Pel-Air Aviation Pty Ltd v Casey [2017] NSWCA 32

Background Facts

The respondent was a nurse who was travelling on a small aircraft in the course of their employment when it was forced to make an emergency landing in the sea. As a result, the respondent suffered physical injuries, Post-traumatic Stress Disorder (PTSD), a major depressive disorder, an anxiety disorder and a complex pain syndrome.

Proceedings were commenced in the NSW District Court, before being transferred to the NSW Supreme Court. The trial judge entered a verdict for $4,877,604. The damages were awarded due to the “bodily injuries” sustained in the accident, in addition to an amount of $515,173 for the costs of fund management, calculated by reference to the NSW Trustee & Guardian (NSWTG) rates.

Legal Issues

On Appeal, the appellant submitted that the trial judge erred in concluding that the respondent’s PTSD was a “bodily injury” as defined in the 1999 Montreal Convention relating to International Carriage by Air (incorporated into the Civil Aviation (Carriers’ Liability) Act 1959 (Cth)). By cross-appeal, the respondent challenged the costs of fund management and that a higher amount should have been awarded pursuant to the rates of the National Australia Trustee Limited (NAT), which had been appointed as manager.

Decision

Macfarlan JA (with whom Ward and Gleeson JA agreed) upheld the Appeal and noted that the medical evidence did not prove that the respondent’s PTSD resulted from actual physical damage to the brain, and did not constitute a “bodily injury” as required by the Montreal Convention. Damages were to be reduced on a percentage basis for various heads of damage.

The cross-appeal was also upheld. The Court noted that the NAT had previously been appointed as fund manager pursuant to a court order, which was authorised by the NSWTG. The respondent’s tutor had decided to make that appointment after discussions with a certified financial planner. There was also no evidence that NAT’s fees were inconsistent with market rates. As the respondent was entitled to fund management due to the nature of the injuries, the onus was on the appellant to prove that the respondent had failed to mitigate their loss by appointing NAT rather than NSWTG. As the appointment was not unreasonable, the respondent was entitled to appoint NAT at the higher cost of $872,000.

Implications

With respect to fund management, it is important for parties to adduce evidence of market rates and to consider the reasons for the appointment of a fund manager.