AV8 Air Charter Pty Limited v Sydney Helicopters Pty Limited  NSWCA 46 (Barrett JA at , Hoeben JA at , Ward JA at )
|Catchwords||TORT – negligence – claim for economic loss by owner of helicopter against bailee of helicopter arising from conduct of pilot – helicopter coming into contact with overhead powerline – challenge to factual findings of trial judge – whether evidence before trial judge capable of proving substantial deterioration in weather conditions – whether due weight given to opinion of experts – whether negligent of pilot to continue flying in deteriorating weather conditions – assessment of alternatives open to pilot – need to assess actions of pilot prospectively not in hindsight – use of Civil Aviation Regulations as particulars of negligence – application of ss 5B and 5C Civil Liability Act 2002 – CAUSATION – negligence not established – CONTRACT – what terms should be implied – extent to which Civil Aviation Regulations were to be implied in contract – PROPORTIONATE LIABILITY – whether owner of powerline liable in tort – class of pilot to whom duty owed – foreseeability of relevant “risk of harm” – powerline owner liable in negligence – DAMAGES – loss of profits and diminution in value of repaired helicopter – failure of trial judge to have regard to agreement between parties – factual error of trial judge requiring appeal court to re-assess damages.|
Hoeben JA (Barrett and Ward JJA agreeing):
Nature of appeal
2 The appeal concerns an economic loss claim founded upon allegations of negligence and breach of contract from the flying of a civilian helicopter that was damaged when it struck a suspended overhead powerline. The accident occurred on 29 January 2009 while the helicopter was on a flight from Scone to Sydney.
3 The appellant owned the helicopter. The respondent was the bailee of that helicopter and Mr Harrold, the respondent’s pilot, was in control of the helicopter at the time of the wire strike. The appellant sought damages for the diminution in the resale value of the helicopter and the loss of profits during the period it could not be used or hired while it was under repair. It was common ground that the Civil Liability Act 2002 (CLA) applied to these proceedings.
4 A summary of the accident is that in deteriorating weather conditions the helicopter descended below cloud level near Broke and flew on for several minutes after that descent before it struck a powerline that was suspended along a valley located in restricted military airspace near Singleton Army Base in NSW. The presence of that powerline was not indicated on the map being the Visual Navigation Chart (VNC) that was then available to Mr Harrold.
5 The issue argued before this Court was whether the respondent’s pilot had been negligent. There were, however, a number of subsidiary issues including contract and the apportionment provisions of the CLA. The oral submissions on the appeal differed somewhat from the written submissions. The oral submissions challenged crucial aspects of the judge’s fact finding. The Court must therefore make its own independent assessment of the facts and give effect to its conclusions about them (Fox v PercyI  HCA 22; 214 CLR 118 at  – , ). The Court must weigh conflicting evidence and draw its own inferences and conclusions – bearing in mind, however, that it has neither seen nor heard the witnesses – and having due regard to those findings of fact of the trial judge which have not been challenged (Warren v Coombs  HCA 9; 142 CLR 531; Vero Insurance Limited v Rail Corporation of NSW  NSWCA 372 at  – ).
6 An important issue in the appeal was the availability of the findings which the trial judge made about the prevailing weather conditions and the extent and location of the cloud cover which restricted the movement of the aircraft. The appellant submitted that taking Mr Harrold’s evidence at its highest did not justify the findings which the trial judge made.
7 The particular findings of the trial judge which were impugned were at ,  – ,  – ,  – ,  – ,  – . The findings by his Honour in those paragraphs were to the effect that the deteriorating weather conditions and increase in cloud gave Mr Harrold little option but to make the choice which he did. His Honour stressed that his options needed to be looked at prospectively in order to assess the reasonableness of the choices which he made. In order to assess the availability of those findings, it is necessary to analyse the evidence on this issue.
68 The appellant submitted that his Honour’s fact finding as to the reasonableness of Mr Harrold’s decision making was erroneous because he had failed to have due regard to the opinion of the experts…
69 His Honour clearly had regard to that material since he set it out in his judgment (, Red 68Q-69H). His Honour made the obvious point that Mr Harrold’s duty was not to make the best decision in the circumstances but to act reasonably in his decision making having regard to the expertise to be expected of a competent helicopter pilot. His Honour noted the strong element of hindsight in the opinion of the experts and the apparent failure by them to recognise the quickly changing circumstances and the dynamic nature of the decision making required of Mr Harrold.
70 As his Honour appreciated, the persons in the best position to assess weather conditions and conditions generally were Mr Harrold and Mr Hodges. Quite clearly the “favourable weather conditions” scenario in the joint opinion can be rejected. Implicit in the “unfavourable weather conditions” scenario considered by the experts is an assumption that an emergency situation had developed. That is not how I interpret the evidence. While weather conditions due to increase in cloud were clearly deteriorating, there continued to remain a reasonably clear path to the east albeit interspersed with some low cloud.
71 The criticism of Mr Harrold’s navigation has already been addressed. It failed to take into account the limited nature of the VNC, Mr Harrold’s unfamiliarity with the SATA and this terrain, and that key geographical features (such as the road) were obscured by cloud. Accordingly, not only did his Honour take into account the opinions in the joint report of the experts but he specifically dealt with those issues in his judgment.
72 There is another difficulty which arises from the form of the experts’ reports. They were, of course, written by persons unfamiliar with the law and there is a significant element of hindsight in the approach which they adopted. Too close a reliance upon their conclusions would incorporate that error into the judgment. The correct approach is that stated by Hayne J in Vairy v Wyong Shire Council  HCA 62; 223 CLR 422 at :
“126 When a plaintiff sues for damages alleging personal injury has been caused by the defendant’s negligence, the inquiry about breach of duty must attempt to identify the reasonable person’s response to foresight of the risk of occurrence of the injury which the plaintiff suffered. That inquiry must attempt, after the event, to judge what the reasonable person would have done to avoid what is now known to have occurred. Although that judgment must be made after the event it must seek to identify what the response would have been by a person looking forward at the prospect of the risk of injury.”
73 By contrast the approach by the experts is of the kind which has been consistently deprecated by the courts. In Vozza v Tooth & Co Ltd  HCA 29; 112 CLR 316 at 318 Windeyer J said:
“It may seem that, because an accident has happened and a workman has been injured, his employer is liable for damages if it can be shown that, by some means, the accident might have been avoided. That is not so.”
Similarly, in Kuhl v Zurich Financial Services Australia Ltd  HCA 11; 243 CLR 361 at  French CJ and Gummow J said:
“19 Two things must be said as to the formulation of a duty of care and its scope and content. First, there is an inherent danger in an action in negligence to look first to the cause of damage and what could have been done to prevent that damage, and from there determine the relevant duty, its scope and content.”
74 Another difficulty is that the experts approached the Civil Aviation Regulations (CAR) as though they constituted particulars of negligence in absolute terms and that any breach of a regulation would constitute a negligent act.
75 That, of course, does not necessarily follow. The correct approach is that explained by the High Court in Leighton Contractors Pty Ltd v Fox; Calliden Insurance Limited v Fox  HCA 35; 240 CLR 1 at  where the Court (French CJ, Gummow, Hayne, Heydon and Bell JJ) said:
“49 The obligation imposed on Leighton under the Regulation, while not founding an action for breach of statutory duty, is central to the Court of Appeal’s conclusion that a common law duty existed. While it is true that obligations under statutory or other enactments have relevance to determining the existence and scope of a duty, it is necessary to exercise caution in translating the obligations imposed on employers, principal contractors and others under the OHS Act and the Regulation into a duty of care at common law. This is because, as Gummow J explained in Roads and Traffic Authority (NSW) v Dederer, “whatever their scope, all duties of care are to be discharged by the exercise of reasonable care. They do not impose a more stringent or onerous burden.”
50 The Court of Appeal gave no consideration to whether Leighton had implemented a reasonable system for ensuring that workers coming onto the site were identified, were required to undergo site induction and were required to show evidence of completion of general and work activity based OHS induction training. The parts of the critical passage which were emphasised in the above quotation indicate that the liability that was imposed on Leighton was special or strict – a duty to provide induction training. …”
The error identified by the High Court in Leighton Contractors v Fox was the expression of the duty in absolute terms as specified by the statute rather than having regard to concepts of reasonableness.
80 As the parties appreciated, the question of breach was to be determined by reference to ss 5B and 5C CLA. Those sections provide:
“5B General principles
(1) A person is not negligent in failing to take precautions against a risk of harm unless:
(a) the risk was foreseeable (that is, it is a risk of which the person knew or ought to have known), and
(b) the risk was not insignificant, and
(c) in the circumstances, a reasonable person in the person’s position would have taken those precautions.
(2) In determining whether a reasonable person would have taken precautions against a risk of harm, the court is to consider the following (amongst other relevant things):
(a) the probability that the harm would occur if care were not taken,
(b) the likely seriousness of the harm,
(c) the burden of taking precautions to avoid the risk of harm,
(d) the social utility of the activity that creates the risk of harm.
5C Other principles
In proceedings relating to liability for negligence:
(a) the burden of taking precautions to avoid a risk of harm includes the burden of taking precautions to avoid similar risks of harm for which the person may be responsible, and
(b) the fact that a risk of harm could have been avoided by doing something in a different way does not of itself give rise to or affect liability for the way in which the thing was done, and
(c) the subsequent taking of action that would (had the action been taken earlier) have avoided a risk of harm does not of itself give rise to or affect liability in respect of the risk and does not of itself constitute an admission of liability in connection with the risk.”
81 His Honour set out his analysis of breach of duty at  –  (Red 74J-82D). If one were to be critical of his Honour it would be that he did not in terms define the relevant “risk of harm”. In applying s5B, it is important to accurately identify the relevant risk of harm since it will usually govern how the other considerations in s5B are to be applied.
82 The importance of identifying the “risk of harm” was stressed in Roads and Traffic Authority (NSW) v Dederer  HCA 42; 234 CLR 330. In the Court of Appeal the majority characterised the risk to the plaintiff as “serious spinal injury flowing from the act of diving off the bridge”. This was a risk said to have been created by the erection of the bridge. However, Gummow J noted that this characterisation of the risk obscured the true source of potential injury which was not the erection of the bridge or any characteristic of the bridge, but rather the possibility of impact upon jumping into the potentially shallow water arising from the shifting sands of the estuary ( – ). This mis-characterisation of the risk led to two further errors. First it incorrectly focused attention on the frequency of the antecedent conduct, namely jumping and diving, and not the probability of the risk occurring as a result of that conduct, namely impact in shallow water. This prevented a proper evaluation of the probability of that risk occurring. Second it resulted in a focus on the RTA’s role in creating the bridge and overlooked the lack of control the RTA had over the events that gave rise to the risk properly identified, namely the plaintiff’s voluntary action in diving and the natural variations in the depth of the estuary beneath the bridge.
83 In accordance with that guidance, I would have assessed the “risk of harm” as the possibility of the helicopter coming in contact with an unmarked obstruction which was not recorded on any map and which was virtually invisible from the air. The foreseeable risk of that occurring would be low. Such an approach might well have ended the inquiry as to breach at that point.
84 As it was, his Honour, at least implicitly, identified the risk of harm somewhat more widely, i.e. the possibility of the helicopter coming in contact with a structure, without the important qualification that such a structure was virtually invisible from the air. Such an approach was generous to the appellant but even on that basis, his Honour asked and answered the questions posed by s5B adversely to the appellant. The preceding analysis of the various challenges made by the appellant to his Honour’s fact finding has covered the issues raised by s5B. There is no need to repeat that analysis here.
85 Subsection 5C(b) was important in this case, particularly when considering the expert evidence. This was very much a case where the risk of harm could have been avoided by doing something in a different way, but that of itself is not indicative of negligence.
86 Most particularly, when considering the risk of harm and the application of ss5B and 5C generally, the risk was not and could not be the possibility of being trapped between the SATA and the rising ground. That was not the sort of risk which eventuated but it was the risk identified by the appellant which was said to be caused by both Mr Harrold flying into the SATA and flying at a height below 500 feet above ground level.
87 Nothing was said in the judgment, or apparently at trial, about the issue of causation. That, of course, is provided for by s5D CLA. Relevantly, that provision states:
“(1) A determination that negligence caused particular harm comprises the following elements:
(a) That the negligence was a necessary condition of the occurrence of the harm (factual causation), and
(b) That it is appropriate for the scope of the negligent person’s liability to extend to the harm so caused (scope of liability).
(2) In determining in an exceptional case, in accordance with established principles, whether negligence that cannot be established as a necessary condition of the occurrence of harm should be accepted as establishing factual causation, the court is to consider (amongst other relevant things) whether or not and why responsibility for the harm should be imposed on the negligent party.”
88 What we are concerned with here is factual causation. Guidance as to the application of s5D(1)(a) was provided by the High Court in Strong v Woolworths Ltd & Anor  HCA5; 246 CLR 182 at  where the plurality said:
“20 Under the statute, factual causation requires proof that the defendant’s negligence was a necessary condition of the occurrence of the particular harm. A necessary condition is a condition that must be present for the occurrence of the harm. However, there may be more than one set of conditions necessary for the occurrence of particular harm and it follows that a defendant’s negligent act or omission which is necessary to complete a set of conditions that are jointly sufficient to account for the occurrence of the harm will meet the test of factual causation within s 5D(1)(a). In such a case, the defendant’s conduct may be described as contributing to the occurrence of the harm. …”
89 It seems to have been assumed at trial that flying into restricted airspace over the SATA (CAR 140) and flying below 500 feet above ground level (CAR 157) satisfied the “factual causation” requirement under s5D(1)(a). Insofar as flying in restricted airspace is concerned, that assumption is somewhat problematic.
90 It follows that by reference to general concepts of negligence, the requirements of s5B and 5C CLA were not established by the appellant. This does not take into account the application of the regulations, not as sources of duty in themselves, but as particulars of negligence.
91 His Honour dealt with that issue at  –  (Red 82F-85X). By reference to the statement of principle in Leighton Contractors v Fox his Honour’s approach to those particulars of negligence unduly favoured the appellant. Although his Honour found that they did not give rise to independent statutory causes of action, but only operated as particulars of negligence, his Honour then treated those asserted negligent breaches of regulation, as if they operated strictly in accordance with their terms, i.e. imposed strict liability. As was made clear in Leighton Contractors v Fox, the correct approach was to impose an obligation on Mr Harrold to act reasonably so as not to fly within restricted airspace and fly below a height of 500 feet above ground level.
92 Even applying the more stringent test, i.e. that CAR 140 and 157 applied strictly according to their terms, his Honour was satisfied that those regulations had not been breached. That finding was available to his Honour for the reasons which he set out.
93 As his Honour noted, CAR 140 and 157 had to be read in conjunction with s30 of the CA Act. Section 30 created a specific defence in relation to each regulation if the breach were established to have been due to “extreme weather conditions or other unavoidable cause”. Moreover, CAR 157 provided its own defence, i.e. “through stress of weather or any other unavoidable cause it is essential that a lower height be maintained”.
94 Based on his findings as to the prevailing weather conditions, his Honour determined in the case of CAR 140, that even if they did not qualify as “extreme weather conditions” they did qualify as an “other unavoidable cause”. In the absence of any authority on the point, that interpretation was open to his Honour. It is an interpretation which is in accord with the natural meaning of the words. This is so because the incursion into the SATA occurred due to exigencies beyond the control of Mr Harrold. To have flown outside the SATA would have meant flying into cloud which all experts agreed was extremely dangerous.
95 If I am wrong in that conclusion, it does not alter the outcome of this appeal. As is clear from the undisputed facts as to the occurrence of the accident, the incursion into the SATA did not cause the accident. The fact that the helicopter was flying in restricted airspace was not an essential pre-condition to the accident. The essential pre-condition was that the helicopter be travelling at a certain height so as to come in contact with the unmarked powerlines. The presence of the powerlines within the SATA was incidental.
96 Apart from CA s30, CAR 157 has its own defence as part of the regulation. His Honour’s findings as to weather conditions certainly appear to satisfy the requirement of “stress of weather”. The unanimous opinion of the experts was that it was extremely dangerous for a helicopter to fly into cloud and that in such circumstances, the average survival time was in the order of 37 seconds (Black 306W). This would satisfy the test that it was “essential that a lower height be maintained”, i.e. that Mr Harrold fly below the clouds even if this meant flying at a height of less than 500 feet above ground level.
97 No authorities were placed before this Court as to the meaning of these regulations. Ruhani v Director of Police (No 2)  HCA 43; 222 CLR 580 which was said to be authority for the meaning of the phrase “stress of weather” was not in fact authority for that. His Honour did refer to a broadly analogous Canadian case where the phrase “stress of weather” was used in a maritime context. There the phrase was construed to mean “a bona fide apprehension of jeopardy arising in the mind of a reasonably competent and skilful master possessing courage and firmness” (The Ship “May” v R (1931) SCR 374 at 382). That construction supports the approach followed by the trial judge.
98 It follows that even applying a higher test than that which the law required, i.e. the direct application of the regulations, Mr Harrold was not in breach in that he was able to make out the defence available under each regulation. That being so, he certainly satisfied the test which should have been applied, i.e. that he act reasonably to comply with the regulations.
Brisbane Barrister – David Cormack