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South West Helicopters Pty Ltd v Stephenson[2017] NSWCA 312 – The right of non-passengers to bring a nervous shock claim against a carrier is off to the High Court for determination

In December 2017, the NSW Court of Appeal held that non-passenger claims for nervous shock arising from the death of a passenger, cannot be maintained against a carrier due to the exclusive liability provided under the Civil Aviation (Carrier’s Liability) Act 1959 (Cth) (the “CACL Act“). However the High Court has granted leave to hear the parties appeal and this contentious issue will likely be finally settled later this year.

Background

In February 2006, two Parkes Shire Council employees, Ian Stephenson and Malcom Buerckner, were killed in a helicopter crash during an aerial noxious weed survey. Parkes Shire Council engaged South West Helicopters Pty Ltd (“South West“) to provide the helicopter and pilot for the survey. The accident led to a number of claims and cross-claims in the Supreme Court. The issues relevant to air carriers concerned the Stephenson’s family dependency claim, and separately the claims made by the Stephenson family members for damages for nervous shock, and the definition of ‘passenger’.

Substituted liability under the CACL Act

S35(2) of the CACL Act provides that liability under the Act is in substitution for any civil liability of a carrier under any other law ‘in respect of’ the death of a passenger, or in respect of the injury that has resulted in the death of the passenger. That is to say, where a civil liability claim satisfies the elements of this provision, the CACL Act provides the exclusive civil liability regime against an air carrier for that liability.

The Court of Appeal held that non-passenger claims for nervous shock against air carriers arising from a passenger death are claims ‘in respect of’ the passenger’s deaths and therefore fall within the exclusive provision of s35(2) of the CACL Act. The consequence of this is that a non-passenger claim in negligence arising from the death of a passenger is excluded by the operation of s35(2) of the CACL Act.

The Court departed significantly from the Full Court of the Federal Court 1998 decision in South Pacific Air Motive v Magnus (1998) 87 FCR 301 where it was held that non-passenger nervous shock claims could  be brought in negligence outside of the CACL Act.

This decision in South West is significant as it means non-passengers are precluded from claiming damages for nervous shock against air carriers in respect of the death of a passenger, and the carrier’s liability is limited only to dependency claims by a passenger representative under s35 of the CACL Act.

The definition of ‘passenger’

The Court also considered the definition of ‘passenger’ under the CACL Act and held that ‘passengers’ are persons other than those involved in the operation of the flight. The Court applied Endeavour Energy v Precision Helicopters Pty Ltd [2015] NSWCA 169 stating that a person on board an aircraft who can give direction as to where the aircraft is to fly, but has no control over its operation, is a ‘passenger’ for the purposes of the CACL Act.

The Court’s clarification of ‘passenger’ provides more certainty to carriers as carriers are entitled to limit their liability to passengers under the CACL Act to A$725,000.00 for Australian domestic carriage.

Appeal to the High Court

As the High Court has granted leave to Appeal, the High Court will have the final say on the right of a non-passenger to be able to bring a claim for nervous shock outside of the CACL Act.

We will keep you updated on the progress and outcome of the Appeal.

This article was written by Matthew Brooks, Partner and Jonathan Yee, Graduate-at-Law.

Matthew Brooks

P: +61 2 9334 8740

E: mbrooks@hwle.com.au

Important Disclaimer: The material contained in this publication is of a general nature only and is based on the law as of the date of publication. It is not, nor is intended to be legal advice. If you wish to take any action based on the content of this publication we recommend that you seek professional advice.