Air NZ wins lost-luggage case

Air New Zealand has won legal action against a Disputes Tribunal decision.

Air New Zealand has won its legal action against a Disputes Tribunal decision that the airline contended had wider implications for the aviation industry and around 3.6 billion annual international travellers.

The case centres on two passengers, whose real names have been substituted with Mr and Mrs Green, who travelled to England in November last year on an Air New Zealand flight to attend a significant event at one of that country's oldest and most respected institutions. When the couple arrived in London they found their suitcases had been left behind in Los Angeles and the luggage didn't turn up until nine days later.

Mrs Green claimed she was told by an Air New Zealand representative that the clothes they had lost would be replaced on a like-for-like basis and the couple spent more than $26,000 replacing the lost items.

Their travel insurer paid out $1900 in compensation and the couple brought a Disputes Tribunal claim for $15,000 in New Zealand against Air New Zealand for the costs of their baggage going astray.

Air New Zealand contended the tribunal didn't have jurisdiction to hear the claim as it arose out of the Montreal Convention, which is a multi-lateral treaty that sets rules relating to the international carriage of passengers, baggage and cargo. It said the convention limited the airline's liability to 1131 Special Drawing Rights (SDRS) which was about $2125 at the time of travel, and it added on another $300 in payment. The offer was not accepted by the couple.

The Disputes Tribunal found it had jurisdiction to hear the claim despite the convention because of the verbal assurance from a staff member that the couple's items would be replaced and it ordered the airline to pay $15,000.

However, the High Court in Christchurch has overruled that decision, saying the tribunal didn't have jurisdiction on the basis it claimed to have.

In a written judgment out yesterday, Justice Gerald Nation said counsel for Air New Zealand had made it clear in his submissions that the airline considered the outcome of the case involved important issues of principle and precedent.

- BusinessDesk