High Court rules on tort claims for trauma for non passengers

Introduction

The much awaited decision in Parkes Shire Council v South West Helicopters Pty Limited [2019] HCA 14 was delivered by the High Court of Australia on 8 May 2019.

Family members of Mr Ian Stephenson, a passenger killed on a helicopter engaged by the Appellant from the Respondent, were held to not be entitled to tortious claims for negligent infliction of psychiatric harm (nervous shock) caused to them from hearing of Mr Stephenson’s death.  The death was compensable under Part IV of the Civil Aviation (Carriers’ Liability) Act 1959 (Cth) (“CACL Act”) regime which applied to the (NSW) intrastate commercial air carriage. Subsection 35(2) of the CACL Act substituted the CACL Act’s (s 28) “accident” cause of action for any other civil liability that might otherwise have applied to the carrier under domestic law.

In a unanimous decision the Court held that this was the case because, in summary, such claims (ie, general law nervous shock claims) were “in respect of” the death of Mr Stephenson and, thus, that civil liability eas excluded by the operation of ss 35(2) of the CACL Act and the Stephensons’ actions should have been dismissed.

The Stephensons’ entitlement to claim under s 28 of the CACL Act was found to be extinguished by s 34 of that Act which imposed a two year time limit on claims, and which expired before their proceedings were commenced. In its construction of the “exclusivity principle” of the Warsaw and related conventions, this appeal to the High Court was dismissed.

It is the construction of sections 35 and 28 which caused the controversy and appeal to the High Court.

Analysis

The decision claws back at what were, previously under prevailing law (South Pacific Air Motive Pty Ltd v Magnus [1998] FCA 1107), considered to be separate or parallel rights or causes of action available to non-passengers (typically members of a family of a person who died from certain charter and air transport accidents), namely the right to claim against the carrier for not only CACL Act/dependency type wrongful death losses but, if evidence supports, to claim in tort for negligent infliction of psychiatric harm.

Paragraph 16 of the judgment by the majority in Parkes provides:

… the liability created by s 28 is relevantly for “damage sustained by reason of the death” of a passenger. It is that liability that s 28 creates which s 35(2) substitutes “for any civil liability of the carrier under any other law in respect of the death of the passenger” (emphasis added). The substitution so effected is clearly intended to be comprehensive.

This all encompassing general view is one which reflects the import of comments by Sackville J, dissenting, in South Pacific, which traversed related issues albeit not in respect of a passenger death.  Sackville J noted that (at 349).

… [h]ad the drafters [of the CACL Act] intended to bring nervous shock claims by non passengers within s 35 of the [CACL] Act, much clearer language … would have been used.

The Parkes majority view of how the entitlement to claims should proceed in respect of a passenger’s death is captured at [33]:

The Stephensons were entitled to claim damages from the respondent pursuant to s 28 of the CACL Act. That entitlement was, by reason of s 35(2), exclusive of their entitlement to claim damages for negligence under the law of tort. So, as Basten JA explained [in the Court of Appeal] there is no reason to seek to read down s 35(2) in order to preserve the rights of the Stephensons to make a claim in respect of Mr Stephenson’s death. In this regard, s 35 did not deny their claims; the Stephensons each had a claim under the CACL Act. Indeed, s 35(2), by dispensing with the need to prove negligence on the part of the respondent, facilitated the prosecution of those claims. An integral aspect of the scheme was, however, that s 34 limited the temporal availability of those claims.

In South Pacific, in which the Full Court held, by majority (Hill J and Sackville J, Beaumont J dissenting), claims by non-passengers for psychological injury were held to not be governed by the CACL Act.

That view is now not to be followed as the High Court has held that the Full Court of the Federal Court’s view “is contrary to the cardinal purpose of the Conventions and misstates the significance of the contract or arrangement between passenger and carrier to questions of liability”: [114].

Exclusivity and what it means for the CACL Act regime – non-evasion of alternative (uncapped damages) wrongful death claims

In our view the construction of both s28 read together with ss 35(2) of the CACL Act in Parkes is far too broad and does not accord with the intention of the drafters of the Pt IV of the CACL Act, nor reflect the context of 35 within Part IV, and that these provisions seek to extend the uniformity of the Warsaw regime specifically to prevent the evasion of Convention monetary limitations by recourse to plaintiffs (specifically) using state/domestic law wrongful death claims avenues.

As described in Tseng, the exclusivity principle sought to prevent:

… artful pleading by plaintiffs seeking to opt out of the Convention’s liability scheme when local law promised recovery in excess of that prescribed by the [Convention]: (Tseng, 525 US at 161, n 3).

That regime accomplished this, in our view, by dually making the linchpin of the ability to claim (by any person) the contract of carriage and circumscribing the kinds of events which caused death/injury itself (ie, introducing the “accident” threshold question with its accompanying geographical and time constraints of embarkation to disembarkation).

One consequence of the latest and authoritative view of the High Court, is that longer limitation periods pursuant to Australian tort law, and uncapped damages (ie uncapped by air carrier liability law) are no longer available to claimants who are non-passengers and who have a duty of care owed to them by air carriers independent of a deceased passenger’s contractual relationship with an air carrier.

In our view the purpose of the Convention was always to create a uniform code for the liability accruing to a carrier which caused a death or injury to a passenger with whom it had contractual relations.  By necessity such claims for deceased passengers need to be exercised by surviving relatives or personal representatives. The Convention regime was not intended to traverse most liability relationships between the carrier and such relatives or personal representatives that are individually owed to them and distinct from (any) passenger’s contractual relationship. This is evidenced by the non-interference by Warsaw with claims of non-passengers or those not onboard in respect of contractual breaches, consumer law, damage by aircraft and so on.

The Convention regime was thus never meant to extend to non-passenger claims, but was rather intended to exclude contemporaneous or alternative actions which could have been more strategically beneficial for the plaintiff/claimant, had the Convention regime/statutory scheme been bypassed (eg, domestic law tort claims brought in an attempt to evade, in particular, the limitations of the Convention caps on damages). These views are similarly expounded in Cousins v Nimvale Pty Ltd [2013] WADC 175 (19 November 2013) by the District Court of WA per Staude DCJ who noted at 32:

In my opinion, pt IV of the Commonwealth Act applies, as far as non-passengers are concerned, only to liability for damage due to death of a passenger. The damage to which s 35(3) refers is damage of the kind that would be claimable for wrongful death pursuant to the Fatal Accidents Act 1959: see McKenna v Avior Pty Ltd. The damage to which s 35(4) refers is that which is recoverable under s 4 of the Law Reform (Miscellaneous Provisions) Act 1941. For the purposes of s 35(2), the liability of the carrier is, therefore, in substitution for liability under those two Acts. (emphasis added)

Likewise, the Court of Appeal in Parkes, in the dissenting judgment of Leeming JA quite reasonably states:

Claims by non-passengers in common law systems can [also] be more remotely connected with the death of a passenger. As Basten JA notes, one example is the right of an employer who has paid out amounts under workers compensation legislation (for examples, s 25 of the Workers Compensation Act 1987 (NSW)). In particular, it is one thing for a non-passenger who is the deceased’s passenger’s next-of-kin to have a claim which turns on the economic loss of the deceased in accordance with the local equivalents of Lord Campbell’s Act: see De Sales v Ingrilli (2003) 212 CLR 338[2002] HCA 52[2003] HCA 16 at [11], [54]-[57] and [91]-[95]. It is another thing for a non-passenger to have a claim for psychiatric injury personally suffered by him or her. Both claims are, in a sense, claims in respect of the death of a passenger, but the relationship between the claim and the death is very different. (emphasis added): South West Helicopters Pty Ltd v Stephenson [2017] NSWCA 312 (7 December 2017), at [282].

In other words, a preferable view in our opinion, is that the drafting in Pt IV of the CACL Act intended to facilitate uniformly a replacement of the derivative Lord Campbell’s Act type “wrongful death claim” – ie, a claim for financial dependents on a deceased passenger derived from the right of the deceased to claim against the entity which caused his or her death. It would appear in Parkes, that the words “sustained damage” (which describes the position of a deceased’s relative with a dependency claim) is seen wholly/analogously as the usage of those words (“sustained damage”) where there has been negligent infliction of psychiatric harm to a third party to the relationship between the entity that causes the death and the deceased. They are different things.

The two may be seen as different insofar that the former claim’s context in the CACL Act is of a “wrongful death” or “Compensation to Relatives” type of claim, as per Leeming JA’s observations in the Court of Appeal at [290], or Staude DCJ’s views in Cousins, whereas this context is far less clear in relation to non-passenger claims for psychiatric injury where death of a passenger is a factual rather than legal element of the non-passenger’s claim: per Leeming JA at [292].

The scope of that which is intended to be explicated in Part IV (s 35) is in our view related to only certain claims and the description and prescription of what such actions might include, when brought by families of deceased passengers. Part IV directly imposes liability where a passenger dies or is injured, it limits that liability, it precludes contracting out, makes special provision for the persons who, in the case of the death of a passenger, can bring proceedings to enforce that liability, and (by s 35(2)) makes that liability exclusive.

The second kind of (more remote and non-derivative harm) is the kind which we argue is not treated at all by the Convention regime and upon which the CACL Act regime does not intend to affect.

The only link between these types of claims is that in both cases there is a third party person making the claim in the event of a death – typically being some relative of the deceased passenger who has “sustained damage” through a direct tortious claim for the kind of harms described and permitted in Jaensch v Coffey (1984) 155 CLR 549; [1984] HCA 52, or Gifford v Strang Patrick Stevedoring (2003) 211 CLR 317; [2003] HCA 33.

A strict liability outcome in future accident claim scenarios?

The impact of the Parkes decision is not entirely “bad” for those who may be affected by or have available to them claims in the circumstances of Parkes, or otherwise. That may seem a strained comment to make given that the decision requires one to reconcile the fact that, if read strictly, Parkes is authority for the view that a family member hearing of the death or seeing the death of their loved in an air crash is no longer able to claim general law compensation for the damage sustained by a breach of duty by an air carrier causing that damage to them.

In fact it seems paradoxical that a stranger on the ground having minor property damage from the same crash, need not even prove negligence to recover their financial losses for property damage under general law and the operation of the Damage by Aircraft Act 1999 (Cth) regime which imposes strict liability obligations upon carriers to compensate. As Leeming JA’s dissent in Court of Appeal queries (at [327]):

If a non-passenger who never had any contractual relationship with a carrier suffers physical damage from an aviation accident, he or she may sue independently of and unaffected by the Warsaw Convention, [or] its successors as implemented in Australian law. Why should a non-passenger who never had any contractual relationship with a carrier who suffers psychiatric injury from an aviation accident be in any different position?

The “unfairness” of this situation is manifest but, as provided by Prof Dempsey:

…the lines drawn by Warsaw were not solely focused on fairness; they were instead focused on uniformity, and strict, albeit circumscribed, liability. Ultimately also, the highest court in a jurisdiction, not the trial court, draws the lines irrespective of perceived “fairness”: Dempsey, Aviation Liability Law, 2nd ed, at [16.171].

As an example of this in practice, Queensland Courts have concluded that if a limitation period of two years under the CACL Act regime has expired a claim under the Act would be extinguished even though that might leave a plaintiff without remedy: Poonkam v Royal Brunei Airlines [2006] QDC 374.

The (single) positive in the situation is perhaps the conclusion that nervous shock damages arising by virtue of a passenger death are permissible under the same provisions of the CACL Act as the “compensation to relatives” type of claim (ie s 28 read together with 35), because of the argument that it is a kind of damage sustained by a non-passenger and arising from the carrier’s “liability in respect of death” as the Parkes majority hold that that term is required to be used.

Thus, a possibility is left open in the judgment: one of whether a claim “in respect of the death” of a passenger (made by a non-passenger, such as for psychiatric harm) may be made all together under s 28, with the “wrongful death” claim whose benefit flows through the deceased passenger to certain people, or arises due to the death itself. The kind of claim anticipated here would amount to, effectively, a strict liability form of nervous shock claim for damages, which is not a kind of damage that the family of a deceased passenger is prevented from claiming under Part IV. To conclude otherwise would suggest that s 35 does limit claims arising upon death of a passenger to only “wrongful death” type actions in Australia and the High Court in Parkes did not go so far as to say that that was the intention in the CACL Act.

The consequences of such a claim would of course be less severe for potential claimants than an outright inability to claim for this kind of damage. In addition there is a positive benefit – negligence would not need to be established.  However, the quid pro quo for that would be significantly curtailed damages under the CACL Act, and less time within which to commence such an action (2 years).

While certainly circumscribing what were previously held to be independent rights for non-passengers to claim for a carriers’ allegedly tortious conduct causing the infliction of psychiatric harm, this decision in our view confirms that negligent infliction of psychiatric harm for non-passenger claims are available (albeit not under domestic tort law) but potentially under existing provisions of the CACL Act in respect of and arising from accidental deaths of passengers and, crucially, without the need to prove negligence against the carrier.

As Professor Dempsey notes, such outcomes do evince a paradox:

… it is paradoxical that a passenger would be denied recovery of emotional damages unless he suffers a personal physical injury [which is the prevailing view under Warsaw/Montreal jurisprudence for passenger psychiatric injury), whereas a spouse or children of the injured party may, in some jurisdictions, recover emotional damages absent his or her own personal physical injury.

However, in our submission, Australia provides one such jurisdiction where the paradox manifests (albeit perhaps only in respect of passenger deaths – see below regarding passenger injuries).

What about damages for a non-passenger psychiatric harm arising from a passenger’s injury?

The situation is not as clear for bodily injuries onboard (which do not result in the death of the passenger or have not yet resulted in the death of the passenger, if brought at such a time) and which are dealt with in s 36 of the CACL Act for Part IV related travel. The reason is that injury per se is not given the same treatment as death in Part IV of the CACL Act (ie, provisions in s 35 which set out in detail that certain others may enforce the claim and describing the kinds of recoverable damages).

However, given the purpose of the scheme is to mirror the uniformity and interpretations sought of the Warsaw regime, and the High Court’s conclusion in Parkes that its result in the Stephensons’ case successfully reflects that uniformity, it would be diametrically opposite to this view if an Australian Court contended that a different situation attached to personal injury claimants in aviation to death claimants, notwithstanding there being evidence of “…damage sustained by reason of the …bodily injury suffered by the passenger”: the s 28, CACL Act trigger for liability to attach to the carrier. The fact of the damage being sustained by a passenger would seem to be the only requirement to attach liability to the carrier to others who sustain damage flowing from that injury.

Conclusions

We have put the view that Parkes should not be read as disentitling families of passengers from making claims that would otherwise have been thought to only have been possible through proof of negligence or some other cause of action, because, as the majority of Kiefel CJ, Bell, Keane and Edelman JJ) held at [33]:

… there is no reason to seek to read down s 35(2) in order to preserve the rights of [passenger family members] to make a claim in respect of [a passenger’s] death. In this regard, s 35 did not deny their claims; [the Stephensons] each had a claim under the CACL Act. Indeed, s 35(2), by dispensing with the need to prove negligence on the part of the respondent, facilitated the prosecution of those claims. An integral aspect of the scheme was, however, that s 34 limited the temporal availability of those claims. [emphasis added]

Thus, while the CACL Act/Convention regime may now be seen to exclude negligent infliction of psychiatric harm-type cases of non-passengers, provable damages arising “in respect of the death of the passenger” may be available without proof of negligence, albeit limited overall to the CACL Act cap on damages, and also constrained to a two year time period. The questions of who are the persons who have the right to bring suit and their respective rights remain left to domestic law and would, for such claims, be limited to “family members” as that term is defined in s 35(5) of the CACL Act (and which is relatively expansive).

Where to now?

The Parkes case makes it even more critical for the international aviation community and Australian domestic policymakers to consider the inclusion of pure psychiatric injury claims (for recognised psychiatric injury) for (surviving but injured) passengers themselves in addition to the scope of non-passengers and claims open to them arising under s 28 . This situation is something we understand to be within the general scope of a review of Australia’s carriers’ liability scheme opened in 2018 by the Australian Department of Infrastructure, Regional Development and Cities within which policy oversight of air carriers’ liability and insurance resides: see https://www.infrastructure.gov.au/aviation/international/liability.aspx

 

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