Limiting Liability under Article 21(2): High Court Sheds Light on Interaction between Air Tariffs and Defences under the Montreal Convention
The High Court has confirmed that a term commonly used in international airlines’ conditions of carriage is not a waiver of the right to avoid unlimited liability for injury to passengers by proving, pursuant to Article 21(2) of the Montreal Convention, that the injury suffered by a passenger was not due to the negligence or any other wrongful act or omission of the carrier, so that the carrier would therefore not be liable for any damages exceeding 113,100 Special Drawing Rights (~AUD240,00 at present exchange rates).
The litigation arose out of a claim for damages brought by two passengers under Article 17 of the Montreal Convention against Air Canada in the NSW Supreme Court. The passengers had travelled from Vancouver to Sydney on a flight operated by Air Canada and allegedly suffered injury as a result of turbulence during the flight. Air Canada invoked the defence under Article 21(2). Article 25 relevantly provides that “[a] carrier may stipulate that the contract of carriage shall be subject … to no limits of liability whatsoever”. The passengers relied on a provision in Air Canada’s International Tariff which stated that: “where the [Convention] applies … [t]here are no financial limits in respect of death or bodily injury” to contend that Air Canada had waived the limit under Article 21(2), and could not rely on the “no negligence” defence.
The primary judge held that the clear and unambiguous language of the Tariff provision removed any doubt that Air Canada had, pursuant to Article 25, waived its right to a defence under Article 21(2). The NSW Court of Appeal allowed an appeal from that decision.
The High Court dismissed an appeal from the decision of the NSW Court of Appeal, and held that although a carrier could, pursuant to Article 25, waive the defence under Article 21(2), Air Canada had not in fact done so. For the purposes of interpreting the Tariff provision, the High Court emphasised that principal regard must be had to its context and purpose.
Although the passengers’ claim was technically brought under the Civil Aviation (Carriers’ Liability) Act 1959 (Cth) as a matter of domestic law, the relevant provisions of the Convention, which are given force by the Act, have a meaning in public international law which has not been altered by the Act. The Court considered the principles of construction of treaties, and the use of the travaux préparatoires to the Convention. It reviewed the drafting history of Article 21 and observed that the repeated references to “unlimited liability” in the travaux préparatoires are an apt description of the strict liability, subject to the defences, that arises from Article 17.
The Court held that, having regard to its context and purpose, the Tariff provision only describes the effect of Articles 17 and 21 of the Convention, rather than stipulating a higher limit of liability for the purposes of Article 25 and a waiving of the defence under Article 21(2).
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