South Pacific Air Motive Pty Ltd v Magnus
[1998] FCA 1107
•09 SEPTEMBER 1998
SOUTH PACIFIC AIR MOTIVE PTY LIMITED and GROUP AIR PTY LIMITED v. KENNETH MAGNUS, CIVIL AVIATION SAFETY AUTHORITY and AIRSERVICES AUSTRALIA
No. NG 1079 of 1997
FED No. 1107/98
Number of pages - 55
Aviation Law
(1998) 157 ALR 443
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
BEAUMONT, HILL AND SACKVILLE JJ
Aviation Law - Aircraft - Carriage by air - Claim for psychological injury suffered by passengers and non-passengers following the ditching of an aeroplane - Claims made after expiration of two years and in reliance on causes of action other than liability under the Civil Aviation (Carriers' Liability) Act 1959 (Cth) - Whether the Civil Aviation (Carriers' Liability) Act embraces psychological injury suffered by passengers and non-passengers as a result of an aeroplane accident.
Carriage By Air Act 1935 (Cth), s 3.
Civil Aviation (Carriers' Liability) Act 1959 (Cth), ss 8, 10, 11, 12, 13, 14, 15, 16, 25A, 25D-25N, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39, 40.
Civil Aviation (Carriers' Liability) Amendment Act 1991 (Cth).
Trade Practices Act 1974 (Cth), ss 52, 53, 82.
Law Reform (Miscellaneous Provisions) Act 1944 (NSW), s 4.
Workers' Compensation Act 1916 (Qld), s 8.
Wrongs Act 1936 (SA), ss 23A, 23C.
Compensation (Fatal Injuries) Act 1974 (NT), s 10.
Carriage by Air Act 1932 (UK), s 1.
Carriage by Air Act 1961 (UK), ss 3, 4.
Federal Court Rules, O 20 r 2, O 29 r 2.
Convention for the Unification of Certain Rules Relating to International Carriage by Air, open for Signature at Warsaw on 12 October 1929 (Warsaw Convention), Arts 1, 3, 17, 18, 19, 20, 21, 22, 23, 24, 25, 29, 36.
Protocol to Amend the Warsaw Convention, (Hague Protocol) Art 19.
K M Beaumont, "Need for Revision and Amplification of the Warsaw Convention" (1949) 16 Journal of Air Law and Commerce 395.
J G Fleming, The Law of Torts (8th ed 1990).
P C Haanappel, "The Right to sue in Death Cases under the Warsaw Convention" (1981) 6 Air Law 66.
A F Lowenfeld and A I Mendelsohn, "The United States and the Warsaw Convention" (1967) Harv L Rev 497.
H Luntz, Assessment of Damages (3rd ed 1990).
Shawcross and Beaumont, Air Law (4th ed).
C Whitting, "A Primer on the Modern Law of 'Nervous Shock'" (1998) 22 Melbourne L Rev 62.
Adelaide Steamship Co Ltd v Spalvins (1988) 152 ALR 418, cited.
Air France v Saks 470 US 392 (1985), cited.
American Airlines Inc v Georgeopoulos (NSW CA, 26 September 1996, unreported), discussed.
American Airlines Inc v Georgeopoulos (No 2) (NSW CA, 5 August 1998, unreported), cited.
Anderson v Liddy (1949) 49 SR (NSW) 320, cited.
Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297, cited.
Daddon v Air France (1984) 7 S& B Av R 141, cited.
Eastern Airlines, Inc v Floyd 499 US 530 (1991), discussed.
Fishman v Delta Air Lines Inc 132 F 3d 138 (2nd Cir, 1998), discussed.
Fothergill v Monarch Airlines Ltd [1981] AC 251, discussed.
Gatewhite v Iberia Lineas [1990] 1 QB 326 (Gatehouse J), cited.
Hay or Bourhill v Young [1943] AC 92, cited.
Herd v Clyde Helicopters Ltd [1997] 2 WLR 380, (HL) cited.
In re Air Disaster at Lockerbie, Scotland on 21 December 1988, 928 F 2d 1267 (2nd Cir, 1991), cited.
In re Korean Air Lines Disaster of September 1, 1983, 932 F 2d 1475 (DC Cir, 1991), cited.
Jaensch v Coffey (1984) 155 CLR 549, cited.
Kotsambasis v Singapore Airlines Ltd (1997) 42 NSWLR 110 (NSW CA), not followed.
McKenna v Avior Pty Ltd [1981] WAR 255, cited.
Page v Smith [1996] 1 AC 155, cited.
Potter v Delta Air Lines Inc 98 F 3d 881 (5th Cir, 1996), discussed.
Preston v Hunting Air Transport Ltd [1956] 1 QB 454, cited.
Scala v Mammalitti (1965) 114 CLR 153, cited.
Sidhu v British Airways plc [1997] AC 430, discussed.
Swiss Bank Corporation v Brink's M.A.T. Ltd (1986) 1 QB 853, cited.
The Workers' Compensation Board of Queensland v Technical Products Pty Ltd (1988) 165 CLR 642, discussed.
Timeny v British Airways plc (1991) 56 SASR 287 (FC), cited.
Tseng v El Al Israel Airlines Ltd 122 F 3d 99 (2nd Cir, 1997), discussed.
Zicherman v Korean Air Lines Co Ltd 133 L Ed 2d 596 (1996), discussed.
SYDNEY, 29 May 1998 (hearing), 9 September 1998 (decision)
#DATE 9:9:1998
Counsel for the Applicant: Mr N C Hutley SC with Mr M Leeming
Solicitor for the Applicant: Norton Smith & Co
Counsel for the Respondent: J M Foord QC with Mr J E Rowe
Solicitor for the Respondent: Coleman & Grieg
THE COURT ORDERS THAT:
1. The appeal be allowed in part.
2. The following answers should be substituted for those given by the primary Judge in answer to the questions determined separately from and prior to all other issues in the proceedings:
Question 1:
Is a cause of action on behalf of a passenger whose alleged injuries are psychological injuries independent of physical injury an action for damage sustained by reason of 'personal injury' suffered by a passenger within the meaning of the term in s 28 of the Civil Aviation (Carriers' Liability) Act 1959?
Answer: In the circumstances of the present case, Yes.
Question 2:
Does Part IV of the Civil Aviation (Carriers' Liability) Act 1959 operate to exclude the causes of action pleaded in the Amended Statement of Claim in respect of claims by passengers for psychological injuries independent of any physical injury?
Answer: Yes.
Question 3:
Does Part IV of the Civil Aviation (Carriers' Liability) Act 1959 operate to exclude the causes of action pleaded in the Amended Statement of Claim in respect of claims by non-passengers for psychological injuries independent of any physical injury?
Answer: No.
THE COURT DIRECTS THAT:
1. On the question of costs, the appellants file written submissions within seven days and the respondents file written submissions within seven days thereafter.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
BEAUMONT J
INTRODUCTION
This is an appeal, by leave granted, from orders of a Judge of the Court answering a series of preliminary questions of law in representative proceedings arising out of an aircraft accident. The questions were put to the primary Judge in the context of facts agreed by the parties for the purposes of determination of the preliminary questions. The appeal raises for consideration several important questions with respect to the meaning and operation of the provisions of Part IV of the Civil Aviation (Carriers' Liability) Act 1959 ("CA Act").
The agreed facts included the following:
* South Pacific Air Motive Pty Ltd ("South Pacific"), the first appellant, was the owner, and Group Air Pty Ltd ("Group Air"), the second appellant, was the operator, of the aircraft, which was chartered to convey a party of students from Sydney to Norfolk Island.
* On 24 April 1994, the aircraft took off from Sydney Airport, but shortly thereafter ditched in the waters of Botany Bay.
* The passengers were on board an aircraft which was engaged in domestic carriage by air to which the provisions of Part IV of the CA Act applied. (Parts II, III, and IIIA of the Act provide for international carriage by air in the manner prescribed by the Warsaw Convention, the Hague Protocol amending that Convention, and the Guadalajara Convention. Part IV deals with domestic carriage.)
Kenneth Magnus, the first respondent, instituted the representative proceedings on 17 March 1997, almost three years after the accident, on behalf of a group of persons; some were passengers, others were not - being, it appears, parents of the students. The significance of this lapse of time is that under Part IV (and under the Warsaw Convention) there is provision for the extinguishment of claims not brought within two years.
By his statement of claim, the first respondent sued the appellants upon several causes of action, both statutory and at common law. He alleged that the appellants had engaged in misleading conduct, contrary to s 52 of the Trade PracticesAct 1974, by, inter alia, holding out that the aircraft was adequate; that the appellants had falsely represented that their air service was, inter alia, of a particular standard, contrary to s 53 (aa) of the Trade PracticesAct; and that the appellants had been guilty of common law negligence. No claim was made under Part IV of the Act.
The appellants sought summary dismissal of the whole or part of the proceedings on the grounds that the claims had been extinguished upon expiration of the two year limitation period. This application was dealt with by the determination of the preliminary questions.
For the purpose of deciding the preliminary questions, the primary Judge classified the claims made in the proceedings as follows:
(i) passengers' claims for one or more physical injuries without any psychological sequelae from the injury or those injuries;
(ii) passengers' claims for one or more physical injuries with some psychological sequelae (psychological damage) as a result of that injury or those injuries;
(iii) passengers' claims for psychological injuries that were independent of any physical injury ("pure mental injury" or "nervous shock"); and
(iv) non-passengers' [sc. the parents'] claims for nervous shock.
THE RELEVANT LEGISLATIVE SCHEME IN OUTLINE
The relevant provisions of the CA Act are found in Part IV (ss 26 - 41). These provisions are to the following effect (I will return to the detail of their language later):
Section 28 provides, so far as is presently material, that -
"Subject to this Part [IV], ... the carrier is liable for damage sustained by reason of ... any personal injury suffered by [a] passenger resulting from an accident which took place on board [an] aircraft ... "
(Section 28 also deals with the death of a passenger, but, fortunately, this did not occur in the present case.)
A question thus arises in the operation of s 28 as to the effect of its introductory qualifying words "[s]ubject to ... Part [IV]". That Part, in ss 31(1), 32, 33, 34, 36, 39 and 40, relevantly provides as follows with respect to "damage sustained by reason of ... personal injury suffered by [a] passenger resulting from an accident which took place on board [an] aircraft..." -
* Subject to the regulations made under the Act relating to passenger tickets, the liability of a carrier under Part IV in respect of each passenger by reason of his or her injury or death is limited to a specified amount (s 31(1)). The carrier's servants and agents are also entitled to invoke this limitation (s 33).
* Contracting out is prohibited (s 32).
* The right of a person to damages under Part IV is extinguished if an action is not brought by him or her or for his or her benefit within two years after (whichever is the later of) (i) the date of arrival of the aircraft at the destination, or (ii) the date on which the aircraft ought to have arrived at the destination; or (iii) the date on which the carriage stopped (s 34).
* With some immaterial exceptions, the liability of a carrier under Part IV, in respect of personal injury suffered by a passenger, is in substitution for any civil liability of the carrier under any other law in respect of the injury (s 36).
* Nothing in Part IV shall be deemed to exclude any liability of a carrier under Part IV: (a) to indemnify an employer of a passenger in respect of any liability under a workers' compensation law; (b) to pay contribution to a tort-feasor who is liable in respect of the death of, or injury to, the passenger - but this provision does not operate so as to increase the limit of liability of a carrier in respect of a passenger beyond the amount fixed by or in accordance with Part IV (s 37).
* If, in an action against a carrier under Part IV, the carrier proves that the damage was caused or contributed to by the negligence of the passenger, the damages recoverable should be assessed in accordance with s 39 (s 39(1)).
* The regulations may make provisions relating to, inter alia, passenger tickets, being provision for, inter alia, the non-application of a provision of s 31 in certain cases (s 40(c)). (No such regulation applies here in any material respect.)
THE DECISION AT FIRST INSTANCE
His Honour reserved for determination the following preliminary questions:
"1. Is a cause of action on behalf of a passenger whose alleged injuries are psychological injuries independent of physical injury an action for damage sustained by reason of 'personal injury' suffered by a passenger within the meaning of the term in s 28 of the [CA] Act...? 2. Does Part IV of the [CA] Act...operate to exclude the causes of action pleaded in the Amended Statement of Claim in respect of claims by passengers for psychological injuries independent of any physical injury? 3. Does Part IV of the [CA] Act...operate to exclude the causes of action pleaded in the Amended Statement of Claim in respect of claims by non-passengers for psychological injuries independent of any physical injury?" The primary Judge ordered that each question be answered in the negative.
THE AUTHORITIES INTERPRETING THE WARSAW CONVENTION
As has been noted, Part II of the CA Act adopts the Warsaw Convention in the case of international carriage by air. Part IV, in dealing with domestic carriage, does not in terms, or otherwise, adopt the Convention. Yet, whilst Part IV is a free-standing provision, it is similar to the Convention in some respects. In the absence of any square authority on the meaning of the relevant provisions of Part IV, I propose to examine the cases which have considered the operation of the Convention for the purpose of ascertaining whether they can illuminate the present questions.
In Preston v Hunting Air Transport Ltd [1956] 1 QB 454, Ormerod J upheld a claim under Art. 17 of the Convention by two infant children of a widowed mother. (Article 17 is in terms similar to s 28 of the CA Act. Relevantly, Art. 17 makes the carrier "liable for damage sustained in the event of the death or wounding of a passenger or any other bodily injury".) Ormerod J rejected an argument that Art. 17 permitted only financial loss to be taken into account as "damage sustained". He said (at 461):
"[Article 17] does not refer particularly to financial loss, it refers to damage, and the question does arise - and it is probably a very important question in this case - whether that damage should be calculated purely on what may be estimated as the financial loss which these infants have sustained, or whether it should be calculated on the broader basis of the loss which they inevitably must have sustained beyond the actual financial loss by the fact that they lost their mother as young children aged some three or four years, who were, at the time of her death, already deprived of a father. As I interpret the words of article 17 it does seem to me that this is an item of damage for which the plaintiffs are entitled to be compensated. I must take into account, in calculating any sum which should be awarded to them, something more than the purely financial loss and award some sum - a sum extremely difficult to arrive at - for the loss which they have sustained by reason of the fact that they have lost the care of their mother at an age when probably they needed it most."
Preston has been criticised in the Supreme Court of the United States. In Zicherman v Korean Air Lines Co. 133 L Ed 2d 596 (1996), it was held that a plaintiff may not recover damages under the Convention for loss of society resulting from the death of a relative in an aircraft accident because (1) in Art. 17, which provided that a carrier would be liable for damage ("dommage" in the official French text) sustained in the event of a passenger's death or bodily injury, the term "dommage" meant legally cognizable harm, but Art. 17 left it to adjudicating courts to specify what harm was cognizable as determined by domestic law; (2) where, as in the case at hand, an airplane crash occurred on the high seas, the U.S. Death on the High Seas Act supplied the substantive United States law; and (3) that Act permitted only pecuniary damages.
Scalia J said (at 607):
"Canada has adopted legislation setting forth who may bring suit under Article 24(2), but has left the question of what types of damages are recoverable to provincial law. Haanappel, supra, at 70-71. The Court of Appeals of Quebec has rejected the argument that Article 17 permits damages unrecoverable under domestic Quebec law. Dame Surprenant v Air Canada, [1973] C.A. 107, 117-118, 126-127 (Ct. App. Quebec) (opinion of Deschnes, J.). But see Preston v Hunting Air Transport Ltd., [1956] 1 Q.B. 454, 461-462 (granting damages under Convention, but without considering Article 24). Finally, the expert commentators are virtually unanimous that the type of harm compensable is to be determined by domestic law."
Article 24(2) provided, in effect, that, in the cases covered by Art. 17, any action for damages, however founded, can only be brought subject to the condition and limits set out in the Convention; and that this is without prejudice to the questions as to who are the persons who have the right to bring suit and what are their rights.
Although a claim made under the CA Act, and not under the Convention, McKenna v Avior Pty Ltd [1981] WAR 255 may be noted here. The plaintiff claimed damages for the death of her son in an aircraft crash. Section 35(8), in dealing with death claims, provides that in awarding damages, the Court is not limited to the financial loss resulting from the death of the passenger. It was held (1) that damages were to be assessed on the same principles as claims under the Fatal Accidents Act - damages were to be assessed by ascertaining the balance of the pecuniary loss to the deceased's relatives from his death over the pecuniary gains accruing from that event; and (2) that the plaintiff was entitled to damages for the lost benefit of household services performed by and financial benefits received from the deceased, but was not entitled to damages for the grief and mental anguish she experienced in consequence of his death.
In Gatewhite v Iberia Lineas [1990] 1 QB 326, the owner of goods damaged in transit sued, although it was not named as either consignor or consignee in the air waybill. Gatehouse J rejected the defendant's argument that the Warsaw Convention limited the right of action against a carrier to the consignor and consignee. Gatehouse J said (at 334-335):
"In my view the owner of goods damaged or lost by the carrier is entitled to sue in his own name and there is nothing in the Convention which deprives him of that right. As the Convention does not expressly deal with the position by excluding the owner's right of action (though it could so easily have done so) the lex fori, as it seems to me, can fill the gap. While bearing in mind the need to guard against the parochial view of the common lawyer, I see no good reason why the civil lawyer's approach to the construction of the Convention, based on the importance of contract, should be of overriding importance. The fact is that the Convention is silent where it could easily have made simple and clear provision excluding the rights of the 'real party in interest' , had that been the framers' intention. It would be a curious and unfortunate situation if the right to sue had to depend on the ability and willingness of the consignee alone to take action against the carrier, when the consignee may be - and no doubt frequently is - merely a customs clearing agent, a forwarding agent or the buyer's bank. It would seem artificial in the extreme to require a special contract in the air waybill itself under article 15(2) to provide the goods owner with a remedy in such a normal situation."
Gatewhite has been critically examined in the House of Lords in Sidhu v British Airways [1997] AC 430. Lord Hope said (at 450-451):
"This decision, however, does not sit easily with the idea that the object of the Convention, in the areas with which it deals, was to provide uniformity of application internationally. As Shawcross & Beaumont, Air Law, 4th ed. (looseleaf reissue), vol. 1, VII (188) have observed, the rule in civil law countries is that only a party to a contract of carriage, or a principal for whom he was acting, is regarded as the appropriate plaintiff. In common law countries the proper plaintiff is the owner of the goods, whose right to sue depends on his interest in the goods, not on the fact that he may also be a party to the contract. It would seem to be more consistent with the purpose of the Convention to regard it as providing a uniform rule about who can sue for goods which are lost or damaged during carriage by air, with the result that the owner who is not a party to the contract has no right to sue in his own name. We were not asked to review the Gatewhite case in detail however, and as the point was not fully argued I would not wish to cast further doubt on the decision which Gatehouse J. reached. It is sufficient for present purposes to say that I am not persuaded that we should apply his reasoning to the question which is before us here, which is not concerned with the question of standing or title to sue but with the question whether a person who has an undoubted title to sue under the convention can pursue a claim outside the Convention where the Convention itself does not provide him with a remedy."
In Eastern Airlines, Inc. v Floyd 499 U.S. 530 (1991), passengers on an aircraft which narrowly avoided ditching sued for damages for mental distress. They advanced claims under state law in contract and in tort; and they also sued under the Warsaw Convention. The Supreme Court addressed only the Convention claim (at 533). This claim was made under Article 17, which is, as has been said, in similar terms to s 28 of the CA Act. The Supreme Court held that Art. 17 did not permit recovery.
Marshall J said (at 552 - 3):
"... our construction of Article 17 better accords with the Warsaw Convention's stated purpose of achieving uniformity of rules governing claims arising from international air transportation... As noted, the Montreal Agreement subjects international carriers to strict liability for Article 17 injuries sustained on flights connected with the United States... Recovery for mental distress traditionally has been subject to a high degree of proof, both in this country and others... (American courts require extreme and outrageous conduct by the tortfeasor);... (British courts limit such recovery through the theory of foreseeabilty;... (French courts require proof of fault and proof that damage is direct and certain). We have no doubt that subjecting international air carriers to strict liability for purely mental distress would be controversial for most signatory countries. Our construction avoids this potential source of divergence. We conclude that an air carrier cannot be held liable under Article 17 when an accident has not caused a passenger to suffer death, physical injury, or physical manifestation of injury. Although Article 17 renders air carriers liable for 'damage sustained in the event of'... such injuries,... we express no view as to whether passengers can recover for mental injuries that are accompanied by physical injuries. That issue is not presented here because respondents do not allege physical injury or physical manifestation of injury... Eastern urges us to hold that the Warsaw Convention provides the exclusive cause of action for injuries sustained during international air transportation. The Court of Appeals did not address this question, and we did not grant certiorari to consider it. We therefore decline to reach it here."
In American Airlines Inc. v Georgeopoulos, NSW Court of Appeal, 26 September 1996, unreported, passengers on an aircraft claimed damages in the Local Court for personal injuries, including nervous shock and mental suffering. The Local Court held that damages for shock were not recoverable because the phrase "any other bodily injury" in Art. 17 of the Convention did not include nervous shock and mental suffering. An appeal by way of stated case was brought to the Supreme Court. The stated case was based on agreed facts. But, because no finding had been made by the Local Court as to the nature of any injury caused to body tissues by the shock alleged, the Court of Appeal ordered that the matter be remitted to the Local Court, so that these findings might be made.
Sheller JA said:
"Nervous shock as a condition or a cause of a condition for which a defendant may be liable in negligence describes a non-impact injury which may or may not give rise to body tissue alteration. In Bell v The Great Northern Railway Company of Ireland [1891] 26 LR (Ir) 428 at 441, Palles CB pointed out the error in assuming, as a matter of law, that nervous shock is something which affects merely the mental functions and is opposed to actual physical injury. In Jaensch, Mrs Coffey suffered severe anxiety and depression and her psychiatric condition caused gynaecological problems;..."
His Honour went on to say:
"Assuming shock, the question is did that shock cause injury and if so what was the nature of the injury. These are matters for expert evidence; Bell v Great Northern Railway Company at 442. The findings on that evidence are vital to any conclusion whether the injury was 'bodily injury' with the meaning of Article 17. In this regard the caution of the United States Supreme Court [in Floyd] is worthy of remark. As their Honours observed at 540, the type of mental injury claimed in that case described as 'mental distress arising out of the incident' was 'injury caused by fright or shock - absent an incident in which someone sustained physical injury'. ...the Court pointed out that it expressed no view as to whether passengers could recover for mental injuries that are accompanied by physical injuries. That issue was not presented because the respondents did not allege physical injury or physical manifestation of injury. To my mind and with the greatest respect it was inappropriate for the Local Court to decide a question of the sort here posed using a label of dubious medical acceptability as the benchmark, without finding precisely what injury, if any, the passenger suffered. It follows that the point argued and carefully considered by the Magistrate was not one appropriate to be taken as a preliminary point."
In Potter v Delta Air Lines Inc 98 F.3d 881 (5th Cir. 1996), a passenger claimed, both under the Warsaw Convention and in state law, negligence as a result of tearing a ligament as she returned to her seat. It was held that this was not an "accident" within Art. 17, and that the Convention pre-empted state law claims including claims not arising from accidents.
Smith J said (at 887):
"It is not axiomatic that the Convention's limitation of liability for personal injury to 'accidents' connotes an intention to give plaintiffs who are not injured in an 'accident' recourse to state law causes of action. In fact, given the Convention's underlying goals of uniformity and certainty in the application of carrier liability law and its use of broad language to sweep into its ambit 'all international transportation of persons, baggage, or goods performed by aircraft for hire,' see article 1(1), quite the opposite is true."
In Sidhu, passengers detained on landing in a war zone sued the carrier for damages at common law for physical and psychological damage. It was held that their rights were extinguished by the limitation provision, Art. 29 of the Warsaw Convention, two years after their detention. It was accepted as common ground that no claim under Art. 17 was open for two reasons: (1) there had been no "accident"; and (2) the psychological consequences claimed to have been suffered (there was no finding at that stage) did not constitute a "bodily injury". Thus the House of Lords did not need to express a view on either question.
It was also common ground that, if a passenger had a claim under Art. 17 against the carrier, there was no concurrent common law remedy. It followed, as Lord Hope noted (at 441), that the issue for determination was whether a passenger who had sustained damage in the course of international carriage by air due to the fault of the carrier, but who had no claim against the carrier under Art. 17, was left without any remedy; or, as Lord Hope had earlier put it (at 435) the question was whether the Convention, as set out in the Schedule to the Carriage by Air Act 1961 (UK), provided the exclusive cause of action and sole remedy for a passenger who claims against the carrier for loss, injury and damage sustained in the course of, or arising out of, international carriage by air. The House of Lords held that it did.
In so holding, Lord Hope said (at 447):
"The reference in the opening words of article 24(2) to 'the cases covered by articles 17' does, of course, invite the question whether article 17 was intended to cover only those cases for which the carrier is liable in damages under that article. The answer to that question may indeed be said to lie at the heart of this case. In my opinion the answer to it is to be found not by an exact analysis of the particular words used but by a consideration of the whole purpose of the article. In this context the purpose seems to me to be to prescribe the circumstances - that is to say, the only circumstances - in which a carrier will be liable in damages to the passenger for claims arising out of his international carriage by air. The phrase 'the cases covered by article 17' extends therefore to all claims made by the passenger against the carrier arising out of international carriage by air, other than claims for damage to his registered baggage which must be dealt with under article 18 and claims for delay which must be dealt with under article 19. The words 'however founded' which appear in article 24(1) and are applied to passenger's claims by article 24(2) support this approach. The intention seems to be to provide a secure regime, within which the restriction on the carrier's freedom of contract is to operate. Benefits are given to the passenger in return, but only in clearly defined circumstances to which the limits of liability set out by the Convention are to apply. To permit exceptions, whereby a passenger could sue outwith the Convention for losses sustained in the course of international carriage by air, would distort the whole system, even in cases for which the Convention did not create any liability on the part of the carrier. Thus the purpose is to ensure that, in all questions relating to the carrier's liability, it is the provisions of the Convention which apply and that the passenger does not have access to any other remedies, whether under the common law or otherwise, which may be available within the particular country where he chooses to raise his action. The carrier does not need to make provision for the risk of being subjected to such remedies, because the whole matter is regulated by the Convention."
In Kotsambasis v Singapore Airlines Ltd (1997) 42 NSWLR 110, a passenger failed in a claim under the Warsaw Convention for nervous shock after an emergency landing. Meagher JA (Powell and Stein JJA concurring) said (at 112 - 3):
"I cannot agree that the term 'bodily injury' used in the Convention includes a psychological injury. I note that the term 'bodily injury' or an equivalent is used in some municipal legislation and that the trend in Anglo-Australian law is to interpret the phrase as including a psychological or mental injury: see, eg, Boyle v Nominal Defendant [1959] SR (NSW) 413; 76 WN (NSW) 598. However, the interpretation of a particular phrase used in municipal law and the change over years in that interpretation cannot guide the interpretation of the same phrase that might appear in an international agreement. The interpretation of an international convention proceeds in much the same way as the interpretation of an Act of Parliament: the words used usually mean what they say, but if they do not or the meaning is unclear or capable of differing interpretations, then courts are to give effect to the meaning intended. It is, therefore, quite proper to look at the intention of the signatories to an international convention in order to ascertain the meaning of the words that appear in it."
His Honour went on to consider Sidhu and Floyd, saying (at 114 - 5):
"The words 'bodily injury' appear, in the authentic French texts, as 'lésion corporelle'. Those phrases can be regarded essentially as equivalents. They both have the same ambiguity, namely whether the phrase can be taken to refer to a psychological injury. This ambiguity can only be resolved by looking at the intention of the contracting parties and adopting a purposive approach to the interpretation of the Convention. It is immediately apparent that the adjective 'bodily' is a word of qualification or limitation. It is a general principle of statutory interpretation, equally applicable to the interpretation of international agreements, that courts are not at liberty to consider any word as superfluous or insignificant - Commonwealth v Baume (1905) 2 CLR 405 at 414 - and, more specifically, that effect is to be given to words of limitation: Randwick Municipal Council v Rutledge (1959) 102 CLR 54 at 94. It is clear that the draftsmen of the Convention did not intend to impose absolute liability in respect of all forms of injury. Other provisions in the Convention are indicative of the approach which should be adopted in the interpretation of art 17. The monetary liability of the carrier is limited by art 22. Article 23 states that any provision tending to relieve the carrier of liability or to fix a lower limit than that which is laid down in the Convention shall be null and void. That article is intended to prevent carriers from contracting out of any of the provisions of the Convention. The surrendering by carriers of their freedom of contract was an important concession which must be seen in the context of the entire Convention, which amongst other things dealt with carriers' liabilities by providing limitations and certainty."
In his concurring judgment, Stein JA referred to Floyd and to a decision to the contrary of the Supreme Court of Israel in Daddon v Air France (1984) S & B Av R VII/141. His Honour said (at 121-2):
"What is plain is that Cooper DCJ found that Ms Kotsambasis did not suffer any form of physical injury on the airplane, but only a psychological one. That is, she suffered a psychological injury unaccompanied by any physical injury within art 17. Cooper DCJ, it seems, found in favour of the appellant because he was bound by Georgeopoulos v American Airlines Inc. (Ireland J, 10 December 1993), unreported). However, the Court of Appeal remitted that matter back to the magistrate (who heard the original action) to make further findings of fact on the nature of the injuries suffered. In obiter Sheller JA American Airlines Inc v Georgeopoulos (Court of Appeal, 26 September 1996, unreported) appeared to prefer the reasoning in Eastern Airlines Inc v Floyd over Daddon v Air France. To the extent that Ireland J found that purely psychological injury is 'bodily injury' under art 17 of the Convention, the decision is in my view erroneous. I would favour the construction adopted by the United States Supreme Court in Eastern Airlines Inc v Floyd in preference to Daddon v Air France. I agree with Meagher JA that 'bodily injury' in art 17 was not intended to include purely psychological injury."
Finally, in Tseng v El Al Israel Airlines 122 F. 3d 99 (2nd Cir. 1997), US Court of Appeals for the Second Circuit, the plaintiff alleged that the airline caused her to suffer personal injury when it subjected her to an intrusive security search prior to boarding an El Al flight. It was held that her complaint was not an "accident" within Art. 17 of the Warsaw Convention because "accident" does not include illness suffered by a passenger "as a reaction to the ordinary events and procedures of air transportation". The question then arose whether it was open to the plaintiff, notwithstanding authorities to the contrary, (for instance Potter and Sidhu), to pursue a claim in tort under state law. It was held that she could do so.
Cardamone J said (at 106):
"We recognize that a construction of the Convention by our sister signatories is 'entitled to considerable weight', Saks, 470 U.S. at 404, but remain unpersuaded to follow the course laid out in Sidhu. For one thing, the Convention is not an exhaustive set of rules and guidelines dealing with international air travel, as is evident from its formal title. As one commentator explained, 'the Convention was not intended to govern the entire relationship between air carriers and passengers..., and does not propose to unify all such rules.' Ras, Warsaw's Wingspan, supra, at 589; see Mankiewicz, The Liability Regime, supra, at 13, 91. For another, neither the text nor the Travaux preparatoires reveal an aim to provide in an exhaustive way for the liability of the carrier for all personal injuries. It is widely accepted that one of the two primary purposes of the Convention was to shield carriers from financial catastrophe following in the wake of a major accident... To that end, the Convention limits airline liability for accidents. But the Convention does not purport to insulate carriers from the ordinary risks of doing business, such as keeping their facilities in good repair. An injury to a passenger caused, for example, by a failure of a carrier to keep its walkways in a safe condition is hardly the type of catastrophic incident that would likely force even a fledgling airline out of business, and cannot be assumed to have been within the contemplation of the drafters of the Convention."
Certiorari has been granted by the Supreme Court in Tseng.
Georgeopoulos has been further considered by the NSW Court of Appeal (American Airlines Inc v Georgeopoulos (No. 2), Meagher, Sheller and Beazley JJA, 5 August 1998, unreported) after the Local Court made a finding that -"3. The evidence does not establish that the nervous shock in the form of a mild post traumatic stress disorder suffered by Mrs Georgeopoulos caused or resulted in:
. Any physical or bodily injury to her.
. Any structural alteration to bodily tissues or alteration in the function of an organ or neurochemical change or any other form of damage to tissues or organs."
It was held that there was no entitlement to recovery under Art 17.
Sheller JA referred to an observation by Castillo J in Jack v Transworld Airlines Inc 854 F Supp 654 (ND Cal 1994) (at 179) that:
"Article 17 does not say that a carrier will only be liable for damage caused by a bodily injury, or that passengers can only recover for mental injuries if they are caused by bodily injuries. No less an authority than our Supreme Court has indicated that the key causal link is between the accident and the damage sustained; see Air France v Saks 470 US 392 (1985) at 396."
But Sheller JA said (at 10-11):
"... I do not think that Article 17 permits this interpretation. Undoubtedly, it is a pre-condition of the carrier's liability for damage that the accident caused the damage and took place on board the aircraft or in the course of operations of embarking or disembarking. In the present cases, the accident caused a mild post traumatic stress disorder. But the damage must also be sustained, that is to say experienced or suffered, 'in the event of', relevantly, bodily injury suffered by the passenger. This is the damage for which the carrier is liable. I do not think Article 17 means that if the passenger died or suffered bodily injury, the carrier is liable for any damage caused by the accident if the damage was not the result of the death or bodily injury."
Sheller JA went on to say (at 11-12):
"I think Stein JA in Kotsambasis at 121 correctly delimited the ambit of recovery for psychic injury when he said 'where mental anguish follows and is caused by physical injury, recovery for both injuries is covered... Moreover, if the psychological injury is proven to be a species of bodily injury, then it would constitute 'bodily injury' within the article'. Mr Evatt accepted that the stress disorder was not the consequence of any physical injury. The appellant is not therefore liable under Article 17 for Mr and Mrs Georgeopoulos' nervous shock or mental distress."
THE REASONING AT FIRST INSTANCE
(a) Passenger claims for psychological injury only
The learned primary Judge accepted that, in some statutory contexts, the words "personal injury" were "apt to include nervous shock; that is, psychological injury not arising out of a physical injury". But, in his Honour's view, having regard to the "scheme and history" of the CA Act, this was not the case here, for two reasons:
First, in Floyd, which was followed in Kotsambasis, it was held that the drafters of the Warsaw Convention had no specific intention to include "purely psychic injury". Kostambasis should itself be followed and it should be held that such an injury was not "bodily injury" within Art. 17 and was not excluded by Art. 24 (the counterpart of s 36) or extinguished by Art. 29 (the counterpart of s 34).
Secondly, there was no warrant for reading "personal injury" in the CA Act more broadly than "bodily injury" in the Convention.
His Honour went on to reject an argument advanced on behalf of the appellants that, in accordance with the reasoning in Sidhu, if the term "personal injury" did not encompass psychological injury, the latter was excluded entirely. The primary Judge said:
"I have difficulty with aspects of Lord Hope's reasoning. He concedes the Convention does not purport to deal with all matters relating to contracts of international carriage by air; on the authority of Floyd, purely psychological injury is one of them. The Convention makes a specific provision about exclusion of actions, in Article 24(2). That exclusion is limited to 'cases covered by Article 17'. Yet his Lordship finds in the Convention as a whole an implied exclusion of all other actions arising out of the international carriage of persons, baggage or cargo by aircraft for reward. However, no question arises as to whether I should follow Sidhu; it is clearly distinguishable. The present case concerns Part IV of the Act, not the Convention. Although the principles embodied in the Convention are reflected in Part IV, there are differences of language. I have mentioned the difference between Article 24(2) and s 36. The cap provision of the Convention (Article 22), on which Lord Hope placed much reliance, states 'In the carriage of persons the liability of the carrier for each passenger is limited' etc, whereas s 31(1) says '...the liability of a carrier under this Part in respect of each passenger, by reason of his injury or death resulting from an accident'. Section 31(1) picks up the very words used in s 28 to impose liability and limits the amount of that liability. Similarly, s 345 extinguishes '(t)he right of a person to damages under this Part' after two years. In my opinion, nothing in Sidhu derogates from the conclusion that a purely psychological injury is not a 'personal injury' within the meaning of Part IV of the [CA] Act."
(b) Non-passengers' claims for pure nervous shock
His Honour held that Part IV had no application here. Liability in nervous shock was not dependent upon proof of a liability to compensate the initial victim; the liability was for breach of an independent duty of care. It followed, in his Honour's view, that the language of s 28 ("... damage sustained by reason of... any personal injury suffered by the passenger...") did not apply to these claims. As s 28 did not apply, s 36 did not exclude liability for these claims, and s 34 did not impose a relevant time limit.
THE APPELLANTS' GROUNDS OF APPEAL
By their notice of appeal, the appellants rely upon the following grounds:
* His Honour ought to have held that the liability imposed by s 28 of the CA Act provided the exclusive remedy for death or injury, including psychological injury or nervous shock, arising from the carriage of passengers to which Part IV applied.
* His Honour ought to have held that s 36 excluded any liability on the part of a carrier other than liability imposed under s 28 to any person for injury caused when a passenger was injured or put in peril during carriage to which Part IV applied.
* His Honour erred in holding that s 36 operated to exclude liability on the part of a carrier only in circumstances where liability is imposed by s 28.
* His Honour ought to have held that s 36, on its true construction, excluded liability on the part of a carrier to any person where that liability arose as a result of injury to a passenger carried in circumstances to which Part IV of the CA Act applied.
* His Honour ought to have followed Sidhu and adopted, in the construction of s 36 of the CA Act, the reasoning of the House of Lords in the interpretation of Art. 24 (2) of the Warsaw Convention.
* His Honour erred in confining the words "personal injury" in s 36 of the CA Act to mean "bodily injury".
* His Honour ought to have held that the words "personal injury" in s 36 of the Act included psychological injury or nervous shock unaccompanied by, or not arising out of, physical injury.
CONCLUSIONS ON THE APPEAL
In my view, there is considerable force in the appellants' arguments.
The starting point, at least, in the resolution of the present questions must be the language of the relevant legislation, that is, Part IV of the CA Act.
I have previously outlined the effect of Part IV. I should now address the actual language of its presently material provisions as follows:
The application of Part IV is dealt with by s 27(1): The Part -
"applies to the carriage of a passenger where the passenger is to be carried in an aircraft being operated by the holder of an airline licence,... under a contract for the carriage of the passenger: ... (b) between a place in a Territory and a place in Australia outside that Territory; ... not being carriage to which the Warsaw Convention, the Hague Protocol or the Guadalaraja Convention applies."
It is common ground that Part IV applied to the carriage of the passengers here.
Section 28 deals with the liability of the carrier for death or injury by providing:
"28. Subject to this Part, where this Part applies to the carriage of a passenger, the carrier is liable for damage sustained by reason of the death of the passenger or any personal injury suffered by the passenger resulting from an accident which took place on board the aircraft or in the course of any of the operations of embarking or disembarking."
As has been mentioned, in order to understand whether, and if so, how s 28 operates, account must be taken of the introductory words "[s]ubject to this Part". Putting that qualification to one side for the moment, the question arises as to the meaning, literally at least, of the language of s 28 itself. Its terms impose a strict liability on the carrier -
"for damage sustained by reason of... any personal injury suffered by the passenger resulting from an accident which took place on board the aircraft..."
Turning first to those passengers who claim to have suffered psychological damage, but not physical injury, it appears that, if taken literally, the relevant ingredients of s 28 were, at least so far as damage was claimed by the first respondent to have been sustained, apparently satisfied:
* There was, at least if as claimed by the first respondent (although no finding has yet been made), "damage sustained by the passengers". In its ordinary meaning, "damage" means "injury or harm" (Macquarie Dictionary). This would, ordinarily, include a psychological injury.
* It was, at least if as claimed by the first respondent, sustained "by reason of [a] personal injury". There was an "injury". In its ordinary meaning, "injury" means "harm of any kind done or sustained" (Macquarie). One of the dictionary meanings of "personal" is "pertaining to the person, body, or bodily aspect" (Macquarie); and psychological harm pertains to the passengers' person, body or bodily aspect.
* The injury, as claimed, resulted from an accident which took place on board the aircraft.
On the assumptions (1) that the facts should be found as claimed by the first respondent; and (2) that the words of s 28 should be given their ordinary meanings, it follows, in my view, that the requirements of s 28 were literally satisfied here, subject of course to the operation of the other material provisions of Part IV, in particular the limitation of actions provision (s 34).
The next question is whether, as a matter of construction of s 28 in particular, and of part IV as a whole, the language of s 28 should receive any different meaning; that is whether the adoption of a "purposive" rather than a "literal" interpretation, would give another construction.
As has been noted, although the learned primary Judge accepted, correctly in my view, that in some municipal contexts the expression "personal injury" was indeed apt to include nervous shock, his Honour went on to reject this interpretation here, essentially on the ground that the reasoning in Floyd should be applied to Part IV.
With all respect, I have difficulty with this approach to the interpretation of Part IV.
For one thing, although the NSW Court of Appeal in Kotsambasis followed Floyd in the interpretation of the Convention, it did so for reasons of international comity, yet acknowledging "the trend in Anglo-Australian law... to interpret the phrase ['bodily injury'] as including a psychological or mental injury". The present question is, of course, one of municipal law in the regulation of domestic carriage.
For another, even if it were permissible, in construing Part IV, to give weight to the approach taken to the interpretation of the Convention in this area, it would not really assist the first respondent, for two reasons. First, in enacting s 28 the Parliament chose to use different language. It is reasonable to infer that by using the expression "personal", rather than "bodily", injury it was intended to distinguish them. So far as Anglo-Australian municipal law is concerned, the use of "personal" rather than "bodily" would reflect the modern approach of our courts to the tort of nervous shock. As Sheller JA noted in Georgeopoulos, in Hay or Bourhill v Young [1943] AC 92, Lord Macmillan had observed fifty years ago (at 103):
"The distinction between mental shock and bodily injury was never a scientific one, for mental shock is presumably in all cases the result of, or at least accompanied by, some physical disturbance in the sufferer's system. And a mental shock may have consequences more serious than those resulting from physical impact. But in the case of mental shock there are elements of greater subtlety than in the case of an ordinary physical injury and these elements may give rise to debate as to the precise scope of legal liability."
And in Jaensch v Coffey (1984) 155 CLR 549, as Sheller JA went on to note, Brennan J said (at 559):
"But at least for the last half-century 'neurasthenic breakdown amounting to (psychiatric) illness' has been held to be 'without more... a form of harm or damage sufficient for the purpose of any action on the case in which damage is the gist of the action,... supposing that the other ingredients of the cause of action are present': per Dixon J in Bunyan v Jordan (1937) 57 CLR 1 at 16."
Moreover, now, according to Lord Lloyd in Page v Smith [1996] 1 AC 155 (at 188):
"In an age when medical knowledge is expanding fast, and psychiatric knowledge with it, it would not be sensible to commit the law to a distinction between physical and psychiatric injury, which may already seem somewhat artificial, and may soon be altogether outmoded. Nothing will be gained by treating them as different 'kinds' of personal injury, so as to require the application of different tests in law."
(See the discussion by Christian Witting, A Primer on the Modern Law of 'Nervous Shock' (1998) 22 Melbourne University Law Review, 62 at 68).
In my opinion, the reference to "personal", rather than "bodily", injury in s 28 is an indication that it was intended to pick up all kinds of injury to the person, whether strictly speaking of a "bodily" kind, as distinct from "mental", or not.
Another difficulty confronting the first respondent, if reference is to be made to the approach taken to the operation of the Convention, is that in a recent decision of the House of Lords (Sidhu) and in some (albeit not all) of the American cases, it has been held that the Convention operates as a code, to the exclusion of any concurrent remedy under the general law. Although Floyd left the question open, Sidhu dealt with the point squarely; and, with respect, the reasoning of Lord Hope in a case such as the present is convincing, at least so far as the passengers are concerned. (I will consider the position of persons other than passengers below.) In other words, even if it be right to draw a distinction between physical injuries (which would fall within s 28 as "bodily" injuries) on the one hand, and mental injuries (which, assumably, fall outside s 28) on the other, the benefits and detriments provided by Part IV would apply to the former kind of claim but not to the latter. In my view, this would give the Act a capricious and extraordinary operation.
In that event, the following well-known observations of Mason and Wilson JJ in Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297 (at 321) are in point:
"... when the judge labels the operation of the statute as 'absurd', 'extraordinary', 'capricious', 'irrational' or 'obscure' he assigns a ground for concluding that the legislature could not have intended such an operation and that an alternative interpretation must be preferred. But the propriety of departing from the literal interpretation is not confined to situations described by these labels. It extends to any situation in which for good reason the operation of the statute on a literal reading does not conform to the legislative intent as ascertained from the provisions of the statute, including the policy which may be discerned from those provisions."
Another, perhaps similar, way of achieving here the outcome found in Sidhu in the case of the Convention, is to treat Part IV as applicable, if not directly, then indirectly or derivatively, to a claim for purely mental (i.e. "non-bodily") injury. In describing the "gravitational pull" of legislation on evidence upon an ancillary process, Olney, Kiefel and Finn JJ said in Adelaide Steamship Co Ltd v Spalvins (1998) 152 ALR 418 (at 428):
"In our view such is the significance of the Act's provisions in this that their advent has created an entirely new setting to which the common law must now adapt itself, and adapt itself in such a way as to 'include [the Act] as a fundamental part of its fabric': see G Calabresi, A Common Law for the Age of Statutes, Harvard UP, Cambridge, 1982, p 86; R v Swaffield 151 ALR 98; on the analogical use of statutes in developing common law principles, see French J, ''Statutory Modelling of Torts'' in Mullany, Torts in the Nineties and the references therein; Bennion, Statutory Interpretation, 2nd ed, pp 369-70."
Their Honours' reasons for assimilating the statute's principles into the common law, also apposite here, included (a) the undesirability of having two streams capable of producing different results depending on adventitious circumstances; and (b) the impracticality of the consequences that could ensue if differing principles were to be applied by the statute and by the common law.
It follows then, in my view, that as a matter of either a literal or a purposive interpretation (or both) a claim for nervous shock, whether free-standing, or as part of a wider claim for personal injuries, should be regarded as within s 28 and the other applicable provisions of Part IV.
Section 28 must, as has been noted, be read in conjunction with s 36 which provides:
"36. Subject to the next succeeding section, the liability of a carrier under this Part in respect of personal injury suffered by a passenger, not being injury that has 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."
In my opinion, the expression "personal injury" should be read in s 36 in the same way as in s 28.
Section 34 operates to extinguish the right of a person to damages under Part IV if an action is not brought within the two year period, and this did not occur in the case of the passengers. Once ss 28, 34 and 36 are read together in the way I would interpret them, it must follow that it should be declared that the passengers' claims were extinguished after the two year period.
Turning next to the more difficult questions arising in the case of the claims by persons other than passengers, there is a threshold issue to be resolved in the application of s 28 in such case: that is whether s 28 is capable of making a carrier liable to persons other than passengers. It will be recalled that s 28 is expressed to operate "where this Part applies to the carriage of a passenger"; and that it is expressed to impose liability "for damage sustained by reason of the death of the passenger or any personal injury suffered by the passenger". All of this suggests, naturally, that the primary focus of s 28 is upon the passenger, certainly in the event of his or her being injured. The position in the event of death is perhaps not so clear. Yet, it will have been noted that s 28 speaks of a liability "for damage sustained by reason of the death... or ... injury". The section does not, at least in terms, purport to limit its operation to damage sustained by the passenger. Nor does s 36. It follows that, taken literally, a person other than a passenger could fall within s 28 or s 36, or otherwise within Part IV, if he or she sustained psychological damage by reason of the death or personal injury of a passenger.
Is there any reason, by adopting a purposive method of interpretation, why such a literal construction should not be adopted? In my view, there is not. It is apparent that Part IV was intended to operate exclusively, as a code, in the event of the death or personal injury of a passenger in an aircraft accident. In that area, Part IV provides some benefits not available under the general law, yet is also restrictive of the rights of a plaintiff at common law in some respects. Whilst the position is not so clear as in the case of a claim by a passenger, I think that it is preferable to apply the "seamless web" approach in this context also as a matter of assumed legislative purpose. The policy considerations mentioned by Lord Hope are equally pertinent here, notwithstanding the absence of a contract of carriage between the carrier and this class of claimants.
Like Bingham J, who was confronted with an equally difficult question of interpretation on an analogous topic, the construction which I would put upon Part IV may not be irresistible. Nonetheless, it is, I think, the best one, and there is no square authority on Part IV, or any authoritative writing, which leads me to think that my provisional preference should be overridden (see Swiss Bank Corporation v Brink's M.A.T. Ltd [1986] 1 QB 853 at 860).
It follows that I would also declare that the rights of these claimants to damages, if any, were extinguished after the two year period had expired.
ORDERS PROPOSED
As has been noted, no findings of fact have yet been made. For the reasons given by Sheller JA, it is difficult, in the absence of actual findings, to describe the injuries as either purely physical or purely psychological. Consequently, there are also difficulties with the form of the questions dealt with by his Honour. In the circumstances, it is appropriate that suitable declaratory orders be made dealing with the limitation aspect.
Costs at first instance and on the appeal must follow the event.
I would propose the following orders:
1. Appeal allowed.
2. Set aside the orders for separate questions and the answers made at first instance. In lieu thereof make the following declaratory orders:
"Declare that - (a) the rights to damages, if any, of passengers, and of persons who were not passengers, on whose behalf these proceedings were brought, were extinguished by the operation of s 34 of the Civil Aviation (Carriers' Liability) Act 1959, no action having been brought within two years after 24 April 1994. (b) Passengers and the other persons mentioned in (a) above, have no rights to any damages other than the rights to damages, if any, granted by Part IV of that Act."
3. Order that the first respondent pay the appellants' costs (a) of the determination of the separate questions at first instance; and (b) of the appeal.
HILL J
I have had the opportunity of reading in draft both the judgments of Beaumont J and Sackville J. They relieve me from setting out both the underlying circumstances in which the appeal arises and the questions which arise for decision.
I agree with both their Honours, and for the reasons they have given, that passengers on a commercial flight in Australia, who suffer psychological harm, but not physical injury are precluded from bringing proceedings against an airline other than in accordance with and subject therefore to the limitation contained in the Civil Aviation (Carriers' Liability) Act 1959 ("CA Act"). In the result, the first two questions posed for decision should be answer in the affirmative.
"does no more than reflect in statutory form the well established principle...that damage sustained by reason of a death of a passenger is not restricted to a 'financial' or 'monetary' loss but extends to a loss of services capable of being valued in monetary terms or to the loss of the reasonable expectation of future financial benefits or services."
McKenna v Avior Pty Ltd [1981] WAR 255 (Smith J), at 258.
A broader view of the sub-section might well be open, namely, that it permits the court to award solatium to certain relatives for the suffering (not nervous shock) caused by the death. Such awards are permitted in some Australian jurisdictions: Wrongs Act 1936(SA), ss 23A-23C; Compensation (Fatal Injuries) Act 1974 (NT), s 10(3)(F); H Luntz, Assessment of Damages (3rd ed 1990), pars 9.7.1 ff. If this broader view is correct, the effect of s 35(8) of the CA Act is merely to permit the claimant making a wrongful death claim to seek solatium. See also Preston v Hunting Air Transport Ltd [1956] 1 QB 454 (Ormerod J), where it was held that in a claim under art 17 of the Warsaw Convention in relation to the death of a passenger, her infant children could recover damages for loss of their mother's care.
Apart from the historical considerations, other factors suggest that s 35(8) is not intended to address nervous shock claims by non-passengers.
* The duty of care owed by a carrier to a non-passenger, not to expose him or her to a risk of nervous shock, is independent of the carrier's duty to the passenger: Jaensch v Coffey, at 560. While this may not be a major consideration in the interpretation of the Warsaw Convention, the drafters of the CA Act must have been aware of the distinct nature of the duties owed to a passenger and a non-passenger under Australian law. Had the drafters intended to bring nervous shock claims by non-passengers within s 35 of the CA Act, much clearer language than that used in s 35(8) would have been used.
* The CA Act contains no equivalent to s 35 governing claims by non-passengers arising out of injuries occurring to passengers as the result of an accident on board an aircraft.
* Had it been intended to embrace nervous shock claims by non-passengers, it is hardly likely that the drafters would have made provision for such claims arising out of the death of a passenger, but ignored claims arising out of injury to a passenger or, for that matter, out of a passenger being put in peril. As the primary Judge observed, the absence of any provision to govern multiple claims in non-passenger nervous shock cases is a telling indication that they were not intended to be covered by Part IV of the CA Act.
* To read s 35(8) of the CA Act as embracing nervous shock claims by non-passengers arising out of the death of a passenger would lead to odd results. The CA Act would cover non-passenger nervous shock claims arising out of the death of a passenger, but not those flowing from a passenger being injured or placed in peril. It is difficult to believe that such an arbitrary result was intended.
Mr Hutley submitted that, even if s 35(8) of the CA Act did not extend to nervous shock claims by non-passengers, Part IV addressed third party claims. He contended that this supported the view that s 36 was intended to preclude non-passenger nervous shock claims. Mr Hutley pointed to s 37(a), which provides that nothing in Part IV shall be deemed to exclude any liability of a carrier to indemnify a third party in respect of any liability in the nature of workers compensation. See also s 37(b).
It is, however, one thing to say that the rights of some non-passengers may be affected by Part IV of the CA Act. It is quite another to say that particular rights or entitlements of a non-passenger, such as a right to claim damages for nervous shock arising out of an aircraft accident involving a relative of the non-passenger, are exclusively within Part IV. For the reasons I have given, I do not think that Part IV has that operation or effect.
From a policy perspective, I see nothing strange about this result. Just as there are policy reasons for not construing the Warsaw Convention as excluding nervous shock claims by non-passengers otherwise than under the Convention itself, so there are reasons for not reading Part IV of the CA Act as excluding such claims otherwise than under Part IV itself. Section 40 of the CA Act contemplates that regulations may be made providing for the circumstances in which tickets must be issued and in which the statutory limit on a carrier's liability will be removed by reason of a failure to comply with the regulations. It is true that regulations under s 40 have not been promulgated. Nonetheless, Part IV of the CA Act, like the Warsaw Convention itself, contemplates that passengers will be warned about the limitations on a carrier's liability. Non-passengers ordinarily receive no such warning.
Exposing carriers to liability for nervous shock claims by non-passengers doubtless makes it more difficult for them or their insurers to calculate the extent of the risks to which they are subject. But carriers are exposed to many forms of liability to non-passengers. If this particular liability creates unacceptable burdens, the position can be remedied by the Commonwealth Parliament. International agreement is not required. If the appellants' argument were accepted, the dividing line between non-passengers' nervous shock claims within Part IV of the CA Act and those outside it would be difficult to support on any sound basis. On the conclusion I have reached all non-passengers nervous shock claims are treated in the same manner.
CONCLUSION
I have explained the manner in which I think the categories of claims identified by the primary Judge should be interpreted. The separate questions should be construed in the same manner. On this basis, the appeal should be allowed in part and the following answers substituted for those given by the primary Judge:
Question 1:
Is a cause of action on behalf of a passenger whose alleged injuries are psychological injuries independent of physical injury an action for damage sustained by reason of 'personal injury' suffered by a passenger within the meaning of the term in s 28 of the Civil Aviation (Carriers' Liability) Act 1959?
Answer: In the circumstances of the present case, Yes.
Question 2:
Does Part IV of the Civil Aviation (Carriers' Liability) Act 1959 operate to exclude the causes of action pleaded in the Amended Statement of Claim in respect of claims by passengers for psychological injuries independent of any physical injury?
Answer: Yes.
Question 3:
Does Part IV of the Civil Aviation (Carriers' Liability) Act 1959 operate to exclude the causes of action pleaded in the Amended Statement of Claim in respect of claims by non-passengers for psychological injuries independent of any physical injury?
Answer: No.
I would give the parties an opportunity to make written submissions on costs. The appellants should file their written submissions within seven days and the respondents should file theirs within seven days thereafter.
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