High Court of Ireland Decisions

1. The Plaintiff is a pharmaceutical manufacturer manufacturing inter alia the female contraceptive pill an ingredient in which is gestodene micronised manufactured by Schering AG of Berlin.

2. The Defendants were retained for the purposes of the carriage of a consignment of gestodene micronised from Berlin to the Plaintiff's premises at Newbridge, Co. Kildare. The consignment was contained in a single cylindrical millboard container 42cms x 42cms x 42cms specified to carry 74 kgs. The consignment weighed much less than this, the total weight of the consignment including the container being 9.3 kgs. The design of the container is such that when carrying 75 kgs it will withstand a fall of 15 feet; having regard to the actual weight of the consignment the container would probably withstand a fall from up to 80 feet.

3. It is accepted that the consignment was suitably packed. The consignment had a value of DM1,800,000. The container was damaged and the contents lost in the course of carriage. In this action the Plaintiff claims against the Defendants for the value of the consignment and the losses being agreed at £ .

4. The Defendants provide an overnight delivery service. In 1994 their main sorting operation was carried out at Brussels Airport - the Brussels Hub. At the relevant time some 100,000 shipments weighing 300 tonnes per night were handled at the Brussels Hub. In a very intensive operation lasting some four hours shipments would arrive by road or air from all over Europe and other parts of the world and would be turned around and forwarded to their destination within that four hour period.

5. The Brussels Hub is the largest of its kind outside of the United States. Some 1,900 staff are employed there at present but something less than this would have been employed in 1994. Each night some 28 aircraft and 70 trucks and vans would arrive and depart within the four hour period. On arrival an aircraft would park on an area called the ramp. Adjoining the ramp were two main buildings in which shipments were sorted for onward carriage. Shipments were classified as either -

6. The Defendants' evidence was to the effect that small non-conveyables were transported from building no. 2 to building no. 3 either by baggage trolley or in an aircraft container and in each case being towed by an electrical tractor. The baggage trolley is a form of trailer of the type used to carry suitcases to aircraft at airports the contents being retained within the same by strong waterproof sheets. The aircraft container sometimes called an igloo is also designed to secure its contents. However, in cross-examination Mr Sodergard the General Manager of the Brussels Hub accepted that the Defendants' induction manual in dealing with small non-conveyables states that the same will be collected by fork lift truck or by other means for transport to the destination sort (building 3). He further accepted that fork lifts were in fact so used. He described this as a not very practical means of transporting small conveyables.

7. It is common case that the damage to the consignment is not consistent with falling from an aircraft or mishandling. On the evidence I find as a matter of probability that the consignment fell from a vehicle while being transported from building 2 to building 3 and was then run over by another vehicle. The risk of a small non-conveyable so falling being run over by another vehicle is very high having regard to the large number of vehicles operating in the Brussels Hub and the speed at which and the pressure of time under which the vehicles operate in that area and the relatively confined area over which such vehicles must travel. The importance of properly securing a small non-conveyable must have been very evident to the Defendants. If this consignment had been carried in a baggage trolley or an aircraft container it is most unlikely that the same could have fallen in the course of being transported. For this reason, having regard to the contents of the Defendants' induction manual and the evidence given by Mr Sodergard I find as a matter of probability that this consignment was being carried from building 2 to building 3 on a wooden pallet by a fork lift truck and that it was unsecured and expected to stay in place under its own weight. Had this consignment been carried on a baggage trolley or aircraft container it is most unlikely that it could fall out unless the baggage trolley or the container was not completely or properly closed which, according to Mr Sodergard is not very likely to have occurred.

8. The contract of carriage is partly in writing and partly oral. Insofar as the same is in writing it is contained in the following documents

9. The Plaintiff's claim in this action is for the direct consequences of damage to and loss of the consignment and accordingly (a) only is relevant. The effect of the provision is that in the event of damage to or loss of the consignment the Defendants will be liable to the Plaintiff subject to the limitation provided for in the Warsaw Convention Article 22 but such limitation shall not apply if the Plaintiff can establish wilful intent or gross negligence.

10. I hold that as the same related exclusively to the carriage of gestodene micronised it supersedes the terms of the standard terms and conditions issued in respect of general carriage

11. On the evidence of Mr Pat Walsh, the Plaintiff's shipping manager I am satisfied that this required of the Defendants that they should be in a position to identify the location of each consignment of gestodene micronised at each point on its journey from Berlin to the Plaintiff's premises at Newbridge and also that each consignment should be so marked that at each stage on its journey the employees of the Defendants dealing with the same should be aware of the importance of the consignments and deal with the same promptly.

12. In addition to the foregoing it was orally agreed between Mr Pat Walsh for the Plaintiff and Mr John Dunne for the Defendants that the Plaintiff would insure the consignment.

13. Having regard to the provisions of the Warsaw Convention Article 23 thereof as hereinafter set out insofar as the contract purported to restrict the liability of the Defendants below that provided for in the Warsaw Convention it was ineffective. Thus the hold harmless agreement, the fax of 17th February 1994 and the terms agreed orally do not relieve the Defendants from liability under the Warsaw Convention

14. The Warsaw Convention was adopted into Irish law by the Air Navigation and Transport Act, 1936. The amendments thereto by the Hague Convention were adopted into Irish law by the Air Navigation and Transport Act, 1959 and the amendments thereto by the Guadalajara Convention were adopted into Irish law by the Air Navigation and Transport Act, 1956.

15. The relevant provisions of the Warsaw Convention as amended (hereinafter called "the Convention") are as follows:-

16. In construing Article 22(2)(a) significance must be accorded to the word special and I take the view that special requires that the declaration be directed towards invoking the provisions of the Article. The fax of 16th February, 1994 was not so directed and could not reasonably have been understood by the Defendants as being so intended. The intention of Mr Walsh who sent the fax was merely to alert the Defendants that the consignment was of significant value. Accordingly, it does not amount to a special declaration for the purposes of the article.

17. The second document relied upon by the Plaintiff is one headed "Luftfracht" (Air freight). This document emanated from Schering AG in response to a fax dated 18th February, 1994 from Miss Viebig on behalf of the Defendants in which she requested certain information in relation to the consignment, but not the value. The luftracht in response stated the value of the consignment at DM1,800,000. Prior to that date the defendants' Berlin office had already ascertained from Schering AG the value of the consignment for the purposes of ascertaining whether or not the Defendants would carry the shipment. At the time the luftracht issued the Defendants were already in possession of the consignment so that even if it could otherwise be said to constitute a declaration for the purposes of Article 22(2)(a) it had not been given at the time that the consignment was handed over to the Defendants. Further I accept the evidence of Miss Viebig that the information furnished by Schering AG was in response to her request for information which would satisfy her that the consignment did not consist of goods restricted for carriage according to IATA regulations and it was not therefore given for the purposes of Article 22(2)(a).

18. The third document relied upon by the Plaintiff is an invoice from Schering AG which accompanied the consignment. On the basis of the comments in Shawcross and Beaumont 4th Ed. Vol. 1 para 604 I hold that the invoice could not amount to a declaration for the purposes of the Convention Article 22(2)(a).

19. Accordingly, the Plaintiff is not entitled to be relieved from the limit on liability pursuant to the Convention Article 22(2)(a) as having made a special declaration of interest in delivery at destination.

20. In order to preclude the limit on liability under the Convention the consignor must show that the damage resulted from an act or omission of the carrier, his servants or agents -

21. To apply a single composite test would be to deprive the conjunctive “and” in Article 25 of meaning

22. As to the meaning of reckless in R -v- Stephenson [1979] 2 All ER 1198, Lane L.J. said -

23. Lane L.G. Applied a subjective test. This was overruled by the House of Lords in metropohitan Police Commissioner -v- Caldwell (1982) AC 341 .

24. I accept the view that “likely” accurately conveys the meaning of probably as used in Article 25. In S S Pharmaceutical Company Ltd v Qantas Airways Ltd an analysis of the facts as found makes it clear that if something more than that damage was likely was meant by probable, for example more likely than not, the majority could not have found for the plaintiff. In Gurtner v Beaton the Court of Appeal considered its approach as consistent with S S Pharmaceutical Company Ltd and also with Goldman v Thai Airways International Ltd as to the meaning of “probable”.

25. Having regard to the foregoing I find that the Defendants were reckless having regard to the following circumstances:-

26. To adopt the phrase from S.S. Pharmaceutical Co Ltd v Qantas Airways Ltd the treatment of

27. Further I find that a reasonable person having knowledge of the circumstances enumerated above would have knowledge that damage of the nature which in fact occurred would probably result if the consignment fell from the fork lift. The onus therefore, passed to the Defendants to show that the actor did not subjectively have the requisite knowledge; they did not apparently seek to identify the actor although it would probably have been possible to do so from their rosters for the night in question and in consequence no evidence as to the actual state of knowledge was led.

28. In consequence of these findings the Defendants are not entitled to rely on the limitation of liability under the Convention.

29. The effect of the airwaybill is to render the Defendants liable if damage was caused by gross negligence. Gross negligence is not a concept known to Irish law (see Austin v Manchester etc. Railway to 138 E.R. 181) but as it is included in the contract of carriage it is necessary to ascribe some meaning to the same. The important notes endorsed on the airwaybill are in German and the phrase translated as "gross negligence" is grobe fahrlassigkeit". As to the meaning of the term in German law I have had the evidence of Dr Grewantshki for the Plaintiff and Dr Menke for the Defendant. Grobe fahrlassigkeit requires recklessness - an inexcusable breach of duty which substantially exceeds the ordinary degree of negligence. While in general the test in German law is the subjective state of mind of the actor as to the risk which he is taking if the actor recklessly did not have knowledge of the risk this can amount to grobe fahrlassigkeit.

30. On the evidence of both witnesses as to German law I am satisfied that the expression "gross negligence" is intended to equate with "grobe fahrlassigkeit" both what has been described and conscious or unconscious and which for present purposes can be termed subjective or objective. Both witnesses gave evidence as to the understanding of Article 25 in German law as being the equivalent to conscious or subjective grobe fahrlassigkeit. This corresponds with the view which I have taken as to the meaning of Article 25 in regard to the second element there required i.e. knowledge, so however that applying the Irish law of evidence, as I must, the required knowledge can be proved circumstantially. Upon the basis of the evidence of the German legal experts having found the Plaintiff to have established its entitlement to be relieved from the limits of liability imposed by Article 25 the Plaintiff must also be entitled to be so relieved pursuant to the provision contained in the airwaybill whereby the Defendants assume liability for damage caused by gross negligence if negligence is equivalent to grobe fahrlassigkeit.

31. I hold that the term gross negligence in the airwaybill is indeed equivalent to grobe fahrlassigkeit in German law.

32. The Defendant seeks to be relieved from liability on foot of the hold harmless agreement. However, the hold harmless agreement insofar as it purports to restrict the liability of the Defendants under the Convention having regard to the provisions of Article 23 of the Convention is null and void and so cannot affect the Defendants' liability under Article 22, neither can it relieve the Defendants from liability under the provisions of the airwaybill for gross negligence as in its terms it expressly provides as follows -

33. Thus in the event of a conflict between the hold harmless agreement and the airwaybill the latter takes precedence.

34. The fax of the 16th February, 1994 forms part of the contract of carriage and provides as follows -

35. The Plaintiff contends that pursuant to this provision they were entitled to receive a report on the loss of the consignment and indeed the Defendants agreed to furnish such a report but failed to do so. Earlier in this judgment I construed this clause and I hold that the same does not entitle the Plaintiff to a report. The agreement by the Defendants to furnish such a report is not supported by consideration and cannot amount to a separate contract. The Plaintiff fails on this aspect of it claim.

36. Accordingly, I hold that the Plaintiff is entitled to recover the amount of its loss without regard to the limit of liability specified in Article 22 of the Convention upon the basis that the damage resulted from the act or omission of the Defendants done recklessly and with knowledge that damage would probably result and further having regard to the term of the contract of carriage that the limits of liability specified in Article 22 of the Convention should not apply where the damage resulted from the Defendants' gross negligence.