South West Helicopters Pty Ltd v Stephenson

[2017] NSWCA 312

Court of Appeal

Supreme Court

New South Wales

• Summary available
• Amendment notes

Medium Neutral Citation:

South West Helicopters Pty Ltd v Stephenson [2017] NSWCA 312

Hearing dates:

7, 8 and 9 August 2017

Decision date:

07 December 2017

Before:

Basten JA at [1];
Leeming JA at [260];
Payne JA at [357]

Decision:

A. Matter number 2016/255761
Appellants: South West Helicopters Pty Ltd and Country Connection Airlines Pty Ltd

 

Respondents:
1.   Ingrid Stephenson
2.   Natalee Stephenson
3.   Jay Stephenson
4.   Essential Energy
5.   Parkes Shire Council

 

(1)   Allow the appeal and set aside the judgments obtained by the first, second and third respondents (the Stephensons) against the first appellant.

 

(2)   Set aside orders that the first appellant pay costs to the first, second and third respondents.

 

(3)   Give judgment for the first appellant against the fifth respondent in the amount of $139,523, such judgment to take effect from 12 August 2016.

 

(4) In proceedings number 339502/2009 in the Common Law Division (Parkes Shire Council’s proceedings under s 151Z(1)(d)),
(a)   set aside orders (1)-(5);
(b)   dismiss the claim brought by the plaintiff against the defendant;
(c)   order that the plaintiff pay the defendants’ costs of the trial of this proceeding.

 

(5)   In proceedings number 339465/2009 (Ingrid Stephenson’s proceedings):
(a)   with respect to the Compensation to Relatives claim,
(i)   set aside orders (1)-(4) and (6)-(10);
(ii)   in place thereof, give judgment for the plaintiff against Parkes Shire Council in the sum of $389,191, such judgment to take effect from 12 August 2016;
(b)   in relation the nervous shock proceedings, set aside orders (1), (2), (4), (5) and (7)-(9);
(c)   in place thereof, give judgment for the plaintiff against Parkes Shire Council in the sum of $340,791, such judgment to take effect from 12 August 2016;
(d)   order Parkes Shire Council to pay the plaintiff’s costs of the trial.

 

(6)   In proceedings number 339470/2009 (Natalee Stephenson’s proceedings):
(a)   in relation the nervous shock proceedings, set aside orders (1), (2), (4), (5) and (7)-(9);
(b)   in place thereof, give judgment for the plaintiff against Parkes Shire Council in the sum of $207,000, such judgment to take effect from 12 August 2016
(c)   order Parkes Shire Council to pay the plaintiff’s costs of the trial.

 

(7)   In proceedings number 339471/2009 (Jay Stephenson’s proceedings):
(a)   in relation the nervous shock proceedings, set aside orders (1), (2), (4), (5) and (7)-(9);
(b)   in place thereof, give judgment for the plaintiff against Parkes Shire Council in the sum of $136,391, such judgment to take effect from 12 August 2016;
(c)   order Parkes Shire Council to pay the plaintiff’s costs of the trial.

 

(8) In relation to the Council’s cross-claim against South West, order that South West pay the Council an amount by way of contribution to the proceedings brought against the Council by the Stephensons of $715,582, but limited to the amount payable pursuant to s 37 of the Commonwealth Carrier’s Liability Act, such order to have effect from 12 August 2016.

 

(9)   Order that Parkes Shire Council pay 25% of South West’s costs of the appeal.

 

(10)   Dismiss the cross-appeal by the fourth respondent (Essential Energy).

 

(11)   Dismiss the cross-appeal by the fifth respondent (Parkes Shire Council).

 

B. Matter number 2017/70847
Appellant – Essential Energy

 

Respondents:
1.   South West Helicopters Pty Ltd
2.   Country Connection Airlines Pty Ltd
3.   Ingrid Stephenson
4.   Natalee Stephenson
5.   Jay Stephenson
6.   Parkes Shire Council

 

(1)   Allow the appeal and set aside the following orders made in the Common Law Division:
(a)   judgment for the first respondent (South West) in respect of the first cross-claim in relation to each proceeding brought by the third, fourth and fifth respondents (the Stephensons).
(b)   judgment against the appellant in relation to the claims brought by the first and second respondents (South West and Country Connection) with respect to the aircraft loss.

 

(2)   In place thereof dismiss the proceedings against the appellant.

 

(3)   In place of order (3) (no order as to costs) order that the first and second respondents pay the appellant’s costs of their claims against it at trial.

 

(4)   Order that the first, second and sixth respondents pay the appellant’s costs in this Court.

 

C. Matter number 2016/271567
Appellant – Parkes Shire Council

 

Respondents:
1.   South West Helicopters Pty Ltd
2.   Country Connection Airlines Pty Ltd
3.   Ingrid Stephenson
4.   Natalee Stephenson
5.   Jay Stephenson
6.   Essential Energy

 

(1)   Dismiss the appeal.
(2)   Order that the appellant pay the costs of the Stephensons with respect to the Council’s appeal and its cross-appeal in South West Helicopters’ appeal.

 

D. All matters

 In all matters each party has liberty to apply with respect to the orders identified above, such liberty to extend for a period of 28 days from the date of delivery of this judgment. Orders are to be entered at the end of that period unless and then not to the extent that application has been made to vary the orders.

Catchwords:

AVIATION – carriage by air – carriers’ liability – Civil Aviation (Carriers’ Liability) Act 1959 (Cth) – Civil Aviation (Carriers’ Liability) Act 1967 (NSW) – liability of carrier for death of passengers in helicopter crash – family of deceased passenger brought claims against carrier for nervous shock – whether liability of carrier for psychological injuries of non-passengers falls within regulatory scheme of statute – whether claims barred by two year statutory limitation provision – whether claims remain available under general law

 

BAILMENT – right of bailee to claim damages for loss of chattel – operator of helicopter claimed contribution for loss of helicopter from joint tortfeasors – whether operator entitled to recover damages

 

STATUTORY INTERPRETATION – treaties – Warsaw Convention – incorporation into domestic legislation – principles of interpretation – regard to be had to treaty purpose, context and subject matter – weight to be given to international case law considering treaty language when interpreting domestic statute

 

TORTS – negligence – compensation to relatives – Compensation to Relatives Act 1897 (NSW) – interaction of claims with exclusive liability provisions under Civil Aviation (Carriers’ Liability) Act 1959 (Cth)

 

TORTS – negligence – joint tortfeasors – liability of employer and helicopter operator for death of employees in crash – claim for contribution between tortfeasors – Civil Aviation (Carriers’ Liability) Act 1959 (Cth), s 37 – whether two year limitation period on claims under s 34 applies – whether contribution claim in relation to liability not arising under statute available – apportionment of responsibility and damages – Law Reform (Miscellaneous Provisions) Act 1946 (NSW), s 5

 

WORDS AND PHRASES – Civil Aviation (Carriers’ Liability) Act 1959 (Cth), s 35 – “passenger” – whether employees on helicopter were “passengers” for purposes of carrier’s liability under statute

 

WORDS AND PHRASES – Civil Aviation (Carriers’ Liability) Act 1959 (Cth), s 35 – “in respect of” – whether claims of employee’s family arose “in respect of” his death for purposes of carrier’s liability under statute

WORKERS COMPENSATION – liability to pay compensation – Workers Compensation Act 1987 (NSW), s 151Z – whether employer able to claim recovery of compensation payments from third party tortfeasor in circumstances where employer was joint tortfeasor

Legislation Cited:

Acts Interpretation Act 1901 (Cth), ss 15AA, 15AB
Aviation Legislation Amendment (Liability and Insurance) Act 2012 (Cth), Sch 1, item 1
Civil Aviation (Carriers’ Liability) Amendment Act 1971 (NSW), s 2
Civil Aviation (Carriers’ Liability) Act 1959 (Cth), ss 11, 11A, 12, 13, 14, 26, 27, 28, 31, 32, 34, 35, 36, 37, 40, 41, 42; Pts 1A, II, III, IIIA, IIIC, IV, IVA
Civil Aviation (Carriers’ Liability) Act 1967 (NSW), ss 2, 4, 5, 6A
Civil Aviation Act 1982 (UK). s 76
Civil Aviation Act 1988 (Cth), s 27
Civil Aviation Legislation Amendment (1999 Montreal Convention and Other Measures) Act 2008 (Cth), s 2
Civil Aviation Regulations 1988, r 157
Civil Liability Act 2002 (NSW), ss 34, 73; Pts 1A, 3, 4, 12
Commonwealth Constitution, covering cl 5; s 109
Compensation to Relatives Act 1897 (NSW), s 3
Damage by Aircraft Act 1999 (Cth), ss 10, 11
Insurance (Application of Laws) Act 1986 (NSW), s 5
Law Reform (Miscellaneous Provisions) Act 1944 (NSW), s 4
Law Reform (Miscellaneous Provisions) Act 1946 (NSW), s 5
Motor Vehicles Insurance Act 1936 (Qld), s 3
Transport Safety Investigation Act 2003 (Cth), s 69
Workers Compensation Act 1916 (Qld), s 8
Workers Compensation Act 1926 (NSW), s 64
Workers Compensation Act 1987 (NSW), ss 25, 151A, 151Z

 

Additional Protocol No 4 to amend the Convention for the Unification of Certain Rules Relating to International Carriage by Air signed at Warsaw on 12 October 1929 as amended by the Protocols done at the Hague on 28 September 1955 done at Montreal on 25 September 1975 (Montreal Protocol No 4)

 

Convention for the Unification of Certain Rules for International Carriage by Air done at Montreal on 28 May 1999 (Montreal Convention)

 

International Convention for the Unification of Certain Rules relating to International Carriage by Air done at Warsaw on 12 October 1929 (Warsaw Convention), Arts 1, 3, 17, 22, 23, 24, 29; Ch III

 

Protocol to amend the Convention for the Unification of Certain Rules Relating to International Carriage by Air signed at Warsaw on 12 October 1929 done at The Hague on 28 September 1955 (Hague Protocol)

  Vienna Convention on the Law of Treaties (1969)

Cases Cited:

2 Elizabeth Bay Road Pty Ltd v The Owners – Strata Plan No 73943 (2014) 88 NSWLR 488; [2014] NSWCA 409
Aéro-Club de l’Aisne v Klopotowska (1970) 24 RFDA 195 (Court of Cassation (First Civ Div))
Agtrack (NT) Pty Ltd v Hatfield (2005) 223 CLR 251; [2005] HCA 38
Air Link Pty Ltd v Paterson (2005) 223 CLR 283; [2005] HCA 39
Australian Securities Commission v Marlborough Gold Mines Ltd (1993) 177 CLR 485; [1993] HCA 15
Azzopardi v Bois [1968] VR 183
Brodie v Singleton Shire Council (2001) 206 CLR 512; [2001] HCA 29
Bywater Investments Ltd v Federal Commissioner of Taxation [2016] HCA 45; 91 ALJR 59
Cauchi v Air Fiji & Air Pacific Ltd [2005] TOSC 7
Chester v Waverley Corporation (1939) 62 CLR 1; [1939] HCA 25
Clark v Oceanic Contractors Inc [1983] 2 AC 130
Commissioner of Taxation of the Commonwealth of Australia v Scully (2000) 201 CLR 148; [2000] HCA 6
Coverdale v West Coast Council (2016) 259 CLR 164; [2016] HCA 15
CSR Timber Products Pty Ltd v Weathertex Pty Ltd (2013) 83 NSWLR 433; [2013] NSWCA 49
De Sales v Ingrilli (2003) 212 CLR 338; [2002] HCA 52; [2003] HCA 16
Demanes v United Airlines 348 F. Supp 13 (C D Cal, 1972)
Dinov v Allianz Australia Insurance Ltd [2017] NSWCA 270
Disley v Levine [2002] 1 WLR 785
Edwards v Endeavour Energy (No 4) [2013] NSWSC 1899
El Al Israel Airlines Ltd v Tseng 525 US 155 (1999)
Endeavour Energy v Precision Helicopters Pty Ltd [2015] NSWCA 169
Endeavour Energy v Precision Helicopters Pty Ltd (No 2) [2015] NSWCA 357
Fellowes (or Herd) v Clyde Helicopters Ltd [1997] AC 534
Fitness First Australia Pty Ltd v Fenshaw Pty Ltd (2016) 92 NSWLR 128; [2016] NSWCA 207
Gifford v Strang Patrick Stevedoring Pty Ltd (2003) 214 CLR 269; [2003] HCA 33
Glen v Korean Airlines Co Ltd [2003] QB 1386; [2003] EWHC 643 (QB)
Grein v Imperial Airways Ltd [1937] 1 KB 50
Gulf Air Company GSC v Fattouh [2008] NSWCA 225; 251 ALR 183
Hambrook v Stokes Brothers [1925] 1 KB 141
Heli-Aust Pty Ltd v Cahill (2011) 194 FCR 502; [2011] FCAFC 62
Herd v Clyde Helicopters Ltd [1996] SLT 976
Holmes v Bangladesh Biman Corporation [1989] AC 1112
Hunter Douglas Australia Pty Ltd v Perma Blinds (1970) 122 CLR 49; [1970] HCA 63
In Re Mexico City Air Crash of October 31, 1979; Haley v Western Airlines Inc 708 F 2d 400 (1983)
J Blackwood & Son Ltd v Skilled Engineering Ltd [2008] NSWCA 142
Jaensch v Coffey (1984) 155 CLR 549; [1984] HCA 52
Johnson Estate v Pischke [1989] 3 WWR 207
King v American Airlines Inc (2002) 284 F 3d 352
Kostas v HIA Insurance Services Pty Ltd (2010) 241 CLR 390; [2010] HCA 32
Laroche v Spirit of Adventure (UK) Ltd [2009] QB 778
Lazarus v Independent Commission Against Corruption (2017) 94 NSWLR 36; [2017] NSWCA 37
Meandarra Aerial Spraying Pty Ltd v GEJ Geldard Pty Ltd [2012] QCA 315
Milich v The Council of the City of Canterbury (No 2) [2012] NSWSC 450
Mount Beauty Gliding Club Inc v Jacob (2004) 10 VR 312; [2004] VSCA 151
Muller v Dalgety & Co Ltd (1909) 9 CLR 693; [1909] HCA 67
Ortet v Georges (1975) 30 RFDA 490 (Appeal Court of Paris (First Div))
Overseas Tank Ship (UK) Ltd v Morts Dock & Engineering Co Ltd [1961] AC 388
Povey v Qantas Airways Ltd (2005) 223 CLR 189; [2005] HCA 33
Public Transport Commission of New South Wales v J Murray-More (NSW) Pty Ltd (1975) 132 CLR 336; [1975] HCA 28
R v Khazaal (2012) 246 CLR 601; [2012] HCA 26
Re Minister for Immigration and Multicultural and Indigenous Affairs; ex parte Lam (2003) 214 CLR 1; [2003] HCA 6
Roadshow Films Pty Ltd v iiNet Ltd (2012) 248 CLR 42; [2012] HCA 16
Scala v Mammolitti (1965) 114 CLR 153; [1965] HCA 63
Seward v The “Vera Cruz” (1884) 10 App Cas 59
Sheather v Country Energy [2007] NSWCA 179; (2007) Aust Torts Rep 81-901
Sidhu v British Airways Plc [1997] AC 430
Smith v London and South Western Railway Co (1870) LR 6 CP 14
Société Mutuelle d'Assurance Aériennes v Gauvain (1976) 21 RFDA 436
South Pacific Air Motive Pty Ltd v Magnus (1998) 87 FCR 301; [1998] FCA 1107
Southgate v Commonwealth of Australia (1987) 13 NSWLR 188
Stephenson v Parkes Shire Council (No 2) [2015] NSWSC 719
Stott v Thomas Cook Tour Operators Ltd [2014] AC 1347; [2014] UKSC 15
Sulewski v Federal Express Corporation 933 F 2d 180 (1991)
Sydney Water Corporation v Turano (2009) 239 CLR 51; [2009] HCA 42
Tame v New South Wales (2002) 211 CLR 317; [2002] HCA 35
Technical Products Pty Ltd v State Government Insurance Office (Qld) (1989) 167 CLR 45; [1989] HCA 24
The Anderson Group Pty Ltd v Tynan Motors Pty Ltd (2006) 65 NSWLR 400
The Queen v Hughes (2000) 202 CLR 535; [2000] HCA 22
The Winkfield [1902] P 42
Tiufino v Warland [2000] NSWCA 110
Trust Company of Australia Ltd v Skiwing Pty Ltd (2006) 66 NSWLR 77; [2006] NSWCA 185
Trustees of the Sydney Grammar School v Winch (2013) 83 NSWLR 80; [2013] NSWCA 37
United Airlines Inc v Sercel Australia Pty Ltd [2012] NSWCA 24; 260 FLR 37; 289 ALR 682
Workers’ Compensation Board (Qld) v Technical Products Pty Ltd (1988) 165 CLR 642; [1988] HCA 49

Texts Cited:

Australia, House of Representatives, Parliamentary Debates (Hansard), 7 April 1959

 

Cheng, B, “A New Era in the Law of International Carriage by Air: From Warsaw (1929) to Montreal (1999)” (2004) 53 International and Comparative Law Quarterly 833

 

Clarke, M, Contracts of Carriage by Air (Lloyd’s List, 2nd ed, 2010)

 

Gageler, S, “Common Law Statutes and Judicial Legislation: Statutory Interpretation as a Common Law Process” (2011) 37 Monash University Law Review 1

 

Handford, P, “Relatives’ Rights and Best v Samuel Fox” (1979) 14 University of Western Australia Law Review 79

 

Handford, P, “'Come Fly With Me': Psychiatric Injury and the Warsaw Convention” [2006] JBL 408

 

Leeming, M, Resolving Conflicts of Laws (The Federation Press, 2011)

 

Mankiewicz, R, The Liability Regime of the International Air Carrier (Kluwer, 1981)

 

Pearce, DC and Geddes, RS, Statutory Interpretation in Australia (8th ed, LexisNexis, 2014)

 

Peel, W E and Goudkamp, J, Winfield and Jolowicz’ Tort (Sweet and Maxwell, 19th ed, 2014)

  Shawcross and Beaumont, Air Law (LexisNexis)

Category:

Principal judgment

Parties:

In matter 2016/255761:
South West Helicopters Pty Ltd (First Appellant)
Country Connection Airlines Pty Ltd (Second Appellant)
Ingrid Margaret Stephenson (First Respondent)
Natalee Joy Stephenson (Second Respondent)
Jay Stephenson (Third Respondent)
Essential Energy (Fourth Respondent)
Parkes Shire Council (Fifth Respondent)

 

In matter 2017/70847:
Essential Energy (Appellant)
South West Helicopters Pty Ltd (First Respondent)
Country Connection Airlines Pty Ltd (Second Respondent)
Ingrid Margaret Stephenson (Third Respondent)
Natalee Joy Stephenson (Fourth Respondent)
Jay Stephenson (Fifth Respondent)
Parkes Shire Council (Sixth Respondent)

  In matter 2016/271567:
Parkes Shire Council (Appellant)
South West Helicopters Pty Ltd (First Respondent)
Country Connection Airlines Pty Ltd (Second Respondent)
Ingrid Margaret Stephenson (Third Respondent)
Natalee Joy Stephenson (Fourth Respondent)
Jay Stephenson (Fifth Respondent)
Essential Energy (Sixth Respondent)

Representation:

Counsel:
A J Sullivan QC/T Brennan (South West Helicopters and Country Connection Airlines)
D E Baran/G Mahony (Ingrid, Natalee and Jay Stephenson)
J Morris SC/R Bianchi/B Epstein (Essential Energy)
P R Cummings SC/P Williams (Parkes Shire Council)

  Solicitors:
Norton White (South West Helicopters and Country Connection Airlines)
Victoria Baker (Ingrid, Natalee and Jay Stephenson)
Norton Rose Fulbright (Essential Energy)
Moray & Agnew (Parkes Shire Council)

File Number(s):

2016/255761; 2016/271567; 2017/70847

 Decision under appeal 

Court or tribunal:

Supreme Court

Jurisdiction:

Common Law

Citation:

[2014] NSWSC 1758;
[2015] NSWSC 719

Date of Decision:

19 December 2014

Before:

Bellew J

File Number(s):

2009/297846; 2009/339465; 2009/33471; 2009/339470; 2009/339502

headnote

[This headnote is not to be read as part of the judgment]

In 2006, Parkes Shire Council engaged South West Helicopters Pty Ltd (“South West”) to provide a helicopter and pilot for the purposes of an aerial noxious weed survey. The helicopter pilot, Shane Thrupp, was an employee of South West. The helicopter itself was owned by a separate company, Country Connection Airlines Pty Ltd (“Country Connection”). Two Council employees, Ian Stephenson and Malcolm Buerckner, were to conduct the survey from the helicopter. Mr Stephenson and Mr Buerckner had previously conducted an aerial weed survey by helicopter for the Council in May 2005.

On 2 February 2006, the helicopter was seen flying low above the main road between Parkes and Orange through a wooded area known as “the Dungeons”. Approximately one kilometre into the Dungeons, the helicopter struck a power line owned by Essential Energy and crashed, killing all three men. The helicopter was destroyed by fire.

The accident led to a number of claims and cross-claims in the Supreme Court. Mr Stephenson’s family commenced three sets of proceedings. His wife, Ingrid Stephenson, brought claims against South West and Parkes Shire Council on two causes of action, in negligence for nervous shock and pursuant to the Compensation to Relatives Act 1897 (NSW). Mr Stephenson’s daughter and son each brought proceedings in negligence for nervous shock against South West and Parkes Shire Council. Essential Energy was joined in each proceeding.

The Council commenced proceedings against South West, seeking to recover workers’ compensation payments made to the families of its two employees. South West cross-claimed against Essential Energy, and both Essential Energy and South West cross-claimed against the Council.

South West and Country Connection also brought a proceeding against Essential Energy in damages for loss of the helicopter. Essential Energy cross-claimed against the Council.

A three week trial took place in the Common Law Division before Bellew J in May and June 2013. The complex nature of the proceedings resulted in four judgments; final orders were made on 12 August 2016. The proceedings in this Court involved three separate appeals by (i) South West and Country Connection; (ii) Essential Energy; and (iii) Parkes Shire Council. As each matter involved several overlapping issues, the Court dealt with the proceedings by reference to the dispositive questions which it was required to determine.

A   South West’s Liability to the Stephensons

The questions to be determined by the Court were:

(1)   For the purposes of the Civil Aviation (Carriers’ Liability) Act 1967 (NSW) (“State Carriers’ Liability Act”), applying Pt IV of the Civil Aviation (Carriers’ Liability) Act 1959 (Cth) (“Commonwealth Carriers’ Liability Act”), in turn applying provisions of the Warsaw Convention, and regulating the liability of intrastate carriers:

(a)   Was Mr Stephenson a “passenger” on board the helicopter?

(b) Did the Stephensons’ claims arise “in respect of” the death of Mr Stephenson, and did South West therefore have a statutory immunity from suit pursuant to s 35(2) of the Commonwealth Carriers’ Liability Act, due to the fact that the Stephensons’ claims were made outside the two year limitation period prescribed by s 34?

(2) If the Commonwealth Carriers’ Liability Act applies, are the Stephensons’ claims under the Compensation to Relatives Act1897 (NSW) still available?

In relation to question (1)(a):

The Court held:

1. “Passengers” are persons other than those involved in the operation of the flight (crew): [60]. A person on board an aircraft who can give directions as to where the aircraft is to fly, but has no control over its operation, is not a member of the crew or a person operating the aircraft. There was no evidence that the pilot was required to submit to the directions of the Council employees: [61]. The employees were “passengers”: [78], [263], [365].

Endeavour Energy v Precision Helicopters Pty Ltd [2015] NSWCA 169; Disley v Levine [2002] 1 WLR 785, applied.

In Re Mexico City Air Crash of October 31, 1979; Haley v Western Airlines Inc 708 F 2d 400 (1983); Sulewski v Federal Express Corporation 933 F 2d 180 (1991); Fellowes (or Herd) v Clyde Helicopters Ltd [1997] AC 534; Johnson Estate v Pischke [1989] 3 WWR 207, considered.

In relation to question (1)(b):

(By Basten JA, Payne JA agreeing):

2. The Warsaw Convention gives effect to the “exclusivity principle”, so that where the description of the basis of the claim is satisfied, the liability of the carrier is limited to that provided for under the terms of the Convention: [87]. The scope of the Convention “depends not on the qualitative nature of the act or omission giving rise to the claim but on when and where the salient event took place”: [90].

Stott v Thomas Cook Tour Operators Ltd [2014] AC 1347; [2014] UKSC 15, applied.

3. Unless the Convention is varied by the terms of the domestic legislation, the language of the Convention governs as part of the law of Australia and should be construed, wherever possible, to operate uniformly in accordance with a construction of the Convention adopted by a superior court in other jurisdictions in which the Convention operates: [93].

Agtrack (NT) Pty Ltd v Hatfield (2005) 223 CLR 251; [2005] HCA 38, considered.

4. The key provisions in s 35 of the Commonwealth Carriers’ Liability Act, governing a carrier’s liability in respect of the death of a passenger, should, unless the language is intractable in indicating a different operation, conform to the operation of the Convention: [100]. When identifying the scope of the connector “in respect of”, the focus must be on the timing and the event and not the nature of the cause of action: [101].

Kostas v HIA Insurance Services Pty Ltd (2010) 241 CLR 390; [2010] HCA 32; Technical Products Pty Ltd v State Government Insurance Office (Qld) (1989) 167 CLR 45; [1989] HCA 24, considered.

5. Section 28 of the Commonwealth Carriers’ Liability Act, which renders the carrier liable “for damage sustained by reason of the death of the passenger”, is not limited to damage sustained by the deceased passenger, as s 35(3) provides that “the liability is enforceable for the benefit of such of the passenger’s family members as sustained damage by reason of his death”: [108]. “Damage” is not limited to financial or economic loss: [109]-[111].

6. Section 35(2) of the Commonwealth Carriers’ Liability Act provides that liability of the carrier “is in substitution for any civil liability of the carrier under any other law in respect of the death of the passenger”. The reference to liability under any other law is not limited to tortious forms of liability, but includes such liability. The Convention “imposes an event-based liability on the carrier”, which is intended to be exclusive of all other remedies available to a moving party seeking relief in connection with injury or death covered by the Convention: [114].

United Airlines Inc v Sercel Australia Pty Ltd [2012] NSWCA 24; 260 FLR 37, applied.

7. To treat the operation of s 35 (relating to death) and s 36 (relating to personal injury) of the Commonwealth Carriers’ Liability Act as having analogous operations, is to disregard both the subject matter of the claim and the differential language of the Convention and the statute: [132], [361].

South Pacific Air Motive Pty Ltd v Magnus (1998) 87 FCR 301; [1998] FCA 1107; Workers’ Compensation Board (Qld) v Technical Products Pty Ltd (1988) 165 CLR 642; [1988] HCA 49, distinguished.

8. The fact that the exclusivity principle is based on liability identified by reference to an event, rather than a cause of action, is inconsistent with the distinction between derivative and non-derivative claims: [150]. Argument by reference to the ticketing requirements of the Conventions provides little support for a restricted construction of s 35(2): [153].

South Pacific Air Motive Pty Ltd v Magnus (1998) 87 FCR 301; [1998] FCA 1107, not followed.

9. The salient event in the present case was the death of a passenger on the aircraft. It occurred in the course of carriage by air. In the context of the Convention and the purposes of the Commonwealth Act, claims of the family in respect of nervous shock are claims “in respect of” the death of Mr Stephenson. It follows that the claims were excluded by s 35(2) of the Commonwealth Carriers’ Liability Act and should have been dismissed: [163], [364].

(By Leeming JA, dissenting on this issue):

10. When construing a statute which turns upon a term such as “in respect of”, its legal meaning is not determined by reference to the broadest meaning which those words may reasonably bear. The legal meaning of a such a term may be, and often will be, when considered in its context and by reference to its purpose, narrower than its maximal meaning considered in isolation: [274]-[280].

Workers’ Compensation Board (Q) v Technical Products Pty Ltd (1988) 165 CLR 642; [1988] HCA 49; Commissioner of Taxation of the Commonwealth of Australia v Scully (2000) 201 CLR 148; [2000] HCA 6; R v Khazaal (2012) 246 CLR 601; [2012] HCA 26; Kostas v HIA Insurance Services Pty Ltd (2010) 241 CLR 390; [2010] HCA 32; 2 Elizabeth Bay Road Pty Ltd v The Owners – Strata Plan No 73943 (2014) 88 NSWLR 488; [2014] NSWCA 409; Coverdale v West Coast Council (2016) 259 CLR 164; [2016] HCA 15, considered.

11. Section 35(2) of the Commonwealth Carriers’ Liability Act, as applied by s 5 of the State Carriers’ Liability Act, does not preclude claims by non-passengers for psychiatric injury following the death of a passenger: [317]-[351].

South Pacific Air Motive Pty Ltd v Magnus (1998) 87 FCR 301, considered and applied.

Cauchi v Air Fiji [2005] TOSC 7, not followed.

El Al Israel Airlines Ltd v Tseng 525 US 155 (1999); Sidhu v British Airways Plc [1997] AC 430; Stott v Thomas Cook Tour Operators Ltd [2014] AC 1347; [2014] UKSC 15; Glen v Korean Airlines Co Ltd [2003] QB 1386; United Airlines Inc v Sercel Australia Pty Ltd [2012] NSWCA 24; 289 ALR 682; Herd v Clyde Helicopters Ltd [1997] AC 534; Grein v Imperial Airways Ltd [1937] 1 KB 50, considered.

In relation to question (2):

The Court held:

12. If the Commonwealth Carriers’ Liability Act applies to the Stephensons’ claims, the liability of South West under the Act would be in substitution for any liability under the Compensation to Relatives Act1897 (NSW): [83], [260], [365].

Agtrack (NT) Pty Ltd v Hatfield (2005) 223 CLR 251; [2005] HCA 38, applied.

B   South West’s Liability for Compensation Payments

The question to be determined by the Court was whether Parkes Shire Council was able to recover payments of workers’ compensation from South West under s 151Z of the Workers Compensation Act 1987 (NSW).

The Court held:

1. Under s 151Z(1)(d), an employer who has made compensation payments is entitled to be indemnified by a tortfeasor liable to pay damages to the worker for the injury in question. The Council’s claim could not succeed under this provision, as it does not confer a right of indemnity in circumstances where the employer is a tortfeasor, but only in circumstances where the third party is the only relevant tortfeasor: [170], [261], [371].

Public Transport Commission of New South Wales v J Murray-More (NSW) Pty Ltd (1975) 132 CLR 336; [1975] HCA 28, applied.

J Blackwood & Son Ltd v Skilled Engineering Ltd [2008] NSWCA 142; CSR Timber Products Pty Ltd v Weathertex Pty Ltd (2013) 83 NSWLR 433; [2013] NSWCA 49, considered.

2. If the Council were to recover its compensation payments, on the assumption that it was a tortfeasor, it had to bring its claim within the terms of s 151Z(2)(e): [173]. As Mrs Stephenson did take proceedings against the Council, the first limb of subs (2)(e) was not satisfied; as she has also obtained satisfaction of the judgment against the Council, the second limb was not satisfied. Accordingly, the Council is not entitled to recover payments of compensation from another tortfeasor: [177], [184], [261], [371].

C   Liability of Joint Wrongdoers

The questions to be determined by the Court were:

(1) Does the two year limitation period on claims imposed by s 34 of the Commonwealth Carriers’ Liability Act operate with respect to a claim for contribution between joint tortfeasors as prescribed by s 37?

(2) Can a claim for contribution be made in respect of a liability which could not arise under Pt IV of the Commonwealth Carriers’ Liability Act?

(3)   Was each of South West, the Council and Essential Energy negligent?

(4)   What is the appropriate apportionment of liability between the negligent parties?

The Court held:

In relation to question (1):

1. “The right of a person to damages under this Part” (s 34) does not include a claim for contribution between tortfeasors under s 37. The claim for contribution arises under the Law Reform (Miscellaneous Provisions) Act 1946 (NSW), s 5: [187]-[188], [352], [372].

In relation to question (2):

2. Although the carrier has an immunity from a suit brought by the passenger (or the passenger’s family), a third party tortfeasor can recover a proportion of its liability through an action for contribution: [189]-[190], [261], [372].

In relation to question (3):

3. South West is liable to the extent that no senior officer carried out the necessary task identification, risk analysis, identification of hazards and the taking of steps to avoid the materialisation of known risks during the flight: [203], [261], [365].

4. The conduct of the Council in planning and preparing for the aerial survey involved serious breaches of its duties of care owed to its employees: [221], [261], [365].

5. Essential Energy had no knowledge of any features of the landscape in the vicinity of the crash site which rendered it likely that there would be low flying aircraft at the level of the power lines: [233]. No specific feature of this power line placed it in a situation where it should have been marked: [235]. The appeal by Essential Energy should be upheld and the cross-claims brought against it by Parkes Shire Council and South West should be dismissed: [236]-[237], [261], [365].

Sydney Water Corporation v Turano (2009) 239 CLR 51; [2009] HCA 42, considered.

Endeavour Energy v Precision Helicopters Pty Ltd [2015] NSWCA 169; Sheather v Country Energy [2007] NSWCA 179; (2007) Aust Torts Rep 81-901, distinguished.

In relation to question (4):

6. Responsibility for contribution for the personal injury claims is allocated as at one-third to the Council and two-thirds to South West: [239], [261], [372].

D   South West’s Claim for Loss of Aircraft

The question to be determined by the Court was whether South West, as bailee, was entitled to recover the value of the helicopter from other negligent parties.

The Court held:

1. Both the owner and the bailee of a chattel may claim the value of the chattel which is destroyed. However, payment to one would constitute a good defence against a claim (even pursuant to a judgment) by the other: [245]. Accordingly, South West is entitled, subject to apportionment of liability, to recover the value of the helicopter: [246], [261], [371].

The Winkfield [1902] P 42; The Anderson Group Pty Ltd v Tynan Motors Pty Ltd (2006) 65 NSWLR 400, applied.

2. The conclusion that Essential Energy did not owe a duty of care to the occupants of the aircraft must entail the conclusion that it owed no duty to the owner or operator of the aircraft: [244], [261], [371].

3. As between the Council and South West, the duty owed by the Council is not the stringent duty owed to an employee and thus it should bear a lower share of responsibility for the safety of the aircraft, which may be assessed at 20%: [241], [353], [371].

Judgment

INDEX

BASTEN JA					Paragraph
A	The proceedings				5
B	South West’s liability to Stephensons
(1)	Key provisions of State Carriers’ Liability Act			17
(2)	Treaties and the Commonwealth Carriers’ Liability Act			27
(3)	Case law – “passenger”			44
(4)	Reasoning of primary judge			64
(a)	“commercial transport operations”		71
(b)	“passenger”		77
(5)	Application of Carriers’ Liability Act, s 35
(a)	The issues		79
(b)	Nervous shock claims		85
(i)	issues and principles of construction	86
(ii)	Commonwealth Carriers’ Liability Act	97
(iii)	“in respect of”	102
(iv)	“damage”	108
(v)	effect of s 37	112
(c)	Elements in cause of action		117
(d)	South Pacific and later authorities		123
(e)	Argument by anomaly		136
(f)	Argument based on ticketing		143
(g)	Argument by inconsistency with other laws		154
(6)	Conclusions			156
C	South West’s liability for compensation payments				164
(1)	Effect of s 37			165
(2)	Effect of s 151Z			167
D	Liability of joint wrongdoers
(1)	Claim by Council against South West			186
(2)	Liability of South West in negligence			191
(a)	activity of helicopter at time of crash		193
(b)	conduct of aerial survey		198
(3)	Liability of Parkes Shire Council in negligence			207
(4)	Liability of Essential Energy			222
E	South West’s claim for loss of aircraft				240
F	Costs				248
G	Orders				257
LEEMING JA					260
Applicable law					263
The nature of the question					271
Giving legal meaning to expressions such as “in respect of”				274
The consequences of the importance of context and purpose				277
The variety of claims by non-passengers against carriers				281
The context of s 35(2) of the Commonwealth Carriers’ Liability Act confirms that Compensation to Relatives Act claims are governed by Part IV				290
The context of s 35(2) of the Commonwealth Carriers’ Liability Act is much less clear in relation to claims by non-passengers for psychiatric injury				292
The Warsaw and Montreal system					296
The exclusivity principle					301
Exclusivity in the various conventions				302
The Australian implementation of the various aviation conventions				311
Exclusivity as reflected in s 35(2) of the Commonwealth Carriers’ Liability Act				315
What non-passenger claims are excluded?					317
Significance of the contract of carriage				319
Carriers are liable to some non-passengers				321
Federal claims are not excluded				330
Existing authority				332
South Pacific Air Motive Pty Ltd v Magnus				340
Cauchi v Air Fiji				348
Conclusion				350
Balance of the appeals					352
Orders				354
PAYNE JA					357

1. BASTEN JA: In May 2005 two officers from Parkes Shire Council conducted an aerial survey of noxious weeds in an area south and east of Parkes. The survey was undertaken by helicopter and took approximately four hours.

2. In February 2006 the Shire Council arranged for a further survey to be undertaken. The same two officers, being Ian Stephenson and Malcolm Buerckner, were to undertake the survey. The Shire Council engaged South West Helicopters Pty Ltd (“South West”) to provide the aircraft and pilot. The pilot, Shane Thrupp, was employed by South West; the helicopter was owned by a separate company, Country Connection Airlines Pty Ltd (“Country Connection”).

3. The helicopter, with Messrs Thrupp, Stephenson and Buerckner aboard, left Parkes airport shortly after 8.30 am on 2 February 2006. Shortly before 9.30 am it was observed flying in a north-easterly direction along the line of the main Parkes-Orange road, through wooded hills known as “the Dungeons”. Approximately one kilometre into the wooded area, the helicopter struck a power line owned by Essential Energy. The helicopter crashed, killing all three men on board. The aircraft itself was destroyed by fire.

4. These tragic circumstances led to a number of claims and cross-claims in the Common Law Division. In May and June 2013 a trial took place over 21 days before Bellew J. The complexity of the proceedings led to four judgments. Final orders were not made until 12 August 2016. The present proceedings involve a number of appeals and cross-appeals in relation to those orders.

A   THE PROCEEDINGS

5. Of the three men who died in the accident, there are no proceedings in relation to the pilot, Mr Thrupp. The families of Mr Stephenson and Mr Buerckner received a payment from their employer, Parkes Shire Council, pursuant to s 25 of the Workers Compensation Act 1987 (NSW). There was no dispute in relation to those payments, but the fact of the payments was relevant to the claims for damages, and to recoupment proceedings brought by Parkes Shire Council.

6. Three sets of proceedings were commenced in 2009 by the family of Mr Stephenson. His wife (Ingrid Stephenson) brought proceedings against South West and Parkes Shire Council on two causes of action, namely in negligence for nervous shock and pursuant to the Compensation to Relatives Act 1897 (NSW). Mr Stephenson’s daughter (Natalee Stephenson) and son (Jay Stephenson) brought proceedings in negligence for nervous shock against the same two defendants. The Stephensons did not make a claim against Essential Energy, but it was joined by South West, which cross-claimed against it and Parkes Shire Council. Essential Energy made a cross-claim against Parkes Shire Council and Parkes Shire Council made a cross-claim against South West. The trial judge ultimately found that all three defendants and cross-defendants were negligent and apportioned responsibility between South West (70%), Parkes Shire Council (20%) and Essential Energy (10%).

7. There were three separate proceedings between the corporate entities. Two were commenced by Parkes Shire Council against South West seeking to recoup amounts of workers’ compensation paid with respect to its deceased employees, Mr Stephenson and Mr Buerckner. Again, South West joined Essential Energy as a cross-defendant and both Essential Energy and South West cross-claimed against Parkes Shire Council.

8. The third corporate proceeding was brought by both South West and the owner of the aircraft, Country Connection, against Essential Energy for the loss of the aircraft. Essential Energy cross-claimed against Parkes Shire Council.

9. Most of the evidence, both oral and documentary, was directed to questions of negligence on the part of the three defendants. Most of the critical findings were challenged by one or more of the parties to the appeal. Due consideration of the evidence, including a number of expert reports, is unavoidable. However, several of the claims arose within two aspects of the legal framework with which it is convenient to deal first. These were whether, and to what extent:

1. South West had a statutory immunity from suit pursuant to the Civil Aviation (Carriers’ Liability) Act 1967 (NSW) (“State Carriers’ Liability Act”); and

2. Parkes Shire Council was able to recover payments of workers’ compensation under s 151Z of the Workers Compensation Act.

10. For the purpose of resolving the legal issues, little more need be said about the circumstances of the accident. It is sufficient to note the following matters, purely by way of background at this stage:

1. there was a pair of power lines (conductors) which crossed the valley through which the road ran, perpendicularly to the road and at a height of some 38 m above the roadway;

2. the power lines were supported on each side of the valley by poles, the span being about 1.2km across the valley;

3. the helicopter was flying along the line of the road at a speed of no less than 80kmh and less than 50 m above the road;

4. the route taken by the helicopter at the time of the accident was not part of the route travelled in the course of 2005 survey; and

5. there was no direct evidence as to why the helicopter took that route, at that height and at that speed.

11. South West contended by way of defence to the claims brought by the Stephensons that the only amounts for which it was liable in damages in respect of the death of Mr Stephenson were amounts payable under the State Carriers’ Liability Act. Any liability which it might have had under the Compensation to Relatives Act or the general law relating to negligence was excluded by the State Carriers’ Liability Act. There was provision under the State Carriers’ Liability Act for the operator of the aircraft to pay damages in the event of the death of a passenger on the aircraft, not contingent on proving negligence, but its liability to make such a payment expired when no proceedings were commenced within two years of the date of the accident.

12. Broadly speaking, this line of defence depended on two factors. First, the statutory limitation on liability related to damages sustained by reason of the death of a “passenger”; there was an issue as to whether Mr Stephenson was a “passenger” for the purposes of the State Carriers’ Liability Act. Secondly, there was a question as to whether the Stephensons’ claims arose “by reason of” or “in respect of” the death of Mr Stephenson. South West said they did. South West had to succeed on both points in order to obtain the exclusion from liability under the State Carriers’ Liability Act.

13. The manner in which these issues were dealt with at trial was, at least in part, unfortunate. In his first judgment, the trial judge placed reliance on an earlier judgment involving a helicopter accident in New South Wales, namely Edwards v Endeavour Energy (No 4) (“Edwards”). [1] That case involved an accident in which a helicopter carrying employees of Endeavour Energy, who were conducting a survey of the company’s power lines, clipped a Telstra wire. The helicopter was able to land, but an employee of Endeavour Energy (Mr Edwards) was severely injured when the large rotor clipped the cabin of the aircraft. The trial judge in that case held that Mr Edwards was not a “passenger” for the purposes of the State Carriers’ Liability Act and hence the operator of the helicopter could not escape liability under that Act. The trial judge in the present case adopted the reasoning in Edwards. [2]

    1. [2013] NSWSC 1899 (Johnson J).

    2. Stephenson v Parkes Shire Council [2014] NSWSC 1758 (“Stephenson”) at [281]-[283].

14. The judgment in this matter was handed down on 19 December 2014; no orders were made disposing of the proceedings at that stage. Following written submissions on outstanding issues filed in the first half of 2015, the trial judge delivered a second judgment on 19 June 2015. [3] Again, no orders were made, but issues as to liability, damages and apportionment had been resolved and the parties were directed to file minutes of proposed orders reflecting the conclusions reached in the judgments.

    3. Stephenson v Parkes Shire Council (No 2) [2015] NSWSC 719.

15. Three days later, on 22 June 2015, this Court handed down judgment in the appeal from Edwards, namely Endeavour Energy v Precision Helicopters Pty Ltd (“Endeavour Energy”), [4] in which the construction of the State Carriers’ Liability Act adopted at trial in Edwards was overturned.

    4. [2015] NSWCA 169.

16. Four weeks later, the judgment of this Court was drawn to the trial judge’s attention by counsel for Essential Energy. For reasons which are not entirely clear, no party invited the trial judge to revisit his findings with respect to the operation of the State Carriers’ Liability Act. Both the judge and the parties appeared to consider that the matter could not be revisited unless there was an application by one party to “reopen” the proceedings in that respect. As no orders had then been made, it might have been expected that all parties (and the Court) would be united in taking that step, so that the proceedings could be decided according to law, as the law then stood, and not on a false legal basis. However, that step was not taken; accordingly the issue has to be resolved by this Court. It will be necessary to return to the manner in which the issue was dealt with in considering what orders should be made with respect to the costs of this aspect of the proceedings.

B   SOUTH WEST’S LIABILITY TO STEPHENSONS

(1) Key provisions of State Carriers’ Liability Act

17. Regulation of claims in relation to injury to persons (including death) caused in the course of international air carriage formed the basis of the Warsaw Convention of 1929. That Convention has subsequently been modified on a number of occasions, including pursuant to the Hague Protocol of 1955. The application of the Conventions in relation to international air carriage is effected in Australia by the Civil Aviation (Carriers’ Liability) Act 1959 (Cth) (“Commonwealth Carriers’ Liability Act”). Similar principles are made applicable to interstate air travel within Australia by Pt IV of the Commonwealth Act. Finally, the same principles are picked up and applied in relation to intrastate air travel by the State Carriers’ Liability Act.

18. Within this scheme, two issues arose in relation to the present proceedings, namely (i) whether the carriage by South West of the Council employees, Mr Stephenson and Mr Buerckner, was carriage by air to which the State Carriers’ Liability Act applied, and (ii) the consequences of the State Carriers’ Liability Act having application, in the event that it did.

19. There are two key provisions in the State Carriers’ Liability Act. In relation to the first issue, s 4 defines the scope of the activities to which the Act applies. (The key phrases are italicised below, though not in the original.)

4   Carriage to which Act applies

The carriage to which this Act applies is the carriage of a passenger where the passenger is or is to be carried in an aircraft being operated by the holder of an airline licence or a charter licence in the course of commercial transport operations under a contract for the carriage of the passenger between a place in the State and another place in the State or from a place in the State back to that place, not being:

(a)   carriage to which Part IV of the Commonwealth Act applies, or

(b)   carriage to which the Warsaw Convention, the Hague Protocol or the Guadalajara Convention applies, or

(c)   carriage to which the provisions of another convention, protocol or treaty apply ….

20. If the Act applies, subject to some exceptions not presently relevant, s 5 then picks up as the applicable law parts of the Commonwealth Act in the following manner:

5   Application of provisions of Parts IV and IVA of the Commonwealth Act

The provisions of Parts IV and IVA of the Commonwealth Act (other than sections 27, 40, 41 and 41J (8)) and, subject to section 7 of this Act, the provisions of the Commonwealth Regulations apply to and in relation to carriage to which this Act applies and matters connected with the carriage, as if those provisions were incorporated in this Act and as if, in those provisions as so incorporated:

(a)   general references to Parts IV and IVA of the Commonwealth Act were references to this Act,

(b)   a reference in one of those provisions to another of those provisions were a reference to that other provision as applying by virtue of this Act,

…

The provisions so identified are referred to in the State Carriers’ Liability Act as the “applied provisions”. [5] Further, “the Commonwealth Act” is defined to mean the Commonwealth Carriers’ Liability Act, as amended from time to time. [6]

5. State Carriers’ Liability Act, s 2(1).

6. State Carriers’ Liability Act, s 2(1).

21. One provision in Pt IV of the Commonwealth Carriers’ Liability Act which does not apply as part of State law is s 27, which defines the application of the Commonwealth Act. That provision is, in effect, replaced for the purposes of intrastate carriage by air by s 4 of the State Carriers’ Liability Act. (The other excluded sections are not presently material.)

22. There is a further “application” provision in the State Carriers’ Liability Act:

6A   Administration of the applied provisions as Commonwealth laws

(1)    It is the intention of Parliament that the applied provisions should be administered and enforced as if they were provisions applying as laws of the Commonwealth instead of being provisions applying as laws of the State.

(2)    To that end:

(a)    Commonwealth authorities have the same powers to enforce the applied provisions as they have to enforce the Commonwealth Act and the Commonwealth Regulations, and

(b)    the laws of the Commonwealth apply to offences against the applied provisions as if they were offences against the Commonwealth Act or the Commonwealth Regulations, and

(c)    the laws of the State do not apply to offences against the applied provisions.

23. Questions as to the effects of this provision were noted by the High Court in Air Link Pty Ltd v Paterson,[7] but put to one side. However, a general and constitutionally uncontroversial effect is to pick up the underlying purpose of the Commonwealth Act, namely to apply within Australia the legal principles governing international air travel, as accepted by Australia. The applied provisions should be construed in the light of this purpose.

    7. (2005) 223 CLR 283; [2005] HCA 39 at [18].

24. It is convenient to identify those aspects of s 4 which are not in issue in the present case. First, there was no dispute that the Council employees were being carried in an aircraft being operated by the holder of a charter licence. Secondly, the contract was not a contract between the employees of the Council and South West, but between the Council itself and South West, pursuant to which the Council’s employees travelled in the aircraft. Thirdly, the contract was for carriage of those persons “from a place in the State back to that place”; none of the exceptions applied. Fourthly, while the trial judge concluded that the carriage did not occur in the course of “commercial transport operations”,[8] that was seen as consistent with the view that the aircraft was not used for the carriage of “passengers”, an issue which remains in dispute. As a result, the critical issue was whether each of the Council employees was a “passenger” for the purpose of the carriage.

    8. Stephenson at [283].

25. As to who was a “passenger”, Parkes Shire Council accepted that the decision of this Court in Endeavour Energy required a different conclusion from that reached by the trial judge. However, it submitted that the reasoning in Endeavour Energy was wrong and should not be followed. That submission was based upon the proposition that although Endeavour Energy had applied an English House of Lords decision, Fellowes (or Herd) v Clyde Helicopters Ltd,[9] that decision was not consistent with other international cases applying either the Convention or a domestic version of the Convention. It was submitted that Endeavour Energy (like Herd) had adopted an “activities test” to categorise a person as a “passenger”, whereas other overseas authorities focused on “the reason or purpose” for which the person flew. It was submitted that a “purely activities based test” created logical problems in its application and that a “purpose-based” test was to be preferred.

    9. [1997] AC 534.

26. As explained below, the critique of the reasoning in Herd (followed in Endeavour Energy) fails because the attempt to characterise the case law into two streams is an artificial construct which breaks down when the reasoning in particular cases is understood in the factual context in which it was deployed. To explain why this is so requires a review of the principal authorities. Before undertaking that task, it is necessary to provide some further outline of the relevant legal parameters of the discussion.

(2) Treaties and the Commonwealth Carriers’ Liability Act

27. Key provisions of the Commonwealth Carriers’ Liability Act, picked up by the State Act, derive from the various international treaties. Reference to the treaties is necessary for that reason, and also because the American authorities to which reference will be made below deal directly with the language of the Conventions governing international air travel. The original treaty, the Warsaw Convention of 1929, has been amended over time. Nevertheless, Article 1 has remained unchanged and reads as follows:

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.

28. Article 3 required that, for the carriage of passengers, “the carrier must deliver a passenger ticket” containing certain information including “a statement that the carriage is subject to the rules relating to liability established by this Convention”, absent which, “if the carrier accepts a passenger without a passenger ticket having been delivered he shall not be entitled to avail himself of those provisions of this Convention which exclude or limit his liability.” The terms of Article 3 have varied significantly over time. Thus the formula was changed by The Hague amendments in 1955 so that the failure to deliver a ticket only precluded the carrier from availing himself of the provisions of Article 22. (Article 22 provided a monetary cap on liability.) It did not, for example, withdraw the benefit of the two year unextendable limitation period provided in Article 29.

29. Article 3 was varied again by the Montreal Convention of 1999. It removed the obligation to provide a physical ticket but preserved the requirement to give “written notice” as to the effect of the Convention regarding liability in respect of death or injury. Significantly, s 5 of Article 3 now states:

5.   Non compliance with the provisions of the foregoing paragraphs shall not affect the existence or the validity of the contract of carriage, which shall, nonetheless, be subject to the rules of this Convention including those relating to limitation of liability.

30. The changes to Article 3 are significant because they reveal a reduction, followed by a removal, of the connection between the immunity from liability under domestic law conferred on the carrier and the provision of a ticket giving notice of that effect to the passenger. Nevertheless, Australia did not accede to the Montreal Convention until 25 November 2008 and it did not come into force until 24 January 2009, some years after the accident in this case.

31. The Conventions imposed their own form of liability, not dependent on proof of negligence. Chapter III of the Warsaw Convention is headed “Liability of the Carrier”. Article 17 reads as follows:

Article 17

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.

32. The original Article 24 was in the following terms:

1.   In the cases covered by Articles 18 and 19 any action for damages, however founded, can only be brought subject to the conditions and limits set out in this Convention.

2.   In the cases covered by Article 17 the provisions of the preceding paragraph also apply, without prejudice to the questions as to who are the persons who have the right to bring suit and what are their respective rights.

33. That formulation remained the same in Article 24 as amended by the Hague Protocol but was reformulated as a result of the Montreal No 4 Convention of 1975. Section 1 then read:

1.   In the carriage of passengers and baggage, any action for damages, however founded, can only be brought subject to the conditions and limits set out in this Convention, without prejudice to the question as to who are the persons who have the right to bring suit and what are their respective rights.

The amendments pursuant to the 1999 Montreal Convention resulted in three changes, namely (i) a renumbering of the articles so that Article 24 became Article 29, (ii) ss 1 and 2 being combined and (iii) a further sentence being added at the end:

In any such action, punitive, exemplary or any other non-compensatory damages shall not be recoverable.

This last sentence does not appear in the Commonwealth Carriers’ Liability Act.

34. Articles 17 and 24 were translated into the following provision in the Commonwealth Carriers’ Liability Act:

28   Liability of the carrier for death or injury

Subject to this Part, where this Part applies to the carriage of a passenger, the carrier is liable for damage sustained by reason of the death of the passenger or any bodily injury suffered by the passenger resulting from an accident which took place on board the aircraft or in the course of any of the operations of embarking or disembarking. [10]

10.    Emphasis added.

35. There are two significant variations between Article 17 and s 28. First, the Act treats the reference to “wounding” in Article 17 as surplusage and merely refers to “any bodily injury”. That change was insignificant. More significantly, although not for this case, the reference to “bodily injury” was only inserted in s 28 in 2013. [11] Before the amendment, s 28 referred to “personal injury”, a point which had some bearing on the reasoning in a Federal Court decision discussed below. [12]

    11. See Aviation Legislation Amendment (Liability and Insurance) Act 2012 (Cth), Sch 1, item 1.

    12. South Pacific Air Motive Pty Ltd v Magnus (1998) 87 FCR 301; [1998] FCA 1107.

36. The second variation is the reformulation of the causal connection between the damage and the event. The Article refers to “damage sustained in the event of the death”, and then refers to “the accident which caused the damage”. Section 28 refers to “damage sustained by reason of the death”; in the second limb it uses the phrase “resulting from” to link either the damage or the death or bodily injury to the accident. Given the order in which the concepts are set out, the natural reading is that it is the death or injury which must result from the accident. The change may not matter and it seems unlikely that the drafter was seeking to do more than avoid a perceived awkwardness in the language of the Convention.

37. Article 22 of the Warsaw Convention provides a cap on the liability of the carrier “for each passenger”. The amount has varied over time, as has the method of calculation. Under the Commonwealth Carriers’ Liability Act, the equivalent provision is found in s 31 which, at the time of the accident, provided as follows:

31   Limitation of liability

(i)   Subject to the regulations relating to passenger tickets, the liability of a domestic carrier under this Part in respect of each passenger, by reason of his injury or death resulting from an accident, is limited to:

(a)   … $500,000 ….

Nothing was said to turn on the initial proviso to this provision.

38. Article 23 renders null and void “[a]ny provision tending to relieve the carrier of liability or to fix a lower limit than that which is laid down in this Convention”. A similar prohibition on “contracting out” appears in s 32.

39. Article 29 of the Warsaw Convention (and as amended by the Hague Protocol) stated as follows:

1.   The right to damages shall be extinguished if an action is not brought within two years, reckoned from the date of arrival at the destination, or from the date on which the aircraft ought to have arrived, or from the date on which the carriage stopped.

2.   The method of calculating the period of limitation shall be determined by the law of the Court seised of the case.

40. The equivalent provision in the Commonwealth Carriers’ Liability Act is s 34 which in 2006 provided:

34   Limitation of actions

The right of a person to damages under this Part is extinguished if an action is not brought by him or for his benefit within two years after the date of arrival of the aircraft at the destination, or, where the aircraft did not arrive at the destination:

(a)   the date on which the aircraft ought to have arrived at the destination; or

(b)   the date on which the carriage stopped;

whichever is the later.

41. There are separate provisions in the Act dealing with liability in respect of death and liability in respect of injury respectively. The more detailed provision (liability in respect to death of a passenger) is s 35 which is of immediate relevance. Section 36, (liability in respect of injury to a passenger) is not directly applicable, but is the provision which has been considered in other cases to which the parties drew attention. Accordingly, it is convenient to set both out here, as in force in 2006.

35   Liability in respect of death

(1)   The provisions of this section apply in relation to liability imposed by this Part on a carrier in respect of the death of a passenger (including the injury that resulted in the death).

(2) Subject to section 37, the liability under this Part is in substitution for any civil liability of the carrier under any other law in respect of the death of the passenger or in respect of the injury that has resulted in the death of the passenger.

(3)   Subject to the next succeeding subsection, the liability is enforceable for the benefit of such of the members of the passenger’s family as sustained damage by reason of his death.

(4)   To the extent that the damages recoverable include loss of earnings or profits up to the date of death, or funeral, medical or hospital expenses paid or incurred by the passenger before his death or by his personal representative, the liability is enforceable for the benefit of the personal representative of the passenger in his capacity as personal representative.

(5)   For the purposes of subsection (3), the members of the passenger’s family shall be deemed to be the wife or husband, de facto spouse, parents, step‑parents, grandparents, brothers, sisters, half‑brothers, half‑sisters, children, step‑children and grandchildren of the passenger, and, in ascertaining the members of the passenger’s family, an illegitimate person or an adopted person shall be treated as being, or as having been, the legitimate child of his mother and reputed father or, as the case may be, of his adoptors.

(6)   The action to enforce the liability may be brought by the personal representative of the passenger or by a person for whose benefit the liability is, under the preceding provisions of this section, enforceable, but only one action shall be brought in respect of the death of any one passenger, and such an action, by whomsoever brought, shall be for the benefit of all persons for whose benefit the liability is so enforceable who are resident in Australia or, not being resident in Australia, express the desire to take the benefit of the action.

(7)   The damages recoverable in the action include loss of earnings or profits up to the date of death and the reasonable expenses of the funeral of the passenger and medical and hospital expenses reasonably incurred in relation to the injury that resulted in the death of the passenger.

(8)   In awarding damages, the court or jury is not limited to the financial loss resulting from the death of the passenger.

….

36   Liability in respect of injury

Subject to the next succeeding section, the liability of a carrier under this Part in respect of personal injury suffered by a passenger, not being injury that has resulted in the death of the passenger, is in substitution for any civil liability of the carrier under any other law in respect of the injury.

42. Because there are claims for contribution and for recoupment of workers’ compensation payments from South West, it is also necessary to set out s 37, which has no equivalent in the Convention and leaves identified liabilities under domestic law unaffected.

37   Certain liabilities not excluded

Nothing in this Part shall be deemed to exclude any liability of a carrier:

(a)   to indemnify an employer of a passenger or any other person in respect of any liability of, or payments made by, that employer or other person under a law of the Commonwealth or of a State or Territory providing for compensation, however described, in the nature of workers’ compensation; or

(b)   to pay contribution to a tort-feasor who is liable in respect of the death of, or injury to, the passenger;

but this section does not operate so as to increase the limit of liability of a carrier in respect of a passenger beyond the amount fixed by or in accordance with this Part.

43. Against the background of the Convention provisions and the relevant Australian legislation, it is convenient to turn next to the case law dealing with the term “passenger”.

(3)   Case law – “passenger”

44. Neither the Convention nor the legislation contains any definition of the term “passenger”. In its ordinary meaning, a passenger is any person who travels in a vehicle or conveyance, other than the driver, pilot or a member of the crew. [13] That approach was adopted by the US Court of Appeals for the Ninth Circuit in In Re Mexico City Air Crash of October 31, 1979; Haley v Western Airlines Inc. [14] The appeal dealt with the summary dismissal of three damages claims by the dependants of persons who died in the crash; the Court affirmed the judgment with respect to claims brought by the personal representatives of two flight attendants who were on duty when the plane crashed. They reversed the judgment of dismissal with respect to a third deceased, a flight attendant employed by the airline, who was not on duty on that flight, but was travelling to Mexico City for the purposes of joining another flight. Such travel was described as “dead heading”.

    13. Endeavour Energy at [84].

    14. 708 F 2d 400 (1983).

45. The bulk of the judgment in Mexico City Air Crash was concerned with whether or not the Warsaw Convention created a cause of action for wrongful death independent of domestic provisions under Californian law. Having concluded that the Convention did establish such a cause of action, the Court turned to consider whether each of the deceased persons was a “passenger”. The Court concluded: [15]

“The term ‘transportation’ seems to us to require as a minimum that the voyage be undertaken for the principal purpose of moving the individual from point A to point B. In the cases of Haley and Tovar [who were indisputably working as flight attendants], the voyages were undertaken not for this reason, but for the exclusive purpose of performing employment duties. We conclude that Haley and Tovar were not, therefore, ‘passengers’ aboard Flight 2605 ….”

15.    Mexico City Air Crash, at 417[8].

46. With respect to the third employee who died, the Court noted that she was receiving full pay and half flight time credit for her time aboard the aircraft, but nevertheless thought there were “genuine issues of material fact” concerning whether she was being transported as a “passenger” aboard the flight. While it was not necessary for the Court to go further, it noted that in another case, Demanes v United Airlines,[16] one member of the Ninth Circuit panel hearing Mexico City Air Crash (Judge Pregerson), then sitting as a District Court judge, had ruled that four pilots who were killed in an air crash while “dead heading” were “passengers” for the purposes of the airline’s liability under the Convention. It should be noted in passing that nothing turns on the reference to a person travelling from “point A to point B”; that would be an essential part of international air travel, but is not an essential part of the domestic law within Australia. [17]

    16. 348 F Supp 13 (C D Cal, 1972).

    17. See State Carriers’ Liability Act, s 4, at [19] above.

47. The reasoning in Mexico City Air Crash was adopted and applied by the US Court of Appeals for the Second Circuit in Sulewski v Federal Express Corporation. [18] That case also involved an appeal against a summary judgment in favour of the employer, the employee being an aircraft mechanic who died when travelling on a cargo plane which crashed on a flight from Singapore to Kuala Lumpur, en route to Hong Kong. The deceased was travelling in the course of his employment in accordance with the respondent’s practice of carrying a mechanic on a plane which was to land at an airport where the respondent did not employ ground staff. The Court found that he was on duty throughout the flight “being ‘on call’ to give technical advice to the operational crew members in the event of mechanical problems during a flight.” [19] Rejecting the proposition that mere presence on board a carrier renders a person a “passenger”, the Court stated: [20]

“It requires, first, that the person board the carrier pursuant to a contract of carriage and, second, that the carriage be undertaken for the primary purpose either of going from one place to another or for the recreational enjoyment of the journey itself.”

18. 933 F 2d 180 (1991) (Feinberg, Meskill and Altimari, Circuit Judges).

19.    Sulewski at 187.

20.    Sulewski at 184.

48. It may be doubted whether this language took the matter any further than Mexico City Air Crash; arguably it provided less clarity than the earlier decision which it described as having “reached a similar conclusion.” [21] Further, the reference to the carriage being “pursuant to a contract of carriage” was derived from the fact that a stowaway could not recover under the Warsaw Convention. Section 42 of the Commonwealth Carriers’ Liability Act provides that Pt IV would apply in relation to the carriage of a person who “travels in an aircraft without the consent of the carrier” as if he were “a passenger carried under a contract for his or her carriage for reward”.

    21.    Sulewski at 184.

49. Both Mexico City Air Crash and Sulewski are consistent with a distinction between persons travelling as crew on duty and those who are not crew on duty on the flight, a person falling into the latter category being a “passenger”.

50. The respondents drew attention to three decisions of French courts which raised somewhat different issues. Because the translations provided to this Court were not adequate to reveal the precise terms of the reasoning, or indeed the statutory provisions which were applied, limited assistance can be obtained from them. However, all three were discussed in Herd.

51. Aéro-Club de l’Aisne v Klopotowska, [22] involved a claim by the surviving widows of two persons killed in an accident in the course of a “test flight”. It is not clear that the case turned on the meaning of “passenger”.

    22.    (1970) 24 RFDA 195 (Court of Cassation (First Civ Div)).

52. Société Mutuelle d'Assurance Aériennes v Gauvain, a decision of the Court of Cassation (First Civil Division) of 4 July 1967, involved a student pilot and a flying club instructor, both of whom died in an accident during a “hedge hopping flight” in the course of which the aircraft touched a high voltage power line and crashed. [23]

    23.    (1967) 21 RFDA 436.

53. Closer to the present case was Ortet v Georges. [24] The purpose of the flight in that case involved aerial photography; the aircraft crashed on take-off killing the pilot and the photographer. Again the decision (denying the application of the Convention) does not appear to turn on the meaning of “passenger”.

    24.    (1975) 30 RFDA 490 (Appeal Court of Paris (First Div)).

54. Each of these decisions was relied upon before the House of Lords in Herd. Lord Hope of Craighead dealt with them as follows: [25]

“In Société Mutuelle d'Assurance Aériennes v Gauvain, 21 R.F.D.A. 436, it was held by the Cour de Cassation that the law of 2 March 1957 by which the rules of the Warsaw Convention were applied to domestic air transport within France did not apply to regulate the liability of the air carrier for the death of a student pilot while undergoing a flying lesson. In Aéro-Club de l'Aisne v Klopotowska, 24 R.F.D.A. 195 the accident occurred during a test flight, which did not have the purpose of carrying people or goods from one point to another according to the definition of air transport in article 113 of the Civil Aviation Code, so it was held by the Cour de Cassation that the law of 2 March 1957 did not apply. In Ortet v Georges, 30 R.F.D.A. 490, the aircraft had been leased for the taking of aerial photographs and it was held by the Cour d'Appel de Paris that the flight did not have the character of air transport. The same approach was taken in Barnes v Service Aerien Français, 47 R.F.D.A. 343, where a helicopter was being used to airlift a man who had suffered a skiing accident to hospital and the Cour d'Appel de Paris held that the provisions of the Warsaw Convention as applied by Law 321.3 of the Civil Aviation Code did not apply.

These decisions all support the argument which Mr Jones presented with great skill on behalf of the appellants that Sergeant Herd was on board the helicopter not in pursuance of a contract of carriage but in pursuance of his duties as a police officer. But we were shown a commentary on the decision in Aéro-Club de l'Aisne v Klopotowska, 24 R.F.D.A.195, which suggests that opinion in France was divided on this point, and that some decisions in the French courts had taken the view that the law of 2 March 1957 was of general application to all cases where there is air transport. In any event the fact that the jurisprudence in one country has adopted an interpretation of the Convention which supports Mr Jones's argument is not in itself a compelling reason for holding that we should follow the same approach in our interpretation of article 1 of Schedule 1 to the Order of 1967.”

25.    Herd at 553-554.

55. The French cases were also considered in a Canadian case, Johnson Estate v Pischke. [26] A family, consisting of father, daughter and son-in-law were flown by the pilot, Mr Pischke, from Estevan in Saskatchewan to Boise, Idaho. The aircraft crashed in bad weather. The son-in-law, Mr Dyer, flew the dual control plane for at least part of the flight for the purpose of obtaining flying experience as part of a pilot training course he was then undertaking. The father, Mr Johnson, and the daughter, Ms Coulter, wished to pick up a dog in Idaho. Mr Johnson and the pilot died soon after the crash; Dyer and Coulter survived at the crash site for 14 days and then walked for five days through waist deep snow, and survived. Claims were made by the executors of Mr Johnson’s estate and by Mr Dyer under the Canadian law which incorporated the Warsaw Convention and the Hague Protocol. The judge concluded that Dyer did not fall within the ambit of the Convention, not being a “passenger”, but a student pilot at the time, whereas the estate did, Mr Johnson being a passenger. Although Halvorson J referred to Gauvain, he identified the reasoning of that case in the following terms: [27]

“There, the court ruled that a student pilot in the course of a training flight with his instructor did not come within the Convention. The court was of the view the flight was not the type of carriage which is governed by the Convention as the principal objective was quite different from that to which the Convention applied.

The same could be said of Dyer’s carriage, but I prefer to base my decision on the meaning of ‘passenger’ and the scheme of the Convention. It is noteworthy that the argument that the student became a passenger when he relinquished control to the instructor did not prevail in Gauvain.”

26. [1989] 3 WWR 207 (QB Sask, Halvorson J).

27.    Johnson Estate at 217.

56. It is convenient to turn next to the decision of the House of Lords in Herd, delivered in February 1997. The case involved a claim by the widow of a police officer (Sergeant Herd) who had died while on surveillance duties, travelling in a helicopter operated by the respondent. The aircraft crashed into a building during a snowstorm. The widow sued for common law damages in negligence, on behalf of her four children. The claim was resisted on the basis of a UK order incorporating the Warsaw Convention, as amended by the Hague rules, into the domestic law of the United Kingdom in relation to carriage by air. The principal opinion was delivered by the Lord Chancellor, Lord Mackay of Clashfern. In applying Articles 1 and 17 of the Convention, Lord Mackay concluded: [28]

“In my view it is clear that the respondents were the carrier in respect of the carriage of Sergeant Herd. It is true that Sergeant Herd was on the aircraft for the purpose of carrying out his duties as a member of the Police Helicopter Unit, but from the facts as alleged … it is clear that he had no responsibility whatever in respect of the operation of the aircraft, which was solely under the control of the pilot, and therefore in my opinion the activities which Sergeant Herd was carrying on while on the aircraft are not to be regarded as contributing in any way to the carriage of himself or the other persons on board. He therefore is properly regarded as a passenger.”

28.    Herd at 542D.

57. In relation to a number of earlier English decisions, Lord Mackay stated that none dealt with the terms of the order which operated in the present case. He continued: [29]

“In so far as they dealt with the Warsaw Convention either as originally agreed upon, or as modified at the Hague, they dealt with provisions very substantially different in important respects from those with which we are concerned in the Order. 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.

The cases in the United States and Canada and all but two of the French decisions could be explained on the basis that if there is a relationship between the carrier and the person carried in addition to, or distinct from, the relationship of the person carried and the carrier, such as, for example, where the person being carried is an employee of the carrier with duties connected with the conduct of the flight, the liability under such relationship is not affected by limitations on the liabilities incurred as carrier.”

29.    Herd at 544D.

58. Lord Nicholls of Birkenhead, Lord Hoffmann, Lord Hope of Craighead and Lord Clyde agreed with the Lord Chancellor. Lord Hope gave additional reasons of his own. Lord Hope considered that the language of Article 1 was straightforward; it applied to “all carriage of persons”, [30] a phrase which does not appear in the Commonwealth Carriers’ Liability Act. Article 17 dealt with liability for damage sustained in the event of the death of a passenger. Lord Hope continued: [31]

326. I respectfully agree with Basten JA that the examples mentioned above, particularly the latter, are fairly described as “anomalies”. They are a consequence of the inevitability of some claims falling close to the boundaries of two distinct legislative regimes, one directed to damage to people and things on the ground caused by aircraft, the other directed to limiting carrier’s liability in respect of passengers and cargo. I also agree with Basten JA that there will always be anomalies, and that relatively limited weight therefore should be accorded to them in fixing the legal meaning of s 35(2). Even so, they tend against South West’s construction.

Federal claims are not excluded

330. Thirdly, if (as in South Pacific Air Motive Pty Ltd v Magnus) the non-passenger’s claim is based on federal law, I find it difficult to see how the exclusivity could be achieved. Suppose for example a federal law prevented discriminatory treatment on board aircraft owned or operated by corporations, and gave monetary redress (analogously to the legislation in Stott v Thomas Cook Tour Operators Ltd), and suppose a passenger complained of similar treatment to that suffered by Mr Stott on carriage governed by the State Carriers’ Liability Act. As presently advised, I cannot see how the applied provisions of Part IV could displace the direct operation of the federal anti-discrimination law.

331. In many circumstances, that would be only a minor consideration bearing upon the construction of State law. Federal law commonly causes difficulties when it interacts with State regimes. One example is the limited effectiveness of State tribunals which are not courts for the purposes of Ch III of the Constitution determining federal claims: see Trust Company of Australia Ltd v Skiwing Pty Ltd (2006) 66 NSWLR 77; [2006] NSWCA 185. However, in the present case, given the desire for uniformity, and the fact that passengers on the same flight may be subject to Part IV as an applied provision, Part IV applying directly, and indeed other Parts of the Commonwealth Carriers’ Liability Act if the flight is part of international carriage, the potential disconformity is to my mind a relatively powerful one.

Existing authority

332. Most statements as to the operation of the “exclusivity principle” arose out of claims by passengers, and are couched in terms of denying other rights to the passenger. One example is Lord Hope’s speech in Sidhu reproduced above. Another is Lord Toulson JSC’s summary in Stott at [34] that “the whole purpose of article 17, read in its context, was to prescribe the circumstances – that is to say, the only circumstances – in which a carrier would be liable to the passenger for claims arising out of his international carriage by air” (emphasis added).

333. More qualified statements may also be found, including that by Handley AJA in United Airlines Inc v Sercel Australia Pty Ltd [2012] NSWCA 24; 289 ALR 682 at [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.”

334. That statement is consistent with a limited notion of exclusivity, although the case did not turn upon a claim which was not “through or under the passenger”. It is also true, as Basten JA has observed, that there may be found broad statements of exclusivity in Sercel, notwithstanding that the case did not deal with a direct claim in negligence by a non-passenger against the carrier.

335. Herd v Clyde Helicopters Ltd [1997] AC 534 is similar in that respect. Importantly, and unlike the other decisions dealing with the exclusivity principle mentioned above, Herd dealt with claims by non-passengers under Scottish law. The litigation arose out of a fatal accident involving a helicopter which had been operated by the respondent under contract with Strathclyde Regional Council. The Carriage by Air Acts (Application of Provisions) Order 1967 (UK) applied provisions based on the Warsaw Convention as amended at the Hague, but with important variations (see below) to claims by passengers on contracts for carriage wholly within Scotland. Sergeant Herd’s children and mother had brought claims under both the Order and in negligence against the carrier, and the carrier contended that the claims at common law were incompetent. There were three points argued in the Court of Session (Second Division): whether there was a contract for carriage, whether Sergeant Herd had been a passenger, and whether the operator was a carrier: see Herd v Clyde Helicopters Ltd [1996] SLT 976. On the further appeal to the House of Lords, the only question was whether the Order applied. See for example the opening paragraph of Lord Hope’s speech: “It is not disputed that, if the Order applies, the provisions of Schedule 1 to the Order provide the exclusive cause of action and sole remedy for the appellants ...”. There was no argument that a claim for psychiatric injury was outside the scope of the claims at common law excluded by the Order if it applied.

336. What is more, the Schedule disapplied Articles 1(2), 1(3), 2(2) and the whole of Part II (Articles 3-16). That is to say, the provisions focussing on the documentation relating to the contract of carriage were inapplicable to determining the rights of Sergeant Herd’s mother and children. This explains the statement by Lord Mackay of Clashfern LC at 544:

“[I]n the very well prepared and careful argument to which your Lordships were treated, a number of decisions were referred to. None of them dealt with the terms of the Order with which your Lordships are concerned in the present case. In so far as they dealt with the Warsaw Convention either as originally agreed upon, or as modified at the Hague, they dealt with provisions very substantially different in important respects from those with which we are concerned in the Order. 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” (emphasis added).

337. True it is that Lord Hope’s reasons did not rely upon the difference between the Convention and the Order. But Lords Nicholls, Hoffmann and Clyde agreed with the Lord Chancellor.

338. I do not read Herd as being authority contrary to the proposition that a non-passenger’s claim for psychiatric injury stands outside the provisions of Part IV. The point was not argued in Herd, and a majority of the House of Lords regarded the regime as materially different from that established by the Warsaw Convention, its successors, and its Australian implementations. To similar effect, in United Airlines Inc v Sercel Australia Pty Ltd at [14(b)] Allsop P referred to the requirement for a ticket and the central place of the contract in the regime established by Article 3 of the Warsaw Convention.

339. That said, statements of principle may be found in the foregoing authorities which bear on the question. However, considerably more persuasive than statements such as those are decisions where the point was squarely argued: see the authorities mentioned in Lazarus v Independent Commission Against Corruption (2017) 94 NSWLR 36; [2017] NSWCA 37 at [87]. So far as I am aware, aside from the present litigation there have been precisely two proceedings in superior courts where the point has been argued.

South Pacific Air Motive Pty Ltd v Magnus

340. The more important authority, in my view, is South Pacific Air Motive Pty Ltd v Magnus. That was not a death case, and it is true that ss 35 and 36 are different, and reflect the different treatment of death and bodily injury claims in the conventions. While not strictly being on point, I think that Magnus is to be given considerable precedential weight. The structure of ss 35 and 36 is materially identical in respect of the exclusion of other civil liability. Further, I would strain to avoid a result whereby, say, non-passenger parents could recover a claim for psychiatric injury when they hear that their son has been in a plane crash, although ultimately it turns out the child was uninjured, but could not recover a claim insofar as their claim was based on their daughter having died in the same crash. The considerations of judicial economy which are especially important in construing legislation such as the Commonwealth Carriers’ Liability Act do not prevent considerable weight being given to the construction of the immediately preceding and similar provision in the same federal statute; to the contrary, it is an aspect of reading the statute as a whole when determining its legal meaning.

341. Prominent in Hill J’s reasons was the fact that there was no contractual relationship between the persons who claimed they had been injured and the carrier. His Honour also relied upon the second matter set out above, namely, the undoubted liability of a carrier to people physically injured on the ground (at 321):

“Claims against carriers clearly falling outside the terms of the Conventions can easily be imagined. A plane might crash and injure a bystander; a plane might crash and damage property; a plane might run into another plane and injury the pilot or passengers in that other plane; a non‑passenger might observe a plane crash and suffer physical damage. There is nothing in the Conventions which suggests that there was any intention to limit the liability of carriers in such situations. In these situations the person injured has no contractual relationship with the carrier. 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 can not 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, however, the Conventions were intended to be a complete code with respect to passengers.

Likewise there is nothing in the CA Act which suggests that that Act was intended to govern claims by non‑passengers of the kind to which I have referred above.

Although, therefore, it seems clear that neither the Conventions nor the CA Act were intended to be a complete code governing all claims against airlines and particularly all claims for damages suffered by non‑passengers, it is possible to say that each constitutes a code in respect of claims by non‑passengers to the extent that those claims relate to the death or personal (bodily) injury of a passenger. But once it is seen that the Conventions and the CA Act are concerned with questions of contractual limitation of liability and notice thereof it is not difficult to conclude that the rationale for the Conventions or the Act being a code dealing with some, although not all, liabilities of airlines to non‑passengers falls away.”

342. True it is that Hill J was not confronted with the potentially differential operation of s 35(2) upon a claim based on Lord Campbell’s Act. Even so, I regard his Honour’s reasoning as persuasive authority on the construction of s 35(2).

343. A further matter was mentioned by Sackville J at the conclusion of his reasons at 350:

“Exposing carriers to liability for nervous shock claims by non-passengers doubtless makes it more difficult for them or their insurers to calculate the extent of the risks to which they are subject. But carriers are exposed to many forms of liability to non-passengers. If this particular liability creates unacceptable burdens, the position can be remedied by the Commonwealth Parliament. International agreement is not required. If the appellants’ argument were accepted, the dividing line between non-passengers’ nervous shock claims within Part IV of the CA Act and those outside it would be difficult to support on any sound basis. On the conclusion I have reached all non-passengers nervous shock claims are treated in the same manner.”

344. And indeed legislation was enacted in 1999 (although it did not specifically respond to the observations of Sackville J). Section 11 of the Damage by Aircraft Act 1999 (Cth) imposes liability on operators and owners of aircraft in the circumstances identified in subsection 10(1):

“(1) This section applies if a person or property on, in or under land or water suffers personal injury, loss of life, material loss, damage or destruction caused by:

(a) an impact with an aircraft that is in flight, or that was in flight immediately before the impact happened; or

(b) an impact with part of an aircraft that was damaged or destroyed while in flight; or

(c) an impact with a person, animal or thing that dropped or fell from an aircraft in flight; or

(d) something that is a result of an impact of a kind mentioned in paragraph (a), (b) or (c).”

345. However, subsection (1A) now expressly excludes mental injury unaccompanied by some “other personal injury, material loss, damage or destruction” from the strict form of liability thereby created. That amendment was made by the Aviation Legislation Amendment (Liability and Insurance) Act 2012 (Cth).

346. I do not need to express a view as to the operation of this legislation (whether before or after the amendment), save to say that it plainly imposes some liability upon carriers outside the scope of the Commonwealth Carriers’ Liability Act. To my mind, that reinforces the point mentioned by Sackville J. This is an area where the Commonwealth Parliament has legislated, at least twice, after South Pacific Air Motive Pty Ltd v Magnus, including in terms squarely connected with non-passengers who suffer purely psychiatric injury. To my mind, that is a further reason not to depart from the law established by that decision; cf Roadshow Films Pty Ltd v iiNet Ltd (2012) 248 CLR 42; [2012] HCA 16 at [120] where Gummow and Hayne JJ observed in respect of another frequently amended federal regime that difficulties were “best resolved by legislative processes rather than by any extreme exercise in statutory interpretation by judicial decisions.”

347. In dissent on this issue, Beaumont J proceeded to identify the literal construction of s 35(2) as extending to a claim by a non-passenger, and then concluded that there was no basis not to adopt such a construction. With great respect, I disagree with the premise; I do not consider that it helps to identify the “literal” meaning of s 35(2); the words “in respect of” are ineluctably contextual. The fact that they are capable of extending to a claim by a non-passenger says very little as to whether s 35(2) in fact applies to extinguish the non-passenger’s claim. That was the point made by Sackville J at 348, which I have elaborated upon at [273]-[280] above in light of the prominence of the submission in South West’s appeal.

Cauchi v Air Fiji

348. Cauchi v Air Fiji [2005] TOSC 7 is to the contrary. It is an interlocutory albeit reserved and fully reasoned decision at first instance in the Supreme Court of Tonga. Ford J (as the Chief Justice of Tonga then was) was taken to, but did not engage with the majority decision in South Pacific Air Motive. The entirety of the dispositive portion of his Honour’s reasons is as follows (at 29):

“Although I acknowledge that the House of Lords [in Sidhu] was dealing with claims by passengers, all the pointers are that in a non-passenger situation the same principle should be applied with, perhaps, an even more aggressive fervour. If air carriers were to be exposed to damages claims falling outside the Convention by non-passengers based on causes of action such as nervous shock and psychological injuries, the floodgates would surely tumble and the Convention rules relating to international carriage by air would soon be subverted. It seems to me that, wherever the boundary lines are finally drawn for the still emerging nervous shock cause of action, they will be unable to make any inroads into the now entrenched principle of construction that the Warsaw Convention is a comprehensive code which excludes any other form of domestic remedy by passengers or non-passengers alike.”

349. With respect, that reasoning is unpersuasive, and not merely because of its invocation of floodgates. It does not grapple with the reasons of either the majority or the minority in South Pacific Air Motive. It is inconsistent with the undoubted liability of carriers to some non-passengers, where there is physical injury. It proceeds on the basis that a tortious cause of action for damage constituted by psychiatric harm is “emerging”. If that is the case in Tonga, it is not true in New South Wales; as noted above, claims for “nervous shock” were recognised by s 4 of the Law Reform (Miscellaneous Provisions) Act 1944 (NSW), more than two decades before the State Carrier’s Liability Act was enacted, and earlier still in cases such as Hambrook v Stokes Brothers [1925] 1 KB 141.

Conclusion

350. All members of the Court in South Pacific Air Motive v Magnus regarded the question as difficult and contestable. I respectfully agree. I would not place great weight on the anomalies referred to above; anomalies are inevitable on any construction. However, ultimately I have concluded that s 35(2) does not preclude a non-passenger’s claim against a carrier for psychiatric injury. That conclusion means that s 35(2) will still preclude claims by non-passengers which are more closely connected with the death of a passenger, such as a claim under the Compensation to Relatives Act. My conclusion principally rests on three considerations.

1. The first is the significance to be given to the contract of carriage, and the regime reflecting a compromise between the contracting parties, rather than affecting the tortious claims of non-passengers for breaches of duties owed by the carrier directly to them. The purpose of the exclusivity recognised in the various conventions, and implemented in Australia to carriage to which no treaty applied by s 35(2), does not go so far as to immunise carriers from liability to persons who do not claim, directly or indirectly, through a passenger who would have received the benefit of the notice of limitation of liability on his or her ticket.

2. Secondly, that is confirmed by what I regard as the weight of persuasive authority, reflected in the majority judgments in South Pacific Air Motive. Not lightly would I depart from a decision of the Full Federal Court which has now stood for 20 years in an area where there has been a deal of legislative amendment but which has been left unaffected, in circumstances where departing from it would create what would be, in effect, inconsistent lines of authority in this Court and in the Federal Court.

3. Thirdly, I place some weight on the totality of legislation in this area, including legislation conferring rights upon non-passengers who suffer injury. As a matter of history, there have been two streams of legislation affecting the claims connected with aircraft made by people on the ground: that flowing from the Air Navigation Act 1920 (UK) and that flowing from the Warsaw Convention. This tends to confirm the limited purpose of the latter, not extending to non-passengers’ claims which are not derivative of a passenger’s claim.

351. Accordingly, I would not uphold this ground of South West’s appeal insofar as it challenged the primary judge’s decision that the claims for psychiatric injury were not precluded by s 35(2) of the Commonwealth Carriers’ Liability Act. 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, including claims under the Compensation to Relatives Act 1897 (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.

Balance of the appeals

352. Despite the length of the foregoing, very little turns on the divergence in opinion between Basten JA and me in the present case. I agree with Basten JA that s 37 of the Commonwealth Carriers’ Liability Act (which is also made applicable as State law) does not exclude any right for statutory contribution as a joint tortfeasor. As noted at the outset, I agree with what Basten JA has said as to both South West and the Council being liable in negligence, that Essential Energy is not liable, and I agree that as between the two negligent defendants’ liability to the Stephensons should be apportioned two-thirds to South West and one-third to the Council.

353. In relation to the apportionment of the liability for South West’s claims of physical damage and economic loss, I agree with the entirety of the reasons of Basten JA, including the different apportionment such that 80% of the amount is borne by South West. It has long been clear that different apportionments under statute may be warranted in cases where there is property damage and personal injury. Adam J made the point in Azzopardi v Bois [1968] VR 183 at 188 by reference to a collision between two cars, for which each driver was equally to blame. The property damage might be reduced by 50% for contributory negligence, but if the injuries of one driver were aggravated by the failure to wear a safety belt, a greater level of contributory negligence for damages for personal injury might be warranted. This Court confirmed the correctness of that reasoning in Tiufino v Warland [2000] NSWCA 110 at [44]-[45]. The different apportionment in the present case reflects a greater deviation by the Council from the standard of care required by it in respect of the safety of its employees.

Orders

354. On the approach I favour, the Stephensons’ judgments based on their psychiatric injury claims against South West should not be set aside, which is to say I respectfully disagree with result (2) within the seven results summarised at [257] above. Accordingly, I would leave in place the judgments obtained by each of Ingrid, Natalee and Jay Stephenson in the “nervous shock proceedings” against both South West and the Council, rather than setting aside the judgments against both defendants and replacing each by a judgment against the Council.

355. In other respects, save as to costs, I agree with the orders proposed by Basten JA.

356. In light of the Stephensons’ success in maintaining three of the four judgments in their favour against South West, but bearing in mind that their principal interest was in maintaining their judgments against the Council and that in many respects their submissions against South West were unsuccessful, I would order that the Council pay the Stephensons’ costs of resisting Council’s cross-appeal and that South West pay one half of the Stephensons’ costs of its appeal. In other respects, I agree with the costs orders proposed by Basten JA.

357. PAYNE JA: I have had the privilege of reading the comprehensive judgments of Basten JA and Leeming JA in draft. I have found resolution of the issue which divides their Honours very difficult. There is no wholly satisfactory answer to the question posed.

358. Whilst s 35(2) of the Civil Aviation (Carriers’ Liability) Act 1959 (Cth) makes a carrier’s civil liability under Part IV exclusive within the scope of the operation of that section, it is far from clear what the scope of the operation of s 35(2) is. Section 35(2) reflects a formulation of a number of international treaties to which Australia is a party which purport to codify certain rules applicable to carriage by air.

359. The meaning of the connecting phrase “in respect of” in s 35(2) which determines the relationship between the excluded liability, being “any civil liability of the carrier under any other law” and the event giving rise to the liability, namely “the death of the passenger” is of course dependent on context. The breadth of the relevant context is canvassed exhaustively in the judgments of Basten and Leeming JJA and I will not repeat it. I agree that it matters not whether such words are labelled “relational terms” or “prepositional phrases”. The point is that the statutory context and purpose will determine the legal meaning of the words “in respect of”, and thus the closeness of the relationship required by them.

360. In resolving this question, I found, in particular, the question of whether to follow the reasoning in the judgment of Sackville and Hill JJ in South Pacific Air Motive Pty Ltd & Anor v Magnus (1998) 87 FCR 30; [1998] FCA 250 1 to be difficult. If I had concluded that their Honours’ consideration of the operation of s 35(2) was part of the ratio in Magnus I would have followed it.

361. I have ultimately concluded, however, that Basten JA is correct that the decision in Magnus does not govern the outcome in the present case. Attention to the differences in the language of ss 35 and 36 leads to the conclusion that Magnus is only of indirect relevance.

362. The observations of the High Court in Agtrack (NT) Pty Ltd v Hatfield (2005) 223 CLR 251; [2005] HCA 38 at [3]-[4] emphasise the breadth of the connection identified by the language of s 35(2). Gleeson CJ, McHugh, Gummow, Hayne and Heydon JJ said at [3]-[4]:

“[3] The common law of Australia gave to Mrs Hatfield no action for damages against Spring Air for loss she suffered by reason of her husband's death. That death took place in the geographical area of the Northern Territory where the plane crashed, but the action was brought in the Supreme Court of Victoria. Both the statute law of the Northern Territory and of Victoria made provision of the same nature as Lord Campbell's Act for recovery for a widow of a deceased husband. However, federal law also makes provision of this nature in the limited circumstances to which Pt IV of the Civil Aviation (Carriers' Liability) Act 1959 (Cth) ("the Carriers' Act") applies.

[4] Where Pt IV of the Carriers' Act imposes a liability in respect of the death of a passenger, the liability is expressed by s 35(2) thereof as being in substitution for any civil liability of the carrier under any law in respect of that death. The result in the present case was that any operation of the law of the Northern Territory was displaced and the law of Victoria was, to this extent, rendered invalid by the operation of s 109 of the Constitution.” (citations omitted)

363. Although addressing a Compensation to Relatives claim for recovery by a widow, the High Court’s emphatic language relating to “any civil liability of the carrier under any law in respect of that death” in these passages seems to me to be inconsistent with the dicta about the construction of s 35 of the Carriers’ Liability Act in Magnus at 347–350 which was relied upon by the respondents. The acceptance in Agtrack that the widow’s Compensation to Relatives claim is precluded by the Commonwealth Carriers’ Liability Act is consistent with the proposition that the claim for psychiatric injury must also fall within the scope of the exclusion in s 35(2) of the Commonwealth Carriers’ Liability Act. I accept, as Leeming JA points out, that this conclusion is but the commencement of the analysis.

364. The critical distinction drawn in Magnus by Hill J at 320 is between a wrongful death claim, being one brought under the Compensation to Relatives Act which is characterised by his Honour as “damages sustained derivatively”, and thus “by the passenger” and damage suffered by a non-passenger. Ultimately, the question must be whether s 35(2) makes such a distinction. In my view, essentially for the reasons of Basten JA, it does not. The psychiatric injury suffered by the plaintiffs in this case met the description of “any civil liability of the carrier under any other law” and was “in relation to” the event giving rise to the liability, namely “the death of the passenger” within the meaning of s 35(2).

Remaining issues in the case

365. On the remaining issues in the case, I agree with the reasons of Basten JA and the orders he proposes and wish only to add some brief additional remarks.

366. The primary judge concluded that at the time of the fatal accident the helicopter was not conducting “commercial transport operations” within the meaning of s 4 of the Civil Aviation (Carriers’ Liability) Act 1967 (NSW) and s 27(1) of the federal Carriers Liability Act.

367. It was submitted on behalf of the Stephensons that Regulation 157(4)(b) of the Civil Aviation Regulations 1988, promulgated under s 27(9) of the Civil Aviation Act1988 (Cth), had the effect that it was “aerial work” rather than “charter work” which was being conducted at the time of the fatal accident and, so the argument went, that “aerial work” was outside the scope of the Carriers Liability Act and the Convention.

368. Regulation 157(1) and (4)(b) of the Civil Aviation Regulations provides:

157   Low Flying

(1)   The pilot in command of an aircraft must not fly the aircraft over:

(a)   any city, town or populous area at a height lower than 1,000 feet; or

(b)   any other area at a height lower than 500 feet.

Penalty:  50 penalty units.

…

(4)   Subregulation (1) does not apply if:

…

(b)    the aircraft is engaged in private operations or aerial work operations, being operations that require low flying, and the owner or operator of the aircraft has received from CASA either a general permit for all flights or a specific permit for the particular flight to be made at a lower height while engaged in such operations; or …

369. An insuperable difficulty with the submission made on behalf of the Stephensons is that South West held an Air Operator’s Certificate under the Civil Aviation Act authorising it to conduct “aerial work operations” at a “low flying” height. Contrary to the submissions, such operations are plainly commercial operations.

370. The conclusion of the primary judge that the aircraft was not engaged in “commercial transport operations” because it was not travelling “between one place and another” is inconsistent with the statutory language of s 4 of the Carriers Liability Act and must be set aside.

371. Given the conclusions about s 151Z of the Workers Compensation Act 1987 (NSW), the property and loss of profit claims in relation to the aircraft and the liability of Essential Energy reached by Basten JA, with which I agree, the only remaining contribution issues concern the claims between the Council and South West.

372. I agree with the apportionment of liability found by Basten JA of one-third to the Council and two-thirds to South West, for the reasons his Honour gives. I wish only to add a few remarks about s 37(b) of the Carriers Liability Act.

373. In the course of oral argument, Senior Counsel for South West at one point suggested that South West would not be liable for contribution because, if successful in their challenges based on the Carriers’ Acts South West would not be a “tortfeasor”, apparently on the basis that South West, if sued, would not be liable as a joint tortfeasor in respect of the same damage: s 5(1)(a) or 5(1)(c) of the Law Reform Miscellaneous Provisions Act 1946 (NSW).

374. That conclusion, if it were open, would be inconsistent with the decision of this Court in United Airlines Inc v Sercel Australia Pty Ltd [2012] NSWCA 24; 289 ALR 682 about the proper operation of s 37 of the Carrier’s Liability Act.

375. Written submissions made by South West on this issue provided:

“The submissions were contrary to the decision of this Court in United Airlines Inc v Sercel which the trial judge followed. The submissions are formally maintained without any contention that this Court should depart from the recent decision in United Airlines.”

376. Ultimately, Senior Counsel for South West in this Court, who was not the author of the written submissions, submitted that:

“The submissions were drafted at a time perhaps before I was involved but we formally indicated we're not going to take that matter further. I find it difficult to therefore depart from that situation.”

377. This short history explains Basten JA’s statement at [190] that apart from the limitation provision, no argument was presented to this Court as a basis on which s 37(b) might be read down so as not to apply in the circumstances of this case.

378. I agree with the orders Basten JA proposes.

**********

Endnotes

Amendments

21 May 2019 - [51] - Deleting "The earliest case" at the beginning of the paragraph.

[52] - Deleting "The most recent case" at the beginning of the paragraph and amending date to read "1967".

[108] - Amending text to read "...such of the members of the passenger's family as sustained damage by reason of his death".

[117] - Amending date to read "1984".

[259] - Inserting "to" in (5)(b), (6)(a) and (7)(a).

[274] - Replacing "the" with "that" before "...context which will determine..."

[325] - Replacing "of" with "for" in quote.

[362] - Amending citation to read "...CLR 251" and "...HCA 38"

11 December 2017 - [139] Deleted repetition of "of the".

[283] Amending "clam" to "claim".

[374] Adding "of" after "operation".

Decision last updated: 21 May 2019