Background
A Sydney Seaplanes floatplane crashed into Jerusalem Bay on 31 December 2017, killing the pilot and all five passengers, including 11-year-old Heather Bowden Page. Her father, Alexander Page, sued Airag Aviation Services Pty Ltd, which had serviced and maintained the aircraft through its employees, including a licensed aircraft maintenance engineer.
Page alleged negligent maintenance allowed carbon monoxide to enter the cabin, causing the pilot’s hypoxia, disorientation and loss of control. He claimed the crash and his daughter’s death caused him PTSD and consequential physical injury to his brain. He sought leave under the Civil Liability (Third Party Claims Against Insurers) Act 2017 (NSW) to join Airag’s insurer, QBE Insurance (Australia) Limited, and to amend his statement of claim.
The Court’s Holding
Coleman J granted leave to join QBE, permitted the proposed amended pleading, and ordered QBE to pay the motion costs. The parties accepted that Page had an arguable case against Airag and that Airag might be unable to meet a judgment; the disputed issue was whether there was an arguable case that QBE’s Airport Owners & Operators Liability Policy responded.
The Court held that this threshold was met under the policy’s Section 3. It was arguable that Page’s claimed bodily injury arose from the use of aircraft parts serviced, repaired or supplied by Airag after those parts had left Airag’s possession. Although Section 1 did not apply, it was arguable that PTSD-associated physical brain damage constituted bodily injury. The Court declined, at this interlocutory stage, to decide whether Airag had breached a policy condition requiring compliance with aviation regulations or whether s 54 of the Insurance Contracts Act 1984 (Cth) affected QBE’s ability to deny indemnity.
Key Takeaways
- Leave to sue an insurer may be granted where policy response is arguable, even though coverage ultimately depends on trial findings.
- Alleged physical damage to the brain associated with PTSD can arguably amount to “bodily injury” where supported by medical evidence.
- A compliance-with-regulations condition precedent and the operation of s 54 could not be conclusively determined on the joinder application.
Why It Matters
The decision confirms that a claimant need not finally prove insurance coverage to obtain leave to proceed against an insurer under the NSW third-party claims regime. The Court focused on whether the pleaded maintenance failures and medical evidence made coverage genuinely arguable.
For aviation and liability insurers, the case illustrates that policy-condition and statutory relief issues may require a full factual record before they can defeat a claimant’s proposed direct action against the insurer.