applicant Ms Rosengarten travelled from Chicago to Washington on flight AA 3820 operated by the respondent American Airlines Inc ("the airline"). She checked in baggage with the airline at Chicago. The baggage had been lost. Its value, as claimed by her and conceded by the airline, was $3,642.00. The airline has paid her $1,770.54, which it maintains was the monetary limit of its liability to her. In this proceeding Ms Rosengarten has claimed the balance of $1,871.46.

Ms Rosengarten had purchased an electronic ticket for around-the-world air travel in Melbourne on 4 May 2010. The ticket recorded bookings on a Qantas flight from Melbourne to Los Angeles on 26 May 2010, on various other flights in the United States of America (including the flight in question on 12 June 2010), Europe and Asia with various airlines, and finally Qantas flights from Bangkok to Sydney and Sydney to Melbourne, with an arrival in Melbourne on 27 July 2010.

The principal issue in the proceeding has become whether Ms Rosengarten's rights against the airline in respect of her lost baggage are governed by the provisions of the 1999 Montreal Convention, properly called the Convention for Unification of Certain Rules for International Carriage by Air, done at Montreal on 28 May 1999. Australia and the United States of America were at all material times, and are, parties to the 1999 Montreal Convention. A decision upon that principal issue determines whether the Tribunal has jurisdiction in this proceeding.

Ms Rosengarten contends that the provisions of the 1999 Montreal Convention do not apply to the carriage of her person and her baggage between Chicago and Washington on the airline's flight AA 3820 because it was not "international carrage" as defined by that Convention. The airline contends that it was "international carriage". I do not think that there has been any dispute between the parties that if the airline's contention is correct the provisions of the Convention apply and as a consequence the Tribunal has no jurisdiction to hear and determine the proceeding; but if I have misunderstood and there is a dispute about those matters I conclude, for reasons given below, that the airline's contention is correct and that as a consequence the Tribunal has no jurisdiction.

In Part 1A of the Civil Aviation (Carriers' Liability) Act 1959 (Commonwealth) as amended ("the Commonwealth Act"), section 9A defines "the Convention" to mean the 1999 Montreal Convention. Part 1A was introduced into the Commonwealth Act by amendment in 2008 and commenced operation on 24 January 2009.

9B The 1999 Montreal Convention to have force of law

Subject to this part, the 1999 Montreal Convention has the force of law in Australia in relation to any carriage by air to which the 1999 Montreal Convention applies, irrespective of the nationality of the aircraft performing that carriage.

The 1999 Montreal Convention is set out in Schedule 1A to the Commonwealth Act. By virtue of section 9B of the Commonwealth Act that Convention must be treated as if its provisions were those of the Commonwealth Act itself. That state of affairs has ramifications for this Tribunal's jurisdiction.

I heard the proceeding on 6 July 2011. Ms Rosengarten appeared in person and gave evidence. For the airline its Australasian manager Michael Fletcher appeared and gave evidence. Mr Fletcher raised the objection as to jurisdiction. He spoke to detailed written submissions. Ms Rosengarten gave a shorter written submission. From those submissions, and from the identity of other persons whose presence I observed in the hearing room, it was evident that each party had received legal advice of high quality. So, despite the legal complexity of the issues raised and the absence of legal representation at the hearing, I saw no need to give either party the opportunity to make further submissions or to seek legal advice. I reserved my decision.

At the hearing the following facts or propositions were either agreed upon or established by uncontracted evidence.

Ms Rosengarten's around-the-world air travel ticket was as described in paragraph 2 above.

She checked in her baggage with the airline at Chicago on 12 June 2010 for flight AA 3820 to Washington.

The airline issued her a boarding pass for the flight.

That value was less than the maximum liability for lost baggage specified in the airline's own conditions of carriage for domestic flights or for any other flights to which the provisions of the 1999 Montreal Convention do not apply. 4. Australia and the United States of America were at all material times, and are, parties to the 1999 Montreal Convention and meet the description "Stated Parties" in that Convention.

The airline has paid Ms Rosengarten $1,770.54, which is the Australian dollar equivalent of the maximum liability for lost baggage under the provisions of the 1999 Montreal Convention.

If the 1999 Montreal Convention does not apply, and whether or not the airline's own conditions of carriage apply, the Tribunal has jurisdiction to hear and determine the proceeding and Ms Rosengarten would be entitled to an order in her favour for $1,871.46.

As does the Commonwealth Act, I refer to the 1999 Montreal Convention as "the Convention".

Chapter III of the Convention is headed "Liability of the Carrier and Extent of Compensation for Damage". The following Articles are contained in Chapter III.

Article 1 paragraph 1 provides that the Convention applies to, amongst other things, all international carriage of persons, baggage or cargo by aircraft for reward.

Article 1 paragraph 2 defines "international carriage". I shall set out the definition later in these reasons.

Article 17 paragraph 2 provides that a carrier is liable for damage sustained in case of destruction or loss of, or damage to, checked baggage on condition that the event which caused the destruction, loss or damage took place on board the aircraft or during any period within which the checked baggage was in the charge of the carrier.

Article 22 paragraph 2 provides for a monetary limit of liability for lost baggage. The limit is 1000 Special Drawing Rights. There are exceptions which do not apply in the present case.

In the carriage of passengers, baggage and cargo, any action for damages, however founded, whether under this Convention or in contract or in tort or otherwise, can only be brought subject to the conditions and such limits of liability as are set out in this Convention without prejudice to the question as to who are the persons who have the right to bring suit and what are their respective rights. In any such action, punitive, exemplary or any other non-compensatory damages shall not be recoverable.

An action for damages must be brought, at the option of the plaintiff, in the territory of one of the States Parties, either before the court of the domicile of the carrier or of its principal place of business, or where it has a place of business through which the contract has been made or before the court at the place of destination.

The Articles to which I have referred demonstrate that Chapter III of the Convention, which now has the force of a Commonwealth statute, has created a cause of action in respect of loss of baggage during international air carriage and that, although causes of action in contract and in tort have not been displaced, it has set out a regime for the determination of those causes of action.

That regime includes the necessity to pursue any of those causes of action in a "court": Article 33 paragraph 1.

As will appear below I conclude that this Tribunal is not a "court" for the purposes under discussion. That conclusion matters only if Ms Rosengarten's flight on 12 June 2010 fell within the definition of "international carriage" so that the Convention was applicable. In my opinion, it did.

Article 1 paragraph 2 of the Convention 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 States Parties, or within the territory of a single State Party if there is an agreed stopping place within the territory of another State, even if that State is not a State Party. Carriage between two points within the territory of a single State Party without an agreed stopping place within the territory of another State is not international carriage for the purposes of this Convention.

Ms Rosengarten's argument is that only the second sentence in Article 1 paragraph 2 covers the case of her flight on 12 June 2010, the first sentence does not, and so there was no "international carriage". There was carriage between two points, Chicago and Washington, within the territory of a single State Party, the United States of America, without an agreed stopping place within the territory of another State. It was domestic carriage, not international carriage.

The airline's argument is that the first sentence in Article 1 paragraph 2 does cover the case of Ms Rosengarten's flight on its aircraft on 12 June 2010, so that it was "international carriage". The argument proceeds as follows:

The "agreement between the parties" was created upon the booking of the electronic ticket for around-the-world air travel, part of the booking being for one of the airline's flights, AA 3820.

The place of departure, Melbourne, for the around-the-world journey was within the territory of a single State Party, Australia.

The place of destination, "according to the agreement between the parties" was also Melbourne (within the territory of a single State Party, Australia) because in the case of a ticket for around-the-world air travel the place of departure and the place of destination are the same.

There was an agreed stopping place within the territory of a single State Party, the United States of America. Indeed there were several, but one (e.g. Chicago) would suffice.

In my opinion the airline's argument is to be preferred, for several reasons.

First, it is "according to the agreement between the parties" that the place of departure and the place of destination for "carriage" are to be ascertained. For the particular flight AA 3820 the point of departure was Chicago and the point of destination was Washington. Ms Rosengarten's boarding pass for the aircraft taking that flight was evidence of an agreement between the parties, but did not create that agreement. The agreement was created when the electronic ticket was booked. By accepting a booking for the flight in question at the time that the ticket was issued the airline became a party to an agreement with Ms Rosengarten, agreeing as it did to perform part of the "carriage" which all of the booked flights were to constitute. Under that agreement the place of departure was Melbourne and the place of destination was Melbourne. That is the proper construction of Article 1 paragraph 2, in my opinion, when applied in the present case.

Secondly, the airline's argument accords with the construction which historically has been given to other Conventions in relation to a return ticket from a place of departure in a Convention country to a place of destination in the same Convention country but with stopping places in other non-Convention countries. Dealing with the 1929 Warsaw Convention as amended by the 1955 Hague Protocol, Lord Bridge in a decision of the House of Lords, Holmes v Bangladesh Biman Corporation [1989] A.C. 1112 at 1131, after having referred to an earlier English decision, Grein v Imperial Airways Ltd [1937] 1 KB 50, went on to say:

When Thai Airways carry a passenger or a cargo pursuant to a single contract from Bangkok to London or from London to Bangkok the carriage is not subject to either convention. But it was decided in Grein v Imperial Airways Ltd and appears never to have been doubted since that carriage of a passenger pursuant to the single contract embodied in a return ticket from a place of departure in a Convention party to a destination in a non-Convention country and back to the original place of departure is "international carriage" within the Convention definition. Thus, if Thai Airways carry a passenger on a return ticket London-Bangkok-London, this is "international carriage" subject to the Hague Convention. This was accepted without argument in Goldman v. Thai Airways Ltd. [1983] 1 WL.R. 1186.

Thirdly, if the airline's version of what an American court has decided is correct, the American court has construed Article 1 paragraph 2 of the 1999 Montreal Convention in the same way as I have construed it. The airline's written submission included a summary, in an unidentified publication, of a decision of the United States District Court Eastern Division of Missouri, Jones v USA 3000 Airlines (E.D.Mo. Feb 9, 2009). According to the summary, a passenger on an airline flight from St Louis to Jamaica, with a return ticket for St Louis, was injured and sued for damages. The defendant airline removed the case to a Federal court on the grounds that the convention required the removal. The plaintiff moved to remand the case to the State court, alleging that the flight from St Louis to Jamaica was not "international carriage", Jamaica not being a party to the Convention. According to the summary, the Federal court, after "citing numerous cases", concluded that "for round-trip international travel the 'place of destination' is the same as the 'place of departure'", that the place of destination was therefore St Louis, not Jamaica, that the Convention therefore applied, and that the case was rightly in the Federal court.

The resources available to this Tribunal have not enabled me to obtain a copy of that decision itself in Jones v USA Airlines. The only decision in that case which I have been able to locate and read is a decision granting the plaintiff an extension of time for filing a notice of appeal. It said nothing about the facts of the case or why the defendant had succeeded. But it contained nothing which caused me to doubt that the airline's version of what the court decided about the applicability of the Convention was correct.

Article 33 paragraph 1 of the Convention requires any "action for damages" to be brought before a "court", which may be a "court" at the place of destination.

In Ali v Malaysian Airlines System Berhad [2007] VCAT 1967, a case involving a claim for compensation for lost baggage on an international flight to which the 1975 Montreal No. 4 Convention applied, I decided that this Tribunal was not a "court" within the meaning of the Montreal No. 4 Convention, which, as later did the 1999 Montreal Convention, had the force of law in Australia under the Commonwealth Act. I went on to decide that the Tribunal had no jurisdiction to hear and determine the proceeding.

In her submission Ms Rosengarten referred to the Ali decision. She did not submit that the decision was wrong, or that there had been any developments in the law since 2007 which meant that the decision would be different now. Her sole point was that the flight on which her baggage was lost was not "international carriage" and so the Convention did not apply to require her to bring her claim in a "court". (In the Ali case there was no dispute that international carriage was involved.)

Such relevant developments in the law as there have been since 2007 have fortified the conclusion I reached in the Ali case that this Tribunal is not a "court" for the purposes of an international convention which has the force of a Commonwealth statute. In his Ali case I referred to a decision which tended to point the other way: Commonwealth v Wood [2006] FCA 60; (2006) 227 ALR 63. But the Full Court of the Federal Court in Commonwealth of Australia v Anti-Discrimination Tribunal (Tasmania) and Nichols [2008] FCA 104 overruled Commonwealth v Wood and cited with approval a New South Wales Court of Appeal decision, Trust Company of Australia (trading as Stockland Property Management) v Skiwing Pty Ltd [2006] NSWCA 185; (2006) 66 NSW LR 77 (commonly referred to as "Stockland'). In Ali I had referred to Stockland and had stated that my conclusion conformed with it. Moreover, the President of the Tribunal, Justice Ross, in ABY, ABZ v Patient Review Panel [2011] VCAT 904 (27 May 2011) has decided that this Tribunal is not a "court" capable of exercising Federal jurisdiction for determining that a State law is unconstitutional.

In the ABY, ABZ case Justice Ross listed "a number of indicia against the proposition that the Tribunal is a court of a State" (paragraph 25), tending in favour of a conclusion that because the Tribunal lacks the requisite level of institutional independence it is not a "court of a state" (paragraph 26). The indicia were:

the non-judicial members of the Tribunal are appointed for a renewal term of five years;

ordinary members of the Tribunal do not have to be legal practitioners;

Tribunal members are not required to take an oath of office; and

in its review jurisdiction the Tribunal stands in the shoes of the administrative decision maker and in certain circumstances may be required to implement Government policy (see section 57 of the VCAT Act 1998)

Accordingly I see no reason to depart from the view I expressed in Ali that this Tribunal is not a "court" in the relevant sense, and see good reason to adhere to it.

Not being a "court" for the purposes of the 1999 Montreal Convention, this Tribunal has no jurisdiction to hear and determine this proceeding. There will be an order that the proceeding is struck out for want of jurisdiction.

While Ms Rosengarten is free to commence proceedings in a court, it seems to me that my decision that there was "international carriage" and that the Convention applies raises an issue estoppel against her and so, as there is no dispute that the airline has paid to her all that the Convention required it to pay, proceedings in a court would be pointless unless my decision in that regard is overturned upon appeal. No doubt, however, she will want to obtain her own advice in that regard.

Rosengarten v American Airlines Inc

At a glance

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Decision date

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Judgment (57 paragraphs)

Rosengarten v American Airlines Inc (ARBN 000 775 753) (Civil Claims) [2011] VCAT 1535 (11 August 2011)

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Legislation Cited (1)

Cases Cited (2)