Australia: High Court confirms limitation of legal rights for claims for psychiatric harm by non-passengers in aviation

Last Updated: 10 June 2019
Article by Andrew Tulloch

In brief - Good news for air carriers as High Court departs significantly from decision in South Pacific Air Motive Pty Ltd v Magnus

In the case of Parkes Shire Council v South West Helicopters Pty Ltd [2019] HCA 14, the High Court of Australia unanimously dismissed an appeal in which the sole issue was whether a claim under the general law of tort for damages for negligently inflicted psychiatric harm consequent upon the death of a passenger during air carriage was precluded by Part IV of the Civil Aviation (Carriers' Liability) Act 1959 (Cth) (CACL Act).

High Court examines entitlement to claim by relatives of Parkes Shire Council officer killed in helicopter crash

Parkes Shire Council had engaged South West Helicopters to assist in carrying out a low level aerial noxious weed survey in 2006. The helicopter struck power lines and crashed, killing the pilot and two officers from Parkes Shire Council, and a number of claims followed as a result of the accident.

Claims were brought against Parkes Shire Council and South West Helicopters by the relatives of Ian Stephenson, one of the Council officers, for negligently inflicted psychiatric harm resulting from his death. The claims were commenced more than two years after the date of the accident and outside the time fixed by section 34 of the CACL Act for the commencement of claims under that Act.

The High Court found that the relatives were entitled to claim against South West Helicopters for damages for loss suffered by reason of the accident pursuant to section 28 of the CACL Act. However, section 35(2) of the CACL Act substituted that entitlement for any claim that might otherwise have been brought under domestic law. Importantly, the entitlement to claim under section 28 of the CACL Act was extinguished by section 24 of the CACL Act before the proceedings were commenced. Accordingly, the claim brought by the Council against South West Helicopters seeking contribution as a joint tortfeasor was similarly dismissed.

Carriers' liability legislative framework

The CACL Act provides, in section 28 of Part IV:

"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."

Section 35(2) then provides:

"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."

Section 37 then is concerned with the liability of a carrier to indemnity and contribution, and provides:

"Nothing in this Part shall be deemed to exclude any liability of a carrier:
  1. 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
  2. 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."

High Court findings on purpose of Civil Aviation (Carriers' Liability) Act, decision in Magnus and application of time bar provisions to relatives' claim

The High Court noted that the "liability of a carrier", referred to in the concluding words of section 37, plainly was that liability created by section 28 of the Act.

Chief Justice Kiefel and Justices Bell, Keane and Edelman, in a joint judgment, observed that the "cardinal purpose" of the CACL Act in giving effect to the Warsaw Convention regime was to achieve uniformity in the law relating to liability of air carriers such that it excludes resort to domestic law.

In a separate judgment, Justice Gordon also took the view that the Convention was intended to be broadly applicable and wholly exclusive in respect of all liability and not just that which would arise from a contractual relationship between a carrier and passenger. She noted that, to the extent that the decision of the Full Court of the Federal Court in South Pacific Air Motive Pty Ltd v Magnus (1998) 87 FCR 301 held that claims by non-passengers for psychological injury were not governed by the CACL Act, that part of the decision should not be followed. Justice Gordon noted that the majority's reasoning in Magnus was contrary to the cardinal purpose of the Conventions and had misstated the significance of the contractual arrangement between passenger and carrier to questions of liability.

Justice Gordon also referred to the cases of Zicherman v Korean Airline Co Ltd (1996) 516 S 217 and Tseng (1999) 525 US 155 for further support of her conclusions.

Claims by the Stephenson dependants for pure mental harm under the CACL Act arose out of the death of Mr Stephenson in the course of carriage and the consequence was that the time bar under the Act applied to those claims.

The appeal of Parkes Shire Council was dismissed with costs.

Considerations for non-passengers as a result of High Court's decision

The decision effectively puts to rest the conclusion of the Federal Court of Australia in Magnus and the argument that it is possible for a non-passenger to circumvent the time bar provisions in the Convention and Part IV of the CACL Act by bringing a cause of action in domestic law outside the Convention or the liability regime in the CACL Act.

Andrew Tulloch
Colin Biggers & Paisley

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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