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United International Stables Ltd v Pacific Western Airlines Ltd [1969] B.C.

J> No 417

Introduction

The plaintiff company has acquired pacing horses from New Zealand in which the plaintiff
has arranged transportation from New Zealand to Canada through an aircraft owned by the
defendant. The purpose for the acquisition of horses is for a race that is going to be held in
North America. The plaintiff decided to opt for an aircraft transportation to prevent the horses
from being lost through sea voyage. The parties through a charter transportation agreement
(hereinafter referred to as ‘charter agreement’) has agreed to transport the horses through air.
The defendant has designed stalls and water system for the horses in the aircraft.
Unfortunately, both the plaintiff and the defendant have no prior experiences in transporting
horses by way of air. On the material day, the horses were loaded into the plane. However, in
the midst of travelling from Honolulu to San Francisco, one of the horses were destroyed by
the aircrew members when the horse endangered the aircraft by being out of his stall and was
not able to manage him in the aircraft.

Problems

The issue that arose from this case is with regards to Schedule 1 of the Carriage By Air Act
19521 which is a translation of Warsaw Convention and also Schedule 3 to that Act which
introduced the Hague Protocol. The crux of this case goes about the fact that it is undisputed
that the carriage was an international one which falls within the Warsaw Convention but
disputed on the application of the Hague protocol. This is because, New Zealand, the place
the horses originated, has not become a party to the protocol. It was also contended that the
protocol will only be applicable if the agreed stopping places were either in Canada or New
Zealand. At this juncture, it will be helpful to reiterate that the mishap on the horse occurred
neither in New Zealand or Canada but it happened from Honolulu to San Francisco.

Judgement and Related Case

The court applied a similar case, Grein v Imperial Airways [1937] 1 KB 50 2 in which the
court agreed with the ratio in that case. Here, what was important is not to look at the journey
or the flights but to look at how the carriage is performed according to the contract signed by
the parties. In determining whether the carriage is an international one, one would have to
look at how the carriage is to be performed according to the signed agreement. The general
1
Carriage By Air Act 1952, Schedule 1
2
Grein v Imperial Airways [1937] 1 KB 50
rule for the application of the Warsaw Convention is that it is enacted to deal with the rights
and liabilities of the parties to contract that are of international carriage by air.

The term ‘place of destination’ and ‘agreed stopping place’ are both used in the contract. On
the meaning of place of destination, the court held that it is meant to be the place when the
carriage begins and at which the carriage shall ends. One the meaning of agreed stopping
place, the court held that it is meant to be a stooping place which was agreed by the parties
beforehand to stop during the court of the journey.

Unfortunately, in the current contract, the place when the carriage begins were not stated. The
court then referred to the correspondence leading up to the contract and the case of
Felsendfeld et al v Sabena [1962] U.S Av. R. 575 3 in which the gist of the case was also to
bring horses from New Zealand to Canada. There, the Warsaw Convention applies but not the
Hague Protocol as the place of New Zealand was only a mere preparation of the carriage in
its journey.

The court in this case also referred to Corocraft Ltd Et al v Pan American Airways Inc [1969]
1 All E R 824 in which the court stipulated that the Warsaw Convention only binds countries
that have ratified it and it is the duty of the courts to apply the convention to ensure
conformity.

The contention of the plaintiff is that under Article 6 , 7 and 9 of the Convention stipulates
the need of an airway bill for a carrier to be excluded from his liability. The usage of the
word in the said article is that the air way bill must have been made out. There are certain
disparities as to what amounts to made out. However, in our situation, the plaintiff’s counsel
contended that there was no air way bill and hence the defendant cannot be said to exclude
his liability by relying on the convention.

The meaning of what amounts to made out was not specifically defined under the convention
though article 6 may be of some aid. Article 6 to the convention explains that the air way bill
must be made by the consignor and handed over to the cargo. Therefore, as this case revolves
around the application of Article 9, the court refused to answer the question on the
application of Warsaw Convention and the Hague Protocol.

3
Felsendfeld et al v Sabena [1962] U.S Av. R. 575
4
Corocraft Ltd Et al v Pan American Airways Inc [1969] 1 All E R 82
The contention by the plaintiff is that there was no signed and delivered air way bill while the
defendant contended that signing is not a prerequisite under the said article. The court applied
the common law jurisdiction meaning of what amounts to made out and held that it is only
related to the making of the bill and not the signing of it. The article expounded that made out
is the making of the air way bill and not the signing part as this is dealt by the following
paragraphs of Article 6. The rationale to this was made by applying the case of Preston et al v
Hunting Air Transport Ltd [1956] 1 Lloyd’s Rep 45 5 in which amount calculate under article
22(2) of the convention may only come into play when all the essential elements under
Article 9 have been fulfilled.

The court ultimately held that even if there was no clear airway bill, it still fulfilled the word’
made out’ as required under article 9 of the convention. The reason why article 9 6 is relevant
in this case is that if article 9 is being applied, damages calculate under article 22(2) of the
Warsaw Convention7 shall be applicable. As stated in to Corocraft Ltd Et al v Pan American
Airways Inc [1969] 1 All E R 82, it is important for the senders to write an air way bill to
recover its full value if there are any mishaps along the way. The omission to do so meant
that the defendant would then have a very limited liability to repay.

The defendant also argued that they were not in charge of the horses as required under Article
18 to render them liable for the mishaps as the plaintiff’s handlers had been in charge of the
horse throughout the journey. However, the court looked at the charter agreement and found
that the plaintiff was said to be overall in charge of the air craft and the surrounding
circumstances within it. Clause 17 of the agreement also stipulates that the liability shall
extends to damage sustained on board the aircraft and also during the disembarkment.

There was insufficient information as to how the stalls designed to contain the horses were to
be maintained and this was the reason why the main horse was allowed to escape ino the first
place. Sufficient evidence were shown to depict the inefficient and inadequacy of the
defendant to take all relevant measure to avoid the damage from happening. The defence
brough forward by the defendant must then fail. Hence, the plaintiff shall be entitled to
damages of $35,000 suffered unless the defendant is able to prove that the value of the horses
was less than that. The amount given by the court were in compliance with article 22(2) of
the Warsaw Convention which were rightfully applied in this case.

5
Preston et al v Hunting Air Transport Ltd [1956] 1 Lloyd’s Rep 45
6
Warsaw Convention, Art 9
7
Warsaw Convention, Art 22
Conclusion

In conclusion, as aforementioned in the said case, even if article 9 cannot be fulfilled by the
carrier of the aircraft, it does not preclude the fact that he may still be held liable if the court
is satisfied that he is the person in charge of the carrier and has not taken any reasonable care
of the goods itself. This case also has shown a novel approach that it is pertinent to look at the
clauses in an agreement in order to determine whether an international convention can be
applied.

References

Statutes

1. Carriage By Air Act 1952, Schedule 1


2. Warsaw Convention, Art 9
3. Warsaw Convention, Art 22

Cases

1. Felsendfeld et al v Sabena [1962] U.S Av. R. 575


2. Corocraft Ltd Et al v Pan American Airways Inc [1969] 1 All E R 82
3. Grein v Imperial Airways [1937] 1 KB 50
4. Preston et al v Hunting Air Transport Ltd [1956] 1 Lloyd’s Rep 45

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