Parkes Shire Council v Stephenson & Ors

[2018] HCATrans 92

[2018] HCATrans 092

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S13 of 2018

B e t w e e n -

PARKES SHIRE COUNCIL ABN 96 299 629 630

Applicant

and

INGRID MARGARET STEPHENSON

First Respondent

NATALEE JOY STEPHENSON

Second Respondent

JAY STEPHENSON

Third Respondent

ESSENTIAL ENERGY (FORMERLY COUNTRY ENERGY) ABN 37 428 185 226

Fourth Respondent

SOUTH WEST HELICOPTERS PTY LIMITED ABN 64 085 167 951

Fifth Respondent

COUNTRY CONNECTION AIRLINES PTY LIMITED ACN 008 451 465

Sixth Respondent

Office of the Registry
  Sydney  No S16 of 2018

B e t w e e n -

PARKES SHIRE COUNCIL ABN 96 299 629 630

Applicant

and

INGRID STEPHENSON

First Respondent

NATALEE STEPHENSON

Second Respondent

JAY STEPHENSON

Third Respondent

ESSENTIAL ENERGY ABN 37 428 185 226

Fourth Respondent

SOUTH WEST HELICOPTERS PTY LTD ABN 64 085 167 951

Fifth Respondent

COUNTRY CONNECTION AIRLINES PTY LIMITED ACN 008 451 465

Sixth Respondent

Office of the Registry
  Sydney  No S17 of 2018

B e t w e e n -

PARKES SHIRE COUNCIL ABN 96 299 629 630

Applicant

and

INGRID MARGARET STEPHENSON

First Respondent

NATALEE JOY STEPHENSON

Second Respondent

JAY STEPHENSON

Third Respondent

ESSENTIAL ENERGY  ABN 37428185226

Fourth Respondent

SOUTH WEST HELICOPTERS PTY LIMITED ABN 64 085 167 951

Fifth Respondent

COUNTRY CONNECTION AIRLINES PTY LIMITED ACN 008 451 465

Sixth Respondent

Applications for special leave to appeal

KIEFEL CJ
EDELMAN J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 18 MAY 2018, AT 11.49 AM

Copyright in the High Court of Australia

____________________

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

MR D.E. BARAN:   May it please the Court, I appear for the first, second and third respondents with MS G.F. MAHONY in each application.  (instructed by Victoria Baker Solicitor)

MR J.M MORRIS, SC:   May it please the Court, I appear with my learned junior, MS B. EPSTEIN for the fourth respondent in each matter.  (instructed by Norton Rose Fulbright Australia)

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

KIEFEL CJ:   Yes, Mr Williams.

MR WILLIAMS:   The application raises three points – or each application raises three points.  The first is whether claims for psychiatric injury to non‑passengers are precluded by the Civil Aviation (Carrier’s Liability) Acts of the Commonwealth and of the States and Territories.  The second is whether the finding of the primary judge as to factual or “but for” causation can be sustained in the absence of any evidence permitting inferences as to why an experienced pilot violated fundamental principles of good airmanship and air safety in flying below 300 feet.

The third question concerning the scope of liability under section 5D of the Civil Liability Act (NSW) is whether or not, and if so, why, to use the words of the Act, responsibility for the harm should be imposed on the Council. Although barely addressed by the primary judge and not addressed at all by the judgments in the Court of Appeal, this raises large questions of principle and policy whereas here the Council had contracted with a specialist in a specialised and heavily‑regulated field. The Council itself had no expertise in the field and the relevant activity was undertaken away from the Council’s premises where it had no practical control of the method of work.

Turning to the first point, it is clear beyond argument that claims by a passenger – or claims that depend on the rights a former passenger would have had if he or she had survived – are subject to the benefits and detriments imposed by the Warsaw Convention through its domestic implementation in the various Civil Aviation (Carrier’s Liability) Acts of the Commonwealth and the States and Territories. 

As Justice Leeming observed at page 403 of the book, in paragraph 316 on page 403, it is also quite clear that many classes of claim arising from air transport are not touched by the Convention at all.  One obvious case is the claim by an occupant of a house that is hit by aircraft debris.  Another, which Justice Leeming referred to at page 406 of the book in paragraph 324, is that of a witness to an aircraft crash. 

Does the liability for the trauma suffered by such a person depend on whether passengers are killed, as here, injured – as in the Federal Court decision in Magnus – or not injured at all?  In the latter case – that of no injury at all to passengers – neither sections 35 nor 36 of the Carrier’s Liability Act (Cth) could have any possible application and on the approach of the majority in the Court of Appeal that case – but not that of death or injury – would fall outside the Carrier’s Liability Act.

EDELMAN J:   There is also an underlying question relating to the nature of statutory and Convention interpretation, particularly the words in the Warsaw Convention “bodily injury” – whether, at the time those words were used they might have encompassed what later became an independent head in Australia of psychiatric harm.

MR WILLIAMS:   Indeed.  The equivalent words in the statute, “lesion corporelle” in the Convention – in the French version of the Convention.  At page 385 of the book, in paragraph 271, Justice Leeming had identified the question as whether the limitations imposed by the Convention apply to:

a tortious claim for psychiatric injury by a non‑passenger following the death of a passenger –

and, at 273, that the question was not answered by construing the phrase “in respect of the death of the passenger” in the abstract shorn of context.  At page 404, in paragraph 319, his Honour identified, correctly, in our submission, the discrimen of the operation of the Convention as being the existence of a “contract of carriage”.

The majority fell into error, in our respectful submission, at page 316 of the book, in paragraph 90, in the judgment of Justice Basten, in treating principles laid down in cases of claims by passengers – or derivative on the rights of passengers – as governing claims which are independent of the rights of passengers, like the present. 

This is also reflected in the reasoning in the majority at page 340 of the book, at paragraph 162 on page 340.  The majority puts too much weight, in our submission, on the decisions post‑Magnus emphasising the existence of the exclusive code without due consideration of what forms of liability that code applies to. 

EDELMAN J:   Has the point ever directly been considered by a court other than in Cauchi v Air Fiji and the South Pacific Case?

MR WILLIAMS:   Not that we are aware of.  The key issue here was the scope of the exclusive code described by Justice Leeming, page 405, paragraph 322 as providing for:

limited exclusivity –

and that was not addressed by focusing on cases about its content.  Cases about content have nothing to say, in our submission, about the scope of the limited exclusivity.  The point is plainly one of general importance, meriting a grant of special leave.

The second and third points are interrelated and it is convenient to start with the third question, the scope of liability. Before the enactment of section 5D of the Civil Liability Act 2002, which is set out at page 75 of the book, questions as to the scope of an employer’s liability for harm that befalls an employee through the actions of a contractor were answered by the incantation of the phrase “non‑delegable duty”. Such issues are now to be addressed through the more nuanced inquiry required by section 5D(1)(b) – in particular, as informed by subsection (4).

EDELMAN J:   But 5D(1)(b) and subsection (4) still require – almost as an anterior consideration – a determination of what the duty is, do they not?

MR WILLIAMS:   They do, yes.

EDELMAN J:   That then requires one to identify what is meant by the notion of a “non‑delegable duty” here.  There does not seem to have been any dispute, either before the trial judge or the Court of Appeal, that the non‑delegable duty includes a duty to ensure a safe system of work. 

MR WILLIAMS:   At that level of principle there was not such a dispute.

EDELMAN J:   If that is so, is not the difficulty for your arguments then that that is a duty to ensure, not just a duty to take care, for example, in the selection of sufficiently competent independent contractors?

MR WILLIAMS:   There is, we would say, a question properly to be asked on the facts here about non‑delegable duty which is, as your Honour points out, a threshold to the application of 5D(1)(b) and (4), where, as here, the relevant activity was one being undertaken by a specialist contractor in a highly‑specialised and regulated field, one in which the employer itself had no expertise and in which its interventions may well have been counterproductive and dangerous.

EDELMAN J:   But that may all be relevant to the second part of paragraph 225, the second aspect of what is described as “non-delegable duty”, which is the duty:

to take reasonable care for their safety –

But the first part of that, to which some emphasis was placed by the primary judge, is the duty to ensure a safe system of work and that is a duty to ensure that the helicopter pilot and so on took care.

MR WILLIAMS:   It is a duty which is not without limitations.  It cannot be that an employer has an absolute duty to ensure where the employer has no relevant expertise and the contractor does have high‑level expertise and where the activity is undertaken away from the employer’s premises, in contrast to the common law cases like Qantas which were about the duty to ensure a safe system of work at the employer’s premises, where, as here, the activity is being undertaken away from the employer’s premises the practical capacity of an employer to ensure a safe system of work is profoundly limited or non‑existent.

EDELMAN J:   Has there been any consideration of that point or that argument in the Court of Appeal’s decision?

MR WILLIAMS:   The Court of Appeal’s decision in respect of causation is, with respect, extremely limited.  It is really to be found only in paragraph 216 – I will find the page reference – page 362 of the book.  Paragraph 216 deals with the second special leave question, that is the “but for” causation.  Paragraphs 217 through to 221 – to the extent to which these points are dealt with at all, they are to be found in here.

So it is really in the first sentence of 217 that it is dealt with.  There is then, for example – and one particular challenge raised by my clients below is then considered in the succeeding paragraphs and then there is a conclusion in 221.  That is the limit of the consideration of these matters in the Court of Appeal.

So we are left with what the primary judge said at pages 78 and 79.  His Honour dealt with, at 235 on page 78 – his Honour referred to Wallace v Kam but did not refer to the preceding paragraph – paragraph 14 in the judgment of this Court in that case – which had pointed out that the 1(b) determination is entirely normative, turning on consideration of whether or not and if so why a responsibility for the harm should be imposed on the negligent party. 

But, then, in paragraphs 237 and 238, the primary judge deals with “but for” causation or “factual” causation as it is put in 5D of the Civil Liability Act and then in 239 and 240 deals with “scope of liability”.  We say – and this is blending in to our second point in respect of 237 – that the reasoning here is wholly insufficient to permit an inference to be drawn as to the alternative hypothesis.  The fact that pilots generally comply with client requests as to the manner in which matters are done is not probative of what would have occurred here.

EDELMAN J:   But that is running together the two duties again.  That is running together the question of whether reasonable care was taken to ensure their safety and what would the consequences of failure to take reasonable care have been with the quite separate duty of a duty to ensure a safe system of work which, at least on one reading of the primary judge’s judgment, was really the concern. 

MR WILLIAMS:   His Honour had to be satisfied, whatever the conclusion on safe system of work and duty to ensure – and we say, again, that duty cannot be an absolute one – his Honour had to be satisfied as to factual causation – as it is described in 5D(1)(a) of the Civil Liability Act and, also, as to scope of liability. 

His Honour could not find my client liable without reaching a conclusion against us on the matter dealt with in 239 and 240.  That is – although your Honours will not find these words here because 5D(4) is not referred to – apart from the whole section having been set out – 5D(4) is not considered by way of analysis, either by the primary judge or by the Court of Appeal.  Your Honours will not find the words “whether or not and, if so, why”.  His Honour, the primary judge at 239 and 240 first referred to Justice Basten’s judgment in Monaghan Surveyors:

intervening and successive causes –

in the penultimate line:

foreseeability and remoteness.

We would say first that is much too narrow a view of the question “whether or not and, if so, why”.  Certainly, “whether or not and, if so, why” can raise those matters, but common law concepts do not determine the exclusive reach of the statutory phrase or, indeed, its proper application.  “Whether or not and, if so, why” involves different questions – additional questions – to these.

KIEFEL CJ:   Mr Williams, what is the new principle that is relevant to grounds 3 or 4?  Why is this not just the application of settled principles to the facts of this case with respect to causation and scope of liability?

MR WILLIAMS:   The principles, particularly dealing with the final question – scope of liability – are not, we would say, settled.  The consideration, 239 and 240 – the primary judge has done no more than to say there is nothing unacceptable or unjust.

EDELMAN J:   But you have the findings at paragraphs – that are summarised at paragraphs 210 on application book 358 and 213, application book 360.  It is difficult to see that in light of those findings there is any question of principle that is involved in determining scope of liability.  It is just a characterisation of those facts, is it not?

MR WILLIAMS:   We would say “whether or not and, if so, why” a council should be held liable for the injury occurring to one of its employees when the employee is entrusted to a specialist aviator.  Take, for example, the analogy with commercial air navigation – a flight from Sydney to Melbourne.  If an accident occurs in the course of such a flight, is the employer liable? 

KIEFEL CJ:   But that is really no more than to say that there are special facts in this case which – that special facts exist in this case.  I still do not see any point of new principle. 

MR WILLIAMS:   The principle, we would say, is the correct application of the 5D(4) test.  We say that it has not been considered by the Court of Appeal.  Your Honours will not find it referred to at all.

KIEFEL CJ:   That is by way of saying that you wish this Court to make all the relevant findings that the Court of Appeal did not.

MR WILLIAMS:   Not findings because it is the – it is not the ‑ ‑ ‑

KIEFEL CJ:   The application of the findings of the primary judge to the section.

MR WILLIAMS:   Yes.  We say when one looks at the four paragraphs of the primary judge’s reasons that I have referred to, the first two as to our second ground, our second point, factual causation, and the third and fourth paragraphs as to scope of liability one sees, in the first of those, error as to the proper method of drawing inferences when considering an alternative hypothesis which we say of itself is a question of general importance.

In respect of scope of liability, one sees simply the application of the wrong test applying principles which, if they are settled by the judgment in Monaghan, are wrongly settled, in our submission, with respect because it is “whether or not and, if so, why”, not as the primary judge put it, relying on Monaghan, a question merely of:

intervening and successive causes, foreseeability and remoteness.

In other words, the courts applied a gloss rather than the statute.  That is the very thing this Court cautioned against in Wallace v Kam.  Those are our submissions. 

KIEFEL CJ:   For the respondent’s purposes, we will not require submissions in relation to proposed grounds 3 and 4.  Yes, Mr Baran.

MR BARAN:   May it please the Court.  In respect of proposed grounds 1 and 2, we join with our learned friends in their application for special leave in respect of those particular issues which are raised and also question 1, identified as the first special leave question at page 533 on volume 2. 

May we say that in terms of what is put against the applicant by South West Helicopters and Country Connections identifies as a considerable and significant problem in how this issue was dealt with by the Court of Appeal because there has been a heavy reliance upon authorities from foreign countries, almost every conceivable country from America, Canada, United Kingdom, to name but a few – often involving the Warsaw Convention, often involving constitutional rights, often involving foreign statutes.

We see this, in particular, in our learned friend’s submissions on behalf of South West Helicopters.  It is at page 562 of volume 2, where they refer to a number of foreign authorities, in particular Thibodeau v Air Canada.  That was a case involving a claim brought – being a protective orders claim – as a result of French not being spoken on an airline.  It was contrary to the Official Languages Act 1985 of Canada.  Again, that is being used – and it is being used to interpret what is a domestic statute. 

King v American Airlines – again, two African‑American people had their flight taken away from them and they were rescheduled – apparently on the basis of race.  Stott v Thomas Cook Operators – of course, a United Kingdom decision – but a human rights decision about a disabled man who was not put in his proper seat ‑ ‑ ‑

EDELMAN J:   Or Lord Toulson’s discussion in Stott also, in one sense, favours your submission.

MR BARAN:   Yes.  Also it was conduct described by Lady Hale at paragraph 67 as “disgraceful behaviour”.  But none of that helps in terms of interpreting this statute.  What is set out at page 296, section 35 – and the very fact that at the end of the day none of these foreign authorities are of any assistance at all.  Our learned friends really only have ‑ ‑ ‑

KIEFEL CJ:   Mr Baran, do you not accept, though, that this raises an important question in relation to the Act?

MR BARAN:   Absolutely, absolutely.

KIEFEL CJ:   Your point is simply that the majority ‑ ‑ ‑

MR BARAN:   I am just speaking in respect of the opposition that has been made.  The application for special leave we say.  It is absolutely impossible in this scenario to oppose special leave for the most important reason of all and that is you have two intermediate courts of appeal who are completely at loggerheads.

KIEFEL CJ:   Yes.

MR BARAN:   May I just answer your Honour Justice Edelman’s question regarding whether or not this point has been dealt with in another court.  There was a decision from Western Australia.  It is a case called Cousins v Nimvale [2013] WADC 175. That was an application to strike out a statement of claim and involved these kinds of issues. The learned District Court judge did make a determination, again, on a pleadings point, following Magnus – namely, that there was a right to bring an action independently for psychiatric injury. 

So, it has been dealt with in that limited context which makes it even more problematic because you have that judge following Magnus and you have this decision under appeal now which is, of course, in conflict with that decision.  

In terms of the Agtrack issue, if I can just put it that way – and that is identified by our learned friends in their written submissions and also there were two paragraphs extracted by Justice Payne at page 419, paragraphs 362 to 363.  We say that that is not authority for the proposition our learned friends contend.  Certainly, Justice Payne thought that that particular series of paragraphs was an emphatic statement about an exclusive code.  What is very important about Agtrack is that the loss that was identified by the High Court was a compensation to relatives act loss.  It was a loss of dependency.

EDELMAN J:   For the passengers.

MR BARAN:   That is right.  That is what had been extinguished and taken up by the federal Act.  There was no suggestion of any other claim.  Really, it came down again to a pleading issue – very much like Air Link v Paterson.  It was a pleading issue and also an issue regarding amendment.  That was the focus of that appeal, nothing to do with claims that we say well and truly are available outside of the Act.

Your Honour, the way it was dealt with in terms of the construction of section 35(2) – coming back to Justice Basten’s judgment at page 323 at paragraph 114 – what his Honour has done, we say, is he has simply construed the section literally.  His Honour has not looked at the purpose and, absolutely critically, the context of the words and the wording – “personal representative”, “benefit”, “passenger” – all of the usual words that one sees in a compensation to relatives act statute are to be found in section 35(2) and going on with the other subsections.

When you look through all of the chain of events that is required to crystallise a claim under the Act, we say that it is beyond argument – that giving it a purposive and contextual construction, it must be the case that it only applies to that kind of claim or a claim which is brought by a person who subsequently dies and that the past special damages, being past medical expenses, and then funeral costs are also caught up in section 35 – nothing else.

Of course, we say that the scenario that has been undertaken that has been undertaken and the expanse of it in very exhaustive determination made by his Honour Justice Leeming is absolutely correct and would be followed by your Honours.  It brings the case to a point where you also have, internally, judges who say, not for the first time - Lord Bingham said the same thing - they have to resolve a very difficult area and it is filled with uncertainty and this is the point. 

We say, so far as an appropriate vehicle is concerned – was raised by my learned friends at grounds 1 and 2 – is a critical vehicle for the grant of special leave.  Basically, it satisfies the following.  Firstly, it is universally accepted that a question of general public importance has been raised. 

There is no question about that.  Secondly, the inconsistency point.  Thirdly, we have State and Territory Civil Liability Acts which require this particular question to be answered so they can be properly applied, or not applied, whatever the case may be. 

We say for all of those very important reasons there should be a grant of special leave in respect of grounds 1 and 2.  In respect of the remaining grounds they should be dismissed.  Those are our submissions.

KIEFEL CJ:   Thank you.  Yes, Mr Morris.

MR MORRIS:   Your Honours, by reason of the resolution of the South West Helicopter special leave points by this Court on, I think, 18 April, which essentially meant that Essential Energy was released from proceedings by reason of the Court of Appeal judgment we actually have no residual interest in this point.  I should say we also – by reason of the resolution of grounds 3 and 4 – we have no residual interest.  But we have been put on notice last night that South – I am sorry, your Honours, given my friend’s interjection ‑ ‑ ‑

KIEFEL CJ:   Should Mr Gleeson go before you?

MR MORRIS:   I think that is correct, your Honour, thank you.

KIEFEL CJ:   Yes, Mr Gleeson.

MR GLEESON:   Your Honours, could we approach these applications from a practical end.  We have indicated in writing that we concede that Mr Williams’ first point is a point of general importance.  Our opposition was on the ground of insufficient prospects.  I can say something about that, or not, as the case may be.  If your Honours do not wish to hear from us on the other grounds of Mr Williams ‑ ‑ ‑

KIEFEL CJ:   No.

MR GLEESON:   No.  That is the issue that Mr Morris was tangentially referring to which was that if the Court had been taking on the factual case we would then wish to say something about the revocation of the dismissal of our application.  But that can be put to one side.  Mr Morris has correctly said he has no interest in the first point and that is right. 

Can I also make clear, if it is not clear on the records, that Mr Baran’s clients have been fully compensated and have no interest in the first point.  They have been paid their verdict in full – both their compensation to relatives verdict and the nervous shock verdict.  That has been done by the Council.  So if the Court takes on the first point, apart from its general importance, its only practical significance is between Mr Williams’ client and my client.

EDELMAN J:   Contribution, is it not?

MR GLEESON:   It is contribution.  The Stephensons in any event – I will not go on with that further.  So what we are wanting to say practically is if the Court was considering a grant on the first point, there are really only two parties that are affected by it.  I do not want to go into costs but your Honours should know this matter has run up enormous costs through all the courts, far more than it ever should have and if we are down to one point of law, your Honours should hear one argument on either side on that point. 

So, that is what I wanted to say generally.  In terms of insufficient prospects I can either go on or sit down, as your Honours please.  The central point that – your Honour Justice Edelman is correct.  It has not been‑ ‑ ‑

KIEFEL CJ:   I am sorry, just to be clear, Mr Gleeson, are you saying we should do anything about the other parties?

MR GLEESON:   For the purpose of the appeal, either Mr Williams, if he gets leave, reflects upon whether he needs to join anyone other than us for the appeal.

KIEFEL CJ:   That is a matter we leave to the appellant.

MR GLEESON:   You leave that to the appellant and in the event that he was to join the others, we say totally unnecessarily, the appropriate course is they would enter a submitting appearance.  If Mr Baran tried to get involved actively ‑ ‑ ‑

KIEFEL CJ:   You are simply pointing to the practical consequences and how this is narrowed to two parties, in effect.

MR GLEESON:   It is right down to that, yes.

KIEFEL CJ:   Yes.

MR GLEESON:   On the other point, your Honour Justice Edelman is correct.  There is only one decision that has directly dealt with the point.  What is important from the overseas decisions is the difference between the field of exclusivity on the one hand and the area where the positive remedy is granted on the other.  Where we would ultimately want to argue

Justice Basten got it absolutely right is that this scheme – whether in the Convention or the statute – has a basic quid pro quo in it.

The airline knows “I will be liable without proof of negligence and I cannot contract out of liability but if it is any civil liability in respect of death or bodily injury to a passenger arising out of that air operation I will only pay up to the maximum in the Act – 500,000 at the time – and I will only pay pursuant to the positive grant of remedy”. 

So, whatever is the meaning of “bodily injury” – that will not actually help Mr Williams because if we are right on the primary scope of exclusivity then you just come back to the positive grant of remedy and it does not give a remedy in this case.  So that is the argument we would be wishing to put, your Honours.  May it please the Court.

KIEFEL CJ:   Mr Morris, is there anything further you need to say?

MR MORRIS:   No, your Honour. 

KIEFEL CJ:   Any reply, Mr Williams.

MR WILLIAMS:   No, your Honour. 

KIEFEL CJ:   There will be a grant of special leave in these matters on grounds 1 and 2.  In our view, grounds 3 and 4 raise no question of general principle.  Would the parties please ensure that they obtain a copy of the directions from the Deputy Registrar? 

The Court will adjourn to reconstitute.

AT 12.23 PM THE MATTERS WERE CONCLUDED