Art. 21(2) caps recovery if carrier can show its wrongful act did not cause passenger’s damages
Australia’s High Court has ruled that art. 21(2) of the Montreal Convention could limit an injured passenger’s recovery if the air carrier could prove that its negligence or other wrongful act or omission did not cause the damages.
The case of Evans v Air Canada, [2025] HCA 22, arose from an Air Canada flight from Vancouver to Sydney in July 2019. Two passengers alleged that turbulence during the flight led to spinal and psychological injuries.
Before the Supreme Court of New South Wales, these passengers sued Air Canada for damages for bodily injuries under art. 17 of the Convention for the Unification of Certain Rules for International Carriage by Air (1999) (Montreal Convention), as incorporated into Australian law.
Air Canada raised a partial liability defence under art. 21(2) of the Montreal Convention. This article capped passengers’ recovery of damages at 113,100 Special Drawing Rights (SDR) – or about $240,000 at the current exchange rate – if the negligence or other wrongful act or omission by Air Canada or its servants or agents did not cause the damages.
The SDR was an international reserve asset established by the International Monetary Fund.
The passengers countered that Air Canada had waived the art. 21(2) partial defence under art. 25 of the Montreal Convention since r. 105(C)(1)(a) of Air Canada’s International Passenger Rules and Fares Tariff (Air Canada Tariff) stated there were no financial limits for death or bodily injury.
The NSW Supreme Court judge discussed two questions. First, the judge addressed whether part 2 of the Civil Liability Act 2002 (NSW) applied to the quantum of the passengers’ damages claim. The judge found in favour of Air Canada on this issue. The passengers did not challenge this finding.
Second, the judge tackled this issue: Under r. 105(C), if the court assessed each passenger’s damages at over 113,100 SDR, would the passenger be entitled to recover that amount even if Air Canada could show that its wrongful act or that of its servants or agents did not solely cause the damages?
The judge decided that art. 25 permitted an air carrier to remove the art. 21(2) partial defence fully, and that Air Canada had indeed removed such partial defence through the clear and unambiguous language of r. 105(C)(1)(a).
The Court of Appeal allowed Air Canada’s appeal. According to the appeal court, while Air Canada could waive the art. 21(2) partial defence under art. 25, it did not do so under r. 105(C)(1)(a). This decision prompted the passengers to appeal.
The High Court of Australia agreed with the Court of Appeal’s reasoning and dismissed the appeal with costs in Air Canada’s favour. The court upheld that Air Canada did not waive the art. 21(2) partial defence under art. 25, even though it could have done so.
The court discussed the context and purpose of r. 105(C)(1)(a) and the meaning of art. 17 and 21. The court explained that r. 105(C)(1)(a) described or declared the impacts of art. 17 and 21, did not impose a higher limit of liability for art. 25, and should be subject to the liability defences in the Montreal Convention.
The court went over five points involving context and purpose to support its interpretation of r. 105(C)(1)(a). First, the court noted that r. 105(C)(1)(a)’s terms accurately stated the meaning of art. 17.
Secondly, the court stressed that the provisions of rr. 105(B) and (C) – including r. 105(C)(1) – gave effect to the Canadian Air Transportation Regulations, SOR /88-58, which required a statement of the limits of and exclusions from liability relating to passengers and goods and required the Air Canada Tariff to describe the effect of numerous instruments, including the Montreal Convention.
Third, the court pointed out that the provisions before and after r. 105(C)(1)(a) served little purpose other than to declare the impacts of the Montreal Convention and the other relevant regimes, as required by the regulations.
Fourth, the court said the provision immediately before r. 105(C)(1)(a) appeared to ensure that the Air Canada Tariff wholly incorporated the Montreal Convention’s liability rules, including by stating that these liability rules would take precedence over the Air Canada Tariff’s inconsistent provisions.
Fifth, the court explained that the passengers’ interpretation of r. 105(C)(1)(a) went against r. 105(C)(4), which confirmed that Air Canada had no plans to waive the art. 21(2) partial defence and gave Air Canada a defence to liability for death or injury that its negligence did not cause.
