Holmes v Bangladesh Biman Corporation
| Jurisdiction | UK Non-devolved |
| Judge | Lord Bridge of Harwich,Lord Griffiths,Lord Ackner,Lord Jauncey of Tullichettle,Lord Lowry |
| Judgment Date | 16 February 1989 |
| Judgment citation (vLex) | [1989] UKHL J0216-1 |
| Date | 16 February 1989 |
| Court | House of Lords |
[1989] UKHL J0216-1
Lord Bridge of Harwich
Lord Griffiths
Lord Ackner
Lord Jauncey of Tullichettle
Lord Lowry
House of Lords
My Lords,
The respondent is the widow of Geoffrey Paul Mervyn Holmes who was killed in an air crash in August 1984. He was a passenger in an aircraft operated by the appellant airline flying from Chittagong to Dhaka in Bangladesh. The plane crashed as it approached Zia International Airport. This was a purely internal Bangladesh flight.
The widow sues the airline for damages under the Fatal Accidents Act 1976 on behalf of herself and her children and under the Law Reform (Miscellaneous Provisions) Act 1934 on behalf of the estate of her deceased husband. Liability not being in dispute, the only issue between the parties is as to the amount of damages recoverable. Under the terms of the contract between Mr. Holmes and the airline and in accordance with the relevant Bangladesh legislation applicable to carriage by air in Bangladesh the damages the widow could recover would be limited to £913. But if the law to be applied is that which governs carriage by air under Schedule 1 to the Carriage by Air Acts (Application of Provisions) Order 1967, damages would be recoverable up to a limit of £83,763. A preliminary issue in the action was ordered to be tried, namely:
"Whether or not the carriage by air referred to in the statement of claim was carriage by air in respect of which Schedule 1 to the Carriage by Air Acts (Application of Provisions) Order 1967 had effect."
Before the issue came to be tried the parties had agreed that the damages suffered exceeded the limit imposed by Schedule 1 to the Order of 1967. Accordingly the final outcome of the action will now be governed by the determination of the issue. If it is determined in the widow's favour, she will be entitled to judgment for £83,763; if not, for £913 only. Leggatt J. determined the issue in the widow's favour [1987] 2 Lloyd's Rep. 1. His judgment was affirmed by the Court of Appeal (Lord Donaldson of Lymington, M.R., Dillon and Bingham, L.JJ.) [1988] 2 Lloyds Rep. 192. The airline now appeals by leave of your Lordships' House.
There are now two international conventions in force, each providing a uniform set of rules governing contracts of international carriage by air to which the convention applies. The first is the Warsaw Convention agreed in 1929. The second is an amended version of the Warsaw Convention agreed at The Hague in 1955, which it will be convenient to refer to as "the Hague Convention." The United Kingdom is a party to both Conventions. The Warsaw Convention was enacted into United Kingdom law by the Carriage by Air Act 1932. This came into force in the United Kingdom, the Channel Islands and the Isle of Man on 13 May 1933 and in all other dependent British territories on 3 March 1935. For brevity I shall hereafter refer to the Channel Islands, the Isle of Man and all other dependent British territories collectively as "other British territory." The Hague Convention was enacted into United Kingdom law by the Carriage by Air Act 1961 and was brought into force in the United Kingdom and other British territory on 1 June 1967.
The scope of the Hague Convention appears from Article 1 which provides:
"(1) This Convention applies to all international carriage of persons, baggage or cargo performed by aircraft for reward. It applies equally to gratuitous carriage by aircraft performed by an air transport undertaking. (2) For the purposes of this Convention, the expression international carriage means any carriage in which, according to the agreement between the parties, the place of departure and the place of destination, whether or not there be a break in the carriage or a transhipment, are situated either within the territories of two High Contracting Parties or within the territory of a single High Contracting Party if there is an agreed stopping place within the territory of another State, even if that State is not a High Contracting Party. Carriage between two points within the territory of a single High Contracting Party without an agreed stopping place within the territory of another State is not international carriage for the purposes of this Convention."
Article 1(1) of the Hague Convention repeats article 1(1) of the Warsaw Convention and the definition of "international carriage" in article 1(2) repeats with immaterial drafting amendments that contained in article 1(2) of the Warsaw Convention. But a number of countries, notably the United States of America, which are party to the Warsaw Convention have never adopted the Hague Convention. Hence the scope of the "international carriage" to which each Convention applies is quite different.
Section 1 of the Act of 1961 enacts that the provisions of the Hague Convention
"as set out in Schedule 1 to this Act shall, so far as they relate to the rights and liabilities of carriers, carriers' servants and agents, passengers, consignors, consignees and other persons, and subject to the provisions of this Act, have the force of law in the United Kingdom in relation to any carriage by air to which the Convention applies, irrespective of the nationality of the aircraft performing that carriage; and the Carriage by Air Act 1932 (which gives effect to the Warsaw Convention in its original form), shall cease to have effect."
Section 10(1) of the Act enacts:
"Her Majesty may by Order in Council apply Schedule 1 to this Act, together with any other provisions of this Act, to carriage by air, not being carriage by air to which the Convention applies, of such descriptions as may be specified in the Order, subject to such exceptions, adaptations and modifications, if any, as may be so specified."
Section 10(2) provides a corresponding power to legislate by Order in Council for other British territory. Section 10 of the Act of 1961 is a re-enactment with immaterial drafting amendments of section 4 of the Act of 1932 which had been exercised by the Carriage by Air (Non-international Carriage) (United Kingdom) Order 1952 ( S.I. 1952 No. 158) to impose a modified version of the Warsaw Convention providing a set of rules to govern all carriage by air not governed by the Warsaw Convention. When the Act of 1961 was brought into force, it was necessary to give continuing force in United Kingdom law to the provisions of the Warsaw Convention in relation to "international carriage" to which it still applied. The enabling power conferred by section 10 was exercised by the Carriage by Air Acts (Application of Provisions) Order 1967 both for this purpose and for the purpose of enacting a modified version of the Hague Convention providing a set of rules governing all carriage by air not falling within the definition of "international carriage" in either of the two Conventions. Thus there are now three sets of rules in the law of the United Kingdom and other British territory which govern different categories of carriage by air to which I shall refer for convenience as "the Hague rules" (Schedule 1 to the Act of 1961), "the Warsaw rules" (Schedule 2 to the Order of 1967) and "the United Kingdom rules" (Schedule 1 to the Order of 1967). The question is whether the United Kingdom rules apply to carriage by air which, according to the agreement between the parties, is to be performed wholly within the territory of a foreign state.
With so much by way of introduction, I have to say at once, with all respect, that, in my opinion, the judge and the Court of Appeal never applied their minds to the right question. They concentrated their attention exclusively on the language, structure and drafting technique of the Order of 1967 and found that it led them to a conclusion in favour of the widow which both Dillon and Bingham L.JJ. described as "startling." But the Order of 1967 can have no wider scope and effect than is duly authorised by the power conferred by section 10 of the Act of 1961 to legislate by Order in Council. If that power is unlimited, the scope of its exercise by the Order will be a matter to be determined on the true construction of the Order. But if on the true construction of section 10 the enabling power is itself limited, then it is axiomatic that the Order cannot exceed that limit. Accordingly, it seems to me that the essential prior question to be answered, before attempting to construe the Order, is whether the words in section 10 "carriage by air … of such descriptions as may be specified" ought to be read as subject to any limitation.
At the heart of the issue lies a principle embodied in a line of authority which I shall have to examine and which certainly establishes a presumption limiting the scope which should be given to general words in a United Kingdom statute in their application to the persons, property, rights and liabilities of the subjects of other sovereign states who do not come within the jurisdiction of the United Kingdom Parliament. This presumption is often described, and has been referred to throughout the argument of this case at all levels, as "the presumption against extra-territorial legislation." This may be a convenient shorthand expression, but if it is understood as accurately and comprehensively expressing the principle involved it is potentially misleading. I cannot help thinking that it has led to some confusion of thought in discussion of the issue arising in this appeal. In one sense all legislation enacted in the United Kingdom to give effect to international conventions, long familiar in the field of maritime law, is extra-territorial in effect. But it would be absurd to suggest that in legislating to embody the terms of such internationally...
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