Liability Rules Revised
Michael Lipton

Passengers injured on international flights will soon be able to obtain better compensation and easier access to courts under the new international requirements permitting them to seek damages in their country of permanent residence. The new liability rules will be a part of a treaty recently finalized by the International Civil Aviation Organization which will up-date the 1929 Warsaw Convention regulating airline liabilities in international disasters.

Under the current law which is article 28(1) of the Convention as amended by certain protocols to which Canada is a signatory, an action for damages in relation to an international carriage by air between two countries must be brought, at the option of the plaintiff, in the territory of one of the high contracting parties either before the court having jurisdiction;

• where the carrier is ordinary resident;
• has its principal place of business;
• has an establishment by which the contract has been made; or
• at the place of destination.

One recent case which highlights the limits of the current law is Roberts v. Guyana Airways Corporation (1998), 41 O.R. (3d) 653 a decision of Mr. Justice Juriansz of the Superior Court of Justice of Ontario. Mrs. Roberts, a Canadian citizen and resident of Ontario, had booked a round trip flight in Guyana from Georgetown to Toronto and return. She purchased the ticket in Guyana and as a result of maintenance problems, Guyana Airways Corporation ("GAC") had chartered an aircraft and crew from Air Transat Inc. ("AT"), a Canadian charter airline to carry the passengers to Toronto. While aboard the GAC flight to Toronto, Mrs. Roberts was injured and instituted an action for damages against GAC and AT. Both defendants brought motions seeking an order to permanently stay the action against them or dismissing it on the grounds that the court had no jurisdiction.

Mr. Justice Juriansz reviewed article 28 of the Convention and found that GAC, a foreign corporation had its principal place of business in Guyana and was not ordinarily resident in Ontario merely because it had a branch office there. Further, the court concluded that since the plaintiff had purchased her ticket and made the contract of carriage through GAC in Guyana and the place of destination is determined by the whole contract of carriage as the place where the carriage ends, the plaintiff had no right to bring the action against GAC in Ontario by reason of article 28(1) of the Convention.

The Judge also considered whether AT was a "carrier" as defined by the Convention. The evidence revealed that GAC issued the tickets pursuant to the requirements of article 3 of the Convention and it had no involvement with the formation of the contract of carriage. Also, GAC had arranged all aspects of the carriage including the ground handling in Guyana and Toronto. Accordingly, the Judge found that AT was not a "carrier" for the purpose of the Convention.

It was next argued that if AT was not a "carrier" then the Convention did not apply to it and an action at common law against it could be maintained outside the purview of the Convention. In determining this question, the court reviewed the decision in Sidhu v. British Airways PLC, [1997] 1 All E.R. 193 (H.L.) where the House of Lords was faced with the question of whether the 1929 Convention provides the exclusive cause of action and sole remedy for a passenger who claims against a carrier for damage sustained in the course of international carriage by air. At page 201, Lord Hope of Craighead speaking for the court stated:

"...if a passenger had a claim under art 17 [art. 17 is concerned with the carrier's liability for death or injury suffered by a passenger] against the carrier, there was no concurrent common law remedy. It is common ground, therefore, that a passenger who has a claim for bodily injury caused by an accident which took place on board the aircraft, or in the course of any of the operations of embarking or disembarking, cannot maintain a separate claim at common law for any loss, injury or damage not covered by art 17 of the Convention. That seems to follow inevitably from the provisions of art 24(2), which declares that in the cases covered by art 17 any action of damages, however, founded, can only be brought subject to the conditions and limits set by the Convention."

Later at page 212, Lord Hope of Craighead concluded:

"I believe that the answer to the question raised in the present case is to be found in the objects and structure of the Convention. The language used and the subject matter with which it deals demonstrate that what was sought to be achieved was a uniform international code, which could be applied by the courts of all the High Contracting Parties without reference to the rules of their own domestic law. The Convention does not purport to deal with all matters relating to contracts of international carriage by air. But in those areas with which it deals -- and the liability of the carrier is one of them -- the code is intended to be uniform and to be exclusive also of any resort to the rules of domestic law."

Mr. Justice Juriansz also reviewed the decision in Naval-Torres v. Northwest Airlines, (1998) 159 D.L.R. (4th) 67 where Mr. Justice Sharpe examined the English and American case law on the subject. At pages 5 and 6 he stated:

"As its formal title indicates, the purpose of the Warsaw Convention is to unify certain rules relating to international carriage by air and the liability of carriers. The issue presented here is the extent to which the Convention is exhaustive of the rights of passengers who assert claims arising during the course of international carriage by air. I have been referred to an extensive body of case law, primarily from the United Kingdom and the United States, which addresses this issue. Those cases are not uniform in their approach. It is possible to identify two lines of authority bearing upon the issue before me. First is the view recently expressed by the House of Lords in Sidhu v. British Airways Plc, [1997] 1 All E.R. 193 that the Convention provides 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. Sidhu holds that the exclusivity of the Convention prevails even if an injured or aggrieved party has no recourse under the Convention and is deprived of a legal remedy for an injury or loss that would otherwise be available under domestic law. Another view, adopted by some American Courts, is that the Convention is only exclusive with respect to claims for which it affords a remedy and that accordingly, if a loss has been suffered for which no remedy is available under the Convention, the plaintiff is at liberty to pursue domestic causes of action: see Tandon v. United Airlines, 926 F. Supp. 366 (S.D.N.Y. 1996); Abramson v. Japan Airlines Co., 739 F. 2d 130 (U.S.C.A. 3rd Cir. 1984); Walker v. Eastern Air Lines Inc., 775 F. Supp III (S.D.N.Y. 1991). I note that these cases do not question the proposition that if the facts pleaded do bring the claim within Article 17, it follows that the Convention is exhaustive of the rights of the plaintiff.

It is the defendant's position that the correct view is that expressed by the House of Lords in Sidhu. However, the defendant further submits that the claims advanced by the plaintiff in this action do fall within the reach of the Convention. Accordingly, it is the defendant's position that even under the less restrictive view which permits a plaintiff to assert common law claims independent of the Convention where those claims do not fall within the category of claim for which the Convention affords a remedy, the fights of the plaintiff and the proposed class fall to be determined exclusively under the Convention."

The court in Naval-Torres did not decide whether Sidhu or the more liberal position taken by the American cases should be followed in Canada. Instead, Mr. Justice Sharpe considered whether the facts pleaded by the plaintiff fall within the category of claims for which the Convention provided a remedy. In doing so, he found that the claims pleaded were for damages for bodily injury and this was within the article of 17 of the Convention. Applying the principal of Naval-Torres to the Roberts case, the court there found that the damages claimed were within the meaning of article 17 of the Convention and therefore the Convention provided the exclusive remedy in the circumstances of the case.

The Judge in the Roberts case next turned its mind to whether passengers may bring suit against agents of the carrier which are performing services in furtherance of the contract of carriage in place of the carrier itself or at least services which the carrier is legally obliged to perform. It was contended by GAC and AT that while the plaintiff could bring an action against an agent of the carrier in its own name, article 28(1) of the Convention, governs were such action may be brought. As a result, it was argued that article 28(1) applies to "any action for damages" and is not limited to an action against the carrier. Accordingly, actions against the agent of the carrier must be brought where the carrier is ordinarily resident or has its principal place of business, or has an establishment by which the contract has been made or before the court having jurisdiction at the place of destination.

The judge in the Roberts case determined that this argument was at odds with the purposive approach followed by the courts in interpreting the Convention. He found that applying article 28 in the manner contended would have results which might be seen as undesirable. Depending on where the ticket was purchased, what was the final destination, what limited aspect of the contract of air travel was carried out by the agent and where the agent had its principal place of business or was ordinarily resident, the action might have to be brought in a jurisdiction which was highly inconvenient to both the passenger and the agent.

Mr. Justice Juriansz also found that both Mrs. Roberts and AT were residing in Ontario and most of the witnesses including her physician were present in the jurisdiction. Moreover, he determined that if the plaintiff sought to sue an agent of GAC that provided only local and limited ground services in Toronto, the argument of AT would have the result that such a suit would have to be brought in Guyana. He then concluded that this was not intended by the Convention and found that article 28 was intended to govern suits against carriers. Further, the Judge found that the place where a passenger may bring suit against an agent of a "carrier" in its own name is not dealt with by the Convention and is to be determined by domestic law. Accordingly, the Judge concluded that Mrs. Roberts' suit against Air Transat was properly brought in Ontario. He also observed that his finding that the passenger may bring suit against the carrier and the carrier's agent in different jurisdictions in respect of the same events, would not be desirable. If this was done, he opined that the court would have jurisdiction to order a stay of the proceedings, if circumstances warranted it.

Although Mrs. Roberts was entitled to pursue her claim against AT, it was necessary for her counsel to follow a somewhat tortuous path. Clearly this process is not in keeping with the principle of accessibility of justice to all and underscores the necessity for modernizing the liability rules regulating airlines which provide international flights.

Accordingly, the recent steps of the International Civil Aviation Organization in Montreal, Canada are long overdue and most welcomed. Under the new Convention which is expected to be implemented by late 2000, passengers such as Mrs. Roberts will be able to sue the carrier in the country where they had their principal and permanent place of residence at the time of the accident. As one commentator puts it, this means that passengers from countries where jurisdiction award generous damages, such as the United States, will find it easier to file law suits. Time will tell how the universe will unfold.

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