By: James Cooper, Francois Guillot and Ethan Naylor

Evans v Air Canada [2025] HCA 22

At a glance

• The High Court found Air Canada had not waived its right to limit liability under Article 21(2) of the Montreal Convention, despite language in its Tariff.
• A waiver of valuable legal rights requires clear, unambiguous wording – Air Canada’s Tariff was deemed merely declaratory of the Convention.
• The case highlights the need for airlines to ensure conditions of carriage are precisely drafted, especially amid rising turbulence incidents and evolving passenger rights.

Introduction

In a significant recent judgment¹ , the High Court of Australia unanimously found that Air Canada had not waived its right to rely on the limit of liability under Article 21(2) of the Montreal Convention 1999 (the Convention), despite a provision in Air Canada’s Tariff which read that “there are no financial limits in respect of death or bodily injury”.

Background

Two passengers travelling on an Air Canada flight from Vancouver to Sydney in July 2019 (the Claimants) suffered spinal and psychological injury allegedly caused by turbulence experienced during the flight.

The Claimants sought damages from Air Canada under Article 17(1) of the Convention on the basis that injury had taken place on board the aircraft.

In defence of the claim, Air Canada sought to rely on Article 21(2) of the Convention. It provides that a passenger’s entitlement to damages is limited to 113,100 Special Drawing Rights (approx. AU$240,000) (being the applicable limit at the time of the Air Canada flight) where the carrier can prove that the damage was not caused by the ‘negligence or any other wrongful act or omission by the carrier or its servants or agents’.

The Claimants, in turn, argued that Air Canada had waived its right to rely on the liability limit under Article 21(2) because:

(a) Article 25 of the Convention provides that carriers ‘may stipulate that the contract of carriage shall be subject to higher limits of liability than those provided for in this Convention or to no limits of liability whatsoever’, and

(b) Rule 105(C)(1)(a) (Rule) of Air Canada’s International Passenger Rules and Fares Tariff (the Tariff), which formed part of its contract of carriage with passengers, stated that:

“Where the Montreal Convention applies the limits of liability are as follows:

a. there are no financial limits in respect of death or bodily injury’”

Lower court decisions

At first instance, the primary judge held that Article 25 of the Convention allowed a carrier to remove the partial defence to liability provided by Article 21(2). The ‘clear and unambiguous language’ of the Rule was to that effect, meaning that Air Canada was not entitled to rely on a defence seeking to limit its liability in that way.

The Court of Appeal allowed Air Canada’s appeal. It held that while Air Canada was open to waive the partial defence under Article 21(2), it had not done so despite the language of the Rule.

Leave was then granted for the Claimants to appeal to the High Court of Australia.

High Court decision

The High Court unanimously dismissed the Claimants’ appeal. Consistent with the Court of Appeal decision, it held that while Article 25 empowered Air Canada to waive the partial defence in Article 21(2), it had not done so in the present case.

The High Court noted that interpreting the Rule required ‘consideration of the meaning of the words of [the] rule in their context and in light of their purpose’. It concluded that the context and purpose of the Rule make it clear that it only describes the effect of Articles 17 and 21 (and is therefore merely declaratory) rather than stipulating a higher limit of liability for the purpose of Article 25. The rationale was as follows:

(a) The Rule accurately reflects Article 17, as stipulated in the Convention. While the Rule states there is no maximum cap on what a carrier might have to pay, it did not remove the carrier’s right to defend itself against higher claims by proving it was not negligent, as allowed under Article 21(2) of the Convention,

(b) The Rule gives effect to the Canadian Air Transportation Regulations, including the requirement to state the limits of, and exclusions from, liability with respect to passengers and goods. To comply with these regulations, the Tariff must describe the legal effect of multiple instruments because passengers on an Air Canada flight could be subject to different legal regimes depending upon the points of a connecting flight. The rule correctly refers to the Convention,

(c) The provisions surrounding the Rule do little more than declare the provisions of the Convention. The Rule therefore also merely declares the effect of Article 17,

(d) The provisions surrounding the Rule ensure that the liability rules of the Convention are fully incorporated in the Tarriff, even to the extent that those rules prevail over any inconsistent provisions in the Tariff. Unlike some surrounding terms, the Rule does not use ‘the language of a waiver’ or language that raises or abolishes the Article 21(2) defence, and

(e) Rule 105(C)(4) of the Tariff explicitly states that Air Canada can avoid liability for injuries or deaths not caused by their negligence. This demonstrates that Air Canada never intended to waive the ‘no negligence’ defence under Article 21(2).

The Court referred to the principle that ‘”for a party to be held to have abandoned or contracted out of valuable rights arising by operation of law, the provision relied upon must make it clear that that is what was intended. … ‘[T]he more valuable the right, the clearer the language will need to be’. It follows that the partial defence under Article 21(2) of the Convention would therefore only be waived if carriers explicitly agree to do so in clear, unambiguous terms, consistent with the surrounding provisions and the general context.

Conclusion

It is rare for air carrier liability cases to make their way on appeal to the High Court of Australia. This decision has therefore garnered much attention in aviation circles in Australia.

While Air Canada was ultimately successful, it is an important reminder that a carrier’s conditions of carriage can play an important role in passenger-related claims, particularly where a claimant is seeking a further foothold or support for a claim. How those conditions of carriage are ultimately interpreted is likely to vary depending on the jurisdiction in which the claim is brought. From an Australian law perspective, carriers should regularly review their conditions of carriage to ensure the terms are clear and unambiguous, and consistent. This is particularly important in a consumer contract context.

It will be interesting to see if Australia’s foreshadowed new Aviation Industry Ombuds Scheme and associated Aviation Customer Rights Charter materialises, and if so, the extent to which that Scheme / Charter seeks to address concerns arising under conditions of carriage.

Finally, the underlying claim here was an example of serious injury sustained due to turbulence (in this case, the aircraft suddenly dropped amid severe clear-air turbulence (CAT)). This is a reminder of the apparent increase in frequency and severity of these events over the last few years, and possible evidence of a trend going forward. The intensification of jet streams, which some believe to be a direct consequence of climate change, is a key driver of increased CAT. The risk of such incidents, and the potential for serious injury and significant claims, is a key focus for airlines and their insurers.