Agtrack (NT) Pty Ltd v Hatfield

[2004] HCATrans 205

[2004] HCATrans 205

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Melbourne  No M55 of 2003

B e t w e e n -

AGTRACK (NT) PTY LIMITED (TRADING AS SPRING AIR)

Applicant

and

ANN CHRISTINE HATFIELD

Respondent

Application for special leave to appeal

GLEESON CJ
HAYNE J

TRANSCRIPT OF PROCEEDINGS

AT MELBOURNE ON FRIDAY, 18 JUNE 2004, AT 9.32 AM

Copyright in the High Court of Australia

MR R.F. MARGO, SC:   May it please your Honours, I appear with MR R.M. PETERS for the applicant.  (instructed by Norton White) 

MR A.G. UREN, QC:   If the Court pleases, I appear with my learned friend, MR P.F. O’DWYER, SC, for the respondent.  (instructed by Slater & Gordon) 

GLEESON CJ:   Yes, Mr Margo.

MR MARGO:   Your Honour, there are very few facts in this matter and none in dispute.  If the special leave questions have any merit, this is a convenient and appropriate vehicle.  The logic ‑ ‑ ‑

GLEESON CJ:   Mr Margo, what exactly was the amendment to the pleadings that was said to be required, apart from a reference to the legislation?

MR MARGO:   To plead the holding of an air operator’s certificate and to ‑ ‑ ‑

HAYNE J:   Why was that not implicit in what was already pleaded?

MR MARGO:   Well, your Honours have seen that the court below, Justice Ormiston, on one view, thought it was, but their Honours eventually followed Air Link (No 1) in the New South Wales Court of Appeal and accepted that an action had not been brought within the meaning of section 34 of the Act.

HAYNE J:   Do you accept that all of the facts necessary to maintain a claim under the Carriers’ Liability Act were pleaded?

MR MARGO:   Not in the terms required by the Convention, your Honour.  The fact that amendment was sought and granted shows that the matter had not been pleaded as required, we submit, by section 34 of the Act.

HAYNE J:   Of course, a possible answer to the application might have been that if your side suggested that there was a deficiency of pleading, a rather coy pleading that your side had put on was likewise deficient, and that if leave should be refused to the plaintiff, so too should leave be refused to the defendant.

MR MARGO:   With respect, your Honour, the defence did plead that the action was not maintainable ‑ ‑ ‑

HAYNE J:   Yes, but not a word of the Act.

MR MARGO:   Your Honour, it also pleaded the facts would show that the Act applied, and no particulars were sought at all on that matter.

GLEESON CJ:   Where do we find the pleadings?

MR MARGO:   They are attached to the judgment of the primary judge, which is at tab ‑ ‑ ‑

GLEESON CJ:   Tab 47, is it?

MR MARGO:   Tab A in the – the proposed amendment ‑ ‑ ‑

GLEESON CJ:   Page 42, I think.

MR MARGO:   Page 46, your Honour. 

GLEESON CJ:   But 42 is the original statement of claim.

MR MARGO:   Page 42 is the original, but if your Honours go to page 46 you can see the amendments proposed.  Of course, a lot had to be deleted from the statement of claim.  We submit, with respect, your Honours, that the New South Wales Court of Appeal was correct in its unanimous view that if a statement of claim on its face pleads negligence, breach of contract, and does not contain what Justice Ormiston referred to as jurisdictional facts, but which are nonetheless matters essentially required to be pleaded, it is not simply a matter of not identifying the statute but it does not satisfy the requirements of the Convention.  His Honour Justice Ormiston sought to distinguish between jurisdictional facts which had not been pleaded, but, as Justice Ipp pointed out and as the New South Wales Court of Appeal held, those are nonetheless matters essential to be pleaded.

GLEESON CJ:   Essential for the purpose of avoiding surprise to the other party?

MR MARGO:   Essential in order to bring an action within the meaning of section 34 of the Convention, your Honour.  That is what the New South Wales ‑ ‑ ‑

HAYNE J:   The Convention or the Act?

MR MARGO:   The Convention as applied by the Act.  Your Honours, the English Court of Appeal in Western Digital was faced with a case where the amendments sought – the parties, for the relevant purpose of the amendment application, the same plaintiffs, British Airways as the actual carrier, same goods, same flights, same consignments, same damage.  They pleaded all that within time.  It was a claim under the Convention, had been pleaded within time, and the amendment that was sought was simply to change the air waybill of reference, or to add a reference to another air waybill, the house air waybill, instead of the master waybill.  The English Court of Appeal held that that could not be done under the Convention. 

GLEESON CJ:   Where do we find that in your references?

MR MARGO:   At page 142 of the judgment of the learned President in the New South Wales Court of Appeal, which is page 142 in our bundle of authorities, tab D.

GLEESON CJ:   Tab?

MR MARGO:   Page 141, I beg your pardon.  The learned President quotes from the relevant portion of the judgment in the Court of Appeal.  The amendment was refused at first instance and again in the Court of Appeal.  The view the New South Wales Court of Appeal took was that it would not follow the English Court of Appeal, but preferred to follow Proctor v Jetway Aviation, its own decision on its own rules, decided ‑ ‑ ‑

HAYNE J:   This seems to be an argument that is founded upon an unstated premise of identity of the pleading problem that is presented.  Take, for example, the passage you have just referred us to.  There the problem was that what was sought to be pleaded was a different set of intervening contractual arrangements, is that right?

MR MARGO:   All the facts, the physical facts, your Honour, were identical.  What was sought to be done was to add an additional contract, a different waiver, but all the facts were known to parties on both sides, and both the claims in that case were under the Convention.  The one brought within two years was under the Convention, the amended claim would have been under the Convention, the actual carrier, the parties, the damage, the physical incidents were identical.  As a matter of construction of a multilateral treaty – and, of course, the attitude of the English courts is quite different to that adopted by the court below – they said it was not brought within the meaning of the Convention, as applied by the English statute.

Now, your Honours, the logically prior special leave questions invite authoritative construction by this Court of two important aspects of the Civil Aviation (Carriers’ Liability) Act, in short form, the Commonwealth Act.  The first construction question ‑ ‑ ‑

HAYNE J:   Before you come to that, in order to get to those problems which you say arise, is it necessary for this Court to conclude that the original statement of claim was insufficient?

MR MARGO:   Yes, your Honour.

HAYNE J:   Why is Justice Ormiston wrong in his conclusion that the statement of claim as originally filed pleaded all of the facts necessary to establish a claim under the Act?  All that was missing was reference to the Act.

MR MARGO:   With respect, your Honour, that was not the finding of Justice Ormiston.  His Honour found that essential jurisdictional facts had not been pleaded.  That is why his Honour followed the New South Wales Court of Appeal in Air Link (No 2).  We say that it is an internal contradiction in his Honour’s judgment, that he later went back – and I was chastised in the New South Wales Court of Appeal for suggesting that Justice Ormiston, that the court below, had misdirected itself on this matter.

GLEESON CJ:   Hang on, Air Link (No 2) followed this case, did it not?  Followed Agtrack?

MR MARGO:   Your Honour, the historical intersection was this.  The court below followed Air Link (No 1) on the pleading question.  Air Link (No 1) held that to bring an action under the Act – first of all, it held that section 34, when it referred to an action brought within two years, referred to an action brought under Part IV of the Act.  Secondly, the New South Wales Court of Appeal held that you had to plead all the essential elements, including jurisdictional facts.  They were not that fussed about the District Court rule which required you to name the statute, but you had to have all the facts that would ground an action under section 34.  The court below followed that pleading judgment – and that is why it went to the question of amendment, it would not have been necessary for it to do so otherwise – we say, correctly followed it.  I think that answers Justice Hayne’s question ‑ ‑ ‑

GLEESON CJ:   But the decision of the New South Wales Court of Appeal in Air Link (No 2) was later than and followed the decision in the matter that we are looking at now.

MR MARGO:   Yes, because Air Link (No 1) dealt only with the pleading matter.  They then sent the amendment question back to the District Court judge.  In the interim, Agtrack was decided, and the New South Wales Court of Appeal then followed Agtrack on the amendment question, but with materially different reasoning.  There are serious tensions between the decision of the court below and the decision of the majority in Air Link (No 2).  They include, particularly, the fact that the New South Wales Court of Appeal recognised that section 34 has a special character, that the time limit is of the essence of the right granted by the Act, and that the change worked by amendment back, by an amending rule that allowed relation back, after expiry, was a substantive change. 

With respect to the court below, that question was not squarely addressed by their Honours, because they relied on a distinction between a procedural field of rules and substantive ‑ ‑ ‑

GLEESON CJ:   Mr Margo, in New South Wales it is the Supreme Court itself that makes its rules and alters its rules.  That is sometimes thought to be a reason why this Court would not interfere with a decision of the New South Wales Supreme Court about its own rules, which it can change itself if it wants to.  What is the position in relation to Victoria?

MR MARGO:   The position is the same in Victoria.  The judges have power to alter even rules which have been ratified by the Parliament.

GLEESON CJ:   Well, if the Supreme Court of Victoria has the power to make and alter its own rules, why would this Court interfere with a decision of the Supreme Court of Victoria about its rules?

MR MARGO:   Because, your Honour, this Court is the custodian of construction of a Commonwealth Act which seeks to apply a multilateral treaty and in which we are enjoined to follow the decision of the majority of national courts, which take a contrary view.

GLEESON CJ:   But it all depends in the end, does it not, upon the local pleading rule, and, in particular, the consequences of amendment. 

MR MARGO:   Your Honour, the interpretation of Article 29 of the Convention, which has been adopted by most national courts – it is summarised in the extract of Shawcross & Beaumont that we gave to your Honours in our bundle – is that no local forum rule can be used to toll, interrupt or in any way alter the absolute quality of the two year time limit.

HAYNE J:   I understand that, but the logically prior question is whether the pleading as originally presented sufficiently disclosed the facts upon which a cause of action under the Act was made.  That is step one, is it not?

MR MARGO:   It is, your Honour.  I think I have answered that, with respect.  We submit that it did not, and that the court below found that it did not.

GLEESON CJ:   Where is the passage in Shawcross & Beaumont?

MR MARGO:   It is at tab 6 in our bundle of authorities.  At page 176, they turn to the relevance of the lex fori in calculating the two year period.  It can be used to calculate the period, and that is given a narrow interpretation, meaning how many days make a year, and, if the last day is a Sunday, whether you count that or not. 

GLEESON CJ:   I am looking at paragraph [448].

MR MARGO:   Yes, there, your Honours, they deal with the English law.  They point out that the Limitation Act (UK) does not allow this to be done, but ‑ ‑ ‑

GLEESON CJ:   Well, when you say this, I am reading paragraph [448].

MR MARGO:   Yes, your Honour.

GLEESON CJ:   It does not allow the two year period to be suspended or limited by, for example, reference to the disability of the plaintiff or negotiations between the parties.

MR MARGO:   Yes, and in the middle of the paragraph, your Honours:

Even if there were relevant provisions of English law providing for suspension or interruption –

and we say that amendment which relates back is covered by that ratio – the English courts would not apply it, in the opinion of these authors.  On the next page, “the majority of United States decisions” are to the same effect.  At the bottom of the next page, similar views have been adopted in 15 other countries ‑ ‑ ‑

GLEESON CJ:   What has this present case got to do with suspension or interruption of the limitation period?

MR MARGO:   For the reasons which Justice Ipp explained in Air Link (No 2).  If an amendment which is granted after extinguishment of the cause of action but relating back, as the court below found, with effect that before the amendment is granted no action has been commenced within the two year period, after the amendment is granted it is backdated and treated as if it had been commenced within the two year period.  That is a substantive effect of a purportedly solely procedural rule.  As Justice Ipp pointed out, this is not an accidental side effect of a purely procedural rule, it is the intention of the rule, as evidenced by the legislature and by the subheadings.  It is intended to overcome the effect of the limitation period. 

This limitation period under the Convention as applied by the Act has a special character.  It is a condition precedent of the right that it is brought within two years, and that is part of the whole scheme of the Convention, which the Commonwealth Parliament intended to apply to Part IV.  The second reading speech makes it clear, and repeats several times, that they intended the Warsaw regime to travel over the whole field of federal constitutionally controlled air carriage.

GLEESON CJ:   Is there a pending special leave application in the New South Wales case?

MR MARGO:   There is, your Honours.  It is in October.  The Registry was prepared to list them together, but it was not possible to get agreement of the parties.  There is commonality of counsel in both those applications as well.  Mr Walker is for the respondent in that matter and I am for the applicant.

GLEESON CJ:   So Air Link (No 2) is on its way here for a special leave?

MR MARGO:   It is, your Honours, and whichever vehicle your Honours took – if your Honours were minded to take any – you would have to look at both Air Link (No 2) and Agtrack.  Plus, there are contrary decisions, we submit, in Western Australia, Morgan v Banning, and in South Australia, Timeny.  These cases, your Honours, are being noted very promptly in the international texts, and the view taken in the international texts is that Australia is now diverging from the rest of the common law world in its construction of the ‑ ‑ ‑

HAYNE J:   What is the best example that you point to of that assertion?

MR MARGO:   Shawcross & Beaumont, your Honours.

HAYNE J:   Where?

MR MARGO:   It is actually in the respondent’s bundle.

HAYNE J:   I understand that.  What paragraph?

MR MARGO:   It is footnote 13, tab 4, in the respondent’s bundle, your Honours:

In the emphatic language of a New South Wales court –

they quote Timeny on page 7417, and in footnote 13 they pick up Proctor v Jetway at first instance.  Staples, in Queensland, which held the same as Proctor ‑ ‑ ‑

GLEESON CJ:   Sorry, I have not picked this up.  There is no page ‑ ‑ ‑

MR MARGO:   Tab 4 in the respondent’s bundle of material.

GLEESON CJ:   I have tab 4, yes.

MR MARGO:   And if your Honours would go to the page headed “Limitation of Actions” and find the text to footnote 13, it is at the end of the third last paragraph.

GLEESON CJ:   Yes.

MR MARGO:   And then go to footnote 13, your Honours will see – this is just one incident.

HAYNE J:   I asked you for the best example you have of international texts ‑ ‑ ‑

MR MARGO:   This is it, your Honour.

HAYNE J:    ‑ ‑ ‑ saying that Australia is diverting from the law elsewhere. 

MR MARGO:   Yes, if your Honour could look at the last sentence.  I am sorry I interrupted, your Honour.

HAYNE J:   Yes.

MR MARGO:  

In some of the Australian States, developments in the law as to limitation of actions may produce a different outcome. 

The cases which are referred to previously, including Timeny, are elsewhere referred to as being in the mainstream of interpretation by common law national courts.  The only court that has treated – I had not finished taking your Honours through Shawcross & Beaumont – the only superior court that has taken a different view is the Cour de Cassation, and it has done so in the face of different decisions by the regional Cours d’Appel and all the academic writing in France, which your Honours know is important in France.  It has been expressly disapproved by the United States courts – the decision in Lorans by the Cour de Cassation – because it does not follow accepted principles of interpretation of a multilateral treaty, and we are now moving in that direction.

Now, your Honours, the learned President, Justice Mason, in the New South Wales Court of Appeal sought to distinguish the national cases by saying they did not breach an amendment rule.  The special leave question is that that is the second point of construction.  The first is, we say,

that Part IV must be interpreted as part of the whole of the Commonwealth Act.  It was so intended, and it is so referred to in the second reading speech.

The second point is, does the dominant construction, which has been accepted by most national courts, extend to preclude amendment rules that have a substantive effect by deeming an action to have been brought within two years when the moment before the amendment is granted it was not?  That question has not been determined by any ultimate appellate court in any common law country.  On that question, the Cour de Cassation, as I say, is in a minority.

The facts in Agtrack are slightly different.  There is not the equitable point that your Honour Justice Hayne first raised about conduct of the defendant, because there the claim was served after the two years, the first time the airline sought – the different airline.  I said Agtrack – I meant Air Link.  The facts are slightly different and the rules in New South Wales are slightly different, the District Court rules.  They may not have – we submit that they do not – the statutory backing that is claimed for the rules going here. 

Of course, the other question which would arise – that is why, we submit, your Honours would need to look at the different decisions of the intermediate courts of appeal – is that, really, the Northern Territory rules and Act, we say, should apply, since Pfeiffer should have been applied by the court below.  They in terms do not – they exclude any application to Commonwealth statutes.  They are confined to the Northern Territory.  So that raises the question from John Robertson of whether section 79 can alter the meaning of a restricted rule like that, and if picked up that is an independent and, in a sense, subordinate special leave question.

If your Honours are with us on construction, all the other special leave questions would follow, because there will definitely be inconsistency or irreconcilability under the Constitution. The University of Wollongong v Metwally or section 79 itself ‑ ‑ ‑

GLEESON CJ:   Thank you, Mr Margo.  Yes, Mr Uren.

MR UREN:   If I might say something first about the matter which your Honour Justice Hayne mentioned, namely, the question of the pleading.  It would seem to us, with respect, that paragraphs 11 to 21 of the judgment of Mr Justice Ormiston, where he goes through the alleged defects in the statement of claim and deals with them in what I must admit is a benevolent manner, but nonetheless one which was well open to him, in those paragraphs he accepted, in our view, the adequacy of the statement of claim as it was in its original form.

GLEESON CJ:   Where do we find him saying that?

MR UREN:   Your Honour, he may not say it expressly, but the effect of what his Honour says in dealing with the issues of alleged defect is that he disposes of all of the issues of alleged defect that are referred to ‑ ‑ ‑

GLEESON CJ:   Did the Court of Appeal in this case decide the matter on the assumption that the amendment was necessary?

MR UREN:   They did.

GLEESON CJ:   Or on the assumption that the amendment was superfluous?

MR UREN:   They decided on the basis that the amendment was necessary, because Mr Justice Ormiston and the other judges felt constrained to follow what had been done in Air Link (No 1).  The only substantial – sorry, to go back a step – the main difficulty with the statement of claim as it originally was drawn was because of what Mr Justice O’Bryan said in paragraph 87 of the reasons of the court.  His view was that, although he had some hesitancy about it, the only problem with the original statement of claim ultimately was that the statutory basis for liability had not been pleaded.  So you might say ‑ ‑ ‑

GLEESON CJ:   I do not think that is quite accurate.  What he said was:

I have a degree of hesitancy about holding that the original statement of claim was inadequate because it did not include a reference to the Act ‑ ‑ ‑

MR UREN:   Yes.

GLEESON CJ:   But there was another amendment that you applied to make, and that is the amendment in paragraph 1(b).  Was it necessary for you to plead that the defendant was the holder of an airline licence or charter licence in the course of commercial transport operation?

MR UREN:   That was a matter that his Honour Mr Justice Ormiston dealt with in paragraph 12.  That was a matter which was the subject of an admission.  Our point was, seeing it was expressly admitted, the pleader of the defence must have taken it as being implied in what was originally said that that was the case.  In other words ‑ ‑ ‑

GLEESON CJ:   Sorry, it was admitted by the ‑ ‑ ‑

MR UREN:   Admitted by the defence, in the defence.

GLEESON CJ:   But it could not have been admitted before it was included.

MR UREN:   That was our point.  So it was included, and they took it as being included.

HAYNE J:   The defence to the original statement of claim?

MR UREN:   Yes, the defence to the original statement of claim.

HAYNE J:   Admitted holding the relevant authority?

MR UREN:   Well, they admitted that they were carrying on the business of aircraft charter, and that was, as his Honour said, an implicit concession that it was the holder of an air operator’s certificate authorising charter operations.

HAYNE J:   Is the document at page 45 the defence to the original statement of claim?

MR UREN:   If your Honour would excuse me for a moment.  Yes.

HAYNE J:   So there is an admission of holding an air operator’s certificate?

MR UREN:   Yes.  Our point was that if there was a defect in the original pleading, it was cured by the admission.  But, in any event, it was not a matter of disputation, and it had been pleaded by the other side.  So when the case came for trial what would have been proved, under the aegis of the pleadings as they stood, were sufficient facts to bring the claim within the statute.  So we said the case – on the basis of the principles relating to Commonwealth pleading, if the pleadings allow you to prove matters, then the trial proceeds on the basis of the facts as proved.

GLEESON CJ:   Why did the Court of Appeal get into this question of the effect of the rules relating to amendment, if amendment was not necessary? 

MR UREN:   Yes, because it ‑ ‑ ‑

GLEESON CJ:   Did it feel obliged to do that because of the decision of the New South Wales Court of Appeal in Air Link? 

MR UREN:   Yes.  Mr Justice Ormiston said as much, I think, in paragraph 22, where he deals with Air Link v Paterson (No 1).  Although referring to some differences between that case and the present, at the bottom of paragraph 22, he said:

In the circumstances I believe the case is so close to the present in its fundamental facts . . . that I do not think it desirable that this Court should reach a different conclusion ‑ ‑ ‑

HAYNE J:   I had read his Honour’s reasons as hinging upon what is said at paragraph 21, which I had read as meaning, “All of the facts are pleaded, there is no reference to the Act, the rules require reference to Act, ergo, the pleading is deficient”.  Now, that is a view about the operation of the rules, which is hardly a likely candidate for leave, but if the premise for the Court of Appeal is all of the facts are pleaded, how is it that we get to the questions that the applicant defendant would seek to raise, without going through this elaborate analysis of the operation of the Victorian Rules of Court? 

MR UREN:   We think only because the court felt constrained to follow the New South Wales decision on the pleading issue.  Otherwise, the result is likely to have been that, absent that decision, the pleading would have been regarded as imperfect but adequate.  That is the reading that we would urge.  Also, it seems to be the view Mr Justice O’Bryan took of what Mr Justice Ormiston had said.

HAYNE J:   If facts are proved at trial, is it open to a party to ascribe a different legal characterisation to the facts proved at trial on appeal?

MR UREN:   Yes.

HAYNE J:   Even if that requires amendment?

MR UREN:   Yes.  I think ‑ ‑ ‑

HAYNE J:   Is that a question which raises the possible operation of Weldon v Neal?

MR UREN:   No, in our submission, because the Judicature Act procedure proceeds on the basis of sufficient pleaded facts.  You can work out what legal regime they fall under later.  Our rules now allow one to plead the legal consequence of matters, but I do not think that is a necessary requirement.  They certainly require that, where a statute is relied on, that statute be pleaded, and that is presumably to let people know what statute is relied on.

GLEESON CJ:   Mr Uren, I am not sure that I know enough about the New South Wales cases of Air Link to have a view about this, but there was a time when the District Court of New South Wales was a court of which it used to be said it is not a court of pleading.  This litigation seems to demonstrate that things have changed a good deal since then.  If this decision in Agtrack and the decision of the New South Wales Court of Appeal in Air Link stand, are they authority for the proposition that in cases where, on any view, a substantial amendment to the statement of claim is necessary, the granting of leave to amend after two years produces the consequence that the bar does not operate?

MR UREN:   Your Honour, I do not know about the New South Wales one.  The Victorian one is certainly not, because, if I could take the Court to paragraph 83 of Mr Justice Ormiston’s reasons for judgment, to the second half of that paragraph, what his Honour said was:

What is here in issue is an amendment seeking to add or vary a few minor details and to give the existing claim a new characterisation, closely akin and by no means remote from the subject matter of the original claim.  That is a true amendment and the very kind which the Court ought to be free to give effect to.  It affects only an action already on foot.  The amendment to the rules alone has achieved that end.  That is a mere change to the rules of practice and procedure and questions of inconsistency or irreconcilability with the substantive bar contained in s 34 of the Act are irrelevant upon this analysis. 

Now, that, because of the view which his Honour took of what is meant by an amendment – namely, something which was not too far off what was originally pleaded, as opposed to something completely fresh – may have the effect of limiting what was precisely said in this judgment to cases of that sort.  The New South Wales case may go further, but, in the event that it does, surely a matter relating to the exercise of discretion would be the extent of the difference between the pleaded claim and the claims sought to be added.  Thus if one wanted to add a claim of assault to a case on…..that would be a matter which would certainly be taken into account in the exercise of discretion and may well lead to refusal.

GLEESON CJ:   Suppose that next week somebody came along with a case where the statement of claim that was filed within two years plainly did not allege facts drawing attention to the possibility of a claim under the Act.  It was a statement of claim that unquestionably required substantial amendment.  Would this decision stand as authority for the proposition that if, as a matter of discretion, the court could be persuaded to make the amendment, the bar would not then operate?  Or does this decision stand for the proposition, amongst others, that the existence of the bar would be a very relevant consideration to the exercise of the discretion to make the amendment? 

MR UREN:   It would certainly stand for the latter.  It would be a relevant consideration.  As to the first point, namely, whether the case was so different from that pleaded, in our view the Victorian decision concerns only an amendment which is not significantly different from that which has already been pleaded.

HAYNE J:   This pleading scraped by because the point of departure was in the Territory.  It therefore had to go further to demonstrate application of the Liability Act.  Let it be assumed the point of departure had been given at a place in a State with no point of arrival.  First, a claim under the Act would have had to amend, would it not, to plead interstate carriage or State/Territory perhaps, is that right?

MR UREN:   Yes, but that, in our submission, would not have been sufficiently adequate distinction either.  We realise there is a fact pleaded, but every aeroplane takes off from somewhere and lands somewhere ‑ ‑ ‑

HAYNE J:   You say that this decision would permit amendment to give the point of arrival two years after initiation…..

MR UREN:   Your Honour, if we had such a case, we would certainly argue it, but what the result would be might be another matter.  It would depend on the view the Court would take as to the effect of not including the particular place.  I wonder if I could say something about the question of these alleged international complications and what have you.  In the parts of Shawcross & Beaumont that our learned friend took your Honours to, taking the Court to our authorities for the moment, the passage in Shawcross & Beaumont at page 417, under tab 4, which refers to footnote 13 – could I draw the Court’s attention to the fact that in footnote 13 it is said:

In some of the Australian States, developments in the law as to limitation of actions may produce a different outcome –

and there is then a reference to Hatfield v Agtrack at first instance.  Now, this is scarcely shock and horror at the impertinence of the Australian courts in coming to that conclusion or the difficulties which would ensue if they had in fact done so.  On pages 430 to 431, starting at the bottom of page 430, the very last three words:

In New South Wales the Supreme Court Rules allow the addition of a new cause of action with the leave of the court despite the expiry of a limitation period; this has been held applicable in a carriage by air case governed by the Civil Aviation (Carriers’ Liability) Act 1967 (NSW) which applies to domestic flights a provision identical to art 29(1), but the court emphasised the wholly domestic and non‑international nature of the case, which suggests that a different view might have been taken had the Warsaw Convention rules been directly applicable.

There again, it may or may not be the view of the authors that the Warsaw rules do or do not allow this type of amendment to occur, but nonetheless, within the context of domestic aviation, it does not appear to us that there is any difficulty with respect to the application in the domestic sphere of particular domestic rules.  One must mention, too, that in this field of civil aviation the principle that we assert has been governing in New South Wales at least since 1984, without apparent difficulty.  So the principle that we assert in this particular area has been in apparently happy operation for some 20 years.

Much has been made of Timeny’s Case.  I can never understand why Timeny’s Case has been referred to so often in this case, because it has absolutely no relevance to it, the reason being that that was a case in which, firstly, it was sought to add a party – it was not sought to merely amend the statement of claim – and, secondly, the writ in the first place had been issued two years and 11 months, so that was well out of time after the accident. 

So far as Morgan’s Case is concerned, firstly, what was said by the court in that case is obiter, because they came to the conclusion that the amendment should have been allowed in any event.  Secondly, the point that was made in that case was that the rule which allowed the amendment was inconsistent with the statute of limitations.  That is to say, it was an inconsistency point.  If the rule which allowed relation back was inconsistent with the statute of limitations, then Weldon v Neal would never have been decided the way it was, because Weldon v Neal is predicated upon the fact that the reason for not allowing the amendment is because the defence would be deprived of.  The rule in Weldon v Neal is predicated upon the coexistence of the limitation statute and of the relation‑back rule.

What the applicant here has to do is basically get rid of the relation‑back rule in limitation cases.  It makes no difference, when it is a matter of interpretation, whether the limitation relates to extinguishing the cause of action or merely barring the remedy.  On the point of construction, the point must be the same, for ever since Weldon v Neal the issue has not been taken to be one of construction.  There is no inconsistency between relation back and the Limitation of Actions Act.  There are the questions of injustice in application of them both together.  Views have changed about that since Weldon v Neal.  It is now regarded as unjust that in cases where there is no impediment to the other side, that an amendment not be allowed.

So the pendulum of the perception of justice has swung somewhat, but our learned friend’s argument would, in respect of one particular category of case only, which, it seems, is the air carriers’ liability case, set those modern perceptions aside.  Also, it would seem to us that the argument, if accepted, would have implications also for all limitation statutes, no matter what they said.  If the limitation statute bars you from doing something, then the relation‑back rule could not apply.  But that has not been the way the matter has been looked at since Weldon v Neal, and, in our respectful submission, it is too late to put the matter as one of statutory inconsistency.  If the Court pleases.

GLEESON CJ:   Thank you, Mr Uren.  Yes, Mr Margo.

MR MARGO:   Your Honours, the point raised by my learned friend would be appropriate for a notice of contention if leave were granted, but they do not answer the fact that the court below found that it had to go to amendment.  It was put that it was an admission that the defendant held an air operator’s licence.  That is the way that Justice Ormiston characterised it, but in fact it was pleading of a fact which engaged the Commonwealth Act.  The liability of an operator, apart from international carriage covered by Part IV, with non‑Convention international carriage – and it does cover international carriage for Thailand, East Timor, over Antarctica and the like – if it is domestic carriage, the line of liability passes through holding an air operator’s licence.  That is why the defence brought that out, because otherwise the plaintiff would be taken by surprise. 

Added to that was a plea in the defence of the action not being maintainable, and nothing was done.  Now, we are entitled to observance of the pleading rules in the same way as the plaintiff is.  The international ‑ ‑ ‑

HAYNE J:   Would that have obliged you to plead the statute upon which you relied in defence?

MR MARGO:   We raised the facts ‑ ‑ ‑

HAYNE J:   No, would it have obliged you to plead the statute?  It would, would it not?

MR MARGO:   The defence may be defective, and it was severely criticised in that regard in this case.  In Air Link, there was no such issue, your Honours.  The court is required, if the construction for which we contend is correct, to raise the matter mero motu.  It is not a matter for pleading.  We do not even have to plead limitation under the statute.  Under the pleading rules, taking by surprise – that is another matter.  If we did not plead it, the court was obliged under the Commonwealth statute to raise it mero motu.  That is the difference between a section 34 condition and a period of limitation strictu sensu.  It is of the essence of the right and if the right is not made out on the evidence, an action has not been brought.

Your Honour Chief Justice Gleeson’s question about whether in a case where the statement of claim was clearly inadequate, these rules could be applied to relate back, the answer is definitely yes, in our submission.  His Honour Justice Ormiston was anxious to read down the rules as permissive only and to confine them to the traditional rule in England, that if all the facts are there you are simply recharacterising the action.  But in fact the Victorian provision which gives force to the rules which came into effect at the same time as the rules on the same day is in the Victorian Limitation Act and it says a court “must” grant an amendment, provided the only prejudice is depriving the defendant of the statute of limitations. 

As Justice Ormiston observed, if one went to the Limitation Act, there might be a problem, but he preferred to stay at the level of the rules and he in fact read down the Victorian statute as intended to be permissive only, because the consequence would be so absurd if it were read literally.  Both the Northern Territory and the Victorian statutes say a court must – I think the Northern Territory says “shall” – grant an amendment and they do not follow the New South Wales rule by saying that there has to be a substantial similarity of facts before you can do so.  The only test is absence of prejudice and that means at trial.  If the prejudice can be cured at trial, so be it; the amendment can be granted.  In both Air Link and Agtrack the amendment was granted nearly four years after the accident, and we say that is plainly contrary to the Convention as applied by the Act.

We rely heavily, your Honours, on the dissenting judgment of Justice Ipp.  Relation back has a function to play and has always had a function to play in different areas of the rule, and a beneficial function.  In this case, correctly analysed, to grant an amendment outside the two year period that deems the action to have been commenced within the two year period when the moment before the amendment was granted it was not is direct inconsistency under Telstra v Worthing and any other test one cares to apply.  If that is to be the position and the rules are to be upheld, it should be by this Court.

Justice Mason, in a very intellectually rigorous judgment, if I may say so with respect, at page 142 said that the best that could be said on the direct inconsistency point – that is page 142 at tab 4 of our bundle – he had referred to a United States case which held you could not amend relating back.  I should tell your Honours that we have since found another single court of a District Court judge holding the opposite of that Motorola Case, so the issue is not finally determined at the District Court level.  Then he said, “No, we will follow Proctor” at paragraph 154:  “I am unprepared to

depart from” Proctor.  We had sought leave in our notice of appeal to challenge Proctor, but it was refused. 

In paragraph 155, the learned President came to what he saw as the central question in Air Link, inconsistency, and he distinguished the statute as operating in a domestic field different from the Convention parts of the Act.  We say, with respect, that that was an error.  If one looks at the second reading speech, it was obviously intended that all air carriage within Commonwealth competence should have the same regime.  In the last sentence of that paragraph, he said:

Section 79 of the Judiciary Act indicates a primary intent to treat litigants the same –

he must mean if they are in New South Wales, because the rules differ from State to State –

whether or not involved in federal jurisdiction.  This more than outweighs the force of the more general international comity arguments ‑ ‑ ‑

GLEESON CJ:   Thank you, Mr Margo.

MR MARGO:   Your Honours, that is the closest they come to dealing with direct inconsistency.

GLEESON CJ:   We will adjourn for a short time to consider the course we will take in this matter.

AT 10.19 AM SHORT ADJOURNMENT

UPON RESUMING AT 10.25 AM:  

GLEESON CJ:   Mr Margo, can I ask you a question about that special leave application in Air Link.  Did you indicate that that is coming on in Sydney in October? 

MR MARGO:   Yes, I believe it is in October, your Honour.  I am for the applicant and Mr…..for the respondent. 

GLEESON CJ:   All right.  Well, then, what we will do, assuming it is convenient and possible, is arrange that Justice Hayne and I will deal with that Air Link application and we will reserve our decision in this matter until after we have heard argument in the Air Link application. 

MR MARGO:   If the Court pleases. 

GLEESON CJ:   Just before you go, Mr Margo, can you arrange for the Sydney Registry, on whatever day the Air Link case is listed for argument, to list this matter for judgment on the same day? 

MR MARGO:   I will see that is done, your Honour. 

GLEESON CJ:   Thank you. 

AT 10.26 AM THE MATTER WAS CONCLUDED