Zheng v Australian International Aviation College Pty Ltd

The plaintiff, Shenglong Zheng (“Mr Zheng”), brings proceedings against the first defendant, the Australian International Aviation College (“the AIAC”), for personal injury damages arising from the first defendant’s alleged negligence. The proceedings also involve the second defendant, Canaan Lawyers Pty Ltd, and a cross-claim brought by the first defendant against Mr Zheng’s employee, Hainan Airlines Holding Co Ltd (“Hainan”). However only the plaintiff and the AIAC were involved in the two Notice of Motions which are the subject of this judgment.

Proceedings were commenced in the District Court in March 2021 and were transferred to the Supreme Court in 2022. The plaintiff filed a Second Further Amended Statement of Claim on 14 March 2023.

In the circumstances discussed below, Mr Zheng suffered serious personal injuries whilst a student pilot when the aircraft in which he was flying crashed to the ground.

The plaintiff alleges that the first defendant is liable for negligent acts and omissions, in particular the alleged inadequate training of the flight instructor and inadequate flight handling procedures, together with inappropriate controlling of the aircraft by the flight instructor, for whom the first defendant is vicariously liable. The plaintiff alleges this negligence caused the plaintiff’s injury, loss and damage.

In its Defence, the AIAC admits that its employee, the flight instructor, had control of the aircraft at all relevant times, and that the aircraft collided into trees on the ground. It admits some but not most of the details of the flight. It does not admit the details of what the instructor did from shortly after take-off, nor does it admit the details of how the aircraft behaved between take-off and the collision with the trees. It denies breach of duty and negligence. It pleads various limitation defences.

In 2017, the plaintiff was a cadet pilot employed by Hainan and, as part of his employment, he was undergoing flight training conducted by the first defendant at Port Macquarie Airport.

On the evening of 8 September 2017, the plaintiff was being trained by a flight instructor who the plaintiff pleads was employed or otherwise engaged by the AIAC. Shortly after take-off, the aircraft with the registration number VH-YPQ crashed into trees approximately one kilometre from the airport. The plaintiff pleads that this occurred after the flight instructor noticed changes within the engine sound, changes to acceleration, and observed fluctuating indication on the engine load. The plaintiff alleges the instructor sought to initiate a turn-back to the runway but the aircraft descended and collided into trees.

On the evening of 10 September 2017, investigators from the Australian Transport Safety Bureau (“the ATSB”) arrived at the site of the accident to commence investigations.

On 11 September 2017, the ATSB formally requested the AIAC to produce material pursuant to s 32 of the Transport Safety Investigation Act 2003 (Cth) (“the TSI Act”), including downloaded Engine Control Unit (“ECU”) data and documents held by it.

On 12 September 2017, the College’s Chief Pilot and Chief Flying Instructor, Kevin McMurtrie, advised the ATSB by email that he had received the ECU data from the engine manufacturer. The email stated:

On that day, the ATSB then issued an additional request under s 32 of the TSI Act for the “full maintenance records” of the aircraft.

On 20 September 2017, Mr McMurtrie provided to the ATSB:

On 24 September 2017, the College completed its own investigation of the accident and prepared the “Accident Report and Operational Recommencement Plan” (“the AIAC Report”). It will be appropriate to refer to this report in detail later in this judgment.

On 25 September 2017, the first defendant provided the AIAC Report to the Civil Aviation Safety Authority (“CASA”) in an email stating:

On 26 September 2017, CASA responded saying:

On 12 October 2017, CASA completed its audit of College’s operations and produced a Surveillance Report. The Surveillance Report included the following statement:

The reference in that Surveillance Report to the “operator” is a reference to the AIAC which was the holder of the relevant Air Operator Certificate.

On 23 October 2017, which was about a month after it had been prepared, Mr McMurtrie advised the ATSB by email that the AIAC had prepared the AIAC Report and noted that it had been provided to CASA. Mr McMurtrie’s email included the following:

The email noted that the Report had already been provided to CASA and AIAC’s parent company, HNA General Aviation Group. The email requested that the ATSB make “… a formal request for the information from me …”.

Mr McMurtrie also told the ATSB in that email that some sections of the Report were being updated with additional material (including material about additional training sessions conducted by the AIAC) regarding in-flight partial‑power loss exercises and procedures.

A little over three hours later, the ATSB sent, by return email, a formal “Request for Interview and/or Relevant Material” contained on a form “F32-1” seeking a copy of the AIAC Report.

On 2 November 2017, a Preliminary Report was published by the ATSB.

On 30 June 2020, the ATSB published its Final Report of its investigation findings (“ATSB Report”). At least by that time (if not earlier), the ATSB investigation had been completed.

On 1 March 2021, Mr Zheng commenced proceedings against the AIAC.

On 7 October 2021, the solicitors for Mr Zheng issued a subpoena for the production of documents to CASA. On 20 October 2021, CASA, in response to the subpoena, produced documents, which included the AIAC Report. On 29 October 2021, general access was granted by the Registrar of the District Court to the documents produced by CASA. Neither CASA nor AIAC took objection to general access being granted.

On 9 November 2021, Mr Zheng’s solicitors provided a copy of the AIAC Report to an aviation expert, Mr Bruce Simpson, for the purpose of preparing an expert report. Mr Simpson provided his report (“the Simpson Report”) to Mr Zheng’s solicitors on 30 November 2021. On 1 December 2021, Mr Zheng’s solicitors served the Simpson Report on the AIAC, intending to rely upon its contents as part of the plaintiff’s case.

On 3 May 2022, Mr Zhang’s solicitors served on the AIAC a Notice to Admit Facts and Authenticity of Documents seeking admission of the facts of the accident, the contents of the flight manuals, and the authenticity of extracts from the AIAC’s flight manuals. On 12 May 2022, the AIAC’s solicitors served a Notice Disputing Facts in which all facts were disputed except for those relating to the contents of the flight manuals and the authenticity of the flight manuals.

Mr Zheng filed an Evidentiary Statement dated 7 December 2022, which included a copy of the AIAC Report in the exhibit bundle.

On 28 February 2023, the AIAC’s solicitors wrote to Mr Zheng’s solicitors raising objections to the admissibility in evidence of a number of the annexures to Mr Zheng’s Evidentiary Statement.

The AIAC’s solicitors objected to the admissibility of each of the ATSB’s preliminary and Final Reports. They also objected to the admissibility of the AIAC Report of 24 September 2017. In respect of this report, the solicitors wrote:

The asserted basis for that view was the understanding of the AIAC that its Report fell “… within the definition of ‘restricted information’ …” of the TSI Act.

On 3 May 2023, Mr Zheng’s solicitors responded to the letter from the AIAC’s solicitors. The letter included the following:

Thereafter, extensive further correspondence has been exchanged between the parties regarding the issue of the admissibility of the AIAC Report.

On 23 May 2023, Mr Zheng’s solicitors wrote to ATSB asking whether a certificate under s 60(5) of the TSI Act was required in relation to any restricted information contained in the AIAC Report to enable disclosure of such information.

On 8 June 2023, the ATSB Principal Lawyer responded stating that the ATSB did not disclose any restricted information to the AIAC and that a copy of the AIAC Report was not subject to the non-disclosure requirements of the TSI Act. The letter from the ATSB to Mr Zheng’s solicitors included the following:

On 14 June 2023, Mr Zheng’s solicitors provided a copy of the ATSB letter to the AIAC’s solicitors.

On 10 July 2023, the AIAC’s solicitors wrote to the ATSB Principal Lawyer asking whether the AIAC Report, having been requested by the ATSB and it having been provided to the ATSB on that basis, is therefore protected as restricted information.

On 27 July 2023, the ATSB’s principal lawyer responded and referred the solicitors to ss 60(2) and 60(8) of the TSI Act as to specific persons to whom the provisions of the TSI Act applied. The letter from the ATSB to the first defendant’s solicitors included the following:

On 22 February 2024, Mr Zheng filed a Notice of Motion seeking:

I note that the Motion refers to s 192 of the Evidence Act, however Mr Zheng likely intended to refer to s 192A of the Evidence Act, which is the provision applying to advance rulings on admissibility of evidence. This correction is consistent with the plaintiff’s submissions.

The plaintiff’s Motion is supported by the two affidavits of Bradley Hayward affirmed 22 February 2024 and 14 June 2024, and the exhibits to those affidavits.

On 29 February 2024, the first defendant filed a Notice of Motion seeking:

The first defendant’s Motion is supported only by the affidavit of Mark Gray‑Spencer sworn 8 April 2024, which was not suggested to be a confidential one, notwithstanding the terms of Order 1 and Order 4 sought in the Motion.

It can be seen that the central common issue between the two Motions is whether the AIAC Report contains “restricted information” within the meaning of the TSI Act which would have the consequence that the Report itself and the contents of it are inadmissible. The further common issue is whether, if that is so, it would ineluctably follow that the Simpson Report would also be inadmissible.

For the purpose of determining the two Motions, the Transport Safety Investigation Act 2003 (Cth) is the essential legislation. The relevant provisions are:

It is necessary, in advance of considering the submissions, to pay particular attention to this Report. It was written by Mr Kevin McMurtrie who held the position of Head of Operations into the AIAC. He was also the Chief Pilot. The report is dated 24 September 2017 – i.e., a little over two weeks after the aircraft crash.

It is also important to note the title of the AIAC Report, which refers to the fact that it contains both an accident investigation and a plan for the recommencement of flying operations which had ceased at the AIAC immediately upon the accident happening.

The Report contains references to factual material of various kinds, from various sources, which it is appropriate to describe:

Based upon this material, the Report then contained a “Safety Analysis” which included a reference to two checklists which were part of the AIAC’s Handbook and also part of the aircraft flight manual. These are freely available documents.

The Report then contained a part entitled “Findings” which were described as “preliminary findings” because of limits on the technical capability of personnel at the AIAC.

After the “Findings” were described, a “Safety Message” followed. The final part of the report is under the heading “Recommencing Flying Operations”. In this part of the Report, the following appears:

The description of the investigation undertaken by the AIAC was in these terms:

The Report went on to note that the flying operations would recommence in identified models of aircraft on 27 September 2017 (i.e., four days after the report was written). It then set out the sequence for the recommencement of the various types of flying operations. The Report noted that:

The Report recorded a risk assessment of the decision to resume these flying operations. It noted that the probability level of AIAC being exposed to a similar type of event as the aircraft collision, the subject of the Report, was determined to be “… Possible – unlikely, but possible to occur, with a risk level assignment of C”.

The ultimate risk score was 4C, which was reached after considering that the possible consequences of the risk of the accident as major: extensive injuries, loss of production capability. The AIAC report concluded that the risk score of 4C was an acceptable level of risk with mitigation. It noted that AIAC had put into place “all of the appropriate risk mitigation safeguards ...”.

Various documents and audio files were annexed to the report.

As noted earlier at [18], the existence of the AIAC Report was first made known to the ATSB by an email dated 23 October 2017 sent by Mr McMurtrie to the ATSB about one month after it had been produced.

As noted at [21] and [22], the AIAC requested the ATSB to issue a formal request, and a copy of the Report was then provided.

Some remarks may be made about the Report. First, the Report was not prepared at the direction or request of the ATSB. Secondly, the Report contained the results of broad-ranging enquiries made by Mr McMurtrie and staff at the AIAC of a number of third parties. Thirdly, it is clear that the author of the Report was not suggesting that the Report and the investigations which it undertook, and the conclusions at which it arrived, were in any way a part of the ATSB report. To the contrary, the Report disclaimed any connection with the independent investigation of the ATSB and any reports which it may prepare and release.

Fourthly, flying operations were suspended at the AIAC as a consequence of the accident. It is clear that the staff at the AIAC, and the commercial imperative of resuming flying operations – thereby enabling the ongoing training and ultimate qualification of student pilots – meant that Mr McMurtrie thought it best for CASA to be reassured that any further operations involving the aircraft of the type involved in this crash, would be at an acceptable level of safety.

Fifthly, any such reassurance could only be given if the AIAC first identified, to the extent that it could, and formed a view about, what had caused, or else led to, the particular crash.

Finally, given that the AIAC Report is entirely separate from, and independent of, the ATSB investigation and report, and given that, as is conceded in the course of the AIAC Report, there was a limitation on the investigations by reason of preliminary findings being made on the basis of a limited level of technical capability available to AIAC personnel, the principal purpose of the Report was not to enable a final concluded view to be formed about the cause of the aircraft crash but, rather, was to enable flying operations to be resumed and, to the extent that approval or acquiescence was required so to do from CASA, that such would be forthcoming.

The AIAC submitted that the relief it principally sought was by way of Order 2 in its Notice of Motion, namely that there be an order of the Court determining the AIAC Report was restricted information, with the consequence that it was not to be published.

Alternatively, it sought a pre-trial ruling pursuant to s 192A of the Evidence Act that the AIAC Report was not admissible, and any expert report, such as the Simpson Report, was also inadmissible.

The first defendant submits that upon the proper construction of the TSI Act, in order to allow the ATSB to carry out its function of freely and fully investigating any transport accident, or transport safety event, the underlying premise is that there is an overriding public interest in allowing the ATSB to have extraordinary power to investigate “transport safety accidents” with a view to enhancing the safety of transport as opposed to attributing blame to a person or body for causing the accident.

The first defendant notes that it is not the function of the ATSB to

The first defendant submits that to ensure the TSI Act is effective, the definition of restricted information as applied in s 60 of the TSI Act should not be narrowly construed or read down. The defendant reasons that the purpose of the TSI Act would be undermined if “restricted information” only included material which was actually in the possession of the ATSB, and not copies of that material which were lawfully in the possession of third parties (either as a draft or a copy of the final version of a document provided to the ATSB) because the extent to which “industry participants would be willing to assist the ATSB …” would be lessened.

The first defendant also made submissions about the effect of ss 60(6) and 60(7) of the TSI Act, contending that these are powers available to the Court which are not dependent upon the issuing by the ATSB of a Certificate under s 60(5) of the TSI Act, but rather are stand-alone powers.

Further, by reference to particular items of information contained in the AIAC Report, the first defendant submitted that for various reasons those items fell within the definition of restricted information. In short form, those items were:

The defendant’s submissions were careful, detailed and lengthy. It is not necessary to recount each of those submissions in detail here, each of them has been carefully considered.

Mr Zheng submits that properly construed, the provisions of s 60 of the TSI Act have no application to the copy of the AIAC Report obtained by the plaintiff, used for the preparation of the Simpson Report and intended to be tendered in evidence. The result of this conclusion is that the AIAC Report is not inadmissible by reason of any provisions of the TSI Act and, in particular, s 60(8) of that Act.

Mr Zheng notes that the copy of the AIAC Report was obtained by the issue of a subpoena on 7 October 2021 addressed to CASA. CASA produced a copy of the AIAC Report and access to it was granted without objection by either CASA or the AIAC. He noted that a copy of that document was provided to Mr Simpson for use in the preparation of his report. Mr Zheng submits that in considering the provisions of the TSI Act, it is important to note that the offence provisions in ss 60(1)-(3) apply only to four classes or categories of people, namely, an ATSB Commissioner, an ATSB staff member, an ATSB consultant, or else a non-staff member of the ATSB authorised under s 62 of the TSI Act to have access to restricted information “… where the ATSB considers that it is desirable or necessary to do so”.

It can be seen that the central common issue between the two Motions is whether the AIAC Report contains "restricted information" within the meaning of the TSI Act which would have the consequence that the Report itself and the contents of it are inadmissible. The further common issue is whether, if that is so, it would ineluctably follow that the Simpson Report would also be inadmissible.

The plaintiff draws attention to the the category of people who are the subject of the criminal offences. He submits that there can be no such criminal offence here, with any consequential admissibility because the copy of the AIAC Report was provided to the plaintiff by CASA on subpoena. The plaintiff notes that neither he nor Mr Simpson, the expert, fall within the description of the categories of people referred to in [72]. It follows, the plaintiff submits, that if there is no offence committed by the disclosure or use of restricted information, then there can be no question of inadmissibility.

The plaintiff also submits that the issue of admissibility is determined with respect to the information contained in the copy of the AIAC Report because of the definition of restricted information only applies for the purpose of s 60 of the TSI Act, with the consequence that it is confined to the conduct of an investigation under the TSI Act.

The plaintiff notes that the only question of inadmissibility of restricted information in terms is to be found in s 60(8) of the TSI Act. The plaintiff submits that upon a proper construction of the Act, ss 60(6), (7) and (8) only operate where the ATSB has issued a Certificate in relation to restricted information in accordance with the terms of s 60(5) of the TSI Act. The plaintiff submits that it is not possible to construe the sub-sections dealing with inadmissibility of material as stand-alone powers by which a party could apply to a court for an appropriate ruling. The plaintiff submits that the broad approach contended for by AIAC does not correctly reflect the proper interpretation of the Act.

The plaintiff further submits that the Court, when considering the contents of the introduction to the AIAC Report and the assertions by Mr McMurtrie in email and other correspondence, claiming that the contents of the AIAC Report constituted restricted information are self-serving statements and are misguided. The plaintiff submits that this is a complete misapprehension as to how the TSI Act is to be interpreted.

Putting it briefly and in summary, the plaintiff submits that in circumstances where he has made use of a document obtained under subpoena without objection at the time access was granted, and without any objection until 14 months after service of the Simpson Report by the AIAC, there is simply no applicable contravention of s 60, and in those circumstances because s 60(8) of the TSI Act has no work to do, the Simpson Report is not inadmissible in these proceedings, nor is the AIAC Report. In those circumstances, the plaintiff urges a ruling in advance of the trial with respect to the admissibility of the two Reports.

The Court needs to first consider whether it ought give a ruling in accordance with s 192A with respect to the admissibility of the evidence of the documents proposed. Section 192A has an important role in the facilitation of efficient case management. The use of s 192A is a discretionary case management decision. As with other case management decisions, the question for the Court is whether a decision of the kind sought would accord with the overriding purpose set out in s 56 of the Civil Procedure Act 2005 of facilitating the just, quick and cheap resolution of the real issues in dispute.

Having regard to the arguments put by each of the parties, it is inevitable that a ruling will need to be made in due course in respect of the admissibility of the evidence insofar as the provisions of the TSI Act are concerned.

I am also satisfied that an advance ruling in this case will assist with the efficient conduct of the final hearing and will give AIAC an opportunity to decide whether it wishes to retain an expert to give evidence contrary to the Simpson Report, or whether it accepts the content of the Simpson Report and, accordingly, whether any need for cross-examination of experts would arise. It also needs to know whether the AIAC Report is to be admitted so as to determine what course it will take in the defence of allegations of negligence. I am satisfied that I should exercise the relevant discretion and make a case management decision to give a ruling on the competing arguments about the admissibility of the disputed documents.

I reject the submissions of the AIAC that, upon the proper construction of the TSI Act, the AIAC Report is inadmissible and, further, that the Simpson Report by reason of its reliance upon the AIAC Report, or information within it, is also inadmissible.

The AIAC Report came into existence and was written, I am satisfied, for the purpose of informing CASA and the parent company of the AIAC, HNA General Aviation Group, of the steps which had been taken to establish, at least by way of preliminary findings, how the aircraft accident occurred, and what steps needed to be taken before recommencing flying operations at a level of risk which was regarded as an appropriately safe one. Mr McMurtrie, whom I note did not give any evidence in the proceedings before me, made it plain in writing that his purpose in providing CASA with the report was because the AIAC “view CASA as an important stakeholder in our operation”. He asked CASA to review the plan and “make any suggestions on any aspect that we may not have considered or overlooked”. The provision of the Report to CASA related to the safety steps that Mr McMurtrie regarded as appropriate for recommencement of flying operations. It was not intended to inform CASA of any concluded findings about the cause of the plane crash.

The recommencement of flying operations was an obviously commercial imperative. That is why Mr McMurtrie sent the AIAC Report to its parent company.

The information in the report did not come from the ATSB. The information in the AIAC Report was garnered from the sources referred to earlier at [48]. The ATSB did not provide any information of any sort to the AIAC which was included in the Report. To the contrary, AIAC provided information by email to ATSB that the AIAC Report existed, and volunteered, subject to the appropriate formal request, to give that document to the ATSB. Any information provided by the AIAC to the ATSB was provided pursuant to formal requests under s 32 of the TSI Act. The information which was provided was in the hands of the ATSB, and provided that it was being used (as it was) for the purposes of the investigation into the aircraft collision, “restricted information”. The TSI Act precluded any officer of the ATSB or anyone falling within the four categories of individuals, the subject of the offence provisions of s 60 of the TSI Act, from disclosing the information as set out in s 60.

The copies of the AIAC Report, in the possession of each of the AIAC, CASA and HNA General Aviation Group, were not “restricted information”.

There is no suggestion that any ATSB person (i.e., within the four categories of individuals prohibited from disclosing information) has disclosed information to the plaintiff, or in any other way.

No Certificate under s 60(5) has been issued by the ATSB with respect to restricted information. On the contrary, as is plain from correspondence, the ATSB does not regard the AIAC Report, or its contents, as restricted information.

A reading of ss 60(6)-60(8) of the TSI Act demonstrates that the inadmissibility of any document arises when the Court exercises its power under those sections, but only once a Certificate is issued under s 60(5). The use of the phrase “the information” contained in s 60(5) is repeated in the subsequent sections in a way which demonstrates that the section envisages that where the ATSB allows disclosure of information on the basis that it is not likely to interfere with any investigation, there is nevertheless an ability of the Court to restrict the way in which that information is used in court proceedings.

The scheme of that part of the legislation, is that the ATSB first considers whether it should issue a Certificate expressing its conclusion in relation to restricted information (which it would need to identify), about the likelihood of the disclosure of such information interfering with any investigation. Where a Certificate is issued and is then produced in court proceedings, s 60(6) requires the Court to undertake a balancing exercise as to whether the disclosure of that information and any adverse impact is outweighed by the public interest in the administration of justice. In considering that balancing exercise and whether it should order such disclosure, the Court may direct the way in which the information may be published or communicated, and provides a provision that where the information is used by a person prohibited from disclosing the restricted information, then the material is inadmissible.

There is no basis for accepting the AIAC’s submissions that this is a stand‑alone power capable of being used in the way in which it proposes.

In summary, I am not satisfied that the AIAC Report itself constitutes restricted information, nor that any of the contents of it constitutes restricted information except in the hands of the ATSB. AIAC, on the basis that it was so entitled, provided the AIAC Report to CASA and others. It did not regard the provision of such a report at that time as being in breach of any restriction in s 60 of the TSI Act. Clearly, the AIAC did not fall within the description of the classes or categories of persons contained within s 60(1)—s 60(3), including s 62 of the TSI Act.

The AIAC seeks to prevent the plaintiff from using the material freely provided by it to CASA by means of the AIAC Report. In so doing, I am satisfied that it is seeking to extend the reach of the TSI Act far beyond that which, upon its proper construction, is warranted.

It follows that both the AIAC Report and the Simpson Report are not inadmissible by reason of the provision of the TSI Act.

It is appropriate to make an advanced ruling under s 192A of the Evidence Act.

Having regard to the nature of the issues considered, and the need for the particular finding under s 192A of the Evidence Act to be precise, it is appropriate for the parties to be directed to bring in short minutes of order.

I see no reason why costs should not follow the event. I will make an order that the AIAC pay the plaintiff’s costs of both Notices of Motion.

I make the following order: