Assessing Damages in cases arising under the Montreal Convention 1999 in Australia – which domestic legislation applies?
On 12 December 2023, Justice Rothman of the New South Wales Supreme Court issued a judgment which held Part 2 of the Civil Liability Act 2002 (NSW) (CLA) applied to the determination of the quantum of damages recoverable by the Plaintiffs, who alleged they were injured during turbulence on board an Air Canada flight.
The claim arises under the Montreal Convention 1999 and this decision is the latest in a line of cases considering the issue of whether domestic legislation applies to the determination of the quantum of damages recoverable in these cases.
Civil Liability Act 2002 – NSW
Part 2 of the Civil Liability Act applies ‘to and in respect of personal injury damages’ regardless of whether the claim is ‘brought in tort, in contract, under statute or otherwise’ (s11A). Personal injury damages are defined to mean ‘damages that relate to the death of or injury to a person’ (s26A).
In Grueff v Virgin Australia [2021] FCA 501, Justice Griffiths had considered the application of the Civil Liability Act 2002 (NSW) to the determination of damages recoverable by a passenger who alleged they consumed ‘tainted’ water on board a flight. Griffiths J held that as the Montreal Convention, as given the force of law by the Civil Aviation (Carriers’ Liability) Act 1959, did not provide ‘adequate remedies’ for the determination of the heads and assessment of damages, and the Civil Liability Act 2002 was not inconsistent with the Civil Aviation (Carriers’ Liability) Act 1959. In those circumstances, the effect of section 80 of the Judiciary Act 1903 was that the Civil Liability Act 2002 applied to the assessment of damages.
A different approach was taken by the Federal Court in Emirates v Bradshaw [2021] FCA 1407. In that case, Justice Stewart departed from the reasoning in Grueff and found that there was no “gap” in the Montreal Convention 1999 that needed to be supplemented by the Civil Liability Act 2002 or the common law.
In the recent decision in Evans v Air Canada [2023] NSWSC 1535 the NSW Supreme Court declined to follow the authority set in Bradshaw. The Court was persuaded by the reasoning of Justice Scalia of the United States Supreme Court in Zicherman v Korean Air Lines Co, where the US Court found that questions of compensation are to be answered using domestic laws. In considering that decision, Justice Rothman paid mind to the goal of interpreting treaties uniformly by contracting states. Justice Rothman found that there was a gap in the Montreal Convention 1999 with respect to the compensation available for bodily injury, and that that gap required the courts to utilise domestic law. The Court went on to find that although the Montreal Convention imposed unlimited liability in some circumstances, this was not inconsistent with the limits imposed on the quantification of damages contained in the Civil Liability Act 2002. Finally, the Court addressed the question of fault, noting that the reference to “fault” in the long title of the Act did not have the effect that the Act only applied to claims where fault was alleged.
Wrongs Act 1958 – Victoria
In Victoria, the Wrongs Act 1958 applies to “an award of personal injury damages, except an award that is excluded by subsection (2)”. Subsection (2) excludes fourteen different categories of awards of damages, including an award where the fault concerned is an intentional act and award to which specific legislation applies, such as the Workers Compensation Act 1958.
In Di Falco v Emirates [2018] VSC 472, the Victorian Supreme Court considered the application of the Wrongs Act 1958 to an injury suffered as a result of a fall while travelling on an Emirates flight from Melbourne to Dubai. Emirates’ principal defence was that damages for non-economic loss were only recoverable if the plaintiff suffered ‘significant injury’ pursuant to section 28LE of the Wrongs Act 1958 and since the plaintiff did not suffer a ‘significant injury’, no damages were recoverable.
The Victorian Supreme Court found that the restriction in section 28LE which the airline sought to rely on was only applicable to “any proceeding… in respect of an injury to a person caused by the fault of another person…”. The Court found that the Montreal Convention (and by extension the Carrier’s Liability Act) is defined by its strict liability – it does not require any fault on the part of the defendant. On that basis, there was no allegation of any fault on the part of Emirates and as such, the Wrongs Act 1958 did not apply.
What does this mean?
In NSW, while there remains some inconsistency in the decisions, the NSW Court of Appeal’s decision in Air Canada v Evans tends to support the position that the Civil Liability Act 2002 will apply to the quantification of damages arising out of claims under the Montreal Convention. This means damages for non-economic loss will not be recoverable unless the threshold in section 16 of the Civil Liability Act 2002 is met.
In Victoria, the present position is that where there is no allegation of fault against the airline, the Wrongs Act 1958 will not apply to the quantification of damages.
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