Edwards v Endeavour Energy; Precision Helicopters Pty Limited v Endeavour Energy; Endeavour Energy v Precision Helicopters Pty Limited (No. 4)
[2013] NSWSC 1899
•19 December 2013
Supreme Court
New South Wales
Medium Neutral Citation: Edwards and Ors v Endeavour Energy and Others; Precision Helicopters Pty Limited v Endeavour Energy and Ors; Endeavour Energy v Precision Helicopters Pty Limited and Anor (No. 4) [2013] NSWSC 1899 Hearing dates: 7 May 2012, 8 May 2012, 9 May 2012, 11 May 2012, 14 May 2012, 15 May 2012, 17 May 2012, 22 May 2012, 23 May 2012, 24 May 2012, 25 May 2012 Decision date: 19 December 2013 Before: Johnson J Decision: Parties to bring in short minutes to give effect to this judgment
Catchwords: CIVIL LIABILITY - helicopter undertaking aerial power line inspection at St Albans for Endeavour Energy - helicopter owned and operated by Precision Helicopters - wire strike with disused Telstra catenary wire - helicopter lands but rolls over - Endeavour Energy observer suffers head injury and brain damage - observer not wearing helmet - whether observer a "passenger" for purposes of Civil Aviation (Carriers' Liability) Act 1967 (NSW) - held he was not a "passenger" - liability of Endeavour Energy as employer - whether Telstra and Precision Helicopters liable to injured man - s.151Z Workers Compensation Act 1987 - claim by Precision Helicopters against Endeavour Energy for breach of contract - cross-claim by Endeavour Energy claiming indemnity under contract - s.151Z apportionment of responsibility as between Endeavour Energy (90%) and Precision Helicopters (10%) - Precision Helicopters successful in contract claim - claim in contract by Endeavour Energy rejected Legislation Cited: Civil Aviation (Carriers' Liability) Act 1959 (Cth)
Civil Aviation (Carriers' Liability) Act 1967 (NSW)
Civil Liability Act 2002
Evidence Act 1995
Limitation Act 1969
Telecommunications Act 1997 (Cth)
Workers Compensation Act 1987
Civil Aviation Regulations 1988 (Cth)Cases Cited: Adeels Palace Pty Limited v Moubarak [2009] HCA 48; 239 CLR 420
Agtrack (NT) Pty Limited v Hatfield [2003] VSCA 6; 7 VR 63
Agtrack (NT) Pty Limited v Hatfield [2005] HCA 38; 223 CLR 251
Air Link Pty Limited v Paterson [2005] HCA 39; 223 CLR 283
Andar Transport Pty Limited v Brambles Limited [2004] HCA 28; 217 CLR 424
Bader v Jelic [2011] NSWCA 255
Bennett v Minister of Community Welfare [1992] HCA 27; 176 CLR 408
Burnie Port Authority v General Jones Pty Limited [1994] HCA 13; 179 CLR 520
Caltex Refineries (Qld) Pty Limited v Stavar [2009] NSWCA 258; 75 NSWLR 649
Chapman v Hearse [1961] HCA 46; 106 CLR 112
Clout Industrial Pty Limited (In Liquidation) v Baiada Poultry Pty Limited [2004] NSWCA 89; 61 NSWLR 111
Commonwealth v Amann Aviation Pty Limited [1991] HCA 54; 174 CLR 64
Council of the City of Greater Taree v Wells [2010] NSWCA 147
Czatyrko v Edith Cowan University [2005] HCA 14; 79 ALJR 839
Disley v Levine [2001] EWCA Civ 1087; [2002] 1 WLR 785
English v Rogers [2005] NSWCA 327
Evans v The Queen [2007] HCA 59; 235 CLR 521
Fellowes (or Herd) v Clyde Helicopters Limited [1997] AC 534
Florida Hotels Pty Limited v Mayo [1965] HCA 26; 113 CLR 588
Gaskin v Ollerenshaw [2012] NSWCA 33
Graham Barclay Oysters Pty Limited v Ryan [2002] HCA 54; 211 CLR 540
Grant v Royal Rehabilitation Centre Sydney [1999] NSWCA 250; 47 NSWLR 263
Harmer v Hare [2011] NSWCA 229
Hughes v Lord Advocate [1963] AC 837
J Blackwood & Son v Skilled Engineering [2008] NSWCA 142
Jones v Dunkel [1959] HCA 8; 101 CLR 298
Koehler v Cerebos (Australia) Limited [2005] HCA 15; 222 CLR 44
Kondis v State Transport Authority [1984] HCA 61; 154 CLR 672
Laroche v Spirit of Adventure (UK) Limited [2009] EWCA Civ 12; [2009] QB 778
Latham v Johnson (1913) 1 KB 415
Leonard v Smith (1992) 27 NSWLR 5
Lipman v Clendinnen [1932] HCA 24; 46 CLR 550
McLean v Tedman [1984] HCA 60; 155 CLR 306
Minister Administering the Environmental Planning and Assessment Act 1979 v San Sebastian Pty Limited (1983) 2 NSWLR 268
Mount Beauty Gliding Club Inc v Jacob [2004] VSCA 151; 10 VR 312
Neindorf v Junkovic [2005] HCA 75; 80 ALJR 341
Novakovic v Stekovic [2012] NSWCA 54
Oxley County Council v MacDonald [1999] NSWCA 126
Pester v Marsland (1997) 7 Tas R 233
Podrebersek v Australian Iron and Steel Pty Limited [1985] HCA 34; 59 ALJR 492
Pollard v Baulderstone Hornibrook Engineering Pty Limited [2008] NSWCA
Prichard v Trius Constructions Pty Limited [2011] NSWSC 749
Roads and Traffic Authority of NSW v Dederer [2007] HCA 42; 234 CLR 330
Robinson v Harman (1848) 154 ER 363
Rosenberg v Percival [2001] HCA 18; 205 CLR 434
Sheather v Country Energy [2007] NSWCA 179
Shire of Gin Gin v Coombe [2009] WASCA 92; 52 MVR 382
State Wide Developments Pty Limited v Higgins [2011] NSWCA 35
Sullivan v Moody [2001] HCA 59; 207 CLR 562
Tame v New South Wales [2002] HCA 35; 211 CLR 317
Thornton v Sweeney [2011] NSWCA 244
United Airlines Inc v Sercel Australia Pty Limited [2012] NSWCA 24
Vairy v Wyong Shire Council [2005] HCA 62; 223 CLR 422
Waverley Council v Ferreira [2005] NSWCA 418
Williams v Twynam Agriculture Group Pty Limited [2011] NSWSC 1098
Wyong Shire Council v Shirt [1980] HCA 12; 146 CLR 40Texts Cited: --- Category: Principal judgment Parties: In Matter 2008/289264
Plaintiffs:
Julie Patricia Edwards
Connor James Edwards
Rubyanna Belle Edwards (by her tutor Julie Patricia Edwards)Defendants:
Endeavour Energy
Precision Helicopters Pty Limited
Telstra Corporation Limited
Sydney West Local Health Network trading as Westmead HospitalIn Matter 2009/297468
Plaintiff:
Precision Helicopters Pty LimitedDefendants:
Endeavour Energy
Telstra Corporation Limited
Sydney West Local Health Network trading as Westmead HospitalIn Matter 2010/147165
Plaintiff:
Defendants:
Endeavour Energy
Precision Helicopters Pty Limited
Telstra Corporation LimitedRepresentation: Counsel:
Mr KW Andrews (Julie Patricia Edwards,
Connor James Edwards,
Rubyanna Belle Edwards (by her tutor Julie Patricia Edwards))Mr RS McIlwaine SC; Mr BAP Kelleher (Endeavour Energy)
Mr RS Ashton; Mr DA Lloyd (Precision Helicopters Pty Limited)
Mr DJ Fagan SC; Mr J Downing (Telstra Corporation Limited)
Mr SA Woods (Sydney West Local Health Network trading as Westmead Hospital)
Solicitors:
WH Parsons & Associates (Julie Patricia Edwards, Connor James Edwards,
Rubyanna Belle Edwards (by her tutor Julie Patricia Edwards))Moray & Agnew (Endeavour Energy)
Riley Gray-Spencer Lawyers (Precision Helicopters Pty Limited)
HWL Ebsworth (Telstra Corporation Limited)
Gild Insurance Litigation Pty Limited (Sydney West Local Health Network trading as Westmead Hospital)
File Number(s): - Publication restriction: ---
Judgment
JOHNSON J: The present proceedings arise out of a helicopter crash at St Albans on 4 April 2006. Mr Simeon Edwards, a person being carried on the helicopter at the time of the crash, suffered head injuries and very significant brain damage as a result of the crash. The helicopter was badly damaged. A range of proceedings have resulted whereby various parties seek damages for personal injury or loss, or orders by way of contribution or indemnity, arising from the events of 4 April 2006.
At the time of the crash, the helicopter was being utilised to inspect power lines in advance of the 2006-2007 bushfire season. The helicopter was owned and operated by Precision Helicopters Pty Limited ("Precision"). The inspection was being undertaken as part of a contractual arrangement between Precision and Integral Energy, now Endeavour Energy ("Endeavour"). Mr Edwards was an employee of Endeavour. The crash resulted when the skid of the helicopter caught a catenary wire owned by Telstra Corporation Limited ("Telstra").
The Parties
Claims by the Edwards Family
In 2008, proceedings for damages were commenced by Statement of Claim filed on behalf of Simeon Edwards (by his tutor Julie Patricia Edwards, his wife).
Proceedings for damages for nervous shock were also brought by Julie Patricia Edwards and the children of the marriage, Connor James Edwards and Rubyanna Belle Edwards (then with Ms Edwards as tutor in each case).
On 16 September 2011, Harrison J approved a compromise as between Mr Edwards and other parties to the litigation, and noted that Mr Edwards discontinued the whole of the proceedings which he had initiated.
On 7 May 2012, I commenced to hear the proceedings brought by Ms Edwards and the Edwards children, together with related proceedings which I will mention shortly. In the course of the hearing, the Court was informed that Ms Edwards had settled her claim with other parties.
The hearing of the claims by the Edwards children proceeded before me. As a result of an order made by Harrison J on 16 September 2011, the hearing of their claims was confined to the question of liability only. The question of the children's entitlement to damages for mental harm and the question of assessment of damages are to be determined separately, in the event that liability is established.
The claim by the Edwards children is a claim for nervous shock against four Defendants:
(a) Endeavour;
(b) Precision;
(c) Telstra; and
(d) Sydney West Local Health Network trading as Westmead Hospital ("Westmead Hospital").
The claim by the Edwards children against Westmead Hospital arises from the admission of Mr Edwards to that hospital on 4 April 2006 as a result of injuries sustained in the helicopter accident. On 16 April 2006, Mr Edwards suffered a hypoxic event as a result of an admitted breach of duty of care by Westmead Hospital. Given the settlement of the claim by Ms Edwards and the limited issue for determination of the children's claims, it will not be necessary to make any findings in this judgment concerning the hypoxic event. It is sufficient to note that such an event occurred, which serves to explain the addition of Westmead Hospital as a party to the litigation.
On 12 March 2013, an Amended Statement of Claim was filed by leave to reflect the fact that Connor James Edwards had turned 18 years, and it was no longer necessary for his claim to be advanced by a tutor.
Claim by Endeavour
Endeavour commenced proceedings against Precision and Telstra being a claim for indemnity under s.151Z(1)(d) Workers Compensation Act 1987 ("WC Act").
Claim by Precision
Precision filed a Statement of Claim bringing proceedings against:
(a) Endeavour for damages for breach of contract with respect to the damage to the helicopter and loss of its use, and with respect to its liability (if any) for Endeavour's claim under s.151Z WC Act and/or the claim by members of the Edwards family;
(b) Telstra for indemnity or contribution with respect to claims by members of the Edwards family;
(c) Westmead Hospital for indemnity or contribution with respect to claims by members of the Edwards family.
Endeavour cross-claims against Precision alleging that an indemnity clause in the contract with Precision entitled Endeavour to a complete indemnity for any liability it has arising from the helicopter crash.
As part of the pretrial case management process, I made orders on 3 April 2012 that the various related proceedings be heard concurrently and that evidence in one be evidence in the other proceedings.
The Hearing and Evidence Adduced at the Hearing
The hearing of the various associated proceedings commenced before me on 7 May 2012. Mr KW Andrews of counsel appeared for Ms Edwards and the Edwards children. Mr RS McIlwaine SC and Mr BAP Kelleher of counsel appeared for Endeavour. Mr RS Ashton and Mr DA Lloyd of counsel appeared for Precision. Mr DJ Fagan SC and Mr J Downing of counsel appeared for Telstra.
At the ensuing hearing, a substantial volume of documentary evidence was tendered. A limited number of witnesses were called to give evidence, and few of them were cross-examined at any length.
The witnesses who were called to give evidence were as follows:
(a) Witnesses called for Endeavour -
(i) Peter Inman (owner of the property at Lower Macdonald where the helicopter crash occurred) (T94);
(ii) Susan Inman (owner of the property at Lower Macdonald where the helicopter crash occurred) (T95-96);
(iii) Steven Collins (the Endeavour inspector on board the helicopter at the time of the crash) (T103-114);
(iv) Johannes Langerak (an Endeavour employee involved in the April 2006 inspection, although not present on the helicopter when it crashed) (T115-127).
(b) Witnesses called for Precision -
(i) David Alan Carter (the Precision helicopter pilot flying the helicopter at the time of the crash) (T133-172);
(ii) Andrew Lawrence Horne (Operations Manager with Precision) (T245-247).
(c) Witnesses called for Telstra -
(i) Walter Renato Bednar (Technical Project Specialist with Telstra) (T173-174);
(ii) Jeffrey Robert Brock (a medical practitioner, qualified Army pilot and experienced aviation accident investigator) (T200-201).
(d) Concurrent evidence was given by expert aviation witnesses, Mark Ogden (retained by Endeavour) and Lachlan Macarthur-Onslow (retained by Precision) (T278-312).
In addition, on 14 May 2012, the Court undertook a view for the purpose of s.53 Evidence Act 1995 at the scene of the helicopter crash at 707 Settlers Road, Lower Macdonald, St Albans in the presence of counsel and solicitors for the parties. The Court may draw any reasonable inference from what was seen during the view: s.54 Evidence Act 1995; Evans v The Queen [2007] HCA 59; 235 CLR 521 at 576 [200].
By consent, Mr McIlwaine SC noted that Mr Edwards was not able to give evidence at the trial and that he has no recollection of any relevant events. Other counsel accepted that this was the position and that no submission would be made in this respect in accordance with the principle in Jones v Dunkel [1959] HCA 8; 101 CLR 298 (T101-102).
There was little factual dispute in the case. As I have said, few witnesses were called and cross-examination of witnesses was relatively confined. No witness was cross-examined upon the basis that any part of the evidence of the witness should be disbelieved.
The resolution of the issues requiring determination involves an assessment of the limited oral evidence taken with the substantial documentary evidence, and application of relevant legal principles to the various claims and counterclaims made by the parties.
Areas of Agreement Between the Parties
The parties reached agreement concerning quantum in relation to various issues in the proceedings.
With respect to the notional value of Mr Edwards' claim (relevant to the s.151Z WC Act issue), Mr McIlwaine SC informed the Court of the following agreement between the parties (T4.1):
"It has been agreed for the purposes of the 151Z proceedings that the notional value of the claim for personal injury, if one had have been brought by Mr Edwards, is $16 million inclusive of fund management, plus costs assessed by reference to the Civil Liability Act 2002 as amended and $1.7 million inclusive of fund management plus costs when assessed by reference to the Workers Compensation Act 1987 ..."
In relation to the claim by Precision arising from damage to the helicopter hull, the Court was informed that there was agreement between the parties that the value of the loss of the hull was $420,000.00 (T312.44).
With respect to Precision's claim for loss of business arising from the damage to the helicopter, the Court was informed that the parties had agreed that the figure for this claim was $70,000.00 (T313.4).
There are, of course, live issues concerning Precision's entitlement to these sums.
The practical and helpful approach adopted by the parties in reaching agreement concerning these figures has served to save hearing time and reduce the task of the Court.
The real issues in dispute in the proceedings concern liability and, if liability is established, apportionment of responsibility as between parties held to be liable.
Principal Findings of Fact
What follows constitutes my principal findings of fact. There are virtually no areas of factual contest. Where there is any factual dispute, I will record the controversy and my conclusion with respect to it.
Reference will be made later in the judgment to other factual matters, which are best considered in the context of the submissions to which they relate.
The Scene of the Accident
In 2006, Endeavour (then Integral Energy) owned and maintained power distribution lines in the lower valley of the Macdonald River, a tributary of the Hawkesbury River. A section of the Macdonald River valley, near to the property owned by Mr and Mrs Inman at 707 Settlers Road, Lower Macdonald, St Albans ("the Inmans' property"), is oriented generally north-south.
In this location, Endeavour maintained a high voltage line running north-south down the centre of the valley. Connected to this was an Endeavour spur line which ran in an easterly direction from the high voltage line for about 225 metres onto the Inmans' property.
The Inmans' property comprises relatively flat undulating paddocks west of the lines and a gradual inclination east of the lines up to Settlers Road. Settlers Road is aligned along the edge of the cleared river flats, marking their eastern boundary. It follows a winding course along the foot of hills which define the east side of the river valley.
The Inmans' house is located on the south side of a roughly triangular cleared paddock area which constitutes an indentation into the hills at the east margin of the river flats. This triangular area measures approximately 250 metres along its south side and approximately 500 metres along its north-east side. These two sides are bound by wooded slopes to the south and north-east respectively. To the west, the triangular paddock area opens out onto broader cleared land extending to the river bank.
Settlers Road follows the southern boundary of this cleared area. It makes a tight bend cutting across the eastern point of the triangular paddock area and then runs along the north-eastern boundary of that area.
The survey in evidence shows that the cleared triangular paddock area is mostly at a height above sea level of between two and four metres. To the south of the area, the wooded hillside rises steeply to a height above sea level of 150 metres. To the north-east, hills rise steeply to a height of over 100 metres. On both sides, some steep exposed sandstone bluffs are visible on the slopes.
The Private Power Line on the Inmans' Property
The Endeavour spur line referred to at [32] above terminated approximately 100 metres to the north of the triangular paddock area just described.
From that point, a private power line owned by Mr and Mrs Inman extended to their house. It was about 450 metres in length overall.
In 1990, Mr and Mrs Inman caused a private power line to be constructed, which ran from the Endeavour Substation 1945 (located on Pole 32 situated on the northern part of their property). The power line was supported above ground by seven poles, numbered south to north, D57 to D51. These poles ran from the Inmans' property north, on the eastern side of the property, to connect with the substation.
For approximately the first 80 metres, the private power line followed a southerly course through trees. From there, it proceeded in a south-easterly direction for about 120 metres, parallel to the north-east boundary of the triangular paddock area and about 20 metres in from the fence line. The power line then made a turn away from the north-east boundary and proceeded southerly across the paddock for approximately another 120 metres. Finally, it changed direction slightly to the south-west and continued a further 140 metres to the vicinity of some out buildings near the Inman's property.
The Telstra Catenary Wire on the Inmans' Property
At the time of the helicopter crash in April 2006, there was also strung across this triangular paddock a single catenary wire owned by Telstra, which was suspended between two poles. The southerly pole, No. 761, was about 40 metres to the south of the Inmans' property. The northerly pole, No.769, was on the opposite side of the triangular paddock area, about halfway along the north-east boundary of it. Thus, the catenary wire was suspended across the triangular area, running in a north-easterly direction. It was approximately 250 metres long.
The catenary wire lay to the east of Mr and Mrs Inmans' private power line. At its closest point, at the south end of the power line, the catenary wire was offset by slightly less than 10 metres. About halfway across the paddock, the separation was about 10 metres. Further to the north-east from that point, the line of the private power supply diverged to the west and the separation was greater.
The catenary wire was about 12 metres (or 40 feet) above ground level. The private power line comprised two pairs or wires (four lines in total) which were attached near the top of poles which were about seven-and-a-half metres (or 25 feet) high.
Telstra's catenary wire had, in earlier years, been used to support a phone cable which had also been suspended between poles Nos. 761 and 769. Some time between November 1995 and September 2000, the Telstra phone cable had ceased to be used.
In the interval between September 2000 and 2 August 2004, Telstra had erected a series of poles along the verge of Settlers Road, around the southern and north-eastern boundaries of the triangular paddock. Telstra had strung a replacement telephone cable on these poles.
Consequently, the catenary wire, which remained suspended across the triangular paddock, had been redundant from, at the latest, September 2000.
Telstra's line inspector, Robert Marshall, had noted in September 2000, that the catenary wire was unused and could be recovered. However, this was recorded expressly as a maintenance matter, and was evidently not treated as having any priority or urgency. The telephone service line was lying in the paddock.
In about 2002, Mrs Inman contacted Telstra and requested that the telephone service line lying in the paddock be removed. She was told by Telstra that it was not intended to refix the telephone service line to the catenary wire "as it wasn't worth it".
In May 2002, Mr and Mrs Inman noticed that the telephone service line had been rerouted along the line of Settlers Road.
On 2 August 2004, the two poles between which the catenary wire was suspended were again inspected by Telstra. The disused catenary wire was not removed.
In July 2005, a Telstra work order was issued for a replacement of Pole 769 at the north end of the catenary wire.
On 2 August 2005, Telstra issued a work order to replace one of these poles carrying the catenary wire (Exhibit EE2, pages 1856-1862). The job order described the pole in a manner which indicated that it was condemned, and was to be removed and replaced (Exhibit TC8, page 1177; Exhibit EE2, page 1862).
One of the poles was removed and replaced some time prior to 7 December 2005 (Exhibit EE2, page 1860). At that time, the catenary wire was not removed, but was reconnected to a pole, and remained suspended across the Inmans' property, about 10 metres above ground, in close proximity to the Inmans' private power lines (Exhibit EE2, page 1787). The catenary wire remained in that location until the accident on 4 April 2006.
As will be seen, submissions were made for Endeavour and the Edwards children that the failure to remove the catenary wire by July 2005 (if not earlier) was highly significant on the question of Telstra's liability. On the other hand, Telstra contends that the failure to remove the catenary wire at this time was irrelevant to foreseeability of risk of aerial collision and to questions of duty of care, scope of duty and breach. I will return to these issues later in the judgment.
The evidence reveals that Telstra employees were regularly in the vicinity of the Inmans' property and the Lower Macdonald/St Albans area generally. At the time of the helicopter crash on 4 April 2006, there were two Telstra employees on a fault repair nearby. These employees attended the scene of the accident immediately afterwards.
Shortly after the accident on 4 April 2006, and because of it, Telstra removed the catenary wire from the Inmans' property. This was done quickly, easily and cheaply (at a cost of $2,988.00) (Exhibit EE2, pages 1869-1874, 1888-1890; Exhibit EE2, page 185, Q/A2; page 191, Q/A10).
Inspections by Endeavour of Power Supply Infrastructure and Contractual Arrangement Between Precision and Endeavour
In each of 2003, 2004 and 2005, Endeavour undertook a program of inspecting its power lines through rural areas from the air, using a helicopter. The inspections were carried out between April and June each year. The purpose was to identify the intrusion of any tree growth onto the lines and to identify any faults with the wires, insulators, poles and cross arms of the power lines.
For this purpose, Precision and Endeavour entered into a contract on 20 August 2003, under which Precision agreed to supply suitable helicopters and a competent experienced pilot to carry out low-level aerial inspection of Endeavour's power lines, as part of Endeavour's pre-summer bushfire patrols conducted in the northern region of New South Wales.
The contract was for a period of three years from 1 June 2003.
The contract provided for Endeavour to supply to the pilot geographic maps showing the lines to be inspected and any hazards. It further provided for the pilot to be accompanied on inspection flights by two Endeavour employees, one to act as "inspector" and the other as "observer". The role of observer and inspector were described in Clause 5.1.1 of the contract as follows:
"The flight crew will normally consist of the pilot, an observer to assist the pilot, and an inspector.
The function of the observer, seated beside the pilot, is primarily to assist the pilot by providing advance warning of approaching hazards, tracking flight development to determine changing risks and recording the condition of the power line.
The observer shall be conversant with the overhead power line route and potential hazards to enable the maximum assistance to be provided to the pilot.
The inspector, seated in the rear cabin, should be suitably experienced in line inspection work and shall be conversant with Integral Energy [Endeavour] construction standards.
The inspector's role is primarily to assess the condition of power line structures, conductors and conductor vegetation clearance."
The practical application of this contractual provision would see the Precision pilot occupying the front right-hand seat of the helicopter. The "observer" sat in the front left-hand seat and the "inspector" in the right-hand rear seat. The observer sitting next to the pilot would assist with identifying the power lines to be inspected, and with keeping a lookout for any hazards which might interfere with safe flight. The inspector in the rear seat of the helicopter would observe the power lines as the helicopter flew past, noting defects and maintenance requirements.
In 2003, 2004, 2005 and 2006, Endeavour had conducted extensive public awareness campaigns in the print media about the use of helicopters to conduct inspections of its overhead power lines (Exhibit EE2, pages 624-743).
Events Leading to the Inspection Flight on 4 April 2006
On 28 March 2006, Mr Horne, the Operations Manager for Precision, attended a briefing at Endeavour's Penrith office with a number of Endeavour employees, including Mr Edwards, a tree-management officer, and Martin Healy, an Endeavour work foreman. Mr Healy was the Endeavour staff member with whom Mr Horne liaised for practical purposes associated with the pre-bushfire season aerial inspections. The meeting on 28 March 2006 was the pre-briefing for the 2006 pre-summer bushfire inspections. The topics discussed on that day included the area of operations, map formats, flight duration, defect identification and overhead line defects, transfer of flight dockets and risk assessment forms.
On 2 April 2006, Mr Horne drove a Precision refuelling truck to a refuelling point at Ebenezer, in the north-west of Sydney which was to be used for the purpose of aerial inspections. In that refuelling truck were two helmets, a Gentex SPH4 and a Gentex SPH5. Mr Horne left the refuelling truck at Ebenezer with the helmets inside. I accept that Mr Horne did not tell any Precision or Endeavour employee that the helmets were on the refuelling truck.
Mr Carter was employed by Precision as a helicopter pilot. He had qualified as a commercial helicopter pilot with low-level training in February 1998. Between 1999 and 2003, Mr Carter was employed in the Kimberley region of Western Australia conducting tourist flights, and performing pilot services for mining related companies and Telstra. Between November 2002 and February 2003, he had carried out bushfire piloting services in the Nowra and Snowy Mountain regions.
Between March 2004 and May 2008, Mr Carter was a helicopter pilot for Precision, flying mainly Bell 206 and some Robinson R22 type helicopters in New South Wales, predominantly with respect to power line inspections.
As at 4 April 2006, Mr Carter had approximately 2,760 hours of helicopter flying time, of which about 999 hours were in low-level environments. Prior to April 2006, Mr Carter had flown approximately 50 days of power line jobs for Endeavour. He had also flown 42 days for Country Energy.
On 3 April 2006, Mr Carter flew Precision's Bell helicopter 206BIII VH-J1V from Precision's base at Coffs Harbour to the Endeavour depot at Penrith. After arrival at the Penrith depot, Mr Carter attended a meeting there with Endeavour employees, including Mr Edwards. A broad discussion took place concerning the power line inspection work to be undertaken. He prepared the helicopter for power line inspection work. This included removal of the helicopter's rear right-hand side door to allow the Endeavour inspector to be seated behind the pilot, to obtain a better view of the power lines.
Mr Carter then undertook an aerial power line inspection on 3 April 2006 in which Mr Edwards acted as observer and another Endeavour employee, Mr Langerak, acted as inspector.
The Flight of 4 April 2006
On the morning of 4 April 2006, Mr Carter flew the helicopter from the Endeavour Penrith depot to the Ebenezer refuelling point. He was accompanied by Mr Langerak and two photographers, apparently engaged by Endeavour.
According to Mr Carter, whose evidence I accept, Mr Edwards had a map or maps of the area and they looked at these together at Ebenezer. Mr Carter recalled that there were two sets of maps, one on a large scale showing the whole area to be flown, and the other on a much smaller scale with all the power lines recorded on it. He said that he looked at the maps to get an overview and general understanding of the area where he was required to fly the helicopter, and that his usual practice was to study the maps and to take notes of any hazards such as power lines or Telstra lines, and that the presence of overhead wires was an obvious hazard for low-level flying. I accept that the maps used in this briefing are those contained in Exhibit EE2, pages 801 and 802.
Mr Carter had flown helicopters on two occasions prior to 4 April 2006 in the Lower Macdonald area, but he had never flown before in the area of 707 Settlers Road, Lower Macdonald.
When the helicopter departed Ebenezer after a morning tea break before 10.00 am on 4 April 2006, Mr Carter occupied the pilot's seat on the front right-hand side, Mr Edwards sat in the front left-hand seat as observer and another Endeavour employee, Mr Collins, occupied the rear right-hand seat as inspector. Catherine Leenman, a photographer retained by Endeavour, was seated in the rear left-hand seat. Ms Leenman was to take photographs of Mr Edwards for a profile to be published about him for an internal Endeavour publication.
Of the four persons on board the helicopter, only Mr Carter wore a helmet. The two helmets brought by Mr Horne remained in the refuelling truck (see [64] above). The evidence of Mr Horne, Mr Carter and Mr Collins indicates that Mr Horne did not tell anyone else that the helmets were in the refuelling truck.
None of the Endeavour personnel on the helicopter requested a helmet prior to the inspection flight. Mr Carter was aware the use of helmets was a requirement of Endeavour for its employees. However, Mr Carter did not believe that he had authority to order any Endeavour employee to wear a helmet.
The Manoeuvres Before the Wire Strike
Mr Carter flew the helicopter to the left of the power lines being inspected. This was in accordance with usual practice. It gave the inspector (in the rear right-hand seat of the helicopter) the optimum view of the line. The helicopter was operated about five to 10 metres laterally displaced to the left of the line, and about three to five feet above the line at all relevant times. The speed was approximately 25-30 knots per hour.
At about 10.00 am, Mr Carter was directed by Mr Edwards along the spur line running east to west near the Inman's property, and along the private power line which ran off the spur line, north/south across the Inmans' property.
I am satisfied that the maps which Mr Edwards had with him in the helicopter did not record the private power line. Likewise, I am satisfied that the maps did not disclose the Telstra catenary wire. I am satisfied that Mr Edwards and Mr Carter had not been informed of the presence of the private power line or the catenary wire.
Mr Carter flew the helicopter north to south along the private power line. At the northern end, it was not possible to position the helicopter on the preferred left side of the line because of the proximity of the trees on that side. Mr Carter flew the helicopter to the right-hand side of the line until the trees were no longer a hazard. He then crossed to the left-hand or eastern side of the line.
The Wire Strike
No person on board the helicopter, including Mr Carter, had observed the Telstra catenary wire. Mr Carter later observed (in his statement of 19 April 2012, Exhibit PH1, paragraph 60) that he had not seen the catenary wire prior to contact with it. Mr Carter said that it was difficult to see it due to the background vegetation and because the poles holding the catenary wire were positioned in trees.
Shortly after the helicopter crossed to the left-hand or eastern side of the line, the skid on the front left of the helicopter came into contact with the Telstra catenary wire. At the same time as he noticed and heard the catenary wire touching the helicopter, Mr Edwards called out "Wire". The tail rotor of the helicopter came into contact with the catenary wire and the helicopter began to lose directional control.
Mr Carter could not fly the helicopter forward as that was where the catenary wire and private power line converged, nor to the left, as that was where the catenary wire was located. Nor could he descend, as he could not see what was below the helicopter.
Mr Carter elected to remove the helicopter from the position it was in by ascending and moving to the rear right or western side of the power line, where he conducted an emergency landing. He landed the helicopter upright and not too heavily. However, without directional control, the helicopter did not land level and it rolled over onto its right-hand side.
Mr Carter turned off the helicopter's fuel and electrical power to minimise a fire risk, checked on the condition of other persons aboard, and helped to administer first aid to Mr Edwards, who appeared to be unconscious. Mr Carter gave the relevant co-ordinates to the rescue helicopter.
Mr Edwards suffered catastrophic injuries in the accident, principally a closed head permanent brain injury. Other physical injuries which he suffered were relatively minor by way of comparison. These involved a fracture of the right phalanx of the ring finger, a laceration to the right shoulder and pulmonary contusions.
Injuries to Mr Edwards and Their Probable Cause
No other person on the helicopter suffered any significant injury.
It was the opinion of Dr Brock, which I accept, that Mr Edwards' head injuries were most likely inflicted by "a high energy glancing blow to the right side of his head by the main rotor blade" of the helicopter. In his report, Dr Brock explained how he reached this conclusion, drawing, as well, upon his experience of observing helicopter crashes and resultant injuries, and his examination of the injuries sustained by Mr Edwards and photographs of the condition of the crashed helicopter in this case. Having regard to the extent of the brain injury sustained, I accept that there was a high-energy impact to Mr Edwards' head. In the absence of any evidence of skull fracture, I infer that the high-energy impact took the form of a glancing blow to the head by the main rotor blade.
I accept the evidence of Dr Brock, which is not challenged or contradicted by other evidence, that had Mr Edwards been wearing an appropriate helmet at the time, "he would have significantly or completely avoided his traumatic brain injury as well as the facial fractures and facial lacerations".
It was the opinion of Dr Brock, which once again I accept, that Mr Edwards' head injuries "could have been avoided or reduced in severity by reason of wearing an appropriate helmet (fitted with an approved manufacturer's visor)". Dr Brock stated in evidence that, had Mr Edwards been wearing a helmet, "he would not have sustained a long term injury" (T200-201).
Issues for Determination
A number of issues arise for determination. These include:
(a) whether any liability of Precision to Mr Edwards is restricted by application of the Civil Aviation (Carriers' Liability) Act 1967 (NSW);
(b) whether Endeavour is liable to Mr Edwards for breach of its non-delegable duty of care to him, as his employer, and thus for the purpose of s.151Z(2) WC Act;
(c) whether Precision is liable for any breach of duty to Mr Edwards, and thus for the purpose of s.151Z(1) WC Act;
(d) whether Telstra is liable for breach of duty to Mr Edwards, and thus for the purpose of s.151Z(1) WC Act;
(e) if Precision and/or Telstra are liable to Mr Edwards, in addition to Endeavour, as his employer, what apportionment is appropriate for the purpose of s.151Z(2) WC Act;
(f) whether Endeavour is liable to Precision, for breach of contract, for loss resulting from helicopter hull damage and the loss of use of the helicopter whilst it was out of action, and also for liability (if any) which Precision may have under s.151Z(1) WC Act;
(g) whether the indemnity clause in the contract between Endeavour and Precision entitles Endeavour to an indemnity from Precision for all losses and liabilities otherwise suffered by Endeavour arising from the accident;
(h) whether any or all of Precision, Endeavour and Telstra are liable to the Edwards children.
These various issues will be considered in the balance of this judgment.
Does the Civil Aviation (Carriers' Liability) Act 1967 (NSW) Have Any Application to the Present Proceedings?
It is common ground that the Civil Aviation (Carriers' Liability) Act 1959 (Cth), which relates to international and interstate airline and charter operations, has no application to this case.
Precision submits that the Civil Aviation (Carriers' Liability) Act 1967 (NSW) applies, in the circumstances of this case, so as to render Precision strictly liable for injury suffered by Mr Edwards but, at the same time, placing a ceiling of $500,000.00 on Precision's liability in that respect.
Endeavour submits that the Civil Aviation (Carriers' Liability) Act 1967 (NSW) has no application whatsoever in the circumstances of this case.
Telstra and the Edwards children submit, as well, that the Civil Aviation (Carriers' Liability) Act 1967 (NSW) has no application to this case but that, even if the statute could be available, a finding should be made that Mr Edwards was not a "passenger" for the purpose of that legislation, so that the statute does not apply.
A useful starting point is to identify statutory certificates and permits held by Precision at the relevant time.
Between February and July 2006, Precision held an Air Operator's Certificate ("AOC") for the purposes of the Civil Aviation Act 1988 (Cth). That AOC authorised Precision to conduct (Exhibit EE3):
(a) charter operations as set out in Schedule 2 to the AOC;
(b) aerial work operations as set out in Schedule 3 to the AOC, with that Schedule permitting Precision to utilise a Bell 206 helicopter to conduct aerial work operations in Australia, inter alia, by way of power line inspection.
At the relevant time, Precision held a low-flying permit issued under Clause 157 Civil Aviation Regulations 1988 (Cth), which authorised Precision to fly at a height lower than 500 feet for the purpose of power line inspections (Exhibit EE4).
The journey being undertaken by the Precision helicopter being flown by Mr Carter on 4 April 2006, with Mr Edwards and others on board, involved a journey entirely within the State of New South Wales. Accordingly, it is appropriate to examine s.4 Civil Aviation (Carriers' Liability) Act 1967 (NSW) which provides:
"4 Carriage to which Act applies
The carriage to which this Act applies is the carriage of a passenger where the passenger is or is to be carried in an aircraft being operated by the holder of an airline licence or a charter licence in the course of commercial transport operations under a contract for the carriage of the passenger between a place in the State and another place in the State or from a place in the State back to that place, not being:
(a) carriage to which Part IV of the Commonwealth Act applies, or
(b) carriage to which the Warsaw Convention, the Hague Protocol or the Guadalajara Convention applies, or
(c) carriage to which the provisions of another convention, protocol or treaty apply, being provisions that have the force of law under the Commonwealth Act and that are prescribed for the purposes of this paragraph by the regulations under this Act."
The fact that the Precision helicopter may have taken off from, and returned to, the same location in New South Wales does not mean that it is not a journey falling within the opening words in s.4: Mount Beauty Gliding Club Inc v Jacob [2004] VSCA 151; 10 VR 312 at 319-322 [17]-[25], 324 [35].
The statute requires that the passenger is or is to be "carried in an aircraft being operated by the holder of an airline licence or a charter licence in the course of commercial transport operations under a contract for the carriage of the passenger" within the State.
The terms "airline licence", "charter licence" and "commercial transport operations" are defined in s.26 Civil Aviation (Carriers' Liability) Act 1959 (Cth) in the following way:
"airline licence means:
(a) an international airline licence in force under the Air Navigation Regulations; or
(b) an Air Operator's Certificate in force under the Civil Aviation Act 1988 authorising airline operations; or
(c) a New Zealand AOC with ANZA privileges (as defined in section 3 of the Civil Aviation Act 1988) authorising airline operations.
...
charter licence means:
(a) a charter licence in force under the Air Navigation Regulations; or
(b) an Air Operator's Certificate in force under the Civil Aviation Act 1988 authorising charter operations; or
(c) a New Zealand AOC with ANZA privileges (as defined in section 3 of the Civil Aviation Act 1988) authorising charter operations.
commercial transport operations means operations in which an aircraft is used, for hire or reward, for the carriage of passengers or cargo."
Does the Nature of the Operation on 4 April 2006 Fit Within the Civil Aviation (Carriers' Liability) Act 1967 (NSW)?
Precision contended that the Civil Aviation (Carriers' Liability) Act 1967 (NSW) applied to this operation, and that Mr Edwards was a "passenger" for that purpose.
It was submitted for Endeavour that the circumstances of the present case fell entirely outside activities of a type to which that statute was directed. Telstra and the Edwards children supported this submission and contended that, in any event, Mr Edwards was not a "passenger".
It is necessary to consider the nature of the activity upon which the helicopter and its occupants were engaged on 4 April 2006. The relevant flight operation involved low-level aerial work inspecting power lines, being conducted by Precision as part of its contractual arrangement with Endeavour, and involving both Precision and Endeavour personnel on board.
It is difficult to see how this activity fits within the concept of intrastate airline and charter operations of the type caught by s.4 Civil Aviation (Carriers' Liability) Act 1967 (NSW). On 4 April 2006, the helicopter was engaged in aerial work operations, in the form of a power line inspection, under Precision's AOC (Exhibit EE3). These aerial work operations involved low-flying activities, for the purpose of power line inspections, as allowed under Precision's low-flying permit (Exhibit EE4).
It should be kept in mind that the carriage to which the New South Wales Act applies involves carriage by the holder of an airline licence or a charter licence, in the course of commercial transport operations under a contract, for the carriage of a person or persons between one place and another within the State. The activity being undertaken by the Precision helicopter on 4 April 2006 does not sit comfortably with this statutory formula. It seems far removed from any notion of "commercial transport operations" by the holder of a "charter licence".
There is considerable force in Endeavour's primary submission on this issue, which I am inclined to accept.
Was Mr Edwards a "Passenger"?
However, in case I am wrong in that view, and as the question was fully argued, I will consider the next question as to whether Mr Edwards was, in any event, a "passenger" for the purpose of the relevant legislation.
In support of the submission that Mr Edwards was a "passenger", Precision relied upon a number of decisions of courts considering the meaning of this term in statutes based upon the Warsaw Convention. Particular reliance was placed upon the decision of the House of Lords in Fellowes (or Herd) v Clyde Helicopters Limited [1997] AC 534 ("Herd") and later decisions in which Herd has been applied, including Disley v Levine [2001] EWCA Civ 1087; [2002] 1 WLR 785 and Laroche v Spirit of Adventure (UK) Limited [2009] EWCA Civ 12; [2009] QB 778.
Counsel for Telstra and the Edwards children advanced submissions to the effect that Mr Edwards was not a "passenger" for the purpose of the flight undertaken on 4 April 2006.
A helpful starting point is the origin and purpose of legislation of this type, explained by Callinan J in Air Link Pty Limited v Paterson [2005] HCA 39; 223 CLR 283 at 323 [124] (footnotes excluded):
"The Act was enacted pursuant to the Warsaw Convention of 1929 as amended from time to time. The Convention established a 'uniform international code' for the liability of carriers for injury or death during carriage between countries party to the Convention. It made a compromise between the interests of air carriers and passengers. It took account of the difficulties of proof confronting plaintiffs. It presumed liability of air carriers for injury or death. Carriers could not contract out of it. In return, it relevantly capped damages and extinguished the right to sue for damages after two years. As an international instrument, or perhaps more correctly, an enactment pursuant to such an instrument, it should be construed consistently universally."
There is no definition of "passenger" in the relevant legislation. I accept the submission of Precision that decisions of other courts, concerning the meaning of words contained in legislation derived from the Warsaw Convention, may be called in aid to assist construction of a similar question concerning Australian legislation: Air Link Pty Limited v Paterson at 301 [40] (Kirby J).
It is appropriate to refer to Herd, the principal decision relied upon by Precision. In that case, Sergeant Herd was killed in a helicopter crash in 1990. At the time, Sergeant Herd was a member of the Police Helicopter Unit of the Strathclyde Police Force. His duties were to carry out aerial surveillance and detection within Strathclyde. The helicopters used by the Police Helicopter Unit were supplied under contract by Clyde Helicopters Limited. On the date of his death, Sergeant Herd and two colleagues were carrying out duties on board one of these helicopters. During the flight, a snowstorm was encountered as a result of which the pilot, an employee of Clyde Helicopters Limited, became lost and engine failure occurred. The helicopter collided with a block of flats in Glasgow, resulting in the death of Sergeant Herd.
The House of Lords held that Sergeant Herd was a "passenger" for the purpose of the relevant legislation. Lord Mackay of Clashfern LC delivered the leading judgment, in which the duties of Sergeant Herd were explained in the following way at 540-541:
"The duties of Sergeant Herd and his police colleagues while they were on board the helicopters, provided in pursuance of the contract, were to direct the surveillance operations on which the helicopters were engaged; to give the necessary instructions to the pilots; to inform the pilots of the manoeuvres which they wished them to carry out and generally to act as observers and to provide information to the pilots during the course of each flight. On the occasion of the fatal flight the respondents' pilot was Captain Graham Pryke, who was solely responsible for the flying of the helicopter and all decisions related thereto."
His Lordship concluded at 542:
"In my view it is clear that the respondents were the carrier in respect of the carriage of Sergeant Herd. It is true that Sergeant Herd was on the aircraft for the purpose of carrying out his duties as a member of the Police Helicopter Unit, but from the facts as alleged, which I have quoted above, it is clear that he had no responsibility whatever in respect of the operation of the aircraft, which was solely under the control of the pilot, and therefore in my opinion the activities which Sergeant Herd was carrying on while on the aircraft are not to be regarded as contributing in any way to the carriage of himself or the other persons on board. He therefore is properly regarded as a passenger."
His Lordship referred, in the course of the judgment, to the decision of the United States Court of Appeals (Ninth Circuit) in In re Mexico City Aircrash of October 31, 1979 (1983) 708 F.2d 400, where it was held that two flight attendants, working aboard an aircraft that crashed, were not passengers within the meaning of the Warsaw Convention. In delivering the judgment of the Court, Fletcher J said at 417 (footnotes excluded):
"In the cases of appellants Haley and Tovar, we conclude that the argument sweeps too broadly. Decedents Theresa Haley and Regina Tovar were indisputably working as flight attendants on board Flight 2605. Even though Haley and Tovar were in some sense 'transported' by the plane, we do not think that they received 'transportation' as 'passengers' within the meaning of the Convention. The term 'transportation' seems to us to require as a minimum that the voyage be undertaken for the principal purpose of moving the individual from point A to point B. In the cases of Haley and Tovar, the voyages were undertaken not for this reason, but for the exclusive purpose of performing employment duties. We conclude that Haley and Tovar were not, therefore, 'passengers' aboard Flight 2605, and that the summary judgments in favour of Western on the claims of plaintiffs Haley and Tovar were proper."
In distinguishing this decision in Herd, Lord Mackay of Clashfern LC said at 546:
"In re Mexico City Aircrash (1983) 17 Avi. 18,387 turned on whether or not the persons being carried were being carried merely as passengers of the airline or in their capacity as employees of the airline. Without examining the decision in detail I think it is sufficient to say that the question whether or not the Warsaw Convention applied was decided to depend on whether or not the person carried was an employee of the carrier and travelling in that capacity, in which case the Warsaw Convention would not apply, whereas if, though an employee, the person being carried was being carried truly as a passenger with no responsibility in connection with the operation of the flight and without being obliged to travel as an employee on that particular flight, the Convention would apply."
Herd was applied by the Court of Appeal for England and Wales in Disley v Levine, where it was held that a trainee flying with an instructor in a tandem paraglider, assisting the instructor whilst the instructor had control of the glider, was not a passenger (nor was the paraglider an aircraft).
After referring to the passage from Herd set out above (at [115]), Henry LJ observed at 797 [51] that Sergeant Herd "was a passenger viz a viz the carrier in control of the aircraft, but had it been a police operated aircraft he would have been a crew member". Henry LJ continued at 797 [52]:
"It cannot be said that Ms Disley contributed nothing to the flight. True it is that, as set out in the Agreed Statement of Facts, during the flight Ms Disley watched the defendant demonstrate various flight manoeuvres, but she did not practise controlling the glider, or play any part in its operation during the flight. However, the flight could not have taken place without the contribution she made with her legs both on take-off and landing. But over and above that, she was not on the flight as a passenger, nor on the flight under a contract of carriage, but on the flight as a pilot under instruction, and so as one of the crew."
Henry LJ observed, at 798 [56], that Ms Disley "was under instruction when she was on the flight, and it would not be right to describe her as a passenger" as the "objective was instruction, not carriage".
In a separate judgment, Buxton LJ reached a similar view. After referring to the passage from Herd set out at [116] above, Buxton LJ said 800-801 [67]:
"That observation was however directed at the particular facts of the Herd case, where it had been argued that Sergeant Herd was not a passenger because he was empowered to give directions to the pilot as to where the helicopter should fly. In every other respect, however, Sergeant Herd was on the helicopter for the purpose of being conveyed from one place to another, albeit places that he determined while he was in the air rather than in advance when he was on the ground. He therefore fulfilled the normal understanding of the word 'passenger'. That is also the purposive meaning of the word when it is used in a Convention directed at commercial air transport."
Reference was made, as well, to the decision of the Court of Appeal for England and Wales in Laroche v Spirit of Adventure (UK) Limited, where it was held that a person carried in a hot-air balloon on a flight organised by the defendant company, who was injured when the balloon crashed, was a passenger for the purpose of relevant legislation based upon the Warsaw Convention. Dyson LJ (Jacob and Mummery LJJ agreeing) said at 793-794 [61]-[63]:
"61 The term 'passenger' is not defined by the 1967 Order or the Convention. As Buxton LJ said in Disley's case [2002] 1 WLR 785, para 70, the rule of purposive construction requires the concept of 'passenger' to be looked at in the context of the Convention as a whole. I do not think that it is disputed that, in the context of the Convention as a whole, a 'passenger' is someone (i) who is not regarded as contributing to the carriage of himself or the other persons on board (see Herd's case [1997] AC 534, 542, 548) and (ii) who is on the aircraft for the predominant purpose of being conveyed from one place to another: see Disley's case, at paras 67, 70-74. Obvious examples of persons who are carried on aircraft, but not as passengers, are trainee pilots (who are being carried for the purpose of receiving instruction) and pilots, stewards and other members of the crew (who are being carried for the purposes of carrying other persons).
62 I agree with what the judge said, at paras 41-43 of his judgment. The claimant was undoubtedly being carried in the balloon at the material time and was not himself making any contribution to the process of flying. The fact that the claimant just went for the ride and the destination was to a large extent unpredictable was immaterial to whether he was carried as a passenger. The predominant purpose of the journey was to be carried by air from the starting point to the destination point, wherever that turned out to be. The claimant did not know precisely where the destination point would be, but that did not prevent him from being carried as a passenger. A person who pays to be carried on a conventional aeroplane 'magical mystery tour' has no idea where the flight will end. That is the whole point of such a tour. But that does not mean that he is not carried as a passenger. I can find nothing in the Convention or Schedule 1 to indicate that such a person is not a passenger. If he is not a passenger, what is he? No plausible alternative description was provided by Mr Davey.
63 In my view, the judge was right to hold that the claimant was a 'passenger' within the meaning of article 17 of Schedule 1. He was not a member of the crew. Unlike Miss Disley in Disley's case, he did not contribute to the flight in any way. He was not on board as a pilot under instruction. His role was even more passive than that of Sergeant Herd in Herd's case, who was held to be a passenger although he was on board the helicopter directing the surveillance operations and giving necessary instructions to the pilot. As between the carrier and the carried, the purpose of the carriage of Sergeant Herd was for him to be carried as a passenger. As between the claimant and the defendant, the purpose of the hot air balloon flight was to carry the claimant as a passenger. The fact that the claimant was to be carried from one place to another by hot air balloon for pleasure or reasons of recreation did not mean that he was not carried as a passenger. In this respect, his case stands on the same footing as that of a person carried by conventional aeroplane on a magical mystery tour."
Disley v Levine was distinguished by the Victorian Court of Appeal in Mount Beauty Gliding Club Inc v Jacob at 323-324 [31] in a context which did not involve the question whether the injured person was a passenger. I note, as well, that In re Mexico City Aircrash of October 31, 1979 was considered by the Court of Appeal in United Airlines Inc v Sercel Australia Pty Limited [2012] NSWCA 24 at [42]-[48], in a context which does not bear upon the "passenger" issue in this case.
Precision submitted that the role of Mr Edwards was essentially to direct the pilot having regard to Mr Edwards' knowledge of the power lines and of the hazards (with which he was supposed to be conversant). It was submitted that this was not a contribution to the flying of the helicopter as it has been referred to in the authorities.
Precision submitted further that, having regard to the definition of "commercial transport operations" in s.26 Civil Aviation (Carriers' Liability) Act 1967 (NSW), it was necessary to consider whether Mr Edwards was being carried in the course of operations in which an aircraft was being used for hire or reward for the carriage of passengers. In this respect, reliance was placed upon the conclusion in Herd that Sergeant Herd was being carried for reward, and it was submitted that the same conclusion ought be reached in the present case.
Reliance was placed, as well, upon the judgment of Ormiston JA in Agtrack (NT) Pty Limited v Hatfield [2003] VSCA 6; 7 VR 63 at [13], affirmed by the High Court of Australia in Agtrack (NT) Pty Limited v Hatfield [2005] HCA 38; 223 CLR 251 at 263-264 [33]-[37], in support of the proposition that it is not the specific flight which must be "for reward", but merely the "operations" as a whole.
In a number of places in the contract between Endeavour and Precision, there is reference to the observer (in this case, Mr Edwards) as "crew". Precision submitted that the relevant enquiry was whether or not Mr Edwards was a "passenger" for the purposes of application of the relevant legislation, and not the contract, although acknowledging that the latter may provide some contextual relevance.
It is necessary to consider the circumstances of this particular flight for the purpose of determining whether Mr Edwards was a "passenger". It was central to the conduct of aerial inspection of overhead lines that the pilot be assisted by a crew person, with the title of "observer", who would "assist the pilot" by "providing advance warning of approaching hazards", and by keeping track of the aircraft's position relevant to approaching hazards.
The importance of the contract in this case is that, taken with the evidence of what actually occurred on 4 April 2006, it supports a conclusion that Mr Edwards was not a passenger. It is clear that Mr Edwards, as "observer", formed an essential part of the crew of the helicopter undertaking aerial inspection activities on 4 April 2006. I note that, in answers to interrogatories, Precision admitted that Mr Edwards assisted the pilot in determining "whether the correct asset was being inspected" and that he kept a lookout for hazards, although Precision denied that he was a member of the crew.
I accept the submission of Telstra that, on the facts of this case, there was a mutual exclusivity between being a passenger and being a member of the crew. The only passenger on this flight was the photographer. She had no function in relation to the inspection of power lines, which was the purpose for which the helicopter was being used at the time.
On the other hand, Mr Edwards discharged functions including assisting the pilot with navigation of the aircraft, both by directing him to the power lines which he was to fly near to, and by looking out for, and warning of hazards which he was to avoid. In these ways, Mr Edwards was so closely involved in the conduct of the flight, that the conclusion ought be reached that he was a member of the crew, and not a mere passenger. If Mr Edwards had not been present to act as "observer", the low-level aerial surveillance flight could not have taken place at all.
I am satisfied that the circumstances of the present case are distinguishable from those in Herd, so that the conclusion ought be reached that Mr Edwards was not a "passenger" in the helicopter on 4 April 2006.
The effect of this conclusion is that the Civil Aviation (Carriers' Liability) Act 1967 (NSW) has no application to this case.
The question whether Precision is liable for damages arising from the helicopter crash, in which Mr Edwards was severely injured, is to be answered by reference to applicable statutory law and general law principles.
Applicable Statutory and General Law Principles
Before moving to the factual issues to be determined, by reference to general factual topics, it is necessary to refer to principles to be called in aid to determine liability issues.
Endeavour's Non-Delegable Duty of Care as the Employer of Mr Edwards
Mention has been made earlier to the non-delegable duty of care which Endeavour owed to Mr Edwards as his employer. Before moving to the provisions of the Civil Liability Act 2002, it is appropriate to emphasise the rationale underlying the employer's duty to employees. In Kondis v State Transport Authority [1984] HCA 61; 154 CLR 672, Mason J said at 687-688:
"The employer has the exclusive responsibility for the safety of the appliances, the premises and the system of work to which he subjects his employee and the employee has no choice but to accept and rely on the employer's provision and judgment in relation to these matters. The consequence is that in these relevant respects the employee's safety is in the hands of the employer; it is his responsibility. The employee can reasonably expect therefore that reasonable care and skill will be taken. In the case of the employer there is no unfairness in imposing on him a non-delegable duty; it is reasonable that he should bear liability for the negligence of his independent contractors in devising a safe system of work. If he requires his employee to work according to an unsafe system he should bear the consequences."
In McLean v Tedman [1984] HCA 60; 155 CLR 306, Mason, Wilson, Brennan and Dawson JJ said at 313:
"The employer's obligation is not merely to provide a safe system of work; it is an obligation to establish, maintain and enforce such a system. Accident prevention is unquestionably one of the modern responsibilities of an employer (see Fleming: The Law of Torts (6th ed, 1983) pp 480-1). And in deciding whether an employer has discharged his common law obligation to his employees the court must take account of the power of the employer to prescribe, warn, command and enforce obedience to his commands."
The non-delegable duty rests on the employer, whether or not the employer takes any share in the conduct of the operations and however the business is formed or structured: Pollard v Baulderstone Hornibrook Engineering Pty Limited [2008] NSWCA 99 at [34]; Andar Transport Pty Limited v Brambles Limited [2004] HCA 28; 217 CLR 424 at 440 [34]-[35].
The non-delegable duty of an employer is one of "a special and 'more stringent' kind", requiring the employer to ensure that reasonable care is taken: Burnie Port Authority v General Jones Pty Limited [1994] HCA 13; 179 CLR 520 at 550. If there is a real risk of an injury to an employee in the performance of a task in a workplace, the employer must take reasonable care to avoid the risk by devising a method of operation for the performance of the task that eliminates the risk, or by the provision of adequate safeguards, and the employer must take into account the possibility of thoughtlessness or inadvertence or carelessness, particularly in a case of repetitive work: Czatyrko v Edith Cowan University [2005] HCA 14; 79 ALJR 839 at 842-843 [12].
It is for the employer to devise whatever reasonably appropriate measures are necessary to eliminate the risk of injury to the employee, whether in the form of the provision of equipment, the giving of directions or the creation or implementation or work systems: English v Rogers [2005] NSWCA 327 at [73].
An employer's duty of care is not modified because its employees are sent to work for a third party, or are engaged in work involving interaction with third parties. The employer has an independent obligation to satisfy itself of the safety of the system or work in which its employees are engaged, notwithstanding the fact that the employees are working at the premises of a third party, or in the performance of tasks also involving the employees of a third party: Andar Transport Pty Limited v Brambles Limited at 448-449 [57].
The starting point in these proceedings is the substantial duty owed by Endeavour to its employee, Mr Edwards. This important aspect must be kept in mind when considering issues of liability and apportionment.
Provisions in the Civil Liability Act 2002
The Civil Liability Act 2002 applies to regulate the various claims brought against one party or another in these proceedings: s.5A.
Section 5 of the Act defines negligence to mean a "failure to exercise reasonable care and skill".
Provisions concerning duty of care are contained in ss.5B and 5C, which state:
"5B General principles
(1) A person is not negligent in failing to take precautions against a risk of harm unless:
(a) the risk was foreseeable (that is, it is a risk of which the person knew or ought to have known), and
(b) the risk was not insignificant, and
(c) in the circumstances, a reasonable person in the person's position would have taken those precautions.
(2) In determining whether a reasonable person would have taken precautions against a risk of harm, the court is to consider the following (amongst other relevant things):
(a) the probability that the harm would occur if care were not taken,
(b) the likely seriousness of the harm,
(c) the burden of taking precautions to avoid the risk of harm,
(d) the social utility of the activity that creates the risk of harm.
5C Other principles
In proceedings relating to liability for negligence:
(a) the burden of taking precautions to avoid a risk of harm includes the burden of taking precautions to avoid similar risks of harm for which the person may be responsible, and
(b) the fact that a risk of harm could have been avoided by doing something in a different way does not of itself give rise to or affect liability for the way in which the thing was done, and
(c) the subsequent taking of action that would (had the action been taken earlier) have avoided a risk of harm does not of itself give rise to or affect liability in respect of the risk and does not of itself constitute an admission of liability in connection with the risk."
Sections 5D and 5E relate to causation. Those provisions state:
"5D General principles
(1) A determination that negligence caused particular harm comprises the following elements:
(a) that the negligence was a necessary condition of the occurrence of the harm (factual causation), and
(b) that it is appropriate for the scope of the negligent person's liability to extend to the harm so caused (scope of liability).
(2) In determining in an exceptional case, in accordance with established principles, whether negligence that cannot be established as a necessary condition of the occurrence of harm should be accepted as establishing factual causation, the court is to consider (amongst other relevant things) whether or not and why responsibility for the harm should be imposed on the negligent party.
(3) If it is relevant to the determination of factual causation to determine what the person who suffered harm would have done if the negligent person had not been negligent:
(a) the matter is to be determined subjectively in the light of all relevant circumstances, subject to paragraph (b), and
(b) any statement made by the person after suffering the harm about what he or she would have done is inadmissible except to the extent (if any) that the statement is against his or her interest.
(4) For the purpose of determining the scope of liability, the court is to consider (amongst other relevant things) whether or not and why responsibility for the harm should be imposed on the negligent party.
5E Onus of proof
In proceedings relating to liability for negligence, the plaintiff always bears the onus of proving, on the balance of probabilities, any fact relevant to the issue of causation."
These principles and provisions will be kept in mind when approaching claims for liability as between the various parties.
Part 1A of the Civil Liability Act 2002 modifies the common law as regards claims in negligence. It has been held that s.5B "presupposes the existence of the law of negligence, and operates against its background": Harmer v Hare [2011] NSWCA 229 at [212].
Section 5B(1) sets out the three preconditions which must co-exist before liability in negligence arises when the type of negligence alleged is a failure to take precautions against a risk of harm arising. Section 5B(2) provides a non-exhaustive list of factors the Court is required to take into account in deciding whether the third of the preconditions in s.5B(1) exists (that is, whether a reasonable person would have taken precautions against a risk of harm): Harmer v Hare at [212].
Despite s.5B being contained within Part 1A Division 2 which is headed "Duty of Care", it is directed to whether a found duty of care has been breached, not whether a duty of care exists at all: Council of the City of Greater Taree v Wells [2010] NSWCA 147 at 33.
However, determining the scope of the duty of care is an essential step before deciding if it has been breached, and it has been held that it is ordinarily preferable to bracket together the issues of the scope of the duty of care and the breach of the duty of care: Sheather v Country Energy [2007] NSWCA 179 at [20]-[21]. Thus, whilst the factors listed in s.5B(1) and (2) are, strictly speaking, relevant to questions of breach of duty, those same factors arise for consideration on questions of scope of duty, which should ordinarily be considered at the same time: Graham Barclay Oysters Pty Limited v Ryan [2002] HCA 54; 211 CLR 540 at 585 [106], 611-612 [192].
The first of the s.5B(1) preconditions is foreseeability. Liability cannot arise in negligence unless the defendant knew or ought to have known of the risk of harm. It is emphasised that foreseeability of harm alone is insufficient to establish a duty of care: Sullivan v Moody [2001] HCA 59; 207 CLR 562 at 576 [42]; Tame v New South Wales [2002] HCA 35; 211 CLR 317 at 402 [250]. In order to determine whether a particular risk of harm was foreseeable, it is necessary to define the risk: Roads and Traffic Authority of NSW v Dederer [2007] HCA 42; 234 CLR 330 at 351 [59]; Novakovic v Stekovic [2012] NSWCA 54 at [37].
Whilst, in some cases, risk of harm can be foreseeable, despite being unlikely to be realised, there are nonetheless other risks of harm which are more farfetched or fanciful and therefore not foreseeable, such that no relevant duty of care arises: Wyong Shire Council v Shirt [1980] HCA 12; 146 CLR 40 at 47; Koehler v Cerebos (Australia) Limited [2005] HCA 15; 222 CLR 44 at 64 [54].
Turning to the third precondition for liability and negligence under s.5B(1), the question of what precautions a reasonable person in the defendant's position would have taken against the risk of injury, the Court must have regard to the non-exhaustive list of factors in s.5B(2). Whilst there are differences in wording, it has been said that s.5B(2) is a reiteration of Mason J's analysis or so-called "calculus of negligence" in Wyong Shire Council v Shirt at 47-48; Waverley Council v Ferreira [2005] NSWCA 418 at [45].
In a number of cases, the courts have concluded that despite a defined risk of harm being foreseeable, the particular precaution or precautions contended for by the plaintiff were not required (or indeed, that no specific precautions were required), either according to Mason J's analysis in Wyong Shire Council v Shirt or the s.5B(2) non-exhaustive list of factors: Novakovic v Stekovic at [40]-[45]; Bader v Jelic [2011] NSWCA 255 at [26].
Enquiry under s.5B(2) as to whether a defendant should have taken precautions against a risk of harm as contended for by a plaintiff turns on, amongst other relevant matters, the foreseeability of the risk, whether the risk was not insignificant, and whether in the circumstances, a reasonable person in the defendant's position would have taken those precautions. The enquiry is not to be undertaken in hindsight, but must be answered prospectively, before the incident occurred: Vairy v Wyong Shire Council [2005] HCA 62; 223 CLR 422 at 461 [124]-[126]; Adeels Palace Pty Limited v Moubarak [2009] HCA 48; 239 CLR 420 at 438 [31]; Novakovic v Stekovic at [40].
The enquiry as to whether the particular precautions contended for should have been taken is not confined to what could have been done to eliminate, reduce or warn against the risk. Rather, whilst asking what could have been done will reveal what was practicable, it is necessary to ask as well - would it have been reasonable for the defendant to take these measures?: Neindorf v Junkovic [2005] HCA 75; 80 ALJR 341 at 361 [93]. In other words, the knowledge of how the injured plaintiff actually came to sustain his or her injury has to be excluded, when considering whether the defendant was obliged to take any of the precautions against the risk of harm contended for by the plaintiff in the circumstances of the case: Novakovic v Stekovic at [41].
Finally, in undertaking the enquiry under s.5B(2), it has been held that a person does not breach his or her duty of care merely because there are steps that he or she could have taken to advert the risk that, in the event, materialised: Thornton v Sweeney [2011] NSWCA 244 at [131]; Novakovic v Stekovic at [42].
Issues for Determination in the Proceedings
It is appropriate to now turn to a range of issues which fall for determination in the proceedings. Submissions were made by affected parties concerning these issues.
The best way forward is to consider each issue by reference to its factual content. After conclusions have been reached concerning each of these issues, I will turn later in the judgment to the question of the consequences of these findings to issues of liability, allocation of responsibility and apportionment.
The Helmet Issue
I have already made findings that Mr Edwards was not wearing a helmet at the time of the crash, and that the very severe head injuries which he suffered, including traumatic brain injury, would have been significantly or completely avoided if he had been wearing a helmet (see [74], [87]-[89] above).
Dr Brock's conclusion concerning the likely causation of Mr Edwards' head injuries was not challenged by Endeavour in cross-examination. Nor was there challenge to the evidence of Dr Brock that, had Mr Edwards been wearing a helmet, his injuries would have been significantly or completely avoided.
I have also found that located on the Precision refuelling truck at Ebenezer were two helmets of a suitable type to be worn by a person carrying out the functions performed by Mr Edwards (see [64] above). These helmets were left behind in the refuelling truck at Ebenezer.
It was submitted on behalf of the Edwards children, Precision and Telstra that the provision of helmets lay within the discharge of the non-delegable duty of care owed by Endeavour to Mr Edwards, its employee, to take reasonable care and to ensure that reasonable care was taken to provide him with a safe place of work, safe system of work and safe plant and equipment.
Endeavour personnel did not take steps to arrange for helmets to be provided for Endeavour staff, let alone seek to enforce any rule that helmets should be worn.
The evidence of all witnesses was that helmets were not made available by Endeavour. Mr Collins gave evidence that no helmet was provided by Endeavour, and that no Endeavour personnel, including managers, ever said anything to him about wearing a helmet (T108). Mr Langerak gave evidence that there was no instruction regarding helmets, and that Endeavour never made helmets available (T123, 127). The statement of Mr Horne (Exhibit PH3, paragraph 21) noted that he discussed the fact that helmets were not worn with Mr Healy, an Endeavour employee, and was informed by Mr Healy that he (Mr Healy) knew persons were not wearing helmets and why they were not doing so (due to discomfort).
Endeavour's response to interrogatories by Telstra stated that Endeavour did not have a written policy or procedure with respect to the wearing of protective equipment during low-level aerial surveillance as at 4 April 2006 and that, although helmets were made available for use by Endeavour employees performing low-level aerial surveillance, it was not mandatory to do so.
Endeavour's documents set out the task profile for aerial inspection of lines, with specified safety equipment including "helmets Nomex or equivalent" (Exhibit TC8, pages 287, 289, 293). The evidence demonstrates that the provision of helmets was a well-recognised industry standard precaution against injury, in the context of aerial power line inspections since the 1990s (Exhibit TC8, pages 349, 384, 447; Exhibit EE2, page 303).
Neither of Endeavour's relevant workplace instruction documents prescribed that Endeavour crew on helicopter aerial inspections should wear helmets (Exhibit EE2, page 341ff, 428ff).
The reports of Mr Ogden make clear that, by early 2006, it had been known for decades that the risk of severe and fatal injuries in helicopter crashes could be drastically reduced by the wearing of helmets (Exhibit EE2, pages 4-7, 31-34, 37, 39).
There is no evidence of Endeavour having taken steps to ensure that appropriate helmets were made available to crew members embarking on aerial inspections, nor that they be warned of the heightened risk associated with flying at low level on such operations without a helmet, or that they be required, or at least encouraged, to wear one.
Helmets would not have been prohibitively or disproportionately expensive. They were commercially available for $1,500.00-$2,000.00 each (T301-302). It was the evidence of Dr Brock that suitable helmets, capable of providing protection against head injury of the type sustained by Mr Edwards, were available commercially in Australia in 2006.
The more difficult question concerns any liability of Precision under s.151Z, and liability to the Edwards family. The relevant question of causation in this area is a question of fact, to be resolved in the manner described by Sackville AJA in State Wide Developments Pty Limited v Higgins. Further, the principles considered in Oxley County Council v MacDonald assist the resolution of this question in the present proceedings.
I accept Precision's submission that there is a significant factual distinction between the position of Brambles in Oxley County Council v MacDonald, and of Precision in the present case. The remoteness difficulty confronting Brambles does not, in my view, exist for Precision in the present case.
I accept that the Precision helicopter was being flown by a Precision employee (Mr Carter) whilst carrying Endeavour employees (including Mr Edwards). This was a scenario anticipated, indeed required, under the contract. The possibility that a s.151Z scenario may arise because of alleged negligence on the part of the pilot (a Precision employee) in the context of injury being caused to an Endeavour employee, was a possibility which could be reasonably supposed to have been in the contemplation of both parties, at the time the contract was made, as being not unlikely to occur. Likewise a scenario where liability may be found in favour of the family of the injured Endeavour employee. These conclusions have been reached by examination of the particular facts of this case.
In the circumstances of this case, I am satisfied that s.151Z liability is not too remote, so as to place it outside the proper scope of damages for Endeavour's breach of contract.
Likewise, I am satisfied that liability to the Edwards family is not too remote, so as to place it outside the proper scope of damages for Endeavour's breach of contract.
I am satisfied that Precision has made good its claim against Endeavour for breach of contract, and that Precision is entitled to damages for damage to the helicopter hull, loss of business and any liability which Precision has under s.151Z WC Act and to the Edwards family.
Endeavour's Cross-Claim in Contract
Endeavour has brought a cross-claim against Precision, involving a claim based upon the contract. Endeavour relies upon an alleged breach by Precision of Clause 3.3 of the contract (set out at [381] above).
In addition, Endeavour alleges a breach by Precision of Clause 6.2 of the contract which provides:
"Indemnity by the contractor
The Contractor indemnifies Integral and Integral's Representatives and keeps each of them indemnified, from and against all liability, loss, damage, penalty, charge, claim, harm, injury, costs or expenses of any kind whatsoever (including Consequential Loss) ("Loss") incurred or suffered directly or indirectly from or in connection with:
(a) a breach of this Agreement by the contractor;
(b) the termination of this Agreement because of a breach by the Contractor;
(c) any wilful, unlawful or negligent act or omission of the Contractor or a Representative of the Contractor;
(d) any injury to or death of a natural person and any loss of or damage to a third party's real or personal property caused or contributed to by the Contractor or a Representative of the Contractor;
(e) any loss of or damage to real or personal property of Integral, caused by or contributed to by the Contractor or a Representative of the Contractor;
(f) any claim, action, demand or proceeding by a third party against Integral or any Representative of Integral caused by or contributed to by the Contractor or a Representative of the Contractor; or
(g) any claim, action, demand or proceeding by a third party against Integral or any Representative of Integral arising directly or indirectly out of a breach of this Agreement by the Contractor, or by any wilful, unlawful or negligent act or omission of the Contractor or any of the Contractor's Representatives,
except to the extent that any Loss is solely and directly caused by the negligence of Integral or a Representatives of Integral who is not also a representative of the Contractor."
Submissions
With respect to Clause 3.3, Endeavour submits that Precision failed to provide and perform the services required under that provision and, in particular, the requirement that services be provided in a "proper workmanlike and professional manner" (Clause 3.3(a)) and "with due care, skill and judgment in accordance with generally accepted industry standards and practices and codes of conduct" (Clause 3.3(b)). Reliance was placed upon submissions advanced against Precision, in the area of aviation negligence referred to earlier.
Senior counsel for Endeavour submitted that Clause 6.2 applied so that Precision was required to indemnify Endeavour for all matters caught by the clause, which included all aspects of Precision's claims against Endeavour, as well as Endeavour's own liability to Mr Edwards. It was submitted that Mr Edwards is not a party to the contract so that Precision is liable in the manner contended for by Endeavour.
Counsel for Precision submits that Endeavour's construction of Clause 6.2 is flawed. Upon Endeavour's construction, it was submitted that subclauses (a)-(c) of Clause 6.2 would be mere surplusage, if the indemnity related to a conventional breach of contract claim inter se. Precision submitted that Clause 6.2 provided for circumstances where Precision claimed against Endeavour for loss claimed by a third party. However, properly construed, Mr Edwards was not a third party. Precision submitted that Mr Edwards was not caught by Clause 6.2(d).
Precision submitted that an indemnity clause such as Clause 6.2 should be construed strictly against Endeavour, and it must be clear that the language of the indemnity under consideration is intended to indemnify against the liability in question: Andar Transport Pty Limited v Brambles Limited at 435-437 [20]-[23].
Precision submitted that Clause 6.2 had no application because it contemplates, and was intended to deal with, claims against Endeavour by third parties. However, Mr Edwards was not a third party. By operation of Clause 6.3, Precision submitted that he was relevantly a contracting party, given that Endeavour is agent for each of its representatives.
Precision submitted that Mr Edwards only needed indemnity if Clause 6.2 related to claims as a result of conduct of a non-contracting third party.
Decision on Endeavour's Contract Cross-Claim Against Precision
I approach the construction of Clause 6.2 upon the basis that it should be strictly construed against Endeavour. Indemnity clauses of this kind are to be construed strictly and are to be read contra preferendum. In the case of ambiguity, the indemnity clause is to be construed in favour of the party on whom it was sought to impose an obligation (Precision): Andar Transport Pty Limited v Brambles at 435-437 [20]-23].
In my view, the proper meaning of Clause 6.2 is that it serves to indemnify Endeavour with respect to claims as a result of conduct of a non-contracting third party. The reference to a "third party" at various points in Clause 6.2 supports this construction. I accept the submission of Precision that the construction advanced by Endeavour would produce some anomalous results, including the rendering of subclauses (a)-(c) as mere surplusage.
I am not satisfied that Clause 6.2 operates in a manner which assists Endeavour, in its efforts to defeat any claim against it by Precision, or to shift liability from Endeavour to Precision in any area where Endeavour itself has responsibility in this litigation.
Clause 6.2 has no role to play in the resolution of issues posed for determination in this litigation.
I reject Endeavour's assertion, by way of cross-claim against Precision, based on alleged breach of contract.
Application of s.151Z WC Act
Section 151Z is in the following terms:
"151Z Recovery against both employer and stranger
(1) If the injury for which compensation is payable under this Act was caused under circumstances creating a liability in some person other than the worker's employer to pay damages in respect of the injury, the following provisions have effect:
(a) the worker may take proceedings both against that person to recover damages and against any person liable to pay compensation under this Act for payment of that compensation, but is not entitled to retain both damages and compensation,
(b) if the worker recovers firstly compensation and secondly those damages, the worker is liable to repay out of those damages the amount of compensation which a person has paid in respect of the worker's injury under this Act, and the worker is not entitled to any further compensation,
(c) if the worker firstly recovers those damages the worker is not entitled to recover compensation under this Act,
(d) if the worker has recovered compensation under this Act, the person by whom the compensation was paid is entitled to be indemnified by the person so liable to pay those damages (being an indemnity limited to the amount of those damages),
(e) if any payment is made under the indemnity and, at the time of the payment, the worker has not obtained judgment for damages against the person paying under the indemnity, the payment is, to the extent of its amount, a defence to proceedings by the worker against that person for damages,
(e1) if any payment is made under the indemnity and, at the time of the payment, the worker has obtained judgment for damages against the person paying under the indemnity (but judgment has not been satisfied), the payment, to the extent of its amount, satisfies the judgment,
(f) all questions relating to matters arising under this section are, in default of agreement, to be settled by action or, with the consent of the parties, by the Commission.
(2) If, in respect of an injury to a worker for which compensation is payable under this Act:
(a) the worker takes or is entitled to take proceedings independently of this Act to recover damages from a person other than the worker's employer, and
(b) the worker also takes or is entitled to take proceedings independently of this Act to recover damages from that employer,
the following provisions have effect:
(c) the damages that may be recovered from the person by the worker in proceedings referred to in paragraph (a) are to be reduced by the amount by which the contribution which the person would (but for this Part) be entitled to recover from the employer as a joint tortfeasor or otherwise exceeds the amount of the contribution recoverable,
(d) the amount of the contribution that the person is entitled to recover from the employer as a joint tortfeasor or otherwise is to be determined as if the whole of the damages were assessed in accordance with provisions of Division 3 as to the award of damages,
(e) if the worker does not take proceedings against that employer or does not accept satisfaction of the judgment against that employer, subsection (1) applies as if the worker had not been entitled to recover damages from that employer, except that:
(i) if the compensation paid by that employer exceeds the amount of the contribution that could be recovered from that employer as a joint tortfeasor or otherwise - the indemnity referred to in subsection (1) (d) is for the amount of the excess only, and
(ii) if the compensation paid by that employer does not exceed the amount of that contribution - subsection (1) (d) does not apply and the employer has, to the extent of the compensation so paid, a defence to an action for such a contribution.
(3) This section applies to proceedings taken independently of this Act by a person to whom compensation is payable under this Act in respect of the death of a worker as a result of an injury.
(4) If a worker is liable under subsection (1) (b) to repay any money out of damages recovered by the worker, the worker is not liable to repay the money out of any damages payable after the date of recovery by way of periodic or other payments for loss of future earnings or earning capacity or for future expenses.
(5) For the avoidance of doubt, this section applies and is taken always to have applied to the recovery of compensation or damages, whether or not the compensation or damages were paid under an award or judgment. For example, compensation or damages may be paid under an agreement."
Endeavour makes a claim in these proceedings for an indemnity under s.151Z(1)(d) WC Act. It is necessary to keep in mind that the liability referred to in s.151Z(1) is the liability of Precision and/or Telstra to Mr Edwards.
Endeavour sues pursuant to s.151Z(1)(d) as the injured worker, Mr Edwards, has recovered and continues to recover compensation under the WC Act.
Section 151Z(1)(d) requires Endeavour, as Mr Edwards' employer, to firstly establish that Mr Edwards was injured in circumstances where Precision and/or Telstra would, if sued, have been liable to pay damages to Mr Edwards in respect to his injuries.
Where there is liability by either or both of Precision and Telstra, but no liability on the part of Endeavour, the application of s.151Z(1)(d) is that described by Cole AJA (Mason P and Sheller JA agreeing) in Grant v Royal Rehabilitation Centre Sydney [1999] NSWCA 250; 47 NSWLR 263 at 265 [8]:
"Accordingly, to determine whether the sum which has been paid as compensation is recoverable from the tortfeasor, two steps are necessary. The first is to determine the quantum of common law damages which would have been recoverable had they been sued for. The second is to determine the amount of compensation which has been paid. The amount of the indemnity provided by s151Z(1)(d) is limited by the former determination. If the amount claimed by way of indemnity is less than the amount of damages so determined, the employer or insurer making continuing payments of compensation can further claim under the indemnity at a later point in time up to the limit of the sum determined as the amount of damages which the injured worker would have recovered at common law."
In short, the task is to first determine the quantum of damages under the Civil Liability Act 2002 which Mr Edwards would have recovered. This figure is agreed at $16 million.
The second step is to determine the amount of compensation paid. If the amount of the compensation paid is less than the amount of damages determined, the employer making continuing payments of compensation can further claim under the indemnity, up to the limit of the sum determined as the amount of damages which the injured worker would have recovered at common law.
In this case, Endeavour (as employer) has presently paid a very substantial sum by way of compensation, and will continue to make payments of approximately $10,000.00 per week, for the remainder of Mr Edwards' life.
In this case, it is alleged by each of Precision and Telstra that Endeavour would have been liable to Mr Edwards, had he sued Endeavour. That allegation requires application of s.151Z(2)(a)-(d): Clout Industrial Pty Limited (In Liquidation) v Baiada Poultry Pty Limited [2004] NSWCA 89; 61 NSWLR 111.
It is common ground between the parties that s.151Z(2)(e) applies to this case: J Blackwood & Son v Skilled Engineering [2008] NSWCA 142. This is so given that:
(a) Mr Edwards took, for a period, proceedings independently of the Act to recover damages from a person other than his employer, and
(b) he took, for a period, proceedings independently of the Act to recover damages from his employer.
In this regard, I note that by 13 August 2009, an Amended Statement of Claim had been brought in proceedings 2008/20086, Simeon Edwards v Integral Energy, Precision, Telstra and Sydney Western Area Health Service. As mentioned earlier in this judgment, these proceedings were discontinued, with the approval of the Court.
The phrase "independently of this Act" simply means the taking of proceedings which do not rely, in any way, on the WC Act: Leonard v Smith (1992) 27 NSWLR 5 at 10F.
Endeavour submits, correctly, that s.151Z(2)(a) and (b) are made out in this case.
The next step is to apply s.151Z(c) and (d), which must be read together. The manner in which those provisions are to be applied is that set out in Clout Industrial Pty Limited (In Liquidation) v Baiada Poultry Pty Limited at 118-126 [22]-[35]. The process indicated by the authorities is to:
(a) identify the contribution, if any, of the employer to the worker's injuries;
(b) assess the damages the employer would have had to pay, if sued outside the modified damages regime of Part 5 WC Act (in this case, this figure is agreed at $16 million), and apply the contribution figure to that amount to establish the "ordinary contribution";
(c) assess the damages the employer would have had to pay the worker under the modified damages provision of Part 5 WC Act (in this case, this is agreed at $1.7 million), and apply the contribution figure to that amount to establish the "employer's contribution";
(d) subtract the "employer's contribution" from the "ordinary contribution" to establish "the difference";
(e) subtract "the difference" from the damages the worker would have obtained to arrive at the indemnity.
The written submissions on behalf of Endeavour and Telstra on the s.151Z issue included calculations by way of examples to be applied, depending upon the particular findings made by the Court. There was agreement between the parties as to the workings contained in these calculations.
It is accepted by the parties that any indemnity figure ordered as a result of these proceedings, pursuant to s.151Z(2)(e)(i) would not affect the right of Endeavour to seek to recover its future payments of compensation to Mr Edwards. Each and every payment of compensation by Endeavour to Mr Edwards, made pursuant to the WC Act, represents a separate cause of action: J Blackwood & Son v Skilled Engineering at [152]. Pursuant to s.14(1)(d) Limitation Act 1969, each payment has a six-year limitation period: J Blackwood & Son v Skilled Engineering at [153].
The effect of the operation of s.151Z(2)(e)(i) leads to the outcome that, following an order for indemnity in the present case, Endeavour, in respect of payments to be made thereafter would have to issue proceedings within the six-year limitation period to recover those further payments.
Endeavour submitted, and the other parties accepted, that the application of s.151Z(2)(e)(i) in these proceedings does not limit Endeavour's entitlement to recover compensation payments to be made to Mr Edwards after and in excess of the indemnity resulting from these proceedings pursuant to that provision.
The preceding analysis is not controversial in this case. The relevant formula to be applied to produce a mathematical outcome is agreed, with the remaining live issue involving the Court's assessment of the division of responsibility as between Endeavour (as employer) and Telstra and/or Precision (as alleged non-employer tortfeasors). It is to that issue that I now turn.
Decision Concerning Apportionment of Responsibility
For reasons explained earlier in this judgment, I am well satisfied that Endeavour bears the overwhelming responsibility for damages to be paid for negligence, arising from the helicopter crash on 4 April 2006 and the resulting serious injury sustained by its employee, Mr Edwards. The employer's non-delegable duty of care was breached with respect to the failure to provide helmets, and to ensure that they were worn (by Endeavour employees, including Mr Edwards), together with negligence with respect to mapping and information-gathering functions in advance of an aerial power line inspection, which were well-recognised industry obligations at the time of the crash.
The breach of duty with respect to the helmet issue played a critical causal role in Mr Edwards sustaining serious head injuries, as a result of a glancing blow from the rotor to his unprotected head. This is the primary area of breach for which Endeavour bears responsibility.
For reasons expressed earlier in this judgment, I am not satisfied that Telstra has breached any duty of care to Mr Edwards. Even if there were such a breach, I am not satisfied that the injury to Mr Edwards was foreseeable in the circumstances. Accordingly, I do not find that Telstra is a non-employer tortfeasor for the purpose of s.151Z WC Act.
Once again, for reasons expressed earlier in this judgment, I have accepted that there is a breach of duty established, in the circumstances of the case, resulting from the failure by Precision and its employees to bring to the attention of Mr Edwards the presence of helmets aboard the refuelling truck at Ebenezer. Although it was the responsibility of Endeavour to provide helmets and to ensure its employees wore them, in the practical circumstances of operations on 4 April 2006, it remained relevant that Precision had helmets which were available for use, if their presence was made known to Endeavour employees, including Mr Edwards.
I observe immediately, however, that the evidence indicates that Endeavour personnel did not, in practice, wear helmets. This is a likely consequence of the failure of Endeavour to properly train its employees in this respect, and to provide helmets for that purpose. However, I am satisfied that Precision is in breach of its duty to Mr Edwards, in the events of that day, in not making known the presence of the helmet available for the purpose of these very flights, and that the requirements of ss.5B and 5D Civil Liability Act 2002 have been made out.
Accordingly, a foundation has been laid for an assessment of some responsibility by a non-employer tortfeasor, Precision, in this respect. In the course of my findings concerning the helmet issue, I indicated that an appropriate level of apportionment on that issue was 85% for Endeavour and 15% for Precision (at [192] above). Having now determined other areas of liability, there is no finding adverse to Telstra, nor is there any further finding adverse to Precision. A further adverse finding has been made against Endeavour.
A final determination of responsibility as between Endeavour and Precision should have regard to all adverse findings made against those entities. This process involves a comparison of culpability (the degree of departure from the standard of care of the reasonable person) and the relative importance of the acts of the parties in causing the damage: Podrebersek v Australian Iron and Steel Pty Limited at 494. It is the whole conduct of each negligent party in relation to the circumstances of the accident which must be subjected to comparative examination.
Again, for reasons expressed earlier in this judgment, I am not satisfied that Precision (and Mr Carter) breached a duty of care to Mr Edwards based upon aviation issues. The suggested shortcomings in the flying of Mr Carter do not, upon proper analysis, lead to a finding of breach of duty towards Mr Edwards. As mentioned earlier in the judgment, the evidence rises no higher than a type of hindsight self-criticism by Mr Carter (which I am not satisfied gives rise to a finding of negligence), associated with the expression of opinions, by one or other of the aviation experts, as to what might have been done better on the day from a flying perspective. However, I am not satisfied that these matters give rise to a finding of negligence against Precision.
Having undertaken the comparative examination required by reference to the whole conduct of each of Endeavour and Precision, the calculations to be undertaken, for the purpose of s.151Z WC Act should reflect 90% responsibility on the part of Endeavour, and 10% responsibility on the part of Precision.
Conclusion
I commenced this judgment with a broad description of the different claims advanced by the parties in the proceedings. It is appropriate to return to those claims to summarise the outcomes in this litigation.
Claims by the Edwards' Family
I am satisfied that the Edwards children, Connor James Edwards (now in his own right) and Rubyanna Belle Edwards (with Ms Edwards as tutor) have established liability against Endeavour and Precision, arising from the findings which I have made in this judgment.
I am not satisfied that the Edwards children have established liability against Telstra.
Claim by Endeavour
I am satisfied that Endeavour has established against Precision a claim for indemnity of 10% under s.151Z(1)(d) WC Act.
Endeavour has failed in its claim for indemnity against Telstra.
Endeavour has failed in its claim against Precision for indemnity against loss arising from the contract between them.
Claim by Precision
I am satisfied that Precision has made good its claim for damages for breach of contract with respect to the damage to the helicopter hull and loss of its use, as well as its claim for breach of contract for Precision's liability to Endeavour under s.151Z WC Act and for Precision's liability to the Edwards family, including the Edwards children.
Precision has failed in its claim against Telstra for indemnity or contribution with respect to claims by members of the Edwards' family.
Orders
Having reached these conclusions, the appropriate course is to require the parties to bring in short minutes of order, to give effect to the terms of the judgment. In addition, there are outstanding aspects of the litigation relating to the claim by the Edwards children.
The proceedings will be adjourned to allow appropriate steps to be taken to progress the litigation.
In addition, if the parties cannot agree as to costs, a timetable will be fixed for the provision of written submissions on any contested costs issue.
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Decision last updated: 08 January 2014
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