Arndell BHT Arndell v Old Bar Beach Festival Incorporated; Cox v Mid-Coast Council - [2020] NSWSC 1710 - NSWSC 2019 case summary — Zoe

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Arndell BHT Arndell v Old Bar Beach Festival Incorporated; Cox v Mid-Coast Council

[2020] NSWSC 1710

Supreme Court of NSW|2019-03-21|Before: Rothman J

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At a glance

Source facts

Court

Supreme Court of NSW

Decision date

2019-03-21

Before

Rothman J

Catchwords

[2009] HCA 48 Arthur Robinson (Grafton) Pty Ltd v Carter (1968) 122 CLR 649
[1968] HCA 9 Baird v Roberts [1977] 2 NSWLR 389 Bankstown City Council v Zraika (2017) 94 NSWLR 159
[2016] NSWCA 51 Council of the City of Greater Taree v Wells [2010] NSWCA 147 Council of the Shire of Wyong v Shirt (1979-1980) 146 CLR 40
[1980] HCA 12 Crimmins v Stevedoring Industry Finance Committee (1999) 200 CLR 1

Source

Original judgment source is linked above.

Catchwords

[2009] HCA 48 Arthur Robinson (Grafton) Pty Ltd v Carter (1968) 122 CLR 649[1968] HCA 9 Baird v Roberts [1977] 2 NSWLR 389 Bankstown City Council v Zraika (2017) 94 NSWLR 159[2016] NSWCA 51 Council of the City of Greater Taree v Wells [2010] NSWCA 147 Council of the Shire of Wyong v Shirt (1979-1980) 146 CLR 40[1980] HCA 12 Crimmins v Stevedoring Industry Finance Committee (1999) 200 CLR 1[1999] HCA 59 Donoghue v Stevenson [1932] AC 562 Goode v Angland (2017) 96 NSWLR 503[2017] NSWCA 31 Graham v Baker (1961) 106 CLR 340[1961] HCA 48 Home Office v Dorset Yacht Co Ltd [1970] AC 1004 Husher v Husher (1999) 197 CLR 138[1999] HCA 47 Kirby v Sanderson Motors Pty Ltd (2002) 54 NSWLR 135[2002] NSWCA 44 Livingstone v Rawyards Coal Co (1880) 5 App Cas 25 Malec v JC Hutton Pty Ltd (1990) 169 CLR 638[1990] HCA 20 Mead v Kerney [2012] NSWCA 215 Modbury Triangle Shopping Centre Pty Ltd v Anzil (2000) 205 CLR 254[2000] HCA 61 New South Wales v Fahy (2007) 232 CLR 486[2007] HCA 20 Podrebersek v Australian Iron and Steel Pty Ltd (1985) 59 ALJR 492[1985] HCA 34 Purkess v Crittenden (1965) 114 CLR 164

Judgment (23 paragraphs)

[1]

of the City of Greater Taree v Wells [2010] NSWCA 147 Council of the Shire of Wyong v Shirt (1979-1980) 146 CLR 40; [1980] HCA 12 Crimmins v Stevedoring Industry Finance Committee (1999) 200 CLR 1; [1999] HCA 59 Donoghue v Stevenson [1932] AC 562 Goode v Angland (2017) 96 NSWLR 503; [2017] NSWCA 31 Graham v Baker (1961) 106 CLR 340; [1961] HCA 48 Home Office v Dorset Yacht Co Ltd [1970] AC 1004 Husher v Husher (1999) 197 CLR 138; [1999] HCA 47 Kirby v Sanderson Motors Pty Ltd (2002) 54 NSWLR 135; [2002] NSWCA 44 Livingstone v Rawyards Coal Co (1880) 5 App Cas 25 Malec v JC Hutton Pty Ltd (1990) 169 CLR 638; [1990] HCA 20 Mead v Kerney [2012] NSWCA 215 Modbury Triangle Shopping Centre Pty Ltd v Anzil (2000) 205 CLR 254; [2000] HCA 61 New South Wales v Fahy (2007) 232 CLR 486; [2007] HCA 20 Podrebersek v Australian Iron and Steel Pty Ltd (1985) 59 ALJR 492; [1985] HCA 34 Purkess v Crittenden (1965) 114 CLR 164; [1965] HCA 34 Rylands v Fletcher (1868) LR 3 HL 330 Seltsam Pty Ltd v Ghaleb [2005] NSWCA 208 Shaw v Shaw (1954) 2 QB 429 South Western Sydney Local Health District v Sorbello [2017] NSWCA 201 State of New South Wales v Moss (2000) 54 NSWLR 536; [2000] NSWCA 133 Vairy v Wyong Shire Council (2005) 223 CLR 422; [2005] HCA 62 Van Velzen v Wagenerhan (1975) 10 SASR 549 Wallace v Kam [2012] NSWCA 82 Watts v Rake (1960) 108 CLR 158; [1960] HCA 58 Wyong Shire Council v Shirt (1979-1980) 146 CLR 40; [1980] HCA 12 Texts Cited: Civil Aviation Advisory Publication 92-1(1) Category: Principal judgment Parties: 2015/199567 Amber Christine Arndell by her tutor Kathy-Lee Arndell (Plaintiff) Old Bar Beach Festival Incorporated (First Defendant) Mid-Coast Council (Second Defendant) Paul Clarendon Cox (Third Defendant/Cross-Defendant) Mid-Coast Council (Cross-Claimant)

[2]

2014/286417 Paul Clarendon Cox (Plaintiff) Mid-Coast Council (First Defendant/Third Cross-Defendant) Old Bar Beach Festival Incorporated (Fourth Defendant/Cross-Claimant) Arthur Armour (First Cross-Defendant) Old Bar Heritage Airport Management Committee (Second Cross-Defendant) Representation: Counsel: 2015/199567 R McIllwaine SC/J Davidson (Plaintiff) R Sheldon SC/A Barnett (Second Defendant) D Mockler (Solicitor) (Third Defendant/Cross-Defendant)

[3]

2014/286417 R Royle/J Harrison (Plaintiff) R Sheldon SC/A Barnett (First Defendant/Third Cross-Defendant)

[4]

Solicitors: 2015/199567 Stacks Law Firm (Plaintiff) Hicksons Lawyers (First Defendant) Mills Oakley (Second Defendant) Stewart Cuddy & Mockler (Third Defendant/Cross-Defendant)

[5]

2014/286417 Stewart Cuddy & Mockler (Plaintiff) Mills Oakley (First Defendant/Third Cross-Defendant) Hicksons Lawyers (Fourth Defendant/Cross-Claimant) Mid-Coast Council (Third Cross-Defendant) File Number(s): 2015/199567; 2014/286417

[6]

Judgment

HIS HONOUR: Before the Court for judgment are two proceedings claiming damages in negligence. Amber Christine Arndell (hereinafter "the plaintiff") sues, through her tutor Kathy-Lee Arndell, the plaintiff's mother, both Mid-Coast Council (hereinafter "the Council", formerly known as Greater Taree City Council) and Paul Clarendon Cox (hereinafter "the Pilot"). The other proceedings are proceedings in which the Pilot sues the Council, also in negligence.
On 1 October 2011, the Pilot was flying a light aircraft which collided with a Ferris wheel, located at the annual Old Bar Festival at Old Bar, NSW (hereinafter "the Festival"). The plaintiff was seated, with her younger brother, in a gondola on the Ferris wheel. The claims in negligence arise out of injuries said to have been sustained as a consequence of that collision.
The Old Bar Airstrip (hereinafter "the Airstrip"), at Old Bar, is operated by the Council through a committee known as the Old Bar Heritage Airport Management Committee (hereinafter "the Airstrip Committee") for which the Council is responsible. In April 2011, the Festival organisers applied to the Council to use the Council Park and Reserve for the Festival to be held on 1 and 2 October 2011. The Festival organisers applied to the Council to use the land adjacent to the airstrip, which included sporting fields, parks, gardens and the like.
Further, the operator of the Ferris wheel made an application to Council to operate the Ferris wheel at the Festival. [1] While the Council has admitted that the application to operate the Ferris wheel was to have been accompanied by a site plan indicating the precise location of the Ferris wheel, that site plan has not been produced.
Further again, a Council Officer, Mr Joshua Smith, inspected the Ferris wheel after it had been erected and before the Festival commenced. [2] Mr Smith did not require the Ferris wheel to be moved, if he were to have had the power so to do. The President of the Airstrip Committee, Mr Neville French, observed the Ferris wheel in its location prior to the collision. [3]
There are a number of issues in the proceedings, some of them less significant than others. The most significant issues seem to be the relative, if any, negligence of the Council and the Pilot. That relative culpability affects the damages, if any, to be awarded to the plaintiff. The relative negligence, if any, of the Council and of the Pilot, obviously, affects the damage, if any, to be awarded in the proceedings commenced by the Pilot alleging the negligence of the Council.

[7]

Evidence on Liability: General

The actual incident, being the collision between the aeroplane and the Ferris wheel, is relatively uncontroversial in terms of the evidence and easily recounted. The controversy surrounds the circumstances of the attempt at landing the aircraft and the placement of the Ferris wheel.
The Pilot flew from Taree Airport to the Airstrip. The aircraft was a Morgan Aero Works Sierra 200 Aircraft. The flight from Taree Airport to the Airstrip is approximately six minutes and the Pilot had a passenger, being the Pilot's son-in-law, John Rowan. The Pilot sought to land the aircraft from the north of the Airstrip and undertook, on the first attempt, a deliberate "touch and go" ("the first touch and go"), an activity in which the aircraft touches down on the runway momentarily and then immediately takes off, for the purpose of assessing the landing strip. This first touch and go was completed successfully.
On the second approach, again from the north, the Pilot intended to land the aircraft, but did not. Instead, the Pilot took off again; veered slightly to the left and impacted the upper-right quadrant of the Ferris wheel ("the second touch and go").
Exhibit C in the proceeding is a photograph taken during the rescue of the plaintiff and her brother, which depicts the upper part of the Ferris wheel and the relationship between the aircraft and the gondola in which the plaintiff was located. The Pilot and his son-in-law can be seen sitting in the aircraft, which is lodged precariously in the Ferris wheel. The second touch and go is captured in a video taken on the plaintiff's mobile telephone, which is Exhibit D in the proceedings.
While the video, Exhibit D, was not recorded for the purpose of recording an accident, as the aeroplane captured in it moved closer to the Ferris wheel, the recording of the events must have been increasingly frightening. The video shows the mechanism by which the aeroplane collided with the Ferris wheel, but liability depends less on the mechanism of the accident than on the responsibility for the decisions that led to it occurring.
It is necessary to deal with the relationship between the Airstrip Committee and the Council; the responsibility of the Council for the location of the Ferris wheel; the location of the Ferris wheel and its position relative to the Airstrip; and certain issues touching on the precautions taken prior to seeking to land the aircraft and the decision as to the direction from which to land.

[8]

The location of the Ferris wheel

There are a number of photographs that depict the Ferris wheel after the accident. There is no evidence that precisely pinpoints the location of the Ferris wheel by measurement or description. Exhibit J, which is a survey of the Airstrip and areas around the Airstrip, is a survey of the general area, taken at a time when the Ferris wheel was no longer in situ.
The Court conducted a view of the area, which is an important aspect in understanding the relative positioning of the relevant items. This is even more the case in circumstances where the Court must determine the location of the Ferris wheel from photographs and other imprecise indications.
The Ferris wheel was located, as is clear from the photographs, [4] at the south-eastern corner of the intersection of Third Avenue and Old Bar Road in Old Bar. The photographs depict the Ferris wheel near Third Avenue and between Third Avenue and the adjacent building, close to where the Court and the parties viewed the monument, located at the corner of Old Bar Road and Third Avenue.
Objection was taken to the use of Exhibit J to depict the location of the Ferris wheel, because the author only estimated the location of the Ferris wheel from the photographs, which, it was said, was a matter for the Court. Exhibit J was tendered, with a qualification, pursuant to s 136 of the Evidence Act 1995 (NSW), that it was not to be used to pinpoint the location of the Ferris wheel.
Notwithstanding the inability to use Exhibit J to pinpoint the location of the Ferris wheel, the photographs, otherwise in evidence, and which are utilised in the Report, and the other material in Exhibit J allow the Court to determine, on the balance of probabilities, that the centre of the Ferris wheel was located: north-west of the smaller tree to the west of the brick building; north-east of the monument; and south of the southern kerb of Third Avenue. It is clear that it was located before the bend in the road in Third Avenue and its extremities overhung roadway on Old Bar Road.
Further, the plane in which the wheel is turning seems, on the photographic evidence, to be approximately east-west. This can be seen from collision photograph 1 at p 42 of Exhibit J, which is a photograph taken facing north-east along Third Avenue.
The location of the Ferris wheel is, as a matter of certainty, adjacent to the corner of Old Bar Road and Third Avenue, east of the Old Bar Road part of the southern corner and south of the curb on Third Avenue. Based upon the location of the monument, the tree and the brick building, the Ferris wheel was, more probably than not, at about the location depicted at p 51 of Exhibit J.

[9]

The foregoing conclusions are accepted by the Court as, more probably than not, that which arises from the evidence. The next issue with which the Court is required to deal, before dealing with the conclusions as to liability, is the expert conclave on liability and the evidence of the Pilot as to the events of the day. Included in that analysis must be the issues of weather conditions that were said to prevail immediately before or at the time of the accident.

[10]

The Second Touch and Go

The Airstrip was an Aeroplane Landing Area ("ALA"). It was not an aerodrome. Nor was it monitored or staffed by aircraft traffic control personnel or, for that matter, ground staff. As a consequence of its status as an ALA and the condition of the Airstrip as an unattended grass strip, there were certain obvious requirements in relation to its use.
As already stated, and as is uncontroversial in these proceedings, the Council had a subcommittee, the Airstrip Committee, which operated the Airstrip. The terms of the delegation to the Airstrip Committee are before the Court. There is some controversy as to the application of one or other of the regulations to the operators of the Airstrip, as distinct from the application of the regulations to a pilot. First, it is necessary to deal with that which occurred on 1 October 2011, and immediately before that date.
As earlier stated, an application was made by the Old Bar Festival for the conduct of its annual Festival on Council land at Old Bar. The Council land is adjacent to the Airstrip. For the purpose of the conduct of the Festival, there were a number of meetings of the Airstrip Committee relating to the use of the Airstrip as part of the Festival activities. 2011, the year that this incident occurred, was the 80th anniversary of the Airstrip.
The Airstrip had some historical significance. First, it was a stop off for the first aircraft flights from Sydney to Brisbane. Secondly, it had a role during the war, each of which was to be highlighted as part of the 80th anniversary festivities.
The Festival had been conducted in prior years. The two years prior to 2011, when the Festival was being conducted, the Airstrip was closed to air traffic.
It is necessary to point out some of the history of the Pilot. He was born in January 1958 and was, at the date of the incident, 53 years of age. The Pilot was a motor mechanic by training and had worked in an upholstery business. In 1986/87, he commenced flying lessons and did approximately 25 hours and completed his first solo flight. On account of financial issues, the Pilot did not complete the lessons or his training.
In or about 1984, the Pilot moved to the Central Coast and, sometime later, in April 2006, purchased a motel, the All Seasons Country Lodge, in Taree with his partner. In 2008, the Pilot's mother died and the Pilot was prescribed antidepressant medication, Zoloft and sleeping tablets. The medication with Zoloft ceased in or about March 2009.

[11]

Responsibility for the location of the Ferris wheel

Initially, the plaintiff sued the Old Bar Beach Festival Incorporated as the first defendant. The proceedings against the Old Bar Beach Festival Incorporated were resolved and there are no current proceedings before the Court relating to the organisers of the Festival.
No party suggests that any liability, for which either the second or the third defendant, being the Council or the Pilot, is responsible, is, if there be liability, affected, adversely or otherwise, by any liability of the Old Bar Beach Festival Incorporated. Nor does either of the remaining defendants, the Council or the Pilot, submit that any contribution to any damages is to be considered in relation to the liability, if any, of the Old Bar Beach Festival Incorporated.
The Pilot has no responsibility for the placing of the Ferris wheel. Nor does the Pilot have any responsibility for the continued use of the Airstrip or its operations, other than the decision that he would use it to land.
By its pleadings, the Council accepts its status as a body politic pursuant to the terms of s 220 of the Local Government Act 1993 (NSW). The Council also accepts that it had the care, control and management of the Airstrip; and that it was an Aeroplane Landing Area ("ALA").
It is also admitted in these proceedings that the Council established the Airstrip Committee, formally known as the Old Bar Heritage Airport Management Committee, under the provisions of s 355 of the Local Government Act and through the Airstrip Committee, the Council exercised its care, control and management of the Airstrip. The Airstrip Committee was, for all relevant purposes, part of the Council's body politic pursuant to s 220 of the Local Government Act.
Further to the foregoing admissions, the Festival was conducted on public land, controlled by Council, on 1 and 2 October 2011, and that land was adjacent to the Airstrip. The Council's permission was required and given to use the land on which the Festival was to be conducted and the Council was aware that the Airstrip was, during the period 1 and 2 October 2011, to be used for landing and take-off by aircraft, during the Festival.
Each of the foregoing admissions is made on the pleadings by Council. Evidence was adduced by the Council from members of the Airstrip Committee and, particularly, the President of the Airstrip Committee, Mr Neville French, who gave evidence in the proceedings. Mr French gave evidence of the delegation and his awareness of it and referred to the appointment of the Airstrip Committee and the Civil Aviation Advisory Publication 92-1(1) (hereinafter "CAAP 92-1").

[12]

Statutory context

The second defendant, Mid-Coast Council, in these reasons referred to as the Council, is constituted pursuant to the terms of s 219 of the Local Government Act and is a body politic of the State with perpetual succession and the legal capacity and powers of an individual. [14] While it is expressly stated, notwithstanding the foregoing, that the Council is not a body corporate, for present purposes, that aspect matters little and the Council is bound by the laws of the State; does not have Crown immunity; and can be sued by the plaintiff and the Pilot.
The operation of the Council is governed, at least in part, by the terms of the Local Government Act and the Local Government Regulations. It is conceded in these proceedings that the Council had the care, control and management of the Airstrip.
Further, as already stated, the Festival was conducted on community land adjacent to the Airstrip, part of which was classified as a sportsground. The Council was aware that the Festival was to be conducted and the Council granted approval both for the conduct of the Festival and the operation, use and location of the Ferris wheel. With the exception of the preceding comment as to the approval of the location of the Ferris wheel, the foregoing comments are uncontroversial.
An employee of Council, as already stated, inspected the Ferris wheel and the Council imposed no condition relating to the re-location of the Ferris wheel or the initial location of the Ferris wheel, either as part of the approval process for the conduct of the Festival or the approval process for the operation of the Ferris wheel.
By operation of s 223 of the Local Government Act, the role of the governing body of the Council, which is defined as its elected representatives by s 222 of the Local Government Act, is prescribed. There are a number of subparagraphs all of which are operative and binding on the Council. The role includes: making decisions necessary for the proper exercise of the Council's regulatory function; and acting honestly, efficiently and appropriately.
The Local Government Act applies to the area of land over which the Council has responsibility. The Council is required, in the course of its planning, to manage risks to the local community or area or to the Council and to manage them effectively and proactively.

[13]

The existence of a duty of care

It is easier to deal with the liability of the Pilot. The Pilot in performing the functions of flying the aircraft, including landing and taking off, and, in particular, in performing the first and second touch and go, owed a duty of care to those who could foreseeably be injured by a failure to take reasonable care in the performance of those acts. The class of persons covered by such a duty would be other pilots, and the passengers of other aircraft, the passenger of the Pilot's aircraft, and persons in the vicinity of the Airstrip that that may be harmed by an impact caused by the Pilot's lack of due care. Later in these reasons, I will deal with the foreseeability of psychiatric injury, as a separate issue.
Notwithstanding the obvious differences, the duty owed by a pilot, in flying an aircraft, is the same duty that is owed by a driver of a motor vehicle. The duties and any liability associated with a lack of due care by the Pilot are governed by the terms of the Civil Liability Act. So too are any duties imposed upon the Council. However, the determination of whether the Council has a duty of care is less straightforward.
As with the imposition of any duty of care, that the injury or harm may be reasonably foreseeable is a necessary condition, but it is not sufficient. Liability in negligence, particularly in relation to statutory authorities such as the Council, is not sheeted home for every reasonably foreseeable injury caused by an act or omission of the Council. Whether there exists a duty of care in the Council for the injuries sustained by either the Pilot or the plaintiff is a matter with which the Court will now deal.

[14]

Is there a duty owed by the Council?

The starting point for the determination of a duty of care would, ordinarily, be the matrix or calculus derived from the reasons for judgment of the High Court in the Council of the Shire of Wyong v Shirt [16] (hereinafter "Shirt"). The facts in Shirt are well-known and relate to the erection of the sign referring to "DEEP WATER", which was ambiguous as to which part of the water was deep and, as a result of which, an inexperienced water skier fell and suffered severe physical injury.
As described, prima facie, a duty of care arises when there exists between the defendant, who is said to owe it, and the plaintiff to whom it is said to be owed, a sufficient relationship of proximity, such that a reasonable person in the position of the defendant would foresee that carelessness would be likely to cause damage. [17] Whether there is proximity, is a conclusion; not a test.
Nevertheless, Shirt was concerned more with the issue of a breach of the duty of care, rather than its existence; and the question of foreseeability, when being utilised in relation to the issue of damages or the risk of injury, is a different concept from that which is applied when dealing with the existence of a duty of care and, in particular, the issue of proximity.
Confining my comments, for the present, to the issue of the existence of a duty of care under common law, it is appropriate to deal with, next, the judgment of the High Court in Modbury Triangle Shopping Centre Pty Ltd v Anzil [18] . They were proceedings in which it was alleged that the owner and occupier of a shopping centre breached the duty of care owed to the plaintiff by failing to light adequately a car park, which was the place at which the plaintiff was injured by an attack from three persons acting criminally.
The High Court considered that the occupier of the land did not owe a duty that extended to taking reasonable care to prevent physical injury that resulted from the criminal behaviour of third parties on the land. Of importance to the proceedings before the Court currently, is the comment of Gleeson CJ in Modbury, where his Honour said: "Most actions in tort which come before trial courts arise out of relationships in which the existence of a duty of care is well established, and the nature of the duty well understood. Cases arising out of the use of a motor vehicle, or involving employer and employee, or bailor and bailee, turn upon the application to the facts of well settled principles concerning legal responsibility. References to duty of care, breach of duty, and causation provide convenient sub‑headings for a judgment, but in many cases the concepts require no further analysis. In other cases, of which the present is an example, there is a real issue as to the scope of legal responsibility. Such an issue cannot then be resolved by a detailed recitation of the facts, the repetition of the standard rubrics under which discussion of the tort of negligence is commonly organised, and an appeal to common sense. I do not suggest that is what occurred in the present case. The learned judges identified and addressed the problem that arose, although, as will appear, I disagree with the conclusion they reached. A recitation of facts may not be useful unless it distinguishes between facts essential to the cause of action, particulars, and evidence. Modern pleadings take a form which often blurs such distinctions. The rubrics under which issues are organised for discussion may do little to assist the resolution of those issues. Common sense is important, but it is not a substitute for legal analysis when that is required." [19]

[15]

Civil Liability Act 2002 (NSW)

One of the reasons that it was necessary for the Court to analyse the principles associated with the existence of a common law duty of care, notwithstanding the promulgation of the Civil Liability Act, is that the Civil Liability Act presupposes the existence of a duty of care and does not prescribe the basis upon which such a duty of care will be held to exist. Rather, where, under the common law, a duty of care may exist, the Civil Liability Act qualifies whether harm caused by any breach of such a duty of care is actionable and in what circumstances.
A number of general comments need to be noted. First, harm, where used in the Civil Liability Act, includes personal injury which, in turn, includes impairment of mental condition; and "negligence" means any failure to exercise reasonable care and skill.
The provisions of s 5B of the Civil Liability Act provide for circumstances where negligence continues to apply. It does so by rendering all persons not negligent in failing to take precautions against the risk of injury or harm unless the following applies: the risk was foreseeable, by which the provision makes clear it has to be a risk which the person knew or ought to have known; the risk was not insignificant; and a reasonable person in the position of the defendant would have taken those precautions. [37]
The last mentioned condition precedent, being whether a reasonable person would have taken those precautions, is required to be assessed after consideration of the probability that the harm would occur if care were not taken; the likely seriousness of the harm; the burden of taking the precautions to avoid the risk of harm; and the social utility of the activity that creates the risk.
In determining liability for negligence, the provisions of s 5C of the Civil Liability Act apply and require the Court to factor into the burden of taking precautions to avoid risk, the proposition that the burden includes the burden of taking precautions to avoid similar risks for which the Council would be responsible. In so doing, the Court is prohibited from taking into account any subsequent action that, if it were to have been taken, would have avoided the risk of harm, unless that was, beforehand, foreseeable. Subsequent conduct cannot, of itself, constitute an admission of liability. [38] Nor does the fact that the risk of harm could have been avoided by doing something differently, of itself, give rise to or affect liability. [39]

[16]

Dangerous recreational activity

As has already been stated, the Pilot was flying a Morgan Aeroworks Sierra 200 aircraft and was doing so at the request of the owner, who had, in turn, been requested to participate in the static air display at the Airstrip. The Pilot was licensed to fly the aircraft and held a "recreational licence".
The fact that the Pilot held a "recreational" licence does not, of itself, determine whether the activity upon which the Pilot was engaged was a recreational activity. Nevertheless, it is a factor to be weighed in the determination of that question.
Secondly, and more importantly, the circumstances of the flight were that, plainly, on the material before the Court, the activity was engaged in as a favour to Mr Morgan and for the Pilot's enjoyment and leisure. The Court, as presently constituted, is prepared to accept that the activity in which the Pilot was engaged may not have been a sport nor, despite the public nature of the Airstrip, engaged at a place where people ordinarily engaged in sport or activity for enjoyment, relaxation or leisure. The latter aspect is less obvious.
Given the nature of the Airstrip as an ALA, used overwhelmingly for recreational flying of light aircraft, the Airstrip may well be a place in which people ordinarily engage in a pursuit or activity for enjoyment, relaxation or leisure. [50] Whatever be the proper classification of the Airstrip in terms of para (c) of the definition of recreational activity, in my view, the pursuit or activity engaged in by the Pilot was for his enjoyment, relaxation or leisure.
I note that the passenger was not a paying passenger, to the extent that that may be relevant. Nor was the Pilot paid for flying the plane. Of significance is that s 5L of the Civil Liability Act excludes liability in negligence as a result of the materialisation of an obvious risk of a dangerous recreational activity, but the provisions of Div 4, which define the term obvious risk, differentiate between an obvious risk and an inherent risk. As Tobias JA makes clear in Vairy, [51] a danger may be both inherent and obvious.
Even though it is essential, in determining liability in negligence, to put oneself in a position where one is assessing foreseeability and other matters other than in retrospect, it is informative, in the case of flying and the risk of collision with an obstruction at the end of a runway, to hypothesise about the need for a warning. Leaving aside the recreational activity aspect, would there be any utility in placing a warning sign at the end of an airstrip, warning against possible obstructions during take-off?

[17]

Council's duty to the plaintiff, Amber Arndell

Thus far, the Court has recited the terms of CAAP 92-1(1), without significant comment. It is said in relation to that publication, that the publication and guidelines do not impose a duty upon the Council. Such a statement is correct.
However, as already commented, the plaintiff's claim against the Council is not based upon a breach of statutory duty. It is framed in negligence and requires, subject to the operation of ss 43A and 44 of the Civil Liability Act, the plaintiff to establish, on the balance of probabilities, that there exists a duty of care and that it has been breached. Further, the duty of care has to encompass a foreseeable risk of harm, being harm of a psychiatric injury or mental harm.
The Court has already recited the Committee Appointment and the terms of the delegation. It is unnecessary to reiterate them.
The terms of the delegation, as already noted, require the Airstrip Committee to undertake and document a review of take-off and landing distances available, obstructions within the approach and take-off areas and other obstructions. [55] Further, the delegation requires that the Airstrip Committee maintain "in a safe serviceable condition" a number of areas, which expressly includes the flyover areas, and requires the Airstrip Committee to close the Airstrip if there be "any aspect … unsafe to either aircraft or the public generally". [56] The flyover area is not part of the fenced Airstrip.
The notes to the delegation emphasise rather than detract from that responsibility. As was pointed out during the course of the proceedings, there are structures at the Old Bar Park, specifically the fencing and lighting towers, which infringe the lateral transitional slope recommended in CAAP 92-1(1) and para [1] of the notes to the delegation specifically excludes those aspects (the fencing and lighting towers) from the requirement of the Airstrip Committee to implement the recommended standard in CAAP 92-1(1). Similarly, the express reference to the existence of vegetation, particularised as trees that may inhibit or preclude the use of the ALA, informs the Airstrip Committee that it may need to seek various approvals to reduce and remove the vegetation affecting the serviceability of the Airstrip.
It is clear, from the terms of the delegation, that Council was aware of the terms of CAAP 92-1(1); had instructed its committee, the Airstrip Committee, to close the Airstrip if the "flyover areas" were not in a safe serviceable condition; that the risk of a lack of safety was to aircraft and the public generally; and the ambit of the "splay" derived from the application of CAAP 92-1(1). Indeed, the Council had such an awareness at a time when it was also aware of the precise location of the Ferris wheel.

[18]

Damages

It is necessary to assess the damages payable in order to formulate the basis upon which judgment will be entered. As a consequence of the foregoing, the damages payable by the Council to the Pilot is a theoretical exercise, undertaken on account only of the possibility of a successful appeal by the Pilot.
In respect to the alleged damage suffered, as a consequence of the collision, by each of the plaintiff and the Pilot, it is necessary, first, to assess the nature of the injury and its effects; the loss, if any, of earning capacity; and to derive from those assessments the appropriate basis for the determination of damages.
Neither the plaintiff nor the Pilot submits that there was compensable physical injury suffered as a consequence of the collision. The injury to each of them is said to be psychiatric. It is necessary to deal with the evidence in relation to each. For the reasons already described, namely, its theoretical effect, the analysis in relation to the Pilot will be in more summary form than might otherwise have been the case.

[19]

The Pilot's injury

Before dealing with the detailed situation of the Pilot, it is necessary to deal with an issue of principle in the assessment of damages, which issue of principle applies far more generally than only to the Pilot. As has been pointed out in various authorities, the purpose of damages is to seek to place the party who has been injured, or who has otherwise suffered, in the same position as that party would have been in if he or she had not sustained the injury which is being compensated. [72]
The High Court, in Husher v Husher, [73] continued and commented that where, as is the situation in most cases of personal injury, a victim's gainful employment has been interrupted by the negligent infliction of physical injury, that victim is to be compensated by an amount that reflects the financial consequences that follow from the impairment. The Court then dealt with the principles previously discussed by the Court in Graham v Baker [74] and their Honours said: "[7] Since at least Graham v Baker it has been recognised that it is convenient to assess an injured plaintiff's economic loss 'by reference to the actual loss of wages which occurs up to the time of trial and which can be more or less precisely ascertained and then, having regard to the plaintiff's proved condition at the time of trial, to attempt some assessment of his future loss'. But damages for both past loss and future loss are allowed to an injured plaintiff 'because the diminution of his earning capacity is or may be productive of financial loss'. Both elements are important. It is necessary to identify both what capacity has been lost and what economic consequences will probably flow from that loss. Only then will it be possible to assess what sum will put the plaintiff in the same position as he or she would have been in if injury had not been sustained." [75] (Footnotes omitted.)
As has been emphasised on many occasions, particularly in the judgments of McHugh J in the Court of Appeal and in the High Court, the compensation is a compensation for loss of the capacity to earn income which has brought about financial loss. The pre-injury income is relevant to assessing the loss of earning capacity, because it renders more probable the assessment of that earning capacity with a degree of precision that, otherwise, may be unavailable.
In the case of the Pilot, there is no issue that the Pilot suffered injury as a consequence of the collision. So much is clear from the medical reports of Dr Anne-Marie Rees, the opinion of whom I accept. The latest of those reports, dated 19 May 2017 deals, again, with the Pilot's personal details; and then with the alterations if any from the previous assessment, his current functioning and his medication. In her summary, Dr Rees said: "It was my opinion previously that this [a reference to acute stress reaction to the plane crash the subject of these proceedings] had developed into a Post-Traumatic Stress Disorder which would meet criteria in the DSM-5 whereby he felt intense fear for his life related to the traumatic experience. There were also re-experiencing phenomena and hypervigilance, mood issues, avoidance problems. He also had a specific phobia related to sharp objects which had resulted from the accident as well. I diagnosed him with major depressive disorder also related currently to the anxiety and Post Stress Disorder but also because of all the stress related to counsel regarding the Ferris wheel crash. I would uphold all these diagnoses still. … [I]n my opinion, given his presentation currently, his condition is much more severe than an Adjustment Disorder. He still has significant symptoms of post-traumatic stress. He meets criterion A under DSM-5 as he always has done related to the nature of the trauma whereby he could have died or killed his son in law or killed the children that were on the Ferris wheel. He also has other symptoms of Post-Traumatic Stress Disorder ongoing with re-experiencing phenomena related to nightmares and flashbacks. He is on the edge and hypervigilant particularly when triggered by multiple associated issues and is significantly avoidant in order to minimise his anxiety which otherwise would present with frequent panic attacks.… He continues to have a Major Depressive Disorder which is of chronic type… He is on high doses of antidepressants as well as sleeping medications now to manage these disorders and he is under the care of a psychiatrist, Dr Koller."

[20]

In matter 2015/199567, Arndell v Mid-Coast Council and Ors: 1. Judgment for the plaintiff. 2. The second defendant, Mid-Coast Council, shall pay the plaintiff, Amber Christine Arndell, damages in the sum of $1,513,023.30. 3. Judgment on the cross-claim for the cross-claimant. 4. Pursuant to s 5 of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW), the cross-defendant, Paul Clarendon Cox, shall indemnify and/or contribute, by payment to the cross-claimant, Mid-Coast Council, 35% of the aforesaid damages, being an amount of $529,558.16. 5. Interest shall be payable on all amounts from the date of judgment in accordance with the prescribed rate and shall be payable by the second defendant to the plaintiff and by the cross-defendant to the cross-claimant respectively. 6. The second defendant, Mid-Coast Council, shall pay the plaintiff's costs of and incidental to the proceedings on the following bases: 1. on and from 20 December 2017, on an indemnity basis; 2. otherwise, costs, prior thereto, if any, on an ordinary basis. 1. The cross-defendant, Paul Clarendon Cox, shall indemnify and/or contribute, pursuant to s 5 of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW), 35% of the costs assessed and/or agreed, payable pursuant to the immediately preceding order. 2. Leave is granted to any party to approach for the purposes of correcting any arithmetic or mechanical error in the foregoing calculations or the accidental omission of a head of damage.

[21]

In matter number 2014/286417, Paul Clarendon Cox v Mid-Coast Council and Ors: 1. Judgment for the defendants. 2. The plaintiff shall pay the defendants' costs of and incidental to the proceedings. 3. Otherwise, the proceedings are dismissed.

[22]

Endnotes

Exhibit H.
Exhibit K and Exhibit 6.
Exhibit U.
There are a number of photographs in different exhibits but the clearest are in Exhibit L, some of which are reproduced in Exhibit J. Also Exhibit C (photo 62) depicts the airstrip from the Ferris wheel structure and shows Third Avenue through the structure and past the aircraft.
See also Ex J, p.26, collision photo 5.
A visual representation of the lateral and vertical aspects of the term "splay" can be seen at [39], below. The lateral aspect of the splay is often referred to as the "lateral transitional slope".
Exhibit J, p 37.
Exhibits 3, 4 and 5 respectively.
Tcpt, p 296(30-47).
Tcpt, p 517(6-9).
Tcpt, p 540(20-27).
See Exhibit H, Application to Operate an Amusement Device.
Graham Barclay Oysters Pty Ltd v Ryan (2002) 211 CLR 540; [2002] HCA 54 especially at [78] - [79] and [84], per McHugh J, and at [148] - [149], per Gummow and Hayne JJ.
Local Government Act, s 220.
Graham Barclay Oysters Pty Ltd v Ryan (2002) 211 CLR 540; [2002] HCA 54.
(1979-1980) 146 CLR 40; [1980] HCA 12.
Wyong Shire Council v Shirt (1979-1980) 146 CLR 40; [1980] HCA 12 at 44, [1], per Mason J, citing Donoghue v Stevenson [1932] AC 562 at 580; Home Office v Dorset Yacht Co Ltd [1970] AC 1004 at 1027, 1034, 1054 and 1060.
(2000) 205 CLR 254; [2000] HCA 61.
Modbury Triangle, supra, at [13].
Uniform Civil Procedure Rules 2005 (NSW) ("UCPR") r 14.7; Shaw v Shaw (1954) 2 QB 429 at 441; Kirby v Sanderson Motors Pty Ltd (2002) 54 NSWLR 135; [2002] NSWCA 44.
Modbury Triangle, supra, at [109], per Hayne J.
Modbury Triangle, supra, at [111].
(1868) LR 3 HL 330.
Modbury Triangle at [112], per Hayne J.
Graham Barclay Oysters, supra.
Graham Barclay Oysters Pty Ltd v Ryan, supra, at [134] per Gummow and Hayne JJ.
Vairy v Wyong Shire Council (2005) 223 CLR 422; [2005] HCA 62 (hereinafter "Vairy").
Vairy v Wyong Shire Council, supra, per Gummow, Hayne, Callinan and Heydon JJ; Gleeson CJ, McHugh and Kirby JJ dissented.

[23]

Amendments 15 December 2020 - Costs orders amended on 15 December 2020. Order (6) subsequently varied. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 15 December 2020

As a consequence of the foregoing and the decision that the location of the Ferris wheel was as indicated in Exhibit J and that the height of the Ferris wheel was, most likely, 20 m, the Court is in a position to accept each of the findings contained in Exhibit J. Those findings are: Finding Page Finding description Number No 4.1 9 Confirmation that the intersection of Old Bar Road and Third avenue, OLD BAR, NSW, was the general location of the site of the collision. 7.2 12 The location of the top Ferris wheel was. Latitude -31 ° 58' 11.76" Longitude 152° 35' 29.42" Elevation 29.0m. The uncertainty of this location was estimated at +/-2.0m and 0.1m in height. 9.3 16 The location of the airfield in 2018 was unlikely to have changed since 2011, based on the consistency with the image taken in 2011 and our field inspection. The Airfield could be accurately replicated. 11.1 18 The overall runway length was 589m. This was defined by the centre of threshold markers at each end of the runway. The observed magnetic bearing of the RWY17 was 168°. The estimated uncertainty of the runway length was 0.5m. 11.2 18 The airfield runway was 10m wide, the runway strip 30m and flyover clearance area 60m wide. RWY17/35 met the requirements of CAAP 92-1(1) on the ground. 11.3 18 The elevation at the end of RWY17 centreline was 13.1m being 4.1 m above the ground elevation at the Ferris wheel location. The estimated uncertainty of the elevation at the runway end is 0.1m. 12.1 19 The obstacle distance from the end of RWY17 and the Ferris wheel location is 160.6m. The uncertainty of this distance is 3.0m and can be summarised as the sum of the uncertainty of the location of the airfield and the location of the Ferris wheel, (refer 7.2 and 11.2). 12.2 19 Based on an obstacle distance of 160.6m, a 5% lateral divergence equates to a splay offset of 38.0m from the RWY17 centreline. 12.3 19 The centre of the Ferris wheel location calculates at a lateral offset of 35.3m to the RWY17 centreline. The uncertainty in the calculation could be up to 1.7m. 12.4 19 The centre of the Ferris wheel was located inside a 5% lateral take-off clearance splay of the end of RWY17 by an estimated 2.7m with a maximum uncertainty of 1.7m. 13.1 20 Based on an obstacle distance of 160.6m, a 5% vertical take-off slope gradient equates to a take-off elevation gain of 8.0m from the end of RWY17. The uncertainty in this elevation is 0.25m. 13.2 21 The obstacle elevation of the Ferris wheel was located above a 5% vertical gradient clearance splay of the end of RWY17 by an estimated 7.9m with a maximum calculation uncertainty of 0.35m (0.1m +0.25m). 14.1 22 The aircraft impact zone is coincident with the region of the Ferris wheel that falls within the required RWY 17/35 approach obstacle clear area; CASA Guideline 92-1(1).

Mr Howie recites further notes in relation to his conclusion at paragraph 17 in the following terms: "NOTES TO THE CONDUCT OF AIRMANSHIP AT POINT 17 Reasoning to support my comments at point 17. 1. All aircraft manufacturers that I have been acquainted with across a very large spectrum of aircraft ranging from light general aviation aircraft like a Cessna 152 to the Boeing 737 to the Airbus series of aircraft, produce performance data, including take-off and landing data; 2. This data includes approach speeds and take-off speeds; 3. In addition, the data will include data on landing and take-off distances, including the effect of aircraft weight, headwind component and other environmental conditions; 4. The manufacturer will produce data for various headwind components, say 0, 5,10,15 knots and above depending on the aircraft; 5. The manufacturer will also produce data for various downwind components that can be used for take-off and landing and, it has been my experience that a manufacturer will place a downwind component limit for take-off and landing; 6. This limit must not be exceeded; 7. Sample limits, depending on the aircraft type, could be like 5,10 maybe 15 knots; 8. The limit is generally not high because the higher the downwind component, the take-off or landing distance can be very adversely affected, that is, the take-off or landing distance with a downwind component will INCREASE the distance used in both cases; 9. I do not know if the Morgan Aeroworks Cheetha Sierra 200 aircraft has this data as I have not got the relevant manuals to review; 10. The manufacturer of all aircraft will prescribe take -off and landing speeds, taking into account such things as weight, runway surface, temperature and other environment conditions; 11. So, it is incumbent on the pilot in command, to understand these matters, which is a training matter, and apply them to the conditions that faces him on, in this case, for both landing and take-off; 12. In the case before us on 1 October 2011, the pilot in command, if his flying skills and airmanship skills were to the required standard, he should have, (a) Known the required approach airspeed and (b) Known where the local wind was blowing from if he was to use runway 17 and (c) Known the strength of the local wind if he was to use runway 17 and (d) Had recognition that wind strength (measured in knots in aeronautical terms) can vary; 13. Wind strength can vary or change when on final approach to a runway, meaning for example, that the local wind at say 500 feet (ft) above the groundlevel (AGL) could be at certain strength but at 300 feet AGL to could be lighter or stronger but at the proposed touchdown point, the local wind could be lighter or stronger again; 14. So, if the approach speed on the occasion of 1 October 2011, was higher than that prescribed by the manufacturer, even only a small amount, and if the local wind at 500 ft, 300 ft was a downwind component, even if only a small amount, then the overall effect of this is, (a) The speed over the ground is higher ( ie the aircraft speed + speed of the local wind ) then that would have been expected. Therefore, (b) There is a very good chance that if these conditions continue, it is inevitable that the aircraft will touch down past the beginning of runway 17, perhaps, deep into the runway distance; 15. Further, if the pilot has misjudged his descent and the aircraft is higher then normal as it turns onto it's final approach and if no corrective action is taken by the pilot, the 3 factors can and will all merge together as the aircraft flies down the final approach path to landing. That is; (a) Flying at a too higher speed then recommended by the manufacturer and (b) On final approach too higher than that required and (c) Aircraft is being effected by a downwind, however small. 16. The combined effect of this is that, unless preventative action is taken by the pilot, the aircraft will touch down past the intended touch down point; 17. If the landing distance is only small AND if the surface of the runway is wet or greasy, then, (a) The aircraft may not stop within the landing area and (b) Depending on the pilot skill level, there maybe some aircraft controllability issues. 18. Similarly, for take-off, in this case, the touch and go manoeuvre undertaken prior to the collision with the Ferris wheel. That is, (a) A downwind component, albeit small, will effect the distance to take-off, that is, increase the take-off distance and (b) If the take-off speed used is higher than that prescribed by the aircraft manufacturer, then the take-off distance will be higher and (c) If the take-off speed used is higher than that prescribed AND there is a downwind component, albeit small, then the take-off distance will be higher AND (d) If the runway is wet or greasy, this will exacerbate the take-off distance, that is, the take-off distance will be higher than that expected 19. 19. Since I do not have any experience in the recreational light aircraft area and I have not seen the manuals that would support the flying of the Morgan Aeroworks Cheetah Sierra 200 aircraft, I can not for certain say that take-off and landing performance data is available to a pilot. However, I would presume that, at the least, the manufacturer would prescribe a landing speed and a take-off speed to be observed by the pilot in command."

The assumption provided to Mr Howie as to the location of the Ferris wheel is an assumption based upon the location provided in Exhibit J. As a consequence, the conclusions reached by Mr Howie on the issue of the Ferris wheel and its location within the splay of the Airstrip, when taking-off to the south, are relevant to the issues before the Court. These conclusions are contained at Exhibit AA p 21 and are in the following terms: "LOCATION OF THE FERRIS WHEEL AND ITS CONNECTION WITH CAAP 92(1)-1 1. CAAP 92-1(1) is issued by the Civil Aviation Authority, which is the former name of the Civil Aviation Safety Authority, which is the authority of the Australian Government which oversights aviation matters; 2. CAAP 92-1(1) provides advisory guidance to the flying industry in regards to aeroplane landing areas which do not fall into other Authority prescribed landing areas/aerodromes such as Sydney International airport; 3. The information contained in this publication is not a legal requirement to comply with but if complied with, will meet any regulatory requirement set out by the Civil Aviation Safety Authority; 4. The information contained in the publication sets out factors that may-be used to determine the suitability of a place for landing and taking- off; 5. Application of these guidelines will in most cases, ensure that a take-off or landing, will be conducted safely, with sound piloting skills and sound airmanship displayed by the pilot in command Source: CAAP 92-1(1) dated July 1992 6. The Ferris wheel at Old Bar was located 34 meters east of the centre line and 161 meters from the end of runway 17 Source: List of Assumptions given to me, paragraph 2.3 7. The Ferris wheel was 20 meters in height and about 18 metres in diameter Source: List of Assumptions given to me, paragraph 2.4 8. I have done an analysis of location of the Ferris wheel in comparison to the advisory information contained in CAAP 92-1 (1), paragraph 5.5 figure 2A 9. I found that the location of the Ferris wheel was within the runway 17 take-off obstacle clearance splay as described in the CAAP 92-1(1), paragraph 5.5 figure 2A. This analysis was done in the vertical obstacle clearance splay and since the Ferris wheel encroached this area, therefore, I concluded that no further analysis was required in the lateral obstacle clearance area. 10. The Ferris wheel should not have been placed there if the organisers wished to use CAAP 92- 1(1) as their document to use to ensure safety of operations; 11. The analysis was done using a scale of 1 centimetre to 5 metres; 12. I did not have the capability to determine if all or only a part of the Ferris wheel was within the take-off obstacle clearance splay"

These reasons have already referred to the judgment of the High Court in Graham Barclay Oysters. [25] In his reasons for judgment in Graham Barclay, McHugh J remarked, in relation to the liability of public authorities, in the following terms: "[78] A public body invested with a discretionary statutory power may be in breach of a common law duty of care if it fails to exercise the power for the benefit of an individual or class of individuals. In these cases, failure to exercise the power given constitutes actionable negligence that sounds in damages. In determining whether a public authority has breached a common law duty by failing to exercise a statutory power, it is essential to examine the words and policy of the legislation. That is because the legislation may indicate that the legislature has legislated to cover the field and excluded all common law duties of care. In other cases, the imposition of a common law duty may be inconsistent with or undermine the effectiveness of the duties imposed by the statute. In some cases, the circumstances of the case − for example, active intervention by the authority or reliance by the plaintiff − may establish a duty of care. But the legislation may give the authority such a wide discretion to exercise the power in question that the tribunal of fact cannot find that the failure to exercise the power constituted a breach of the duty. … [80] Despite this general rule, however, cases often arise where the failure to exercise a power will constitute a breach of a common law duty of care that a public authority independently owes to an individual. If a duty of care exists, discharging the duty may require the authority to exercise the power 'to avert a danger to safety or to bring the danger to the knowledge of citizens otherwise at hazard from the danger'. But it invites error to think that the common law has converted the discretionary statutory power into an affirmative duty to exercise the power. The common law cannot interfere with the exercise of the discretion and require the authority to enforce the power. To attempt to do so would bring the common law into conflict with the legislative intention that the exercise of the power be discretionary. The common law avoids the conflict by holding that in the circumstances the failure to exercise the power is a breach of a common law duty existing independently of the statute. The common law duty may or may not be an affirmative duty to take reasonable care to protect the plaintiff from harm. However, the existence of the statutory power does not create the common law duty although in some cases - particularly in reliance cases - it may be an important factor in finding that a duty of care was owed." (Footnotes omitted.)

At trial, in Graham Barclay Oysters, as pointed out in the joint judgment of Gummow and Hayne JJ, the trial judge held that the Council owed a common law duty of care to oyster consumers to take steps that were reasonably open to it to minimise human faecal contamination of the lake in which the oysters were bred. [26] Their Honours, in the joint judgment, also dealt with those matters that were said to be "salient features of the relationship" between the statutory authority and the class of persons to whom it was said the Council owed a common law duty of care and dealt with that in the following terms: "[149] An evaluation of whether a relationship between a statutory authority and a class of persons imports a common law duty of care is necessarily a multi-faceted inquiry. Each of the salient features of the relationship must be considered. The focus of analysis is the relevant legislation and the positions occupied by the parties on the facts as found at trial. It ordinarily will be necessary to consider the degree and nature of control exercised by the authority over the risk of harm that eventuated; the degree of vulnerability of those who depend on the proper exercise by the authority of its powers; and the consistency or otherwise of the asserted duty of care with the terms, scope and purpose of the relevant statute. In particular categories of cases, some features will be of increased significance. For example, in cases of negligent misstatement, such as Tepko Pty Ltd v Water Board, reasonable reliance by the plaintiff on the defendant authority ordinarily will be a significant factor in ascertaining any relevant duty of care. [150] The factor of control is of fundamental importance in discerning a common law duty of care on the part of a public authority. It assumes particular significance in this appeal. This is because a form of control over the relevant risk of harm, which, as exemplified by Agar v Hyde, is remote, in a legal and practical sense, does not suffice to found a duty of care." (Footnotes omitted.)

In order for damage to be available for psychiatric injury, it is necessary, separately, to show that a person of normal fortitude might have sustained a recognisable psychiatric injury, from the risk of harm, which was reasonably foreseeable. [36] As Gleeson CJ said in Tame: "[15] In the case of physical injury to person or property, arising out of commonplace relationships such as employer and employee, or bailor and bailee, or resulting from commonplace activities such as driving a motor vehicle, the requirements as to legal responsibility are well settled, often against a background of insurance practice. But defining the circumstances in which it is reasonable to require a person to have in contemplation, and take steps to guard against, financial harm to another person, or emotional disturbance that may result in clinical depression, requires the caution which courts have displayed. [16] Furthermore, there may be something about the vulnerability or susceptibility of a particular plaintiff that makes it unreasonable to require a person to have in contemplation the kind, or perhaps the degree, of injury suffered. In the context of remoteness of damage, it is established that a tortfeasor must take a victim as the victim is found; but we are presently concerned with whether there is a duty of care, and whether a tort has been committed. Putting to one side cases where a defendant knows, or ought to know, of the peculiar susceptibility of a plaintiff, the law has established what Brennan J described in Jaensch v Coffey as 'an objective criterion of duty'. The variety of degrees of susceptibility to emotional disturbance and psychiatric illness has led courts to refer to 'a normal standard of susceptibility' as one of a number of 'general guidelines' in judging reasonable foreseeability. This does not mean that judges suffer from the delusion that there is a 'normal' person with whose emotional and psychological qualities those of any other person may readily be compared. It is a way of expressing the idea that there are some people with such a degree of susceptibility to psychiatric injury that it is ordinarily unreasonable to require strangers to have in contemplation the possibility of harm to them, or to expect strangers to take care to avoid such harm. Such people might include those who, unknown to a defendant, are already psychologically disturbed. That idea is valid and remains relevant, even though 'normal fortitude' cannot be regarded as a separate and definitive test of liability." (Footnotes omitted.)

His Honour went on to agree, at least in most respects, with the joint judgment of Gummow and Kirby JJ, who said: "[185] A fundamental objective of the law of negligence is the promotion of reasonable conduct that averts foreseeable harm. In part, this explains why a significant measure of control in the legal or practical sense over the relevant risk is important in identifying cases where a duty of care arises. Further, it is the assessment, necessarily fluid, respecting reasonableness of conduct that reconciles the plaintiff's interest in protection from harm with the defendant's interest in freedom of action. So it is that the plaintiff's integrity of person is denied protection if the defendant has acted reasonably. However, protection of that integrity expands commensurately with medical understanding of the threats to it. Protection of mental integrity from the unreasonable infliction of serious harm, unlike protection from transient distress, answers the 'general public sentiment' underlying the tort of negligence that, in the particular case, there has been a wrongdoing for which, in justice, the offender must pay. Moreover, the assessment of reasonableness, which informs each element of the cause of action, is inherently adapted to the vindication of meritorious claims in a tort whose hallmark is flexibility of application. Artificial constrictions on the assessment of reasonableness tend, over time, to have the opposite effect. … [192] Before turning to consider each of the postulated control mechanisms, it is appropriate to identify the justification that is said to support them. At base, the justification lies in a perceived distinction between psychiatric and physical harm. Authorities have isolated four principal reasons said to warrant different treatment of the two categories of case. These are (i) that psychiatric harm is less objectively observable than physical injury and is therefore more likely to be trivial or fabricated and is more captive to shifting medical theories and conflicting expert evidence, (ii) that litigation in respect of purely psychiatric harm is likely to operate as an unconscious disincentive to rehabilitation, (iii) that permitting full recovery for purely psychiatric harm risks indeterminate liability and greatly increases the class of persons who may recover, and (iv) that liability for purely psychiatric harm may impose an unreasonable or disproportionate burden on defendants. This final concern is reflected in the statement that: '[i]t would be an entirely unreasonable burden on all human activity if the defendant who has endangered one person were to be compelled to pay for the lacerated feelings of every other person disturbed by reason of it, including every bystander shocked at an accident, and every distant relative of the person injured, as well as all his friends.' … [233] But it was not reasonably foreseeable that a person in the position of Mrs Tame would sustain a recognisable psychiatric illness from a clerical error which she was told was a mistake that had been rectified and in respect of which she received a formal apology. The appellant's reaction was extreme and idiosyncratic. The risk of such a reaction was far‑fetched or fanciful and, in the manner indicated in Wyong Shire Council v Shirt, was not one which the law of negligence required a reasonable person to avoid." (Footnotes omitted.)

It has been suggested that the terms of s 5B of the Civil Liability Act reinstates the "but for" test of causation. [44] The High Court said, of this test: "[18] The determination of factual causation under s 5D(1)(a) is a statutory statement of the 'but for' test of causation: the plaintiff would not have suffered the particular harm but for the defendant's negligence. While the value of that test as a negative criterion of causation has long been recognised, two kinds of limitations have been identified. First, it produces anomalous results in particular cases, exemplified by those in which there is more than one sufficient condition of the plaintiff's harm. Secondly, it does not address the policy considerations that are bound up in the attribution of legal responsibility for harm. [19] The division of the causal determination under the statute into the distinct elements of factual causation and scope of liability is in line with the recommendations in the Final Report of the Committee convened to review the law of negligence ('the Ipp Report'). The authors of the Ipp Report acknowledged their debt to Professor Stapleton's analysis in this respect. The policy considerations that inform the judgment of whether legal responsibility should attach to the defendant's conduct are the subject of the discrete 'scope of liability' inquiry. In a case such as the present, the scope of liability determination presents little difficulty. If the appellant can prove factual causation, it is not in contention that it is appropriate that the scope of Woolworths' liability extend to the harm that she suffered. In particular cases, the requirement to address scope of liability as a separate element may be thought to promote clearer articulation of the policy considerations that bear on the determination. Whether the statutory determination may produce a different conclusion to the conclusion yielded by the common law is not a question which is raised by the facts of this appeal." (Footnotes omitted.)

The foregoing deals with scope of duty. Nevertheless, despite its terms, as Hayne J points out in Vairy [59] , the task is always determined prospectively: "[128] If, instead of looking forward, the so‑called Shirt calculus is undertaken looking back on what is known to have happened, the tort of negligence becomes separated from standards of reasonableness. It becomes separated because, in every case where the cost of taking alleviating action at the particular place where the plaintiff was injured is markedly less than the consequences of a risk coming to pass, it is well nigh inevitable that the defendant would be found to have acted without reasonable care if alleviating action was not taken. And this would be so no matter how diffuse the risk was - diffuse in the sense that its occurrence was improbable or, as in Romeo, diffuse in the sense that the place or places where it may come to pass could not be confined within reasonable bounds. [129] To approach the inquiry about breach in this prospective way is to apply long‑established principle. In Aiken v Kingborough Corporation, Dixon J described the test to be applied in determining whether a statutory authority had breached a duty of care owed to a person entering land as being that a member of the public, entering public land as of right, "is entitled to expect care for his safety measured according to the nature of the premises and of the right of access vested, not in one individual, but in the public at large". No doubt this statement of the content of the duty must now be understood, taking proper account of subsequent developments in the common law concerning the duty of care owed to entrants by those who occupy land or have the care, control and management of public land. But those later developments do not affect the conclusion which underpins the passage cited from Aiken that the inquiry about breach must be made looking forward, not looking back at what happened to the particular plaintiff. Further, as earlier explained, Shirt is consistent with only that approach to the problem. And later decisions of the Court, notably Romeo and Commissioner of Main Roads v Jones, can be understood only in that way." (Footnotes omitted.)

In or to the same effect are the comments of the Court of Appeal in South Western Sydney Local Health District v Sorbello [92] in which Simpson JA said: "[72] What is now in issue is the extent, if any, to which Ms Sorbello can exploit such working capacity as she has. It is important to note the distinction between 'working capacity' and 'earning capacity'. The terms are not co-extensive. 'Earning capacity' recognises the realities of the world of employment. [73] In Nominal Defendant v Livaja [2011] NSWCA 121 this Court said: '65 There are distinctions to be drawn between injury and impairment or disability consequent upon injury, and between impairment or disability and diminished earning capacity. Because an individual has a physical and mental ability to undertake certain tasks, it does not necessarily follow that he has a significant residual earning capacity. Earning capacity must be measured by reference to the individual, when viewed with all his or her characteristics, in the labour market. When a person in middle age has spent all his or her life in a skilled or semi-skilled occupation which, as a result of injury, is no longer available, the identification of occupations which are theoretically available is only part of the task. There must also be a practical assessment of the likelihood of the individual obtaining employment in some such occupation.' [74] It has been accepted by this Court that, once a plaintiff has established a loss of earning capacity, the onus of demonstrating a failure to exercise any residual earning capacity lies on the defendant: Mead v Kearney [2012] NSWCA 215 at [16] and [25]. In Harold Luntz: Assessment of Damages for Personal Injury and Death, (4th ed 2002, Butterworths) at 118, the following is stated: 'Although a plaintiff who proves to the satisfaction of the court that the incapacity is genuine may take advantage of inferences of fact that may be drawn where there were no symptoms of the condition before the defendant's negligence caused some injury, the ultimate onus of proving that the incapacity is due to the defendant's negligence and not a pre-existing condition rests on the plaintiff. Once this onus is satisfied, it is not necessary for the plaintiff also to satisfy the court of the extent of the loss, in the sense of proving what employment the plaintiff is not incapacitated from performing; a defendant who contends that the plaintiff has a residual capacity has at least an evidentiary onus of adducing evidence of what the plaintiff is capable of performing and what jobs are open to a person with such a residual capacity. A fortiori, it is unrealistic to expect a plaintiff who contends that all work capacity has been lost to show by evidence what employment opportunities remain and what they would pay, in case the court accepts the defendant's contention the some residual capacity remains …' (italics in original, bold added) That passage was cited with approval in Mead." [93]

Nevertheless, the uncertainties can be dealt with in a number of ways. In Seltsam Pty Ltd v Ghaleb, [95] the Court discussed the interrelationship of the principles to be applied in cases of uncertainty or pre-existing conditions that may otherwise give rise to injury of a like kind. [96] In Seltsam, Ipp JA discussed the pre-existing conditions and the application of the judgment of the High Court in Watts v Rake [97] and Purkess v Crittenden [98] and referred to the application of Malec v Hutton [99] and recited the well-known passage at page 643 of the report of Malec. I reiterate those comments: "[102] In Malec Deane, Gaudron and McHugh JJ said at 643: '[I]n respect of events which have or have not occurred, damages are assessed on an all or nothing approach. But in the case of an event which it is alleged would or would not have occurred, or might or might not yet occur, the approach of the court is different. The future may be predicted and the hypothetical may be conjectured. But questions as to the future or hypothetical effect of physical injury or degeneration are not commonly susceptible of scientific demonstration or proof. If the law is to take account of future or hypothetical events in assessing damages, it can only do so in terms of the degree of probability of those events occurring. The probability may be very high - 99.9 per cent - or very low - 0.1 per cent. But unless the chance is so low as to be regarded as speculative - say less than 1 per cent - or so high as to be practically certain - say over 99 per cent - the court will take that chance into account in assessing the damages.' Brennan and Dawson JJ stated at 639-640: 'The judgment of the majority in the Full Court seems to us to overlook the difference between the fact that the [plaintiff] had not been working for some time before the trial and an evaluation of the [plaintiff's] earning capacity which was destroyed in consequence of the [defendant's] negligence. The fact that the [plaintiff] did not work is a matter of history, and facts of that kind are ascertained for the purposes of civil litigation on the balance of probabilities: if the court attains the required degree of satisfaction as to the occurrence of an historical fact, that fact is accepted as having occurred. By contrast, earning capacity can be assessed only upon the hypothesis that the [plaintiff] had not been tortiously injured: what would he have been able to earn if he had not been tortiously injured? To answer that question, the court must speculate to some extent. As the hypothesis is false - for the [plaintiff] has been injured - the ascertainment of earning capacity involves an evaluation of possibilities, not establishing a fact as a matter of history. Hypothetical situations of the past are analogous to future possibilities: in one case the court must form an estimate of the likelihood that the hypothetical situation would have occurred, in the other the court must form an estimate of the likelihood that the possibility will occur. Both are to be distinguished from events which are alleged to have actually occurred in the past.' Their Honours said at 640: 'In assessing the [plaintiff's] earning capacity in the present case, what had to be evaluated was the prospect that the deteriorating back condition would have precluded him from engaging in gainful employment had he not contracted brucellosis. An evaluation of that prospect had to be made. To make a finding on the balance of probabilities as though the prospect were something that had occurred in the past was to misconceive the process of evaluation.' [103] Therefore, according to Malec: (a) In the assessment of damages, the law takes account of hypothetical situations of the past, future effects of physical injury or degeneration, and the chance of future or hypothetical events occurring. (b) The court must form an estimate of the likelihood that the alleged hypothetical past situation would have occurred. (c) The court must form an estimate of the likelihood of the possibility of alleged future events occurring. (d) These matters require an evaluation of possibilities and are to be distinguished from events that are alleged to have actually occurred in the past, which must be proved on a balance of probabilities. [104] What was said in Watts v Rake and Purkess v Crittenden now has to be qualified by these principles (cf Commonwealth of Australia v Elliott [2004] NSWCA 360 at [81]). Malec has an important bearing, for example, on the way in which a court must determine whether a defendant has discharged the 'disentangling' evidentiary burden on it of showing that part of the plaintiff's condition was traceable to causes other than the accident and that, had there been no accident, the plaintiff would have suffered disability from his pre-existing condition. [105] Where a defendant alleges that the plaintiff suffered from a pre-existing condition, the evidential onus as explained in Watts v Rake and Purkess v Crittenden remains on the defendant and must be discharged by it. Nevertheless, to the extent that the issues involve hypothetical situations of the past, future effects of physical injury or degeneration, and the chance of future or hypothetical events occurring, the exercise of 'disentanglement' discussed in those cases is more easily achieved. That is because the court is required to evaluate possibilities in these situations - not proof on a balance of probabilities. [106] Without intending to give an exhaustive list of possibilities, it may be that, had the defendant's negligent act not occurred, a pre-existing condition might have given rise to the possibility that the plaintiff's enjoyment of life and ability to work would have been reduced and to a susceptibility to further injury; in addition, other causes entirely unrelated to the defendant's negligent act might have contributed to the plaintiff's ultimate condition. [107] Appropriate allowances must be made for these contingencies. A proper assessment of damages requires the making of a judgment as to the economic and other consequences which might have been caused by a worsening of a pre-existing condition, had the plaintiff not been injured by the defendant's negligence. A pre-existing condition proved to have possible ongoing harmful consequences (capable of reasonable definition) to the plaintiff, even without any negligent conduct on the part of the defendant, cannot be disregarded in arriving at proper compensation." [100]

Arndell BHT Arndell v Old Bar Beach Festival Incorporated; Cox v Mid-Coast Council

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