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Friday, 28 June 1996
Page: 3181


Mr PYNE(3.23 p.m.) —We who are fortunate enough to serve the Australian people in this place spend many hours discussing and debating the issues of the day. Free speech is well served as we tackle legislation from different individual and party points of view, engaging in rigorous and sometimes bitter debate in the democratic tradition. But despite our varied backgrounds, geographical, political, religious and otherwise, all of us are here with a common purpose in mind—to make a better Australia, to create a fairer and more just society for all our people and for future generations.

There are certain things that divide us, but in times of crisis especially we have been known to unite fiercely to achieve a common goal. I have noted with some satisfaction and gratitude the manner in which the opposition has supported the efforts of the government in dealing with proposed controls on automatic and semi-automatic firearms. The shocking tragedy that was the catalyst for these initiatives, I pray, will never be repeated.

Australians are a tough but fair-minded people and we recoil in unison at tragedy and rally stoically in the face of adversity and injustice, somehow believing that these things couldn't and shouldn't happen here. But they do. Sadly, the lives of far too many Australians are touched by tragedy of one sort or another.

Today I would like to draw to the attention of the House two families in my electorate. Let me say at the outset that these people have been somewhat reluctant to come forward with their story. They have been seeking no publicity—so I will not be naming them today—merely justice.

On 13 August 1989, many members will remember there was an accident involving two hot-air balloons at Alice Springs. Thirteen people died when one of the balloons descended onto the other, puncturing it and sending it into a fatal 600 metre free fall. The families of two that perished in that shocking accident live in my electorate of Sturt. Their fight for justice has been long and, seven years down the track, totally unsuccessful.

My constituents issued proceedings against a company called Farbix, which operated both balloons, against the estate of the deceased pilot and against the pilot who was found by the subsequent inquest into the accident to have been grossly negligent in allowing his balloon to descend upon the other. The Supreme Court of the Northern Territory granted interlocutory judgments against all three.

If this had been a motor vehicle accident, the compensation procedures would have been straightforward. The operating company and the drivers would have been covered by third party personal insurance and the compensation would have been paid on the determination of fault. Sadly, in 1989, the same straightforward and logical approach did not apply to aviation laws. The aggrieved relatives are naturally seeking compensation and their claims have been assessed by the legal firm that represents them.

There have been major problems in the discovery process. Was Farbix insured? All attempts to find the answer to that question have been fruitless. Arthur Andersen and Co., who placed Farbix into liquidation, did an extensive search of all company documents and could not find an insurance policy. Insurance company insiders believe that only one company was underwriting balloons at the time of the accident. However, the Civil Aviation Authority could not positively identify the insurer because regulations did not mandate that insurance details be registered with the authority.

Still, the legal firm that represented my constituents believes that Farbix was insured. At the time of the inquest, a Mr R.J. Davies of Australasian Aviation Claims in North Sydney—and I note the presence of the member for North Sydney (Mr Hockey)—identified himself to the lawyers as represent ing the underwriters. He would not, and still refuses to, identify the underwriter he claimed to represent.

This conspiracy of silence plumbs new depths in relations between insurance companies and their policyholders. We often hear stories about people attempting to defraud insurance companies with bogus claims. We hear also about insurance companies' failure to admit liability, leaving aggrieved policy- holders in the lurch. Two wrongs do not make a right and there is no excuse for the hostility on the part of either the insurer or the insured toward each other.

In this situation there is no doubt as to the veracity of the claim. But as no-one can seem to identify the insurer, the insurer obviously feels little responsibility to play fair. Rather, the insurer is shrouded in anonymity. Theirs is an attitude of `if no-one gets caught, then no harm has been done'.

Indeed, everyone in this case seems so far to have escaped blame. The pilot at fault had a verdict of manslaughter set aside after attempting to flee to South Africa. The pilot who was not at fault died in the crash and his estate has no value. Farbix, naturally, is bankrupt.

Mr Davies is well aware of who is holding the aces in this hand. He has indicated he would recommend an ex gratia payment. He has pointed out to my constituents that they face a very expensive court battle if they decide not to accept such a pay-off. Despite his ministrations, an actual offer is yet to be made. This drawn out game of cat and mouse, the equivocation and prevarication on the part of Mr Davies, has caused enormous distress.

I have been informed that the cost of discovering the identity of the insurer may exceed $100,000, which obviously leaves my constituents in a bind. To get all the answers will involve my constituents appointing a liquidator so that action may be taken against the insurer—if there is one. They would then be obligated to indemnify the liquidator in a claim against the insurer to enforce payment under the policy. The process will be long and draining, both financially and emotionally. In the end, of course, they may not win.

Some of my colleagues would be aware that the families of other victims have been experiencing similar problems in gaining recompense. However, the fact that my constituents are not alone in their plight is small consolation to them and of great concern to me and, I am sure, to all my parliamentary colleagues and the community at large.

The federal government acted last year to ensure that all carriers of air passengers were sufficiently insured. The Monarch Airlines crash earlier this decade raised the spectre of insurance companies avoiding compensation pay-outs if the insurer believed the operator had failed to meet safety standards. This is one of the problems for my constituents. If the insurer is found, they may avoid liability if they successfully prove that Farbix failed to disclose or acted in a negligent fashion or breached aviation regulations.

From 20 January this year, that loophole has been no longer available to insurance companies. All carriers of fare-paying passengers now need a certificate from the Civil Aviation Safety Authority. Criminal prosecution or Federal Court injunctions await those who fail to comply with this new regulation. The requirement on carriers is that they now carry at least $½ million insurance per passenger before such a certificate is issued.

This new registration arrangement does not cover intrastate level and, hence, hot air ballooning. The various states need to enact complementary legislation to bring their laws into line with the federal regulations, and my understanding is that they will begin doing so shortly.   However, the cavalry has arrived too late for my constituents. No amount of compensation will ever bring back their loved ones lost in that tragedy seven years ago. The fact that their grief has been compounded with the shabby treatment dealt to them since defies any definition of fairness or justice. I would urge either Mr Davies to break his silence or the insurance company responsible to come forward and confess. Their conspiracy is shameful and totally un-Australian.

There is a sad footnote to all this. Just last Friday I happened on a story written by Trudy Harris of the Australian. She reported that the relatives of a young victim of the Monarch Airlines crash are also having difficulty in gaining compensation for their loss. In this case the identity of the insurance company that underwrote Monarch is known—Rural and General Insurance Ltd. Sadly, their resolve to thumb their nose at the misery of others is just as strong. As the young girl's grieving father said, `It's insulting to hear that my child isn't worth anything. We booked her on that plane and we expected to see her when the plane arrived.'

I await with interest the announcement of my colleague the Minister for Transport and Regional Development (Mr Sharp) regarding the government's wide-ranging review of aviation safety. Perhaps we should also be inquiring into the practices of some of these tawdry insurance companies which are very happy to sell the premiums but seem very reluctant to disperse the benefit.