In brief - VCAT finds it has jurisdiction for claims of aggrieved passengers

In an interesting decision arising from a dispute aboard a Qantas flight when a passenger was refused permission to hang a suit in a business class suit locker, VCAT determined that it had jurisdiction for the claim and that the Civil Aviation (Carriers' Liability) Act 1959 (Cth) did not apply to exclude the Tribunal's jurisdiction or limit the claimants' entitlements.

Passenger refused permission to hang suit in business class suit locker

In Lustig v Qantas Airways Limited (Civil Claims) 2013 VCAT 1012 the applicants, Mr Peter Lustig and Mr Giuseppe De Simone, claimed that they were travelling together and had boarded a Qantas flight at Sydney airport to return to Melbourne in April 2006.

Before the flight departed, an incident took place during which the customer service manager on the flight refused to allow Mr De Simone to hang a suit in the business class suit locker. It is alleged that the customer service manager subsequently assaulted Mr De Simone during the dispute, in which both passengers participated. Both passengers were then asked to leave the aircraft, which they did.

It is alleged they were told that if they left the aircraft Qantas would not press charges.

Airline informs passengers of decision not to carry them in future

Mr Lustig was subsequently charged with interfering with a crew member of the aircraft and, although he was convicted in the District Court of New South Wales, that conviction was subsequently quashed and a new trial was ordered but has never been pursued.

Both passengers were informed after the incident that Qantas had decided that it would not carry them again in the future.

Passengers seek apology from airline and damages for expenses incurred

Mr Lustig and Mr De Simone each made an application against Qantas in VCAT seeking a range of orders.

Mr Lustig sought:

• damages of $4.50 for a bus ticket to change terminals at Mascot Airport, the cost of a Virgin flight back to Melbourne and further damages up to $9,000

• a written apology

• retraction of the "never use our services again" letter

• reinstatement of Frequent Flyer and Qantas Club statements together with 10 million Frequent Flyer points

• exemplary and/or punitive damages

• such other orders as the Tribunal deems appropriate

Mr De Simone sought:

• damages of $300 for the cost of the flight from Sydney to Melbourne and the cost of a replacement Virgin flight

• Frequent Flyer points to the value of $9,699

• a public apology from Qantas

• reinstatement of Qantas Frequent Flyer status

• an order preventing Qantas from prohibiting him from flying again with Qantas

Airline submits that VCAT not vested with federal jurisdiction and cannot hear application

Qantas submitted that the Victorian Civil and Administrative Tribunal had no jurisdiction to hear and determine the applications on two bases:

• Qantas relied on a defence of immunity under federal law, submitting that the provisions of Part IV of the Civil Aviation (Carriers' Liability) Act 1959 (Cth) applied and the Tribunal does not have jurisdiction to hear and determine claims made under this Act because it is a federal law and the Tribunal is not vested with federal jurisdiction under the Judiciary Act 1903 (Cth).

• The provisions of the Commonwealth Places (Application of Laws) Act 1970 (Cth) apply to the claims, so that any claim under the Fair Trading Act (Vic) becomes a claim under Commonwealth law and the Tribunal is unable to hear and determine the claims because it is not vested with federal jurisdiction.

Application of the Civil Aviation (Carriers' Liability) Act 1959 (Cth)

Qantas maintained that Part IV of the Act applied, because except for the claims in relation to the cost of replacement flights and the bus ticket, the claims were for damages for personal injury sustained in an "accident" which took place on board an aircraft travelling between two states.

It further submitted that the claim was statute barred, as proceedings were not brought within two years after the date of arrival of the aircraft at the destination and that the provisions of Part IV of the Act extinguish any other causes of action.

Member Grainger, who determined the dispute, noted that the question for the Tribunal was whether the claims are claims for damage "sustained by reason of any bodily injury suffered by (a) passenger resulting from an accident which took place onboard the aircraft or in the course of any of the operations of embarking or disembarking".

Claims found not to be claims for personal injury

Member Grainger found in relation to Mr Lustig's claims that his claim for damages for a bus ticket and for a return flight back to Melbourne are not claims for damages arising out of a personal injury. He was also satisfied that the claim relating to the retraction of the "never use our services again" letter and written apology were not claims for damages arising out of personal injury.

While the claim for damages was limited to $9,000 and for the award of Frequent Flyer points and the claim for exemplary and/or punitive damages was more questionable, he was satisfied that these claims were not claims for personal injury as long as the exemplary damages relate only to the alleged breach of contract, misrepresentations and the unconscionable conduct of Qantas. He also found that the exemplary damages sought by Mr De Simone were not compensation for an alleged assault.

Claims found to arise from contractual relationship between passengers and airline

Member Grainger further rejected the argument that federal jurisdiction was being exercised in this instance.

While he accepted that there were cases which suggest that the Montreal Convention extinguishes all claims for damages arising out of international travel other than those for personal injury and damage to baggage, there is nothing in the wording of Part IV of the Civil Aviation (Carriers' Liability) Act 1959 (Cth) to support the submission in respect of that Part that all other claims are also extinguished.

Submission was made that the events which gave rise to the claims occurred at Sydney Airport, being a Commonwealth place, and that as such, any claim under the Fair Trading Act would involve a purported exercise of federal jurisdiction, because that Act cannot apply of its own force to events which occurred at Sydney Airport.

Member Grainger accepted that the incident on 6 April took place on a Qantas aircraft which was located in a Commonwealth place, but he said that the claims made by Mr Lustig and Mr De Simone could not be described as a cause of action arising out of a defined event at a Commonwealth place. Rather, they arose out of a generalised contractual relationship between each of them with Qantas.

The applications by Qantas were dismissed and an order was made for the proceeding to be set down for hearing.

Matter yet to be resolved seven years later

It has now been more than seven years since the incident which gave rise to the claims. It is hoped that this matter will soon be finally determined. For the present however, the decision of Member Grainger provides an interesting analysis of the application of the federal jurisdiction and the Civil Aviation (Carriers' Liability) Act 1959 (Cth) and the Commonwealth Places (Application of Laws) Act to claims of this type.

This is commentary published by Colin Biggers & Paisley for general information purposes only. This should not be relied on as specific advice. You should seek your own legal and other advice for any question, or for any specific situation or proposal, before making any final decision. The content also is subject to change. A person listed may not be admitted as a lawyer in all States and Territories. © Colin Biggers & Paisley, Australia 2024.

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