Kenneth Magnus v South Pacific Air Motive Pty Ltd & Ors [1997] FCA 1299 (27 November 1997)

FEDERAL COURT OF AUSTRALIA

AVIATION LAW - Civil liability claim - Claim for psychological injuries suffered by passengers and non-passengers following the ditching of an aeroplane - Claims made after expiration of two years and in reliance on causes of action other than liability under the Civil Aviation (Carriers' Liability) Act 1959 - Whether claims precluded by that Act.

Civil Aviation (Carriers' Liability) Act

Federal Court Rules, Order 20 rule 2

NG194 of 1997

kenneth magnus v SOUTH PACIFIC AIR MOTIVE PTY LTD, GROUP AIR PTY LTD, CIVIL AVIATION SAFETY AUTHORITY and airservices australia

JUDGE: WILCOX J

PLACE: SYDNEY

DATE: 27 NOVEMBER 1997

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG194 of 1997

BETWEEN:	KENNETH MAGNUS Applicant
AND:	SOUTH PACIFIC AIR MOTIVE PTY LTD First Respondent GROUP AIR PTY LTD Second Respondent CIVIL AVIATION SAFETY AUTHORITY Third Respondent and AIRSERVICES AUSTRALIA Fourth Respondent
JUDGE:	WILCOX J
DATE:	27 NOVEMBER 1997
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1. The proceeding be dismissed as against South Pacific Air Motive Pty Ltd and Group Air Pty Ltd to the extent that it claims on behalf of the applicant or any group member relief in relation to any physical injury sustained by that person, including psychological damage sustained by that person as a result of that physical injury.

2. Otherwise the Notice of Motion of South Pacific Air Motive Pty Ltd and Group Air Pty Ltd dated 31 July 1997 be dismissed.

3. South Pacific Air Motive Pty Ltd and Group Air Pty Ltd pay to Kenneth Magnus 90% of the costs incurred by him in respect of the said motion.

4. The principal proceeding stand over for a further directions hearing at 9.30am on 12 December 1997.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG194 of 1997

BETWEEN:	KENNETH MAGNUS Applicant
AND:	SOUTH PACIFIC AIR MOTIVE PTY LTD First Respondent GROUP AIR PTY LTD Second Respondent CIVIL AVIATION SAFETY AUTHORITY Third Respondent and AIRSERVICES AUSTRALIA Fourth Respondent

JUDGE:	WILCOX J
DATE:	27 NOVEMBER 1997
PLACE:	SYDNEY

REASONS FOR JUDGMENT

WILCOX J: This is an application by South Pacific Air Motive Pty Ltd ("South Pacific") and Group Air Pty Ltd ("Group Air"), pursuant to Order 20 rule 2 of the Federal Court Rules, for summary dismissal of a proceeding brought by Kenneth Magnus against them and two other respondents, Civil Aviation Safety Authority and Airservices Australia. The proceeding arises out of an incident involving the ditching of an aircraft. South Pacific and Group Air argue the proceeding does not disclose a reasonable cause of action against them.

The proceeding

The action was instituted as a representative proceeding under Part IVA of the Federal Court of Australia Act 1977 . The group members were originally described as:

"(i) a group of identified passengers on the aircraft;

(ii) a group of unidentified passengers on the said aircraft;

(iii) a group of identified parties who were not passengers on the aircraft;

(iv) a group of unidentified parties who were not passengers on the said aircraft."

However, the applicant subsequently identified the group members by name. There are 14 altogether, six allegedly being passengers on the aircraft and eight non-passengers.

For the purposes of this application, South Pacific and Group Air accept the following allegations made in the applicant's Amended Statement of Claim:

(i) At material times South Pacific was the owner, and Group Air the operator, of a DC3 aircraft, VH-EDC;

(ii) The aircraft was chartered to convey a party of students and their band equipment from Sydney to Norfolk Island;

(iii) At about 9.00am on 24 April 1994 the aircraft took off from Sydney Airport but shortly thereafter ditched in the waters of Botany Bay;

(iv) The ditching of the aircraft caused physical injuries and/or nervous shock to the applicant and those group members who were passengers and nervous shock to the remaining group members, who were parents of passengers;

(v) The damage resulted from breaches by South Pacific and Group Air of ss 52, 53(aa) and 53(c) of the Trade Practices Act 1974 and their negligent conduct.

Mr Mark Mackrell, solicitor for South Pacific and Group Air, argues that, even on these assumed facts, the proceeding cannot succeed against his clients due to certain provisions in the Civil Aviation (Carriers' Liability) Act 1959 .

The scheme of the Civil Aviation (Carriers' Liability) Act 1959

In 1959 in moving the second reading of the Civil Aviation (Carriers' Liability) Bill, the then Minister for Defence, Mr Townley, explained it had three main purposes:

"Part II of the bill contains provisions which approve ratification and give effect to the Hague Protocol amending the Warsaw Convention. Part III repeals the Carriage by Air Act 1935 which gives effect to the Warsaw Convention and makes appropriate provision for continuing to give effect to that convention during an interim period prior to its denunciation and the coming into force of the amended convention. Finally, Part IV extends the principles of the amended convention to all domestic carriage by air within Federal Competence but with certain modifications which are considered more appropriate for domestic purposes ..."

Mr Townley went on to note the:

"Warsaw Convention of 1929 establishes uniform international rules which govern the liability of international air carriers to passengers in respect of death or injury and loss of baggage and also to consignors of cargo. The convention applies to all international carriage of persons, baggage and cargo performed by aircraft for reward, and applies also to gratuitous carriage by air performed by an air transport undertaking".

Mr Townley said 46 countries, including Australia, had by then become parties to the Warsaw Convention.

Mr Townley also referred to the Hague Protocol to amend the Warsaw Convention. That Protocol was adopted by representatives of 44 States, including Australia, at a conference held at The Hague in September 1955. Australia signed the Protocol in 1956 but in 1959 it had not yet been ratified by the requisite 30 States.

The Bill was enacted as the Civil Aviation (Carriers' Liability) Act.

The Act has been amended on a number of occasions, most notably by the introduction in 1962 of Part IIIA, to give effect to the 1961 Guadalajara Convention, and by amendments (Parts IIIB and IIIC), enacted in 1991 but not yet operative, to give effect to the Montreal No.3 Convention and the Montreal No.4 Convention. These two Conventions were made on 25 September 1975, but are not yet in force for Australia.

As Mr Townley explained, Part IV of the Act extends the principles of the amended Warsaw Convention to domestic carriage, but with modifications; the Part does not carry any international convention directly into domestic law. Subsequent amendments to Part IV have broadened the scope of carriers' liability beyond the corresponding liability of international carriers under the Conventions and Parts II, III and IIIA; but it remains true that Part IV extends international principles into domestic law.

The international conventions

The Warsaw Convention is Schedule 1 to the Act. Chapter III of the Convention is entitled "Liability of the Carrier" and includes Articles 17 to 30. Article 17 is as follows:

"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."

Article 24.2 provides that, in cases covered by Article 17, "any action for damages, however founded, can only be brought subject to the conditions and limits of this Convention". Those conditions and limits include a requirement that the action be brought within two years, failing which "(t)he right to damages shall be extinguished" (Article 29.1). Article 20 exempts a carrier from liability "if he proves that he and his servants and agents have taken all necessary measures to avoid the damage or that it was impossible for him or them to take such measures"; and Article 21 allows a defence of contributory negligence. Article 22 limits the liability of the carrier for each passenger to 125,000 francs, unless there is a contractual agreement to a higher figure.

Article 23 makes null and void any provision "tending to relieve the carrier of liability or to fix a lower limit than that which is laid down in this Convention". The scheme of the Convention, therefore, is to impose upon carriers absolute liability for damage arising out of the "death or wounding of a passenger or any other bodily injury" subject to the specified qualifications and up to the specified amount of damages. The exclusions and limitations do not apply if the damage was caused by the carrier's wilful misconduct (Article 25). Otherwise the cause of the damage is irrelevant. The claimant need not prove negligence or other breach of duty.

These provisions of the Warsaw Convention were substantially unaffected by the Hague Protocol: see Schedule 2 to the Act. The monetary limit was increased to 250,000 francs and Article 25 was broadened to exclude this limitation where the relevant act or omission was "done with intent to cause damage or recklessly and with knowledge that damage would probably result"; but Article 17 was retained intact, as were the relevant parts of Articles 20, 21, 23 and 24.

Schedule 3 contains the Guadalajara Convention which relates primarily to agency situations. It is not presently relevant.

Article 17 was varied by the Montreal No.3 Convention (Schedule 4 to the Act), so as to be limited to "damage sustained in the event of death or personal injury of a passenger". However, in the Montreal No.4 Convention (Schedule 5 to the Act) the original Article 17 was kept. Both Montreal Conventions retained the essential scheme of the amended Warsaw Convention: substantially, absolute liability of the carrier up to a specified monetary limit, with the obligation to bring any claim pursuant to the Convention, and not otherwise, and extinguishment of the right of action after two years.

Part IV of the Act 1926

As might be expected from Mr Townley's remarks, Part IV enacts a similar scheme for domestic carriage. Section 27(1) indicates both the scope of the Part and its constitutional foundations:

"27(1) This Part applies to 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, or in an aircraft being operated in the course of trade and commerce between Australia and another country, under a contract for the carriage of the passenger:

(a) between a place in a State and a place in another State;

(b) between a place in a Territory and a place in Australia outside that Territory;

(c) between a place in a Territory and another place in that Territory; or

(d) between a place in Australia and a place outside Australia;

not being carriage to which the Warsaw Convention, the Hague Protocol or the Guadalajara Convention applies."

The term "commercial transport operations" is defined by s 26 as meaning "operations in which an aircraft is used, for hire or rental, for the carriage of passengers or cargo".

I think Mr Mackrell put the situation correctly in his written submission:

"Part IV of the Act, subject to modifications, applies the same regime to domestic air transport operations over which the Commonwealth was perceived to have legislative power. Essentially, the Act applies to all carriage other than intra-state carriage to which neither the Convention nor the Amended Convention applies. All the States have enacted legislation which applies the Act to intra-state carriage."

Mr Mackrell suggested all the elements of s 27 applied to this case, so Part IV applied to it. This suggestion was not disputed by counsel for Mr Magnus, Mr J Foord QC and Mr J Rowe. It seems clearly correct. The claims of the applicant and group members are all made in respect of the carriage of passengers, as distinct from flight crew. There is uncontested evidence that, at the relevant time, Group Air held an Air Operator's Certificate, which is a form of "charter licence" within the definition of that term in s 26 of the Act. The relevant flight was one made in the course of "commercial transport operations" between a place in a Territory (Norfolk Island) and a place in Australia outside that Territory (Sydney) and, therefore, was not international carriage, "carriage to which the Warsaw Convention, the Hague Protocol or the Guadalajara Convention applies".

Section 28 contains a provision imposing liability on carriers that is similar to, but not identical with, Article 17 of the Warsaw Convention. It reads:

"28. 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 personal 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."

Sections 29 and 30 deal with baggage. They may be ignored. But s 31 is relevant; subject to any regulation or contract fixing a higher amount, the section caps at $100,000 "the liability of a carrier under this Part in respect of each passenger, by reason of his injury or death resulting from an accident". By s33 that limitation also applies to an action against a servant or agent of a carrier acting within the scope of his employment or authority. Section 32 nullifies any contracting out provision and s 34 imposes a two year limitation on actions. The section is in these terms:

"34. 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."

Section 35 is a lengthy section dealing with liability in respect of the death of a passenger. The section is not directly relevant to this case; all the passengers on the flight to Norfolk Island survived the ditching. But it is germane to the argument about the critical section, s 36, to note that s 35 contains provisions for the handling of multiple claims in relation to a particular passenger. Subsection (3) makes the liability imposed by the Part "enforceable for the benefit of such of the members of the passenger's family as sustained damage by reason of his death", except for some monetary claims enforceable only by the passenger's personal representative. Subsection (6) permits an action to be brought by the personal representative of the passenger, or by any person for whose benefit the liability is enforceable; but only one action may be brought in respect of the death of any one passenger and it "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". Subsection (9) provides:

"(9) Subject to the next succeeding subsection, the amount recovered in the action, after deducting any costs not recovered from the defendant, shall be divided amongst the persons entitled in such proportions as the court (or, where the action is tried with a jury, the jury) directs."

Section 36 deals with liability in respect of injury. It provides:

"36. 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."

The following section was mentioned in argument. It provides:

"37. 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."

Section 38 lays down some rules relevant to the assessment of damages and s 39 deals with contributory negligence. Sections 40 and 41 relate to baggage and cargo.

The parties' submissions

Mr Mackrell's submissions on behalf of South Pacific and Group Air focussed on two aspects of Part IV of the Act. First, Mr Mackrell pointed out the accident occurred on 24 April 1994 but the action was not commenced until 17 March 1997, more than two years later; accordingly, he argued the rights of action of the applicant and each group member were extinguished by s 34. Mr Mackrell said the ages of the passengers were immaterial; the Act makes no provision for an extension of the limitation period because of a passenger's minority. Second, Mr Mackrell argued the claims under the Trade Practices Act and for common law negligence were misconceived, in view of s 36. That section provides the liability of a carrier under Part IV in respect of personal injury suffered by a passenger is in substitution for any civil liability of the carrier under any other law; thus the (virtually absolute) liability imposed on the carrier by s 28 excluded whatever other liability South Pacific and Group Air might have had.

These submissions are unquestionably correct, insofar as the proceeding claims damages for physical injuries sustained by passengers. Counsel for Mr Magnus conceded as much. However, they limited their concession to physical injuries; they argued Part IV has no application to nervous shock claims, whether by a passenger or non-passenger. Counsel said there is a well recognised distinction between claims for personal injury and nervous shock claims: "(a)n action for damages for nervous shock is a breach of an independent duty owed to the person suffering such an injury irrespective of obligations to persons killed, injured or put in peril. It is in no way dependent on the rights of the person injured or put in peril". Counsel referred to s 4 of the Law Reform (Miscellaneous Provisions) Act (NSW) 1944 ("the LR(MP) Act") and two High Court decisions, Scala v Mammolitti [1965] HCA 63; (1965) 114 CLR 153 and Jaensch v Coffey [1984] HCA 52; (1983) 155 CLR 549.

The LR(MP) Act made two changes to New South Wales law concerning nervous shock. Section 3(1) provided: "In any action for injury to the person caused after the commencement of this Act, the plaintiff shall not be debarred from recovering damages merely because the injury complained of arose wholly or partly from nervous shock". Section 4(1) extended a tortfeasor's liability for nervous shock in relation to other people. It read:

"4(1) The liability of any person in respect of injury caused after the commencement of this Act by an act, neglect or default by which any other person is killed, injured or put in peril, shall extend to include liability for injury arising wholly or in part from mental or nervous shock sustained by -

(a) a parent or the husband or wife of the person so killed, injured or put in peril; or

(b) any other member of the family of the person so killed, injured or put in peril where such person was killed, injured or put in peril within the sight or hearing of such member of the family."

Section 4(5) defined several of the words and terms used in these sections. Interestingly, s 4(2) to (3A) contained procedural rules, not unlike those contained in s 35 of the Civil Aviation (Carrier's Liability) Act, for the handling of multiple claims under the section.

Section 4 of the LR(MP) Act was probably a response to the decision of the High Court of Australia in Chester v Waverley Municipal Council [1939] HCA 25; (1939) 62 CLR 1. The appellant's seven year old son was drowned in an inadequately guarded, water-filled trench created by the respondent. She participated in a search for the boy and was present when his body was found. As a result she suffered nervous shock. Over a strong dissent from Evatt J, the High Court denied recovery on the ground the respondent owed no legally enforceable duty to the mother. Latham CJ expressed the relevant question (at 10) as being "whether the defendant should have foreseen that a mother would suffer from nervous shock amounting to illness if she saw the dead body of her child where the death of the child had been brought about by the negligence of the defendant towards the child". He thought a reasonable person would not foresee such an effect, so there was no relevant duty of care. Starke J said at 13-14:

"In my opinion the shock to the appellant was not within the ordinary range of human experience; it is so remote from the act or omission of the respondent in opening or guarding the trench that no reasonable person ought to or would foresee or contemplate the injury to the appellant".

Scala v Mammolitti was an action under s 4(1) of the LR(MP) Act. The leading judgment was given by Taylor J, with whom Barwick CJ and Windeyer J agreed. At 159 Taylor J said:

"After a number of vicissitudes the liability of a person for injury by nervous and mental shock came to be governed by the same principle as liability for other injuries. There was no liability for nervous and mental shock unless it was caused by breach of a duty to take reasonable care. But such a duty was owed to every person who, it could reasonably be foreseen, was likely, as a result of a careless act, to suffer injury of the character in question."

Taylor J went on to explain the purpose of s 4(1):

"Clearly enough, it merely operates to extend the field in which persons standing in a special relationship to a person killed, injured or put in peril may recover for nervous or mental shock, and, in the case of a husband or wife, makes it unnecessary to show that an injury to the plaintiff of this kind could reasonably have been foreseen. But in no way does it make the right to recover damages for nervous or mental shock dependent upon proof of a liability to compensate the initial victim. Before the section a wife might recover damages for nervous or mental shock where her husband had been injured by the negligence of a third person, but only if it could reasonably have been foreseen by the wrong-doer that injury of that character was likely to ensue. Her action was for the breach of an independent duty owed to her and the failure of her husband to recover was not fatal to her claim. All that the section does is to make it no longer necessary to prove that damage to her of that character was reasonably foreseeable." [Emphasis added.]

Jaensch v Coffey did not depend on the LR(MP) Act; it was a South Australian case. The respondent's husband was injured in a collision with a vehicle negligently driven by the appellant. The respondent did not see the accident but she visited her husband in hospital when he was seriously ill and suffered nervous shock as a result of that visit. Applying common law principles, the High Court unanimously held the appellant owed the respondent a duty of care and upheld the award of damages made to her. At 559-560 Brennan J observed:

"A century ago psychiatric illness, without more, was not a form of harm or damage for which damages for negligence could be recovered: Victorian Railways Commissioners v Coultas (1888) 13 App. Cas. 222. But at least for the last half-century `neurasthenic breakdown amounting to (psychiatric) illness' has been held to be `without more ... a form of harm or damage sufficient for the purpose of any action on the case in which damage is the gist of the action, ... supposing that the other ingredients of the cause of action are present': per Dixon J. in Bunyan v. Jordan [1937] HCA 5; (1937) 57 C.L.R. 1 at p.16. The term `nervous shock' has been used to described [sic] that form of damage, although the term may not be an accurate medical description of the range of psychiatric illnesses which it is intended to cover - `any recognizable psychiatric illness' was the description used by Lord Denning M.R. in Hinz v. Berry [1970] 2 Q.B. 40, at p.42, and cited by Windeyer J. in Mount Isa Mines Ltd. v Pusey [1970] HCA 60; (1970) 125 C.L.R. 383, at p.394, and that description must be right. Compensation is awarded for the disability from which the plaintiff suffers, not for its conformity with a label of dubious medical acceptability. The term `nervous shock' is useful nevertheless as a term of art to indicate the aetiology of a psychiatric illness for which damages are recoverable in an action on the case when the other elements of the cause of action are present."

Later (at 560) he said:

"The respective duties of care owed to the plaintiff and to the other person and the causes of action arising from their breach are independent one of the other. It is now settled law that the duty owed to one is not to be regarded as secondary to or derived from the duty owed to the other." [Emphasis added.]

In the course of an extensive review of case law, Deane J also commented on changing attitudes to mental shock. He said at 592:

"The changes and developments in views about liability for nervous shock which are to be found in cases during the last hundred years are, to a large extent, to be explained by reference to increasing knowledge of the nature of mental injury and illness caused by shock: the law, `marching with medicine but in the rear and limping a little' has, `cautious step by cautious step' (per Windeyer J., Mount Isa Mines Ltd. v. Pusey (1970) 125 C.L.R., at pp.395, 403) come to accept that mental illness occasioned by nervous shock is as much a real injury caused to a person as conventional bodily damage sustained as a result of physical impact."

Although the third and fourth respondents, Civil Aviation Safety Authority and Airservices Australia, are not directly concerned with the present application, they appeared by their solicitor, Mr M A Jones, to put brief submissions. In relation to passenger claimants, Mr Jones supported the contentions of Mr Mackrell on behalf of South Pacific and Gulf Air. He said passengers' nervous shock claims fall within the concept of "personal injury"; the Act (like the Convention) was intended to codify passengers' rights. In relation to non-passengers, Mr Jones sided with Mr Foord and Mr Rowe, saying Part IV had no application to their claims. As will appear, I do not think the relevant dichotomy is between passengers on the one hand and non-passengers on the other.

The issues in the present case

The claims made in the present case are not totally clear, but all must fall within one or more of the following four categories:

(i) passengers' claims for one or more physical injuries without any psychological sequelae from that injury or those injuries;

(ii) passengers' claims for one or more physical injuries with some psychological sequelae (psychological damage) as a result of that injury or those injuries;

(iii) passengers' claims for psychological injuries that are independent of any physical injury ("pure mental injury" or "nervous shock"); and

(iv) non-passengers' claims for nervous shock.

It is theoretically possible - although perhaps unlikely - that a particular passenger could have claims falling within more than one category. For example, a passenger may have sustained a physical injury (perhaps a minor one) that resulted in no or little psychological sequelae (category (i) or (ii)) but also a psychological injury not causally related to the physical injury (category (iii)).

Physical injury claims

As I have said, there is no issue about the first category. Section 36 excludes passengers' claims for physical injuries based on the Trade Practices Act or common law negligence and any physical injury claim under s 28 of the Act is now extinguished by s 34. To the extent the proceeding involves claims in the first category, it must be dismissed.

During argument little attention was paid to claims within the second category. However, I think there is little doubt their situation is similar to those within category (i). Counsel for the applicant did not suggest otherwise. If psychological damage is caused by a physical injury, it is simply an incident of that injury, an ingredient in the "damage sustained by reason of ... any personal injury suffered by the passenger", to use the words of s 28 of the Act.

Passengers' psychological injury claims

Whether Part IV of the Act applies to a claim for an independent psychological injury sustained by a passenger depends upon whether the relevant injury falls within the meaning of "personal injury", as that term is used in ss 28 and 36 of the Civil Aviation (Carriers' Liability) Act. Relying on two cases arising under workers' compensation law, Mr Mackrell says all psychological injuries do so.

The first case is Rheem Australia Ltd v Manufacturers Mutual Insurance Ltd [1984] 2 NSWLR 370. It concerned a workers' compensation insurance policy issued by the respondent to the appellant that, reflecting s 18(3) of the New South Wales Workers' Compensation Act, provided an indemnity to an employer "liable to pay compensation under the Act to or in respect of any person who is or is deemed by the Act to be a worker of such employer, or to pay any other amount ... in respect of his liability independently of the Act for any injury to any such person ..." The appellant was held to be in breach of its common law and statutory duties to a female employee whereby she was injured, and therefore liable in damages to her husband for loss of consortium. The appellant sought indemnity from the respondent. As Glass JA said at 371, the question was whether the appellant's liability to the husband was in respect of its liability for an injury to its female worker. His Honour went on (at 372-373) to note the indemnity clearly extended to liability to dependants of the worker; it was not "confined to situations where the employer is liable to the worker for injury to him" (original emphasis). At 374 he said: "Once the indemnity is so construed in point of law it follows as a matter of fact that the employer's liability to an injured worker's husband for loss of consortium consequent upon her injury falls within the indemnity according to its true meaning". Samuels and Mahoney JJA agreed.

The second case cited by Mr Mackrell is The Workers' Compensation Board of Queensland v Technical Products Proprietary Limited [1988] HCA 49; (1988) 165 CLR 642. Patricia Hart suffered nervous shock and psychiatric illness after her husband sustained serious injury in the course of his employment. She sued her husband's employer, Technical Products. That company claimed indemnity under the insurance policy issued by the Workers' Compensation Board. Reversing the Full Court of the Supreme Court of Queensland, the High Court held the policy did not apply. The indemnity in the policy extended to "all sums for which, in respect of injury to any worker employed by him," the employer "may become legally liable by way of ... damages arising under circumstances creating also, independently of this Act, a legal liability in the employer to pay damages in respect of that injury". The Full Court had held the liability to Mrs Hart was "a legal liability in the employer to pay damages in respect of that injury". But the High Court unanimously held to the contrary, having regard to the context in which the words were used. At 656 Deane, Dawson and Toohey JJ said:

"It was conceded by the employer that the reference to `damages in respect of that injury' in s. 8(1)(b) is apt to cover damages payable to a worker and assessed by reference to his injury, but it was said that it is also apt to cover damages payable to another and assessed by reference to injury to that other and should be read as covering both categories. But it seems to us that if the expression naturally refers to the first category of damages, as it clearly does, it cannot easily be read at the same time as a reference to the second. Moreover, to read the expression as referring to damages for nervous shock to a third party occasioned by injury to a worker gives rise to an anomaly. Nervous shock may be caused not only by injury to another but also by placing another in peril. Damages awarded in the latter situation would, where the person placed in peril was a worker, be for breach of the same duty of care, but would clearly not be covered by s. 8(1)(b)."

Their Honours went on to observe that, in the context of some enactments, words such as "damages in respect of an injury" or "liability for damages in respect of an injury" may extend to liability at the suit of a person other than the person sustaining the injury. This observation underlines the central importance of construing words like "personal injury" in their particular context, with reference to the scheme and history of the statute in which they appear. For this reason the two workers' compensation cases cited by Mr Mackrell do not provide assistance in resolving the meaning of "personal injury" in ss 28 and 36 of the Civil Aviation (Carrier's Liability) Act 1961 .

I have no doubt that, in some contexts, the words "personal injury" are apt to include nervous shock; that is, psychological injury not arising out of a physical injury. However, when attention is paid to its scheme and history, I think it becomes clear they were not intended to do so in the Civil Aviation (Carrier's Liability) Act. I take two steps in reaching this conclusion.

First, in Floyd v Eastern Airlines Inc (1991) 1 S & B AvR the United States Supreme Court held Article 17 of the Warsaw Convention does not allow recovery for purely mental injuries; nervous shock is not "wounding of a passenger or any other bodily injury". A major reason for that conclusion was the lack of recognition of purely psychic injury, as a compensable injury, when the Warsaw Convention was negotiated in 1929; a reason consistent with the comment of Deane J in Jaensch v Coffey quoted above. In delivering the reasons of the Court, at VII/638 Marshall J said:

"Our review of the documentary record for the Warsaw Conference confirms - and courts and commentators appear universally to agree - that there is no evidence that the drafters or signatories of the Warsaw Convention specifically considered liability for psychic injury or the meaning of lesion corporelle. Two explanations commonly are offered for why the subject of the mental injuries never arose during the convention proceedings:

(1) many jurisdictions did not recognise recovery for mental injury at that time, or

(2) the drafters simply could not contemplate a psychic injury unaccompanied by a physical injury ...

Indeed, the unavailability of compensation for purely psychic injury in many common and civil law countries at the time of the Warsaw Conference persuades us that the signatories had no specific intent to include such a remedy in the convention. Because such a remedy was unknown in many, if not most, jurisdictions in 1929, the drafters most likely would have felt compelled to make an unequivocal reference to purely mental injury if they had specifically intended to allow such recovery."

The words "lesion corporelle" were used in the French language text of the Convention. They may be translated as "bodily injury".

On a matter of interpretation of an international convention, I should follow a unanimous decision of the Supreme Court of the United States, particularly as the New South Wales Court of Appeal did so in Kotsambasis v Singapore Airlines Limited (13 August 1997, unreported). It follows I should hold that a purely psychological injury is not a "bodily injury" within the meaning of Article 17 of the Warsaw Convention and is not excluded by Article 24 of that Convention or extinguished by Article 29.

The second step involves the application of this conclusion to Part IV of the Civil Aviation (Carriers' Liability) Act. As I see the situation, there is no warrant for reading "personal injury" in Part IV more broadly than "bodily injury" in the Convention. There is nothing in the legislative history to suggest a wider reading was intended; on the contrary, the idea behind Part IV was to extend to domestic carriers the principles made applicable to international carriers by the Warsaw Convention. Mr Townley said in his second reading speech that, in applying the Convention rules to domestic carriage, Part IV of the Bill "makes two important modifications of those rules". One modification was the omission of the defence that the carrier had taken all possible measures to avoid the damage (see Article 20.2). The other modification was that the carrier was not deprived of the benefit of the monetary cap if the damage resulted from an act or omission done with intent to cause damage, or recklessly and with knowledge that damage would probably result (see Article 25). Mr Townley also mentioned provisions relating to the assessment of damages. He made no mention of an intention to expand the ambit of liability. He made no suggestion that "personal injury", in s 28, would have a wider connotation than "bodily injury" in Article 17 of the Convention. Against that background, I see no warrant for reading "personal injury", in s 34 or s 36, in such a way as to include "pure mental injury" or "nervous shock"; that is, a psychological injury that is not a result of a physical injury sustained by the same person.

In relation to that conclusion, it is necessary to refer to another case mentioned by Mr Mackrell, the recent decision of the House of Lords in Sidhu v British Airways plc [1996] UKHL 5; [1997] 1 All ER 193. The appellants were passengers on a British Airways flight from London to Kuala Lumpur that landed at Kuwait on 2 August 1990, some four hours after that country was invaded by Iraqi forces at the commencement of what became known as the Gulf War. While the passengers were in the transit lounge, Iraqi soldiers took over the terminal and closed the airport. The passengers were captured and sent to Baghdad where they were held prisoners for several weeks before being released. The appellants brought actions in England and Scotland claiming damages for negligence. The pursuer in the Scottish action claimed only psychological injury; the plaintiffs in the English action alleged physical and psychological injuries and loss of baggage.

The Warsaw Convention, as amended by the Hague Protocol, was adopted into United Kingdom law by the Carriage by Air Act (UK) . Section 1(1) of that Act gave the Convention force of law in regard to international carriage by air.

The only substantive speech in the House of Lords was that of Lord Hope of Craigend. The other members of the board (Lord Browne-Wilkinson, Lord Jauncey of Tullichettle, Lord Mustill and Lord Steyn) agreed with him. Lord Hope noted neither the pursuer nor the plaintiffs made a claim under Article 17 of the Convention. He said two reasons had been mentioned in the course of the Scottish case: there had been no "accident" causing the alleged damage and the alleged psychological damage did not fall within the concept of "bodily injury". In relation to the latter reason, Lord Hope said at 201:

"It was suggested to your Lordships in the course of the argument that the phrase `bodily injury' in art 17 ought now to be construed as including psychological damage, especially if it were shown to have a physiological basis by medical evidence. But that point does not arise for decision in this case and it was not fully argued. I prefer to express no opinion upon it."

Lord Hope made an observation concerning the effect on a psychological claim of a person having a claim for bodily injury under Article 17:

"It should be recorded also that all parties were agreed that, if a passenger had a claim under art 17 against the carrier, there was no concurrent common law remedy. It is common ground, therefore, that a passenger who has a claim for bodily injury caused by an accident which took place on board the aircraft, or in the course of any of the operations of embarking or disembarking, cannot maintain a separate claim at common law for any loss, injury or damage not covered by art 17 of the convention. That seems to follow inevitably from the provisions of art 24(2), which declares that in the cases covered by art 17 any action of damages, however founded, can only be brought subject to the conditions and limits set by the convention." (Emphasis added)

This reasoning is not directly applicable to Australian domestic carriage. The equivalent provision of Article 24(2) is s 36. That section does not speak of "cases covered by" another provision but "liability ... under this Part in respect of personal injury suffered by a passenger" being "in substitution for any civil liability ... under any other law in respect of the injury". That is, liability under Part IV in respect of personal injury (whatever that may mean) is substituted for liability under another law in respect of the same injury. If "personal injury" is confined to bodily injury, as distinct from psychological injury, the exclusion is similarly confined. The result is different to that agreed in Sidhu to occur under the Convention.

After making this observation, Lord Hope stated the "stark issue" before the House was:

"whether a passenger who has sustained damage in the course of international carriage by air due to the fault of the carrier, but who has no claim against the carrier under art 17 of the convention, is left without a remedy."

In addressing that issue, he made a close analysis of the text of the Convention, noting Article 1(1)'s reference to "all international carriage of persons, baggage or cargo performed by aircraft for reward" and the heading of Chapter III, "Liability of the Carrier". He went on to note provisions of Chapter III, paying particular attention to the capping provision, Article 22, which, he said, indicated an intention "that, unless he agrees otherwise by special contract ... the carrier can be assured that his liability to each passenger and for each package will not exceed the sums stated in the article. ... The effect of these rules would, I think, be severely distorted if they could not be applied generally to all cases in which a claim is made against a carrier". Referring to Article 23, prohibiting contracting out, Lord Hope said: "to surrender freedom of contract on this issue was an important concession on the part of carriers, which made sense only in the context of the entire set of rules by which their conduct was to be regulated". After referring to Articles 24, 28 and 29, Lord Hope concluded his analysis by saying:

"It would be largely destructive of the system which this chapter seems to have been designed to lay down if a passenger were to be able, for example, to maintain a claim of damages for non-bodily injury, for loss of or damage to the personal possessions which he had with him inside the aircraft or for economic loss, outside the conditions and limits set by the convention while maintaining a claim under the convention for the bodily injury. No doubt it was for this reason that it was conceded that, if he had a claim under art 17, the passenger would not be able to maintain any other claim against the carrier arising out of the same incident. But it seems to me that, by parity of reasoning, the same approach must be taken to cases arising out of international carriage by air where he has no claim under art 17 at all."

Mr Mackrell urged this reasoning upon me, in support of the proposition that, if the term "personal injury" did not encompass psychological injury, the latter was excluded entirely. He said "the passenger must find his remedy under Part IV or not at all" and argued any other view would create difficulties for carriers in arranging insurance against risks. As will appear, I reject that submission in relation to Part IV, whose wording differs in crucial respects from that of the Convention.

Returning to Sidhu, I note that Lord Hope referred to other materials, from which he gained no worthwhile assistance, before concluding as follows:

"I believe that the answer to the question raised in the present case is to be found in the objects and structure of the convention. The language used and the subject matter with which it deals demonstrate that what was sought to be achieved was a uniform international code, which could be applied by the courts of all the High Contracting Parties without reference to the rules of their own domestic law. The convention does not purport to deal with all matters relating to contracts of international carriage by air. But in those areas with which it deals - and the liability of the carrier is one of them - the code is intended to be uniform and to be exclusive also of any resort to the rules of domestic law."

I have difficulty with aspects of Lord Hope's reasoning. He concedes the Convention does not purport to deal with all matters relating to contracts of international carriage by air; on the authority of Floyd, purely psychological injury is one of them. The Convention makes a specific provision about exclusion of actions, in Article 24(2). That exclusion is limited to "cases covered by Article 17". Yet his Lordship finds in the Convention as a whole an implied exclusion of all other actions arising out of the international carriage of persons, baggage or cargo by aircraft for reward.

However, no question arises as to whether I should follow Sidhu; it is clearly distinguishable. The present case concerns Part IV of the Act, not the Convention. Although the principles embodied in the Convention are reflected in Part IV, there are differences of language. I have mentioned the difference between Article 24(2) and s 36. The cap provision of the Convention (Article 22), on which Lord Hope placed much reliance, states "In the carriage of persons the liability of the carrier for each passenger is limited" etc, whereas s 31(1) says "... the liability of a carrier under this Part in respect of each passenger, by reason of his injury or death resulting from an accident". Section 31(1) picks up the very words used in s 28 to impose liability and limits the amount of that liability. Similarly, s 34 extinguishes "(t)he right of a person to damages under this Part" after two years.

In my opinion, nothing in Sidhu derogates from the conclusion that a purely psychological injury is not a "personal injury" within the meaning of Part IV of the Civil Aviation (Carriers' Liability) Act. Claims falling with category (iii) above are viable claims not subject to summary dismissal.

Non-passengers' nervous shock claims

Mr Mackrell does not concede Part IV of the Civil Aviation (Carriers' Liability) Act has no application to nervous shock claims by non-passengers. Indeed, he argues to the contrary. But I think it is apparent this is the position. I have already quoted authority for the proposition that liability in nervous shock is not dependent upon proof of a liability to compensate the initial victim; the liability is for breach of an independent duty of care. It would be incorrect to describe that liability as "damage sustained by reason of ... any personal injury suffered by the passenger", and those are the words used by s 28 of the Act in imposing liability under Part IV.

Section 28 plainly does not extend to a case where a non-passenger suffered nervous shock because of knowledge, or a belief, that a passenger was dead, injured or in peril. Section 36 uses the words "liability ... in respect of personal injury suffered by a passenger" in excluding other causes of action. As s 28 does not impose liability in respect of any injury (psychological or otherwise) sustained by a non-passenger, s 36 does not exclude liability towards a non-passenger under any other law and s 34 does not impose a relevant time limit.

Mr Mackrell concedes this is the position where the passenger in relation to whom the person sustained nervous shock was uninjured. But he says Part IV applies to a non-passenger's claim if the relevant passenger was killed or injured. If he is correct, two separate codes would govern non-passengers' nervous shock claims, depending on whether the passenger happened to be killed or injured. I see no warrant in the Act for this conclusion. The result would be odd. Of two students in the subject aircraft when it ditched in Botany Bay, suppose one was completely unhurt, the other suffered a minor injury. Suppose also both students had been taken to the airport by a parent and both parents witnessed the ditching and suffered nervous shock. On Mr Mackrell's argument, one parent would have the benefit of a right of action under s 28, subject to the time limit imposed by s 34 and the exclusion made by s 36. The other parent could sue under s 4(1) of the LR(MP) Act at any time within six years but would have to establish a cause of action arising outside the Civil Aviation (Carrier's Liability) Act. In either case, if the claimant's child sustained a blow or other discomfort, an issue might arise as to whether this constituted "personal injury". It is difficult to think this was intended.

Another reason for concluding "personal injury" was not intended to cover non-passenger nervous shock is the omission of any provisions to handle multiple claims. The drafter of the Civil Aviation (Carrier's Liability) Act inserted such provisions in relation to death claims (s 35). With the benefit of the model provided by s 4 of the LR(MP) Act, the drafter might have been expected to insert similar provisions in regard to non-passenger nervous shock claims, if they had been envisaged.

Orders

The application for summary dismissal succeeds only to a limited extent. The appropriate order is to dismiss the proceeding to the extent, and only to the extent, it claims on behalf of the applicant or any group member relief in relation to any physical injury sustained by that person, including psychological damage sustained by that person as a result of that physical injury, in respect of the ditching of the aircraft referred to in the Amended Statement of Claim.

In relation to costs, the fair course is to order South Pacific and Group Air to pay 90% of the costs incurred by Mr Magnus in relation to the Notice of Motion. There was no active dispute about the matters on which South Pacific and Group Air succeeded. They failed on the contentious items.

I certify that this and the preceding sixteen (16) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Wilcox

Associate:

Dated: 27 November 1997

Counsel for the Applicant:	J Foord QC and J E Rowe
Solicitor for the Applicant:	Coleman & Greig
Solicitor for the First and Second Respondents:	M Mackrell of Norton Smith
Counsel for the Third and Fourth Respondents: Solicitor for the Third and Fourth Respondents:	M A Jones Corrs Chambers Westgarth
Date of Hearing:	23 September 1997