Australia: Transport & Logistics News - June 2016 (Part 2)

In brief - Local and international news about aviation and road transport

In part two of this issue, we cover local aviation and road transport news and summarise some interesting aviation and road transport cases from Australia and around the world which have been handed down in the last eight months.


New regulations for drones

Regulations have recently come into force in Australia to update the safety regime applicable to remotely piloted aircraft (RPA), a term which replaces the previous term "unmanned aerial vehicle", for "drones" as they are more commonly known.

The Civil Aviation Legislation Amendment (Part 101) Regulations 2016 establishes a set of standard operating conditions for RPAs, the categorisation of RPAs according to their weight or, in the case of airships, envelope capacity and introduces the concept of an "excluded RPA" in relation to RPA operations which are considered to be of lower risk. There are reduced regulatory requirements for excluded RPAs, such as not needing an operator's certificate or a remote pilot licence (RePL).

The new regulations permit private land owners to carry out some operations on their own land under the "standard RPA operating conditions" notwithstanding these may be commercial like operations. Private land owners operating an RPA of less than 25kgs in weight need not hold an unmanned aircraft operator's certificate or an RePL provided that no one involved in the operation receives direct remuneration. For RPAs of greater than 25kgs but of less than 150kgs, the operator needs to hold a RePL for the category of aircraft being flown.

RPAs are categorised as either "micro RPA", "very small RPA", "small RPA", "medium RPA" and "large RPA" depending upon their weight, and different obligations and requirements arise for the different categories.

The regulations now require a person operating or conducting operations using a very small RPA for hire or reward to notify the CASA rather than being required to obtain an unmanned aircraft operator's certificate and RePL.

Autonomous flight (the operation of an unmanned aircraft without pilot intervention in the management of the flight) is prohibited until suitable regulations can be developed by CASA. In the meantime, autonomous flight can be approved by CASA on a case-by-case basis under regulation 101.097.

There are a series of new offences, including offences relating to the environment in which an RPA can be operated, the failure to hold an appropriate RePL or unmanned operator certificate, various record keeping obligations and compliance with agreed policy and procedures, and failing to notify CASA of changes in operation or circumstances.

There are 11 strict liability offences, including:

  • operating an unmanned aircraft in controlled airspace and failing to comply with the requirements in the Manual of Standards (regulation 101.072)
  • operating an unmanned aircraft beyond visual line of sight (regulation 101.073)
  • causing an autonomous aircraft to be launched or released (regulation 101.097)
  • operating an RPA in a prescribed area not in accordance with the requirements in the Manual of Standards (regulation 101.247)
  • operating an RPA without a RePL (regulation 101.252)

Clearly this is a developing area of activity which poses peculiar dangers for aviation safety. The operation of RPAs has also raised concerns in relation to public rights of privacy. It is inevitable that there will be further refinement of the regulatory framework over time.

In the meantime, those operating RPAs need to be fully aware of the current regulatory framework if they are not to fall foul of the requirements.

Australian decisions

Hollis v Rogers [2016] ACTSC 56

In its decision handed down on 8 April 2016, Justice Burns in the Supreme Court of the Australian Capital Territory upheld a magistrate's finding of guilt against David Hollis, a Virgin Australia pilot, who tested with an alcohol level of 0.059 grams of alcohol per 210 litres of breath.

Regulation 99.375 of the Civil Aviation Safety Regulations 1998 (Cth) prohibits a person from performing or being available to perform a safety-sensitive aviation activity (SSAA) where the person, after testing as set out in the regulations, has an alcohol level of 0.02 grams or more of alcohol per 210 litres of breath.

Section 33 of the Civil Aviation Act 1988 defines SSAAs as activities that impact directly or indirectly on the safety of civil aviation operations in Australian territory or the operation of Australian aircraft outside Australian territory. Part IV of theCivil Aviation Act is entitled "Drug and Alcohol Management Plans and Testing" and sets out the testing requirements.

At the hearing at first instance, Hollis gave evidence that on 10 August 2013 he had flown from the Gold Coast to Canberra. He said that following arrival he went to his hotel room and then met his First Officer at a bar in the hotel at about 5 pm where they shared a bottle of red wine and consumed some potato wedges. They then had dinner and another glass of red wine at a bar. After dinner, Hollis returned to the hotel where he consumed two vodka, lime and soda drinks before going to bed at about 10 pm. He awoke the following morning at 6.30 am and had a coffee before catching the bus to the airport where he arrived at around 7.35 am.

The alcohol test was conducted in the Virgin crew area as a random test by Rogers, an approved alcohol and drug tester employed by the Civil Aviation Safety Authority (CASA) soon after Hollis' arrival at the airport.

The magistrate was satisfied that the alcohol test was properly conducted and that the offence was proved. Although Hollis had lost his employment with Virgin Australia as a result of the offence, and had suffered embarrassment and humiliation, the magistrate noted the serious potential ramifications of flying an aircraft while under the influence of alcohol, imposed a conviction and fined Hollis $2,000.

The appeal against the sentence was based on assertions that the magistrate had erred in various findings in reaching her conclusions.

Burns J accepted that there must be a finding of what activity was being undertaken by the pilot in the course of his duties as a crew member to satisfy the requirement that he was "performing an SSAA". However, he was satisfied that the magistrate's failure to state the activity that Hollis was undertaking in the course of his duties as a crew member was ultimately of no significance, as the offence may be proved by establishing that an accused person is either performing or is available to perform an applicable SSAA.

The judge considered that there could be no doubt that Hollis was available to perform activities as a pilot and that was the reason he had travelled to the airport and entered the Virgin crew area. The judge also found that the testing requirements were satisfactorily complied with.

Finally, Burns J noted that Hollis had not demonstrated any error of fact or law by the magistrate in the sentencing process and there could be no possible argument that the sentence imposed was manifestly excessive. Accordingly, the appeal was dismissed.

While no doubt the effect on Hollis' career and reputation as an airline pilot has been significant, the relevant regulations are clearly aimed at ensuring the safety of the aviation industry in Australia and, in all the circumstances, notwithstanding that there was some dispute regarding the evidence, the findings both at first instance and on appeal seem unremarkable.

Australian Competition and Consumer Commission v P T Garuda Indonesia Ltd [2016] FCAFC 42

What is a market in Australia under the Trade Practices Act?

On 21 March 2016, the ACCC's appeal against Perram J's dismissal of the ACCC's proceedings against PT Garuda and Air New Zealand's alleged price fixing was upheld by the Full Court of the Federal Court. The ACCC was successful in its argument that the Australian price fixing law in force at the relevant time (i.e. pre-2009 when the price fixing was prohibited by sections 45 and 45A (now repealed) of the Trade Practices Act requiring that the conduct occurred in a market "in Australia") should apply not only to a cartel conduct which took place in Australia per se, but also to a cartel conduct which occurred outside Australia where cargo was shipped into Australia from overseas. The Court confirmed that all aspects of the market need to be considered (not just a geographical dimension) when deciding whether the alleged price fixing would substantially lessen competition in a market in Australia. Relevantly, the Court held:

Ultimately, the determination of whether a market is "in Australia" is an evaluative exercise, which should not exclude any aspect of the market from consideration. In this case, Air NZ and Garuda supplied a suite of air cargo services to each port in Australia, commencing the provision of those services outside Australia. But (i) the suite of services they provided included important components which were provided in Australia; (ii) the services were marketed and ultimately supplied to customers, including significant customers in Australia; and (iii) there were Australian barriers to entry into the market. Wherever else the market might also have been located, the market was "in Australia". This conclusion is based on the legislative text of s 4E of the Trade Practices Act when read with ss 45 and 45A. It is a conclusion which is consistent with the purpose of s 4E and the overarching purpose of the Trade Practices Act, being "to enhance the welfare of Australians through the promotion of competition and fair trading and provision for consumer protection". It is also consistent with Australian authorities to which we refer later in these reasons. Those authorities emphasise matters other than the physical location of a supplier, or where any substitution is given effect, as relevant factors in the identification of the market. It is also consistent with the conclusions which have been reached upon similar fact patterns in New Zealand and in Europe. (At [7])

New cartel laws

Since July 2009, new cartel prohibitions were introduced into the Competition and Consumer Act replacing the prohibition on price fixing in section 45A of the Trade Practices Act. No longer do the parties need to be in competition in Australia for the new cartel prohibitions to apply. This reflects the broad approach to what is a market "in Australia" as defined in the above extract.

Cook v Modern Mustering Pty Ltd & Ors and Savage & Ors v Modern Mustering Pty Ltd & Ors [2015] NTSC 82

In this case, a passenger who sustained serious spinal injuries in a helicopter accident failed to prove that the pilot had breached his duty of care and did not show that flying below 500ft had been a breach in the pilot's duty which caused his injuries.

The passenger, Mr Cook, who had been engaged as a cattle "spotter" as part of a mustering operation, received a lump sum payment of $10.5 million in work health proceedings. However, he then brought a common law claim against the owner of the helicopter, the holder of the Air Operator's Certificate (AOC) and the pilot in the Supreme Court of the Northern Territory.

In a judgment of Justice Kelly delivered on 10 December 2015, consideration was given to issues of breach of duty of care and whether that breach of duty was causative of Mr Cook's injuries.

It was alleged that the pilot negligently flew below 500ft in breach of regulations, as at the time the helicopter was not engaged in aerial stock mustering operations, which was the basis upon which permission for low flying had been granted.

There was also an issue of the meaning of "aerial stock mustering operations" and whether Mr Cook, who was not employed by the owner of the helicopter or the holder of the AOC, was a "crew member". Low flying was only permitted if "persons other than crew members are not carried". (See Civil Aviation Regulations, regulation 157(4)).

On the day of the accident, Mr Cook had himself first flown a gyrocopter and done some mustering. He then returned to the camp to board the helicopter and to act as a cattle "spotter" for the pilot and to provide guidance to him regarding the mustering operation. After some further mustering, the helicopter was returning to the camp to enable Mr Cook to operate the gyrocopter once again when the loss of power occurred.

Despite an attempted autorotation, the helicopter tail rotor clipped a tree and the helicopter landed on its skids without its tail, slid forward for some distance and tipped forward until the rotor hit the ground and the helicopter tipped over landing on the passenger side. While Mr Cook was very seriously injured, the pilot was uninjured.

The relevant regulations define "crew member" to mean a person assigned by an air operator for duty on an aircraft. It was argued that as Mr Cook was employed by a different company to the pilot and holder of the AOC, he was not a crew member and accordingly it was not permissible for the helicopter to fly lower than 500ft.

This argument was rejected as, if correct, the judge considered the helicopter could never fly below 500ft with a spotter on board. While that may be overstating the consequence of this finding, it nevertheless seemed that the judge looked at the overall nature of the operation and how it was controlled by those aboard to determine that Mr Cook was a "crew member".

The plaintiff maintained that as the purpose of the return flight was to enable Mr Cook to disembark and board the gyrocopter, the helicopter was not engaged in aerial mustering operations at the time of the accident.

The judge did not consider that this made sense as, if correct, the pilot would be changing regulatory requirements mid-flight depending on the particular activities in which he was engaged. He also noted that only minutes before the accident mustering operations were being undertaken. He concluded accordingly that the helicopter was engaged in aerial stock mustering operations when the accident occurred and was not in breach in flying below 500ft.

As to the issue of the breach of duty of care, the judge considered the "Shirt calculus" as stated by Justice Mason in Wyong Shire Council v Shirt [1980] HCA 12 where he said:

In deciding whether there has been a breach of the duty of care, the tribunal of fact must first ask itself whether a reasonable man in the defendant's position would have foreseen that his conduct involved a risk of injury to the plaintiff or to a class of persons including the plaintiff. If the answer be in the affirmative, it is then for the tribunal of fact to determine what a reasonable man would do by way of response to the risk. The perception of the reasonable man's response calls for a consideration of the magnitude of the risk and the degree of the probability of its occurrence, along with the expense, difficulty and inconvenience of taking alleviating action and any other conflicting responsibilities which the defendant may have. It is only when these matters are balanced out that the tribunal of fact can confidently assert what is the standard of response to be ascribed to the reasonable man placed in the defendant's position (at [14]).

He also referred to other decisions including that of Gleeson CJ in New South Wales v Fahy [2007] HCA 20 and noted that the relevant risk was that of injury to Mr Cook if there was a sudden loss of power or mechanical failure. There was a lack of evidence as to the probability of the occurrence and only limited evidence as to whether the height of the helicopter increased or decreased the risk and its likely consequences.

In the circumstances, the court found that the plaintiff had not proved on the balance of probabilities that the defendant was in breach of a duty of care to the plaintiff. It was also noted that, even if in breach of the duty of care in flying below 500ft, the plaintiff had not shown that this was a cause of the injury. Accordingly, the plaintiff's claim failed.

The judgment seems a sensible one and it seems reasonable to avoid the imposition of somewhat artificial divisions in the purpose of flight to determine the applicable regulations for flight operations. Those engaged in the heli-mustering industry would recognise the common sense of that outcome.

While it may be regrettable that such a seriously injured person was not entitled to compensation at common law, he nevertheless had already received very substantial damages by way of workers' compensation.

The decision should be of particular interest to those involved in the use of aircraft including helicopters in the agricultural industry.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Andrew Tulloch
Andrew Probert
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