MME Logistics Pty Ltd v Clamback & Hennessy Pty Ltd - [2007] SASC 444

SUPREME COURT OF SOUTH AUSTRALIA
(Magistrates Appeals: Civil)
MME LOGISTICS PTY LTD & ANOR v CLAMBACK & HENNESSY PTY LTD
[2007] SASC 444
Judgment of The Honourable Justice Sulan
17 December 2007
AVIATION - CARRIAGE BY AIR - OTHER MATTERS
Defendant was contracted to conduct a ferry flight from United States to Australia of an aircraft owned by one of the plaintiffs - dispute arose between the parties as to the method by which the ferry flight would be conducted - contract was terminated - question as to which party had performed the anticipatory breach of the contract - primary question was whether a co-pilot should be regarded as an essential member of the flight crew - Magistrate found in favour of defendant that a co-pilot was essential, and that the defendant did not intend to conduct the ferry flight in a manner which was otherwise illegal - appeal dismissed.
Supreme Court Civil Rules 2006 r 282, referred to.
Fox v Percy (2003) 214 CLR 118, discussed.

MME LOGISTICS PTY LTD & ANOR v CLAMBACK & HENNESSY PTY LTD
[2007] SASC 444
Magistrates Appeal

SULAN J: The plaintiff company, which is the appellant, and the defendant, which is the respondent, entered into a contract for the defendant to ferry an aircraft owned by one of the plaintiffs from the United States to Australia. For reasons that will be explained later in these reasons, the agreement was terminated and the defendant ultimately did not ferry the aircraft to Australia. The most significant area of dispute between the contracting parties was whether the ferry flight would be carried out by a single pilot, or by a pilot flying with a co-pilot. The plaintiffs and the defendant both claim that the opposing party breached or repudiated the contract.
The plaintiffs sought a refund of the fee paid to the defendant to ferry the aircraft from the United States to Australia. In a counterclaim, the defendant sought damages to compensate it for certain expenses.
The trial proceeded before a Magistrate. The Magistrate found that the contract was terminated due to the unreasonable insistence by the plaintiffs that the ferry flight be conducted with only a single pilot. The Magistrate entered judgment in favour of the defendant and made an award of damages and costs in the defendant’s favour.
In their notice of appeal, the plaintiffs, now the appellants, disclose 26 grounds of appeal. Each of these contends that the Magistrate erred in making certain findings of fact and law. Before turning to the submissions of the parties, it is necessary to set out the background to the aborted ferry flight.
The evidence at trial
Background facts
The second plaintiff, Gary McKernan, corresponded with staff of the defendant company in early 2006. The plans for the proposed ferry flight changed several times. It appears from the evidence that the plane was collected from an airport in Atlanta, Georgia. The aircraft then appears to have been flown to an airport near Las Vegas. I note this only to put in context the evidence of the witnesses as to the location of various conversations, and the order in which they occurred.
A document was tendered in evidence that was titled “Aquisition [sic] of Aircraft from the USA: Recommendations by Ray Clamback”.[1] The document was dated 28 October 2005. It set out the procedure that the defendant recommended be followed by persons purchasing aircraft in the USA and importing them to Australia. One of the recommended steps, which was proposed to be taken by the defendant rather than the importer, was to obtain a Special Flight Permit from CASA.
[1] Exhibit D1, tab 3.
Much email correspondence was provided to the court. The first email of relevance was sent on 29 January 2006. That email was sent from Lyn Gray (on behalf of the defendant) to Gary McKernan, one of the plaintiffs. The content of the email is as follows:[2]
[2] Exhibit D1, tab 4.
Thanks for the reply Gary,
I look forward to you [sic] call tomorrow. There are certain pit falls in keeping the aircraft on the US register:
1. only one pilot can go in the aircraft on the US register which is not the safest way to ferry.
2. our paperwork can take up to 6 days longer on the US register as the FAA has to come an [sic] actually inspect the plane and we need to book them and wait their arrival
3. if you are going to put the Mooney on the Oz register anyway, you may as well do it before we depart
4. the costs to you are cheaper on the Oz register.
To ferry the aircraft, we don’t need an Australian C of A or an Australian Maintenance Release. This is all done once the aircraft arrives here. Attached is our list of ferry recommendations.
We will supply all the necessary fuel tanks and equipment.
Both Ray and I will be in office tomorrow.
I note that in relation to the statement that the US regulations only permitted one pilot to go on the aircraft, Mr Clamback gave evidence it was not correct. He stated at that time the regulation was interpreted differently by different examiners, but that it had now been settled.[3]   Amongst the conditions on the annex to that permit[4] were that “The aircraft is to be operated in accordance with applicable air traffic control and general operating rules of the Civil Aviation Regulations” and that “Aircraft shall carry essential crew only”.
[3]    T 236.
[4]    Exhibit D1, tab 22.
Permits obtained
In due course, the defendant company sought and obtained a permit from CASA. The defendant nominated as the “crew required to operate aircraft and its equipment” a pilot and co-pilot. A permit was issued by CASA in those terms on 15 February 2006.[5]
[5] Exhibit D1, tab 21.
Ms Gray gave evidence that the special flight permit sought from CASA enabled an Australian-registered aircraft to be flown, even though it would not meet the Australian requirements at the time of the flight. She stated that on a ferry flight there were four particular respects in which the aircraft would not meet the requirements, including that the aircraft would be flown over gross weight.[6]
[6] T 122.
An item of FAA documentation was before the Court. This was a Foreign Civil Aircraft Special Flight Authorization issued on 15 February 2006.[7] The document relevantly provides:
… Lyn Gray is hereby authorized to operate the aircraft identified above for the purpose of flying it from Atlanta, GA, to Sydney, Australia.
In consideration of the foregoing, all operations of the aircraft shall be in accordance with the following restrictions and limitations….
…
4.No person may be carried in this aircraft during flight unless that person is essential to the purpose of the flight and has been advised of the content of this authorization and of the airworthiness status of the aircraft.
5This aircraft shall be operated only by airmen holding appropriate certificates or licenses issued or validated by the United States or the country of registry.
[7] Exhibit D1, tab 23.
Ms Gray gave evidence that she had prepared the paperwork for the FAA Foreign Civil Aircraft Special Flight Authorization the day after arriving in Atlanta. She stated that the significance of her being authorised to operate the aircraft was that she was required to be in the aircraft whenever it was operated, and was required to be in command at all times. However, she gave evidence that others could operate the aircraft under her command, and that Mr McKernan had, in fact, flown the aircraft while they were in the USA.[8]
[8] T 126-7.
Events in Atlanta
Ms Gray gave evidence that she had met Mr McKernan at Hartsfield Airport near Atlanta. He had driven her to her motel, and during the drive she discussed aspects of the ferry flight, and mentioned that the co-pilot was at that time in Denver.[9]
[9] T 124-5.
Mr McKernan’s evidence was that he met Ms Gray at the Hartsfield International Airport near Atlanta and drove her to her hotel. He stated that he and Ms Gray had a conversation during the drive to the hotel, and it was at this time that Ms Gray told him that there would be a second pilot on board. Mr McKernan stated that he was ‘gobsmacked’ because he thought the plane would be overweight with a second pilot, but he did not discuss it with her.[10] This was in conflict with the evidence of Ms Gray, who stated that Mr McKernan had been told in Australia about the use of a co-pilot.[11]
[10] T 9.
[11] T 193.
When cross-examined about why he had not discussed the use of two pilots with Ms Gray, Mr McKernan stated that he did not know what the weights of the equipment would be, and so he could not say whether the use of two pilots would have caused the plane to be overloaded, and therefore could not be insistent about the use of a single pilot.[12]
[12] T 53, T 57.
Events in Las Vegas
A document entitled “Ferry Delivery Acceptance and Instructions” was executed on or about 16 February 2006.[13] The document contained the following conditions, inter alia, for the ferry delivery:
While in the custody and control of Clamback and Hennessy Pty. Ltd. the aircraft is to be operated at all times in accordance with Federal Aviation Authority and/or Civil Aviation Safety Authority rules and regulations and permits. Clamback and Hennessy Pty. Ltd. agree indemnify [sic] MME Logistics Pty. Ltd. against all claims and liabilities arising out of any operation not in accordance with the rules regulations and permits.
The crew of the aircraft shall be limited to essential operating crew only, as stipulated in the FAA and/or CASA ferry permits. The carriage of passengers and/or non-essential flight crew is prohibited.
The acceptance of the aircraft for delivery shall be acceptance of the instructions contained herein.
[13] Exhibit D1, tab 24.
Ms Gray gave evidence that Mr McKernan had given her this document while they were in Las Vegas. Ms Gray said that passengers were never carried, only essential crew, and because there was nothing in the document contrary to normal practice, she signed the document.[14] Mr Clamback confirmed that there was nothing in the document that was not normal practice.[15] He stated that he first became aware of Mr McKernan’s concern over co-pilot when shown this document.[16]
[14] T 128-30.
[15] T 219.
[16] T 219.
Mr McKernan gave evidence that the document reduced to writing the discussions he had had with the respondents. He said he understood that by Ms Gray signing the document, the respondent agreed to the conditions.[17]
[17] T 62-3.
Correspondence of 28 February 2006
On 28 February, Mr McKernan sent an email to the respondent raising his concerns about the use of a co-pilot. Aminta Hennessy responded to the email, and interspersed her responses with the concerns of Mr McKernan. Ms Hennessy’s email is shown below, with the enquiries of Mr McKernan emphasised:[18]
[18] Exhibit D1, tab 29.
The carriage of a passenger whilst in ferry configuration is not permitted. If you do so, it is in direct contradiction of my instructions.
We never carry passengers on ferry flights and we agree that it is not permitted.
In the first instance, courtesy would have dictated disclosure to the owner of your intention to carry a passenger prior to acceptance of the offer to ferry the aircraft.
We never carry passengers.
The aircraft will be in at least 110% overloaded [sic] in single pilot operation, and carriage of “non-essential” crew adds an unnecessary 200 lb weight (estimated). There are serious implications regarding insurance liability should the carriage of the passenger contribute in any way to the loss or damage to the aircraft. Additionally, you are exposing the owner of the aircraft to “deep pocket litigation” should any incident occur in USA jurisdiction.
Your reference to ‘non-essential crew
For many years now we have deemed it necessary to carry an extra pilot as aircrew on ferry flights for many many reasons.
·If the autopilot breaks down the pilot ends upon long long legs over water, hand flying the aircraft, hand pumping fuel, if the fuel system breaks down. We have the fuel system automated with standby electrical and hand pumps to kick in but even the best laid plans can go astray.
·Myself as a ferry pilot I have had 4 autopilot breakdowns and one fuel problem and all occasions I was the only pilot on board. The work load increases dramatically. If you then combine this with negotiating bad weather for long distances – it is to all intents and purposes on long haul not particularly safe.
·As Ferry pilots get older there is also the possibility of illness or heart attack – who knows, but Ray has had one pilot die on him in an aircraft at the bottom of the Richmond ILS at Sydney – these things happen. Singapore Airlines has one pilot a year die at the controls of their heavies!
Please confirm that you intend to and will operate the aircraft in accordance with FAA and CASA regulations pertaining to the flight permits.
·I can confirm that we always operate the aircraft in accordance with FAA and CASA regs – in this particular case it comes under CASA.
·I can understand your concerns Gary – but we have been ferrying now for something like 40 years and have had many many years to think about all the safety aspects of ferrying. I would say that we have carried extra crew on nearly every flight now for something like 10 years. We are also aware of our legal responsibilities in relation to the insurance, aircraft safety and regulators.
·One of the reasons that our insurance is so low is twofold – Ray is on board and/or supervising the ferries first hand and that two aircrew are generally carried.
·I have no idea what discussions you had with Ray Clamback and I will copy him in on this email so that he can answer you when he receives it.
Mr McKernan responded as follows:[19]
I disagree with your reasoning – no other ferry operator I contacted considered having a second pilot on board for any of the reasons you propose. I have been flying for 28 years and have never had a heart attack, died at the controls or had a u/s autopilot.
My other Ovation was delivered single pilot in 2000. My friend’s Ovation was delivered single pilot.
Your company has ferried similar aircraft across the Pacific in single pilot configuration previously.
[19] Exhibit D1, tab 29.
Ms Hennessy responded, inter alia, that the respondent very seldom ferried in single pilot configuration.[20]
[20] Exhibit D1, tab 29.
Mr McKernan gave evidence that he sent his email of 28 February after seeing the respondent’s website, which clearly indicated that there would be two pilots.[21] Mr McKernan stated that he wrote the email, and in particular his statement that “the carriage of a passenger whilst in ferry configuration is not permitted” because:[22]
A.I became concerned that the co-pilot that they were going to take along on the flight would have been probably a student that they were training or alternatively somebody having a Pacific Ocean adventure as described above Clamback Cruises, specialists in Pacific Ocean adventures, and I thought they were probably taking somebody along and doing it on my nickel and my concern was that firstly another pilot would have put the aircraft well over its maximum take-off weight, that if there was an emergency and the aircraft, evacuation of the aircraft in the water, possibly upside down, with a lot of confusion, it would be much better to have no-one between yourself and the door than someone because that second person could be incapacitated, could panic, or could have frozen, so I believe that where you’re taking a risk of ending up in the water, one pilot is much better than two, but I couldn’t argue with anything, providing that the aircraft was under the 115% take-off weight, but my calculations said it was going to be much greater than that.
I was concerned also that if they did have an accident or an incident or hull loss, that they could expose my company to deep-pocket litigation even though it may not have been my fault. The lawyers in America tend to line up anyone they can and if lawyers knew of my personal situation they would certainly queue up, so I was very concerned that they could breach rules and regulations pertaining to the flight and that possibly my insurer could deny a claim if I’d let the flight continue with two pilots and overweight.
[21] T 64-5.
[22] T 17.
The contract is terminated
Mr Clamback responded to Mr McKernan on 2 March that:[23]
The second pilot is mandatory in our opinion. The last Mooney ferried from the US to Australia that we know of, carried two crew. We were involved in this ferry but did do the flight. [sic]
[23] Exhibit D1, tab 32.
Mr McKernan telephoned Ms Gray on Saturday night. I infer that this was Saturday 4 March 2006. The outcome of that telephone conversation was that the ferry flight would not proceed, as the defendant company would not conduct the flight single pilot, and Mr McKernan refused to allow the flight to proceed with a co-pilot.
Ms Gray gave evidence that after receiving an email from Mr McKernan, they had a telephone conversation. They discussed how the ferry flight would be carried out, including the advantages of using a second pilot. She told him a second pilot was mandatory for Clamback and Hennessy for safety reasons.[24]
[24] T 146-7.
Ms Gray gave evidence that they had demonstrated to Mr McKernan that the weight would be within limits if a second pilot were used. However, Mr McKernan gave a direction that the flight not proceed with a second pilot. In her opinion, she was unable to do the work because of Mr McKernan’s insistence on using a single pilot.[25]
[25] T 190-2.
Mr Clamback explained his position on the use of a second pilot as follows:[26]
A.I made a decision sometime ago that if I couldn’t use a second pilot I wasn’t going to expose Lyn Gray to unnecessary danger and if the pilot couldn’t go then I wasn’t going to do the job.
[26] T 226.
He was not prepared to accept Mr McKernan’s direction to the contrary.[27] Mr Clamback confirmed that Ms Gray had received a telephone call from Mr McKernan on the Saturday night,[28] and that it had concluded with Ms Gray saying that the second pilot was mandatory.[29] Mr Clamback gave evidence that at that time, the ferry flight would have gone ahead if they could use two pilots.[30]
The trial before the Magistrate
[27] T 226.
[28] T 227.
[29] T 228.
[30] T 229.
Evidence relating to use of co-pilot
Mr McKernan gave evidence that he had declined to travel on the ferry flight because he thought the aircraft would be too overloaded with two pilots, and most Mooney aircraft were ferried to Australia with a single pilot.[31] Nevertheless, Mr McKernan stated that he understood that if he were to be on board during the flight, it would be as a pilot.[32]
[31] T 6, T 45.
[32] T 44.
Mr McKernan stated he had no objection to the use of a co-pilot, if the weight had been maintained.[33] However, he stated that he suspected that his plane was being used for a ‘joyride’. When asked about the use of two pilots, Mr McKernan acknowledged that the respondent had used two pilots before, but for the purpose of “keeping in good with the students”. Mr McKernan stated that he became aware that the respondent was involved in an enterprise called “Clamback Cruises”, which was described as an expert in “Pacific Ocean adventures”. His evidence was that this supported his suspicion that the respondent was conveying a passenger on a “joyride” in his aircraft. It was his opinion that this was the reason for carrying an additional person on board.[34]
[33] T 33, T 47.
[34] T 67-8.

Mr McKernan rejected the suggestion that if the electric fuel pump failed, and hand pumping was necessary, it would be accomplished more safely and easily with two people on board.[35] He disputed that there may be valid safety reasons for using a co-pilot stating that:[36]
A.I wouldn’t think so, because if you’ve landed in water and your aeroplane’s upside down you don’t want anyone between yourself and the door of the aircraft because that person could panic, could freeze, could be incapacitated.
[35] T 74-5.
[36] T 33; see also T 69.
Mr McKernan spoke of his experience of what had occurred on a ferry flight of another of his aeroplanes, and of an aeroplane of his friend’s. He had never participated in a ferry flight. He had never been in an aeroplane that ditched. When asked whether professional pilots might be better placed to understand potential problems, Mr McKernan stated that he had completed several pilot-proficiency courses which included training on ditching.[37]
[37] T 75.
There is some doubt in my mind as to whether Mr McKernan was qualified to express his opinion on several topics on which he purported to do so. However, for the reasons that follow, it is unnecessary for me to decide that question.
Ms Gray disputed the assertion that all other ferry companies used a single pilot. She stated that most would use a second pilot when they could, and that the most experienced ferry pilots would only fly with two pilots.[38]
[38] T 167.
Ms Gray gave evidence that the only way to qualify to become a ferry pilot was to gain experience on ferry flights piloted by experienced pilots.[39] Both she and Mr Clamback stated that the standard arrangement was that new pilots in the position of Mr Thompson (the proposed co-pilot) would pay their own way.[40]
[39] T 115.
[40] T 115; T 212-13.
Ms Gray said that co-pilots were required to work hard and do whatever was necessary, as directed by the pilot. Ms Gray stated that they would only use people who would be useful.[41] Ms Gray gave evidence that it was not reasonable to infer that a student pilot would be going on a ‘joy-ride’. She stated that Mr Thompson could fly the aircraft under her command, could take off and land and had a radio operator’s certificate, although he could not have operated the aircraft on his own.[42]
[41] T 115-16.
[42] T 170-1.
Ms Gray explained the utility of a second pilot, as follows:[43]
A.We take a second pilot to make the flight safer. If anything happens to the pilot en route there is someone there who can take over the radio and broadcast our position, there’s someone there who can help fly the aircraft,. If something goes wrong with the plumbing of the ferry system, there’s someone there who can help repair it while one flies the plane. We found a second pilot invaluable. Through experience we’ve learnt this is true.
[43] T 116.
Ms Gray gave evidence that as the pilot in command on a ferry flight, she had responsibility for all aspects of the flight.[44]
[44] T 114.
Ms Gray gave evidence of her own experience of ditching a plane following a mechanical malfunction. Her evidence was that the co-pilot performed certain tasks, and that if was ‘much easier’ with a second person on board.[45]
[45] T 117-18.
Ms Gray stated that it was the ferry company’s job to determine who was required for the flight. She agreed reasonable minds might differ on what was required.[46] Both she and Mr Clamback explained why Mr Thompson would be appropriate as a co-pilot.[47]
[46] T 196.
[47] T 196; T 220.
Mr Clamback gave evidence that he had been a qualified pilot for 47 years, a professional pilot for 38 or 39 years, and involved with Clamback & Hennessy for about 25 years.[48] He stated he had been involved in about 300 ferry flights, the majority from the United States.[49] He had been involved in two ditchings, one with and one without a co-pilot, and stated that his experience had led him to adopt the practice of using two pilots on ferry flights.[50] He explained the utility of a second pilot and the necessary level of skill.[51]
[48] T 208.
[49] T 209.
[50] T 210.
[51] T 210-12.
Mr Clamback stated that Clamback & Hennessy always used two pilots. He regarded that as fundamental to the contract. He agreed that was not spelt out in the terms provided to Mr McKernan, but considered that the use of the phrase “the pilot in command” rather than the “the pilot” made it implicit that a second pilot would be on board.[52] He stated that the most experienced ferry flight operator in Australia always used a co-pilot,[53] but accepted that there was no standard industry practice.[54]
[52] T 215-16.
[53] T 212.
[54] T 215.
Evidence relating to weight and balance calculations
Mr McKernan did not believe that the weight and balance calculations of the defendant were accurate. However, when questioned by the Magistrate, it became apparent that Mr McKernan did not have any accurate figures, and his challenges to the defendant’s calculations were based on estimates. He said that the figures he used were from a ferry flight he arranged in 2000. However, these differed from the figures which were ultimately used in ferrying the aircraft, which he did not challenge.[55]
[55] T 78-82.
Ms Gray had carried out detailed weight and balance calculations for the benefit of the court. On this calculation, the aircraft was very slightly underweight,[56] although on the early working draft it would be overweight, due to an overestimate of the fuel requirement. Ms Gray stated the fuel requirement would decrease if there were a tailwind. She stated that, with a 10-knot tailwind, there would be a ‘buffer’ in the fuel requirements.[57]
[56] T 149-50.
[57] T 159-61.
Ms Gray conceded that some of the figures were incorrect on both the draft and the copy to court; however, she stated that the error would be apparent after she plotted the results on the relevant chart.[58] In any event, her discussions with Mr McKernan related only to the aircraft weight, not the weight and balance calculations.[59] Ms Gray stated that they were mindful of the safety concerns as well as the implications for insurance.[60]
[58] T 182-4; T 187.
[59] T 187-8.
[60] T 153.
Ms Gray explained the importance of the wind conditions used in weight and balance calculations.[61] Mr Clamback explained how the calculations would be fine-tuned as the flight approached.[62]
[61] T 134-5.
[62] T 225.
Appeal to this Court
As noted above, the notice of appeal disclosed 26 grounds of appeal. Shortly stated, the appellant’s complaint is that the Magistrate did not deal with the illegality of the method by which the respondent had intended to perform the contract. As I understand counsel’s oral submissions, the gravamen of the appellant’s case was that the carriage of a non-essential member of flight crew, and what he described as the weight and balance issue, would amount to an unlawful method of performing the contract, which would in turn constitute an anticipatory breach of the contract. A further issue, which assumed less importance during the appeal, was the removal of the oxygen system and the fire extinguisher. I shall deal with each of those issues in turn. I shall address first, however, the Magistrate’s findings on the credibility and reliability of the witnesses.
Reliability of witnesses
Counsel submitted that the Magistrate had not concluded that he accepted the evidence of the defendant’s witnesses that a co-pilot was essential. However, in his reasons, the Magistrate made very favourable findings about the reliability of the two witnesses for the defendant. He observed that they made appropriate concessions and were forthright in their evidence. These factors are apparent on the transcript – for example, Ms Gray readily accepted that there were errors in the weight and balance calculations she had prepared for the court, and Mr Clamback readily conceded that there was no industry standard as to the use of co-pilots.
An appeal from a magistrate to a single judge of this Court is an appeal by way of re-hearing.[63] The obligations and constraints on an appellate court conducting such a re-hearing were set out by Gleeson CJ, Gummow and Kirby JJ in Fox v Percy.[64] Their Honours noted that an appellate court should respect the trial judge’s advantages in being able to observe witnesses, particularly where questions of credibility arise. However, they emphasised that this principle does not diminish the obligation of the appellate court to perform its function of considering and weighing the evidence led at trial. Their Honours also observed that the demeanour of witnesses when giving evidence was merely one aspect for consideration, and commented on the importance of reasoning on the basis of more objective criteria such as “the apparent logic of events”.[65] With those principles in mind, I turn to consider the witnesses’ evidence.
[63] Supreme Court Civil Rules 2006, r 282.
[64] (2003) 214 CLR 118.
[65] Ibid 126-9.
Mr McKernan was the only witness for the plaintiffs. I have read the evidence of all the witnesses carefully. The Magistrate had the benefit of observing the witnesses give evidence. However, even on its face in the transcript, the evidence of Mr McKernan is difficult to accept. There was a stark contrast between his experience and that of Ms Gray and Mr Clamback. Nevertheless, Mr McKernan expressed his opinion on matters – such as the procedure for ditching an aircraft – of which he had no practical experience. He refused to make any concessions when questioned about the possible utility of a co-pilot on a long ferry flight, nor did he concede that there was any merit in Ms Gray’s and Mr Clamback’s opinions relating to procedures for ditching an aircraft, despite the fact that both of those witnesses had experienced such an event. His evidence that he was unaware until very late that a co-pilot was to be used was inconsistent with the correspondence tendered by the plaintiffs.
Mr McKernan stated that he wanted the defendant to comply with all FAA and CASA rules, and stated that if the aircraft had been lost, the authorities would have had regard to the qualifications of the pilot and co-pilot, and the weight and balance calculations.[66] Mr McKernan’s reliability was, in my view, seriously compromised by his response to questioning about the use of fuel on the ferry flight. The defendant’s witnesses had explained that more fuel would be required if there was a headwind, and thus it was important to refine calculations of the weight of the aircraft (including fuel) based upon changing wind conditions. Mr McKernan was asked whether he would expect a pilot to turn back if they encountered a head wind and it became apparent that there would be insufficient fuel.[67] Mr McKernan stated:
A.No, I would actually expect that they would have put a lot more fuel into the ferry bag than what they said they were going to and kept going for commercial reasons.
[66] T 77.
[67] T 90-1.
Mr McKernan accepted that this was contrary to the permit.
In the light of this evidence, it is unsurprising that the Magistrate rejected Mr McKernan’s assertion about his motivation. Although the Magistrate’s finding as to the motivation of Mr McKernan was unnecessary, it is clear that the Magistrate considered Mr McKernan to be an unreliable witness, and in my view it was open to the Magistrate to have regard to the conflicting evidence as to his motivation in considering Mr McKernan’s reliability. For the reasons I have outlined above, I have difficulty accepting much of the evidence of Mr McKernan.
The weight and balance calculations
In my view, the weight and balance issue may be resolved simply. It was common ground that the weight and balance calculations were inaccurate at the time the contract was terminated. They were inaccurate in the sense that they were required to be further refined before the flight, and Ms Gray accepted in cross-examination that there was an error in the calculations as they presently stood.
However, this state of affairs of itself cannot in my view constitute an anticipatory breach of the contract on any view of the evidence. Ms Gray in particular explained at some length the process for completing the weight and balance calculations. She explained that the calculations were continually refined leading up to the flight to take account of changing wind conditions. Mr Clamback compared the process to setting a budget. Ms Gray also noted that the final figures were checked against a graph which would reveal any errors in calculation, such as that which she conceded.
Ms Gray and Mr Clamback are both highly experienced ferry flight pilots. There is no reason to question their practice for performing the weight and balance calculations. If one accepts the legitimacy of the practice of iterative calculation and checking used by the defendant company, as I do in the absence of any evidence to the contrary, then there is no basis for inferring that any inadequacies of the weight and balance calculations at the time of the termination of the contract would have led to the ferry flight being conducted in an illegal manner.
I would dismiss this ground of appeal.
Intention to fly overweight
Ms Gray gave evidence that the CASA permit obtained for the ferry flight permitted the aircraft to be flown at 5% overload. She explained the process by which a larger load could be approved if it was found to be required closer to the time of the flight.[68] Ms Gray explained that the stronger the headwind, the greater the volume of fuel required. She explained that although it would have been possible to fly the aircraft at 5% overweight, as allowed by the permit, they decided to use the time while they were grounded to apply for a permit to fly at 15% overweight, so as to have an additional “buffer”.[69] They corresponded with the aircraft manufacturers to ensure this was possible.[70] In an email dated 2 March 2006 from Mr Clamback, Mr McKernan was asked whether he wished the respondent to apply for a new permit, having regard to considerations of weight and weather conditions.[71] Mr Clamback’s evidence confirmed Ms Gray’s.[72]
[68] T 123-4.
[69] T 165.
[70] Exhibit D1, tab 31.
[71] Exhibit D1, tab 32.
[72] T 223; T 245.
Counsel for the appellants sought to rely on this evidence to suggest that as the permit only allowed the aircraft to be flown at 5% overweight, the correspondence disclosed an intention to fly the aircraft in contravention of the permit conditions. I reject that submission. Ms Gray explained the purpose of the correspondence with the aircraft’s manufacturers. The correspondence indicates that instructions were sought from Mr McKernan. There is no reason to call that evidence into question.
Carriage of non-essential flight crew
Ms Gray had prepared a CASA permit on which she nominated a pilot and co-pilot as the essential flight crew. That permit had been approved by CASA. The use of a co-pilot on this flight was in that sense lawful as it had been approved by CASA and the defendant had been issued with a permit to conduct the flight with a co-pilot.
However, in my view the question of what is essential is ultimately a question for the court. Although the validity of the CASA permit was not expressly challenged by the appellants, it is a necessary corollary of counsel’s argument that if a co-pilot was not essential, then a permit to fly with a co-pilot should not have been issued by CASA.
Counsel for the appellants relied on two primary lines of evidence to establish that the Magistrate was wrong to conclude that a co-pilot was essential. Both lines of evidence were of very little weight, for reasons I shall expand upon in due course.
First, counsel relied on the evidence that other ferry pilots were prepared to fly solo, and invited the inference that other ferry pilots did not regard the use of a co-pilot as essential. The only evidence that other ferry pilots flew single-pilot was evidence of Mr McKernan, who gave evidence of a ferry flight conducted with his friend’s aircraft. Weighing against that was the far more persuasive evidence of Ms Gray and Mr Clamback. No independent expert evidence was called on this question.
Secondly, counsel relied on the fact that to conclude that a co-pilot was essential “would suggest that the FAA officers were in breach of their own law because they say only one pilot is essential”. Counsel said that the evidence of the FAA position could be taken from the early the early email exchange which recommended obtaining a CASA permit as two pilots could not be used on an FAA permit. That is plainly hearsay. It was not admissible evidence of the practice of US regulators. Nor was it evidence of the legality or otherwise of the practice. In any event, counsel’s submission represented a double-edged sword for the appellants, as that evidence disclosed that CASA did permit the use of a co-pilot as an essential member of flight crew.
Counsel conceded that the identification of “essential” flight crew would be a matter of fact in the circumstances. However, he noted Mr Clamback’s evidence that at the time of the ferry flight there was a particular view on the subject amongst FAA officials in the United States. I have set out Mr Clamback’s evidence on that topic above. His statement was qualified. In any event, that evidence is plainly inadmissible as hearsay on the question whether the use of a co-pilot was lawful.
I was referred to the aircraft’s manual, which specifies that it can carry one pilot and three passengers.[73] Counsel for the appellant relied on this evidence to show that only one pilot was required to operate the aircraft. That is evidence of very little weight. A ferry flight is self-evidently an unusual use of a small aircraft such as that owned by the plaintiffs. That is clear from the evidence regarding the need to fit out the aircraft specially for the flight, and the need to obtain a special permit to enable the aircraft to fly overweight. The aircraft manual does not purport to address the requirements for a ferry flight.
[73] Exhibit D1, tab 48.
Counsel contended that the Magistrate had erred by considering the appropriateness rather than the lawfulness of the proposed method of completing the ferry flight. He stated that the defendant’s witnesses referred to “desirability, convenience, utility”, and contended that there was no evidence that it was not possible to fly the aircraft with a single pilot. Counsel further submitted that contingencies such as a pilot suffering a heart attack could occur on any flight.
I understand that a special flight permit such as that issued by CASA in the present case may be required in a range of circumstances. In my view, the essential flight crew for a particular flight will depend on the circumstances. In this case, I have regard to the evidence of Ms Gray’s and Mr Clamback’s experiences of ditching an aircraft over water, the evidence about the effect of the age of the pilots, the length of the flight and the possibility of fatigue, particularly if, for example, the radio or fuel system failed. I note that fatigue is one factor referred to in the aircraft’s manual as being a matter to be taken into account in planning any flight.
For these reasons, I am of the view that the judgment of Ms Gray and Mr Clamback that a co-pilot was essential was soundly based. The use of a co-pilot had been approved by CASA. The evidence to the contrary was of little weight and the only witness called by the plaintiffs was Mr McKernan, who was an unsatisfactory witness. The plaintiffs have failed to discharge their onus of proof.
There may be cases in which only a single pilot is considered necessary. I do not propose to set down a test for what will be essential in all circumstances. Nor do I propose to consider how any potential conflicts between FAA provisions and CASA provisions should be reconciled, if such conflicts exist. However, it is clear to me that the plaintiffs have failed to prove that the use of a co-pilot was not essential.

I would dismiss this ground of appeal.
The use of a student pilot
Counsel for the appellants contended that even if a co-pilot were essential, the proposed co-pilot was not qualified as he had only a student pilot’s license and could not fly the aircraft on his own. Counsel did not point to any law or regulation prohibiting student pilots from flying as co-pilots.
I reject counsel’s submission. I accept that the proposed co-pilot was not qualified to fly alone; however, he was not intended to fly on his own. Ms Gray gave evidence on the utility of the practice of using student pilots as co-pilots. In the absence of any evidence to the contrary, I would dismiss this ground of appeal.
Removal of fire extinguisher and oxygen system
Counsel for the appellants contended that the removal of fire extinguisher and oxygen system was in contravention of regulation 282(4) of the Civil Aviation Safety Regulations 1988 (Cth). This point was not pressed in any detail by counsel. I cannot find any evidence led by the plaintiffs to establish that this practice was in contravention of the regulation. An Airworthiness Directive issued by CASA, which set out the minimum number of fire extinguishers to be provided on an aircraft was tendered in evidence;[74] however, that document did not apply to private aeroplanes with a maximum take-off weight less than 5700 kilograms. Mr Clamback disputed that the removal of the fire extinguisher was unsafe. He indicated that with the fuel in the back of the aircraft during the ferry flight a fire extinguisher would be of no use.[75] In an email dated 22 February 2006, Ms Gray gave the following explanation for removing the oxygen bottle:[76]
We had to remove the oxygen bottle for two reasons. First, we could risk the possibility of having oxygen in thewcabin [sic] with the fuel tank but more importantly, the weight and C of G position was too much. We are, of course, bringing the bottle back with us in the C210.
[74] Exhibit D11.
[75] T 250.
[76] Exhibit D1, tab 26.
I cannot find any relevant evidence suggesting that this was unreasonable. I would dismiss this ground of appeal, as the plaintiffs have failed to establish their case.
Conclusion
It is axiomatic that the onus at trial was on the plaintiffs (the appellants in these proceedings) to establish that the defendant’s proposed method of conducting the ferry flight was illegal (and that there was thus an anticipatory breach of the contract). There was little evidence presented by the plaintiffs to demonstrate any illegality. Some of the evidence relied upon – such as the evidence of Mr Clamback about the attitude of FAA officials towards the use of co-pilots – was plainly inadmissible for the purpose that counsel sought to rely on it.
I would dismiss the appeal on all grounds.