If live animals are airfreighted and do not arrive alive, it is natural to assume that the air carrier is liable for the loss. But this is not always the case. If the shipper is negligent, it may bear its own loss.

In the decision of Singapore Airlines Cargo Pte Limited v Principle International Pty Ltd [2017] NSWCA 216, the NSW Court of Appeal laid down a number of markers to assist in determining who and to what extent, an air carrier and a shipper is liable for death or injury to live animals transported by air according to The 1999 Montreal Convention relating to International Carriage by Air.

This is an analysis of the decision.

The facts

  • Eighteen head of cattle died in flight while transported by SIA Cargo, the air carrier, from Melbourne to Harbin, China on 27 September 2013.
  • Principle, the shipper, prepared a load plan about three months beforehand. It showed two crates, each with nine cattle, to be placed on the main deck in the cargo plane. The load plan was given to the Department of Agriculture, Fisheries and Forestry for approval to obtain an export permit. It was not given to SIA Cargo.
  • Principle was responsible for loading the cattle into the crates, including the distribution of the cattle and the stock density. It made no special load requests to SIA Cargo for placement of the crates. SIA Cargo said that if a request had been made in the Final Pre Advice document in the section ‘joining special load information’, it would have been acted upon.
  • SIA Cargo prepared a Load Instruction Report for its loadmaster after the crates were weighed and were ready to be loaded, about three hours before the flight. The cattle numbers per crate were not recorded because only weight was relevant to the aircraft’s fuel consumption. The Report provided that twenty six crates of cattle be loaded on the upper deck and nine crates be loaded on the lower deck of the aircraft.
  • The cattle that died were in two crates which were placed on the lower deck, in the back section near the tail.
  • The cattle were in good health and condition when they were loaded.
  • None of the other cattle transported on the flight died.
  • The crates were of standard design, were made of wood and were suitable for transportation of cattle by air. Ventilation was provided at ‘cattle height’, by 50 mm pinholes in each of the solid sides, and the crates were mostly open at the top.
  • The value of the dead cattle was $72,160.
  • An airway bill was raised and so the Montreal Convention applied to determine liability.

Montreal Convention: Article 18 – Damage to Cargo

What “event” caused the deaths?

Art 18(1) provides: The carrier is liable for damage sustained in the event of the destruction or loss of, or damage to, cargo …

If the “event” took place during the carriage by air (defined under Art 18(3) to mean the period during which the cargo is in the charge of the carrier) then SIA Cargo was liable.

SIA Cargo argued that the “event” which caused the deaths took place when Principle placed the cattle into crates without adequate ventilation, before the cargo came into its charge.

Principle argued that the “event” was the placement of the crates by SIA Cargo on the aircraft.

The Court (Beazley, P) decided that the “event” was the placement of the two crates by SIA Cargo on the lower deck at the aft in a place where the conditions caused the cattle to die either by suffocation or heat stress (the Montreal Convention imposes strict liability so the exact cause of death does not need to be proved).

The Court (Meagher JA) added that the “event” must cause the deaths. In this case, what caused the deaths was the very little distance between the top of the crate and the roof of the lower deck which created a “lack of ventilation”, along with the presence of nine cattle per crate and limitations in the aircraft’s ventilation system in that part of the lower deck.

Therefore SIA Cargo was liable for the loss under Art 18(1).

Was there “defective packing”?

Art 18(2) provides: However, the carrier is not liable if … the damage to the cargo resulted from … defective packing of that cargo performed by a person other than the carrier or its servants or agents;

The onus is on the carrier to identify how the packing was defective.

The Court (Beazley, P) stated that “packing” of cargo covered not only the design of the crates, but also the way in which cattle were placed or packed in the crates.

In this case, the expert evidence was that the design of the crates was suitable for transporting cattle by air, particularly in terms of ventilation. The space per head of cattle (stock density) in the crates was in line with Australian Standards.

Therefore the packing was not defective and SIA Cargo could not rely on Art 18(2) to avoid liability.

Montreal Convention: Article 20 – Exoneration

Art 20 provides: If the carrier proves that the damage was caused … by the negligence … of the person claiming compensation … the carrier shall be wholly or partly exonerated from its liability

The onus is on the air carrier to prove that the shipper was negligent, and if so, the loss is apportioned between the air carrier and the shipper.

SIA Cargo argued that Principle was aware of the risk of injury to the cattle if the crates were placed on the lower deck because that risk was identified in its load plan. SIA Cargo also submitted that the aircraft had been approved for loading cattle in all holds and that normal flight conditions applied.

The Court (Beazley, P) accepted this and noted that Principle had taken no steps to inform SIA Cargo of this risk or to require the crates to be placed on the upper deck. She concluded:

In my opinion, Principle should bear the greater proportion of the liability for the loss, given that it had all the information in its possession relating to the risk and the means of avoiding the risk of harm to the cattle. It took no steps to inform SIA Cargo where crates containing nine cattle should be placed and thus SIA Cargo had no notice, information or advice as to where the crates should be placed. … In my opinion, the appropriate proportion is 80 per cent to Principle and 20 per cent to SIA Cargo.

The Court (Meagher, JA) added that the apportionment of 20 per cent liability to SIA Cargo arose from the fact that SIA Cargo could have checked … by requesting a copy of the approved loading plan before the preparation of its Loading Inspection Report

Therefore, the Court ordered SIA Cargo to pay $14,432 to Principle, together with interest.

Conclusion

Shippers of live animals need to be proactive in communicating to the air carrier the means of avoiding the risk of harm to the stock.

Specifically, the shipper needs to give information relating to the risk when consigning the stock to the air carrier, so as to avoid the consequence illustrated in this decision that despite its liability under Art 18(1), the air carrier was able to greatly reduce its liability under Art 20 of the Montreal Convention and pay only 20 per cent of the loss.