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	England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Western Digital Corporation & Ors v British Airways Plc [2000] EWCA Civ 153 (12 May 2000) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2000/153.html Cite as: [2001] 1 All ER 109, [2001] QB 733, [2000] 2 Lloyd's Rep 142, [2000] EWCA Civ 153, [2000] 2 All ER (Comm) 647, [2000] CLC 1276, [2000] 3 WLR 1855

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Case No.: 99/0826/A3
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION - COMMERCIAL COURT
The Hon. Mr Justice David Steel
Royal Courts of Justice
Strand, London, WC2A 2LL
Friday 12 May 2000

This appeal and cross-appeal raise issues concerning title to sue and the complaints procedure under the Warsaw Convention as amended by the Hague Protocol in 1955 ("the Warsaw Convention") and under the Guadalajara Convention. The Warsaw and Guadalajara Conventions were, "so far as they relate to the rights and liabilities of carriers, carriers' servants and agents, passengers, consignors, consignees and other persons", given the force of law in this country by virtue of, respectively, the Carriage by Air Act 1961 and the Carriage by Air (Supplementary Provisions) Act 1962. The relevant carriage took place in June 1996. We are not directly concerned with amendments to the Convention (particularly to article 24) introduced by the Montreal Protocol scheduled to the Carriage by Air and Road Act 1979, when in force.

2. The case arises from the loss of two consignments of computer equipment which the second claimants ("Western Digital Singapore") agreed to supply to the third claimants ("Western Digital Nederlands"). These companies were subsidiaries of the first claimants, Western Digital Corporation of California. The equipment was to be consigned "cif/freight prepaid" to Western Digital Nederlands c/o Express Cargo Forwarding of Liddall Way, West Drayton, Middlesex (from which they were to be collected by "Irish Express Cargo Forwarding" for onward delivery to Dublin). Express Forwarding Cargo Ltd., the fuller name of the company with a Liddall Way address, describes itself as a "division" - and was presumably a subsidiary - of Irish Express Cargo Limited, a company with a Dublin address. Western Digital Singapore used the services of an accredited IATA freight forwarder, LEP International (S) Ltd. ("LEP"), to arrange delivery to Express Cargo Forwarding. LEP combined the two consignments with five others in relation to which they had also received instructions from Western Digital Singapore. LEP then arranged for their carriage by air with Qantas Airways Limited ("Qantas"). LEP acted also as Qantas's agent in issuing an air waybill No. 081-95894934 dated 21^st June 1996. The Qantas air waybill identified LEP as consignor and Express Cargo Forwarding in Middlesex as consignee, adding under the head "Accounting Information": "Freight prepaid a/c of Western Digital (S) Pte Ltd". The air waybill gave a general description of the seven consignments, with the further information: "Consolidation as per manifest attached".
3. LEP itself issued to Western Digital Singapore separate house air waybills (HB 041777 and HB 041784) dated 21^st June 1996 for each of the two consignments subsequently lost. Each identified at its head the "Master Air waybill" as "081 SIN 95894934", and included boxes headed "to" and "By first Carrier" which were completed respectively "LON" and QF9". Each showed Western Digital Singapore as consignor and Express Forwarding Cargo as consignee. The claimants' case is that the manifest attached to the Qantas air waybill included copies of the LEP air waybills, although there is an issue about that, which cannot at this stage be resolved. The actual carriage was performed by the defendants, British Airways plc, by flight BA036 on 21^st June 1996, under arrangements presently unknown, although British Airways is a major shareholder of Qantas and the two companies are part of an "alliance" of airlines.
4. Two letters dated 28^th June 1996 were written to British Airways under the letter-head of Express Cargo Forwarding Ltd. describing itself at the foot of its letter-paper as "a division of Irish Express Cargo Limited". They were signed "for and on behalf of Irish Express Cargo Limited". Quoting respectively the references "081-95894934 HB 041777" and "081-95894934 HB 041784", each letter read:
"Please be advised that the above mentioned consignment was received in a condition which obliges us to reserve the right to claim against you as carriers. Brief details are mentioned below but full particulars will be furnished as soon as they are ascertained.
You are kindly requested to inform us in writing of your opinion in this matter without delay."
5. No details were in fact "mentioned below" or enclosed. A formal claim with back-up documentation was later made on 23^rd July 1996. A writ was issued on 19^th June 1998, claiming against British Airways:
"Damages for breach of contract made in or about June 1996 as evidenced by or contained in Air Waybill No. 081-95894934; and/or breach of Article 18 of the Warsaw Convention as Amended at the Hague in 1955, and/or breach of duty and/or negligence and/or conversion in and about the loading, handling, custody, care and arrangements for taking and making delivery of the Plaintiffs' cargo computer disks carried under the said Air Waybill, and the carriage thereof from Singapore to London on or about 21^st June 1996 which resulted in loss and/or damage to the said cargo ..."
6. Originally, the writ pursued claims against Qantas with reference to air waybill No. 081-95894934 and against LEP with reference to its air waybills "Nos. 041784 and 041777 which were consolidated under Air Waybill 081 95894934", but these claims were deleted in October 1998 by amendment under RSC O.20 r.1. Points of Claim served 16^th November 1998 pursued the claim against British Airways, on the primary basis that the contract for carriage contained in or evidenced by Qantas air waybill No. 081-95894934 was made by LEP as named consignor acting on behalf of the first and/or second claimants, with the named consignee, Express Cargo Forwarding Limited, acting on behalf of the third claimant (paragraph 2). Further or alternatively, it was alleged that at all material times the first and/or second and/or third claimants were owners of the lost consignments (paragraph 6). On 18^th January 1999, the claimants purported under O.20 r.3 to amend the points of claim to add the following paragraph 3A:
"Further and in the alternative and without prejudice to paragraph 2 herein, if LEP did not act on behalf of the first and/or second plaintiff in concluding the contract with Qantas, then the second plaintiff will claim in these proceedings as the consignor named in LEP's house air waybills numbered 041784 and 041777, which comprised a contract of carriage between the second plaintiff and LEP. It is averred, as pleaded below at paragraph 8, that the defendant performed the contract of carriage between the second plaintiff and LEP."
The defendants applied under O.20 r.4(1) to disallow this amendment.
7. By judgment handed down on 28^th June 1999 and consequential order dated 14^th July 1999, David Steel J. declared that the claimants had no cause of action against British Airways in respect of any of the matters complained of in the action, on the ground that "the owner of a consignment carried by air for reward, who is not named as consignor or consignee or person entitled to delivery under the Air Waybill sued on, covering the .... carriage, is not entitled to claim against the carrier under Article 18 of the Convention". He also struck out paragraph 3A, having regard to the fact that the writ (as amended in October 1998) referred solely to the Qantas air waybill. The claimants appeal against these rulings.
8. David Steel J. further declared that the two letters dated 28^th June 1996 complied with article 26(2) of the Warsaw Convention, in that it sufficed if they in fact gave British Airway´.s sufficient notice to conduct enquiries as to whether the cargo had been lost, and it had not been shown that they did not do so. The defendants cross-appeal against that ruling, and seek an order striking out the writ and amended points of claim under article 26(4).
9. The claimants' case on the appeal
Mr Michael Crane QC for the claimants submits that the facts can be analysed in two alternative ways. The primary (and original pleaded) case is that LEP acted as agents for the second and/or third claimants in contracting with Qantas. The alternative amended case, for which he seeks to reinstate paragraph 3A, is that the second and/or third claimants contracted with LEP as principals. On either case, he relies against British Airways upon the Guadalajara Convention, which provides:
"ARTICLE I
....
(b) "contracting carrier" means a person who as a principal makes an agreement for carriage governed by the Warsaw Convention with a passenger or consignor or with a person acting on behalf of the passenger or consignor;
(c) "actual carrier" means a person, other than the contracting carrier, who, by virtue of authority from the contracting carrier, performs the whole or part of the carriage contemplated in paragraph (b) but who is not with respect to such part a successive carrier within the meaning of the Warsaw Convention. Such authority is presumed in the absence of proof to the contrary.
ARTICLE II
If an actual carrier performs the whole or part of carriage which, according to the agreement referred to in Article I, paragraph (b), is governed by the Warsaw Convention, both the contracting carrier and the actual carrier shall, except as otherwise provided in this Convention, be subject to the rules of the Warsaw Convention, the former for the whole of the carriage contemplated in the agreement, the latter solely for the carriage which he performs."
10. The relevant rule of the Warsaw Convention is article 18, which reads:
"(1) The carrier is liable for damage (dommage) sustained in the event of the destruction or loss (perte) of, or of damage to, any registered baggage or any cargo, if the occurrence which caused by damage (dommage) so sustained took place during the carriage by air.
(2) The carriage by air within the meaning of the preceding paragraph comprises the period during which the baggage or cargo is in charge of the carrier, whether in an aerodrome or on board an aircraft, or, in the case of a landing outside an aerodrome, in any place whatsoever."
11. The first step to applying the Guadalajara Convention is to identify an agreement for carriage governed by the Warsaw Convention. Mr Crane submits that the claimants' primary and alternative cases are no more than different routes to establishing British Airways's position as actual carrier with potential responsibility by virtue of article II of the Guadalajara Convention and article 18(1) of the Warsaw Convention. Accordingly, in his submission, the judge was wrong to strike out paragraph 3A of the amended points of claim, by which the claimants seek to pursue the alternative case.
12. Liability as an actual carrier under the Guadalajara Convention depends upon the existence of a specific agreement for carriage with a specific contracting carrier. Recourse to an actual carrier depends upon identifying the carriage, or part of the carriage, under that agreement which the actual carrier (not being the contracting carrier) performed by virtue of authority from the contracting carrier. The writ (as amended) and the points of claim as originally served rely exclusively upon the Qantas air waybill as evidencing the relevant contract of carriage, and also upon LEP's alleged role as agents in bringing the second and/or third claimants into contractual relations with Qantas. British Airways is by implication alleged to have performed the carriage by authority of Qantas. The alternative case that LEP itself contracted as principal for carriage by air of the two consignments under the LEP air waybills asserts a new and different contract (or possibly two contracts) as the basis for saying that British Airways became responsible as actual carriers (acting by implication with authority from LEP) under articles I and II of the Guadalajara Convention.
13. Article 29(1) of the Warsaw Convention provides:
"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."
14. Mr Crane's submission is that an action was brought within two years against British Airways as actual carrier, and that all that is now wished is to redefine the basis upon which British Airways were actual carriers. This has some attraction in the light of the wording of Article 29(1). But I have come to the conclusion that it paints with too broad a brush. Article 29(1) extinguishes any right to damages if an action is not brought to enforce it within two years. The right to damages here depends upon there being a specific agreement with a specific carrier from whom the actual carrier receives his authority. If an action is brought against a carrier on the basis that it was an actual carrier with reference to a different agreement, contracting carrier and authority, that involves a different right to damages (or in English terms a different cause of action), even though it relates to the same cargo and the same physical carriage. The first right to damages is not the subject of any action and is extinguished, because action was not brought upon it within two years. Although the introduction by amendment of paragraph 3A would not deprive the defendants of the benefit of any defence to this new claim under article 29(1) (see The "Jay Bola" [1992] 2 Ll.R. 62), it would still be wrong to permit the introduction of a claim which was clearly extinguished by lapse of time. On this basis, the judge was in my judgment right to disallow the amended case sought to be introduced in paragraph 3A.
15. Before us in oral argument, Mr Shepherd for British Airways also suggested that the claimants' case based on LEP's alleged agency was, even on common law principles, doomed to failure, and should be struck out on that ground. This is a point which was not raised by the summons before the judge, or argued or considered below. Nor is it raised by the notice of appeal. Apart from this, on the limited submissions which we heard on it, I do not think that the claimants' case of agency can be said to be either unarguable or without a real prospect. It involves some conceptual problems. But they may not be insuperable. LEP's house air waybills were each expressly subject to LEP's general trading conditions (1990 edition) set out on their reverse, which provided inter alia:
"2.(i) The Company is a Freight Forwarder and, subject to the following provisions, shall be entitled either to arrange all or any of the carriage, storing, packing or handling of the goods, or any other services required by the Customer, as agent on behalf of the Customer, or to provide all or any part of such services as principal contractor. The word "goods" in these conditions shall include any packing containers, or equipment.
(ii) When acting as an Agent, the Company does not make or purport to make any contract with the Customer for the carriage, storage, packing or handling of any goods nor for any other physical service in relation to them and acts solely on behalf of the Customer in securing services by establishing contracts with third parties so that direct contractual relationships are established between the Customer and such third parties.
(iii) To the extent that the Company itself by its own servants performs all or any part of the carriage, storage, packing or handling of the goods, or any other services required by the Customer, the Company shall be deemed to provide such services, or the part so performed, as principal contractor.
(iv) Where the Company has held itself out to be the operator of a regular line or service over the route, or part of the route, on which the goods are to be carried, and has accepted instructions for the carriage of the goods by that line or service, the Company shall (except where the Company procures a bill of lading or other document evidencing a contract of carriage between the carrier and the Customer or Owner) be deemed to provide such carriage, or such part thereof, as principal contractor, without prejudice to the question whether any of the other services are arranged by the Company as agent or provided as principal contractor.
(v) Except to the extent set out in sub-clause (iv) the Company shall be deemed to be acting as agent in any case where the Company enters into a contract with any other person for the carriage, storage, packing or handling of the goods or for any other services in relation thereto and such contract is capable of being enforced by the Customer or Owner as principal, whether or not the Customer or Owner is named or disclosed as principal by the Company.
(vi) The charging or agreement to charge a fixed price for any services shall not of itself determine whether the Company arranges such services as agent or provides the same as principal contractor."
16. It seems to me doubtful whether LEP held itself out as the operator of a regular line within sub-clause (iv). So sub-clauses (v) and (vi) on their face suggest that the situation should if possible be analysed as one where LEP acted as agents for the claimants when contracting with Qantas. One difficulty about such an analysis is that LEP consolidated the two relevant consignments with five others. But, in the present case, those five others were the subjects of precisely parallel delivery instructions from Western Digital Singapore to LEP. Another is that LEP made one contract with Qantas, but (probably) received seven sets of instructions from Western Digital Singapore and may well therefore have made seven separate contracts with Western Digital Singapore, although there has been no detailed investigation of their relationship. Nonetheless it appears possible, in the light of sub-clauses (v) and (vi) and what must have been the certainty that consolidation would occur, that LEP had authority from Western Digital Singapore to make a single combined contract with Qantas. The third difficulty is that the sum of LEP's charges to Western Digital Singapore for the seven consignments is likely to have been less than the lump sum for which LEP incurred liability towards Qantas, the difference representing LEP's profit or fee. But this is expressly catered for by sub-clause (vi), and I do not see why a principal and agent may not contract on terms that the agent will arrange a contract for the principal with a third party for whatever he can, but that the principal will only pay the agent a limited sum. Further difficulty might, I suppose, arise if the third party contract was at a greater freight than the principal had agreed to pay, but that is unlikely in the present situation, and may in any event represent a risk that the principal incurs under conditions such as LEP's.
17. The court should therefore, in my view, approach this appeal on the basis that the second and/or third claimants have a properly arguable case for saying, under common law principles, that they were party to a contract for carriage by air evidenced by the Qantas air waybill and embracing all seven consignments, including the two which were lost. Further, so far as this may be relevant, it seems to me that, under common law principles, this would not be a case of agency for an undisclosed principal. Qantas had notice that LEP was acting for an agent, indeed for a named agent, Western Digital Singapore, although the latter may as an fob seller have been acting in turn as agent for Western Digital Nederlands.
18. The Warsaw Convention
I turn to the central question which the judge determined. It is whether the Warsaw Convention permits suit against a contracting or actual carrier in respect of loss of or damage to cargo by anyone other than a person named in the air waybill as consignor or consignee or a person entitled to delivery under the air waybill.
19. The scope of the Convention is found in article 1. The Convention applies to all international carriage of persons, baggage and cargo performed by aircraft by air for reward, as well as to gratuitous carriage by aircraft performed by an air transport undertaking (article 1(1)), though not to carriage of mail or postal packets (article 2(2)). For its purposes "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" are within territories of different contracting states or are within the territory of a single contracting state but with "an agreed stopping place" within the territory of another state (article 1(2)). By article 1(3):
"Carriage to be performed by several successive air carriers is deemed, for the purposes of this Convention, to be one undivided carriage if it has been regarded by the parties as a single operation, whether it had been agreed under the form of a single contract or of a series of contracts, and it does not lose its international character merely because one contract or a series of contracts is to be performed entirely within the territory of the same State."
20. In parenthesis, article 30 regulating liability in cases of successive carriage further provides that a successive carrier
"is deemed to be one of the contracting parties to the contract of carriage in so far as the contract deals with that part of the carriage which is performed under his supervision".
21. These provisions all contemplate the existence of an agreement, contract or contracts between parties for the relevant international carriage. Chapter II (articles 3 to 16) dealing with documents of carriage (passenger tickets, baggage checks and air waybills) does so likewise. The passenger ticket to be delivered by an air carrier under article 3(1) must contain inter alia
"(a) an indication of the places of departure and destination,
(b) ....
(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".
By article 3(2):
"The passenger ticket shall constitute prima facie evidence of the conclusion and conditions of the contract of carriage."
though:
"The absence, irregularity or loss of the passenger ticket does not affect the existence or 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."
Article 22(1) limits the carrier's liability in the carriage of persons, but adds:
"Nevertheless, by special contract, the carrier and passenger may agree to a higher limit of liability."
22 Article 4(1) provides for delivery of a baggage check containing a like indication and notice, mutatis mutandis, to that required for tickets under article 3(1). Under article 4(2) the baggage check "shall constitute prima facie evidence of the registration of the baggage and of the conditions of the contract of the carriage". Its absence, irregularity or loss has a similar consequence to that provided in the case of a passenger ticket.
23. Under article 5(1), the carrier has the right to require the consignor to make out and every consignor has the right to require the carrier to accept an air waybill, although under article 5(2):
"The absence, irregularity or loss of this document does not affect the existence or the validity of the contract of carriage which shall, subject to the provisions of Article 9, be none the less governed by the rules of this Convention."
24. Article 8 provides for an air waybill to contain a like indication and notice, mutatis mutandis, to that required for tickets and checks under articles 3(1) and 4(1). Article 9 removes the carrier's entitlement to limit under article 22, if with its consent, cargo is loaded on board an aircraft without an air waybill or with an air waybill without the notice regarding limitation of liability required by article 8(c). By article 11:
"The air waybill is prima facie evidence of the conclusion of the contract, of the receipt of the cargo and of the conditions of carriage."
25. Under article 22(2)(a), the limit of the carrier's liability in the carriage of registered baggage and cargo applies 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 which case the carrier is liable to pay up to the declared sum, "unless it proves that that sum is greater than the passenger's or consignor's actual interest in delivery at destination".
Article 12(1), (2) and (3) confer on the consignor and regulate rights of disposal during transit which are expressly "[s]ubject to his liability to carry out all his obligations under the contract of carriage". Article 12(4) continues:
"The right conferred on the consignor ceases at the moment when that of the consignee begins in accordance with Article 13. Nevertheless, if the consignee declines to accept the waybill or the cargo, or if he cannot be communicated with, the consignor resumes the right of disposition."

26. Article 13(1) provides that, except in circumstances where the consignor has exercised his right of disposal under article 12,

"the consignee is entitled, on arrival of the cargo at the place of destination, to require the consignor to hand over to him the air waybill and to deliver the cargo to him, on payment of the charges due and on complying with the conditions of carriage set out in the air waybill"

27. Article 13(2) requires the carrier to give notice to the consignee as soon as the cargo arrives, and article 13 provides:
"If the carrier admits the loss [perte in the French text] of the cargo, or if the cargo has not arrived at the expiration of seven days after the date on which it ought to have arrived, the consignee is entitled to put into force against the carrier the rights which flow from the contract of carriage"

28. Article 14 provides:
"The consignor and consignee can respectively enforce all the rights given them by Articles 12 and 13, each in his own name, whether he is acting in his own interest or in the interest of another, provided that he carries out the obligations imposed by the contract".

29. Article 15(1) provides:
"Articles 12, 13 and 14 do not affect the relations of the consignor or consignee with each other or the mutual relations of third parties whose rights are derived from the consignor or consignee."

30. By article 15(3) "Nothing in this Convention prevents the issue of a negotiable air waybill".
31. The judge derived from the provisions of chapter II a provisional conclusion that the owner of a consignment who was not the consignor or consignee named in an air waybill (or a person to whom the consignor had ordered delivery to be effected under article 12) could not hold the carrier liable under the provisions of article 18 in chapter III. He based this on the emphasis placed in chapter II on the central role of the consignor and consignee and their special status vis-à-vis the carrier. Before considering this conclusion further, it is appropriate to look at chapter III.
32. The Convention deals separately in Chapter III with liability of the carrier. Articles 17, 18 and 19 provide for the three subjects of death/bodily injury, loss (perte) or damage (avarie) to baggage or cargo and delay. Article 20 provides a limited defence if the carrier "proves that he and his servants or agents have taken all necessary measures to avoid the damage or that it was impossible for him or them to take such measures", while article 21 provides for damage (dommage) caused or contributed to by a claimant's own fault. Article 22 is the limitation provision. Article 24, 25A, 26, 27, 28, 29 and 30 read as follows:
"ARTICLE 24
(1) In the cases covered by Article 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.
ARTICLE 25
The limits of liability specified in Article 22 shall not apply if it is proved that the damage resulted from an act or omission of the carrier, his servants or agents, done with intent to cause damage or recklessly and with knowledge that damage would probably result; provided that, in the case of such act or omission of a servant or agent, it is also proved that he was acting within the scope of his employment.
ARTICLE 25A
(1) If an action is brought against a servant or agent of the carrier arising out of damage to which this Convention relates, such servant or agent, if he proves that he acted within the scope of his employment, shall be entitled to avail himself of the limits of liability which that carrier himself is entitled to invoke under Article 22.
(2) The aggregate of the amounts recoverable from the carrier, his servants and agents, in that case, shall not exceed the said limits.
(3) The provisions of paragraphs (I) and (2) of this Article shall not apply if it is proved that the damage resulted from an act or omission of the servant or agent done with intent to cause damage or recklessly and with knowledge that damage would probably result.
ARTICLE 26
(1) Receipt by the person entitled to delivery of baggage or cargo without complaint is prima facie evidence that the same has been delivered in good condition and in accordance with the document of carriage.
(2) In the case of damage, the person entitled to delivery must complain to the carrier forthwith after the discovery of the damage, and, at the latest, within seven days from the date of receipt in the case of baggage and fourteen days from the date of receipt in the case of cargo. In the case of delay the complaint must be made at the latest within twenty-one days from the date on which the baggage or cargo have been placed at his disposal.
(3) Every complaint must be made in writing upon the document of carriage or by separate notice in writing despatched within the times aforesaid.
(4) Failing complaint within the times aforesaid, no action shall lie against the carrier, save in the case of fraud on his part.
ARTICLE 27
In the case of the death of the person liable, an action for damages lies in accordance with the terms of this Convention against those legally representing his estate.
ARTICLE 28
(1) An action for damages must be brought, at the option of the plaintiff, in the territory of one of the High Contracting Parties. either before the court having jurisdiction where the carrier is ordinarily resident, or has his principal place of business, or has an establishment by which the contract has been made or before the court having jurisdiction at the place of destination.
(2) Questions of procedure shall be governed by the law of the court seised of the case.
ARTICLE 29
(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.
ARTICLE 30
(1) In the case of carriage to be performed by various successive carriers and falling within the definition set out in the third paragraph of Article I, each carrier who accepts passengers, baggage or cargo is subjected to the rules set out in this Convention, and is deemed to be one of the contracting parties to the contract of carriage in so far as the contract deals with that part of the carriage which is performed under his supervision.
(2) In the case of carriage of this nature, the passenger or his representative can take action only against the carrier who performed the carriage during which the accident or the delay occurred, save in the case where, by express agreement, the first carrier has assumed liability for the whole journey. (3) As regards baggage or cargo, the passenger or consignor will have a right of action against the first carrier, and the passenger or consignee who is entitled to delivery will have a right of action against the last carrier, and further, each may take action against the carrier who performed the carriage during which the destruction, loss, damage or delay took place. These carriers will be jointly and severally liable to the passenger or to the consignor or consignees."
33. The Convention as a code
That the Convention contains a code which supersedes common law rules relating to the nature and standard of liability is now clearly established. In Sidhu v. British Airways [1997] AC 430, the House of Lords was concerned with English and Scottish actions in respect of a scheduled airline flight from London to Kuala Lumpur which put down in Kuwait in the early hours of 2^nd August 1990 some hours after the Iraqi invasion had begun. In the English action commenced on 30^th July 1993 the plaintiffs claimed damages at common law for personal injuries and negligence. In the Scottish action the pursuer claimed damages for delay at common law for breach of a condition allegedly to be implied in her contract that the airline would take reasonable care for her safety. It was common ground that neither the English plaintiff nor the Scottish pursuer had suffered any "accident" on board the aircraft or in the course of embarking or disembarking, so that article 17 could not assist. (Further the Scots pursuer at least had not suffered any bodily injury). It was further common ground that, if a party had a claim under article 17, there could be no concurrent common law remedy. The House of Lords held, by parity of reasoning, that in the field of liability for personal injury, for baggage or cargo or for delay, where the circumstances are such that no claim exists under the provisions of Chapter III, the Convention excludes any common law claim: see per Lord Hope at pp. 448B-C and 453C-D:
"It would be largely destructive of the system which this chapter seems to have been designed to lay down if a passenger were to be able, for example, to maintain a claim for damages for non-bodily injury, for loss of or damage to the personal possessions which he had with him inside the aircraft or for economic loss, outside the conditions and limits set by the Convention while maintaining a claim under the Convention for the bodily injury." (p.448B)
"The Convention does not purport to deal with all matters relating to contracts of international carriage by air. But in those areas with which it deals - and the liability of the carrier is one of them - the code is intended to be uniform and to be exclusive of any resort to the rules of common law." (p.453D)
34. This approach was followed by the US Supreme Court in El Al Israel Airlines, Ltd. v. Tseng (1999) 26 Avi. 16,141, where a passenger claimed damages in tort under New York law for emotional injuries allegedly suffered as a result of an obtrusive security search at John F. Kennedy International Airport before a flight to Tel Aviv. There was no "accident" and no "bodily injury" within article 17. The court held that no such claim was possible, saying:
"Given the Convention's comprehensive scheme of liability rules and its textual emphasis on uniformity, we would be hard put to conclude that the delegates at Warsaw meant to subject air carriers to the distinct nonuniform liability rules of the individual signatory nations." (p.16,146)
35. The court also considered the Montreal Protocol No. 4, amending article 24 to read as follows:
"1. 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 prospective rights.
2. In the carriage of cargo, any action for damages, however founded, whether under this Convention or in contract or in tort or otherwise, can only be brought subject to the conditions and limits of liability set out in the 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. ...."
36. Focusing on the 28 words of amended article 24(1), the court said:
"Both parties agree that, under the amended Article 24, the Convention's preemptive effect is clear: the treaty precludes passengers from bringing actions under local law when they cannot establish air carrier liability under the treaty. Revised Article 24, El Al urges and we agree, merely clarifies, it does not alter, the Convention's rule of exclusivity." (p.16,148; see also p.16,142)
37. This reference to the Montreal Protocol No. 4 highlights the difference between the issues before the courts in Sidhu and in El Al and the issue in the present case. It could subvert the Convention if air carriers were exposed to liability of a nature or cause not specified in the Convention. But title to sue in respect of such a liability is a different matter. The Montreal Protocol No. 4 goes on expressly to make clear that the exclusivity which it provides in respect of passenger, baggage and cargo claims is "without prejudice to the question as to who are the persons who have the right to bring suit and what are their respective rights". So, under the Montreal Protocol No. 4, the intention seems clear to reserve a significant role to national law when it comes to determining by whom the claims allowed by articles 17-19 may be brought. Previously this was explicitly stated in respect of passenger claims: see article 24(2) of the Warsaw Convention as amended by the Hague Protocol. Special emphasis on the rights of, for example, personal representatives and dependants in cases of passenger liability is understandable. But article 24(1) of the Warsaw Convention itself refers to "any action for damages, however founded". The phrase "however founded" is capable of wide application, and suggests awareness of the possibility of non-contractual claims. Here too, the Montreal Protocol No. 4 may be clarificatory, rather than amendatory, in its effect.
38. In Sidhu and El Al the claimants were party to the relevant contract of air carriage. That is the typical situation which the draftsmen of the Convention took as their basic working model. The Convention has been described as operating by imposing statutory terms upon contracts of carriage: see Grein -v Imperial Airways Ltd [1937] 1 KB 50, 74-77 per Lord Greene MR and Holmes -v- Bangladesh Biman Corp. [1989] AC 1112, 1129 and 1141 per Lords Bridge and Jauncey. But examination of some not uncommon situations indicates that the Convention may operate more widely. Passenger tickets are frequently bought for persons who are either incapable of contracting for them ( e.g. very young infant members of a family) or for persons who do not contract for them (e.g. partners, or dependants for whom parents or grandparents pay), and luggage is frequently handed over on their behalf on the same basis. They must be passengers within the meaning of the Convention: see Chitty on Contracts 28th ed. paragraph 35 - 023. This is confirmed by Fellowes (or Herd) -v- Clyde Helicopters Ltd [1997] AC 534, where police officers carried on an aircraft chartered by a police authority were held within the equivalently worded schedule to the domestic Order (The Carriage by Air Act (Application of Provisions) Order 1967). In Fellowes (although it was not cited to us) the House of Lords held that the effect of the language of the Warsaw Convention supported by the terms of section 1 (one of the 1962 Act) was to introduce "general rules with regard to the liability of the carrier in respect of the contract of carriage" rather than "merely statutory contractual terms": see page 543 E-G per Lord Mackay, with whom Lords Nicholls, Hoffman and Clyde agreed, and page 551 F-G and 553 E-G per Lord Hope.
39. The fact that the draughtsmen of the Convention worked, understandably, from a typical contractual model must not be allowed to detract from the role of the Convention as a code introducing certain general rules. It is easy to find in the text of the Convention formulations which, taken literally, would be inconsistent with a sensible set of rules. I can take two examples from the presently uncontroversial area of passengers:
(a) Article 22(1) refers to the carrier and the passenger agreeing by special contract to a higher limit of liability and Article 22(2) to the passenger making a special declaration of interest at the time the package was handed over to the carrier and paying any supplemental sum required. But a third party (for example, a parent, spouse or employer) must also be able to make a relevant special contract or declaration. The Convention must, like any code, be interpreted flexibly and analogically to cater for such situations: compare the provision in s.1-102(1) of the American Uniform Commercial Code that it should be liberally construed and applied to promote its underlying purposes and policies, and the commentary that this "consecrates the general process of development or unfolding of the code, so that it decides by analogy what it does not control by genuine development" (Mitchell Franklin in "On the Legal Method of the Uniform Commercial Code" (15) 16 Law and Contemporary Problems 330).
(b) Article 30 regulates the right of action of "the passenger or his representative". It makes no reference to claims by dependants although by Article 24(2) the provisions of Article 17 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". Claims not merely by personal representatives, but also by dependants must be contemplated. Yet they are not mentioned expressly in Article 30(2) at all.
40. Flexibility is, I think, important if the Convention is to continue over time to fulfil its role as a set of general rules governing the rights and liabilities of the (in effect unlimited) categories of persons referred to in section 1(1) of the 1961 Act. As Lord Hope said in Fellowes at page 553 E:
"In my opinion the Convention agreed at Warsaw, as amended at the Hague, was intended to be, and is, capable of accommodating changes in the practice of airlines and aircraft operators with regard to the purposes of which aircraft are used to carry people and goods, and in the contractual arrangements in pursuance of which people and goods are carried by air for reward."
41. Preliminary analysis of the Convention
While it is clear that in certain respects the Convention scheme provides general rules rather than merely statutory contractual terms, it is also clear that the draughtsmen had very much in mind as a premise to its application the existence of a relevant contract of carriage by air. Who may sue or be sued on such a contract are, on the face of it (and subject to any Convention provisions), matters for domestic law.
42. So far as both baggage and cargo were concerned, the typical model which the draftsmen had in mind was one under which the passenger in the case of baggage and the consignor in the case of cargo would be party to the contract of carriage. That is evident from, for example, Articles 4, 5, 10(2), 11(1), 12(1), 16(1) and 22(2a). An assumption that the person with whom the carrier deals on a principal-to-principal basis will be a party to the contract of carriage is entirely understandable. Even where such a party is obviously a forwarding agent, he will commonly be expected to incur personal liability (as IATA accredited agents expressly undertake). However, the Convention does not attempt to define or confine the concept of consignor and in its amended form does not even require the consignor's identity to appear in any documentation. Further the air waybill is itself no more than prima facie evidence of the conclusion of the contract. None of this suggests a rigid approach to the concept of consignor. None of it suggests an intention to exclude from consideration any person who under domestic law would be a party to the contract through or in addition to a person named as consignor in the Air waybill.
43. The common law recognises that an agent, even though himself party to and entitled to sue or be sued on a contract under its terms or by custom (as often the case with forwarding agents), may at the same time be acting for a principal: see e.g. Chitty on Contracts, 28^th ed. Vol. 2, Agency (written by Prof. Reynolds) paragraphs 32-083/5 and the extensive authority there cited. Further, under common law principles, not only a disclosed but also an undisclosed principal may sue or be sued on a contract made by his agent: see Chitty, paragraphs 32-087/8. The concept of an undisclosed principal has, it seems, no exact counterpart in civil law, although a similar result may often be achievable by other routes (see Bowstead and Reynolds on Agency 16^th Ed. paragraphs 1-018 and 8-070; Zimmerman on The Law of Obligations Chap. 2 section II Agency). A note of caution appears appropriate in respect of any such generalisation, since (a) we were, understandably, not given the benefit of any comparative law material in this area and (b) as Lord Bingham of Cornhill L.C.J., speaking extra-judicially, has recently recalled, "the civil law as found in (say) France, Germany, Italy, Spain or The Netherlands is no more uniform than the common law as found in (say) England, the United States, Canada and Australia" ("A New Common Law for Europe", published as one of The Clifford Chance Millennium Lectures, and in turn citing Cappelliti, New Perspectives for a Common Law of Europe (1978)). The references by Prof. Tosi to French maritime law in the commentary referred to later in this judgment also point towards the need for caution.
44. Under English Law and practice the right of suit in contract is commonly associated with ownership of the goods. If the person shipping or consigning goods is owner, he can sue. If he is acting for the owner, the owner can intervene and sue. In the case of a sale on terms that property and risk pass f.o.b. on shipment or consignment, the ordinary inference is that the shipper/consignor contracts with the carrier as agent for the consignee. A reservation of risk is however sufficient to establish loss for the purposes of a contractual claim, whether or not property may have passed. And a consignor who has parted with both property and risk may still make and sue on a "special contract" with the carrier, under which he can recover substantial damages, which he will then hold on trust for the person really interested: see The Albazero [1977] AC774, especially 842-4 per Lord Diplock. In some cases the circumstances in which delivery is made (for example against payment of freight) may also justify the inference of a contract with a consignee: see E G Brandt -v- Liverpool [1924] 1KB 575.
45. There is nothing in the Convention which expressly excludes the application of such principles. Indeed, Shawcross and Beaumont, Air Law 4th ed. (loose-leaf reissue) vol. 1 VII (188) (now VII (622)) cited by Lord Hope in Sidhu at page 450G states that the rule in civil law countries is that only a party to a contract of carriage, or a principal for whom he was acting, is regarded as the appropriate plaintiff, and it was submitted before us that the draughtsmen of the convention had, primarily, a civil law rather than common law, theory of contract in mind. Mr Crane also submits that the passage in Shawcross and Beaumont overlooks the possibility that under civil law systems a consignee may take the benefit of a contract of carriage as a third party. Interestingly, perhaps, although the recent Contracts (Rights of Third Parties) Act 1999 generally excluded contracts for carriage by air from its operation, the reason for such exclusion may very well be that the extent to which third parties are entitled to take such benefit is expressly governed by the Warsaw Convention. Again, however, it is to be observed that the Convention does not attempt to define or confine the concept of consignee, does not require the consignee to be named in any documentation and makes the Air waybill no more than prima facie evidence of the conclusion of the contract and the conditions of carriage.
46. Mr Shepherd submits that there is nevertheless to be derived from the scheme of the Convention and from, in particular, its frequent references to the consignor and the consignee, a conclusion that the only persons entitled to assert any rights, or under any liabilities, vis-a-vis the carrier, are those named as consignor or consignee in the Air waybill. This involves the review of the terms of, in particular, Chapters II and III, which led the judge to a provisional conclusion in favour of Mr Shepherd's submission.
47. Mr Crane points out that chapter II is primarily concerned with regulating the relations between the two sides in respect of documentation and arrangements for receipt, carriage and delivery, and in that connection it is also natural that the chapter should confer rights and impose obligations on those actually dealing with each other as principals. In contrast, the subject of liability is dealt with in chapter III, and that focuses, in general, upon the carrier's position, rather than upon the identity or characteristics of the "plaintiff" (see articles 22(4) and 28) to whom the carrier is or may be liable. In my judgment, this distinction has some force, but it is not entirely watertight. In chapter II, article 13(3) is on one view addressing the conditions under which a consignee may claim for loss of an entire consignment. In chapter III, article 22(2) assumes a passenger or consignor having an "actual interest in delivery at destination", although this to my mind illustrates no more than the typical model on which the draughtsmen were working. Article 30 regulates successive carriage in terms requiring a passenger or his representative to "take action only against the carrier who performed the carriage during which the accident or delay occurred, save in cases where, by express agreement, the first carrier has assumed liability for the whole journey" (article 30(2)), and distributing the claims which a passenger or consignor or consignee may make regarding baggage and cargo between the first and last carrier and the carrier performing the carriage during which the destruction, loss, damage or delay took place (article 30(3)).
48. In Gatewhite Gatehouse J confined Article 13(3) (also Article 14) to the exercise of rights of disposal (i.e. under Article 13(1) and (2)). I myself see some difficulty about accepting this. Article 13(3) appears to me to be more a footnote (or proviso as the judge said) to Article 26. But, as such, I think it addresses the conditions for a claim for loss (perte) rather than the identity of the claimant. As to Article 30, which refers to the consignor and consignee in the context of Chapter III dealing with liability, that article is clearly focused upon a perceived need to regulate and distribute the rights of claim between two sides in the very specific situation of successive carriage, rather than being aimed at any identification or limitation of those entitled to present themselves either as, or through, the consignor or consignee. Article 14 underlines the role of the consignor and consignee as parties to the contract, but what is noticeable is the absence of any general rules of the Convention providing who may sue as "plaintiffs" for loss and damage or excluding others from maintaining such claims.
49. It may be said that the answer to the point made in the last sentence of this quotation lies in energetic or purposeful extrapolation, from other provisions of the Warsaw Convention such as articles 13(3), 26(1) and (2) and 30(3), of some underlying intention to confer general rights of suit on consignors and consignees or persons to whom they may direct delivery. But, even assuming that this were done, the need for such extrapolation highlights the fact that the Convention does not expressly regulate certain key aspects of everyday liability claims. That being so, there is even less reason in my judgment to construe the Convention as intended not merely to confer rights of suit on consignors or consignees named as such in the air waybill (or on other persons entitled under article 12(1)), but also to exclude suit by those party to the relevant contract for air carriage as their principals.
50. There are, it seems to me, also some positive pointers in the language of the Convention, towards an entitlement on the part of others besides a named consignor or consignee to claim for loss or damage. I have referred to the phrase "however founded" in Article 24(1). The provisions of Article 14, confirming that the consignor or consignee can exercise the rights given by Articles 12 and 13 although acting in the interests of another, might be said to be unnecessary if other provisions of the Convention anyway confine attention to the consignor or consignee.
51. Moreover, article I(b) of the Guadalajara Convention defines contracting carrier as a person who as principal makes an agreement for carriage governed by the Warsaw Convention "with a passenger or consignor or with a person acting on behalf of the passenger or consignor". That must in the case of a passenger embrace situations of a parent contracting with an airline "on behalf of" an infant child, although the only legally binding agreement is or can be between the parent and the airline. Equally, however, it must embrace a ticket agent who is required by the airline to accept personal liability on the contract for the ticket price, when making a contract to which the passenger also becomes party. In the case of cargo, this provision is capable of covering the situation of an agent acting for a disclosed principal, and incurring no liability on the contract. But it seems improbable that this was the reason for its insertion. It would, as it seems to me, cover the readily foreseeable case of the agent who acts for a principal but who, although he is an agent, is required to commit himself personally under the contract. I see no reason in this situation why it should then be restricted to cases where the agent discloses that he is so acting.
52. A reading of the Convention which restricts claims for loss of or damage to baggage or goods to the person named in the relevant documentation as consignor or consignee would have some odd consequences. Baggage checks for baggage delivered by a family at a check-in desk may, not uncommonly, be affixed en bloc by airlines to the ticket of any one member of the family, or distributed at random among the tickets of different family members. It seems unlikely that anyone contemplates by this practice that the only member of the family who can claim for loss, damage or delay is the passenger to whose ticket the baggage check happens to have been affixed, although he has no interest in the relevant baggage and did not even put it on the conveyor at check-in.
53. Pausing here, I am not therefore persuaded on a simple reading of the text of the Convention that its draughtsmen intended the limitation in respect of loss or damage claims for which British Airways contends. I have concentrated up until this point on claims brought under the Convention by principals of a named consignor or consignee in circumstances where, as a matter of domestic law and by the terms of the Convention, such consignor or consignee falls to be treated as party to the relevant contract of carriage. The other aspect of the general issue determined by David Steel J. concerns the possibility under English law of claims in the absence of any contractual relationship, based simply on ownership of the baggage or cargo lost or damaged in transit.
54. Common law (and I have little doubt at least some civil law) systems recognise that ownership of property (or it may be an immediate right to its possession) may give rise to a tortious or delictual claim against a person in whose possession such property is lost or damaged. Such claims have long been recognised at common law: see The Albazero at p.844 citing Hayn v. Culliford (1879) 4 CPD 182. In air carriage falling outside the scope of the Convention, they have been recognised as a basis for holding responsible a carrier from whose possession goods have been lost: see e.g. Moukataff v. BOAC [1967] 1 Ll.R. 396 (where at pp. 412-3 the argument was rejected that the statutes governing Crown proceedings and the Post Office excluded any tortious claim against an air carrier for loss of mails). To counter attempts by goods-owners to use this route to avoid contractual terms by pursuing claims against sub-bailees, the doctrine of bailment on terms has been developed and recognised: see The Pioneer Container [1994] 2 AC 324. In German law a similar doctrine to bailment on terms evidently exists (cf the response by Assessor Erich Schõnwerth and Dr Wolf Müller-Rostin in (1993) ZLW (Zeitschrift für Luft und Weltraumrecht) 21 to a previous article by Dr Robert Kuhn in (1989) 38 ZLW 21, both articles being cited in note 23 of paragraph VII/622 of Shawcross & Beaumont Air Law, 4^th ed. issue 76).
55. The unamended Warsaw Convention referred to a carrier and not to his servants or agents. The Hague Protocol introduced amendments into Articles 25 and 25A to refer to "servants and agents". Article 25 as amended, deals simply with the extent to which the carrier's liability under Article 22 may be affected by acts or omissions of his servants or agents. Article 25A gives any servant or agent, acting within the scope of his employment by carrier, an entitlement to avail himself of the limits of liability which the carrier is entitled to invoke under Article 22. Nothing in Articles 17-21 or in Article 25A itself imposes any liability on a servant or agent. Following Sidhu the language of Article 25A ("damage to which this Convention relates") may restrict the nature of the claim which may be made against any responsible servant or agent. But that is a different matter. Whether a servant or agent may be held liable at all must, on the face of it, be determined by domestic law; as to that, see Midland Silicones -v- Scruttons [1962] AC446 (while noting the discussion regarding the different United States position in Shawcross and Beaumont at paragraph VII (644, issue 76). Servants or agents do not have under the Convention the protection of other provisions, for example, the two year time limit in Article 29, although that is specifically provided under English law by section 5(1) of the 1961 Act. Accordingly, Article 25, appears specifically to contemplate and to regulate tort claims, which would necessarily be brought by the owner or person with an immediate right to possession of baggage or cargo. Whether Article 25 could extend protection to a sub-contractor (such as British Airways in the present case) may be open to debate. The Guadalajara Convention was on any view introduced in order specifically to protect such sub-contractors. It deals specifically with non-contractual claims. It extends to sub-contractors, in respect of the carriage they performed, the full liability and protection provided by the rules of the Warsaw Convention. British Airways seeks to read the Guadalajara Convention as substituting for their previous exposure to baggage and cargo owners a new exposure to no-one except consignors or consignees named in an Air waybill to which British Airways was never a party and which it may never have seen, and to do this even though such consignors or consignees may have suffered no actual loss at all. Other servants or agents would on any view continue liable under Article 25A to the persons really interested in the claim, that is the owners or persons immediately entitled to possession who suffered the loss. I would in these circumstances be disinclined to read into the Guadalajara Convention the intention for which British Airways contends unless compelled by other consideration. The Guadalajara Convention also extends the protection of the limits of liability in the Warsaw Convention to servants or agents of the actual carrier: see Articles V and VI. Once again, the exposure of servants or agents arises on its face under domestic law and will be to the owner or person entitled to immediate possession of the baggage or cargo lost or damaged.
56. Whilst considering the possibility of extra contractual claims, it is to be noted in parenthesis that the limit of liability for hand luggage in Article 22(3) is not matched by any provision providing for liability in respect of or regulating the standard of liability in respect of hand luggage. Either claims for hand luggage are regulated by domestic law (as the draughtsmen of the convention appear to have thought: see the initial report and opening address to the Second International Conference at Warsaw which led to the finalisation of the original Convention in 1929, by Mr Henri de Vos reported at pages 22 and 253 at the minutes) or the Convention provisions of Articles 17-21 must be extended analogically to cater for such claims. In either case there is nothing expressed in the Convention to prevent the owner of hand luggage suing whether or not he happens to be the passenger carrying it on board.
57. There remains the question whether a carrier by air who contracts for carriage under an Air waybill and actually carries (and loses or damages) the relevant cargo may incur not merely liability to the consignor or consignee or their principals based on the existence of the contract of carriage, but also extra contractual liability to an owner of such cargo who cannot claim to be such a principal. Bearing in mind the different status of a contracting carrier and an actual carrier, the answer is not inevitably the same in each case. Further, the question does not directly arises for consideration in the present case, since British Airways was simply an actual carrier under the Guadalajara Convention. I see cause, however, to be cautious about a proposition that the owner of baggage or cargo cannot ever claim for its loss or damage against a contracting carrier.
58. First, the Guadalajara Convention shows that the provisions of Chapter III are perfectly capable of operating between non-contracting parties. Secondly, the words "however founded" in Article 24(1) are wide enough to cover such claims. Thirdly, and more fundamentally, there are situations where an owner may be a complete stranger, not merely to the contract of carriage but to any suggestion or idea that his goods would be carried anywhere, as for example where his goods have been borrowed or stolen or taken by mistake and are without his knowledge or authority handed to a carrier for carriage to a consignee: see Chitty paragraph 36-050.
59. British Airways' case involves the proposition that the only person able to claim their delivery up, or to claim in respect of their loss or damage, is the passenger carrying them or the person named as their consignor or consignee. Take the not uncommon situation of a stolen artefact or work of art. If it is shipped abroad by air, the only person who could direct or claim delivery up by the airline would be a thief, handler or dishonest forwarding agent, if such appeared as consignor and consignee. On British Airways' case, these too would then also be the only persons who could sue the airline for any loss or damage. Mr Shepherd submitted that this was in effect the price the innocent world at large must pay for the benefit of air transport. It seems most improbable that the Convention was intended to have that effect. Here too, I prefer to view the Convention as establishing the general framework, including the nature and standard of liability, but to read its provisions as operating with some flexibility, and as allowing a role for the relevant domestic law, when identifying those entitled to sue in situations where the Convention is not in terms exclusive. The most that airlines could sensibly expect in situations such as these is that they would still enjoy in relation to the true owners the benefit of the internationally agreed and statutorily enacted scheme provided by Chapter III of the Warsaw Convention.
60. Previous authority on title to sue
I turn to authority specifically in point on the issue of title to sue. There is surprisingly little and the direction in which it points has changed. The judge examined many of the relevant authorities. We were shown further authorities together with a review of the jurisprudence "The Cargo Owner's Right to Sue under the Warsaw Convention" (1992) 17 Annals ASL (II) 441 by Robert Wilkinson, a former partner in the applicants' solicitors who wrote it well before the subject-matter of this case for an October 1991 meeting of the Aviation Law Association of Australia and New Zealand.
61. I start with European authority. A line of French authority restricts the right of suit to the consignor or consignee named in the air waybill. It is summarised in footnote 5 on page VII/303 of Shawcross and Beaumont's Air Law (4^th ed, issue 76), together with a decision of the Tribunal de Commerce of Brussels (15^th May 1981) and the Cameroon Supreme Court (7^th October 1982). The decisions are, as customary, briefly reasoned. They include three decisions in the French Cour de Cassation. In Ste. International Transit Transport v. Ste. Industrielle et Commerciale and Others (23^rd February 1981) S.I.C. entrusted S.I.T.T. with arranging the carriage by air of electronic equipment from Paris to Ibadan. S.I.T.T. used Air France for the purpose. S.I.C. was not named as consignor or consignee on the air waybill. The Cour de Cassation upheld the Court of Appeal's decision that S.I.C. could not sue under the contract of carriage, since it was not party to it, and referred for support to articles 18(1) and (2), 24(1) and 30(3) of the Warsaw Convention. This reasoning appears to treat the Warsaw Convention as defining, and limiting, by reference to the air waybill the agreement for carriage upon which its operation is predicated. In Cie. Iberia v. Cie d'Assurances La Concorde (23^rd June 1987), the air waybill box headed "Consignee" was completed with the name of a bank (probably the bank issuing a letter of credit covering payment) under whose name also appeared the words "NOTIFY: Galerie Maison et Jardin", the buyer. The Cour de Cassation adopted a slightly more relaxed attitude, upholding the Court of Appeal's decision that Galerie Maison et Jardin was entitled to sue Cie. Iberia. In Ste. France Handling and Lufthansa v. Ste. Japan Time S.A. (14^th May 1991) the Cour de Cassation overturned the lower court's decision allowing Ste. Japan to sue as buyer and importer, in circumstances where, although it appeared on the relevant air waybills as "notify party", the banks financing the transactions appeared as consignees. The Court referred to articles 12-15 and 30(3) of the Convention.
62. An article in Transport Aérien by Prof. J-P Tosi (professor at the University of Montpellier) considers the state of authority as at 1995. He points to the difference between the "very narrow limits" adopted by French jurisprudence and the approach taken in Gatewhite Ltd. v. Iberia Airlines Aereas de Espana Soc. [1989] 1 Ll.R. 160 (see below). He describes the French approach as based more on the consideration that "a certain formalism is necessary in view of the risk that a carrier runs of seeing itself pursued by different claimants in courts competent under article 28 but not situated in the same country" than "on very debatable textual arguments (the principal of which is based on article 30, which however only concerns successive carriers and which seems inspired more by practical than by juridical considerations)" In dealing with the consignor's right of action under French law, he refers to authority establishing that entry on the waybill is a necessary but not sufficient condition of suit, on the basis that an fob seller has no interest after shipment and cannot be regarded as party to the contract of carriage, and questions whether this applies if the consignor can show that he has suffered loss. The consignee's right of action is, he indicates, linked to the right of disposal and the right to take delivery, but, he continues, the rights of consignor and consignee must be regarded as alternative, although this question has not been addressed in the French jurisprudence. He summarises the state of French authority with respect to actions by a "real consignee", not featuring on the waybill, pointing out that French authority only affords a right of action "in exceptional cases" and citing the Cour de Cassation's decision of 23^rd June 1987 as an example. He concludes his consideration of the position of a "real consignee" with reference to a further Cour de Cassation decision of 7^th July 1992 (BTL 1992, p.638) recognising the right of a "a real" consignee to sue in a maritime context (i.e. the right of an owner to sue for damages he has suffered due to loss or damage to goods delivered against a bill of lading held and presented by a third company which did not declare itself to be acting for the owner). Prof. Tosi is evidently unconvinced by the current state of aviation authority, since he comments that it ought not to survive unchanged this extension of the right to claim to a real consignee in a maritime context. As to the "real consignor", Prof. Tosi observes that in land transport French law allows a consignor who has contracted with a "commission agent" to sue the carrier, even though not appearing on the consignment note, but points out that this is based on an article in the French Commercial Code which is not applicable to air transport. Nevertheless, he continues by saying that "it is however excessive to refuse an action to the real consignor when he is the sole person to have suffered damage. Maritime law is evolving towards the recognition of a right of action in this case" and citing authority, before concluding: "Air law ought to move in the same direction". A little later (and writing before Sidhu), he draws attention to the different approaches of French law and common law regarding delictual liability.
63. In N.V. Oregon v. Coop. Vereniging Nederlands Luchtvracht Groupage Centrum U.A. and Seeboard World Airlines Inc. (25^th May 1971) the Court of Haarlem, First Chamber held that the right of suit for non-delivery was limited to the named consignor or, after the goods had arrived at the place of destination, to the named consignee, basing its conclusions that the rights were alternative on articles 12-14 and that they were exclusive on a contrario extrapolation from article 24(2).
64. Turning to United States authorities, it is to be noted that the United States has never enacted the Hague Protocol, so that they were decided under the unamended Warsaw Convention which requires the identity of the consignor and consignee to be declared in the "consignment note". In Manhattan Novelty Corp. v. Seaboard & Western Airlines, Inc. (1957) 5 Avi. 17,229 (New York Supreme Court), a plaintiff not named as consignor or consignee was held unable to sue, "even though he has a proprietary interest in the goods shipped and even though the consignee may have been the plaintiff's custom broker". This was followed in the New York State City Court in Holzer Watch Co., Inc. v. Seaboard & Western Airlines, Inc. (1958) US and Can. Av. Rep. 142, with the statement that that it was reasonable that an air carrier should answer only to those it knowingly deals with, and in Pilgrim Apparel, Inc. v. Nat. Union Fire Ins. Co. (1959) 6 Avi. 17,733 (New York State City Court), with the statement that "others having an interest in the goods must look to the consignor or consignee". In Parke, Davis & Co. v. B.O.A.C. (1958) US and Can. Av. Rep. 122 (New York State City Court), the Manhattan and Holzer cases were distinguished, on the ground that
"The carrier there was not on notice that the plaintiff in those cases was the real party in interest. Immediately following the name of the customs broker there appears "a/c Parke, Davis & Company, Detroit, Michigan". Further, due to the necessity of having the shipment passed by U.S. Customs and U.S. Public Health Service, it was incumbent upon the real party in interest, Parke Davis & Company, to have the customs broker in New York, where the shipments first landed in this country, arrange these details."
65. In 1979 in the Appellate Division of the Supreme Court of New York, it was held in Leon Bernstein Commercial Corp. v. Pan American World Airways 421 N.Y.S.2d 587, that an undisclosed principal of the named consignor or consignee could sue:
"Although there are authorities to the effect that only the consignor or consignee named in the air waybill may sue, we have held that the Convention is not to be so narrowly construed, if to do so would defeat the rights of the true owner. (American Banana Company, Inc. v. Venezolana Internacional De Aviacion S.A. (VIASA) 67 A. d. 2d 613, 411 N.Y.S. 2d 889). In that case VIASA urged that the consignee had no standing to sue because it was not the real party in interest. It has been held that the real party at interest has standing to sue although not the consignee named in the air waybill. (Parke, Davis & Co. v. BOAC ....).
66. In Johnson v. American Airlines (1987) 834 F.2d 721 (9^th Cir.) a Federal Court reserved judgment on the question whether a principal has standing to sue whose agent was the consignor or consignee named in the consignment note. In the U.S. District Court in Rank Precision Ind. Ltd. v. Jardine Air Cargo (U.S.) Ltd. (1987) 20 Avi. 18,325, the court held that the right to bring suit was limited to the consignor or consignee, and that a reference to a company as "co-load" did not alter that result. Since the court cited as authority Parke, Davis, its decision on the latter point may merely mean that it regarded that reference as too obscure to constitute the notice of agency to which it was argued that it amounted.
67 Leon Bernstein was applied in BRI Coverage Corp. v. Air Canada (1989) 25 F. Supp. 133 (U.S. District Court of New York), where the undisclosed principal of both the consignor and the consignee was allowed to sue.
68. In Pan American World Airways Inc. v. SA Fire and Accident Insurance Co. Ltd. [1965] 3 SALR 150, the South African Appellate Division was again concerned with the unamended Warsaw Convention, and had before it, necessarily, only the older American cases on the Convention in that form. A diamond merchant had consigned a parcel to the Post Office for despatch to New York. The South African Postal Administration consigned it by air to the United States Postal Administration. The merchant sued the air carriers in delict for its loss. The case was argued on the pleadings. Four out of five judges considered that, where a consignment note had been issued, only the consignor and consignee could sue. But a different majority (composed of two of the four, Holmes J.A. and Potgieter J.A., and the fifth, Steyn C.J.) held that, in the absence of any plea that a consignment note had been issued, the action was maintainable. The restriction of suit to the consignor and consignee was treated as an exclusion or limitation of liability in the context of article 9. Holmes J.A., with whose judgment Potgieter J.A. concurred, voiced doubt about the assumption, which the court was required to make, that the Convention contemplated either Postal Administration as consignor or consignee.
69. The majority, in considering that, where there was a consignment note, the right of suit was limited to consignor or consignee, referred to the American cases of Parke Davis, Pilgrim Apparel and Manhattan Novelty. Ogilvie Thomson J.A. said that "If attainable without doing violence to the language of the Convention, uniformity is, in an international matter of this kind, manifestly desirable". He also said that "Exactly what persons answer those descriptions [i.e. of consignor and consignee] need not be decided in this appeal".
70. A similar division of opinion between a majority (Luckhoo J. with whose judgment on this point Bollers C.J. agreed) and minority (Sir Kenneth Stoby, Chancellor) appears in Bart v. British Indian Airways, Ltd. [1967] 1 Ll.R. 239. This too was a decision under the unamended Warsaw Convention. After citing Manhattan, Holzer Watch, Pilgrim Apparel and the South African case of Pan American Airways, Luckhoo J. referred to the statements in the House of Lords underlining the importance of uniformity in the construction of international conventions, and expressed himself to be "coerced" by the cumulative effect of the articles of the unamended Convention to conclude that only the consignor or consignee could sue. Sir Kenneth Stoby took the view that the Convention did not intend to remove the title to sue of either undisclosed principals or bailors, who had suffered the loss.
71. In Tasman Pulp & Paper Co. Ltd. v. Brambles JB O'Loghlen Ltd.[1981] NZLR 225, the plaintiff did not appear as either consignor or consignee on the air waybill, but claimed to sue the air carrier for damage to a package of fabric in contract and/or in tort as owner of the goods. The only issue actually decided was whether the plaintiff's action against the air carrier should be struck out. But after a full review of the authorities as they then stood, Prichard J. made clear, in respect of the alternative claim, that he preferred the view taken by Steyn C.J. in Pan American and Stoby C. in Bart, namely that the owner of goods lost or damaged retained a common law right to sue. As to the claim based on breach of contract, it seems clear that he held a similar view with respect to any claim by those interested in goods to sue on a contract for air carriage as unnamed or undisclosed principals of the named consignor or consignee. This aspect was adjourned for the plaintiff to reconsider its pleadings with a view to alleging expressly that it was party, and upon what factual basis, to the contract for air carriage (page 236).
72. In reaching his decision Prichard J took into account the desirability of uniformity in the construction of an international Convention. He identified as "the real question, .... whether the Convention should be construed so as to abrogate the common law rights of the injured party", particularly common law rights to sue for damages. To that extent, his reasoning may be vulnerable to criticism, in the light of Sidhu and El Al, for not recognising the respects in which the Convention scheme of responsibility does supersede common law principles of liability. But, in the particular area of title to sue, there is in my view force in both his approach and his reasoning. He pointed out that the emphasis on the positions of consignor and consignee in Chapter II is understandable in the context of a chapter dealing with matters of documentation and procedures for stoppage in transit and uplifting of cargo at destination (page 234); that article 14 is in terms restricted to the enforcement of rights under articles 12 and 13 (pages 227-8 and 233-4); and that if the intention had been to limit the right of suit for cargo damaged or destroyed to the consignor and consignee in all cases, one would have expected the Convention to provide for the consignor and/or consignee to have such rights in comprehensive and exclusive terms (pages 233-5). Above all, he was clearly reluctant to conclude that, in a common situation like that before him, the Convention confines title to sue to persons who have suffered no actual loss and puts the persons really interested and at risk in the hands of nominal claimants. I quote later in this judgment one particularly forceful passage from Prichard J's judgment in this connection.
73. Polatex Trading Co. Pty. Ltd. v. Scandinavian Airlines System (11/12/84; District Court of New South Wales) is a pithily reasoned decision from the South West Pacific area (as the judge in Polatex identified it). The judge's reasoning pays due regard to the considerations informing the House of Lords' later decision in Sidhu. He was content to accept that "the entire scope of the parties' rights and obligations are to be found in the contract evidenced in the air waybill and/or as found in the application of" the relevant Australian statute enacting the Convention, so that Polatex could not evade that scheme of liability. But he rejected the argument that the only person who could maintain an action to enforce that scheme of liability was a named consignor or consignee. The issue was narrow, whether the endorsee of a consignee could sue, but the judge's observations have more general force:
"The word "consignee" is not defined in the Convention. Perhaps it does not need any definition. It means at least the person to whom the goods are consigned. Certainly Article 14 entitles that person to enforce whatever rights are conferred by Articles 12 and 13. But, as is pointed out in Shawcross [on Air Law], the words of Article 14 are enabling only and not exclusive. The argument that the carrier should know from the face of the air waybill the identity of the contracting parties is to me of superficial attraction only. In the modern commercial world of today and even as it existed in Warsaw in 1929 or in The Hague or in Mexico in later time, it is ever the fact that international trade was financed by banking houses and that the security for loans made for such a purpose might be the very goods to be transhipped. To effect that security, it is ever the fact that the lender would acquire some measure of title over the goods and to that end may well insist on being the named consignee. But all of that is in the knowledge that the consignee so nominated might endorse the bill to another."
74. David Steel J. apparently thought that the only person other than the consignor or consignee named in the air waybill who could ever claim was someone to whom the consignor had under article 12(1) ordered delivery to be made in lieu of a named consignee (see the last sentence in his judgment, before the heading "Conclusion"). He also thought that this conclusion was supported by and consistent with the decision in Polatex. But in that case it was the consignee (Scholefield Goodman (Aust) Pty. Ltd.), not the shipper or consignor ("Bibazir C") who endorsed the air waybill "On payment of all charges deliver to the order of Polatex Trading Co. Pty. Ltd.", the actual owner of the goods during the transit, whose name also appeared as notify party on the air waybill. Neither article 12 nor article 13 provides expressly for a consignee to specify delivery to some other consignee, although it is possible that this might be implied.
75. In Gatewhite Ltd. v. Iberia Airlines Aereas de Espana Soc. [1989] 1 Ll.R. 160, decided in the English Commercial Court, Gatehouse J. undertook a full reconsideration of the issue. The second plaintiffs, growers of chrysanthemums in Grand Canary, had agreed to sell a quantity to the first plaintiffs, Gatewhite, under a contract under which property passed on their shipment by air. The second plaintiffs consigned the chrysanthemums via Iberia Airlines under an air waybill naming the first plaintiffs' customs clearing agents, Perishables Transport, as consignees. The first plaintiffs only appeared on the waybill as notify party. There was delay in transit and the chrysanthemums were spoiled. The sole issue before Gatehouse J. was whether the first plaintiffs, as owners throughout the air carriage, had title to sue the airline. After a full review of the authorities he concluded that they did. He reminded himself of the need to avoid too parochial a view of an international convention (pages 163 and 165). He reminded himself of the desirability of uniform construction of international conventions, but pointed out that in 1989 there was "already a division of opinion on the issue, to be found not only in dissenting judgments but in actual decisions" (page 166, and see 164). He found in the Convention nothing to exclude the right of an owner to sue for damage to or loss of goods in carriage or to restrict such right to the consignor or consignee. He echoed the view, similar to that expressed by Prichard J., that
"it would be a curious and unfortunate situation if the right to sue had to depend on the ability and willingness of the consignee alone to take action against the carrier, when the consignee may be - and no doubt frequently is - merely a customs clearing agent, a forwarding agent or the buyer's bank. It would seem artificial in the extreme to require a special contract in the air waybill itself under article 15(2) to provide the goods owner with a remedy in such a normal situation." (page 166)
76. In the subsequent Hong Kong authority of Regalite International Ltd. v. Aircargo Consolidation Service (UK) Ltd. [1996] 3 HKLR 453, Mr Recorder Edward Chan Q.C. refused to follow the previous decision of Traynor J. in Cordial Manufacturing Co. Ltd. v. Hong Kong America Air Transport Ltd. [1976] HKLR 555. In Cordial the first plaintiff, an fob seller, had consigned goods under an air waybill which named the bank issuing a letter of credit on behalf of the second plaintiff, the buyer. Traynor J. held that the fob seller, although named in the air waybill as consignor, could not sue for loss of the goods (delivered to a lorry driver who produced forged documents), since he had parted with all interest in the goods on their shipment, had ceased under articles 13 and 14 to have any claim, had made no special contract with the air carrier, and had by shipping the goods simply brought such a contract into existence "between the carrier and another, be it the consignee (Irving Trust Inc.) or the second plaintiff" (page 584). He also held that the buyer, the second plaintiff, could not sue, on the basis that the scheme of the Convention, particularly articles 13 and 14, was to confine rights of action to the named consignor or, once the goods had arrived at destination, the named consignee.
77. In Regalite goods were delivered at destination by the air carrier to the notify party (their intended buyer), contrary to the seller/consignor's instructions to deliver only to the named consignee, the buyer's bank (Bank of America). In a detailed judgment Mr Recorder Chan said that the decision in Cordial was surprising and had given rise to great inconvenience in cases of goods consigned to banks under letters of credit or on cash (or acceptance of draft) against payment terms. On the facts before him, he found a special contract between the consignor and air carrier, enabling the former to sue for its loss, whether or not it was owner. He also held that the consignor had retained ownership and preferred Gatehouse J's decision in Gatewhite to Trainor J's in Cordial, saying:
"The proposition that the owner of goods could not bring an action against the carrier for loss and damage to his cargo during the course of carriage is a startling proposition. In the case where goods are consigned to a banker under D/P arrangements but are wrongfully released to someone else, usually the consignee banker would have no real interest in the goods. In the present case, the Bank of America would not even have any interest in the goods as security as his customer got the goods without any payment and hence the overwhelming probabilities would be that the Bank of America had not even lent the price against the security of the goods. In this situation, it is understandable that the consignee banker would have little incentive to be involved in any litigation against the carrier. It is also understandable that the plaintiff could not get the Bank of America to join as co-plaintiff as the Bank of America was basically the banker of [the buyer]"
78. In the Scottish courts in Sidhu the decision in Gatehouse was distinguished as dealing with a quite separate aspect of the Convention to that in issue in Sidhu (per Lord Marnoch in the Inner House), while Lord Clyde in the Inner House said that the area of title to sue was one where the Convention was not necessarily exhaustive: see (1996) SLT 529, 537B and 546E). In the House of Lords, at pp.450-1, Lord Hope cast some doubt upon the decision:
"This decision, however, does not sit easily with the idea that the object of the Convention, in the areas with which it deals, was to provide uniformity of application internationally. As Shawcross & Beaumont, Air Law, 4th ed. (Looseleaf reissue), vol. 1, VII (188) have observed, the rule in civil law countries is that only a party to a contract of carriage, or a principal for whom he was acting, is regarded as the appropriate plaintiff. In common law countries the proper plaintiff is the owner of the goods, whose right to sue depends on his interest in the goods, not on the fact that he may also be a party to the contract. It would seem to be more consistent with the purpose of the Convention to regard it as providing a uniform rule about who can sue for goods which are lost or damaged during carriage by air, with the result that the owner who is not a party to the contract has no right to sue in his own name.
We were not asked to review the Gatewhite case in detail however, and as the point was not fully argued I would not wish to cast further doubt on the decision which Gatehouse J reached. It is sufficient for present purposes to say that I am not persuaded that we should apply his reasoning to the question which is before us here, which is not concerned with the question of standing or title to sue but with the question whether a person who has an undoubted title to sue under the Convention can pursue a claim outside the Convention where the Convention itself does not provide him with a remedy."
79. It is to be noted that Lord Hope's reservation about Gatewhite related specifically to the possibility of suit by an owner not party to the contract of carriage. His reference in the context of civil law to "a party to a contract of carriage, or a principal for whom he was acting" is at least neutral in the context of the primary issue presented by the present case, which is whether a principal, for whom a person named as consignor or consignee is acting, may intervene.
80. Looking back over the whole body of authority which I have sought to review, it can be seen that a line of French authority from the 1970s to the 1990s, a Dutch authority (1971) and a Belgian case (1981) adopt the position for which British Airways contends (and the question-marks which Prof. Tosi writing in 1995 introduced in relation to the inevitability of this direction for future French law have not borne fruit, to date). Otherwise, however, the direction of international authority has swung from a refusal to recognise any right of suit in anyone but a consignor, consignee or other person entitled under article 12(1), towards a general readiness to recognise both the intervention of, firstly, (a) principals of whose existence notice was given (Parke, Davis in 1958), then, latterly, of (b) any, even undisclosed principals: see Leon Bernstein in 1979 and BRI Coverage in 1989 in the United States, though a contrary note appears in Rank Precision in 1987, as well as Tasman Pulp in 1981 in New Zealand and the reasoning in Polytex in 1984 in New South Wales, and Regalite in 1996 in Hong Kong. Thirdly, claims by (c) persons founding on their ownership of affected cargo were supported in Tasman Pulp in 1981 in New Zealand and Gatewhite in 1989 in England. The uniformity of international jurisprudential thinking which influenced the majority judges in Pan American in 1965 in South Africa and in Bart in 1967 in British Guyana has thus shifted markedly in an opposite sense.
81. Further analysis
I take separately the positions of (I) principals of the person named as consignor or consignee on any air waybill and (II) claimants relying simply on their ownership or right to immediate possession of cargo to claim against an actual carrier responsible for its loss or damage. Mr Crane's submissions before us concentrated upon (I). This was understandable on the particular facts - and also no doubt because Lord Hope's doubt about the correctness of Gatewhite related to (II). If permissible at all, a claim under (II) would also require the claimant to establish his own ownership (or the right to immediate possession) as well as possession on the part of the relevant carrier at the time of the loss or damage.
(I) Principals of a person named as consignor or consignee on any air waybill
1) Nothing in the Convention as amended requires the naming of a consignor or consignee in the air waybill or explicitly restricts the concept of consignor or consignee to someone so named.
2) The Convention takes as a working model international carriage by air under an agreement or contract to which the consignor and consignee would be or fall to be treated as party. But the Convention does not set out to define either consignor or consignee, or to exclude domestic contractual rules which would either define them or permit others to claim to be (or to be held liable as) their principals.
3) In the view I take, the Convention's references to consignor and consignee should not therefore be read in an exclusive sense. The Convention assumes, and to some extent (e.g. in the context of articles 13(3) and 30(3)) imposes, a particular contractual model. But that model also allows for flexibility, both in the identification of the consignor or consignee and, more importantly, in the identification of the principals of persons named in the air waybill as consignor or consignee.
4) I adopt the view, taken by other courts which have considered this problem, that there are, in this respect, strong considerations of commercial sense in favour of an interpretation which recognises and gives effect to the underlying contractual structure, save in so far this is positively inconsistent with the Warsaw and Guadalajara Conventions. These considerations were well expressed by Prichard J. in Tasman Pulp & Paper Co. v. Brambles [1981] 2 NZLR 225, 235:
"The effect is that the owner of goods is put completely in the hands of a nominal consignee who, for a variety of reasons, may be incapable of or averse to instituting proceedings against an airline. The consignee may be a customs agent or forwarding agent who is insolvent or in liquidation. Or the consignee may be a bank, the directors of which might well refuse to embark on costly litigation on behalf of a customer - even though that customer offered to indemnify the bank for costs. And, finally, however willing and able he may be, the action may not be one which the consignee is empowered to bring - his right to sue being limited to the rights conferred on him by Article 13."
It may be, as I have indicated earlier in this judgment, that the last point made in this extract can be answered by both interpreting article 13(3) as a condition to loss (perte) claims and by extrapolating a general underlying intention to confer rights of suit for loss (perte) or damage (avarie) on the consignor or consignee, irrespective of their interest and of any actual damage which they may have sustained. There is still no reason to infer an equally general and unstated exclusion of any right of suit by any principal of the consignor or consignee who has really sustained the relevant damage.
Further, the points made in the first three sentences of the passage from Prichard J's judgment are valid in any event. Litigation is a costly and committing affair, and the analysis urged by British Airways would require named consignors and consignees to be prepared to litigate against air carriers at peril of liability for costs, in matters in which they had no real interest. Prichard J's observations can, I think, be further reinforced by the consideration that, if an airline can insist upon restricting its sights to the particular named consignor, consignee or person entitled, it would, presumably, follow that it can set off, in the liquidation of any such consignor, consignee or person entitled, debts which it may be owed (e.g. for freight unpaid) arising out of mutual dealings with that person quite unconnected with the present carriage, even though such debts would be incapable of set off because the carrier was on notice or had been given notice of the interests of the goods-owner really concerned: see Bowstead and Reynolds on Agency 16^th Ed. Article 83 (and, regarding the civil law position, the concluding sentence of paragraph 1-018).
5) I am not persuaded to a contrary view by the argument that a carrier must know in advance by whom he will be sued. There is no requirement even to identify any consignor or consignee in any document of carriage. Actual carriers are under the Guadalajara Convention exposed to suits by persons unknown relying on agreements to which actual carrier was not party. After any loss, damage or delay, it will become clear who is claiming, and it seems to me that there may even be potential advantages on both sides, if those with the incentive and information to mount a claim are at least able to do so. On any view, however, the considerations favouring a conclusion that cargo-interests should be able to intervene and to sue for loss and damage as a principal on a contract evidenced by an air waybill issued to his shipping or customs agent appear to me considerably to outweigh any argument based on the supposed inconvenience or uncertainty that this might involve for air carriers.
6) It is no answer to the claimants' submissions that, if the claimants had raised their alternative case in time, they might have succeeded in relying on the LEP air waybill as evidencing a contract for air carriage with LEP and in holding British Airways liable under the Guadalajara Convention accordingly. This was an alternative case which would be inapplicable if the claimants are right on their primary case. On their primary case, deriving from their analysis of LEP's conditions and of the contractual position, the LEP air waybill does not evidence any contract for air carriage. Rather, it evidences an agency, and the issue is whether the claimants are entitled to assert LEP's agency on their behalf in relation to the making of the contract for air carriage with Qantas. As I have indicated, nothing suggests that agency situations are uncommon in the consignment of goods by air and the fact that they have arisen for consideration in a number of prior cases indicates that they are not.
7) The interests of international uniformity no longer point towards a restriction of the right of suit to any named consignor, consignee or person entitled under article 12(1). The new magnetic pole of international jurisprudence draws quite strongly towards conclusions that there is no such general restriction in the Convention, and that, at least under systems which recognise the rights of unnamed or even undisclosed principals, there is nothing in the Conventions to prevent such principals of the named consignor or consignee intervening and suing (or being sued) in reliance on the relevant contract for carriage by air. As principals they will necessarily be subject to any limitations on suit which the Convention imposes on their consignor or consignee agents.
8) The amendments to article 24 under the Montreal Protocol No.4, although not in force in respect of this carriage, suggest strongly that there is no inconsistency between (on the one hand) detailed provisions such as those in Chapter II or article 30(3), regulating a consignor's or consignee's right of suit, and (on the other hand) claims by others, particularly principals of a consignor or consignee permitted under domestic law rules to sue on the relevant contract. In this field also, I prefer to view the Montreal Protocol No.4 as clarificatory, rather than amendatory (see the words of the United States Supreme Court in the El Al case, cited above).
9) I would add that, even on the view adopted by some United States courts that only disclosed principals should be allowed to sue, the claimants in the present case have a properly arguable case that LEP's alleged agency on their behalf was disclosed, as a result of the combination of the reference on the Qantas air waybill of the information "Freight prepaid a/c of Western Digital (S) Pte Ltd" and the manifest consisting of the relevant LEP air waybills which are said (though there is a factual issue about this) to have been attached to or to have accompanied the Qantas air waybill: see generally Bowstead and Reynolds on Agency 16^th Ed. paragraph 8-110. The fact that LEP acted as issuing agents in respect of the Qantas air waybill may reinforce this argument, although consideration would require to be given to the significance of LEP's dual capacity on the attribution to Qantas of any knowledge which LEP had.
10) For these reasons, I consider that Western Digital Singapore or (if Western Digital Singapore as fob seller proves to have acted as agent for its buyers) Western Digital Nederlands had a properly arguable claim with a real prospect of success against British Airways, on the basis that (a) it was a principal of the consignor or consignee named in the air waybill issued by Qantas and (b) British Airways performed the carriage the subject of that air waybill and is liable accordingly for the short delivery of the cargo under the Guadalajara Convention. I would set aside the declaration made by the judge in paragraph 2 of his Order dated 14^th July 1999, in so far as he held that the claimants were not entitled to pursue any such claim under article 18 of the Convention.
(II) Claimants relying on their ownership (or right to immediate possession) of cargo to claim against an actual carrier responsible for its loss or damage.
1) I find this a more difficult point to resolve. A possible view of the Convention is that its provisions only contemplate liability claims based upon or at least ancillary to an underlying contractual relationship (whether this derives from the relevant governing law or is imposed by the specific provisions of the Convention). On this view, articles 17 to 21 cannot fix the nature or standard of any duty owed other than to a party to such a contract. If this view is correct, then on the basis of Sidhu and El Al, any possibility of any non-contractual claim would appear to be superseded and excluded by the Convention. But I have come to the conclusion that this is not the preferable view and that the scheme of the Warsaw and Guadalajara Conventions is to read as permitting such claims, where they would be allowed under the relevant domestic law.
2) Firstly, the extension of the Convention scheme to an actual carrier by the Guadalajara Convention illustrates that the provisions of the Warsaw Convention are fully capable of operating between non-contracting parties, and the Conventions contain provisions which contemplate parallel non-contractual claims, particularly against servants or agents, which depend on ownership or a right to immediate possession.
3) Secondly, the phrase "however founded" in article 24(1) itself suggests the possibility of extra-contractual claims in respect of baggage or cargo under article 18. In this respect, as I have said, I would prefer to view the Montreal Protocol No.4 amendments as clarificatory. The fuller wording used in article 24(2) does not justify a contrary conclusion, and appears explicable by reference to the special considerations governing dependency claims in personal injury cases.
4) If the owner of cargo has a claim against an actual carrier responsible for its loss or damage, the provisions of Chapter III are fully capable of regulating that claim. The claim will be based and restricted accordingly. Domestic law may establish title to sue, while the Convention, as the House of Lords held in Sidhu, will regulate the nature and standard of responsibility. Neither the detailed provisions of Chapter II nor the presence of article 30(3) regulating specific aspects of the carrier's position in relation to the consignor and consignee are, in my view, inconsistent with this.
5) The amendments to article 24 by the Montreal Protocol No.4 confirm the consistency - by elaborating the phrase "however founded" to make clear that it embraces tort-based claims and adding the phrase "without prejudice to the question who are the persons who have the right to bring suit and what are their respective rights". Similar confirmation is found if one looks at a parallel convention in the same family as the Warsaw Convention - that is, the Convention on the Contract for the Carriage of Goods by Road ("CMR") enacted by the Carriage of Goods by Road Act 1965. Chapter III of CMR corresponds closely to Chapter II of the Warsaw Convention, while Chapter VI of CMR contains provisions regulating successive carriage. Yet article 28(1) in Chapter IV of CMR expressly contemplates extra-contractual claims.
6) The two common law authorities in point, Tasman Pulp and Gatewhite, favour recognition of claims on such a basis, although they predate Sidhu which casts doubt upon them in this respect. The practical considerations identified by Prichard J. in Tasman Pulp all militate in favour of recognising that non-contractual actions may be brought against actual carriers by the persons really interested, that is by the relevant baggage or cargo owner (or person entitled to immediate possession). Again I find the contrary considerations of simplicity and uniformity uncompelling, and, in the case of an actual carrier facing a non-contractual claim, the argument that he must be entitled to know where he stands lacks virtually any force. As the present case confirms, even where the relevant documents are obtained, there may be considerable room for argument which evidences the relevant contract of carriage, who are the parties to it, and who is the consignor or consignee.
7) That Chapter III of the Convention would govern such non-contractual claims, if admissible at all, is clear under English law from Sidhu. I note also, in parenthesis, that, in their article on the German legal position (referred to above), Schönwerth and Müller-Rostin conclude that extra-contractual claims by a third party owner (e.g. a cargo-owner not party to the contract of carriage in the air waybill or an individual asking a passenger to take items for him) would - at least in circumstances where the owner knew or could have contemplated that his goods would be carried by air - be subject to the scheme of liability prescribed by articles 17-21 of the Convention.
8) Apart from straightforward cases of carriage in circumstances contemplated by those owning or having the right to immediate possession of the relevant baggage and cargo, the entirely foreseeable case of goods consigned without the knowledge or authority of those owning or having the right to their immediate possession suggests that the Convention cannot confer on carriers by air any absolute immunity to claims by such persons.
9) Despite the unfavourable dictum in Sidhu, I would therefore conclude that the Conventions do not exclude claims against an actual carrier based on title to the relevant baggage or cargo, but subsume them within the Convention scheme of liability in Chapter III of the Warsaw Conventon. Thus, although the nature and standard of any liability on British Airways' part is regulated by the Warsaw and Guadalajara Conventions, title to sue is determined by the law governing extra-contractual claims. In this case, it is not suggested that such law, whichever it may be, does not permit an owner of goods lost in possession of a carrier by air to claim against that carrier in respect of such loss, apart from the Convention. I would therefore also set aside the judge's declaration in paragraph 2 of his Order dated 14^th July 1999, to the extent that he held the contrary as a matter of principle.
82. The cross-appeal - complaint under article 26(2)
I turn to the cross-appeal. Mr Shepherd for British Airways submits that the judge erred both in the test he applied and in his approach to the facts. What is required under article 26(2), in the case of damage (avarie), is that "the person entitled to delivery must complain to the carrier forthwith after discovery of the damage, at the latest, within .... fourteen days from the date of receipt in the case of cargo". Failing complaint within such time, no action lies against the carrier (article 26(4)). The claimants rely on the two letters dated 28^th June 1996 as sufficient notice. Mr Shepherd submits, first of all, that any notice which these letters gave was not given by the person entitled to delivery, the consignee, Express Cargo Forwarding Ltd., but was given by Irish Express Cargo Limited for whom they were signed. Since the former's name appeared at their letter-head with a note at the foot that the former were a division of the latter, I see no force in this. Irish Express Cargo Limited must be taken to have been acting for and with the authority of Express Cargo Forwarding Ltd., the actual named consignee.
83. Much more significantly, it is submitted that the letters did not amount to a complaint, still less a complaint in relation to the subject matter of the claimant's primary case, that is the partial loss of packages from the larger consignment being carried by British Airways. Each letter related to an identified part of that consignment and that identified part had as a matter of fact been wholly lost. Yet each letter advised that the identified part "was received" but was "in a condition which obliges us to reserve the right to claim against you as carriers". Mr Crane argues subtly that, on the authority of Fothergill v. Monarch Airlines Ltd. [1981] AC 251, the word "damage" (avarie) in article 26(2) covers partial loss of baggage or cargo, so that advice of a claim in respect of the "condition" of goods on arrival must be treated as covering both physical damage and partial loss. That appears to me specious. Letters relating to the condition of two sets of identified goods received cannot amount to a claim that those goods have not been received, even though in terms of the Convention those sets of goods may constitute part of a larger consignment, in which context their loss would involve a partial loss or avarie, rather than a total loss or perte.
84. Lord Wilberforce said in Fothergill that the purpose of article 26(2) appeared "reasonably clear":
"It is (1) to enable the airline to check the nature of the "damage"; (2) to enable it to make inquiries how and when it occurred; (3) to enable it to assess its possible liability; to make provision in its accounts and if necessary to claim on its insurers; (4) to enable it to ensure that relevant documents (for example the baggage checks or passenger ticket, or the air waybill) are retained until the issue of liability is disposed of.
If one then enquires whether these considerations are relevant to a case of partial loss of objects contained in baggage, the answer cannot be doubtful: they clearly are. Moreover, prompt notification may give the airline the opportunity of recovering the objects lost."
85. In Fothergill the plaintiff had on arrival home from holiday found that his suitcase was damaged, and he completed a "property irregularity report" ("p.i.r.") which under the heading "Nature of Damage" stated "Side seam completely parted from the case. [Damage] occurred on the homebound flight." On arrival home he discovered items were missing from the case, but no further complaint was made within the time limit. His action failed. The p.i.r.
"said nothing about the contents of the baggage and it was totally insufficient for the purpose for which it was required .... One need only figure a case in which the objects lost were valuable jewellery to see the necessity for a specific complaint of the loss." (per Lord Wilberforce at page 278G).
86. Lord Fraser at page 289G agreed:
"It gave no hint that such loss [of contents] had occurred, and indeed, by referring only to damage to the suitcase, it implied that that was the only matter of complaint. I entirely agree with the opinion of Kerr J. [1978] QB 108, 120:
".... the complaint must relate to the claim which the passenger is seeking to enforce. It must give sufficient details to the carrier to enable him to make the relevant enquiries."
87. Lords Scarman and Roskill agreed with Kerr J's reasoning (pages 296B and 302D-E).
88. Lord Wilberforce's listing of the purposes of article 26(2) cannot, I accept, be read as suggesting that all such purposes can or must be satisfied merely by the notice required under that article. It is clear, as Kerr J's reasoning also confirms, that many of them would involve and could only be satisfied as a result of follow-up activity. I would also agree that a complaint under article 26(2) need only be in general terms. Nevertheless, there must be within the time stated a complaint, which must at least embrace the damage to which the subsequent action relates. In this case, such complaint as was made within the relevant time was specifically limited to physical damage to identified items and did not embrace the loss of such items the subject of this action. It indicated a problem about the condition of the identified items, not about their arrival. No doubt this could have been cured if, as contemplated by the form, the "brief details" promised had been "mentioned below" on the letters. But they were not. It follows in my view that article 26(2) was not complied with and the claimants' action falls to be dismissed on that ground.
89. The judge considered that the objective adequacy of the complaint was not the test. What mattered was whether it had in fact enabled British Airways to investigate the position. He considered that it had not been shown that it did not. He cited Schmoldt v. Pan American World Airways Inc. (1989) 21 Avi. 17,974 and BVI Coverage (above). The former case does not assist. In the latter case, a claim in March 1985 that goods did not arrive "in tact" and that the airline would be held responsible for the missing goods was held a sufficient complaint to permit an action for damage found on the goods when they were belatedly located and delivered in May 1985. The judgment places reliance on the investigation which the airline was able to make after the initial complaint. I do not find the reasoning or the result easy to follow, and on no view are the present facts analogous as to the course of events. Here, although the judge seemed to place the onus of proof on the airline to show that it did not make full investigations, there is nothing to show that it did so or that it entered into any sort of discussion with the consignees or with anyone interested in cargo which could have led them to consider that no further complaint was required. On the material available, British Airways' first response was to a later complaint (dated we understand 23^rd July 1996) made after the time limit had expired, and no reliance is placed on that response as debarring them from invoking article 26(2). In my judgment, the test under article 26(2) is an objective one. British Airways is right in its submission that no relevant complaint was made under that article within the relevant time. If the claimants were to avoid the natural consequence of the failure to make any timely complaint on any basis, the onus was upon them to do so. They have not done so.
90. Finally, Mr Crane submitted that Qantas had "waived" or, more accurately, varied the period of notice required in respect of any claim for partial non-delivery, so as to extend it to 120 days. On this basis, Mr Crane relied on the later complaint dated 23^rd July 1996 as within the prescribed time limit. This point was not pleaded or argued before David Steel J., or indeed included in the appellant's notice of appeal. But it was raised, very briefly, both in Mr Crane's skeleton, answered equally briefly by Mr Shepherd's, and in oral submissions. It did not appear to have merit at the time, and was unfortunately overlooked when preparing this judgment for handing down. We therefore received further written submissions from both sides, which set out the point more fully. The point still appears to me to lack merit, and I now state its nature and my reasons for this conclusion.
The point turns on clause 12 of the terms and conditions on the reverse of Qantas's air waybill, reading:
"12.1 The person entitled to delivery must make a complaint to the Carrier in writing in the case
12.1.1 of visible damage to the goods, immediately after discovery of the damage and at the latest within 14 days from receipt of the goods,
12.1.2 of other damage of the goods, within 14 days from the date of receipt of the goods,
12.1.3 of delay, within 21 days of the date the goods are placed at his disposal, and
12.1.4 of non-delivery of the goods, within 120 days from the date of the issue of the Air Waybill;
12.2 for the purpose of Subparagraph 12.1 above complaint may be made to the Carrier or to the last Carrier or to the Carrier who performed the transportation during which the loss, damage or delay took place;
12.3 any rights to damages against Carrier shall be extinguished unless an action is brought within two years 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 transportation stopped."
91. Mr Crane suggests that, since the Warsaw Convention prescribes no period for any complaint in respect of non-delivery, clause 12.1.4 would be ineffective if it referred to total non-delivery. It must therefore include partial non-delivery. However, it seems to me clear that Qantas's terms and conditions of carriage follow, carefully, the language and concepts which are familiar in air carriage. "Damage" in the sense of avarie is covered by clause 12.1.1 and 12.1.2, which adopt the same time limits as expressed in the first sentence of article 26(2) of the Warsaw Convention. The subject-matter moves to delay in clause 12.1.3, which adopts the same time limit as in the second sentence of article 26(2). Clause 12.1.4 deals with non-delivery, in relation to which it purports to introduce a 120 day time limit. Clause 12.2 appears to have been drafted with articles 26 and 29 of the Warsaw Convention and article IV of the Guadalajara Convention in mind. Clause 12.3 provides for a two year limit for litigation, mirroring article 29(1).
92. As regards clause 12.1.4, it is true that the Warsaw Convention does not contain, or therefore under article 23 permit, in respect of international air carriage within its scope any such time limit in respect of total non-delivery (perte). But that cannot mean (and Mr Crane does not, as I read his skeleton dated 11^th May 2000, suggest that it does mean), that clause 12.1.4 can be read as confined to partial non-delivery. Qanta's terms and conditions are elaborately drafted. If Qantas had had in mind a scheme so confusing and using terminology so differently from the Conventions, the draftsman could and would surely have made this expressly clear. It follows that clause 12.1.4 must in circumstances of non-delivery (perte) be ineffective - at least in cases of international air carriage within the relevant international conventions. But there is equally no reason in those circumstances to attempt to give clause 12.1.4 artificial partial validity by treating it as covering cases of partial non-delivery. On any ordinary canon of construction in the present aviation context, partial non-delivery must have been envisaged, and must be treated, as falling within clause 12.1.1 and 12.1.2 (avarie): see the extensive discussion of the internationally accepted scope of the concept of "damage" (avarie), in relation to the time limit for complaint, in Fothergill v. Monarch Airlines Ltd. (above) (and also, now, in the English context, s.4A of the Carriage by Air Act 1961).
93. The claimants' action in respect of the international carriage by air is thus barred, and falls to be dismissed. The cross-appeal succeeds accordingly.
94. Conclusion
In the result, the claimants are entitled to have paragraph 2, but not paragraph 3, of the David Steel J's Order dated 14^th July 1999 set aside and the respondent is entitled to have paragraph 1 of that Order set aside. The result is that the claimants' action in respect of the international carriage by air must fail for want of any timely complaint. I consider that we should hear counsel on the appropriate form of order to give effect to such conclusions.
MR JUSTICE HARRISON: I agree.
LORD JUSTICE MORRITT: I also agree.