Australia: Montreal Convention time bar proves fatal to airline passengers claim

Last Updated: 7 November 2018
Article by Andrew Tulloch

In brief - Plaintiff fails in application to correct identity of respondent outside of time limitation period

The two year time bar under the Montreal Convention 1999 has brought a potential claimant unstuck when legal action was commenced against the wrong legal entity as carrier in Bhatia v Malaysian Airline System Berhad [2018] FCA 1471.

Dr Bhatia commenced legal action in the Federal Court of Australia against Malaysian Airline System Berhad (MAS) on 4 June 2018, claiming damages for personal injuries he alleges he sustained on a Malaysian Airlines flight between London and Kuala Lumpur on 5 June 2016.

Plaintiff's right to damages and Articles 33 and 35 of the Montreal Convention

It was accepted that his right to damages was governed by the Civil Aviation (Carriers' Liability) Act 1959 (Cth), which adopts and schedules the Montreal Convention 1999 (Convention).

Article 33 of the Convention provides:

1. An action for damages must be brought, at the option of the plaintiff, in the territory of one of the States Parties, either before the court of the domicile of the carrier or of its principal place of business, or where it has a place of business through which the contract has been made or before the court at the place of destination.

Article 35 provides:

1. The right to damages shall be extinguished if an action is not brought within a period of two years, reckoned from the date of arrival at the destination, or from the date on which the aircraft ought to have arrived, or from the date on which the carriage stopped.

The difficulty for Dr Bhatia was that MAS is a company under external administration and the flight was, in fact, operated by Malaysia Airlines Berhad (MAB) rather than MAS.

The question was whether his right to damages was now extinguished or whether he would be permitted to amend the originating proceedings to correct the identity of the respondent from MAS to MAB, and avoid operation of the two year time bar.

The matter was heard before Her Honour Justice Charlesworth in the Federal Court in South Australia. Judgment was delivered on 2 October 2018.

Court's conclusions on plaintiff's right to damages and its powers under Federal Court Rules

Justice Charlesworth concluded that Dr Bhatia's right to damages against MAB had been extinguished as he had not brought an action within the meaning of Article 35(1) within two years of 5 June 2016. She also concluded that there was no power under the Federal Court Rules 2011 (Cth) to make an order to overcome this extinguishment, so his application for amendment should be dismissed.

It was argued that he had commenced "action" within two years and that, accordingly, had protected rights as required under Article 35.

The judge referred to the High Court decision in Agtrack (NT) Pty Ltd v Hatfield [2005] HCA 38 ((2005) 223 CLR 251) in which case, after a two year period had expired, Mrs Hatfield had applied to amend her pleadings so as to make express reference to a claim under the Civil Aviation (Carriers' Liability) Act. In that case, as her right to damages against the carrier had not been extinguished, amendment was allowed.

Although Dr Bhatia's Statement of Claim alleged sufficient facts named against the person named as the respondent, and was described by her honour as a "model of compliance", Dr Bhatia could not prove the critical facts alleged in the Statement of Claim to establish a right to damages against the named respondent, MAS, because he could not prove that MAS was the carrier. As such, the proceedings which he had commenced were bound to fail. The judge noted that this led to a conclusion that the proceeding was not an "action" against MAB which suffered from a mere procedural irregularity but rather was a hopeless proceeding against MAS, a different entity.

Federal Court Rules for amending an originating application

Rule 8.21 allows amendment of an originating application to correct a mistake in a name of a party to the proceeding or to correct the identity of a party to the proceeding or to substitute a person for a party to the proceeding, and such amendment takes effect under Rule 8.22 from the date on which the originating application was amended. However, this was not considered to be a mistake in the name of a party but rather that the wrong entity had been sued.

Reference was also made to the decision of the High Court in Bridge Shipping Pty Ltd v Grand Shipping SA (1991) 173 CLR 231 in which Justice Dawson said (at [242]):

A mistake in the name of a party is not, to my mind, the same thing as a mistake in the identity of that party. In other words, one may intend to sue the landlord but be mistaken in the belief that X is the landlord. That is not to mistake the name of X, but to mistake the identity of the landlord.

In any event, if another person was substituted under Rule 8.22, the proceeding would have been taken to have started from the date on which that person was substituted, which would have been outside the two year limitation period. Regrettably, in these circumstances, the Court was both unable and unwilling to permit the plaintiff to amend the proceedings as requested.

Bhatia v Malaysian Airline System Berhad holds important lessons for plaintiffs

The simple lesson is to be conscious of the severe time limitation period under the Convention and to take appropriate steps to ensure that the correct defendant is sued within that limitation period.

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.

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