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Perrett v Collins & Ors [1998] EWCA Civ 884 (22 May 1998)
URL: http://www.bailii.org/ew/cases/EWCA/Civ/1998/884.html
Cite as:
[1998] NPC 161,
(1999) 1 TCLR 1,
[1998] 2 Lloyd's Rep 255,
1999 SLT 224,
1999 SC (HL) 9,
[1999] WLR 9,
[1998] EWCA Civ 884,
[1998] UKHL 46,
61 Con LR 1,
1999 SCLR 126,
[1999] 2 All ER 241,
[1999] Lloyd's Rep IR 105,
[1999] BLR 35,
[1999] PNLR 77,
[1999] 1 WLR 9,
1999 GWD 1-47
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IN
THE SUPREME COURT OF JUDICATURE
No
CCRTF 97/0743/2
IN
THE COURT OF APPEAL (CIVIL DIVISION)
ON
APPEAL FROM ORDER OF HIS HONOUR JUDGE HALLGARTEN QC
Royal
Courts of Justice
Strand
London
WC2
Friday,
22nd May 1998
B
e f o r e:
LORD
JUSTICE HOBHOUSE
LORD
JUSTICE SWINTON THOMAS
LORD
JUSTICE BUXTON
ANTHONY
PERRETT
Plaintiff/First
Respondent
-
v -
SIMON
COLLINS
First Defendant/Second Respondent
LES
UNDERWOOD
Second
Defendant/First Appellant
PFA
(ULAIR) LIMITED
(t/a
Popular Flying Association)
Third
Defendant/Second Appellant
(Handed
down judgment
Smith
Bernal Reporting Limited, 180 Fleet Street,
London
EC4A 2HD
Tel:
0171 831 3183
Official
Shorthand Writers to the Court)
MR
G KAVANAGH
(Instructed by Ince & Co of London) appeared on behalf of the Appellants
MR
S REID
(Instructed by Stephens & Sons of Chatham Kent) appeared on behalf of the
First Respondent
MR
E BAILEY
(Instructed by Dibb Lupton Alsop of London) appeared on behalf of the Second
Respondent
J
U D G M E N T
(As
Approved to the Court
)
(Crown
Copyright)
LORD
JUSTICE HOBHOUSE:
This
is an action for personal injuries suffered by the Plaintiff Mr Anthony Perrett
when the plane in which he was being carried as a passenger crashed on 18th
January 1993. The aeroplane was a light aircraft, a Kit Fox model 3 which
belonged to and had been assembled by the First Defendant Mr Simon Collins who
was piloting the aeroplane at the time that it crashed. The Second and Third
Defendants are respectively Mr Les Usherwood and the PFA (ULAIR) Limited. The
Third Defendants traded under the name The Popular Flying Association (PFA).
Mr Collins was one of their members and Mr Usherwood was one of their
inspectors. Mr Usherwood had inspected the aircraft at various stages during
its construction and upon its completion and had certified that it was in an
airworthy condition. As a result, on 4 January 1993 the Company had issued a
certificate for fitness for flight stating that the aircraft "has been
inspected and is fit to fly". It was valid for one month - until 4 February
1993. It covered the flights of the aircraft with two persons on board, that
is to say the pilot and a passenger, for the purpose of obtaining a permit to
fly. It appears that it is normal practice to take a passenger on a proving
flight in order to replicate the loading conditions of a normal flight.
The
Plaintiff's case is that the personal injuries which he suffered when the
aeroplane crashed were caused by the negligence of one or more of the
Defendants. He alleges that the aeroplane had a propeller which did not match
the gearbox fitted to the engine of the aeroplane. If there is a mismatch, the
power absorbtion characteristics of the propeller will not correspond to the
power output of the engine and the aircraft will be unable to fly safely. That
this was what occurred and was the explanation of why the aeroplane crashed is
in dispute. But the Second and Third Defendants have also disputed that they
owed the Plaintiff any duty of care. The County Court Judge ordered that
preliminary issues be tried as between the Plaintiff and the Second and Third
Defendants whether either of them owed the Plaintiff a duty of care. These
issues were tried before HHJ Hallgarten QC sitting in the Central London County
Court. By a judgment delivered on 23rd April of last year he decided these
issues in favour of the Plaintiff. With the leave of the Judge, the Second and
Third Defendants have appealed to this Court. The First Defendant has also
been represented on this appeal and supports the case of the Plaintiff, no
doubt because the First Defendant will, if he is held at the trial to have been
at fault, wish to be able to claim a contribution from the Second and Third
Defendants towards any damages which he may have to pay to the Plaintiff.
The
preliminary issues were ordered to be tried upon an agreed statement of facts.
One was prepared. But it was so exiguous that before the Judge both sides put
in additional documentary material so as to flesh out the position and role of
the Second and Third Defendants and their relationship to the First Defendant.
We have had access to the same documentary material and it does not appear
that, save possibly on questions of detail, it is controversial. As regards
the allegations of fault, these have to be taken from the Plaintiff's
Particulars of Claim and assumed for present purposes to be correct (although
they will be or may be in dispute at any trial of the issues of fault or
causation that may follow). Thus it must be assumed that a reasonably
competent inspector in the position of Mr Usherwood would have checked whether
the propeller and the gearbox matched each other and would, exercising
reasonable care, have observed that they did not and that the aircraft was not
in that condition fit to fly; an inspector exercising reasonable care would not
have certified that the aircraft was in an airworthy condition. As regards the
Company, the Third Defendants, although the Plaintiff does not put his case
against them on the basis of vicarious liability but upon inadequate
supervision no separate point has been taken. This is no doubt because owing
to the fact that the Second and Third Defendants are both covered by the same
insurance policy, the question is academic as between them. If it were however
to become relevant hereafter, there might have to be further consideration of
the extent to which delegation by the Third Defendants to the Second Defendant
sufficed to render the Third Defendants responsible for any want of care or
other fault of the Second Defendant. But, as I have said, that is not a point
with which we are concerned.
No
point has been taken in this case on the question of reasonable foresight. It
is accepted on behalf of the Defendants that, if reasonable care was not
exercised in relation to the airworthiness of this aircraft, it was reasonably
foreseeable by persons in the position of the Second and Third Defendants that
injuries might be caused to persons being carried in the aircraft such as the
Plaintiff. Similarly, although there were delegated statutory functions no
argument has been raised that there is any over-riding principle of public
policy which protects the Second or Third Defendants from liability. The
arguments that are advanced on their behalf are that the criteria of
'proximity', in particular a criterion of 'directness', and what is 'fair, just
and reasonable' are not satisfied. In this connection they refer to the role
being performed by Mr Usherwood and the statutory scheme within which he and
the Company were operating. They also rely upon the decision (by a majority)
of the House of Lords in
Marc
Rich v Bishop Rock
[1996] 1 AC 211 and two unreported Court of Appeal decisions,
Philcox
v Civil Aviation Authority
25th May 1995 and
Reeman
v Department of Transport and ors
26th March 1997.
What
the Second and Third Defendants seek to achieve in this case is to extend
decisions upon "economic" loss to cases of personal injuries. It represents a
fundamental attack upon the principle of tortious liability for negligent
conduct which had caused foreseeable personal injury to others. That such a
point should be considered to be even arguable shows how far some of the
fundamental principles of the law of negligence have come to be eroded. The
arguments advanced in the present case illustrate the danger anticipated by
Lord Lloyd in the final paragraph of his dissenting speech in the
Marc
Rich
case. They also illustrate the dangers of substituting for clear criteria,
criteria which are incapable of precise definition and involve what can only be
described as an element of subjective assessment by the court: such ultimately
subjective assessments tend inevitably to lead to uncertainty and anomaly which
can be avoided by a more principled approach.
The
Statutory Framework:
Under
Part III of the Civil Aviation Act 1982, the Government is given the power to
make orders, "Air Navigation Orders", for generally regulating air navigation
and in particular-
"For prohibiting aircraft from flying unless certificates of airworthiness
issued or validated under the Order are in force with respect to them"
and
"Generally for securing the safety efficiency and regularity of air
navigation and the safety of aircraft and of persons and property carried
therein, for preventing aircraft endangering other persons and property ....".
Thus
under the Air Navigation Order 1989, Article 7,
"An aircraft shall not fly unless there is in force in respect thereof a
certificate of airworthiness duly issued or rendered valid under the law of the
country in which the aircraft is registered and any conditions subject to which
the certificate was issued or rendered valid are complied with.
Provided
that the foregoing prohibitions shall not apply to flights beginning and ending
in the United Kingdom without passing over any other country of
....
An
aircraft flying in accordance with the "A Conditions" or the "B Conditions" set
forth in Schedule 2 to this Order; or
An
aircraft flying in accordance with the conditions of a permit to fly issued by
the Authority in respect of an aircraft."
Article
8 requires the Authority (that is to say the Civil Aviation Authority, which is
charged under s.3 of the Civil Aviation Act 1982 with among other things
responsibility for the safety of air navigation and aircraft (including
airworthiness), to issue certificates of airworthiness if it is satisfied that
the aircraft is fit to fly having regard to, among other things, the design,
construction, workmanship and materials of the aircraft including, in
particular, engines fitted to it.
The
A Conditions in Schedule 2 permit in certain circumstances and subject to
certain safeguards, an aircraft to fly "only for the purpose of enabling it to
qualify for the issue or renewal of a certificate of airworthiness". Article
104 gives the Authority power to except from Article 7 (and other Articles)
classes of aircraft or persons either absolutely or subject to such conditions
as it thinks fit. It was under this exemption that the Company, the Third
Defendants, was given an exemption by reference to Article 7 and certain
paragraphs of the A Conditions: this exempted all aircraft operated by members
of the PFA when an aircraft was flying for the purposes of -
"a flight test to qualify for the issue or renewal of a Permit to Fly
..... provided that no more than thirty days prior to any such flight the
aircraft has been certified as fit for flight by an Inspector approved by the
Popular Flying Association."
This
exemption was granted subject to certain conditions which included -
"A certificate of fitness for flight when issued by the PFA shall only be
signed by Inspectors authorised for that purpose."
The
position therefore was that Mr Collins' plane could not have taken off on 18th
January 1993 unless Mr Usherwood or some other PFA Inspector had certified that
the aircraft was airworthy and the requisite documents to that effect had been
signed by himself and by an authorised signatory of the Third Defendants. The
statutory purpose which underlay this scheme was the safety of air navigation
including the safety of aircraft and persons carried in them.
The
Popular Flying Association:
The
Third Defendants are a trading company incorporated under the Companies Acts.
The precise nature of the Company's constitution is not covered by the
evidence. It has limited liability. It trades under the name of "The Popular
Flying Association" and it appears that either its main role or one of its main
roles is to run that Association. That Association exists to facilitate
amateurs to enjoy facilities for flying light aircraft. Thus, it has members
who pay membership fees or subscriptions in return for which it provides them
with facilities. These facilities include a scheme which enables members to
construct and fly their own light aircraft. The Kit Fox aircraft is an
aircraft which is designed for this purpose. It is supplied to amateur flyers
in a kit form which they can then assemble for themselves. In order that, when
complete, the aircraft can obtain first a provisional and then a full
certificate of airworthiness, the assembly of the aircraft has to be supervised
and checked by an inspector. Mr Usherwood was the person who was carrying out
this role in relation to Mr Collins' assembly of this aircraft. The
Plaintiff's allegation is that during this process an alternative gearbox was
fitted without the appropriate and corresponding substitution of a propeller
which matched the substituted gearbox.
The
Company, as the Popular Flying Association, appoint inspectors for the purpose
of, among other things, inspecting aircraft during the course of their
construction by members of the Association and certifying whether the relevant
work has been done to his "entire satisfaction" and the aircraft is in an
airworthy condition. Any such inspector has to be approved by the Association
and is allocated an official number. Mr Usherwood was an approved inspector
with the official number 371.
The
PFA inspector operates under "Notes for Guidance" issued by the Association.
These provide, among other things, -
"First issue of a permit to fly for an amateur built aircraft, the design
of which has already been cleared by the PFA or CAA
Before
test flying the aircraft the completed instructor's log book, PFA form 71/1,
the declaration of design, and the components record sheet (PFA form 67/1), or
other evidence of a satisfactory standard of construction, should be sent to
PFA Headquarters. This document must be duly signed out by a PFA inspector or
CAB licensed engineer. Under scrutiny of the documents, the PFA will authorise
test flying under 'A' conditions for the purpose of obtaining a Permit to Fly.
...."
It
was under this procedure that the form 71/1/7 - application for issue of a
Permit to Fly - came in this case to be countersigned by Mr Usherwood and the
certificate of fitness of flight dated 4th January 1993 came to be issued by
the Third Defendants.
It
appears that the remuneration of the inspector is a matter of private
arrangement between the inspector and the member. Mr Collins selected Mr
Usherwood off the list of the Association's inspectors because he lived close
to where Mr Collins was assembling the aircraft. They were not previously
known to one another. Mr Collins paid Mr Usherwood a nominal fee (apparently
£20) for each inspection visit. As between Mr Collins, Mr Usherwood and
the Company it was contemplated that they all would be covered by insurance.
The Plaintiff, Mr Perrett, had come along on 18th January simply as a friend of
Mr Collins and there is no suggestion that he had any relevant knowledge of any
insurance arrangements or of how it had come about that the aircraft had been
certified fit to fly.
It
is convenient also at this stage to observe that an unsafe condition of an
aircraft such as this may arise from different causes for which different
persons are responsible. In the present case the allegation is that the fault
was a construction fault, the responsibility of those who were assembling or
supervising the assembly of the aircraft. It is said that it involved the
fault of both the constructor, Mr Collins, and the inspector, Mr Usherwood.
But this need not have been the case. The fault might have been a design
defect or a defect in a part supplied by the manufacturer which the constructor
assembling the aircraft could not be expected to be aware of but which the
inspector should have picked up. The lack of airworthiness in any given case
may or may not arise from a factor which involves fault on the part of the
constructor who has assembled the aircraft. The role of the inspector is
distinct and is independent of the role of the constructor. It is not
secondary or ancillary to that of the constructor, although each has a
responsibility for the safety and airworthiness of the aircraft. It is indeed
the case of the First Defendant, Mr Collins, that he assembled the aircraft in
accordance with the instructions of the manufacturers and that he had no reason
to suppose that the substitution of a different gearbox would also require the
substitution of a different propeller. On the other hand, it is alleged that
the expertise of Mr Usherwood as a PFA inspector included the requirement to
check that the characteristics of the propeller fitted and matched those of the
engine and gearbox.
I
have mentioned this aspect at this stage because it answers one of the
arguments of the Second and Third Defendants. They submitted that any
liability on their part was unnecessary and inappropriate because the First
Defendant was or would be expected to be insured. It was thus argued, by
analogy from the
Marc
Rich
case, that there is no need or warrant to put another Defendant into the loop
because the injured party's right are adequately addressed by having regard to
the liability of the constructor and the insurance carried by him. Whatever
may have been the merits or demerits of that argument in the context of the
Marc
Rich
case, they do not apply to the present case. An injured passenger's sole
remedy may be against the person who has certified the aircraft fit to fly.
The denial of a duty of care owed by such a person in relation to the safety of
the aircraft towards those who may suffer personal injuries, whether as
passengers in the aircraft or upon the ground, would leave a gap in the law of
tort notwithstanding that a plaintiff had suffered foreseeable personal injury
as a result of the unsafety of the aircraft and the unreasonable and careless
conduct of the defendant. It would be remarkable if that were the law.
History
and Principle:
In
the common law there has always been a distinct category of liability for
causing physical injury to the human body and to goods. The torts of trespass
to the person and trespass to goods typify this. These torts originally
derived from strict criteria regarding intentional unlawful acts which caused
such loss or injury. The law developed from that into a scheme where such
intention was not required but unreasonable conduct on the part of the
defendant sufficed. However the fundamental point remained the same that the
defendant had by some activity caused either injury to the plaintiff's person
or damage to his goods. It is the unreasonable conduct of the defendant
causing foreseeable injury or damage which provides the legal nexus between the
defendant and the plaintiff and founds the liability of the one to the other.
Thus the formulations of the existence of a duty of care by the Court of Appeal
in
Le
Lievre v Gould
[1893] 1 QB 491 (adopted by the House of Lords in
Donoghue
v Stevenson
[1932] AC 562) are by reference to injury to a person or his property. These
are physical concepts arising from physical consequences of the defendant's
conduct: They do not relate to economic loss though economic loss may come into
account at the time that it is necessary to quantify the plaintiff's loss as a
result of the physical consequence of which he is entitled to complain.
Economic
loss is altogether a more sophisticated concept. It relates to economic
advantage or disadvantage usually in the context of business activities. A
number of particular difficulties arise. One is that in a competitive economic
society the conduct of one person is always liable to have economic
consequences for another and, in principle, economic activity does not have to
have regard to the interests of others and is justifiable by the actor having
regard to his own interests alone. This principle can be seen illustrated in
cases which predate the development of the modern law of negligence such as
Mogul
SS v McGregor Gow
[1892] AC 25. (See also
Crofter
Hand Woven Harris Tweed v Veitch
[1942] AC 435.) Another difficulty is the question of remoteness. Once
economic consequences are taken into account independently from and in the
absence of any physical consequences, important problems arise for the law in
deciding how far the responsibility of the actor should extend. It is in the
context of liability for negligent misstatement that these problems have been
particularly recognised. The courts have retreated from the extreme
proposition that liability for economic loss can be approached in the same way
as liability for physical injury. (
eg,
Denning LJ in
Candler
v Crane Christmas
[1951] 2 KB 164 at 178-9; Lord Devlin in
Hedley
Byrne v Heller
[1964] AC 465 at 517; Megarry VC in
Ross
v Caunters
[1980] Ch 297 at 323.) The courts have adopted more sophisticated criteria. (
eg,
Smith
v Bush
[1990] 1 AC 831;
Caparo
v Dickman
[1990] 2 AC 605;
Murphy
v Brentwood
[1991] 1 AC 398;
D.o.E.
v Thomas Bates
[1991] 1 AC 499;
White
v Jones
[1995] 2 AC 207.) In
Murphy
v Brentwood
at p.487, Lord Oliver said:
"As was pointed out by Lord Diplock in
Dorset
Yacht v Home Office
[1970] AC 1004, 1060, Lord Atkin's test, though a useful guide to
characteristics which will be found to exist in conduct and relationships
giving rise to a legal duty of care, is manifestly false if used as a
universal; and Lord Reid, in the course of his speech in the same case,
recognised that the statement of principle enshrined in the test necessarily
required qualification in cases where the only loss caused by the defendant's
conduct was economic. The infliction of physical injury to the person or
property of another universally requires to be justified. The causing of
economic loss does not. If it is to be characterised as wrongful it is
necessary to find some factor beyond the mere occurrence of the loss and the
fact that its occurrence could be foreseen. Thus the categorisation of damage
as economic serves at least the useful purpose of indicating that something
more is required and it is one of the unfortunate features of
Anns
that it resulted initially in this essential distinction being lost sight of."
It
was in
Caparo
v Dickman
[1990] 2 AC 605 that Lord Bridge returned (at 617-8) to the question of the
extent to which a universal principle could be extracted from the decisions
which had followed on from the
Dorset
Yacht
and
Anns
cases. He said:
"But since
Anns
a series of decisions of the Privy Council and of your Lordships' House,
notably in judgments and speeches delivered by Lord Keith of Kinkel, have
emphasised the inability of any single principle to provide a practical test
which can be applied to every situation to determine whether a duty of care is
owed and, if so, what is its scope. .... What emerges is that, in addition to
foreseeability of damage, necessary ingredients in any situation giving rise to
a duty of care are that there should exist between the party owing the duty and
the party to whom it is owed a relationship characterised by the law as one of
"proximity" or "neighbourhood" and that the situation should be one in which
the court considers it fair, just and reasonable that the law should impose a
duty of a given scope upon one party for the benefit of the other."
In
Caparo,
the allegation that auditors were liable to shareholders for a report which
they had made to the company was rejected. The House had particular regard to
the role which the auditors were performing and the purpose of their report.
The avoidance of economic loss to shareholders was not one of those purposes.
The House declined to extend the duty of care beyond the limits which had been
recognised in previous cases. It is of significance for the present case that
at p.618, Lord Bridge said:
"I think the law has now moved in the direction of attaching greater
significance to the more traditional categorisation of distinct and
recognisable situations as guides to the existence, the scope and the limits of
varied duties of care which the law imposes."
Thus
where a case fits into a category where the existence of a duty of care and a
potential liability in the tort of negligence has already been recognised, the
more elusive criteria to which Lord Bridge referred for dealing with the cases
that go beyond the recognised category of proximity do not arise.
This
does not mean that in cases of personal injuries problems do not arise about
the scope or existence of the duty of care. In
Donoghue
v Stevenson
[1932] AC 562 and
Grant
v Australian Knitting Mills
[1936] AC 85, both cases of product liability, the courts had to consider the
extent of the duty of care of a manufacturer of a product towards consumers of
it. Mere foreseeability did not suffice. In those cases the relevant
consideration was whether or not the manufacturer was entitled to expect that
there would be an intermediate inspection of the product before it was used by
the consumer. This concerned the foresight of a chain of causation between the
defendant's conduct and the plaintiff's injury. Cases of nervous shock have
given rise to recurrent problems. (
eg,
Alcock
v Ch. Con. S. Yorks
[1992] 1 AC 310;
Page
v Smith
[1996] AC 155.) Other cases have concerned the liability of some public
institution or body for adverse consequences suffered by members of the public.
There questions arise whether what can be recognised as a general public duty
owed to the community as a whole can be used to support an allegation of a duty
owed to particular individuals. In
Dorset
Yacht v Home Office
[1970] AC 1004, a case of property damage, the plaintiffs were able to
establish such a particular duty of care. In
Hill
v Chief Constable of West Yorkshire
[1989] AC 53 and
Barrett
v Enfield L.B.C.
[1998] QB 367 the plaintiffs were not.
A
minimum requirement of particularity and contemplation is required. But it has
never been a requirement of the law of the tort of negligence that there be a
particular antecedent relationship between the defendant and the plaintiff
other than one that the plaintiff belongs to a class which the defendant
contemplates or should contemplate would be affected by his conduct. Nor has
it been a requirement that the defendant should
inflict
the injury upon the plaintiff. Such a concept belongs to the law of trespass
not to the law of negligence. That this is so is illustrated by the products
liability cases. It is also illustrated by
Clay
v Crump
[1964] 1 QB 533 to which I will refer shortly and by the repairer cases such as
Herschtal
v Stewart Arden
[1940] 1 KB 155 and
Haseldine
v Daw
[1941] 2 KB 343. In
Haseldine
v Daw
,
a decision of the Court of Appeal, a lift engineer had failed adequately to
repair a lift which as result later fell to the bottom of its shaft. The
plaintiff happened to be in it at the time and was consequently injured.
In
cases of personal injury, it suffices that the activity of the defendant has
given rise to the situation which has caused the injury to the plaintiff.
Where the defendant is involved in an activity which, if he is not careful,
will create a foreseeable risk of personal injury to others, the defendant owes
a duty of care to those others to act reasonably having regard to the existence
of that risk. The limiting factors are the concepts of foreseeability and
reasonableness. (
eg,
Woods
v Duncan
[1946] AC 401.)
In
the law of personal injuries two of the leading cases both decided at the level
of the Court of Appeal can be referred to. The first is
Adler
v Dickson
[1955] 1 QB 158. The defendants were the master and boatswain of the P&O
passenger liner Himalaya. The plaintiff was a passenger who was injured when
an insecure gangway slipped and fell. The plaintiff had a contract with
P&O which excluded liability for such an injury. The defendants were
however held liable. They owed the plaintiff a duty of care in tort. They
should have seen that the gangway was properly secured. The defendants'
contractual duty was to their employers but this did not mean that they did not
owe a duty of care in the law of tort to those who were liable to be affected
by any carelessness on their part which was foreseeably capable of causing
injury to such persons. It was their conduct which had given rise to the
situation (the inadequately secured gangway) which was the situation which
caused the plaintiff's injury. Indeed, this point was not in contention in the
case; the dispute was whether the defendants could rely upon their employer's
contractual exemption.
The
second is
Clay
v Crump
[1964] 1 QB 533. The plaintiff was a workman who was injured when an insecure
wall collapsed upon him. The relevant defendant was an architect employed in
supervising the contract works. If the architect had exercised reasonable care
he would not have allowed the wall to remain standing in a dangerous condition.
At pp.555-7 Ormrod LJ said:
"It was contended on behalf of the architect that he was employed under a
contract with the owners and in consequence was answerable to them alone if by
any act or omission he was in breach of that contract. It may be that there
was a time when this view of the law would have prevailed. Decisions in recent
years however broadened the basis upon which persons may be found liable if
they are in default in the performance in their contractual duties and in
considering whether the architect in the case owed a duty to the plaintiffs
other questions have to be taken into account and the contractual liabilities
of the architect to the building owner."
"This is a case in which it can be said that the plaintiff was so closely
and directly affected by the acts of the architect as to have been reasonably
in his contemplation when he was directing his mind to the acts or omissions
which are called into question? In my judgment, there must be an affirmative
answer to that question. The architect, by reason of his contractual
arrangement with the building owner, was charged with the duty of preparing the
necessary plans and making arrangements for the manner in which the work should
be done. This involved taking precautions or giving instructions for them to
be taken so that the work could be done with safety. It must have been in the
contemplation of the architect that builders would go on the site as the whole
object of the work was to erect buildings there. It would seem impossible to
contend that the plaintiff would not be affected by the decisions and plans
drawn up by the architect."
He
followed and applied
Donoghue
v Stevenson
.
He rejected an argument that the opportunities for intermediate inspection
sufficed to relieve the defendant architect of responsibility although it did
show that others were at fault as well. The judgments of the other members of
the court were to like effect.
Where
the plaintiff belongs to a class which either is or ought to be within the
contemplation of the defendant and the defendant by reason of his involvement
in an activity which gives him a measure of control over and responsibility for
a situation which, if dangerous, will be liable to injure the plaintiff, the
defendant is liable if as a result of his unreasonable lack of care he causes a
situation to exist which does in fact cause the plaintiff injury.
Once
this proximity exists, it ceases to be material what form the unreasonable
conduct takes. The distinction between negligent misstatement and other forms
of conduct ceases to be legally relevant, although it may have a factual
relevance to foresight or causation. Thus a person may be liable for directing
someone into a dangerous location (
eg,
the Hillsborough cases;
eg,
Sharpe
v Avery
[1938] 4 AER 85) or a producer may be liable for the absence of an adequate
warning on the labelling of his product (
eg,
Heaven
v Pender
11 QBD 503 at 517, per Cotton LJ). Once the defendant has become involved in
the activity which gives rise to the risk, he comes under the duty to act
reasonably in all respects relevant to that risk. Similarly none of the
particular difficulties which arise in relation to economic loss arise in
relation to the causing of personal injury. Once proximity is established by
reference to the test which I have identified, none of the more sophisticated
criteria which have to be used in relation to allegations of liability for mere
economic loss need to be applied in relation to personal injury, nor have they
been in the decided cases.
The
argument of the Second and Third Defendants is that it is necessary to go
further. The injury to the Plaintiff must have been
directly
caused by them. The Plaintiff must show
in
addition
that it is fair, just and reasonable that they should be under a liability to
the Plaintiff. For these propositions they rely on the
Marc
Rich
case.
The
Marc Rich case
:
In
the
Marc
Rich
case,
the leading speech, with which all other members of the House agreed save for
Lord Lloyd, was delivered by Lord Steyn. The plaintiffs were cargo owners.
The relevant defendants were the classification society (NKK) whose surveyor
had recommended that the vessel's class be not withdrawn and that she could
complete her voyage with only temporary repairs. These repairs were inadequate
and the vessel sank a short time afterwards. The plaintiff's cargo was lost.
It was held that the classification society owed no duty of care towards the
cargo owners. The classification system in the conduct of maritime trade is
one whereby the shipowner has an agreement with a classification society to
class his ship. The relationship is a contractual one between the shipowner
and the classification society. It enables the ship owner to describe his
vessel as classed. The shipowner will use this description for the purpose of
obtaining insurance and obtaining charterparty engagements or other agreements
for the carriage of cargoes (or passengers). This system works because the
classification society has rules with which the shipowner must comply including
subjecting his vessel to periodic surveys by classification society surveyors
and complying with their recommendations; similarly, following a casualty
affecting seaworthiness, the shipowner must inform the classification society
and comply with its surveyor's recommendations for the carrying out of
temporary and permanent repairs. The sanction is the withdrawal of class.
Notwithstanding that it was foreseeable by the classification society and its
surveyor that improperly authorising the shipowner to continue the voyage with
inadequate repairs would be likely to lead to a further casualty which would
imperil the cargo being carried (and the lives of her crew), Lord Steyn
concluded that no duty of care was owed by the classification society to the
cargo owners.
His
starting point was to reject the submission of cargo owners that in cases of
physical damage to property in which the plaintiff has a proprietary or
possessory interest, the only requirement is proof of reasonable
foreseeability. He preferred the proposition that:
"Since the decision in
Dorset
Yacht Co v Home Office
[1970] AC 1004, it has been settled law that the evidence of foreseeability and
proximity as well as considerations of fairness justice and reasonableness are
relevant to all cases whatever the nature of the harm sustained by the
plaintiff."
He
approved and adopted as a correct summary of the current state of the law what
had been said by Saville LJ in the Court of Appeal:
"Whatever the nature of the harm sustained by the Plaintiff, it is
necessary to consider the matter not only by enquiring about foreseeability but
also by considering the nature of the relationship between the parties; and to
be satisfied that in all the circumstances it is fair, just and reasonable to
impose a duty of care. Of course these three matters overlap with each other
and are really facets of the same thing. For example, the relationship between
the parties may be such that it is obvious that a lack of care will create a
risk of harm and that as a matter of common sense and justice a duty should be
imposed. ... Again in most cases of the direct infliction of physical loss or
injury through carelessness, it is self-evident that a civilised system of law
should hold that a duty of care has been broken, whereas the infliction of
financial harm may well pose a more difficult problem. Thus the three
so-called requirements for a duty of care are not to be treated as wholly
separate and distinct requirements but rather as convenient and helpful
approaches to the pragmatic question whether a duty should be imposed in any
given case. In the end whether the law does impose a duty in any particular
circumstances depends on those circumstances."
He
thus confirms an over-arching formula within which can, and he would say must,
be found all cases of recognised duties of care. However he appears to
recognise that for some categories of conduct, as for example where it creates
a risk of harm (by which I take him to be referring to personal injury), "it is
obvious that as a matter of common sense and justice a duty should be imposed".
Furthermore, he (like Balcombe LJ in the Court of Appeal, [1994] 1 WLR at
1088-9) appears to be prepared to treat the three factors as interlinked. If
this understanding is correct, and it ties in with what Lord Bridge said about
attaching greater importance to the more traditional categorisation of
established situations of liability (see above), no problem arises. The
over-arching formula does not affect the outcome. Established categories, with
or without the assistance of 'common sense and justice', provide the answer.
The certainty provided by the previous authorities is not undermined. Indeed
it would be surprising if Lord Steyn had, by his decision of what he described
as a
novel
question relating to property or economic interests, intended to depart from or
call into question established decisions and principles relating to personal
injury. It is a truism to say that any case must be decided taking into
account the circumstances of the case, but where those circumstances comply
with established categories of liability, a defendant should not be allowed to
seek to escape from liability by appealing to some vaguer concept of justice or
fairness; the law cannot be re-made for every case. Indeed, the previous
authorities have by necessary implication held that it is fair, just and
reasonable that the plaintiff should recover in the situations falling within
the principles they have applied. Accordingly, if the present case is covered
by the decisions in or the principles recognised by previous authorities - and
it is -
Marc
Rich
does not require us to depart from them; indeed, we remain bound to follow them.
Lord
Steyn's next step was to consider the circumstances of the case - the material
factors. He took first the question whether the case involved "direct physical
loss". He said that "the law more readily attaches the consequences of
actionable negligence to directly inflicted physical loss than to indirectly
inflicted physical loss". He said (p.237):
"In the present case the shipowner was primarily responsible for the vessel
sailing in a seaworthy condition. The role of the NKK was a subsidiary one."
He
used this factual conclusion to distinguish the case before him from
Clay
v Crump
.
He expressly said that the fact that the carelessness of the surveyor did not
involve the direct infliction of physical damage did not exclude the existence
of a duty of care; indeed he could not have done so without overruling previous
authority. As I have attempted to explain, established principle shows that
this is not a requirement. The highest that the point can be put is that where
the conduct would amount to a direct invasion or property or personal rights
amounting to or closely analogous to trespass, a special justification is
required to negative liability. But where on general principle in the context
of foreseeable risk of personal injury, a duty of care exists; lack of
directness, unless it destroys the causative link, provides the defendant with
no answer.
Lord
Steyn went on to consider further factors. He pointed out that there was no
element of reliance as between the cargo owners and the surveyor; the cargo was
already on board the ship and in the charge of the shipowner. The carriage was
covered by bill of lading contracts with the shipowner on Hague-Visby terms, an
internationally recognised scheme for the division of risk between ship and
cargo interests, including undelegable obligations of the carrier. (
International
Packers v Ocean S.S.Co,
[1955] 2 Lloyds 218) This was a regime where all parties were covered by
insurance and principles of limitation of liability apply which would be
disrupted if the alleged liability was to be accepted. He considered the
special role of classification societies within this scheme and the position of
NKK, a non profit-making body performing functions, some of which would have to
be performed by governments if classification societies did not exist. He took
into account the relationship of NKK to the shipowners and ship interests and
the desirability of a simple and clear scheme for the resolution of disputes
between cargo interests and ship interests. He considered the cumulative
effect of these factors, particularly "the outflanking of the bargain between
shipowners and cargo owners, the negative effect on the public role of NKK and
other considerations of policy" (p.242) showed that it was not fair, just and
reasonable to impose a duty of care on NKK.
In
my judgment the decision in
Marc
Rich
does not assist the Second and Third Defendants' argument.
(1) Its
reasoning was essentially directed to considerations relevant to economic loss
and is not germane to personal injury.
(2) It
does not, nor does it purport to, re-open established categories of liability,
in particular, established categories of liability for personal injury.
(3) The
decision was based upon broad policy considerations relating to the
organisation and structure of maritime trade which are peculiar to that
situation.
(4) The
role of Mr Usherwood was not a subsidiary one to that of Mr Collins; Mr
Usherwood had an independent and critical role in the granting of a certificate
of fitness for flight for this aircraft, without which it could not take off.
(5) The
existence of a duty of care owed by the Second and Third Defendants would not
duplicate the liability of Mr Collins; it was perfectly possible that
circumstances could exist where an innocent third party would suffer personal
injury and be unable to recover from Mr Collins.
(6) A
passenger about to be taken up in an aircraft is entitled to assume that it has
met the applicable safety requirements and that those involved have taken
proper care, and to rely upon it; this element was absent in
Marc
Rich
.
(7) The
analogy sought to be drawn between the positions of NKK and the Third
Defendants, whilst showing some features in common, suffices neither to bring
the present case within the reasoning in
Marc
Rich
nor to take it out of the established categories where defendants, sometimes
public bodies, have been held liable for personal injuries suffered by members
of the public affected by their activities.
Marc
Rich
should not be regarded as an authority which has a relevance to cases of
personal injuries or as adding any requirement that an injured plaintiff do
more than bring his case within established principles. If a plaintiff is
attempting to establish some novel principle of liability, then the situation
would be different and the considerations discussed by Lord Steyn could be
relevant. (
Barrett
v Enfield L.B.C.
[1998] QB 367) But that is not this case.
The
Other Authorities
:
The
Second and Third Defendants also sought to rely on
Philcox
v The Civil Aviation Authority
.
The plaintiff was a shareholder in and the assignee of the company which had
owned a light aircraft which crashed. The defendants, the CAA, had given it a
certificate of airworthiness. It was alleged that the CAA had been negligent
in doing so. The plaintiff claimed for what he described as economic loss; the
judge held that the defendant owed the company, and the plaintiff, no duty in
respect of economic loss. The Court of Appeal dismissed the plaintiff's
appeal. Staughton LJ approached the case on the basis that it was a claim for
economic loss, citing among other cases
Marc
Rich
.
He concluded that "the Civil Aviation Authority is there to protect the public
against the owner's failures and not to protect the owner against his own
errors". Millett LJ was prepared to treat the case as a claim for the loss of
the aircraft - "physical damage and consequential loss not pure economic loss".
But his reasoning does not assist the Second and Third Defendants here. He said:
"It
is clear to my mind that the risk which the scheme of the legislation is
designed to prevent is the risk that the owner or operator of an aircraft will
fly the aircraft even when it is unfit to fly; and that the persons for whose
protection the scheme has been established are the passengers, cargo owners and
other members of the public likely to be harmed if an unfit aircraft is allowed
to fly. The owners and operators of the aircraft are not within the class of
persons for whose protection the scheme has been established; they are the
persons against whose imprudent activities the scheme is designed to protect
the public."
Ward
LJ delivered a judgment approaching the case in the same way as Staughton LJ.
This authority is against the Second and Third Defendants.
In
Reeman
v Department of Transport
the plaintiffs had bought a fishing vessel relying upon the fact that she had a
Departmental certificate that she complied with the statutory regulations.
Unhappily, it was discovered a year later that she did not in fact do so and
that the Department's surveyor had carelessly failed to do the correct
stability calculations. As a result the vessel was prohibited from proceeding
to sea and the plaintiffs were ruined. Foreseeability of reliance upon the
certificate was not disputed: the question was whether they could recover for
the economic loss which they had suffered. The Court of Appeal reluctantly
decided that they could not. The leading judgment was that of Phillips LJ.
His reasoning is based upon drawing the distinction between causing physical
harm to the plaintiff, which he said was still covered by
Donoghue
v Stevenson
,
and causing economic loss to which different criteria had to be applied. He
reviewed a number of authorities including
Caparo,
Marc
Rich
and
Philcox;
he rejected the argument that it was proper to reason from a liability of the
Department for loss of life or personal injury to those sailing on board an
unsafe and negligently certified vessel to a conclusion that there was a
liability to the owners for economic loss. His reasoning therefore confirms
and supports the reasoning which I have developed in this Judgment.
The
judgments of Peter Gibson LJ and the Lord Chief Justice were to like effect and
equally based upon the need to test a claim for economic loss against distinct
criteria. The Lord Chief Justice stressed that it was in essence a claim based
upon negligent mis-statement and underlined the need for the statement to be
"plaintiff-specific", "purpose-specific" and "transaction-specific". The
plaintiffs could not meet those conditions. The Court of Appeal approved a
similar decision at first instance in
The
Morning Watch
[1990] 1 Lloyds 547.
Here
again there is nothing for the Second and Third Defendants. The decision is a
decision about liability for economic loss. The reasoning reinforces the
distinction to be made between such cases and claims in respect of personal
injury.
Finally
we have been helpfully referred by Mr Bailey for the First Defendant to a
Canadian case,
Swanson
v The Queen
80 DLR 741. This was a much more extreme case than the present but the
essentials were the same. A company was running an airline in flagrant
disregard of the safety requirements which it was the function and statutory
duty of a Government agency to enforce. One of the company's planes crashed.
Two passengers were killed. Their families sued and were held entitled to
recover in the tort of negligence. The deceased had been owed a duty of care
by the Government. The reasoning is favourable to the Plaintiff. It is
interesting to note that the judgment includes a reference to
Murphy.
Conclusion:
For
the reasons which I have given, I would dismiss this appeal. The decision of
Judge Hallgarten was right. The reliance of the Appellants upon the
Marc
Rich
case is misconceived. They owed the Plaintiff a duty of care.
LORD
JUSTICE SWINTON THOMAS:
This
is an appeal from an order of His Honour Judge Hallgarten, Q.C., in the Central
London County Court dated the 14th May 1997, in which he decided a preliminary
issue relating to the potential liability of the Second and Third Defendants in
the action.
The
Preliminary Issue was formulated:
"In the light of the Agreed Statement of Facts, did :
(a)
The Third Defendant, being a person approved by the Civil Aviation Authority
(“the Authority”), pursuant to Article 110 of the Air Navigation
Order 1989 (”the Order”), as a person qualified to furnish reports
to the Authority in connection with the issue, pursuant to Article 7(1)(e) of
the Order, of a Permit to Fly in respect of a given aircraft; and/or
(b)
The Second Defendant, being a person to whom the Third Defendant had delegated
the inspection of the aircraft, with a view to enabling it to furnish such a
report;
owe
a duty of care in tort to the Plaintiff?"
The Judge answered the question in the affirmative.
The
agreed Statement of Facts was:
"1. In about November, 1990, the First Defendant purchased a Denney
Kitfox Model 3 aircraft in kit form, from Juniper Sales Ltd. The First
Defendant then commenced construction of the aircraft.
2.
The Second Defendant inspected and approved the construction of the aircraft
on the 26th February, 1992 and 3rd December, 1992, alternatively did so on
those and diverse other occasions.
3.
On or about 3rd December, 1992, the Second Defendant signed the document
annexed hereto marked “A”.
4.
On or about 4th January, 1993, the Second/Third Defendants issued the
documents annexed hereto marked “B”.
5.
On 18th January, 1993, the aircraft took off from Rochester Airport on a test
flight with the First Defendant at the controls and carrying the Plaintiff as a
passenger. The aircraft crashed shortly after take off."
In
the crash the Plaintiff sustained personal injuries.
Document
“A” was an application for a Permit to Fly by the First Defendant
issued by the P.F.A. and contained this statement, signed by the Second
Defendant who is described as a “C.A.A. Licensed Engineer or approved
P.F.A. Inspector”:
“I
hereby declare that this aircraft has been overhauled and prepared to my entire
satisfaction and that it is in an approved condition.”
Document
“B” is described as “Certificate of Fitness for
Flight”, and states:
“It
is hereby certified that the aircraft defined hereon has been inspected and is
fit to fly provided it is properly loaded. This certificate is valid until the
4th February, 1993 or until the airworthiness condition of the aircraft is
changed, whichever is the sooner.”
The
document was signed on behalf of P.F.A.
In
November, 1990, the First Defendant purchased the Denney Kitfox Aircraft kit
and, over the next 2 years, he constructed the aircraft. The aircraft was
supplied with a “Type B” gearbox. It is said that whilst he was
building the aircraft the First Defendant discovered that there was an
alternative gearbox, a “Type C” available, which was said to give a
better performance. Accordingly, he exchanged the Type B gearbox for a Type C
and installed the Type C in the aircraft. When he changed the gearbox from a
Type B to a Type C he should also have changed the propeller which had
originally been supplied with the kit. That propeller was compatible with the
Type B gearbox but not with the Type C. The Second Defendant, who was required
to inspect and approve the aircraft on behalf of the Third Defendant before the
First Defendant could obtain a certificate of airworthiness, knew of and
approved of the change of gearbox.
On
occasions in the course of its construction the Second Defendant inspected the
aircraft. On the 3rd December, 1992, the Third Defendant issued the
declaration, which was signed by the Second Defendant, declaring that the
aircraft was in an airworthy condition. On the 4th January, 1993, the Second
Defendant certified that the aircraft was fit to fly, and issued the
Certificate for Fitness for Flight valid for one month. The effect of these
documents under the regulatory scheme was that the First Defendant was
authorised to take the aircraft on a Test Flight for one month with a passenger
on board as “ballast”. On the 18th January, 1993, the First
Defendant took the aircraft on a test flight from Rochester Airport. The
Plaintiff was his passenger. The first flight was very short, consisting only
of taking off and flying to a height of about 20 feet and then landing. On the
second flight the aircraft was taken up to 150 feet. As it descended, it went
out of control and hit the ground with the result that the Plaintiff was
injured.
The
relevant regulatory framework can be set out comparatively shortly. The flying
of aircraft in the United Kingdom is regulated by the Civil Aviation Act 1982.
Section 60 authorises the Crown by Order in Council to give effect to the
obligations of the United Kingdom under the Chicago Convention and to regulate
air navigation. The Civil Aviation Authority is the statutory regulator of air
transport in the United Kingdom. Section 3 of the 1982 Act lays down the
functions of the C.A.A. which include “such functions as are for the time
being conferred on it by or under Air Navigation Orders with respect to the
registration of aircraft, the safely of air navigation and aircraft (including
airworthiness), the control of air traffic, the certification of operators of
aircraft......” The relevant A.N.O. for the purposes of this case is the
Air Navigation Order 1989. By Article 7(1) there is a requirement that an
aircraft shall not fly unless a valid Certificate of Airworthiness is in force
in relation to the aircraft. Article 8(1) provides that the Authority shall
issue a certificate of airworthiness if it is satisfied that the aircraft is
fit for flying having regard to the design, construction, workmanship and
materials of the aircraft which it considers necessary for the airworthiness of
the aircraft.
Article
110 provides:
"In relation to any of its functions pursuant to any of the provisions
of this Order the Authority may, either absolutely or subject to such
conditions as it thinks fit, approve a person as qualified to furnish reports
to it and may accept such reports.”
Under
Article 110 the C.A.A. approved the Third Defendant, P.F.A. (Ulair) Ltd.,
trading as Popular Flying Association, as being qualified to furnish reports to
it concerning the issuing of Permits to Fly which are then accepted by the
C.A.A. They have been carrying out that function since 1948. The objectives
of P.F.A. include “the discharge of regulatory responsibilities assigned
by statutory bodies and government departments; the co-operation and
negotiation with government departments and other interested organisations to
ensure that members’ best interests are protected; and generally to do
all such acts as may be conducive to the encouragement and development of
recreational flying.”
In
his Particulars of Claim the Plaintiff alleged that each of the Defendants was
negligent. In their defence the Second and Third Defendants allege, inter
alia, that they did not owe a duty of care to the Plaintiff.
In
his judgment, Judge Hallgarten, referred to
Marc
Rich and Co O.G. v Bishop Rock Marine Co Ltd
[1996] 1 AC 211 and said that, following what was said in that case and
others, the questions that he was required to answer were:
(1)
Was the loss or damage foreseeable?
(2)
Was there sufficient proximity between the Plaintiff and the Defendant?
(3)
Was it fair, just and reasonable to impose a duty on the Defendant?
The
Judge answered those questions in the affirmative. It is not now in dispute
that the loss or damage was foreseeable.
On
the issue as to proximity the Judge said that the Second Defendant was involved
with the inspection of the aircraft throughout. He would appreciate that the
occupants of the aircraft might suffer injury if the aircraft was passed as fit
to fly when it was not. The First Defendant was essentially an amateur and the
Second Defendant had extensive powers of control and without the approval of
the Third Defendant the aircraft could not have flown. The Judge said that
that was in contrast to the facts in the
Marc
Rich
case.
In
answering the questions as to whether it was just, fair and reasonable that the
Second and Third Defendants be liable to the Plaintiff, the Judge relied on the
fact that they were responsible for the safety of the occupants of the
aircraft. The Judge did not accept the submission that the First Defendant was
primarily responsible for the safety of passengers in the aircraft with the
Second Defendant’s role being a subsidiary one. The Judge said that if,
in circumstances such as arise in this case, the Second and Third Defendants
owed no duty to the Plaintiff, the injured Plaintiff might well be left without
a remedy. He took into account the fact that the Second and Third Defendants
were not a commercial undertaking but he did not take the view that that factor
should tip the balance in their favour. The Third Defendant is obliged under
its Rules to indemnify the Second Defendant and both the Second and the Third
Defendants are covered by insurance. He then said that the comparison with a
classification society and the regime of carriage of good by sea, involved in
the
Marc
Rich
case, was flawed and deceptive, and that there were very real distinctions to
be drawn between that case and the present case. The Judge then took into
account the fact that the Plaintiff had not overtly indicated that he was
relying on the Second Defendant to ensure that the aircraft was safe. He took
into account the existence of criminal sanctions under Article 99 of the Air
Navigation Order and took the view, that insofar as that was a material
consideration, it assisted the Plaintiff rather than the Second and Third
Defendants. Finally he took into account the submission that there was a trend
against the Courts finding a duty of care on the part of Regulators or
Supervisors. He said that he could not discern any such trend in cases other
than those concerning pure economic loss.
He
answered the questions in the affirmative and said that he did not find that it
was appropriate to draw any distinction between the Second and the Third
Defendant.
In
his Notice of Appeal Mr Kavanagh submits that the Judge was wrong to find that
there was proximity between the Plaintiff and the Second and Third Defendant
because the relationship was not sufficiently direct and close. He says that
the danger to the Plaintiff was not created by the Second Defendant but by the
First Defendant.
On
this issue, as so often in cases relating to the breach of the duty of care,
it is helpful to remind oneself of the classic statement of Lord Atkin in
Donoghue
v Stevenson
[1932] AC 562 at page 580:
"At present I content myself with pointing out that in English law there
must be, and is, some general conception of relations giving rise to a duty of
care, of which the particular cases found in the books are but instances. The
liability for negligence, whether you style it such or treat it as in other
systems as a species of ‘culpa’, is no doubt based upon a general
public sentiment of moral wrongdoing for which the offender must pay. But acts
or omissions which any moral code would censure cannot in a practical world be
treated so as to give a right to every person injured by them to demand relief.
In this way rules of law arise which limit the range of complainants and the
extent of their remedy. The rule that you are to love your neighbour becomes
in law, you must not injure your neighbour; and the lawyer’s question who
is my neighbour? receives a restricted reply. You must take reasonable care to
avoid acts or omissions which you can reasonably foresee would be likely to
injure your neighbour. Who, then, in law is my neighbour? The answer seems to
be - persons who are so closely and directly affected by my act that I ought
reasonably to have them in contemplation as being so affected when I am
directing my mind to the acts or omissions which are called in question.”
One
must bear in mind subsequent warnings, for example by Lord Reid at page 1027
and Lord Morris of Borth-y-Gest at page 1038 in the
Dorset
Yacht Company v Home Office
[1970] AC 1004, that Lord Atkin’s words are not to be treated as though
they are contained in a statute.
In
Grant
v Australian Knitting Mills Ltd
[1936] AC 85 at page 103 Lord Wright said:
"All that is necessary as a step to establish a tort of actionable
negligence is define the precise relationship from which the duty to take care
is deduced. It is, however, essential in English law that the duty should be
established; the mere fact that a man is injured by another’s act gives
in itself no cause of action. If the act is deliberate, the party injured will
have no claim in law even though the injury was intentional so long as the
other party is merely exercising a legal right; if the act involves lack of
due care, again no case of actionable negligence will arise unless the duty to
be careful exists.”
In
Marc
Rich
in the Court of Appeal [1994] 1 W.L.R. 1071 Balcombe, L.J. said at page 1088:
"I doubt whether the words ‘fair just and reasonable’ impose
a test additional to that of ‘proximity’; in my judgment these are
criteria to be adopted in considering whether the necessary degree of proximity
exists.”
One
must consider the question of proximity and “fair just and reasonable" in
the context of the case under consideration but on the facts of a case such as
this the two can conveniently be considered together. Indeed foreseeability is
of assistance in considering justice and fairness. There are real dangers in
compartmentalising these components in negligence, and doing so is a far cry
from the classic dictum of Lord Atkin in Donoghue v Stevenson. This seems to
me to be borne out by the well known passage of Lord Bridge in
Caparo
Industries Plc v Dickman
[1990] 2 AC 605 at page 617 when he said:
"What emerges is that, in addition to the foreseeability of damage,
necessary ingredients in any situation giving rise to a duty of care are that
there should exist between the party owing the duty and the party to whom it is
owed a relationship characterised by the law as one of ‘proximity’
or ‘neighbourhood’ and that the situation should be one in which
the court considers it fair, just and reasonable that the law should impose a
duty of a given scope upon the one party for the benefit of the other.”
In
the
South
Pacific Manufacturing Co Ltd v New Zealand Security Consultants and
Investigations Ltd
,
Cooke, P. said:
"A broad two stage approach or any other approach is only a framework, a
more or less methodical way of tackling the problem. How it is formulated
should not matter in the end. Ultimately the exercise can only be a balancing
one and the important object is that all the relevant factors be weighed.
There is no escape from the truth that, whatever formula be used, the outcome
in a grey area case has to be determined by judicial judgment. Formulae can
help organise thinking but they cannot provide answers.”
Accordingly,
in this case, I prefer to consider the questions of “proximity” and
whether it is “fair, just and reasonable” to impose a liability on
the Second and Third Defendants together. However, on the narrow proximity
question, going back to Lord Atkin’s test there can be no doubt, as is
conceded, that it was foreseeable that if the Second and Third Defendants
granted a certificate of fitness to fly in respect of this aircraft with an
inappropriate gearbox there was likely to be an accident, then plainly they
ought reasonably to have in contemplation a person travelling as a passenger on
the Test Flight in the aircraft as being so affected when they were directing
their minds to the acts or omissions which are called in to question.
Mr
Kavanagh submits that the Judge was wrong to say that it was fair, just and
reasonable to impose a duty on these Defendants. He says that the owner of the
aircraft is primarily responsible for safety. He stresses that the Defendants
are non commercial, non profit making and are giving their services out of
goodwill and not for reward. They were in fact paid by the First Defendant at
the rate of £20 a visit. That may be a nominal charge but nonetheless the
charge was made. He points out that the First Defendant is insured. However
he may or may not be liable to the Plaintiff and there might well be similar
cases in which the owner was not insured. He says that the Plaintiff was in
the aircraft at the invitation of the First Defendant and it is, accordingly,
not unfair that he should bear the responsibility for the Plaintiff’s
safety. He submits that the imposition of a duty of care may have far reaching
potential. There may be an increase in insurance premiums. P.F.A. might
decline to continue to carry out this work on behalf of C.A.A. There are, he
submits, serious implications for other Regulators. He submits that the Judge
failed to place sufficient weight on the responsibilities of the First
Defendant and over estimated the degree of control and supervision by the
Second and Third Defendants.
Mr
Kavanagh relies on the speech of Lord Steyn, with whom the other Lords apart
from Lord Lloyd of Berwick, who dissented, agreed in
Marc
Rich
and
Co O.G. v Bishops Rock Marine Co Ltd
(supra). The headnote reads:
"The First Defendants’ vessel loaded the Plaintiff’s cargo
under bills of lading incorporating the Hague Rules in consequence of which the
shipowner was owed a non delegable duty to the cargo owners to make the vessel
seaworthy at the inception of the voyage. In mid-voyage the vessel was put
into port because of a crack in her hull. A Surveyor, acting on behalf of the
Third Defendant Classification Society, in which the vessel was entered,
carried out inspections of the vessel and recommended that, after repairs
specified by him, the vessel should continue on her voyage. A few days after
leaving port the vessel sank with the loss of the cargo. The cargo owners
brought proceedings against the ship owners, the charterers and the
Classification Society. The claim against the ship owners was settled. The
action against the charterers was discontinued. The cargo owners sought to
recover the balance of their loss from the Classification Society, alleging
breach of a duty of care owed by the Society to the cargo owners to take
reasonable care in the surveys undertaken and the recommendations made so as
not to expose the cargo to a risk of damage or loss. The Society accepted for
the purposes of that issue that the damage suffered was physical damage and
that it had been foreseeable that lack of care by the Society was likely to
expose the cargo owners’ property to the risk of that damage. The House
of Lords held that to impose a duty of care on Classification Societies would
be unfair, unjust and unreasonable as against ship owners who would ultimately
have to bear the costs and that such a duty would be at variance with the
international contractual structure between ship owners and cargo owners.
Therefore a duty ought not to be imposed on the Society.”
It
is absolutely clear that that case depended on its own facts and the facts of
that case are very different from the facts of the present case. Lord Steyn
stressed that a ship owner was primarily responsible for the vessel sailing in
a seaworthy condition. The role of the N.K.K. (the Classification Society) was
a subsidiary one. The actual terms of the bills of lading contracts
incorporating The Hague Rules were fundamental to the decision. Lord Steyn
said at page 239:
"The dealings between ship owners and cargo owners are based on a
contractual structure, the Hague Rules, and tonnage limitation on which the
insurance of international trade depends...... underlying it is the system of
double or overlapping insurance of cargo. Cargo owners take out direct
insurance in respect of the cargo. Ship owners take out liability risks
insurance in respect of breaches of their duties of care in respect of the
cargo. The insurance system is structured on the basis that the potential
liability of ship owners to cargo owners is limited under the Hague Rules and
by virtue of tonnage limitation provisions. And insurance premiums payable by
owners obviously reflect such limitations on the ship owners’
exposure.”
Then
on page 240 Lord Steyn said:
"The result of a recognition of a duty of care in this case would be to
enable cargo owners, or rather their insurers, to disturb the balance created
by the Hague Rules and Hague-Visby Rules as well as by tonnage limitation
provisions, by enabling cargo owners to recover in tort against a peripheral
party to the prejudice of the protection of ship owners under the existing
system. For these reasons I would hold that the international trade system
tends to militate against the recognition of the claim in tort put forward by
the cargo owners against the Classification Society.”
Those
considerations do not apply in this case.
Lord
Steyn then went on to say that the fact that a defendant acts for the
collective welfare is a matter to be taken into consideration when considering
whether it is fair, just and reasonable to impose a duty and that consideration
is relevant to the instant case. He placed particular reliance on the bills of
lading contracts, the position and role of N.K.K. and policy factors. The
first two do not apply to the present case, and the policy factors identified
by him in that case are quite different to any policy factors that might arise
in the present case. Then finally Lord Steyn said at page 242:
"I conclude that the recognition of a duty would be unfair, unjust and
unreasonable as against the ship owners who would ultimately have to bear the
cost of holding Classification Societies liable, such consequence being at
variance with the bargain between the ship owners and the cargo owners based on
an internationally agreed contractual structure. It would also be unfair,
unjust and unreasonable towards Classification Societies notably because they
act for the collective welfare and unlike ship owners they would not have the
benefit of any limitation provisions.
Looking
at the matter from the point of view of cargo owners, the existing system
provides them with the protection of the Hague Rules or Hague-Visby Rules. But
that protection is limited under such rules and by tonnage limitation
provisions. Under the existing system any shortfall is readily insurable. In
my judgment the lesser injustice is done by not recognising a duty of care. It
follows that I would reject the primary way in which counsel for the cargo
owners puts his case."
It
follows, therefore, that at the conclusion of his speech, Lord Steyn, having
set out the relevant considerations which, in the main, do not apply to this
case, came to a conclusion on the basis of a “lesser injustice”
concept in deciding whether or not a duty of care should be imposed. Applying
that test to the present case I would conclude, without difficulty, that a
greater injustice would be done to a person injured in circumstances such as
those that arise in this case by not imposing a duty upon those responsible for
issuing a Fitness to Fly certificate than would result to the defendants in
imposing such a duty. The First and Second Defendants have undertaken to
discharge the statutory duty for the protection of the public and in my
judgment no injustice is done by imposing such a duty on them in respect of a
negligent act.
In
Reeman
v Department of Transport and ors
[1997] 2 Lloyds L.R. 648, a ship was built in Holland in 1951 as a Beam
Trawler. She was lengthened, overhauled and refitted in about 1972. In 1977
she was imported from Holland into this country by a company who applied for a
Fishing Vessel Certificate. A survey was carried out by a Surveyor employed by
the Department. He made a negligent error which led to the conclusion that the
vessel satisfied the Department’s stability requirements when in fact she
failed to do so by a significant margin. The Surveyor made a report and the
Department issued a Fishing Vessel Certificate. The same Surveyor later
resurveyed and made the same error. The Plaintiffs purchased the vessel and it
was ascertained that it did not meet the minimum requirements with the result
that the purchaser suffered financially.
Phillips,
L.J. giving the leading judgment said at p. 680:
|
"The statutory framework in the present case is one designed to promote
safety at sea. The scheme adopted to achieve this is to impose duties as to
seaworthiness on the owners of vessels and then to provide for the Department
to check and certify that these duties have been complied with. The purpose
for issuing certificates is not really to encourage skippers or others to rely
upon them by putting to sea, or in any other manner. Somewhat paradoxically,
the purpose of issuing certificates is to help to prevent fishing vessels which
are uncertified and which may be unseaworthy, from putting to sea. More
broadly, one can say that the purpose of issuing certificates is the promotion
of safety at sea.”
A
study of the statutory framework provided by the Fishing Vessels (Safety
Provisions) Act, 1970, and the regulations made thereunder shows that they are
quite different to the regulatory framework governing the issuing of
certificates in relation to aircraft. As was pointed out by Phillips, L.J.
the scheme imposes duties as to seaworthiness on the owners of the vessels.
Phillips,
L.J. continued on p. 680:
"What I cannot accept is Mr Ullstein’s further submission that, in
the case of fishing vessel certificates, a subsidiary purpose for which the
certificate is issued is to inform those who may, in the future, consider
entering into commercial transactions, such as purchase or charter, in relation
to the certified vessel. No trace of such a purpose is to be found in the
statute under which the rules are issued....... The protection of those whose
commercial interests may foreseeably be affected by unseaworthiness of vessels
forms no part of the purpose of the legislation and no part of the purpose for
which fishing vessel certificates are issued. So far as the purpose of the
advice is concerned, the facts of this case are for more inimical to the
finding of a relationship of proximity than the facts in Caparo.”
Accordingly
the distinction between that case and the present case is readily apparent. I
have no doubt that the regulatory framework provided by the Civil Aviation Act,
1982, referred to above is designed, at least in substantial part, for the
protection of those who may be injured if an aircraft is certified as being
certified as fit to fly when it is not.
In
Philcox
v Civil Aviation Authority
(Unreported, Transcript 25th May, 1995) the Plaintiff sued the C.A.A. in
respect of the issuing of a certificate of airworthiness. The Plaintiff was
the assignee of a company who had purchased a light aircraft. Work had been
carried out on the aircraft by Bristol and Wessex Aeroplane Club Ltd. The
aircraft crashed and was damaged. The Plaintiff sued for the cost of repairs.
The issue tried by the Judge was whether the C.A.A. owed a duty to the company
which had assigned its interests to the Plaintiff for economic loss. Staughton
LJ said at p. 14:
"It is the task of the owner of an aircraft to maintain it properly. He
can do it himself or he can engage others to do so. The Air Navigation Order
itself provides for a class of licensed maintenance engineers. It is the
owner’s job to engage one of those and to see that the task is properly
carried out. The Civil Aviation Authority supervises in order to make sure
that the owner has done what he, the owner, ought to have done and what is his
responsibility. The Civil Aviation Authority is there to protect the public
against the owner’s failures and not to protect the owner against his own
errors.”
Staughton
LJ was certainly not excluding a duty owed by a person issuing a certificate to
the general public.
Millett
LJ said at page 15:
"In my judgment the question for the Court can be formulated as follows:
is a duty of care owed by the Civil Aviation Authority to the owner or operator
of an aircraft which is not airworthy to avoid the risk of physical damage to
the aircraft and consequential loss arising from its negligent failure to
prevent the aircraft from flying by withholding a Certificate of
Airworthiness?”
Then
on page 17 he said:
"It is clear, to my mind, that the risk which the scheme of the
legislation is designed to prevent is the risk that the owner or operator of an
aircraft will fly the aircraft even when it is unfit to fly and that the
persons for whose protection the scheme has been established are the
passengers, the cargo owners, and other members of the public likely to be
harmed if an unfit aircraft is allowed to fly.
The
owners and operators of the aircraft are not within the class of persons for
whose protection the scheme has been established; they are the persons against
whose imprudent activities the scheme is designed to protect the public. They
are not entitled to rely on the issue of the certificate to exonerate them from
their own responsibilities to ensure there aircraft are fit to fly.”
Accordingly,
Millett LJ clearly recognised that the scheme of the legislation in relation to
Certificates of Airworthiness was specifically designed to protect the public
such as passengers but did not extend to the owners and operators to exonerate
them from their own responsibility. If that is right, then the regulatory
framework was designed specifically to protect persons in the position of the
Plaintiff in this case from being taken up in an aircraft which should not
have been permitted to fly.
In
Swanson
et
al
v The Queen in right of Canada
80 D.L.R. 741 an action was brought against the Crown arising from the crash
of an aircraft. The action was brought against the Crown for damages alleging
that the negligence of its employees contributed to the loss of the widows and
families of passengers killed in the accident. The Trial Judge held that there
was a duty owed to them by the Crown, that this duty was breached and that it
caused loss to the Plaintiffs. The Plaintiffs alleged negligence by the
Inspector employed by Transport Canada, the body appointed by the Canadian
Transport Commission to issue licenses to operate commercial air services. The
regulatory framework is similar to that in this country. It was alleged that
there were a number of violations of Air Navigation Orders by the owners of the
aeroplane. To a substantial extent the judgment of the Federal Court of Appeal
related to the liability of the Crown under Crown Liability Act, 1985.
However, Linden, J.A., giving the judgment of the Court, also considered the
question as to the nature of the duty owed by the Inspectors to the passengers
travelling in the aircraft.
At
page 750 Linden, J.A. said:
"These people were essentially inspectors of airlines, aircraft and
pilots, who did not make policy but rather implemented it, although they
certainly had to exercise some discretion and judgment during the course of
their work, much like other professional people. I agree with Mr Justice Walsh
when he stated:
‘The
Aeronautics Act and Regulations made thereunder if not, explicitly imposing a
duty of care of the general public, at least do so by implication in that this
is the very reason for their existence. The flying public has no protection
against avaricious airlines, irresponsible or inadequately trained pilots, and
defective aircraft if not the Department of Transport and must rely on it for
enforcement of the law and regulations in the interest of public safety. Its
expressed policy is, as it must be, to enforce these Regulations, but when the
extent and manner of the enforcement is sufficient and inadequate to provide
the necessary protection, then it becomes more than a matter of policy but one
of operation and must not be carried out negligently or inadequately. While
there may be no contractual duty of care owed to the public, as the Plaintiff
suggests, this does not of itself protect the Defendant from liability in tort.'"
Then
a little later he said:
"Their (the Inspectors) task was to enforce the regulations and the
A.N.O.’s as far as safety was concerned to the best of their ability with
the resources at their disposal. This function was clearly operational.
Hence, a civil duty of care was owed to the Plaintiffs to exercise reasonable
care in the circumstances.”
Although
the facts were somewhat different I respectfully agree with the reasoning in
that case and it provides support for the Plaintiff’s contentions in this
case.
The
regulatory framework recognises the dangers that are inherent in flying. That
is the very purpose lying behind the prohibition on taking aeroplanes into the
air without a Certificate of Airworthiness and a Permit to Fly, and the
appointment of the C.A.A. or those authorised by them to issue such
certificates. The whole purpose is one of air safety. In my judgment, any
reasonably well informed member of the public, although not in possession of
the detailed framework, would expect there to be such a regulatory system in
force to ensure his safety when flying and would rely upon it. Furthermore, a
member of the public would expect that a person who is appointed to carry out
these functions of inspecting aircraft and issuing permits would exercise
reasonable care in doing so. The Third Defendants, and those appointed to act
on their behalf, are experts in their field the First Defendant is an amateur
and inevitably will rely on the Second Defendant as an expert. The Amateur who
builds his own aircraft is unlikely to rely on any expertise other than that
provided by the P.F.A.. In relation to a ship, as in the
Marc
Rich
case, the owners are likely to employ their own experts to ensure that the ship
is seaworthy. In the case of a small private aeroplane, the only expertise
which is supplied is that of the Inspector, the Second Defendant. Until the
Certificate of Fitness is granted, the aircraft cannot fly. That is in
contradistinction to the position in the
Marc
Rich
case where there was no such inhibition on the ship owners. The surveyor
acting on behalf of N.K.K. did not issue a permit to sail allowing the ship to
go to sea in contradistinction to the Second Defendant in this case who did
issue such a permit enabling the aircraft to fly. The primary purpose, as I
see it, of the intervention of the C.A.A. or its appointees is the safety of
persons who fly in the aircraft which has been granted the Certificate.
Moreover the primary purpose is to prevent physical injury as opposed to damage
to property. If, as one must assume for the purposes of the preliminary issue,
the Second and Third Defendants were negligent, it is difficult indeed to see
why they should not owe a duty to the Plaintiff. To hold the opposite would
be capable of causing a serious injustice in circumstances such as the owner
not being liable or not being insured. We are told by Mr Kavanagh that the
P.F.A. has had no claim made against it since its foundation in 1946. That is
much to its credit but it does not seem to me to affect the position as to
whether or not it should be held liable in negligence. Moreover it makes it
much more difficult for Mr Kavanagh to put forward the “floodgates”
argument or submissions based on a prohibitive increase in insurance premiums
or people being unwilling to undertake the important tasks entrusted to them
under the Air Navigational Orders. It is true that the Third Defendants are a
non commercial non profit making body and that may be factor to be taken into
account, but advantages accrue to the P.F.A. as a result of their regulatory
function.
In
this case the Second Defendant knew and approved of the fitting of the Type C
gearbox. They issued a certificate which, in effect, certified that the
aircraft was safe to fly. They knew that a passenger might be taken up in the
aircraft. They voluntarily assumed that the responsibility of issuing the
Certificate and, accordingly, in effect, certifying that the aircraft was safe.
In
my judgment the Judge was right to hold that there was sufficient proximity and
that it was fair just and reasonable to impose a duty on the Second and Third
Defendants.
I
also would dismiss this appeal.
LORD
JUSTICE BUXTON:
The
Role of the Court:
In
Marc
Rich & Co v Bishop Rock Ltd
[1996] 1 AC 211 [
Marc
Rich
]
the House of Lords, [1996] 1 AC at p. 236A, upheld as a correct statement of
the law of negligence as it now stands the passage from the judgment of Saville
LJ in the Court of Appeal that has already been cited by Hobhouse LJ.
Their
Lordships added, at p.235E, that it had been settled law for twenty-five years,
since the decision of the House in
Dorset
Yacht Co v Home Office
[1970] AC 1004, that the elements of foreseeability and proximity, and
considerations of fairness, justice and reasonableness are relevant to all
cases, whatever the nature of the harm sustained by the plaintiff.
For
my part, if it were literally the case that considerations determining whether
a duty exists in law do indeed collapse into a pragmatic decision whether there
should be a duty in the particular circumstances, then I would see little role
for an appellate court in elucidating that question. Deciding pragmatic
issues, especially issues of fairness and reasonableness, would seem to be
eminently a task for a first instance judge, with which an appellate court will
only interfere on very limited and special grounds, which do not include mere
disagreement with the judge's conclusion. It is, however, clear that that is
not the effect of the present law. However careful in assessing the competing
factors the trial judge may be, and however aware he may be of what those
factors are, an appellate court is able to substitute its decision for his
simply on the ground that it considers him to have been wrong: see e.g.
Reeman
v Department of Transport
[1997] 2 Lloyds LR 648.
I
am saved from pursuing this difficulty as a matter of decision, and from
addressing the limits, if any, on this court's powers, because I consider that
the decision of Judge Hallgarten QC was not only innocent of any irrationality
or lack of material on which it could properly proceed, but also plainly right.
Nonetheless, because this court does clearly play an appellate role as to the
merits in law of the decision, I venture to indicate the factors that lead me
to think, despite the arguments addressed to us, that the judge's decision was
correct in law.
Direct
physical loss
"In the straightforward case of the direct infliction of physical injury
by the act of the plaintiff there is, indeed, no need to look beyond the
foreseeability by the defendant of the result in order to establish that he is
in a "proximate" relationship with the plaintiff...The infliction of physical
injury to the person or property of another universally requires to be
justified": Lord Oliver of Aylmerton in
Murphy
v Brentwood DC
[1991] 1 AC 398 at p486H-487B.
Lord
Oliver continued, "The causing of economic loss does not". The root of this
distinction therefore lies in the difference, strongly emphasised as being of
the first importance in
Murphy
itself, between physical damage and economic loss. It was the fact that the
damage in
Anns
[1978] AC 720 had been wrongly classified as physical damage that led the House
in
Murphy
to feel able to differ from the result that was based on that classification:
see for instance per Lord Bridge, [1991] 1 AC at p.466H. The distinction is
not, however, a simple one between physical damage and economic loss, because
the cases of (foreseeable) physical damage that are likely to attract liability
without more consideration, following the approach referred to by Lord Oliver in
Murphy,
are cases of "direct" physical damage. That notion is difficult to define, and
is not defined in the cases that employ it; but at least one consideration
seems to be that damage may be held not to be "direct" if it is inflicted by an
act of the tortfeasor that produces the damage without other human
intervention. It will of course be noted that this is a different issue from
that of causation, since it is perfectly possible for a person to cause damage
otherwise than by his own direct act. The existence of this sub-category of
physical damage does however mean that where the physical damage is deemed to
be indirect, the questions of proximity, justice, fairness and reasonableness
remain wholly in issue, and to be established by the plaintiff.
This
process is illustrated in
Marc
Rich
.
Under a sub-heading "Direct physical loss?" the House of Lords said this, at
p.237D:
"Counsel for the cargo owners argued that the present case involved the
infliction of direct physical loss. At first glance the issue of directness
may seem a matter of terminology rather than substance. In truth it is a
material factor. The law more readily attaches the consequences of actionable
negligence to directly inflicted physical loss than to indirectly inflicted
physical loss. For example, if the N.K.K. surveyor had carelessly dropped a
lighted cigarette into a cargo hold known to contain a combustible cargo,
thereby causing an explosion and the loss of the vessel and cargo, the
assertion that the classification society was in breach of a duty of care might
have been a strong one. There would be a paradigm case of directly inflicted
physical loss. Counsel for the cargo owners referred your Lordships to
Clay
v A.J. Crump & Sons Ltd
[1964] 1 Q.B. 533 by way of support for the proposition that, in this case,
there was a direct infliction of loss in the relevant sense. In that case an
architect assured a demolition contractor that he could safely leave a wall
standing. The demolition contractor acted on this advice. The wall collapsed
on a workman. The workman sued the architect in tort. It was held that the
architect owed a duty of care to the workman. The architect was primarily
responsible for leaving the wall in a dangerous condition. In the present case
the shipowner was primarily responsible for the vessel sailing in a seaworthy
condition. The role of N.K.K. was a subsidiary one. In my view the
carelessness of the N.K.K. surveyor did not involve the direct infliction of
physical damage in the relevant sense. That by no means concludes the answer
to the general question. But it does introduce the right perspective on one
aspect of this case."
In
Clay
v Crump
this court in my judgement held that the architect was in the same position as
the manufacturer of the ginger beer in
Donoghue
v Stevenson
,
despite the fact that it was not the architect who did the work on the wall,
and that he could in one sense be said to be acting in a secondary capacity in
relation to that work. For that conclusion I would draw attention in
particular to what was said by Upjohn LJ, [1964] 1 QB at p.567, and by Davies
LJ at pp.571-572. I do not understand the House of Lords in
Marc
Rich
to differ from that view, but rather to hold that, on the facts of that case,
the physical damage was not "direct" in the sense that was drawn in
Clay
v Crump
from the observations of Lord Atkin in
Donoghue
v Stevenson
[1932] AC at pp.581-582.
In
our case, the judge accepted that, as in
Marc
Rich
,
the physical damage had been "indirect". If the point matters (which in the
present case in the event it does not) I am far from sure that that follows
from the House's analysis in
Marc
Rich
.
The judge held, in my view entirely rightly, that it was wrong to speak of the
First Defendant as primarily responsible, with the Second Defendant's role
being only subsidiary. The Second Defendant was not simply an inspector from
outside, whose approval was in practice obligatory on the owner because of
insurance pressures. Rather, as the judge found, the Second Defendant was
involved with the inspection of the aircraft throughout. Further, the judge
drew attention to the fact that the declared aims of the Third Defendants, the
PFA, were
"to get enthusiastic aviators into the air as cheaply as possible and to
promote and supervise the design and construction of light aircraft by amateurs"
One
of those enthusiastic aviators was the First Defendant. The judge found as to
him that
"In the context of the safety regime operated under the aegis of the
Third Defendant, a person in the position of the First Defendant - however
skilled - was essentially an amateur"
We
were much pressed with the responsibility undertaken by the First Defendant for
keeping his aircraft in an airworthy condition, as set out for instance in his
application for a permit to fly. Counsel argued that that was inconsistent
with the placing of any responsibility on the PFA for a failing in that
condition. But it is to be observed first that, that very application, in
standard form, was conditional on modifications to the aircraft only having
been undertaken with the approval of the PFA, who were deemed to act as the
First Defendant's agent for the issue of the permit; and, second, that the fact
that another party is at fault in not preventing the occurrence of the damage
does not of itself absolve an earlier inspector or adviser of liability for
direct
physical damage. The latter point is illustrated by
Clay
v Crump
itself, where the building contractor, who had an opportunity to inspect the
wall, was held equally liable with the architect.
On
the facts of our case, therefore, I consider that the very close involvement of
the inspector in the construction of the plane, and the very close involvement
in organisational terms between the First Defendant and the PFA, the PFA's role
being expressly intended to facilitate the First Defendant's construction and
flying, brought the case well within the category of direct physical damage as
recognised both in
Clay
v Crump
and in the passage that I have ventured to cite from
Marc
Rich
.
However, even if I am wrong about that, the aspects of this case to which I
draw attention in the preceding paragraphs are clearly relevant to the other
consideration ventilated under the head of direct physical loss in
Marc
Rich
,
of putting the nature of the damage in the right perspective: that is to say,
the right perspective so far as the justice, fairness and reasonableness of any
recovery by the injured party is concerned, those factors unequivocally coming
into play when the physical damage is other than "direct". The judge was
entirely right to conclude that the nature and purpose of the activities of the
PFA and thus also of the Second Defendant rendered it just, fair and reasonable
that the plaintiff should recover against them, even though a different
inspecting body, with a different role and different responsibilities, had not
been held liable in
Marc
Rich
.
I
would further add that the particular nature of the activities of the PFA
undermines the argument advanced to the judge and to us that this case was
a
fortiori
of
Marc
Rich
,
in that the House of Lords had attached importance to the position of the
classification society as a non profit-making entity: whereas the PFA was, to
quote the judge, not even a commercial non-profit making body, but "a voluntary
non-profit making organisation aiming to give the maximum assistance to its
members as cheaply as possible". The judge thought that that was undoubtedly a
factor that weighed in the Second and Third Defendants' favour, but not one
that ought to tip the balance. I certainly agree with the latter assessment,
but I would be prepared to go further than did the judge. I do not for a
moment seek to cast doubt on the value of the work of the PFA in supporting its
members' flying activities. The fact has to be faced, however, that those
activities are voluntarily undertaken by the members, for the pursuit of their
own interests, and are extremely dangerous to third parties unless carried out
with due care. That the activities are recreational rather than commercial in
nature, and that the PFA in facilitating them thus can be said to act
"non-commercially", cannot in my view improve the position of either the PFA or
one of its members if in the course of those activities a third party is
negligently injured.
Personal
injury
The
basic statements of the law of negligence that I have ventured to cite above
make a distinction, for the purposes of analysis, between physical damage to
person or property on the one hand; and merely economic loss on the other.
That is no doubt necessary in order to demonstrate the different and particular
considerations that apply in the case of economic loss. However, when one
turns to the judgemental issues of justice, fairness and reasonableness the
importance of fact that what is put at risk is the plaintiff's body, and not
just his goods, is, as Hobhouse LJ has demonstrated, deeply embedded in the law
of negligence. That was certainly the judge's view. He started his assessment
of justice, fairness and reasonableness by saying:
"It seems to me that what is paramount with aircraft -- at any rate such
as those with which the Second and Third Defendants are concerned -- is the
physical safety of occupants. In this regard, it is noteworthy that in the
Marc
Rich
case the majority of the House of Lords only adverted to the particular class
of interest with which it was directly concerned, namely cargo".
In
that connexion we were taken to the judgments in this court in the
Reeman
v Department of Transport
[1997] 2 Lloyds LR 648, and in particular to a passage in the judgment of
Phillips LJ, with whose reasoning both Lord Bingham of Cornhill CJ and Peter
Gibson LJ agreed. The claim in
Reeman
was for economic loss suffered by the purchasers of ship that had previously
been negligently certified as passing stability tests by the Department's
surveyor, but which greatly diminished in value in the hands of the purchasers
once the true condition of the vessel became known. Dealing with one
particular argument of the plaintiffs Phillips LJ said:
"If
those who are charged with survey and certification of such property fail to
exercise proper skill and care, a number of consequences may follow:
1.
The danger which the regulations are designed to guard against may result in
loss of life, injury or damage to third parties. 2. The owner of the property
concerned with whom the authority is in direct relationship may suffer
pecuniary damage as a result, for instance, of being prohibited from using his
property for its commercial purpose, or spending money on unnecessary
modifications to it. 3. Third parties induced to purchase, hire insure or
finance the property in question may suffer prejudice.
In
argument, Mr Ullstein Q.C. for Mr and Mrs Reeman has treat it as axiomatic
that, if Mr Reeman had put to sea in the vessel which had then capsized with
the consequences that he and the crew had been drowned, the widows of those who
lost their lives would have had claims against the department under the Fatal
Accidents Acts. For myself, I do not find this axiomatic. In
Murphy
v Brentwood District Council
[1991] 1 AC 398 Lord Mackay at p.457 and Lord Keith at p. 463 expressly left
open the question of whether a local authority, which had failed to take
reasonable care to ensure compliance with building bylaws, would be legally
liable in respect of injury to persons resulting from such failure.
In
Philcox
v Civil Aviation Authority
,
(The Times June 8, 1995) The Court of Appeal held that the Civil Aviation
Authority's statutory duty to issue certificates of airworthiness involved no
duty to the owner of the aircraft to exercise reasonable care to prevent him or
his aircraft suffering injury as a result of taking off in an unairworthy
condition. Finally, in
Marc
Rich & Co AG v Bishop Rock Marine Co. Ltd
[1996] 1 AC 211 the House of Lords held that a classification society which
had certified a vessel as seaworthy when she was not, owed no duty of care to
the owners of cargo lost when the vessel sank and, per Lord Steyn at p. 237,
could not be said to be directly responsible for that loss. These decisions at
least raise a serious question as to whether the department owed any duty to
Mr. Reeman, or even to his crew, in respect of the risk of death or injury
flowing from the unseaworthiness of the vessel".
As
to
Philcox,
the ratio of that case was as stated by Millett LJ, that the relationship of
proximity alleged to exist between the plaintiff and the Civil Aviation
Authority was based on the legislative scheme for inspection. Millett LJ
continued:
"It is clear, to my mind, that the risk which the scheme of the
legislation is designed to prevent is the risk that the owner or operator of an
aircraft will fly the aircraft even when it is unfit to fly; and that the
persons for whose protection the scheme has been established are the
passengers, cargo-owners, and other members of the public likely to be harmed
if an unfit aircraft is allowed to fly. The owners and operators of the
aircraft are not within the class of persons for whose protection the scheme
has been established; they are the persons against whose imprudent activities
the scheme is designed to protect the public. They are not entitled to rely on
the issue of the certificate to exonerate them from their own responsibility to
ensure that their aircraft are fit to fly".
By
emphasising that that scheme is intended for the protection of persons in the
position of the present plaintiff
Philcox,
as both Hobhouse and Swinton Thomas LJJ have pointed out, is strongly
supportive of liability in our case.
But,
more generally, it would not have followed from a finding in
Reeman
that it was fair just and reasonable that Mr and Mrs Reeman should recover for
personal injury caused to them by the negligent survey that they could also
recover for economic loss caused to them by that same survey. As
Caparo
v Dickman
[1990] 2 AC 605 emphasised, the fact that the plaintiff can recover in respect
of one type or kind of loss or damage does not in itself mean that he can
recover for loss or damage of a different type or kind inflicted by the same
act of the defendant. In
Caparo,
the fact that the auditors owed a duty to conduct the audit competently to the
plaintiffs as shareholders did not mean that the plaintiffs could recover in
respect of different damage, damage as market operators, caused to them by that
same audit. I would in particular refer to the speech of Lord Oliver of
Aylmerton, [1990] 2 AC at p.651E-G:
"the duty of care is inseparable from the damage which the plaintiff
claims to have suffered from its breach. It is not a duty of care in the
abstract but a duty to avoid causing to the particular plaintiff damage of the
particular kind which he has in fact sustained. I cannot improve on the
analysis which is to be found in the judgment of Brennan J in the High Court of
Australia in the
Shire
of Sutherland
case, 60 ALR 1:...."a postulated duty of care must be stated in reference to
the kind of damage that a plaintiff has suffered and in reference to the
plaintiff or a class of which the plaintiff is a member."
The
caution expressed by this court in
Reeman
was therefore justified not least by the fact that it was dealing with an
argument that, even if it were successful, would not have displaced the court's
view of the proper outcome of the case. But when the question has to be
directly confronted, as it does in our case, I agree with my Lords in having no
doubt that the judge was entirely right to regard the fact that the plaintiff's
claim was for foreseeable physical injury as a potent factor pointing to the
existence of a duty. As was pointed out in argument, failure of an aeroplane
in flight will almost inevitably lead to injury, and probably, though happily
not in this case, to death. A person who has the misfortune to suffer those
consequences should surely be able to look to the organisation that has
certified the plane as fit to fly, and that exists in order to enable the plane
to fly, if that certification was made negligently.
Other
cases
The
emphasis placed in
Caparo
v Dickman
on the nature of the interest protected enables me to deal shortly with fears
that were expressed to us about the possible effect of our finding in other
cases: for instance, if an aircraft should crash and cause not only injury to
many persons on the ground, but also extensive damage to property; or if a
person injured or killed on a commercial flight should sue the CAA, in an
attempt to circumvent the limitations placed on his level of recovery against
the carrier by international conventions.
Such
cases will have to be dealt with as they arise, on the case by case basis
recognised by the House of Lords in
Caparo:
I refer in that connexion in particular to the observations of Lord Bridge,
[1990] 2 AC at p.618C-E. I would, however, add that I do not regard the
judge's decision in this case as in any way marking a departure from the
principles or, if that is the wrong concept, the approach for long recognised
in this branch of the law. The judge recognised that conduct threatening an
imminent and obvious danger of physical injury to an identifiable class of
persons is a strong candidate for control by the law of negligence. As is
demonstrated in the judgment of Hobhouse LJ, there was nothing revolutionary in
that.
Policy
Counsel
for the PFA urged a number of policy considerations that he said pointed away
from the imposition of a duty, including the danger that the PFA might withdraw
from this work, thus putting the burden on the CAA, with greater expense to
small aircraft operators or the taxpayer or both; the possibility of the PFA
being charged greater insurance premiums, which cost would be spread generally
over aircraft operators or the public; and the danger of "defensive surveying"
by the PFA.
There
was no evidence to support any of these contentions, not even evidence from the
PFA as to its future attitude towards surveying. Counsel said we had to
speculate as, he said, the House of Lords had speculated in
Marc
Rich
.
I am unable to agree, on either score. In a number of cases, of which
Caparo
v Dickman
was one, wide claims have been made as to the effect of the court's decision,
particularly on industry or insurance practice. In my respectful view, the
court should be very cautious before reaching or acting on any conclusions that
are not argued before it in the way in which technical issues are usually
approached, with the assistance of expert evidence. Nor, I have to say, would
I in any event find help in a case of the present type in knowing what the
implications of a finding of duty would be for the PFA's insurance position or
for its inclination to continue with its present work. If the plaintiff has
been negligently injured by a failing by the PFA, I cannot see that it would be
right to withhold relief from him simply on the ground that to grant that
relief might cause a rise in the PFA's insurance premiums, or even cause a more
expensive system of inspection to be substituted for that of the PFA.
Further
as to policy, this case has none of the complications of
Marc
Rich
,
where the claim was seen as conflicting with the settled scheme of obligations
between cargo owners and carriers imposed by the Hague Rules, and as
introducing serious hinderance to the settlement of cargo claims. It is plain
that that was the main consideration leading the House of Lords to its
decision, as it had been the principal ground of decision in that case in the
Court of Appeal: see [1996] 1 AC at p.238C. Neither the Court of Appeal nor
the House of Lords speculated about those matters. They drew on the
considerable knowledge of the judges concerned in the case as to the terms and
operation of the Hague Rules, matters that are in any event ones of fact and
not of prognostication.
Conclusion
I
have gone into this matter in some detail because of the suggestion that we
should be constrained in this case by the result and reasoning in
Marc
Rich
.
But in essence the case is extremely clear. I agree entirely with my Lords
that the balance of justice comes down firmly on the side of imposing a duty,
and that members of the public would expect to be protected from injury by
careful operation of the regulatory system, and to be compensated if injured by
its negligent operation. That was the judge's view too. I also would dismiss
this appeal.