THE SUPREME COURT
2000 No. 252

Denham J.
Murphy J.
Murray J.
Hardiman J.
Fennelly J.

BETWEEN
AHP MANUFACTURING B.V.
 t/a WYETH MEDICA  IRELAND
		
PLAINTIFF/RESPONDENT

AND

DHL WORLDWIDE NETWORK N.V.,
DHL WORLDWIDE EXPRESS GmbH AND
DHL INTERNATIONAL (IRELAND) LIMITED 
		
DEFENDANT/APPLICANT

JUDGMENT of the Court delivered the 30th day of July 2001 by FENNELLY J.
	
	The respondent is a company incorporated in the Netherlands and engaged in the manufacture of female contraceptive pills.  It is part of the Wyeth group of companies. It has a place of business in the State at Newbridge, Co Kildare.
	The appellants (defendants) are part of the worldwide DHL group which provides an international courier service. The first named defendant is incorporated under the laws of Belgium and organises that business at what is known as the Brussels Hub, where the principal events involved in this case took place and which is the centre of DHL’s operations in Europe. The second named defendant is incorporated under the laws of the Federal Republic of Germany. The third defendant is incorporated in the state. 
	The appeal relates to damage, while being carried by the defendants, whom I will now call the appellants, to a consignment of a female contraceptive substance, Gestodene Micronised. This is a principal component of the substance manufactured by the Respondent. It was purchased from  Schering AG in Germany and consigned by the latter to the second applicant for transport to the Respondent. It had a value of DM 1,800,000. The claim was made principally under the provisions of the Warsaw Convention. The High Court (Finnegan J) gave judgment in favour of the respondent for £760,777.68, the Irish pound equivalent of DM1,800,000, with interest.

CONTRACTUAL RELATIONSHIP
	 It is necessary to refer to the facts surrounding the contractual relationship between the parties.
	From the month of February 1994, the Respondent commenced the purchase of consignments of Gestodene Micronised from Schering AG, Berlin and arranging for their transport from Germany, via DHL’s Brussels Hub to Ireland. It was apparent from the beginning that each consignment would have a very high value.   The dimensions of each cylindrical package, a fibre drum, would be 42 x 42 x 42 cm and its weight 7.3 kg. There would be one consignment per month.
	The Appellants indicated at a meeting with the Respondent on 17th February 1994 that they would only accept the consignments if the Respondent either paid for an on-board courier which would cost £1,000 per consignment or else signed a document called a “Hold Harmless” letter, which will be described shortly.  The Respondent indicated that every shipment should be monitored through the system and given priority attention. The Respondent declined the option of the courier on the ground of cost, but agreed to the “Hold Harmless” letter. This purported to limit DHL’s liability to US$100 and provided that the respondent was to arrange its own insurance. It was to cover all the shipments.
	The letter read, in part:

		"DHL shall not be required to effect any insurance of such items against any risks and (notwithstanding DHL’s actual or imputed knowledge of the value  ) and I/we confirm that I/we will arrange such insurance in such and against such risks as I/we deem appropriate  and at my/our own expense and responsibility. I/we warrant that  such insurance will contain a waiver of all rights of subrogation against DHL."

FACTS OF THE ACCIDENT
	Pursuant to these arrangements three consignments were transported from Germany to Ireland without incident. The consignment, which I will call the package, despatched on 28th April 1994 was damaged beyond repair at the DHL Brussels Hub on the night of 1st May 1994.
	The Brussels Hub is the central sorting office for DHL.  It is the largest of its kind in Europe.  Trucks and aircraft arrive from all over Europe. Their loads are unloaded , sorted and placed on aircraft for onward transport to their final destinations. DHL aims to provide an overnight service: goods despatched at the end of one day should reach their destination he following day. At the relevant time it handled about 100,000 shipments each night. The work is at its most intense between midnight and four o’clock in the morning. 
	Goods are classified as conveyables if they are suitable for transport on conveyor belts and non-conveyables if they are not. The package was a considered to be a small non- conveyable, being less than 25 kilos in weight and less than one metre in length. The system for its handling was that it would be transported in a container with the conveyable goods to Building 3. There, non-conveyables  would be sorted out and left to await transport to their outward destination. No witness was available to give evidence as to how precisely the package was transported, but the Appellants accepted that it was most likely taken from the off-load part of Building 3 to  the reload part by a fork-lift truck fitted with a wooden pallet and that it was not secured on the pallet. There is, however, no evidence at all as to whether the package was placed there alone or stacked with other items on the pallet, or of where it was on the pallet. All that is known is that it was found on the ground between two entrances to Building 3 (the one from which it would have emerged and the one where it would have re-entered to be reloaded) in a damaged condition. It is admitted that, if it fell off the pallet in this area, there was a high probability of its being damaged, as indeed it was, by the wheels of another vehicle.  There were many vehicles transporting goods, often at speed, at the most intense period of activity at the Hub.
	On that set of facts, the learned trial judge found that:
	
	"The risk of a small non-conveyable so falling being run over by another vehicle is very high having regard to the  large number of vehicles operating in the Brussels Hub and the speed at which and the pressure of time under which the vehicles operate in that area and the relatively confined area over which such vehicles must travel. The importance of properly securing a small non-conveyable must have been very evident to the Defendants. If this consignment had been carried in a baggage trolley or an aircraft container it is most unlikely that the same would have fallen in the course of being transported. For this reason, having regard to the contents of the Defendants’ induction manual an the evidence given by Mr Sodergard [the Defendants’ General Manager] I find as a matter of probability that this consignment was being carried from building 2 to building 3 on a wooden pallet by a forklift truck and that it was unsecured and expected to stay in place under its own weight. Had this consignment been carried on a baggage trolley or aircraft container it is most unlikely that it could fall out unless the baggage trolley or the container was not completely or properly closed which, according to Mr Sodergard is not very likely to have occurred."

	It is agreed that the learned trial judge inadvertently misstated the carriage as having been from Building 2 to Building 3, but this is immaterial.  His findings were relevant to his conclusions as to the issue of recklessness under the Warsaw Convention. I will summarise the relevant provisions of  the Warsaw Convention before returning to some other evidence upon which the respondent relies in the appeal.

WARSAW CONVENTION
	The Warsaw Convention as amended from time to time has the force of law in the State by virtue of certain provisions of the Air Navigation and Transport Acts. Section 17(1) of the Air Navigation and Transport Act, 1936	provided:

	"The provisions of the Warsaw Convention as set out in the First Schedule to this Act shall, so far as they relate to the rights and liabilities of carriers, passengers, consignors, consignees and other persons, and subject to the provisions of this section and the next following section, have the force of law in Saorstát Eireann in relation to any carriage by air to which the Warsaw Convention applies, irrespective of the nationality of the aircraft performing that carriage."

	It is common case that DHL is responsible, subject to the terms of  the Warsaw Convention, for loss or damage to goods occurring while they are being handled at the Brussels airport. Article 18(2) defines “carriage by air” as comprising a time when the goods are in the care of the carrier in an “aerodrome.”

	The provisions relevant to liability are in Chapter III of the Convention.
	Article 18(1) imposes strict liability:

	"Article 18(1) 	The carrier is liable for damage sustained in the event of the destruction or loss of or of damage to any registered luggage or any goods if the occurrence which caused the damage so sustained took place during the carriage by air."

	Article 20(1) permits the carrier to escape liability “if he proves that he and his agents have taken all necessary measures to avoid the damage or that it was impossible for him or them to take such measures.” No attempt was made to discharge this burden. Nor was reliance placed on Article 21 which envisages a form of contributory negligence.
	The liability of the carrier is, however, restricted by Article 22(2) (as amended by the Hague Protocol) to a small sum per kilogram of weight, expressed in French francs, and unrelated to any actual loss, unless the consignor of the goods makes a “special declaration of interest in delivery at destination and has  paid a supplementary sum if the case so requires.” The respondent relied on certain purported declarations for the purpose of this Article but the learned trial judge rejected these claims as not being specially directed to the invocation of the Article.  There is no appeal form that part of his judgment.  Thus, at first sight, the limitation applies.
	The carrier is not permitted to fix any lower limit of liability than that provided for. Any provision of a contract attempting to impose such a limit is “null and void” (see Article 23). The Hold Harmless Letter contained a purported limit but the Appellants do not rely on it.
	The main focus of the case both in the High Court and on the appeal has been on Article 25 of the  Warsaw Convention as amended by the Hague Protocol of 1925, to which effect of law in the State was given by section 7 of the Air Navigation and Transport Act, 1959. As so amended it 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; provided that, in the case of such act or omission or a servant or agent, it is also proved that he was acting within the scope of his employment."
	
	In its original form, Article 25 had provided:

	"The carrier shall not have the right to avail himself of the provisions of the present Convention which exclude or limit his liability, if the damage is due to malice or to such default on his part as, in accordance with the law of the Court seised of the case is considered to involve malice."

THE ALTERNATIVE CLAIM
	Two further provisions of the  Warsaw Convention are relevant to the respondent’s alternative claim alleging  “gross negligence” (grobe Fahrlassigkeit) by the Appellants, based on the “Important Notes” ( wichtige Hinweise) printed on the German version of the Airwaybill. Those notes would impose liability on the carrier for gross negligence. They provided that where the Warsaw Convention applied, liability of the carrier would be limited by the Convention except as follows:

	"(a)	In respect of direct consequence of damage loss or unreasonable delay of the consignment where the Defendants have demonstrated wilful intent or gross negligence.
	(b)		In respect of indirect consequences of damage loss or unreasonable delay of the consignment the Defendants shall be liable in respect of wilful action, gross negligence and culpable non-observance of essential contractual terms."
	
	The learned trial judge heard evidence of this concept in German law from expert witnesses, concluding that it was not, for the purposes of this case materially different from the concept of recklessness envisaged by Article 25 of the Convention. The  “Important Notes” were attached only to the German language version of the Airwaybill. Even in that form, it was never given to the respondent. The printed terms in English, printed on the reverse of the English language version of the Airwaybill contained no reference to “gross negligence” or to any similar concept.
	Article 6 of the Convention provides for an “air consignment note” (called the Airwaybill in amendments to the Convention) to be made out by the consignor in three parts. Article 11(1) provides:
	
	“In the absence of evidence to the contrary the air consignment note shall be evidence of the conclusion of the contract, of the receipt of the goods and of the conditions of carriage.”

	In this connection, the Appellants accept that the   Warsaw Convention does not prevent the carrier from adopting obligations including a basis of liability going beyond the terms of the Convention. Article III. 2 of the Guadalajara Convention of 1961 (given effect in the State by the Air Navigation and Transport Act, 1965.) envisages that there may be “a special agreement under which the contracting carrier assumes obligations not imposed by the Warsaw Convention...”  They say that there was no such special agreement in this case.

THE HIGH COURT JUDGMENT
	The  learned trial judge reviewed authorities on the normal meaning of the term “recklessness.” He held that failure to take account of knowledge of probability of damage as an additional component of the test in Article 25 would deprive the conjunction “and” of meaning. His review of the authorities on the interpretation of the  Warsaw Convention led him to conclude that, while the test for recklessness was an objective one, the test for knowledge is subjective. So stated, his conclusions on the law have been accepted at the hearing of the appeal. It is rather his application of these tests to the facts of the case that have been challenged. The  learned trial judge expressed himself as follows:
	
	"Having regard to the foregoing I find that the Defendants were reckless having regard to the following circumstances:-

	1.	The consignment was carried on a wooden pallet by forklift without being 	secured.
	2.	The nature of the consignment was such it was likely risk (sic) that it would be dislodged by movement of the forklift.
	3.	It was likely that if dislodged the consignment would be run over by another vehicle having regard to the heavy volume of vehicular traffic, the speed at which that traffic travelled and the constraints under which the drivers operated.
	To adopt the phrase from S.S. Pharmaceutical Co Ltd v Qantas Airways Ltd the treatment of the consignment amounted to deplorably last (sic, should read 'bad')  handling

	Further I find that a reasonable person having knowledge of the circumstances enumerated above would have knowledge that damage of the nature which in fact occurred would probably result if the consignment fell from the forklift.  The onus therefore, passed to the Defendants to show that the actor did not subjectively have the requisite knowledge; they did not apparently seek to identify the actor although it would probably have been possible to do so from their rosters for the night in question and in consequence no evidence as to the actual state of knowledge was led.

	In consequence of these findings the Defendants are not entitled to rely on the limitation of liability under the Convention."

	The  learned trial judge also held that the effect of the airwaybill was to render the Appellants liable if damage was caused by gross negligence. He found as a fact, having heard the evidence of experts on German law called by the respective parties, that gross negligence covered both the subjective and objective tests of liability, which he had discussed in respect of Article 25. Consequently, he found the Appellants liable under that heading also.

THE APPEAL
	There is no contest on any issue of primary fact. The Appellants challenge the inferences of fact drawn by the  learned trial judge both in support of his conclusion that the Appellants were, objectively speaking, guilty of  recklessness and that the actor responsible for the act that caused the damage actually knew, i.e. subjectively it was probable.
	The challenge to the findings of the  learned trial judge are summed up in the contention that there was no direct evidence and no evidence from which inferences could reasonably be drawn as to:
	(a) 	how that container came to be on the roadway;
	(b) 	where it was coming from and where it was going to;
	(c)		the manner in which the container was loaded or stacked, including whether there was any other article on the pallet;
	(d) 	what caused the container to fall to the ground.

	On the issue of knowledge, the Appellants argued that it was impossible to draw inferences from the facts of the fall of the container to the ground as to the state of knowledge of the unidentified actor involved in its fall. The respondent was relying on the same conclusions drawn from the fact that the container was carried unsecured on the pallet of a fork-lift truck to infer recklessness (objectively) and knowledge of probability of damage (subjectively). Furthermore, the  learned trial judge, at one point, appeared to shift the burden of proof to the Appellants, whereas it should always rest on the claimant, i.e. the respondent. 
	The respondent fully supported the approach of the  learned trial judge and said that he was entitled to infer knowledge not only from the facts he had found and recorded in his judgment but also from the uncontradicted evidence of the experts called for the respondent and from certain admissions made by Mr Sodergard, particularly that it was not rational to carry the container in the manner described. 
	As to the proof of knowledge of probable damage, the respondent argued that the  learned trial judge did not impose any legal burden of proof on the Appellants. The facts of how the accident happened were at all times exclusively within the control of the Appellants. At a certain point, where evidence was given from which it was reasonable to infer knowledge in the absence of an explanation, the  learned trial judge was entitled to draw that inference from the failure of the Appellants to give evidence. In fact, the  learned trial judge did not go so far. He merely concluded that the objective facts would lead a reasonable person to believe that damage was likely. In those circumstances, he held that the evidential burden passed to the Appellants who could call the actor to give evidence of his subjective state of knowledge. Reliance was placed on a decision of the Federal Court of Australia in Trade Practices Commission v David Jones (Australia) Pty Ltd and others 64 A.L.R. 67 on the drawing of inferences from failure to give evidence.

THE CONVENTION CLAIM
	Although the Convention enjoys the force of law in the State by virtue of the Air Navigation and Transport Acts, it is an international agreement. As such, it should receive a purposive interpretation. On the other hand it falls to be applied by the courts of each contracting state in accordance with its national procedural rules and, in particular, the rules of evidence. There is no system of reference of questions of interpretation for  rulings to bind the courts of the contracting states as there is under the Treaty Establishing the European Community. Hence, it falls to this Court to interpret the Convention in accordance with its scheme and objects. It may, of course, have regard to notions such as recklessness as they exist in the common law, but terms in the Convention should receive, as far as practicable, an autonomous Convention meaning. It is desirable that such an international agreement be interpreted with reasonable consistency in the different contracting states. Inconsistent decisions could lead to forum shopping. Decisions of the courts of other contracting states are useful sources of guidance for that purpose.
	Article 25 comprises the distinct elements, recognised in the case law, of a reckless act and knowledge of its probable consequences, although the two are inevitably closely related.
 	The parties referred to Sidhu and others v British Airways plc [1997] A.C. 430 (“Sidhu”); Goldman v Thai Airways plc [1983] 1 WLR 1186 (“Goldman”), both decisions of the House of Lords. The principal other authority was the decision of the Court of appeal of Australia in SS Pharmaceutical Co Ltd v Qantas Airways Ltd [1991] LLR (“Qantas”). Other useful authorities cited were Antwerp United Diamond B.V.B.A. v Air Europe [1996] Q.B. 317 (“Antwerp United”); Nugent and Killick v Michael Goss Aviation Ltd [2000] 2 Lloyd’s Reports 222; Rolls Royce plc v Heavylift Volga DENPR Ltd [2000] 1 Lloyd’s Reports 653.
	Sidhu is not, on its facts, of direct relevance to the present case. The House of Lords there held that the Convention  excluded other common law remedies, where passengers claimed that the aircraft was negligently landed in Kuwait to coincide with the Iraqi invasion of that country and leading to the imprisonment of the passengers, but brought their proceedings outside the two-year time limit laid down by Article 29 of the Convention.  Nonetheless, the speech of Lord Hope contains (at page 453) a passage which is relevant to the interpretation of the Convention. Having noted the tendency of the common law to provide a remedy whenever a breach of duty has led to a loss, he continued:
	
	“Alongside these principles ... there lies another great principle, which is that of freedom of contract. Any person is free, unless restrained by statute, to enter into a contract with another on the basis that his liability in damages is excluded or limited if he is in breach of contract. Exclusion and limitation clauses are a common feature of commercial contracts, and contracts of carriage are no exception. It is against that background, rather than a desire to provide remedies to enable all losses to be compensated that the Convention must be judged. It was not designed to provide remedies against the carrier to enable all losses to be compensated. It was designed instead to define those situations in which compensation was to be available. So it set out the limits of liability and the conditions under which claims to establish that liability, if disputed, were to be made. A balance was struck, in the interests of certainty and uniformity.”

	Although these remarks concerned the reliance of the carrier on a limitation period for the making of claims, they are equally applicable to the Convention rule limiting the quantum of the carrier’s liability and the conditions under which that limitation could be overcome. The limit will not apply, by virtue of Article 25, if the “act or omission of the carrier his servants or agents was done with intent to cause damage or recklessly and with knowledge that damage would probably result.”  In the passages cited by the Appellants from the authorities judges have used different terms to describe the special nature of this requirement. O’Connor L.J. in Goldman spoke of  “exceptional wrongdoing”;  in Antwerp United, Hirst L.J. referred to “extreme misconduct” and  Kirby P. in Qantas to a “rigorous standard” and “stringent requirements.” Gleeson C.J. and Handley J.A., in the last-mentioned case, accepted such descriptions “provided that the more colourful description is not permitted to replace the language of the Article as the test to be applied.” 
	In my view, a court should not lightly infer recklessness from the sort of evidence which would merely justify a finding of negligence. While it is clear that an intentional and a reckless act are not the same, the juxtaposition in Article 25 of the latter with the former demonstrates that proof of recklessness in the true sense is required, i.e. the commission of an act, conscious of the danger of damage but not caring whether damage will occur. Eveleigh L.J. in Goldman emphasised the need for caution in resorting to cases on English statutes. What had to be determined was “the meaning of a convention .... incorporated into English law.”  He thought that the ordinary meaning of recklessness  could be described thus: “When a person acts recklessly, he acts in a manner which indicates a decision to run the risk or a mental attitude of indifference to its existence.” 
	I would adopt the explanation of the scheme of the Convention given by Kirby J.A. in Qantas (page 297):
	
	"From this scheme of the Warsaw-Hague Convention, it may be deduced that the Convention introduced an early form of quasi no fault liability in air carriers and entitlements in passengers and consignors without the need on their part to prove fault.  True, the air carrier could escape liability altogether; but only by proof of the matters set out in art. 20.  The onus of proving those matters lay upon the air carriers.  Likewise, the passenger or consignor could escape the régime under art. 25; but only by the proof of the stringent requirements set out in that article.  The general régime was to be that laid down in art. 22.  The price for the entitlement provided under that article was the imposition of a maximum coverage which, even in 1929, was not high.  To secure a higher coverage for cargo, a special declaration, attracting higher charges was contemplated.  Alternatively, the consignor could take out its own insurance.  In construing the phrase in art. 25 which must be applied to the facts of the present case, it is vital to keep this overall scheme of the Convention clearly in mind.  The phrase appears in articles which are designed to give effect to that scheme.  It must therefore be given a construction which advances the achievement of its purpose and does not frustrate the attainment of that object." 

	As a matter of principle, it is true that a judge applying the standard of proof on the balance of probabilities may be able to infer that an act was committed recklessly in the sense of described by Eveleigh L.J.. The evidence would need, however, to be clear and cogent. This is not to alter the standard of proof. It is the consequence of the fact that people do not readily, in the normal course of their lives, and particularly in the ordinary course of their work act in conscious disregard of the consequences of their careless actions. Clear and convincing, though not necessarily direct proof would be needed to displace the  assumption that people will in general try to avoid obvious risks of damage to others.
	As to the element of knowledge, it is common case that the Convention envisages proof of actual knowledge. The  learned trial judge approached the issue of knowledge on that basis, though with a qualification to which I will refer later. It is, therefore, strictly speaking unnecessary to refer to the authorities on this issue in any detail. Kirby J.A. in the Australian Court of Appeal in Qantas referred in some detail to the  travaux préparatoires for the Hague amendment to demonstrate that actual knowledge was intended to be the test.  Eveleigh L.J. in Goldman also analysed the travaux préparatoires though only to support his own conclusion, based on the wording of the provision, to the same effect. He could “not believe that lawyers who intended to convey the meaning of the well-known phrase ‘knew or ought to have known’ would have adopted “with knowledge”.”
	It is instructive to consider the application of these principles to the cases which have been cited. Goldman was a personal injury claim by a passenger who was thrown violently form his seat when the plane was flying through an area of clear air turbulence. (CAT). The trial judge had found the captain guilty of recklessness in failing to turn on the “Fasten Seat Belts” sign when he had been  warned to expect CAT. The Court of Appeal felt unable, though without much apparent enthusiasm, to disturb his findings on this issue based as it was on his assessment of the witnesses, expert and other.  On the other hand, there was in the view of the Court of Appeal no evidence from which he could have found that the captain knew that damage would probably result.  Eveleigh L.J. laid emphasis on the “adverbial phrase ‘with knowledge that damage would probably result’” and concluded: “I cannot see that we are entitled to attribute to him knowledge which another pilot might have possessed or which he himself should have possessed.”
	The principal case in which the agreed principles were applied to the contrary effect, i.e. against the carrier, was Qantas.  In that case, goods in transit under the responsibility of the carrier, and   marked “Keep dry and cool”, were left in the month of January unprotected and without any waterproof cover for some seven hours in the open on tarmac during a thunderstorm at Sydney Airport. Such storms are frequent in Sydney at that time of year and one had been forecast. As stated in the leading judgment, "it was obvious to everybody that it was a wet day, and the likelihood of a thunderstorm was also apparent."  The goods were liable to damage from rain and were in fact damaged to the extent of being rendered unsaleable. The carrier admitted "deplorably bad handling."  The majority in the Court of Appeal declined to disturb the findings of the trial judge. In particular, the majority considered that inferences could be drawn from the failure of the carrier to call as witnesses identifiable persons, who had been directly responsible for the handling of the goods. The majority judgment contains the following passage:
	
	"However, servants or agents of the appellant unloaded this and other cargo and moved it to its intended location.  The inference is fairly open, as we have already held, that such servants or agents, including Mr Johnson [the person in charge] and perhaps others, observed the marks on the cargo which indicated that it should be stored in a dry environment, observed the poor state of the plastic wrapping later reported in Tokyo, observed that it was raining, and that a typical Sydney summer thunderstorm was likely, and left the cargo in the open without taking the steps that they knew would be essential to protect that cargo if it should rain heavily.  On the basis such servants and agents must also have known that such 'deplorably bad handling' of the cargo would probably result in damage to the cargo."

	The respondent relies heavily on this passage as well as  on a decision of the Federal Court of Australia-General Division in Trade Practices Commission v David Jones and others  (“Trade Practices” ) 64 A.L.R. 67 on the inferences that may be drawn from failure to give evidence. The Appellants, on the other hand, rely equally strongly on the dissenting judgment of Kirby J.A. in Qantas. That learned judge disagreed with the majority not only in respect of the inferences of recklessness  but more especially in respect of the issue of knowledge of probable damage.
	It remains the task of the Court to determine, however helpful the authorities which have been cited, whether the  learned trial judge in this case erred in drawing inferences which led him to  the conclusion that the acts of the Appellants their servants were both reckless and done with the requisite knowledge.  Even where there is general agreement on the applicable legal principles there can be divergences in their application even to similar facts.   
	The core of the conclusion of the  learned trial judge is that the carriage of the package on a wooden pallet by forklift without its being secured was likely to lead to the package being dislodged. In the latter event, it is not disputed that severe damage was highly likely. However, nothing is known about how or where the package was placed on the pallet or how it was dislodged. The evidence is as consistent with its having been placed alone on the pallet as with or surrounded by other consignments and as consistent with its being placed at the back as at the front or side of the pallet. Equally, there is no indication as to whether it fell off or was dislodged by accidental contact with another passing forklift truck or a different method of conveyance. In this state of affairs, there is no doubt that, at common law, a court would presume negligence against the carrier, thus imposing upon him a burden to disprove fault on his behalf.  Nonetheless, it is not enough, in my view, to justify an inference of recklessness, i.e. a conclusion that some unnamed servant or agent of the Appellants behaved not merely carelessly but with  indifference as to the risk of damage to the goods. A conclusion of recklessness would not be an inference but would be speculation.
	The respondent attached a good deal of importance to a claimed admission in evidence by Mr Sodergard, the Appellants’ General Manager,  that the transport of the package on a forklift in the manner described was not “rational.” This evidence needs to be seen in context and it should be remembered that the witness was not a native speaker of the English language. What he said was:  "It is not a very practical way of transporting shipments of this kind. They are not very rational to do so, so it’s not something that our supervisors would encourage staff to do."  It is by no means clear that it concerns the safety of the carriage.  It is significant that  the learned trial judge did not attach the same importance to this admission as the respondent. I do not think it is open to this court on appeal to make findings of primary fact, which would be required if it were to draw any conclusions from this piece of evidence. The same applies to the expert evidence upon which  the learned trial judge did not pronounce any conclusion.  I do not think the inference of recklessness was justified.  
	In the light of this conclusion, it is not strictly necessary to consider the issue of knowledge of probability of damage. I will deal, however, with that matter as an alternative and on the hypothesis that my primary conclusion is not correct. Even assuming a servant or agent of the Appellants to have behaved recklessly in placing the package on the pallet in the manner considered by the  learned trial judge to be reckless, I do not consider that there is any evidence to justify a finding of subjective, i.e. actual, knowledge on the part of the operative in question that damage was probable. I accept, for the purposes of this issue that it is not necessary to identify still less name the operative in question. It would be sufficient if it could be shown that an operative of the Appellants, in handling the goods recklessly, must have known that damage was probable. 
	I do not think the  learned trial judge correctly applied the subjective test. Firstly, having referred to the authorities, including Goldman and Qantas, he stated that the test of knowledge was subjective, but went on to say

	“However, the onus on a Plaintiff to satisfy the Court on the subjective test of knowledge can be satisfied by establishing facts which must have been apparent to the actor which would give the requisite knowledge to a reasonable person that damage would probably result whereupon the onus would pass to the defendant who could offer the actor in evidence as to his subjective state of knowledge. In the present case the actor has not been identified and accordingly in order to satisfy the requirement of Article 25 it is sufficient for the Plaintiff to show that the circumstances are such that a person acting with knowledge of those circumstances must be regarded as having the requisite knowledge.”

	His final conclusion quoted earlier in this judgment is based similarly on the test of a reasonable man as the basis for shifting the burden of proof. This is, in my view, incorrect. It is the approach that was rejected by the Court of Appeal in England in Goldman, where Eveleigh L.J. refused to accept an approach based on “knowledge which another pilot might have possessed or which he himself should have possessed.”  In effect, the  learned trial judge relied on the same facts to found his inference of recklessness by some servant or agent of the Appellants as to reach the further conclusion that the same servant or agent had the requisite subjective knowledge. This blurs the distinction between the two parts of the test. It submerges the subjective requirements of the second part in the objective requirement of the first.
	The respondent invited the Court at the hearing of the appeal to follow certain dicta in the Australian case law regarding the drawing of inferences from the failure of a defendant to call rebutting evidence.   The facts in Qantas from which the majority of the Court of Appeal of Australia were prepared to draw inferences from failure to call evidence were different. In that case, there was direct evidence of the markings on the consignment which the responsible personnel must have seen. The person directly in charge of the cargo was identified by name, was in court during the hearing and was not called. Furthermore, the carrier had admitted “deplorably bad handling.” These elements were of such a character as to convince a majority of the court that the person in question, if called, would not have been able to deny that he knew of the likelihood of damage from leaving the goods in the open during a thunderstorm.  I would distinguish that type of case, where there was compelling reason to infer actual knowledge from the silence of the carrier from a case, such as the present, where the actor has not been identified. I am conscious of the complaints made by the respondent regarding the Appellants’ failure to investigate the occurrence, to furnish a report on it and general lack of cooperation. I do not think these criticisms are sufficient reason to justify a finding of fact made by inference that a particular person had a particular state of mind. The criticisms cannot fill gaps in the evidence.   They are not such as to persuade that such a state of mind is more likely to exist. For similar reasons, I am not persuaded of the relevance of Trade Practices. That was a case of alleged collusive pricing arrangements contrary to Australian legislation. There was evidence of a meeting at which a number of the defendants attended but of which none were called to give evidence and of parallel pricing in the relevant market thereafter. The effect of the decision can be fairly summarised as meaning that, where there is evidence of market behaviour from which the existence of an arrangement or understanding could be reasonably inferred combined with evidence of a meeting between the relevant market operators, a court could more readily infer that such an arrangement or understanding was arrived at at the meeting in question when none of the participants availed of the opportunity to give evidence. The probability of the meeting having been the occasion of collusive market behaviour was increased by the fact that those attending declined the opportunity to give evidence. No analogous conclusion can be drawn in the present case. No person has been so identified as to lead to the presumption of knowledge that the particular handling of the package would probably result in damage. The  learned trial judge made it clear that he was not drawing any additional inference adverse to the Appellants from their failure to call evidence. He stated:
	
	"I do not draw any additional inference from the failure to do so in this case as the evidence before me was that the actor had not been identified and indeed had he been identified the onus would nonetheless remain on the Plaintiff as the Defendant here as always is not obliged to give evidence."

	I agree that, in the circumstances, it would not have been warranted for the court to draw an inference of  knowledge of probable damage from the failure of the Appellants to call evidence from the responsible operator or actor.
	For these reasons, I would allow the appeal insofar as the Convention issue is concerned.

GROSS NEGLIGENCE
	As explained above, the respondent’s case on this issue depends entirely on the terms of Article 11(1) of the  Warsaw Convention, combined with the inclusion of the  “Important Notes” ( wichtige Hinweise) on the German language version of the Airwaybill. The contractual arrangements between the parties had been made in February at a meeting in Ireland. All discussions were in the English language. The German language printed document was never at any stage sent to the respondent, who were not even aware of it until after the accident. It was sent only to the German consignor, which was not a contracting party. The English-language version of the printed notes attached to the Airwaybill contains no reference to “gross negligence.” Article 11(1) makes the terms of the Airwaybill evidence of the conditions of carriage only in the absence of evidence to the contrary.  Each of the points I have mentioned tends to the contrary of the “Important Notes” as a contractual document. The Appellants have, of course, acknowledged in oral argument that a carrier may, in principle, and in particular by virtue of a “special agreement” of the type envisaged by Article III of the Guadalajara Convention, assume obligations and thus liability greater than the terms of the Convention. Nonetheless, that liability must be based on the terms of the contract. I do not believe that the  “Important Notes” formed part of the contract between the respondent and the Appellants. It is clearly not a “special agreement” as envisaged by the Guadalajara Convention. Accordingly, the Appellants could not be held liable for gross negligence. I would allow the appeal on this ground also.
	Accordingly, I would allow the appeal and substitute an order dismissing the claim of the respondent.