Barry, Christopher --- "International aviation litigation: An overview" [2021] PrecedentAULA 18; (2021) 163 Precedent 18

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INTERNATIONAL AVIATION LITIGATION

AN OVERVIEW

By Christopher T Barry QC

This article will discuss the distinguishing features of the Montreal Convention as adopted in Australia, including its exclusivity; its limitation period; the manner in which courts are given jurisdiction to make awards of damages; and the limitations imposed upon awards of damages.

THE MONTREAL CONVENTION

The growth of the aviation industry led to the first attempt to unify the rules relating to liability for injury to passengers during international carriage by air with the signing of the Warsaw Convention on 12 October 1929. The Convention was adhered to by 151 state parties and came into effect on 13 February 1933.^[1] There followed a plethora of conventions and intercarrier agreements which amended the Warsaw Convention.^[2] In addition, there were different private contractual arrangements between airlines and passengers, and state parties had varying domestic laws.

To consolidate, modernise and bring uniformity to the system of compensation for injury to passengers during international transportation by air, a conference was held in Montreal in November 1999. The ensuing negotiations led to the adoption of the Convention for the Unification of Certain Rules for International Carriage by Air (the Montreal Convention).^[3] Since its adoption, over 100 nation states have incorporated the Montreal Convention into their domestic laws. In Australia, this was done by inserting s9B into the Civil Aviation (Carriers Liability) Act 1959 (Cth) (CACL), which gives the Montreal Convention the force of law ‘in relation to any carriage by air in which the 1999 Montreal Convention applies, irrespective of the nationality of the aircraft performing that carriage’.

CIVIL AVIATION (CARRIERS LIABILITY) ACT 1959

Schedule 1A of the CACL sets out all of the relevant articles of the Montreal Convention. Section 41E(1) of the CACL provides that ‘a person (other than a person who is, or is an agent of, the Crown in any capacity) must not engage in, or propose to engage in, a passenger-carrying operation, unless an acceptable contract of insurance in relation to the operation is in force’.

The Montreal Convention as adopted in Australia acts as a code requiring compulsory insurance for liability for damages for the death or injury to any passenger who entered into a contract of carriage for air transportation to, or from, one of the contracting state parties.

The exclusivity principle

Section 9D of the CACL relevantly provides that:

‘The liability under the Convention is in substitution for any civil liability of the carrier under any other law in respect of the death of the passenger or in respect of the injury that has resulted in the death of the passenger’.

Further, s9E provides that:

‘The liability of a carrier under the Convention, in respect of personal injury suffered by a passenger that has not resulted in the death of the passenger, is in substitution for any civil liability of the carrier under any other law in respect of the injury’.

Thus the only available remedy is that prescribed by the Montreal Convention.^[4] In circumstances involving the death or injury of a passenger, domestic law has no application and no claim in tort or contract can be made. Third parties, such as the family of the deceased passenger, also have no claim in tort for nervous shock.^[5]

Other jurisdictions, including the US, have also adopted this ‘exclusivity principle’.^[6]

The limitation provision

One effect of the Montreal Convention’s exclusivity principle is that the provisions of domestic limitation acts also do not operate.

The limitation period under the Montreal Convention is two years. If proceedings are not instituted within that timeframe, the right to damages is extinguished.^[7]

This operates as a strict time bar, subject to one exception. There have been cases where legal practitioners who are unfamiliar with this area of law have issued proceedings in negligence, and the carrier has waited two years before seeking to strike out the claim using the limitation period and the exclusivity principle.

The High Court has held that provided the facts pleaded in the ‘negligence’ action include facts that, if proven, would satisfy the requirements of the Montreal Convention, the pleadings may be amended under the procedural rules of the court in which the proceedings are brought to bring the claim under the Montreal Convention or its intrastate equivalent.^[8]

Jurisdiction of courts

Proceedings under the CACL may be brought in the Federal Court or in a state court vested with federal jurisdiction under s39(2) of the Judiciary Act 1903 (Cth). However, because of the exclusivity principle, proceedings can only be brought in the territory of one of the state parties if the conditions imposed by Article 33 of the Montreal Convention are met. There are five bases upon which jurisdiction can be conferred:

1. The domicile of the carrier;

2. The carrier’s principal place of business;

3. Where the carrier has a place of business where the contract of carriage was made;

4. At the place of destination under the contract of carriage; or

5. Where the injured or deceased passenger had his or her principal and permanent residence.^[9]

The ‘place of destination under the contract’ for a return ticket is the place from which the journey began, meaning that death or injury on the outward journey would not, by itself, be grounds for jurisdiction. One of the other five bases for jurisdiction would also have to be established or it would need to be proven that the claim could not be brought in the territory of that contracting party.^[10]

Limitations on damages

There is a two-tier system for the award of damages under the Montreal Convention. Article 21 provides:

‘(1) For damages arising under Part 1 of Article 17 not exceeding 100,000 Special Drawing Rights for each passenger, the carrier shall not be able to exclude or limit its liability.
(2) The carrier shall not be liable for damages arising under paragraph 1 of Article 17 to the extent that they exceed for each passenger 100,000 Special Drawing Rights if the carrier proves that
(a) such damage was not due to the negligence or other wrongful act or omission of the carrier or its servants or agents; or
(b) such damage was solely due to the negligence or other wrongful act or omission of a third party.’

From time to time, the Reserve Bank of Australia publishes the International Monetary Fund’s Special Drawing Right (SDR).^[11] The limit of damages under the first tier of Article 21 is calculated by multiplying the SDR. At present, the limit is approximately $212,000.

It is worth noting that the cap on damages is lifted where fault is an issue but the onus of proving the absence of fault is on the carrier.

An example of the operation of Article 21 was in the shooting down of MH17 over Ukraine in 2014. The family of the deceased passengers argued for the cap to be lifted because MH17 should not have been flying over a war zone. Malaysian Airlines contended that it complied with all air traffic rules, and argued that it was the wrongful act of a third party firing a Russian-made missile at MH17 that caused the destruction of the aircraft, and therefore damages were limited to the cap imposed under the first tier. Almost all of the MH17 cases have since been settled.

DEATH OR INJURY OF PASSENGERS

The provision that has generated the most litigation under the Montreal Convention is the provision that imposes liability.

Article 17 of the Montreal Convention relevantly provides:

‘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 the operations of embarking or disembarking.’ [emphasis added]

Each of the emphasised words has been the subject of litigation (mostly in the US) and will be addressed individually.

Accident

In Air France v. Saks,^[12] the US Supreme Court held that an accident is an event or occurrence that is unexpected, unusual and external to the passenger.

The High Court of Australia in Povey v Qantas Airlines Ltd^[13] took the same approach. In that case, the plaintiff suffered deep vein thrombosis (DVT) on a long-haul flight between Sydney and London. The High Court held that the statement of claim did not disclose a cause of action because the DVT was not an ‘accident’. Instead, it was a physiological change occurring within the body of the plaintiff.

The following scenarios have also not met the definition of an ‘accident’:

• Experiencing a heart attack on an aircraft.^[14]

• Tripping over the shoes or the bag of another passenger left in the aisle.^[15]

• An injury caused by another passenger who falls when trying to get to their seat.^[16] Except if the passenger falls because they have been given alcohol when already intoxicated.^[17]

• An injury caused by a passenger spilling hot tea on themselves. Unless the circumstance involves the hot tea sliding off a food tray during turbulence, which would then give rise to tier one damages.^[18]

• Choking on food, except if it was caused by the ingestion of a fish bone that had been left in the meal.^[19]

Some of these decisions appear difficult to reconcile but the guiding principle is that established in Air France v. Saks; namely, that the passenger’s own reaction to an unusual or unexpected event is not within the Montreal Convention unless the relevant ‘accident’ bears some relation to the operation of the aircraft, for example, turbulence or meal preparation.

Embarking or disembarking

Article 17 of the Montreal Convention does not limit an ‘accident’ to events occurring on board an aircraft and includes those that take place ‘in the course of any of the operations of embarking or disembarking’. In the US case of Day v. Transworld Airlines,^[20] it was held that embarking occurs when the ticket is handed over or screened at the departure gate. An accident that occurs while a passenger is in line to board the plane qualifies,^[21] but only if the line is under the direction or control of the carrier’s employees who are organising the line for the purpose of boarding the plane. In contrast, an accident while waiting in the departure lounge will not qualify,^[22] and nor will death caused by a terrorist attack in the terminal while a passenger is waiting to board.^[23] The operation of disembarking is complete once the passenger is inside the terminal building. Numerous cases of passengers being injured when collecting their luggage have failed.^[24]

Bodily injury

The Montreal Convention does not regard mental trauma or nervous shock caused by events such as an emergency landing, an aborted take-off, a runway overshoot or even a crash landing as ‘damage’ unless physical damage has also occurred.^[25] There are several reasons for this, including:

• some state parties have cultural beliefs that do not recognise mental illness;

• there is a belief that it is difficult to establish or refute a claim for pure mental harm; and

• there is a presumption that many people find flying inherently stressful.

For these and perhaps other reasons, no compensation is recoverable for pure mental harm.^[26]

There have been attempts to persuade courts that ‘pure mental harm’ is in fact a bodily injury because the process involves a disturbance of the chemical balance and neurological pathways within the brain, but such claims have been unsuccessful.^[27]

Damage

Article 17 of the Montreal Convention refers to ‘damage sustained’, but does not identify what kind of ‘damage’ can be the subject of compensation or how it is to be calculated. The Montreal Convention leaves the identification of recoverable heads of damage and their quantification up to the domestic law of the jurisdiction in which the case is being heard. Different countries have different heads of damage. An obvious example is where a ‘solatium’ is paid for the death of a relative where no more than a normal grief reaction is proven. A ‘solatium’ is not recoverable in several Australian state courts.^[28] The test that has been applied in determining if the type of damage falls under the Montreal Convention has been described by the US Supreme Court as being any ‘legally cognisable harm’.^[29]

SUMMARY

Several distinct questions must be asked in a case involving injury during international air transportation:

• Was there a contract of carriage for the purposes of the Montreal Convention?

• How did the injury occur?

• Was it an ‘accident’?

• Did the injury arise out of the aircraft’s operations?

• Did the injury occur during the course of ‘embarking’ or ‘disembarking’?

• Did it involve ‘bodily injury’?

• Does the claim fit within one of the five heads of jurisdiction in Article 33 of the Montreal Convention?

• Are the damages likely to exceed the first tier and if so, can the carrier prove that the damage was not caused by the negligence or other wrongful conduct of the carrier, or was caused solely due to the negligence of a third party?

• Has more than two years expired since the event giving rise to the claim?

• What heads of damages are recoverable under the domestic law of the country in which proceedings will commence?

If each of these questions can be answered in the affirmative then a claim for damages can be brought under the Montreal Convention.

Christopher T Barry QC is a barrister at Fifth Floor Selborne Chambers. EMAIL [e-mail].

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^[1] Convention for the Unification of Certain Rules Relating to International Transportation by Air, opened for signature 12 October 1929, 49 Stat. 3000, TS No. 876[1933] LNTSer 29; , 137 LNTS 11 (entered into force 13 February 1933).

^[2] Protocol to Amend the Convention for the Unification of Certain Rules Relating to International Carriage by Air, opened for signature 28 September 1955 (entered into force 1 August 1963) (the Hague Protocol); Convention, Supplementary to the Warsaw Convention, for the Unification of Certain Rules Relating to International Carriage by Air Performed by a Person Other than the Contracting Carrier, opened for signature 18 September 1961, UNTS 7305 (entered into force 1 May 1964) (the Guadalajara Convention); Protocol to Amend the Convention for the Unification of Certain Rules Relating to International Carriage by Air Signed at Warsaw on October 12, 1929, as Amended by the Protocol Done at The Hague on September 28, 1955, opened for signature 8 March 1971 (The Guatemala City Protocol); Additional Protocol No. 1 to Amend the Convention for the Unification of Certain Rules Relating to International Carriage by Air, Signed at Warsaw on 12 October 1929, opened for signature 25 September 1975 (entered into force 15 February 1996) (Montreal Protocol No. 1); Additional Protocol No. 2 to Amend the Convention for the Unification of Certain Rules Relating to International Carriage by Air, Signed at Warsaw on 12 October 1929, opened for signature 25 September 1975 (entered into force 15 February 1996) (Montreal Protocol No. 2); Additional Protocol No. 3 to Amend the Convention for the Unification of Certain Rules Relating to International Carriage by Air, Signed at Warsaw on 12 October 1929 as Amended by the Protocols Done at the Hague on 28 September 1955 and at Guatemala City on 8 March 1971, opened for signature 25 September 1975 (Montreal Protocol No. 3); Montreal Protocol No. 4 to Amend the Convention for the Unification of Certain Rules Relating to International Carriage by Air Signed at Warsaw on 12 October 1929 as Amended by the Protocol Done at the Hague on 28 September 1955, opened for signature 25 September 1975 (entered into force 14 June 1998) (Montreal Protocol No. 4).

^[3] Convention for the Unification of Certain Rules for International Carriage by Air, opened for signature 28 May 1999, UNTS 2242 (entered into force 4 November 2003) (the Montreal Convention), art 35(1).

^[4] Agtrack (NT) Pty Ltd v Hatfield [2005] HCA 38.

^[5] Parkes Shire Council v South West Helicopters Pty Ltd [2019] HCA 14.

^[6] El Al Israel Airlines Ltd v. Tseng (1999) 525 US 155.

^[7] The Montreal Convention, above note 3, art 35(1).

^[8] Air Link Pty Ltd v Paterson (2005) 223 CLR 283.

^[9] The Montreal Convention, above note 3, art 30(1)–(2).

^[10] Gulf Air Co v Fattouh [2008] NSWCA 225.

^[11] International Monetary Fund, SDR Valuation (12 February 2021) <https://www.imf.org/external/np/fin/data/rms_sdrv.aspx>.

^[12] [1985] USSC 43; (1985) 470 US 392.

^[13] [2005] HCA 33.

^[14] See Tandon v. United Airlines Inc 926F Supp. 366 (United States District Court Reports, 1st Series).

^[15] Sethy v. Malev Hungarian Airlines (2001) 13 Fed Appx. 18 (United States Court of Appeals, Appendix Reports).

^[16] Ramos v. Transmeridian Airlines Inc (2005) 385 Fed Supp 2d 137 (United States District Court Reports, 2nd Series).

^[17] Oliver v. Scandinavian Airlines System (1983) 17 Avi 1 8,283 (CCH Aviation Law Reports (USA)).

^[18] Robinson v. Virgin Atlantic Airlines Inc (2006) 31 Avi 17,359 (CCH Aviation Law Reports (USA)).

^[19] Rhodes v. American Airlines Inc (1996) WL 1088897 (West Law Reports).

^[20] [1975] USCA2 816; (1975) 528 F 2d 31 (United States Court of Appeals Reports, 2nd Series).

^[21] Evangelinos v. Transword Airlines (1977) 550 Fed.2d 152 (United States Court of Appeals Reports, 2nd Series).

^[22] Rabinowitz v. Scandinavian Airlines (1990) 741 Fed. Supp 441 (United States Court of Appeals Reports, 2nd Series).

^[23] Buonocore v. Transworld Airlines Inc [1990] USCA2 258; (1990) 900 F.2d 8 (United States Court of Appeals Reports, 2nd Series).

^[24] MacDonald v. Air Canada (1971) 439F.2d 1402 (United States Court of Appeals Reports, 2nd Series).

^[25] Ehrlich v. American Airlines (2004) 360F.3d 366 (United States Court of Appeals Reports, 3rd Series).

^[26] Eastern Airlines Inc v. Floyd (1991) US 530 (United States Supreme Court).

^[27] Weaver v. Delta Airlines Inc (1999) 56 F. Supp 2d 1190 (United States Court of Appeals Reports, 2nd Series); see also King v. Bristow Helicopters [2002] UKPC 43; [2002] 2 AC 628; Pell Air v Casey [2017] NSWCA 32.

^[28] McKenna v. Avior Pty Ltd [1981] WAR 255.

^[29] Zicherman v. Korean Airlines Ltd [1996] USSC 6; (1996) 516 US 217 (United States Supreme Court).