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Thursday, 25 September 1958

Mr TOWNLEY (Denison) (Minister for Supply) . - by leave - I move -

That the bill be now read a second time.

The main purpose of the Civil Aviation (Damage by Aircraft) Bill is to approve ratification of the Rome Convention; to give effect to the convention within Australian territory and to extend its main principles to aircraft engaged in international flights over Australian territory which are not otherwise subject to the provisions of the convention. The text of the convention is set out in a schedule to the bill.

The convention was adopted by a diplomatic conference which met in Rome in October, 1952, to deal with the problem of damage caused on the surface by aircraft engaged in international air navigation. Australia is one of the 26 signatory States, having signed the convention on the 19th October, 1953. The convention, which is expressed to come into force as soon as five signatory States have deposited their instruments of ratification, came into force during 1957. Canada, Egypt, Pakistan, Ceylon, Luxembourg, Spain and Ecuador are parties, while it is' believed that other States, including the United Kingdom, New Zealand and Holland, are likely to ratify the convention in the near future.

The purpose of the convention, as set out in its preamble is, first, to ensure adequate compensation for persons who suffer damage caused on the surface by foreign aircraft while limiting in a reasonable manner the liability of operators, and, secondly, to unify to the greatest extent possible the rules applying in the various countries of the world to the liability incurred for such damage.

The convention is based on a system of strict or absolute liability, the only exceptions being contributory negligence on the part of the persons suffering the damage, or where the damage results from armed conflict or civil disturbance or where the operator has been deprived of the aircraft by act of public authority. It covers damage resulting directly from actual contact, fire or explosion, including damage caused by a person or thing falling from an aircraft.

The convention attaches liability to the operator of the aircraft, who is defined as the person who was making use of the aircraft at the time the damage was caused, provided that if control of the navigation of the aircraft is retained by a person from whom an aircraft is chartered that person shall be considered the operator.

The system of strict liability is coupled with a limitation of liability. The limits in respect of an accident increases with the weight of the aircraft, but the rate of increase becomes progressively lower as the weight increases. In addition to the overall limit, there is a sub-limit of approximately £A 15,000, of 500,000 gold francs, in respect of the death or personal injury of any one person. One-half of the over-all limit is set aside to meet claims for loss of life or injury, but to the extent that it is not absorbed it is available for property claims.

By way of example, the over-all limits applying to foreign aircraft likely to be operating in Australia are: -


These limits greatly exceed the amount of surface damage so far experienced in any civil accident, not only in Australia, but also elsewhere, so that any reduction of the compensation payable to persons suffering damage, due to the limitation provisions, would only arise in the most exceptional catastrophe. In addition, the operator is not only strictly liable whether negligent or not. but he is deprived of any limit if it is proved that the damage was caused by a deliberate act of the operator or his servants done with intent to cause damage.

The convention contains a very detailed chapter on insurance, but it does not establish a mandatory system. First, each State must decide whether it desires to impose an obligation to insure, in respect of surface damage, upon foreign aircraft entering its territory. But if it does so decide, then it is obliged to accept the insurance as satisfactory if certain specified conditions are fulfilled.

The most important of these conditions are, first, that the insurer is authorized to effect the insurance under the law of the State where the aircraft is registered or the insurer has his principal place of business; and, secondly, that the financial responsibility of the insurer has been verified by either of those States.

Another matter of great importance in relation to insurance is the provision of the appropriate currency to meet claims. Many attempts have been made in the past to devise some machinery which would guarantee that the claims of victims would in all cases be met in their national currency.

The new convention has, on this point, adopted a realistic approach. It was recognized that national treasuries could hardly be expected, in relation to this particular matter of damage caused by aircraft, to give an unconditional assurance, in the convention, that the necessary currency would be made available. On the other hand, it is well known that, in practice, commercial self-interest, founded on the desire to obtain or retain insurance business, secures that, in fact, claims are always met. It has, therefore, been thought sufficient to provide that if any claim is not satisfied by payment in the currency of the State where the claim is made, the insurer in question may be regarded as not financially responsible.

The provisions which I have outlined are those which are of the greatest general interest; they are supplemented by a number of detailed and carefully worked out rules concerning the form of security permitted, certificates to be carried, defences available to the insurer and the circumstances in which there may be a direct right of recourse against the insurer.

Actions under the convention may only be brought in " a single forum ", namely, the courts of the place where the damage occurred. The severity of this rule is mitigated, from the point of view of the operator-defendant, by an elaborate system of safeguards against procedural abuses and in particular an obligation is cast upon contracting States to ensure that he is notified of the proceedings and has a fair and adequate opportunity to defend his interest. A further obligation is cast upon the State where the action is brought - i.e., the victim's state - to ensure that all actions are consolidated before a single court, thus relieving the operator of a multiplicity of proceedings in different countries and ensuring that the limits are applied. These safeguards have been imposed in the interest of the operator but the victim is given as a quid pro quo an automatic right once he has obtained a final judgment to have the judgment enforced in the first instance in the State where the operator has his residence, and if assets in that State are insufficient, in any other State in which the operator may have assets. These provisions are, of course, of great benefit to victims.

I turn now to a brief examination of the provisions of the bill. Part I. of the bill deals with preliminary matters such as date of commencement and definitions. Part II. gives the convention the force of law and contains a number of additional provisions necessary to supplement and give proper effect to the provisions of the convention itself. For example, under the convention the general rule is that an action may only be brought in the courts of the contracting State where the damage occurred and the State where the action is brought is obliged to take all possible measures to consolidate actions arising out of the same incident for disposal in a single proceeding before the same court. The provisions of Part II. relating to jurisdiction and consolidation of actions are designed to give effect to this obligation. The convention also leaves it open to each State to apply its own rules as to who may bring such actions, what are the various claimants' respective rights and precisely what elements of damage are recoverable. The bill, therefore, contains supplementary provisions for this purpose.

The usual regulation-making power is included to authorize regulations necessary for carrying out and giving effect to the convention. There are a number of specific procedural and evidentiary matters which could not be conveniently provided for in the bill or the need for which will only be determined in the light of experience. The regulation-making power expressly includes matters of this nature. For example.

Chapter III. of the convention, as we have seen, leaves it to each State to decide whether it will require foreign operators to insure against liability under the convention. If a State so decides, its insurance requirements must comply with the principles laid down in the convention. In the event of Australia requiring such insurance a number of detailed rules will be necessary in relation to such matters as the carriage in aircraft of documents relating to insurance, the exercise of discretionary powers provided for in the convention, for example, to decide whether the insurance effected is satisfactory or whether certificates will be required from appropriate authorities as to the financial stability of an insurer, and the form of documents required in connexion with insurance. These requirements can be prescribed by regulation.

Part III. of the bill extends certain of the basic principles of the convention to two further classes of aircraft engaged in international air commerce, namely -

(a)   Australian aircraft on the domestic portion of an international flight; and

(b)   foreign aircraft of a non-contracting

State in flight over Australian territory.

Australian aircraft engaged in international flight are governed by the convention on all stages of their international flight over the territory of contracting States, except when flying within Australia. It is obviously reasonable and desirable that Australian aircraft engaged in international flights, particularly Qantas aircraft, should be subject to the same rules of liability and the same insurance requirements during the whole course of their international operations.

The bill does not apply to damage caused by aircraft engaged in purely domestic air transport but the desirability of further extending its provisions to all damage caused by aircraft is receiving careful consideration.

Adoption of the convention will be of advantage to Australia's international operator, since eventually it will establish uniform rules of liability in many countries over which Qantas operates, thus facilitating insurance arrangements and ensuring a limit of liability in the event of an unprecedented catastrophe. It will also be of substantial advantage to Australian victims of damage caused by aircraft, since they will be able to recover from foreign operators without proving negligence and without the necessity of suing in foreign courts up to relatively very high limits. For these reasons I recommend the bill to honorable members.

Debate (on motion by Mr. Calwell) adjourned.

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