In brief - Medical evidence necessary to show actual physical damage to brain to satisfy "bodily injury" in Pel-Air appeal 

The New South Wales Court of Appeal decision in Pel-Air Aviation Pty Ltd v Casey [2017] NSWCA 32 denies plaintiffs suffering from a PTSD condition a claim under the Montreal Convention in the absence of compelling evidence of physical change to the brain. 

Pel-Air's successful appeal is good news for aviation insurers

On 24 June 2015, we reported on the decision of Casey v Pel Air Aviation in our article entitled Post-traumatic stress disorder (PTSD) leads to compensation following aviation accident, and indicated that the damages award was a landmark decision for aviation insurers when a substantial award of damages was handed down. 

Pel-Air Aviation Pty Ltd appealed the decision to the New South Wales Court of Appeal in Pel-Air Aviation Pty Ltd v Casey [2017] NSWCA 32, and the result handed down on 9 March 2017 will bring a sigh of relief from aviation insurers. 

NSW Supreme Court awards Ms Casey damages for physical and psychiatric injuries suffered in aircraft accident

The plaintiff/respondent to the appeal, Ms Casey, was a nurse employed by Care Flight (NSW) who travelled on board a small aircraft to evacuate a patient and the patient's husband from Samoa to Melbourne. 

The aircraft, which was due to refuel at Norfolk Island, was unable to land due to heavy weather and was forced to perform an emergency landing in the sea. Miraculously, the aircraft's occupants survived the impact and were rescued after spending 90 minutes in the water. 

Ms Casey alleged that, as a result of the incident, she sustained physical injuries to her spine and to her right knee and psychiatric injuries, including post-traumatic stress disorder (PTSD), major depressive disorder and an anxiety disorder.

At first instance, the Supreme Court entered into judgment in favour of Ms Casey in the sum of $4,877,604. 

Issues on appeal include whether PTSD is a "bodily injury" in accordance with Article 17(1) of the Montreal Convention

Pel-Air Aviation Pty Ltd appealed the decision and the questions on appeal were as follows:
  1. Whether Ms Casey's PTSD is a "bodily injury" in accordance with the 1999 Montreal Convention.
  2. Whether the damages award was incorrect in respect of non-economic loss and care and treatment expenses.
  3. Whether the evidence justified an award of funds management, particularly if PTSD was not a "bodily injury".
Ms Casey brought her claim for damages pursuant to the Civil Aviation (Carriers' Liability) Act 1959 (Cth) (Carriers' Liability Act) which incorporates the Montreal Convention for the Unification of Certain Rules for International Carriage by Air (1999) (the Convention) into Australian law.

Pursuant to Article 17(1) of the Convention, "The carrier is liable for damage sustained in the case of death or bodily injury of a passenger upon condition only that the accident which caused the death or injury took place on board the aircraft or in the course of any of the operations of embarking or disembarking". 

Is PTSD a bodily injury?

At first instance, Pel-Air conceded that Ms Casey's major depressive disorder, a pain disorder and an anxiety disorder were, at least in part, caused by Ms Casey's physical injuries and by extension could form part of the "bodily injury" compensable under the Carriers' Liability Act. However, Pel-Air disputed that Ms Casey's PTSD was a "bodily injury". 

On appeal it was argued by Pel-Air that "bodily injury" suggests damage to a person's body, including a person's brain. It was also conceded by Pel-Air that in circumstances where there is physical damage to a person's brain, bodily injury would be proven. However, in circumstances where a person's brain is considered to be malfunctioning as a result of biochemical changes, it was contended by Pel-Air that this change was not sufficient to constitute a "bodily injury". 

The Court relied upon a Joint Report of the psychiatric expert witnesses, who considered several questions relevant to the matters at issue. Relevantly, the experts concluded that:
  • a reference to "brain function" is a reference to chemical changes in the brain, and
  • while there is evidence which suggests that some persons suffering from PTSD or generalised anxiety disorder can suffer from physical changes to specific areas of the brain, there was no evidence available to the experts to suggest the plaintiff had structural changes in her brain 

Biochemical changes in brain do not constitute bodily injury, Court concluded

Macfarlan JA gave the lead judgment, with Ward JA and Gleeson JA agreeing.

Macfarlan JA considered a variety of case examples in order to determine whether Ms Casey's PTSD was a "bodily injury". He concluded that, "if the evidence in a particular case demonstrates that there has been a physical destruction of a part or parts of the brain, "bodily injury" will have been proved". Therefore, it needs to be shown on the medical evidence that there has been an "actual physical damage" to the claimant's brain.

In the circumstances of this case, there was no medical evidence to suggest that Ms Casey's PTSD resulted from actual physical damage, which raised the question as to whether the "biochemical changes in her brain…constitute 'bodily injury'". 

Macfarlan JA concluded that they do not, relying on Morris v KLM Royal Dutch Airlines; King v Bristow Helicopters Ltd [2002] 2 AC 628, where majority of the House of Lords concluded that biochemical changes were not sufficient to constitute "bodily injuries". Macfarlan JA stated at paragraph 51 that: 
I consider that it is insufficient for a claimant to prove that the function of his or her brain has changed or even that chemical changes have occurred in it. In the absence of compelling medical evidence to the contrary, such malfunctioning or chemical changes cannot fairly be described as "injuries" to the body. Moreover, importance must be attached to the adjective "bodily" as a limiting word. It clearly draws a distinction between bodily and mental injuries - mental injuries are covered only if they are a manifestation of physical injuries, or if they result from physical injuries (including physical injuries to the brain). 

As such, Macfarlan JA was not satisfied that Ms Casey's PTSD was a "bodily injury". 

Impact of the decision on Ms Casey's damages and funds management

Unfortunately for Pel-Air, despite successfully arguing that Ms Casey's PTSD did not constitute a "bodily injury", Macfarlan JA was not satisfied that the award for non-economic loss would be substantially reduced. The primary judge assessed Ms Casey as having non-economic loss at 80% of the "most extreme case". Despite the PTSD being the "most significant cause of her mental harm", disentangling Ms Casey's psychiatric condition led the Court to consider that her condition "would not be significantly better than it is" and therefore it would suggest the appropriate reduction be only 10%. 

In terms of the claim for future hospitalisations (an average of 1.5 admissions per year) and gratuitous care (past and future), no reductions were made to account for the removal of the PTSD condition. (However, a minor amendment was made to an anomaly to the rate for future care.)

Pel-Air contended that if Ms Casey did not have PTSD, she did not require the costs for managing her damages. Pel-Air relied upon the evidence that Ms Casey was able to manage with the assistance of her family members. 

The Court referred to Ms Casey's treating doctors who referenced her "current cognitive capacity, short term memory problems, concentration, difficulty making decisions and impaired judgment" which ultimately rendered her incapable of satisfactorily managing her affairs. The Court's view was that her family would not continue to be available to assist her. As such, Macfarlan JA made an allowance of $872,000 (calculated by reference to the National Australia Trustee Limited rates) for Ms Casey's fund management, noting that these rates were not considered to be "outside the market".

This is commentary published by Colin Biggers & Paisley for general information purposes only. This should not be relied on as specific advice. You should seek your own legal and other advice for any question, or for any specific situation or proposal, before making any final decision. The content also is subject to change. A person listed may not be admitted as a lawyer in all States and Territories. © Colin Biggers & Paisley, Australia 2019.

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