Australia: Court of Appeal cant see landmark in crash landing case

Last Updated: 17 March 2017
Article by Christy Miller and Jessica Tinsley

Most Read Contributor in Australia, November 2017

The New South Wales Court of Appeal has quashed a landmark decision that saw an aircraft accident survivor awarded compensation for post-traumatic stress disorder.

A 2015 decision of the New South Wales Supreme Court was thought to be the first case where an air carrier was found liable for post-traumatic stress disorder (PTSD) (a purely psychiatric injury) under an international aviation convention.

However, this decision has just been overturned in Pel-Air Aviation Pty Ltd v Casey [2017] NSWCA 32 when the Court of Appeal found in favour of the appellant, Pel Air Aviation, that the PTSD did not constitute a "bodily injury" and therefore was not compensable under the Civil Aviation (Carriers' Liability) Act.

The case is of significant value in the aviation industry to solidify the ability of the Carriers' Liability Act to exclude a range of psychological complaints which may, at the same time, significantly curtail the operation of other statutory frameworks such as discrimination laws.

While the Court of Appeal has left open a window to link back a psychiatric claim to bodily injury, immediate steps taken by airlines to limit the effects of in-flight trauma may further assist to limit liability

The plane crashes in the ocean

An ill-fated flight between Samoa and Melbourne in November 2009 had been arranged to obtain urgent medical treatment for a passenger in Australia. Among the occupants of the aircraft was Ms Casey, a nurse in the employ of CareFlight (NSW) Limited, who was sent to treat the passenger during the flight.

Ferocious weather depleted fuel supplies and a refuelling stop was planned on Norfolk Island. After four failed attempts to land, the aircraft had used up the last of the fuel and the pilot was forced to ditch the plane in the ocean. Astoundingly the occupants of the aircraft survived the impact and were ultimately rescued by a fisherman after spending 90 minutes in the middle of the ocean after the plane sunk.

Not surprisingly Ms Casey suffered significant physical injuries, including spinal injuries and an injury to her right knee. In addition, she suffered PTSD, a major depressive disorder, an anxiety disorder and developed a complex pain syndrome.

Missing the mark

It was not in dispute that Ms Casey suffered the injuries during the crash or that the claim was governed by the Carriers' Liability Act which implements, subject to some minor modifications, the provisions of the 1999 Montreal Convention for the Unification of Certain Rules for International Carriage by Air.

Pel Air Aviation accepted that the crash had been caused by the negligence of the pilot and co-pilot, for which it had vicarious liability. Therefore, it conceded that Ms Casey's physical injuries and the psychiatric injuries flowing from the physical injuries were all compensable under the Carriers' Liability Act.

The issue in dispute was whether Ms Casey's PTSD was compensable. Pel Air Aviation argued the PTSD was caused by the trauma of the incident and was accordingly a 'pure psychiatric injury'. As the Montreal Convention restricts liability to "bodily injuries", PTSD should not be included.

After hearing submissions from Pel Air Aviation, the Supreme Court decided it had relied too heavily on international cases and paid insufficient attention to two Australian cases which left open the issue of whether psychiatric injuries could be compensable under the Montreal Convention and Carriers' Liability Act.

The Court concluded that, either the PTSD is at least in part a manifestation of the bodily injury, or that bodily injury caused or contributed to the PTSD, or there is a combination of such cause and effect. Whichever it was, the Court said, the result was that the PTSD Ms Casey suffered, was a compensable bodily injury.

Judgment was entered in favour of Ms Casey for the sum of $4,877,604.

The Court of Appeal finds PTSD is not a "bodily injury"

One of the major issues of the appeal was whether the primary judge erred in concluding that Ms Casey's PTSD constituted a "bodily injury".

In quashing the decision at first instance, the Court of Appeal found that while "bodily injury" does not exclude consideration of damage to a person's brain there must be evidence of actual physical damage to the brain. The Court held that there was no evidence that Ms Casey's PTSD resulted from actual physical damage to her brain.

It also considered whether the evidence provided of biochemical changes in her brain constituted "physical damage". While the primary judge rejected Pel Air Aviation's dependence on certain international cases, the Court of Appeal drew on these same cases in deciding that evidence of abnormal brain functioning and chemical imbalance was insufficient to prove a bodily injury.

In deciding this the Court of Appeal has realigned the Australian position with the dominant position internationally that:

  • the adjective "bodily" is a limiting word that draws a distinction between bodily and mental injuries;
  • mental injuries are covered only if they are:
    • a manifestation of physical injuries; or
    • if they result from physical injuries (including physical injuries to the brain).

Takeaways for the aviation industry

While airlines and aviation insurers can breathe a sigh of relief after the Court of Appeal's decision, it has not completely quashed the possibility of compensation being awarded for a pure psychiatric injury under the Montreal Convention in the future.

The Court of Appeal has left it open for developments in medical research to produce evidence that psychiatric disorders can cause physical (as opposed to chemical) changes to the brain.

Accordingly, this issue is unlikely to go away. Future cases dealing with this issue may include complex medical evidence from individuals trying to prove physical damage to their brain as a result of in-flight trauma.

Further, individuals who suffer psychological injuries may be more inclined to frame their injuries or concerns as arising, where possible, outside of the confines of the Carriers' Liability Act (which is restricted to embarkation, disembarkation and during flight). This will be particularly so in discrimination cases where claims for suffering hurt and humiliation cannot point to a bodily injury.

If a claim does arise on board, the airline can consider taking steps to offer and provide immediate and, in some cases, ongoing support to passengers who have suffered in-flight trauma, including, for example:

  • in-flight emergency response procedures that take into account recommendations from trauma experts;
  • offer of immediate assistance to trauma victims and their families (which can include counselling); and
  • keeping records of passengers potentially suffering from trauma and implementing systems for ongoing management.

These responses are designed to reduce the extension of a psychological complaint to a physical and minimise the extent of any complaint arising.

Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this bulletin. Persons listed may not be admitted in all states and territories.

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