Merck Sharpe and Dohme & Anor v Emery Air

[2000] HCATrans 334

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S230 of 1999

B e t w e e n -

MERCK SHARPE AND DOHME (AUSTRALIA) PTY LIMITED

First Applicant

MERCK & CO INC

Second Applicant

and

EMERY AIR FREIGHT CORPORTION

Respondent

Application for special leave to appeal

GLEESON CJ
GAUDRON J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 4 AUGUST 2000, AT 10.40 AM

Copyright in the High Court of Australia

MR R.B.S. MACFARLAN, QC:   If the Court pleases, I appear with my learned friend, MR P.E. KING, for the applicants.  (instructed by Withnell Hetherington)

MR S.D. RARES, SC:   May it please the Court, in this matter I appear with my learned friend, MS L.A. MUSTON, for the respondent.  (instructed by Conway Leather Shaw)

GLEESON CJ:   Mr Macfarlan.

MR MACFARLAN:   Your Honours, the ultimate issue in these proceedings was whether the respondent carrier was entitled to limit its liability in respect of damage to the applicants’ goods.  It was only entitled to do so under the provisions of the Warsaw Convention if there existed an air waybill that contained certain specified particulars.  The special leave question that has been raised relates to the approach of the majority in the Court of Appeal in construing Article 8 of the Warsaw Convention, which was the relevant article.

The approach, which I will describe in a moment, was one which we say was inconsistent with Article 31 of the Vienna Convention on Treaties.  It was inconsistent with the textual base approach which has been – as stated in the House of Lords and in the United States Supreme Court in the context of the Warsaw Convention.  This Court has not yet had occasion to consider upon an appeal the provisions of the Warsaw Convention, but we say that the approach of the majority below was inconsistent with the textual approach which was manifest in this Court’s consideration of Article 31 of the Vienna Convention, which is the general provision as to interpretation of treaties.

Your Honours, the nub of the problem as we put it, so far as the judgment of the majority below is concerned, is that they adopted a substance over form approach, and that is the expression used by the learned President.  We submit ‑ ‑ ‑

GAUDRON J:   It is not really a question of construction of the Warsaw Convention, is it?  It is a question of construing the waybill.  I know they have said that it is a substance over form approach, but they are really saying, “Well, let us look to the substance of what is in the waybill rather than the form in which it is expressed.”

MR MACFARLAN:   Yes.

GAUDRON J:   And that has some support, does it not, in the terms of the Convention because all it requires is that there be particulars, not that they be identified as such?

MR MACFARLAN:   That is so but the words “contained in” are used in the Convention.

GAUDRON J:   Yes.

MR MACFARLAN:   The point is brought into the starkest contrast when one considers the issue concerning the need for agreed stopping places to be contained in the bill.  The way in which the Court of Appeal dealt with it was to say that it was sufficient if agreed stopping places were ascertainable by reference to timetables which were ‑ ‑ ‑

GAUDRON J:   Yes, I realise that, but it seemed to me that the agreed stopping places might come in through the master waybill.  Was that attached to the ‑ ‑ ‑

MR MACFARLAN:   No, it was not, your Honour, and that was not available to the applicants.

GAUDRON J:   The master waybill was not available?

MR MACFARLAN:   No, it was not.  It was a matter of subcontract by the respondent freight forwarder.  It arranged with Qantas for the actual air carriage of these goods.

GLEESON CJ:   Where do we most conveniently see the documentary basis of this argument?

MR MACFARLAN:   Your Honour will see the air waybill in the authorities bundle at page 1 but we have enlarged copies which may help, your Honour.

GLEESON CJ:   All right, thank you.

MR MACFARLAN:   Your Honours will see it was under the letterhead of the respondent and said to be issued by it in the top left‑hand corner with the address of the respondent and in the second box down on the right:

RECEIVED BY EMERY AIR FREIGHT AT:

Place EWR –

is a reference to Newark in New York.  On the left‑hand side one sees about the fourth box down:

Airport of Departure (Addr of First Carrier) –

there is a reference there to a Qantas flight, which was a freighter flight, not a regular passenger flight, but a scheduled freight flight.  The evidence showed that details as to the departure and stopping places of such a freight flight were not available to the general public but were available to freight forwarders, but that would not include the applicants, who are the owners of the goods.  So the ‑ ‑ ‑

GLEESON CJ:   For whose benefit is this information intended to be provided?

MR MACFARLAN:   Well, your Honour, it is primarily for the applicants’ benefit, the consignor and consignee of the goods, so that the international character of the carriage is established and the identity of the party or parties that can be sued are established.

GLEESON CJ:   Is it the case that if Merck Sharpe and Dohme had wanted to find out the stopping points then they could have done so, directly or indirectly, by seeking details of QF7554?

MR MACFARLAN:   They could not directly, according to the evidence, your Honour, because that information was not public.  It was available only to freight forwarders.  It is perhaps possible, although the evidence did not show it, that Merck Sharpe and Dohme could have engaged a freight forwarder and sought the information from them, but it may be the freight forwarder would not feel at liberty to disclose that information.  I should mention that the goods were not, in fact, carried by Qantas in the end.  They were carried on an Evergreen Airlines aircraft, so there was a sub‑subcontract for the carriage and that was relevant to one issue as to the ‑ ‑ ‑

GAUDRON J:   Is it not the case that the way this worked, the first and last carrier is Emery?

MR MACFARLAN:   Yes.

GAUDRON J:   And its subcontractors.  Throughout Emery is the carrier.

MR MACFARLAN:   Well, that is one view of it, your Honour.

GAUDRON J:   Well, that is the view on which you sued.

MR MACFARLAN:   Yes.

GAUDRON J:   Yes.  Now, its name and address are clearly shown all over the place, is it not?

MR MACFARLAN:   They are, but they are not shown, if I could just add to that, your Honour, as first carrier because your Honour ‑ ‑ ‑

GAUDRON J:   Well, I know that.  That is what ultimately you are coming to.

MR MACFARLAN:   Yes.

GAUDRON J:   You are really coming to the form of the waybill when you say that, not the construction of the Convention, but the form that the waybill must take when it says the particulars of the first carrier.  Now, when it says “Airport of Departure”, why does it not mean exactly that, airport, given that – which, of course, is going to be New York; there can be no complaint ‑ ‑ ‑

MR MACFARLAN:   Well, that is not entirely obvious, your Honour.

GAUDRON J:   It is not the way it was decided in the Court of Appeal, I know.

MR MACFARLAN:   No, but the goods did not leave from Newark Airport.  They left from the John F. Kennedy ‑ ‑ ‑

GAUDRON J:   No, no, but I said why is it not New York, J.F. Kennedy?

MR MACFARLAN:   Well, if they could have gone from John F. Kennedy, they could equally have gone from Boston, as the evidence disclosed, because that was a stopping place of this flight.

GAUDRON J:   I thought it was Chicago, was it not?

MR MACFARLAN:   I am sorry, it may be Chicago, yes, Chicago, and the evidence showed there was time enough to get the goods on that flight.  So from the face of the air waybill, without reference to the timetables, which were not available to the applicant, and other information ‑ ‑ ‑

GAUDRON J:   What is this reference under “By First Carrier”?

MR MACFARLAN:   That is a reference to the master air waybill.

GAUDRON J:   And was that ascertainable?

MR MACFARLAN:   The applicants did not have it and had no right to it.  Whether ‑ ‑ ‑

GAUDRON J:   No, but was it ascertainable?

MR MACFARLAN:   No, not as of right, your Honour.  It may be, if the freight forwarder had been asked for it, the freight forwarder may have made it available but the applicants had no right to it.  The reference to 081 at the commencement of that reference is to Qantas and that was a matter of agreement.  Could I just pick up one thing your Honour Justice Gaudron said a moment ago, that the question of airport of departure is really a question of construction of this bill rather than the approach to construction of Article 8.

We say it relates to the construction of Article 8 because what their Honours below appear to have done is to look at some aspects of the bill and not the whole and one would interpret Article 8, we submit, as requiring the whole of the bill to be looked at and so it does relate to the proper construction of Article 8.

But the point perhaps more obviously arises in relation to the agreed stopping places issue because, according to the majority’s approach, one can refer to matters not contained in or referred to in the bill for the purpose of supplying the particulars required by Article 8 to be contained in the bill and the Court of Appeal was, in effect, saying, “Well, if you can get the information from somewhere else quite independently of the bill, then that is a compliance with the requirement that the particulars be contained in the bill.”  We submit that cannot be right.  There is an intermediate position which is supported by some Courts of Appeals decision in America.

GAUDRON J:   Well, I was going to ask that.  That was going to be exactly what I was going to ask.  What is the proper law of this waybill and was that adverted to at any stage?

MR MACFARLAN:   It was not, your Honour, as I recall.  I did not appear at first instance but I do not recall ‑ ‑ ‑

GAUDRON J:   But is that not a preliminary question to the construction of the waybill?  If the proper law of the contract is US law, then it is US law and the American authorities are directly relevant.

MR MACFARLAN:   They are certainly directly relevant, your Honour, but they do not point in the respondent’s direction.  Could I say this about the two Court of Appeal’s decisions:  they are dealing with an intermediate position where there is an incorporation by reference where an air waybill says, “So‑and‑so can be seen by reference to the timetables,” so there is an express incorporation by reference and we acknowledge that although one could take different views about that, there is certainly a very sensible argument that if there is an incorporation by express reference, then that satisfies a requirement that particulars be contained in a bill.

The Court of Appeal’s decision is based on a District Court decision in America, Martin Marietta, which is in our authorities, which goes a step further, which does not require incorporation by reference but, in effect, says what the Court of Appeal here said, that if you can get the information from other sources then that is good enough.

GAUDRON J:   Well, it gives you sufficient information to get it from other sources.

MR MACFARLAN:   Well, Article 8 requires things to be contained in the bill, certain particulars, and the effect of the decision is that they need not be contained in them if you can get the information elsewhere and, in our submission, that disregards the text of the Convention and the expression “substance over form”, which the majority used, tends to promote a neglect of the text and ‑ ‑ ‑

GLEESON CJ:   But this is a provision about form.

MR MACFARLAN:   Yes.

GLEESON CJ:   It is about what has got to be in a document.

MR MACFARLAN:   Yes, that is so and, your Honour, one could say this.  We would certainly accept that the words of Article 8 do not have to be set out verbatim in the bill.  It is a matter of whether the particulars required are there.

GAUDRON J:   So one comes down to agreed stopping places.  At the end of the day it comes down to that.

MR MACFARLAN:   No, it does not.  That is the most obvious one which raises the special leave question.

GAUDRON J:   Well, if you have airport of departure and agreed stopping places, because Emery’s name and address is all over this document and they are the carriers throughout.

MR MACFARLAN:   But I have not expounded the point about that.  The problem with that, your Honour, is that one gleans from parts of the bill information that the first carrier is Qantas, contrary to the indications that your Honour has otherwise mentioned and in the left‑hand side, fifth box down, “(Addr of first carrier)” there is a reference to the Qantas flight.

GLEESON CJ:   Is that followed by the words, because they are slightly obscured by a stamp, “And Requested Route”?

MR MACFARLAN:   Yes, I believe so, your Honour, “Routing”.

GLEESON CJ:   “And Requested Routing”?

MR MACFARLAN:   Yes, and then the next box down “By First Carrier 081” is a reference again to Qantas.

GLEESON CJ:   What is the significance of that number 11 after “SYD”?

MR MACFARLAN:   I do not know, your Honour.  It is the date.

GAUDRON J:   The date of departure of the flight?

MR MACFARLAN:   Yes.

GLEESON CJ:   So the way to find out the requested route is if you can find out from somebody what QF7554 to Sydney was going to do?

MR MACFARLAN:   Yes, which was information available on inquiry of the airline to freight forwarders but not to the general public.

GLEESON CJ:   So somebody knew.  Anybody who knew that number, QF7554, and had access to the freight forwarder could find out?

MR MACFARLAN:   If the freight forwarder was prepared to supply that information.  It may be it would be regarded as confidential.  The airlines seem not have been ‑ ‑ ‑

GAUDRON J:   No, but was not the evidence that any freight forwarder would have known what that meant, could have told them what that meant?

MR MACFARLAN:   That was the implication of the evidence, yes, your Honour, that it was available to freight forwarders on inquiry by them.

GAUDRON J:   Yes.

MR MACFARLAN:   Yes.

GLEESON CJ:   Then the question for resolution would be whether or not to give the information that appears in this document is a compliance with an obligation to give, in the document, particulars of the route.

MR MACFARLAN:   Yes, that is a question, your Honour.  The question of construction of the Convention, we would submit, would be, “Do the words ‘contained in’ in Article 8 permit the supply of the particulars otherwise than via the bill?”

GAUDRON J:   Can you use a shorthand to do it?

MR MACFARLAN:   You could arguably use a shorthand, but that has not been done because ‑ ‑ ‑

GAUDRON J:   Well, arguably it has been done.

MR MACFARLAN:   Well, it has not, with respect, your Honour.

GAUDRON J:   QF7554 to Sydney departing on the 11th.

MR MACFARLAN:   But that means nothing with respect to the applicants.  They can only find out about that by ‑ ‑ ‑

GAUDRON J:   Well, I dare say they could work out that it was a Qantas flight.

MR MACFARLAN:   Indeed.

GAUDRON J:   And that 7554 was its number.

MR MACFARLAN:   Indeed.

GAUDRON J:   And it was going to Sydney.

MR MACFARLAN:   Indeed, they could assume that.  It may not be the case.  It may be going to Brisbane and then road transport from there.

GAUDRON J:   Yes, but it said it was going to Sydney – “SYD” anyway.

MR MACFARLAN:   Yes.

GAUDRON J:   Most people familiar with air travel know that it is Sydney.

MR MACFARLAN:   Indeed.

GAUDRON J:   Well, is that not a starting point?

MR MACFARLAN:   It is certainly a starting point, your Honour, but it is not enough.

GAUDRON J:   What is missing?

MR MACFARLAN:   What is missing is the information about where that Qantas flight is scheduled to stop, Fiji and other places.

GAUDRON J:   Yes.

MR MACFARLAN:   And that can only be ascertained by further inquiry.

GAUDRON J:   By reference to the scheduled route for QF7554.

MR MACFARLAN:   Yes, which is not information available to the public.

GAUDRON J:   Well, that was not how I understood the evidence.  Any freight forwarder would know.

MR MACFARLAN:   Yes.  Well, a distinction was drawn in the evidence between freight forwarders and the public and his Honour in passing in the principal judgment referred to the information being available to freight forwarders and that his Honour was reflecting in passing the fact that it was not available to everyone.

GLEESON CJ:   Yes, that is it, Mr Macfarlan.

MR MACFARLAN:   Yes, your Honour.

GLEESON CJ:   We will adjourn for five minutes or so.

MR MACFARLAN:   If your Honour pleases.

AT 11.01 AM SHORT ADJOURNMENT

UPON RESUMING AT 11.12 AM:

GLEESON CJ:   Yes, Mr Rares.

MR RARES:   Your Honours, in our respectful submission, a number of the points that my learned friend was addressing as to the evidence did not arise in the evidence.  There was no issue that these documents were not available to the applicants at all.  Their own surveyor had both waybills by the time the first survey was done date of 30 November 1995.  There was no reason why any of the materials about timetables could not have been obtained.  More importantly, in our respectful submission, the case really dealt with the ordinary construction of international conventions in the ordinary way and it looked at the purpose of the enactment.

Their Honours in the majority from about paragraphs 52 onwards dealt with ordinary principles of construction, looked at the purpose for which these provisions were provided and came to the conclusion that there was compliance, that you could identify from the material here, in accordance with a string of decisions, both in England and in America, that had stood for up to almost 50 years, that you could refer to timetables and public otherwise available information.

There was no evidence that if the applicants had sought to find out what the precise route was that they would not have been told and they engaged my client as a freight forwarder.  There was no reason why they would not have been able to be told.

GLEESON CJ:   Is it the case that the reason why somebody whose credentials, if I can use that expression, are not known to the person on the other end of the telephone cannot find information about the route of a plane?  It is the same as you cannot find out information about the list of the passengers on the plane but if, on the other hand, you are a freight forwarder or somebody whose credentials are accepted, you will be told.

MR RARES:   Your Honour, there was no suggestion in the evidence that it was a question of anybody’s credentials in being able to find out.  There was no suggestion of any confidentiality.  Indeed, Mr Fitch, whose evidence the trial judge accepted and was called by the plaintiff, said in the transcript – he was asked:

Do you see the information relating to the route that QF7445 takes?  Is that released to the public?
A.  No.  Cargo flights do not appear on the Qantas timetable.  Normally cargo flights and the routing allowed schedule of cargo flights have very limited promulgation because it is for comparatively limited interest.

Q.  The Federal Airport Commission at Sydney, does that publish such a list?
A.  I believe so.

These are not confidential or secret or in any way hidden and they are readily available to anyone who knows, but when one looks at what is the purpose of having that information, it is to establish the international character of the carriage and here, if one goes back to Article 1, for example, one sees that if you fly with an agreed stopping place in a different State but you wind up in the same State from which the flight originated, that that is treated as international carriage because you note that the agreed stopping place involves an international aspect to the journey.

Here the international aspect is transparent.  It is United States to Sydney.  It is on a scheduled flight.  One can find the details of the schedule and, as I say, decisions in the New York Supreme Court from 1949 which their Honours refer to and the English Court of Appeal on the unamended form of the Warsaw Convention established that one can look to timetables to determine compliance with these provisions.

GLEESON CJ:   Yes, thank you, Mr Rares.  Anything you want to put in reply, Mr Macfarlan?  Do you want to put anything in rely to that?

MR MACFARLAN:   Yes, your Honour.  The reference of the President to the availability of the timetables to freight forwarders is at page 59 line 25.

GLEESON CJ:   Thank you.

MR MACFARLAN:   And, in our submission, your Honours, at page 86 of the application book line 32 we put that these were only accessible to people in the freight forwarding industry and issue was not joined in the submissions in reply to that and, accordingly, we did not descend to show that by reference to the evidence but I do have a page from the transcript which is part of the evidence on that.  If I could make that available to your Honours.

GLEESON CJ:   Thank you.

MR MACFARLAN:   I do not suggest this is the whole of the evidence but at T Mr Fitch, to whom my learned friend recently referred, said:

Q.  Is that a document to your knowledge that is readily available to consignees?
A.  No, I would say a basic internal Qantas document that was probably handed to some regular shippers, but it is not a public document.

GAUDRON J:   What is the document there?

MR MACFARLAN:   That is a reference to the timetable, your Honour.  It is a summary of flight information, your Honour.  We put that point in our submissions.  It was not denied in response and, therefore, we have not put ourselves in a position to give your Honours all the evidence on that, but the implication from his Honour the President’s judgment is that that was the case, as his Honour spoke of accessibility to people in the ‑ ‑ ‑

GAUDRON J:   But what we are talking about appears at line G, “the FAC international aircraft summary”.

MR MACFARLAN:   Yes, that is a summary of flight information.

GAUDRON J:   But that only deals with one aspect of knowledge.

MR MACFARLAN:   Well, it does, your Honour, but we put the point in our submissions as to the evidence.  It was not gainsaid in the response so we have not come armed with all of the evidence on that topic but the fact that that was the outcome of the evidence is certainly at least strongly implied by the President’s reference at page 59 in the middle indicating:

that the routing information for the nominated flight was readily accessible to people in the freight forwarding industry.

Because it needs to be noted that the flight was a freight flight and not a normal passenger flight.  That is the matter we put in reply, your Honour.

GLEESON CJ:   Thank you.

Whilst we are not to be taken as necessarily agreeing with every step in the process of reasoning of the majority in the Court of Appeal, the Court is of the view that there are insufficient prospects of success of an appeal to warrant a grant of special leave in this matter.  For that reason, the application is refused with costs.

AT 11.20 AM THE MATTER WAS CONCLUDED