Connaught Laboratories Limited v. British Airways

In Carriage of Goods by Air on (Updated )

This case concerned damage to four cartons of vaccines carried by air from Toronto to Sydney, Australia via Heathrow. The cartons bore labels directing that they be kept refrigerated at between 2 and 8 degrees Celsius. A similar direction was printed on the air waybills. At Heathrow, the cartons were not placed in a refrigerated area and, as a consequence, the vaccines were spoiled upon arrival in Sydney. The main issue in the case was whether the carrier could limit its liability to approximately $2,500 pursuant to Article 22 of the Warsaw Convention. The Plaintiff argued that Article 25 of the Convention applied to disentitle the carrier from relying upon the Article 22 limits. Article 25 provides “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”. In a thorough and well reasoned judgment, the trial Judge considered whether the test set out in Article 25 was subjective or objective. The trial Judge ultimately concluded the test was subjective and that the Plaintiff therefore had to prove not only that the carrier was reckless but also that the carrier knew damage would probably result from its recklessness. There was, however, no evidence of why the cartons were not stored in a refrigerated area at Heathrow. The trial Judge noted that it could have been because the relevant person thought no damage would come to the vaccines if not refrigerated or because of mere inadvertence. Neither of these scenarios would meet the Article 25 test. However, the trial Judge also noted that it could have been that the relevant person knew there was a risk of damage but simply did not want to bother storing the cargo as directed. Such conduct would meet the Article 25 test. The trial Judge resolved this issue by drawing an adverse inference from the failure of the carrier to present any evidence as to what actually happened and why. In result, the Plaintiff was entitled to recover its expenses and the cost, but not the invoice price, of the shipment. On appeal, the Ontario Court of Appeal in a relatively short endorsement agreed with the findings and conclusions of the trial Judge and dismissed the appeal. The Court of Appeal said that given the facts and circumstances of the case it was open to the trial Judge to make a prima facie finding of recklessness and knowledge that damage would probably result and that the evidence to rebut this was solely within the knowledge of the carrier, who called no evidence.