Australia: Damage to air cargo and the application of Article 18 of the Montreal Convention

Last Updated: 1 November 2017
Article by Marcus Saw and Andrew Tulloch

IN BRIEF - AIR CARRIER'S SHARE OF LIABILITY REDUCED IN APPEAL CASE

In Singapore Airlines Cargo Pte Limited v Principle International Pty Ltd [2017] NSWCA 216, the New South Wales Court of Appeal considered the operation of the Montreal Convention 1999 in the context of damage to air cargo, in circumstances where the cargo were live animals. Exporters and air carriers will find the Court's analysis of what constitutes an "event" and "defective packing" under Article 18 interesting to consider.

EXPORTER BRINGS PROCEEDINGS AGAINST AIR CARRIER FOLLOWING DEATH OF CATTLE DURING FLIGHT TO CHINA

The Respondent to the appeal (Principle) conducted business exporting live animals, including cattle, from Australia to Asia. In August 2013, it contracted with the Appellant (Singapore Airlines) for the carriage of cattle from Melbourne to Harbin, China on board three separate flights. Upon their arrival in Harbin, 18 head of cattle that had been transported in two crates in the back section of the lower deck of one of the flights were found to have died during the flight.

It was found that the death of the cattle was due to lack of ventilation on the lower deck.

Principle brought proceedings at first instance against Singapore Airlines in the District Court in New South Wales for damages arising from the death of the cattle pursuant to Article 18 of the Montreal Convention 1999 (which is applicable in Australia by virtue of the Civil Aviation (Carriers' Liability) Act 1958 (Cth)).

"EVENT", "DEFECTIVE PACKING" UNDER ARTICLE 18 AND EXPORTER'S CONTRIBUTION TO LOSS AMONG ISSUES CONSIDERED ON APPEAL

The determination of the appeal involved a consideration of a number of issues, including the following:

  1. What was the relevant "event" for the purpose of the Montreal Convention 1999 (issue 1);
  2. Whether the deaths of the cattle resulted from the use of crates, which in the circumstances amounted to "defective packing" (issue 2);
  3. Whether Principle contributed to the loss and damage by failing to provide load plans to Singapore Airlines or otherwise inform Singapore Airlines that the crates ought to be placed on the upper deck (issue 3).

ARTICLE 18 OF THE MONTREAL CONVENTION 1999

Article 18 provides for a strict liability regime for the liability of air carriers in the event of damage to cargo during carriage by air. The relevant parts of Article 18 of the Montreal Convention 1999 are as follows:

Article 18--Damage to Cargo
1. The carrier is liable for damage sustained in the event of the destruction or loss of, or damage to, cargo upon condition only that the event which caused the damage so sustained took place during the carriage by air.
2. However, the carrier is not liable if and to the extent it proves that the destruction, or loss of, or damage to, the cargo resulted from one or more of the following:
...
(b) defective packing of that cargo performed by a person other than the carrier or its servants or agents
...

(Emphasis added)

WHAT WAS THE "EVENT" THAT CAUSED THE DAMAGE?

The first issue for determination in the appeal was whether there was an "event" for the purpose of Montreal Convention 1999 (issue 1).

Singapore Airlines recognised that the cause of death was the lack of ventilation to the cattle in those crates on the lower deck. It argued that the relevant "event" was the placing of the cattle into the crates and that, thereafter, whatever happened to the cattle was part of the ordinary carriage by air (such that there was no "event" for the purpose of Article 18). Alternatively, Singapore Airlines sought to characterise the relevant "event" as putting the cattle in the crates without any written warning to the carrier.

President Beazley (with whose judgment Payne JA agreed) noted that that the relevant inquiry for the purpose of determining liability under Article 18 was whether there was an event or happening which caused the damage which took place during the carriage by air. It was not a question of whether what occurred was unusual or unexpected and not part of the usual course of carriage. She examined the decisions in Povey v Qantas Airways Ltd [2005] HCA 33 and In re Deep Vein Thrombosis and Air Travel Litigation [2004] QB 234 in reaching this conclusion and also distinguished the wording in Article 17 (which refers to an "accident") from that in Article 18 (which refers to an "event").

Without more, the loading of the cows into the crates did not result in damage and therefore this could not be characterised as an "event" for the purpose of the Montreal Convention 1999. Rather, it was the placement of the crates containing the 18 heads of cattle on the lower deck of the aircraft, given the ventilation conditions on that deck, which was the "event" which caused the damage during carriage by air.

DID LOADING AND PLACEMENT OF CRATES CONSTITUTE "DEFECTIVE PACKING"?

The Court went on to consider whether there was defective packing for the purpose of Article 18(2) of the Montreal Convention 1999.

The onus of proving this issue in defence to the claim was on Singapore Airlines.

Singapore Airlines submitted that loading nine cows into one crate which was then placed on the lower deck of the aircraft constituted defective packing and that therefore it had no liability to Principle by virtue of Article 18(2).

Against Singapore Airlines' position, Principle argued that there was no evidence that the crates that were used were defective in any way and therefore Singapore Airlines had not discharged the onus of proving defective packing.

The Court noted that the design of the crates was a relevant factor in determining this issue, but was not the only aspect of the packing of the cargo to be considered. The judges acknowledged, by way of example, that a determination of the adequacy of the "packing" of cargo could involve a consideration of the way in which the items were packed or placed in the packaging.

The Court held that due to the finding that the death of the cattle was as a result of inadequate ventilation on the lower deck, it could not be said that the loss resulted from defective packing performed by someone other than the carrier.

PRINCIPLE'S PROPORTIONATE LIABILITY ADJUSTED UPWARDS TO 80% AFTER COURT FINDS IT FAILED TO PROVIDE LOAD PLAN TO SINGAPORE AIRLINES

Finally, the Court considered whether and to what extent negligence, wrongful act or omission on the part of Principle caused or contributed to the loss.

The Court held that a failure by Principle to provide its load plan and to inform Singapore Airlines that the crates containing the cattle were to be placed on the upper deck contributed to the death of the cattle and the loss suffered. The evidence was that a load plan had been prepared but was not provided to Singapore Airlines and that Principle was aware of the risk of injury to the cattle if carried on the lower deck.

In the circumstances, the Court adjusted Principle's proportionate liability upwards from 40% (as determined at first instance) to 80%.

EXPORTERS AND CARRIERS SHOULD TAKE NOTE OF COURT'S ANALYSIS OF "EVENT" AND "DEFECTIVE PACKING"

The case is fact specific and we expect that its precedential significance will be limited.

In circumstances where decisions on the meaning and effect of Article 18 are fairly rare, it is worth noting the Court's treatment and analysis with regards to what constitutes an "event" under Article 18 as well as the commentary on what might constitute "defective packing" in a particular case.

Andrew Tulloch
Transport and logistics
Colin Biggers & Paisley

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Marcus Saw
Andrew Tulloch
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions