Court of Appeal Supreme Court New South Wales

• Medium Neutral Citation: United Airlines Inc v Sercel Australia Pty Ltd [2012] NSWCA 24
• Hearing dates: 1 March 2011 & 18 October 2011
• Decision date: 05 March 2012
• Before: Allsop P at [1]; Macfarlan JA at [103]; Handley AJA at [104]

Decision

The Court orders:

1. Leave to appeal granted.

2. Applicant to file a Notice of Appeal within 14 days.

3. Appeal dismissed with costs.

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

• Catchwords: WORKERS' COMPENSATION - passenger on board aircraft suffered injury during flight while landing in Texas - passenger employed by and in course of employment with respondent at time of injury - respondent made workers' compensation payments through insurer - whether respondent could recover payments from applicant pursuant to Workers Compensation Act 1987 (NSW), s 151Z(1)(d).; CARRIAGE BY AIR - right of indemnity and contribution pursuant to Civil Aviation (Carriers' Liability) Act 1959 (Cth) ("Act"), s 37 - whether two year time bar provision in Art 29 of Warsaw Convention and amending instruments ("Convention") made applicable in Pt IIIC of Act applicable - discussion of Art 17 and Art 24 of Convention - two year time bar not applicable to respondent's claim.; STATUTORY INTERPRETATION - consistency between Parts of statute - avoidance of unjust or capricious result - applicable principles in construing Australian Act derived from or based on international instruments.; PRIVATE INTERNATIONAL LAW - choice of laws - respondent not barred from bringing proceedings - right of indemnity and contribution created by New South Wales statute - Regie Nationale des Usines Renault SA v Zhang [2002] HCA 10; 210 CLR 491 distinguished.
• Legislation Cited: Acts Interpretation Act, s 15A; Carriage by Air Act 1932 (UK), Sch II; Carriage by Air Act 1935 (Cth), s 3, Sch II; Carriage by Air Act 1961 (UK), s 5(2); Civil Aviation (Carriers' Liability) Act 1959 (Cth), ss 8, 9B, 9D, 9E, 9F, 11, 12, 13, 14, 21, 24, 25J, 25K, 25L, 28, 34, 35, 36, 37, 38, 39, Sch 1, Sch 5; Constitution, ss 76(ii), 109; Convention for the Unification of Certain Rules for International Carriage by Air done at Montreal on 28 May 1999, Arts 17, 18,19, 35; Convention for the Unification of Certain Rules Relating to International Carriage by Air done at Warsaw on 12 October 1929, Arts 1, 3, 17, 20, 21, 22, 24, 29, 39(2); District Court Act 1973 (NSW), s 127; Judiciary Act 1903 (Cth), ss 39(2), 79; Limitation Act 1963 (UK), s 4; Limitation Act 1969 (NSW), s 14(1)(d); Montreal Protocol No. 4 to Amend the Convention for the Unification of Certain Rules Relating to International Carriage by Air Signed at Warsaw on 12 October 1929 as amended by the Protocol Done at The Hague on 28 September 1955 done at Montreal on 25 September 1975; Protocol to amend the Convention for the Unification of Certain Rules Relating to International Carriage by Air, signed at Warsaw on 12 October 1929 done at The Hague on 28 September 1955, Art 29; Vienna Convention on the Law of Treaties (1969), Arts 31, 32; Warsaw Convention as amended at The Hague, 1955, and by Protocol No 4 of Montreal, 1975, Arts 1, 3, 17, 18, 19, 20, 21, 22, 24, 29, 30A; Workers' Compensation Act 1926 (NSW), s 64(b); Workers Compensation Act 1987 (NSW), ss 151Z(1)(d), 9AA
• Cases Cited: Adan v Secretary of State for the Home Department [1997] 1 WLR 1107; Adan v Secretary of State for the Home Department [1999] 1 AC 293; Air France v Sté Méditerranéenne de Transit 1982 Revue Française de Droit Aérien 214 (Cour de Cassation Nov 1981); Attorney-General v Arthur Ryan Automobiles Ltd [1938] 2 KB 16; Australian Solar Mesh Sales Pty Ltd v Anderson [2000] FCA 864; 101 FCR 1; Benjamin v British European Airways 572 F 2d 913 (1978 2nd CCA); Chubb Insurance Co of Europe SA v Menlo Worldwide Forwarding Inc 634 F 3d 1023 (2011 9th CCA); Cie d'Aviation Pakistan International Airline v Cie Air Inter 1981 Revue Française de Droit Aérien 143; Connaught Laboratories Ltd v Air Canada (1978) 94 DLR 3rd 586; Data General Corp v Air Express International Co 676 F Supp 538 (1988); El Al Israel Airlines Ltd v Tsui Yuan Tseng 525 US 155 (1999); Fejo v Northern Territory [1998] HCA 58; 195 CLR 96; Felton v Mulligan [1971] HCA 39; 124 CLR 367; Fothergill v Monarch Airlines Ltd [1981] AC 251; France Handling v Sabena 1982 143 Revue Française de Droit Aérien 345; Fuller v K & J Trucks Coffs Harbour Pty Ltd [2006] NSWCA 88; 67 NSWLR 516; Government Insurance Office of NSW v C E McDonald (NSW) Pty Ltd (1991) 25 NSWLR 492; Gulf Air Company GSC v Fattouh [2008] NSWCA 225; 251 ALR 183; Howard Rotavator Pty Ltd v Wilson (1987) 8 NSWLR 498; In re Mexico City Air Crash of October 31, 1979 708 F 2d 400 (1979 9th CCA); Kurnell Passenger & Transport Service Pty Ltd v Randwick City Council [2009] NSWCA 59; 230 FLR 336; Kwanchi Pty Ltd v Kocsis (1996) 40 NSWLR 270; L B Smith Inc v Circle Air Freight Corporation 488 NYS 2d 547 (1985); Magnus Electronics Inc v Royal Bank of Canada 611 F Supp 436 (1985); Mitchell Shackleton & Co Ltd v Air Express International Inc 704 F Supp 524 (1989 SDNY); Moorgate Tobacco Co Ltd v Philip Morris Ltd [1980] HCA 32; 145 CLR 457; Motorola Inc v MSAS Cargo International Inc 42 F Supp 2d 952 (ND Cal 1998); NBGM v Minister for Immigration and Multicultural Affairs [2006] HCA 54; 231 CLR 52; Oriental Fire and General Insurance Co Ltd v Citizens National Bank of Decatur 581 NE 2d 49 (1991); Povey v Qantas Airways Ltd [2005] HCA 33; 223 CLR 189; QBE Workers Compensation (NSW) Ltd v Dolan [2004] NSWCA 458; 62 NSWLR 42; R v Commonwealth Court of Conciliation & Arbitration; Ex parte Barrett [1945] HCA 50; 70 CLR 141; Re McJannet; Ex parte Australian Workers' Union of Employees Queensland (No 2) [1997] HCA 40; 189 CLR 654; Regie Nationale des Usines Renault SA v Zhang [2002] HCA 10; 210 CLR 491; Royal Insurance Company v Emery Air Freight Corporation 834 F Supp 633 (SDNY 1993); Sidhu v British Airways Plc [1997] 1 AC 430; Smith's Dock Company v John Readhead & Sons [1912] 2 KB 323; Somaghi v Minister for Immigration, Local Government and Ethnic Affairs (1991) 31 FCR 100; South Eastern Sydney Area Health Service v Gadiry [2002] NSWCA 161; 54 NSWLR 495; Split End Ltd v Dimerco Express (Phils) Inc 19 Avi 18,364 (1986 DCNY); Ste Roissy Fret v Ste Scandinavian Airlines Systems France 1984 38 Revue Française de Droit Aérien 442 (Cour de Cassation); The Paquete Habana 175 US 677 (1900); Tickle Industries Pty Ltd v Hann [1974] HCA 5; 130 CLR 321; Tooth & Co Ltd v Tillyer [1956] HCA 49; 95 CLR 605; Turner v George Weston Foods Ltd trading as Tip Top Bakeries (Newcastle); Turner v George Weston Foods Ltd [2007] NSWCA 67; Victorian WorkCover Authority v Esso Australia Ltd [2001] HCA 53; 207 CLR 520; Watson v The Council of the City of Newcastle [1962] HCA 6; 106 CLR 426; Westpac Banking Corporation v Tomassian (1993) 32 NSWLR 207; Workcover Queensland v Amaca Pty Ltd [2010] HCA 34; 241 CLR 420; Workers' Compensation Board of Queensland v The Nominal Defendant (Qld) [1989] 1 Qd R 356
• Texts Cited: G N Calkins "The Cause of Action under the Warsaw Convention" (1959) 26 Journal of Air Law and Commerce 217 and 323; R Gardiner Treaty Interpretation (Oxford 2008); A F Lowenfeld and A I Mendelsohn "The United States and the Warsaw Convention" (1967) 80 Harvard Law Review 497; R H Mankiewicz The Liability Regime of the International Air Carrier (Kluwer 1981); Martin et al Shawcross and Beaumont Air Law (4th Ed Butterworths 1977); McClean et al Shawcross and Beaumont Air Law (Loose leaf Butterworths LexisNexis); The Oxford-Hachette French Dictionary (1984)
• Category: Principal judgment
• Parties: United Airlines Incorporated (Applicant); Sercel Australia Pty Limited (Respondent)
• Representation: R S McIlwaine SC (Applicant); M J Jenkins (Respondent); Blackstone Waterhouse Lawyers (Applicant); Moray & Agnew Lawyers (Respondent)
• File Number(s): 2010/55277

Decision under appeal

• Date of Decision: 2010-03-01 00:00:00
• Before: Robison DCJ
• File Number(s): 855 of 2009

Judgment

1 ALLSOP P: On 8 September 2005, Mr Sandeep Arora, an employee of the respondent ("Sercel"), was a passenger on United Airlines flight UA716 from Sydney to Houston. He was on the business of Sercel. As the plane was braking after landing, he was hit on the head by a hard plastic or metal object that detached from the interior of the aircraft. Mr Arora also suffered neck and knee injury which he blamed on the event in question. This evidence was accepted by the primary judge. No issue on appeal was taken with the fact of injury or with the amount awarded.

2 Sercel made workers' compensation payments through its insurer. Sercel now seeks to recover those payments under the Workers Compensation Act 1987 (NSW) (the "1987 Act"), s 151Z(1), which relevantly is in the following terms:

"(1) If the injury for which compensation is payable under this Act was caused under circumstances creating a liability in some person other than the worker's employer to pay damages in respect of the injury, the following provisions have effect:

...

(d) if the worker has recovered compensation under this Act, the person by whom the compensation was paid is entitled to be indemnified by the person so liable to pay those damages (being an indemnity limited to the amount of those damages)"

3 No action was brought by Mr Arora against the applicant ("United"). United submitted below and on appeal that Sercel's claim for indemnity is out of time by reference to the governing statute, the Civil Aviation (Carriers' Liability) Act 1959 (Cth) (the "Act"). The primary judge, Robison DCJ, rejected that contention. In my view, he was correct to do so for the following reasons. The action was for a sum under $100,000. Leave is required: District Court Act 1973 (NSW), s 127(2)(c)(ii). The matter is one of importance. Leave should be granted.

The governing legislation

4 There was no issue but that the flight in question was governed by the Convention for the Unification of Certain Rules Relating to International Carriage by Air done at Warsaw on 12 October 1929 (the "Warsaw Convention") as amended by the Protocol that was opened for signature at the Hague on 28 September 1955 (the "Hague Protocol") and by the Protocol done at Montreal on 25 September 1975 and called "Montreal Protocol No 4 to amend the [Warsaw Convention] as amended by the [Hague Protocol]" (the "Montreal Protocol"). The Warsaw Convention, the Hague Protocol and the Montreal Protocol are to be read and interpreted together as one single instrument that is set out as Schedule 5 to the Act. I will refer to the combined convention hereafter simply as "the Convention" and I will refer to the Warsaw Convention as amended by the Hague Protocol as the "Warsaw/Hague Convention". Part IIIC of the Act (ss 25J-25N) concerns carriage to which the Convention applies. In due course, it will be necessary to discuss provisions in other Parts of the Act; for the present, it is of assistance to set out relevant provisions of Pt IIIC and of the Convention.

5 Section 25K in Pt IIIC of the Act gives the Convention the force of law:

"(1) Subject to this Part, the Convention has the force of law in Australia in relation to any carriage by air to which the Convention applies, irrespective of the nationality of the aircraft performing that carriage.

(2) A reference in this Part to the Convention is to be read, unless the contrary intention appears, as a reference to the Convention as having the force of law because of this section."

(The phrase "the Convention" is defined by s 25J and s 5(1) in the same way I have above.)

6 By s 25L, certain provisions of Pt IV of the Act are to apply when the Convention applies:

"Sections 35 to 39 (inclusive) apply to carriage to which the Convention applies in the same way as they apply to carriage under Part IV, and for that purpose:

(a) a reference in section 37 to Part IV is taken to be a reference to this Part and the Convention; and

(b) any other reference to Part IV is taken to be a reference to the Convention."

7 Sections 35 to 39 that are incorporated into Pt IIIC by s 25L are contained in Pt IV of the Act, which deals with carriage that is inter-State, from a Territory, within a Territory or from Australia that is not carriage to which the various international conventions apply. Its provisions (ss 26-41) set out a regime, the language of which derives from the conventions.

8 Section 35 deals in detail with liability in respect of the death of a passenger, identifying those who can sue and the damages that can be recovered. Section 35(2) is in the following terms:

"Subject to section 37, the liability under this Part is in substitution for any civil liability of the carrier under any other law in respect of the death of the passenger or in respect of the injury that has resulted in the death of the passenger."

9 Section 36 deals with liability in respect of injury of a passenger. It is in the following terms as amended by s 25L for its incorporation into Pt IIIC:

"Subject to the next succeeding section, the liability of a carrier under [the Convention] 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."

10 Section 37 is central to the resolution of the controversy and is in the following terms, as amended by s 25L for its incorporation into Pt IIIC:

"Nothing in [Pt IIIC and the Convention] shall be deemed to exclude any liability of a carrier:

(a) to indemnify an employer of a passenger or any other person in respect of any liability of, or payments made by, that employer or other person under a law of the Commonwealth or of a State or Territory providing for compensation, however described, in the nature of workers' compensation; or

(b) to pay contribution to a tort-feasor who is liable in respect of the death of, or injury to, the passenger;

but this section 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 this Part."

(Section 37 has counterpart provisions in ss 9F and 14 of the Act.)

11 Section 38 deals with proceeds of insurance policies and other subventions.

12 Section 39 deals with contributory negligence.

13 It is important to note that s 34, which is not incorporated into Pt IIIC, deals with limitation of actions and provides for a two year time bar, the language of which can be seen to be taken from Art 29 of the Warsaw Convention and the Convention, as follows:

"The right of a person to damages under this Part is extinguished if an action is not brought by him or her or for his or her benefit within two years after the date of arrival of the aircraft at the destination, or, where the aircraft did not arrive at the destination:

(a) the date on which the aircraft ought to have arrived at the destination; or

(b) the date on which the carriage stopped;

whichever is the later."

14 There are a number of provisions of the Convention that are relevant as having the force of law in the resolution of the controversy. For reasons that will become apparent it is also necessary to have regard to cognate provisions of the Warsaw Convention.

(a) The scope of application is to all international carriage. Agreement between the parties is, however, central. Article 1 rr 1 and 2 are in the following terms (being identical to the same provisions in the Warsaw Convention):

"1. This Convention applies to all international carriage of persons, baggage or cargo performed by aircraft for reward. It applies equally to gratuitous carriage by aircraft performed by an air transport undertaking.

2. For the purposes of this Convention, the expression international carriage means any carriage in which, according to the agreement between the parties, the place of departure and the place of destination, whether or not there be a break in the carriage or a transhipment, are situated either within the territories of two High Contracting Parties or within the territory of a single High Contracting Party if there is an agreed stopping place within the territory of another State, even if that State is not a High Contracting Party. Carriage between two points within the territory of a single High Contracting Party without an agreed stopping place within the territory of another State is not international carriage for the purpose of this Convention."

(b) The requirement for a ticket and the central place of the contract can be seen in Art 3 which is different in form, but similar in substance, to Art 3 in the Warsaw Convention. Article 3 in the Convention is in the following terms:

"1. In respect of the carriage of passengers a ticket shall be delivered containing:

(a) an indication of the places of departure and destination;

(b) if the places of departure and destination are within the Territory of a single High Contracting Party, one or more agreed stopping places being within the territory of another State, an indication of at least one such stopping place;

(c) a notice to the effect that, if the passenger's journey involves an ultimate destination or stop in a country other than the country of departure, the Warsaw Convention may be applicable and that the Convention governs and in most cases limits the liability of carriers for death or personal injury and in respect of loss of or damage to baggage.

2. The passenger ticket shall constitute prima facie evidence of the conclusion and conditions of the contract of carriage. The absence, irregularity or loss of the passenger ticket does not affect the existence or the validity of the contract of carriage which shall, none the less, be subject to the rules of this Convention. Nevertheless, if, with the consent of the carrier, the passenger embarks without a passenger ticket having been delivered, or if the ticket does not include the notice required by paragraph 1 (c) of this Article, the carrier shall not be entitled to avail himself of the provisions of Article 22."

(c) The liability of the carrier is provided for by Art 17. This creates a cause of action and is in the following terms (being identical to Art 17 of the Warsaw Convention):

"The carrier is liable for damage sustained in the event of the death or wounding of a passenger or any other bodily injury suffered by a passenger, if the accident which caused the damage so sustained took place on board the aircraft or in the course of any of the operations of embarking or disembarking."

(d) Article 18 deals with damage to baggage or cargo. Article 19 deals with delay.

(e) The question of fault and onus is dealt with in Art 20. Similar, but differently worded, provisions exist in the Warsaw Convention. Article 20 is in the following terms:

"In the carriage of passengers and baggage, and in the case of damage occasioned by delay in the carriage of cargo, the carrier shall not be liable if he proves that he and his servants and agents have taken all necessary measures to avoid the damage or that it was impossible for them to take such measures."

(f) Contributory negligence is dealt with in Art 21 r 1, which is in the following terms (being similar to relevant provisions in the Warsaw Convention):

"In the carriage of passengers and baggage, if the carrier proves that the damage was caused by or contributed to by the negligence of the person suffering the damage the Court may, in accordance with the provisions of its own law, exonerate the carrier wholly or partly from his liability."

(g) Limits of liability are dealt with in Art 22, somewhat more elaborately than in the Warsaw Convention. It is appropriate to set out the terms of Art 22 because they help illuminate the role played by the words "fixed by or in accordance with this Part" in s 37. Article 22 is in the following terms:

"1. In the carriage of persons the liability of the carrier for each passenger is limited to the sum of two hundred and fifty thousand francs. Where, in accordance with the law of the court seised of the case, damages may be awarded in the form of periodical payments, the equivalent capital value of the said payments shall not exceed two hundred and fifty thousand francs. Nevertheless, by special contract, the carrier and the passenger may agree to a higher limit of liability.

2. (a) In the carriage of registered baggage, the liability of the carrier is limited to a sum of two hundred and fifty francs per kilogramme, unless the passenger or consignor has made, at the time when the package was handed over to the carrier, a special declaration of interest in delivery at destination and has paid a supplementary sum if the case so requires. In that case the carrier will be liable to pay a sum not exceeding the declared sum, unless he proves that the sum is greater than the passenger's or consignor's actual interest in delivery at destination.

(b) In the carriage of cargo, the liability of the carrier is limited to a sum of 17 Special Drawing Rights per kilogramme, unless the consignor has made, at the time when the package was handed over to the carrier, a special declaration of interest in delivery at destination and has paid a supplementary sum if the case so requires. In that case the carrier will be liable to pay a sum not exceeding the declared sum, unless he proves that the sum is greater than the consignor's actual interest in delivery at destination.

(c) In the case of loss, damage or delay of part of registered baggage or cargo, or of any object contained therein, the weight to be taken into consideration in determining the amount to which the carrier's liability is limited shall be only the total weight of the package or packages concerned. Nevertheless, when the loss, damage or delay of a part of the registered baggage or cargo, or of an object contained therein, affects the value of other packages covered by the same baggage check or the same air waybill, the total weight of such package or packages shall also be taken into consideration in determining the limit of liability.

3. As regards objects of which the passenger takes charge himself the liability of the carrier is limited to five thousand francs per passenger.

4. The limits prescribed in this Article shall not prevent the court from awarding, in accordance with its own law, in addition, the whole or part of the court costs and of the other expenses of the litigation incurred by the plaintiff. The foregoing provision shall not apply if the amount of the damages awarded, excluding court costs and other expenses of the litigation, does not exceed the sum which the carrier has offered in writing to the plaintiff within a period of six months from the date of the occurrence causing the damage, or before the commencement of the action, if that is later.

5. The sums mentioned in francs in this Article shall be deemed to refer to a currency unit consisting of sixty-five and a half milligrammes of gold of millesimal fineness nine hundred. These sums may be converted into national currencies in round figures. Conversion of the sums into national currencies other than gold shall, in case of judicial proceedings, be made according to the gold value of such currencies at the date of the judgment.

6. The sums mentioned in terms of the Special Drawing Right in this Article shall be deemed to refer to the Special Drawing Right as defined by the International Monetary Fund. Conversion of the sums into national currencies shall, in case of judicial proceedings, be made according to the value of such currencies in terms of the Special Drawing Right at the date of the judgment. The value of a national currency, in terms of the Special Drawing Right, of a High Contracting Party which is a Member of the International Monetary Fund, shall be calculated in accordance with the method of valuation applied by the International Monetary Fund, in effect at the date of the judgment, for its operations and transactions. The value of a national currency, in terms of the Special Drawing Right, of a High Contracting Party which is not a Member of the International Monetary Fund, shall be calculated in a manner determined by that High Contracting Party.

Nevertheless, those States which are not Members of the International Monetary Fund and whose law does not permit the application of the provisions of paragraph 2 (b) of Article 22 may, at the time of ratification or accession or at any time thereafter, declare that the limit of liability of the carrier in judicial proceedings in their territories is fixed at a sum of two hundred and fifty monetary units per kilogramme. The monetary unit corresponds to sixty-five and a half milligrammes of gold of millesimal fineness nine hundred. This sum may be converted into the national currency concerned in round figures. The conversion of this sum into the national currency shall be made according to the law of the State concerned."

(h) Article 24 r 1 is important. The applicant's argument was to the effect that the action for indemnity and contribution was conditioned by the time limit in Art 29. One route to that conclusion was the argument that the action for indemnity or contribution was a cause of action created or recognised by the Convention, Arts 17 and 24, the consequence of which was, it was submitted, that it was limited or conditioned by the time bar. Article 24 is in the following terms:

"In the carriage of passengers and baggage, any action for damages, however founded, can only be brought subject to the conditions and limits set out in this Convention, without prejudice to the question as to who are the persons who have the right to bring suit and what are their respective rights."

(i) The words of the English text of Art 24 of the Warsaw Convention are slightly different, but essentially similar.

"1. In the cases covered by Articles 18 and 19 any action for damages, however founded, can only be brought subject to the conditions and limits set out in this Convention.

2. In the cases covered by Article 17 the provisions of the preceding paragraph also apply, without prejudice to the questions as to who are the persons who have the right to bring suit and what are their respective rights."

(j) The time bar provision, Art 29, is in the following terms (being the same as in the Warsaw Convention and the Warsaw/Hague Convention):

"1. The right to damages shall be extinguished if an action is not brought within 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.

2. The method of calculating the period of limitation shall be determined by the law of the Court seised of the case."

(k) Article 30A provides for rights of recourse of a person liable under the Convention in the following terms:

"Nothing in this Convention shall prejudice the question whether a person liable for damage in accordance with its provisions has a right of recourse against any other person."

15 Section 8(2) of the Act provides for the primacy of the French texts of the instruments making up the Convention, and all other conventions referred to in s 8 other than the Convention for the Unification of Certain Rules for International Carriage by Air done at Montreal on 28 May 1999 (the "1999 Montreal Convention"). It will be necessary to refer to the French text of some relevant provisions in due course.

The issues for decision

16 The primary point for decision is whether the action brought by Sercel against United under s 151Z(1)(d) that is recognised expressly by s 37 of the Act as incorporated into Pt IIIC is time barred by the operation of Art 29 of the Convention having the force of law. United says that Art 29 defeats Sercel's claim.

17 An alternative contention of United is that Sercel is unable to bring proceedings in New South Wales as the events on which the cause of action was based occurred in Texas and there was no cause of action available to Sercel in Texas.

The nature of the jurisdiction

18 Whilst the claim by Sercel is made under a law of the Parliament of New South Wales, the resolution of the rights of the parties requires consideration of the claimed defence to the action based on the operation of a law of the Commonwealth Parliament in the form of Art 29, by force of s 25K. The matter is therefore before the Court (District Court and Court of Appeal) in the exercise of federal jurisdiction: Judiciary Act 1903 (Cth), s 39(2); the Constitution, s 76(ii); R v Commonwealth Court of Conciliation & Arbitration; Ex parte Barrett [1945] HCA 50; 70 CLR 141 at 154; Felton v Mulligan [1971] HCA 39; 124 CLR 367 at 374, 375, 388, 403 and 408; Fejo v Northern Territory [1998] HCA 58; 195 CLR 96 at 120; Re McJannet; Ex parte Australian Workers' Union of Employees Queensland (No 2) [1997] HCA 40; 189 CLR 654 at 656-657; Moorgate Tobacco Co Ltd v Philip Morris Ltd [1980] HCA 32; 145 CLR 457 at 476; Australian Solar Mesh Sales Pty Ltd v Anderson [2000] FCA 864; 101 FCR 1 at 6-8.

The rights of Sercel under s 151Z

19 There was no submission pressed that s 151Z was invalid as inconsistent with any law of the Commonwealth Parliament for the purposes of the Constitution, s 109 or that, to the extent the Judiciary Act, s 79 was relevant, s 151Z was not picked up by that provision as "otherwise provided" by the Constitution or any law of the Commonwealth Parliament.

20 There was, for a time, a submission pressed by the applicant that s 37 of the Act was unconstitutional but this was abandoned. In the light of this abandonment, the Commonwealth Attorney-General, who had indicated a desire to appear, decided not to appear. The applicant did, however, press a construction of s 37 that involved a consideration of the Acts Interpretation Act 1901 (Cth), s 15A, to which I will return.

21 The nature of the cause of action under s 151Z(1)(d) has been discussed in a number of decisions of this Court. None was the subject of challenge before us. The action is one for an indemnity, not for damages: Westpac Banking Corporation v Tomassian (1993) 32 NSWLR 207 at 209, 215F-216A and 220; QBE Workers Compensation (NSW) Ltd v Dolan [2004] NSWCA 458; 62 NSWLR 42 at 50-52 [40]-[50]; Fuller v K & J Trucks Coffs Harbour Pty Ltd [2006] NSWCA 88; 67 NSWLR 516 at 518 [9]; Turner v George Weston Foods Ltd trading as Tip Top Bakeries (Newcastle); Turner v George Weston Foods Ltd [2007] NSWCA 67 at [33]; and Kurnell Passenger & Transport Service Pty Ltd v Randwick City Council [2009] NSWCA 59; 230 FLR 336 at 356-357 [88]. This conclusion is reinforced by the decision of the High Court in Workcover Queensland v Amaca Pty Ltd [2010] HCA 34; 241 CLR 420 at 429-431 [14]-[24].

22 The liability of the person for the damages is to be assessed at the time of the act or omission causing the compensable injury, regardless of whether the proceedings were taken or taken within the time prescribed by any limitation period: Kurnell Passenger & Transport at [87]; Tooth & Co Ltd v Tillyer [1956] HCA 49; 95 CLR 605 at 611-612; Tickle Industries Pty Ltd v Hann [1974] HCA 5; 130 CLR 321 at 333; Workcover Qld v Amaca at 432-434 [28]-[31]; Fuller v K & J Trucks at 526 [39]; Workers' Compensation Board of Queensland v The Nominal Defendant (Qld) [1989] 1 Qd R 356 at 359; and Smith's Dock Company v John Readhead & Sons [1912] 2 KB 323 at 327.

23 The statement by Taylor J in Watson v The Council of the City of Newcastle [1962] HCA 6; 106 CLR 426 at 441 about the phrase in the Workers' Compensation Act 1926 (NSW), s 64(b), "the person so liable to pay damages as aforesaid" that it was "indicative of a person presently liable to pay damages and not of a person who is no longer liable" was not directed to the question of time bar, but to the circumstances where the right to the indemnity under s 64(b) continued to exist notwithstanding the discharge by the tortfeasor of its obligation to pay damages to the worker: see 106 CLR at 437-438. In Government Insurance Office of NSW v C E McDonald (NSW) Pty Ltd (1991) 25 NSWLR 492 at 497, Handley JA noted that the other members of the Court in Watson did not express themselves as Taylor J did and that Tooth & Co v Tillyer was not cited to the Court. Handley JA concluded at 497:

"In my opinion the statements quoted earlier from the joint judgment in Tooth & Co Ltd v Tillyer were part of the ratio of the court's decision and are binding on this Court. If I am wrong and they are only dicta they are highly persuasive, and in my respectful opinion are clearly correct and should be followed by this Court.

These conclusions are supported by the dicta of Barwick CJ, concurred in by McTiernan J, in Tickle Industries Pty Ltd v Hann (especially at 331, 332-333) and by further dicta of Barwick CJ in Xpolitos v Sutton Tools Pty Ltd (at 423) which were concurred in by Stephen J and Jacobs J and by dicta of Gibbs J in the same case (at 430, 431 and 432)."

24 The later analysis of the judgments in Watson by Handley JA in Kwanchi Pty Ltd v Kocsis (1996) 40 NSWLR 270 at 280-281 would also permit the conclusion that what was said by Taylor J in Watson at 441 was obiter.

25 For the reasons given by Handley JA in GIO v C E McDonald, Taylor J's statement in Watson at 441 is not binding on this Court and with respect is not in accordance with the authority to which I have otherwise referred.

26 Subject to the operation of the Act, including the Convention, the limitation period for the cause of action under s 151Z(1)(d) is six years under the Limitation Act 1969 (NSW), s 14(1)(d), running from each payment of compensation, each such payment giving rise to a new cause of action: South Eastern Sydney Area Health Service v Gadiry [2002] NSWCA 161; 54 NSWLR 495 at 498-501; Howard Rotavator Pty Ltd v Wilson (1987) 8 NSWLR 498 at 501-502; Kwanchi at 276 and 279; Attorney-General v Arthur Ryan Automobiles Ltd [1938] 2 KB 16 at 21, 22; and Victorian WorkCover Authority v Esso Australia Ltd [2001] HCA 53; 207 CLR 520. Section 14(1)(d) will not, of course, be picked up by the Judiciary Act, s 79 if there is an inconsistent time bar operative as law from the Convention.

27 Under the 1987 Act, s 9AA(1) compensation is payable in respect of employment that is connected with New South Wales. The fact that the worker is outside the State when the injury happens does not prevent compensation being payable under the 1987 Act: s 9AA(2). Section 9AA(3) provides that the worker's employment is connected with the State in which he or she usually works ((3)(a)) or in which he or she is usually based ((3)(b)) or in which the employer has its principal place of business ((3)(c)). Here, there was no issue but that Mr Arora and Sercel were resident in New South Wales. Sercel's workers' compensation insurer had its place of business in New South Wales. The workers' compensation payments were made in New South Wales. The right of action is not for damages but an indemnity owing its existence to a New South Wales statute.

Resolution of the alternative contention

28 It is convenient, at this point, to deal with the alternative contention referred to at [17] above. The submission was that since the events in question occurred in Texas, the relevant operative law as the lex causae was that of Texas. Reliance was placed on Regie Nationale des Usines Renault SA v Zhang [2002] HCA 10; 210 CLR 491. Evidence was led of Texas law in a report signed by a Ms Staton and Mr Thornton of Jackson Walker LLP. That evidence was to the effect that the Texas Labour Code provided for subrogation rights in favour of a workers' compensation insurer to the rights of the worker to sue for damages. It was thus a derivative action through the rights of the worker, here (if it otherwise existed) to sue United under the Convention. Thus, if that primary action were statute barred under the Warsaw Convention, no independent indemnity claim could be brought upon the expiry of the two year time limit. The underlying assumption (based on the derivative character of the subrogated claim) was that the claim could only be brought under the Warsaw Convention: El Al Israel Airlines Ltd v Tsui Yuan Tseng 525 US 155 (1999).

29 Regie Nationale v Zhang concerned the rules for the determination of the lex causae for torts. The lex loci delicti, the law of the place of the wrong, was chosen as the proper law.

30 The action by Sercel is not in tort; it is a claim under a statutory indemnity governed by the law of New South Wales. The action for which United may be liable to Mr Arora would, subject to the operation of the Act and the Convention, be governed by the lex causae of the tortious claim under the Warsaw Convention. Here there was no dispute but that Mr Arora's claim was recognised by Texas law under the Convention. There was no dispute in this Court that Mr Arora suffered bodily injury by an accident for the purposes of Art 17 of the Convention. Mr Arora's direct claim is barred by the two year limit in the Warsaw Convention.

31 Just as compensation under the 1987 Act is payable even if the injury took place out of New South Wales, the statutory indemnity applies to permit recovery of such sums in accordance with the operation of the New South Wales statute in accordance with New South Wales law, albeit, as here, picked up (to the extent it is) as surrogate federal law in the resolution of a controversy in federal jurisdiction by the Judiciary Act, s 79.

32 Texas law does not affect Sercel's rights here.

The primary contention

The submissions of the applicant

33 The applicant's submissions can be shortly summarised as follows. First, the Convention imposes an event based liability on the carrier, which is intended to be exclusive of all other remedies available to a moving party seeking relief in connection with injury or death covered by the Convention. Thus the claim by Sercel is of a character recognised by the Convention to fall within its terms and is conditioned by the operation of Art 29. Secondly, s 37 in its terms is apt to be construed as conditioning or limiting the claim under s 37 by reference to Art 29. For the reasons that follow, I reject the applicant's submissions.

The French text

34 The Court adjourned the hearing of this appeal in March 2011 for the parties to adduce evidence of the French text of relevant parts of the Convention, Arts 17, 24 and 29 in particular. Notwithstanding the lack of contest between the parties that the Convention applied, the translations provided were of the Warsaw Convention. Nevertheless, the differences do not appear to be material.

35 The uncontentious French and literal translation into English (placed into evidence by the parties) of Art 17 (unchanged in the Convention from the Warsaw Convention) are as follows:

"Le transporteur est responsable du dommage survenu en cas de mort, de blessure ou de tout autre lésion corporelle subie par un voyageur lorsque l'accident qui a causé le dommage s'est produit à bord de l'aéronef ou au cours de toute opération d'embarquement ou de débarquement.

The carrier is liable for damage sustained in the event of the death or wounding of a passenger or all other bodily injury suffered by a passenger, if the accident which caused the damage so sustained took place on board the aircraft or in the course of any of the operations of embarking or disembarking ."

The uncontentious French and literal translation into English (placed into evidence by the parties) of Art 24 of the Warsaw Convention are as follows:

"1. Dans les cas prévus aux articles 18 et 19, tout action en responsabilité, à quelque titre que ce soit, ne peut être exercée que dans les conditions et limites prévues par la présente convention.

2. Dans les cas prévus à l'article 17, s'appliquent également les dispositions de l'alinéa précédent, sans préjudice de la détermination des personnes qui ont le droit d'agir et de leurs droits respectifs.

1. In the cases covered by Articles 18 and 19 any action for responsibility, whatever the legal ground, can only be brought subject to the conditions and limits set out in the present Convention.

2. In the cases covered by Article 17, also apply the provisions of the preceding paragraph, without prejudice to the questions as to who are the persons who have the right to bring legal action and what are their respective rights ."

36 The English version of Art 24 of the Warsaw Convention set out in Schedule 1 to the Act is as follows:

"1. In the cases covered by Articles 18 and 19 any action for damages, however founded, can only be brought subject to the conditions and limits set out in this Convention.

2. In the cases covered by Article 17 the provisions of the preceding paragraph also apply, without prejudice to the questions as to who are the persons who have the right to bring suit and what are their respective rights."

37 The parties did not provide a French text of Art 24 of the Convention; but the language is similar to Art 24 of the Warsaw Convention.

38 The uncontentious French text of Art 29 (unchanged in the Convention from the Warsaw Convention) is as follows:

"1. L'action en responsabilité doit être intentée, sous peine de déchéance, dans le délai de deux ans à compter de l'arrivée à destination ou du jour où l'aéronef aurait dû arriver, ou l'arrêt du transport.

2. Le mode de calcul du délai est déterminé par la loi du tribunal saisi."

39 The opening words of Art 29 r 1 of the French text ("l'action en responsabilité") are to be noted. See also the use of the phrase "action en responsabilité " in Art 24 r 1 of the Warsaw Convention. The word "responsabilité" translates as responsibility in general expression, but as "liability" in a legal context: see The Oxford-Hachette French Dictionary (1984) at 713.

The enactment history

40 Central to the resolution of the appeal is the inter-relationship between the express recognition of the right to indemnity and the right of contribution in s 37(a) and (b), on the one hand, and the operation of the Convention, in particular the time bar in Art 29, on the other. An appreciation of the enactment history of s 37, and of the various conventions provided for by the Act assists in that regard.

The Carriage by Air Act 1935 (Cth)

41 The Warsaw Convention was given the force of law by the Carriage by Air Act 1935 (Cth) (the "1935 Act"), s 3. It may be noted that in s 3(2) it was stated that the provisions of the Warsaw Convention "so far as they relate to the rights and liabilities of carriers, passengers, consignors, consignees and other persons" had the force of law. Subsections (2) and (4) were in the following terms:

"(2) Upon a date being declared in pursuance of the last preceding sub-section, the provisions of the Convention shall, so far as they relate to the rights and liabilities of carriers, passengers, consignors, consignees and other persons, and subject to this section, have the force of law in the Commonwealth and in any Territory in respect of which a notice has been published in the Gazette in pursuance of the last preceding sub-section in relation to any carriage by air to which the Convention applies, irrespective of the nationality of the aircraft performing that carriage.

...

(4) Any liability imposed by Article seventeen of the Convention on a carrier in respect of the death of a passenger shall be in substitution for any liability of the carrier under any other law in respect of the death of that passenger, and the provisions set out in the Second Schedule to this Act shall have effect with respect to the persons by and for whose benefit the liability so imposed is enforceable and with respect to the manner in which it may be enforced."

42 This made clear that the Convention, made domestic law by s 3(2) created a cause of action. This approach had not been universal. Until the Second Circuit in 1978 and the Ninth Circuit in 1979, in Benjamin v British European Airways 572 F 2d 913 (1978 2nd CCA) and In re Mexico City Air Crash of October 31, 1979 708 F 2d 400 (1979 9 th CCA), respectively, the United States Courts held that the Warsaw Convention only created a legal presumption of liability and not a cause of action. This view had, however, been subject to significant criticism: G N Calkins "The Cause of Action under the Warsaw Convention" (1959) 26 Journal of Air Law and Commerce 217 and 323 and A F Lowenfeld and A I Mendelsohn "The United States and the Warsaw Convention" (1967) 80 Harvard Law Review 497.

43 The Second Schedule to the 1935 Act identified those apart from the passenger who had the benefit of the cause of action. The Second Schedule was in the following terms:

"Provisions as to Liability of Carrier in the Event of the Death of a Passenger

1. The liability shall be enforceable for the benefit of such of the members of the passenger's family as sustained damage by reason of his death.

In this paragraph the expression 'member of a family' means wife or husband, parent, step-parent, grandparent, brother, sister, half-brother, half-sister, child, step-child, grandchild:

Provided that, in deducing any such relationship aforesaid, any illegitimate person and any adopted person shall be treated as being, or as having been, the legitimate child of his mother and reputed father or, as the case may be, of his adopters.

2. An action to enforce the liability may be brought by the personal representative of the passenger or by any person for whose benefit the liability is under the last preceding paragraph enforceable, but only one action shall be brought in the Commonwealth or any Territory of the Commonwealth in respect of the death of any one passenger, and every such action by whomsoever brought shall be for the benefit of all such persons so entitled as aforesaid as either are domiciled in the Commonwealth or any Territory of the Commonwealth or, not being domiciled there, express a desire to take the benefit of the action.

3. Subject to the provisions of the next succeeding paragraph, the amount recovered in any such action, after deducting any costs not recovered from the defendant, shall be divided between the persons entitled in such proportions as the court (or, where the action is tried with a jury, the jury) directs.

4. The court before which any action is brought may at any stage of the proceedings make any such order as it appears to the court to be just and equitable in view of the provisions of the First Schedule limiting the liability of a carrier and of any proceedings which have been, or are likely to be, commenced outside the Commonwealth or any Territory of the Commonwealth in respect of the death of the passenger in question."

The Second Schedule was based on a similar Schedule to the Carriage by Air Act 1932 (UK), as to which see R H Mankiewicz The Liability Regime of the International Air Carrier (Kluwer 1981) at 161-162.

44 In the Act, these matters came to be expressed in the relevant provisions dealing with the death of a passenger: see ss 9D, 12 and 35 of the Act. These provisions clarified for Australian law what Art 24 of the Warsaw Convention had left unclear: the persons who could sue the carrier in the event of the death of the passenger.

45 The 1935 Act did not provide for the action contemplated by s 37 of the Act - the workers' compensation indemnity and contribution between tortfeasors.

46 As can be seen from the 1935 Act, s 3(2) and (4) particularly, the cause of action created by the Warsaw Convention was for the passenger if injured and others if the passenger was killed. Article 24(2) had left this deliberately open because of the different national approaches to wrongful death claims. The Ninth Circuit in its careful and persuasive opinion in In re Mexico City Air Crash at 413-414 discussed the history of Art 24. The scope left open by the phrase "tout action en responsabilité" or any action for liability (in the English text "any action for damages") was principally concerned with wrongful death claims and the phrase "à quelque titre que ce soit" (or "however founded" in the English text) reflects the intention of the delegates that the cause of action created by the Warsaw Convention, Art 17 was not to be exclusive - national law could provide for the beneficiaries of the wrongful death action: In re Mexico City Air Crash at 414 and see Sidhu v British Airways Plc [1997] 1 AC 430 at 447.

47 It is important to appreciate that it is Art 17 that creates the relevant cause of action: for wrongful death or personal injury: Benjamin at 916; In re Mexico City Air Crash at 410-414. Article 24 r 2 of the Warsaw Convention commences "In the cases covered by Article 17". In Art 24 r 1 of the Warsaw Convention, the introductory words refer to any action for "responsabilité" (liability) or damages. They do not create liability as does Art 17. Nevertheless, the scope of liability under Art 17, being the causes of action created by it, is affected by Art 24 by its conditioning of any action and by the limiting to national law of the persons who have the right to sue. The Warsaw Convention was (as the Convention is) concerned with contracted international carriage of persons, luggage and goods: Arts 1 r 1 and 3 r 1 of the Warsaw Convention and the Convention. Under Art 17, it is damage ("dommage") for which the carrier is liable in the event of death or wounding of the passenger in the circumstances identified including an "accident". (There was no issue here but that Mr Arora's injuries were caused by an "accident".)

48 The Ninth Circuit in In re Mexico City Air Crash noted at 413 that in Art 24 the word "responsabilité" had been translated as "damages" in the English version. It noted that "liability" was the more literal translation, but that the distinction was without a difference. That view is correct if it be recognised that Art 24 did not itself create any action relevant to the injury or death. It was dealing with the cause of action created by Art 17 and, together, Arts 17 and 24 can be seen to create and condition a cause of action in favour of the passenger and his or her estate or heirs, subject to the operation of national law in the identification of such people. The phrase "however founded" does not widen the cause of action created by Art 17 (when read with Art 24) into one that is available beyond the liability contemplated by Art 17 - the liability for damage sustained arising out of the performance of the contract of transportation which in the event of injury is sustained by the passenger and in the case of death, may be sustained by his or her estate or others. It is a structure not apt to encompass other legal claims by third parties who are strangers to the passenger or the contract of carriage.

The Act passed in 1959

49 By 1959, when a new Act was passed, the Hague Protocol had amended the Warsaw Convention. Part II provided for carriage to which the Warsaw Convention and the Hague Protocol applied. Part III provided for carriage to which the Warsaw Convention alone applied and Pt IV dealt with carriage that was inter-State or from a Territory, or international to the extent not covered by a convention.

50 In Pt II (ss 10-19), s 11 provided that the Warsaw/Hague Convention had the force of law. Section 12 dealt with liability in respect of death, incorporating matters that had been in the Second Schedule to the 1935 Act. Section 12(2) provided that:

"Subject to section 14, the liability under the Convention is in substitution for any civil liability of the carrier under any other law in respect of the death of the passenger or in respect of the injury that has resulted in the death of the passenger."

51 Section 13 dealt with liability in respect of injury, as follows:

"Subject to the next succeeding section, the liability of a carrier under the Convention 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."

52 Section 14 was in the following terms:

"Nothing in the Convention or in this Part shall be deemed to exclude any liability of a carrier:

(a) to indemnify an employer of a passenger or any other person in respect of any liability of, or payments made by, that employer or other person under a law of the Commonwealth or of a State or Territory providing for compensation, however described, in the nature of workers' compensation; or

(b) to pay contribution to a tort-feasor who is liable in respect of the death of, or injury to, the passenger;

but this section 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 the Convention."

It is to be noted that s 14(a) only referred to the indemnification of the employer.

53 In Pt III (ss 20-25), s 21 provided that the Warsaw Convention (that is without being affected by the Hague Protocol) had the force of law.

54 By s 24, with one exception irrelevant here, ss 12-17 (that is, including s 14) applied, as if included in the Part.

55 The time bar in both Pts II and III was contained in Art 29, given the force of law by ss 11 and 21.

56 In Pt IV (ss 26-41), rather than a convention being given the force of law, provisions were enacted whose terms were drawn from the conventions. Section 28 dealt with liability of the carrier for death or injury, as follows:

"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."

57 Section 34 was in substantively the same terms as it now appears (see [13] above).

58 Section 35 dealt in detail with liability in respect of death.

59 Sections 36 and 37 were as follows:

"36 Liability in respect of injury

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.

37 Certain liabilities not excluded

Nothing in this Part shall be deemed to exclude any liability of a carrier:

(a) to indemnify an employer of a passenger or any other person in respect of any liability of, or payments made by, that employer or other person under a law of the Commonwealth or of a State or Territory providing for compensation, however described, in the nature of workers' compensation; or

(b) to pay contribution to a tort‑feasor who is liable in respect of the death of, or injury to, the passenger;

but this section 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 accorda nce with this Part."

Amendments after 1959

60 As the years went by, various changes were made to the Act. In 1970, amongst other amendments, ss 14 and 37 were amended by widening ss 14(a) and 37(a) to include other persons, apart from the employer, who had made workers' compensation payments, such as the State Government Insurance Office in Queensland mentioned in the Second Reading Speech, Thursday 4 June 1970 in the Senate.

61 In 1991, after the Montreal Protocol was acceded to by Australia, Pt IIIC was introduced by Act No. 189 of 1991. I have dealt with the relevant provisions earlier. Section 37, from Pt IV, was incorporated as amended by s 25L, into Pt IIIC. Section 37, it is to be noted, is incorporated into a regime in which Art 30A operates to preserve rights of so-called "recourse actions".

62 Finally, in 2008, by Act No. 79, Pt 1A was introduced into the Act to deal with carriage to which the 1999 Montreal Convention applies. Section 9B provides that the 1999 Montreal Convention has the force of law; s 9D deals with liability for death in some detail; s 9E deals with liability in respect of injury; s 9F is in the same terms as ss 14 and 37 and is to be read with Arts 29 and 35 of the 1999 Montreal Convention that are in similar terms to Arts 29 and 24 of the Convention.

63 The provisions concerning the 1999 Montreal Convention, being enacted after Pt IIIC, can be put to one side. No argument was put that this later convention assists in the interpretation of the Convention or the Warsaw Convention: cf Vienna Convention on the Law of Treaties (1969), Art 31 r 3(a) or (b); R Gardiner Treaty Interpretation (Oxford 2008) at 225-249. However, the construction of Pt IIIC should be undertaken within the context of the whole of the Act as it stood in 1991 and of its enactment history.

The proper construction of s 37

64 Each of the regimes of liability provided for by the Act has a provision dealing with indemnity and contribution, each regime has a two year time bar in certain respects, and each has a provision like Art 24 of the Convention requiring that actions be subject to the conditions and limits of the relevant convention. The relationship between the provisions in each Part dealing with liability, limitation and indemnity and contribution should be consistent and harmonious. It would not be a conclusion that would be likely to commend itself that under one Part of the Act there was a six year limitation for one of the provisions concerning indemnity and a two year limitation for another in another Part. Further, there is no indication from any secondary material that this relationship has changed over time.

65 It is necessary to recall that it is a provision of an Australian Act (s 37) the meaning of which is to be discerned: NBGM v Minister for Immigration and Multicultural Affairs [2006] HCA 54; 231 CLR 52 at 71-72 [61]. Also, an interpretation of a statute that produces an unjust or capricious result is to be avoided, unless the language is intractable: Tickle Industries. In this context, it is to be recognised that the kind of action contemplated by ss 14(a) and 37(a) such as the predecessors to s 151Z(1) was well-known prior to 1959 as rights of action accruing with each payment: Attorney-General v Arthur Ryan Automobiles Ltd. None of these introductory remarks denies the importance of the principles of construing international conventions or statutes based on or derived from international instruments. These principles are well-known and were not in dispute before us: see generally Gulf Air Company GSC v Fattouh [2008] NSWCA 225; 251 ALR 183 at 190-191 [24]-[27] and see Povey v Qantas Airways Ltd [2005] HCA 33; 223 CLR 189 at 202 [24]-[25].

66 It is convenient to start with Pt IV. Sections 28 and 34 involve language that is quite different from that used in s 37. The liability is for "damage" (s 28, reflecting Art 17), the right of a person to "damages" (s 34, reflecting Art 24 "any action for damages", or "any action for liability" - action en responsabilité ). This reflects the conception that the Warsaw Convention (and through Pt IV, the arrangements to govern domestic carriage and international non-Warsaw carriage) created causes of action in favour of the passenger as party to a contract of carriage and persons through him or her (at the instance of national law) for damages or liability for injury or death. Section 36 made those actions a complete substitute for "any civil liability" of the carrier "in respect of the injury". That was subject, however, to s 37. Without s 37, the breadth of s 36 would have prevented any civil liability of the carrier under any other law in respect of the injury. The wording of s 36 (especially the language "any civil liability ... in respect of the death ... or ... injury) is wider than the causes of action created or recognised by the Convention as created by s 28 (based on Art 17) and extinguished by s 34 (based on Art 29).

67 Section 37 does not deal with an action for damages or liability for the injury or death of the passenger, though it does provide for liability of the carrier in respect of the injury to or death of the passenger. It deals with the liability to pay two types of payments (creating two co-relative rights of well-known rights or entitlements) which might arise in respect of the death of or injury to a passenger - workers' compensation payments and contribution of another tortfeasor who is also liable. Neither type of liability or right is for damages or for the primary liability, though as would have been understood in 1959, both are, or are likely to be, conditioned on the existence of liability of the carrier to the passenger for injury or death.

68 As I have said, the structure and nature of actions for statutory indemnity for workers' compensation payments were well-known by 1959. For there to be a two year time limit for the enforcement of the rights in s 37 by reference to s 34 (referring to the "right of a person to damages") would, from 1959 onwards, have made s 37 of limited utility. Its operation would have been, and been seen to be, capricious, and would have given only limited recourse against the carrier under the indemnity.

69 Section 37 operated in its terms to protect the rights there identified. It was not a "right to damages" as in s 34. The language of Pt IV is inapt to require it to be conditioned by a two year limitation by reference to the criteria in s 34 by the characterisation of those rights as "rights to damages". Sections 34 and 37 were directed to different legal rights, obligations and remedies: the "right to damages" (s 34) and the liability to indemnify and pay contribution (s 37).

70 Parts II, III and IIIC operate similarly. For the reasons already given, the kinds of actions referred to in ss 14 and 37 do not fall naturally into the language of Arts 17 and 24. The actions contemplated in Arts 17 and 24 are by the passenger or by one of the persons permitted by national law to sue in an action for damages or action for liability ("action en responsabilité") for damage sustained in the event of injury or death. The wide words of ss 12(2), 13, 35(2) and 36 in the elimination of any civil liability of the carrier ("any civil liability under any other law in respect of the death ... or ... injury") do not operate to widen the intended scope of the causes of action created and provided for by Art 17 as affected by Art 24 and ss 28, 35(2) and 36. What is extinguished by Art 29 of the Warsaw Convention, the Warsaw/Hague Convention and the Convention (and s 34 of the Act) is the "right to damages" for the action for damages or action for liability ("l'action en responsabilité") created by and provided for by Arts 17 and 24 of the Warsaw Convention, the Warsaw/Hague Convention and the Convention (and ss 28, 35(2) and 36 of the Act).

71 This way of interpreting the Act, the Warsaw Convention, the Warsaw/Hague Convention and the Convention accords with how High Contracting Parties have dealt with the matter, with the text of ss 14 and 37, with the provisions of the conventions, with the views of major text writers and with some, but not all, of the case law.

72 As to High Contracting Parties, in the United Kingdom contribution between tortfeasors was legislated for: see the Carriage by Air Act 1961 (UK), s 5(2) and the Limitation Act 1963 (UK), s 4(4). Article 29 of the Warsaw Convention is not to be read as applying to contribution proceedings between persons liable for any damage to which the Warsaw Convention relates: see Martin et al Shawcross and Beaumont: Air Law (4 th Ed Butterworths 1977) at 416-417; and see Vol 1 of the current looseleaf edition Ch VII Carriage by Air at [446]. This approach by the United Kingdom Parliament can at least be utilised, not for construing the Act, but for the assessment of the reasonableness of the construction which is, for other reasons, persuasive. For the avoidance of doubt, the reference to the United Kingdom legislation is not made in application of the Vienna Convention on the Law of Treaties, Art 31(3)(b) or Art 32.

73 The 1935 Act and the Act legislated for those who would take the benefit of the open ended wording of Art 24 by dealing with death claims. This can be seen as the extent of the working out of the matters left open by Art 24.

74 The text of ss 14 and 37 is inapt to pick up the two year limitation in Art 29 or s 34 of the Act. The drafter was astute to ensure the limits of liability would not be increased "beyond the amount fixed by or in accordance with this Part [or this Part and the Convention]". Those words recognise that under the Act, death claims have provisions for the types of damages recoverable: ss 12 and 35 and claims for death or injury have both identified limits and limits which require calculation: see Art 22 and s 31. The words "or in accordance with" are apt to deal with the kind of calculation in Art 22, and are not apt to deal with a subject distinct from the limit or cap of monetary liability in Art 22 or s 31, being a time bar in Art 29 or s 34.

75 Though the language is to a degree precautionary ("Nothing in this Part shall be deemed to exclude") the provision does not assume that the rights mentioned (indemnity and contribution) are covered by or incorporated within the cause of action created by Art 17 or s 28. If it had made that assumption there would have been no need to refer to the limit of liability. The section could simply have said such actions were to be taken to be actions for damages contemplated by Arts 24 and 29. Sections 14 and 37 stand apart from the conventions. The only limit upon them is that of monetary liability.

76 In addition to the matters already referred to, other language of the Convention conforms with rights of indemnity and contribution under s 37 not falling within Arts 17 and 24. The two year limitation period from the date of arrival makes sense if the cause of action to which it relates then commences. The cause of action which then commences is for damages for liability to the passenger or those connected with him or her for injury or death arising out of the performance of the contract of carriage. The right of indemnity does not accrue until payment of the compensation is made. This will always be later, and possibly years later. It would be an unexpected operation of a law (and one that would also be unjust and capricious) if a time bar provision could operate to extinguish the right to sue, before it arose. The nature of the limitation in Art 29 reinforces the fact that the actions to which it relates are those created by, relevantly here, Art 17, affected by Art 24. Further, the Convention itself contemplates the survival of recourse actions for the benefit of a party liable under the Convention: Art 30A.

77 Thus, in my view, the text and structure of the Act, the Warsaw Convention, the Warsaw/Hague Convention and the Convention lead to the conclusion that the right of indemnity in ss 14 and 37 is not subject to the two year time bar in s 34 and Art 29. The position would, of course, be different if the employer's action was founded in subrogation, entitling it to succeed to the rights of the worker (passenger). In those circumstances (as in Texas under its Labor Code) the subrogated action in the right of the passenger would be subject to Art 29.

78 It remains to consider the texts and cases relied upon by the parties. In understanding a convention, the liberal process of interpretation that is to be adopted permits, indeed requires, the giving of significant regard to learned authors, past and present (la doctrine) and the decisions of foreign courts, in particular appellate decisions: Fothergill v Monarch Airlines Ltd [1981] AC 251 at 279 and 294-295; Somaghi v Minister for Immigration, Local Government and Ethnic Affairs (1991) 31 FCR 100 at 117; Adan v Secretary of State for the Home Department [1997] 1 WLR 1107 at 1114 and on appeal [1999] 1 AC 293 at 307-308; and The Paquete Habana 175 US 677 at 740 (1900).

79 The question as to how claims other than direct claims by passengers for injury or by those entitled to sue for their death under national law should be analysed has not been decisively dealt with, either in the texts or the cases. Article 30A and the 1999 Montreal Convention to a degree deals with "rights of recourse": see Chubb Insurance Co of Europe SA v Menlo Worldwide Forwarding Inc 634 F 3d 1023 (2011 9 th CCA), discussed below.

80 Some of the cases (and the submissions of the parties) used the phrase "loss shifting actions". This is nomenclature that is less than helpful. For instance, in Split End Ltd v Dimerco Express (Phils) Inc 19 Avi 18,364 (1986 DCNY) and Data General Corp v Air Express International Co 676 F Supp 538 (1988) the third party actions were between the contracting parties to the contract of transportation, the party to the contract (such as a freight forwarder) sued its contracting carrier, but in a third party suit. The same can be said about Air France v Sté Méditerranéenne de Transit 1982 Revue Française de Droit Aérien (RFDA) 214 (Cour de Cassation Nov 1981). In such cases, plainly the Art 29 limitation should apply.

81 In Mitchell Shackleton & Co Ltd v Air Express International Inc 704 F Supp 524 (1989 SDNY) the carrier was allowed to sue its non-carrying agent outside the two years.

82 In Canada, in Connaught Laboratories Ltd v Air Canada (1978) 94 DLR 3 rd 586, the Ontario High Court permitted one carrier to sue its subcontracted agent carrier outside the two years, on the basis that the Warsaw Convention said nothing about carriers' liabilities inter se.

83 In L B Smith Inc v Circle Air Freight Corporation 488 NYS 2d 547 (1985), Circle, the defendant, cross claimed against Iberia Air Lines. The report does not indicate whether Circle was a carrier or freight forwarder. It can be assumed that Iberia was the carrier. Article 29 was held to apply.

84 In Magnus Electronics Inc v Royal Bank of Canada 611 F Supp 436 (1985) the District Court in Illinois dealt with a claim by a seller who sued the consignee and air carrier for the unpaid portion of purchase price of generators carried from Miami to Buenos Aires. The primary action against the carrier and the cross claim by the consignee against the carrier were both required to be commenced within two years. Both actions, however, were (as in Split End, Data General and Air France) such as contemplated and created by Art 18 (the equivalent of Art 17 in respect of cargo). The moving parties were the consignor (through a freight forwarder) and consignee.

85 In Oriental Fire and General Insurance Co Ltd v Citizens National Bank of Decatur 581 NE 2d 49 (1991) diamonds were stolen in transit from Mumbai to Chicago carried by Swiss Air. The carrier and other defendants including the Bank were sued. The Bank was to pay the seller by documentary credit upon presentation of commercial documents. The Bank issued third party proceedings against the carrier in the event it was liable on the documentary credit. The Court found Art 29 to bar the third party claim, citing Magnus Electronics and Data General (being cases where, unlike that before the Court in Oriental Fire and General, the third party claim was between parties to the contract of carriage). Reference was also made to Split End.

86 In Royal Insurance Company v Emery Air Freight Corporation 834 F Supp 633 (SDNY 1993) the District Court dealt with a claim against a carrier which cross claimed against another carrier. The cross claim was found to be covered by Art 29 (contrary to the decision in Connaught).

87 In Motorola Inc v MSAS Cargo International Inc 42 F Supp 2d 952 (ND Cal 1998) the owners and insurers of cargo sued the carrier for damage to goods and the carrier cross claimed against the actual carrier. Both the primary action and the third party claim between carriers were held to be covered by Art 29. Connaught was rejected, reliance being placed on Royal Insurance v Emery and Split End.

88 In France, the Cour de Cassation in 1981 in France Handling v Sabena 1982 143 RFDA 345 held that a suit by an airline against a non-carrier was not covered by the Warsaw Convention. The Court of Appeal of Aix-en-Provence in 1980 in Cie d'Aviation Pakistan International Airline v Cie Air Inter 1981 RFDA 143 set a limitation period for the carrier suing its sub-contractor outside the Warsaw Convention. See also to similar effect in the Cour de Cassation Ste Roissy Fret v Ste Scandinavian Airlines Systems France 1984 38 RFDA 442.

89 As is made clear in the discussion by the authors of the current loose leaf edition of Shawcross and Beaumont Air Law (Butterworths, LexisNexis) at Ch VII [466.1] the jurisprudence on actions for contribution is confused. The authors note that the position is clearer under the 1999 Montreal Convention in which Art 37 refers specifically to rights of recourse:

"Article 37- Right of Recourse against Third Parties

Nothing in this Convention shall prejudice the question whether a person liable for damage in accordance with its provisions has a right of recourse against any other person."

90 The Ninth Circuit in Chubb looked at the question of contribution under the 1999 Montreal Convention. Some of the discussion turned on Arts 35 and 37 and their relationship (cf Arts 29 and 30A of the Convention). There was also a discussion of contribution under the Warsaw Convention. The contracting carrier (UPS) had been sued by the insurer of the cargo interest. That claim was settled. UPS sought to sue the actual carrier, Qantas, outside the two year time bar. The Court looked to the text of Art 35 (of the 1999 Montreal Convention) and the phrase "right to damages":

"Article 35 - Limitation of Actions

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.

2. The method of calculating that period shall be determined by the law of the court seised of the case."

The contours of the phrase "right to damages" were taken from Arts 17-19 of the 1999 Montreal Convention. Arts 17-19 of the 1999 Montreal Convention deal with the subjects dealt with by Arts 17 and 19 of the Warsaw Convention, the Warsaw/Hague Convention and the Convention: the liability of the carrier. These actions were such by which a passenger or consignee may hold a carrier liable. The Court drew a clear distinction between a "right to damages" and indemnification or contribution for such compensation. After dealing with Arts 35 and 37 and some cases on the 1999 Montreal Convention the Court dealt with Qantas' arguments based on the Warsaw Convention cases, being Motorola, Data General, Split End and L B Smith. The Court said the following at 1028 [3] about these cases:

"We have considered these cases, but find their textual analysis unpersuasive. Instead, we are guided by the Ontario Supreme Court of Canada's ruling that Article 29 of the Warsaw Convention does not apply to suits brought by one carrier against another. See Connaught Laboratories Ltd. v. Air Canada ... 'Such claims,' the court held, were not 'intended to be included, within the purview of The Warsaw Convention,' which, 'deals with the claims of passengers, consignors and consignees, and the liability of carriers therefor,' not 'with the claims of carriers inter se.' Id. ¶ 26."

(Footnotes omitted.)

91 The reasoning of the Court in Chubb is important in a number of respects. First, it found the reasoning of the District Court decision about the Warsaw Convention holding that contribution claims against the carrier fell within the Convention as unpersuasive (though, to the extent they can be seen to be cases between the parties to the contract of transportation, that criticism might be seen as unwarranted). Secondly, it approved Connaught. Thirdly, it distinguished contribution and indemnification actions from the right to damages, a phrase similar to "action for damages" or "action for liability" ("action en responsabilité") in Art 24.

92 Chubb provides persuasive support for the view that the text and structure of the Warsaw Convention do not create a right of action for contribution or indemnity and that such a right is not covered by the Convention or Art 29. Alternatively, it adds weight to the proposition that, at least, there is no clear authority for the proposition that claims such as those in s 37(a) and (b) were intended to fall within the Warsaw Convention. Certainly, as at 1959 or 1970 there was no such consensus.

93 The preparatory work for the Warsaw Convention in relation to Art 24 was concerned to a degree with the nature of the action by a passenger and those interested in wrongful death claims: see Calkins op cit; Benjamin at 917; In re Mexico City Air Crash at 413; and Mankiewicz op cit at 161-162. There were various drafts before the meeting in Warsaw in 1929: see Calkins at 218-219. Those drafts made clear that the discussion and consideration were directed to the liability of the carrier based on the contract. The combined draft that was submitted to the third session of the Comité International Technique d'Experts Juridiques Aériens ("Citeja") in Madrid in 1928 dealt with the liability of the carrier in Ch III. Articles 22, 26, 27 and 31 are to be noted in Calkins at 221-223. As Calkins points out at 223-224, this draft and these Articles make clear that the action is a "liability action" for the injury, damage or death. He noted the following about draft Art 27 (equivalent to Art 24) at 224:

"Article 27 also shows the intent of the draftsmen with respect to the basis of liability. The article provided that in the case of the death of the holder of the cause of action every liability action no matter how brought could be pursued by the persons to whom such action belonged in accordance with the national law of the deceased or in default of such national law in accordance with that of the place of last permanent residence."

94 As Calkins then explains at 225-227, at the third session of Citeja, surgery was done to the draft Arts 26 and 27, whereby the clarity of the creation of a liability action based on the contractual responsibility of the carrier was lost. There was no disclosed intention in the discussion, however, to change the basis of the action for liability.

95 This background is powerful support for the approach in Connaught and Chubb .

96 The applicant relied strongly on Sidhu v British Airways Plc [1997] 1 AC 430. That case can be accepted fully for what it decided: that from a consideration of the whole purpose of the Warsaw Convention, it can be taken to prescribe the circumstances, being 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. No other action was available to the passenger. Lord Hope of Craighead said at 447:

"The structure of these two provisions [being Arts 17 and 24] seems to me therefore to be this. On the one hand the carrier surrenders his freedom to exclude or to limit his liability. On the other hand the passenger or other party to the contract is restricted in the claims which he can bring in an action of damages by the conditions and limits set out in the Convention. The idea that an action of damages may be brought by a passenger against the carrier outside the Convention in the cases covered by article 17 - which is the issue in the present case - seems to be entirely contrary to the system which these two articles were designed to create.

...

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."

(Emphasis added.)

His Lordship was speaking of the unity and comprehensiveness of the actions given by the Warsaw Convention to the passenger (extending also to wrongful death claims). Those actions were given to the passenger, all others were removed from him or her and those that were given were subject to the conditions and limits of the Convention.

97 The same approach was taken by the United States Supreme Court in El Al Israel Airlines. The rights of the passenger to damages were exclusively to be found in the Warsaw Convention. One did not have access to State law if one fell outside Art 17. The Court viewed the Warsaw Convention as intended to give airlines the protection of actions provided for under Art 17 when read with Art 24 (to passengers and those claiming in respect of death under national law) being the only actions those people could bring.

98 This expression of the matter by both the House of Lords and the Supreme Court reflects Australian law, though Australian statute law may go further: see ss 9D(2), 9E, 12(2), 13, 24, 25L, 35(2) and 36 of the Act which make the causes of action provided for a complete substitute for "any civil liability of the carrier in respect of the injury". Australian law is, however, expressly subject to the statutory recognition of the additional rights: to enforce an indemnity for workers' compensation payments and to recover contribution: s 9F (ss 9D and 9E are relevantly expressed, "subject to s 9F"), s 14 (ss 12(2) and 13 are relevantly expressed, "subject to s 14"), and s 37 (ss 35(2) and 36 are relevantly expressed "subject to s 37") and see s 25L.

99 That provision, s 37, has one limitation - the monetary limits of the Convention. The text, structure and purpose of s 37 are not apt to make s 37 subject to the time limit in Art 29. The time bar applies in Art 29 to the right to damages or liability given by the Convention, relevantly here by Art 17 as affected by Art 24. Claims by persons other than passengers their estates or heirs were not picked up by the words of the Convention. Nevertheless they were likely to be excluded by provisions such as s 36 of the Act. The width of that exclusion by Parliament of other actions was subject to the rights of indemnity and contribution in s 37. The conformance with the Convention was as to monetary limit. The time bar, being inapt for such an action, was not picked up by Parliament. Article 30A recognised the lack of prejudice by the Convention to certain recourse actions. This is not to construe s 37 contrary to the operation of the Convention, because such actions were not created by the Convention under Art 17 as affected by Art 24.

100 I said that I would return to the operation of the Acts Interpretation Act, s 15A. Section 15A is in the following terms:

"Every Act shall be read and construed subject to the Constitution, and so as not to exceed the legislative power of the Commonwealth, to the intent that where any enactment thereof would, but for this section, have been construed as being in excess of that power, it shall nevertheless be a valid enactment to the extent to which it is not in excess of that power."

The argument of the applicant was that the construction of s 37 that would remove it from the operation of Art 29 was sufficiently contrary to the intention of the Convention as to require reading down or a different construction. No discussion of the Constitutional premise in that submission need be undertaken. It suffices to say in rejection of the submission that the above discussion demonstrates that the liabilities and co-ordinate rights under s 37 are not of the character to which the Convention is directed and thus to construe s 37 in the way I have does no violence to and does not contradict the Convention.

101 I have read the additional comments of Handley AJA, with which I agree.

102 The application for leave to appeal should be granted, the applicant ordered to file a notice of appeal within 14 days and the appeal should be dismissed with costs.

103 MACFARLAN JA: I agree with Allsop P.

104 HANDLEY AJA : In this matter I have had the considerable benefit of reading the reasons of Allsop P in draft. I agree with the orders proposed and with his reasons but will add some brief supplementary reasons. The President has set out the facts, the provisions of the Conventions, and the sections of the Civil Aviation (Carriers' Liability) Act 1959 (the 1959 Act) prior to the amendments in 2008 to give effect to the Montreal Convention 1999. There is no need for me to repeat this material.

105 The employer's claim under s 151Z(1)(d) of the Workers Compensation Act 1987 (NSW) was to be indemnified for payments of workers compensation "in respect of" the in-flight injury sustained by its employee.

106 Part IV of the 1959 Act applies to air carriage within Australia, other than intra-State carriage, and to international carriage not covered by the Conventions. Section 37(1)(a) in Pt IV, quoted by the President [10], provides that that Part does not exclude the liability of a carrier under a provision such as s 151Z(1)(d).

107 Since Pt 1V does not apply to carriage within the Conventions s 37 cannot be inconsistent with Australia's international obligations, and there is no question of reading it down.

108 The international flight on which the employee was injured was governed by Pt IIIC which gave the force of law to the Montreal No 4 Convention (the relevant Convention). Section 25L in this Part incorporated s 37 by reference.

109 Part II gave the force of law to the Warsaw Convention and Hague Protocol. Section 14 in this Part re-enacted the provisions of s 37, and provided that they applied notwithstanding anything in that Convention or in that Part.

110 Part III gave the force of law to the Warsaw Convention. Section 24 in this Part incorporated s 14 by reference.

111 Sections 14, 25L and 37 are relevantly in the same terms and have the same meaning. This Court must give effect to the clear words of s 25L, even if the section is a breach of Australia's international obligations under the relevant Convention.

112 Article 17 of the Warsaw Convention provides for the carrier's liability for injuries to passengers. Article 24 provides that actions for damages under Article 17 in the event of the death or wounding of a passenger can only be brought subject to the conditions and limits in that Convention. Article 29 provides for a 2-year limitation period. The same Articles are found in the later Conventions including the relevant Convention.

113 I agree with the President that, as a matter of construction, those Articles only apply to claims by persons travelling on passenger tickets or claiming under or through such persons, including, in the case of death, their dependants. This employer did not claim through or under the passenger. It had an independent claim, albeit one which depended on the carrier's original liability to the passenger.

114 This construction is supported by the decision of the Ontario High Court in Connaught Laboratories Ltd v Air Canada (1978) 94 DLR (3rd ) 586. The case involved a cargo claim against the contract carrier and the latter's claim against the actual carrier for indemnity or contribution. The third party claim was brought more than 2 years after the consignor's loss. The Warsaw Convention as amended at The Hague in 1955 was applicable. Article 29, the 2 year limitation provision, was in Ch III headed "Liability of the Carrier". Robins J held that it did not apply to actions between carriers. He said at pp 593-4:

"All the articles in that chapter relate to the liability of carriers for damages suffered through the death, wounding or other bodily injury to a passenger and for damages sustained by the destruction or loss of or damage to baggage and cargo. None of the articles in the chapter regulate or purport to regulate the claims of carriers one against the other. Such claims are not included, nor does it appear that they are intended to be included within the purview of the Warsaw Convention ... While the Convention deals with the claims of passengers, consignors and consignees, and the liability of carriers therefor, it does not deal with the claim[s] of carriers inter se. Consequently ... art 29 does not apply ..."

115 The Convention before the Court did not contain an article such as Article 30A in the relevant Convention, which provides that rights of recourse are not affected. Nor did it contain the equivalent of Article X in the Guadalajara Convention which provided that the rights and obligations of carriers between themselves were not affected.

116 Article 30A of the relevant Convention provides:

"Nothing in this Convention shall prejudice the question whether a person liable for damage in accordance with its provisions has a right of recourse against any other person."

117 The decision in Connaught Laboratories Ltd v Air Canada (above) was followed by the Ninth Circuit in Chubb Insurance Co v Menlo Worldwide Forwarding Inc 634 F. 3rd 1023, 1028 (2011). That case involved an action by the consignor against the contract carrier and a claim by the latter against the actual carrier for indemnity and contribution. The case was governed by the Montreal Convention 1999. The third party claim was brought outside the 2 year limitation period and the third party pleaded the limitation defence under Art 35.

118 O'Scannlain J, writing for the Court, rejected the limitation defence on two grounds. He dealt with the former at p 1026 as follows:

"The 'right to damages' is not defined in Art 35, but its contours become clear when the Convention is read as a whole ... Construed against this backdrop, the 'right to damages' ... is the cause of action under the Montreal Convention by which a passenger or consignor may hold a carrier liable for damage sustained to passengers, baggage or cargo. It is plain that [the consignor's] action against [the contract carrier] asserted such a right. But it is equally plain that [the] third-party action against Qantas does not. [The contract carrier] does not seek compensation for damage sustained to the [cargo] ... [it] ... seeks indemnification (and contribution) from Qantas, as an actual carrier, for such compensation it has already paid [the consignor]."

119 The 1999 Convention contained in Art 37 the equivalent of Art 30A in the relevant Convention. O'Scannlain J dealt with the second ground at pp 1026-7:

"While the Montreal Convention does not create a cause of action for indemnification or contribution among carriers, it does not preclude such actions as may be available under local law ... the ... Convention refers to these local law causes of action for indemnification, contribution, apportionment or set-off, not as a right to damages, but as a right of recourse ... If Art 35 were construed to extinguish a carrier's 'right of recourse' at the expiration of the specified two-year period, then the Convention would do precisely what Art 37 says it does not: 'prejudice the question whether a person liable for damage ... has a right of recourse against any other person'. To avoid an explicit conflict ... the 'right to damages' extinguished by Art 35 must be understood not to include a carrier's 'right of recourse' against another carrier."

120 The second ground is not relevant because the employer was not liable for damage in accordance with the provisions of the relevant Convention. However the first ground supports the conclusion of the President that the right of recourse asserted by the employer is not within the 2 year limitation period in Art 27.

121 In Sompo Japan Insurance Inc v Nippon Cargo Airlines Co Ltd 522 F. 3rd 776 (2008) in a case governed by the relevant Convention, the Seventh Circuit considered the effect of Art 24 on claims by a concurrent tortfeasor for contribution and setoff. Ripple J, writing for the Court, said at p 781:

"... the Convention's preemption is not complete: 'auxiliary issues' not addressed by the Convention, such as who may recover and for what harms they may be compensated are left to domestic law ... An air carrier's right to a setoff or contribution from a joint tortfeasor is, similarly, incidental to the causes of action available under the Convention and therefore not subject to its limited pre-emption."

122 He referred at p 782 to Art 30A which provided that rights of recourse were not affected by the Convention. The decision is not directly in point because this employer was not liable for the damage to the passenger under the relevant Convention, and was not exercising a right of recourse within Art 30A.

123 Nevertheless the right to indemnification for workers compensation payments is an auxiliary issue incidental to a cause of action available under the relevant Convention which has been left to domestic law, although in this case, unlike those cited, it imposes a direct liability on the carrier.

124 For these supplementary reasons, and the reasons given by the President, the orders he proposes should be made.

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Decision last updated: 07 March 2012