Endeavour Energy v Precision Helicopters Pty Ltd

1. [1]

   BASTEN JA: On 4 April 2006 two officers employed by the appellant, Endeavour Energy (“Endeavour”), were conducting an aerial inspection of power lines in the Wiseman’s Ferry area, north-west of Sydney. Endeavour used the services of Precision Helicopters Pty Ltd (“Precision”), which supplied the helicopter and pilot. While inspecting a power line over a rural property, the helicopter’s tail rotor came into contact with a dummy line, known as a catenary wire, strung across a small gully by Telstra Corporation Ltd (“Telstra”).

2. [2]

   The pilot, Mr David Carter, was able to land the helicopter in the paddock adjoining the power lines but, without the stabilising force provided by the rotor, the machine tipped over onto one side. In the course of that movement, the main rotor appears to have hit the cabin of the helicopter and the head of Endeavour’s inspector, Mr Simeon Edwards. Mr Edwards suffered catastrophic head injuries, but survived.

(1) Procedural history

1. [3]

   In 2008, Mr Edwards brought proceedings against his employer, Endeavour, and against Precision and Telstra. His claims were settled on the basis that he obtained a judgment against Endeavour which provided for payments of $10,000 per week for the rest of his life. Those payments covered care, treatment and lost wages. No issue before this Court is directly concerned with those proceedings. One might expect that all the claims made by Mr Edwards against the three defendants would have been accompanied by cross-claims between the various defendants. The outcome of the cross-claims would have depended upon the same elements of liability as arose with respect to Mr Edwards’ claims. Yet, if there were cross-claims in the original proceedings, they have played no part in the appeals to this Court. Rather, those appeals related to two entirely discrete proceedings commenced by the defendants amongst themselves, with accompanying cross-claims. The respective liabilities of all three to Mr Edwards were thus in issue.

2. [4]

   The trial judge held that Precision was liable in negligence to Mr Edwards, on a limited basis. He apportioned overall responsibility as between Endeavour and Precision at 90% and 10% respectively. He held that there was no relevant negligence on the part of Telstra. [1] Endeavour appealed against that judgment in so far as it was favourable to Precision and Telstra; Precision cross-appealed with respect to the finding of liability against it.

3. [5]

   There were also claims for compensation to relatives. The claim brought by Mr Edwards’ wife, Julie Edwards, was settled and is not before this Court. [2] There remained outstanding claims by Mr Edwards’ children. There has been a limited finding with respect to liability in their favour against Endeavour and Precision, but their claims have not proceeded to the stage of determining causation of harm or assessing damages. Nevertheless Endeavour filed an application for leave to appeal against the interlocutory judgment upholding its liability to them (matter no 2014/70909). Precision sought leave to cross-appeal. In the course of the hearing in this Court, Endeavour conceded liability and, although its application was not withdrawn, it must presumably be dismissed. All proceedings between Precision and the children were settled after this judgment was reserved, the parties providing formal notice of the withdrawal of all proceedings between them, approved by the trial judge on 26 February 2015.

4. [6]

   The claims against Telstra turned entirely upon a general law duty of care and negligent breach of that duty. The trial judge dismissed the claims, either on the basis that Telstra owed no duty of care, or that, if it did, it did not breach its duty. For reasons which will be explained below, those findings must be set aside. Telstra did owe a duty of care to Endeavour, Precision and their respective employees and, consequentially, relatives of their employees. Applying s 5B of the Civil Liability Act 2002 (NSW), there should be a finding of breach.

5. [7]

   The situation of Precision differed in a material respect from that of the other parties. On one view, the liability of Precision to Mr Edwards arose under the Civil Aviation (Carriers’ Liability) Act 1967 (NSW) (“the State Carriers’ Liability Act”) without the need to demonstrate fault on its part. The trial judge held otherwise, and assessed liability in negligence. If Precision were strictly liable under the statute, its liability was capped at $500,000. [3] That outcome should be accepted, as contended by Precision on its appeal.

6. [8]

   Under s 151Z(1)(d) of the Workers Compensation Act 1987 (NSW), Mr Edwards’ employer, Endeavour, is entitled to an indemnity for compensation payments made by it under the Workers Compensation Act, which may be recovered from other tortfeasors. As the amounts recoverable, even if Precision’s apportioned responsibility is only 10%, exceed the cap on Precision’s liability, no other party has a claim against Precision for damages arising out of the accident.

7. [9]

   Precision also suffered loss as a result of the accident. Although the pilot was not injured, the damage to the helicopter and consequential business loss was agreed at $490,000. Precision sought to recover that amount from Endeavour and Telstra. Precision’s claim against Telstra depended upon negligence under the general law. Precision’s claim against Endeavour was partly based on a general law tortious cause of action, but also upon the contract between Precision and Endeavour. Endeavour, for its part, contended that it was entitled to a contractual indemnity from Precision in respect of its own loss, pursuant to the terms of the same contract. Endeavour contended that the State Carriers’ Liability Act did not apply in any event.

8. [10]

   The first proceeding in time (after the Edwards’ claims) was brought by Precision. On 1 April 2009 it filed a statement of claim seeking indemnity or contribution from Endeavour, Telstra and the Area Health Service responsible for treating Mr Edwards, in respect of damages payable by Precision in favour of Mr Edwards, his wife and the children. The claim by Precision determined at trial was a second further amended statement of claim filed on 18 May 2012, more than halfway through the hearing (which commenced on 7 May 2012 and ended on 25 May 2012). The second further amended statement of claim filed by Precision limited the subject matter of the claim to damages payable with respect to the claims brought by the children (now settled).

9. [11]

   Although the Area Health Service (identified by the time of the trial as Sydney West Local Health Network, trading as Westmead Hospital) remained a party to proceedings brought on behalf of the children, the trial judge noted that because of the “limited issue for determination of the children’s claims, it will not be necessary to make any findings” with respect to the hospital. A matter of days before judgment was delivered on 19 December 2013, Precision and the Area Health Service signed a notice of discontinuance, to which the other parties added their consents the following month. Accordingly, nothing now turns on the treatment provided to Mr Edwards at Westmead Hospital.

10. [12]

    Endeavour filed a cross-claim in Precision’s proceedings seeking contribution from Precision and Telstra and an order of apportionment pursuant to s 35 of the Civil Liability Act. (No reference was made in this court to “proportionate liability” as defined in s 34 of the Civil Liability Act.) Endeavour also sought damages for breach of contract from Precision and an indemnity pursuant to the terms of the contract.

11. [13]

    Endeavour’s cross-claim in the Precision proceeding was filed on 20 May 2010, before any amendment had been made to the statement of claim. To the extent that it sought orders against Precision, [4] the drafting is confused. Once the statement of claim was reduced to a claim with respect to damages payable to the children, the scope of the cross-claim must also have been affected.

12. [14]

    The second set of proceedings between the defendants involved a claim by Endeavour against both Precision and Telstra for indemnity with respect to payments made to Mr Edwards, pursuant to s 151Z of the Workers Compensation Act. The amount which had been paid as at 30 October 2009 was in excess of $1.6 million. The statement of claim was amended on 7 May 2012, although the amount was not updated.

13. [15]

    Pursuant to s 151Z of the Workers Compensation Act, an injured worker cannot be paid and retain both compensation under the Act and damages in respect of the same injury for the same period. The proceedings brought by Endeavour were based on the proposition that Endeavour had paid and continued to pay compensation payments. Those presumably continued up until the time of the trial, the trial judge noting that payments were accruing at approximately $10,000 per week for the remainder of Mr Edwards’ life. [5]

14. [16]

    Section 151Z(1) deals with a number of different circumstances in which compensation is payable and a person other than the employer is liable to pay damages in respect of the injury. Endeavour asserted that both Precision and Telstra were such persons, due to their liability in negligence to Mr Edwards. In those circumstances Endeavour was entitled to bring proceedings pursuant to s 151Z(1)(d) seeking indemnity from each of those defendants, the indemnity being limited to the amount of damages for which each tortfeasor was liable.

15. [17]

    Section 151Z(2) applies where the worker is entitled to take proceedings to recover damages both from the third person and from his employer. In calculating the amount of damages payable by the third person, allowance must be made for apportionment and contribution between the employer and the third person. When calculating the contribution payable by the third person, allowance must also be made for the reduced damages payable by the employer, calculated in accordance with Pt 5 of the Workers Compensation Act. In the present case, that figure was agreed as $1.7 million. The calculation undertaken by the trial judge resulted in a finding that Precision was liable in an amount of $3.13 million “plus interest”. (Neither the rate at which interest should be calculated, nor the date from which interest ran was specified.)

16. [18]

    In the separate proceeding brought by Precision, orders were made in the following terms: [6]

17. [19]

    Regardless of the form of these orders (which is to say the least awkward) it was inappropriate to give a judgment in favour of one party in one proceeding, the effect of which is reversed by a judgment given in another proceeding. It may be that the composite set of proceedings should not have gone to trial in the form in which they stood at that time.

18. [20]

    In broad terms, the following issues arise:

(a) background circumstances

1. [21]

   The circumstances surrounding the accident are best understood by reference to a sketch plan prepared by the pilot after the incident, which is annexed to this judgment. On the left hand side (the west) of the map there is a faint marking indicating the McDonald River. A high voltage line is more distinctly marked, running from north to south alongside the McDonald River, to the west of the river. There is a branch line shown extending due east from the main high voltage line, crossing the river and continuing until it meets a transformer pole. From that pole, a low voltage service line runs in a southerly direction curving to the east and following a line of trees. Within the trees can be seen the broad curve of Settlers Road. When the service line reaches a point due north of a house (owned by the Inmans) the service line swings due south and proceeds in a straight line across a shallow open valley. Settlers Road follows the tree line around the top of the shallow valley.

2. [22]

   At the time of the accident, employees of Endeavour Energy were inspecting the service line and the supporting poles from the helicopter. Having come from the north down the McDonald River, the helicopter swung east following the branch high voltage line toward the transformer pole. It crossed over the high voltage line shortly before reaching the pole and continued along the curved arc in a south-easterly direction, along the western side of the service line (that is, away from the trees). (This was described in the evidence as flying on the right of the power line.) When the service line struck out due south across the open paddock, the helicopter crossed over the service line to proceed down the easterly (left) side of the line.

3. [23]

   Flying just above the power line, the helicopter came into contact with the Telstra catenary line at or near the point marked “contact with wire point”. The rear rotor of the helicopter hit the catenary wire and broke free from the helicopter. The pilot rose, crossed over the service line and landed in the open paddock to the west of the service line. Without the aid of the rear rotor, the helicopter could not be maintained in a level plane and, on contact with the paddock, rolled onto its side, at which stage the main rotor came into contact with the front of the cabin, causing injury to Mr Edwards, who was seated in the front passenger seat alongside the pilot.

4. [24]

   The evidence (to which there will be further reference below) indicated that, while the catenary line was visible from some directions, it was not readily visible from above. It was not marked on any map to which either the pilot or Endeavour staff had access. As may be seen from the sketch map, the line ran in a single loop across the valley, without intermediate supporting poles. The supporting poles at each end were partly concealed by trees. According to an aviation accident report completed shortly after the accident and following an investigation by the chief pilot with Precision, the pilot in command of the helicopter on the day, David Carter, “has inspected this line annually on three occasions and has never detected or been warned of this particular hazard.” [7]

5. [25]

   Also annexed to this judgment are two photographs showing the service power line on the left and the catenary line to its right. It will be seen from the photographs that the service line (looking north) veered to the west before reaching the tree line, a factor not clearly demonstrated in the indicative sketch map prepared by the pilot.

6. [26]

   There was no evidence that Telstra’s catenary line served any purpose: indeed, the evidence was that it served none. The Telstra line to the Inman’s property had originally come across the gully where the catenary line ran, but the operational telephone wire had been rerouted along Settlers Road in September 2000. In August 2004 Telstra had inspected the poles at either end of the catenary wire and, in July 2005 a work order had issued requiring the removal and replacement of the pole at the northern end. It was in fact removed and replaced between July and early December 2005, only months before the accident.

7. [27]

   The first issue raised by these circumstances is whether Telstra owed a duty of care with respect to the siting and maintenance of the catenary wire.

(b) duty of care - issues

1. [28]

   The existence of a duty of care is to be determined in accordance with the general law. Although the Civil Liability Act has a division headed “Duty of care”, [8] it is accepted that the provisions relate more to breach than to the existence of a duty. [9] Nevertheless, the provision adopts language relevant to both duty and breach [10] . (The heading to a Division in an Act is part of the Act. [11] ) The first provision in Div 2, s 5B, reads as follows:

2. [29]

   The first two elements in s 5B(1), foreseeability and significance of risk, will usually constitute matters to be considered in determining whether a duty is owed in particular circumstances to a class of persons including the plaintiff. That does not mean that duty is to be addressed by application of s 5B and s 5C: as explained by Beazley P in Grills v Leighton Contractors Pty Limited, [12] such an approach would be erroneous. The existence of a duty of care depends, in part, upon a prospective determination that physical injury to a class of persons which would include the plaintiff was reasonably foreseeable in circumstances where the defendant did not take reasonable care in conducting its affairs. [13] As Gageler J stated in Brookfield Multiplex Ltd v Owners Corporation Strata Plan 61288: [14]

3. [30]

   The present case was said to involve a foreseeable risk of physical harm, both to persons and property. The relevant conduct of Telstra was the stringing of a thin cable across a valley. The class of persons to whom the putative duty must be owed is sufficiently identified as persons involved in low level flying activities in the area. Ultimately, this aspect of the duty question must depend upon whether it was reasonably foreseeable that there would be low flying aircraft, including helicopters, in the area.

4. [31]

   That question may be sufficiently answered in the present case by combining the knowledge of Telstra as to the existence of power lines in the area with the knowledge (actual or constructive) that the owner of the power supply infrastructure might inspect its infrastructure from the air. As will be seen shortly, both limbs of this test were satisfied. However, were that not the case, there would be a more general question as to whether Telstra ought not reasonably to have foreseen the possibility of low flying aircraft in an open area, near habitation, close to extensive bushland. That bushfire control or medivac flights might use the area (as in fact happened after the accident in which Mr Edwards was injured) was reasonably foreseeable.

5. [32]

   The next question will be to ask whether the risk was “not insignificant”. The significance of a risk involves two main variables, namely the seriousness of the consequences should the risk materialise and, secondly, the likelihood of the risk materialising. In the present case, the likelihood of the risk materialising may have been very low, though not insignificant: the consequences if it did materialise were likely to be catastrophic for any individual involved, in circumstances where only a small number of individuals would likely be involved.

6. [33]

   The third question raised by s 5B asks what “precautions” a reasonable person would have taken in those circumstances. The reference to “precautions” is a reference to conduct which might minimise or remove the risk of harm which has been identified as not insignificant. The factors referred to in s 5B(2) recognise that both the chances of the risk materialising and the likely seriousness of the harm should be addressed. The section also identifies the burden of taking precautions and the social utility of the activity creating the risk. The last two factors cannot operate against a finding of negligence in the present case. Removal of the wire would have been cheap: indeed, the appropriate “precaution” would have been not to re-erect the wire in the first place. There was no demonstrated social utility in maintaining the wire across the valley.

(c) duty – factual assessment

1. [34]

   The real issue with respect to duty was, as the foregoing analysis indicates, whether Telstra owed a duty of care to a class of persons including the plaintiff on any of four possible bases as to the foreseeability of risk. These were:

2. [35]

   The last two bases collapse into each other in the circumstances of the case: there was no evidence of actual use of the area by low flying aircraft other than the power line inspections, before the accident. Accordingly, the third and fourth questions amount to one, namely whether Telstra ought to have foreseen a possible use of the area by bushfire control aircraft or medivac flights or similar emergency services. Addressing first the question of actual knowledge of Telstra, two circumstances must be addressed, namely:

3. [36]

   As to the first matter, there seems to have been no dispute that Telstra knew of the proximity of the power supply lines on the Inman property to Telstra’s catenary wire. Between September 2000, being the last date on which the Telstra service line across the paddock was in use and April 2006 (when the accident occurred), Telstra had rerouted the telephone service line, noted that the catenary wire was unused and could be recovered, inspected the poles carrying the catenary wire, replaced one of the poles and reconnected the catenary wire. [15] The trial judge further found: [16]

4. [37]

   It should be inferred from these facts that officers of Telstra were aware of the proximity of the power lines to the catenary wire. No argument was raised that their knowledge could not be ascribed to Telstra.

5. [38]

   The second issue concerns inspection of power lines. There was evidence before the trial judge that a government authority, the Electricity Council of New South Wales, had issued a publication in February 1991 entitled “Procedures for the Aerial Inspection and Patrol of Overhead Lines”. That document stated in the introduction:

6. [39]

   The trial judge found that between April and June in 2003, 2004 and 2005 (that is the three years preceding the year of the accident) Endeavour had undertaken a program of power line inspection through rural areas, using a helicopter. [17] He further noted that in each of those years and in 2006, Endeavour had “conducted extensive public awareness campaigns in the print media about the use of helicopters to conduct inspections of its overhead power lines”. [18] These findings were amply supported by the evidence (documents relating to the advertisements comprising more than 100 pages of the trial record) and were not challenged. While there was no direct evidence that Telstra officers knew of such activity, nor was there any evidence to the contrary. It was an available inference that Telstra had actual knowledge of such activities taking place prior to the accident; if that inference were not drawn, the inference that they ought to have had such knowledge should have been drawn.

7. [40]

   It must also have been well known to Telstra that telephone service lines and electricity power supply cables might run in close proximity to each other and at a similar height above the ground. Those matters would be sufficient to demonstrate a risk that a helicopter inspection of power lines could make contact with Telstra overhead wires.

8. [41]

   The manner in which the claim was addressed at trial may not have been assisted by the form of the pleading. The allegation that Telstra owed a duty of care failed to identify to whom the duty was owed or, in the event that it was denied, the circumstances giving rise to the duty. [19] The defence merely denied the allegation. [20] The trial judge identified Telstra’s submission before him with respect to the application of s 5B of the Civil Liability Act as identifying the risk of harm to a low flying aircraft as “nil”. [21] Telstra further relied upon the absence of evidence “by way of direct or indirect communication or notification, that there existed any possibility of low-level flight taking place in this area for any purpose.” [22] The judge further noted Telstra’s submissions to the following effect: [23]

9. [42]

   In addressing the competing submissions, [24] the trial judge accepted that there had been “no express communication by Endeavour with Telstra.” [25] He also took into account “the apparent lack of concern on the part of Mr and Mrs Inman” who were “aware that helicopters would pass over the property, from time to time, undertaking the aerial power line inspection process, of any risk posed by the catenary wire.” This was treated as a “practical barometer of the approach which a reasonable person may take to assessment of this risk.”

10. [43]

    The judge further observed that the wire was in “an obscure location, well removed from any area where it might reasonably be considered that a helicopter would fly.” [26] The judge’s conclusion is encapsulated in the following statement: [27]

11. [44]

    The reasoning in these passages is unconventional. First, consideration is given to the “apparent lack of concern” on the part of the Mr and Mrs Inman, who knew that helicopters undertook aerial inspections of the power lines. However, there was no suggestion that the Inmans owed any duty of care to Endeavour Energy, or to any other party. Secondly, it was not entirely clear what was meant by the reference to their “apparent lack of concern”. Each of Mr and Mrs Inman was called to affirm the truth of their statements of evidence. Neither was cross-examined. Neither expressed any view as to the safety of the operation or the risks involved. No assistance could have been obtained from their evidence as to the existence or otherwise of a duty of care owed by Telstra to persons in the helicopter.

12. [45]

    The second stage in the reasoning involved a finding that Telstra had no knowledge of the use of helicopters to inspect power lines, although no specific finding was made to that effect. In this Court, Telstra relied on the finding of the trial judge that Endeavour made no inquiries of it (Telstra) as to the presence of any telephone service lines in the vicinity of power lines. [28] That finding was made in the course of denying Telstra’s liability to Mr Edwards. [29] There was an assumption that such inquiries would have been necessary to put Telstra on notice of the power line inspections. Endeavour recognised the risk of other power lines in the vicinity of its own grid: there were, presumably, a limited number of institutional operators of power lines. Whether Endeavour took steps to ask those operators to identity their property in the area is not known. That is because the only question which seems to have been addressed was the existence of the Telstra wire.

13. [46]

    The further statement that the catenary wire was not in an area in which it might “reasonably be considered that a helicopter would fly” could be thought to support an implicit finding that Telstra had no constructive knowledge of the possibility of a helicopter in that area, despite the actual knowledge of Mr and Mrs Inman to the contrary and despite the fact that other persons in the area, including Telstra employees, would probably have known of such activity. Whether there is an actual finding in the immediately succeeding paragraph that a reasonable person would have expected helicopters to be conducting aerial power line inspections is unclear. However, if that finding were made, as it should have been, the “considerable further leap” is not that. There was no suggestion that in carrying out the aerial survey, the helicopter was not in a position reasonable and appropriate for carrying out the inspection at the time it clipped the catenary wire.

14. [47]

    The evidence that it was a long-standing practice within the electricity supply industry to conduct aerial surveys of power lines in rural areas, combined with the public advertising campaigns which preceded the carrying out of such activities, including in the area of the Inman property, was sufficient to find that a telecommunication company maintaining wires and cables in the vicinity of power lines in rural areas ought reasonably to have known of the practice of aerial inspection. The possibility of a helicopter carrying out such an inspection coming into contact with a telephone line which was unknown to the pilot and not readily detectable by visual means imposed a duty of care on a telecommunications company responsible for such wires. Accordingly, Telstra owed a duty of care to the owner of the helicopter and its occupants. The failure of the trial judge to accept that conclusion was in error.

(d) breach of duty

1. [48]

   As already noted, s 5B of the Civil Liability Act appears in a division headed “Duty of care”. [30] A statement that a person is not negligent “in failing to take precautions against a risk of harm unless …” deals with breach. The fact that the trial judge dealt with the liability of Telstra on the basis that there was no foreseeable significant risk suggests that he dismissed the case on the basis that Telstra did not owe a duty to the occupants of the helicopter or Endeavour Energy. Once it is accepted that a duty was owed, it is necessary to consider breach, having regard to the terms of subs (1)(c) and subs (2) together with, if relevant, s 5C. That requires consideration of the precautions that Telstra should reasonably have taken against the identified risk of harm.

2. [49]

   Although the case pleaded against Telstra identified 37 particulars of negligence, the case turned on the simple proposition that the catenary wire served no purpose and could readily have been removed at any time after September 2000. Telstra’s case, as summarised by the trial judge, was that Telstra would not have taken any precautions against the risk of an aerial collision, because no reasonable person would foresee the possibility of a low level flight within the paddock. [31] Once that contention is dismissed, it appears that Telstra had no answer to the proposition that it could and should have removed the wire entirely when one of the poles supporting it was removed and replaced and the wire re-erected, at some time between August and 7 December 2005. [32]

3. [50]

   Telstra’s submissions as to breach of duty in this Court merely reiterated that, because foreseeability was not made out, the trial judge did not err in failing to consider the other elements in s 5B(1)(c) and (2). That the trial judge did not make such findings is not in doubt. Telstra made no submissions as to breach in the event that the conclusion of the trial judge with respect to foreseeability was not accepted. In the course of oral argument, senior counsel for Telstra accepted that his client’s liability depended upon the question of foreseeability. [33] Nor was any issue of causation raised, in the event that breach was established.

4. [51]

   There should be a finding that Telstra was in breach of its duty to the owners, operators and occupants of the helicopter. The question of apportionment of liability will therefore need to be addressed in due course. Apportionment will arise both in respect of liability for injuries suffered by Mr Edwards and for Precision’s claim in relation to its helicopter.

(a) issues

1. [52]

   The primary dispute adjudicated by the trial judge involved the responsibility of Precision for the accident, and in particular the injuries to Mr Edwards. The judge upheld a claim in negligence against Precision and quantified the responsibility of Precision (overall) at 10%, with the responsibility of Endeavour constituting 90%. One issue related to the failure of Mr Edwards to wear a helmet. As the proceedings brought by Mr Edwards against Endeavour Energy had been settled, no question of contributory negligence was before the Court. The judge referred to the fact that the apportionment concerned an amount of $16 million, which was accepted to be the assessment of common law damages in favour of Mr Edwards. There was evidence that that amount, which was almost entirely attributable to the brain damage suffered in the accident, would have been significantly reduced had Mr Edwards worn a helmet. It appears to have been assumed for the purposes of the argument that either Mr Edwards bore no responsibility for the failure to wear a helmet, or the agreed damages reflected a reduction for contributory negligence.

2. [53]

   The issue of Precision’s liability is complicated by questions arising under contract and statute. Although the basis of liability for personal injury under the State Carriers’ Liability Act is strict, it is convenient to deal first with the contractual arrangements between Endeavour and Precision.

(b) contractual arrangements: Endeavour and Precision

1. [54]

   The contractual arrangements pursuant to which Endeavour obtained from Precision helicopter services needed to undertake the aerial inspection of its power lines were important in a number of respects. First, and most broadly, the nature of the contract was relevant to the application of the State Carriers’ Liability Act. Secondly, and relevantly to the claims in negligence, the contract allocated responsibility for various activities, including in ways relevant to safety. Thirdly, there was an indemnity relied upon by Endeavour in its case against Precision.

2. [55]

   The contract, referred to as the “Services Agreement”, commenced on 31 May 2003 and ran to 31 May 2006. The first party to the agreement was Endeavour, then known as Integral Energy Australia. Precision was identified as “the Contractor”. The primary operative provision was cl 3.1 which read as follows:

3. [56]

   The term “Services” was defined by reference to the specification, which provided for “the supply of a suitable helicopter service together with a competent experienced pilot to carry out the following detailed, low level, aerial works.” The specification then itemised a number of activities, including “[i]nspection of power lines from low voltage to 132kV across Integral Energy’s franchise area.”

4. [57]

   Levels of performance were specified in the following terms:

5. [58]

   Schedule 3 required the commitment of two helicopters for the pre-summer bushfire patrol and also identified a four page Integral document known as “GNV 1010 (Business Procedure)”. That document set out pre-flight requirements for helicopter inspection of overhead power lines. Various aspects of this document were the subject of detailed submissions and it is therefore desirable to set out the critical passages.

6. [59]

   Clause 6 of the contract was headed “Warranties and indemnities”. The contractual indemnity given by Precision was in the following terms:

7. [60]

   Endeavour relied on cl 6.2 as providing it with an indemnity, by way of defence to Precision’s claims against it with respect to aircraft damage, and as a basis for recovery with respect to Endeavour’s liability to Mr Edwards. [34]

8. [61]

   The trial judge, adopting Precision’s submissions, approached the question by construing the clause strictly in favour of the party on whom the obligation was imposed, [35] by reading down the terms of cl 6.2 to avoid any surplusage in pars (a)-(c), [36] and by reading the reference to “a third party” as a reference to someone other than Mr Edwards. [37]

9. [62]

   Endeavour challenged the acceptance by the trial judge of each step in Precision’s submissions in this regard. There was force in its criticisms although, for reasons which will be explained, cl 6.2 does not significantly affect the outcome of the case and may therefore be dealt with briefly.

10. [63]

    The principle that an indemnity be construed strictly in favour of the indemnifier depends upon identifying uncertainty or ambiguity in the language of the agreement. Although the benefit of the indemnity was conferred on both Endeavour and Endeavour’s “Representatives”, the latter phrase presumably including Mr Edwards, the present issue concerned Endeavour itself and loss suffered by it directly or indirectly as a result of a negligent act of Precision “or a representative of” Precision. The term “Representative” of a party to the agreement was defined to include “an employee, agent, officer, director … or subcontractor of that party”. [38] To the extent that Mr Carter or Mr Horne, Precision’s operations manager, or any other employee or agent of Precision was negligent, in the course of providing services under the Services Agreement, such conduct would naturally fall within the terms of the indemnity. The loss covered extended to a loss for which Endeavour was liable, in connection with “any injury to… a natural person” and, any claim “by a third party” against Endeavour.

11. [64]

    Endeavour submitted that the finding of the trial judge that “Mr Edwards was not a third party” for the purposes of cl 6.2(d), was erroneous. In fact, the term “third party” does not appear in par (d) with respect to personal injury, although it does appear in pars (f) and (g). Endeavour submitted that the finding of the trial judge implied that Mr Edwards was a party to the agreement, which he clearly was not.

12. [65]

    That was one interpretation available; another was that the indemnity, while extending to claims by third parties and natural persons, did not include a claim by a “Representative” of Endeavour. The justification for that reading was by no means clear in the judgment or in the submissions for Precision. The language of cl 6.2 is apt to cover injury to such a person for which Endeavour is liable and to exclude such coverage would be to neuter the effect of the provision with respect to one of the most obvious circumstances in which liability could be foreseen.

13. [66]

    Reliance upon cl 6.3, does not obviously achieve that result. Clause 6.3 provides a mechanism by which a representative of Endeavour (such as an employee) may obtain a contractually enforceable benefit under cl 6.2. The real focus for present purposes is upon the extent to which the indemnity is lost or lessened as a result of negligence on the part of Endeavour or its employees and agents. First, cl 6.2 contains an exception where the loss is “solely and directly” caused by the negligence of Endeavour or its representative. Secondly, there is an apportionment provision (cl 6.4) with respect to a claim by Precision where there is negligence on the part of Endeavour for which Endeavour is not solely liable.

14. [67]

    The latter clause has two distinctive features: first, it does not use the term “Representative” to describe those persons for whom either party is liable. Further, it applies only where Precision has suffered loss, as broadly defined in cl 6.2. In that situation, cl 6.4 requires an apportionment in a manner which removes any potential liability of Endeavour for that part of the responsibility for the loss deriving from the acts or defaults of Precision (including Precision’s agents and employees) and those of third parties. In this respect, cl 6.4 operates as a limitation on the joint and several liability of Endeavour.

15. [68]

    To understand the significance of this provision in the present circumstances, it is necessary to consider in what respect cl 6 might render Precision liable to Endeavour, beyond the application of general law (and statutory) principles. So far as the personal injuries to Mr Edwards are concerned, it was not submitted that the contractual liability could affect the cap imposed by the State Carriers’ Liability Act. With respect to the destruction of the aircraft, each negligent party will be liable to the extent of its responsibility. Thus cl 6 will not have any practical consequence in the present case. Its construction need not be addressed further.

(c) State Carriers’ Liability Act

1. [69]

   Precision held an Air Operator’s Certificate (“AOC”) under the Civil Aviation Act 1988 (Cth), issued on 22 February 2006 and valid until 31 July 2006. The certificate authorised Precision to use certain registered aircraft identified in the schedules to the certificate to carry out “charter operations” and “aerial work operations”. The aerial work operations included various activities, including inspection of power lines. The charter operations were simply identified as “Pax” (presumably carriage of passengers) and cargo in Australia.

2. [70]

   An AOC is a permit to operate aircraft in Australian territory: Civil Aviation Act, s 27. The coverage outlined in the schedules to the AOC, and the distinction drawn between charter operations and aerial work operations were deemed significant to the next step in the scheme of control.

3. [71]

   Precision claimed that its liability in respect of the accident was covered by the State Carriers’ Liability Act. The consequence of the application of that legislation was to render Precision strictly liable for damage sustained by reason of the injury to Mr Edwards, but subject to a cap on that liability of $500,000. Each of the other parties denied the operation of the State Carriers' Liability Act, and hence the relevance of the statutory cap on liability.

4. [72]

   The statutory scheme involves the combined operation of the State Carriers’ Liability Act and the Civil Aviation (Carriers’ Liability) Act 1959 (Cth) (“the Commonwealth Carriers’ Liability Act”). The primary purpose of the Commonwealth Carriers’ Liability Act is to give effect in domestic law to the terms of various international conventions relating to travel by air. Those provisions [39] are supplemented by Pt IV which is headed “Other carriage to which this Act applies”. Part IV covers carriage of a passenger in an aircraft within Australia and internationally, not being carriage to which one of the Conventions applies and not being carriage within a State. [40] The Commonwealth Carriers’ Liability Act does not, therefore, apply to the present circumstances of its own force.

5. [73]

   The coverage of the State Carriers’ Liability Act is identified in the following terms:

6. [74]

   The State Carriers’ Liability Act does not contain its own regulatory scheme: rather it picks up and applies provisions from the Commonwealth Carriers’ Liability Act, as provided by s 5:

7. [75]

   Part IVA of the Commonwealth Carriers’ Liability Act requires carriers to be insured against liability to passengers for death or personal injury: it was not said to be engaged in the present case, nor was it suggested that its provisions assisted in the interpretation of the operative provisions. The relevant operative provisions in Pt IV, were, at the time of the accident, as follows:

8. [76]

   Before turning to the substantive issues it is convenient to note that s 31, in its present terms, specifies a cap on liability of $725,000.00. At the time of the accident the relevant figure was $500,000.00. The increase resulted from an amendment which commenced on 31 March 2013, [41] applying only to accidents taking place from that date. [42] The parties assumed, no doubt correctly, that s 5 of the State Carriers’ Liability Act is ambulatory; that is, it picks up the enumerated provisions of the Commonwealth Carriers’ Liability Act as amended from time to time, including the times from which they operate. [43]

9. [77]

   The critical issue for present purposes turned not upon the operation of the applied provisions picked up by s 5, but on the application of the State Carriers’ Liability Act, pursuant to s 4. (Had it been necessary to construe the applied provisions, it would also have become necessary to consider the declaration of 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.” [44] )

10. [78]

    There were two key provisions at the heart of the argument as to the operation of s 4, namely the use of the terms “passenger” and “commercial transport operations”. The term “passenger” is not defined in either piece of legislation. The term “commercial transport operations” is defined in Pt IV of the Commonwealth Carriers’ Liability Act to mean “operations in which an aircraft is used, for hire or reward, for the carriage of passengers or cargo.” [45] There are a number of respects in which this definition is wider than the operation of s 4 and thus does not govern the limits of its operation. For example, such operations extend to the carriage of cargo, without passengers: s 4 only applies where the aircraft is being operated “under a contract for the carriage of the passenger”, referring to “the carriage of a passenger” in the opening words of the provision. Further, the term “contract” is also defined in s 26 of the Commonwealth Carriers’ Liability Act to include an arrangement made without consideration, which would extend beyond operations under an arrangement for hire or reward.

11. [79]

    There was no dispute that Mr Edwards’ presence in the helicopter constituted carriage in which an aircraft was used. There was also no dispute that the aircraft was used “for hire or reward”, albeit the relevant contract was between Precision and Endeavour and did not involve Mr Edwards as a party. The question turned upon whether Mr Edwards was a “passenger” for the purposes of the section.

12. [80]

    The trial judge dealt with the issue as depending upon “the nature of the activity upon which the helicopter and its occupants were engaged on 4 April 2006.” [46] That activity was identified as “low-level aerial work inspecting power lines”. The judge continued: [47]

13. [81]

    Having thus concluded that s 4 was not engaged, the trial judge then considered whether, “Mr Edwards was, in any event, a ‘passenger’ for the purpose of the relevant legislation.” [48]

14. [82]

    Dividing the issues in that way may be legitimate if it be assumed that s 4 can be engaged with respect to “the carriage of a passenger” where the passenger is not the person injured. However, that distinction may be doubted. Read as a whole, s 4 envisages that it is the carriage of the passenger which occurs under a contract and in the course of commercial transport operations. The correctness of the approach adopted at trial might be critical if there were a dispute as to the liability of the operator of an aircraft on a scheduled flight between two places in the State, carrying passengers, but also transporting staff who were not engaged in the flight, but who were to be available for subsequent flights. It is not an issue which need be decided in the present case, which turned upon whether Mr Edwards was a passenger. Were he not a passenger, neither the no fault liability provision (s 36) nor the cap on liability (s 31) would apply.

15. [83]

    The approach of the trial judge should not be accepted, for a different reason. The scope of s 4 was not to be identified by reference to a “concept of intrastate airline and charter operations”. Nor was it appropriate to assume, because the AOC differentiated between “charter operations” and “aerial works operations”, that such a distinction was to be found in s 4: the terms of the section were different.

16. [84]

    Section 4 refers to a passenger who is carried in an aircraft being operated by the holder of an airline licence, which includes an AOC. [49] There was no suggestion that the operation of the aircraft was outside the terms of the AOC. Accordingly, it is important to focus on the concept of carriage of a “passenger”. A primary definition of “passenger” is “a traveller in or on a public or private conveyance (other than the driver, pilot, crew, etc).” [50] Applying such ordinary concepts, it was accepted that Mr Edwards was a traveller, and the question was asked whether he was a member of the “crew” of the aircraft, because of his purpose in being in the helicopter.

17. [85]

    Adopting that approach, the question was not answered by characterising, at a high level of generality, the purpose for which Endeavour had contracted the services of Precision. Rather, it required consideration of the actual activities to be carried out by Mr Edwards.

18. [86]

    It is convenient to begin with the following aspects of the agreement set out above. [51] First, although it is clear that the “flight crew”, as viewed from Endeavour’s perspective, would consist of the pilot (provided by Precision) and an observer and an inspector (provided by Endeavour) the functions of each were identified. Flying the helicopter was solely the responsibility of the pilot; inspecting the power lines was solely the responsibility of the inspector. The function of the observer was in part to record the condition of the power line, but primarily to indicate the route and to provide warning of approaching hazards to the pilot. The observer in the present case was Mr Edwards. Pursuant to the contract, his role included the provision of information to the pilot which was no doubt important from time to time in relation to the course taken by the pilot. Mr Edwards did not, however, have a role in operating the helicopter or directing the pilot in his operation of the helicopter.

19. [87]

    Thus, Mr Edwards’ role was to identify infrastructure owned by Endeavour which was to be inspected. This was not a flight with a scheduled route, although a route plan was identified in advance. However, in identifying the relevant infrastructure, Mr Edwards was serving the interests of his employer, Endeavour, and was not employed by Precision as an assistant to the pilot, nor as a navigator. Mr Edwards did carry out any part of the services to be provided by Precision: to the extent that there was a division between the aircraft crew and others, he fell into the latter category.

20. [88]

    The trial judge accepted, correctly, that assistance might be obtained from authorities dealing with the concept of “passenger” in relevant international conventions. Primary consideration was given to the decision of the House of Lords in Fellowes (or Herd) v Clyde Helicopters Ltd. [52] That case involved a claim by the widow of a deceased police officer (Sgt Herd) who had died when the helicopter in which he was travelling collided with a building during a snow storm. The House of Lords upheld the conclusion reached in the lower courts that the police officer, being carried in the helicopter in order to carry out police surveillance duties, was a “passenger” and the liability of the aircraft operator was therefore subject to the relevant convention provisions, applied to internal travel by UK legislation equivalent to the State Carriers’ Liability Act. Because the trial judge concluded that the reasoning of their Lordships would result in a different conclusion in the present case, it is necessary to consider the principle articulated in Herd.

21. [89]

    The principal opinion was that of Lord Mackay of Clashfern LC, with whom Lords Nicholls of Birkenhead, Hoffmann, Hope of Craighead and Clyde agreed, Lord Hope giving further reasons of his own. In describing the role of the officers on the helicopter, Lord Mackay stated: [53]

22. [90]

    The role played by the officers in giving instruction to the pilot was thus closely analogous to that played by Mr Edwards in the present case. Lord Mackay noted that the contract required the provision of facilities by Clyde Helicopters, for “crew members”, suggesting that the word “crew” included police officers. [54] Lord Mackay had regard to the language of Art 17 of the Warsaw Convention, dealing with “bodily injury suffered by a passenger”, stating: [55]

23. [91]

    The trial judge noted [56] that Herd had been “applied” by the Court of Appeal for England and Wales in Disley v Levine. [57] The circumstances of that case were distinguishable: a trainee flying a paraglider (not an aircraft) with an instructor was held not to be a passenger. Nevertheless, as the trial judge noted, Buxton LJ said of Herd: [58]

24. [92]

    The trial judge distinguished Herd, holding that Mr Edwards was not a “passenger” in the helicopter for the following reasons: [59]

25. [93]

    Having regard to the role played by Sergeant Herd, as set out at [89**] and [90*] above and as briefly identified by Buxton LJ in Disley, the point of distinction is unpersuasive. In both cases the injured person was in the helicopter for the purpose of carrying out duties derived from his employment with a third party. Neither Sergeant Herd nor Mr Edwards had any physical control over the flying of the helicopter. On the other hand, like Sergeant Herd, Mr Edwards’ role was to give necessary instruction to the pilot, to inform him of manoeuvres he wished the pilot to carry out and “generally to act as observers and to provide information to the pilot” during the course of the flight.

26. [94]

    Precision’s appeal in this respect should be upheld: Mr Edwards was a “passenger” for the purposes of s 4 of the State Carriers’ Liability Act and for the purposes of Pt IV of the Commonwealth Carriers’ Liability Act, being applied as State law. Precision was thus liable for the damage suffered by Mr Edwards, regardless of negligence, but its liability was capped at $500,000.

(d) pre-flight precautions

1. [95]

   The contractual relationship gave rise to mutual claims of breach of contract between Endeavour and Precision. Endeavour alleged that Precision’s pilot had failed to exercise reasonable care in flying the helicopter, including failing to keep a proper lookout for aerial hazards, failing to survey the route to be flown by the helicopter and failing to establish the optimal flight path for the purpose of inspecting the power line on the Inman property. These were described as the “aviation issues”. The trial judge rejected the claim of negligence based on the aviation issues. [60] Because of the finding that liability of Precision for personal injury arose under the State Carriers’ Liability Act, no question of negligence is relevant to that liability; there remain, however, claims in negligence with respect to the loss of the aircraft.

2. [96]

   The second broad area of dispute involved what were briefly identified as the mapping and planning issues. These turned on the allocation of responsibilities under the Services Agreement between Endeavour and Precision. The trial judge held that Precision had established breaches of contract by Endeavour, [61] as a result of findings made in a separate section of the judgment headed “Issues Arising From Suggested Inspection and Mapping Failures on the Part of Endeavour”. [62]

3. [97]

   The reasoning in these pages was curiously structured. The primary submissions against Endeavour were apparently put by Telstra and adopted by Precision (and the Edwards children). [63] The contractual documents referred to above were set out in the course of outlining Telstra’s submissions. [64] Endeavours submissions were then summarised. [65] The reasoning followed. [66]

4. [98]

   The reasoning commenced with the proposition that “the question is whether Endeavour breached its duty to its own employee, Mr Edwards, in the ways contended for by Telstra, Precision and the Edwards children.” [67] If that were the question, it was not obvious why that question required a careful analysis of the contractual relationship between Precision and Endeavour.

5. [99]

   In the end, breach of duty by Endeavour did not appear to depend upon a contractual analysis but rather evidence that “an electricity supplier, in the position of Endeavour, was expected to undertake reliable mapping, with identification and listing of hazards for the purpose of assisting the helicopter pilot undertaking aerial power line inspection.” [68]

6. [100]

   The breach of duty was the failure on the part of Endeavour to undertake “ground-based inspection activities” which would have revealed the presence of the Telstra wire. [69] The judge further found that Endeavour failed to implement “industry standard precautions” and accepted Telstra’s submissions as to “particular areas of deficiency on Endeavour’s part.” [70]

7. [101]

   It was the last finding which adopted submissions dealing with the obligations of Endeavour under the Services Agreement and the operational document GNV 1010. This was referred to as an “industry guide”. [71] At no point was there discussion of the obligations of Precision with respect to low flying operations undertaken by it and its pilots. If Endeavour had obligations to its employee, Mr Edwards, as it undoubtedly did, so Precision had equally strong obligations to Mr Carter, its pilot. In these circumstances, two separate questions arose, namely:

8. [102]

   It is not possible to separate entirely these two questions. Thus, the obligations of both Precision and Endeavour must start with the basic elements of the contractual arrangement. Precision was required to “provide and perform the Services … in a proper, workmanlike and proper professional manner”. [72] It was required to comply with “all applicable Laws”. [73] It was also required to “ensure that” each of its representatives involved in the provision of services complied at all times with all applicable laws. [74] The term “Laws” was defined to mean “all applicable laws, statutes, Authorisations and Australian Standards.” These included, Endeavour submitted, Precision’s Operations Manual which was to be provided to personnel, including pilots, pursuant to the Civil Aviation Regulations. [75] The regulations required, with respect to “low flying” that an aircraft not fly at a height lower than 500 feet, although that requirement did not apply with respect to an aircraft “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”. [76] As at April 2006, Precision held an AOC which permitted specified aerial work operations, including inspection of power lines. [77]

9. [103]

   The operations manual specified the experience levels for pilots engaged in low flying operations. [78] It further required: [79]

10. [104]

    Endeavour submitted that the effect of the regulation, taken with the operations manual, was to require Precision’s pilot to take all reasonable steps to establish “an optimum path and aircraft manoeuvring plan” with respect to the aerial inspections. This obligation was said to inform the duty of care owed by Precision to Mr Edwards, as the party vicariously responsible for the conduct of the pilot.

11. [105]

    There were two factual matters which warranted the conclusion, as submitted by Endeavour, that Precision had failed to take reasonable care in a matter which materially contributed to the accident. First, the branch line to the Inman house required a return trip. Accordingly, there was no practical objection to the inspection being carried out on either limb of the trip. To carry out the inspection whilst flying south towards the Inman house was not the optimal path for the purpose of inspection. That was because the inspector was placed on the right hand side of the aircraft and thus not on the same side as the power line if the aircraft travelled down the western side (referred to as the right hand side) of the line. For more than half the trip, that course was inevitable because there were trees on the eastern side. It was only when the aircraft reached the shallow valley, with open land on both sides that it was able to cross over the power line to the eastern side, so that the inspector was on the correct side of the aircraft to carry out the inspection. It was near the point of crossover that the rotor collided with the Telstra wire.

12. [106]

    Secondly, from the point of view of safety, to fly the length of the branch line at a safe distance would have allowed for an aerial inspection of the area, in accordance with the operations manual, before proceeding in a northerly direction along the western side of the branch line. That course would have avoided the need to crossover the power line to the eastern side at any point, would have allowed an opportunity to observe the catenary wire without going near it and would have resulted in the optimum path for the inspection. Not to take that course, Endeavour submitted, involved a failure on the part of the pilot to exercise reasonable care, in accordance with the operations manual.

13. [107]

    Precision also claimed that Endeavour had breached the contract, relying on cl 5.1.3 of the document GNV 1010. Precision submitted that this imposed an absolute obligation on Endeavour to mark “all hazards” on a route plan for a proposed aerial inspection of overhead power lines. The document defines a “route plan” as “a geographic plan detailing the intended flight location and all power lines to be inspected.” [80] Although all of the specific hazards identified involve power lines, Precision sought to emphasise the reference to “all hazards” and the fact that matters identified following the words “such as” were clearly intended to be examples of hazards.

14. [108]

    Whilst Precision’s construction is available on a literal reading of the words out of context, read in context, it cannot be right. It is implausible in the extreme that Endeavour, by an internal document annexed to the contract, was seeking to impose on itself an obligation to mark all hazards, without qualification or exception, on the relevant route plan. Clause 5 is carefully structured. It commences by identifying the “crew” and their respective functions; it then provides for a “risk assessment” to be carried out, in accordance with another document; the requirement for “route and hazard marking” follows as the next subclause, with “pre-flight briefing” as the fourth subclause.

15. [109]

    It is tolerably clear that the hazards to be marked on the route plan are those known to Endeavour. It is implausible to think that Endeavour was undertaking an obligation to mark unknown hazards. Further, that construction is supported by the pre-flight briefing requirements which required that the pilot and crew be informed prior to departure of, among other things, the “location of any known over-crossings, aerial ropeways, high structures, areas to be avoided and any significant features such as major rivers and highways”. [81] While it may be accepted that hazards were not intended to be limited to risks posed by power lines, it should be accepted that the obligation to install markers on power lines was intended to apply to Endeavour’s own assets. Further, it is clear that primary attention was being given to overhead power lines. That appears from the risk assessment which, while requiring identification of “all hazards associated with the work”, noted that particular attention was to be given to “power line over-crossings”, including power lines owned by other bodies.

16. [110]

    It is not in dispute that the presence of the Telstra wire which caused the accident was not actually known to any person associated with either Endeavour or Precision. The question of negligence was therefore a question as to whether either body ought, in the exercise of reasonable care, to have identified the existence of the hazard.

17. [111]

    The case with respect to Precision is noted above: Precision’s submissions did not indicate any different understanding of the regulations. The case with respect to Endeavour depended upon whether its responsible employees ought in the exercise of reasonable care to have undertaken a risk assessment of a kind which would have identified the Telstra catenary line. The trial judge held that Endeavour ought to have carried out a ground-based inspection of the route. The reasoning, adopted from Telstra’s submissions, has significant elements of hindsight. It involved the proposition that, because the catenary wire could not readily be observed except from the ground, therefore a ground-based inspection was required.

18. [112]

    Although the trial judge set out the relevant provisions from the Civil Liability Act, in summarising Telstra’s submissions no reference was made to the structure of the reasoning which that legislation requires. Critically for this purpose, the Act requires that in assessing the burden of taking precautions to avoid a risk of harm, it is necessary to assess the burden of taking precautions “to avoid similar risks of harm for which the person may be responsible”. There was no evidence suggesting that the Inmans’ property was peculiarly subject to the risk which materialised. Indeed, there was evidence that the crew had identified an unmarked Telstra wire at an earlier time on the same flight. In the absence of evidence to the contrary, the judge was required to consider whether it would have been a reasonable precaution to require an officer from Endeavour to walk or drive along the route of every power line to be inspected.

19. [113]

    There was some evidence as to what might be treated as reasonable in the circumstances. Two aviation experts were called in the course of the proceedings, both of whom accepted that to detect the Telstra wire it would have been necessary to walk or drive along the power line before flying over it. The judge continued: [82]

20. [114]

    The evidence did not support a finding that such an inspection was a precaution that a reasonable operator in the position of Endeavour would have taken against the risk of harm which materialised. This Court was not directed to any other evidence which would support such a finding. Accordingly, Precision failed to establish a breach by Endeavour of a duty of care in this respect.

21. [115]

    Further, as the contract did not impose an absolute obligation on Endeavour, the contractual duty should be understood as similar in its terms to the duty of care. There was no breach of contract in this respect.

22. [116]

    As noted above, [84] the judge seems to have found that Endeavour was remiss in not making direct inquiries of Telstra as to what infrastructure it had in the area. (Given the large area to be inspected, and the possibility of other operators, that might not have been the full extent of the inquiries required.) The finding was made in the context of rejecting liability on the part of Telstra. However, in this Court Telstra suggested that this was also a finding “necessarily [with respect to] the nature and scope of any duty of care found against Telstra.” [85] Curiously, Telstra pleaded this as a particular of “contributory negligence” against Precision [86] but not, it appears, against Endeavour. Nor was there any express finding of such “contributory negligence” on this basis. There was a particular of negligence pleaded by Precision against Endeavour, in somewhat impenetrable terms, alleging a “failure to confirm/check with all relevant parties, including Telstra … the location/the positioning of hazards, aerial hazards, including catenary wires and/or other instructions….” [87] (This particular was pleaded back by Endeavour against Precision. [88] ) As between Endeavour and Mr Edwards, the trial judge found negligence in the failure of Endeavour to make inquiries of Telstra. [89]

23. [117]

    This finding should be accepted. Endeavour’s operational documents were emphatic as to the risks associated with other power lines and related hazards. The same concern should have extended to telephone wires which common experience would teach may follow similar routes over rural properties. An inquiry to the known owners of such infrastructure would have been an obvious precaution. The Court was taken to no evidence suggesting that such a course would have been impractical or unduly burdensome. Nor was it submitted that such a course would not have yielded relevant information. It would follow that Endeavour was in breach of its contractual and general law duties of care to Precision, with the result that this aspect of Precision’s claim for the loss suffered as a result of the destruction of its helicopter should be upheld.

(e) Liability for Edwards’ failure to wear a helmet

1. [118]

   A separate claim arose as to the responsibility of Endeavour or Precision (or both) for Mr Edwards’ failure to wear a helmet. Once it is accepted (contrary to the finding of the trial judge) that Precision’s liability with respect to personal injury is derived from and limited by the State Carriers’ Liability Act, this issue falls away. As it was fully argued and another view may be taken as to the basis of liability, the issue should be addressed. [90]

2. [119]

   There was no dispute between the parties that, as found by the trial judge, “the very severe head injuries which [Mr Edwards] suffered, including traumatic brain injury, would have been significantly or completely avoided if he had been wearing a helmet”. [91] It was also accepted by the trial judge that there were two helmets of a suitable type to be worn by a person carrying out Mr Edwards’ functions in the Precision refuelling truck which had met the helicopter prior to its last flight. The helmets had been left in the truck.

3. [120]

   The trial judge found that Endeavour did not supply its staff with helmets for low level flying, that such helmets were readily available and that Endeavour had no policy of providing helmets. The judge recorded that Endeavour did not submit that it was not negligent in failing to provide Mr Edwards with a helmet. [92] Rather, Endeavour’s case at trial, and on appeal, was that Precision also owed Mr Edwards a duty in this regard which it had failed to uphold.

4. [121]

   The trial judge found that the failure of the responsible officer of Precision “to inform Mr Carter [the pilot] and Mr Edwards (at the least) of the ready availability of helmets capable of being worn in the helicopter, involved a failure to take precautions with respect to a foreseeable and significant risk, in circumstances where a reasonable person in Mr Horne’s position would have taken these precautions”. [93]

5. [122]

   The judge nevertheless found that primary responsibility lay with Endeavour and that liability should be apportioned between Endeavour and Precision (in this regard) as 85% and 15%. On appeal, Endeavour sought to challenge that apportionment. By way of a cross-appeal, Precision challenged the finding of liability on its part. It also challenged the finding that any negligence on the part of its officer caused any loss.

6. [123]

   The claim against Precision derived from the responsibility of the pilot for the operation and safety of the aircraft “during flight time” and “the safety of persons … on the aircraft”, pursuant to the Civil Aviation Regulations, reg 224(2). So far as the wearing of helmets was concerned, the obligation on the pilot was said to arise from a general law duty of care, rather than from any specific regulatory requirement.

7. [124]

   In this respect Telstra referred to a document prepared by a State government agency, the Electricity Council of New South Wales, in 1991, entitled “Procedures for the Aerial Inspection and Patrol of Overhead Lines”. In its introduction, the document stated that it “specifies the need to inspect overhead lines in high fire prone areas annually, before the onset of the bushfire season.” It further noted that “[a]erial operations are fast and provide an effective method of line inspection and are not dependant [sic] on ground conditions and line access problems.” [94] With respect to safety equipment, the Electricity Council stated: [95]

8. [125]

   By 2001, an equivalent document was published by the Electricity Association of New South Wales. Although the guide contained a disclaimer that it did not “purport to ensure compliance with all relevant statutes and regulations, such as occupation health and safety laws”, [96] section 6, dealing with safety precautions, contained the following general statements:

9. [126]

   That material, combined with the unchallenged evidence of Dr Brock that had the plaintiff been wearing a helmet he would not have sustained “any long term head injury”, [97] amply supported the finding of the trial judge that both the operator of the helicopter and the employer of persons in the aircraft should have required that all crew and passengers engaged in low flying activities wear helmets.

10. [127]

    Precision had control of operational issues with respect to use of the helicopter and should, on that basis, bear a significant level of responsibility. That conclusion depends not merely on the effect of the Commonwealth regulation, but also on the contractual obligation contained within Endeavour’s procedural document known as GNV 1010. Reflecting the Electricity Association document noted above, section 6, headed “Authorities and Responsibilities”, stated:

11. [128]

    The helicopter was fitted with a safety harness for each occupant. The pilot’s control of the aircraft would have extended to ensuring that occupants used the available harnesses. Helmets were not a fitted feature of the aircraft, but their use was a safety feature of a similar kind to the harnesses. The authority of the pilot ran to control and direction with respect to all occupants of the aircraft. To the extent that he failed to carry out his duties in that regard, Precision was liable.

12. [129]

    With respect to Endeavour, the finding was, in substance, that it had a policy requiring the wearing of helmets, but took no steps to ensure that helmets were either available or worn. With respect to Precision, the pilot, Mr Carter, acknowledged he knew that it was Endeavour’s policy that helmets were to be worn but said that he “did not believe that [he] had authority to order any passenger to wear a helmet”. [98] The operations manager of Precision, Mr Andrew Horne stated that there were two helmets available in Precision’s refuelling truck and that he was aware that Endeavour’s employees were not wearing helmets on board Precision’s helicopters. [99] The pilot himself wore a helmet, apparently for radio communication purposes, as well as safety.

13. [130]

    The reasoning of the trial judge with respect to Precision’s liability tended to elide the distinction between liability and apportionment of responsibility. Thus, he noted that the pilot had “significant responsibilities” as pilot in command of the helicopter under reg 224 of the Civil Aviation Regulations. [100] With respect to the question whether that responsibility extended to the provision of helmets to occupants of the helicopter, the judge observed that the pilot, Mr Carter, had not been cross-examined about that matter, “let alone enforcing the wearing of helmets by all persons in the helicopter.”

14. [131]

    Any such cross-examination would have been relevant to matters of practice, but not to the scope of the legal duty. Nor, with respect to negligence, does the ignorance of the defendant preclude a duty arising if the defendant ought reasonably to have known that which was not known. Although the judge also said that Endeavour had not submitted that reg 224 imposed “responsibility” on Precision to enforce the wearing of helmets by all persons in the helicopter, [101] Endeavour did submit that reg 224 imposed responsibility for safety on the pilot and hence Precision. [102]

15. [132]

    The second step in the reasoning, focusing on Mr Carter’s knowledge, dismissed the availability of helmets in the refuelling truck as an irrelevant consideration, because Mr Horne had not informed Mr Carter of their availability. [103] However, if the knowledge of any person was relevant, it was the knowledge of Precision and not the particular knowledge of Mr Carter. Furthermore, if his responsibility as pilot extended to requiring occupants of the aircraft to wear helmets, it may have involved refusing to fly where helmets were not available or to an obligation to inquire as to the availability of helmets.

16. [133]

    The judge’s conclusion was that “the failure of Mr Horne to inform Mr Carter and Mr Edwards (at the least) of the ready availability of helmets capable of being worn in the helicopter, involved a failure to take precautions with respect to a foreseeable and significant risk, in circumstances where a reasonable person in Mr Horne’s position would have taken those precautions.” [104] It would appear that the duty of Precision was thus identified as a duty to inform Mr Edwards that a helmet was available. Unsurprisingly, given the limited nature of that finding, Precision challenged the next step in the reasoning, namely that the breach was causative of the harm. The judge simply stated in this regard that “[a] causal link is demonstrated by reference to factors in s 5D of the Act.” [105]

17. [134]

    The causal link, which was not in dispute, was between the failure to wear the helmet and the traumatic head injury. The relevant link for the purpose of establishing liability as found by the judge was between providing information that a helmet was available and the wearing of the helmet. There was some limited evidence that Endeavour’s employees had refused to wear helmets in the past, because they caused lack of peripheral vision and were dirty. [106] There was no evidence that Endeavour’s employees did wear helmets when they knew they were available, nor that they took steps to obtain helmets. Accordingly, there was substance in Precision’s complaint that the critical element in the chain of causation had not been established as more probable than not.

18. [135]

    Precision also contended that Dr Brock was speaking of a different sort of helmet from that available on the refuelling truck. However, this was an issue relating to a factual opinion expressed by an expert: it should have been the subject of cross-examination if it were to be relied upon. No mention was made of this distinction in the judgment, nor was this Court referred to the issue as having been raised before the trial judge. The challenge on that basis should be rejected.

19. [136]

    It is necessary to return to the content of the duty relied on by Endeavour. Endeavour submitted that if Precision ought reasonably to have known that helmets were necessary as a safety measure, it should have instructed its pilot accordingly. The pilot was in full control of the aircraft and had authority to insist that occupants wear helmets. Thus, Endeavour submitted, all the pilot had to say was “no helmet, no fly”. In this Court, Precision contended that such a case was not run below, referring to the statement of the trial judge at [187], which has been discussed above.

20. [137]

    Precision’s objection elides the number of distinct issues. First, the regulatory obligation with respect to safety did not in terms refer to the wearing of helmets. Endeavour conceded there was no regulatory obligation to require that helmets be worn. That, however, was not the issue: the issue was whether Precision owed a duty of care requiring it to “advise” occupants of the aircraft to wear helmets, to “promote” the wearing of helmets or to “require” the wearing of helmets. The second point of elision in Precision’s objection is between the content of the duty and causation. The pilot wore a helmet; there were two helmets in Precision’s ground refuelling truck; there was significant literature supporting the need to wear helmets. The somewhat imprecise evidence that Endeavour employees did not favour wearing helmets did not provide any firm basis to conclude that helmets would not have been worn had appropriate warnings been given by the pilot or other Precision staff and appropriate helmets had been made available.

21. [138]

    Accordingly, Precision’s objection that the case now sought to be pursued was not run below was at best an oversimplification. Precision went further, asserting that had it been run other evidence might have been adduced, calling in aid that a new issue cannot be raised on appeal where “evidence could have been given which by any possibility could have prevented the point from succeeding”. [107]

22. [139]

    That too involved a significant overstatement. In addition to the evidence set out above, one of the experts, Mr Mark Ogden, was expressly asked:

23. [140]

    His careful and detailed answer extended over four full pages. Given his expertise, his answers were not directed to a general law duty of care, but to the regulatory environment, having regard to the extensive evidence as to the safety value of helmets. Mr Ogden was questioned at the trial with respect to his answers in that regard. [109] Both experts agreed that “the pilot in command has a responsibility for the safety of persons and cargo on the aircraft; on being asked to assume that there were helmets in the refuelling truck, Mr Ogden gave evidence (with which Mr MacArthur-Onslow agreed) that, “if the pilot was aware that they were there in my opinion he should have offered them.”

24. [141]

    Precision’s objection to the manner in which the argument was formulated on appeal cannot be accepted in its absolute form. Further, Precision’s cross-appeal as to the finding of liability should also be rejected.

25. [142]

    It was not submitted that the role of the pilot identified in the regulation did not operate in the manner relied on by Endeavour. The recognition within the industry that low level aerial inspections by helicopters required the wearing of helmets by those on the aircraft, as a safety precaution, was sufficient to establish that element as part of the general law duty of care, a conclusion supported by the medical evidence in the present case. The state of knowledge expected of helicopter operators can have been no less than that expected of electricity suppliers. Accordingly, Precision and Endeavour both owed general law duties of care to supply helmets to occupants of helicopters used for this activity and to require that the helmets be worn. There is no doubt that both parties were in breach of that duty.

26. [143]

    There remains a question of apportionment. The apportionment of 85% against Endeavour, accepted by the trial judge, must have depended upon the nature of the duty identified by him. A duty in the terms noted above requires that apportionment be reconsidered.

27. [144]

    The high level of responsibility born by an employer towards an employee must be balanced against the immediate control of the operation of the aircraft in the hands of Precision. On one view, responsibility could be apportioned equally with respect to the failure to provide and insist on use of helmets. However, as with other aspects of apportionment, the parties should have an opportunity to put further submissions on that issue.

28. [145]

    There is a separate question as to how the loss should be apportioned. To the extent that either Precision or Endeavour may be found negligent on another basis, and to the extent that Telstra is also found to be liable in negligence to Mr Edwards, it is necessary to apportion responsibility by an accumulative assessment of the separate responsibilities on each account. Before undertaking that exercise it is necessary to address the entirely separate basis upon which both Precision and Endeavour alleged that the other was liable, namely what were described as navigational or aviation issues.

(4) Aviation issues

1. [146]

   The navigational or aviation issues concerned the responsibility of Precision, Endeavour (or both) for the direction in which the branch line was inspected. Endeavour alleged negligence on the part of Precision’s pilot, which is now primarily relevant to responsibility for the loss of the aircraft. Precision alleged that Endeavour was responsible for preparing adequate route plans

2. [147]

   The positioning of the inspector in the aircraft and the impossibility of flying to the east (on the left hand side) of the power line where it skirted the tree line, would have been apparent both to Mr Edwards and to the pilot. In that sense, the trees were a hazard to be avoided in identifying a route plan. It is apparent that “the preparation of route plans” was a responsibility of Endeavour under cl 5.1.2 of GNV 1010. That allocation of responsibly is clear from the requirement that power line over-crossings be “distinctively highlighted and identified on the plan and the location conveyed to the pilot and inspection crew.” It followed that the route plan had to be prepared by Endeavour, whether by the inspector or the observer, or, prior to the commencement of the flight, by some other officer. Accepting Endeavour’s argument that the safer course was to fly to the south end of the branch line and inspect on the return flight, the primary responsibility for specifying that route plan lay with Endeavour.

3. [148]

   Endeavour’s criticism of the pilot was put on two main bases. First, reliance was placed on the responsibility of the pilot to carry out “an aerial survey of the area to establish an optimum path and aircraft manoeuvring plan for the safe conduct of the operation.” That required, Endeavour submitted, that Mr Carter should have flown south along the line at a higher altitude, before undertaking a low level inspection, which would have involved flying back in a northerly direction. Such a step would not have involved any significant delay or use of additional resources. Further, Mr Carter had conceded in his evidence that the failure to undertake such a survey was “poor airmanship”. [110]

4. [149]

   Secondly, based on the expert evidence of Mr Ogden, it was preferable to remain on the west side of the line at all times if possible (which it was), because the ground on that side was reasonably level whereas the ground on the eastern side of the line, crossing the gully, was sloping. The west side was therefore preferable on safety grounds in case there was a need to land the aircraft in an emergency. Indeed, Mr Carter chose the western side to land after the tail rotor clipped the Telstra wire.

5. [150]

   This second point suggested poor airmanship for a reason which was unrelated to the accident. Thus, in terms of s 5B of the Civil Liability Act, to remain on the west side was to take a precaution against “a risk” of harm, but not the risk which materialised. On one view, that contention raised a question of causation similar to that considered recently in Wallace v Kam. [111] Thus, although the accident would not have occurred “but for” the helicopter crossing to the eastern side of the wire, the damage suffered may not have been within the scope of liability appropriate to that particular breach. [112] On any view, the matter was to be addressed on the basis of the foreseeability of harm, with specific attention to the terms of s 5B.

6. [151]

   If the precaution in question (staying to the west of the power line) was required in the exercise of a duty of care because of a risk of the need for an emergency landing, while such a risk might be foreseeable, for example because of engine failure, that risk was not shown to be significant (or “not insignificant”, in the language of the statute) and therefore did not involve negligence. That reasoning should be accepted.

7. [152]

   The real issue in the present case was that the branch line over the Inman property had not been marked on Endeavour’s maps or route plan and it seems likely that no assessment had been made of any risks involved. That was something for which Endeavour was responsible. Its failure involved a breach of its duty of care to the persons in the aircraft and to its owner.

8. [153]

   On the other hand, knowing that the flying operation was diverting from the known route plan, the pilot should have been conscious of the possibility of additional risks. It was on this basis that Endeavour’s claim of negligence on the part of Precision should be upheld.

9. [154]

   This conclusion does not depend upon the evidence of Mr Carter that what he did involved “poor airmanship”, a view which he accepted “in hindsight”. An assessment of the circumstances as they appeared to the relevant officers of each company, prior to the accident, was required. No doubt Mr Carter’s acceptance that it was poor airmanship to cross the power line was made with the benefit of hindsight, but it does not follow that this conclusion can only be reached by inadmissible hindsight reasoning. The preferable conclusion is that the lack of a route plan and the lack of prior consideration of possible hazards, required that the pilot proceed in a southerly direction along the general route of the power line before carrying out an inspection by returning in a northerly direction. His failure to take that course involved a breach of his duty of care to his passengers and the owner of the aircraft.

10. [155]

    Nor is this conclusion inconsistent with the evidence of the experts, who were ultimately not critical of the pilot in this respect. Read as a whole it is clear that their evidence was primarily directed to regulatory issues and (in respect of ground-based inspections) industry practice. Their evidence did not greatly assist in assessing breach of a general law duty of care.

11. [156]

    As a matter of fact, the inspection would have taken place with the aircraft on the left hand side of the line (heading north), because that would have placed the inspector next to the power line. Thus, the hazard would have been avoided, not because it would have been seen, the judge having found that it would not have been seen, but fortuitously. That in turn raises a question as to whether the requirement of causation would have been satisfied.

12. [157]

    Because, absent negligence the aircraft would not have proceeded to the eastern side of the power line, it may be said that the negligence was a necessary condition of the harm, thus satisfying s 5D(1)(a). There was a further question as to whether it was appropriate for the scope of the liability to extend to the harm which in fact materialised. [113] Unlike the proposed duty to remain on the west side of the power line because that was where the flat land lay (a duty unrelated to the risk which in fact materialised) the duty to fly over the area was directed specifically to avoidance of the particular harm, namely the presence of dangers to the aircraft, being the risk which in fact materialised. Unlike some of the examples discussed in the cases, the risk was not a product of the negligence, except in the sense that the risk was unknown. [114]

13. [158]

    On the other hand, it remains true that the reason the risk would not have materialised, but for the negligent failure to survey the route, was not because such a survey would have revealed the risk, but because the aircraft would in the ordinary course have remained on the western side of the power line.

14. [159]

    A similar problem arose in Curtis v Harden Shire Council, [115] a case involving a car skidding out of control on loose aggregate laid by the Council. In discussing whether the Council was liable for the loss of control, where it had failed to breached its duty to give adequate warnings, but the driver had arguably lost control as a result of inattention, I noted: [116]

15. [160]

    While the factors are finely balanced, in my view it was appropriate that liability for this negligence extend to the harm caused to Mr Edwards. While it may be true that the Telstra wire would not have been detected from the air because it was hard to see and the poles which supported it were not readily visible, it would probably not have been detected for quite a different reason. That is because, when flying south on an inspection flight, both Mr Edwards and the pilot would have been looking for hazards on the western side of the line, knowing that on the return trip they would fly close to the power lines but on the western side. In other words, the relevant duty of care involved inspection on the other side of the line from the hazard; there was no hazard on the western side and therefore the risk which materialised would not have been encountered.

16. [161]

    For that negligence, so far as it related to the harm suffered by Mr Edwards, both parties were partly responsible. Apportionment of responsibility is irrelevant with respect to personal injuries, given the cap on Precision’s liability in that regard. It will be relevant to the loss of the aircraft.

(5) Orders

1. [162]

   Precision’s liability with respect to the injury to Mr Edwards being limited by the State Carriers’ Liability Act obviates the need to consider whether the contractual indemnity extends to any amount in excess of the cap on Precision’s liability in respect of personal injury to a passenger. The first cross-claim by Endeavour with respect to Precision should be dismissed.

2. [163]

   The findings set out above involve the following elements of negligence:

3. [164]

   As between Endeavour and Precision with respect to personal injury liability, (c) is not relevant on the basis that Precision’s liability is strict, statutory (and capped). The exercise of apportionment remains to be undertaken, on the basis that both Endeavour and Telstra were negligent and their negligence was causative of the personal injuries suffered by Mr Edwards.

4. [165]

   Apportionment of liability on a just and equitable basis does not provide clear standards or permit precise calculation. It involves a weighing of various causative factors, resulting in relevant loss. One material factor is that the liability of Precision, in connection with the personal injury to Mr Edwards, is strict and not based on negligence. Unlike the calculation under s 151Z of the Workers Compensation Act, the cap on Precision’s liability does not mean that, in circumstances where other tortfeasors may be liable, the plaintiff will recover less than the full amount of his loss. Accordingly, the correct course may be to reduce the total damages by the share to be paid by Precision and then allocate the remaining loss between Endeavour and Telstra. The parties should have the opportunity to reach agreement as to apportionment or, in the absence of agreement, to provide succinct written submissions as to their respective proposals.

5. [166]

   Once apportionment has been determined, there will need to be a reassessment of the payments of contribution and the calculation required under s 151Z of the Workers Compensation Act, as between Endeavour and Telstra. Those calculations will also need to be undertaken by the parties.

6. [167]

   With respect to liability for the loss of the aircraft, based on findings (a), (d), (e) and (f), I would apportion liability between the three parties. However, a majority of the Court does not consider that the negligence identified in (e) and (f) was causative of loss; accordingly there was no relevant negligence on the part of Precision. The aircraft loss must therefore be apportioned between Endeavour and Telstra. The parties should have an opportunity to agree or provide written submissions in that regard.

7. [168]

   The final orders will not only require significant recalculation of the amounts involved, but also may require the revival of various cross-claims consequentially dismissed by the trial judge. The parties should have an opportunity to formulate appropriate orders to give effect to these reasons for judgment, by reference to the three appeals and the separate applications for leave to appeal.

8. [169]

   There will also need to be adjustments with respect to orders as to costs made below and an allocation of the costs of the parties in this Court. In the event that agreement is not reached, the parties should provide proposed orders and submissions in support with the draft substantive orders.

9. [170]

   The Court directs that, absent agreement reached within three weeks of the delivery of these reasons, the parties are to file and serve:

10. [171]

    MACFARLAN JA: Subject to one qualification, I agree with Basten JA.

11. [172]

    The qualification is that I agree with Sackville AJA that the negligence of Endeavour and Precision in relation to the “aviation issue” was not causative, in the legal sense, of the helicopter accident and therefore of Mr Edwards’ injury.

12. [173]

    I also agree with Sackville AJA's reasoning in relation to the other issues with which he deals.

13. [174]

    SACKVILLE AJA: This case demonstrates the astonishing complexities that can arise when several parties are alleged to have been at fault in an accident in which another person is injured. The complexities reflect, in part at least, the variety of apparently uncoordinated statutory regimes that can govern the liability of parties joined to the proceedings. The complexities can remain even if – as in this case – the plaintiff’s claims (and claims by his family members) have been resolved.

14. [175]

    I have had the great advantage of reading Basten JA’s judgment in draft. I agree with much of his Honour’s judgment, but I respectfully differ on some matters and there are others on which I wish to express my own views.

15. [176]

    I do not repeat the facts recounted in Basten JA’s judgment and I use the same abbreviations. I deal with the issues in the same order as his Honour.

Telstra’s Duty of Care

1. [177]

   Mr Fagan SC, who appeared with Mr Downing for Telstra, identified the relevant question in determining whether Telstra owed a duty of care to Mr Edwards, as follows:

2. [178]

   Mr Fagan submitted that the topography of the area where the accident occurred, in particular the steep slope of the land, made it highly unlikely that any helicopter would attempt to fly or land in proximity to the catenary wire. Even if a helicopter had to land to deal with an emergency on the ground, the pilot would not choose to bring the aircraft anywhere near the catenary wire. He contended that the prospect of someone flying in at an altitude low enough to collide with Telstra’s wire was therefore a far-fetched possibility and not reasonably foreseeable. It followed, so he argued, that Telstra did not owe Mr Edwards a duty to take reasonable care to prevent the catenary wire constituting a hazard to low-flying aircraft such as helicopters.

3. [179]

   Mr Fagan appeared to accept that the position would be different if Telstra had actual knowledge that Endeavour regularly carried out aerial inspections of the power lines in the area in advance of the bushfire season. He pointed out, however, that witnesses called by Telstra had given unchallenged evidence that they were unaware of any such activities. Moreover, it was common ground that Endeavour, although conducting extensive public awareness campaigns in the print media about its use of helicopters, [120] had given no explicit warning to Telstra about its intention to fly helicopters at very low altitude in the area. Indeed, the primary Judge found that “the notification scheme relied on by Endeavour was superficial and ineffective.” [121]

4. [180]

   In Grills v Leighton Contractors Pty Ltd, [122] Beazley P (Barrett and Gleeson JJA agreeing) referred to the observation of the High Court in Adeels Palace Pty Ltd v Mubarak [123] that ss 5B and 5C of the Civil Liability Act 2002 (NSW) (Civil Liability Act) are “evidently directly to questions of breach of duty” and that the heading to Div 2 of Part 1A of the Civil Liability Act (“Duty of Care”) is therefore “apt to mislead”. On this basis her Honour said that it is an error to determine the existence and content of a duty of care by serial reference to the provisions of ss 5B and 5C. Her Honour also said that it risks confusion to refer to s 5B in the context of determining the existence of a duty of care: [124]

5. [181]

   In Woolworths Ltd v Ryder, [125] a case cited by Mr Fagan, I set out a number of propositions which are consistent with the analysis in Grills v Leighton Contractors Pty Ltd. It is convenient to repeat the propositions here:

6. [182]

   The evidence showed that Endeavour had carried out inspections of power lines, including those of the Inmans’ property, in each of the three years preceding the accident. Nonetheless, I accept Mr Fagan’s submission that the existence or otherwise of a duty of care cannot be decided on the basis that Telstra was aware that a program of inspection of power lines by helicopter was regularly undertaken over or near the Inmans’ property by or at the behest of Endeavour. While it seems surprising that officers of Telstra were unaware of Endeavour’s practice, there was no affirmative evidence that they had actual knowledge of that practice. Nor was there any challenge to the evidence of the Telstra personnel who gave evidence that they were unaware of any inspection flights in the area. The evidence perhaps suggests a lamentable failure of communication between two large instrumentalities, but it does not establish on the balance of probabilities that Telstra had actual knowledge of the risk posed by its catenary wire to low flying aircraft carrying out inspections of power lines.

7. [183]

   Despite Telstra’s lack of actual knowledge of the risk posed to surveillance aircraft by the catenary wire, in my opinion the evidence clearly establishes that the class of injury sustained by Mr Edwards was reasonably foreseeable to an enterprise in Telstra’s position. As Basten JA has pointed out, [126] Telstra knew that there were power lines on the Inmans’ property in the vicinity of the catenary wire. If Telstra had known that Endeavour was using low flying helicopters to inspect power lines on the Inmans’ property, the risk posed by the catenary wire to pilots and passengers in the aircraft would have been manifest. But Telstra did not need that knowledge to appreciate that the catenary wire posed a risk of catastrophic damage if helicopters or other aircraft were deployed to inspect power lines in this way. It is hardly unknown in Australia for tragedies to occur when low flying aircraft, such as crop dusters or helicopters, come in contact with power lines.

8. [184]

   Unless Telstra made inquiries of the body responsible for the power lines, Telstra simply could not know whether or not aerial inspections of the power lines took place and, if so, how close to the ground aircraft would fly. In fact, if Telstra had made rudimentary inquiries or had ascertained matters of common knowledge in the electrical power industry, it would have learned that maintaining the catenary wire in position without taking precautions to prevent harm created a significant risk of catastrophic injury to persons conducting aerial inspections of power lines.

9. [185]

   Information was readily available to Telstra demonstrating that power lines were regularly inspected by air in New South Wales and that standard practice was for helicopters to come within a few metres of the structure being inspected. A document entitled Procedures for the Aerial Inspection and Patrol of Overhead Lines published in February 1991 by the Electricity Council of New South Wales stated that helicopters inspecting power lines could come as close as 5 metres to a power line and even closer in some circumstances. Similar statements were made in other publications. Thus the National Guidelines for Aerial Surveillance of Overhead Electricity Networks, published in 2006 by the Energy Networks Association, specified that the unrestricted aerial zone for rotary wing aircraft extended from five metres above the top of the structure or overhead line. I refer to these publications not for the purpose of addressing whether or not Telstra breached a duty of care, but in order to show that the risk posed by the catenary wire – that is, catastrophic injury to occupants of low flying aircraft – was not a far-fetched possibility, but a real risk that should have been foreseen by Telstra.

10. [186]

    Foresight of harm does not establish that a duty of care exists. The factors identified by Allsop P in Caltex Refineries (Qld) Pty Ltd v Stavar [127] provide a useful guide as to whether the circumstances in a particular case give rise to a duty of care, recognising that the list is non-exhaustive and that each case must depend on its own facts. The factors that are especially important in the present case are the hidden nature of the hazard constituted by the catenary wire, the vulnerability of Mr Edwards (and other occupants of low flying aircraft) to catastrophic injuries by the presence of the hazard, and the control exercised by Telstra over the catenary wire. These matters strongly suggest that it was reasonable to require Telstra to have in contemplation the risk of injury that eventuated. Accordingly, in my view Telstra owed a duty to Mr Edwards to take reasonable care to prevent harm by reason of the potential proximity of the catenary wire to low flying aircraft, including helicopters.

11. [187]

    For these reasons I agree with Basten JA that the primary Judge erred in holding that Telstra owed no duty of care to the occupants of the helicopter or to its owners and operators.

Telstra’s Breach of Duty

1. [188]

   I agree with Basten JA for the reasons given by his Honour that Telstra breached the duty of care that it owed to the owners, operators and occupants of the helicopters.

Mr Edwards as a Passenger

1. [189]

   I also agree with Basten JA that Mr Edwards was a “passenger” in the helicopter within the meaning of s 4 of the Civil Aviation (Carriers’ Liability) Act 1967 (NSW) (State Carriers' Liability Act) and that therefore Precision’s liability in respect of the accident was capped by s 31 of the Civil Aviation (Carriers’ Liability) Act 1959 (Cth). I wish to add the following brief observations on this issue.

2. [190]

   The submissions on behalf of the Edwards contended that whether Mr Edwards was to be regarded as a “passenger” within the meaning of s 4 of the State Carriers’ Liability Act depended on the terms of the Services Agreement between Precision and Endeavour (then known as Integral Energy Australia). The terms of the contract, specifically the allocation of responsibilities between the pilot, the observer and the inspector, are relevant to determining whether Mr Edwards was a “passenger” in the relevant sense. But the critical issue is the meaning of the word “passenger” in s 4. The resolution of that issue is not necessarily to be determined by the language of the contract. The parties to a contract may choose, for example, to use the word “passenger” in a sense that does not correspond to its meaning when understood in its statutory context.

3. [191]

   It is true that the contract stated that the “flight crew will normally consist of the pilot, an observer to assist the pilot, and an inspector”. The contract did not purport, however, to address whether the observer was a “passenger” for the purposes of the State Carriers’ Liability Act.

4. [192]

   Moreover, the words “crew” and “passenger” are not necessarily mutually exclusive. “Crew” is capable of a variety of meanings. The word can mean “the persons operating an aircraft in flight” (Macquarie Dictionary), although that definition leaves open the meaning of “operating”. It can also mean a “group of people engaged upon a particular work”. While it may have been accurate enough to describe the observer as a member of the flight crew for certain purposes, that did not exclude him from being a “passenger” within s 4 of the State Carriers’ Liability Act. For the reasons given by Basten JA, which reflect the approach of the House of Lords in Fellowes (or Herd) v Clyde Helicopters Ltd, [128] Mr Edwards was such a passenger.

Claims Between Endeavour and Precision

1. [193]

   I agree with Basten JA that:

2. [194]

   I also agree with Basten JA that Precision has a claim against Endeavour for contribution or damages by reason of Endeavour’s failure to ask Telstra where its lines were located, before Endeavour carried out the aerial inspection of its own power lines in the area. There was some evidence suggesting that Telstra maintained a database identifying the location of lines in its network. In any event, it is hardly to be supposed that Telstra, if asked, would have been unable or unwilling to identify the location of its lines, including the catenary wire. On the balance of probabilities an inquiry of Telstra would have revealed the location of the catenary wire and avoided the accident.

The Helmet Issue

1. [195]

   I agree with Basten JA that Endeavour and Precision each breached its duty of care to Mr Edwards by failing to take reasonable steps to provide a helmet and to instruct or warn him, as the case may be, that while flying he should wear the helmet in the interests of safety. I also agree that the failure to exercise care in each case was causative of the injuries sustained by Mr Edwards.

Precision’s Aviation Liability

1. [196]

   In my opinion, Mr Carter’s election to inspect the power lines while travelling in a southerly direction and to the east of the lines did not involve any breach of duty causative of loss to Mr Edwards. Endeavour and Telstra argued that Mr Carter should have flown south at a higher altitude in order to conduct a survey of the topography and then flown north to inspect the power lines, travelling to the west of those lines. The survey was required in the exercise of reasonable care, so it was submitted, because Endeavour had not provided Precision with an appropriate flight plan.

2. [197]

   I am prepared to assume that in the exercise of reasonable care Mr Carter should have conducted a high level survey of the area before inspecting the power lines, although the experts were by no means clear that his actions were unreasonable. However, the primary Judge found [129] that if Mr Carter had conducted a high level survey before inspecting the power lines, the survey would “not have provided any practical assistance at all”. This finding was soundly based on the evidence, since the experts agreed that it was most unlikely that an aerial survey would have revealed the existence of the catenary wire.

3. [198]

   It may be that if Mr Carter had conducted the aerial survey, the helicopter would not have followed a path to the east of the power lines that brought it into contact with the catenary wire. But that does not mean that Mr Carter’s breach of duty was a cause of the injuries sustained by Mr Edwards. Whether Mr Carter’s negligence caused Mr Edwards’ injury depends on the application of ss 5D and 5E of the Civil Liability Act, which relevantly provide as follows:

4. [199]

   In Wallace v Kam, [130] the High Court emphasised the distinction between the separate requirements in s 5D(1) of the Civil Liability Act of factual causation and scope of liability. Their Honours stated that: [131]

5. [200]

   The primary Judge made no finding that if the pilot of the helicopter had conducted a high level survey, the route taken to inspect the power lines would have avoided the area on which the catenary line was located. Basten JA finds that had a high level survey been conducted, the pilot would have first flown the helicopter to the south. He then would have turned to the north and conducted the low level inspection by flying north along the western side of the power lines. Basten JA infers that this would have been the route taken because the inspector would have been sitting in the right hand seat and would have inspected the power lines by looking to his right. On this hypothesis, the assumed negligence of Precision was a necessary condition of the harm suffered by Mr Edwards. This is so because had Precision not negligently failed to survey the route, the helicopter would not have flown to the east of the power lines. Thus the aircraft would have avoided the catenary wire (located to the east of the power lines) and the accident would not have occurred.

6. [201]

   As was pointed out in Wallace v Kam, [132] the normative question posed by s 5D(1)(b) of the Civil Liability Act is to be answered through the application of precedent. In a novel case, however: [133]

7. [202]

   It is not necessarily easy to make the judgment required in a novel situation. In the present case, the key finding is that even if the pilot had acted with due care and conducted a high level survey prior to inspecting the power lines, neither he nor Mr Edwards would have discovered the existence of the catenary wire. As it happens, insofar as there was a possibility of an unmarked catenary wire creating a hazard in the vicinity of the power lines, the unmarked line could have been located to the west of the power lines (rather than its actual location, to the east). In any event, on the primary Judge’s findings a high level survey would not have detected the catenary wire.

8. [203]

   The object of conducting a high level survey before inspecting the power lines, as due care required, was to detect hazards creating a risk of injury to passengers in the helicopter. But discharge of that duty could only detect hazards observable through the high level survey. To impose liability on Precision when the exercise of due care could not have detected the hazard would be to hold it responsible for the materialisation of risks that the exercise of due care could have done nothing to avoid. If, for example, the catenary wire had been located on the western side of the power lines, the accident could have occurred even if Precision had acted with due care. In this situation, Precision would not be held liable. As a matter of legal policy, it is difficult to see why Precision should be held liable for a breach of duty that was unrelated to its failure to detect the hazard that materialised.

9. [204]

   The fact that the catenary wire would have been avoided had the pilot conducted a high level survey was a fortuitous by-product of the way such a survey would have been conducted. The selection of the route to conduct the (hypothetical) inspection of the power lines would have been unconnected with anything that a properly conducted aerial survey could have discovered. As I have noted, the catenary wire (or any other undetectable hazard) could just as easily have been located to the west of the power line as to the east.

10. [205]

    For the same reasons, I do not think that Endeavour’s failure to propose a route plan caused (in the relevant sense) the injuries to Mr Edward. The preparation of a route plan would not have enabled Mr Carter to detect the catenary wire or to be aware of the hazard it presented. The risk that materialised was one which was beyond the scope of the duty of Precision and Mr Carter to avoid harm to the pilot and passengers of the helicopter by the exercise of reasonable care. [134]

Orders

1. [206]

   As Basten JA has indicated, [135] the findings I have made involve the following elements of negligence:

2. [207]

   I agree with Basten JA that directions should be made for the parties to file written submissions dealing with the issues his Honour has identified.