BRITISH AVIATION INSURANCE CO LTD v HASTING No. SCGRG-98-942 Judgment No. S235 [1999] SASC 235

DEBELLE J. The defendant Barry Hasting ("Hasting") owns a Cessna 170B aircraft. The aircraft was covered by a policy of insurance issued by British Aviation Insurance Co Limited ("the insurer"). On 13 January 1995 the aircraft crashed while being piloted by Hasting. It had collided with power lines. The plaintiff Alan Reimann, who was a passenger, was injured. Damage was also caused to the power lines which were owned by the Electricity Trust of South Australia. The total amount of the damages payable to Mr Reimann and to the Electricity Trust of South Australia had been agreed in the sum of $115,900. Hasting sought indemnity from the insurer which denied liability to indemnify Hasting. The issue upon which the action went to trial was whether Hasting was entitled to be indemnified for the damages pursuant to the aircraft policy.

The policy contained a series of general exclusions. The relevant exclusion is contained in paragraph 5. It reads:

(5) Due to or arising out of or directly or indirectly connected with:

(a) racing, record attempts, speed trials, mustering, aerial seeding or fertilisation, dusting, spraying, fish spotting or any other form of flying involving abnormal hazards."

It is unnecessary to refer to sub-paragraphs (b) and (c) of paragraph 5. The insurer had denied liability on the ground that the accident was due to or arose out of flying the aircraft in a manner which involved an abnormal hazards.

When read together, the preamble to paragraph 5 and the terms of paragraph 5 entirely lack syntax so that the meaning is obscured. The trial judge held that the intention of the parties was clear and that they intended that indemnity would be denied if the claim for loss and damage arose out of circumstances specifically referred to in paragraph 5. He imported the words "To any claim for loss or damage" to precede immediately the opening words in paragraph 5. Thus, the trial judge held, if a claim for loss and damage arose from a form of flying involving abnormal hazards, the insurer was entitled to refuse indemnity. On this appeal, both parties accepted this construction of the policy.

Hasting is a farmer and contractor who lives and works on Yorke Peninsula. At the trial he was aged 47 years. He learned to fly in 1986 and purchased a single-seated aeroplane. In November 1994 he purchased the Cessna. He flew the Cessna regularly. It was a rear-wheel aircraft which is suitable for landing and take-off on rougher surfaces such as paddocks. From the date of delivery, Hasting had made numerous trips in the Cessna. He landed and took off from a variety of areas. He is an active member of the Country Fire Service ("CFS") and used the aircraft in the course of his duties for the CFS. At the time of the accident he had flown 271 hours, of which 31.7 hours had been piloted in the Cessna. He was, nevertheless, a relatively inexperienced pilot.

Sunday 22 January 1995 was a fine day. Hasting decided to fly the Cessna. He took Mr Reimann with him. Mr Reimann is an experienced glider pilot. They flew from Hasting's property to Wardang Island. They then flew south to Marion Bay, travelling along the west coast of Yorke Peninsula. They were flying at an altitude of between 600 and 1000 feet.

Hasting had a friend called Bennett who lived on a property near Marion Bay. He told Reimann that he wished to see if Bennett was home with a view to visiting him. Bennett was also a member of the CFS. Hasting wished to discuss some CFS related matters with him. Hasting and Bennett live approximately 120 miles from one another by road. Hasting gave evidence that he was familiar with Bennett's property. He had flown over it on two occasions some months before and had also visited it by road. Hasting flew over the property and observed Bennett's vehicles parked on the property. He, therefore, assumed that Bennett was home and decided to visit him. He decided to land in a paddock near Bennett's house.

There are numerous stobie poles both on Bennett's property and surrounding it. Their location is described in the reasons of the trial judge and they are depicted on Exhibit B8. It is common ground that electricity wires are a well recognised hazard and a major cause of aircraft accidents, particularly in country areas, where pilots frequently land in paddocks. It is, therefore, essential for a safe landing in a paddock that a pilot ascertain whether wires exist and the position of them. The expert witnesses who were called agreed that it is a basic safety requirement for a pilot who is considering landing on a country air strip or in a paddock to become familiar with the area and assess its suitability for landing and taking off. The appropriate procedure will be mentioned in a moment.

Hasting flew in a northerly direction over Bennett's house at an altitude of about 500 feet. He flew some distance past the house and then performed a 180 degree turn and flew back towards the house in a southerly direction. He intended landing in a paddock to the south of the house. He identified a track in the paddock which he thought might be suitable as a landing strip. He then banked and turned right and flew in a north-westerly direction away from the house and the paddock. He then turned left at 90 degrees and was travelling for some distance in a south-westerly direction. He then made a further left hand 90 degree turn which resulted in the aircraft travelling in a south-easterly direction which was the proposed direction along which he intended to bring the aircraft to land.

The stobie poles are between 30 and 35 feet high. Hasting was intending to fly at 50 feet to inspect the surface of the paddock to determine its suitability for landing. As the aircraft approached the paddock from a north-westerly direction, Hasting was looking down to observe the terrain. As he approached the prospective landing area, Reimann suddenly said words to the effect that he was concerned about the power lines. Hasting responded that he had seen them. At the time he thought the aircraft was at about 50 feet. As he was approaching the area and looking down, Reimann yelled out "wire". Hasting looked up but could not immediately see a wire. By the time he saw it, the wire was at eye level and it was too late to take evasive action. The screen of the aircraft collided with the wire. The aircraft fell to the ground, tilting to the left. The trial judge found that Hasting had intended to perform a low level pass to assess the suitability of the landing area.

There was expert evidence from two witnesses as to the procedure to be adopted to assess the suitability of the intended landing area when a pilot intends to land in an area which is not an aerodrome. It is a three stage exercise. One expert, Mr McNamara, described it in these terms:

"As a general rule it is recommended that an inspection be conducted in three stages.

* The first stage is a circuit of the selected field at 1,000 feet to consider size, wind direction, obstacles and surface conditions.

* The second stage is a circuit of 500 feet with a descent to 200 feet on final approach and an overfly of the landing area at that height, again considering obstacles and surface conditions.

* The third stage is another circuit at 500 feet with a descent to 50 feet on short final and an overfly at that height for a close inspection of the surface conditions."

The trial judge held that Hasting had not completed the three stages but had combined the second and third stages and had failed to fly over the landing area at 200 feet. Instead, he was flying at what he thought was 50 feet but was in fact flying at an altitude of 25 feet.

Hasting had been taught to fly by a Mr O'Driscoll, a flight instructor of over 30 years experience. He made continuous assessments of Hasting's flying capacity. He last reviewed his flying skills on about 30 November 1994. He had taught Hasting a procedure called a "precautionary approach", the procedure adopted by pilots when they land in other than a recognised aerodrome. That procedure did not comply with the precautionary procedure that was taught and recommended. It did, however, involve two or three fly-overs to assess the suitability of the area for landing.

The trial judge made the following findings. Hasting was aware of the power lines in the immediate vicinity of the paddock in which he intended to land. He had seen them on previous occasions when he had visited the property and on two previous occasions when he had flown over the area. There were also trees in the area. Hasting was undecided about whether to land the aircraft and, at the time of the accident, was reducing height in order to inspect the immediate area and the surface of the paddock upon which he was intending to land. He considered it was safe to reduce height from 500 feet to 50 feet in order to make a closer inspection of the surrounding area. The judge found that Hasting was conducting a form of precautionary search procedure. Had he conducted the search in accordance with the recommended procedures, the search would have revealed that the area was unsuitable for landing. However, Hasting did not follow the proper procedure. He commenced a manoeuvre at 500 feet, then reduced height to 200 feet, and finally to 50 feet, all in one circuit. He was attempting to maintain a height of 50 feet and, if he had been able to do so, he would not have collided with the wire. However, he mis-judged the position. The judge also found that Hasting had observed all of the wires except the one that the plane hit. He saw that wire when it was too late to take evasive action. The judge concluded that the failure was due to Hasting's failure to follow the appropriate procedures which he had been taught.

Shortly stated, the trial judge has found that Hasting was conducting a routine flight, that he decided to land in a paddock in order to visit a friend, that he was conducting a precautionary procedure to check whether it was safe to land, and that he carried out that precautionary procedure in a negligent manner.

It is convenient to repeat the terms of the exclusion clause as it was interpreted by the trial judge. The policy did not apply

"to any claim for loss or damage due to or arising out of or directly or indirectly connected with:

(a) racing, record attempts, speed trials, mustering, aerial seeding or fertilisation, dusting, spraying, fish spotting or any other form of flying involving abnormal hazards."

The trial judge held that the words "forms of flying involving abnormal hazards" could not be construed ejusdem generis with the forms of flying which preceded them. He was unable to find a genus. There may in fact be a kind of genus but it is unnecessary to stay with that issue since neither party challenged that part of His Honour's reasoning.

The trial judge applied the decision of Hogarth J in MacLean v MacLean (1977) 15 SASR 306 when considering whether Hasting had been engaged in a form of flying involving abnormal hazards. Hogarth J held that the exclusion referred to in the expression "forms of flying involving abnormal hazards" was not intended to refer to some casual act of negligence even though it might momentarily constitute an abnormal hazard in flying. Instead, the form of flying referred to in the exclusion contemplated some sustained course of action which is hazardous, and abnormally hazardous, in itself. Both parties accept this construction of the clause.

Applying the decisions in Albion Insurance Co Limited v Body Corporate Strata Plan No 4303 [1983] VicRp 94; [1983] 2 VR 339 and SGIC v Lane (1997) 68 SASR 257, the trial judge also had regard to the commercial purpose of the contract which, he held, was to indemnify negligent acts of pilots which did not involve forms of flying which involved abnormal hazards.

The judge then held that the exercise of performing a precautionary examination of the intended landing area, although hazardous, did not constitute a form of flying involving abnormal hazards. In reaching that conclusion, he had regard to the evidence that it was a safe and legitimate procedure for a pilot of Hasting's experience to undertake the procedure of a preliminary examination as part of the landing procedure. The conditions were satisfactory to undertake the procedures and Hasting was qualified to undertake them. Hasting was, therefore, undertaking a recognised and legitimate exercise but had undertaken it in a negligent manner in that he had failed to follow each step in the procedure. The trial judge, therefore, concluded that the exercise he was performing did not constitute a form of flying involving abnormal hazards.

The appeal was essentially directed to the question whether the exercise in which Hasting had engaged could properly be characterised as negligent flying. The submissions by Mr Maurice QC, who appeared for the appellant, were focussed on Hasting's conduct in attempting to make a low level pass in this aircraft at a height of 50 feet above the ground for the purposes of establishing if the paddock was suitable for landing. He did not question the finding of the trial judge that it was a safe and legitimate procedure to inspect the proposed landing site in the manner described in the evidence. Indeed, his client's own expert, Mr Freeman, had said that it was an appropriate procedure as this extract from his evidence demonstrates:

"Q You would say that it would be a perfectly safe and legitimate procedure for somebody going to visit a friend on another property, from his property to another property, to do that sort of manoeuvre, to look at it from 500 feet, go down to 200 and then make a final pass at 50 feet for the purpose of seeing that the ground is all right to land on, and then perhaps going around another circuit and landing, or another two circuits if necessary.

Q Indeed, satisfying himself that the area he was going to land on was suitable for landing as an airfield, as a landing place.

Instead, he submitted that Hasting's failure to inspect at higher altitudes before descending to 50 feet was a form of flying involving abnormal hazards.

If Hasting had been flying for some time at low levels, there might have been some force in that submission. But to focus on the last moments of this flight is to isolate a relatively small part of Hasting's flying that morning. It is to identify one brief aspect instead of considering whether it had been a sufficiently sustained course of flying which involved abnormal hazards. Hasting was undoubtedly negligent in carrying out the procedures required to inspect the landing surface. He admitted that he should have inspected at higher and safer altitudes. It was an act of extreme negligence at the end of a flight which was otherwise safe. His negligence was of a relatively short duration. Failure by Hasting to carry out the required procedures had the consequence that he was flying at a dangerous altitude. Had he followed each step of the required procedures, it is unlikely that he would have flown at such a low level in the vicinity of the stobie poles. As Mr Maurice QC noted in his submission, if Hasting had performed a full circuit of the area at 200 feet above ground level, he would have made observations which would have drawn his attention to the wire with which the aircraft collided. The expression "forms of flying involving abnormal hazards" is not intended to attract the exclusion clause to momentary acts of negligence. If it did, it would negate the purpose and intent of the policy. Instead, as was held in McLean v McLean (supra), the exclusion applies to a sustained course of conduct where the pilot is intentionally flying in a way involving abnormal hazards. It refers to flying which inherently involves abnormal hazards.

There will be occasions when negligent flying will be of such a duration or of such a kind that it will constitute a form of flying involving abnormal hazards. It will often be a question of fact and degree whether the particular course or form of flying which is being examined involves abnormal hazards: cf Taylor v Stapley [1954] HCA 12; (1954) 90 CLR 1 at 9. Hasting acted negligently for a brief time but of sufficient duration to cause the accident. His failure to carry out the proper procedures for examining a proposed landing surface of this kind was negligent but was not a form of flying involving abnormal hazards.

The trial judge correctly interpreted the terms of the exclusion. It was plainly open to him to find that the events which caused the crash were an act of negligence on the part of Hasting and did not involve a form of flying involving abnormal hazards.

In the course of his of his argument, Mr Maurice QC referred to reg 157 of the Civil Aviation Regulations which prohibit flying at a height lower than 500 feet in country areas among others. Sub-reg (4)(e) of reg 157 provides a number of exceptions to that prohibition but it is doubtful whether the procedures involved in assessing the suitability of a landing surface come within those exceptions. However, reg 92(1) appears to permit landing at a place other than an aerodrome providing landing and take-off can be completed safely.

"An aircraft shall not land at, or take-off from, any place unless:

(a) the place is an aerodrome established under the Air Navigation Regulations; or

(b) the use of the place as an aerodrome is authorised by a licence granted under Regulation 89C; or

(c) the place is an aerodrome for which an arrangement under section 20 of the Act is in force and the use of the aerodrome by aircraft engaged in civil air navigation is authorised by the Authority under that section; or

(d) the place (not being a place referred to in paragraph (a), (b) or (c)) is suitable for use as an aerodrome for the purposes of the landing and taking-off of aircraft;

and, having regard to all the circumstances of the proposed landing or take-off (including the prevailing weather conditions) the aircraft can land at, or take-off from, the place in safety."

Para (d) and the concluding words of reg 92(1) appear to permit the practice of landing in paddocks provided it will be safe to land and take-off. By implication reg 92 authorises the recommended procedures to assess the suitability of the proposed landing area and, to that extent, constitutes a further exception to the operation of reg 157. But it is unnecessary to reach a firm conclusion on this question. The fact that a pilot is flying in breach of a statutory injunction does not necessarily mean that the flying involves abnormal hazards. As Mr Maurice acknowledged, the regulations provide no more than a background against which the course of flying should be assessed. He did not submit that the mere act of flying below 500 feet constituted a form of flying involving abnormal hazards.

For these reasons, I would dismiss the appeal.