Despite a provision in the Air Canada International Passenger Rules and Fares Tariff (the Air Canada Tariff) in Rule 105(C)(1)(a) stating that "there are no financial limits in respect of death or bodily injury", the High Court has held that, when read in context, the Rule is merely declaratory of the effect of Article 17 of the Montreal Convention 1999.

In the decision in Evans & Anor v Air Canada [2025] HCA 22 (handed down on 14 May 2025), the High Court dismissed an appeal and found unanimously that Air Canada had not waived the limitations or defences to liability recognised by the Montreal Convention by its issue of the Air Canada Tariff.

The decisions of Rothman J in the New South Wales Supreme Court at first instance, and the subsequent New South Wales Court of Appeal ruling, are discussed in our previous publications. These address compensation for injuries sustained during international air carriage and the interpretation of Air Canada’s tariff rules in light of the Montreal Convention 1999, as examined in Further Turbulence in International Aviation Injury Compensation and The Montreal Convention 1999 and the Interpretation of an Airline Tariff Rule.

Article 17 of the Montreal Convention provides:

"1. The carrier is liable for damage sustained in case of death or bodily injury of a passenger upon condition only that the accident which caused the death or injury took place on board the aircraft or in the course of any of the operations of embarking or disembarking."

Article 21 then provides for limitation of liability, which was originally set by the Convention at 100,000 Special Drawing Rights (SDRs) per passenger. This amount was subsequently increased in a five-yearly review to 128,821 SDRs (approximately AU$240,000) at the time giving rise to the subject claim (current limitation is now 151,880 SDRs – approximately AU$318,700).

Article 21 provides:

"1. For damages arising under paragraph 1 of Article 17 not exceeding 100,000 Special Drawing Rights for each passenger, the carrier shall not be able to exclude or limit its liability.

2. The carrier shall not be liable for damages arising under paragraph 1 of Article 17 to the extent that they exceed, for each passenger, 100,000 Special Drawing Rights if the carrier proves that:

(a) such damage was not due to the negligence or other wrongful act or omission of the carrier or its servants or agents; or

(b) such damage was solely due to the negligence or other wrongful act or omission of a third party."

The High Court noted that Article 21 establishes a two-tier system of liability. The first-tier liability under Article 17 operates up to the financial limit or threshold, under which the only defence is the claimant's, or another relevant person's, contributory negligence or wrongdoing (under Article 20). The second-tier liability under Article 17 applies beyond that limit but is subject to the "no negligence" defence in Article 21(2).

The High Court considered the meaning of Rule 105(C)(1)(a) of the Air Canada Tariff, concluding that its context and purpose make clear it describes only the effect of Articles 17 and 21 of the Montreal Convention, rather than stipulating any higher limit of liability. The Court considered that there were five matters of context and purpose that supported this interpretation:

• Rule 105(C)(1) accurately reflects the meaning of Article 17 of the Montreal Convention.

• The rule gives effect to the Canadian Air Transport Regulations, which include a requirement to state the limits of, and exclusions from, liability in respect of passengers and goods.

• Each of the preceding and succeeding provisions to the particular rule does little more than declare the effect of the provisions of the various liability conventions and the Canadian Air Transport Regulations.

• The preceding rule under the Air Canada Tariff is concerned with ensuring that the liability rules of the Convention are "fully incorporated" in the Air Canada Tariff, even to the extent of providing that those rules prevail over any inconsistent provision of the Air Canada Tariff.

• The Air Canada Tariff provides in Rule 105(C)(4) that Air Canada has a defence to liability for death or injury not caused by its negligence, thereby making it clear that Air Canada did not intend to waive the 'no negligence' defence in Article 21(2).

While other airlines will need to carefully review the terms of their own tariffs and passenger rules, this decision should provide some reassurance regarding the intended primacy of the Montreal Convention and its provisions in respect of international air carriage liability.

Should you wish to discuss this matter further or explore similar issues, please feel free to contact our Transport & Logistics team.