Barclay V Penberthy and the Collapse of the High Court's Tort Jurisprudence
Beever, Allan, University of Queensland Law Journal
I FACTS AND FINDINGS
Five employees of the plaintiff company were injured in a plane crash. Two died. The accident occurred because of a substandard part negligently designed by an engineer (the first defendant) that caused one of the plane's engines to fail and because the pilot (his employer being the second defendant) responded negligently to the emergency. The plaintiff brought suit against the defendants, attempting to recover inter alia for the loss to it caused by the injuries to its employees. By the time the case reached the High Court, the issues were whether the plaintiff could recover in an action per quod servitum amisit and for pure economic loss in the tort of negligence. (1)
The High Court unanimously held that an action per quod was in principle available with respect to both defendants. However, dissenting on this matter, Heydon J maintained that the action could not be brought for procedural reasons not relevant to this discussion. (2) The High Court also unanimously held that the plaintiff could recover only in respect of its losses suffered as the result of the injuries to the surviving employees; (3) the losses consequent upon the deaths of the deceased employees being barred by the rule laid down in Baker v Bolton, (4) read to mean "that the death of a person cannot constitute a cause of action giving rise to a claim for damages". (5)
Further, by a majority, Heydon J dissenting, the Court ruled that sufficient proximity existed between the plaintiff and the pilot such that a duty of care was owed to the plaintiff and the second defendant was therefore vicariously liable for the plaintiff's relevant economic losses. Again, however, the Court was unanimous that the plaintiff could recover only for the loss suffered in relation to the injuries to its surviving employees; losses consequent to death being barred by the rule in Baker v Bolton.
The decision in Barclay v Penberthy, therefore, stands for three important propositions.
1. That the action per quod servitum amisit exists and should continue to exist in Australian law.
2. That, statutory exceptions aside, recovery for loss cannot occur if the loss is the result of the death of a person.
3. That pure economic loss continues to be available in negligence as long as proximity exists as between the parties.
All of these conclusions should be rejected. Barclay v Penberthy is wrong with respect to every important matter. What is more, these errors are the result of a fundamental mistake, a mistake that results from adopting an understanding of tort law quite inadequate to its subject matter. Consequently, Barclay v Penberthy is a landmark judgment, a landmark for revealing the collapse of the High Court's tort jurisprudence.
The following terminology is used in different ways by different commentators. This is not the place to discuss the best use of the terms, but for the sake of clarity it is necessary to stipulate definitions. As defined here, a right in rem is a right to or over a res. Conversely, a right in personam is a right held directly against a person. On the other hand, a right is multital if it is held (perhaps in relation to a res) as against the world; paucital if it is held only as against one person or a small and defined number of persons. In general, rights in rem are multital and rights in personam are paucital, but the terms are not coextensive. For instance, in the sense used here, equitable interests can be in rem and paucital. Similarly, rights to the person such as the right to bodily integrity are multital and in personam (or, at least, cannot be in rem as they do not relate to a res). Nothing significant turns on this choice of terminology, but it is important to avoid possible confusion.
III THE ACTION PER QUOD: THE MAJORITY'S POSITION
The defendants in Barclay v Penberthy maintained that the action per quod ought to be "absorbed into" and "subsumed by" the law of negligence. …