Liability For Losses Caused By Contaminated Fuel In Aircraft

Duty of Care in Negligence

Sam Speed runs a business which provides a re-fuelling service for aircraft at the regional airport at Albury in New South Wales. Sam stores his fuel at a depot he owns in an underground tank. One day, Sam receives a tanker load of 10 000 litres of fuel from his supplier. The fuel is pumped into Sam’s underground tank, and Sam puts a dip-stick into the tank to check that the correct amount has been delivered. Unfortunately, Sam is distracted by a phone call, and forgets to screw the lid back onto the tank, with the result that dust enters the fuel during the night, contaminating it.

The next day, still unaware of what has happened, Sam refuels three light aircraft with the fuel. Each aircraft is owned by a different company, White Ltd, Blue Ltd and Green Ltd.

The aircraft owned by White Ltd takes off successfully, but about 2 km from the end of the runway the engine cuts out because of the fuel contamination and the aircraft, which is worth $ 1 million, crashes onto a road and is totally destroyed, although the pilot miraculously survives without any injury. 

The aircraft owned by White Ltd also destroys a Mercedes Benz car worth $ 75 000 owned by Ms Susan Swift, who usually never parks her car on that street but did so that day because the parking lot she uses was full.

Sam hears on the radio what happened to the aircraft owned by White Ltd, and that the pilot reported a problem with the fuel system to air traffic control moments before the crash. Fearing that the accident might have been due to contaminated fuel, Sam runs across to the aircraft owned by Blue Ltd, waving his arms to attract the attention of the pilot, who is just about to start his engine. Sam tells the pilot that there seems to be something wrong with the fuel and that it could damage the engine, and the pilot decides not to take off for Sydney.  There are no other aircraft able to fly to Sydney, and because the aircraft owned by Blue Ltd does not take off, one of the passengers, Ms Mary Harper, who is a maritime engineer, is unable to get to Sydney to certify that a cargo ship owned by Safmarine Ltd is seaworthy, with the result that Safmarine Ltd loses $ 250 000 in profit because its vessel cannot put to sea that day. 

After alerting the pilot of the Blue Ltd plane, Sam also runs to the aircraft owned by Green Ltd and gives him the same information about the fuel, but the pilot says “Look, mate, I understand what you are saying, but I don’t have time for this. I’m going to take off anyway.  I have to get to Melbourne by 10 am”, and with that the pilot closes his window and taxis towards the runway. As the pilot starts his take-off run, the aircraft’s engine cuts out, it swerves across the runway and suffers $ 200 000 worth of damage.

Accident reports confirm that the aircraft owned by White Ltd and Green Ltd crashed because their engines were damaged by the contaminated fuel. 

Advise Sam on what liabilities he may have to all potential plaintiffs who have suffered loss under the above facts. 

The issue is to determine as to in which of the given scenarios would Sam be held liable for the losses suffered by plaintiffs.

A person must provide reasonable care to another person and if he/she fails to do so and as a result that person suffers harm then the defendant would be liable to pay the damage to the concerned person under the applicability of the tort of negligence. The person who behaves negligently is termed as defendant and the person who suffers harm is known as plaintiff.  The three imperative conditions of negligence that need to be present for tort of negligence are highlighted below (Davenport &Parker, 2014).

• Defendant owes duty of care towards the plaintiff
• There is a breach of that duty owing to negligent conduct
• The activity of defendant has resulted damages to the plaintiffs

The honourable court has established a test to determine whether duty of care is owed in the give scenario or not. This test is known as neighbour test which indicates that necessary care or measures that must be taken into account while owing duty of care to their neighbour so that they would not suffer losses. It is evident from Donoghue v. Stevenson [1932] All ER 1 case that the key element of presence of duty of care has been found by considering whether the conduct of the reasonable person (defendant) would have foreseen that their action/inaction could harm the another person (plaintiff) (Gibson & Fraser, 2015). The verdict of Ultramares Corp v Touche Niven & Co 174 NE 441 (1931) case is testimony of the level of duty of care which is determined by considering the case scenarios and the level of risk involved (Lindgren, 2013).

The factors which the court considers while finding whether breach of standard duty of care exist due to the negligent practice of defendant are as highlighted below (Harvey, 2016).

• Likelihood of the activity of the defendant would result in harm (loss of finance, life,
• Seriousness or the amount of risk involved that the harm could incur
• Social utility
• Cost and effort that would be needed in order to prevent the harm

As per Bolton v Stone [1951] AC 850 case, when the defendant would not give necessary measures in discharging duty of care irrespective of the probability of harm, then it would be concluded that duty of care has been breached by defendant (Lindgren, 2013). Also, when the risk of harm is significant and defendant acts negligently while exercising duty of care, then the duty of care would be said to be breached as evident from Paris v. Stepney Borough Council [1951] AC 367 case  (Gibson & Fraser, 2015).

It is noteworthy that when a person is giving service to other person as a part of their occupation or professional work, then it is essential that defendant must ensure that standard level of duty of care is provided to plaintiff under s 50(1) of Civil Liability Act 2002 (NSW).   Failing to do so would be termed as breach of duty of care (Davenport &Parker, 2014).

The judgement given in Perre v Apand (1999) 198 CLR 180 case, provides the underlying aspect that various factor such as reasonable foreseeability, proximity, connection between the parties, policies and so forth would be considered while deciding whether the harms are foreseeable. Further, as per 5D (1) of Civil Liability Act 2002 (NSW), the plaintiff would be liable to claim for the damages when the following harms has been incurred due to the breach of duty of care by defendant (Harvey, 2016).

• Physical injury
• Mental injury
• Property loss
• Loss of money

Additionally, as per the verdict of Cork v Kirby Maclean [1952] 2 ALL ER 402, when the harm would be incurred even if the defendant has not breached its duty of care, then plaintiff could not take compensation from defendant. Further, if plaintiff is well aware about the risk of the conduct and voluntary assumes the risk and enters negligently into risk that results in harm then the plaintiff would not be accountable for the suffered harm as per assumption of risk of tort (Davenport &Parker, 2014).

Sam is involved in the business of providing fuel to aircrafts. Essentially, any person who is involved in such kind of business requires highest level of duty of care to the clients because the risk associated with faulty fuel supply is significantly higher and can result in loss of life and property. Also the good quality fuel is an essential aspect to prevent any blockage of the engine of aircraft. Here, Sam has working negligently as the tank lid remained open which caused contamination of engine fuel. It indicates that Sam has breached the required duty of care. Also, he has not provided any representation or pre-checking of the fuel to the clients about the aircraft fuel.

• An aircraft of White Ltd has crashed and also, significant damage has been incurred to a nearby parked Mercedes Benz. It is witnessed that the aircraft engine got jammed because of the presence of contamination in the fuel provided by Sam. Therefore, the negligence on the part of Sam has caused the loss of aircraft and Mercedes and hence, both White Ltd and owner of Mercedes Benz are liable to recover the damages from Sam. 
• Sam has notified the pilot of Blue Ltd well before the aircraft could take-off and therefore, no losses has incurred to Blue Ltd. Therefore, Blue Ltd cannot demand for any compensation from Sam. However, a passenger of Blue Ltd could not fly for Sydney and hence, could not provide certification to a cargo ship owned by Safmarine and therefore, the cargo ship owner suffered a loss of $250,000. Under tort of negligence, the defendant would not be responsible to pay the compensation for the losses which are unforeseeable and in present case, the loss suffered by Safmarine is unforeseeable and thus, Safmarine cannot demand the loss of $250,000 from Sam. 
• Sam has brought the fuel contamination problem to the notice of pilot of Green Ltd. However, pilot of Green Ltd aircraft has acted negligently and therefore, suffered a loss of $200,000. It is witnessed that the losses have resulted because of the assumption of risk. This is because pilot is well aware about the possible risk associated with the contaminated fuel and still voluntarily took into risk of flying the plane. Therefore, Sam can defend himself under the assumption of risk and plaintiff Green Ltd would not have the right to claim for damages from Sam.

Conclusion

White Ltd and owner of Mercedes Benz have the legal right to recover the damages of $1 million and $75,000 respectively from Sam because Sam is responsible for these losses. However, owner of Green Ltd, Blue Ltd and Safmarine cannot recover damages from Sam.

References

Davenport, S. & Parker, D. (2014). Business and Law in Australia (2^nded.). Sydney:LexisNexis Publications.

Gibson, A. & Fraser, D. (2015).Business Law (8^thed.).  Sydney: Pearson Publications.

Harvey, C. (2016). Foundations of Australian law (2^nd ed.), Victoria: Tilde University Press.

Lindgren, KE. (2013). Vermeesch and Lindgren's Business Law of Australia (12^thed.). Sydney: LexisNexis Publications.