Singapore Airlines Cargo Pte Limited v Principle International Pty Ltd - [2017] NSWCA 216 - NSWCA 2017 case summary — Zoe

NSWNSWCA

Singapore Airlines Cargo Pte Limited v Principle International Pty Ltd

[2017] NSWCA 216

Court of Appeal (NSW)|2017-05-16|Before: Beazley P, Meagher JA, Payne JA

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At a glance

Source facts

Court

Court of Appeal (NSW)

Decision date

2017-05-16

Before

Beazley P, Meagher JA, Payne JA

Catchwords

[1985] HCA 34 Povey v Qantas Airways Ltd (2005) 223 CLR 189

Source

Original judgment source is linked above.

Catchwords

[1985] HCA 34 Povey v Qantas Airways Ltd (2005) 223 CLR 189

Judgment (31 paragraphs)

[1]

Introduction

BEAZLEY P: On 19 August 2013, the first respondent, Principle International Pty Ltd (Principle), which conducted a business of the export of live animals, particularly cattle, to Asia, contracted with the appellant Singapore Airlines Cargo Pte Limited (SIA Cargo), for the carriage by air of cattle from Melbourne to Harbin, China. The carriage of the cattle, which was subject to the 1999 Montreal Convention relating to International Carriage by Air (the Montreal Convention), was arranged on three separate flights departing Melbourne on 23, 25 and 27 September 2013.
Eighteen head of cattle transported on the 27 September flight were dead on arrival. Those cattle had been loaded into two crates with nine cattle in each crate and had been placed on the lower deck of the cargo hold for the duration of the flight. There was no consensus as to the exact cause of death. Mr Brightling, SIA Cargo's expert witness, considered suffocation to be the cause of death. Professor Phillips, Principle's expert witness, considered heat stress to be the most likely cause of death. However, as Art 18(1) of the Montreal Convention imposes strict liability on a carrier if the conditions specified in the Article are satisfied, the exact cause of death was not an issue in the proceedings.
Principle brought proceedings against SIA Cargo claiming damages in the sum of $72,160, being the claimed value of the dead cattle. The trial judge, Norton DCJ SC, held that SIA Cargo was liable under Art 18(1) of the Montreal Convention for the loss, but that as Principle had contributed to the loss, liability was to be apportioned pursuant to Art 20 of the Convention. Her Honour apportioned liability 60 per cent to SIA Cargo and 40 per cent to Principle and accordingly entered a verdict for Principle in the sum of $43,296.

[2]

Why leave should be granted

Leave to appeal is required because the amount in issue is less than $100,000: Supreme Court Act 1970 (NSW), s 101(2)(r). The principles governing the grant of leave are well established. Leave to appeal will only be granted where there are substantial reasons to allow an appellate review: Carolan v AMF Bowling Pty Ltd t/as Bennetts Green Bowl [1995] NSWCA 69; Rodi v Gelonesi [2012] NSWCA 424 at [24]; Collier v Lancer (No 2) [2013] NSWCA 186 at [7]. In Lee v New South Wales Crime Commission [2012] NSWCA 262, Bathurst CJ (Macfarlan and Barrett JJA agreeing) said, at [12], that in the usual case: "… it is only appropriate to grant leave concerning matters that involve issues of principle, questions of general public importance or where it is reasonably clear there has been an injustice in the sense of going beyond it being reasonably arguable that the primary judge was in error: Carolan v AMF Bowling Pty Ltd [1995] NSWCA 69; Zelden v Sewell [2011] NSWCA 56 at [22]; Jaycar Pty Ltd v Lombardo [2011] NSWCA 284 at [46]; GKD v Director of Department of Family & Community Service [2012] NSWCA 219 at [10]; Be Financial Pty Ltd v Das [2012] NSWCA 164 at [32]-[34]."
The quantum of damages awarded is also relevant to the question whether the Court will grant leave, the Court being disinclined to do so where the amount at issue is significantly below the statutory threshold: see Bushby v Dixon Holmes du Pont Pty Ltd [2012] NSWCA 90; The Entrance Plaza Pty Ltd v Davids [2016] NSWCA 362; Australian Federation of Islamic Councils Inc v Farrell [2016] NSWCA 256; HP Mercantile Pty Ltd v Clements [2015] NSWCA 212. Where there is no question of principle and the amount at issue is small, leave to appeal will usually be refused: Rodi v Gelonesi at [25].
This is an appropriate case in which to grant leave to appeal and to cross-appeal. Although the amount in issue in this case is modest, the transportation of cargo by air is a matter of significant commercial importance and this case raises the proper construction of Art 18(1) of the Montreal Convention in relation to the carriage by air of live cattle. The parties did not refer the Court to any appellate authorities on the proper construction of Art 18(1), nor, on my research, is there any Australian authority on its construction. Accordingly, leave to appeal and cross-appeal should be granted.
The summonses for leave to appeal and to cross-appeal have been heard concurrently with the appeal and cross-appeal.

[6]

The Montreal Convention

The Montreal Convention has the force of law in Australia pursuant to the Civil Aviation (Carriers' Liability) Act 1959 (Cth), s 9B and is Schedule 1A to that Act. It provides, relevantly: "Article 18 - Damage to Cargo 1. The carrier is liable for damage sustained in the event of the destruction or loss of, or damage to, cargo upon condition only that the event which caused the damage so sustained took place during the carriage by air. 2. However, the carrier is not liable if and to the extent it proves that the destruction, or loss of, or damage to, the cargo resulted from one or more of the following: … (b) defective packing of that cargo performed by a person other than the carrier or its servants or agents; … 3. The carriage by air within the meaning of paragraph 1 of this Article comprises the period during which the cargo is in the charge of the carrier. 4. The period of the carriage by air does not extend to any carriage by land, by sea or by inland waterway performed outside an airport. If, however, such carriage takes place in the performance of a contract for carriage by air, for the purpose of loading, delivery or transhipment, any damage is presumed, subject to proof to the contrary, to have been the result of an event which took place during the carriage by air. If a carrier, without the consent of the consignor, substitutes carriage by another mode of transport for the whole or part of a carriage intended by the agreement between the parties to be carriage by air, such carriage by another mode of transport is deemed to be within the period of carriage by air. … Article 20 - Exoneration If the carrier proves that the damage was caused or contributed to by the negligence or other wrongful act or omission of the person claiming compensation, or the person from whom he or she derives his or her rights, the carrier shall be wholly or partly exonerated from its liability to the claimant to the extent that such negligence or wrongful act or omission caused or contributed to the damage. When by reason of death or injury of a passenger compensation is claimed by a person other than the passenger, the carrier shall likewise be wholly or partly exonerated from its liability to the extent that it proves that the damage was caused or contributed to by the negligence or other wrongful act or omission of that passenger. This Article applies to all the liability provisions in this Convention, including paragraph 1 of Article 21."
As SIA Cargo submitted that the proper construction and application of Art 18 was to be contrasted with that of Art 17(1), it is relevant to also set out its terms: "Article 17 - Death and Injury of Passengers - Damage to Baggage 1. The carrier is liable for damage sustained in case of death or bodily injury of a passenger upon condition only that the accident which caused the death or injury took place on board the aircraft or in the course of any of the operations of embarking or disembarking."

[12]

Background facts

At the time of the export of the cattle subject of Principle's claim, Ms King was Principle's operations manager. Pursuant to the Aircraft Charter Agreement (the Charter Agreement) between Principle and SIA Cargo, Principle was responsible for all security and legal requirements relating to the cargo and for obtaining all governmental approvals: Arts 2 and 4. The Charter Agreement in Art 1(a) specified "30 Main deck pallets and 9 lower decks". Article 2(5) provided that Principle was to "declare the carriage of any cargo requiring special handling when seeking any carriage quotation".
Principle engaged Charterair Pty Ltd (Charterair) as the freight forwarder for the transportation of the cattle. Mr Niemeyer was Charterair's representative.
It was necessary for the cattle to be loaded into crates and weighed before being loaded onto the aircraft. Charterair had sourced the crates into which the cattle were loaded. Twenty six crates were loaded on the upper deck of the aircraft. Four places on the upper deck remained empty. Nine crates were loaded on the lower deck, five of which contained nine cattle. The two crates containing the cattle that died had been placed in the back section of the lower deck of the aircraft, described as at "the front of the front of the aft lower deck".
There was no direct evidence as to what occurred at the time of loading the cattle onto the aircraft. However, the usual procedure for loading live cattle was explained by Mr Muir, the Cargo Manager for SIA Cargo in Victoria, and it was not suggested that the procedure was any different on this occasion.
Mr Muir explained that the shipper, in this case Principle, was responsible for loading the cattle into the crates, including the distribution of the cattle and the stock density in the crates in which they were to be transported. Mr Muir referred to the existence of the Australian Standards that regulate the space that cattle must have for the purpose of transport, but stated that it was not the function of the airline to ensure compliance with those standards. Rather, whether or not cattle, and the crates in which they were to be transported, were suitable for carriage, was a matter for the shipper and approval by DAFF. Mr Muir said that if an export permit, which is issued by DAFF, was not available, SIA Cargo would not accept the cargo.
Once the crates were ready to be loaded onto the aircraft, SIA Cargo's cargo handling agent recorded the weight and contour of each crate as it was loaded. The total weight of the cargo was important, as its distribution in the aircraft affected how the flight operated, including the aircraft's fuel consumption. Each crate was then placed on a Unit Load Device (ULD). Each ULD had its own code.
The recorded weight and the ULD codes were sent to Singapore in a document entitled "Final Pre Advice", which was a pro forma document completed for each cargo. A Loading Instruction Report (LIR) was prepared in Singapore from the information in the Final Pre Advice document. The purpose of the LIR was to ensure the aircraft was balanced. Once the LIR was prepared, it was sent to SIA Cargo or its agent at the port of departure, approximately three hours before the flight.
In one section of the Final Pre Advice document there is a section entitled, "Joining special load information". Mr Muir said that that section was to record any particular request that had been made in respect of the carriage of the cargo on the flight. By reference to the circumstances such as occurred in this case, Mr Muir said that if a shipper required particular crates to be located in specific locations on the aircraft, it could make that request, which would be conveyed to Singapore in the Final Pre Advice document. He said that he was aware of such requests having been made on numerous occasions and said that those request had been met.
In this case, the Final Pre Advice, numbered SQ7152/27SEP, was sent to Singapore at 3:44am on 27 September 2013. The ULD for each crate and the gross weight of each crate was recorded, but there was no reference to cattle numbers in each crate. The "Joining special load information" section of the document did not contain any information pertaining to the loading of the cattle. Nor was there any entry anywhere else on the document relating to the placement of the crates on the aircraft.
Mr Muir said that the number of cattle in each crate was not part of the information provided for the preparation of the LIR, nor had Principle given any indication to SIA Cargo as to where any pallet should be placed on the aircraft. This was not in dispute, and is apparent from an email from Ms King to Mr Neimeyer on 23 March 2014, in which she said that neither he nor the airline had seen her load plan. The Final Pre Advice SQ7152/27SEP was not sent to Principle or its freight forwarding agent, Charterair, nor was Principle informed that the loading was to be done by reference to the ULD pallet reference.
Mr Muir agreed in cross-examination that SIA Cargo did not have any procedure whereby it asked the exporter whether or not there were specific requirements as to the placement of crates in the aircraft. Mr Muir also agreed in cross-examination that there was nothing to prevent SIA Cargo's cargo agents from counting the number of cattle in each crate, as those agents were present at the loading.

[13]

The evidence of Mr Brightling and Mr Maddern as to loading the cattle

In addition to Mr Muir, there were three expert witnesses who gave evidence in relation to the transport of livestock, including evidence as to the adequacy of the crates: Mr Brightling, a vet with experience in livestock exports; Professor Phillips, the foundation professor of animal welfare at the University of Queensland with experience in livestock transporting systems, who has a particular interest in exporting live animals by ship; and Mr Maddern, who has no formal professional qualifications, but is experienced in the airline industry. Mr Brightling and Mr Maddern gave evidence in relation to the loading of the cattle onto the aircraft. The oral evidence of these three witnesses was given in a concurrent evidence session. Mr Brightling and Mr Phillips also gave evidence in relation to the adequacy of the crates.
Mr Brightling, in his report dated 16 November 2015, gave the following evidence in relation to the procedure in loading the livestock: "• When all livestock in the consignment are in crates, the exporter and air freight forwarder consult regarding preferred positions for specific crates on the plane and advise the aircraft loadmaster accordingly. This advice would normally comprise a copy of the record sheet with the [ULD] number and weight details of each crate, with crates intended for the lower cargo holds marked accordingly. • Responsibility for loading the cargo transfers from the exporter to the airline once the door of the last crate has been nailed or screwed shut and a record sheet with all crates listed has been given to the aircraft loadmaster."
He further stated, in respect of the loading of the crates onto the aircraft: "The aircraft loadmaster is responsible for ensuring the cargo is loaded safely and efficiently, and that the aircraft departs on time. The loadmaster has the final say on where each crate is positioned on the aircraft, taking into account the exporter's load plan preference, aircraft trim and fuel efficiency considerations. If the exporter clearly advises the loadmaster which crates are intended to be loaded in the lower cargo holds, and which are not, that advice is invariably followed. Crates are generally loaded onto the aircraft in the hour or so prior to departure. This is done by air freight handlers working to directions provided by the aircraft loadmaster. The exporter is usually not involved."
In cross-examination, Mr Brightling gave the following evidence: "HER HONOUR: Would [the fact that the crates were high risk and not fit for the lower hold] have been obvious to whoever was putting the crates in that position on the plane? WITNESS BRIGHTLING: If they knew what they were doing, it should have been. … HER HONOUR: People experienced with loading these. Would they realise that's a potential problem? WITNESS BRIGHTLING: The people - the aircraft people probably know. The livestock people ought to."
Mr Brightling also gave the following evidence: "WITNESS BRIGHTLING … If I was loading the plane, I would have loaded all of the main deck positions with the exception of the tail position. The tail position is quite different because it requires a much lighter weight because of the trim of the plane, but you would fill all of the main deck positions first and then only go downstairs into the lower hold with whatever is left over. In this case, to me, it did not make livestock sense to have spare positions on the main deck upstairs. … … If I had been the operations manager for this consignment, I would have said to the [freight] forwarder and to the load master that, 'There's 35 crates. I want 29 on the main deck and the remaining six, three each, forward and aft, in the lower hold,' and I have absolutely no doubt that if that had been requested it would have been done. HER HONOUR: I think my question was would a load master know that for himself? WITNESS BRIGHTLING: The aircraft load master, in my experience, is an aircraft person, not a livestock person, and they would view the crates of livestock the same as crates of books or anything else, which is they would be loaded according to the trim of the plane and not the cargo in the crate."
Mr Maddern also gave evidence in relation to the placement of pallets on the plane, as follows: "HER HONOUR: Your evidence is the trim of the plane could have been adjusted with more up the top than there were. Is that your evidence? WITNESS MADDERN: The loading is done according to the load instruction report and that's where the change should have been made. The load master will only load the pallets where he's told to load them following the load instruction report. HER HONOUR: But whoever drew up the instructions for that person could have drawn up instructions that meant more went upstairs. WITNESS MADDERN: And they could have moved the weight around to achieve it."

[14]

Evidence relating to the load plan

The Export Control (Animals) Order 2004 required that a load plan was to be submitted to DAFF for approval. Ms King stated in her affidavit affirmed 9 July 2015 that, as required by the approvals for the export of cattle, she had prepared a load plan for the shipment of the cattle. In fact, Ms King had prepared at least two load plans, both of which were in evidence. Both those load plans specified that crates containing nine cattle were to be loaded on the upper deck.
Ms King said that the first load plan (by reference to its date) was prepared as part of the export approval process prior to the loading. However, in cross-examination, she said that she could not say when the first load plan was created, nor when or whether it was sent to DAFF. It is known from email communications from DAFF to Ms King that DAFF was in possession of a load plan, although which load plan, was not clearly established. As noted above, at [26], it is also known from email correspondence between Ms King and Mr Niemeyer on 21 March 2014 that neither Mr Niemeyer nor SIA Cargo saw either load plan.
It appears that a reason for the existence of more than one load plan was because the number of cattle to be exported had changed. The second load plan was prepared after the aircraft had departed Melbourne. Ms King said that it was based on notes she had prepared at the time of loading the cattle. She said it was made with her freight forwarder and the officer from the Australian Quarantine and Inspection Service (AQIS).
The email correspondence between Ms King and Mr Niemeyer to which reference is made above, followed an email to Ms King from an officer in DAFF, investigating the cause of death of the cattle. The officer advised Ms King that she "wanted to go over the loading of the aircraft". The email referred to the load plan supplied to DAFF which, the officer stated, seemed to be in compliance with the conditions of the export approval, but that the LIR was different. The email concluded: "In the final load plan some of the crates loaded on the lower deck were not the ones with the extra 10% space. I am not saying this caused the mortalities, but I wanted to go over the process of loading the aircraft with you."
On 22 March 2014, Mr Niemeyer provided a detailed email response to Ms King's email of 21 March, including suggestions as to how to respond to DAFF, as follows: "The exporter/agent advises the carrier which are the crates for the lower holds. However, due to operational reasons, such as aircraft weight & balance requirements the load plan can vary. The airline load plan is generated by head office, in this case Singapore, about 3 hours prior to departure when all factors such as weather and fuel requirements and diversion points are taken into consideration. Such factors can affect the trim of the aircraft. That is then transmitted to the station for loading to commence. The extra 10% space in the lower decks would not have contributed to the mortalities. DAFF have been advised time and time again that the ventilation in the lower holds will support the same load as in the main deck single crates. This is also supported by the airline who would have taken this into consideration at the time head office did their plan."
In a subsequent email on 24 March 2014 from Ms King to Mr Niemeyer, Ms King asked: "What they are looking for to finish off the report is some sort of evidence that carrier was informed which crates were for the lower deck. I can see their point as this is a gap between my final loading plan and SQ plan. So, how do SQ know which crates are for the lower deck? Is there anything in writing either by you or the Qantas ground staff that is passed on to SQ?"
Mr Muir said that at no time did he see a load plan in relation to this shipment. Having seen the load plan in Ms King's affidavit, he searched SIA Cargo's records, but found no information or communication relating to the required location of pallets. Mr Muir said that if the load plan had been provided to SIA Cargo, it would not have been of any assistance in the loading of the aircraft, as it did not identify the pallets which were to be placed on the upper deck by reference to the ULD codes.

[15]

Trial judge's reasons

Her Honour observed, relevantly, that the following matters were not in issue by the close of submissions: 1. The waybill was the only relevant document required by the Montreal Convention: judgment [22]. 2. The Charter Agreement did not specify any other document as being required to be provided prior to the aircraft being loaded: judgment [23]. 3. The final load plans prepared by Ms King showed all crates containing nine cattle were to be placed on the main deck: judgment [24]. 4. No load plan was supplied to SIA Cargo or Mr Niemeyer by Ms King prior to the cattle being loaded onto the plane: judgment [25]. 5. All cattle died as a result of lack of adequate ventilation. Although the parties did not agree as to the cause of the lack of ventilation, they agreed it was not relevant to decide whether the cattle had died due to heat stroke or asphyxiation: judgment [26]. 6. The cattle were in good order and condition when they were loaded into the aircraft in Melbourne: judgment [27]. 7. The plane was loaded by reference to the LIR which was prepared by representatives of SIA Cargo in Singapore. This document did not make reference to the number of cattle in each crate, nor did SIA Cargo make any enquiry in that regard. The LIR was not provided to Principle prior to the cattle being loaded onto the plane: judgment [28]. 8. Principle was required by statute to provide a copy of the load plans to the authorities: judgment [29].
Her Honour further stated, at [43], that the following was clear: "(1) The 18 cattle in question were in good health and condition when they were placed in the crates at Melbourne airport. (2) The crates were suitable and fit for the purpose of carrying nine cows in each crate provided that crate was not placed on the lower deck. The evidence establishes that there were other crates of the same dimensions which contained nine cows placed on the upper deck and lower deck in which there were no fatalities. (3) The crates were not sealed containers and were open at the top except four or five boards running across the top … (4) When the plane arrived in China all 18 cows in the two adjacent crates on the lower deck were dead. There were no fatalities in any other crate."
Her Honour found, at [44], that these factors were "sufficient to shift the burden to the carrier". She noted that there was some evidence that the ventilation system on the plane had been tested and was found to be operating, but that there was no evidence as to the adequacy of the ventilation in the area of the hold where the two crates were placed. Her Honour observed, at [44], that it was: "… clear from the dimensions of the hold and the crates that there was very little distance between the top of the crates and the roof of the hold."
Her Honour reiterated, at [44], that it was agreed that the cattle had died from lack of ventilation. Her Honour, at [45], expressed the view that the fact that there was no record of any fault in the functioning of the ventilation system did not establish that the crates in question were receiving adequate ventilation. Her Honour, at [45], also referred to the evidence of Mr Brightling to the effect that the ventilation in the hold was quite different from that in the lower hold, "where there [was] next to no space" in the area above the crates loaded on the lower deck. This had caused Mr Brightling to give evidence that crates which were suitable for the upper deck "may not be suitable for the lower deck". Her Honour also noted, at [46]-[48], Mr Brightling's evidence, the substance of which is set out above at [29]-[32].
Her Honour found, at [49], that: "… the lack of ventilation to the cows in the two crates in the lower hold was an event within the meaning of article 18 and that event took place during the course of the carriage by air."

[18]

Consideration

The principles governing the construction of an international agreement such as the Montreal Convention were not in issue, and indeed were not the subject of submissions. Nonetheless, it is useful at the outset to refer to the relevant principles as the determination of the first issue on the appeal involves, first, a question of construction of Art 18(1) and then, having regard to the proper construction of the section, the identification or characterisation of the "event", if any, that caused the damage to the cattle.
Those relevant principles were set out by the plurality in Povey v Qantas Airways Ltd (2005) 223 CLR 189; [2005] HCA 33 as follows: "24 … The guiding principles of treaty interpretation are found in the Vienna Convention on the Law of Treaties. Article 31 provides that a treaty must be interpreted in good faith, in accordance with the ordinary meaning of the terms in their context and in the light of the object and purpose of the treaty. Interpretative assistance may be gained from extrinsic sources in order to confirm the meaning resulting from the application of Art 31, or to determine the meaning when interpretation according to Art 31 leaves the meaning 'ambiguous or obscure' or 'leads to a result which is manifestly absurd or unreasonable'. 25 Importantly, international treaties should be interpreted uniformly by contracting states. But, of course, the ultimate questions are, and must remain: what does the relevant treaty provide, and how is that international obligation carried into effect in Australian municipal law?"
In this case, SIA Cargo's liability under Art 18(1) is dependent upon there being an "event", which caused the deaths of the cattle, that took place during the carriage by air, being the period in which the cargo is in the charge of the carrier: see Art 18(3). It is neither relevant nor necessary, for the purposes of identifying the "event", for the cause of death to be established. As is apparent from the respective submissions of the parties, each seeks to identify the "event" within the meaning of Art 18(1) as having occurred when the cattle were in the charge of the other. According to Mr Muir's evidence, the exporter was responsible for loading the cattle into the crates and that occurred on the tarmac. It appears that thereafter, the cattle were in the charge of the carrier's agent, who was responsible for weighing the cattle, placing each crate onto a ULD and then loading the ULDs onto the aircraft (see above at [22]). The placement of each ULD within the aircraft was done by reference to the LIR prepared in Singapore.
SIA Cargo referred the Court to decisions dealing with the Warsaw Convention 1929 as modified by the Hague Protocol 1955, and the Warsaw Convention as amended by the Montreal Protocol No 4 1975. These decisions related to the equivalent of Art 17 of the Montreal Convention which provided, relevantly, that the airline was liable for "damage sustained in the event of the death … or any other bodily injury suffered by a passenger; if the accident which caused the damage so sustained took place on board the aircraft".
Thus, in In re Deep Vein Thrombosis and Air Travel Litigation [2003] EWCA Civ 1005; [2004] QB 234, which concerned the alleged liability of a number of carriers under Art 17 of the Warsaw Convention, the claimants had all suffered deep vein thrombosis leading to serious, and in some cases fatal, injury as a result of travelling in the carriers' aircraft. The claimants had identified two "accidents" causing injury. The first was "subjecting the passengers to carriage by air" that had features which included cramped seating and other features of carriage which pertained throughout the flight: at [27]. The second was the failure to warn of the risk of DVT or to advise of precautions which could avoid or minimise that risk: at [29]. The same "accidents" were contended for by the claimants in the House of Lords: [2006] 1 AC 495 at [24], [39].
It was accepted that for there to be an accident, there must be "an event" (at [24]). Lord Phillips, at [26], referred to the meaning of "event" in ordinary speech as described by Lord Mustill in Axa Reinsurance (UK) plc v Field [1996] 1 WLR 1026, at 1035, as being "something which happens at a particular time, at a particular place, in a particular way", although observing that an activity that continued for a period, "such as circulating contaminated air, could amount to an accident for the purposes of article 17."
Phillips LJ nonetheless rejected that there had been an "event" in the circumstances of that case. As his Lordship explained: "[27] … The act of altering the pressurisation, the supply of oxygen or the temperature in the cabin would all, in my opinion, be capable of constituting an 'event' that satisfied the first element of an 'accident'. As I understand it, however, the allegations in respect of those matters are intended to treat them, like cramped seats, as integral features of carriage pertaining throughout the flight rather than the effects of acts of the crew in the course of the flight. [28] I do not consider that existence of these permanent features of the aircraft, or the subjecting of the passengers to carriage in aircraft with these features, is capable of amounting to an event that satisfies the first limb of the definition of an accident which 'took place on board the aircraft …'."
The same point had been made in Olympic Airways v Husain 540 US 644 (2004) which also involved Art 17 of the Warsaw Convention as amended by the Hague Protocol, although, on the facts, the outcome was different in that case. A passenger who suffered from asthma and was sensitive to cigarette smoke, and his wife, had requested non-smoking seats. Their allocated seats were located in close proximity to the economy class smoking section of the flight. A request that they be moved was rejected three times by the airline's flight attendant. The passenger suffered an asthma attack and died during the course of the flight.
The issue before the Supreme Court of the United States was whether the refusal by the flight attendant to assist and re-seat the passenger constituted an "accident" for the purposes of Art 17. Thomas J, in giving the opinion of the Court, stated, at 655, that "[t]he rejection of an explicit request for assistance would be an 'event' or 'happening' under the ordinary and usual definitions of these terms". On that basis, the conduct of the flight attendant in declining to grant assistance to the respondent and Dr Hanson was held to constitute an "accident" on the approach to Art 17 adopted in Air France v Saks US 392 (1985). In other words, there was something involved that was not simply a normal aspect of the flight.
Article 17 of the Warsaw Convention as modified by the Montreal Protocol No 4 was considered by the High Court in Povey. That case involved a claim by a passenger alleging he had suffered Deep Vein Thrombosis (DVT) during the course of, or following, a return flight from Sydney to London caused by the conditions and procedures of passenger travel upon the flights. The claim had been summarily dismissed by the Court of Appeal of Victoria. The issue before the High Court was whether the appellant's claim disclosed an arguable cause of action and, in that regard, whether flight conditions and/or a carrier's failure to warn passengers of precautions they could take to avoid DVT could constitute an "accident" within the meaning of Art 17: see plurality at [7].
The plurality (Gleeson CJ, Gummow, Hayne and Heydon JJ), at [24], noted the relevant principles of construction and observed, at [32], that the term "accident" in Art 17 "may be used to refer to the event of a person's injury or to the cause of injury". In finding that the former meaning was the sense in which "accident" was used, the plurality explained, at [33]: "In Art 17, 'accident' is used to refer to the event rather than the cause of injury. And that event is one which Art 17 requires to be located at a place (on board the aircraft) or otherwise to be fixed by reference to circumstances of time and place (in the course of any of the operations of embarking or disembarking)." (footnotes omitted)
The plurality noted, at [44], that this conclusion was consistent with the decision in In re Deep Vein Thrombosis Litigation, where the Court of Appeal had found that for there to be an accident "there had to be an event external to the passenger which impacted on the body in a manner which caused death or bodily injury". The Court added that conditions of the flight such as cramped seating did not constitute an event for the first limb of the definition of an accident. Their Honours, at [40], distinguished Husain because on the appellant's case in Povey, nothing that happened on board that was unusual or unexpected so as to satisfy the second limb of the meaning of accident.
Kirby J, at [188], also distinguished Husain as a case in which there had been an external event, viz, the flight attendant's rejection of an explicit request for assistance. In a short concurring judgment, Callinan J agreed that the appeal should be dismissed. McHugh J would have allowed the appeal in part, on the basis that certain acts alleged by the appellant to have been done by flight attendants could, if proved, be capable of constituting an "accident" for the purposes of Art 17. This related to certain allegations that flight attendants had offered the appellant beverages during the flights and discouraged him from moving around the cabin: see at [82].
In Winchester Fruit Ltd v American Airlines Inc [2002] 2 Lloyd's Rep 265, which concerned the carriage of fruit which had deteriorated by the time the consignment had reached the port of destination, Judge Hallgarten QC observed, in relation to Art 18 of the Warsaw Convention, that it was necessary to determine if the damage was the consequence of some "occurrence". As his Honour observed, at [42], "as a matter of construction of the Convention there must be an occurrence which is something separate from the very destruction, loss or damage itself".
Article 17(1) and its equivalent provisions in cognate Conventions subject of consideration in these authorities requires, relevantly, there to have been an "accident which caused the death or injury [which] took place on board the aircraft". The essential point that SIA Cargo contended was to be derived from them, for the purposes of this case, was that the "event" had to be something other than the ordinary conditions of carriage. For myself, I do not consider that these authorities directly transpose themselves or necessarily aid the proper construction of Art 18(1) of the Montreal Convention. This is perhaps best seen in the plurality's explanation in Povey as to why the claim in that case should be dismissed.
In Povey the parties' submissions were premised upon an acceptance that death or injury was caused by an accident for the purposes of Art 17 only if "caused by an unexpected or unusual event or happening that is external to the passenger", as held by the Supreme Court of the United States in Saks: see Povey at [28]. The question that was then in issue between the parties in Povey was "at the point of identifying what is meant by 'an unexpected or unusual event or happening that is external to the passenger'".
In resolving that issue, the plurality pointed out, at [33], that in Art 17 "accident" refers to an event rather than the cause of injury. Their Honours explained, at [36], that: "… 'accident' … is a concept which invites two questions: first, what happened on board … that caused the injury of which complaint is made, and secondly, was what happened unusual or unexpected?" Their Honours further explained that merely showing "some adverse physiological change does not identify the occurrence of an accident".
By contrast, when the question in issue, as it is for the purposes of Art 18(1), is whether "the event which caused the damage … took place during the carriage by air", the inquiry is not directed to ascertaining whether something occurred that was unusual or unexpected, that is, something that was not part of the usual course of carriage, as SIA Cargo argued. Rather, the inquiry is to identify, as Art 18(1) by its terms expressly specifies, whether there was an event or happening which caused the damage and which took place during the carriage by air. The event must be identified in the context of an "event which caused the damage". The inquiry is not directed to ascertaining whether there was something unusual or unexpected happening outside the normal incidents of the flight. That is relevant to determining whether there was an accident for the purposes of Art 17(1).
In this case, there was no damage caused to the cattle by the mere fact that they were placed in crates. Accordingly, that could not have been the "event" which caused the damage. Nor is it relevant, as argued by SIA Cargo, that the lack of ventilation was merely a condition of the flight. As I have explained, that is not the relevant inquiry for the purposes of Art 18(1). The cause of death, as SIA Cargo recognised, was the lack of ventilation to the cattle in those crates as placed on the lower deck. However, that was not the "event" for the purposes of Art 18(1). Rather, as is clear from the evidence, it was the placement of the crates, each containing nine cattle, on the lower deck given the conditions on the lower deck, which was the "event" which caused the damage.
It follows that, contrary to SIA Cargo's submission, there was an "event" within the meaning of Art 18(1) in respect of which SIA Cargo was liable for damage sustained, which in this case, was the loss of the cattle.

[20]

Trial judge's reasons

Her Honour recorded, at [30], that it had been agreed by the experts that: "… the crates were an unsuitable design for their purpose of transporting small cattle in a lower cargo hold because of inadequate ventilation at cattle height …" and that: "… there was inadequate ventilation for cattle in the two crates in question [and] that there was no ventilation failure within the aircraft …"
The experts further agreed during the course of oral evidence that the crates were not suitable for carriage of nine cattle in the lower hold, but were suitable for the carriage of cattle on the upper deck. These agreements were reached on the assumption that the cattle were 1000mm high. However, Principle's expert, Professor Phillips, had suggested in his oral evidence that the cattle would have been 115cm in height (incorrectly recoded in her Honour's reasons as 1500mm). Her Honour was not able to make any accurate finding as to the height of the cattle. This caused her Honour to observe, at [31], that "[t]his divergence of opinion reduces somewhat the weight of the agreement reached by the experts".
Her Honour found, at [51], that the extent of the experts' agreement was that "the crates were unsuitable to transport small cattle in the lower hold because of inadequate ventilation at cattle height". Her Honour also found that there was no agreement amongst the experts that the cattle were overcrowded in the crates and that there was no agreement, nor any evidence, as to the exact height of the cattle. Her Honour also observed that the experts agreed that the crates were suitable for a carriage of nine cattle on the upper deck.
Her Honour observed, at [52]-[53], that the crates complied with the relevant Australian regulations and that crates of similar design and dimensions had been used for many years without any complaints having been received. Her Honour also found that SIA Cargo's agents were present at the time of the loading, but Principle had no knowledge as to which crates would be placed on the lower deck.
Her Honour concluded, at [54], that SIA Cargo had not established that "the death of the cattle resulted from defective packaging", and that the evidence did not establish the deaths would have occurred had the crates been placed on the main deck of the aeroplane.

[21]

Evidence relating to the crates

The crates had been manufactured by CMTP Packaging Pty Ltd (CMTP). Christopher Meade, the managing director of CMTP, gave evidence that the 1600mm crates in which the cattle were transported had been manufactured by CMTP since 2006 and supplied to many exporters for use in export of cattle by air. Mr Meade said that, from his recollection, crates of that dimension had been used for that purpose several times a year of the previous nine years. He also said that he had no records of any complaints as to problems with the use of these crates because of the asserted defects referred to by Mr Brightling, or that the crates had caused death or injury to cattle.
The crates were made of wood. The sides comprised a solid sheet to a height of approximately 1.2m. There were a number of 50mm pinholes in the solid side sheet on three sides, but none on door of the crate. There was then an open portion of several centimetres between the top of the solid sheet and a single beam of wood forming the top outer edge of the crate. The top of the crate was open except for four or five boards running across the top.
As noted above, the experts had agreed that : "… the crates were an unsuitable design for their purpose of transporting small cattle in a lower cargo hold because of inadequate ventilation at cattle height … … there was inadequate ventilation for the cattle in the two crates in question …"
This agreement had been based upon Mr Brightling assessment that the wither height of the cattle that died was about 1000mm. On that measurement, the height of the side walls was above head height of the cattle. In his oral evidence, Mr Brightling explained that his estimate of the height of the cattle as 1000mm was his "best guesstimate" from "scanning through the Internet looking at literature for average heights by weight", a task which he said in any event was "a bit tricky".
Mr Brightling in his report stated that these crates did not conform with the recommendations of Hogan and Willis, "Best practice design of crates for livestock by air" (2009), which he described as the definitive work on aircraft livestock crate design. Hogan and Willis' recommendations regarding ventilation were as follows: "• The design should ensure there is no ventilation dead (still-air) space within the stock crate. … • When holes and slots are used for ventilation purposes, attention must be given to allow noxious gases such as CO2 to be able to escape from the stock crate. Therefore openings must be provided in the lower half of the four walls, as well as higher up and on each and every tier. … • All stock crates should have a sufficiently large ventilation opening at a height of 25 to 30cm above floor level on all four sides to allow for circulation. … … solid walls should not exceed the height of the animals head in normal resting position … The top of the panel should be positioned to match the wither height of the animal and its position will therefore vary with the age of the animal being transported."
Mr Brightling, in his oral evidence, stated that the crates "were high risk and not fit for the lower hold". He maintained that view notwithstanding that there were other crates containing nine cattle placed on the lower deck where there were no mortalities. He accepted, however, that that should have been obvious to those who placed the crates in that position in the aircraft, "if they knew what they were doing".
Professor Phillips agreed in oral evidence that, regardless whether the cause of death was suffocation, as Mr Brightling had opined, or heat stress, which was his view as to the cause of death, "there's a connection with the inadequate ventilation at cattle height with these crates in the lower cargo hold". This was consistent with his report, in which he had expressed agreement with Mr Brightling "that inadequate ventilation was the probable cause of death". However, Professor Phillips also stated in his report that: "… this was unlikely to be due to crate design because there were other crates that were just as highly stocked … but in different locations and these did not suffer any mortality."
According to Professor Phillips, it was the location of the crates and not the crates themselves that "was critical in causing mortality". This aspect of his evidence was raised with him in cross-examination, having regard to the agreement reached by the experts in their conclave and to which reference is made above at [78]. He answered: "I've always felt that, and even in my first report I did say that I believe that the crate design had contributed to the mortality of the cattle."
This evidence needs to be understood in the context of Professor Phillips' further evidence, the relevant aspects of which were as follows. First, he described the transport of live cattle as a "high risk" process. He was of the opinion that the crates used in this shipment complied with the International Air Transport Association (IATA) Live Animals Regulations. He pointed out that Hogan & Willis' recommendations, to which Mr Brightling referred, were not mandatory.
In cross-examination, Professor Phillips was asked about cattle height, and the design of the crates and whether it increased the risk of mortality as follows: "[COUNSEL]: … One of the points that is raised by the conclave in answer to question 1 is this phrase of 'cattle height'. Now, what do you understand that as a reference to? Are you talking about the withers, the height of the withers? WITNESS PHILLIPS: Normally, cattle height will be the height of withers. [COUNSEL]: But that assumes the cattle is standing, correct? WITNESS PHILLIPS: Yes. [COUNSEL]: And given the design of this crate, would you agree that if a heifer was not standing, that is seated, that the risk would be increased? That is, the risk of mortality with [these crates]. WITNESS PHILLIPS: Risk of mortality. … [COUNSEL]: In the lower deck … WITNESS PHILLIPS: Well I don't think so because if there is a risk of mortality that's caused by her lying down, she'll get up. [COUNSEL]: Well, can we just deal with that? The problem with the crate design, is it not, is the ventilation of cattle height which is said to be inadequate at the height of the withers, correct? WITNESS PHILLIPS: It's said to be inadequate at the height of the withers. I was assuming Mr Brightling's estimate of 1000 millimetres to be correct. But my research has shown that it's more likely to be 115 centimetres, which would mean that the cattle could reach the ventilation ports if they strain their neck upwards. [COUNSEL]: If they strain, I see. But what I'm asking you is given that the conclave have agreed that there was inadequate ventilation at cattle height, then there would be an increase in the inadequacy if the particular heifer was lower than the withers. Do you agree with that? In other words, the lower you go on the crate, the worse the ventilation becomes. WITNESS PHILLIPS: That's true."

[24]

Consideration

Article 18(2) provides that the carrier is not liable if and to the extent it proves that the loss resulted from, relevantly "defective packing of that cargo performed by a person other than the carrier or its servants or agents". This requires an identification of what was the relevant packing that resulted in the loss, and who performed that packing, matters in respect of which the carrier bears the onus.
The design of the crates was a relevant factor in determining this question, but it was not the only aspect of the "packing" of the cargo. The "packing of cargo" may, in a given case, involve the packaging of the items and/or the way in which items are placed or packed in the packaging. This can be illustrated by reference to the carriage of a fragile item. The package may not have been sturdy enough; the item may have been placed inside the package without adequate protection to stop it moving during the course of carriage; or the item could have been too large for the package in which it was placed, so as to render the package liable to strain so that it did not provide adequate protection for the item during the course of handling.
Damage to the item could have occurred because of one or any combination of these factors. But they were all part of the "packing" of the cargo. Whether or not a carrier would be liable and the extent to which it would be liable for damage to the item would depend upon which factor or combination of factors was established as having resulted in damage.
There was considerable focus in the evidence and the submissions on the suitability of the design of the crates in which the cattle were loaded. This focus may explain her Honour's finding, at [54], that it had not been established that "the death of the cattle resulted from defective packaging", or it may be that her expression was merely a slippage of language. Indeed, the same expression was occasionally used in argument in this Court. Putting that to one side, SIA Cargo's case was, and was understood by her Honour to be that it was not liable because "of the selection of [these] crates and the placing of nine cattle in each of the crates" which had been undertaken by Principle and not by it: see judgment at [51].
As the experts had agreed that the crates were suitable for transporting cattle by air: see judgment at [53], there was nothing inherently wrong with the packaging used to transport the cattle. Nor did her Honour make any finding, and this Court was not asked to find, that there were inadequate ventilation holes lower down in the crates to allow appropriate air circulation within the crates. Her Honour made no finding, and this Court was not urged to make a finding, that the placement of nine cattle in the crates of itself involved over-packing. Rather, as her Honour found at [44], and as was agreed by the experts, the deaths resulted from inadequate ventilation "at cattle height" in the lower hold.
This then raises the question whether the loss was due to "defective packing of that cargo performed by a person other than the carrier or its servants or agents". There are to two other matters, in addition to those discussed above, that are relevant to that question.
First, there was the evidence of SIA Cargo's expert Mr Brightling that it should have been obvious to those who loaded the planes, that the crates with nine cattle in them should not have been loaded onto the lower deck. It was the carrier's agents who were responsible for the loading.
Secondly, the evidence established that there was a connection between inadequate ventilation at cattle height and these crates containing nine cattle on the lower deck. What the evidence did not establish, however, was the height of the cattle. If Professor Phillips was correct as to the likely height of the cattle, they could have reached upwards for air.
Although there had been agreement amongst the experts in their conclave that the crates were an unsuitable design for their purpose of transporting small cattle in a lower cargo hold, because of inadequate ventilation at cattle height, that agreement had been based upon an assumed height of the cattle of 1000mm. As has been pointed out above, Professor Phillips qualified this assumption in his evidence, indicating that the height of the cattle was more likely to have been 115cm. On that assumption, Professor Phillips said that the cattle could have reached the ventilation ports by straining their necks upwards. Mr Brightling did not disagree with this. As noted above, her Honour wrongly recorded this evidence as indicating a height of 1500mm. Nonetheless, her observation, at [31], that this divergence of opinion "reduces somewhat the weight of the agreement reached by the experts", remains apposite.
In my opinion, in this case, the packing of the cargo comprised the placement of nine head of cattle in crates of a particular design, which were not found to be defective in any way. Given the effect of the finding that the death of the cattle was due to lack of ventilation on the lower deck, a matter which was agreed between the parties, it could not be said that the loss resulted from defective packing performed by someone other than the carrier. Accordingly, I consider that her Honour was correct in finding that SIA Cargo had not established that the loss resulted from defective packing performed by a person other than the carrier or its servants or agents.

[26]

SIA Cargo's submissions

SIA Cargo submitted that her Honour was correct in finding, at [61], that Principle was aware that there was a risk of injury to the cattle if the crates containing nine cattle were placed on the lower deck. As her Honour observed, so much was established by the load plan that Ms King prepared but did not forward either to the freight forwarder or to SIA Cargo. SIA Cargo also submitted that her Honour was correct to find that a reasonable person in the position of Principle would have requested that the crates with nine cattle be placed on the main deck and that its failure to make the request or to inform SIA Cargo that crates with nine cattle in them should not be placed on the lower deck contributed to the loss.
SIA Cargo pointed out that stocking density was the responsibility of the shipper and that this aircraft had been approved by AQIS for carrying stock on the lower deck. SIA Cargo submitted, however, that her Honour erred, at [62], in apparently placing reliance upon the fact that its staff or agents could have counted the number of cattle being loaded in circumstances where, according to Mr Brightling's evidence, SIA Cargo would have been aware of the risk to the cattle in being loaded on the bottom deck. SIA Cargo submitted that this, together with her Honour's reliance on the fact that the final loading of the plane was entirely under the control of SIA Cargo and that it had placed the cattle in the lower hold, led her to find erroneously that SIA Cargo bore the greater degree of responsibility for the death of the cattle.
SIA Cargo further submitted that her Honour erred in her observation, at [63], that it was a matter of speculation as to what would have happened if a request had been made not to place the crates with nine cattle in them on the lower deck. There was uncontradicted evidence of SIA Cargo's normal practice. In this regard, SIA Cargo pointed out that her Honour had misstated Ms King's comment in her email of 21 March 2014 to Mr Niemeyer. Ms King did not say, as recorded by her Honour, "airlines do what they want". Rather, in seeking Mr Niemeyer's advice, Ms King said, "I cant [sic] really say that the airline does what it wants". In any event, her Honour's observation did not accord with the evidence of Mr Muir and Mr Brightling. SIA Cargo submitted, therefore, that based on that evidence, her Honour should have concluded that if the request had been made, it would been acceded to.

[28]

Consideration

Article 20 is predicated upon liability having been established under Art 18(1) and requires the carrier to prove that damage was caused or contributed to by the negligence or other wrongful act or omission of the person claiming compensation.
Her Honour found, at [61], that Principle was aware that there was a risk of injury to the cattle if the crates containing nine cattle were placed on the lower deck. As her Honour observed, "so much was established by the load plan". In my opinion, Principle has not established any error in her Honour's finding that the loss of the cattle was contributed to by Principle's negligence or omission. The finding was clearly supported by the evidence, including, as her Honour remarked at [65], Principle's own load plans and its failure to take any precautionary steps to inform SIA Cargo that the crates containing nine cattle were to be placed on the upper deck.
That raises the question whether her Honour's apportionment of 60 per cent liability to SIA Cargo and 40 per cent to Principle warrants appellate interference. The apportionment of liability involves an evaluative judgment, as was explained in Podrebersek v Australian Iron & Steel Pty Ltd (1985) 59 ALJR 492; [1985] HCA 34. This includes, relevantly for the purposes of this case, a comparison not only of the particular acts of each party but also "of the degree of departure from the standard of care of the reasonable man … and of the relative importance of the acts of the parties in causing the damage" (citations omitted).
In my opinion, of particular relevance in assessing Principle's contribution to the loss was that it was aware of the risk of injury if the crates containing nine cattle were loaded on the lower deck. It is apparent from Ms King's 21 March 2014 email to Mr Niemeyer that she understood this and in fact, questioned how SIA Cargo would know that in the absence of it having a copy of the load plan. Further, as has already been noted, Principle took no steps to inform SIA Cargo of their requirement as to the placement of these crates or to indicate a risk to the cattle should they be placed on the lower deck. I should add that I am of the opinion there was no basis for her Honour to treat as "speculation" Mr Muir's evidence that SIA Cargo would have acceded to a request to place the cattle on the upper deck, in circumstances where this evidence was not challenged in cross-examination. Rather, it should have been accepted that SIA Cargo would probably have done so.
There are two aspects of the evidence that point to SIA Cargo nonetheless bearing some responsibility for the loss. The first is the evidence that, while it was open to Principle to make a request in relation to the placement of the crates on the aircraft, SIA Cargo did not provide to Principle a copy of the Final Pre Advice nor otherwise present to it a means or procedure whereby it could make any such request. The second was Mr Brightling's evidence that it should have been obvious to those loading the aircraft, and his comment that the "aircraft people probably know" that the crates containing nine cattle should not have been put on the lower deck.
In my opinion, Principle should bear the greater proportion of the liability for the loss, given that it had all the information in its possession relating to risk and the means of avoiding the risk of harm to the cattle. It took no steps to inform SIA Cargo where crates containing nine cattle should be placed and thus SIA Cargo had no notice, information or advice as to where the crates should be placed. It is only Mr Brightling's evidence and the omission of SIA Cargo to provide the Final Pre Advice or any other document or means by which Principle could make a request in relation to the loading that points to any responsibility on SIA Cargo's part.
Accordingly, I consider her Honour erred in determining that SIA Cargo should bear the greater proportion of the liability and appellate interference is thereby warranted. In my opinion, the appropriate proportion is 80 per cent to Principle and 20 per cent to SIA Cargo.

[30]

Orders

Although the appellant has only partially succeeded on its appeal and the respondents have failed on their cross-appeal other than in respect of the confined issue of interest, it is appropriate that the respondents pay 70 per cent of the appellant's costs in this Court. However, because the respondents have succeeded in making out a claim against the appellant, the costs order made in the court below should stand.
The orders I propose are:
Grant leave to appeal;
Appeal allowed in part;
Grant leave to cross-appeal;
Cross-appeal allowed in part;
Set aside judgment entered in favour of the respondents in the sum of $43,296 and in its place enter judgment for the respondents, with effect from 30 September 2016, in the amount of $14,432, together with interest in accordance with the Civil Procedure Act 2005 (NSW), ss 100 and 101;
The respondents to the appeal to pay the appellant's costs in this Court.
MEAGHER JA: These reasons assume a familiarity with the facts as found by the primary judge and the relevant evidence given at trial which is summarised in Beazley P's reasons for judgment. There are four questions in the appeal.
The first is whether the deaths of the cattle in the two crates were caused by an "event" that took place during the carriage by air. That is the condition which must be established for the air carrier to be liable under Art 18(1) of the Montreal Convention. The primary judge held that the relevant event was "the lack of ventilation to the cows in the two crates in the lower hold": Judgment [49].
The carrier (SIA Cargo) contends that this did not constitute an "event" within Art 18(1). Relying on what was said by Lord Phillips in In re Deep Vein Thrombosis and Air Travel Group Litigation [2004] QB 234 at [27]-[28], it submits that the primary judge's formulation merely describes an integral feature of the air carriage, namely the normal operation of the aircraft's ventilation system, rather than something which "took place on board the aircraft" during the carriage by air. At [26], Lord Phillips accepted that an activity that continues for a period, such as the circulation of contaminated air, could constitute an event (and also an accident for the purposes of Art 17). However, that was said not to be this case because here there was no finding (or no finding that did not involve error) that the aircraft's ventilation system in the lower deck was not functioning normally.
SIA Cargo submits that the relevant "event" which resulted in the deaths was the loading of nine cattle into each of the two crates. That occurred before the crates were placed onto Unit Load Devices and delivered into the charge of SIA Cargo. Everything that happened thereafter - specifically the stowing of the two ULDs in the aft section of the lower deck - was said to be "just part of the ordinary carriage by air of cargo", and not an event for the purposes of Art 18(1).
The immediate difficulty for this description of the relevant "event" is that it does not identify something which resulted in the death of the cattle. That is because the evidence did not establish that the cattle would have died irrespective of where in the aircraft the ULDs were stowed: Judgment [54]. For this reason, SIA Cargo's formulation of the event that resulted in the loss of the cattle must be rejected.
It is a mischaracterisation of the primary judge's formulation of that event to say that it is only concerned with the operation of the aircraft's ventilation system. Her Honour's formulation refers to a "lack of ventilation to the cows in the two crates" in the aft section of the lower deck. The evidence and primary judge's findings show that there were three conditions or factors which contributed to that "lack of ventilation": (1) the presence of nine cattle in each crate; (2) the stowage of the crates in a part of the lower deck where there was very little distance between the top of the crate and the roof of the lower deck; and (3) the limitations inherent in the normal operation of the aircraft's air ventilation system in that part of the lower deck.
So understood, the primary judge's formulation describes in a short hand way the combination of conditions to which the cattle were subject that resulted in their deaths. The cattle were held in those conditions from some time shortly after the two crates were stowed. The stowing of the crates in that position, which was the event within Art 18(1), occurred after the cattle were in the carrier's charge, and accordingly during the carriage by air. That act exposed them to the "lack of ventilation" which resulted in their deaths.
This formulation of the Art 18(1) event more clearly identifies something which happened during the carriage by air. Although the shipper (Principle) did not plead the happening of an event in those terms, counsel for SIA Cargo accepted in this Court that that description reflects the way in which this first question was argued before the primary judge. Given that it does not involve any allegation of different conduct by the carrier, reliance upon it at this stage of the proceedings does not give rise to any prejudice. It follows that the deaths of the cattle in the two crates were caused by something which happened, or an event that took place, during the carriage by air. Grounds 1, 2, 3 and 7 should be dismissed.
The second question in the appeal is whether SIA Cargo's liability is relieved by virtue of "defective packing" of the cargo within Art 18(2)(b). That provision operates "if and to the extent" the carrier proves that destruction, loss or damage "resulted from" one or more of four enumerated causes. Article 18(2) differs from Warsaw Convention, Art 18(3) (as inserted by Montreal Protocol No 4) in two respects. First, it includes the expression "and to the extent" to make clear that the defence is available even if only part of the destruction, loss or damage is proven to have resulted from one of the enumerated causes. Secondly, it omits the adverb "solely" before "resulted from" to extend the defence to circumstances where there are other concurrent and sufficient causes of the relevant destruction, loss or damage besides the enumerated causes.
The expression "defective packing" used in this Article does not include the stowage of the cargo in the aircraft. In this context, "packing" refers to the way in which the cargo offered for transportation is covered, wrapped or contained in order to provide protection from the normal conditions that the cargo is likely to encounter, assuming that it is carried with reasonable care. Similar provisions relieving the carrier from liability are to be found in international road and marine carriage conventions. That the "packing of the cargo" is distinct from its stowage is apparent from the language of Art 11(2), which provides that any statements in the airway bill relating to the "weight, dimensions and packing of the cargo" are prima facie evidence of the matters stated at the time the cargo is accepted for carriage.
The "defective packing" alleged was the loading of the nine cattle into the two crates. At the same time, it was accepted that the evidence did not establish that the deaths would have occurred had those crates been placed on the main deck. It follows that SIA Cargo did not, and could not, establish that the deaths had arisen from "defective packing" as distinct from, at best, a combination of "defective packing" and "stowage". That is because a necessary condition for the death of the cattle was the stowage of the two crates in the aft section of the lower deck. That stowage did not constitute "defective packing", and was performed by the carrier or its servants or agents. It follows that this question also must be answered in the negative and ground 6 dismissed.
The third question is whether the trial judge erred in exonerating SIA Cargo from 40% of its liability to Principle. SIA Cargo submits that it should have been wholly exonerated and Principle by its cross-appeal submits that SIA Cargo should not have been exonerated at all. The relevant provision of the Montreal Convention is Art 20, which directs attention to the extent to which the damage suffered by Principle was caused or contributed to by its "negligence or other wrongful act or omission". The term "negligence" in this phrase describes a failure to comply with a standard of conduct, rather than an actionable breach of a legal duty.
The necessary enquiry is refined by Civil Aviation (Carriers' Liability) Act 1959 (Cth), s 9H, which regulates the damages that are recoverable where a carrier proves that the destruction or loss of cargo was caused or contributed to by the negligence of the consignor. As the damages that would have been recoverable by Principle had there been no negligence on its part were below the limit on the amount of damages fixed by or in accordance with the Montreal Convention, they were to be reduced "to the extent the Court thinks just and equitable having regard to the share of … the consignor in the responsibility for the damage": s 9H(3).
The primary judge assessed the 40% exoneration as follows. On the one hand, Principle's failure to inform the carrier that crates containing nine cattle should not be placed on the lower deck contributed to their deaths: Judgment [65]. Moreover, Principle was aware of the risk of injury if those crates were stowed on the lower deck and a reasonable shipper exercising care would have made such a request: Judgment [61]. On the other hand, SIA Cargo could have observed the number of cows in each crate as the crates were being placed in the hold of the cargo and should have been aware of the risk of stowing the crates on the lower deck. And it was a matter for "speculation" as to what would have happened if Principle had requested that the crates be placed on the main deck: Judgment [62]-[63]. In those circumstances, her Honour concluded at Judgment [66]: The final loading of the crates on to the plane was entirely under the control of [SIA Cargo]. The evidence suggests that those involved had considerable experience in the export of live animals. It is clear that [SIA Cargo] could have made a notation of the number of cattle in each crate and could have counted the number of cattle in each crate as they were loaded on to the aeroplane. [SIA Cargo] must have been aware that the export of live cattle is a high risk activity, but made no attempt to request guidance from [Principle] with respect to the loading of the plane.
Against that conclusion, SIA Cargo submits that it was not the role of its staff to count cattle in crates so as to decide where they should be loaded. To the contrary, the exporter was responsible for devising a loading plan which described the carriage of the cattle on the aircraft taking account of space, crate and ventilation requirements. Consistently with that being the case, the evidence indicated that it was the exporter or its freight forwarding agent who advised the carrier which crates were to be carried in the lower deck. In support of its cross-appeal, Principle challenges her Honour's finding that its failure to provide a load plan providing for the cattle to be carried on the upper deck contributed to their deaths.
In my view, SIA Cargo's argument should be upheld and that of Principle rejected. The Export Control (Animals) Order 2004 (Cth), s 2.52(2) (made under Export Control (Orders) Regulations 1982 (Cth), r 3, in turn made under Export Control Act 1982 (Cth)) provides that any application for permission to export cattle must include "travel and loading plans" which describe how the livestock will be loaded and carried, including "space or crate requirements" and "ventilation". The officer of Principle responsible for making that application and overseeing the carriage, Ms King, prepared such a load plan, which provided for all of the crates containing nine cattle to be carried on the upper deck. She did not, however, provide a copy of that load plan either to SIA Cargo or to the freight forwarder retained to assist in arranging the carriage, Mr Niemeyer. The evidence of Mr Muir, the Victorian cargo manager of SIA Cargo, was that, had there been a request for particular crates to be located on the upper deck, that request would have been forwarded to Singapore. He described requests of that kind as having been met "on numerous occasions". When the cattle were loaded into the crates, they were weighed and a deadload weight statement was prepared by SIA Cargo. That statement was then used to generate the carrier's Loading Instruction Report, which indicated where the various crates were to be loaded within the main or lower deck of the aircraft.
The evidence of Mr Brightling, a vet with experience in livestock exports, and Mr Maddern, an air carriage expert, was that there was no reason why such a request could not have been accommodated in relation to this carriage, given the other cargo and the aircraft weight distribution and balance requirements. That was because crates of the same size on the upper deck containing five or six animals could have been swapped for the crates with nine animals in them in the lower deck.
Mr Muir's evidence as to requests being made by shippers for crates or pallets to be located in specific locations was confirmed by an email exchange after the relevant consignment between Ms King and Mr Niemeyer, who did not give evidence but who was also chairman of a body of shippers and brokers that looked after the export of livestock. An officer of the Department had inquired about the loading of the aircraft and sought an explanation as to why the actual loading of the aircraft was not in accordance with the load plans supplied to the Department. In that context, there followed an exchange between Ms King and Mr Niemeyer, which included the following: Ms King: What would I say to below, I can't really say that the airline does what it likes or I relied on my freight forwarder to load as per my plan, considering you didn't see my plan and neither did the airline. Any suggestions? Mr Niemeyer: The exporter/agent advises the carrier which are the crates for the lower holds.
Thus the evidence indicated that, as between the shipper and the carrier, the former was responsible for devising a load plan which complied with statutory and other requirements. Having done so, and in order to ensure that the livestock was carried in accordance with the approved load plan, the shipper had to provide the carrier with specific instructions in the event that particular crates were to be carried in one hold rather than another. SIA Cargo was justified in assuming that the load plan did not require that any particular crates be stowed in the upper or lower deck. The shipper gave no such instructions. Had it done so, contrary to the primary judge's finding, it was highly likely that the relevant crates would have been carried on the main deck.
In these circumstances, the shipper was primarily responsible for the deaths of the cattle. Accepting that SIA Cargo could have checked the correctness of its assumption by requesting a copy of the approved loading plan before the preparation of its Loading Instruction Report, I consider that SIA Cargo should be exonerated from 80% of its liability to Principle. Appeal ground 5 is upheld and cross-appeal ground 2 dismissed.
The fourth and final issue is whether the primary judge erred in not awarding Principle interest on the judgment sum in its favour. I agree with Beazley P that such interest should have been awarded. Cross-appeal ground 3 should be allowed.
In the result, I agree with the orders proposed by Beazley P.
PAYNE JA: I agree with the orders proposed by Beazley P for the reasons her Honour gives. I also agree with the additional reasons of Meagher JA.

Parties

Applicant/Plaintiff:

Singapore Airlines Cargo Pte Limited

Respondent/Defendant:

Principle International Pty Ltd

Legislation Cited (7)

Civil Procedure Act 2005(NSW)

Australian Meat and Live-stock Industry Act 1997(Cth)

Civil Aviation (Carriers' Liability) Act 1959(Cth)

Export Control (Orders) Regulations 1982(Cth)

Export Control Act 1982(Cth)

Supreme Court Act 1970(NSW)

Uniform Civil Procedure Rules 2005(NSW)

Cases Cited (17)

Beazley P (Payne JA agreeing) (1) In determining whether the carrier is liable under Art 18(1), the inquiry is to identify, as Art 18(1) by its terms expressly specifies, whether there was an event or happening which caused the damage and which took place during the carriage by air. The inquiry is not directed to ascertaining whether something occurred that was unusual or unexpected, that is, something that was not part of the usual course of carriage. [53], [68] Povey v Qantas Airways Ltd (2005) 223 CLR 189; [2005] HCA 33; Olympic Airways v Husain 540 US 644 (2004); In re Deep Vein Thrombosis and Air Travel Litigation [2003] EWCA Civ 1005; [2004] QB 234; Winchester Fruit Ltd v American Airlines Inc [2002] 2 Lloyd's Rep 265, considered (2) There was an "event" within the meaning of Art 18(1) in respect of which SIA Cargo was liable for the damage sustained, being the placement of the creates, each containing nine cattle, on the lower deck given the conditions on the lower deck. [69]-[70]

Meagher JA (Payne JA agreeing) (3) It is necessary, in identifying the relevant "event" for the purposes of Art 18(1), to identify something which resulted in the death of the cattle. [125] In re Deep Vein Thrombosis and Air Travel Litigation [2003] EWCA Civ 1005; [2004] QB 234, considered (4) The "event" that exposed the cattle to the lack of ventilation which resulted in their deaths was the stowage of the crates in the lower deck. That occurred after the cattle were in the carrier's charge, and accordingly during the carriage by air. [126]-[128]

(1985) 59 ALJR 492

(2005) 223 CLR 189

Cited By (2)

Salih v Emirates

Wattie v Industrial Relations Secretary on behalf of the Secretary of the Department of Justice