T-806-83
Harry Richer Furs Inc. (Plaintiff)
v.
Swissair and Swiss Air Transport Co. Ltd.
(Defendants)
INDEXED AS: HARRY RICHER FURS INC. v. SWISSAIR
Trial Division, Dubé J.—Montréal, November 3,
4, December 3; Ottawa, December 22, 1987.
Air law — Action to recover value of carton of furs disap
pearing in transit — Defendants pleading limitation of liabili
ty under Warsaw Convention, Art. 22(2)(a) — Plaintiff relying
on Convention, Art. 25 — Plaintiff not discharging onus of
proving defendants acting with intent to cause damage or
recklessly knowing damage would probably result — Insuffi
cient evidence to establish theft — American case law inappli
cable as U.S.A. not adopting amended version of Art. 25 under
Hague Protocol.
The plaintiff's action was to recover $13,994.64, the value of
one carton of fur garments which disappeared in transit. The
defendants relied on paragraph 22(2)(a) of the Warsaw Con
vention, which would limit their liability to $531.12. The
plaintiff relied on Article 25 of the Convention, which provides
for full liability when the damage results from an act or
omission of the carrier, his servants or agents, done with intent
to cause damage or recklessly and with knowledge that damage
will probably result.
Held, the action should be dismissed.
The onus was on the plaintiff to establish that the defendants
acted with intent to cause damage or recklessly while knowing
that damage would probably result from their act or omission.
There was insufficient evidence for a finding of theft. Many
possibilities were suggested as to how the carton was lost, but
none was substantiated by solid evidence. The alleged omission
of the reservation agent, who waited to put a tracer on the lost
carton until the off-loading was completed, was not done with
intent to cause damage, or recklessly with knowledge that
damage would probably result.
In order to negate the limitation found in paragraph 22(2)(a)
and apply the exception in Article 25, there must be more than
ordinary negligence on the part of the carrier. Swiss Bank
Corp. v. Air Canada, where it was found that servants of the air
carrier had stolen the package, was distinguished. In a case of
theft, knowledge that damage will result is obvious. Where
cargo is lost, a ruling that reckless negligence is necessarily
implied would render the limitation of liability provisions of the
Convention void.
American case law is of little assistance when Article 25 is at
issue as the United States has not adopted the new version
under the Hague Protocol.
STATUTES AND REGULATIONS JUDICIALLY
CONSIDERED
Carriage by Air Act, R.S.C. 1970, c. C-14, Schedule I,
Arts. 22(2)(a) (as am. by Schedule III, Art. XI), 25
(as am. idem, Art. XIII).
CASES JUDICIALLY CONSIDERED
DISTINGUISHED:
Swiss Bank Corp. v. Air Canada, [1982] 1 F.C. 756
(T.D.); affd. [1988] 1 F.C. 71 (C.A.).
REFERRED TO:
Reiner v. Alitalia Airlines, 9 Avi. 18,228 (N.Y. Sup. Ct.
1966); Perera Co. Inc. v. Varig Brazilian Airlines, Inc.,
19 Avi. 17,810 (2d Cir. 1985); Lerakoli, Inc. v. Pan
American World Airways, Inc., 19 Avi. 18,131 (2d Cir.
1986); O'Rourke v. Eastern Air Lines, Inc., 18 Avi.
17,763 (2d Cir. 1984); Shawinigan, Ltd. v. Vokins & Co.,
Ltd., [1961] 3 All E.R. 396 (Q.B.D.); Lacroix Baart-
mans et autres c. Swiss Air, [1973] R.F.D.A. 75 (Tri-
bunal Fédéral Suisse); Syndicat d'assurances des Lloyd's
et autres c. Sté Aérofret, Cie Alitalia et Cie U.T.A.,
[1969] R.F.D.A. 397 (Cour de Cassation (Ch. corn.));
Horabin v. British Overseas Airways Corpn., [1952] 2
All E.R. 1016 (Q.B.D.).
AUTHORS CITED
Chauveau, Paul "La faute inexcusable" (1979), 4 Ann.
Air & Sp. L. 3.
Cheng, Bin "Wilful Misconduct: From Warsaw to The
Hague and from Brussels to Paris" (1977) II Ann. Air
& Sp. L. 55.
COUNSEL:
Howard C. Ginsberg for plaintiff.
Jean Saint-Onge for defendants.
SOLICITORS:
Robinson, Sheppard, Borenstein, Shapiro,
Montréal, for plaintiff.
Lavery, O'Brien, Montréal, for defendants.
The following are the reasons for judgment
rendered in English by
DuBÉ J.: Five cartons of fur garments were
shipped by the plaintiff from Zurich, Switzerland
via Swissair to itself in Montréal, Quebec. Upon
delivery to the plaintiff at Mirabel on September
11, 1982, one carton valued at $13,994.64 (Can.)
was missing. The plaintiff's action is for recovery
of that amount plus costs.
The defendants plead limitation of liability
under paragraph 22(2)(a) of the Warsaw Conven
tion, (Convention for the Unification of Certain
Rules Relating to International Carriage by Air,
signed at Warsaw on October 12, 1929 as amend
ed by the Hague Protocol of 1955 incorporated in
the Carriage by Air Act, R.S.C. 1970, c. C-14 as
Schedules I, II and III). The limitation provides
for 250 francs per kilogram, which amounts to
$531.12 with respect to the package involved. It is
common ground that the amount tendered by the
defendants in Court is sufficient to cover that
amount and costs.
Paragraph 22(2)(a) of the Warsaw Convention
relied upon by the defendants reads in part as
follows:
Article 22
(2)(a) In the carriage of registered baggage and of cargo, the
liability of the carrier is limited to a sum of two hundred and
fifty francs per kilogramme, unless the passenger or consignor
has made, at the time when the package was handed over to the
carrier, a special declaration of interest in delivery at destina
tion and has paid a supplementary sum if the case so
requires....
On the other hand, the plaintiff relies upon
Article 25 of the Convention, as amended by the
Hague Protocol, which provides for full liability
under certain circumstances. It reads:
Article 25
The limits of liability specified in Article 22 shall not apply if
it is proved that the damage resulted from an act or omission of
the carrier, his servants or agents, done with intent to cause
damage or recklessly and with knowledge that damage would
probably result; provided that, in the case of such act or
omission of a servant or agent, it is also proved that he was
acting within the scope of his employment.
That Article 25 substantially modifies the origi
nal Article 25 of the Warsaw Convention which
read as follows:
Article 25
(1) The carrier shall not be entitled to avail himself of the
provisions of this Convention which exclude or limit his liabili
ty, if the damage is caused by his wilful misconduct or by such
default on his part as, in accordance with the law of the Court
seized of the case, is considered to be equivalent to wilful
misconduct.
(2) Similarly the carrier shall not be entitled to avail himself
of the said provisions, if the damage is caused as aforesaid by
any agent of the carrier acting within the scope of his
employment.
The distinction between the two articles is par
ticularly relevant as some countries, including the
United States, have not adopted the new version
under the Hague Protocol. Thus, the American
jurisprudence' cannot be of much assistance in
this matter.
In this case, therefore, the central issue to be
resolved is whether or not the loss of the carton
resulted from an act or omission on the part of the
carrier (the defendants), his servants or agents
(while acting within the scope of their employ
ment) with intent to cause damage or recklessly
and with knowledge that damage would probably
result. The onus, therefore, is on the plaintiff to
establish, not merely that the defendants were
negligent, but that they acted with intent to cause
damage or recklessly while knowing that damage
would probably result from their action or omis
sion. It is clearly an onerous burden to overcome.
Admittedly, under clean airwaybill of lading
number 085-92895924 dated at Zurich, Switzer-
land on September 10, 1982 the defendants
acknowledged receipt at Zurich of 5 cartons con
taining various fur garments in good order and
condition for carriage to and delivery at Montréal,
Quebec. It is also admitted that, at all material
times, the plaintiff was the owner of the cargo.
Counsel for both parties have cited American jurispru
dence: Reiner v. Alitalia Airlines, 9 Avi. 18,228 (N.Y. Sup. Ct.
1966); Perera Co. Inc. v. yarig Brazilian Airlines, Inc., 19 Avi.
17,810 (2d Cir. 1985); Lerakoli, Inc. v. Pan American World
Airways, Inc., 19 Avi. 18,131 (2d Cir. 1986); O'Rourke v.
Eastern Air Lines, Inc., 18 Avi. 17,763 (2d Cir. 1984).
It has been clearly established as well that the
defendants failed to deliver to the plaintiff one
carton of fur garments. However, the evidence
tendered at the trial provides no definitive expla
nation as to why the carton was lost and never
found. Many possibilities were suggested, includ
ing the possibility of theft and insufficient security
protection, but no particular theory can be posi
tively identified as being a conclusive solution to
the problem.
In fact, none of the witnesses ever saw the
missing carton either at the Zurich Airport or on
board the aircraft or at the Mirabel Airport. A. I.
Mascle, a former cargo manager for KLM Royal
Dutch Airlines, called as an expert by the plaintiff,
outlined four possibilities as to what might have
happened to the missing cargo (paragraph 33 of
his affidavit):
a) the box in question was short-loaded in the unit;
b) the box in question was short-loaded on the flight;
c) the box in question was loaded elsewhere on the flight,
i) amongst other cargo for Montreal; or
ii) amongst cargo for Toronto on the same flight.
Peter Bernhard, presently manager for Swissair
at New York and formerly at Zurich, described
several irregularities that might lead to the loss of
a parcel at the Zurich Airport (abridged from his
evidence):
1. loading on the wrong pallet at the airport warehouse thus
leading to the wrong destination;
2. short shipment: parcels left behind;
3. mislabelling in the warehouse;
4. damaged parcels set aside for repairs, which disappear;
5. short shipment or non-delivery of one parcel by the shipper
himself;
6. goods placed in the wrong area;
7. mislabelling of the parcels by the shipper or his agent.
Other witnesses offered hypothetical possibilities
as to what might have happened to the missing
carton of furs, none of which were substantiated
by solid evidence.
There is however an alleged omission on the part
of a servant of the carrier which deserves some
consideration. The cargo in question had been
loaded into igloos, which are containers placed on
board aircraft. The Swissair aircraft landed at
Mirabel on Saturday, September 11, 1982 at 3:30
p.m. The igloos were taken on board trolleys into
the Swissair warehouse at about 4:30 p.m. Raouf
Dimitri, the Swissair reservation agent, proceeded
to off-load the igloo in which all the cartons of the
plaintiff's shipment were to have been stuffed,
according to the manifest, and realized that one
was missing in that igloo. He testified that he
thought that the missing parcel would be found in
one of the other igloos. At the completion of his
shift at 6:00 p.m., he left for home. The warehouse
being closed on Sunday, it was only on Monday
that he finally ascertained that the missing parcel
was not to be found in any of the other igloos.
Tracers were sent out Monday at noon.
Mr. Dimitri was asked point-blank by counsel
whether he had himself stolen the box. He
answered in the negative. He appeared credible to
me and I was given no reasons to suspect his
honesty. No charges were ever laid against him in
that connection and there are no blemishes on his
record.
In the view of Mr. Mascle, the aforementioned
expert, "the quicker cargo is traced, the better the
chance that it will not be lost forever". In his
opinion "waiting for Monday before advising of
the shortage was irresponsible". Other experts
disagreed and felt that there being no activities in
the warehouse on Sunday, it was proper to wait for
Monday to continue the off-loading and no tracer
ought to have been issued until the off-loading of
all the igloos was completed. Mr. Arthur Robert
Fehlmann, cargo sales and service manager for
Lufthansa testified that he would have waited till
Monday under the circumstances so as to complete
the search and ascertain the loss.
In my view, although the alleged omission was
that of a servant of the carrier, it cannot be found
that it was done with intent to cause damage or
recklessly with the knowledge that damage would
probably result.
There is controversy as to whether the intent to
cause damage ought to be objective or subjective. 2
I do not however consider it necessary in this
instance to settle that issue as even if I were to
apply the interpretation most beneficial to the
plaintiff, the . objective test, I still cannot find
intent to cause damage or recklessness on the part
of the defendants.
The international jurisprudence has established
that in order to negate the limitation afforded
under paragraph 22(2)(a) of the Convention and
apply the exception provided under Article 25,
there must be more than ordinary negligence on
the part of the carrier. Depending upon the par
ticular country in which the case is heard, the act
or omission has been variously described as "gross-
ly careless"' or "faute lourde" 4 or "faute
inexcusable" 5 or "wilful misconduct". 6
In Swiss Bank Corp. v. Air Canada' a parcel
containing bank notes in the amount of $60,400
was given to the air carrier in Zurich for safe
transportation to Montréal. The pilot personally
handed the packet over to an employee of Air
Canada upon arrival in Montréal. The parcel
subsequently disappeared but such disappearance
was not noted until approximately one month af
terwards, thus making efforts to find it or deter
mine the reasons for its disappearance very
difficult.
Walsh J., then of the Federal Court, came to the
conclusion that the circumstantial evidence of that
case led to a presumption of theft, although the
culprits could not be proven guilty beyond a
reasonable doubt. In evidence was the fact that
one of the employees had left the package unat-
2 Swiss Bank Corp. v. Air Canada, [1982] 1 F.C. 756 (T.D.),
at pp. 775-776; judgment affirmed by the Federal Court of
Appeal, [1988] 1 F.C. 71; Swiss Bank Corp. v. Air Canada, per
Marceau J., at p. 82; Cheng, Bin "Wilful Misconduct: From
Warsaw to The Hague and from Brussels to Paris" (1977) II
Ann. Air & Sp. L. 55.
3 Shawinigan, Ltd. v. Vokins & Co., Ltd., [1961] 3 All E.R.
396 (Q.B.D.), at p. 403.
4 Lacroix Baartmans et autres c. Swiss Air, [1973] R.F.D.A.
75 (Tribunal Fédéral Suisse).
5 Syndicat d'assurances des Lloyd's et autres c. Sté Aérofret,
Cie Alitalia et Cie U.T.A., [1969] R.F.D.A. 397 (Cour de
Cassation (Ch. corn)); Chauveau, Paul "La faute inexcusable"
(1979), 4 Ann. Air & Sp. L. 3.
6 Horabin v. British Overseas Airways Corpn., [1952] 2 All
E.R. 1016 (Q.B.D.).
7 Supra, note 2.
tended in an unlocked car while running errands at
the airport. Also, the mysterious disappearance of
shipping documents and the failure to enter receipt
of the parcel on the valuable cargo register. An
investigation report showed two employees to be
unreliable. Furthermore, one of them had been
identified by the Dorval Police Department as
having been present when other cargo had previ
ously disappeared.
That decision was recently upheld by the Feder
al Court of Appeal, which went further and came
to the conclusion that the servants of the air
carrier had effectively stolen the package. In a
case of theft, the knowledge that damage will
result is obvious.
In conclusion, there is not in this case sufficient
evidence for a finding of theft. The only finding
open is this instance is that one carton of furs was
lost and never found. To rule that such a loss
necessarily implies reckless negligence would in
effect render null and void and of no effect the
limitation of liability provisions of the Convention.
For all those reasons, the plaintiffs action to
recover more than the amount tendered in Court
by the defendants is dismissed with costs.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.