Filipovic v Colonia Insurance

[2002] NSWCA 118

CITATION:	Filipovic v Colonia Insurance [2002] NSWCA 118
FILE NUMBER(S):	CA 40265/01; 40266/01; 40267/01; 40268/01
HEARING DATE(S):	21 February 2002
JUDGMENT DATE:	8 May 2002
PARTIES :	Tony Filipovic v Colonia Insurance & Ors Cecilia Filipovic v Colonia Insurance & Ors McLelland v Tony Filipovic & Ors McLelland v Cecilia Filipovic & Ors
JUDGMENT OF:	Handley JA at 1; Santow JA at 2; Young CJ in Eq at 3

LOWER COURT JURISDICTION :	Supreme Court - Common Law Division
LOWER COURT FILE NUMBER(S) :	CLD 20881/95; 20880/95
LOWER COURT JUDICIAL OFFICER :	Bell J

COUNSEL:	For C & T Filipovic - B J Gross QC/S B Dixon For Colonia & Baltica - R S McIlwaine SC/B Morris For McLelland - M F Richardson
SOLICITORS:	For C & T Filipovic - Russell McLelland Brown Wollongong For Colonia & Baltica - Price Waterhouse Coopers Legal Sydney For McLelland - In Person
CATCHWORDS:	CIVIL AVIATION REGULATION - Reg 157 - landing - unlawful flying - low flying
LEGISLATION CITED:	Civil Aviation Regulations 1988
DECISION:	Appeals dismissed with costs

- 2 -IN THE SUPREME COURT

CA 40265/01
CLD 20881/95

CA 40266/01
CLD 20880/95

CA 40267/01
CLD 20881/95

CA 40268/01
CLD 20880/95

HANDLEY JA
SANTOW JA
YOUNG CJ in EQ
8 May 2002

FILIPOVIC v COLONIA INSURANCE COMPANY (UK) LTD

and associated appeals

CIVIL AVIATION REGULATION – Reg 157 – landing – unlawful flying – low flying

On 6 September 1992, as a result of pilot error, a helicopter crashed on a country property injuring a passenger who sued the company that insured the pilot. The pilot was insured with the respondent against liability for bodily injury or death subject to an exception which excluded cover where the aircraft was being used for an unlawful purpose or for low flying. Taking off from and landing on an unlicensed landing ground was covered but the pilot was required by the policy to survey the landing ground from the ground or from the air immediately prior to landing or taking off as the case may be.

Clause 157 of the Civil Aviation Regulation 1988 made it an offence for an aircraft to fly over an area at a height lower than 500 feet above the highest point on the terrain and any object on it within a radius of 300 metres from a point on the terrain vertically below, but sub clause (4) excluded flying in the course of actually taking off or landing at an aerodrome.

Before the crash the helicopter was flying at a height of less than 500 feet contrary to Reg 157. The insurer disclaimed liability on the ground that the pilot was not in the course of actually landing on the property. The trial Judge found that the helicopter had been flying below 500 feet and the pilot had not been in the course of actually landing at the time of the crash. The passenger appealed.

HELD : The appeal should be dismissed. A pilot is not in the course of actually landing unless he has committed the aircraft to come to the ground for landing. Since this pilot could not see the intended landing site from the aircraft immediately before he crashed he was not in the course of actually landing at that time.

ORDERS

Appeal dismissed with costs.

CA 40265/01
CLD 20881/95

CA 40266/01
CLD 20880/95

CA 40267/01
CLD 20881/95

CA 40268/01
CLD 20880/95

HANDLEY JA
SANTOW JA
YOUNG CJ in EQ
8 May 2002

FILIPOVIC v COLONIA INSURANCE COMPANY (UK) LTD

and associated appeals

1 HANDLEY JA: I agree with Young CJ in Eq.

2 SANTOW JA: I agree with Young CJ in Eq.

3 YOUNG CJ in EQ: The Court is hearing four appeals from two sets of proceedings heard together by Bell J in the Common Law Division of this Court arising out of a fatal helicopter crash on Sunday 6 September 1992 near Dapto, NSW.

4 In the first set of proceedings, the widow of the late Frank John Filipovic sued the pilot’s flying school (first defendant), the owner of the helicopter (second defendant), the insurers of the first and second defendants (the third and fourth defendants) and the pilot (the fifth defendant).

5 Originally the plaintiff sued the insurers directly pursuant to s 51 of the Insurance Contracts Act 1984. However, the plaintiff did not press this claim and the Judge allowed an amendment whereby the plaintiff sought a declaration that the third and fourth defendants were liable to indemnify the fifth defendant for the damages he might have to pay as a result of the crash.

6 The plaintiff’s counsel told the trial judge that he wished to discontinue against the first and second defendants. It was then too late to discontinue and the Judge found verdicts for the first and second defendants. After hearing the evidence, she also found a verdict for the third and fourth defendants. Her Honour found a verdict for the plaintiff against the fifth defendant for $765,925. She dismissed the cross claim of the fifth defendant against the third and fourth defendants for indemnity.

7 The appeal concerns the verdict in favour of the third and fourth defendants and the dismissal of the fifth defendant’s cross claim against those defendants for indemnity.

8 The second set of proceedings was brought by the surviving passenger in the helicopter, Tony Filipovic. The proceedings were structured in the same way and followed the same course. The result was the same, save that the verdict was for $1,301,316. The appeals lodged followed the same pattern as in the earlier set of proceedings.

9 On the appeals, Mr B Gross QC appeared for the appellants, and Mr R S McIlwaine SC and Mr B Morris for the respondents.

10 There is no doubt at all that the crash was caused by pilot error rather than equipment failure or fault.

11 The relevant insurance policy, covered, inter alios, the pilot for all liability for compensation for bodily injury, death or property damage subject to exceptions. Section 4 of the policy contains general exclusions. The focus is on the following:

“1. You are not covered under this policy if at the time of an accident or occurrence giving rise to a claim:
1.1 the Aircraft is being used with your knowledge and consent for any unlawful purpose …
1.5 the Aircraft was, with your knowledge and consent, being used for …
1.5.2 low flying or any other form of flying involving abnormal hazards …”.

12 The addenda of the policy contained the following clause:

“1. It is understood and agreed that the landing and taking off of the aircraft by day from Landing Grounds other than duly authorised or licensed aerodromes is covered under this policy subject to each such landing ground being surveyed from the ground or from the air by the Insured and/or by the pilot immediately prior to landing or taking off as the case may be. In the event of a claim being made under the policy arising out of the use of any such landing ground the onus of proving its suitability as such shall rest entirely on the Insured.”

13 There was a limit of $1 million in relation to any one occurrence.

14 The trial took eight days before her Honour who reserved her decision and delivered a 49 page set of written reasons some months later. Her Honour’s reasons contain a very comprehensive and detailed treatment of the facts.

15 The admitted facts were that the crash took place on Tony Filipovic’s 21st birthday. The fifth defendant had recently obtained a helicopter pilot’s licence. He hired the helicopter and flew it to the County Council’s picnic grounds at West Dapto. There he picked up Frank and Tony Filipovic with the apparent aim of taking them to the Filipovic farm which was about 4 km west as the crow flies. The helicopter crashed into trees on a slight rise near the Filipovic farm, some 70 metres below the area of level ground on that farm.

16 Tony Filipovic, the survivor of the crash, said in his statement to the police that the fifth defendant was his sister’s boyfriend who had offered him his first flight in a helicopter. They flew west for about five minutes to the family farm. He then said:

“We then flew towards the coalmine and then turned and flew over a gully that was heavily wooded on either side.
We were about 10 or 15 metres above the trees. At one point the helicopter gave a jolt, that was as we came to the end of the gully, it was like a descending corridor of trees. We descended to the level of the trees and it did it again, then the skids hit the tops of the trees.
I don’t remember anything after that, I must have been knocked out. At the time of the accident we were flying above the trees of the gully, there were also trees on the side of the gully. Prior to the accident Rod had been flying a lot higher but as he turned he went lower towards trees. At the time of the jolt we had reached the end of the gully and couldn’t go any further we had to turn.”

17 It would seem that the helicopter hit a tree at 1.38 pm and then hit some more trees and fell to earth, killing the pilot and Frank Filipovic.

18 The insurers claimed that at all material times the pilot was in breach of general exclusion 1.5.2 of the policy and general condition 2.1 of the policy in that he was using the aircraft with his own knowledge and consent for low flying and forms of flying involving abnormal hazards, and did not comply with the relevant regulations. The central point made by the insurers was that the helicopter was flying at a height of less than 500 feet contrary to regulation 157 of the Civil Aviation Regulations.

19 Regulation 157 of the Civil Aviation Regulations 1988 is concerned with low flying. It makes it an offence for an aircraft to fly over the area such as that in question at a height lower than 500 feet above the highest point on the terrain and any object on it within a radius of 300 metres from a point on the terrain vertically below the helicopter. However, sub-regulation (4)(e) provides that that restrictions do not apply “if the aircraft is flying in the course of actually taking off or landing at an aerodrome.” “Aerodrome” for this purpose includes any site suitable for use as an aerodrome for the purpose of landing and taking off of aircraft. As her Honour recorded, the parties were agreed that in the event that the pilot had been in the course of actually landing the helicopter on a site upon the Filipovic property, the proposed landing site would be an aerodrome for the purpose of the regulation.

20 As her Honour pointed out at [19] of her reasons, “There was a considerable body of evidence pointing to the pilot as having been engaged in low flying in the period prior to the collision. There was some evidence to suggest that it may have been his intention to land the helicopter on the Filipovic property. A central issue in the way the matter was conducted was whether the third and fourth defendants had established as a matter of probability that at the time of the accident the pilot was not flying the helicopter in the course of actually landing on that property.” That is also the focus of this appeal.

21 Her Honour reviewed the evidence of various eye witnesses who observed the flight of the helicopter on its way to the crash site. This evidence included a concession by Tony Filipovic that for most of the flight the helicopter was operating at a height of less than 500 feet above the terrain.

22 The Judge referred to the fact that a Mr Matthews saw the crash. He said that the helicopter passed about 100 metres above his vehicle. He watched the helicopter travel west for about 30 seconds. He said, “It then proceeded to do a 360 degree circle in an anti-clockwise direction. From where I was it appeared to be very low to the tree-line. I would estimate at this time the helicopter was approximately one and a half kilometres from where I was. It also appeared to me that it was going to travel up and over the escarpment prior to going into the turning circle.” He then said, “After completing the circle, the helicopter then made a low pass along the tree-line heading south. After a matter of three or four seconds I noticed tree debris flying up into the air. At this stage the noise from the helicopter ceased.” He went on to say, “As the helicopter completed that circle and travelled in the southerly direction, its altitude changed and impacted with what I believe to be a tree.” The witness said that by “altitude changed” he meant it went slightly lower. He said, however, that the helicopter did not gradually decrease its height, it decreased just prior to impact. He emphatically rejected the suggestion that just prior to the impact the helicopter had been dropping in height.

23 Mr Hayes was on his farm at Dapto. He observed the helicopter about three kilometres away. It travelled over a hill just above tree level. It banked to turn and made a circle in an anti-clockwise direction, swooping back up the hill. It then disappeared from view, but the noise from the engine stopped suddenly and thin white smoke appeared from the same area.

24 Mr O’Dea, the head of Safety Regulation with the Civil Aviation Authority, gave evidence which the trial judge accepted, that when a helicopter lands other than on an established aerodrome, whilst there is no legal requirement for a pilot to fly a full reconnaissance circuit, flying that circuit is a matter of prudence and that is what pilots are told during training. He was later asked whether, after reading the evidence, in his view the pilot was in the course of actually landing the helicopter. Mr O’Dea gave the opinion that he was not so doing and based that opinion on five matters:

(i) three witnesses indicated that the helicopter was operating at a low level,
(ii) the same three witnesses described the helicopter conducting an orbit to the north of the Filipovic property and then travelling south over or near it down to a ridge south of it. The orbit to the north of the Filipovic property did not go around the property in a way that could be construed as a meaningful reconnaissance circuit,
(iii) the helicopter had not steadied on a heading towards the property in a position from which it could descend,
(iv) the helicopter was well below the Filipovic property,
(v) there was nothing in the evidence which might be identified as part of the precautionary reconnaissance prior to landing.

25 Mr O’Dea, however, agreed that lay persons are notoriously unreliable in estimating the height of aircraft.

26 Mr O’Dea was asked a series of questions suggesting that the facts showed that the helicopter was in the course of landing when it crashed.

27 A considerable amount of time was spent in debating whether Mr O’Dea was correct in saying that you have to commence a landing only when you get to the 500 feet level. Mr O’Dea had said in cross-examination, “The three witnesses have indicated the machine was operating at a low level, indicated that it conducted an orbit to the north of the Filipovic property past going south over it or near it and went down a ridge to the south of it. The orbit to the north didn’t go around the property in a way that could be construed as a meaningful reconnaissance. The aircraft had not steadied on a heading towards the property in a position from which it could descend, it was well below the property. There’s nothing in the evidence that I’ve seen that could be identified as part of the precautionary reconnaissance prior to landing or a landing approach itself.”

28 On the next day he was asked, still in cross-examination, with reference to that evidence:

“Do you agree that landing by a helicopter can physically be achieved as an overall process which can incorporate not only the final straight run into the landing spot but also orbiting?”

Mr O’Dea replied, “There can be a curve at the final end, but you still have to be going down towards a recognisable point.”

29 The evidence continued:

“Q. So long as there is a recognisable point, the landing process can incorporate a combination of orbiting and, in effect, a straight run as the ultimate stage of the landing process; is that right?
A. No. Orbiting suggests a complete 360, and what I am saying is the final approach would be much less than 360 degrees.
Q. The final approach in the landing process can incorporate not merely the ultimate straight run into the landing spot itself, but also some preceding orbiting which doesn’t have to be a full circle; correct?
A. That’s not part of the approach. The approach is the descent from the safe altitude down to where the landing is to occur.”

30 In re-examination Mr McIlwaine SC asked Mr O’Dea:

“Can you describe to her Honour in your words please what the period or phase of the flight is, that is where it commences and where it ends which is flying the helicopter in the course of actually landing?”

Mr Gross objected to that question but her Honour allowed it.

31 Mr O’Dea said:

“I believe there are two phases in what has been referred to. I haven’t heard the term used before, ‘the process’. There are two phases. One is approaching the selected spot, inspecting it if that is necessary, selecting approach, safe approach paths, assessing the wind. This can be done in a square sided circuit or a circular orbit. If you like, that is a preliminary phase or the circuit. I believe the landing actually starts when the aircraft leaves the 500 feet on the way towards an identified spot by an identifiable approach path.”

32 Her Honour found [87], “I am satisfied that at no time during the flight from the picnic ground to the point of collision was the helicopter flying at a height of 500 feet above the highest obstacle on the ground below within the radius specified by the Regulation.” She then said at [97], “I am unable to conclude that the helicopter was in the course of actually landing.” She said in making that finding she took the words “flying in the course of actually … landing at an aerodrome” “to refer to the conduct of an aircraft from the moment it commences its descent to an identified landing site.” She said that this did not include the conduct of a reconnaissance orbit or part orbit prior to the commencement of the final approach to an identified landing site. However, in any event she was not persuaded that the pilot was engaged even in informal reconnaissance orbit or partial orbit with a view to landing the plane on the Filipovic property in the period immediately prior to the collision with the tree. She said that this was so notwithstanding her acceptance of the evidence that the pilot had expressed the intention of taking Tony and Frank Filipovic up to the family property and landing on it.

33 She went on to say, “To my mind the evidence pointed to the pilot flying south over the wooded area at a low altitude for a period of time prior to collision with the trees. Nothing in the account of Tony Filipovic or the observations of the other witnesses is suggestive of the pilot losing control and the helicopter commencing a sharp downward descent prior to the first jolt. As the helicopter flew above and close to the tree cover after crossing the fairway, I accept that the pilot could not have had a landing site on the latter property in view.” The significance of that last comment was virtually to uphold the submission that you cannot be in the course of actually landing, where you are still seeking to identify a landing spot, in the case of a helicopter flight in daylight, which in the present case was some 70 metres below that landing spot.

34 Her Honour then concluded that the likelihood is “that the pilot was not in the course of actually landing the helicopter, or undertaking any step immediately preliminary thereto at the time of the first impact.” She thus found for the third and fourth defendants.

35 The four notices of appeal are in identical form. They essentially seek a new trial of the two sets of proceedings. The basal proposition put forward is that the facts show that the pilot was in the course of actually landing at a deemed aerodrome at the time of the crash. Thus, it is said, it is immaterial that the helicopter may have been low flying for the whole of the trip. If the accident occurred during landing, the pilot is not at that time flying illegally or low flying contrary to the regulation.

36 The appellants say that her Honour fell into error that there can only be a landing when the aircraft leaves the 500 feet position on the way towards an identified landing spot by an identifiable approach path. They also say that her Honour fell into error in saying that the conduct of a reconnaissance orbit prior to the commencement of the final approach to an identified landing site is not in the course of landing.

37 After the oral hearing on 21 February 2002, counsel sought and were granted leave to file supplementary submissions. Detailed submissions were filed on behalf of the appellants which spent considerable time analysing the evidence of Mr O’Dea and why her Honour erred in placing too much reliance on him.

38 Both in the course of the additional submissions and at the oral hearing there was some debate before us as to the onus and the effect of bearing the onus had or should have on the result of the proceedings. In due course it was accepted the respondent insurer bore the onus and thus counsel for the appellants took comfort in expressions that her Honour used from time to time that she was unable to conclude that the helicopter was in the course of actually landing. However, as counsel for the respondents put in their written submissions, this cannot disguise the absence of any direct evidence or other evidence upon which a reasonable inference could be drawn that at the time of the crash the helicopter was actually in the course of landing no matter what valid criticism might be made of Mr O’Dea’s evidence. Indeed, when one reads her Honour’s judgment as a whole, the whole tone is that she held that the helicopter was not in the course of actually landing at the time of the crash and she did so not only on Mr O’Dea’s evidence, but on a consideration of the whole of the evidence.

39 The notices of appeal refer to a number of ways in which her Honour is alleged to have erred in her fact-finding process in delegating to Mr O’Dea as an expert witness her role of deciding what had happened, in mistaking the facts and in putting too much emphasis on Mr O’Dea’s evidence. I am not persuaded that any of these matters fall outside the ordinary fact-finding process of a trial judge in preferring one piece of evidence over another or that her Honour at any time mistook any part of the evidence.

40 In particular, I do not accept that her Honour placed too much reliance on Mr O’Dea. Her Honour merely noted the evidence from Mr O’Dea that actual landing starts when the aircraft leaves 500 feet. To my mind, there is not the slightest reason for imputing to her Honour some firm view that one can only land a helicopter if one has reached a point 500 feet above the terrain.

41 Mr Gross QC for the appellants said that the critical time is the time of the crash. At that time, even though there had been previous low flying, regulation 157(4)(e) applied because the helicopter was in the course of actually landing.

42 The word “actually” is a word of significance: it means “in fact”. The term shows the regulation is not referring to preparation for landing or to an aircraft commencing its descent. What is landing is a question of fact and will depend on the type of aircraft and the weather conditions.

43 One knows from common experience that the actual way in which an aircraft descends from its cruising level to the ground depends greatly on the type of aircraft. A “jumbo jet” coming into Sydney Airport may commence its descent a couple of hundred kilometres away from the airport. However, one does not hear the captain call out to the crew to prepare for landing until very much closer to the airport. With a smaller plane distances will be much abbreviated and different conditions again will apply to helicopters which can fly backwards or move up and down.

44 The regulation refers to flying “in the course” of actually landing. This emphasises that the actual landing has commenced and that the descent below 500 feet is something that is part of the actual landing procedure.

45 Thus, the course of actual landing does, as her Honour held, refer to the process under which the pilot has in fact committed the aircraft to come to the ground for landing.

46 This is in fact what Mr O’Dea said, but it does not seem to me that her Honour merely accepted this evidence without applying her own mind to the problem.

47 Mr McIlwaine SC made the valid point, to my mind, that if the pilot were to land on the flat land on the Filipovic farm he would have needed to gain more height from the point where he crashed. This fact reinforces that what was happening could not be described as “landing”. Landing connotes moving from a point in the air downwards to the ground.

48 Again, as her Honour pointed out, the pilot could not see the landing site from where he crashed. Whether or not the pilot needs to see an identified landing spot throughout the landing process, it was very difficult to say that he was in the course of actually landing on a site; that is, as distinct from being at the anterior stage of trying to put himself in a position to actually commence landing, by first gaining height and then seeking to locate an identified landing spot when at sufficient height to do so.

49 Mr Gross QC says that not only did her Honour put too much emphasis on Mr O’Dea’s evidence, but that she should have accepted Mr Hayes’ evidence and rejected Mr Matthews’ evidence as his evidence was inconsistent with other lay witnesses. Had she done this, as Mr Matthews’ evidence really provided the basis for Mr O’Dea’s expert evidence, that evidence could be severely discounted because the factual basis of it had gone. However, her Honour clearly recognised that Mr Matthews’ description of the final moments of the helicopter’s life differed from other evidence in two principal matters. Despite this, and despite the strong challenge to his evidence, her Honour recognised the problems, yet still accepted the evidence. She was entitled to take this position.

50 Moreover, her Honour found her facts on the evidence generally, not on the basis of Mr O’Dea’s theory alone. Her Honour thoroughly and comprehensively considered the whole of the evidence and reached a conclusion on that evidence generally. The findings of fact that she made were fairly open to her.

51 In my view, her Honour correctly construed the regulation. She made no error in her finding of fact and the appeals must be dismissed with costs.

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