Parkes Shire Council v South West Helicopters Pty Limited

[2018] HCATrans 237

[2018] HCATrans 237

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S140 of 2018

B e t w e e n -

PARKES SHIRE COUNCIL ABN 96 299 629 630

Appellant

and

SOUTH WEST HELICOPTERS PTY LIMITED ABN 64 085 167 951

Respondent

KIEFEL CJ
BELL J
KEANE J
GORDON J
EDELMAN J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON WEDNESDAY, 14 NOVEMBER 2018, AT 10.59 AM

Copyright in the High Court of Australia

MR N.J. WILLIAMS, SC:   May it please the Court, I appear with MR P.K. WILLIAMS for the appellant.  (instructed by Moray & Agnew)

MR J.T. GLEESON, SC:   May it please the Court, I appear with MR T.J. BRENNAN for the respondent.  (instructed by Norton White)

KIEFEL CJ:   Yes, Mr Williams.

MR WILLIAMS:   Thank you, your Honour.  The agreement that is known today as the Warsaw Convention of 1929 has its origins in conferences held from 1925 on private air law and in particular in the work from 1926 of a committee of experts.  The public law aspects of international air travel had been settled a bit earlier in a 1919 convention which became the Air Navigation Acts in Australia and in England.

The negotiations leading up to the 1929 agreement are critical to an understanding of the scope of the Warsaw Convention and are detailed in the supplementary book of authorities at tab 23, from page 375.  In the middle of page 375, the work of the technical committee known by the acronym CITEJA is referred to.  At the foot of 375, the author notes – this is a Mr Ide, who was the American observer to these conferences throughout that period, that the study of the following problems with air law was divided among four commissions.  The four commissions are then noted at page 376.  In particular, the second commission has as its third item of business:

Liability of carrier towards consignors of goods and towards passengers.

The third commission has:

Damage and liability toward third parties (landing, collision and jettison) -

on its agenda.  In May 1929 the third commission produced a draft recommending, controversially, unlimited liability to third parties on the ground.  This is referred to at 378.  From about point 5 on the page there is a reference to the work of the first commission on the aeronautical register and aerial mortgages which were overshadowed by the question of liability for damage caused to third parties. 

There is a reference to the text.  There was then prolonged discussion which pushed the aeronautical register and aerial mortgages off the agenda.  The countries voted 12 to seven in favour of unlimited liability.  At the foot of the page the draft was referred back to the third commission for further study in an effort to conciliate the opposing viewpoints.

At the top of page 379 there is a reference to the conference a few months later.  The first was May 1929; this one is October 1929, at Warsaw.  At the foot of 379 the final title of the Convention is referred to.  It received signatures of 13 delegates before the conference closed, and a further 10 were obtained.  So a high degree of unanimity in relation to the Warsaw Convention concerning passengers and consignors.

Then from about point 3 on the page the conference unanimously adopted resolutions proposing that the work should go on in relation to some of the other difficulties, from about point 5.  The Warsaw Convention regulates only some of the difficulties regarding air transport and resolves that further work should be done.

At the foot of 380, to resume that account there were meetings in 1930 of the commissions just before the Fifth Plenary Session in Budapest.  But then – 381 - the principal work – this is about point 3 – of the Session was the approval of a draft convention that I will turn to.  It is annexed to this, but I will come to that in a moment.  From about point 5 on 381 there is an explanatory note that deals with the history to date up to the middle of 1930:

“Among the various drafts . . . that regarding damage caused by aircraft to third parties on the ground has always been considered as one of the most important and urgent.  The urgency has been more evident since the signature of the International Convention of Warsaw . . . which regulates the liability of the air carrier for damage caused to passengers and freight carried by air.

“After the signature of the Warsaw Convention ‑ ‑ ‑

resolutions were passed deferring the work back.  At the top of 382:

“Taking heed of this necessity, the C.I.T.E.J.A. first proposed to submit to the Second Diplomatic Conference at Warsaw not only the draft regarding the liability of the carrier regarding passengers and freight, but also that on the liability regarding third parties.  This intention, however, could not be carried out on account of the wide divergence of views . . . whether or not the principle of limited liability could be applied to third parties injured on the ground.

In other words, both were originally proposed to travel together and at the foot of that paragraph:

The draft regarding the liability for damage caused to third parties was finally completed and approved –

in Budapest in October 1930, so one year after Warsaw.  The draft is at 389 of the book – that is appendix B that was referred to a moment ago.  In Article 1, it is drafted in very wide terms:

Any damage caused to persons or objects on the ground –

This is about point 5, on 389:

by aircraft while manoeuvring or flying, entitles the injured party to compensation if it can be proved that damage has been caused and that it has been caused by aircraft.

At the foot of the page, there is a limit on liability:

not be less than 2,500,000 French frs. for each category of damages.

It is a no‑fault scheme with a limitation of liability.  There are limitations on 390, at about point 5 on the page; Article 10 – a two‑year limitation period – four years where the damage does not become apparent within that time.  So, the history of what happened from there is taken up in the article that is behind tab 24.  If Warsaw can be seen as multilateralism as its best in dealing with technical legal problems, what followed, in relation to third‑party liability, was rather less optimistic.  From page 397, the Rome Convention is referred to at about point 5 on the page.  Agreed in 1933 it:

provided for a system of absolute liability on the part of operators of aircraft . . . coupled with a monetary limit . . . Under these circumstances unlimited delictual liability could arise, including the situation where the operator of the aircraft had failed to provide sureties –

At 398, in the middle of the page:

A cleavage developed between those states –

with the airports and those whose territory was overflown but who did not have much aviation.  The Convention -399 - was eventually signed in May 1933.  There were a few ratifications and not a great deal of enthusiasm for it.  There is also, though I do not need to go back to it, on 396, from about point 5 on 396, a summary of the earlier history leading up to that point.

So following that, in Australia Rome was not adopted but New South Wales legislated separately in 1952.  There was a 1952 Rome Convention but the New South Wales legislation was introduced three weeks after the 1952 Convention was agreed.  The second reading speech refers to the 1933 Convention but in passing, but not to the 1952 Convention.  These may be seen from tab 3, the Damage by Aircraft Act 1952, page 33 of the book – this is still in the supplementary book of authorities. Section 2, the principal section:

(1)No action shall lie in respect of trespass of in respect of nuisance, by reason only of –

overflight:

(2)Where material loss or damage is caused to any person or property on land or water by . . . an aircraft while in flight, taking off or landing . . . damage shall be recoverable without proof of negligence ‑

On page 34:

loss or damage includes, in relation to persons, loss of life and personal injury. 

So, the later Rome Convention, in short this is a very broad cause of action, personal injury, no need for proof of negligence and no limitation on liability.  The later Rome Convention of 1952 was ratified by Australia and implemented and we see that at tab 1 of the supplementary book, the Civil Aviation (Damage by Aircraft) Act 1958, one year before the Civil Aviation (Carriers’ Liability) Acts that are in question before the Court.

So, from page 4, section 8 gives the provisions of the Convention which are appended, the force of law in Australia and section 9(1) deals with actions.  The Convention itself, page 8 of the book, section 16, deals with the scope of the Act in relation to aircraft being moved and, in short, it has a limited scope and it is only aircraft that are undertaking journeys that have an international dimension.  That is reinforced by the terms of the Convention itself which are set out on page 9 as a schedule to the Act.  There is a recitation about the:

desire to ensure adequate compensation for persons who suffer damage caused on the surface by foreign aircraft, while limiting in a reasonable manner the extent of the liabilities –

Then in Article 1:

Any person who suffers damage on the surface shall, upon proof only that the damage was caused by an aircraft in flight or by any person or thing falling therefrom, be entitled to compensation as provided by this Convention.  Nevertheless there shall be no right to compensation if the damage is not a direct consequence of the incident giving rise thereto, or if the damage results from the mere fact of passage of the aircraft through the airspace in conformity with existing air traffic regulations.

No liability for trespass for overflying.  The limitation to damage that is not of direct consequence is an exclusion of claim such as compensation to relatives – dependency‑type claims, services claims.  If it matters, in our submission, nervous shock is a direct consequence.  Taking the example of a witness close to a crash, an observer of a crash, a person learning at a crash, they all suffer the same injury in each case and it is a direct consequence of the crash.

The limitation as to international scope is set out on page 16, in Article 23.  It is limited to:

damage contemplated in Article 1 caused in the territory of a Contracting State by an aircraft registered in the territory of another Contracting State.

In Article 9, on page 11, the rights conferred by this Convention are made exclusive, as is the case in respect of the Warsaw Convention.

Now, at tab 2 of the book, Australia, having enacted that legislation in 1958, later denounced the Rome Convention of 1952 and passed the Damage by Aircraft Act 1999, which is set out from page 19. Page 21 of the book, the commencement date is not before Australia’s denunciation of the Rome Convention. Section 3, the object:

The main object of this act is to facilitate the recovery of damages for certain injury, loss, damage or destruction caused by aircraft –

Then the application of the Act, in section 9 on page 23, receives a broad scope, including, for example in 9(4)(b):

aircraft owned by a foreign corporation or a trading or financial corporation ‑

Section 10 deals with liability. Section 10(1) sets out first three kinds of impact and then 10(1)(d) deals with things that are the result of an impact of the kind mentioned in paragraphs (a), (b) or (c). Subsection (2) then deals with joint and several liability. Section 11 makes a recovery independent of proof of intention or negligence. Section 13 deals with certain repeals which, on page 27, seem to include the Civil Aviation (Damage by Aircraft) Act 1958. That is the scope of third‑party liability as it came through from the mid‑1920s until the legislation that was in force at the time of this accident.

Turning now to the carrier conventions, the Warsaw Convention in particular, that is set out in the joint book of authorities.  In volume 1 of the joint book it is an annexure behind tab 3 to the Civil Aviation (Carriers’ Liability) Act and Warsaw itself, each of the relevant versions is a schedule but Warsaw starts on page 56.  We should note that the title of the Convention is “Convention for the unification of certain rules relating to international carriage by air”.  It does not purport to be comprehensive, as some of the cases have noted.  Article 1(1):

This Convention applies to all international carriage of persons, baggage or cargo performed by aircraft for reward.  It applies equally to gratuitous carriage by aircraft performed by an air transport undertaking.

There is a definition of the expression “international carriage” involving places of departure and destinations, no transhipment and the like.  That is critical to the operation of the Convention in particular cases.  Page 57 deals with the passenger ticket, which is central to the contractual dimension of the Convention.  Article 3(1):

For the carriage of passengers the carrier must deliver a passenger ticket which shall contain the following particulars:

…

(c)the agreed stopping places . . . 

(e)a statement that the carriage is subject to the rules relating to liability established by this Convention.

Then in Article 3(2):

The absence, irregularity or loss of the passenger ticket does not affect the existence or the validity of the contract of carriage, which shall none the less be subject to the rules of this Convention.  Nevertheless, if the carrier accepts a passenger without a passenger ticket being delivered he shall not be entitled to avail himself of those provisions of this Convention which exclude or limit his liability.

That is a 1929 version.  There were some relevant changes to that.  I will turn to those.  The next is at page 71.  This is in the Warsaw Convention as amended at The Hague in 1955.  It starts from page 70 but the relevant provision is on page 71.  Again, Article 3(1):

a ticket shall be delivered . . . 

(b)if the places of departure and destination are within the territory of a single High Contracting party . . . an indication of at least one such stopping place -

if there are to be stops, and:

(c)a notice to the effect that, if the passenger’s journey involves an ultimate destination or stop in a country other than the country of departure, the Warsaw Convention may be applicable and that the Convention governs and in most cases limits the liability of carriers for death or personal injury –

Then sub‑article 2:

The passenger ticket shall constitute prima facie evidence of the conclusion and conditions of the contract.  The absence . . . does not affect the existence or the validity of the contract –

which is still subject to the Convention, but:

if, with the consent of the carrier, the passenger embarks without a passenger ticket having been delivered, or if the ticket does not include the notice required by paragraph 1(c) of this Article, the carrier shall not be entitled to avail himself of the provisions of Article 22.

Article 22 is the limitation of liability provision.  Then the final relevant version for present purposes is on page 114, Montreal No 4.  These are the three conventions that were in force at the time of this accident.  Montreal No 5 ‑ ‑ ‑

KIEFEL CJ:   I am sorry, what page was that, Mr Williams?

MR WILLIAMS:   Page 114, your Honour.  Montreal No 5, the 1999 agreement, was not in force in 2006 when the accidents occurred.  It has, on page 114, the same application.  It:

applies to all international carriage of persons, baggage or cargo . . . for reward –

including gratuitous carriage.  Then on page 115, Article 3, a passenger:

ticket shall be delivered containing –

in paragraph (c) a notice to the effect that if there is a stop:

the Warsaw Convention may be applicable and that the Convention governs and in most cases limits the liability of carriers for death or personal injury -

Then sub‑article 2:

shall constitute prima facie evidence of the conclusion and conditions . . . The absence, irregularity or loss . . . does not affect the existence or the validity of the contract –

But if the passenger embarks with the carrier’s consent without a:

ticket having been delivered, or if the ticket does not include the notice required by paragraph 1(c) of this Article, the carrier shall not be entitled to avail himself of the provisions of Article 22.

So, at least as those conventions stood in domestic law in 2006, Justice Basten suggests there may have been some changes since, but that is not relevant to the issue before the Court today.  It is the question of the legislation as it stood in 2006.  Delivery of the ticket triggered the key elements of the Convention bargain.  Curtailment of the right to reduce or contract out of liability, that is found in Article 23 at page 124 in the Montreal No 4 Convention version – no lowering of the limit of liability.  There is also in 32, though I do not need to go to it, a provision that prevents contracting out.  There is in Article 22 on page 122 a monetary limit on liability.

Article 24 on page 124 excludes other remedies.  The Convention remedy is the exclusive remedy.  In Article 29 on page 126, there is a two‑year limitation period.  All of those are on the carrier’s side of the ledger.  On the passengers’ side, Article 17 at page 120:

The carrier is liable for damage sustained in the event of the death or wounding of a passenger or any other bodily injury suffered by a passenger, if the accident which caused the damage so sustained took place on board the aircraft or in the course of any of the operations of embarking or disembarking.

Tortious liability for nervous shock – at least in Anglo‑Australian jurisdictions – or, at least, in England – Australia was more controversial – was regarded as settled by the text writers at least by the early 1920s.  Jaensch v Coffey – which is in the joint book of authorities, volume 2, tab 19 – sets out some of that history.  Tab 19, volume 2, page 567, in the judgment of Justice Deane – at about point 4 on the page, his Honour refers to the controversial decision in Victorian Railways Commissioners v Coultas in which the Privy Council had held in 1890:

that liability in negligence did not extend to injury consequent upon nervous or mental shock which was unaccompanied by “actual physical injury”.   

That decision was rejected, even by contemporary authority, and there is a series of references there to cases, well and truly predating the 1920s, and a reference to Sir Fredrick Pollock’s Law of Torts and some Australian cases.  Beneath that:

It is now the settled law in this country that there is a distinction, for the purposes of the law of negligence, between mere grief or sorrow which does not sound in damages and forms of psychoneurosis and mental illness –

which have sometimes been called nervous shock.  So, during the negotiations of the carrier and the third‑party liability conventions in the second‑half of the 1920s, less than a decade after the end of the First War, the delegates can hardly be supposed to have been ignorant of nervous shock.  It would be surprising if many of them did not have family members, or neighbours, or friends whose lives had been ruined by it. 

The use of the term “bodily injury” in Article 17 of the Convention – setting the scope of damage for passengers – using the French term “lésion corporelle” – has been seen in some overseas decisions as reflecting a deliberate decision not to create nervous shock liability to passengers and, having regard to the technological state of aircraft in the 1920s, such a decision is readily understandable. 

But no such considerations applied in respect of the third‑party conventions.  The possibility of nervous shock claims arising from aircraft crashes must have been apparent to those who settled the conventions in the 1920s ‑ the 1930 draft.  But the form chosen in the 1930 Budapest draft, at the very much contemporaneously with the Warsaw Convention, which is in the supplementary book of authorities, tab 23, page 389, the term was “Any damage”, no restriction to any bodily damage. 

The 1958 Commonwealth Act, as we have seen, created liability to any person who suffers damage.  The 1952 New South Wales Act, created liability where material loss or damage is caused to any person by an aircraft, that being defined to include personal injury.

From this, we submit two points emerge.  The first is that at the time of the negotiation of the Warsaw Convention, liability in tort to third parties on the ground were the subject of quite separate consideration being undertaken by the third commission, not the second commission that was working on the Liability to Passengers Convention that became Warsaw, although there was plainly coordination between the two.  The Warsaw Convention itself, of course, focused upon contractual liability to passengers and consignors and to those who claimed through them. 

The second point is that at the time the 1959 Commonwealth Carriers Act was passed, the legislative context included, at both Commonwealth and New South Wales level, statutory no‑fault liability upon aircraft operators for damage widely defined, including personal injury to third parties on the ground.

Now, within that context, neither the drafters of the Warsaw Convention nor the drafters of the 1959 Commonwealth Act nor the drafters of the 1967 Civil Aviation (Carriers’ Liability) Act 1967 (NSW) should be understood as having, by a side wind, removed the rights of a stranger to the contract, to sue in tort for nervous shock.

So, to put it into a factual context, on facts not dissimilar to those in South Pacific v Magnus, a person witnessing a crash might suffer nervous shock from fear of being hit, someone next to them might suffer it from an apprehension, thankfully ill‑founded, that a relative on the plane has died, and a third might suffer it on learning that a relative on the plane has in fact died.  The airline in each case owes a duty to all on the ground foreseeability satisfied in each case.  On the respondent’s case here, the first two would succeed in a third‑party tort claim, while the third would fail.

KEANE J:   Mr Williams, I am not entirely sure that I understand your submission about the other treaties; that is to say, the treaties other than the ones that the Court has been looking at so far.  Looking at appendix B on page 389, Article 1 says:

Any damage caused to persons or objects on the ground by aircraft while manoeuvering or flying, entitles the injured party to compensation –

So, the first thing is, these other treaties, if I may call them that, dealing with liability to third parties on the ground, they are creating a liability and making it exclusive, are they not?  First question.  And, secondly, are you arguing that injury caused to people on the ground by manoeuvring or flying encompasses crashing?

MR WILLIAMS:   To answer the second question, yes.  The answer to both questions is yes, as to these conventions.  Well, as to the drafted appendix B, it was to be exclusive.  As to the 1933 Rome Convention, it was to be exclusive, and as implemented federally in 1958 it was implemented according to its terms and it was the exclusive remedy.  The New South Wales legislation of 1952 had a different origin although it did refer to Rome in 1933.  The origin of the 1952 New South Wales Act was in a provision in section 9 of the British Air Navigation Act of 1920 in virtually identical terms that while implementing the public aspects of the 1919 Conventions on international air navigation, also created a liability to third persons on the ground.  Some States created such a liability, other States did not.  It was simply a matter of domestic legislation.

So, the New South Wales legislation was not exclusive and operated widely, unlike the 1958 Commonwealth Act which was restricted to journeys that had an international dimension of some kind.  So, from 1952 in New South Wales through to at least 1999 when a more comprehensive Commonwealth Act was introduced, there was liability to third parties on the ground.  Our submission is that all of these conventions include in liability, liability for crashing.  It is not simply manoeuvring on the ground and being up in the air.  There is an intermediate stage.  Much of the legislation defines the moment of flight as starting when power is applied to the aircraft for take‑off and as finishing when the aircraft has finished its landing and, plainly within that, the central purpose was to address the misadventures that can occur between one and the other.

In our submission there was, by the time of the 1967 Act in New South Wales, New South Wales legislation which made provision in tort for no‑fault liability and did not restrict claims to any particular form of claim.  By the time of the 1959 Act at the Commonwealth level there was New South Wales legislation of 1952 that created that unlimited liability.  Of course, bearing in mind that Part IV has a more general application than was intended and indeed was picked up by States, that is relevant to the construction of the Commonwealth Act, in our submission.

It is relevant to the Commonwealth Act in 1959 that there was the Commonwealth’s own scheme, not comprehensive throughout the Commonwealth but certainly dealing with flights that had an international dimension that dealt with liability to third parties on the ground.

That, we submit, raises the central problem of construction of this convention, because the carrier convention did not come into existence in a vacuum; it came into existence from a particular negotiation context in which third‑party liability was very much in the minds of those who were working on the collective problem of regulation of private air law internationally but came through a different stream and should not be read as intending to encroach on the work of the third commission, at that point uncompleted, concerning third‑party liability.

If I can return then to the outline.  It is about paragraph 8 of the oral outline.  The passenger ticket, as we have sought to demonstrate, plays a critical role.  Can I take the Court into the joint book of authorities, volume 1, to tab 15, to the decision in Herd, for some international authority making that point good.

KIEFEL CJ:   Mr Williams, your argument respecting the carrier  conventions, do you say that is the approach taken by Justice Leeming?

MR WILLIAMS:   Justice Leeming was cognisant of this.  Justice Leeming had considerable history of this and did indeed refer to the ‑ ‑ ‑

KIEFEL CJ:   I thought he focused on the Montreal Convention.

MR WILLIAMS:   Montreal is the key convention among the carriers conventions because it is the integration, it is the presently applicable iteration of Warsaw.

KIEFEL CJ:   But do you say your argument reflects his Honour’s reasoning?

MR WILLIAMS: It does. His Honour’s reasoning, reading from page 394 - he did refer to the 1952 Act, I think. Paragraph 325 is perhaps where I should start because his Honour refers there to the Civil Liability Act. Section 73(1) of the Civil Liability Act is where the provision that was the 1952 New South Wales Act is now to be found. That Act was repealed, I think, subsequent to these events but the same provision enacted, I think, without any relevant change as section 73(1) of the Civil Liability Act in New South Wales.  He refers also there to the Civil Aviation Act of the UK and to the origins of the provision in the Air Navigation Act 1920. He refers to Southgate v Commonwealth for that proposition. 

KEANE J:   It does not look, though, as if this is an argument that was addressed by the majority.  The majority do not seem to have been cognisant of the argument you were just putting to us.

BELL J:   And it would have to be said that Justice Leeming dealt with the history that you have taken us to be somewhat economically.

MR WILLIAMS:   His Honour did refer at 395 ‑ ‑ ‑

GORDON J:   Is that page or paragraph, Mr Williams?

MR WILLIAMS:   I am sorry:  pages 394 and 395.

GORDON J:   Can I be blunt?  Having listened to the submissions so far this morning, it seemed to be an expansion of what was put by Justice Leeming

MR WILLIAMS:   It is.

GORDON J:   So that is the first proposition; you accept that.

MR WILLIAMS:   Yes.

GORDON J:   Secondly, as I understood the way you were putting it, in a sense you were putting, as Justice Bell says, the economical approach of Justice Leeming into a broader context than Justice Leeming did.  Is that a fair summary of what you have just put to us?

MR WILLIAMS:   That is so.  The respondent’s submissions broaden the scope of international material which had been referred to below, that got us to thinking, if I can put it that way, into making our own inquiries and that has led us to expand our own reference to international material.

KIEFEL CJ:   Are you able to say whether or not this argument was put to the court below?

MR WILLIAMS:   In these terms - well, the argument was certainly put that the scope of the Warsaw Convention does not encompass third‑party claims.  There was not, as I apprehend it, reference to the work of the third commission and to the 1930 draft, nor to the Rome 1933 Convention.  There was reference in Justice Leeming to 73(1) of the Civil Liability Act, which is the successor to the 1952 Act and there was reference to the Damage by Aircraft Act 1999 (Cth), which I have taken the Court to.  So it is the same proposition supported by a wider reference to extrinsic material than occurred below in contextual material.

KIEFEL CJ:   Yes, I see, thank you.

MR WILLIAMS:   So Herd in the joint book of authorities, volume 1, tab 15, page 452 at about line E, this is Lord Mackay of Clashfern:

In particular, the ticketing provisions are fundamental in those Conventions to the limitation of liability, since the delivery of a ticket with the appropriate notice of limitation is generally essential to the application of the limitation provisions which involves a relationship between, for example, the passenger and the carrier which is not necessary in the Order.

That case, of course, concerns a particular form of an order.  So, if I can turn then, in paragraph 9 of our outline, to nervous shock claims.  The non –passenger, in our submission, is necessarily a stranger to the contractual relationship which lies at the heart of the Warsaw Convention.  Part IV of the Civil Aviation (Carriers’ Liability) Act (Cth) should not be seen as regulating the relationship between the non‑passenger and the carrier.

We have referred already to tortious liability having been well established by the relevant time, and the reasoning in South Pacific Air Motive v Magnus is found from the joint book of authorities, volume 2, tab 25 and it is reasoning upon which we respectfully rely.  In the judgment of Justice Hill on page 737, from about C to D, there is a reference to ‑ ‑ ‑

KIEFEL CJ:   What page of the reports is that, Mr Williams?

MR WILLIAMS:   Page 737 of the book, 321 of the law report. 

KIEFEL CJ:   Thank you.

MR WILLIAMS:   From about letter C there is a reference to the Warsaw Convention provisions in which his Honour makes the point that the limitation of liability is focused upon passengers and notified through the ticket.  Then from about line E, his Honour refers to the diverse array of third‑party claims - injury to a bystander, damage to property, running into another plane injuring pilot or passengers on that other plane or the non‑passenger who observes the crash and suffers physical damage.   Then from about line F:

No notice of limitation of liability will be drawn to the attention of such a non‑passenger suffering loss or damage arising out of an aircraft action.

So it cannot be said, at least to the extent of the above claims, that the conventions were intended to be a complete code in respect of non‑passengers.  Clearly they were intended to be a complete code with respect to passengers.

KEANE J:   There is no support there, though, for the proposition in your paragraph 9 that the third party is dealt with by the regulatory regime stemming from the third‑party conventions.  Justice Hill is simply saying this is the relevant regime; this is as far as it goes.

MR WILLIAMS:   Yes.

KEANE J:   He is not saying, and that is because there is another regime that deals with this subject matter.

MR WILLIAMS:   No, no, we accept that. We cite Justice Hill and, indeed, Justice Sackville for the propositions in the first part of the paragraph which are that the non‑passenger is a stranger to the contractual relationship.  That relationship focuses upon the ticket and limitations of liability flowing from that.  Justice Sackville from page 760 - at the foot of 760 Justice Sackville starts by accurately, with respect, summarising the proposition for which Zicherman stands.  Then at page 762, from about, this is page 346 of the law report, from about letter B on 346:

Obviously enough, some claims by non‑passengers are unaffected by the Convention.  For example, the claim of a person on the ground who is injured or killed in consequence of an air crash is unaffected –

This is closer to the point that your Honour Justice Keane is raising with me:

More importantly for present purposes, there is a fairly obvious explanation for the reservation in Art 24(2) concerning the rights of person to bring suit.  Different countries have different rules governing the compensation or damages for cases of wrongful death:  see P C Haanappel . . . This was also the case when the Convention was drafted.  The drafters considered it necessary for the Warsaw Convention to provide a mechanism for the family or representatives of a deceased person to bring a claim for damages consequential on the death of a passenger.  They also had to take into account the diversity of approaches under different legal regimes to what Anglo‑Australian lawyers would call wrongful death claims.  But it is by no means obvious that they had in mind non‑derivative claims, such as that by a non‑passenger alleging nervous shock by reason of seeing on aircraft crash or learning that a passenger had been killed, injured or placed in peril.

Then from 763, about letter B, his Honour turns to deal with:

Non‑passengers’ claims for psychological injury under Pt IV of the CA Act –

and the reasoning in that, at the foot of page 764, his Honour having reviewed various provisions in the workers’ compensation legislation, at about letter F, his Honour states in effect that history points to a focus on derivative claims:

the section is concerned to provide for fatal accident claims and claims by legal representatives of a deceased passenger, as those concepts have been generally understood under Australian law.  The history of s 35 of the CA Act suggests that the section was designed to bring fatal accidents claims and claims by the legal representatives of a deceased passenger within the scheme created by Pt IV of the CA Act.

I do not think that s 35(8) was intended to embrace nervous shock claims brought by non‑passengers.

His Honour then quotes from a decision of Justice Smith in the Western Australian Supreme Court:

the subsection –

“does no more than reflect in statutory form the well established principle . . . that damage sustained by reason of a death of a passenger is not restricted to a ‘financial’ or ‘monetary’ loss but extends to a loss of services capable of being valued in monetary terms or to the loss of the reasonable expectation –

Then from about letter C on page 349 of the original report, 87 FCR at 349:

Apart from the historical considerations, other factors suggest that s 35(8) is not intended to address nervous shock claims by non‑passengers:

·duty of care owed by a carrier to a non‑passenger . . . is independent of the carrier’s duty to the passenger ‑

Then the second point, section 36 has no code of the kind found in section 35 and if it had been intended that this legislation would regulate nervous shock claims by non‑passengers, it would be expected that section 35 and 36 would contain similar provisions, having the effect that South Pacific contended in that case.  Then:

·To read s 35(8) of the CA Act as embracing nervous shock claims . . . would lead to odd results.  The CA Act would cover non‑passenger nervous shock claims arising out of the death of a passenger, but not those flowing from a passenger being injured or placed in peril.  It is difficult to believe that such an arbitrary result was intended.

Of course in this case some of those who suffered shock were under a misapprehension as to whether there had been injuries and that in a sense really highlights the arbitrariness – a person watching a plane take off might see it crash into Botany Bay and apprehend reasonably that all on board would be killed, but learn later after suffering the shock that indeed no one was, or that some were and some were not, or that some were injured.  The discrimen of liability on the position taken by the majority below would be essentially arbitrary in such cases.  Where there is death, there would be no claim.  If there is apprehended death but not actual, there would be a claim.  These are arbitrary results, in our submission, and they tend against the construction adopted.

BELL J:   On your argument, the distinction between the provision clearly made in the Warsaw Convention in relation to the claims of relatives is based, you would have us understand on a correct understanding of the history, a distinction was being drawn between derivative and non‑derivative actions and that distinction we find in the considerations of the – I cannot remember, was it the third charter group looking at third‑party damage for people on the surface.  I am just seeking to understand the history because on another view there might be thought to be something of an oddity about certain claims by the relatives being governed by the Warsaw Convention, notwithstanding the contractual argument that you make and other claims by that group not being.

MR WILLIAMS:   The way in which we have put it is that independent claims arising from an independent duty owed by the operator to all persons on the ground are not caught by the Warsaw Convention.  They are third‑party liability claims that were being considered by the third commission and that what the second commission dealt with ultimately being realised in Warsaw 1929 was claims by passengers in respect of injury and claims in respect of the rights of passengers by their legal representatives flowing from death, but in each case sourced in the rights of the passenger.  Of course, the passenger cannot claim where there is a death, but that is the ultimate source of the rights.

GORDON J:   That view is the ticket.

MR WILLIAMS:   Yes, centrality of the ticket.

EDELMAN J:   Mr Williams, you took us to Jaensch v Coffey as an example of the consideration at the time of the Act and presumably also at the time of the Warsaw Convention of psychiatric injury as an independent rather a dependent claim.  That evolved understanding in Australia was replicated in other countries, was it, or is it a matter that would have informed or been understood at the time generally of the Warsaw Convention?

MR WILLIAMS:   The answer to that is complex.  In respect of Anglo‑Australian countries, there was some perceived difference in Australia between Australia and the UK flowing from the different juridical status of the 1890 Privy Council decision, which every jurisdiction was keen to avoid.  There were Canadian decisions, I think, that treated it as a decision in respect of the law of Victoria, notwithstanding that it came from the Privy Council.  There were Australian decisions that sought to evade it in various ways and gave it limited effect.  In England, as we have seen in the quote from Jaensch v Coffey, it was essentially ignored.

That is the strict legal answer in respect of Australia and England.  The US was, I think, more complex and I am not sure that I can give an answer.  The European civil law jurisdictions were more complex in that there are sometimes two different kinds of rights in civil law jurisdictions.  One is a wholly derivative right which is inherited, in effect, and sometimes there are potential tort actions that seem to bear some analogy to nervous shock that are in fact dependent – or they are basically a suit for the wrongful death of the ‑ ‑ ‑

KIEFEL CJ:   This is in systems like the German system?

MR WILLIAMS:   Yes.

KIEFEL CJ:   But not the French?

MR WILLIAMS:   There is some difference between them, yes.  I will go to some of the material about that but I think that is the short answer, there was variation in the civil systems.

Can I then turn to paragraph 10 of our outline.  The exception is the derivative action that depends on the rights of the passenger ‑ going to the point your Honour Justice Bell raised with me – and 24(2) left to individual nations to work out where the rights devolved because of the complexity that I have referred to in the answer I just gave your Honour Justice Edelman about the different rights involved.

Could I go to Sercel in the joint book of authorities, volume 3, tab 31?  And from page 1149 – that is in 260 FLR and the passage is at page 51 in the Federal Law Reports.  Page 1149, paragraph 46:

As can be seen from the 1935 Act, s 3(2) and (4) particularly, the cause of action created by the Warsaw Convention was for the passenger if injured and others if the passenger was killed.  Article 24(2) had left this deliberately open because of the different national approaches to wrongful death claims.  The Ninth Circuit . . . in In re Mexico City Air Crash –

that I will go to in a moment:

. . . discussed the history . . . The scope left open by the phrase “tout action en responsabilité” or any action for liability (in the English text “any action for damages”) was principally concerned with wrongful death claims and the phrase “a quelque titre que ce soit” (or “however founded” in the English text) reflects the intention of the delegates that the cause of action created by the Warsaw Convention, Art 17 was not to be exclusive – national law could provide for the beneficiaries of the wrongful death action –

Again, a reference to In re Mexico City Air Crash and Sidhu.  Then his Honour continued:

It is important to appreciate that it is Art 17 that creates the relevant cause of action –

And it is a cause of action:

for wrongful death or person injury –

referring there to Benjamin and In re Mexico City Air Crash.  Then skipping over the top of 1150:

The Warsaw Convention was (as the Convention is) concerned with contracted international carriage of persons, luggage and goods –

with references to the relevant provisions.  And then a reference to:

The Ninth Circuit in In re Mexico City Air Crash –

And at the foot of that paragraph:

The phrase “however founded” does not widen the cause of action created by Art 17 (when read with Art 24) into one that is available beyond the liability contemplated by Art 17 – the liability for damage sustained arising out of the performance of the contract of transportation which in the event of injury is sustained by the passenger and in the case of death, may be sustained by his or her estate or others.  It is a structure not apt to encompass other legal claims by third parties who are strangers to the passenger or the contract of carriage.

And, we submit, that the reference there “strangers to the passenger” is a reference to people who are not claiming through the passenger but claiming through the passengers’ rights or the rights the passenger would have had had he or she survived.

Then, at the top of 1154 at the top of page 56 of the law report version, just above paragraph 71:

“right to damages” for the action for damages or action for liability . . . created by and provided for by Arts 17 and 24 –

On the facing page in paragraph 77, his Honour concludes that the position – this, of course, was a case about the workers’ compensation right flying from section 37:

The position would, of course, be different if the employer’s action was founded in subrogation, entitling it to succeed to the rights of the worker (passenger).

Finally, in this case I should go to Justice Handley at page 1161, paragraph 113.  Having referred in paragraph 112 to Articles 17, 24 and 29, Justice Handley states in 113:

I agree with the President that, as a matter of construction, those Articles only apply to claims by persons travelling on passenger tickets or claiming under or through such persons, including, in the case of death, their dependants.  This employer did not claim through or under the passenger.  It had an independent claim, albeit one which depended on the carrier’s original liability to the passenger.

Could I then turn to Re Mexico City Aircrash.  That is in volume 2 of the joint bundle of authorities.  It is behind tab 18.  The passage starts at the foot of page 523 in the right‑hand column:

We have considered the context and the history of the “without prejudice” language –

going on to page 524:

of article 24(2), and we conclude that it is best explained as the result of uncertainties among the Convention delegates concerning certain attributes of the right that they meant to create.  The delegates realized that several claimants might attempt to collect damages on behalf of a single dead passenger and that they might institute suit in different forums.

There is then a reference to Mr de Vos, the reporter for the Warsaw Conference, explaining in his report that:

while the forum issue had been resolved in the working draft, the question of who are “the persons upon whom the action devolves in the case of death” was to be left to local law apart from the Convention.  This, we believe, is the true import of article 24(2).  The “without prejudice” language does not in any way tend to contradict the existence of a cause of action in the Convention for injured passengers; the only question is whether the indefiniteness of the article as to the identity of persons entitled to recover precludes finding that any such cause of action survives in the event of the passenger’s death.

There is just one more passage relevant to this and that is in Lockerbie in volume 1 of the joint book of authorities.  It is at tab 16 of the book, page 482.  In the right‑hand column, there is a reference to the 1926 International Confidential on Private Aviation Law – at about point 5.

KIEFEL CJ:   Which page are you at?

MR WILLIAMS:   Page 482 in the book, 1283 of the original report, in the right‑hand column at about point 7, after the quotation of the International Conference of 1926:

As this report plainly states, the drafters’ primary concern stemmed from the fact that the laws of descent regarding a person’s ability to claim damages in a wrongful death action vary widely according to national laws.

There is then a reference to various international law writers.  There is a reference to France:

the decendent’s heirs inherit the right to sue on the decedent’s behalf, but close family members and even a divorced spouse have the right to sue for personal damages.

There is reference again to Haanappel:

It was feared by the drafters that if the heirs brought a contractual action, but those entitled to sue for personal damages brought tort actions, the sum of the actions might exceed the liability limit imposed by the Convention . . . Thus, in recognition of the widely varying laws of descent –

focusing, we say, on the right of the passenger:

the drafters gave up any attempt to decide who could sue and on what legal basis, but instead explicitly provided that no matter how many plaintiffs were involved or what their rights were under local law, in no event could the sum total of recovery exceed the Convention’s liability limit.

Dropping down, I think the next key passage is about point 7.  It is again a reference to Mr deVos and a quote:

The question was asked of knowing if one could determine who are the persons upon whom the action devolves in the case of death are, and what are the damages subject to reparation.  It was not possible to find a satisfactory solution to this double problem, and the CITEJA esteemed that this question of private international law should be regulated independently from the present Convention.

So, in short, we say the principle of exclusivity that is embodied in the Warsaw Convention did not seek to regulate all claims, plainly did not seek to regulate all claims and that nervous shock claims brought by third parties are beyond the substantive scope of the Convention and that is so - third parties to the contract, we would say - that is so whether they are relatives or not and a failure to appreciate the importance of that distinction lies behind the errors in the court below that we identify in paragraph 12.  Could I turn then to ‑ ‑ ‑

KEANE J:   Mr Williams, just looking at 482, the passage in Lockerbie you took us to, the reference to:

in France the decedent’s heirs inherit the right to sue . . . but close family members and even a divorced spouse have the right to sue for personal damages –

Do you accept, do you, that people other than people claiming by way of descent are intended to be covered by the provisions of 24(2)?  I mean that seems to be what is being suggested in that passage that – at least, so far as the French were concerned you could have claims by persons other than the heirs, people other than those who stand in the shoes of the deceased.

MR WILLIAMS:   The history was that there was an attempt to answer these questions in the form of the Convention itself.  One of the slightly earlier drafts – a couple of the slightly earlier drafts did have an attempt to answer this question.  In the end and I will turn to this now with Zicherman and Tseng, the Convention in view of the wide diversity of different rights to claim, the Convention drafters left these matters to domestic law and so we apprehend there is not ‑ ‑ ‑

KEANE J:   So, the Convention drafters deliberately, having identified the mischief that could cause the liability to blow out in a way that did not conform to the Convention, having deliberately identified that mischief, then deliberately chose to basically leave it at large for the laws of the various high contracting parties?

MR WILLIAMS:   To leave it as a matter of the law of the high contracting parties - I will turn to the authority on that.

GORDON J:   Sorry, is that what this report then deals with after the passage that Justice Keane has just taken you to?  That is the point Justice Keane just raised – you have this disparity between the laws and then it goes on to talk about the fact that the next two years they could not resolve it so they have left it to the domestic law.

MR WILLIAMS:   Yes, and that is in particular the passage at 483.

GORDON J:   Or the quote you took us to in the report.

MR WILLIAMS:   Yes, the quote in 483, that the problem of determining to whom the action devolves and what is the reparation was too difficult to answer by reference to the diversity of legal systems, and it was left to domestic law to resolve.  That, in a sense, is the point that was made in Mexico City Air Crash ‑ ‑ ‑

EDELMAN J:   Subject to the cap.

MR WILLIAMS:   Subject to the cap, yes.

GORDON J:   That is what is referred to up at the top, is it not, of that page 483?  Despite this problem about who was entitled to sue and what, there was one thing that was going to be certain and that was the cap. 

MR WILLIAMS:   When they were suing through the rights of the passenger that is so.  If they were suing on an independent claim ‑ ‑ ‑

GORDON J:   Your argument is it is open.

MR WILLIAMS:   That is so, because it was not within the remit of the second commission, not within the scope of the Warsaw Convention as settled ‑ ‑ ‑

KEANE J:   Well, on that basis the cap would not apply, because it was left out of the Convention.

MR WILLIAMS:   The cap would apply to anyone who claimed through the rights of the passenger.

KEANE J:   But your point is that they are not claiming through the rights of the passenger.  Your contention is that there is a separate, freestanding, independent right that the Convention does not purport to deal with.

MR WILLIAMS:   For nervous shock claims, yes.  Yes.

KEANE J:   So the cap does not apply to them? 

MR WILLIAMS:   No, nor does it apply to someone who has an aircraft land on their house.

KEANE J:   No, of course. 

EDELMAN J:   But it does apply, in France, to the close family members, or even a divorced spouse who have the right to sue for personal damages.

MR WILLIAMS:   Well, I am not sure whether there is any decision in France that rules on that but that would be a question that was left to domestic French law, whether this is a right that is ultimately claimed through the passenger, whether it is a right that is derivative on the passenger’s rights or the rights the passenger would have had.

EDELMAN J:   Have you looked at the Haanappel article that is cited after that proposition?

MR WILLIAMS:   Yes, yes.  Well, your Honours have seen already that it has been cited by different judges for different points.  It is in the key passages at a high level of generality.  I apprehend my friend might be going to rely on it, but there is a high level of generality in the key passages that have been cited here.   

So, if I can turn then to Zicherman or, in particular, if I can turn to Tseng, which is in the joint book of authorities ‑ it is in the first volume of the joint book of authorities, tab 13 and in particular, to the passage from 387.  Here the court – this was Justice Ginsburg I think writing for the majority - at about point 2 on the page ‑ ‑ ‑

KIEFEL CJ:   What is that in the report, Mr Williams?

MR WILLIAMS:   It is page 170 of the original report.

KIEFEL CJ:   Thank you.

MR WILLIAMS:  

The Zicherman Case itself involved auxiliary issues:  who may seek recovery in lieu of passengers and for what harms they may be compensated . . . Looking to the Convention’s text, negotiating and drafting history, contracting states’ postratification understanding of the Convention and scholarly commentary, the Court in Zicherman determined that Warsaw drafters intended to resolve whether there is liability, but to leave to domestic law . . . determination of the compensatory damages available to the suitor.

Then on 389 at about point 2, this is quoting with approval from the United States Amicus Curiae brief:

“[T]he Convention’s preemptive effect on local law extends no further than the Convention’s own substantive scope.” . . . A carrier, therefore, “is indisputably subject to liability under local law for injuries arising outside of that scope:  e.g., for passenger injuries occurring before ‘any of the operations of embarking’” or disembarking.

Zicherman is in volume 3 of the book from page 1172 which is behind tab 32.  While there is a reference at 1166 in the middle of the page to the original count, which included pecuniary damages, grief and mental anguish, loss of decedent’s society and companionship and for pain and suffering, the case actually involved in the Supreme Court at 1168 not that wide a group of issues, but at about point 2 narrower issues.  There is a question whether:

under general maritime law, dependency is not a requirement . . . In a cross‑petition, KAL contended that the Warsaw Convention does not allow loss‑of‑society damages –

There is then discussion of that, but from the foot of 1170:

The other alternative, and the only one we think realistic, is to believe that “dommage” means (as it does in French legal usage) “legally cognizable harm,” but that Article 17 leaves it to the adjudicating courts to specify what harm is cognizable.

Then at the top of 1172:

The most natural reading of this Article is that, in an action brought under Article 17, the law of the Convention does not affect the substantive questions of who may bring suit and what they may be

compensated for.  Those questions are to be answered by the domestic law selected by the courts of the contracting states.

To the same effect on 1174 at about point 3, after some reference to the deliberations:

Both these statements make clear that the questions of who may recover, and what compensatory damages they may receive, were regarded as intertwined; and that both were unresolved by the Convention and left to “private international law” – i.e., to the area of jurisprudence we call “conflict of laws,” dealing with the application of varying domestic laws to disputes that have an interstate or international component.

The correct approach, in our submission, is that to be found in Justice Leeming’s judgment in the core appeal book.  It is on page 398 of the core appeal book.  In paragraph 351:

I consider that the substitution of liability effected by s 35(2) extends to claims by non‑passengers which are derivative upon a claim by a passenger –

derivative upon a passenger’s rights, we would say:

including claims under the Compensation to Relatives Act 1987 (NSW), but does not extend to a claim by a non‑passenger which is based on breach of duty owed directly to a non‑passenger, even if at the factual level damage in the form of psychiatric injury has been caused to the non‑passenger by reason of the passenger’s death.

That, in our respectful submission, is the correct approach.  Unless there are matters with which I can assist, those are our submissions.

KIEFEL CJ:   Thank you, Mr Williams.  Yes, Mr Gleeson.

MR GLEESON:   Your Honours should have our outline by now.  Your Honours, could I indicate at the outset that our approach to this problem is very different to Mr Williams’, so you understand where we are trying to go, as it were.  We leave the question of the other conventions to near the end of our submissions, and we will essentially say they are irrelevant to the problem, although I will deal with them at that part of the submissions.

Where we wish to place focus is upon, first of all, the nature of the statutory scheme.  You are being asked to consider the legal techniques that underpin it and the appropriate construction principles which will lead you, we submit, to resolve the meaning of section 35(2) consistently with the analogue provisions which appear in other parts of the scheme.  For that purpose, although it is a domestic accident in New South Wales, we submit the answer will be the same to what it would be if it was an accident in international carriage.  That will be the first part. 

We then want to address specific submissions to the meaning of section 28 of the Commonwealth Act and the equivalent Article 17 of the Warsaw Convention, a matter that has not been much addressed so far, which is to ascertain what is the positive liability being created by the new scheme.  Then the bulk of our submissions will focus on section 35 and Article 24, that being the core, we submit, to the resolution of this appeal.  Then I will deal with what I might call the related or subsidiary matters. 

Your Honours, in terms of this scheme, the Civil Aviation (Carriers’ Liability) Act 1959 and the State Acts, we would proffer the description at a general level that they are a comprehensive scheme to regulate the civil liability of air carriers for damage sustained in a certain event, the event being death or personal injury of the passenger or damage to the cargo during the course of an air operation.

So what is critical to the scheme is it is liability based.  It focuses in that sense on the carrier.  Of course, it will have consequences for ultimate rights, but it starts at the end of liability and it is event based.  It is focusing on death or injury, et cetera, during the course of the air operation.  If one steps back, that was the basic problem that the Warsaw Convention was trying to deal with, which was that with aircraft travelling across borders and there being accidents one immediately had a large conflict of laws problem.  Which domestic system would govern liability?  Would it be the system of the carrier?  Would it be the system of the place where the accident occurred?  What if the accident was over the high seas, and so on. 

So the central problem that Warsaw dealt with, which is why it is liability based, is to provide a single uniform answer to which system will govern the liability.  The problem – this came out at the end of Mr Williams’ submissions – Warsaw tried to deal with but failed on because of the diversity in domestic law systems was, given that in some circumstances, such as death, the claimant will necessarily be someone other than the passenger, what system of law is to govern the answer to the two questions:  who can sue and for what harm?

KIEFEL CJ:   Thank you, Mr Gleeson.  Yes, Mr Williams.

MR WILLIAMS:   Just three points, I think, or perhaps four.  Our friends criticised our reliance on Justice Deane’s summary in Jaensch v Coffey of the state of the law on nervous shock in the 1920s.  Might I hand up an extract from Clerk and Lindsell 7th edition 1921.  I should say we have not given our friends notice of this.  It was a point emerging in reply.  Page 148 of the 1921 edition, “nervous shock caused by fright”.  We read from there down to about point 3 on page 149 and we call attention to the cases in the footnotes on the bottom of 148, being cases from essentially 1890 through to 1901.

EDELMAN J:   I think it was Bourhill v Young was the decision of Lord Wright in the 1940s where he picked up on this earlier jurisprudence as well.

MR WILLIAMS:   Yes.

KEANE J:   Is not this talking about the response of the person who is himself or herself subjected to the fright?  It is not the third party who witnesses someone else suffering a misfortune.  This is concerned with consequential loss by the actual victim, not a spectator, the immediate victim of the tort.

MR WILLIAMS:   People who are affected – it is discussing Coultas who were persons who were not physically touched at all but who were frightened by an incident not involving any impact.  No different, we would say, to watching an aircraft crash.

KEANE J:    But if they were apprehensive that the aircraft might strike them, not that they were suffering a reaction based on their empathic concern for the fate of others.  This is about where you threaten harm to someone and as a result of the threat they take fright.

MR WILLIAMS:   Certainly, and we say the prospect of an aircraft crashing in an urban area plainly gives rise to ‑ ‑ ‑

KEANE J:   But that is not this case.  The harm we are concerned with here is the harm that was suffered by the Stephensons because they learned of the crash.

MR WILLIAMS:   We put it in two steps.  First, in the 1920s, the law of nervous shock was developed to the point where those who witnessed a frightening event or a shocking event could claim, as was established by these cases, including according at least to the text writers, people such as those in Victoria Railway Commissioner v Coultas – that is step one.  So nervous shock was established at that level.  The prospect of a plane crashing in front of you causing you fright or alarm or shock was an established cause of action, and certainly at a later point following I think Bourhill v Young, which was in the 1940s ‑ ‑ ‑

KEANE J:   But for our purposes that is not identifying a problem different from a plane actually landing on you, or a bit of a plane actually landing on you, as opposed to witnessing someone else’s demise or hearing about it.

BELL J:   Becoming aware of someone else’s demise in one’s own home not relevantly being on land or sea when an object hits you from the air.

MR WILLIAMS:   Well, we accept that there has been an evolution in the law of torts in that respect.  The way in which we put the point is that by the 1920s the law of nervous shock was developed to the point where there was a recognised cause of action that would apply to those who witnessed an aircraft crash and were put in fright or in shock by that event and that the prospect of that, not simply having the plane crash on you or being hit by debris, not simply physical injury coming from it – the prospect of nervous shock coming from the crash, even without any physical impact on the person themselves must have been in contemplation of some of the delegates.

BELL J:   As I understand Mr Gleeson’s argument, he accepts that there may be instances where a person, as you suggest, apprehends danger seeing a plane apparently in distress might be outside the exclusivity of the Convention.  But that is not the Stephensons’ claim.

MR WILLIAMS:   We accept that it is not the Stephensons’ claim, but the way in which we put the point is, as we did this morning, there was plainly in contemplation by the 1920s the possibility of nervous shock damage to witnesses of aircraft accidents.  Plainly nervous shock was a cause of action which must have been in the contemplation of those who were drafting the third party liability provisions. 

The way in which they resolved the question of the scope of liability was in the widest terms:  damage and in some of the later instances legislative and otherwise personal injury and that is carried through in the 1952 New South Wales Act and the 1999 Commonwealth Act.  So it is not by that stage restricted to nervous shock as it was understood in the 1920s, but certainly as it was understood in the 1920s it must have been something that was in contemplation of at least some of the delegates because it was settled law.

KIEFEL CJ:   There might be a slight elision, Mr Williams.  Clerk & Lindsell, the discussion you have taken us to, might indicate that at that time there was a recognition of nervous shock as a kind of damage but the cases they were referring to limit liability to persons directly affected.  If one takes the example of the train and provides an analogy with an aircraft it would be similar to a baggage handler being told to drive out in front of a landing aircraft and although the aircraft avoids that person they suffered nervous shock.  That is a long way from the example that we have here.

MR WILLIAMS:   We put it in the two‑stage way I indicate, that nervous shock was recognised.  Nervous shock coming from fright was recognised by the time of these discussions.  The third‑party liability conventions must have been conducted with that possibility in mind.  Those defined “damage” in the broadest terms.

KIEFEL CJ:   That is damage as distinct from liability.  On the argument against you, the question of what kind of harm was to be recognised was left for local law. 

MR WILLIAMS:   Speaking of the third‑party conventions, not the carrier conventions, the damage was – and the cause of action, because of course it was no requirement of negligence – any person who suffers damage that is caused by an aircraft could not have been in wider terms.  Again, if we go to the 1999 Act that we referred to - and our friends - which is in the supplementary book of authorities, at page 22 of that book is the meaning of “in flight”.  Relevantly, in section 5(2) a heavier‑than‑air aircraft is:

in flight from the moment when power is applied for the purpose of take‑off until the moment when its landing run ends.

Now, if it crashes, it is still in flight.  It has not got to the end of the landing run.  The whole period of liability continues and, indeed, in the case of ACQ which is tab 9 in this book - we have given the CLR references in paragraph 6, I think, of our oral outline - at page 103, paragraph 24, bearing in mind the facts here, this was an aircraft that crashed and caused a line to fall and a worker entered the field before the lines had been turned off and stumbled and suffered injury and the Court upheld liability in that circumstance based upon paragraph 10(1)(d).

In paragraph 24, in the second half of the paragraph, the Court of Appeal nevertheless was correct to conclude that 10(1)(d) does in a sense extend liability from direct consequences to indirect or consequential results but what these two categories of expression may mean is another issue.  So the scope of the provision is left to another day but undoubtedly a wide view of liability coming from those provisions for an injury occurring some substantial period of time after the aircraft has ceased to be in flight in the ordinary sense of the word. 

Can I say something about Haanappel where our friends started which is in volume 4, tab 40 at 1416.  This is the passage that was referred to in Lockerbie.  In the paragraph toward the foot of the page, in our submission, the passage provides the respondent with no assistance because it makes plain that in contracts of transport of passengers in France there was a tacit stipulation for a third party made by the passenger in his contract in favour of those persons in respect of whom he has a duty of assistance. 

So, quasi‑delictual claims or contract claims are sourced in the tacit stipulation in favour of the third party.  In our submission, there is no analogy with a nervous shock claim which could be to a person who has no connection whatsoever to anyone on board.  Finally, I think, the respondent’s submissions about section 35 ‑ ‑ ‑

BELL J:   Can I just take up one matter with you there?  You are positing a nervous shock claim perhaps by a person who observes a plane about to fall into the sea or something of that - and then you say but there is no death.  Was that your submission?  No connection with death.

MR WILLIAMS:   No analogy with the kind of case that is referred to here where there is a tacit stipulation.

BELL J:   All I am just taking up with you is in the case of the person who sees a plane about to fall into the ocean and suffers nervous shock, apprehending terrible consequences for the people on board, but for whatever reason that does not occur, you are not there dealing with damage sustained by reason of the death, for the purposes of section 28.

MR WILLIAMS:   The point we make in that respect is that in the case of nervous shock where all of the categories of persons, of third parties in question are within the contemplation, foreseeability of the carrier, it is anomalous to seek to draw a distinction between those who, as in Magnus, might have apprehended injury or death when there was none and those who suffer the same injury where there was death, for example.  So it is that anomaly to which we call attention – nervous shock, the same foreseeability and the same duty but in the ‑ ‑ ‑

BELL J:   I am sorry, but is it foreseeability that if one does not conduct the aircraft with due care in its management and people who are passengers on it die, those people’s relatives may suffer psychiatric injury?  Is that the foreseeability of which you speak?

MR WILLIAMS:   Well, the foreseeability is that if one does not conduct the aircraft with due care, a range of persons may suffer nervous shock.

BELL J:   But looking ‑ surely in the context of a claim such as this, the foresight is of the possibility of psychiatric harm to those who care about the passengers on the plane.

MR WILLIAMS:   That is one category.  The other category are those who, like the chap who was driving along the road when the helicopter crashed, might witness the accident and suffer the same kind of nervous shock.

BELL J:   But that is a distinct ‑ that is a direct ‑ that is rather like having a section of the blade hit one, is it not?

MR WILLIAMS:   Well, the way in which we put it is that the duty to avoid nervous shock is the same duty in respect of all categories even if factual distinctions can be drawn between them.

BELL J:   But the duty is borne out of the foreseeability and in this class of case it is foreseeability of the damage to death of a passenger.

MR WILLIAMS:   That is one class of foreseeable injury here.  One is ‑ another is, as we say, to those who have witnessed the accident but in each case it is nervous shock and in each case it is foreseeable.  Unless there are matters with which I can assist, those were our submissions.

KIEFEL CJ:   Thank you, Mr Williams.  The Court reserves its decision in this matter and adjourns to 9.30 am on Friday, 16 November.

AT 4.15 PM THE MATTER WAS ADJOURNED