1 On 2 May 2026, the claimant boarded a flight operated by the respondent company from Denpasar, bound for Singapore. Before departure, her luggage was checked in at the respondent’s check-in counter at the airport in Denpasar. Among the bags so checked was a Rimowa Salsa, a hard-shell suitcase.

2 She arrived in Singapore later that day. When she collected her luggage from the baggage carousel at Changi Airport, she noticed that one of the wheels of the Rimowa luggage was missing entirely. The wheel housing had been completely sheared off, and the hard-shell casing that encased and supported the wheel had cracked and broken away. The claimant promptly lodged a damaged baggage report through the respondent’s online portal on the same day.

3 The respondent arranged for the luggage to be collected by its vendor for assessment, and the bag was picked up from the claimant’s residence on 5 May. The very next day, on 6 May, the respondent informed the claimant that, following its vendor’s assessment, the damage sustained was irreparable. The respondent said that in accordance with its repair policy guidelines and after considering prior usage and depreciation, it was of the view that the luggage “no longer [held] any residual value”. This was because the model of the luggage was manufactured in 2016—and, indeed, the claimant had purchased the luggage that year on 31 May from the Rimowa store at Mandarin Gallery in Singapore. Nonetheless, the claimant made its first offer of compensation: $90. The claimant rejected the offer. The day after that, on 7 May, the respondent revised its offer upward to $218. This was again rejected by the claimant.

4 The claimant then requested that the luggage be assessed not by the respondent’s own vendor, but by Rimowa itself, and that the official assessment be shared with her. The respondent agreed to this, and on 22 May 2026, Rimowa issued a damage certificate letter. That letter made three things clear: first, that the damage consisted of cracks and missing material at the wheel housing mounting; second, that the damage was caused by rough or improper handling; and third, that the luggage was damaged beyond repair and could not be restored to its original condition. Rimowa also stated that the retail price of a comparable replacement luggage of the same brand was $1,630.

5 On 3 June, the respondent maintained its earlier offer of $218. The claimant insisted that the respondent compensate her in the full sum of $1,630. On 5 June, the respondent increased its offer to $327. The claimant declined. By the time of the hearing before this tribunal, the respondent had raised its offer to $652. That offer, too, was declined, the claimant preferring instead to have her claim determined by this tribunal.

6 The respondent did not dispute its liability for the damage to the luggage. What it contested was the claimant’s asserted entitlement to recover damages measured by the cost of a brand-new comparable replacement, at $1,630. The claimant contended that no second-hand market exists for the damaged luggage, and on that basis submitted:

7 The respondent, for its part, argued that the $1630 sought by the claimant “is the current retail price of a comparable new product, rather than the valuation of [her] Bag immediately before it was damaged. Replacing a ten-year-old, heavily used Rimowa with a brand-new retail model is considered a betterment”. It further asserted that the damaged luggage, being ten years old, must be regarded as having fully depreciated and therefore as having no residual value. On this basis, it argued that there was no recoverabl any actual loss. Accordingly, notwithstanding its numerous settlement offers, the claim ought to be dismissed.

8 The claimant’s rejoinder to the betterment argument was as follows:

9 The claimant also contended that the respondent’s depreciation argument was impermissible under Article 26 of the Schedule to the Carriage by Air (Montreal Convention, 1999) Act 2007 (the “Montreal Convention”), on the ground that such a policy produces a compensation figure below the actual proven loss and therefore operates as a provision tending to fix a lower limit of liability than that which the Convention permits.

10 I address first the claimant’s argument concerning Article 26 of the Montreal Convention. Put simply, Article 26 renders null and void any contractual provision between the parties that purport to absolve the carrier of liability altogether, or to limit compensation at a level inconsistent with the Convention’s own prescribed limits.

11 The respondent was doing neither of those things. It accepted liability to compensate the claimant for her losses arising from the damage to the luggage. The Montreal Convention does not, however, prescribe what rights to compensation are applicable in respect of such damage: see Article 29 of the Montreal Convention. That question fell to be answered by reference to the applicable principles of domestic law of the contracting state: see Zicherman v Korean Air Lines Co (1996) 516 US 217; 116 U.S. 217; applied in Evans v Air Canada [2023] NSWSC 1535 at [108]-[109], which was not raised on appeal in [2024] NSWCA 153 (see [16]) and (2025) 423 ALR 155; [2025] HCA 22 (see [3]). The respondent’s position—that the claimant’s actual loss is nil because the luggage has fully depreciated—was an argument about the quantum of recoverable loss to be determined by reference to the applicable principles under domestic law. It was not a provision tending to relieve the carrier of liability or to fix a lower limit of compensation within the meaning of Article 26.

12 The dispute being one of quantum, the appropriate starting point is the compensatory principle that damages are intended to place the successful claimant “as far as money can do it, in as good a situation” as she would have occupied had the wrong not been committed: see British Westinghouse Electric and Manufacturing Co. Ltd. v Underground Electric Railways Co. of London Ltd. [1912] AC 673 at 689 per Viscount Haldane LC. The question, then, is what sum of money would place the claimant, as far as money can do, in as good a situation as she would have been in had her luggage not been damaged beyond repair.

13 For chattel destroyed beyond repair, the normal measure of damages is the market value of that chattel at the time and place of its destruction: see James Edelman, McGregor on Damages (Sweet & Maxwell, 21st Ed, 2021) at para 37-063. The claimant is therefore entitled to recover the market value of her ten-year-old luggage at the time of its destruction in May 2026. One conventional means of identifying that market value is by reference to the cost of obtaining a replacement in an available market, which serves as a proxy for the present market value of the chattel at the time and place of destruction.

14 The parties agreed that there is no available market for a ten-year-old luggage of this model and size in Singapore. The claimant’s response to this reality was that if no second-hand equivalent can be obtained, then the only way to replace her loss is to buy a brand-new replacement. The respondent contended that awarding the cost of a new chattel in place of an old one places the claimant in a better position than she occupied before the damage was done.

15 I agree with the respondent on this point. The betterment does not sit well with the basic compensatory aim, which “is not physically to replace what the claimant has lost but to replace it financially, to make him whole in financial terms”—and if the claimant “is given the price of a new chattel, [s]he will be made more than whole”: see Voaden v Champion [2002] 1 Lloyd’s Law Reports 623 (“Voaden v Champion”) at [86]. It bears emphasis, moreover, that the relevance of replacement cost in the assessment of damages lies in its function as a proxy for the present market value of the destroyed chattel; the cost of replacement is not an end in itself. In this regard, the cost of a brand-new replacement is not a reasonable proxy for what was lost—that is, a chattel which is “old and second-hand and coming towards the end of its life”; and damages for its destruction “is not prima facie to be measured by the cost of a brand-new chattel, even where the market cannot supply a closer replica of what has been lost”: see Voaden at [87].

16 Two cases illustrate the application of these principles. In Voaden v Champion, the court held that the measure of damages for a lost pontoon with a remaining life expectancy of eight years was not the replacement cost of a new one with a 30-year useful life. Instead, damages were awarded at 8/30 of the price of the new pontoon. Similarly, in Singapore Bus Service (1978) Ltd v Gwee Sok Ai [1996] 3 SLR(R) 307, the Court of Appeal held that the replacement cost for a double-decker bus damaged beyond repair was to be assessed by taking the cost of a new bus at the time of destruction and apportioning it on a straight-line basis over 12 years, the period of permitted use. The Court of Appeal stated the applicable principle in the following terms (at [15]):

17 In the present case, the claimant bore the burden of proving her loss, but she only advanced one figure: $1,630, being the cost of a brand-new luggage of a comparable model. For the reasons set out above, she is not entitled under well-established legal principles to recover that sum. Beyond this figure, the claimant led no other evidence of loss by reference to any reasonable approximation of the market value of the destroyed luggage at the material time. In these circumstances, I award the claimant the sum of $5, which is a rough and ready estimate of loss suffered from damage to a ten-year-old piece of luggage of a brand well-regarded for its durability. I order the respondent to pay this amount to the claimant by 12 October 2026. I make no order as to costs or disbursements.

18 I observe in closing that the claimant would have fared considerably better in terms of outcome had she accepted the respondent’s latest offer of $652—or, for that matter, any of its earlier offers. Whether the respondent’s offer remains open despite this judgment is a matter for the respondent’s goodwill, particularly given that it has been put to the trouble and expense of these proceedings.