FRENCH CJ, GUMMOW, HAYNE, HEYDON, CRENNAN, KIEFEL AND BELL JJ
Matter No P55/2011
AARON BARCLAY APPELLANT
AND
ALEC PENBERTHY & ORS RESPONDENTS
Matter No P57/2011
ALEC PENBERTHY & ANOR APPELLANTS
AND
AARON BARCLAY & ORS RESPONDENTS
Barclay v Penberthy Penberthy v Barclay
[2012] HCA 40
2 October 2012
P55/2011 & P57/2011
ORDER
In Matter No P55/2011
1.Subject to orders 4 and 5, appeal dismissed.
2.Special leave be granted to the third respondents to cross‑appeal, the cross‑appeal be treated as instituted and heard instanter and dismissed.
3.The appellant pay the costs of the third respondents of the appeal, and the third respondents pay the costs of the appellant of the cross‑appeal, the costs to be set‑off.
4.The appellant and the first and second respondents, and the third respondents have leave, within 21 days of the date of these orders, to bring in agreed draft orders finally disposing of the appeal, including consequential orders dealing with the orders made in the Court of Appeal and with the further conduct of the trial in the Supreme Court.
5.In the absence of agreed draft orders as provided in order 4, the appellant and the first and second respondents, and the third respondents have leave, within 28 days of the date of these orders, to file written submissions as to the appropriate orders finally disposing of the appeal as indicated in order 4.
In Matter No P57/2011
1.Subject to orders 4 and 5, appeal dismissed.
2.Special leave be granted to the second respondents to cross‑appeal, the cross‑appeal be treated as instituted and heard instanter and dismissed.
3.The appellants pay the costs of the second respondents of the appeal, and the second respondents pay the costs of the appellants of the cross‑appeal, the costs to be set‑off.
4.The appellants and the first respondent, and the second respondents have leave, within 21 days of the date of these orders, to bring in agreed draft orders finally disposing of the appeal, including consequential orders dealing with the orders made in the Court of Appeal and with the further conduct of the trial in the Supreme Court.
5.In the absence of agreed draft orders as provided in order 4, the appellants and the first respondent, and the second respondents have leave, within 28 days of the date of these orders, to file written submissions as to the appropriate orders finally disposing of the appeal as indicated in order 4.
On appeal from the Supreme Court of Western Australia
Representation
B W Walker QC with H J Langmead SC and M D Rush for the appellant in P55/2011 and the first respondent in P57/2011 (instructed by DLA Piper Australia)
D J Fagan SC with S A Richards for the first and second respondents in P55/2011 and the appellants in P57/2011 (instructed by SRB Legal)
W A Harris SC with A Golem for the third respondents in P55/2011 and the second respondents in P57/2011 (instructed by Herbert…
Grounds of appeal
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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Details
AGLC
Barclay v Penberthy [2012] HCA 40
Case
[2012] HCA 40
Decision Date
CaseChat Overview and Summary
The High Court of Australia considered appeals arising from a plane crash that occurred during aerial testing of marine technology. The crash, caused by engine failure and the pilot's negligent response, resulted in the death of some employees of Nautronix (Holdings) Pty Ltd and injury to others, including the pilot, Mr. Penberthy, and an engineer, Mr. Barclay. Nautronix sought to recover damages for pure economic loss suffered due to the injuries and deaths of its employees, both in negligence and under the action *per quod servitium amisit*.
The central legal issues before the High Court were whether the action *per quod servitium amisit* survived as a distinct common law action in Australia, whether it had been absorbed into the tort of negligence, and if so, how damages for pure economic loss suffered by an employer due to injury to an employee should be assessed, particularly concerning remoteness and the rule in *Baker v Bolton*. The court also considered the circumstances under which an employer could recover damages for the loss of services of an employee.
The High Court determined that the action *per quod servitium amisit* continues to exist as a distinct common law action in Australia, separate from the tort of negligence. The court affirmed that employers can recover damages for pure economic loss resulting from the negligent injury or death of their employees, provided the loss is not too remote. The reasoning involved an analysis of the historical development of tort law and the specific nature of the *per quod* action, distinguishing it from claims for loss of profits. The court also addressed the rule in *Baker v Bolton*, which generally precludes recovery for the death of an employee, but the specific orders indicate that this rule was a point of contention and subject to further consideration.
Ultimately, the appeals were dismissed, with the High Court upholding the liability of Mr. Penberthy and Fugro in negligence and the action *per quod*. Mr. Barclay was found liable in the *per quod* action but succeeded in displacing the negligence finding against him. Special leave to cross-appeal on the issue of the rule in *Baker v Bolton* was granted but dismissed. The parties were given leave to agree on draft orders to finally dispose of the appeals, including consequential orders relating to the Court of Appeal and the further conduct of the trial, or to file written submissions if agreement could not be reached.
Orders
Orders of the court
In Matter No P55/2011
1. Subject to orders 4 and 5, appeal dismissed.
2. Special leave be granted to the third respondents to cross‑appeal, the cross‑appeal be treated as instituted and heard instanter and dismissed.
3. The appellant pay the costs of the third respondents of the appeal, and the third respondents pay the costs of the appellant of the cross‑appeal, the costs to be set‑off.
4. The appellant and the first and second respondents, and the third respondents have leave, within 21 days of the date of these orders, to bring in agreed draft orders finally disposing of the appeal, including consequential orders dealing with the orders made in the Court of Appeal and with the further conduct of the trial in the Supreme Court.
5. In the absence of agreed draft orders as provided in order 4, the appellant and the first and second respondents, and the third respondents have leave, within 28 days of the date of these orders, to file written submissions as to the appropriate orders finally disposing of the appeal as indicated in order 4.
In Matter No P57/2011
1. Subject to orders 4 and 5, appeal dismissed.
2. Special leave be granted to the second respondents to cross‑appeal, the cross‑appeal be treated as instituted and heard instanter and dismissed.
3. The appellants pay the costs of the second respondents of the appeal, and the second respondents pay the costs of the appellants of the cross‑appeal, the costs to be set‑off.
4. The appellants and the first respondent, and the second respondents have leave, within 21 days of the date of these orders, to bring in agreed draft orders finally disposing of the appeal, including consequential orders dealing with the orders made in the Court of Appeal and with the further conduct of the trial in the Supreme Court.
5. In the absence of agreed draft orders as provided in order 4, the appellants and the first respondent, and the second respondents have leave, within 28 days of the date of these orders, to file written submissions as to the appropriate orders finally disposing of the appeal as indicated in order 4.
Background
Background to the litigation
Something first should be said respecting the circumstances giving rise to the litigation.The facts Fugro Spatial Solutions Pty Ltd ("Fugro") was the holder of an Air Operator's Certificate issued by the Civil Aviation Safety Authority ("CASA") pursuant to the Civil Aviation Act 1988 (Cth) ("the Act") in respect of a Cessna 404 Titan Twin Engine Aircraft with the registration number VH‑ANV ("the Plane"). The certificate authorised the conduct of activities including aerial survey work. There has been no issue as to whether the flight in which the Plane crashed was authorised by that certificate. Fugro was a member of an international corporate group and was ultimately owned by a company in the Netherlands. Fugro carried on the business of providing air charter services for commercial purposes, including the testing and development of technology, from premises it occupied at Jandakot Airport, near Perth. Mr Alec Penberthy was employed by Fugro as a commercial pilot. Mr Aaron Barclay was an aeronautical engineer employed by Aeronautical Engineers Australia Pty Ltd ("AEA") and was an authorised person, within the meaning of the Civil Aviation Regulations 1988 made under the Act, to approve the design for a modification to or repair of an aircraft component. In July 2000, AEA was engaged to advise whether a sleeve bearing within an engine driven fuel pump in the Plane could be replaced locally. Mr Barclay advised that this could be done and he drafted the design drawing for the local manufacturer of the sleeve bearing, using an aluminium bronze alloy. The bearing was then manufactured and on 18 October 2000 was installed in the right engine of the Plane. The Plane then went back into service. Nautronix (Holdings) Pty Ltd ("Nautronix Holdings") held the whole of the issued share capital of Nautronix Limited ("Nautronix")[4]. These companies have related corporations in the United States. By assignment from Nautronix made in July 2006, Nautronix Holdings sued in the Supreme Court upon relevant claims of Nautronix.[4]Now named L-3 Communications Nautronix Limited. In 2003, Nautronix carried on the business of researching and developing marine technology, in particular, acoustic technology for subsea communications used in defence, oil and gas, and related industries. At its premises on Marine Terrace in Fremantle, Nautronix had about 100 employees. These included the Engineering Director, Mr Harry Protoolis; the Project Manager, Mr Steven Warriner; the software team leader, Mr Malcolm Cifuentes; the Project Manager, Mr Michael Knubley; and Mr Ozan Perincek, who was the Systems Engineer. Mr Protoolis was killed instantly in the crash and Mr Warriner died several months thereafter from his injuries. Messrs Cifuentes, Knubley and Perincek were on the flight and were injured but, with the pilot, Mr Penberthy, they survived. Nautronix was testing equipment of its design which was intended to indicate from aircraft the position of submarines and to provide communications with them. This was being done with a view to Nautronix selling the equipment to the Royal Australian Navy and the United States Navy. The testing involved flying the Plane, as modified by Fugro to accommodate the equipment and its operation, to a destination in the Indian Ocean west of Rottnest Island where there was a naval support surface vessel. Nautronix understood that there also was a submarine on the flight path of the Plane.
Evidence
Evidence Before The Court
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Decision
Reasons for decision
FRENCH CJ, GUMMOW, HAYNE, CRENNAN AND BELL JJ
HEYDON J
The result in Argent may be compared with that of the trial in Vaccaro v Giruzzi[75]. A company sought to recover damages for loss of services when its sole shareholder was injured in an automobile accident occasioned by the negligence of the defendant. As a result of the accident, the sole shareholder had required the services of an employee of the company, Mr Cava, for a period of three months to act as driver and assistant. Potts J rejected the submission that because this was a one‑man company, the measure of damages included a loss of profits suffered by the company. Potts J held that this circumstance did not qualify the general rule which denied recovery of loss of profits as too remote, and added[76]:"If great profits were to be made because of the servant's services, the loss could have been avoided by the employment of a substitute (as was the case here, where Mr Cava was employed). If it is argued that the services of the injured servant were so specialized (and this, I assume, is the basis of counsel for the plaintiff's emphasis on a one‑man company) that no substitute would have sufficed (which is not the case here), then the loss is too remote, as Genereux makes clear."The result in Vaccaro was that in the action by the company for damages for loss of services it was entitled to recover the amount of wages paid to the employee for the services over the period of three months but was not entitled to damages for loss of profits.[75](1992) 93 DLR (4th) 180.[76](1992) 93 DLR (4th) 180 at 186.Conclusions and orders Special leave should be granted to Nautronix to cross‑appeal in each appeal against the holding of the Court of Appeal respecting the rule in Baker v Bolton. But each cross‑appeal should be dismissed with costs. The result in this Court is that Mr Penberthy and Fugro remain liable in negligence to Nautronix and are liable also in the action per quod. Mr Barclay succeeds, without opposition, in displacing the holding against him on the negligence claim, but is liable on the per quod action. The appellants should pay the costs of Nautronix of the appeals in this Court, to be set‑off against the orders on the cross‑appeals. This outcome requires some complexity in the further orders to be made on the appeals. The appropriate parties should have 21 days within which to agree and bring in draft orders fully disposing of the appeals, including consequential orders dealing with the orders made in the Court of Appeal and with the further conduct of the trial in the Supreme Court. In the absence of agreement, written submissions as to the appropriate orders should be filed within 28 days. In each appeal, the orders now to be made should be as follows:In appeal No P55 of 2011(1)Subject to orders 4 and 5, appeal dismissed.(2)Special leave be granted to the third respondents to cross‑appeal, the cross‑appeal be treated as instituted and heard instanter and dismissed.(3)The appellant pay the costs of the third respondents of the appeal, and the third respondents pay the costs of the appellant of the cross‑appeal, the costs to be set‑off.(4)The appellant and the first and second respondents, and the third respondents have leave, within 21 days of the date of these orders, to bring in agreed draft orders finally disposing of the appeal, including consequential orders dealing with the orders made in the Court of Appeal and with the further conduct of the trial in the Supreme Court.(5)In the absence of agreed draft orders as provided in order 4, the appellant and the first and second respondents, and the third respondents have leave, within 28 days of the date of these orders, to file written submissions as to the appropriate orders finally disposing of the appeal as indicated in order 4.In appeal No P57 of 2011(1)Subject to orders 4 and 5, appeal dismissed.(2)Special leave be granted to the second respondents to cross‑appeal, the cross‑appeal be treated as instituted and heard instanter and dismissed.(3)The appellants pay the costs of the second respondents of the appeal, and the second respondents pay the costs of the appellants of the cross‑appeal, the costs to be set‑off.(4)The appellants and the first respondent, and the second respondents have leave, within 21 days of the date of these orders, to bring in agreed draft orders finally disposing of the appeal, including consequential orders dealing with the orders made in the Court of Appeal and with the further conduct of the trial in the Supreme Court.(5)In the absence of agreed draft orders as provided in order 4, the appellants and the first respondent, and the second respondents have leave, within 28 days of the date of these orders, to file written submissions as to the appropriate orders finally disposing of the appeal as indicated in order 4.
Ratio Decidendi
Legal Principle Established
Established by:
FRENCH CJ, GUMMOW, HAYNE, CRENNAN AND BELL JJ,
HEYDON J