South West Helicopters Pty Ltd v Stephenson [2017] NSWCA 312 | Case summary

South West Helicopters Pty Ltd v Stephenson [2017] NSWCA 312 | Case summary | Zoe

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Vienna Convention on the Law of Treaties (1969) Cases Cited: 2 Elizabeth Bay Road Pty Ltd v The Owners - Strata Plan No 73943 (2014) 88 NSWLR 488; [2014] NSWCA 409 Aéro-Club de l'Aisne v Klopotowska (1970) 24 RFDA 195 (Court of Cassation (First Civ Div)) Agtrack (NT) Pty Ltd v Hatfield (2005) 223 CLR 251; [2005] HCA 38 Air Link Pty Ltd v Paterson (2005) 223 CLR 283; [2005] HCA 39 Australian Securities Commission v Marlborough Gold Mines Ltd (1993) 177 CLR 485; [1993] HCA 15 Azzopardi v Bois [1968] VR 183 Brodie v Singleton Shire Council (2001) 206 CLR 512; [2001] HCA 29 Bywater Investments Ltd v Federal Commissioner of Taxation [2016] HCA 45; 91 ALJR 59 Cauchi v Air Fiji & Air Pacific Ltd [2005] TOSC 7 Chester v Waverley Corporation (1939) 62 CLR 1; [1939] HCA 25 Clark v Oceanic Contractors Inc [1983] 2 AC 130 Commissioner of Taxation of the Commonwealth of Australia v Scully (2000) 201 CLR 148; [2000] HCA 6 Coverdale v West Coast Council (2016) 259 CLR 164; [2016] HCA 15 CSR Timber Products Pty Ltd v Weathertex Pty Ltd (2013) 83 NSWLR 433; [2013] NSWCA 49 De Sales v Ingrilli (2003) 212 CLR 338; [2002] HCA 52; [2003] HCA 16 Demanes v United Airlines 348 F. Supp 13 (C D Cal, 1972) Dinov v Allianz Australia Insurance Ltd [2017] NSWCA 270 Disley v Levine [2002] 1 WLR 785 Edwards v Endeavour Energy (No 4) [2013] NSWSC 1899 El Al Israel Airlines Ltd v Tseng 525 US 155 (1999) Endeavour Energy v Precision Helicopters Pty Ltd [2015] NSWCA 169 Endeavour Energy v Precision Helicopters Pty Ltd (No 2) [2015] NSWCA 357 Fellowes (or Herd) v Clyde Helicopters Ltd [1997] AC 534 Fitness First Australia Pty Ltd v Fenshaw Pty Ltd (2016) 92 NSWLR 128; [2016] NSWCA 207 Gifford v Strang Patrick Stevedoring Pty Ltd (2003) 214 CLR 269; [2003] HCA 33 Glen v Korean Airlines Co Ltd [2003] QB 1386; [2003] EWHC 643 (QB) Grein v Imperial Airways Ltd [1937] 1 KB 50 Gulf Air Company GSC v Fattouh [2008] NSWCA 225; 251 ALR 183 Hambrook v Stokes Brothers [1925] 1 KB 141 Heli-Aust Pty Ltd v Cahill (2011) 194 FCR 502; [2011] FCAFC 62 Herd v Clyde Helicopters Ltd [1996] SLT 976 Holmes v Bangladesh Biman Corporation [1989] AC 1112 Hunter Douglas Australia Pty Ltd v Perma Blinds (1970) 122 CLR 49; [1970] HCA 63 In Re Mexico City Air Crash of October 31, 1979; Haley v Western Airlines Inc 708 F 2d 400 (1983) J Blackwood & Son Ltd v Skilled Engineering Ltd [2008] NSWCA 142 Jaensch v Coffey (1984) 155 CLR 549; [1984] HCA 52 Johnson Estate v Pischke [1989] 3 WWR 207 King v American Airlines Inc (2002) 284 F 3d 352 Kostas v HIA Insurance Services Pty Ltd (2010) 241 CLR 390; [2010] HCA 32 Laroche v Spirit of Adventure (UK) Ltd [2009] QB 778 Lazarus v Independent Commission Against Corruption (2017) 94 NSWLR 36; [2017] NSWCA 37 Meandarra Aerial Spraying Pty Ltd v GEJ Geldard Pty Ltd [2012] QCA 315 Milich v The Council of the City of Canterbury (No 2) [2012] NSWSC 450 Mount Beauty Gliding Club Inc v Jacob (2004) 10 VR 312; [2004] VSCA 151 Muller v Dalgety & Co Ltd (1909) 9 CLR 693; [1909] HCA 67 Ortet v Georges (1975) 30 RFDA 490 (Appeal Court of Paris (First Div)) Overseas Tank Ship (UK) Ltd v Morts Dock & Engineering Co Ltd [1961] AC 388 Povey v Qantas Airways Ltd (2005) 223 CLR 189; [2005] HCA 33 Public Transport Commission of New South Wales v J Murray-More (NSW) Pty Ltd (1975) 132 CLR 336; [1975] HCA 28 R v Khazaal (2012) 246 CLR 601; [2012] HCA 26 Re Minister for Immigration and Multicultural and Indigenous Affairs; ex parte Lam (2003) 214 CLR 1; [2003] HCA 6 Roadshow Films Pty Ltd v iiNet Ltd (2012) 248 CLR 42; [2012] HCA 16 Scala v Mammolitti (1965) 114 CLR 153; [1965] HCA 63 Seward v The "Vera Cruz" (1884) 10 App Cas 59 Sheather v Country Energy [2007] NSWCA 179; (2007) Aust Torts Rep 81-901 Sidhu v British Airways Plc [1997] AC 430 Smith v London and South Western Railway Co (1870) LR 6 CP 14 Société Mutuelle d'Assurance Aériennes v Gauvain (1976) 21 RFDA 436 South Pacific Air Motive Pty Ltd v Magnus (1998) 87 FCR 301; [1998] FCA 1107 Southgate v Commonwealth of Australia (1987) 13 NSWLR 188 Stephenson v Parkes Shire Council (No 2) [2015] NSWSC 719 Stott v Thomas Cook Tour Operators Ltd [2014] AC 1347; [2014] UKSC 15 Sulewski v Federal Express Corporation 933 F 2d 180 (1991) Sydney Water Corporation v Turano (2009) 239 CLR 51; [2009] HCA 42 Tame v New South Wales (2002) 211 CLR 317; [2002] HCA 35 Technical Products Pty Ltd v State Government Insurance Office (Qld) (1989) 167 CLR 45; [1989] HCA 24 The Anderson Group Pty Ltd v Tynan Motors Pty Ltd (2006) 65 NSWLR 400 The Queen v Hughes (2000) 202 CLR 535; [2000] HCA 22 The Winkfield [1902] P 42 Tiufino v Warland [2000] NSWCA 110 Trust Company of Australia Ltd v Skiwing Pty Ltd (2006) 66 NSWLR 77; [2006] NSWCA 185 Trustees of the Sydney Grammar School v Winch (2013) 83 NSWLR 80; [2013] NSWCA 37 United Airlines Inc v Sercel Australia Pty Ltd [2012] NSWCA 24; 260 FLR 37; 289 ALR 682 Workers' Compensation Board (Qld) v Technical Products Pty Ltd (1988) 165 CLR 642; [1988] HCA 49 Texts Cited: Australia, House of Representatives, Parliamentary Debates (Hansard), 7 April 1959

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headnote [This headnote is not to be read as part of the judgment] In 2006, Parkes Shire Council engaged South West Helicopters Pty Ltd ("South West") to provide a helicopter and pilot for the purposes of an aerial noxious weed survey. The helicopter pilot, Shane Thrupp, was an employee of South West. The helicopter itself was owned by a separate company, Country Connection Airlines Pty Ltd ("Country Connection"). Two Council employees, Ian Stephenson and Malcolm Buerckner, were to conduct the survey from the helicopter. Mr Stephenson and Mr Buerckner had previously conducted an aerial weed survey by helicopter for the Council in May 2005. On 2 February 2006, the helicopter was seen flying low above the main road between Parkes and Orange through a wooded area known as "the Dungeons". Approximately one kilometre into the Dungeons, the helicopter struck a power line owned by Essential Energy and crashed, killing all three men. The helicopter was destroyed by fire. The accident led to a number of claims and cross-claims in the Supreme Court. Mr Stephenson's family commenced three sets of proceedings. His wife, Ingrid Stephenson, brought claims against South West and Parkes Shire Council on two causes of action, in negligence for nervous shock and pursuant to the Compensation to Relatives Act 1897 (NSW). Mr Stephenson's daughter and son each brought proceedings in negligence for nervous shock against South West and Parkes Shire Council. Essential Energy was joined in each proceeding. The Council commenced proceedings against South West, seeking to recover workers' compensation payments made to the families of its two employees. South West cross-claimed against Essential Energy, and both Essential Energy and South West cross-claimed against the Council. South West and Country Connection also brought a proceeding against Essential Energy in damages for loss of the helicopter. Essential Energy cross-claimed against the Council. A three week trial took place in the Common Law Division before Bellew J in May and June 2013. The complex nature of the proceedings resulted in four judgments; final orders were made on 12 August 2016. The proceedings in this Court involved three separate appeals by (i) South West and Country Connection; (ii) Essential Energy; and (iii) Parkes Shire Council. As each matter involved several overlapping issues, the Court dealt with the proceedings by reference to the dispositive questions which it was required to determine. A South West's Liability to the Stephensons The questions to be determined by the Court were: (1) For the purposes of the Civil Aviation (Carriers' Liability) Act 1967 (NSW) ("State Carriers' Liability Act"), applying Pt IV of the Civil Aviation (Carriers' Liability) Act 1959 (Cth) ("Commonwealth Carriers' Liability Act"), in turn applying provisions of the Warsaw Convention, and regulating the liability of intrastate carriers: (a) Was Mr Stephenson a "passenger" on board the helicopter? (b) Did the Stephensons' claims arise "in respect of" the death of Mr Stephenson, and did South West therefore have a statutory immunity from suit pursuant to s 35(2) of the Commonwealth Carriers' Liability Act, due to the fact that the Stephensons' claims were made outside the two year limitation period prescribed by s 34? (2) If the Commonwealth Carriers' Liability Act applies, are the Stephensons' claims under the Compensation to Relatives Act 1897 (NSW) still available? In relation to question (1)(a): The Court held:

"Passengers" are persons other than those involved in the operation of the flight (crew): [60]. A person on board an aircraft who can give directions as to where the aircraft is to fly, but has no control over its operation, is not a member of the crew or a person operating the aircraft. There was no evidence that the pilot was required to submit to the directions of the Council employees: [61]. The employees were "passengers": [78], [263], [365]. Endeavour Energy v Precision Helicopters Pty Ltd [2015] NSWCA 169; Disley v Levine [2002] 1 WLR 785, applied. In Re Mexico City Air Crash of October 31, 1979; Haley v Western Airlines Inc 708 F 2d 400 (1983); Sulewski v Federal Express Corporation 933 F 2d 180 (1991); Fellowes (or Herd) v Clyde Helicopters Ltd [1997] AC 534; Johnson Estate v Pischke [1989] 3 WWR 207, considered. In relation to question (1)(b): (By Basten JA, Payne JA agreeing):
The Warsaw Convention gives effect to the "exclusivity principle", so that where the description of the basis of the claim is satisfied, the liability of the carrier is limited to that provided for under the terms of the Convention: [87]. The scope of the Convention "depends not on the qualitative nature of the act or omission giving rise to the claim but on when and where the salient event took place": [90]. Stott v Thomas Cook Tour Operators Ltd [2014] AC 1347; [2014] UKSC 15, applied.
Unless the Convention is varied by the terms of the domestic legislation, the language of the Convention governs as part of the law of Australia and should be construed, wherever possible, to operate uniformly in accordance with a construction of the Convention adopted by a superior court in other jurisdictions in which the Convention operates: [93]. Agtrack (NT) Pty Ltd v Hatfield (2005) 223 CLR 251; [2005] HCA 38, considered.
The key provisions in s 35 of the Commonwealth Carriers' Liability Act, governing a carrier's liability in respect of the death of a passenger, should, unless the language is intractable in indicating a different operation, conform to the operation of the Convention: [100]. When identifying the scope of the connector "in respect of", the focus must be on the timing and the event and not the nature of the cause of action: [101]. Kostas v HIA Insurance Services Pty Ltd (2010) 241 CLR 390; [2010] HCA 32; Technical Products Pty Ltd v State Government Insurance Office (Qld) (1989) 167 CLR 45; [1989] HCA 24, considered.
Section 28 of the Commonwealth Carriers' Liability Act, which renders the carrier liable "for damage sustained by reason of the death of the passenger", is not limited to damage sustained by the deceased passenger, as s 35(3) provides that "the liability is enforceable for the benefit of such of the passenger's family members as sustained damage by reason of his death": [108]. "Damage" is not limited to financial or economic loss: [109]-[111].
Section 35(2) of the Commonwealth Carriers' Liability Act provides that liability of the carrier "is in substitution for any civil liability of the carrier under any other law in respect of the death of the passenger". The reference to liability under any other law is not limited to tortious forms of liability, but includes such liability. The Convention "imposes an event-based liability on the carrier", which is intended to be exclusive of all other remedies available to a moving party seeking relief in connection with injury or death covered by the Convention: [114]. United Airlines Inc v Sercel Australia Pty Ltd [2012] NSWCA 24; 260 FLR 37, applied.

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Judgment INDEX BASTEN JA Paragraph A The proceedings 5 B South West's liability to Stephensons (1) Key provisions of State Carriers' Liability Act 17 (2) Treaties and the Commonwealth Carriers' Liability Act 27 (3) Case law - "passenger" 44 (4) Reasoning of primary judge 64 (a) "commercial transport operations" 71 (b) "passenger" 77 (5) Application of Carriers' Liability Act, s 35 (a) The issues 79 (b) Nervous shock claims 85 (i) issues and principles of construction 86 (ii) Commonwealth Carriers' Liability Act 97 (iii) "in respect of" 102 (iv) "damage" 108 (v) effect of s 37 112 (c) Elements in cause of action 117 (d) South Pacific and later authorities 123 (e) Argument by anomaly 136 (f) Argument based on ticketing 143 (g) Argument by inconsistency with other laws 154 (6) Conclusions 156 C South West's liability for compensation payments 164 (1) Effect of s 37 165 (2) Effect of s 151Z 167 D Liability of joint wrongdoers (1) Claim by Council against South West 186 (2) Liability of South West in negligence 191 (a) activity of helicopter at time of crash 193 (b) conduct of aerial survey 198 (3) Liability of Parkes Shire Council in negligence 207 (4) Liability of Essential Energy 222 E South West's claim for loss of aircraft 240 F Costs 248 G Orders 257 LEEMING JA 260 Applicable law 263 The nature of the question 271 Giving legal meaning to expressions such as "in respect of" 274 The consequences of the importance of context and purpose 277 The variety of claims by non-passengers against carriers 281 The context of s 35(2) of the Commonwealth Carriers' Liability Act confirms that Compensation to Relatives Act claims are governed by Part IV 290 The context of s 35(2) of the Commonwealth Carriers' Liability Act is much less clear in relation to claims by non-passengers for psychiatric injury 292 The Warsaw and Montreal system 296 The exclusivity principle 301 Exclusivity in the various conventions 302 The Australian implementation of the various aviation conventions 311 Exclusivity as reflected in s 35(2) of the Commonwealth Carriers' Liability Act 315 What non-passenger claims are excluded? 317 Significance of the contract of carriage 319 Carriers are liable to some non-passengers 321 Federal claims are not excluded 330 Existing authority 332 South Pacific Air Motive Pty Ltd v Magnus 340 Cauchi v Air Fiji 348 Conclusion 350 Balance of the appeals 352 Orders 354 PAYNE JA 357

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A THE PROCEEDINGS

Of the three men who died in the accident, there are no proceedings in relation to the pilot, Mr Thrupp. The families of Mr Stephenson and Mr Buerckner received a payment from their employer, Parkes Shire Council, pursuant to s 25 of the Workers Compensation Act 1987 (NSW). There was no dispute in relation to those payments, but the fact of the payments was relevant to the claims for damages, and to recoupment proceedings brought by Parkes Shire Council.
Three sets of proceedings were commenced in 2009 by the family of Mr Stephenson. His wife (Ingrid Stephenson) brought proceedings against South West and Parkes Shire Council on two causes of action, namely in negligence for nervous shock and pursuant to the Compensation to Relatives Act 1897 (NSW). Mr Stephenson's daughter (Natalee Stephenson) and son (Jay Stephenson) brought proceedings in negligence for nervous shock against the same two defendants. The Stephensons did not make a claim against Essential Energy, but it was joined by South West, which cross-claimed against it and Parkes Shire Council. Essential Energy made a cross-claim against Parkes Shire Council and Parkes Shire Council made a cross-claim against South West. The trial judge ultimately found that all three defendants and cross-defendants were negligent and apportioned responsibility between South West (70%), Parkes Shire Council (20%) and Essential Energy (10%).
There were three separate proceedings between the corporate entities. Two were commenced by Parkes Shire Council against South West seeking to recoup amounts of workers' compensation paid with respect to its deceased employees, Mr Stephenson and Mr Buerckner. Again, South West joined Essential Energy as a cross-defendant and both Essential Energy and South West cross-claimed against Parkes Shire Council.
The third corporate proceeding was brought by both South West and the owner of the aircraft, Country Connection, against Essential Energy for the loss of the aircraft. Essential Energy cross-claimed against Parkes Shire Council.
Most of the evidence, both oral and documentary, was directed to questions of negligence on the part of the three defendants. Most of the critical findings were challenged by one or more of the parties to the appeal. Due consideration of the evidence, including a number of expert reports, is unavoidable. However, several of the claims arose within two aspects of the legal framework with which it is convenient to deal first. These were whether, and to what extent: 1. South West had a statutory immunity from suit pursuant to the Civil Aviation (Carriers' Liability) Act 1967 (NSW) ("State Carriers' Liability Act"); and 2. Parkes Shire Council was able to recover payments of workers' compensation under s 151Z of the Workers Compensation Act.
For the purpose of resolving the legal issues, little more need be said about the circumstances of the accident. It is sufficient to note the following matters, purely by way of background at this stage: 1. there was a pair of power lines (conductors) which crossed the valley through which the road ran, perpendicularly to the road and at a height of some 38 m above the roadway; 2. the power lines were supported on each side of the valley by poles, the span being about 1.2km across the valley; 3. the helicopter was flying along the line of the road at a speed of no less than 80kmh and less than 50 m above the road; 4. the route taken by the helicopter at the time of the accident was not part of the route travelled in the course of 2005 survey; and 5. there was no direct evidence as to why the helicopter took that route, at that height and at that speed.
South West contended by way of defence to the claims brought by the Stephensons that the only amounts for which it was liable in damages in respect of the death of Mr Stephenson were amounts payable under the State Carriers' Liability Act. Any liability which it might have had under the Compensation to Relatives Act or the general law relating to negligence was excluded by the State Carriers' Liability Act. There was provision under the State Carriers' Liability Act for the operator of the aircraft to pay damages in the event of the death of a passenger on the aircraft, not contingent on proving negligence, but its liability to make such a payment expired when no proceedings were commenced within two years of the date of the accident.
Broadly speaking, this line of defence depended on two factors. First, the statutory limitation on liability related to damages sustained by reason of the death of a "passenger"; there was an issue as to whether Mr Stephenson was a "passenger" for the purposes of the State Carriers' Liability Act. Secondly, there was a question as to whether the Stephensons' claims arose "by reason of" or "in respect of" the death of Mr Stephenson. South West said they did. South West had to succeed on both points in order to obtain the exclusion from liability under the State Carriers' Liability Act.
The manner in which these issues were dealt with at trial was, at least in part, unfortunate. In his first judgment, the trial judge placed reliance on an earlier judgment involving a helicopter accident in New South Wales, namely Edwards v Endeavour Energy (No 4) ("Edwards"). [1] That case involved an accident in which a helicopter carrying employees of Endeavour Energy, who were conducting a survey of the company's power lines, clipped a Telstra wire. The helicopter was able to land, but an employee of Endeavour Energy (Mr Edwards) was severely injured when the large rotor clipped the cabin of the aircraft. The trial judge in that case held that Mr Edwards was not a "passenger" for the purposes of the State Carriers' Liability Act and hence the operator of the helicopter could not escape liability under that Act. The trial judge in the present case adopted the reasoning in Edwards. [2]
The judgment in this matter was handed down on 19 December 2014; no orders were made disposing of the proceedings at that stage. Following written submissions on outstanding issues filed in the first half of 2015, the trial judge delivered a second judgment on 19 June 2015. [3] Again, no orders were made, but issues as to liability, damages and apportionment had been resolved and the parties were directed to file minutes of proposed orders reflecting the conclusions reached in the judgments.
Three days later, on 22 June 2015, this Court handed down judgment in the appeal from Edwards, namely Endeavour Energy v Precision Helicopters Pty Ltd ("Endeavour Energy"), [4] in which the construction of the State Carriers' Liability Act adopted at trial in Edwards was overturned.
Four weeks later, the judgment of this Court was drawn to the trial judge's attention by counsel for Essential Energy. For reasons which are not entirely clear, no party invited the trial judge to revisit his findings with respect to the operation of the State Carriers' Liability Act. Both the judge and the parties appeared to consider that the matter could not be revisited unless there was an application by one party to "reopen" the proceedings in that respect. As no orders had then been made, it might have been expected that all parties (and the Court) would be united in taking that step, so that the proceedings could be decided according to law, as the law then stood, and not on a false legal basis. However, that step was not taken; accordingly the issue has to be resolved by this Court. It will be necessary to return to the manner in which the issue was dealt with in considering what orders should be made with respect to the costs of this aspect of the proceedings.

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(1) Key provisions of State Carriers' Liability Act

Regulation of claims in relation to injury to persons (including death) caused in the course of international air carriage formed the basis of the Warsaw Convention of 1929. That Convention has subsequently been modified on a number of occasions, including pursuant to the Hague Protocol of 1955. The application of the Conventions in relation to international air carriage is effected in Australia by the Civil Aviation (Carriers' Liability) Act 1959 (Cth) ("Commonwealth Carriers' Liability Act"). Similar principles are made applicable to interstate air travel within Australia by Pt IV of the Commonwealth Act. Finally, the same principles are picked up and applied in relation to intrastate air travel by the State Carriers' Liability Act.
Within this scheme, two issues arose in relation to the present proceedings, namely (i) whether the carriage by South West of the Council employees, Mr Stephenson and Mr Buerckner, was carriage by air to which the State Carriers' Liability Act applied, and (ii) the consequences of the State Carriers' Liability Act having application, in the event that it did.
There are two key provisions in the State Carriers' Liability Act. In relation to the first issue, s 4 defines the scope of the activities to which the Act applies. (The key phrases are italicised below, though not in the original.) 4 Carriage to which Act applies The carriage to which this Act applies is the carriage of a passenger where the passenger is or is to be carried in an aircraft being operated by the holder of an airline licence or a charter licence in the course of commercial transport operations under a contract for the carriage of the passenger between a place in the State and another place in the State or from a place in the State back to that place, not being: (a) carriage to which Part IV of the Commonwealth Act applies, or (b) carriage to which the Warsaw Convention, the Hague Protocol or the Guadalajara Convention applies, or (c) carriage to which the provisions of another convention, protocol or treaty apply ….
If the Act applies, subject to some exceptions not presently relevant, s 5 then picks up as the applicable law parts of the Commonwealth Act in the following manner: 5 Application of provisions of Parts IV and IVA of the Commonwealth Act The provisions of Parts IV and IVA of the Commonwealth Act (other than sections 27, 40, 41 and 41J (8)) and, subject to section 7 of this Act, the provisions of the Commonwealth Regulations apply to and in relation to carriage to which this Act applies and matters connected with the carriage, as if those provisions were incorporated in this Act and as if, in those provisions as so incorporated: (a) general references to Parts IV and IVA of the Commonwealth Act were references to this Act, (b) a reference in one of those provisions to another of those provisions were a reference to that other provision as applying by virtue of this Act, … The provisions so identified are referred to in the State Carriers' Liability Act as the "applied provisions". [5] Further, "the Commonwealth Act" is defined to mean the Commonwealth Carriers' Liability Act, as amended from time to time. [6]
One provision in Pt IV of the Commonwealth Carriers' Liability Act which does not apply as part of State law is s 27, which defines the application of the Commonwealth Act. That provision is, in effect, replaced for the purposes of intrastate carriage by air by s 4 of the State Carriers' Liability Act. (The other excluded sections are not presently material.)
There is a further "application" provision in the State Carriers' Liability Act: 6A Administration of the applied provisions as Commonwealth laws (1) It is the intention of Parliament that the applied provisions should be administered and enforced as if they were provisions applying as laws of the Commonwealth instead of being provisions applying as laws of the State. (2) To that end: (a) Commonwealth authorities have the same powers to enforce the applied provisions as they have to enforce the Commonwealth Act and the Commonwealth Regulations, and (b) the laws of the Commonwealth apply to offences against the applied provisions as if they were offences against the Commonwealth Act or the Commonwealth Regulations, and (c) the laws of the State do not apply to offences against the applied provisions.
Questions as to the effects of this provision were noted by the High Court in Air Link Pty Ltd v Paterson, [7] but put to one side. However, a general and constitutionally uncontroversial effect is to pick up the underlying purpose of the Commonwealth Act, namely to apply within Australia the legal principles governing international air travel, as accepted by Australia. The applied provisions should be construed in the light of this purpose.
It is convenient to identify those aspects of s 4 which are not in issue in the present case. First, there was no dispute that the Council employees were being carried in an aircraft being operated by the holder of a charter licence. Secondly, the contract was not a contract between the employees of the Council and South West, but between the Council itself and South West, pursuant to which the Council's employees travelled in the aircraft. Thirdly, the contract was for carriage of those persons "from a place in the State back to that place"; none of the exceptions applied. Fourthly, while the trial judge concluded that the carriage did not occur in the course of "commercial transport operations", [8] that was seen as consistent with the view that the aircraft was not used for the carriage of "passengers", an issue which remains in dispute. As a result, the critical issue was whether each of the Council employees was a "passenger" for the purpose of the carriage.
As to who was a "passenger", Parkes Shire Council accepted that the decision of this Court in Endeavour Energy required a different conclusion from that reached by the trial judge. However, it submitted that the reasoning in Endeavour Energy was wrong and should not be followed. That submission was based upon the proposition that although Endeavour Energy had applied an English House of Lords decision, Fellowes (or Herd) v Clyde Helicopters Ltd, [9] that decision was not consistent with other international cases applying either the Convention or a domestic version of the Convention. It was submitted that Endeavour Energy (like Herd) had adopted an "activities test" to categorise a person as a "passenger", whereas other overseas authorities focused on "the reason or purpose" for which the person flew. It was submitted that a "purely activities based test" created logical problems in its application and that a "purpose-based" test was to be preferred.
As explained below, the critique of the reasoning in Herd (followed in Endeavour Energy) fails because the attempt to characterise the case law into two streams is an artificial construct which breaks down when the reasoning in particular cases is understood in the factual context in which it was deployed. To explain why this is so requires a review of the principal authorities. Before undertaking that task, it is necessary to provide some further outline of the relevant legal parameters of the discussion.

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(2) Treaties and the Commonwealth Carriers' Liability Act

Key provisions of the Commonwealth Carriers' Liability Act, picked up by the State Act, derive from the various international treaties. Reference to the treaties is necessary for that reason, and also because the American authorities to which reference will be made below deal directly with the language of the Conventions governing international air travel. The original treaty, the Warsaw Convention of 1929, has been amended over time. Nevertheless, Article 1 has remained unchanged and reads as follows: Article 1 1. This Convention applies to all international carriage of persons, baggage or cargo performed by aircraft for reward. It applies equally to gratuitous carriage by aircraft performed by an air transport undertaking.
Article 3 required that, for the carriage of passengers, "the carrier must deliver a passenger ticket" containing certain information including "a statement that the carriage is subject to the rules relating to liability established by this Convention", absent which, "if the carrier accepts a passenger without a passenger ticket having been delivered he shall not be entitled to avail himself of those provisions of this Convention which exclude or limit his liability." The terms of Article 3 have varied significantly over time. Thus the formula was changed by The Hague amendments in 1955 so that the failure to deliver a ticket only precluded the carrier from availing himself of the provisions of Article 22. (Article 22 provided a monetary cap on liability.) It did not, for example, withdraw the benefit of the two year unextendable limitation period provided in Article 29.
Article 3 was varied again by the Montreal Convention of 1999. It removed the obligation to provide a physical ticket but preserved the requirement to give "written notice" as to the effect of the Convention regarding liability in respect of death or injury. Significantly, s 5 of Article 3 now states: 5. Non compliance with the provisions of the foregoing paragraphs shall not affect the existence or the validity of the contract of carriage, which shall, nonetheless, be subject to the rules of this Convention including those relating to limitation of liability.
The changes to Article 3 are significant because they reveal a reduction, followed by a removal, of the connection between the immunity from liability under domestic law conferred on the carrier and the provision of a ticket giving notice of that effect to the passenger. Nevertheless, Australia did not accede to the Montreal Convention until 25 November 2008 and it did not come into force until 24 January 2009, some years after the accident in this case.
The Conventions imposed their own form of liability, not dependent on proof of negligence. Chapter III of the Warsaw Convention is headed "Liability of the Carrier". Article 17 reads as follows: Article 17 The carrier is liable for damage sustained in the event of the death [or wounding of a passenger] or any other bodily injury suffered by a passenger, if the accident which caused the damage so sustained took place on board the aircraft or in the course of any of the operations of embarking or disembarking.
The original Article 24 was in the following terms: 1. In the cases covered by Articles 18 and 19 any action for damages, however founded, can only be brought subject to the conditions and limits set out in this Convention. 2. In the cases covered by Article 17 the provisions of the preceding paragraph also apply, without prejudice to the questions as to who are the persons who have the right to bring suit and what are their respective rights.
That formulation remained the same in Article 24 as amended by the Hague Protocol but was reformulated as a result of the Montreal No 4 Convention of 1975. Section 1 then read: 1. In the carriage of passengers and baggage, any action for damages, however founded, can only be brought subject to the conditions and limits set out in this Convention, without prejudice to the question as to who are the persons who have the right to bring suit and what are their respective rights. The amendments pursuant to the 1999 Montreal Convention resulted in three changes, namely (i) a renumbering of the articles so that Article 24 became Article 29, (ii) ss 1 and 2 being combined and (iii) a further sentence being added at the end: In any such action, punitive, exemplary or any other non-compensatory damages shall not be recoverable. This last sentence does not appear in the Commonwealth Carriers' Liability Act.
Articles 17 and 24 were translated into the following provision in the Commonwealth Carriers' Liability Act: 28 Liability of the carrier for death or injury Subject to this Part, where this Part applies to the carriage of a passenger, the carrier is liable for damage sustained by reason of the death of the passenger or any bodily injury suffered by the passenger resulting from an accident which took place on board the aircraft or in the course of any of the operations of embarking or disembarking. [10]
There are two significant variations between Article 17 and s 28. First, the Act treats the reference to "wounding" in Article 17 as surplusage and merely refers to "any bodily injury". That change was insignificant. More significantly, although not for this case, the reference to "bodily injury" was only inserted in s 28 in 2013. [11] Before the amendment, s 28 referred to "personal injury", a point which had some bearing on the reasoning in a Federal Court decision discussed below. [12]
The second variation is the reformulation of the causal connection between the damage and the event. The Article refers to "damage sustained in the event of the death", and then refers to "the accident which caused the damage". Section 28 refers to "damage sustained by reason of the death"; in the second limb it uses the phrase "resulting from" to link either the damage or the death or bodily injury to the accident. Given the order in which the concepts are set out, the natural reading is that it is the death or injury which must result from the accident. The change may not matter and it seems unlikely that the drafter was seeking to do more than avoid a perceived awkwardness in the language of the Convention.
Article 22 of the Warsaw Convention provides a cap on the liability of the carrier "for each passenger". The amount has varied over time, as has the method of calculation. Under the Commonwealth Carriers' Liability Act, the equivalent provision is found in s 31 which, at the time of the accident, provided as follows: 31 Limitation of liability (i) Subject to the regulations relating to passenger tickets, the liability of a domestic carrier under this Part in respect of each passenger, by reason of his injury or death resulting from an accident, is limited to: (a) … $500,000 …. Nothing was said to turn on the initial proviso to this provision.
Article 23 renders null and void "[a]ny provision tending to relieve the carrier of liability or to fix a lower limit than that which is laid down in this Convention". A similar prohibition on "contracting out" appears in s 32.
Article 29 of the Warsaw Convention (and as amended by the Hague Protocol) stated as follows: 1. The right to damages shall be extinguished if an action is not brought within two years, reckoned from the date of arrival at the destination, or from the date on which the aircraft ought to have arrived, or from the date on which the carriage stopped. 2. The method of calculating the period of limitation shall be determined by the law of the Court seised of the case.
The equivalent provision in the Commonwealth Carriers' Liability Act is s 34 which in 2006 provided: 34 Limitation of actions The right of a person to damages under this Part is extinguished if an action is not brought by him or for his benefit within two years after the date of arrival of the aircraft at the destination, or, where the aircraft did not arrive at the destination: (a) the date on which the aircraft ought to have arrived at the destination; or (b) the date on which the carriage stopped; whichever is the later.
There are separate provisions in the Act dealing with liability in respect of death and liability in respect of injury respectively. The more detailed provision (liability in respect to death of a passenger) is s 35 which is of immediate relevance. Section 36, (liability in respect of injury to a passenger) is not directly applicable, but is the provision which has been considered in other cases to which the parties drew attention. Accordingly, it is convenient to set both out here, as in force in 2006. 35 Liability in respect of death (1) The provisions of this section apply in relation to liability imposed by this Part on a carrier in respect of the death of a passenger (including the injury that resulted in the death). (2) Subject to section 37, the liability under this Part is in substitution for any civil liability of the carrier under any other law in respect of the death of the passenger or in respect of the injury that has resulted in the death of the passenger. (3) Subject to the next succeeding subsection, the liability is enforceable for the benefit of such of the members of the passenger's family as sustained damage by reason of his death. (4) To the extent that the damages recoverable include loss of earnings or profits up to the date of death, or funeral, medical or hospital expenses paid or incurred by the passenger before his death or by his personal representative, the liability is enforceable for the benefit of the personal representative of the passenger in his capacity as personal representative. (5) For the purposes of subsection (3), the members of the passenger's family shall be deemed to be the wife or husband, de facto spouse, parents, step‑parents, grandparents, brothers, sisters, half‑brothers, half‑sisters, children, step‑children and grandchildren of the passenger, and, in ascertaining the members of the passenger's family, an illegitimate person or an adopted person shall be treated as being, or as having been, the legitimate child of his mother and reputed father or, as the case may be, of his adoptors. (6) The action to enforce the liability may be brought by the personal representative of the passenger or by a person for whose benefit the liability is, under the preceding provisions of this section, enforceable, but only one action shall be brought in respect of the death of any one passenger, and such an action, by whomsoever brought, shall be for the benefit of all persons for whose benefit the liability is so enforceable who are resident in Australia or, not being resident in Australia, express the desire to take the benefit of the action. (7) The damages recoverable in the action include loss of earnings or profits up to the date of death and the reasonable expenses of the funeral of the passenger and medical and hospital expenses reasonably incurred in relation to the injury that resulted in the death of the passenger. (8) In awarding damages, the court or jury is not limited to the financial loss resulting from the death of the passenger. …. 36 Liability in respect of injury Subject to the next succeeding section, the liability of a carrier under this Part in respect of personal injury suffered by a passenger, not being injury that has resulted in the death of the passenger, is in substitution for any civil liability of the carrier under any other law in respect of the injury.
Because there are claims for contribution and for recoupment of workers' compensation payments from South West, it is also necessary to set out s 37, which has no equivalent in the Convention and leaves identified liabilities under domestic law unaffected. 37 Certain liabilities not excluded Nothing in this Part shall be deemed to exclude any liability of a carrier: (a) to indemnify an employer of a passenger or any other person in respect of any liability of, or payments made by, that employer or other person under a law of the Commonwealth or of a State or Territory providing for compensation, however described, in the nature of workers' compensation; or (b) to pay contribution to a tort-feasor who is liable in respect of the death of, or injury to, the passenger; but this section does not operate so as to increase the limit of liability of a carrier in respect of a passenger beyond the amount fixed by or in accordance with this Part.
Against the background of the Convention provisions and the relevant Australian legislation, it is convenient to turn next to the case law dealing with the term "passenger".

[55]

(3) Case law - "passenger"

Neither the Convention nor the legislation contains any definition of the term "passenger". In its ordinary meaning, a passenger is any person who travels in a vehicle or conveyance, other than the driver, pilot or a member of the crew. [13] That approach was adopted by the US Court of Appeals for the Ninth Circuit in In Re Mexico City Air Crash of October 31, 1979; Haley v Western Airlines Inc. [14] The appeal dealt with the summary dismissal of three damages claims by the dependants of persons who died in the crash; the Court affirmed the judgment with respect to claims brought by the personal representatives of two flight attendants who were on duty when the plane crashed. They reversed the judgment of dismissal with respect to a third deceased, a flight attendant employed by the airline, who was not on duty on that flight, but was travelling to Mexico City for the purposes of joining another flight. Such travel was described as "dead heading".
The bulk of the judgment in Mexico City Air Crash was concerned with whether or not the Warsaw Convention created a cause of action for wrongful death independent of domestic provisions under Californian law. Having concluded that the Convention did establish such a cause of action, the Court turned to consider whether each of the deceased persons was a "passenger". The Court concluded: [15] "The term 'transportation' seems to us to require as a minimum that the voyage be undertaken for the principal purpose of moving the individual from point A to point B. In the cases of Haley and Tovar [who were indisputably working as flight attendants], the voyages were undertaken not for this reason, but for the exclusive purpose of performing employment duties. We conclude that Haley and Tovar were not, therefore, 'passengers' aboard Flight 2605 …."
With respect to the third employee who died, the Court noted that she was receiving full pay and half flight time credit for her time aboard the aircraft, but nevertheless thought there were "genuine issues of material fact" concerning whether she was being transported as a "passenger" aboard the flight. While it was not necessary for the Court to go further, it noted that in another case, Demanes v United Airlines, [16] one member of the Ninth Circuit panel hearing Mexico City Air Crash (Judge Pregerson), then sitting as a District Court judge, had ruled that four pilots who were killed in an air crash while "dead heading" were "passengers" for the purposes of the airline's liability under the Convention. It should be noted in passing that nothing turns on the reference to a person travelling from "point A to point B"; that would be an essential part of international air travel, but is not an essential part of the domestic law within Australia. [17]
The reasoning in Mexico City Air Crash was adopted and applied by the US Court of Appeals for the Second Circuit in Sulewski v Federal Express Corporation. [18] That case also involved an appeal against a summary judgment in favour of the employer, the employee being an aircraft mechanic who died when travelling on a cargo plane which crashed on a flight from Singapore to Kuala Lumpur, en route to Hong Kong. The deceased was travelling in the course of his employment in accordance with the respondent's practice of carrying a mechanic on a plane which was to land at an airport where the respondent did not employ ground staff. The Court found that he was on duty throughout the flight "being 'on call' to give technical advice to the operational crew members in the event of mechanical problems during a flight." [19] Rejecting the proposition that mere presence on board a carrier renders a person a "passenger", the Court stated: [20] "It requires, first, that the person board the carrier pursuant to a contract of carriage and, second, that the carriage be undertaken for the primary purpose either of going from one place to another or for the recreational enjoyment of the journey itself."
It may be doubted whether this language took the matter any further than Mexico City Air Crash; arguably it provided less clarity than the earlier decision which it described as having "reached a similar conclusion." [21] Further, the reference to the carriage being "pursuant to a contract of carriage" was derived from the fact that a stowaway could not recover under the Warsaw Convention. Section 42 of the Commonwealth Carriers' Liability Act provides that Pt IV would apply in relation to the carriage of a person who "travels in an aircraft without the consent of the carrier" as if he were "a passenger carried under a contract for his or her carriage for reward".
Both Mexico City Air Crash and Sulewski are consistent with a distinction between persons travelling as crew on duty and those who are not crew on duty on the flight, a person falling into the latter category being a "passenger".
The respondents drew attention to three decisions of French courts which raised somewhat different issues. Because the translations provided to this Court were not adequate to reveal the precise terms of the reasoning, or indeed the statutory provisions which were applied, limited assistance can be obtained from them. However, all three were discussed in Herd.
Aéro-Club de l'Aisne v Klopotowska, [22] involved a claim by the surviving widows of two persons killed in an accident in the course of a "test flight". It is not clear that the case turned on the meaning of "passenger".
Société Mutuelle d'Assurance Aériennes v Gauvain, a decision of the Court of Cassation (First Civil Division) of 4 July 1967, involved a student pilot and a flying club instructor, both of whom died in an accident during a "hedge hopping flight" in the course of which the aircraft touched a high voltage power line and crashed. [23]
Closer to the present case was Ortet v Georges. [24] The purpose of the flight in that case involved aerial photography; the aircraft crashed on take-off killing the pilot and the photographer. Again the decision (denying the application of the Convention) does not appear to turn on the meaning of "passenger".
Each of these decisions was relied upon before the House of Lords in Herd. Lord Hope of Craighead dealt with them as follows: [25] "In Société Mutuelle d'Assurance Aériennes v Gauvain, 21 R.F.D.A. 436, it was held by the Cour de Cassation that the law of 2 March 1957 by which the rules of the Warsaw Convention were applied to domestic air transport within France did not apply to regulate the liability of the air carrier for the death of a student pilot while undergoing a flying lesson. In Aéro-Club de l'Aisne v Klopotowska, 24 R.F.D.A. 195 the accident occurred during a test flight, which did not have the purpose of carrying people or goods from one point to another according to the definition of air transport in article 113 of the Civil Aviation Code, so it was held by the Cour de Cassation that the law of 2 March 1957 did not apply. In Ortet v Georges, 30 R.F.D.A. 490, the aircraft had been leased for the taking of aerial photographs and it was held by the Cour d'Appel de Paris that the flight did not have the character of air transport. The same approach was taken in Barnes v Service Aerien Français, 47 R.F.D.A. 343, where a helicopter was being used to airlift a man who had suffered a skiing accident to hospital and the Cour d'Appel de Paris held that the provisions of the Warsaw Convention as applied by Law 321.3 of the Civil Aviation Code did not apply. These decisions all support the argument which Mr Jones presented with great skill on behalf of the appellants that Sergeant Herd was on board the helicopter not in pursuance of a contract of carriage but in pursuance of his duties as a police officer. But we were shown a commentary on the decision in Aéro-Club de l'Aisne v Klopotowska, 24 R.F.D.A.195, which suggests that opinion in France was divided on this point, and that some decisions in the French courts had taken the view that the law of 2 March 1957 was of general application to all cases where there is air transport. In any event the fact that the jurisprudence in one country has adopted an interpretation of the Convention which supports Mr Jones's argument is not in itself a compelling reason for holding that we should follow the same approach in our interpretation of article 1 of Schedule 1 to the Order of 1967."
The French cases were also considered in a Canadian case, Johnson Estate v Pischke. [26] A family, consisting of father, daughter and son-in-law were flown by the pilot, Mr Pischke, from Estevan in Saskatchewan to Boise, Idaho. The aircraft crashed in bad weather. The son-in-law, Mr Dyer, flew the dual control plane for at least part of the flight for the purpose of obtaining flying experience as part of a pilot training course he was then undertaking. The father, Mr Johnson, and the daughter, Ms Coulter, wished to pick up a dog in Idaho. Mr Johnson and the pilot died soon after the crash; Dyer and Coulter survived at the crash site for 14 days and then walked for five days through waist deep snow, and survived. Claims were made by the executors of Mr Johnson's estate and by Mr Dyer under the Canadian law which incorporated the Warsaw Convention and the Hague Protocol. The judge concluded that Dyer did not fall within the ambit of the Convention, not being a "passenger", but a student pilot at the time, whereas the estate did, Mr Johnson being a passenger. Although Halvorson J referred to Gauvain, he identified the reasoning of that case in the following terms: [27] "There, the court ruled that a student pilot in the course of a training flight with his instructor did not come within the Convention. The court was of the view the flight was not the type of carriage which is governed by the Convention as the principal objective was quite different from that to which the Convention applied. The same could be said of Dyer's carriage, but I prefer to base my decision on the meaning of 'passenger' and the scheme of the Convention. It is noteworthy that the argument that the student became a passenger when he relinquished control to the instructor did not prevail in Gauvain."
It is convenient to turn next to the decision of the House of Lords in Herd, delivered in February 1997. The case involved a claim by the widow of a police officer (Sergeant Herd) who had died while on surveillance duties, travelling in a helicopter operated by the respondent. The aircraft crashed into a building during a snowstorm. The widow sued for common law damages in negligence, on behalf of her four children. The claim was resisted on the basis of a UK order incorporating the Warsaw Convention, as amended by the Hague rules, into the domestic law of the United Kingdom in relation to carriage by air. The principal opinion was delivered by the Lord Chancellor, Lord Mackay of Clashfern. In applying Articles 1 and 17 of the Convention, Lord Mackay concluded: [28] "In my view it is clear that the respondents were the carrier in respect of the carriage of Sergeant Herd. It is true that Sergeant Herd was on the aircraft for the purpose of carrying out his duties as a member of the Police Helicopter Unit, but from the facts as alleged … it is clear that he had no responsibility whatever in respect of the operation of the aircraft, which was solely under the control of the pilot, and therefore in my opinion the activities which Sergeant Herd was carrying on while on the aircraft are not to be regarded as contributing in any way to the carriage of himself or the other persons on board. He therefore is properly regarded as a passenger."
In relation to a number of earlier English decisions, Lord Mackay stated that none dealt with the terms of the order which operated in the present case. He continued: [29] "In so far as they dealt with the Warsaw Convention either as originally agreed upon, or as modified at the Hague, they dealt with provisions very substantially different in important respects from those with which we are concerned in the Order. In particular, the ticketing provisions are fundamental in those Conventions to the limitation of liability, since the delivery of a ticket with the appropriate notice of limitation is generally essential to the application of the limitation provisions which involves a relationship between, for example, the passenger and the carrier which is not necessary in the Order. The cases in the United States and Canada and all but two of the French decisions could be explained on the basis that if there is a relationship between the carrier and the person carried in addition to, or distinct from, the relationship of the person carried and the carrier, such as, for example, where the person being carried is an employee of the carrier with duties connected with the conduct of the flight, the liability under such relationship is not affected by limitations on the liabilities incurred as carrier."
Lord Nicholls of Birkenhead, Lord Hoffmann, Lord Hope of Craighead and Lord Clyde agreed with the Lord Chancellor. Lord Hope gave additional reasons of his own. Lord Hope considered that the language of Article 1 was straightforward; it applied to "all carriage of persons", [30] a phrase which does not appear in the Commonwealth Carriers' Liability Act. Article 17 dealt with liability for damage sustained in the event of the death of a passenger. Lord Hope continued: [31] "Sergeant Herd was being carried by air in the helicopter when it crashed, and the carriage was being performed for reward by the respondents under their contract with the police authority. It is not suggested that the surveillance and detection duties on which Sergeant Herd was engaged at the time involved him at any stage in the handling of the helicopter. It is a matter of admission that the flying of the helicopter was a matter for which the pilot, Captain Pryke, was solely responsible. Although Sergeant Herd was on board the helicopter in the course of his duties as a police officer, he was there merely as a passenger so far as the performance of the contract of carriage for reward was concerned."
Lord Hope then considered whether the authorities required a different view to be taken of the wide scope of the relevant articles adopted by the 1967 Order and concluded that they did not. [32]
Contrary to submissions made on behalf of the Parkes Shire Council, the reasoning in these cases cannot be characterised as either an "activities-based" test or a "purpose-based" test. Both characterisations are inappropriate. It is true that reference is made to the nature of the activities carried on by the person travelling in the aircraft, but primarily for the purpose of determining whether he or she was operating as a member of the crew of the aircraft. Purposes were also identified, but not by reference to any kind of purpose. For example, whether the traveller is travelling on business, for recreation, and if for recreation, whether to holiday at the destination or to sightsee during the course of the flight, are not treated as relevant, except perhaps in the French case of Ortet v Georges, which was not followed in Herd. Rather, the attention to purpose has been to identify the relationship between the operation of the aircraft and the purpose for which the traveller is on the aircraft. Thus, the category of "passenger" is broadly treated as a residual category of persons other than those involved in the operation of the flight. The latter category will include the crew and other employees of the business operating the aircraft, together with persons who, while not employees, are on a training flight and thus involved in the control or operation of the aircraft.
No doubt there is a line to be drawn between the pilot in control of the aircraft and a third party on board who may give instructions as to where the aircraft is to fly. Importantly for present purposes, Herd held that the police officer who could give such directions, but had no control over the operation of the aircraft, was not to be treated as a member of the crew or as a person operating the aircraft. That distinction was adopted in Endeavour Energy and is applicable in the present case. If the evidence demonstrated that the pilot was bound to comply with directions given by another person in the aircraft, regardless of the pilot's own view as to proper safety precautions, a different conclusion might be reached. However, there was no evidence in this case that if the pilot had thought it necessary to overfly a particular area before descending, or thought flying at a low altitude was not safe, he could have been required nevertheless to submit to direction of the Council employees.
There are two further aspects of the inquiry which should properly be noted. First, the present case is not directly concerned with the application of international Conventions, but rather with the proper construction of domestic legislation. As already noted, Pt IV of the Commonwealth Carriers' Liability Act does not in all respects mirror the Warsaw Convention, either in its original form or as amended. Nevertheless, the present question turns upon the application of Pt IV of the Commonwealth Carriers' Liability Act pursuant to s 27(1), which states that the Part applies to "the carriage of a passenger" in certain kinds of aircraft operations. Secondly, the critical element of liability "in respect of the death of a passenger" (s 35 of the Commonwealth Carriers' Liability Act) also turns on the meaning of "passenger". In those respects the legislation mirrors Articles 1 and 17 of the Convention. As Lord Hope stated in Herd in relation to English domestic law: [33] "Schedule 1 to the Order of 1967 was not made in order to give effect to any treaty obligations of the United Kingdom, but uniformity of interpretation is nevertheless important. All those who are involved in carriage by air, whether as carriers or as passengers, and their insurers should be able to assume that the same law applies no matter where the event occurs or where the forum is for the dispute …. In this situation I think that it is appropriate to have regard to the purpose and subject matter of the Conventions and to decisions of foreign courts in regard to the Conventions …".
This was the approach adopted by this Court in Endeavour Energy; if applied in the present case, there is no basis for distinguishing this aspect of Endeavour Energy on the facts. Nor is there reason to doubt the correctness of that approach, which is consistent with established authority in the UK, the USA and Canada.

[56]

(4) Reasoning of primary judge

The trial judge dismissed the application of the Commonwealth Carriers' Liability Act largely by adopting the reasoning of the trial judge (Johnson J) in Edwards. He set out the reasoning in Edwards at [105]-[108] in which the activity of the aircraft, being involved in "low-level aerial work inspecting power lines", [34] was held to be "far removed from any notion of 'commercial transport operations' by the holder of a 'charter licence'." [35] The trial judge held that "the helicopter was being used for an aerial weed survey, not for the carriage of passengers or cargo." [36]
The trial judge then considered whether Mr Stephenson was to be regarded as a "passenger" and, again following the reasoning in Edwards, concluded that he was not. In Edwards, Johnson J had sought to apply the reasoning in Herd and subsequent cases, but had distinguished them on the facts. Johnson J had referred to Laroche v Spirit of Adventure (UK) Ltd, [37] dealing with a person carried in a hot air balloon, which crashed, causing him injury. In that case Dyson LJ had held: [38] "He was not a member of the crew. Unlike Miss Disley in Disley's case, [39] he did not contribute to the flight in any way. He was not on board as a pilot under instruction. His role was even more passive than that of Sergeant Herd in Herd's case, who was held to be a passenger although he was on board the helicopter directing the surveillance operations and giving necessary instructions to the pilot."
Johnson J held: [40] "[129] It is necessary to consider the circumstances of this particular flight for the purpose of determining whether Mr Edwards was a 'passenger'. It was central to the conduct of aerial inspection of overhead lines that the pilot be assisted by a crew person, with the title of 'observer', who would 'assist the pilot' by 'providing advance warning of approaching hazards', and by keeping track of the aircraft's position relevant to approaching hazards. [130] The importance of the contract in this case is that, taken with the evidence of what actually occurred on 4 April 2006, it supports a conclusion that Mr Edwards was not a passenger. It is clear that Mr Edwards, as 'observer', formed an essential part of the crew of the helicopter undertaking aerial inspection activities on 4 April 2006. I note that, in answers to interrogatories, Precision admitted that Mr Edwards assisted the pilot in determining 'whether the correct asset was being inspected' and that he kept a lookout for hazards, although Precision denied that he was a member of the crew. [131] I accept the submission of Telstra that, on the facts of this case, there was a mutual exclusivity between being a passenger and being a member of the crew. The only passenger on this flight was the photographer. She had no function in relation to the inspection of power lines, which was the purpose for which the helicopter was being used at the time. [132] On the other hand, Mr Edwards discharged functions including assisting the pilot with navigation of the aircraft, both by directing him to the power lines which he was to fly near to, and by looking out for, and warning of hazards which he was to avoid. In these ways, Mr Edwards was so closely involved in the conduct of the flight, that the conclusion ought be reached that he was a member of the crew, and not a mere passenger. If Mr Edwards had not been present to act as 'observer', the low-level aerial surveillance flight could not have taken place at all."
Having set out the last paragraph quoted above, the trial judge concluded that "the same applies to Mr Stephenson." He continued: [41] "It was part of Mr Stephenson's role to act as an observer, and to direct Mr Thrupp to particular areas which were required to be inspected for the presence of noxious weeds. His presence on the flight was essential to the conduct of the survey. He was not a passenger being conveyed from one place to another."
This reasoning did not fairly reflect the reasoning of the trial judge in Edwards; it did not rely upon a contractual obligation to keep a look out for hazards, being the critical element relied upon by Johnson J in concluding that Mr Edwards was not a passenger. Nor did it seek to distinguish an earlier passage from the judgment of Buxton LJ in Disley v Levine to the following effect: [42] "That observation [referring to Lord Mackay's discussion of Gauvain in Herd] was, however, directed at the particular facts of the Herd case, where it had been argued that Sergeant Herd was not a passenger because he was empowered to give directions to the pilot as to where the helicopter should fly. In every other respect, however, Sergeant Herd was on the helicopter for the purpose of being conveyed from one place to another, albeit places that he determined while he was in the air rather than in advance when he was on the ground. He therefore fulfilled the normal understanding of the word 'passenger'. That is also the purposive meaning of the word when it is used in a Convention directed at commercial air transport."
On this reasoning, Mr Stephenson, like Mr Herd, was a passenger, though the factual basis for this conclusion will be addressed below.
The reasoning in Edwards was rejected by this Court on appeal in Endeavour Energy. Nevertheless, because that reasoning is itself under challenge, it is appropriate to address the reasoning of the trial judge in Edwards afresh. There are four interrelated reasons why his approach should not be accepted.

[57]

(a) "commercial transport operations"

First, the phrase "commercial transport operations" which is to be found in s 4 of the State Carriers' Liability Act (in which respect it mirrors s 27(1) of the Commonwealth Carriers' Liability Act) is not obviously a term of limitation. The operations involved were carried out pursuant to a contract between the Shire Council and the aircraft operator, for reward. They were undoubtedly commercial operations. The purpose of the agreement between the parties was for the aircraft to convey council workers whilst they undertook a survey. By any ordinary meaning of language, that involved a commercial transport operation. No reason was given why the ordinary meaning should not be accepted. The phrase is in fact a defined term in s 26 of the Commonwealth Carriers' Liability Act. It means "operations in which an aircraft is used, for hire or reward, for the carriage of passengers or cargo". Although the definition had been set out by the trial judge at [271], it was not referred to in the course of the reasoning. To the extent that the definition referred to the "carriage of passengers", it too turned on who should be classified as a passenger.
Secondly, some form of limitation appears to have been placed on the defined term because s 4 requires that the carriage be "in an aircraft being operated by the holder of an airline licence or a charter licence". There is no reason to read down the defined term in this way. The licensing requirement applies to the party operating the aircraft. In any event, because there are definitions in Pt IV of the Commonwealth Carriers' Liability Act of "airline licence" and "charter licence", each of which includes "an Air Operator's Certificate in force under the Civil Aviation Act 1988 (Cth)" authorising, respectively, airline operations and charter operations, the same meaning must be given to the phrases "airline licence" and "charter licence" in s 4 of the State Carriers' Liability Act.
A separate issue might arise if South West did not hold an air operator's certificate under the Civil Aviation Act; however, it did have such a certificate authorising it to conduct "(a) Charter operations as set out in Schedule 2" and "(b) Aerial work operations as set out in Schedule 3". The aerial work identified in Sch 3 included the following: "AERIAL SPOTTING (a) Fire (b) Flood (c) Flora (d) Fauna". Not only did South West have a relevant licence, the terms of the licence expressly identified the operation upon which the aircraft was engaged when it crashed.
Thirdly, to describe that operation as "far removed from any notion of" the kind of operation identified in the definition is to impose a preconceived construct on the language of the section. Such a limitation should not be imposed unless it finds its source in the language of the section. Subject to the next point, no such source was identified.
Fourthly, and perhaps by way of explanation of the last matter, the judge paraphrased s 4. He stated that the New South Wales Act applied to carriage under a contract "for the carriage of a person or persons between one place and another within the State." [43] That was wrong. To the extent that the section is concerned only with place of departure and destination, it expressly applies to carriage "from a place in the State back to that place". It is not restricted to travel from place A to place B.
For all these reasons, the first constraint on the application of the Commonwealth Carriers' Liability Act cannot be accepted, unless it depends on the second identified limitation, namely the meaning of "passenger".

[60]

(a) the issues

On the basis that the State Carriers' Liability Act applies with respect to the carriage of the Shire Council employees, it is necessary to consider the operation of s 35(1) of the Commonwealth Act referring to "liability imposed by this Part on a carrier in respect of the death of a passenger". That refers to the liability imposed by s 28 "for damage sustained by reason of the death of the passenger". Section 35(2) identifies that liability as "in substitution for" any civil liability of the carrier under any other law "in respect of the death of the passenger"' subject to the exclusion of certain liabilities under s 37. The reference to liability "under any other law" includes liability under the general (non-statutory) law of the State and under statute law, subject to the exclusions provided by s 37.
There are, in principle, three sources of liability which may arise "in respect of" the death of a passenger, namely (i) an entitlement to compensation under workers' compensation legislation; (ii) a claim under the Compensation to Relatives Act by dependants of the deceased, in circumstances where the deceased (if death had not ensued) would have been entitled to recover damages, and (iii) a claim for nervous shock suffered by a third party who witnessed or heard of the death.
There is no issue in relation to the claims by the widows for workers' compensation; that liability arose in the employer and not the carrier. Their only relevance for present purposes is that the carrier may be liable to indemnify the employer in respect of such payments, a liability being preserved by s 37 of the Commonwealth Carriers' Liability Act and separately addressed below.
In the event that the State Carriers' Liability Act applied, s 28 of the Commonwealth Carriers' Liability Act rendered the carrier liable for damages "sustained by reason of the death of the passenger". That liability, which is capped with respect to amount by s 31 and with respect to the time of claim by s 34, is further addressed in s 35. Relevantly, s 35(2) provides that "the liability under this Part is in substitution for any civil liability of the carrier under any other law in respect of the death of the passenger". The Compensation to Relatives Act is such a law; it allows a dependant to recover damages resulting from the death of the person upon whom the plaintiff was dependent. The trial judge allowed a claim on this account by Mrs Stephenson, calculated by reference to her husband's income as a proportion of the family's income as at the date of his death.
The Stephensons also had claims for nervous shock resulting from the death of Mr Stephenson; in dealing with that claim, the trial judge addressed the possibility that it might be excluded by the Carriers' Liability Acts, if indeed they applied. He concluded that, even if the Acts otherwise applied, the nervous shock claim would nevertheless be maintainable. [45] Despite the lengthy discussion in relation to this claim, [46] no similar analysis was undertaken with respect to the claim under the Compensation to Relatives Act. The calculation in that regard was made in the second judgment. [47] It appears to have been common ground (certainly nothing was put to the contrary on the appeal) that if the Commonwealth Carriers' Liability Act applied, such a claim would fall within the exclusion under s 35(2). That is, the liability of the carrier under Pt IV of the Commonwealth Carriers' Liability Act would be in substitution for any liability under the Compensation to Relatives Act. So much was determined by the High Court in Agtrack (NT) Pty Ltd v Hatfield. [48]
It remains, therefore, to address the claims for nervous shock. This exercise requires consideration of the relevant statutory provisions, and the arguments for a confined construction of the exclusion of extraneous bases of liability. In order to identify a relevant connection between the cause of action in negligence and the death of Mr Stephenson, it is necessary to address the elements of the cause of action. It is also necessary to consider three bases upon which the application of the exclusivity principle is resisted, namely (i) an argument based on the creation of anomalies, (ii) an argument by reference to ticketing requirements in the Convention, and (iii) an argument by reference to inconsistency of laws.

[62]

(i) issues and principles of construction

The availability of a claim in damages for nervous shock suffered by the relatives of the deceased depends on the proper construction of s 35(2) and s 35(3). In short, the issue turns on the scope of the connecting phrase "in respect of" which determines the relationship between the excluded liability, being "any civil liability of the carrier under any other law" and the event giving rise to the liability, namely "the death of the passenger".
In addressing that issue it is necessary to consider the extent to which the Convention, and cases from other jurisdictions construing the Convention, should be taken into account in construing the language of the Commonwealth Carriers' Liability Act, as adopted and applied by the State Carriers' Liability Act. That is important for two reasons. First, Article 24 of the Warsaw Convention [50] has been described as giving effect to "the exclusivity principle". That is, a claim falling within the terms of Article 17 (relevantly for the present case) "can only be brought subject to the conditions and limits set out in this Convention." That does not mean that if the Convention does not provide a remedy, the domestic general law can fill the gap. Rather, it means that in circumstances where the description of the basis of the claim is satisfied, the liability of the carrier is limited to that provided for under the terms of the Convention, as explained in Stott v Thomas Cook Tour Operators Ltd. [51]
That principle was described by Lord Toulson JSC [52] in Stott as the "exclusivity principle". Lord Toulson stated: [53] "In the Sidhu case [1997] AC 430 the House of Lords considered the question whether a passenger who sustained damage in the course of international carriage by air due to the fault of the carrier, but had no claim against the carrier under article 17 of the Warsaw Convention, was left without a remedy. It concluded that this was so. Lord Hope of Craighead gave the only speech. He analysed the history, structure and text of the Convention, and he reviewed the domestic and international case law. He explained that the Convention was a package. It gave to passengers significant rights, easily enforceable, but it imposed limitations. He held that the whole purpose of article 17, read in its context, was to prescribe the circumstances - that is to say, the only circumstances - in which a carrier would be liable to the passenger for claims arising out of his international carriage by air."
Lord Toulson noted that the same principle had been applied in the United States. "[36] In the USA the leading authority is the decision of the Supreme Court in El Al Israel Airlines Ltd v Tseng (1999) 525 US 155. The plaintiff was subjected to an intrusive security search at John F Kennedy International Airport in New York before she boarded a flight to Tel Aviv. She sued the airline under New York tort law for damages for psychosomatic injury. The Supreme Court had previously held in Eastern Airlines Inc v Floyd (1991) 499 US 530 that mental or psychic injuries unaccompanied by physical injuries were not compensable under article 17, but the plaintiff argued that her claim in respect of the treatment which she suffered before embarkation was not within the reach of the preemptive effect of the Convention. The Court of Appeals for the Second Circuit accepted that argument (1997) 122 F 3d 99. In its judgment it expressed the fear that if the Convention had the preclusive effect for which the airline contended, it would follow, for example, that a passenger injured by a malfunctioning escalator in the airline's terminal would have no remedy against the airline even if it had recklessly disregarded its duty to maintain the escalator in proper repair. The Supreme Court (1999) 525 US 155 reversed the decision of the Court of Appeals in an opinion delivered by Ginsburg J (Stevens J dissenting). … [41] In King v American Airlines Inc (2002) 284 F 3d 352, the Court of Appeals for the Second Circuit considered the question whether discrimination claims could properly be regarded as generically outside the Convention's substantive scope, so that a claim for compensation under local law would not be affected by the Convention. The assumed facts were that the plaintiffs were bumped from an overbooked flight because of their race. Upholding an order for the dismissal of the claim, the court held that discrimination claims under local law which arose in the course of embarking on an aircraft were preempted by the Convention. [42] The argument advanced unsuccessfully by the plaintiffs was that discrimination claims fell outside the scope of the Convention because of their qualitative nature. Sotomayor CJ (now Sotomayor J of the US Supreme Court), delivering the opinion of the court, emphasised, at pp 360-361, that the preemptive scope of the Convention depends not on the qualitative nature of the act or omission giving rise to the claim but on when and where the salient event took place: '33. … Article 17 directs us to consider when and where an event takes place in evaluating whether a claim for an injury to a passenger is preempted. Expanding on the hypothetical posed by the Tseng court, a passenger injured on an escalator at the entrance to the airport terminal would fall outside the scope of the Convention, while a passenger who suffers identical injuries on an escalator while embarking or disembarking a plane would be subject to the Convention's limitations. Tseng 525 US 155, 171. It is evident that these injuries are not qualitatively different simply because they have been suffered while embarking an aircraft, and yet article 17 plainly distinguishes between these two situations.' (Original emphasis.) '35. The aim of the Warsaw Convention is to provide a single rule of carrier liability for all injuries suffered in the course of the international carriage of passengers and baggage. As Tseng makes clear, the scope of the Convention is not dependent on the legal theory pled nor on the nature of the harm suffered. See Tseng 525 US 155, 171 (rejecting a construction of the Convention that would look to the type of harm suffered, because it would "encourage artful pleading by plaintiffs seeking to opt out of the Convention's liability scheme when local law promised recovery in excess of that prescribed by the Treaty"); Cruz v Am Airlines (1999) 193 F 3d 526, 531 (DC Cir 1999) (determining that fraud claim was preempted by article 18, because the events that gave rise to the action were "so closely related to the loss of [plaintiffs'] luggage … as to be, in a sense, indistinguishable from it").'"
Secondly, the exclusivity principle requires that "the preemptive scope of the Convention depends not on the qualitative nature of the act or omission giving rise to the claim but on when and where the salient event took place". [54] That language was taken from the judgment of Sotomayor CJ in the Second Circuit Court of Appeals in King v American Airlines Inc. [55] In Stott, Lord Toulson described the holding in King in the following terms: [56] "The assumed facts were that the plaintiffs were bumped from an overbooked flight because of their race. Upholding an order for the dismissal of the claim, the court held that discrimination claims under local law which arose in the course of embarking on an aircraft were preempted by the Convention."
On that approach, the fact that an essential element of the claims by the relatives was the death of a family member in an accident which occurred in the course of a flight would not allow a restrictive view of the connection between the loss suffered (and hence the cause of action) and the "event".
Should this approach be applied in construing the terms of s 35(2) and s 35(3) of the Commonwealth Act? To answer this question, it is necessary to have regard to the context in which these provisions appear in the Commonwealth Carriers' Liability Act, including by reference to its structure and general provisions.
As noted above, the Warsaw Convention of 1929 has been significantly amended by later international instruments, to which Australia has acceded over time. The application of the Convention may, therefore, have a piecemeal effect. That is recognised by the fact that the Commonwealth Carriers' Liability Act has separate Parts dealing with the separate Conventions and the Hague Protocol. [57] Each of these Parts contains an opening section which, with respect to the Warsaw Convention as amended at the Hague, is as follows: 11 Convention to have force of law (1) The provisions of the Convention have, subject to this Part, the force of law in Australia in relation to any carriage by air to which the Convention applies, irrespective of the nationality of the aircraft performing that carriage. It is, of course, true that each Convention so applied may be varied by the terms of the Act. Otherwise, in accordance with well established principles, one would expect that the language of the Convention would govern as part of the law of Australia and that it would be construed, wherever possible, to operate uniformly in accordance with any point of construction adopted by a superior court in another jurisdiction in which the Convention operates.
This reasoning is consistent with the approach adopted in Agtrack, dealing with the construction of s 34 imposing a limitation period on an action under Pt IV. The joint reasons of five members of the Court stated: [58] "Given the subject, scope and purpose of the statute as a whole, it is readily apparent that s 34 should be given a construction harmonious with that which applies to the international carriage dealt with under the Conventions, in particular with reference to Art 29 of the Warsaw Convention."
Part IV of the Commonwealth Carriers' Liability Act, which contains the "applied provisions" adopted by the State Carriers' Liability Act, does not give force of law in Australia to any particular Convention, because its purpose is to extend the operation of those Conventions to domestic air carriage. [59] The State Carriers' Liability Act has a similar purpose, namely to give effect to Pt IV of the Commonwealth Act in relation to air carriage to which the Commonwealth Act and the Conventions do not apply. [60]
In that context, it is significant that the State Act, s 6A(1), expresses an intention that "the applied provisions should be administered and enforced as if they were provisions applying as laws of the Commonwealth instead of being provisions applying as laws of the State." That provision may have two relevant consequences for the enforcement of the applied provisions in this State. First, it is apt to pick up the purpose of the Commonwealth legislation in expanding to domestic air carriage the laws applied by the Conventions as in force from time to time. Accordingly, if it is appropriate to have regard to the meaning given to specific articles in the Conventions by overseas courts in construing the Commonwealth Carriers' Liability Act, it is also appropriate to give effect to such case law in applying the State Carriers' Liability Act. Secondly, the effect may be to pick up and apply as State law relevant provisions of the Acts Interpretation Act 1901 (Cth). Thus the requirements of s 15AA requiring that the court adopt the interpretation that would best achieve the purpose or object of the Act should govern the interpretation of the applied provisions. Similarly, the court would be empowered to have regard to extrinsic material, in accordance with s 15AB of the Acts Interpretation Act, to the extent that it "is capable of assisting in the ascertainment of the meaning of the provision".

[63]

(ii) Commonwealth Carriers' Liability Act

Of the matters addressed in Pt II of the Commonwealth Carriers' Liability Act which may qualify the operation of the Convention, s 11A deals with the cap on liability fixed in Article 22 by reference to "special drawing rights"; that provision has its counterpart in s 31 of Pt IV, although the cap in that provision is expressed in Australian dollars. Sections 12 and 13 in Pt II have counterparts in s 35 (liability in respect of death) and s 36 (liability in respect of injury) in Pt IV; and s 14 in Pt II has its counterpart in s 37 in Pt IV.
Although a reading of the provisions in Pt IV might suggest a degree of independence from the terms of the Convention, when read in the context of their counterpart provisions in Pt II they gain a quality of uniformity. For example, s 12(1) refers to liability imposed by the Convention (as compared with liability imposed by Pt IV), so that it is the liability under the Convention which is in substitution for any other civil liability (s 12(2) and s 35(2)) and which is enforceable for the benefit of family members (s 12(3) and s 35(3)). Section 12(11) deals with a procedural matter addressed in Article 22, par 4 of the Warsaw Convention, which has no direct equivalent in s 35.
The language in Pt II indicates that where the drafter considered that a particular provision departed from the Convention, that was stated. Where there was no such indication, the intention, it may be inferred, was to restate the Convention in language familiar in domestic law, but without changing its operation. Relevantly for present purposes, there is no indication of departure from the Convention in s 12(2) and (3). Section 12(2) is said to be subject to s 14. Section 14, which protects the rights of employers under workers' compensation legislation to recover payments from the carrier, and the rights of third party wrongdoers to contribution, commences "[n]othing in the Convention or in this Part shall be deemed to exclude [such] liability". The equivalent of s 14 in Pt IV is s 37 which commences "[n]othing in this Part shall be deemed to exclude any liability of a carrier".
It follows that the key provisions in s 35 should, unless the language is intractable in indicating a different operation, conform to the operation of the Convention.
From this analysis, two further propositions emerge: first, applying the exclusivity principle, it is necessary to focus on the language of the exclusion of liability in s 35(2), and not on the scope of the liability created under the Convention and adopted by the statute. Thus, the fact that there is no liability under the Convention for pure mental harm does not prevent the exclusion (in this case pursuant to s 36, rather than s 35) of a claim for mental harm resulting from an accident in the course of carriage by air. Secondly, when identifying the scope of the connector "in respect of" the focus must be on the timing and the event and not the nature of the cause of action.

[64]

(iii) "in respect of"

In Kostas v HIA Insurance Services Pty Ltd, [61] French CJ stated: "The extent of the term 'a question with respect to a matter of law' is controlled by the words 'with respect to'. They are to be read and applied having regard to their legislative context. [62] Like the terms 'in relation to' or 'in connection with', they constitute a 'prepositional phrase' of indefinite content. [63] "
In Technical Products Pty Ltd v State Government Insurance Office (Qld), [64] Brennan, Deane and Gaudron JJ addressed the scope of the connecting phrase "in respect of" in the Motor Vehicles Insurance Act 1936 (Qld), s 3(1) which relevantly read: 3(1) … the owner of any motor vehicle shall … indemnify himself and all other persons … by a contract of insurance … against all sums for which he … or any such other person … shall become legally liable by way of damages in respect of such motor vehicle for accidental bodily injury … where such injury is caused by, through, or in connection with such motor vehicle.
On one view, the scope of the obligation to insure would have been the same if the words "in respect of such motor vehicle" had been omitted as surplusage; on that view, the relevant connection with the motor vehicle was provided by the last clause connecting the injury with the motor vehicle.
Both majority judgments rejected that approach. The joint reasons of Brennan, Deane and Gaudron JJ stated: [65] "… a requirement that liability in damages for an injury be 'in respect of' a motor vehicle is different from a requirement that the injury be 'caused by, through, or in connection with' the motor vehicle. The first focuses upon the relationship between the relevant liability in damages and the vehicle. The second looks only to the relationship between the injury itself and the vehicle. The words 'in respect of' have a very wide meaning. Indeed, they have a chameleon-like quality in that they commonly reflect the context in which they appear. The nexus between legal liability and motor vehicle which their use introduces in s 3(1) is a broad one which is not susceptible of precise definition. That nexus will not, however, exist unless there be some discernible and rational link between the basis of legal liability and the particular motor vehicle."
Dawson J (also in the majority), stated: [66] "The words 'in respect of' require some material connexion between the two matters referred to. Those matters are liability for damages for accidental injury on the one hand and, on the other, a motor vehicle. Having regard to the immediate context of s 3(1), a merely coincidental or extraneous connexion between those two things can hardly be sufficient and the wider context of the Act takes the matter no further."
On the facts, the sufficient connection was not established. The injury occurred to a worker who was loading a container on a trailer. The employee was required to work on a platform raised some seven feet above the ground on the tines of a forklift, in circumstances which were unsafe. He fell, suffering injury. As explained by Dawson J: [67] "No aspect of the trailer, or of the trailer considered as one with the container which it carried, was said to have contributed to the liability of the employer. The presence of the trailer explained the use being made of the fork-lift, but it was the way in which the fork-lift was being used which gave rise to liability on the part of the employer, not any use being made of the trailer. That liability was, therefore, not in respect of the trailer and, for that reason, not in respect of a motor vehicle within the meaning of s 3(1)."

[65]

(iv) "damage"

The language used to impose liability on the carrier ("for damage sustained by reason of the death of the passenger") is silent as to who may have sustained the damage. It is clearly not limited to damage sustained by the deceased passenger. That is because s 35(3) provides that "the liability is enforceable for the benefit of such of the members of the passenger's family as sustained damage by reason of his death" (emphasis added).
The term "damage" is not defined, either in the Acts or the Convention. At least with respect to an injured passenger, there is no reason to suppose that it is limited to financial or economic loss. Where the word is used without discrimination with respect to both death and bodily injury, it would be curious if the word had one meaning with respect to death and another with respect to bodily injury.
Further, as the provisions clearly envisage that a member of the passenger's family may have sustained damage by reason of the death of the passenger, one question is whether the injury suffered by such a person is limited to economic or financial loss. That it is not so limited flows from s 35(8), which provides that "[i]n awarding damages, the court … is not limited to the financial loss resulting from the death of the passenger." There is, however, no limitation in s 35(2) whereby the scope of the liability under any other law is limited by the scope of the liability imposed under the Commonwealth Carriers' Liability Act.
It may be accepted that the terms of s 35 were drafted with Australian domestic laws in mind. The statutory provisions in some states allow claims for solatium or bereavement, as do English statutes. It may be that such provisions were the genesis of the reference in s 35(8) that the court "is not limited to the financial loss…." On the other hand, such a provision is equally consistent with acceptance that general damages may be awarded where personal injury (including psychiatric injury) has been "sustained by reason of" the death of a passenger, within the terms of s 28 of the Commonwealth Carriers' Liability Act.

[66]

(v) effect of s 37

Two other aspects of the statutory language provide indirect assistance in the construction of s 35(2). First, a statement in s 37 that "[n]othing in this Part shall be deemed to exclude any liability of a carrier" to indemnify an employer of a passenger for workers' compensation payments carries a possible implication that such liabilities would otherwise be excluded. As noted in United Airlines Inc v Sercel Australia Pty Ltd [68] a claim pursuant to s 151Z of the Workers Compensation Act 1987 (NSW) is one for an indemnity, and not for damages: "[66] … Without s 37, the breadth of s 36 would have prevented any civil liability of the carrier under any other law in respect of the injury. The wording of s 36 (especially the language 'any civil liability … in respect of the death … or … injury') is wider than the causes of action created or recognised by the Convention as created by s 28 …. [67] Section 37 does not deal with an action for damages or liability for the injury or death of the passenger, though it does provide for liability of the carrier in respect of the injury to or death of the passenger. It deals with the liability to pay two types of payments (creating two co-relative rights of well-known rights or entitlements) which might arise in respect of the death of or injury to a passenger - workers' compensation payments and contribution of another tortfeasor who is also liable. Neither type of liability or right is for damages or for the primary liability, though as would have been understood in 1959, both are, or are likely to be, conditioned on the existence of liability of the carrier to the passenger for injury or death."
In Sercel, the issue was whether the two year limitation period under the Commonwealth Carriers' Liability Act applied with respect to a claim conceded under s 37(a). The Court held that it was not so constrained.
This analysis is inconsistent with a constrained view of the operation of s 35(2). As this Court held in Sercel, the reference to liability under any other law, in s 35(2), is not limited to tortious forms of liability, but it must surely include such liability. The Court also accepted that the Convention "imposes an event-based liability on the carrier", which is intended to be exclusive of all other remedies available to a moving party seeking relief in connection with injury or death covered by the Convention. [69] The Court also accepted the correctness of the reasoning in Sidhu. [70]
It is possible, given the opening words of s 37, that it was added from an abundance of caution, rather than because the drafter believed that such a claim was clearly caught by s 35(2), if not excluded. On the other hand, the use of "deemed" in the chapeau to s 37 is not the usual use of a statutory fiction in an extensive definition; [71] nor is it a statement that the drafter intended that Pt IV had that effect. Rather, it is a recognition the drafter envisaged that both forms of payment would be covered by the exclusive effect of the Part, if that effect were not otherwise expressly overridden. This reflects the usage referred to by Windeyer J in Hunter Douglas Australia Pty Ltd v Perma Blinds: [72] "The words 'deem' and 'deemed' when used in a statute thus simply state the effect or meaning which some matter or thing has - the way in which it is to be adjudged. This need not import artificiality or fiction. It may be simply the statement of an indisputable conclusion, as if for example one were to say that on attaining the age of twenty-one years a man is deemed to be of full age and no longer an infant."
Secondly, the final words of s 37 envisage that the cap on the liability of the carrier imposed by s 31 will operate and is not affected by this section. Section 31 capped the liability of the carrier "in respect of" each passenger by reason of his or her injury or death, applying the same connecting phrase as s 35(2).

[67]

The common law of tort was uncompromising in its approach to death. Any cause of action enjoyed by an injured party was extinguished on death; nor did death give rise to a cause of action in others who may have been dependent on the deceased. Those principles have been reversed by statute. However, the common law until quite recently (and well after the Warsaw Convention and the Hague Protocol) resisted claims for "nervous shock" suffered by relatives upon the death of a loved one. As explained by Gibbs CJ in Jaensch v Coffey [73] in 1984: "As the law relating to damages for what is sometimes crudely called 'nervous shock' has limped on with cautious steps … the old and irrational limitations on the right to recover damages for an injury of this kind have one by one been removed. Finally, in McLoughlin v O'Brian, [74] the House of Lords … has held that a plaintiff was entitled to recover damages for nervous shock from a defendant whose negligent driving had caused a road accident in which the plaintiff's daughter was killed and her husband and other children were injured, notwithstanding that the plaintiff had been two miles from the scene of the accident when it occurred and did not hear of the accident until about two hours later, and did not see its consequences until she then went to the hospital." In similar circumstances, the wife of the injured driver was able to recover in Jaensch.
Peel and Goudkamp suggest that the somewhat archaic language of "nervous shock", "has the advantage of serving as a reminder that this head of liability has in most cases required something in the nature of a traumatic response to an event." [75] In the present case, Mrs Stephenson's claim in negligence had three essential elements, namely (i) the death of her husband, (ii) the carrier's liability in negligence for the death of her husband, and (iii) her psychiatric illness resulting from hearing of her husband's death. [76]
By way of comparison, Mrs Stephenson's claim under the Compensation to Relatives Act had three elements, namely (i) the death of her husband; (ii) the defendant's liability for her husband's death, and (iii) her financial loss resulting from his death. The acceptance in Agtrack that such a claim is precluded by the Commonwealth Carriers' Liability Act is consistent with the proposition that the claim for psychiatric injury must also fall within the scope of the exclusion in s 35(2) of the Commonwealth Carriers' Liability Act.
The comparison with Technical Products is instructive, by way of an example. The injured employee was engaged in an exercise of loading a container; the unsafe system of work no doubt derived in part from the fact that the container was on the back of a trailer. Nevertheless, there was nothing about the trailer, as a motor vehicle, which played any causal role, other than being the passive support for the material being placed in the container, in the events leading to the injury. By contrast, the Stephensons' claims for nervous shock were entirely dependent upon the death of Mr Stephenson. The injuries were a direct response to his death in the aircraft accident, which thereby played an essential causative role in the injuries.
As will be seen shortly, the construction of the Convention provides contextual support for this conclusion. That is because the exclusivity principle found in Article 17 depends on when and where the salient event took place. The exclusion of liability under the Convention includes all and any liability in respect of that event.
It is then necessary to consider next whether such a conclusion is excluded by any of the three arguments identified above.

[68]

(d) South Pacific and later authorities

Because the arguments favouring a constrained construction of s 35(2), and the reasons of the trial judge, rely on aspects of the reasoning in South Pacific it is convenient to explain the issues in that case first. South Pacific involved claims by the parents of children on a flight from Sydney to Norfolk Island which ditched in Botany Bay shortly after take-off. The watching parents made claims for nervous shock. No passenger died. Accordingly, the case was not directly concerned with the scope and meaning of s 35, which deals only with liability in respect of death.
The case was brought as a representative action on behalf of various passengers and non-passengers for psychological injuries based on domestic laws other than the Commonwealth Carriers' Liability Act. There were three separate questions before the Court, asking whether the claims in nervous shock were excluded by s 36 of the Commonwealth Carriers' Liability Act. Section 36 referred to "personal", not "bodily", injury thus departing from the language of Article 17.
On one view of the facts, the injury suffered by the family member who, for example, saw the plane crash into Botany Bay, did not depend on whether or not a passenger suffered any injury. If the Court had followed that reasoning, the result may not have been directly relevant to the present question, which is concerned with the operation of s 35, not s 36. However, the reasoning went further and addressed the operation of s 35 in a manner which needs to be identified.
The primary judge held, in answering separate questions, that all of the causes of action were available. [77] In the Full Court, Beaumont J reached four conclusions which were central to disposing of the issues, in the following terms: 1. s 28 of the Act, referring to "personal injury" suffered by passengers, encompassed psychological injury of a passenger, unaccompanied by physical damage; [78] 2. s 36 of the Act excludes claim for psychological injury by passengers under any other domestic law; [79] 3. s 28 is not limited to injury suffered by a passenger; therefore a non-passenger could bring a claim under Pt IV of the Act for psychological injury suffered as a result of injury to a passenger; [80] and 4. Pt IV operates as an exclusive code with respect to claims "in the event of the death or personal injury of a passenger in an aircraft accident." [81]
Hill J agreed with Beaumont J in respect of (1) and (2). [82] Noting that there were many claims which might be made in respect of an aircraft accident against a carrier which did not depend on injury to a passenger, Hill J continued: [83] "Although, therefore, it seems clear that neither the Conventions nor the [Commonwealth Carriers' Liability Act] were intended to be a complete code governing all claims against airlines and particularly all claims for damages suffered by non-passengers, it is possible to say that each constitutes a code in respect of claims by non-passengers 'to the extent that those claims relate to the death or personal (bodily) injury of a passenger.'"
The last conclusion appeared to be an affirmation of (4), in language which was similar to that adopted by Beaumont J. However Hill J continued: [84] "But once it is seen that the Conventions and the [Commonwealth Carriers' Liability Act] are concerned with questions of contractual limitation of liability and notice thereof, it is not difficult to conclude that the rationale for Conventions or the Act being a code dealing with some, though not all, liabilities of airlines to non-passengers falls away. I therefore agree with Sackville J … that the [Commonwealth Carrier's Liability Act] has no application to claims for psychological injury to non-passengers arising out of injuries occurring to passengers as the result of an accident on board an aircraft."
The second member of the majority, Sackville J, also agreed with propositions (1) and (2) set out above. [85] He then considered, as a matter of construing ss 35(2) and 36 of the Commonwealth Carriers' Liability Act, the claims of non-passengers for psychological injury. [86] Sackville J also relied upon the reasoning that (i) there were cases of injury resulting from aircraft accidents which were not covered by the Convention and the Carriers' Liability Acts, and (ii) persons other than passengers did not receive notice of the constraints on the carrier's liability. [87]
Sackville J addressed the operation of s 35 in some detail, not because it had any application to the claims before the Court, but because counsel for the carrier had relied upon aspects of s 35 as demonstrating that nervous shock claims by third parties were, at least in some circumstances, covered by the statutory scheme and therefore fell within the substituted liability in respect of personal injuries, pursuant to s 36. [88] It appears that the judge's reasoning followed the structure of the argument put on behalf of the carrier. No weight was given to the differences in the language of s 35 and s 36. To the extent that the different statutory language may have given rise to different outcomes, this possibility appears to have been rejected on the basis that the result would be difficult to maintain "on any sound basis." [89]
To the extent that the reasoning addressed the language of s 35, it focused upon s 35(8), providing that in awarding damages, the court is not limited to "the financial loss resulting from the death of the passenger." That provision, it was held, "is not intended to address nervous shock claims by non-passengers". [90] Rather, it was said to extend to claims for solatium (brought by non-passengers). [91]
On one view, the focus on s 35(8) was misconceived. There was a line of authority, in both US and UK courts, which supported two propositions, namely that (i) claims for pure mental harm are not available under the Convention and (ii) the Convention nevertheless excluded the carrier from liability for such claims under domestic law. Further, the use of the connecting phrase applying to liability of the character "in respect of" the death of the passenger is not in terms, or by implication, restricted to damage suffered by the deceased. The immunity from recovery under the Convention for nervous shock with respect to a passenger arose from the reference in Article 17 to the "wounding of a passenger or any other bodily injury suffered by a passenger". Similar language (though without reference to wounding) is to be found in s 28 of the Commonwealth Carriers' Liability Act. But that language is not to be found with respect to damage in respect of the death of a passenger. Accordingly, to treat the operation of s 35 (relating to death) and s 36 (relating to personal injury) as having analogous operations, is to disregard both the subject matter of the claim and the differential language of the Convention and the statute.
In dealing with the expression "in respect of", Sackville J referred to the judgment of the High Court in Workers' Compensation Board (Qld) v Technical Products Pty Ltd, [92] dealing with the claim by a wife in respect of the consequences of injury to her husband. Deane, Dawson and Toohey JJ stated: [93] "The phrase 'damages in respect of that injury' in s 8(1)(b) [of the Workers' Compensation Act 1916 (Qld)] is clearly a reference to 'damages in respect of injury to a worker'. The natural meaning of the expression is, therefore, damages payable to a worker and assessed by reference to his injury. So construed, the expression would exclude damages for nervous shock to a person other than a worker, not only because such damages are payable to a person other than the worker, but also because the damages are measured by the extent of the nervous shock and its consequences and not by the extent of the injury causing the nervous shock and its consequences...."
That reasoning may be relevant to the liability referred to in s 36 which is stated to be "in respect of personal injury suffered by a passenger". However, it did not follow (nor did Sackville J suggest that it did) that the same reasoning applied to liability "in respect of the death of the passenger" in s 35(2). It is clear that s 35 envisages that the person for whose benefit the liability is enforced is not the deceased person and, further, the measure of the benefit to the other person is not measured by reference to the loss suffered by the passenger.
The principle applied by both sets of reasons in Workers' Compensation Board is that, in construing the phrase "in respect of", close attention must be paid to the statutory context. Section 8(1) of the Workers' Compensation Act 1916 (Qld) imposed on every employer a legal liability to pay compensation to a worker and to insure against its liability to pay compensation "in respect of injury to any worker" and against any liability to pay damages "in respect of that injury". The Court held that the natural and ordinary meaning of the latter requirement was to insure against any liability to pay damages to the worker (or the worker's dependants). Cases adopting a broader reading of similar language were distinguished as depending, in one case "entirely upon the particular provisions of the legislation in question", and in another "upon a specific clause in the policy". [94] The joint reasons of Wilson and Gaudron JJ also relied on the structure of the Act which, in contrast to its provisions with respect to payments to the worker, had no procedural provisions with respect to claims by a third party. [95] In relation to the Commonwealth Carriers' Liability Act, such reasoning can only apply if s 35 and s 36 have the same effect (despite differences in language), if they are read without reference to the context provided by the Convention and if their role in the statutory scheme is ignored. The reasoning is not applicable.

[69]

(e) argument based on anomaly

There is no doubt that a scheme which is foreign to the domestic legal system is apt to give rise to anomalies. It is likely to undermine the coherence of the local domestic law. That is particularly so where the imported element is designed to be applied by way of an exception in many domestic systems with differing rules, principles, institutions and legal cultures.
The Stephensons' argument relied, in effect, on two propositions, namely that (i) a person (not a passenger) injured by an aircraft accident and (ii) a person who suffers psychiatric injury as a result of believing a passenger was injured or died in a crash may recover under the general law, unaffected by the Conventions and Pt IV of the Commonwealth Carriers' Liability Act.
The fact that non-passengers injured by an aircraft accident may not be excluded from recovery under the general law was a factor referred to by Hill J in South Pacific in the passage set out at [127] above. So much may be accepted; however, it does not greatly advance the present argument. To take Hill J's first example, the claim by a bystander injured by debris from an aircraft accident does not make a claim any element of which is based upon the death of a passenger on the plane. Thus the first proposition involves no anomaly; such claims arise under a separate statutory scheme and are entirely independent of harm to any passenger or any rights in respect of any passenger.
The second proposition relies on a possible anomaly, but creates others. The anomaly relied upon arises because the exclusion of liability for pure mental harm, on the more expansive view of s 35(2), is only excluded because it is a liability which arises "in respect of the death of the passenger." It would not, for example, operate where, as in South Pacific, the parents of offspring on the aircraft which landed in Botany Bay suffered mental harm. In other words, where the mental harm resulted from a fear that a relative had suffered injury or death the claim could be brought under the general law, but in cases where the mental injury flowed from the known death of a passenger, the claimant would be restricted to a claim under the Carriers' Liability Act. On the assumption that such a claim is not excluded, that fact does not constitute an anomaly. It is a consequence of the different wording of s 35(2) and s 36. The excluded liability under s 36 is "in respect of personal injury [or bodily injury] suffered by a passenger, not being injury that has resulted in the death of the passenger". The assumption is based upon a reading of s 36, accepted by the majority in South Pacific, that the nervous shock claim brought by a parent in respect of a child who was a passenger is not a claim "in respect of personal injury suffered by a passenger". In other words, in s 36, the language of the connecting phrase "in respect of" is said to be limited to a claim by a passenger. It is clear that a claim in respect of the death of a passenger cannot be a claim by the deceased passenger. Further, that point of distinction is reflected in s 35(3), which allows that the liability "is enforceable for the benefit of such of the members of the passenger's family as sustained damage by reason of his death."
The true anomaly arises from what may be a third category of cases, namely where the relative witnesses or is told of the crash and believes that a passenger died, when in fact that was not the case. (These facts mirror those in South Pacific.) In that case it is arguable that the claim is not a claim for damage suffered "in respect of the death of the passenger", because no passenger died. If that claim were to fall outside the scope of the exclusive liability of the carrier under the Convention or the Act, there would be something to be said for the proposition that a claim in circumstances where a passenger did in fact die, brought by the shocked relative, should also lie outside the scope of the Convention or s 35(2). The alternative argument is that if mental shock flowing from a known death is covered by s 35(2), then so should the mental shock flowing from a reasonable but wrong belief in death. Construed with the purpose of providing limitations on the liability of the carrier, the latter option may be seen to be the preferred reading.
A possible anomaly arises from the approach adopted in South Pacific. First, the person who suffered pure mental harm by reason of the injury to a passenger will recover if he or she is a non-passenger, but not if he or she were the passenger. Secondly, even if this anomaly were to be avoided, there will be a point at which a similar rational disconformity will arise, but that is because there is a limit to the extent that the Convention varies domestic law. Thus, a third party who suffers mental harm as a result of witnessing an aircraft crash may be able to recover under the general law (by proving negligence) if he or she was unaffected by knowledge of any particular passenger on board.
In this area, argument by reference to anomalies appears to be unproductive. That claims for damages may arise from an aircraft accident which will have no basis in the existence or otherwise of injury or death to a passenger provides no assistance in construing provisions in the Convention (and in the Carriers' Liability Acts) which relate to injury or death of a passenger. On the other hand, the fact that a passenger may not be able to recover for pure mental harm, in the absence of physical injury, does not necessarily mean that a relative of a deceased passenger may not recover for pure mental harm. If that conclusion flows from a reading of the ordinary meaning of s 35, as compared with ss 28 and 36, that result should be accepted.

[70]

(f) argument based on ticketing

A further basis for distinguishing a claim by a person who is not a passenger, but who fears for harm done to a passenger, from a claim by a passenger or on behalf of the passenger is that the non-passenger has no contractual relationship with the carrier and therefore should not be bound by the statutory limitations on the rights of recovery of those who are in a contractual relationship. That is because the Convention (and the Carriers' Liability Acts) operate by reference to the obligation of the carrier to issue a "ticket" to the passenger, and the ticket contains notice of the rights and liabilities of the passenger vis-à-vis the carrier.
That argument attracted support in South Pacific. As Hill J noted, "[a]n examination of the conventions applicable to international air travel makes it clear that one matter which they were concerned to regulate in a uniform way among the convention countries was the liability of a carrier in contract." [96] After referring to the possibility of third party claims against carriers, unrelated to injury or death of passengers, Hill J continued: [97] "In these situations the person injured has no contractual relationship with the carrier. No notice of limitation of liability will be drawn to the attention of such a non-passenger suffering loss or damage arising out of an aircraft action. So it can not be said, at least to the extent of the above claims, that the Conventions were intended to be a complete code in respect of non- passengers."
It is true that the Convention sought to regulate in a uniform way the liability of a carrier in contract; but it was not so limited. There is no doubt that the exclusion of liability under domestic law included liability for tortious claims in negligence. That left an issue as to whether the absence of notice meant that no claim by a non-passenger under domestic law was excluded.
Sackville J dealt with this issue in more detail, but did not accept that limitation on the exclusion provision. Thus he stated: [98] "Article 24 clearly contemplates that some third parties (that is, non-passengers) might be entitled to bring suits under the Convention if the law of the contracting state permits such a course. Sidhu demonstrates that, despite the expression '[i]n the cases covered by [Art 17]' in Art 24(2) a broad view can be taken of the exclusionary effect of the Convention. Indeed, if Sidhu is correct, passengers suffering injury arising out of international air travel may be unable to claim under the Warsaw Convention, yet be denied relief under any other laws. The decision in Sidhu reflects the view of the House of Lords that the Convention was intended to be a uniform international code which afforded certainty to carriers, albeit at the price of loss of freedom of contract. These factors suggest that the Convention might be read as excluding not merely third-party claims for the wrongful death of a passenger, but claims by relatives or dependants of passengers for nervous shock."
As Sackville J noted, other considerations point in a different direction, remarking that the claim of a person on the ground who is injured or killed in consequence of an air crash is unaffected by the Convention. [99] He continued: "The drafters considered it necessary for the Warsaw Convention to provide a mechanism for the family or representatives of a deceased person to bring a claim for damages consequential on the death of a passenger. They also had to take into account the diversity of approaches under different legal regimes to what Anglo-Australian lawyers would call wrongful death claims. But it is by no means obvious that they had in mind non-derivative claims, such as that by a non-passenger alleging nervous shock by reason of seeing an aircraft crash or learning that a passenger had been killed, injured or placed in peril." The distinction drawn in this passage is between a "non-derivative" claim and a wrongful death claim. One brought in this State under the Compensation to Relatives Act is characterised as "derivative", in the sense that it seeks financial recompense for the expectation of continued economic support from the deceased which has been foreclosed. The exclusion of liability under Article 24 with respect to "any action for damages, however founded" does not make this distinction. Ultimately, the question must be whether s 35(2) makes such a distinction.
In South Pacific, Sackville J then stated: [100] "That the exclusionary effect of the Warsaw Convention might be more limited in relation to non-derivative claims by non-passengers is supported by the contractual aspects of the Convention. The Convention imposed two major disadvantages on carriers. They lost the right to contract out of liability and they were subjected to a strict liability regime in the event of a passenger being killed or injured in an aircraft accident. In return, carriers received a considerable benefit, namely, a monetary limit on their liability 'in the carriage of persons' (Art 22). The passenger was protected by the requirement (in its present form) that the carrier deliver a ticket giving notice that the Warsaw Convention 'in most cases limits the liability of carriers for death or personal injury'. The notice is of such importance that a failure to give it deprives the carrier of the benefit of the limits of liability imposed by the Convention (Art 3(2)). The rationale is plainly that a passenger, on being informed of the position, may elect to insure against the risks of air travel and, in doing so, provide additional protection for his or her family. In any event, the passenger is aware that the Warsaw Convention limits the liability of carriers."
As a matter of contractual rights and obligations created by the Convention, the foregoing analysis may be accepted, although there may also be respects in which it should be qualified. [101] However, the text of the Convention provides no support for a reading down of its operation in the manner proposed. Nor is it clear that a similar argument will operate with respect to the translation of the obligations in the Convention into s 35(2). Finally, this reasoning is inconsistent with subsequent authority in the UK and the US.
As already explained, the fact that the exclusivity principle is based on liability identified by reference to an event, rather than a cause of action, is inconsistent with the distinction between derivative and non-derivative claims.
Further, reliance upon the ticketing provisions to read down the exclusivity principle is inconsistent with the approach adopted by the House of Lords in Herd, followed in Endeavour Energy. There was no suggestion that the widow's claim with respect to Sergeant Herd's death should be allowed because Sergeant Herd did not have a contract of carriage with the helicopter operator. Similarly, the distinction considered above in a number of cases dealing with those on an aircraft who were, or were not, members of the crew was not said to turn on whether or not the person had a "ticket" or contract of carriage with the operator and employer.
Some of the reasoning in South Pacific appears to reflect the exigencies of the case. Where potential claimants are out of time to make a claim for the not inconsiderable sum available pursuant to Pt IV of the Commonwealth Carriers' Liability Act, the point in issue is whether they can claim under the general provisions of domestic tort law. However, in other cases a claimant who had little or no chance of proving negligence may wish his or her claim to fit within the terms of Pt IV of the Act. In that case the question would be whether the nervous shock claim brought by a relative was a claim "for damage sustained by reason of the death of the passenger" within the terms of s 28 of the Act. On a literal (or liberal) reading of the provision, it would be satisfied. If that were the case, there would be a level of incoherence in allowing such a claim where it suited the claimant, but in finding that the liability of the carrier to a claim brought later under domestic law was not excluded. One effect would be, inconsistently with Agtrack, to put at nought the limitation period imposed under the statute. A second effect would be to limit the exclusivity principle so that it did not cover all of the claims which were available under the Convention. There is no authority which would support that conclusion.
In any event, the argument by reference to the ticketing requirements of the Conventions provides little support for a restricted construction of s 35(2), even accepting that the Conventions provide important context to the construction of the Act.

[72]

(6) Conclusions

For the Stephensons to succeed in their claim for damages for psychiatric injury against South West, they needed to establish a right to damages in circumstances in which no right arises under the Convention for pure mental harm. That, as noted above, has the appearance of an anomalous result.
The result may be accepted if their claims are not claims "in respect of" the death of Mr Stephenson. It is true that they are not claims by Mr Stephenson or his estate, but that circumstance is accommodated by s 35(3)-(6). Those provisions recognise that an action may be brought under the Statute either by "the personal representative of the passenger or by a person for whose benefit the liability is … enforceable". [103]
The trial judge took a different view of these provisions, based on the reasoning of the Full Court of the Federal Court in South Pacific. However, attention to the differences in the language of s 35 and s 36 leads to the conclusion that South Pacific is, at best, of limited and indirect relevance.
Further, the approach adopted in relation to the Convention (and the Carriers' Liability Acts) appears to assume that each is restrictive of rights under domestic law and should be read narrowly for that reason. However, that is to see only one side of the picture. The fact that the liability of the carrier is not dependent upon establishing negligence, but only damage sustained by reason of an accident on an aircraft, may be highly beneficial to the passenger. Further, as noted in the joint reasons in Agtrack: "52 … In the Second Reading Speech in the House of Representatives upon the Bill for what became the Carriers' Act, the Minister for Defence said: [104] 'Part IV of the bill will apply the international rules, with certain modifications to domestic airline operators except when they are engaged in purely intra-state carriage, which is, of course, a matter for the States.' … 53 In the Second Reading Speech … the Minister went on: [105] 'The most important objective in applying the principles of the convention to domestic aviation is to deprive the domestic carriers of their present right to contract out of all liability for damage howsoever caused, and to make them liable for proven damages up to [what was then] £7,500. Clause 32 of the bill provides that any contract attempting to fix a lower limit is null and void.'"
The cap on liability (which presently stands at $725,000 under the Commonwealth Carriers' Liability Act) may be less than would be recovered in a claim in negligence (if successful) and a claim under the Compensation to Relatives Act, but it is by no means an insignificant amount. The limit applies equally in relation to injury and death. [106]
To the extent that weight can be placed upon the fact that there was a contractual liability between the passenger and the carrier, pursuant to which, under the Convention, the passenger received notice of the limits of the carrier's liability, that would now be of less weight given the variation in the terms of Article 3 discussed at [28]-[30] above. There is now no direct connection under the Convention between the immunity from liability conferred on the carrier and the giving of notice to the passenger. However, given the non-application of those changes at the date of the accident, that factor does not bear upon the outcome in the present case.
Accordingly the reasoning of Sackville J in South Pacific does not govern the outcome in the present case for three reasons. First, South Pacific was not concerned with a deceased passenger, and was therefore not directly concerned with the operation of s 35. Secondly, only Sackville J referred to the operation of s 35, and then for the purpose of construing s 36. Thirdly, there have been developments in the case law since South Pacific was decided almost a decade ago. Subsequent case law has established that the substitution of liability pursuant to Article 24(2) of the Convention extended to any claim falling within the scope of the Convention, even if there is no liability under s 17.
Applying the reasoning of the UK Supreme Court in Stott, adopting Sotomayor CJ in King, the "salient event" in the present case was the death of a passenger on the aircraft. It occurred in the course of carriage by air. In the context of the Convention and the purposes of the Commonwealth Act, it is not possible to identify claims of the family in respect of nervous shock as being claims otherwise than "in respect of" the death of Mr Stephenson. It follows that the claims were excluded by s 35(2) of the Commonwealth Carriers' Liability Act and should have been dismissed.

[75]

(2) effect of s 151Z

The claim under s 151Z was pursued successfully at trial, despite the fact that the trial judge had found Parkes Shire Council was itself liable in negligence for the deaths of its two employees. That finding was challenged on appeal, but for reasons outlined below, that challenge should be rejected. Accordingly, the Shire Council's claim for indemnity with respect to compensation payments will be addressed on the basis that negligence was established on the part of each of the Council and South West or Essential Energy. (The discussion below rejects liability on the part of Essential Energy, but that is not relevant for present purposes.)
Although the two sets of proceedings brought by Parkes Shire Council were solely concerned with recoupment of the payments of compensation, the entitlement of the Council was not addressed in the first judgment. It was, however, addressed in the second judgment, the trial judge upholding the claim by Parkes Shire Council despite the fact that it had been held to be liable in negligence to the employees. [109]
There are two provisions in the Workers Compensation Act which were potentially relevant to recovery by Parkes Shire Council. They must be considered separately. The first is s 151Z(1)(d) which, in its statutory context, reads as follows: 151Z Recovery against both employer and stranger (1) If the injury for which compensation is payable under this Act was caused under circumstances creating a liability in some person other than the worker's employer to pay damages in respect of the injury, the following provisions have effect: (a) the worker may take proceedings both against that person to recover damages and against any person liable to pay compensation under this Act for payment of that compensation, but is not entitled to retain both damages and compensation, … (d) if the worker has recovered compensation under this Act, the person by whom the compensation was paid is entitled to be indemnified by the person so liable to pay those damages (being an indemnity limited to the amount of those damages), ….
The claim could not succeed under this provision as the equivalent of this provision in the Workers Compensation Act 1926 (NSW), namely s 64(1)(b), has long since been held by the High Court not to confer a right of indemnity in circumstances where the employer is a tortfeasor, but only in circumstances where the third party is the only relevant tortfeasor. [110]
However, the trial judge did not apply this established reading of s 151Z(1)(d) for two reasons. First, he referred to a sentence in a judgment of Campbell JA in J Blackwood & Son Ltd v Skilled Engineering Ltd [111] where it was said: "Further, that prima facie right of the employer under section 151Z(1)(d) is one that the employer has whether or not the employer is itself a tortfeasor who has caused the injury to the worker with respect to which the compensation has been paid."
With respect, that statement was wrong. It was not a necessary part of the reasoning of Campbell JA and was not found in the judgment of Giles JA, with whom Beazley JA agreed. That sentence in isolation, even if it were part of the reasoning, could not be adopted in the face of unanimous High Court authority to the contrary. Nor did it matter that it had been followed by another judge in the Common Law Division. [112] Finally, although the trial judge referred to CSR Timber Products Pty Ltd v Weathertex Pty Ltd, [113] he dismissed the statement of law contained in the judgment of Meagher JA (with whom Bathurst CJ and Hoeben JA agreed) as obiter. Meagher JA stated at [33]: "It is critical to an understanding of the scheme of s 151Z to appreciate that if s 151Z(1) is considered alone, it does not apply where the employer is liable to the worker for damages at common law. That is because its application depends on the injury for which compensation is payable being caused under circumstances creating liability in 'some person other than the worker's employer' to pay damages in respect of that injury....". That conclusion was also accepted by this Court in Endeavour Energy v Precision Helicopters Pty Ltd (No 2). [114]
The second reason why the trial judge considered that the constraint in s 151Z(1) did not apply was that an employer which was itself a tortfeasor was now able to recover compensation payments under s 151Z(1)(d) pursuant to s 151Z(2)(e). That conclusion was correct; however, the entitlement arose under, and only under the terms of the latter provision; it was wrong to treat the later provision as amending the earlier provision. Accordingly, if the Shire Council were to recover its compensation payments, on the assumption that it was a tortfeasor, it had to bring its claim within the terms of s 151Z(2)(e). The precise requirements of that provision were not addressed.
Section 151Z(2)(e), in its statutory context, provides as follows: 151Z Recovery against both employer and stranger … (2) If, in respect of an injury to a worker for which compensation is payable under this Act: (a) the worker takes or is entitled to take proceedings independently of this Act to recover damages from a person other than the worker's employer, and (b) the worker also takes or is entitled to take proceedings independently of this Act to recover damages from that employer, … (e) if the worker does not take proceedings against that employer or does not accept satisfaction of the judgment against that employer, subsection (1) applies as if the worker had not been entitled to recover damages from that employer, except that: (i) if the compensation paid by that employer exceeds the amount of the contribution that could be recovered from that employer as a joint tortfeasor or otherwise - the indemnity referred to in subsection (1) (d) is for the amount of the excess only, and (ii) if the compensation paid by that employer does not exceed the amount of that contribution - subsection (1) (d) does not apply and the employer has, to the extent of the compensation so paid, a defence to an action for such a contribution.
In order to identify the operation of these provisions regarding the current claims in respect of deceased workers, two further provisions should be noted. First, s 151Z(3) provides: 151Z Recovery against both employer and stranger … (3) This section applies to proceedings taken independently of this Act by a person to whom compensation is payable under this Act in respect of the death of a worker as a result of an injury. Further, s 3(1A) provides: (1A) A reference to a worker who has been injured includes, if the worker is dead, a reference to the worker's legal personal representative or the worker's dependants, or any other person to whom or for whose benefit compensation is payable.
Mrs Stephenson was entitled to take proceedings against South West. One may put aside for present purposes the fact that her proceedings against South West were brought out of time and therefore failed; each limb of subs (2)(a) and (b) is formulated in the continuing present tense. It operates regardless of limitation periods. Mrs Stephenson was also entitled to (and did) bring proceedings against Parkes Shire Council. Paragraphs (a) and (b) of subs (2) were therefore satisfied and the following paragraphs had effect.
In order for Parkes Shire Council, as a tortfeasor, to obtain the indemnity provided under subs (1)(d), the preconditions to the operation of par (2)(e) must be satisfied. As Mrs Stephenson did take proceedings against the Council, the first limb was not satisfied; as she has also obtained satisfaction of the judgment against the Council, the second limb was not satisfied. Accordingly, Parkes Shire Council is not entitled to recover payments of compensation from another tortfeasor.
According to Parkes Shire Council, that conclusion stultifies the purpose of subs (2)(e). That purpose, it was submitted, was to allow an employer tortfeasor to recover compensation as if it were not a tortfeasor, but limited to the excess over any contribution which could be recovered from it by the third party tortfeasor. Thus, the purpose was to allow a limited recovery, taking into account its own liability as tortfeasor to the other tortfeasor.
If that were the purpose, it would have been satisfied simply by making provision in accordance with sub-pars (i) and (ii) of par (e). But that was not what the drafter did; rather, two additional (alternative) preconditions were imposed in par (e). That is, there were negative preconditions additional to those identified in pars (a) and (b).
The Shire Council sought to avoid the consequences of the additional requirements by alleging an entitlement which was said to have arisen prior to the worker obtaining a judgment. Once the worker commences proceedings, the first alternative is not satisfied; the second precondition to the operation of the provision appears to assume a judgment (which may arguably involve a settlement, as recognised by subs (5)) which is then not accepted. Where proceedings are brought and a judgment is obtained and satisfied, paragraph (e) is not engaged. That is in fact what happened in the present case. In effect the Shire Council seeks to recover on the basis that the proceedings were brought at a time when neither negative condition was satisfied, but the second condition might be satisfied in the future.
Whilst acknowledging the possibility of such a construction, it is singularly unattractive. It depends upon the chance that proceedings between the employer and the third party tortfeasor will be completed before the worker's claim against the employer. Such an approach is not consistent with the statement of the conditions in pars (a), (b) and (e) in what appears in each case to be a continuous present tense. Furthermore, once the first alternative in par (e) is not satisfied (because the worker has commenced proceedings) there is no reason to assume that the second alternative (the occasion for which has not yet arisen) will be satisfied so as to then engage par (e).
The Shire Council was not able to articulate any policy which would justify its approach. However, the purpose is not obscure; it is that an employer which is also a tortfeasor is not able to recover compensation from another tortfeasor where it has made a payment of damages to the worker. Where the worker does not take proceedings or does not accept satisfaction of a judgment obtained in such proceedings, no payment will have been made. Where the worker sues his or her employer, the proceedings will either succeed or fail. If they fail, that will be because the employer is not liable and s 151Z(1)(d) will apply. If they succeed, the worker will be awarded damages. The reason why the drafter may have thought it appropriate to exclude recovery from the third party tortfeasor in such circumstances is that the employer which is liable to pay damages will deduct the amount of compensation already paid from the award of damages, pursuant to s 151A. In fact, as the orders in the present case demonstrate, that is precisely what happened. Further, the worker who recovers damages will cease to be entitled to any further compensation, again pursuant to s 151A.
Thus, Mrs Stephenson obtained a judgment against both Parkes Shire Council and South West in an amount of $389,191. Of that amount, $237,024.80 was said to be satisfied by a payment to Parkes Shire Council by South West, pursuant to the judgment Parkes Shire Council obtained against South West under s 151Z(1)(d). In other words, the damages payable by South West to the plaintiffs were reduced by the repayment of compensation to the employer. Of the balance, a further sum of $77,838.20 was satisfied by the retention by Parkes Shire Council of that amount, said to be pursuant to s 151Z(1)(a) of the Workers Compensation Act. To the extent that the retained money was part of the damages payable by Parkes Shire Council, it was probably better seen as made pursuant to s 151A; to the extent that it was retained from the damages payable by South West, it was arguable that that took place pursuant to s 151Z(1)(a). In the event, the amount paid to Mrs Stephenson by Parkes Shire Council was $74,328.
No doubt the same result could have been achieved, on the basis that both Parkes Shire Council and South West were liable in damages to Mrs Stephenson, by the Council retaining the full amount of compensation paid, in satisfaction of Mrs Stephenson's repayment obligation, and by claiming a contribution to the damages from South West. It was therefore not necessary for Parkes Shire Council to seek to recover the compensation from South West, pursuant to s 151Z(1)(d) and (2)(e). That result is consistent with the expectation of the drafter of subs (2)(e), namely that the provision was not required in circumstances where the employer was liable to make a payment in damages to the worker. No contorted construction of that provision is required. Accordingly the Parkes Shire Council proceedings against South West with respect to compensation paid in respect of the death of Mr Stephenson should have been dismissed.
It appears that the circumstances with respect to Mr Buerckner were different. Mr Buerckner's widow commenced proceedings against Parkes Shire Council, but those proceedings were settled. The first precondition in subs (2)(e) was not satisfied; the question is whether the alternative was satisfied. Although the notice of appeal sought to challenge the order made with respect to compensation paid to Mrs Buerckner, that aspect of the appeal was not pressed and the judgment in those proceedings must stand, assuming South West was otherwise liable in damages to Mrs Buerckner.

[76]

(1) Claim by Council against South West

The ordinary meaning of s 37(b) of the Commonwealth Carriers' Liability Act is that, despite ss 35 and 36, a carrier can still be liable to another tortfeasor for contribution with respect to the death of (or injury to) the passenger. The cap on the amount of the liability of the carrier is not, however, to be exceeded. One question is whether the limitation period imposed by s 34 operates with respect to a claim for contribution. A second question is whether a claim for contribution can be made in respect of a liability which could not arise under Pt IV.
In contrast to s 37(a), the payment by way of contribution in s 37(b) is referrable to the damages payable to the plaintiff and, arguably, the claim for contribution involves "[t]he right of a person to damages under this Part" for the purposes of s 34. The claim would then be barred because it was brought more than two years after the crash.
That reading of s 34 should not be accepted. While it is open to describe the claim for contribution as in respect of "damages" it is at least awkward to describe the right of the tortfeasor to obtain contribution as the "right of a person to damages". In any event, the claim for contribution does not assert a "right … under this Part", the right to contribution arising, in this State, under the Law Reform (Miscellaneous Provisions) Act 1946 (NSW), s 5. Section 34, so far as it relates to damages in respect of the death of a passenger, refers to a right arising under s 28.
On the other hand, to allow a claim for contribution by a joint tortfeasor against the carrier, in circumstances where the carrier is not (or is no longer) liable under the Commonwealth Carriers' Liability Act, would appear to circumvent the purpose of the tight controls on liability imposed by that Act. Thus, the carrier can obtain no benefit from its immunity to a suit brought by the passenger (or the passenger's family) because the passenger's claim against a third party tortfeasor can lead to recovery of at least a proportion of the carrier's liability through an action for contribution.
The apparent anomaly may be seen as a compromise in circumstances where the immunity of the carrier would otherwise leave the joint tortfeasor bearing the whole liability for the injury to the passenger, even though its proportionate responsibility may have been low. In any event, apart from reliance on the limitation provision, no argument was presented to this Court as a basis on which s 37(b) might be read down so as not to apply in the circumstances of this case. Accordingly, South West may be liable on a claim for contribution by Parkes Shire Council.

[78]

(a) activity of helicopter at time of crash

The helicopter took off from Parkes airport at 8.35am on 2 February 2006. The crash occurred very close to 9.30am. It was witnessed by Russell Schmidt, who was driving from Parkes towards Orange when, shortly before entering the wooded area known as The Dungeons, he saw a helicopter coming towards him from his right, which he described as swinging onto the line of the road in front of him at a point which was probably about a kilometre before the crash site. Mr Schmidt said that he was travelling between 80 and 100kph at the time, but later agreed that his speed was probably 100kph, which was the speed limit. [115] The judge made the following finding based on Mr Schmidt's evidence: [116] "Although it was apparent that Mr Schmidt was not accustomed to giving evidence, I am satisfied that he was doing his best to be truthful and accurate when recalling what had occurred. I am satisfied that he saw the helicopter come towards him, perform what was effectively a u-turn, and then travel in the same direction as that in which he was travelling before coming into contact with the wire and crashing in the manner which he described. I am satisfied it was the contact with the wire which caused the helicopter to crash."
Mr Schmidt described the helicopter as approximately 50-60 feet above him, although the known height of the power lines is approximately 120 feet where they cross the road and it is therefore apparent that the helicopter was flying at about that height above the road when it struck the power line and crashed. [117] The judge was not satisfied that he could rely upon Mr Schmidt's estimate of his own speed, although he appears to have accepted that the helicopter was flying slightly faster.
The critical issue, as to which Mr Schmidt's evidence was of no assistance, was whether the pilot had performed a "fly over of the area of The Dungeons before descending." The judge held that that was a matter of speculation and made no finding [118] that there was, or was not, a high-level fly-over.
The judge also considered the purpose of the flight at the time of the crash, which he addressed in the following way: "[136] A related question is whether Mr Thrupp was engaged in the survey at the time of the crash. The path taken by the 2005 survey did not involve flying into the area where the accident occurred. The closest the path of the 2005 survey came to the accident site was to fly along a route located approximately 2 km to the west. [137] … The advantage of working from the ground is that most noxious weeds are more easily detected from the ground, although this assumes that it is possible to gain vehicular access to the relevant area. … … [139] The Council was responsible for weed growth along the edges of the road adjacent to the accident site …. The fact that such weed growth could have been accessed by a motor vehicle does not, of itself, support the conclusion that Mr Thrupp was not engaged in the survey at the time of the accident. It remains the case that one of the purposes of the flight was to detect new weed growth. Deviating from the flight path adopted for the purposes of the 2005 survey, and flying into the area of the accident site, was consistent with that purpose. [140] In these circumstances I am satisfied that at the time of the accident Mr Thrupp was engaged in the survey."
The Council challenged the conclusion and the reasoning leading to it. The Council placed some weight on the accepted expertise and experience of the pilot, combined with the proposition that such low-level flying was both unnecessary for the purpose of the survey and, on any view, poor airmanship. Why these factors led to an inference that the aircraft was involved in some manoeuvre other than carrying out the weed survey is obscure. Further, the finding of poor airmanship, at least as a matter of degree, depended upon whether there had been a high-level fly-over, although perhaps with negative results. These things are not known, although it will be necessary to consider what such a fly-over would have shown in the present circumstances. The Council's challenge to this finding must be rejected. Accordingly, the putative break in causation based upon this challenge must also be rejected.

[79]

(b) conduct of aerial survey

The trial judge heard evidence from a number of persons with experience and expertise in low-level flying, both in helicopters and fixed wing aircraft. The evidence was unequivocal as to the difficulty of observing power lines from the air; the need to look not merely for power lines but for poles and structures which might indicate the presence of power lines in the area, together with cleared easements which may merely indicate a track, but may also indicate the presence of power lines. The trial judge appeared to have gained particular assistance from the evidence of Keith Stewart, a special constable of police in the Aviation Support Branch. Mr Stewart had undertaken work with fixed wing aircraft and helicopters, including mustering cattle and buffalo, flying tourists on the Great Barrier Reef, bushfire fighting and police duties generally. He identified having undertaken low-level flying a good deal of the time below 500 feet. [119] There had been a coronial inquest into the present crash, in the course of which Mr Stewart had flown the Coroner to the location of the crash. Mr Stewart gave evidence of approaching the wire, knowing its location and height, along the road travelled by the helicopter on the day of the crash. He stated: [120] "What I did on this occasion, with the Coroner on board, was identified a point on the road that indicated to me where the actual wire was and I flew fairly slowly straight towards the wire and stopped at a predetermined point and the wire was more or less at eye level. And the problem with wires is that you have no depth perception, your Honour, and you normally sort of, when you do see them, your eyes tend to play tricks and you don't know if it is a thick wire further away or a thin wire up close."
Mr Stewart also gave evidence that when he undertook the fly-over in May 2007, he was able to observe at a height of 500 feet the poles on each ridge and the swathe cut through the bush at the top of each ridge along the easements over which the wires travelled. However, the swathes did not descend far into the valley and were not visible when flying along the road.
Another witness called on behalf of South West was Mr Ian Dolby, who had, in August 2011, been the chief pilot of South West for about eight years. His evidence included the following statements: [121] "15 Noxious weeds surveys, from a pilot's safety and operational perspective, do not differ from any other type of low-level survey such as those involving locust spotting, wild animal identification and counting. It is understood that the aircraft is operating in a potentially more dangerous section of airspace when at low level [earlier defined as below 500 feet above ground] and accordingly certain procedures are adopted to minimise the risk. These procedures include: (a) Briefing by customer: … The briefing would normally involve the pilot meeting with the customer's officers who would be on the flight, studying a small scale topographical map provided by the customer and reviewing that information against any airspace requirements, known hazards, sensitive ground areas or installations and any other matter which might be relevant to the particular operation. (b) Briefing by pilot: … Assistance with flight safety would primarily require the passengers to, whenever possible, keep a lookout for any hazard which might affect the aircraft, such as other low-flying aircraft or power-lines. (c) Low level flight only when necessary: Although South West Helicopters had approval to conduct low level survey work, pilots do not descend to low level unless it is operationally required. … (d) High level orientation: Depending on the size and the nature of the area to be surveyed, it is usual practice for a pilot to carry out a high-level orientation & safety inspection of the area prior to descending to low level. … 17 The large, very high voltage, power lines, which are on steel towers, are marked on aeronautical charts and some other topographical maps, but the major hazard to low level operations arises from smaller high voltage lines such as the one [the aircraft] struck in this accident. 18 On the 4th May, 2006, some three months after the accident whilst conducting another job, I was transiting the area of The Dungeons in a helicopter. I flew over the area at approximately 1,000 feet above ground level as a high level orientation and made a point of looking for the power poles on each of the eastern and western ridges which supported the line which was struck in the accident. I was able to see the line from about 750 metres away although at certain angles I had difficulty in doing so. … 20 I spotted the clearings around the poles and the poles themselves, but I did not notice them immediately, even though I was specifically looking for them. 21 On this occasion, I descended down near the eastern poles with the intention of flying along the line to check the standard of visibility for my own information. Although I have conducted many low-level power-line surveys, shortly after starting along the line, I lost sight of the wires and immediately pulled up and away from the line to avoid possible contact. Even knowing that the line was there and flying in very close proximity to and parallel with the line, I found it was impossible to remain visual with the wires themselves."
The trial judge found negligence on the part of South West on two bases. First, South West failed, through its chief pilot, to carry out the obligations imposed by its own operations manual, which were summarised by Mr Dolby. These included an assessment of the tasks required to be performed, the route to be undertaken and the identification of any hazards. None of these steps was taken. These failures were placed by the trial judge at the feet of the chief pilot, Mr Dolby. Captain Tim Joyce, who prepared an expert report on behalf of Essential Energy, said that the following "very basic practices" were overlooked, namely: [122] 1. "There was no briefing by the Chief Pilot …. In the absence of a briefing as required by the Operations Manual the flight should have been abandoned." 2. "Although the eye witness indicated that the helicopter may have passed over the area prior to its descent and the accident, which could be considered a cursory inspection, there is no evidence to suggest that … a detailed inspection took place before the aircraft descended below 500 feet AGL." 3. "There is no evidence that a risk analysis had been conducted by either the pilot or the Chief Pilot prior to undertaking the operation to identify and evaluate risks associated with this operation and put in place procedures to mitigate these risks."
Mr Joyce also noted: [123] "In the case of Mr Thrupp, who held both a Grade One Agricultural Pilot (Helicopter) rating and a mustering rating, it may be normal to expect that the Chief Pilot would delegate much of the responsibility for these checks to the Pilot but the Chief Pilot should still have been involved in the briefing." Captain Joyce also expressed a belief "that when basic operational procedures as well as specific requirements as laid out in the Company's Operations Manual are disregarded, it indicates a culture within an organisation where standard safety requirements are not taken seriously."
Whether or not it was appropriate for Mr Dolby to delegate part of his responsibilities as chief pilot to Mr Thrupp is beside the point; South West is liable to the extent that no senior officer carried out the necessary task identification, risk analysis, identification of hazards and the taking of steps to avoid the materialisation of known risks.
Secondly, the judge was critical of Mr Thrupp in flying at an unnecessarily low and risky height. Accepting that Mr Thrupp must have known of the risk of a wire strike, the judge continued: [124] "The obvious precaution which he should have adopted was to fly at an appropriate height above the power lines. The survey in question was capable of being conducted from a height of 300ft. Mr Thrupp descended to a height of approximately 120ft. For the purposes of conducting the survey, that was simply not necessary. In descending to the level he did, Mr Thrupp breached one of the fundamental principles of good airmanship, namely that a pilot should not descend to a level lower than that which is necessary. In doing so, he breached his duty of care to Mr Stephenson."
The trial judge did not rely upon any finding as to whether or not the pilot in fact conducted a high-level fly-over. However, one may presume that, if he did, he failed to note the indicators of power lines, being the swathes of cut vegetation on the ridges on either side of the valley. On one view, the pilot was negligent if he did not conduct a fly-over and was negligent, albeit on a different basis, if he did but failed to notice what appear to have been reasonably visible indicators of possible power lines.
There is no reason to doubt the correctness of the finding that South West was negligent in significant respects in its conduct of the aerial survey.

[80]

(3) Liability of Parkes Shire Council in negligence

Much of the background to the events of 2 February 2006 may be obtained from a lengthy statement prepared by Mr Kent Boyd and Mr Peter Sullivan, dated 9 February 2006, who were, respectively, the Director of Infrastructure and Manager, Natural Resources with Parkes Shire Council. They stated that the purpose of the aerial survey was to identify outbreaks of noxious weeds and particularly blackberry and African boxthorn. The previous year a survey had been carried out by helicopter which had primarily followed the western boundary of a wooded area known as Bumberry Ridges to the east of Parkes, reaching a northern extremity to the north-east of Peak Hill. Most of the recorded collection of weeds was in the southern part of the area, nearest to Parkes. In 2005, the route of the helicopter had swept in a north-south direction on several runs to the east of the wooded area where the accident occurred and around the edges of a wooded area to the west, north of the town of Cookamidgera. It had not followed the route of the road through The Dungeons. The contractor used in 2005 was a different operator, Dubbo Helicopters. Mr Sullivan, who was Mr Stephenson's supervisor, approved the 2005 proposal on the understanding that the flight would be undertaken "in the vicinity of 330 feet or 500 feet" [125] above ground level and a video camera with high-end zoom capabilities was purchased to enable clear identification of weeds on the ground.
In January 2006 a follow-up aerial inspection was approved "to determine the effectiveness of the control program and also identify any new weed infestations from the previous year." [126] Further advice had been obtained as to an appropriate operator and South West had been identified by Mr Stephenson. He obtained a price of $750 per hour. Mr Sullivan approved the engagement of South West. The joint statement continued: [127] "No written contract had been entered into as the arrangement had been based simply on phone discussions and the hourly rate of $750 per hour. A fixed fee could not be agreed beforehand as it was not known how long the inspection would take. The arrangement was that South West Helicopters were to invoice Council after the inspection based on an hourly rate of $750."
The statement further explained: [128] "Once the helicopter was in the air, the pilot was in control of the helicopter and responsible for adhering to the relevant regulations. Ian Stephenson would have requested what areas to go to and possibly asked to fly lower as required, in accordance with the flying threshold. However, the pilot always had the final element of control."
In his oral evidence, Mr Boyd confirmed the expectation that the aircraft would not proceed below 330 feet. He also confirmed that both he and Mr Sullivan were aware of a fatal helicopter accident at Dunedoo in November 2004. [129] The following exchange took place in cross-examination: [130] "Q. The fact was that there was no risk assessment and no risk management here, Mr Boyd, in respect of the 2006 flight? A. I would disagree with that. Q. What form did it take? A. In my office, we discussed what we thought were the critical elements of the flight. Wire strike was one of the ones that we knew about and were worried about. We talked about a threshold height, so that was to, if you like, set the threshold and deal with the risks associated with wire strike. We weren't experienced in aviation, so the next best thing we can do is make sure that we have an experienced certified pilot or company to do the work. So we were assured that this person was experienced, was - and had good references … and was certified. Q. Are you saying, Mr Boyd, that from council's perspective, the risk assessment and risk management process consisted of discussing a minimum threshold for flying? A. And experience of - and making sure we had an experienced operator to take - … Q. What did you do about conveying the threshold requirements that council put as a defence, a risk management procedure, what did you do about ensuring that was conveyed to anyone? A. I didn't do anything. Q. You left the whole thing to Mr Stephenson, didn't you? A. To pass on to the pilot, yes. Q. But no-one directed Mr Stephenson to pass it on to the pilot, did they? A. I didn't."
Mr Sullivan also gave oral evidence. [131] "Q. … Having decided to fly, and having flown in 2005, did you consider any other risk management alternatives or additions to having a threshold for flying? A. No. Q. Did you consider that you might ascertain what route and what areas were to be covered by the 2006 flight in advance of it flying? A. The - can you state that again, please? Q. Yes, I will. Did you think about finding out, in advance of the flight, where the flight was going to fly, what areas were going to be surveyed? A. Well, basically I was going on Ian's program of inspections and he indicated that he wanted to re-investigate 2005's aerial survey. Q. Did you think about finding out in advance of the flight where that was going, where those areas were to be overflown? A. I had a general understanding of the region, so I was reasonably happy, because I know the topography of - and I understood the reasoning why he wanted to do an aerial survey. Q. Right. Did you think about then identifying any potentially dangerous power lines in the areas that you had a general idea about? A. We, based on the understanding that we weren't going to go below that threshold, we thought that that was all covered. Q. I'm asking you whether or not you considered any alternatives to the threshold? A. No. Q. Any additions to the threshold? A. No. Q. Did you know that you could have accessed in council, through the council in January 2006, data from Essential Energy, demonstrating where the power lines are in the Dungeons area? A. No."
With respect to the information obtained from Essential Energy, evidence was given by an assets manager with the Council, Mr Clint Fitzsummons. He explained that he had obtained from Country Energy, which was the former name of Essential Energy, a zip file containing "all the data files for Country Energy's assets." [132] He said that the data was presented in a way that would enable him to transpose it into the Council's software called "MapInfo", a step that he took. He later printed out a copy of the data, on which he marked the accident site. He noted that the information appeared to be incomplete in that it failed to provide an indication of all the poles between which the conductors (electricity lines) ran. In his oral evidence, Mr Fitzsummons identified the area covered by the 2005 survey as about 880 square kilometres, [133] allowing about 500 metres on either side of the flight path. [134] He calculated that there were 364 wires within the area. [135] He also gave evidence that he had calculated how many times the helicopter would have flown over conductors on the flight path in 2005, stating that it was 31 times. [136]
A number of inferences may be drawn from this evidence, namely: 1. At no stage did any senior officer in Parkes Shire Council identify the route to be taken by the helicopter, nor place any limits on the scope and nature of the activities, beyond obtaining from Mr Stephenson an informal indication that he expected that the survey would be undertaken between 330 and 500 feet above ground level and would re-cover the area covered in 2005. 2. Although senior Council officers were aware of the risk of power line strikes, they took no steps to identify where there might be power lines in the area expected to be traversed by the helicopter. 3. Although the reason given for not being concerned as to the location of power lines was the expectation that the helicopter would at all times be above the height of power lines, no direction was given to that effect. 4. The absence of any written contract or, indeed, any communication between senior Council officers and officers of South West meant that there was no clear delineation of responsibility. 5. No formal risk assessment of any kind was carried out with respect to the proposed flight in February 2006.
The trial judge dealt with the evidence and made findings with respect to the facts relating to Parkes Shire Council's role. His survey of the evidence was extensive. [137] He made certain findings [138] upon which he later expanded. [139] Briefly stated, the judge found liability on the part of Parkes Shire Council by the following steps: 1. The Council owed a non-delegable duty to its employees to ensure a safe system of work and to take reasonable care for their safety. [140] 2. The risk against which the duty was to be judged was that the helicopter would impact with a power line and crash, thereby injuring or killing those on board. [141] 3. The judge held: [142] "The risk and danger of wire strikes was known to Mr Boyd. He described it as a 'real issue'. It was also known to Mr Sullivan. He described it as 'important'." 1. For the purposes of the Council's safety policy, Mr Boyd and Mr Sullivan bore responsibility as the management of the Council. 2. Mr Boyd and Mr Sullivan failed in carrying out that duty: 1. in not conducting a risk assessment; [143] 2. in failing to impose a flight threshold of 500 feet above ground level; [144] and 3. in not obtaining information within the Council as to the presence of overhead wires in the relevant area, which should have been obtained and passed on to the pilot. [145]
The trial judge concluded: [146] "For all of these reasons, I am satisfied that the Council breached its duty of care to Mr Stephenson by failing to access information available to it regarding the presence of wires in the relevant area, failing to conduct a proper risk assessment and failing to impose, as a condition of the flight, a height threshold of 500f."
With respect to causation, the judge concluded that had a flight threshold been imposed, the pilot would not have descended as he did. [147] It was that particular failure which was identified as the critical breach of duty which was causative of the accident. [148]
On appeal, the Council was emphatic, not to say strident, in challenging each step in the reasoning of the trial judge and various inferences drawn from the evidence. For example, the trial judge made an express finding that the helicopter was in the process of conducting the aerial noxious weed survey at the time of the crash. The Council challenged that finding as erroneous on the basis that (i) the aircraft was not at the time on the course which had been taken in the 2005 survey; (ii) flying at a height of approximately 120 feet was unnecessary and therefore must have been carried out for some ulterior purpose; and (iii) flying at such a low height was such poor airmanship that the pilot must, in effect, have been on a frolic of his own.
With respect to the flight threshold, the thrust of the Council's submissions was that the absence of evidence as to what was said between the pilot and the two deceased employees of the Council makes it impossible to find that a threshold had not been imposed and communicated to the pilot. However, the informality of the process adopted by the Council, as indicated in the evidence partly extracted above, demonstrated that no clear parameters were placed upon the carrying out of the survey. Accordingly, the finding of the trial judge that no flight threshold was imposed was unassailable.
The Council further submitted that the data obtained from Essential Energy was "so inaccurate that it could not properly be put to any use by the Council." More will be said about the use to which such information could be put by a pilot in due course; the bald assertion by the Council was, however, untenable. The fact that information may be incomplete or inaccurate in some aspect may mean that it cannot be used for some purposes. Thus, Mr Fitzsummons did not trust the information for the purpose of building approvals, especially within the city of Parkes. However, the indication of power lines in rural areas was to be assessed by a different standard.
The Council complained of the failure of the trial judge to reach a conclusion as to "the speed of the helicopter within a range" at the time of the crash. In fact, there was no doubt as to the probability that the helicopter was travelling between 80 and 120kph; no precise finding was made because none was required.
The challenge to the findings of the trial judge with respect to the negligence of the Council should be rejected. Its conduct in planning and preparation for the aerial survey involved serious breaches of its duties of care owed to its employees.

[81]

(4) Liability of Essential Energy in negligence

In dealing with the liability of Essential Energy, the judge concluded that, contrary to its submissions, Essential Energy owed a duty of care to South West and to the occupants of the aircraft. His reasoning was as follows: "[254] Firstly, the harm which could arise as a consequence of a helicopter striking an overhead wire was foreseeable. Although there is no evidence that EE had actual knowledge of the fact that the survey was to be conducted, the area was regarded by EE as fire prone, a factor from which it must have known that low level flying in the area would be likely. [255] Secondly, the nature of the harm which would be likely to eventuate from that circumstances [sic] was obviously serious, if not catastrophic. As a provider of energy services EE must have been aware that this was the case. [256] Thirdly, although for the reasons already set out the Council and South West had some control over the avoidance of the risk of a wire strike, that control was not exclusive to them. In the present case, the wire struck by the helicopter was obviously difficult to see and was located adjacent to a roadway which, on the evidence was likely to be used by pilots for the purposes of navigating the area. The length of the span was such that there was a considerable distance between the supporting poles and there was nothing in the immediate vicinity of the crash site which indicated the presence of anything which might require the supply of power, and thus put a pilot on notice as to the possibility of the presence of wires. [257] In my view, a combination of these circumstances was such as to impose a duty upon EE, not only to aircraft owners but to all persons who could sustain damage as a consequence of a pilot flying low in the area of The Dungeons: Sheather v Country Energy [2007] NSWCA 179 at [73]."
With respect to breach and causation, the trial judge made the following findings: "[258] The risk of wire strike was not insignificant. Creating a 'corridor' or 'easement' by clearing vegetation was not sufficient. The evidence establishes that the wire struck by the helicopter was essentially invisible. The evidence also establishes that the placement of markers on the wire would have made them visible from 300m away, thus providing a pilot with an adequate opportunity of seeing them and taking evasive action so as not to collide with them. That, in my view, was an appropriate response to the risk. The failure of EE to implement it constituted a breach of its duty of care, to both South West and Mr Stephenson. [259] The breach was, in my view, a cause of the accident. On the evidence, the presence of markers on the wires would have enabled them to be seen from several hundred feet away."
Essential Energy had taken no steps to mark the lines or otherwise make their presence known to low flying aircraft. Accordingly, on the appeal as at trial, it focused on the proposition that it owed no duty of care to South West, or the occupiers of the aircraft.
The thrust of its case was that it was responsible for 1.4 million power poles and 200,000 kilometres of cables covering some 750,000 square kilometres in New South Wales and parts of Victoria and Queensland. The submissions continued: [149] "Every wire is in navigable airspace for a helicopter engaged in low-level flight, whatever the purpose of that flight may be. Every wire presents a danger to such helicopters at low level. All wires are hard to see. Further, while the wires in the valley at the Dungeons were difficult to see, the indicators on the tops of the hills were not. Every pilot who was called was able to recognise the indicators and their significance. There was no notice to Essential Energy by any person that these wires presented a danger that was any different to any other for a pilot engaged in low-level flight. Pilots who were using the road as a navigational aid would be flying above the wires, not below the horizontal plane between the hilltops (ie not into the wire environment)."
A second element of this submission was that: [150] "[L]ow level aviation (under 500 feet AGL) is a highly regulated, licenced specialist industry with pilots trained to identify and avoid wire strike. Low level aviation included agricultural crop dusting and spraying, mustering, aerial survey and inspections, weed inspection, search and rescue, and Police operations. Essential Energy submitted that this area of the industry is entirely different from general licenced commercial aviation because of the risks of wire strike associated with low level flight which can occur anywhere. Without specialist endorsement, a helicopter pilot is not entitled to fly lower than 500 feet AGL. At this height there is no risk of wire strike. Below 300 feet AGL the assumption is that one is in a wire environment and the mandatory principles of good airmanship pertain."
There is merit in Essential Energy's submission that the trial judge tended to confuse general considerations with the specific. Thus, it was undoubtedly true that wire strike was a foreseeable risk of low-level flying. It was also true that the foreseeable harm was serious, if not catastrophic, if the risk materialised. The question which should have been asked was whether the particular stretch of wires which resulted in the crash called for the installation of visible coloured balls to mark their presence or whether it was necessary for Essential Energy to consider such safety devices on all power lines in rural areas. It appears that the judge adopted that former approach. Two specific factors appear to have been relied upon. First, there was the fact that the area was regarded by Essential Energy as "fire prone", which was said to render the presence of aircraft in the area undertaking low-level flying more likely. Secondly, it was said that the wire was "adjacent to a roadway" which was likely to be used by pilots for the purposes of navigation. There was, however, no evidence that aircraft using the roadway for navigation would descend below 300 feet. On the other hand, there must be vast areas of New South Wales which might be described as "fire prone".
The relevance of these statements was that the existence of a duty of care depended on whether it was reasonably foreseeable that there would be low flying aircraft, including helicopters, in the area. [151] However, as explained in Sydney Water Corporation v Turano [152] in a passage referred to by Sackville AJA in Endeavour Energy: [153] "Reasonable foreseeability of the class of injury is an essential condition of the existence of a legal obligation to take care for the benefit of another. … It remains, as Gleeson CJ observed in Tame v New South Wales, [154] that the concept is to be understood and applied with due regard to the consideration that, in the context of the issue as to duty of care, it is bound up with the question of whether it is reasonable to require a person to have in contemplation the risk of injury that has eventuated."
This last passage appears to invite an evaluative judgment as to what is reasonable in the circumstances of the particular case. In Endeavour Energy, the circumstances which gave rise to liability in Telstra with respect to the presence of the catenary wire near the power lines owned by Endeavour Energy arose from the practice of using helicopters to inspect power lines which, if Telstra had no actual knowledge of the practice, it was nevertheless reasonable to expect that it should have such knowledge. As explained by Sackville AJA [155] the hidden nature of the hazard, the vulnerability of the occupants of low flying aircraft and the control exercised by Telstra over the catenary wire "strongly suggest that it was reasonable to require Telstra to have in contemplation the risk of injury that eventuated."
A similar approach was adopted in Sheather v Country Energy. [156] In Sheather, a low flying helicopter, operating on a social occasion, hit a spur power line running through an area known as Chinaman's Gap south-east of Holbrook in central New South Wales. A road ran through the gap, which was a shallow saddle at the apex of a hilly ridge. The spur power line cleared the tree canopy on either side of the road by between three and five metres; the gap in the tree canopy created by the road was approximately 44 metres wide. [157] The factors which persuaded Hodgson JA (with whom Tobias JA agreed) that Country Energy owed a duty to the pilot were explained in the following terms: [158] "One possible class is pilots or owners of aircraft (including helicopters) flying low over Chinaman's Gap. That there may be persons in that class seems clear, and it also seems clear that the possibility of there being such persons was something Country Energy, as a reasonable person, would have been aware of. There was evidence that low cloud sometimes gathered around the hills, such as could compel an aircraft on visual flight rules to fly low. The road was a navigation aid, and Chinaman's Gap was in a shallow saddle, so that it was a likely place where an aircraft forced to fly low would cross the ridge. Aircraft could legitimately fly low there for other reasons, such as emergencies of various kinds: helicopters could fly low there, and even land in the vicinity, on search and/or rescue missions, or on police work. Also, Mr Doake had specifically drawn to Country Energy's attention that aircraft, including ultra-light aircraft, flew low in that area, and that the lines constituted a danger to them. The probability of an aircraft or a helicopter flying as low as 30 metres over Chinaman's Gap could reasonably have been seen as quite small, but the consequences of a collision with the wires would be catastrophic. There were no visible cues to the existence of the wires: one pylon supporting them was a pylon of the main line, the other was over 850 metres away from the road, and there was no clearing of the tree-line to suggest the existence of a power line. To put markers on the lines was a very obvious way of greatly reducing risk, and the cost of putting markers on the lines was minimal when they were erected, and quite small later on after Mr Doake's communication."
The fact which exercised all members of the Court was that the pilot was flying at approximately 100 feet above the ground and therefore well under what was a safe flying level. Ipp JA (with whom Tobias JA also agreed) distinguished between hazards which were a risk only to those not taking reasonable care for their own safety and concealed hazards which were a risk even to persons taking reasonable care for their own safety. In the latter case, the controller of the hazard owed a duty of care to persons who might be within its vicinity, even if those persons were not in fact taking reasonable care for their own safety. Ipp JA reasoned in that way from the road authority cases. He therefore concluded: [159] "Thus, unlike the defect in the roadway in Ghantous, [160] the defect in this case was not a defect that the authority could reasonably assume could be avoided by the use of reasonable care. The spur line constituted a risk to low-flying aircraft even when the pilots used reasonable care. Country Energy's attention had specifically been drawn to the fact that aircraft flew low in that area and the spur line constituted a danger to all such aircraft. The spur line was a 'defect' equivalent to the second category of defects referred to in [65] above."
Both Hodgson JA (referring to low flying activities which could occur almost anywhere in the State) and Ipp JA (referring to a power line as a concealed hazard) relied on factors which were generic and risks which were likely to arise almost anywhere in rural New South Wales where there are power lines. However, both also placed weight upon the fact that Country Energy's attention had specifically been drawn to what might be perceived as risks attaching to this particular power line. I would understand Sheather as imposing a duty of care on the energy company in circumstances where there was some specific feature of the risk attaching to low flying aircraft in the vicinity of the power line, not merely a generic risk applicable across the State electricity grid.
There was no actual knowledge on the part of Essential Energy in the present case as to features of the landscape in the vicinity of the crash site which rendered it likely that there would be low flying aircraft at the level of the power lines. Or at least, there was no evidence to suggest that this particular area of rural New South Wales was more likely than other areas to attract such low flying activity. Were it otherwise, a requirement to mark each power line was not shown to be reasonable. Although the evidence tendered by Essential Energy was largely unhelpful, the general thrust may be accepted. It was unhelpful to be told the total number of poles and the total length of conductors. The number of poles was irrelevant. Most of the length of conductors is probably in towns and cities. If all (or many) conductors in rural areas were dual or multiple wires, the relevant length would be a small fraction of the total.
Because the failure of the pilot to take reasonable care was the very activity which put the pilot at risk (namely flying below 500 feet) the analogy with the highway cases provides little assistance. The question was whether the energy provider owed a duty to place warning markers on what was concededly a concealed hazard, but not a "defect". It was precisely the possibility of such a concealed hazard which made low-level flying unreasonable behaviour.
No specific feature of this power line placed it in a situation where it should have been marked. There had been no complaint about it; there had been no prior indication of any accident or near miss. Both Endeavour Energy (in relation to the Telstra wire) and Sheather (in relation to the spur power line) are distinguishable on this basis.
Precisely how the conclusion is formulated is not important in the circumstances of this case. It may be said either that there was no duty of care owed by Essential Energy to those using low flying aircraft, or there was no breach of any duty owed because a reasonable person in the position of Essential Energy would not have taken the precaution said to be necessary with respect to this particular wire, namely the placing of markers on the wire where it crossed the road.
It follows that the appeal by Essential Energy should be upheld and the cross-claims brought against it by Parkes Shire Council and South West should have been dismissed.

[83]

E SOUTH WEST'S CLAIM FOR LOSS OF AIRCRAFT

In 2009 South West commenced proceedings against Essential Energy seeking to recover damages resulting from the destruction of the helicopter and consequential losses. On 13 December 2010 an amended statement of claim was filed joining the owner of the aircraft, Country Connection, as a second plaintiff. [161] Further, in the proceedings brought by Parkes Shire Council against South West, South West cross-claimed against the Council for loss arising from the destruction of the helicopter and consequential losses.
The trial judge accepted that Country Connection was the owner of the helicopter and was entitled to recover for the loss of the aircraft. The judge also accepted that South West was the operator and was entitled to recover loss of profits. [162] The value of the aircraft was fixed at $670,000 and the judge concluded that Country Connection was entitled to recover that sum from Essential Energy, [163] subject to apportionment pursuant to the cross-claims. That order cannot stand in the absence of liability on the part of Essential Energy. As between the Council and South West and Country Connection, the duty owed by the Council is not the stringent duty owed to an employee and thus should bear a lower share of responsibility for the safety of the aircraft, which may be assessed at 20%. Country Connection made no claim against Parkes Shire Council.
With respect to South West, the trial judge disallowed the claim for the cost of the aircraft, but allowed two elements of consequential loss. Various costs were identified including expenditure incurred to modify another helicopter to enable it to undertake the work previously undertaken by the lost aircraft and loss of profits from the interruption to South West's business. In relation to expenditure, most of the amounts claimed were disallowed, resulting in an allowance of $4,360. [164] There is no challenge to this assessment.
So far as loss of profit was concerned, the judge allowed an amount of $23,256, [165] which was, again, not challenged. The resultant loss was an amount of $27,616. Based on the apportionment set out above, South West is entitled to recover 20% of that figure, being $5,523, from Parkes Shire Council.
The conclusion that Essential Energy did not owe a duty of care to the occupants of the aircraft must entail the conclusion that it owed no duty to the owner or operator of the aircraft. Accordingly the judgment in favour of Country Connection against Essential Energy must be set aside.
Parkes Shire Council alleged that the claim with respect to the loss of the aircraft was an apportionable claim for the purposes of Pt 4 of the Civil Liability Act 2002 (NSW), being a claim for economic loss or damage to property. [166] That may be so, however apart from the negligence of the pilot, for which South West was vicariously liable, there were only two concurrent wrongdoers, namely South West and Parkes Shire Council. Accordingly, South West cannot recover more than the apportioned responsibility as between the two parties, but nothing turns on the operation of Pt 4 of the Civil Liability Act.
The real issue on the appeal was the claim by South West, as bailee of the aircraft, for the value of the aircraft. That claim was refused by the trial judge on the basis that it is "not open to both Country Connection and South West to recover damages for the loss of the helicopter." [167] That may be so, but only because payment to one would constitute a good defence against a claim (even pursuant to a judgment) by the other. In principle, both the owner and the bailee of a chattel may claim the value of the chattel which is destroyed. That principle was established in The Winkfield. [168] A mail steamer, the Mexican, was carrying a cargo of mail and parcels for the Postmaster-General when the vessel collided with the Winkfield. The Postmaster-General sued the owners of the Winkfield for the total value of the mail which had been lost, which included mail in his custody as bailee. The Court (Collins MR, Stirling and Mathew LJJ) held that "in an action against a stranger for loss of goods caused by his negligence, the bailee in possession can recover the value of the goods, although he would have had a good answer to an action by the bailor for damages for the loss of the thing bailed." [169]
That principle was accepted and applied by this Court in The Anderson Group Pty Ltd v Tynan Motors Pty Ltd. [170] Accordingly, South West is entitled, subject to apportionment of liability, to recover the value of the helicopter. That proposition was ultimately not resisted by Parkes Shire Council on the appeal. South West is entitled to judgment against the Council in an amount of $134,000 (being 20% of $670.000). The total judgment should therefore be for the total of the two sums, namely $139,523.

[84]

F COSTS

The primary appellant was South West. It sought to resist liability to the Stephensons and in that respect has been entirely successful. It has also successfully set aside the liability found against it under s 151Z of the Workers Compensation Act in respect of the compensation paid as a result of the death of Mr Stephenson. (It did not press its challenge to the indemnity in respect of the compensation payments as a result of the death of Mr Buerckner.) Finally, South West was successful in seeking to recover damages for the loss of the helicopter.
There were two other respects in which South West challenged the judgment below. First, it sought to deny the allegation that the pilot was negligent in flying the helicopter at less than 300 feet above ground level and, secondly, that the Chief Pilot had failed to conduct a proper assessment and briefing prior to the flight. Those challenges have been dismissed. Finally, South West sought to challenge the apportionment of responsibility assessed by the trial judge, primarily on the basis that the trial judge failed to give proper weight to the responsibility of the Council as the employer of Messrs Stephenson and Buerckner. In this respect it has been partly successful. With respect to the appeal by Essential Energy, South West sought to defend its judgment against Essential Energy, in which it was unsuccessful.
As was noted in outlining the procedural background to the appeal, South West had an opportunity, before the trial judge made final orders, to seek to reopen the judgments which had been delivered so as to invite the trial judge to apply the law as it then stood with respect to the Carriers' Liability Acts, as established by this Court in Endeavour Energy. Its failure to do so was the effective reason for this Court having to deal with the judgment given at trial on a false basis. Whether, had Endeavour Energy been properly applied, there would have been any appeal with respect to the operation of the Carriers' Liability Acts is a matter for speculation. Ironically, it was Essential Energy, which had the least interest of all the parties in this issue, which drew the attention of the Court and the other parties to the decision in Endeavour Energy.
The decision in Endeavour Energy has been applied in this judgment not only in relation to the operation of the Carriers' Liability Acts, but also with respect to the entitlement of Parkes Shire Council to recover payments of compensation pursuant to s 151Z of the Workers Compensation Act. In that respect too, South West has been successful, but in a manner which should have been disposed of at trial. Although South West's submissions were resisted, the appropriate course is to let these costs lie where they fall. Further, South West cannot recover the costs of unsuccessfully defending its judgment against Essential Energy. These issues should be treated, in broad terms, as encompassing 75% of South West's costs of the appeal.
South West has otherwise been successful in reducing the apportionment of responsibility as between it and Parkes Shire Council and in obtaining a judgment for the cost of the aircraft, again against Parkes Shire Council. Parkes Shire Council should pay South West 25% of its costs of the appeal.
The Stephensons had made no claim against Essential Energy and should not be responsible for any part of the costs of the disputes between the other parties as to the liability of Essential Energy. Essential Energy should, however, recover its costs of the appeal from the Shire Council and South West. Those parties should pay Essential Energy its costs to be apportioned as with respect to their respective responsibilities for the crash.
Although the Stephensons resisted the appeal by South West, their financial interests lay primarily in maintaining their claim against Parkes Shire Council, in which they were successful. Parkes Shire Council has been unsuccessful in challenging the finding that it breached its duty of care to its employees. Accordingly, Parkes Shire Council should pay the Stephensons their costs of resisting the Council's cross-appeal. Otherwise, the Stephensons should neither receive nor pay costs in this Court.
As to the costs of the trial, Parkes Shire Council should pay the costs of the defendant (South West) in the Council's proceedings seeking repayment of compensation with respect to the death of Mr Stephenson. The Council is entitled to maintain its judgment with respect to Mr Buerckner's death. The order of the trial judge that there be no costs on the cross-claims in those proceedings should stand.
In the Stephenson proceedings, the judge ordered that the defendants pay the plaintiffs' costs in the proportions for which the defendants were liable in damages. That principle should be applied, but with a variation to provide for payments in accordance with the respective liabilities of the defendants as determined on appeal. Further, Essential Energy should have its costs of the cross-claims in each of those proceedings.

[85]

G ORDERS

The findings set out above lead to the following results: 1. South West is not liable to the Stephensons with respect to payments under the Compensation to Relatives Act, a matter not in dispute in this Court. 2. South West is not liable to the Stephensons in negligence for nervous shock. 3. South West is not liable to Parkes Shire Council with respect to the compensation payable by the Council in relation to Mr Stephenson. 4. South West is liable to pay contribution to Parkes Shire Council with respect to its liability in negligence to the Stephensons, subject to the cap applied by s 37 of the Commonwealth Carriers' Liability Act. 5. Essential Energy has no liability in relation to any claim. 6. Liability with respect to damages payable to the Stephensons is to be apportioned as to one-third to the Council and two-thirds to South West. Council is therefore entitled to recover by way of contribution from South West two-thirds of the payments made to the Stephensons for their claims under the Compensation to Relatives Act and for nervous shock, subject to the cap which operates pursuant to s 37. 7. Parkes Shire Council is liable to South West and Country Connection with respect to the loss of the aircraft, liability being apportioned as to 20% to the Council and 80% to South West.
Both Parkes Shire Council and Essential Energy filed notices of cross-appeal in the appeal commenced by South West. Each sought, in effect, a reversal of the orders against it in the proceedings at trial. Against the possibility that such a process was inappropriate for that purpose, each filed, by leave, a separate notice of appeal in the course of the proceedings. It is appropriate that each cross-appeal be dismissed, with the issues raised being addressed in the respective appeal proceedings.
The conclusions reached above would lead to the following orders: A. Matter number 2016/255761 Appellants: South West Helicopters Pty Ltd and Country Connection Airlines Pty Ltd Respondents:
Ingrid Stephenson
Natalee Stephenson
Jay Stephenson
Essential Energy
Parkes Shire Council 1. Allow the appeal and set aside the judgments obtained by the first, second and third respondents (the Stephensons) against the first appellant. 2. Set aside orders that the first appellant pay costs to the first, second and third respondents. 3. Give judgment for the first appellant against the fifth respondent in the amount of $139,523, such judgment to take effect from 12 August 2016. 4. In proceedings number 339502/2009 in the Common Law Division (Parkes Shire Council's proceedings under s 151Z(1)(d)), 1. set aside orders (1)-(5); 2. dismiss the claim brought by the plaintiff against the defendant; 3. order that the plaintiff pay the defendants' costs of the trial of this proceeding. 1. In proceedings number 339465/2009 (Ingrid Stephenson's proceedings): 1. with respect to the Compensation to Relatives claim, 1. set aside orders (1)-(4) and (6)-(10); 2. in place thereof, give judgment for the plaintiff against Parkes Shire Council in the sum of $389,191, such judgment to take effect from 12 August 2016; 1. in relation to the nervous shock proceedings, set aside orders (1), (2), (4), (5) and (7)-(9); 2. in place thereof, give judgment for the plaintiff against Parkes Shire Council in the sum of $340,791, such judgment to take effect from 12 August 2016; 3. order Parkes Shire Council to pay the plaintiff's costs of the trial. 1. In proceedings number 339470/2009 (Natalee Stephenson's proceedings): 1. in relation to the nervous shock proceedings, set aside orders (1), (2), (4), (5) and (7)-(9); 2. in place thereof, give judgment for the plaintiff against Parkes Shire Council in the sum of $207,000, such judgment to take effect from 12 August 2016 3. order Parkes Shire Council to pay the plaintiff's costs of the trial. 1. In proceedings number 339471/2009 (Jay Stephenson's proceedings): 1. in relation to the nervous shock proceedings, set aside orders (1), (2), (4), (5) and (7)-(9); 2. in place thereof, give judgment for the plaintiff against Parkes Shire Council in the sum of $136,391, such judgment to take effect from 12 August 2016; 3. order Parkes Shire Council to pay the plaintiff's costs of the trial. 1. In relation to the Council's cross-claim against South West, order that South West pay the Council an amount by way of contribution to the proceedings brought against the Council by the Stephensons of $715,582, but limited to the amount payable pursuant to s 37 of the Commonwealth Carrier's Liability Act, such order to have effect from 12 August 2016. 2. Order that Parkes Shire Council pay 25% of South West's costs of the appeal. 3. Dismiss the cross-appeal by the fourth respondent (Essential Energy). 4. Dismiss the cross-appeal by the fifth respondent (Parkes Shire Council). B. Matter number 2017/70847 Appellant - Essential Energy Respondents:
South West Helicopters Pty Ltd
Country Connection Airlines Pty Ltd
Ingrid Stephenson
Natalee Stephenson
Jay Stephenson
Parkes Shire Council 1. Allow the appeal and set aside the following orders made in the Common Law Division: 1. judgment for the first respondent (South West) in respect of the first cross-claim in relation to each proceeding brought by the third, fourth and fifth respondents (the Stephensons). 2. judgment against the appellant in relation to the claims brought by the first and second respondents (South West and Country Connection) with respect to the aircraft loss. 1. In place thereof dismiss the proceedings against the appellant. 2. In place of order (3) (no order as to costs) order that the first and second respondents pay the appellant's costs of their claims against it at trial. 3. Order that the first, second and sixth respondents pay the appellant's costs in this Court. C. Matter number 2016/271567 Appellant - Parkes Shire Council Respondents:
South West Helicopters Pty Ltd
Country Connection Airlines Pty Ltd
Ingrid Stephenson
Natalee Stephenson
Jay Stephenson
Essential Energy 1. Dismiss the appeal. 2. Order that the appellant pay the costs of the Stephensons with respect to the Council's appeal and its cross-appeal in South West Helicopters' appeal. D. All matters In all matters each party has liberty to apply with respect to the orders identified above, such liberty to extend for a period of 28 days from the date of delivery of this judgment. Orders are to be entered at the end of that period unless and then not to the extent that application has been made to vary the orders.
LEEMING JA: South West Helicopters Pty Ltd challenges the primary judge's conclusion that the claims made by Mrs Ingrid Stephenson and her children Natalee and Jay were not precluded by s 35(2) of the Civil Aviation (Carriers' Liability) Act 1959 (Cth) (Commonwealth Carriers' Liability Act) as made applicable by the Civil Aviation (Carriers' Liability) Act 1967 (NSW) (State Carriers' Liability Act). Like Basten JA, whose reasons I have had the considerable advantage of reading in draft, I have concluded that the legislation applied to the carriage, and has the effect of precluding Mrs Stephenson's claim under the Compensation to Relatives Act 1897 (NSW). However, unlike Basten JA, but like the primary judge, I have concluded that the claims for psychiatric injury by Ingrid, Natalee and Jay Stephenson are not precluded.
That difference has relatively few consequences in terms of ultimate result amongst defendants all of which are solvent. For the reasons given by Basten JA, I would not interfere with the finding by the primary judge that South West was negligent in failing to undertake any form of risk identification or analysis, and in flying at an unnecessarily low height. I also agree with what Basten JA has written as to (a) the unavailability of a claim by the Council against South West based on s 151Z of the Workers' Compensation Act 1987 (NSW), (b) that the Council was negligent but that Essential Energy was not, (c) that the Council may shift part of the burden of its tortious liability to South West, (d) that as between South West and the Council, their liability to Ingrid, Natalee and Jay Stephenson should be apportioned two-thirds to South West and one-third to the Council, and (e) as to South West's claims for physical and economic loss and their apportionment.
In what follows, I first identify the applicable law and the respects in which I agree with Basten JA's reasons, and explain the nature of the question which arises. I then address the relevant aspects of the Warsaw and Montreal regime in light of which the domestic law at the heart of this appeal is to be construed, including the so-called "exclusivity principle". I thereafter seek to explain why my conclusion as to the operation of that principle, as implemented by domestic law, does not preclude claims by non-passengers for psychiatric injury.

[86]

Applicable law

I agree with Basten JA, for the reasons his Honour gives, that Mr Stephenson was a "passenger" in a helicopter which was being operated on 2 February 2006 in the course of "commercial transport operations" for the purposes of s 4 of the State Carriers' Liability Act.
Although the contract for carriage between South West and Parkes Shire Council was oral and undocumented, it was established that South West undertook to carry Mr Stephenson from Parkes airport and back to that place for the purposes of an aerial weed survey. Since that carriage was "from a place in the State back to that place" and was not part of any inter-State or international carriage, it followed that the State Carriers' Liability Act applied to it. The amendment made by s 2(b)(ii) of the Civil Aviation (Carriers' Liability) Amendment Act 1971 (NSW), expanding the scope of carriage to which the Act applied to include carriage "from a place in the State back to that place" was arguably necessary to achieve that result (I say "arguably" having regard to the majority and minority reasoning in Mount Beauty Gliding Club Inc v Jacob (2004) 10 VR 312; [2004] VSCA 151). The inclusion of carriage to the same place further confirms that the statutory notion of "commercial transport operations" was, at least after 1971, broader than what one might at first blush expect to be connoted by that term.
Accordingly, most of Parts IV and IVA of the Commonwealth Carriers' Liability Act applied to the carriage as if they were incorporated within the State Act: s 5. Part IV provides for a regime which broadly resembles the Warsaw Convention as amended at The Hague. Part IVA is not presently relevant (it is neutral on all questions arising in the appeal, and no party made any submissions based on any of its provisions). Likewise, none of the exceptional provisions in Part IV which are not made applicable (ss 27, 40 and 41) is relevant. In what follows I shall refer simply to "Part IV", although sometimes that will be a reference to the provisions of Part IV save for ss 27, 40 and 41 as made applicable to intra-State carriage by s 5 of the State Carriers' Liability Act.
The State Act defines the "applied provisions" as those provisions in Parts IV and IVA made applicable because s 4 is satisfied. The applied provisions have the force of State law. Notwithstanding covering clause 5 of the Commonwealth Constitution, the Commonwealth Carriers' Liability Act does not apply to all carriage by air throughout Australia, but only to the carriage identified in it. Its limited "legislative grasp" (to use Lord Wilberforce's phrase in Clark v Oceanic Contractors Inc [1983] 2 AC 130 at 152) reflects two things. The first is the limitations on Commonwealth legislative power and the failure in the 1920s and 1930s to achieve either a referral of power or a constitutional amendment by referendum: see Heli-Aust Pty Ltd v Cahill (2011) 194 FCR 502; [2011] FCAFC 62 at [34]-[38]. In other cases where there is a gap in federal legislative power, a State law may apply a law of the Commonwealth as State law: see for example s 5 of the Insurance (Application of Laws) Act 1986 (NSW), applying most of the Insurance Contracts Act 1984 (Cth) as a law of New South Wales to and in respect of State insurance.
The second, which is central to the issues arising on South West's appeal, is the structure of the various international treaties governing international carriage by air. As will be seen below, whether or not the Commonwealth Carriers' Liability Act applies depends not on the particular flight but the particular contract for carriage of passengers or cargo on a flight. Thus, some passengers or cargo may be involved in carriage to which the Commonwealth Act applies, while other passengers or cargo on the same flight may be outside the scope of the Commonwealth Act and for that reason subject to the applied provisions by reason only of the State Act.
For example, Mr Paterson was injured while disembarking a flight from Cobar to Dubbo (both in central New South Wales), but because his ticket was for onward travel from Dubbo to Sydney and thence to the Gold Coast in Queensland, the whole of his carriage was within the scope of the Commonwealth Act: Air Link Pty Ltd v Paterson (2005) 223 CLR 283; [2005] HCA 39 at [28]. Consistently with the provisions relating to successive carriage found in s 27(4) of the Commonwealth Act (in turn reflecting Article 1.3 of the Warsaw Convention and all of its successors), it mattered not that the last stage of his ticketed journey was to be performed by a different carrier. Further, it is clear that injury suffered during embarking or disembarking falls within the liability imposed by s 28 of the Commonwealth Act (in turn reflecting Article 17 of the Warsaw Convention). Nothing turns on either of those two points of detail for the purposes of these appeals. The presently relevant point of the example is to note the likelihood that many or most of Mr Paterson's fellow passengers on the leg between Cobar and Dubbo would not have been involved in carriage to which the Commonwealth Act applied of its own force.
Section 6A(1) of the State Act provides, somewhat unusually, that "[i]t is the intention of Parliament that the applied provisions should be administered and enforced as if they were provisions applying as laws of the Commonwealth instead of being provisions applying as laws of the State". To that end s 6A(2) purports to confer power upon Commonwealth authorities to enforce the applied provisions, and makes Commonwealth laws applicable to offences against those provisions and disapplies State laws to offences against those provisions. Similarly, there is a regime permitting Commonwealth authorities to investigate accidents (see for example s 69 of the Transport Safety Investigation Act 2003 (Cth)), in accordance with The Queen v Hughes (2000) 202 CLR 535; [2000] HCA 22.
The principal reason for mentioning these aspects of the legislative regime is to observe that while the content of the legislation which is central to this appeal is federal law, it remains legislation which, in its application to the carriage of Mr Stephenson, has the force of State law. As will be seen below, one reason for my conclusion as to the limited operation of the "exclusivity principle" is that I fail to see how that principle, in its application as one of the applied provisions which have the force of State law, could exclude a claim under a federal law which applied of its own force. The fiction effected by s 6A that the applied provisions should be administered and enforced as if they were laws of the Commonwealth does not affect their constitutional status. For example, a claim under the applied provisions would not of itself give rise to a matter in federal jurisdiction: the plaintiff's claim arises under the State law, not the law of the Commonwealth which is only made applicable by State law. However, I agree with Basten JA at [96] that it appears to have the consequence that the applied provisions are interpreted as if they were laws of the Commonwealth.

[87]

The nature of the question

The question which arises is of general importance. It is whether a tortious claim for psychiatric injury by a non-passenger following the death of a passenger during carriage to which Part IV applies (either directly, or as made applicable by s 5 of the State Carriers' Liability Act) is itself regulated by those provisions. If that is so, there is at least one important consequence: because this litigation was commenced more than two years after the accident, the claim is precluded by s 35(2) of the Commonwealth Act (as applied by s 5 of the State Act). Section 35(2) relevantly provides that: "the liability under this Part is in substitution for any civil liability of the carrier under any other law in respect of the death of the passenger or in respect of the injury that has resulted in the death of the passenger".
The question resembles one issue decided by a Full Court of the Federal Court in South Pacific Air Motive Pty Ltd v Magnus (1998) 87 FCR 301, where relatives of passengers involved in an accident claimed that they had suffered psychiatric injury when they learned that the aircraft had crashed. None of the passengers suffered any serious physical injury. The contracts of carriage all involved carriage from a State to a Territory, so Part IV of the Commonwealth Act applied directly. Because it was not a death claim, the question was whether s 36 extinguished the relatives' claims which were brought more than two years after the accident. Section 36 provided: "Subject to the next succeeding section, the liability of a carrier under this Part in respect of personal injury suffered by a passenger, not being injury that has resulted in the death of the passenger, is in substitution for any civil liability of the carrier under any other law in respect of the injury." A majority of the Full Court (Hill and Sackville JJ) held that their claims were not extinguished. It was in that context that South West advanced a submission which resembled the dissenting reasons of Beaumont J: "Whatever might be the reach of s 36, the terms of s-s 35(2) make plain that s 35 pre-empts claims of all descriptions by non-passengers 'in respect of the death of a passenger'. The provisions in s 35 must always relate to non-passengers. The 'liability' for damage sustained by reason of death (s 28) is always to be characterized as 'liability' to another person. Section 35 provides for that 'liability' to be in substitution for any other 'liability' under any other law."
I do not agree that the position is so clear-cut. On the view I take, the question is not answered by asking whether a non-passenger's claim against a carrier for psychiatric injury following the death of a passenger fits within the words "civil liability of the carrier under any other law in respect of the death of the passenger", considered in the abstract as a free-standing English phrase. It may assist to indicate at the outset the reasons why I hold that view.

[88]

Giving legal meaning to expressions such as "in respect of"

The meaning of any legal expression which uses the words "in respect of" to specify the terms of a relationship is inevitably contextual. In Workers' Compensation Board (Q) v Technical Products Pty Ltd (1988) 165 CLR 642 at 653-654; [1988] HCA 49, it was said of the words "in respect of" that "the phrase gathers meaning from the context in which it appears and it is that context which will determine the matters to which it extends". A majority of the High Court approved that passage in Commissioner of Taxation of the Commonwealth of Australia v Scully (2000) 201 CLR 148; [2000] HCA 6 at [39]. The same point was made in R v Khazaal (2012) 246 CLR 601; [2012] HCA 26 by French CJ, who described "in respect of" and other "relational terms" such as "connected with", "in relation to" and "in connection with" at [31]: "They may refer to a relationship between two subjects which may be the same or different and may encompass activities, events, persons or things. They may denote relationships which are causal or temporal or relationships of similarity or difference. The task of construing such terms does not involve the resolution of ambiguity. They are ambulatory words and may be designed to cover a variety of subjects and a variety of relationships between those subjects. The nature and breadth of the relationships they cover will depend upon their statutory context and purpose."
French CJ had made the same point in Kostas v HIA Insurance Services Pty Ltd (2010) 241 CLR 390; [2010] HCA 32 at [24] (citations omitted): "The extent of the term 'a question with respect to a matter of law' is controlled by the words 'with respect to'. They are to be read and applied having regard to their legislative context. Like the terms 'in relation to' or 'in connection with', they constitute a 'prepositional phrase' of indefinite content."
Those observations have often been followed and applied in this Court, including in Trustees of the Sydney Grammar School v Winch (2013) 83 NSWLR 80; [2013] NSWCA 37 at [159]-[162], Fitness First Australia Pty Ltd v Fenshaw Pty Ltd (2016) 92 NSWLR 128; [2016] NSWCA 207 at [39]-[41] and Dinov v Allianz Australia Insurance Ltd [2017] NSWCA 270 at [6]-[7] and [13]. It matters not whether such words are labelled "relational terms" or "prepositional phrases". The point is that the statutory context and purpose will determine the legal meaning of the words "in respect of", and thus the closeness of the relationship required by them.

[89]

The consequences of the importance of context and purpose

I pause to note what I consider to be the main force of the proposition that the legal meaning of "in respect of" is determined by context and purpose. It is that posing the question whether a particular relation is capable of being encompassed by that term is probably unhelpful and potentially distracting. The answer to that question may assist if the posited relation is so remote that it cannot fairly be said to fall within the scope of the words "in respect of". But to say that a relation is capable of falling within the scope of the words "in respect of" considered in isolation says little about whether that relation in fact falls within the scope of the particular legislative provision which includes the words "in respect of".
To be clear about this, a carrier's liability to a non-passenger who is a relative of a passenger following the latter's death is plainly capable of being described as a liability "in respect of" the death of the passenger. But that is, in my respectful opinion, merely the beginning of the analysis of the question whether s 35(2) extinguishes the claim. If the words "in respect of" in s 35(2) bear the widest meaning they may bear, then the non-passenger's claim will be extinguished. But whether they bear the widest meaning, or some narrower meaning, depends upon altogether different considerations. It was for this reason, to take but one example, that what was determinative in Commissioner of Taxation of the Commonwealth of Australia v Scully when construing the words "consideration of a capital nature for, or in respect of, personal injury to the taxpayer" was the word "consideration", which imported a requirement that the payment must be one which compensated for injury, rather merely than being one consequential upon an injury: see especially at [36]-[41].
It is settled law, as Learned Hand J said in 1945, and as the High Court has repeatedly confirmed since, that statutory construction does not involve making a fortress out of the dictionary (see the authorities collected in 2 Elizabeth Bay Road Pty Ltd v The Owners - Strata Plan No 73943 (2014) 88 NSWLR 488; [2014] NSWCA 409 at [81]). Dictionary definitions specify a range of possible meanings, which may not much assist in identifying the particular meaning in its context. The meaning of any word used in a statute depends on the context and purpose of the legislation in which it appears: Coverdale v West Coast Council (2016) 259 CLR 164; [2016] HCA 15 at [18]. So too, when faced with the task of construing a statute which turns upon a relational term such as "in respect of", its legal meaning is not determined by reference to the broadest meaning which those words may reasonably bear. The legal meaning of a term such as "in respect of" may be, and often will be, when considered in its context and by reference to its purpose, narrower than its maximal meaning considered in isolation.
Of course, when the relationship is very close, there will probably not be much dispute as to whether it is caught by "in respect of". But a non-passenger's claim against a carrier may arise in number of ways, some of which are closely connected with the passenger's death, others more remotely.

[90]

The variety of claims by non-passengers against carriers

Speaking generally, in some civilian legal systems, a deceased person's cause of action was transmissible to his or her heirs. For example, Scottish law provided that an action would lie against a defendant whose wrongful act caused death at the suit of various listed relatives of the deceased person. Lord Campbell drew upon this when piloting the Fatal Accidents Act 1846 (Eng), commonly known as Lord Campbell's Act, through Parliament: see P Handford, "Relatives' Rights and Best v Samuel Fox" (1979) 14 University of Western Australia Law Review 79 at 98-99 and 110-112. It will be seen below that the rights of relatives in civil law countries, and under Lord Campbell's Act and its counterparts in common law countries, were squarely within the scope of the various air conventions and the Commonwealth and State Carriers' Liability Acts.
Claims by non-passengers in common law systems can also be more remotely connected with the death of a passenger. As Basten JA notes, one example is the right of an employer who has paid out amounts under workers compensation legislation (for examples, s 25 of the Workers Compensation Act 1987 (NSW)). In particular, it is one thing for a non-passenger who is the deceased's passenger's next-of-kin to have a claim which turns on the economic loss of the deceased in accordance with the local equivalents of Lord Campbell's Act: see De Sales v Ingrilli (2003) 212 CLR 338; [2002] HCA 52; [2003] HCA 16 at [11], [54]-[57] and [91]-[95]. It is another thing for a non-passenger to have a claim for psychiatric injury personally suffered by him or her. Both claims are, in a sense, claims in respect of the death of a passenger, but the relationship between the claim and the death is very different.
One difference is the source of the claim. Claims under Compensation to Relatives legislation are squarely sourced in statute. This is not merely because the common law set its face against the survival of tortious causes of action, reflected in the maxim actio personalis moritur cum persona, but because it was a "totally new action" - "new in its species, new in its quality, new in its principle, in every way new", as Lord Blackburn described it in Seward v The "Vera Cruz" (1884) 10 App Cas 59 at 70-1. In contrast, a non-passenger's claim in negligence for psychiatric injury is sourced in the common law. It is true that the common law claim is affected by statute. Statute, in the form of s 4 of the Law Reform (Miscellaneous Provisions) Act 1944 (NSW), was initially enacted to overcome narrow decisions at common law, notably Chester v Waverley Corporation (1939) 62 CLR 1; [1939] HCA 25. However, in Jaensch v Coffey (1984) 155 CLR 549; [1984] HCA 52 the High Court expanded the scope of this species of negligence, abandoning the requirement of seeing or hearing the event contemporaneously, and in Gifford v Strang Patrick Stevedoring (2003) 211 CLR 317; [2003] HCA 33 the High Court confirmed that s 4 neither excluded nor fettered a plaintiff's rights at common law. Thereafter, further legislation has been enacted regulating such claims, notably, Part 3 of the Civil Liability Act 2002 (NSW). It remains the case that the source of such a claim is the general law.
There is an historical difference too. Lord Campbell's Act predated the modern formulation of negligence. For example, in 1870, the Court of Exchequer Chamber maintained that a plaintiff could recover unforeseeable damages: Smith v London and South Western Railway Co (1870) LR 6 CP 14, with (for example) Channell B stating at 21 that a person who is guilty of negligence "is equally liable for its consequences, whether he could have foreseen them or not". As Fraser JA observed in Meandarra Aerial Spraying Pty Ltd v GEJ Geldard Pty Ltd [2012] QCA 315 at [28], Smith did not survive the Privy Council's decision in The Wagon Mound: Overseas Tank Ship (UK) Ltd v Morts Dock & Engineering Co Ltd [1961] AC 388; see especially at 416 where Viscount Simonds observed of it that "the law of negligence as an independent tort was then of recent growth and ... its implications had not been fully examined". Professor Handford cited Patrick Atiyah's statement that the right of recovery under Lord Campbell's Act "antedates the present conceptual framework of the law of negligence": (1979) 14 UWALR 79 at 99-100.
A third difference is central to these appeals. Section 3(1) of the Compensation to Relatives Act commences as follows: "Whensoever the death of a person is caused by a wrongful act, neglect, or default, and the act, neglect, or default is such as would (if death had not ensued) have entitled the party injured to maintain an action and recover damages in respect thereof, then and in every such case the person who would have been liable if death had not ensued shall be liable to an action for damages ..."
The second element of the right, which is emphasised above, is an entitlement on the part of the deceased to maintain an action for damages. Thus in a very precise sense, a relative's claim under Lord Campbell's Act and its counterparts is derivative, insofar as an element of the claim is that the deceased would have had the right to maintain an action and recover damages.
It is easy therefore to see that a provision which extinguishes liability against the carrier is apt to extend to extinguishing derivative liability, an element of which is that the deceased would have had the right to maintain an action and recover damages. It is especially easy to reach that conclusion when it is borne in mind that the Compensation to Relatives Act claim may be characterised for practical purposes as the common law counterpart to those claims in civil law legal systems which were at the forefront of attention given when drafting the Warsaw Convention (see [291] below).
However, a non-passenger's claim in negligence for psychiatric injury is a different creature: 1. The elements of such a claim are the general requirements of duty, breach, and (especially) foreseeability, now determined in accordance with Part 1A of the Civil Liability Act. 2. The duty, in the modern formulation of the law, is one owed directly to the non-passenger. The claim is not dependent upon the deceased passenger himself or herself having a claim against the carrier, although that death may be a factual element of the claim. As Taylor J observed in Scala v Mammolitti (1965) 114 CLR 153 at 159; [1965] HCA 63, the right to recover damages for nervous or mental shock was in no way dependent upon proof of a liability to compensate the initial victim. In accordance with these principles, each of the separate proceedings commenced by Ingrid, Natalee and Jay Stephenson alleged that South West owed a duty of care to them. 3. The non-passenger's claim in negligence for psychiatric injury may be available if the passenger is badly injured, or indeed (as was the case in South Pacific Air Motive Pty Ltd v Magnus) if the non-passenger wrongly believed that the passenger had been injured. 4. The non-passenger's claim for psychiatric injury may arise in two quite different ways. The non-passenger may be a bystander or rescuer who witnesses a crash, as in Glen v Korean Airlines Co Ltd [2003] QB 1386; [2003] EWHC 643 (QB). Such a claim (for example, one involving seeking to rescue a grievously injured passenger who later dies) might readily be said to be "in respect of" the death of that passenger. Alternatively, the non-passenger might be a close family member who learns that a passenger has perished in a crash, as in the present case. Do either or both of those cases fall within the words "in respect of" the death of the passenger in s 35(2)?
Finally on this point, as is illustrated by South Pacific Air Motive Pty Ltd v Magnus, a non-passenger may also have a claim under a federal law such as the Trade Practices Act 1974 (Cth) or these days the application of the Australian Consumer Law as federal law to, say, a carrier which is a corporation. Another reason why the position is not nearly so clear-cut as South West's submission suggests is that it is no small thing for s 35 when it is only made applicable to the carriage of a particular passenger by reason of State law to operate to exclude a claim under federal law. The interaction between a federal law such as the Trade Practices Act and the Commonwealth Carriers' Liability Act to liability under Part IV of the latter Act which arises directly requires the resolution of a potential conflict between the laws enacted by the same Parliament. That is very different from the interaction between a federal law and an "applied law" which only applies to the carriage by reason of a law enacted by a State Legislature. As presently advised, the former must prevail, in accordance with s 109 of the Constitution.

[91]

The context of s 35(2) of the Commonwealth Carriers' Liability Act confirms that Compensation to Relatives Act claims are governed by Part IV

Enough has been said as to the range of claims by non-passengers giving rise to liability of carriers which might fall within the words "in respect of the death of the passenger" and thus to the need to consider s 35(2) in its context. There are two distinct matters of context. There is the immediate context of s 35, which speaks of "liability under this Part", read in the context of Part IV and the balance of the statute. And there is the broader, international context, because the language in the federal statute which is made applicable as a matter of State law is itself informed by the international treaties which are annexed to the same federal law and which in large measure it seeks to replicate, not least for the reason that the carriage of some passengers on the same flight may be governed by the treaties while the carriage of other passengers on the same flight may be governed by Part IV, either directly or as applied by the State Carriers' Liability Act.
It is easily seen that, having regard to context, claims under the Compensation to Relatives Act fall within the class of claims "in respect of the death of the passenger" to which s 35(2) applies. For one thing, such claims are very closely connected with the passenger's death, and the entitlement of the relatives of the deceased to make such a claim is derivative of the carrier's liability to the deceased. Further, there are very close links between s 35 of the Commonwealth Carriers' Liability Act and the Compensation to Relatives Act. Thus the requirement in s 35(6) that "only one action shall be brought in respect of the death of any one passenger" resembles s 5 of the 1897 Act ("Not more than one action shall lie for and in respect of the same subject matter of complaint"). The division of the fund authorised by s 35(9) likewise resembles the division authorised by s 4 of the 1897 Act. Further, s 35 is to be construed harmoniously with its counterparts in the various conventions, all of which (as will be seen below) were squarely directed to claims under Lord Campbell's Act. The reason for the "gap" in Article 24(2) of the Warsaw Convention with respect to the persons entitled to compensation and their respective rights was explained in R Mankiewicz, The Liability Regime of the International Air Carrier (Kluwer, 1981) at 161: "The reason for that omission is evident. In 1929 many countries, particularly amongst common law countries, had no rules on the survival of contractual rights, and wrongful death statutes, where they existed, varied greatly in scope and substance, ie with respect to the 'persons who have the right to bring suit' and to 'their respective rights'. In a matter so intimately intertwined with the national particularities of tort and family law, any attempt at unification of these rules was bound to lead nowhere."

[92]

The context of s 35(2) of the Commonwealth Carriers' Liability Act is much less clear in relation to claims by non-passengers for psychiatric injury

But the position is much less clear in the case of a non-passenger's direct claim in negligence for psychiatric injury. First, the connection between the non-passenger's claim and the passenger's death is not so close as a claim under the Compensation to Relatives Act. The claim is not derivative; rather the passenger's death is a factual element of the non-passenger's claim, but not a legal element. Secondly, in contrast with the undoubted fact that Article 24(2) responded to the different treatment of wrongful death claims in civil law and common law legal systems, there is nothing (so far as I am aware) in the travaux préparatoires to suggest that a direct claim for psychiatric injury by a non-passenger was within the mischief to which Article 24(2) was directed. Thirdly, the issue is affected by existing authority, notably the divided decision of a Full Court of the Federal Court in South Pacific Air Motive Pty Ltd v Magnus. Although that decision was not wholly on point - the non-passengers' psychiatric injury was caused by the fear that passengers who were their relatives had been killed - it was fully reasoned and turns on a closely cognate provision of the Commonwealth Carriers' Liability Act. The principles in Australian Securities Commission v Marlborough Gold Mines Ltd (1993) 177 CLR 485 at 492; [1993] HCA 15 apply, either in terms or by analogy, although the deference warranted is less than if the decision had been on s 35.
So much is easily stated; articulating exact weight to be given is less straightforward. Some of the complexities may be seen in S Gageler, "Common Law Statutes and Judicial Legislation: Statutory Interpretation as a Common Law Process" (2011) 37 Monash University Law Review 1, emphasising the desirability of judicial economy by confining decisions on construction to what is sufficient to decide the present case, and the means by which, through the operation of stare decisis, decisions of local appellate courts may control or at least influence the legal meaning of Commonwealth and State legislation.
The position may, at least in theory, be a little more complex here, because it is uncontroversial that the Commonwealth and State Acts which apply to carriage outside the scope of the Warsaw Convention and its successors are to be construed harmoniously with those treaties: Agtrack (NT) Pty Ltd v Hatfield (2005) 223 CLR 251; [2005] HCA 38 at [45]-[54]. That in turn means that the principles of treaty interpretation found in the Vienna Convention on the Law of Treaties apply (including, for example, Article 31 r 3(a) and (b), permitting account to be taken of subsequent treaties and subsequent practice), although no submissions were made to that effect in this appeal. The proposition of present relevance is that because treaties should be interpreted uniformly by contracting States, regard should be had to decisions of the courts of other States, especially those of ultimate appellate courts: Povey v Qantas Airways Ltd (2005) 223 CLR 189; [2005] HCA 33 at [25] and [128]. As Gordon J observed in Bywater Investments Ltd v Federal Commissioner of Taxation [2016] HCA 45; 91 ALJR 59 at [148], that can have the effect of departing from what would otherwise be the approach taken by applying ordinary domestic principles of statutory interpretation.
On any view of the matter, it is unavoidable to consider the more general question, namely, whether a tortious claim for psychiatric injury by a non-passenger following the death of a passenger, on carriage to which the Warsaw Convention and its successors applied, is governed by the applicable convention. That in turn directs attention to Article 24 of those Conventions (Article 21 in the case of the 1999 Montreal Convention) and authorities dealing with the so-called "exclusivity principle".

[93]

The Warsaw and Montreal system

As was observed in the Defence Minister's Second Reading Speech for the Civil Aviation (Carriers' Liability) Bill 1959, a series of multilateral conventions governs aspects of the liability of international air carriers, commencing with the Convention for the Unification of Certain Rules Relating to International Carriage by Air done at Warsaw on 12 October 1929 (the "Warsaw Convention"). The Warsaw Convention was amended by the Protocol that was opened for signature at the Hague on 28 September 1955 and by the Protocol done at Montreal on 25 September 1975 and called "Montreal Protocol No 4 to amend the [Warsaw Convention] as amended by the [Hague Protocol]". It will be convenient to use the same terminology as is used by the Commonwealth Act and refer to "the Warsaw Convention as amended at The Hague" to refer to the combined effect of the first two of those instruments, and to refer to the "Montreal No 4 Convention" to refer to the combined effect of all three of those instruments. (The foregoing is far from being a complete listing of international treaties governing international carriage by air, but will be sufficient for the purposes of these appeals.)
Separate from the foregoing is the Convention for the Unification of Certain Rules for International Carriage by Air done at Montreal on 28 May 1999, which the Commonwealth Act defines as "the 1999 Montreal Convention". The latter is a departure from the successive amendments of the Warsaw Convention. It also departs from its predecessors substantively, not least in no longer mandating an upper limit of a carrier's liability in respect of the death or injury of a passenger; instead there is strict liability to a limit, above which the carrier's liability is presumptive. It also dilutes the obligations of carriers to notify passengers of the limitations of liability. The position is well summarised in Professor Bin Cheng's article, "A New Era in the Law of International Carriage by Air: From Warsaw (1929) to Montreal (1999)" (2004) 53 International and Comparative Law Quarterly 833.
The 1999 Montreal Convention came into force in November 2003, 60 days after the thirtieth ratification (that of the United States). As is plain from s 2 of the Civil Aviation Legislation Amendment (1999 Montreal Convention and Other Measures) Act 2008 (Cth) as well as the Minister's Second Reading Speech, it was years after Mr Stephenson's death that Australia ratified and implemented that convention. Accordingly, it may largely be put to one side.
The fundamental approach taken in all of the conventions is to identify the contract for international carriage and to ask by reference to the place of departure and the place of destination what conventions apply. Articles 1 and 3 of all conventions make the agreement of the parties to the contract of carriage central to the identification of the place of departure and the place of destination, as Allsop P observed in Gulf Air Company GSC v Fattouh [2008] NSWCA 225; 251 ALR 183 at [28] and United Airlines Inc v Sercel Australia Pty Ltd [2012] NSWCA 24; 289 ALR 682 at [14(a) and (b)].
Speaking generally, almost all countries ratified the original Warsaw Convention (in many cases, such as Indonesia and Hong Kong, because the country was formerly a colony of a High Contracting Party), while progressively fewer ratified the more recent conventions based on the Warsaw Convention. For example, until very recently, Indonesia had only ratified the Warsaw Convention. The particular convention which applies turns upon identifying to which treaty (if any) the States in which the place of departure and the place of destination are located is a party. Carriage by air from Sydney to Denpasar was thus, until very recently, carriage to which the (unamended) Warsaw Convention applied. There is reason to think that some of the complexities of previous decades will be reduced, with the relatively widespread ratification of the 1999 Montreal Convention, but that post-dated the accident which gave rise to these appeals.

[95]

Exclusivity in the various conventions

Focussing first on the conventions, the relevant liability is imposed by Article 17 (which Basten JA has reproduced). Although these appeals are cases of an accident causing the death of a passenger, it is necessary to note that there is now a substantial (although not wholly uniform) body of authority to the effect that mental distress or psychiatric injury was not included by bodily injury ("lesion corporelle" in the authentic French text): see P Handford, "'Come Fly With Me': Psychiatric Injury and the Warsaw Convention" (June 2006) JBL 408.
Article 24, which is the provision making that liability exclusive, differs. In the English text of the unamended Warsaw Convention and in the text of the Warsaw Convention as amended at the Hague, Article 24 provides: "1. In the cases covered by Articles 18 and 19 any action for damages, however founded, can only be brought subject to the conditions and limits set out in this Convention. 2. In the cases covered by Article 17 the provisions of the preceding paragraph also apply, without prejudice to the questions as to who are the persons who have the right to bring suit and what are their respective rights."
In the Montreal No 4 Convention, Article 24 is much less elliptic. It provides: "1. In the carriage of passengers and baggage, any action for damages, however founded, can only be brought subject to the conditions and limits set out in this Convention, without prejudice to the question as to who are the persons who have the right to bring suit and what are their respective rights."
The difference was considered by the United States Supreme Court in El Al Israel Airlines Ltd v Tseng 525 US 155 (1999). The issue was the effect of Article 24 of the unamended Warsaw Convention and in particular the words "the cases covered by Article 17" ("les cas prévus a l'article 17") which could "only be brought subject to the conditions and limits set out in th[e] Convention". Did that prohibition only apply to claims which the passenger could actually maintain under Article 17, or did it extend to "all personal injury cases stemming from occurrence on board an aircraft or in embarking or disembarking", including the claim for tort damages for an intrusive body search in circumstances where there was no "accident" and therefore could never be any liability under the Convention? Ginsburg J writing for the Court observed at 168 that "That prescription is not a model of the clear drafter's art".
The Court found in favour of the carrier, preferring the broader construction of the exclusion, but for reasons which were largely directed to the relationship between carrier and passenger, noting that: "A complementary purpose of the Convention is to accommodate or balance the interests of passengers seeking recovery for personal injuries, and the interests of air carriers seeking to limit potential liability": at 170.
The Court cited with approval what had been said by the House of Lords in Sidhu v British Airways Plc [1997] AC 430, where the carriage was of passengers between Kuala Lumpur and London via Kuwait and governed by the Warsaw Convention as amended at The Hague, which was made applicable as a matter of domestic English law by the Carriage By Air Act 1961 (UK). Lord Hope said at 447 that: "the purpose is to ensure that, in all questions relating to the carrier's liability, it is the provisions of the Convention which apply and that the passenger does not have access to any other remedies" (emphasis added).
In Tseng, the carriage was from New York to Tel Aviv in 1993. The United States had not ratified the Hague Protocol by 1999 (when the appeal was decided), and only ratified the Montreal Protocol No 4 on 28 September 1998. Hence (noting that in the United States legal system, treaties ratified by the Senate have the force of law without the need for domestic legislation), the United States Supreme Court was construing Articles 17 and 24 of the (unamended) Warsaw Convention. However, the Court went further and addressed an argument based upon the amendments to Article 24 effected by the Montreal No 4 Convention, as to which it was common ground that the Article precluded passengers from bringing actions under local law. The submission that the amended form of Article 24 had a broader operation than the unamended article in the Warsaw Convention 1929 was rejected, by reference to Sidhu, as well as decisions of courts of Canada, New Zealand and Singapore.
In Stott v Thomas Cook Tour Operators Ltd [2014] AC 1347; [2014] UKSC 15, the carriage was between the United Kingdom and Greece, and governed by the 1999 Montreal Convention (to which effect had been given by European Community Law). The article governing exclusivity was Article 29 of the 1999 Montreal Convention, which is even broader than Article 24 of the Montreal No 4 Convention. Lord Toulson JSC said that that Article had the same effect as Article 24 of the Warsaw Convention except for the addition of a sentence specifically excluding punitive, exemplary and other non-compensatory damages: at [31]. It applied such that a claim by a passenger for unlawful discriminatory treatment contrary to the Civil Aviation (Access to Air Travel for Disabled Persons and Persons with Reduced Mobility) Regulation 2007 (UK) was extinguished.
Thus (a) the verbal differences between Article 24 of the Warsaw Convention and Article 24 of the Montreal No 4 Convention were elided, and (b) two ultimate appellate courts referred to the rights of passengers being exclusively those conferred by the Convention.

[96]

The Australian implementation of the various aviation conventions

The ratification by Australia of the Warsaw Convention and many of its subsequent amending conventions, coupled with the failure of many countries to ratify conventions subsequent to the Warsaw Convention, has meant that for many years a variety of distinct although broadly similar international regimes has applied to international carriage involving Australia. Treaties in the Australian legal system are not "self-executing" and lack "direct application", although they may have some effect in domestic law (for example, the change of status of an enemy alien by a peace treaty requires no legislation: see Re Minister for Immigration and Multicultural and Indigenous Affairs; ex parte Lam (2003) 214 CLR 1; [2003] HCA 6 at [99]-[100]). Hence each possible international regime required the enactment of separate domestic implementing law. That leads directly to the structure of the Commonwealth Carriers' Liability Act. Thus: 1. By Part III of the Commonwealth Act, the unamended Warsaw Convention has the force of law and applies to any carriage by air to which that Convention applies (for example, until very recently, carriage between Sydney and Denpasar). Article 24 was not affected by the Hague Protocol, and s 24 makes the provisions in s 12 applicable to such carriage in the same way as if the carriage were carriage to which the Warsaw Convention as amended at the Hague applied. 2. By Part II of the Commonwealth Act, the Warsaw Convention as amended at the Hague has the force of law and applies to any carriage by air to which that Convention applies. Section 12 contains provisions as impliedly contemplated by Article 24(2) of that convention as to "who are the persons who have the right to bring suit and what are their respective rights". 3. By Part IIIC of the Commonwealth Act, the Montreal No 4 Convention has the force of law and applies to any carriage by air to which that convention applies (the example given in Shawcross and Beaumont, Air Law, Vol 1, Division VII, para [329] is carriage from London to New York in November 2000). In the case of death claims, Article 29 took a different form from Article 24 of the Warsaw Convention, but the question "who are the persons who have the right to bring suit and what are their respective rights" was once again left open as a matter of local law. Section 25L makes, inter alia, s 35 of the Commonwealth Act applicable to such carriage. 4. By Part IA of the Commonwealth Act, the 1999 Montreal Convention has the force of law and applies to any carriage by air to which that Convention applies.
Part IV of the Commonwealth Carriers' Liability Act applies to inter-State and Territorial carriage. It also applies to international carriage to which none of the international conventions apply. The most notable example of a country which had not (at least until after the hearing of the present appeal) adopted the Warsaw Convention or any of its successors is Thailand; hence Lord Bridge's example in Holmes v Bangladesh Biman Corporation [1989] AC 1112 at 1131 about return carriage from London to Bangkok to London.
Broadly speaking, Part IV follows the same scheme as the Warsaw Convention and the treaties which amended it. Part IV directly imposes liability where a passenger dies or is injured, it limits that liability, it precludes contracting out, makes special provision for the persons who, in the case of the death of a passenger, can bring proceedings to enforce that liability, and (by s 35(2)) makes that liability exclusive.
The State Carriers' Liability Act follows the same pattern. It recognises that there may be intra-State carriage which is governed by either federal domestic law or the Warsaw Convention (and its successors). Mr Paterson's carriage mentioned above is an example of an intra-State flight being made part, by reasons of the agreement between passenger and carrier, of inter-State carriage to which Part IV applied directly. If instead of flying from Sydney to the Gold Coast, Mr Paterson had been flying from Sydney to Denpasar on the same contract of carriage, then the (unamended) Warsaw Convention would have applied to the whole of his carriage, to which Part III of the Commonwealth Carriers' Liability Act gave the force of law in relation to that carriage.

[99]

Significance of the contract of carriage

First, critical to the operation of all of the treaties and both the Commonwealth and State Carriers' Liability Acts is the notion of a contract of carriage. This may be seen in various ways. 1. Only by having regard to the terms of the agreement between carrier and passenger may the applicable law be identified. The basic structure of the Commonwealth Carriers' Liability Act - a series of Parts each specifying a different regime for carriage by air - turns upon the particular contract for carriage. That reflects the way in which the various conventions operate. 2. As previously noted, it is easy to see how passengers on the same flight may be subject to different regimes, because of differences in the ways in which each has agreed the particular flight will form part of the single contract of carriage. 3. The regime established by the Warsaw Convention and the later amending conventions is best seen as a compromise between carrier, passengers and cargo-owners, preventing the carrier from contracting out of liability while at the same time limiting the carrier's maximum liability. 4. The same is true of the Commonwealth Carriers' Liability Act. In Agtrack at [53], the High Court reproduced what the Minister had said in the Second Reading Speech for the bill which became that Act: "The most important objective in applying the principles of the convention to domestic aviation is to deprive the domestic carriers of their present right to contract out of all liability for damage howsoever caused, and to make them liable for proven damages up to [what was then] £7,500." 1. The importance given to the notification of limitations of liability on the ticket in the conventions prior to the 1999 Montreal Convention reflects the same concern: see for example what was said in Herd v Clyde Helicopters Ltd [1997] AC 534 at 544 by Lord Mackay LC as to the delivery of a ticket with the appropriate notice of limitation being "generally essential to the application of the limitation provisions" in the Warsaw Convention and its successors. Indeed, in one early and influential decision, Grein v Imperial Airways Ltd [1937] 1 KB 50, Greene LJ referred at 75 to the rules in the Warsaw Convention, when implemented by domestic legislation, as governing "the contractual relations of the parties to the contract of carriage of which ... they became statutory terms".
None of this is directed to people who are not in any contractual relationship with the carrier, or whose statutory claim is premised upon a passenger having a claim against the carrier, but who instead have a direct tortious claim against it.

[100]

Carriers are liable to some non-passengers

Secondly, it is clear that a non-passenger who suffers physical injury on the ground by reason of an air accident has no claim under the Convention, but even so may sue at general law (subject to other legislation such as the (former) Damage by Aircraft Act 1952 (NSW) and (from 2012) Pt 12 of the Civil Liability Act 2002 (NSW)).
Professor Clarke gave, as a footnote to the passage extracted above as to the limited exclusivity effected by the various conventions, the following: "Nor do they deal with loss connected with carriage by air by unconnected with contracts of carriage, such as injury suffered by persons impacted by an air crash; eg Glen v Korean Airlines Co Ltd [2003] EWHC 64 (QB); [2003] QB 1386."
The point is elaborated at para 2.3.2: "Although [the Montreal 1999 Convention], like [the Warsaw Convention], is exclusive as regards the liability of the carrier (and its servants and agents) it does not apply to other persons with possible liability arising out of the same incident; these include a manufacturer or certifying authority, as regarded defects in the aircraft, or security firms, as regards hijacking or robbery. Nor do the Conventions apply to persons outside the contract of carriage, such as the victims of a crash who were on the ground or persons on board who have 'hitched a lift', whether by invitation or as stowaways."
Indeed, in Glen v Korean Airlines Co Ltd [2003] QB 1386 it was held that "material loss or damage" in s 76(2) of the Civil Aviation Act 1982 (UK) included psychiatric injury, so that witnesses to an aircraft crash were entitled to recover. Simon J rejected a submission that the "trade-off between landowners and carriers" did not include psychiatric injury. Section 76(2) is identical to s 73(1) of the Civil Liability Act, which provides: "Where material loss or damage is caused to any person or property on land or water by, or by a person in, or an article or person falling from, an aircraft while in flight, taking off or landing, then unless the loss or damage was caused or contributed to by the negligence of the person by whom it was suffered, damages in respect of the loss or damage are recoverable without proof of negligence or intention or other cause of action, as if the loss or damage had been caused by the wilful act, neglect, or default of the owner of the aircraft."
The common ancestor of s 73(1) of the Civil Liability Act and s 76(2) of the Civil Aviation Act 1982 (UK) is the Air Navigation Act 1920 (UK): see Southgate v Commonwealth of Australia (1987) 13 NSWLR 188 at 190. The Secretary of State for Air, the Hon Mr W Churchill, told the House of Commons when introducing the Bill that it: "aims at reconciling the rights of landowners in the superincumbent air following on organisation for civil aviation by abolishing actions for mere aerial trespass - that is to say, aeroplanes flying over the ground owned by the landowner - and to substitute instead absolute liability by the owners of aircraft to compensate injured persons on the ground without any question of proof of negligence."
It is not necessary to express a concluded view as to whether "material loss or damage" in s 73(1) extends to mental distress or psychiatric injury, although it may be noted that s 73(4) defines "loss or damage" to include personal injury, and personal injury elsewhere in the Civil Liability Act includes mental injury. What matters for present purposes is that the legislation all proceeds on the basis that a claim by a plaintiff on the ground who is not a passenger for loss or damage is outside the exclusivity conferred by the regime for which the Commonwealth and State Carriers Liability Acts provides.
If a non-passenger who never had any contractual relationship with a carrier suffers physical damage from an aviation accident, he or she may sue independently of and unaffected by the Warsaw Convention, its successors as implemented in Australian law. Why should a non-passenger who never had any contractual relationship with a carrier who suffers psychiatric injury from an aviation accident be in any different position?
Further, as this appeal itself illustrates, there is a completely different way in which carriers are liable to non-passengers. The immunity conferred by the Commonwealth and State Carriers' Liability Act is qualified. Basten JA has referred at [190] to the apparent anomaly that although, on the view his Honour takes, South West is not directly liable to the negligence claims of the Stephensons, it is liable to pay a portion of that liability because, as it happens, the Council is also liable to the Stephensons, and is able to cross-claim against South West as a joint tortfeasor. A narrower approach to s 35(2) avoids the oddness of a result such as the present, where South West is liable indirectly on a cross-claim brought by another tortfeasor, such that it is necessary to apportion the liability of the two, although South West is not liable to the Stephensons directly and is only called upon to discharge any of that liability because of the happenstance that the Council was sued and has been found liable.
I respectfully agree with Basten JA that the examples mentioned above, particularly the latter, are fairly described as "anomalies". They are a consequence of the inevitability of some claims falling close to the boundaries of two distinct legislative regimes, one directed to damage to people and things on the ground caused by aircraft, the other directed to limiting carrier's liability in respect of passengers and cargo. I also agree with Basten JA that there will always be anomalies, and that relatively limited weight therefore should be accorded to them in fixing the legal meaning of s 35(2). Even so, they tend against South West's construction.

[102]

Existing authority

Most statements as to the operation of the "exclusivity principle" arose out of claims by passengers, and are couched in terms of denying other rights to the passenger. One example is Lord Hope's speech in Sidhu reproduced above. Another is Lord Toulson JSC's summary in Stott at [34] that "the whole purpose of article 17, read in its context, was to prescribe the circumstances - that is to say, the only circumstances - in which a carrier would be liable to the passenger for claims arising out of his international carriage by air" (emphasis added).
More qualified statements may also be found, including that by Handley AJA in United Airlines Inc v Sercel Australia Pty Ltd [2012] NSWCA 24; 289 ALR 682 at [113]: "I agree with the President that, as a matter of construction, those Articles only apply to claims by persons travelling on passenger tickets or claiming under or through such persons, including, in the case of death, their dependants. This employer did not claim through or under the passenger. It had an independent claim, albeit one which depended on the carrier's original liability to the passenger."
That statement is consistent with a limited notion of exclusivity, although the case did not turn upon a claim which was not "through or under the passenger". It is also true, as Basten JA has observed, that there may be found broad statements of exclusivity in Sercel, notwithstanding that the case did not deal with a direct claim in negligence by a non-passenger against the carrier.
Herd v Clyde Helicopters Ltd [1997] AC 534 is similar in that respect. Importantly, and unlike the other decisions dealing with the exclusivity principle mentioned above, Herd dealt with claims by non-passengers under Scottish law. The litigation arose out of a fatal accident involving a helicopter which had been operated by the respondent under contract with Strathclyde Regional Council. The Carriage by Air Acts (Application of Provisions) Order 1967 (UK) applied provisions based on the Warsaw Convention as amended at the Hague, but with important variations (see below) to claims by passengers on contracts for carriage wholly within Scotland. Sergeant Herd's children and mother had brought claims under both the Order and in negligence against the carrier, and the carrier contended that the claims at common law were incompetent. There were three points argued in the Court of Session (Second Division): whether there was a contract for carriage, whether Sergeant Herd had been a passenger, and whether the operator was a carrier: see Herd v Clyde Helicopters Ltd [1996] SLT 976. On the further appeal to the House of Lords, the only question was whether the Order applied. See for example the opening paragraph of Lord Hope's speech: "It is not disputed that, if the Order applies, the provisions of Schedule 1 to the Order provide the exclusive cause of action and sole remedy for the appellants ...". There was no argument that a claim for psychiatric injury was outside the scope of the claims at common law excluded by the Order if it applied.
What is more, the Schedule disapplied Articles 1(2), 1(3), 2(2) and the whole of Part II (Articles 3-16). That is to say, the provisions focussing on the documentation relating to the contract of carriage were inapplicable to determining the rights of Sergeant Herd's mother and children. This explains the statement by Lord Mackay of Clashfern LC at 544: "[I]n the very well prepared and careful argument to which your Lordships were treated, a number of decisions were referred to. None of them dealt with the terms of the Order with which your Lordships are concerned in the present case. In so far as they dealt with the Warsaw Convention either as originally agreed upon, or as modified at the Hague, they dealt with provisions very substantially different in important respects from those with which we are concerned in the Order. In particular, the ticketing provisions are fundamental in those Conventions to the limitation of liability, since the delivery of a ticket with the appropriate notice of limitation is generally essential to the application of the limitation provisions which involves a relationship between, for example, the passenger and the carrier which is not necessary in the Order" (emphasis added).
True it is that Lord Hope's reasons did not rely upon the difference between the Convention and the Order. But Lords Nicholls, Hoffmann and Clyde agreed with the Lord Chancellor.
I do not read Herd as being authority contrary to the proposition that a non-passenger's claim for psychiatric injury stands outside the provisions of Part IV. The point was not argued in Herd, and a majority of the House of Lords regarded the regime as materially different from that established by the Warsaw Convention, its successors, and its Australian implementations. To similar effect, in United Airlines Inc v Sercel Australia Pty Ltd at [14(b)] Allsop P referred to the requirement for a ticket and the central place of the contract in the regime established by Article 3 of the Warsaw Convention.
That said, statements of principle may be found in the foregoing authorities which bear on the question. However, considerably more persuasive than statements such as those are decisions where the point was squarely argued: see the authorities mentioned in Lazarus v Independent Commission Against Corruption (2017) 94 NSWLR 36; [2017] NSWCA 37 at [87]. So far as I am aware, aside from the present litigation there have been precisely two proceedings in superior courts where the point has been argued.

[103]

South Pacific Air Motive Pty Ltd v Magnus

The more important authority, in my view, is South Pacific Air Motive Pty Ltd v Magnus. That was not a death case, and it is true that ss 35 and 36 are different, and reflect the different treatment of death and bodily injury claims in the conventions. While not strictly being on point, I think that Magnus is to be given considerable precedential weight. The structure of ss 35 and 36 is materially identical in respect of the exclusion of other civil liability. Further, I would strain to avoid a result whereby, say, non-passenger parents could recover a claim for psychiatric injury when they hear that their son has been in a plane crash, although ultimately it turns out the child was uninjured, but could not recover a claim insofar as their claim was based on their daughter having died in the same crash. The considerations of judicial economy which are especially important in construing legislation such as the Commonwealth Carriers' Liability Act do not prevent considerable weight being given to the construction of the immediately preceding and similar provision in the same federal statute; to the contrary, it is an aspect of reading the statute as a whole when determining its legal meaning.
Prominent in Hill J's reasons was the fact that there was no contractual relationship between the persons who claimed they had been injured and the carrier. His Honour also relied upon the second matter set out above, namely, the undoubted liability of a carrier to people physically injured on the ground (at 321): "Claims against carriers clearly falling outside the terms of the Conventions can easily be imagined. A plane might crash and injure a bystander; a plane might crash and damage property; a plane might run into another plane and injury the pilot or passengers in that other plane; a non‑passenger might observe a plane crash and suffer physical damage. There is nothing in the Conventions which suggests that there was any intention to limit the liability of carriers in such situations. In these situations the person injured has no contractual relationship with the carrier. No notice of limitation of liability will be drawn to the attention of such a non‑passenger suffering loss or damage arising out of an aircraft action. So it can not be said, at least to the extent of the above claims, that the Conventions were intended to be a complete code in respect of non‑passengers. Clearly, however, the Conventions were intended to be a complete code with respect to passengers. Likewise there is nothing in the CA Act which suggests that that Act was intended to govern claims by non‑passengers of the kind to which I have referred above. Although, therefore, it seems clear that neither the Conventions nor the CA Act were intended to be a complete code governing all claims against airlines and particularly all claims for damages suffered by non‑passengers, it is possible to say that each constitutes a code in respect of claims by non‑passengers to the extent that those claims relate to the death or personal (bodily) injury of a passenger. But once it is seen that the Conventions and the CA Act are concerned with questions of contractual limitation of liability and notice thereof it is not difficult to conclude that the rationale for the Conventions or the Act being a code dealing with some, although not all, liabilities of airlines to non‑passengers falls away."
True it is that Hill J was not confronted with the potentially differential operation of s 35(2) upon a claim based on Lord Campbell's Act. Even so, I regard his Honour's reasoning as persuasive authority on the construction of s 35(2).
A further matter was mentioned by Sackville J at the conclusion of his reasons at 350: "Exposing carriers to liability for nervous shock claims by non-passengers doubtless makes it more difficult for them or their insurers to calculate the extent of the risks to which they are subject. But carriers are exposed to many forms of liability to non-passengers. If this particular liability creates unacceptable burdens, the position can be remedied by the Commonwealth Parliament. International agreement is not required. If the appellants' argument were accepted, the dividing line between non-passengers' nervous shock claims within Part IV of the CA Act and those outside it would be difficult to support on any sound basis. On the conclusion I have reached all non-passengers nervous shock claims are treated in the same manner."
And indeed legislation was enacted in 1999 (although it did not specifically respond to the observations of Sackville J). Section 11 of the Damage by Aircraft Act 1999 (Cth) imposes liability on operators and owners of aircraft in the circumstances identified in subsection 10(1): "(1) This section applies if a person or property on, in or under land or water suffers personal injury, loss of life, material loss, damage or destruction caused by: (a) an impact with an aircraft that is in flight, or that was in flight immediately before the impact happened; or (b) an impact with part of an aircraft that was damaged or destroyed while in flight; or (c) an impact with a person, animal or thing that dropped or fell from an aircraft in flight; or (d) something that is a result of an impact of a kind mentioned in paragraph (a), (b) or (c)."
However, subsection (1A) now expressly excludes mental injury unaccompanied by some "other personal injury, material loss, damage or destruction" from the strict form of liability thereby created. That amendment was made by the Aviation Legislation Amendment (Liability and Insurance) Act 2012 (Cth).
I do not need to express a view as to the operation of this legislation (whether before or after the amendment), save to say that it plainly imposes some liability upon carriers outside the scope of the Commonwealth Carriers' Liability Act. To my mind, that reinforces the point mentioned by Sackville J. This is an area where the Commonwealth Parliament has legislated, at least twice, after South Pacific Air Motive Pty Ltd v Magnus, including in terms squarely connected with non-passengers who suffer purely psychiatric injury. To my mind, that is a further reason not to depart from the law established by that decision; cf Roadshow Films Pty Ltd v iiNet Ltd (2012) 248 CLR 42; [2012] HCA 16 at [120] where Gummow and Hayne JJ observed in respect of another frequently amended federal regime that difficulties were "best resolved by legislative processes rather than by any extreme exercise in statutory interpretation by judicial decisions."
In dissent on this issue, Beaumont J proceeded to identify the literal construction of s 35(2) as extending to a claim by a non-passenger, and then concluded that there was no basis not to adopt such a construction. With great respect, I disagree with the premise; I do not consider that it helps to identify the "literal" meaning of s 35(2); the words "in respect of" are ineluctably contextual. The fact that they are capable of extending to a claim by a non-passenger says very little as to whether s 35(2) in fact applies to extinguish the non-passenger's claim. That was the point made by Sackville J at 348, which I have elaborated upon at [273]-[280] above in light of the prominence of the submission in South West's appeal.

[104]

Cauchi v Air Fiji

Cauchi v Air Fiji [2005] TOSC 7 is to the contrary. It is an interlocutory albeit reserved and fully reasoned decision at first instance in the Supreme Court of Tonga. Ford J (as the Chief Justice of Tonga then was) was taken to, but did not engage with the majority decision in South Pacific Air Motive. The entirety of the dispositive portion of his Honour's reasons is as follows (at 29): "Although I acknowledge that the House of Lords [in Sidhu] was dealing with claims by passengers, all the pointers are that in a non-passenger situation the same principle should be applied with, perhaps, an even more aggressive fervour. If air carriers were to be exposed to damages claims falling outside the Convention by non-passengers based on causes of action such as nervous shock and psychological injuries, the floodgates would surely tumble and the Convention rules relating to international carriage by air would soon be subverted. It seems to me that, wherever the boundary lines are finally drawn for the still emerging nervous shock cause of action, they will be unable to make any inroads into the now entrenched principle of construction that the Warsaw Convention is a comprehensive code which excludes any other form of domestic remedy by passengers or non-passengers alike."
With respect, that reasoning is unpersuasive, and not merely because of its invocation of floodgates. It does not grapple with the reasons of either the majority or the minority in South Pacific Air Motive. It is inconsistent with the undoubted liability of carriers to some non-passengers, where there is physical injury. It proceeds on the basis that a tortious cause of action for damage constituted by psychiatric harm is "emerging". If that is the case in Tonga, it is not true in New South Wales; as noted above, claims for "nervous shock" were recognised by s 4 of the Law Reform (Miscellaneous Provisions) Act 1944 (NSW), more than two decades before the State Carrier's Liability Act was enacted, and earlier still in cases such as Hambrook v Stokes Brothers [1925] 1 KB 141.

[105]

Conclusion

All members of the Court in South Pacific Air Motive v Magnus regarded the question as difficult and contestable. I respectfully agree. I would not place great weight on the anomalies referred to above; anomalies are inevitable on any construction. However, ultimately I have concluded that s 35(2) does not preclude a non-passenger's claim against a carrier for psychiatric injury. That conclusion means that s 35(2) will still preclude claims by non-passengers which are more closely connected with the death of a passenger, such as a claim under the Compensation to Relatives Act. My conclusion principally rests on three considerations. 1. The first is the significance to be given to the contract of carriage, and the regime reflecting a compromise between the contracting parties, rather than affecting the tortious claims of non-passengers for breaches of duties owed by the carrier directly to them. The purpose of the exclusivity recognised in the various conventions, and implemented in Australia to carriage to which no treaty applied by s 35(2), does not go so far as to immunise carriers from liability to persons who do not claim, directly or indirectly, through a passenger who would have received the benefit of the notice of limitation of liability on his or her ticket. 2. Secondly, that is confirmed by what I regard as the weight of persuasive authority, reflected in the majority judgments in South Pacific Air Motive. Not lightly would I depart from a decision of the Full Federal Court which has now stood for 20 years in an area where there has been a deal of legislative amendment but which has been left unaffected, in circumstances where departing from it would create what would be, in effect, inconsistent lines of authority in this Court and in the Federal Court. 3. Thirdly, I place some weight on the totality of legislation in this area, including legislation conferring rights upon non-passengers who suffer injury. As a matter of history, there have been two streams of legislation affecting the claims connected with aircraft made by people on the ground: that flowing from the Air Navigation Act 1920 (UK) and that flowing from the Warsaw Convention. This tends to confirm the limited purpose of the latter, not extending to non-passengers' claims which are not derivative of a passenger's claim.
Accordingly, I would not uphold this ground of South West's appeal insofar as it challenged the primary judge's decision that the claims for psychiatric injury were not precluded by s 35(2) of the Commonwealth Carriers' Liability Act. I consider that the substitution of liability effected by s 35(2) extends to claims by non-passengers which are derivative upon a claim by a passenger, including claims under the Compensation to Relatives Act 1897 (NSW), but does not extend to a claim by a non-passenger which is based on breach of duty owed directly to a non-passenger, even if at the factual level damage in the form of psychiatric injury has been caused to the non-passenger by reason of the passenger's death.

[107]

Orders

On the approach I favour, the Stephensons' judgments based on their psychiatric injury claims against South West should not be set aside, which is to say I respectfully disagree with result (2) within the seven results summarised at [257] above. Accordingly, I would leave in place the judgments obtained by each of Ingrid, Natalee and Jay Stephenson in the "nervous shock proceedings" against both South West and the Council, rather than setting aside the judgments against both defendants and replacing each by a judgment against the Council.
In other respects, save as to costs, I agree with the orders proposed by Basten JA.
In light of the Stephensons' success in maintaining three of the four judgments in their favour against South West, but bearing in mind that their principal interest was in maintaining their judgments against the Council and that in many respects their submissions against South West were unsuccessful, I would order that the Council pay the Stephensons' costs of resisting Council's cross-appeal and that South West pay one half of the Stephensons' costs of its appeal. In other respects, I agree with the costs orders proposed by Basten JA.
PAYNE JA: I have had the privilege of reading the comprehensive judgments of Basten JA and Leeming JA in draft. I have found resolution of the issue which divides their Honours very difficult. There is no wholly satisfactory answer to the question posed.
Whilst s 35(2) of the Civil Aviation (Carriers' Liability) Act 1959 (Cth) makes a carrier's civil liability under Part IV exclusive within the scope of the operation of that section, it is far from clear what the scope of the operation of s 35(2) is. Section 35(2) reflects a formulation of a number of international treaties to which Australia is a party which purport to codify certain rules applicable to carriage by air.
The meaning of the connecting phrase "in respect of" in s 35(2) which determines the relationship between the excluded liability, being "any civil liability of the carrier under any other law" and the event giving rise to the liability, namely "the death of the passenger" is of course dependent on context. The breadth of the relevant context is canvassed exhaustively in the judgments of Basten and Leeming JJA and I will not repeat it. I agree that it matters not whether such words are labelled "relational terms" or "prepositional phrases". The point is that the statutory context and purpose will determine the legal meaning of the words "in respect of", and thus the closeness of the relationship required by them.
In resolving this question, I found, in particular, the question of whether to follow the reasoning in the judgment of Sackville and Hill JJ in South Pacific Air Motive Pty Ltd & Anor v Magnus (1998) 87 FCR 30; [1998] FCA 250 1 to be difficult. If I had concluded that their Honours' consideration of the operation of s 35(2) was part of the ratio in Magnus I would have followed it.
I have ultimately concluded, however, that Basten JA is correct that the decision in Magnus does not govern the outcome in the present case. Attention to the differences in the language of ss 35 and 36 leads to the conclusion that Magnus is only of indirect relevance.
The observations of the High Court in Agtrack (NT) Pty Ltd v Hatfield (2005) 223 CLR 251; [2005] HCA 38 at [3]-[4] emphasise the breadth of the connection identified by the language of s 35(2). Gleeson CJ, McHugh, Gummow, Hayne and Heydon JJ said at [3]-[4]: "[3] The common law of Australia gave to Mrs Hatfield no action for damages against Spring Air for loss she suffered by reason of her husband's death. That death took place in the geographical area of the Northern Territory where the plane crashed, but the action was brought in the Supreme Court of Victoria. Both the statute law of the Northern Territory and of Victoria made provision of the same nature as Lord Campbell's Act for recovery for a widow of a deceased husband. However, federal law also makes provision of this nature in the limited circumstances to which Pt IV of the Civil Aviation (Carriers' Liability) Act 1959 (Cth) ("the Carriers' Act") applies. [4] Where Pt IV of the Carriers' Act imposes a liability in respect of the death of a passenger, the liability is expressed by s 35(2) thereof as being in substitution for any civil liability of the carrier under any law in respect of that death. The result in the present case was that any operation of the law of the Northern Territory was displaced and the law of Victoria was, to this extent, rendered invalid by the operation of s 109 of the Constitution." (citations omitted)
Although addressing a Compensation to Relatives claim for recovery by a widow, the High Court's emphatic language relating to "any civil liability of the carrier under any law in respect of that death" in these passages seems to me to be inconsistent with the dicta about the construction of s 35 of the Carriers' Liability Act in Magnus at 347-350 which was relied upon by the respondents. The acceptance in Agtrack that the widow's Compensation to Relatives claim is precluded by the Commonwealth Carriers' Liability Act is consistent with the proposition that the claim for psychiatric injury must also fall within the scope of the exclusion in s 35(2) of the Commonwealth Carriers' Liability Act. I accept, as Leeming JA points out, that this conclusion is but the commencement of the analysis.
The critical distinction drawn in Magnus by Hill J at 320 is between a wrongful death claim, being one brought under the Compensation to Relatives Act which is characterised by his Honour as "damages sustained derivatively", and thus "by the passenger" and damage suffered by a non-passenger. Ultimately, the question must be whether s 35(2) makes such a distinction. In my view, essentially for the reasons of Basten JA, it does not. The psychiatric injury suffered by the plaintiffs in this case met the description of "any civil liability of the carrier under any other law" and was "in relation to" the event giving rise to the liability, namely "the death of the passenger" within the meaning of s 35(2).

[108]

Remaining issues in the case

On the remaining issues in the case, I agree with the reasons of Basten JA and the orders he proposes and wish only to add some brief additional remarks.
The primary judge concluded that at the time of the fatal accident the helicopter was not conducting "commercial transport operations" within the meaning of s 4 of the Civil Aviation (Carriers' Liability) Act 1967 (NSW) and s 27(1) of the federal Carriers Liability Act.
It was submitted on behalf of the Stephensons that Regulation 157(4)(b) of the Civil Aviation Regulations 1988, promulgated under s 27(9) of the Civil Aviation Act 1988 (Cth), had the effect that it was "aerial work" rather than "charter work" which was being conducted at the time of the fatal accident and, so the argument went, that "aerial work" was outside the scope of the Carriers Liability Act and the Convention.
Regulation 157(1) and (4)(b) of the Civil Aviation Regulations provides: 157 Low Flying (1) The pilot in command of an aircraft must not fly the aircraft over: (a) any city, town or populous area at a height lower than 1,000 feet; or (b) any other area at a height lower than 500 feet. Penalty: 50 penalty units. … (4) Subregulation (1) does not apply if: … (b) the aircraft is engaged in private operations or aerial work operations, being operations that require low flying, and the owner or operator of the aircraft has received from CASA either a general permit for all flights or a specific permit for the particular flight to be made at a lower height while engaged in such operations; or …
An insuperable difficulty with the submission made on behalf of the Stephensons is that South West held an Air Operator's Certificate under the Civil Aviation Act authorising it to conduct "aerial work operations" at a "low flying" height. Contrary to the submissions, such operations are plainly commercial operations.
The conclusion of the primary judge that the aircraft was not engaged in "commercial transport operations" because it was not travelling "between one place and another" is inconsistent with the statutory language of s 4 of the Carriers Liability Act and must be set aside.
Given the conclusions about s 151Z of the Workers Compensation Act 1987 (NSW), the property and loss of profit claims in relation to the aircraft and the liability of Essential Energy reached by Basten JA, with which I agree, the only remaining contribution issues concern the claims between the Council and South West.
I agree with the apportionment of liability found by Basten JA of one-third to the Council and two-thirds to South West, for the reasons his Honour gives. I wish only to add a few remarks about s 37(b) of the Carriers Liability Act.
In the course of oral argument, Senior Counsel for South West at one point suggested that South West would not be liable for contribution because, if successful in their challenges based on the Carriers' Acts South West would not be a "tortfeasor", apparently on the basis that South West, if sued, would not be liable as a joint tortfeasor in respect of the same damage: s 5(1)(a) or 5(1)(c) of the Law Reform Miscellaneous Provisions Act 1946 (NSW).
That conclusion, if it were open, would be inconsistent with the decision of this Court in United Airlines Inc v Sercel Australia Pty Ltd [2012] NSWCA 24; 289 ALR 682 about the proper operation of s 37 of the Carrier's Liability Act.
Written submissions made by South West on this issue provided: "The submissions were contrary to the decision of this Court in United Airlines Inc v Sercel which the trial judge followed. The submissions are formally maintained without any contention that this Court should depart from the recent decision in United Airlines."
Ultimately, Senior Counsel for South West in this Court, who was not the author of the written submissions, submitted that: "The submissions were drafted at a time perhaps before I was involved but we formally indicated we're not going to take that matter further. I find it difficult to therefore depart from that situation."
This short history explains Basten JA's statement at [190] that apart from the limitation provision, no argument was presented to this Court as a basis on which s 37(b) might be read down so as not to apply in the circumstances of this case.
I agree with the orders Basten JA proposes.

[109]

Endnotes

[2013] NSWSC 1899 (Johnson J).
Stephenson v Parkes Shire Council [2014] NSWSC 1758 ("Stephenson") at [281]-[283].
Stephenson v Parkes Shire Council (No 2) [2015] NSWSC 719.
[2015] NSWCA 169.
State Carriers' Liability Act, s 2(1).
State Carriers' Liability Act, s 2(1).
(2005) 223 CLR 283; [2005] HCA 39 at [18].
Stephenson at [283].
[1997] AC 534.
Emphasis added.
See Aviation Legislation Amendment (Liability and Insurance) Act 2012 (Cth), Sch 1, item 1.
South Pacific Air Motive Pty Ltd v Magnus (1998) 87 FCR 301; [1998] FCA 1107.
Endeavour Energy at [84].
708 F 2d 400 (1983).
Mexico City Air Crash, at 417[8].
348 F Supp 13 (C D Cal, 1972).
See State Carriers' Liability Act, s 4, at [19] above.
933 F 2d 180 (1991) (Feinberg, Meskill and Altimari, Circuit Judges).
Sulewski at 187.
Sulewski at 184.
Sulewski at 184.
(1970) 24 RFDA 195 (Court of Cassation (First Civ Div)).
(1967) 21 RFDA 436.
(1975) 30 RFDA 490 (Appeal Court of Paris (First Div)).
Herd at 553-554.
[1989] 3 WWR 207 (QB Sask, Halvorson J).
Johnson Estate at 217.
Herd at 542D.
Herd at 544D.
Herd at 547H.
Herd at 548A-C.
Herd at 555F-556B.
Herd at 552C-D.
Edwards at [105].
Edwards at [107].
Stephenson at [283].
[2009] QB 778.
Laroche at [63] (Jacob and Mummery LJJ agreeing).
Disley v Levine [2002] 1 WLR 785.
Edwards at [129]-[132].
Stephenson at [296].
Disley at [67].
Edwards at [107].
Endeavour Energy at [84]-[94] (in my reasons); [189]-[192] (Sackville AJA, Macfarlan JA agreeing).
Stephenson at [332].
Stephenson at [298]-[332].
Stephenson (No 2) at [38]-[42].
(2005) 223 CLR 251; [2005] HCA 38 at [3]-[4], [61] (Gleeson CJ, McHugh, Gummow, Hayne and Heydon JJ).
(1998) 87 FCR 301; [1998] FCA 1107 (Beaumont, Hill and Sackville JJ).
Set out at [32] above.
[2014] AC 1347; [2014] UKSC 15 at [29]-[30], [34]-[40].
Lord Neuberger of Abbotsbury PSC, Baroness Hale of Richmond DPSC and Lords Reed and Hughes JJSC agreeing.
Stott at [34].
Stott at [42] (Lord Toulson JSC).
(2002) 284 F 3d 352 at [33].
Stott at [41].
Commonwealth Carriers' Liability Act, Pts IA, II, III, IIIA, IIIC.
Agtrack at [54].
Commonwealth Carriers' Liability Act, s 27(1).
State Carrier's Liability Act, s 4.
(2010) 241 CLR 390; [2010] HCA 32 at [24].
See, in relation to the like term "in respect of", State Government Insurance Office (Qld) v Crittenden (1966) 117 CLR 412 at 416 per Taylor J; [1966] HCA 56; Workers' Compensation Board (Qld) v Technical Products Pty Ltd (1988) 165 CLR 642 at 653-655 per Deane, Dawson and Toohey JJ; [1988] HCA 49; Technical Products Pty Ltd v State Government Insurance Office (Qld) (1989) 167 CLR 45 at 47 per Brennan, Deane and Gaudron JJ, 51 per Dawson J, 54-55 per Toohey J; [1989] HCA 24
O'Grady v Northern Queensland Co Ltd (1990) 169 CLR 356 at 376 per McHugh J; [1990] HCA 16.
(1989) 167 CLR 45; [1989] HCA 24.
Technical Products at 47.
Technical Products at 51.
Technical Products at 52.
[2012] NSWCA 24; 260 FLR 37 at [21] (Allsop P).
Sercel at [33].
Sercel at [96].
Muller v Dalgety & Co Ltd (1909) 9 CLR 693 at 696 (Griffith CJ); [1909] HCA 67; DC Pearce and RS Geddes, Statutory Interpretation in Australia (8th ed, LexisNexis, 2014) at [4.45].
(1970) 122 CLR 49 at 65; [1970] HCA 63.
(1984) 155 CLR 549 at 552; [1984] HCA 52.
[1983] 1 AC 410.
W E Peel and J Goudkamp, Winfield and Jolowicz' Tort (Sweet and Maxwell, 19th ed, 2014) at 5‑081 (emphasis in original).
Further amended statement of claim filed 8 May 2013, pars 5, 6 and 7.
South Pacific at 305A-C.
South Pacific at 318B.
South Pacific at 318C-D.
South Pacific at 318E-F.
South Pacific at 318F-G.
South Pacific at 319F.
South Pacific at 321G-322A.
South Pacific at 322A-B.
South Pacific at 344C-D.
South Pacific at 347C-350D.
South Pacific at 346B-D and 346E-F.
South Pacific at 348D.
South Pacific at 350D.
South Pacific at 349C.
South Pacific at 349B.
(1988) 165 CLR 642; [1988] HCA 49.
Workers' Compensation Board at 655-656.
Workers' Compensation Board at 657.
Workers' Compensation Board at 650.
South Pacific at 320G.
South Pacific at 321F.
South Pacific at 345F.
South Pacific at 346B.
South Pacific at 346E-F.
See later amendments to the Convention; see also provisions relating to stowaways.
M Leeming, Resolving Conflicts of Laws (The Federation Press, 2011), Ch 3.
Commonwealth Carriers' Liability Act, s 35(6).
Australia, House of Representatives, Parliamentary Debates (Hansard), 7 April 1959 at 905.
Ibid.
Commonwealth Carriers' Liability Act, s 31(1).
[2012] NSWCA 24; 260 FLR 37 at [66].
United Airlines at [21] and [67].
Stephenson (No 2) at [87]-[138].
Public Transport Commission of New South Wales v J Murray-More (NSW) Pty Ltd (1975) 132 CLR 336; [1975] HCA 28.
[2008] NSWCA 142 at [44].
See Milich v The Council of the City of Canterbury (No 2) [2012] NSWSC 450 at [11].
(2013) 83 NSWLR 433; [2013] NSWCA 49 at [33]-[35].
[2015] NSWCA 357 at [43].
Stephenson at [127].
Stephenson at [129].
Stephenson at [132].
Stephenson at [135].
Tcpt, p 261-262.
Tcpt, p 264(45).
Affidavit, 31 August 2011.
Joyce Report, 21 November 2011, pp 1-2.
Joyce Report, p 2.
Stephenson at [249].
Statement, Boyd and Sullivan, par 5.
Statement, Boyd and Sullivan, par 12.
Statement, Boyd and Sullivan, par 20.
Statement, Boyd and Sullivan, par 25.
Tcpt, 27/05/13, p 459(5)-(20).
Tcpt, p 423(3)-(35).
Tcpt, pp 488(19)-489(4).
Statement, Fitzsummons, 31 May 2012, par 8.
Tcpt, 28/05/13, p 547(2).
Tcpt, p 548(44).
Tcpt, p 549(15).
Tcpt, p 564(12)-(18).
Stephenson at [37]-[102].
Stephenson at [102].
Stephenson at [225]-[242].
Stephenson at [225].
Stephenson at [226].
Stephenson at [227].
Stephenson at [229].
Stephenson at [230] and [231].
Stephenson at [232].
Stephenson at [234].
Stephenson at [238].
Stephenson at [242].
Written submissions, 6 March 2017, par 17.
Submissions, par 12(g) fn 18.
See Endeavour Energy at [30].
(2009) 239 CLR 51; [2009] HCA 42 at [45].
At [181].
(2002) 211 CLR 317 at [12].
Endeavour Energy at [186].
[2007] NSWCA 179; (2007) Aust Torts Rep 81-901.
Sheather at [4].
Sheather at [29].
Sheather at [71].
Referring to Brodie v Singleton Shire Council (2001) 206 CLR 512; [2001] HCA 29.
Proceedings 2009/297846.
Stephenson (No 2) at [145].
Stephenson (No 2) at [148].
Stephenson (No 2) at [157].
Stephenson (No 2) at [173].
Civil Liability Act, s 34(1).
Stephenson (No 2) at [145].
[1902] P 42.
The Winkfield at 54 (Collins MR).
(2006) 65 NSWLR 400 at [55] (Young CJ in Eq, Santow JA and I agreeing).

South West Helicopters Pty Ltd v Stephenson

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