Liability of International Air Carriers

In Evans v Air Canada [2025] HCA 22 a recent unanimous decision of the High Court considered whether passengers had capacity to recover damages for bodily injury allegedly caused by turbulence experienced on an Air Canada flight.

Consideration was given to whether Air Canada’s International Passenger Rules and Fares Tariff (“Air Canada Tariff”) formed part of the contract of carriage with passengers.

The Court also considered whether certain treaty provisions could be given effect in domestic law, including whether defences to liability recognised by the Convention for the Unification of Certain Rules for International Carriage by Air (1999) (“Montreal Convention”) were expressly incorporated into the Air Canada Tariff.

A partial defence contained in the Montreal Convention was raised and the Court considered whether Air Canada had waived the partial defence limiting the extent of recovery of damages.

The Court described the issue as follows:

2. The issue in this Court arises from a claim, made by two passengers who travelled on an Air Canada flight from Vancouver to Sydney in July 2019, for damages arising from spinal and psychological injury allegedly caused by turbulence experienced on the flight. In the Supreme Court of New South Wales, the passengers sought damages from Air Canada for these bodily injuries under Art 17 of the Montreal Convention, as incorporated into Australian law. Air Canada relied upon a partial defence in Art 21(2) of the Montreal Convention, available where the damage was not due to negligence or any other wrongful act or omission by Air Canada or its servants or agents. Under that partial defence, damages would be subject to a cap that limited the extent of the passengers’ recovery to 113,100 Special Drawing Rights (an international reserve asset created by the International Monetary Fund) which is approximately $240,000 at present exchange rates. The appellant passengers replied that, under Art 25, Air Canada had waived the partial defence in Art 21(2) because the Air Canada Tariff provided in r 105(C)(1)(a) that “[t]here are no financial limits in respect of death or bodily injury”.

The Civil Aviation (Carriers’ Liability) Act 1959 (Cth) (“Civil Aviation Act”) gives the Montreal Convention domestic legal effect in Australian law.  The Court found however that although the appellant passengers’ claim was brought under the Civil Aviation Act as a matter of domestic law, the treaty provisions that are given effect in domestic law have meaning in public international law that is not altered by the Civil Aviation Act. 

The Court noted that the system of rules governing liability for international air carriers and their application had been described as “an unusual hybrid of public international law and private transnational law”.  Consideration therefore needed to be given to the history of and background to the Montreal Convention, the Warsaw Convention and the Hague Protocol in order to interpret rule 105 of the Air Canada Tariff relating to liability of carriers and, in particular, limitations to that liability.

The Court found:

47. The interpretation of r 105(C)(1)(a) requires consideration of the meaning of the words of that rule in their context and in light of their purpose. Contrary to the submissions of Air Canada relying upon reasoning of the Court of Appeal, it cannot be assumed that it made “no commercial sense for Air Canada to volunteer to accept unlimited liability for death or bodily injury … on a no-fault basis” by waiving the defence in Art 21(2) of the Montreal Convention or that an acceptance of such liability by Air Canada without the benefit of the Art 21(2) defence was “unprecedented in a century of international commercial aviation”. Indeed, on another view, Professor Cheng observed in 2004, with reference to statements from market participants, that:

“in serious death and injury cases, major airlines tend increasingly to ignore the limits, and to pay full awardable damages. In fact, in view of the enormous cost of modern aircraft and of operating international air services, not to mention air travel claiming to be the safest means of transport, the difference in cost between insuring passenger liability for SDR100,000 a head or even for what could be compensation in full becomes negligible”. 

48. There is also no room in this context for the application of any expectation or “presumption”, as relied upon by Air Canada, to the effect that “for a party to be held to have abandoned or contracted out of valuable rights arising by operation of law, the provision relied upon must make it clear that that is what was intended. … ‘The more valuable the right, the clearer the language will need to be.'” Any such principle could have no application where the “right” in question is the application of a regime that (in Art 21) establishes the limit or threshold for tiers of liability for the application of a defence but also contemplates (in Art 25) that that limit or threshold can be raised or abolished by the stipulation of a carrier.  
49. Although the meaning of r 105(C)(1)(a) is not to be determined by such a priori assumptions, the provision must nevertheless be interpreted having regard to its context and purpose. That context and purpose make clear that r 105(C)(1)(a) only describes the effect of Arts 17 and 21 of the Montreal Convention, rather than stipulating a higher limit of liability for the purposes of Art 25 of the Montreal Convention. …

The Court unanimously dismissed the passengers’ appeal.

The judgment can be read here.

The judgment summary can be read here.