The High Court of Australia handed down its decision on the appeal in Barclay v Penberthy [2012] HCA 40 (2 October 2012) http://www.austlii.edu.au/au/cases/cth/HCA/2012/40.html today. (This is almost, but probably not quite, the final tort decision in which Gummow J will participate before his retirement this month- I see that Harbour Radio Pty Limited v Trad , a very interesting defamation appeal, is still outstanding and so will probably arrive in the next few weeks.)

Barclay was quite a tort smorgasbord, involving no less than three important issues. Briefly, the actions were brought in relation to a plane crash involving five employees of the company Nautronix. Two sadly died, three were seriously injured. Claims were brought against Fugro as the employer of Mr Penberthy, who had been the pilot of the plane (found to have behaved negligently in response to the incident of engine failure) and Mr Barclay, who had been the engineer found to have negligently advised the use of a sub-standard part which led to the engine failure.

(1) The claims by the company in relation to the two deceased employees were rejected by all members of the HCA on the basis that the common law rule in Baker v Bolton (1808) 1 Camp 493 [170 ER 1033], "that the death of a person cannot constitute a cause of action giving rise to a claim for damages" [1], was still valid and should continue to be a part of the common law unless amended by the Parliament.

(2) Claims by the company for damages for economic loss in negligence in relation to the loss caused by the injuries to senior employees succeeded, however. The majority (FRENCH CJ, GUMMOW, HAYNE, CRENNAN AND BELL JJ) held that the pilot, Penberthy, owed a duty of care to the company to not cause economic loss, under principles that are now fairly well-established in Australia (though of course more controversial elsewhere). (While there had been an action in the lower courts against the more remotely involved engineer Mr Barclay, who of course had no idea who was going to use the plane he serviced in the future, at the High Court level Nautronix abandoned their claim against him in negligence, relying instead simply on the actio per quod noted below- see [20].) The majority referred to the 2004 decision in Woolcock Street Investments Pty Ltd v CDG Pty Ltd as settling the law, though it must be said that this itself still has some ambiguities! At any rate, having concluded that there was clearly foreseeable harm (Penberthy knew very clearly the importance of the people he was carrying to the economic goals of the company) the main issue was "vulnerability"- could Nautronix have protected itself against the risks? The majority said at [46]-[47] that it had not been shown that they could have. On this point Heydon J dissented, holding that the onus was on the company to have made out the point and it had not led sufficient evidence- see [87]. I must confess to some sympathy with this view- it does seem to invert what one would have thought the ordinary onus of proof should be.

(3) Probably the most time is spent in the various judgments on the question of the old actio per quod, the action for loss of services of an employee. To sum up an interesting set of discussions, all the members of the Court hold that the action is still part of the common law of Australia (various smaller or greater statutory adjustments simply testify to the ongoing substratum of common law.) The majority make the point, though, that it is not part of the law of negligence, and does not depend on finding that the defendant in any sense owed a "duty of care" to the plaintiff- it is an action which flows from a wrong done to the employee, and is based on the consequential loss of services suffered by the employer. (Heydon J says that the plaintiff ought not to have been able to rely on the action as a separate claim, as it had not been properly pleaded at trial- but even he then goes on to say that if the plaintiff had pleaded it, it would have been available.) There is some very interesting discussion on whether the action is "quasi-proprietary" in nature, and its connection to the action for inducing breach of contract, and some reference to the comments in Zhu a few years ago on the issues.

(4) As a part of having found the actio per quod still a part of the common law, the majority then spend some time discussing the principles on which damages should be based under the action- not on the basis of "all economic loss" flowing from the deprivation of services, but essentially on the basis of what it has cost or will cose to replace the services, which presumably makes the action not all that attractive in many cases. (Heydon J declined to get into this discussion as he would have denied this claim on the pleading point.)

Finally, I cannot help but feel some puzzlement at the way that Kiefel J approaches the issues. Her Honour has not given many separate judgments on torts in the past. It is strange to find her referring at a number of points to a distinction between the actio per quod and "tort" law in general- see eg [140]. It seems her Honour must sometime be using the word "tort" to mean "the action for negligence", which is unusual. See also [142] and [145].

Regards

Neil