Australia: Who Is A "Passenger"?

Last Updated: 22 April 2016
Article by Maurice Thompson and Joel Cockerell

The New South Wales Court of Appeal (NSWCA) recently considered whether the Civil Aviation (Carriers' Liability) Act 1967 (NSW) (the CACLA) applied to a person injured on a helicopter, other than the pilot, while conducting an aerial inspection of power lines.1

The main issue for consideration related to the correct interpretation of the term "passenger" in Section 4 of the CACLA. The decision is noteworthy as it provides clear guidance on the application of the strict liability regime imposed by the CACLA.

Background

On 4 April 2006, a helicopter's tail rotor came into contact with a wire strung across a gully by Telstra Corporation Ltd (Telstra). The pilot, David Carter (Mr Carter), was able to land the helicopter. However, because of damage to the rotor, the helicopter tipped over (the Event).

The helicopter was owned and operated by Precision Helicopters Pty Ltd (Precision). In addition to Mr Carter, two power line observers employed by Endeavour Energy (Endeavour) were on board the helicopter at the time. Endeavour had engaged the services of Precision to conduct an aerial inspection of power lines.

One of Endeavour's power line observers, Simeon Edwards (Mr Edwards), suffered "catastrophic head injuries" as a result of the Event.

Resulting claims

The Event gave rise to a number of complex interlinked claims. These claims were made by Mr Edwards and his family against Endeavour, Precision and Telstra.

Those claims were not, however, the issue dealt with by the NSWCA. Rather, the appeals dealt with proceedings commenced by Endeavour, Precision and Telstra amongst themselves in relation to their respective liabilities. As Sackville AJA commented, this case is an example of the "astonishing complexities that can arise when several parties are alleged to have been at fault in an accident in which another person is injured".

Consideration of issues on appeal

The NSWCA considered a number of issues in relation to the respective liabilities of Telstra, Endeavour and Precision.

Of particular interest to carriers, however, is the ancillary issue considered by the NSWCA in respect of the liability of Precision. That issue was whether Mr Edwards was a "passenger" for the purposes of the CACLA, and therefore whether the CACLA applied to place a monetary cap on Precision's liability.

Was Mr Edwards a passenger for the purposes of the CACLA?

Precision submitted that its liability was governed by the CACLA. This was significant in a high-value claim such as this because if the CACLA applied, it would render Precision strictly liable for the damage suffered by Mr Edwards but also cap Precision's liability at AUD 500,000.

The CACLA relevantly applies to carriage of a "passenger" where the carriage takes place within New South Wales. As the NSWCA found that the operation of the aircraft came within the terms of its Air Operator's Certificate, the main question for the NSWCA was whether Mr Edwards was a passenger within the meaning of the CACLA.

Basten JA, with which the other two judges agreed on this point, noted that the issue of whether Mr Edwards was a passenger was to be determined by considering the "actual activities" carried out by him.

Basten JA also noted that Mr Edward's role was "in part to record the condition of the power line, but primarily to indicate the route and to provide warning of approaching hazards to the pilots".

Despite this, his Honour noted that Mr Edward's role did not extend to "operating the helicopter or directing the pilot in his operation of the helicopter". Combined with the fact that Mr Edwards was not employed by Precision and was serving the interests of his own employer (Endeavour), he could not be said to be part of the crew of the helicopter. It followed that Mr Edwards was a passenger within the meaning of the CACLA.

As the CACLA applied, Precision's liability was therefore limited to AUD 500,000. It followed that Telstra and Endeavour would be responsible for the lion's share of the damages awarded to Mr Edwards.

The negligence issues

The NSWCA also made a number of findings in relation to the respective liabilities of Endeavour, Telstra and Precision. In summary, the NSWCA found that there was a failure by:

  1. Endeavour to inquire of Telstra as to its lines in the area;
  2. Endeavour to require Mr Edwards to wear a helmet;
  3. Precision to require Mr Edwards to wear a helmet; and
  4. Telstra to remove the catenary wire, instead of re-erecting it when a pole collapsed.

Impact of the decision

The decision of the NSWCA makes clear that the term "passenger" in the CACLA is not to be given an unduly narrow interpretation. The term may extend to persons on an aircraft who are carrying out functions in the course of their employment, so long as they are not seen as being part of the crew of the aircraft. This will be of particular interest to operators and their insurers seeking to rely upon the monetary cap on damages forming part of the CACLA strict liability regime, particularly when responding to high-value claims.

Who Is A "Passenger"?

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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