Aviation. Airport Assets (Restructuring and Disposal) Bill 2008 (Qld) Civil Aviation Legislation Amendment (1999 Montreal

Transcription

1 Aviation Airport Assets (Restructuring and Disposal) Bill 2008 (Qld) In a similar fashion to the Queensland Government s recent sale of Stanwell Corporation s share in a WA wind farm to Transfield, the Queensland Government is now following the same approach to the Cairns and Mackay regional airports, with the introduction of the Airport Assets (Restructuring and Disposal) Bill 2008 (Qld) ( the Bill ) on 26 August Following an announcement earlier this year of the Queensland Government s proposal to divest its interests in the Cairns, Mackay and Brisbane Airports, it introduced the Bill into Parliament. The Bill provides the framework necessary for the government to apply funds from the sale of its airport interests towards new health infrastructure in north Queensland; a new hospital for Mackay, and redevelopment works to the Cairns and Mount Isa Hospitals. The Bill allows for the land of both airports to be owned by government owned corporations which will retain ownership of the land as lessor, and the airport lessee/operator will take a 99 year lease over the airport. Accordingly, the airport leases for In Brief This is a big edition of CN s Aviation newsletter with developments across a range of areas from airport divestments, new civil and administrative case law as well as the impending implementation of legislation ratifying the Montreal Convention into Australian law. By Paul Hopkins, Senior Partner What's inside Mackay and Cairns airports will be sold. It is proposed that the government s divestment process be fully implemented by the end of The Bill seeks to provide a balance between ensuring certain levels of flexibility in the new leaseholder s interests in the use of airport land to that of the State s retention of appropriate powers concerning safety, development and infrastructure. A new proposed planning regime for the airport land will seek to promote consistency in the application of the Integrated Planning Act 1997 (Qld), base planning documentation and the land use plans within the Transport Infrastructure Act 1994 (Qld). Land use plans applying to the Cairns and Mackay airports are set to continue to be exempt from local planning schemes, however infrastructure charges for proposed developments will apply for the respective local governments. The Cairns and Mackay local governments will have increased involvement in the review of land use plans with submissions to be made for mandatory State approval. Airport Assets (Restructuring and Disposal) Bill 2008 (Qld) Civil Aviation Amendment (1999 Montreal Convention and Other Measures) Bill 2008 (Cth) Liability under the Damage by Aircraft Act 1999 (Cth) Cautious CASA vindicated by the Administrative Appeals Tribunal September 2008 Civil Aviation Legislation Amendment (1999 Montreal Convention and Other Measures) Bill 2008 (Cth) The Australian Government has announced that by the end of 2008, international air carriers liability in Australia to passengers and cargo owners will be governed by the 1999 Convention for the Unification of Certain Rules for International Carriage by Air ( the Montreal Convention ) 1. This implementation will bring Australia into line with its key aviation partners. The Montreal Convention was a product of the International Conference on Air Law of The stated aim was: to provide the world with a revised (Warsaw) Convention which will respond to the needs of States, the travelling public, air carriers, and the air transport industry in the third millennium. The key provisions of the legislation affecting the liability of air carriers are: Commercial Dispute Resolution Corporate & Commercial Construction & Engineering Insurance 1

2 a two-tiered system of liability; a fifth jurisdiction in which a carrier may be sued; an increase to carriers maximum liability for delay and loss or damage to baggage and cargo; a broadening of the definition of family member ; and an obligation to make advance payments. The Montreal Convention applies wherever a passenger s ticket allows for an international flight between State Parties (irrespective of whether that ticket also includes domestic flights or flights to or from States which are not parties to the Montreal Convention). The two-tiered system of liability Under the new legislation, international carriers will remain liable for the death or bodily injury of a passenger whilst on board an aircraft or in the course of any of the operations of embarking or disembarking (though this concept is not defined). It is also open to debate whether bodily injury, like personal injury 2, includes mental injury. The key amendment to this area is that the carriers burden requirements will vary according to the quantum of damage caused. Under the first tier, liability attaches strictly where the damage caused is less than 100,000 Special Drawing Rights (SDRs) for each passenger (approximately A$180,000). This liability can be reduced or excluded only in the case of proven contributory negligence of the person claiming compensation. The second tier concerns damage above the 100,000 SDRs threshold. Under this limb, the carriers liability is unlimited and fault is presumed, however, this liability may be wholly or partly exonerated where the carrier can disprove negligence or where the damage is shown to be a result of a third party s negligence. These limits will be subject to fiveyearly reviews to account for inflation and no punitive, exemplary or other non-compensatory damages arising from international carriage by air will be recoverable. Air carriers will be required to maintain, (and may be called upon to furnish evidence of), 2 adequate insurance to cover their liability. The liability limit of purely domestic carriers will be unaffected for passenger death or personal injury, remaining at 260,000 SDRs per passenger as prescribed by Part IV of the Civil Aviation (Carriers Liability) Act 1959 (Cth). The fifth jurisdiction Proclamation of the legislation will also enable a passenger to bring an action in the country of their permanent residence at the time of the accident provided the carrier operates and has a premises in that country. This will have the effect of making it easier for passengers of carriers from State Parties, whether Australian or otherwise, to litigate in their home jurisdiction. Liability for baggage, cargo and delay International carriers liability for lost or damaged baggage will be capped at 1,000 SDRs per passenger unless the damage is shown to have been caused by intentional or reckless conduct. The liability limit for cargo under the Montreal Convention is 17 SDRs per kilogram irrespective of the cause. In respect of delay of passengers, baggage or cargo, the carriers liability is limited to 4,150 SDRs per passenger although this liability may be avoided where it can be shown that all reasonable measures to avoid the damage were taken. The definition of Family Members In addition to increasing the liability of international carriers, the legislation has expanded the categories of family members who can enforce liability. The term now encompasses stepsiblings and wards, and any wholly or partly financially dependent foster sibling, foster child or guardian of the passenger. Advance payments Finally, subject to their national legislation, carriers may be required to make advance payments to victims or their relatives without delay following aircraft accidents. These payments are not regarded as admissions of liability and may be offset against any future payment by the carrier. Future reform The next proposed major reform to international aviation liability concerns the liability of carriers for damage caused by aircraft and appears set to emulate the two-tier system utilised in the Montreal Convention. At this stage, the texts of the proposed treaties have been approved but are yet to be finalised by the International Civil Aviation Organisation (ICAO). As such, they are unlikely to be adopted within Australia in the short term. 1 2 As contained within the Civil Aviation Legislation Amendment (1999 Montreal Convention and Other Measures) Act 2008 (Cth). South Pacific Air Motive Pty Ltd & Anor v Magnus & Ors (1998) 157 ALR 443. Liability under the Damage by Aircraft Act 1999 (Cth) and Beau Mollinger, Solicitor Liability of aircraft owners and operators is often considered in the context of passengers and cargo, which is governed by the Civil Aviation (Carriers Liability) Act 1959 (Cth) (CAA). The CAA caps damages payable for death or injury to person, or damage to cargo or luggage. However, the CAA does not govern liability to persons or property that are injured or damaged as a result of an incident with an aircraft, other than by way of carriage. This is governed by the Damage by Aircraft Act 1999 (Cth) (DAA), and the recent New South Wales Court of Appeal case of Aircair Moree Pty Ltd & Ors v Cook [2008] NSWCA 161 ( Moree v Cook ) considered the interaction of the DAA with the state civil liability legislation. The case has shed light on civil liabilities in aviation and the seemingly inequitable exposure to liability that arises between co-defendants examined in part under the common law or state civil liability legislation, and in part under the federal statutory liability regime of the DAA.

3 While the state system allows defendants to have recourse to basic common law principles of contribution, voluntary assumption of risk and contributory negligence, this case serves as a warning to operators that the same is not the case for federally regulated aviation liability under the DAA. Background General civil liability for damage to property and person is governed by state legislation, which in NSW is the Civil Liability Act 2002 (NSW) ( the CLA ). At the outset it must be recognised that the CLA embodies, in essence, a statutory codification of the common law tort of negligence. Tortfeasor status is effectively imposed on a party shown to be in breach of the CLA, and the CLA (as interpreted by the common law) allows a tortfeasor to claim contribution, contributory negligence and voluntary assumption of risk (to the extent it is not expressly excluded) to reduce exposure to liability, and ultimately any damages payable to a plaintiff. The current DAA 1 operates in relation to liability of aircraft operators to persons or property on the ground. The case of Moree v Cook is a complex web of vicarious liability, common law tort and statutory liability. The facts While conducting an aerial spray of a cotton field, an aircraft collided with a power line passing over the cotton field, dislodging the wire cable from one of the supporting poles. The aircraft was owned by ACQ Pty Ltd (ACQ) and operated by Aircair Moree Pty Ltd (Aircair). The plaintiff, Mr Cook, was employed as a linesman and was sent by his employer, Northpower (formerly Country Energy) to assess and mend the dislodged wire cable. The cable conducted an electric current of 22,000 volts, remaining live even after the strike. The plaintiff attended the site in the company of a colleague. Soon after arrival the pair traversed the cotton field at the site of the strike in opposite directions; the plaintiff went to inspect the fallen wire cable and his colleague to shut off the electric current to the live cable some distance away. The cable had landed in a field that was particularly muddy, and difficult to walk through because of the patterned planting of cotton bushes. As the plaintiff had no recollection of the incident, the court accepted third party accounts that the cable would not have been clearly visible to the plaintiff, who would also have been distracted by boots heavily caked with mud and avoiding collision with cotton bushes. As the plaintiff approached the cable through these obstacles he suffered serious injuries due to an electric shock, occasioned by an unusual phenomenon where the electric current jumps through a charged field in the adjacent airspace. This was attributed to the electricity passing through a charged ionised field, which meant the plaintiff did not need to be in physical contact with the cable but merely penetrate the invisible ionised field surrounding the cable. The shock took place well before the plaintiff s colleague had an opportunity to shut off the electric current. Claims The plaintiff launched actions against NorthPower (within the auspices of the Workers Compensation Act 1987 (NSW)) and Aircair (for vicarious liability for the pilot s alleged negligence). The claim against Aircair was governed by the CLA, which requires the plaintiff to demonstrate a duty of care, and a wilful or negligent breach that will sound in damages. The basis for the plaintiff s action against ACQ and Aircair, jointly and severally, was section 10 of the DAA which states that the operator of the aircraft and the owner of the aircraft immediately before an impact are liable for personal injury, loss of life, material loss, damage or destruction caused by an impact with all or part of an aircraft while in flight. Section 11 of the DAA stipulates that where liability is established under section 10, damages are recoverable without proof of intention, negligence or other cause of action, as if the injury, loss, damage or destruction had been caused by the wilful act, negligence or default of the defendant or defendants. The DAA thus provides for a regime of strict liability in relation to damage to persons or property on the ground. The source of damages and the test for liability is therefore substantially different to that under the CLA, and a defendant s liability would be categorised differently; the DAA liability is statutory and the CLA liability is tortious in nature. It was this characterisation itself that was the subject of dispute, as well as the different consequence for each in assessing damages under section 11. The District Court decision The trial Judge found the Aircar pilot had negligently breached his duty of care to the plaintiff and as a consequence determined that Aircair was vicariously liable for its pilot. His Honour also found Northpower had breached its duty of care to the plaintiff. However, both Aircair and Northpower also succeeded in achieving a 40% reduction for contributory negligence, and 50% apportionment between each other for liability. His Honour found ACQ and Aircair liable under the statutory liability of sections 10 and 11 of the DAA, for reasons which became the subject of an appeal, and are discussed in detail below. It was also determined that the construction of section 11 of the DAA modified the common law in respect of recovery of damages, and directed the court to the process that would have been used had negligence been established accordingly the trial Judge applied the NSW CLA to the assessment of damages, and the amount recoverable by the plaintiff was therefore calculated in accordance with such statutory principles. It was liability, however, and not this use of the NSW CLA in determination of quantum, that was the subject of appeal. The Court of Appeal decision At trial, Northpower was found negligent due to its failure to isolate the cable remotely prior to the plaintiff s arrival, and due to its provision of inadequate training to the plaintiff concerning maintenance clearances. On appeal however, the court took a more refined view 3

4 holding that while a failure to isolate the cable might have breached a general duty of care (such as to a category of persons who may have been at risk of the live cable at the material time), that it had not breached its duty of care to the plaintiff. The Court of Appeal held that the plaintiff was properly trained and experienced, and accordingly, was able to assess himself how to respond to the incident. For this reason, Northpower had not breached its duty of care to the plaintiff. On the second issue, despite the trial judge describing Northpower s training of the plaintiff as motley and ambiguous, the Court of Appeal held that he was clearly aware of the key issues here being the potential danger of the cable and the immediate priority to ensure his own safety in approaching the scene. Northpower was accordingly not considered liable at all, and questions of common law concepts that would apportion liability were not applicable to the employer. Aircair was successful in arguing that its pilot did not owe a duty of care to the plaintiff. In a similar fashion to that of Northpower above, the Court of Appeal held that while Aircair s pilot held a duty of care for reasonably foreseeable injuries to those people on the ground that could have been injured by a fallen cable, that such a duty did not extend to the hypothetical powerline worker who would later attend to undertake repairs. Aircair s pilot could reasonably assume that such a worker was experienced and so the imposition of a duty of care, the Court of Appeal held, did not extend to the plaintiff. As Aircair was not therefore held vicariously liable, there was no breach of duty of care and Aircair would not be found liable under the CLA. The DAA ACQ and Aircair, as owner and operator of the aircraft respectively, also had to contend with statutory liability under the DAA. Three main technical arguments were advanced in an effort to avoid the application of section 10 of the DAA. The first argument was that section 10 was only meant to apply where 4 an aircraft or part of an aircraft falls and strikes a person or property where the plaintiff had no opportunity to avoid injury 2. The Court of Appeal rejected this reasoning because it appeared too limited, and contrary to the historical development of the legislation (arising from the 1952 Rome Convention on Damage caused by Foreign Aircraft to Third Parties on the Surface), which was considered to be aimed at expanding the preexisting state legislation and the former federal DAA (of 1958) to facilitate or improve the applicable compensation regime. The second argument suggested that the DAA only applied to injuries sustained whilst the aircraft was in flight. The Court of Appeal also rejected this proposition without more than merely stating that the construction of the DAA did not allow for such narrow reading. The final argument was that the injuries were not caused by impact. This argument was linked to the submission that because the DAA did not expressly provide for contributory negligence, liability would be escaped by reason of any cause of injury being attributable to the plaintiff, rather than the impact. The Court of Appeal rejected this because: the Parliament was entitled to adopt a policy that ACQ and Aircair bear the consequence of mishaps arising from operations in the aviation industry; previous versions of the DAA made express provision for contributory negligence as a defence, whilst the present DAA makes no such reference 3 ; the idea of cause was not directly linked to proximity; and, there had been no demonstration of any intervening cause that could break the chain of causation from the impact. The court observed that: while inadvertence on the part of [the plaintiff] was clearly a contributory factor to his injuries, his inadvertence was not such as to make him the sole author of his own misfortune. Because the court considered that the DAA did not allow consideration of contributory negligence, the role of the plaintiff s inadvertence was not able to be used in determining the cause of the injuries. The court noted that the nature of the liability under the DAA was strict liability, it was not a statutory duty. The construction of section 10 merely gave rise to a cause of action by application of statute and the liability that followed was automatic and not subject to the tests attributable to alleged breaches of duty. Simply, the court held: [the] DAA does not impose a statutory duty on anyone to act in any particular way. Accordingly, there was no need to consider the incident in terms of duty, breach of duty and causation arising from section 10 liability: Those situations where a defendant owes a duty of care to the plaintiff, and that duty has been breached, are a subclass of the circumstances in which a defendant s action or failure to act has caused a loss to a plaintiff. It is only in relation to that subclass that legal liability can exist in negligence. The present case falls outside that subclass. What the DAA liability meant for ACQ and Aircair As ACQ and Aircair s liability did not arise under the CLA, neither party was able to rely on the CLA provisions of contribution and contributory negligence discussed above. The DAA did not expressly provide for either contribution or contributory negligence. In fact, the court observed that previous versions of the DAA, prior to amendment in the 1999 version, contained provisions for contributory negligence. The court considered this to be an express intention of the Parliament to exclude any contributory negligence on the part of a plaintiff from consideration by a court. However, more importantly, the court noted that because the DAA liability did not involve any sense of a duty of care or breach of duty of care, there was in principle, no tortfeasor. At common law, contribution and contributory negligence are only applicable when considering a tortfeasor s liability. This is not applicable in the context

5 of mere strict statutory liability, which this case demonstrated was, in the absence of express statutory provisions to the contrary illimitable. The court swiftly dispensed with the concept of contributory negligence by finding that where: Aircair owes no duty of care to [the plaintiff], and hence that no tort of negligence was committed by it, voluntary assumption of risk could enter into the picture only if it were a defence to [the] DAA. This would mean that the test the court applied to the facts was a more restrictive test. The court observed that: there is a fundamental difference between the way one goes about establishing whether a duty of care exists, and the way one goes about deciding whether a loss is a consequence of an action of the defendant. A court analyses a defendant s conduct at the time of its actions when considering whether a duty of care is in breach. However, for statutory liability arising on the happening of an event, the court is able to assess liability with the benefit of hindsight and investigations into the cause of the relevant damage. The result is that on an evidential level, it is more difficult for a defendant to avoid application of the DAA. DAA exclusion of defences for ACQ and Aircair Liability under the DAA would have another adverse impact for ACQ and Aircair; it would exclude contribution and contributory negligence when apportioning liability to pay damages. As discussed above, contributory negligence was not open for consideration as such the whole amount of assessable damages would fall due. Further, even though liability on appeal for Northpower was not established, the court concluded that contribution between defendants was also not applicable. ACQ and Aircair ran arguments that use of the term as if in section 11 4 was sufficient to import defences that arise under the CLA (which was applicable for the calculation of damages). However, the court rejected this argument, instead seemingly characterising the words as if as informing the degree of proof required to establish liability under section 10, rather than establishing the nature of the liability which the court considered improper to attribute to any one category listed in section 11. Conclusion what this decision means The court thus rejected the characterisation of the aircraft owner (ACQ) and operator (Aircair) as tortfeasors outright. Unable to claim contribution or contributory negligence, liability was attributed in full. Broadly, this means that one must be very careful to: characterise a statutory provision for damages as either a statutory duty giving rise to an entitlement of damages in consequence of breach or a strict liability; and subsequently Assess whether contribution or contributory negligence is open to defendants liable under aviation liability legislation. This means that in terms of commercial and contractual arrangements, when aircraft owners hire out plant and equipment to aircraft operators, attention should be given to adequate indemnities addressing sections 10 and 11 of the DAA. In terms of aviation litigation, it also means that when claims are brought under sections 10 and 11 of the DAA, unless the defendant is able to overcome application of the DAA, one ought to consider the inability to obtain contribution and contributory negligence when considering any settlement prospects. It would seem somewhat unusual to import a regime for assessment of damages from a state-based tortfeasor regime, without permitting the importation of liability assessment and defences under that regime. It may be insufficient to merely act reasonably. Avoidance of any incident that causes injury or damage under the DAA might be the only means of escaping liability under the DAA which is of course the constant concern of aircraft owners and operators in any event. The decision now stands as a peculiar warning to aircraft operators and owners that a high and near inescapable standard of liability has been imposed by the Commonwealth under the DAA. With this suggested, and as discussed elsewhere in this edition, the 1952 Rome Convention on Damage caused by Foreign Aircraft to Third Parties on the Surface is set to come under review by the ICAO shortly and will hopefully lead to changes in this area Superseding the Civil Aviation (Damage by Aircraft) Act) 1959 (Cth). One might consider this to be a creative attempt at implying voluntary assumption into the very drafting of the legislation. Read as having been intentionally omitted by Parliament. Damages are recoverable in respect of the injury, loss, damage or destruction without proof of intention, negligence or other cause of action, as if the injury, loss, damage or destruction had been caused by the wilful act, negligence or default of the defendant or defendants (our emphasis). Cautious CASA Vindicated by the Administrative Appeals Tribunal and Beau Mollinger, Solicitor Introduction As a regulatory body, the Civil Aviation Safety Authority (CASA) has key statutory functions, with the overriding obligation to ensure the safety of air navigation in Australia. An important aspect of this role is the proper supervision and provision of medical certificates for pilots that demonstrate any medical condition that may impact on their ability to fly, whether wholly or partially. The Administrative Appeals Tribunal recently handed down a decision in White and Civil Aviation Safety Authority [2008] AATA 543 that demonstrates the need for CASA to 5

6 Authors Paul Hopkins Senior Partner T: phopkins@carternewell.com Glenn Biggs Senior Associate T: gbiggs@carternewell.com To tell us what you think of this newsletter, or Queensland to have your contact details in the updated Australasian or removed from the mailing Law list, please contact the editor at privacy@carternewell.com If you would like to receive our newsletter electronically please go to and enter your details in CN Newsletter signup. The material contained in this publication is in the nature of general comment only, and neither purports nor is intended, to be advice on any particular matter. No reader should act on the basis of any matter contained in this publication without considering and, if necessary, taking appropriate professional advice upon his or her own particular circumstances. Carter Newell Beau Mollinger Solicitor T: bmollinger@carternewell.com Carter Newell Lawyers Brisbane Law Firm of the Year 2008 Carter Newell is proud to announce that it has won the Mettle ALB Australasian Law Award for Brisbane Law firm of the Year The awards, which involve peer, client and industry leader nominations, recognise outstanding client service as well as the ability to combine rigorous analysis with astute judgement and advice. Carter Newell would like to thank those who voted for our firm and believe our consistency and stability have been central to our focussed growth strategy to provide specialised services within our key practice areas. The firm enjoys all the benefits of being a Brisbane firm and is proud to represent both Brisbane and Awards. be meticulous in its approach to this function, having regard to the overarching obligation of the body to ensure air navigation safety. The facts The applicant, Mr White, was examined by a Designated Aviation Medical Examiner (DAME) for the purpose of an application to CASA for a class 2 medical certificate. Having been issued a student pilot licence in September 2006, the applicant began flight training. Some five months later, in February 2007, the applicant s application for a class 2 medical certificate was refused on the basis of the DAME examination and further specialist medical evidence. The applicant had been a heavy marijuana user, which had resulted in causing or exacerbating a medical condition that had indicators of epilepsy, but could not be definitively diagnosed. The evidence indicated that the applicant s seizures (of which there were only two) were only triggered by marijuana use; having been seizure free during a lengthy period of abstinence. In November 2007 the applicant s risk of seizure was assessed at five - ten in the following five years. However, medical opinion was also given that, While an unprovoked episode could create the risk of recurrence, there was no risk if the applicant avoided the operative provocation, marijuana use. 1 The decision The Civil Aviation Safety Regulations 1998 (Cth) allow CASA to issue a medical certificate subject to any condition that is necessary in the interests of the safety of air navigation, having regard to the medical condition of the person. Regulation prevents CASA from issuing a medical certificate unless the applicant meets the relevant medical standard, or unless the extent to which such For further information contact Carter Newell: standard is not met is not likely to endanger the safety of air navigation. The Tribunal was guided by relevant case law that the term likely in this context was a reference to a substantial or real and not remote risk of a particular event occurring. The Tribunal s key concern was relative to this second issue of likelihood of endangering air navigation. It accepted that although the cause of the seizures was unknown, and the likelihood was assessed as low by medical opinion, even where the risk was a small one, the issues of air safety were potent enough that the small risk may be sufficient to trigger the need to take appropriate action to address the risk. This upheld the paramount obligation imposed on CASA to ensure safety of air navigation; the likelihood and frequency of an event occurring was not relevant in the context of the potential impact of any materialisation of a real risk, however small. The Tribunal noted that a further seizure, however unlikely, would lead to a degree of incapacity totally destructive of the applicant s ability to control an aircraft in flight. In citing Re Mulholland and Civil Aviation Safety Authority 2, the Tribunal therefore found that, despite the medical opinion (or rather perhaps because of it) this risk was real, and not fanciful or not imaginable. CASA s decision to refuse the class 2 medical certificate was therefore upheld. Conclusion This case is persuasive in demonstrating that CASA has an overriding obligation to look beyond the likelihood of a risk materialising and to have an unashamedly cautious approach to any medical condition that could result in catastrophic accidents, however slim the odds. 1 2 [2008] AATA 543 at [58]. [2007] AATA Brisbane Office Level 13 / 215 Adelaide Street Brisbane Qld Australia 4000 GPO Box 2232 Brisbane Qld Australia 4001 T: F: E: cn@carternewell.com A Member of TAGLaw TM A Worldwide Network of A Member Quality Law of TAGLaw Firms T A Worldwide Network of Quality Law Firm