Barclay v Penberthy

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.