Photo: Wikipedia Commons
Photo: Wikipedia Commons

Posted by & filed under City News.

By ALEXANDER LEWIS

When Australians Vjeckoslav Matic and Matt Atkins boarded an Emirates flight to New York in 2012, they knew they were flying into a storm.

But it would be a different kind to the hurricane they’d been watching ravage their destination on TV screens throughout Sydney airport.

It was a legal tempest with the world’s largest airline that would envelop the environmental engineer and film sales professional for the next three years and test the sea wall of Australian consumer law.

It was no surprise to the pair that when their plane landed in Dubai to refuel, their following flight to New York was cancelled.

As per standard industry practice, Emirates gave them a coupon to stay in a hotel for three nights until the next available flight to New York.

But in the middle of that night, they received a knock on the door.

It was an Emirates staff member who told them the carrier, which in 2012 raked in US $575 million of profit, was no longer prepared to pay for their short stay in Dubai.

Instead they were told they would have to fly to an alternative destination that morning.

Their options were San Francisco, Washington DC and Dallas, all of which being more than 2400 kilometres away from the destination printed on their tickets.

With Washington airport likely to be also closed, and Dallas being the next closest destination to New York, the pair opted to fly there.

They then drove for five days in budget rental cars to New York, where they were moving to work.

It was the cost of car hire and accommodation during their journey from Dallas to New York that they sought from Emirates.

After attempts from Mr Matic and Mr Atkins to settle outside of court, in which they were prepared to settle for as little as $1000 reimbursement, they took Emirates to the ACT Civil and Administrative Tribunal (ACAT) and won.

Last May, ACAT ordered that Emirates pay the passengers $1891.68.

But not only did Emirates refuse to adhere to the judgement, they sued Mr Matic, Mr Atkins and ACAT in the Federal court later that month.

Emirates demanded that ACAT revoke its decision and claimed $11,000 in legal costs from the passengers.

“It was clear to us on that first night in Dubai, bullying was a tactic they were happy to use when dealing with customers,” Mr Matic said.

The airline cited the 1999 Montreal Convention, of which Australia is a signatory, which states in article 33 that “an action for damages must be brought […] either before the court of the domicile of the carrier or of its principal place of business.”

Emirates has argued that ACAT did not have the jurisdiction to deal with the case as it is not a court.

It costs more than $3500 to initiate proceedings in the Federal Court. A room for two people at the Copthorne Airport Hotel, where Mr Matic and Mr Atkins were initially accommodated, costs around $100 a night in today’s prices.

“Who would want to spend tens of thousands of dollars to try recover $2000 or less?” Mr Matic said.

“We dared to take them to ACAT and we won. They are now punishing us for that by suing us in the Federal Court, trying to inflict upon us high costs, and, in the process, sending a clear message to anyone else who would dare to seek similar compensation for their breaches of the Australian Consumer Law.”

Should Emirates win in the Federal Court, it could set a precedent rendering Australian consumer law powerless and allowing international airlines to bully Australian consumers into forgoing their right to receive the service they paid for.

Appeal president William Stefaniak, who presided over the ACAT hearing, said Emirates was creating a storm in a teacup.

“It does not seem to me to be good commercial sense to appeal this matter regardless of the technicalities of law,” Mr Stefaniak said.

“It is simply good business sense, and secondly, perhaps, a bit of a moral obligation to ensure that the customer is reasonably happy.”

“Most people in the position of Emirates would not spend thousands of dollars on counsel to fight a matter where they may not have a very definite chance of winning, where there does appear to be law against them and where common sense and public relations would indicate that it would be far more sensible settling.”

Just last week, Emirates customer service was criticised after passengers on EK419 “vomited with fear” due to the crew’s handling of the discovery of a “suspect package” on board which turned out to be a mobile phone.

Mr Matic, who now lives in Los Angeles with Mr Atkins, said they were shocked by Emirates’ persistence in pursuing the case.

“While we firmly believe we are entitled to the damages we were awarded, we can understand why a corporation would be motivated to challenge cases which might set a precedent,” Mr Matic said.

“To put those costs on to your customers is shocking. Then to seek damages after we offered a no-cost settlement is simply perplexing.”

“This is a cautionary tale for any Australian traveller who mistakenly believes that when they purchase in Australia tickets for international travel they are protected under Australian consumer law.”

Emirates denied it had any liability to the passengers in a statement issued to City Hub late yesterday afternoon.

“The liability of airlines to passengers is governed by international conventions which apply to international carriage.”

“The passengers chose to pursue their claim in an ACT tribunal which did not have jurisdiction to hear it and Emirates was compelled to bring a proceeding in the Federal Court to resolve the issue.”

A ruling is expected when the case is heard next in the Federal Court on August 4.

 

  • cdinoz

    Hasn’t this been spoken about before? There is a precedence too. The Aussie court would only apply had the flight that was cancelled arrived or departed from Australian soil?

    The flight to NY originated in Dubai. The flight to Dubai is irrelevant as is the point of sale of the ticker. Therefore, the airline was from the UAE and the legal jurisdictions were the USA and UAE.

    Isn’t that how the Montreal Convention was challenged?