HappyHerbsLtd(HH)isamanufactureranddistributorofnaturalandherbalremedies operatinginthe United States. Australian Wholesome Life Supplies Ltd (AWLS) is a Melbourne distributor of health supplementsandnaturalremedies.InJanuary 2018AWLSordered30,000boxesofDrSage'sSpecial Powders, a new natural remedy to combat fatigue and stress, from HH. The powders have taken the USmarketbystorm,andAWLSbelieves theywillbeequallysuccessfulinAustralia.Thesaleisagreed onterms FCALosAngeles(Incoterms2010), fordeliverybetween1Februaryand20June2018.

AWLS and HH agree that payment will be made via a commercial, irrevocable letter of credit.

In early February 2018, HH informed AWLS that the product was ready for delivery. After receiving notification from BLA that the credit is available, AWLS organised the shipment of the goods with Los AngelesAirways(LAA).On receiptofthegoodsfromHHon10June, LAAissuedanAirWaybill which detailsthatthegoodswouldbecarried on 12 JunefromLosAngeles toLondononanLAAflight LAV451,andfromLondon to Kuala Lumpur and then onto Melbourne on a Qantas flight QA021 to arrive on the 14 June. The Air Waybill recorded the receipt of 5 pallets and the total weight of the consignment as 545kg.

On receipt of the goods on 14 June AWLS is not happy. AWLS has discovered that the consignment is not in good condition. The powders are incredibly sensitive to moisture. While HH packed the goods with care and as advised by LAA, it appears that moisture somehow contaminated the cargo. The most likely explanation for the moisture's presence is that the cargo-hold temperature on the flight from Los Angeles to London was notproperlyregulated.Consequently,thepowders havesolidified.AWLSwasabletosellthese damagedgoods atadiscountedprice, butsufferedlosses, inclusiveoflossofprofits and the missing goods,amountingto$180,000.

Note: TheMontreal Convention 1999 applies to thisshipment of goods by air. Drawing on the rules of this convention and any relevant cases, respond to the following questions

1. AWLShascontactedQantas to complain about the damage. In response, Qantas has argued that it is not liable for the damage on the following grounds:

• Thegoodswhendamagedwerenotthe responsibility of Qantas, but LAA. Therefore, AWLS should pursue LAA.
• AWLSwillbeunabletoestablishthe negligenceofQantasoranyothercarrierandthereforeanyclaim under Article 18 will berejected.

Using the relevant provisions of the Montreal Convention and any relevant cases respond to these claims byQantas. In your response be sure to make clear whether you think AWLS has a valid claim for the damage to its cargo. [Indicative Marks: 8]