Encore Aviation Pty Ltd v O’Driscoll Aviation Pty Ltd [2026] NSWCA 227
Key takeaways
Performing the same task does not necessarily attract the same standard of care or an equal share of responsibility. Each party’s qualifications, skills, and contractual responsibilities must be considered when assessing liability. A director and their company should not automatically be treated as interchangeable, particularly where an employee/employer relationship may give rise to separate claims.
Brief facts
On 17 April 2018, a helicopter owned by O’Driscoll Aviation Pty Ltd (O’Driscoll Aviation) crashed following engine failure, injuring its pilot, Philip O’Driscoll, and damaging the aircraft. Mr O’Driscoll owned and controlled the company and was the Chief Executive Officer and Head of Flying Operations.
Encore Aviation Pty Ltd (Encore) had been engaged by O’Driscoll Aviation to undertake aircraft maintenance, including inspections. Encore supplied Mr Harris, a licensed aircraft maintenance engineer who inspected the aircraft on the morning of the incident. Following that inspection Mr O’Driscoll also conducted an inspection. However, both Mr Harris and Mr O’Driscoll failed to identify a visible crack in the exhaust diffuser. Had the crack been detected, the helicopter would have been grounded and the accident avoided.
Mr O’Driscoll sought damages against Encore for the injuries he sustained in the accident. O’Driscoll Aviation separately commenced proceedings against Encore for damage to the aircraft. The primary judge found Encore liable in each proceeding but reduced both claims by 50% for contributory negligence.
Encore challenged the finding that the crack was visible before the flight. Mr O’Driscoll and O’Driscoll Aviation challenged the finding of contributory negligence and, alternatively, the 50% reduction in damages. The parties proceeded on the basis that, for the purposes of the contributory negligence claim, no distinction was to be drawn between O’Driscoll Aviation as a corporate entity and Mr O’Driscoll in his capacity as director or pilot.
Judgment
The Court of Appeal upheld the findings that the crack was visible on the exhaust diffuser before the flight and that both Mr Harris and Mr O’Driscoll had carried out an inspection. However, the Court of Appeal found that the primary judge had erred in allocating equal responsibility for the incident.
The Court of Appeal commented that although both Mr Harris and Mr O’Driscoll were authorised to conduct daily inspections, they had different qualifications and professed different skills. Further, Encore’s contract with O’Driscoll Aviation in respect of the aircraft maintenance inferred that they had primary responsibility. Leeming JA referred to the relevant test:
Contributory negligence is to be determined ‘on the basis of what that person knew or ought to have known’ which includes the knowledge that the inspection had already been carried out by a professional.
It was determined that Mr O’Driscoll carried out his own inspection knowing that a licensed aircraft maintenance engineer had already inspected the aircraft. However, Mr O’Driscoll’s senior operational role and certification that he had performed the daily inspection supported retaining a substantial reduction for contributory negligence. The Court of Appeal assessed the apportionment of liability at 60% to Encore and 40% to Mr O’Driscoll and O’Driscoll Aviation, rather than equal apportionment.
The Court of Appeal adopted the parties’ agreed approach of treating Mr O’Driscoll and O’Driscoll Aviation as interchangeable for the purposes of contributory negligence. However, Leeming JA cautioned that this would not necessarily be appropriate in every case. It appeared likely that Mr O’Driscoll performed his duties as a pilot under a contract with the company, rather than in his capacity as a director or shareholder. Therefore, his culpability in the personal injury claim would not necessarily be assessed in the same way as the company’s responsibility in its claim for property damage. His Honour nevertheless followed the parties’ agreed approach. The Court commented:
…The position would be different if O’Driscoll Aviation were Mr O’Driscoll’s employer from which he had obtained workers compensation benefits or which had been sued for modified common law damages pursuant to Part 5 of the Workers Compensation Act 1987 (NSW), such that there was a three-way dispute between Mr O’Driscoll, his company and Encore.
Implications
This decision reaffirms that two people performing the same task does not necessarily entail equal responsibility. Apportionment requires consideration of both the parties’ relative culpability and the significance of their conduct in causing the loss.
Although not an issue here, the Court noted that a worker’s contributory negligence and an employer’s liability may require separate consideration in a three-way dispute involving workers compensation benefits or modified common law damages.
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