AVIATION LAW IN AUSTRALIAAVIATION LAW IN AUSTRALIA By J. E. RICHARDSON* The primary purpose ofthis article is to discuss the Australian statutory law applying to civil aviation. There

AVIATION LAW IN AUSTRALIA

By J. E. RICHARDSON*

The primary purpose of this article is to discuss the Australian statutorylaw applying to civil aviation. There will also be some considerationof one or two unresolved questions involving the application of common law rules, selected not only because of their intrinsic interest, butalso because they are partly affected by Federal and State Acts of Parliament. Part I deals with them. Part II of the article is given over to anexamination of the control and regulation of air navigation in Australia,a subject made complex by a division of constitutional legislative powerbetween the Commonwealth and the States that does not allow theCommonwealth to assume complete legal responsibility for domesticcivil aviation. In Part III there will be a description of the structure andregulation of the Australian air transport industry. Here the Commonwealth has played a role entirely unique in the world aviation scene inwhich, through a series of Acts of Parliament and executive agreements,it has maintained in ' regulated competition' two, and only two, majordomestic air carriers. The final part of this article, Part IV, will be devotedto the statutory regulation of the legal position of an air carrier operatingin Australia, so far achieved mainly by the application of the principlesof two international private law multilateral agreements, the Warsawand Rome Conventions, to Australian domestic aviation. This partalso supplements the analysis of the common law problems discussedin Part I.

An appendix lists Federal and State Acts directly relating to civilaviation.

I - AIRCRAFT AND THE COMMON LAW

The flight of aircraft has raised many interesting questions in distinctiveareas of common law, including contract, tort, crime, property andconflict of laws. Some, as will be seen, have been determined by thepassing of legislation but others remain for further consideration. Thequestions are not for the most part new but they assume a new significanceby reason of the development and exploitation of aircraft as a meansof transport.

Two matters only will be discussed-private property rights in theairspace and the application of the doctrine of res ipsa loquitur to aircraft. Both are substantially affected by Federal and State statute law.

* B.A., LL.M. (Melb.), Barrister and Solicitor; Robert Garran Professor of Lawand Dean of the Faculty of Law, School of General Studies, Australian NationalUniversity.

242

JUNE 1965] Aviation Law in Australia 243

Private property rights in the airspace

All too frequently one hears that the question of a landowner's rightsin the airspace above his land is exhausted by the application of themaxim cujus est solum ejus est usque ad coelum, which may be freelytranslated as meaning that ' he who owns the soil owns all that lies aboveit '. Since the law everywhere seems to place air as an element in thecategory of res omnium communis because of its peculiar properties,such as the capacity to disperse itself freely, the maxim must be takento refer to the column of space above the surface of the land. If it isliterally applied any invasion of the superincumbent airspace by aircraft, however ephemeral, is a trespass actionable per se unless themaxim de minimus non curat lex should be successfully invoked. SomeEnglish decisions support this view and some do not, but none haveinvolved the direct issue of the flight of an aircraft. They have beenconcerned instead with such matters as overhanging parts of buildingsand branches of trees, telephone wires, trespassing animals and theoccasional rifle shot, that is to say, matters that have involved structuresbuilt on the land itself or the direct consequences of the use of land.Flights by aircraft do not come within either category.

United States cases

In 1946 in United States v. Causby1 the Supreme Court of the UnitedStates rejected cujus est solum as being part of United States law.According to the Court, the maxim had no place in the modern world.2

After repudiating the maxim the Court said, however, that ' if the landowner is to have full enjoyment of the land, he must have exclusivecontrol of the imnlediate reaches of the enveloping atmosphere'. Thenit went further and said-' The landowner owns at least as much of thespace above the ground as he can occupy or use in connection with theland. . . . The superadjacent airspace at this low altitude is so closeto the land that continuous invasions of it affect the use of the surfaceof the land itself.'3 In this case United States military aircraft, in takingoff and landing from an airport leased by the United States, flew over theplaintiffs' chicken farm at heights as low as 83 feet interfering with theenjoyment of the property as a home and a business. The Court heldthat the flights by the Federally owned aircraft amounted to a takingof property without compensation contrary to the fifth amendment to

1 (1946) 328 U.S. 256; [1946J U.S. Av.R. 235.2 (1946) 328 U.S. 256, 260-261; [1946J U.S. Av.R. 235, 238-239. The Court also

added-' The air is a public highway, as Congress has declared. Were that not true,every trans-continental flight would subject the operator to countless trespass suits.Common sense revolts at the idea. To recognize such private claims to the airspacewould clog these highways, seriously interfere with their control and developmentin the public interest, and transfer into private ownership that to which only the publichas a just claim.'

:I (1946) 328 U.S. 256, 264-265; [1946J U.S. Av.R. 235, 241-242.

244 Federal Law Review [VOLUME 1

the United States Constitution4• It seems that the Court may havebeen influenced in finding for ownership of the immediate airspaceabove land by the fact that in 1946 the United States could 110t be suedin tort. The only possible recovery for property damage, as in the Causbycase, depended on establishing an unconstitutional taking of privateproperty. The Causby case was applied by the Supreme Court in Griggsv. County of AlleghenyS, a case involving rather similar facts. Aircrafttaking off and landing at an airport owned by the County flew within11 feet of the top of the plaintiff's house situated at the end of a runway.The Court held that the County had acquired an easement over theplaintiff's land for which it should pay compensation in accordancewith the fourteenth amendment to the United States Constitution.6

The constitutional considerations to the fore in both the United Statescases do not, of course, have any counterpart in the Federal and StateConstitutions of Australia.

Canadian case

In Canada in 1953 the Exchequer Court held in Lacroix v. The Queen7

that the subjacent landowner had a right to make use of the airspaceabove him as, for example, by putting up buildings, but that air andairspace \vere not susceptible of ownership, falling instead in the classof res omnium communis. Accordingly, a landowner was not deprivedof any property right in the establishment of a flightway in the airspaceover his land. On this view a suit against the operator of an aircraftby a subjacent landowner would normally have to be based on nuisance.

English cases

In 1815 in England in the case of Pickering v. Rudd8 Lord Ellenboroughconsidered whether the plaintiff could maintain a suit for trespass onthe ground that the defendant had nailed a board on his house thatprojected from the wall so that it overhung the plaintiff's garden. Theplaintiff sued on the basis of the cujus est solum maxim, but the LordChief Justice rejected the argument by saying-

But I am by no means prepared to say, that firing across a fieldin vacuo, no part of the contents touching it, amounts to a clausum

4 The :fifth amendment, so far as relevant reads-' No person shall ... be deprivedof life, liberty, or property, without due process of law; nor shall private propertybe taken for public use, without just compensation. 'I

5 (1962) 369 U.S. 84; [1962] U.S. Av.R. 1.6 Section 1 of the amendment, so far as relevant, reads-' No State shall make or

enforce any law which shall abridge the privileges or immunities of citizens of theUnited States; nor shall any State deprive any person of life, liberty, or property,without due process of law . . . '

7 [1954] Exchequer Ct. R. 69; [1954] U.S. & C. Av.R. 259; [1954J 4 D.L.R. 470.See also Mann v. Saulnier [1959] 19 D.L.R. (2d) 130.

8 (1815) 4 Camp. 219; 171 E.R. 70.

JUNE 1965] A viation Law in Australia 245

fregit. Nay, if this board overhanging the plaintiff's garden be atrespass, it would follow that an aeronaut is liable to an action oftrespass quare clausum fregit, at the suit of the occupier of everyfield over which his balloon passes in the course of his voyage.. . . If any damage arises from the object which overhangs the close,the remedy is by an action on the case. 9

Lord Ellenborough's dictum was supported by Fay v. Prentice10 in 1845and was approved by judges of the Court of Appeal in Lemmon v.Webb."

On the other hand there are some judicial dicta to the contrary,including observations by Brett M.R. in Wandsworth Board of Worksv. United Telephone CO. 12

• In 1957 McNair J., a Judge of the Queen'sBench Division, in Kelsen v. Imperial Tobacco Company Limited13 refusedto follow Lord Ellenborough's views. An advertising sign projected eightinches into the airspace above a shop which the plaintiff had leased.McNair J. granted a mandatory injunction to remove the sign on theground that a trespass and not a mere nuisance was created by theinvasion of the plaintiff's airspace.

On the face of it, the reasoning of McNair J. seemed to amount to aliteral application of cujus est solum going far beyond the view of theSupreme Court of the United States, inhibited by constitutional considerations in the Causby and Allegheny cases.

Australian cases

A few Australian cases are worth mention. In Barker v. The Corporation of the City of Adeiaide13A in 1900 the plaintiff stretched anelectric cable across a public street in Adelaide at a height of 45 feetabove the ground. After the plaintiff refused a request to remove thecable the defendant cut it. In an action for damages the SupremeCourt of South Australia held that the erection of the cable was atrespass upon the property of the Corporation and that the act of cuttingit was therefore justifiable. All members of the Court based theirdecision on the words of an Act providing that the " fee-simple of everypublic street in the municipality shall be vested in the Corporation ofsuch municipality" holding that this did not just mean the fee-simpleof the surface. The implication of the decision is that there are privateproperty rights in space but there was no examination of the cujus estsolum formula or the authorities in which it was considered.

9 Ibid. 220.10 1 C.B. 828; 135 E.R. 769.11 [1894] 3 Ch. 1; affirmed on appeal to the House of Lords [1895] A.C. l.12 (1884) 13 Q.B.D. 904, 915.13 [1957] 2 Q.B. 334; [1957] 2 All E.R. 343.13A [1900] S.A.L.R. 29.


In 1905, Madden C.J. of the Supreme Court of Victoria held inLawlor v. Johnston13a that where the owner of property erected ventilating pipes on an exterior wall of his premises in such a way as to overhang his neighbour's land he was liable for trespass. The learnedJudge did not find it necessary to rely on authority and regarded theact as being a trespass to the land itself. 13c

A more satisfactory approach to the problem was adopted in Tasmaniain Davies v. Bennison13o in 1927. The defendant, incensed by the wailing of cats from the direction of the plaintiff's property, fired a bulletfrom his own property which killed the plaintiff's cat upon the roof ofa shed in her yard. Nicholls C.J. considered the cujus est solum maximand, in particular, Pickering v. Rudd which he noted had been criticisedby Lord Biackburn13E and Sir Frederick Pollock.13F His Honourthought that, although there were legitimate doubts as to how far therights of a landowner ad coelum extended, on the facts of the case beforehim the owner's right extended to a height which justified the claim oftrespass.

In the view of this writer, it defies common sense to hold that theoperator of a high flying aircraft may be held liable for trespass as distinctfrom nuisance. To this writer it is completely unnecessary to adopt andapply concepts of possession or ownership appropriate to land whereareas of private ownership can be closely delineated to air space.14 Onceit is recognized that the owner of the soil has a general exclusive rightto make use of the airspace above his land questions of ownership andpossession can be put aside. One writer has written about the ' contribution to the legal history of a pseudo-maxim [cujus est solum] from itsillegitimate conception on the shores of the Mediterranean Sea andits meteoric appearances in Common and Civil Law to its ingloriousdeath at the hands of the Courts in the New World '.15 It remains tobe seen whether Australia is part of the new world and will look toLacroix v. The Queen rather than Kelsen v. Imperial Tobacco Company.

13a [1905] V.L.R. 714.13C In yet another State, the Supreme Court of New South Wales held in Evans

and wife v. Finn (1904) 4 S.R. N.S.W. 297, that an action lay for nuisance caused bybullets which strayed from a rifle range and came on to and over the plaintiffs' land.The Court did not consider the status of the air space and whether trespass also layin respect of the passage of bullets over the land as was in issue in Clifton v. Bury (1887)4 T.L.R. 8.

130 (1927) 22 Tas. L.R. 52.

13E Kenyon v. Hart (1865) 6 B. & S. 249, 252; 122 E.R. 1188, 1189.13F Law of Torts, 8th ed., 347.14 Similar misgivings are expressed by Messrs Kerr and Evans, the learned authors

of McNair, ' The Law of the Air' (3rd ed. 1964) 47-48.15 H. D. Klein, 'Cujus Est Solum Ejus Est ... Quousque Tandem?' (1959) 26

Journal of Air Law and Commerce 237.


State legislation on surface liability

Four Australian States, New South Wales, Victoria, Western Australiaand Tasmania, have now passed specific Acts dealing with liability inrespect of the flight of aircraft. Section 2 (1) of the Damage by AircraftAct, 1952 (N.S.W.), the first of the State Acts, reads as follows-

No action shall lie in respect of trespass or in respect of nuisance,by reason only of the flight of an aircraft over any property at aheight above the ground, which, having regard to wind, weather,and all the circumstances of the case is reasonable, or the ordinaryincidents of such flight, so long as the provisions of the Air Navigation Regulations are duly complied with.16

The sub-section is copied from section 40 (1) of the Civil AviationAct, 1949 (U.K.).17 The other three State Acts contain a similar provision.' 8 However, even in these four States cases may occur outsidethe scope of the Acts. It is to be noted that the immunity of flight appliesonly where the provisions of the Air Navigation Regulations are compliedwith and this is a formidable condition in view of the complex anddetailed nature of the Regulations. Moreover, a flight must be at aheight which, in all the circumstances of the case, is reasonable.19 TheNew South Wales Act is expressed to bind the Crown which, as a matterof construction, presumably means the State Crown. The Acts of theother three States are not expressed to bind the Crown so that Stateowned aircraft will not be affected by the legislation, nor, for that matter,do any of the State Acts apply to Commonwealth-owned aircraft20.

Whilst granting immunity from trespass or nuisance in respect ofnormal flights, the four States have provided, as a quid pro quo, thatan owner of an aircraft is liable without proof of negligence if his aircraft causes material damage. Section 2 (2) of the New South WalesAct, again closely following the United Kingdom Act21 , reads-

16 The Air Navigation Regulations referred to in s. 2 (1) are those made by theGovernor-General pursuant to the Air Navigation Act 1920 as amended which aremade part of N.S.W. law by the Air Navigation Act, 1938-1964 of that State. All otherStates have similar Acts adopting the Federal Regulations.

17 In Kelson v. Imperial Tobacco Company, McNair J. regarded s. 40 as evidencethat the British Parliament did not adopt Lord Ellenborough's opinion in Pickeringv. Rudd but adopted a contrary view that a flight by an aircraft could be a trespass.This is tantamount to saying that Parliament was curing an established mischief asdistinct from dispelling any doubts or foreshadowing a possible mischief.

18 Corresponding provisions in the other State Acts are-Victoria-Wrongs Act1958, s. 30; W.A.-Damage by Aircraft Act, 1964, s. 4; and Tasmania-Damage byAircraft Act 1963, s. 3.

19 For comments along similar lines on s. 40 of the Civil Aviation Act see McNair,op cit. 99-100.

20 This view may be reached by construction of the legislation having regard todecisions of the High Court in Minister for Works (W.A.) v. Gulson (1944) 69 C.L.R.338 ; Essendon Corporation v. Criterion Theatres Ltd (1947) 74 C.L.R. 1 ; and Com,monwealth v. Bogle (1953) 89 C.L.R. 229. Moreover, it is to be doubted whether aState has constitutional capacity to bind the Commonwealth Crown-Commonwealthv. Bogle (1953) 89 C.L.R. 229, 259-260 per Fullagar J.

21 S. 40 (2).


Where material loss or damage is caused to any person or propertyon land or water by, or by a person in, or an article or person fallingfrom, an aircraft while in flight, taking off or landing, then unlessthe loss or damage was caused or contributed to by the negligenceof the person by whom it was suffered, damages in respect of theloss or damage shall be recoverable without proof of negligence orintention or other cause of action, as if the loss or damage had beencaused by the wilful act, neglect, or default of the owner of theaircraft:

Provided that where material loss or damage is caused as aforesaid in circumstances in which-

(a) damages are recoverable in respect of the said loss ordamage by virtue only of the foregoing provisions of thissubsection; and

(b) a legal liability is created in some person other than theowner to pay damages in respect of the said loss or damage;

the owner shall be entitled to be indemnified by that other personagainst any claim in respect of the said loss or damage.22

In the Causby case low flying aircraft materially interfered with theoperation of the plaintiffs' chicken raising farm and damage of this kindwould fall within the scope of the State Acts. On the other hand theflights in the Causby case also interfered with the owners' enjoymentof their property as a home. Loss of enjoyment may not itself be amaterial loss or damage within the meaning of the legislation.

The State legislation presents difficult interpretative questions such aswhether even if damage is merely contributed to by the person who hassuffered it there is a complete defence to an action under the legislation.23

None of the State Acts seem to prevent a person suffering damage frombringing a common law action in tort independently of the legislation.24

Commonwealth legislation

The Commonwealth has also had a hand in the matter. The CivilAviation (Damage by Aircraft) Act 1958 gives the force of law in Australiato the international convention on damage caused by foreign aircraftto third parties on the surface drawn up at Rome in 1952. Article 1of the Rome Convention states that any person who suffers damageon the surface shall, upon proof only that the damage was caused by anaircraft in flight or by any person or thing falling therefrom, be entitledto compensation as provided by the Convention. The damage must

22 Victoria-Wrongs Act 1958, s. 31; W.A.-Damage by Aircraft Act, 1963, s. 5;Tasmania-Damage by Aircraft Act 1963, s. 4. The State Acts also provide that wherean owner bona fide demises or hires out his aircraft to another person for a periodexceeding fourteen days and does not supply crew, that person is liable instead of theowner.

23 Similar problems under s. 40 of the English Act are described in McNair, op cit.115-120. See further L. R. Edwards, 'Some Aspects of the Liabilities of AirlineOperators in Australia' (1960) 34 Australian Law Journal 142.

24 McNair, Ope cit. 118.


be a direct consequence of the incident giving rise thereto and no rightto compensation arises if the damage results from the mere fact of passageof the aircraft through the airspace in conformity with existing trafficregulations. However, unlike the State Acts the Convention imposesmaximum limits of liability on the operator. The Convention appliesto damage caused in the territory of a contracting State by an aircraftregistered in the territory of another contracting State.

While the Convention is limited in its application to Australia toflights over Australia of the aircraft of foreign States parties to the Convention, the Commonwealth Act also applies its provisions to Australianregistered aircraft on the domestic portions of international flights. 25

The Act further applies the rules of the Convention to aircraft of foreignnon-contracting States in flights over Australia in the course of international trade and commerce.26 Such foreign aircraft do not have thebenefit of the limits of liability specified in the Convention. The FederalAct is expressed to bind both the Commonwealth and State Crownsand clearly covers the international operations of Qantas over Australia.

Since the Acts of the four States in their terms would be applicableto aircraft engaged in the operations covered by the CommonwealthAct, a question arises as to whether there can be liability under bothActs or not. Under section 109 of the Constitution where a State lawis inconsistent with a Commonwealth law the Commonwealth lawprevails and the State law is invalid to the extent of the inconsistency.It seems pretty clear that where damage is caused by aircraft engaged inoperations which fall within the ambit of the Commonwealth Act,liability arises only under the Commonwealth law.

Res ipsa loquiturRes ipsa loquitur is a familiar cry of counsel for the plaintiff in a case

involving an accident occurring inexplicably in circumstances in whichaccidents do not normally occur. Since an aircraft operator no doubthas a duty of care towards persons likely to sustain damage if he isnegligent27, does the maxim res ipsa loquitur apply so that mere proofof injury or damage raises a rebuttable presumption of negligence?

Common law situationLeaving aside Australian statutory law for the moment in cases

involving damage to the surface as where a propeller falls from an aircraft in flight, it would be reasonable to apply the maxim. In the UnitedStates, liability is strict.28 What, however, if an aircraft crashes?Regrettably there are sometimes no survivors to explain the accidentso the application of the maxim could be burdensome to an operator.

25 Civil Aviation (Damage by Aircraft) Act 1958, s. 16 (1).26 Ibid. s. 16 (2).27 McNair, op. cit. 72-76.28 D'Anna v. United States [1950] U.S. Av. R. 282.


In Fosbroke-Hobbes v. Airwork, Ltd29, Goddard J. applied the doctrinein a case in which a crash occurred just outside an aerodrome after takeoff.The evidence showed that the aircraft did not suffer engine failure, butthat it did not gain height as it should have. The doctrine was alsoapplied in Canada in 1960 in a case involving somewhat similar facts. 3o

On the other hand, in Rochester Gas and Electric Corporation v. Dunlop31an American Court refused to apply res ipsa loquitur when damage wascaused by an aircraft sustaining engine failure. The failure of an enginewas held to be insufficient to raise the probability of negligence. InWestern Australia Virtue J. held in Arnold v. Evans31A that the doctrinedid not apply to aircraft generally. His Honour observed that insofaras Fosbroke-Hobbes v. Airwork, Ltd was an authority to the contraryhe disagreed with it.

Relevant legislation

In cases of surface damage the application of the doctrine would beaffected by the Commonwealth and State Acts already mentioned indealing with the legal status of airspace.

Res ipsa loquitur may, of course, be raised in connection with deathor injury of a passenger or the damage or loss of goods consigned forcarriage by air. The Commonwealth and five States32 have passed Actsregulating the liability of the carrier to his passengers and consignors.In short, the carrier is liable unless he can exculpate himself accordingto the terms of the legislation. Since the burden of proof does not lieon the plaintiff suffering the damage there seems to be little room for theapplication of res ipsa loquitur if the flight is covered by a Federal orState Act. The manner in which the carrier liability legislation of theCommonwealth and States applies to Australian aviation will be discussed in Part IV of this article.

The Federal and State Acts do not cover all categories of flight butfor the most part apply only to carriers who hold airline licences requiredunder the Federal Air Navigation Regulations to engage in regular publictransport operations.33 Res ipsa loquitur may therefore be raised inother classes of flight and in New South Wales, where there is no Act,the common law position applies generally to intrastate aviation.

29 [1937] 1 All E.R. 108.30 Zerka, Romley and Alex v. Lau-Goma Airways Ltd (1960) 23 D.L.R. (2d) 145.31 [1933] U.S. Av.R. 511.31A (1953) 54 W.A.L.R. 15.32 Each Act is called the Civil Aviation (Carriers' Liability) Act and all are sub

stantially similar. New South Wales has not yet passed a corresponding Act.31 The Federal Act gives the Warsaw Convention the force of law in Australia. By

art. 1 of the Convention the Convention is applicable to ' all international carriage'for reward and most gratuitous international carriage between the territories of thehigh contracting parties. Later aviation conventions use the term ' Contracting State'instead of 'High Contracting Party'. The Warsaw Convention was signed by theUnited Kingdom as the High Contracting Party on behalf of Australia, a practicelong since discontinued in aviation arrangements.


II - REGULATION OF AIR NAVIGATION

For more than forty years regulation of air navigation in Australiahas been almost entirely a Commonwealth affair.

Air Navigation Act 1920: Goya Henry CaseThe first aviation statute was the Federal Air Navigation Act 1920

authorizing the Governor-General to make regulations to give effectto a convention regulating international aerial navigation known as theParis Convention, 1919, the first major international agreement on flight.The Governor-General was further authorized to make regulationsproviding for the control of air navigation throughout the Commonwealth and the Territories. The Act was passed on the assumption thatthe Commonwealth Parliament possessed three primary sources ofconstitutional power. The first was the interstate and overseas tradeand commerce power vested in the Commonwealth Parliament by section 51 (i) of the Constitution;34 the second, the external affairs powerdescribed in placitum (xxix) of the same section ;35 and the third, thepower to make laws for the Territories set out in section 122.36

In R. v. Burgess; Ex parte Henry37 in 1936 the High Court held, firstly,that the Commonwealth could not under its trade and commerce powerexercise general control over the subject-matter of civil aviation in theCommonwealth, including intrastate civil aviation. Secondly, so faras the Air Navigation Act empowered the Governor-General to makeregulations carrying out the Paris Convention, it was a valid exerciseof the external affairs power. In this case Goya Henry had been convictedof an offence of flying without a licence in contravention of the AirNavigation Regulations. The flight in question was a purely intrastateflight. The Court held that the Regulations could not be sustained onthe basis that they carried out and gave effect to the Convention. Thematters with which the Convention dealt, including the internationalrecognition of sovereignty over airspace and the relations of governmentsto the aircraft of other governments did not require the Commonwealthto provide a compulsory licensing system in respect of intrastate aviation.

Following the Goya Henry Case the Commonwealth vacated regulation of intrastate air navigation except to the very limited extent necessary

34 Constitution s. 51 (i) reads-' The Parliament shall, subject to this Constitutionhave power to make laws for the peace, order, and good government of the Commonwealth with respect to:-(i.) Trade and commerce with other countries and amongthe States:'

35 , (xxix.) External affairs: '36 Section 122 reads-' The Parliament may make laws for the government of any

territory surrendered by any State to and accepted by the Commonwealth, or of anyTerritory placed by the Queen under the authority of and accepted by the Commonwealth, or otherwise acquired by the Commonwealth, and may allow the representationof such territory in either House of the Parliament to the extent and on the terms whichit thinks fit.'

37 (1936) 55 C.L.R. 608.


to carry out the Paris Convention. The validity of the Act as amendedand the new regulations were later upheld in the second Goya HenryCase.38

The Commonwealth then sought to add ' air navigation and aircraft'to its powers listed in section 51 of the Constitution, but the proposedlaw was defeated at the referendum of electors required under section 128of the Constitution.39

Commonwealth-State Agreement in 1937

Following the referendum reversal the Commonwealth convened aconference of Commonwealth and State Ministers in 1937 to considermeans of ensuring that uniform rules would apply to all categories ofair navigation. All six States agreed to pass uniform Air NavigationActs adopting the Air Navigation Regulations of the Commonwealth asState law. As passed, each State Act provided that the Regulations fronltime to time in force applicable to, and in relation to, air navigationwithin the Territories of the Common\vealth should apply mutatis mutandisto and in relation to air navigation within a State. Further, the administration of the Regulations in their application to intrastate air navigationby virtue of the State Act was vested in the Commonwealth authorityresponsible for the administration of the Regulations in their applicationas Federal law.40

The scheme of legal control adopted in 1937 continued without questionuntil last year.

Australian aviation developments after 1937

Meanwhile, however, during the post-war years notable advancesoccurred in commercial aviation, accompanied by legal developments,both in Australia and internationally.

New Australian operators

In Australia the Commonwealth itself decided to engage in interstateand territorial commercial air transport operations and the FederalParliament passed the Australian National Airlines Act 1945 setting

38 R. v. Poole; Ex parte Henry [No.2] (1938) 61 C.L.R. 634.39 Under s. 128 a proposed law to alter the Constitution can become law only if

, in a majority of the States a majority of the electors voting approve the proposed law,and if a majority of all the electors voting also approve the proposed law . . . '. In1937 1,924,946 electors voted in favour of a federal aviation power and 1,669,062 votedagainst but there were separate majorities only in Victoria and Queensland. In thelight of subsequent events, the wording of the proposed amendment ' air navigationand aircraft' was too narrow. In 1959 the Joint Parliamentary Committee on Constitutional Review recommended that the Federal Parliament should seek legislativepower over the subject ' aviation '.

40 The State Acts are-N.S.W.-Air Navigation Act, 1938..1964; Victoria-AirNavigation Act 1958; Queensland-Air Navigation Acts, 1937 to 1947; S.A.-AirNavigation Act, 1937; W.A.-Air Navigation Act, 1937..1945; and Tasmania-AirNavigation Act 1937.


up the Australian National Airlines Commission to operate TransAustralia Airlines (T.A.A.) in competition with the old-establishedexisting major private air operator, Australian National Airways Pty Ltd.

Domestic and international air transportation developed dramaticallythroughout the 1950's. In Australia a third operator, Ansett AirwaysPty Ltd, a subsidiary of Ansett Transport Industries Ltd, establisheda network of routes between State capital cities, and abroad the Commonwealth-owned flag carrier Qantas became one of the major internationalairlines of the world.

Australian expenditure on aviation facilities

Australia, in common with other leading aviation countries, wasfaced with tremendous expenditure on the establishment of modernairports, air navigation facilities and the provision of aircraft. In thewhole history of domestic aviation in this country, the Commonwealthhas provided almost all commercial aviation facilities. In the financialyear 1963/1964 total Commonwealth expenditure on civil aviation was£21.7 million comprising £15.6 million on the provision of ordinaryservices and £6.1 million on services of a capital nature. The recordedvalue of Commonwealth aviation assets at the close of the financialyear was £78.2 million. In return the revenue in 1963/1964, includingdividends from Qantas and T.A.A., totalled only £5.4 million Bycomparison State financial assistance to civil aviation has been negligibleand in 1963/1964, for example, seems to have totalled only about£100,000.41

Chicago Convention 1944

On the international legal scene, the Paris Convention of 1919 wassuperseded by the Chicago Convention of 1944 which made provisionfor much more elaborate and comprehensive standards of internationalair navigation. As at February 1965, 108 States were parties to theConvention, including Australia and all the other major aviation Statesof the world, except Russia and Red China.

The Chicago Convention applies to civil aircraft engaged in international flights. 42 Each contracting State undertakes under article 28,so far as it may find practicable, to provide air navigation facilities inaccordance with standards and practices recommended or establishedfrom time to time under the Convention. Under article 37 each Statealso agrees 'to collaborate in securing the highest practicable degreeof uniformity in regulations, standards, procedures, and organizationin relation to aircraft, personnel, airways and auxiliary services in all

41 The Prime Minister (Sir Robert Menzies) gave this figure to the House of Representatives on 25 August 1964. Parliamentary Debates, 25th Parlt, 1st session 1964, Houseof Representatives, 529.

42 Arts. 3, 5 and 6.


matters in which such uniformity will facilitate and improve air navigation '. To this end the International Civil Aviation Organization(I.C.A.O.) set up under the Convention adopts international standardsand recommended practices and procedures dealing with the variousaspects of air navigation, such as rules of the air, airworthiness and thecharacteristics of airports and landing areas.43

The permanent governing body of I.C.A.O. is a Council of twentyseven contracting States elected by the Assembly under article 54.44

One of the mandatory functions of the Council is to adopt internationalstandards and recommended practices and designate them as Annexesto the Convention.45

Air Navigation Act 1920-1963The Air Navigation Act 1920-1963 provides for the implementation

of the Chicago Convention. For the nlost part it is necessary for theGovernor-General to make regulations to carry the Convention intoeffect.46 Section 26 of the Act also authorizes the Governor-Generalto make regulations dealing with specific categories of civil aviation inAustralia, including, in particular, territorial air navigation,47 and airnavigation undertaken with respect to interstate and international tradeand commerce.48 Until 1963, the Regulations, in their turn, were limitedin application to these three classes of air navigation plus air navigationin controlled airspace directly affecting or possibly endangering thesafety of persons or aircraft engaged in the specified classes of air navigation.49 The Federal Regulations continued to apply in relation to intrastate air navigation as State laws authorized under the provisions of thevarious State Air Navigation Acts.

43 Arts. 38, 54, 57 and 90... Australia has been a member of the Council of I.C.A.o. since its inception.45 Art. 54 (I).46 Air Navigation Act 1920-1963, s. 26 (1) (b).47 Section 26 (1) (c) reads 'in relation to air navigation within a Territory of the

Commonwealth or to or from a Territory of the Commonwealth.48 Section 26 (1) (d) reads-' in relation to air navigation, being regulations with

respect to trade and commerce with other countries and among the States'.49 Regulation 5 then defined, as it still does, , controlled airspace ' to mean ' airspace

or an aerodrome and the airspace in its vicinity' designated by the Director-Generalof Civil Aviation in pursuance of r. 95. Controlled airspace designated under f. 95covers all the major air navigational areas of Australia, e.g., all the capital cities ofAustralia are linked by controlled airspace. Regulation 6 provided for the applicationof the regulations as follows-' (1) Subject to these Regulations, these Regulationsapply to and in relation to-(a) international air navigation within Australian territory;(b) air navigation in relation to trade and commerce with other countries and amongthe States; (c) air navigation within the Territories; (d) air navigation to or from theTerritories; and (e) air navigation in controlled airspace which directly affects, orwhich may endanger, the safety of persons or aircraft engaged in a class of air navigationspecified in paragraph (a), (b) or (d) of this sub-regulation.' As will be seen r. 6 wasamended in 1964. Section 26 (1) (e) also authorized the making of regulations ' inrelation to air navigation, being regulations with respect to any other matter withrespect to which the Parliament has power to make laws' thus leaving room forextending the operation of the Regulations, for instance, if the Commonwealth shouldhave wider power over aviation than it was apparently thought to have.


Licensing of air service operations

By virtue of the State Air Navigation Acts the Regulations providedfor Federal licensing of intrastate commercial air services.50 In additionto Federal licences, however, most of the States required State issuedlicences to conduct intrastate air operations, obtainable under TransportActs applying generally to commercial haulage. 51

Airlines of New South Wales Pty Ltd v. New South Wales

In 1963 Airlines of New South Wales Pty Ltd, a subsidiary of AnsettTransport Industries Limited, challenged the validity of the provisionsof the State Transport (Co-ordination) Act, 1931-1956 (N.S.W.) relatingto the State licensing of aircraft to engage in intrastate air operations.This case arose because the Commissioner for Transport decided tocancel licences held by the Company for certain intrastate air servicesand reallocate the services to an independent rival operator, East-WestAirlines Ltd. In return some unprofitable routes from East-West Airlines were allocated to Airlines of New South Wales. The plaintiffclaimed that the Commonwealth Air Navigation Act and Regulations,including the Federal licensing of air transport services, extended toall air navigation within Australia and that the State legislation in settingup an additional licensing system was inconsistent with the Commonwealth law and, therefore, invalid under section 109 of the Commonwealth Constitution.52

The Court held53 that the provisions of the State Act were not inconsistent with the Federal law and that the plaintiff was not entitled to useaircraft within New South Wales without holding a licence under theState Act. Some of the judges, including Dixon C.J.54, simply said therewas no reason why the State legislation should not operate in relationto allocation of air routes consistently with the Federal law. Morespecifically, Taylor J. considered that the Commonwealth Regulationsrelated to the interests of safety of air traffic and said nothing on thetopic of co-ordination of intrastate transport which was a matter dealt

50 Air Navigation Regulations, Pt. XIII, especially IT. 198, 199.51 N.S.W.-State Transport (Co-ordination) Act, 1931-1956. In 1964 the Air Trans

port Act, 1964 superseded this Act in its application to aviation; Queensland-StateTransport Act of 1960; W.A.-State Transport Co-ordination Act, 1933-1961; andTasmania-Traffic Act 1925, Traffic Act 1961 and the Transport Act 1938 as amended.Aircraft licensing provisions under the Transport Act 1951 of Victoria were repealedby the Transport Regulation Act 1955. S.A. has not had a State administered licensingsystem.

52 Constitution, s. 109 reads-' When a law of a State is inconsistent with a lawof the Commonwealth, the latter shall prevail, and the former shall, to the extent ofthe inconsistency, be invalid.'

53 (1964) 37 A.L.J.R. 399; [1964] Argus L.R. 876.54 (1964) 37 A.L.J.R. 399, 402-403; (1964) Argus L.R. 876, 881, per Dixon C.J.

McTiernan and Kitto JJ. agreed.


with under the State Act. 55 Menzies J. thought that the Federal Regulations did not purport to extend to intrastate air navigation except withincontrolled airspace and were not intended to be exclusive and exhaustive. 56

The decision assumed importance because dicta in some judgementssuggested that Commonwealth power to control air navigation by reasonof developments in commercial aviation since 1937 was not as limitedas previously thought but extended into the area of intrastate commerce.

The Chief Justice observed-

There was an International Convention on Civil Aviation whichmet at Chicago in 1944 which is called the Chicago Convention,and the Air Navigation Act 1920-1960 defines the term' ChicagoConvention' as meaning the Convention on International CivilAviation concluded at Chicago on 7th December, 1944. It wasratified on behalf of Australia and the ratification was approvedby parliament: see s. 3A. The text is to be found in the First Scheduleof the Air Navigation Act 1920-1960. A study of the Schedulesuggests that obligations are placed upon the Commonwealth whichextend over the whole territory of Australia and that in almost allrespects the legislative power which arises from the need of carryingout the Convention given by s. 51 (xxix) would suffice to supportlaws made with a complete disregard of the distinction between

-7interstate and intra-State trade; it would follow that no reliance

...~_.~_--------: upon s. 51 (i) by the Commonwealth would be necessary. But aconsideration of the Regulations made under the Air NavigationAct shows that that view was not adopted; in fact the Commonwealth took power under the Act and exercised the power by regulations which took account of the distinction.57

Windeyer J. went further. He observed-

As to the constitutional power: In my opinion the powers withrespect to trade and commerce with other countries and among theStates (s. 51 (i)), external affairs (s. 51 (xxix)), and incidental mattersas described in s. 51 (xxxix), are ample to give the CommonwealthParliament complete power over all air navigation in Australia.. . . I see no reason for confining the interest and concern of theCommonwealth with air navigation to areas of the superincumbentair that have been declared to be controlled air space. As I see it,Commonwealth power extends to the control of the movement ofall aircraft in all air space above Australia and its territories. Itextends too, I consider, to all such incidental matters as the controlof airports and airfields, the take-off and landing of aircraft, andthe prescribing and policing of safety precautions. I do not overlook,indeed I respectfully adopt, the observation of Dixon J., as he

S5 (1964) 37 A.L.J.R. 399 407-408; [1964] Argus L.R. 876, 890-891. The judgmentof Taylor J. contains an interesting historical account of legal developments affectingthe regulation of civil aviation in Australia commencing with the Paris Convention1919.

56 (1964) 37 A.L.J.R. 399 410-411; [1964] Argus L.R. 876, 895-896.57 (1964) 37 A.L.J.R. 399, 402; [1964] Argus L.R. 876, 880.


then was, in R. v. Burgess; Ex parte Henry (1936), 55 C.L.R. 608,at p. 674, that' under colour of carrying out an external obligationthe Commonwealth cannot undertake the general regulation of thesubject matter to which it relates '. But in carrying out an obligation,measures that at one time might have been unnecessary may, withchanging circumstances, become necessary. It is not that the natureof the power changes. What changes are the conditions and circumstances within which the power is exercisable, and in consequencethe particular aspects of the subject-matter that can be regulated.The great development in recent times of air traffic of all kinds inAustralia, including overseas and interstate air traffic, has createda situation today that is very different from that of thirty years ago.The proper regulation in the interests of safety of the operations ofinterstate and overseas airlines, and the due execution by Australiaof the international obligations it has accepted, may well makeit desirable that the one authority should exercise sole control of allmovement of aircraft in the air and of matters connected with suchmovement, that is to say of all matters connected with how aircraftmay be used. 58

Extension of the Air Navigation Regulations to intrastate airline operations

Following this decision, on 6 August 1964, the Prime Minister wroteto the State Prenliers pointing out that the Commonwealth bore thefinancial brunt of providing and maintaining aviation facilities in Australiaand informing them that it intended to assume comprehensive legalcontrol over civil aviation in lieu of the existing divided control. SomeState Premiers responded by asserting that the Commonwealth wasmaking an unwarranted intrusion into an area of legitimate State power.

Federal versus State licensing laws

The Air Navigation Regulations were then amended to achieve thedeclared Federal policy. Regulation 6 was amended to allow for theapplication of the Regulations to all air navigation within Australia.Regulation 198 already required a licence to use aircraft in regular publictransport operations.

An amendment to regulation 199 enjoined the Director-General ofCivil Aviation in deciding whether to issue an intrastate airline licenceto 'have regard to matters concerned with the safety, regularity andefficiency of air navigation and to no other matters'. Then followed anew regulation59 providing that the grant of a Commonwealth licenceunder regulation 199 should be positive authorization to conduct theoperations covered by the licence, that is to say, that the grant of a Federallicence alone was intended to be sufficient authorization to engage inintrastate air carriage.

58 (1964) 37 A.L.J.R. 399, 411-412; [1964] Argus L.R. 876, 897.59 R. 200B.


Under two new regulations permits were required from the DirectorGeneral to use Commonwealth aerodromes6o and to fly in controlledairspace as defined in regulation 6. 61

Reacting to these events the New South Wales Parliament passedthe Air Transport Act, 1964 making it an offence for a person to carrypassengers or goods by aircraft between places in New South Waleswithout a State licence covering him, the aircraft and the route. TheAct imposed severe penalties for contraventions, the penalty for a thirdoffence being a minimum fine of £10,000 and maximum of £20,000. 62

Airlines of New South Wales Pty Ltd v. New South Wales [No.2]

Airlines of New South Wales applied to the Commissioner for MotorTransport, the licensing authority under the State Act, for a licence toconduct commercial air transport operations between Sydney and Dubbo,but was refused. On the other hand it appeared that the rival operator,East-West Airlines, could not obtain a Commonwealth licence to conductthe service allocated to it by the State. In these circumstances the publicair transport service between Sydney and Dubbo ceased and Airlinesof New South Wales commenced proceedings challenging the validityof the State Act. 63

The decision in this case and its consequences are discussed by MissP. Armstrong elsewhere in this Review and it is unnecessary, therefore,to deal with the case at length. The Court, by a six to one majority,64

upheld the Federal Regulations providing a licensing system for allcommercial airline services within Australia.

A clear majority of the Court thought that the licensing provisionswere valid under the trade and commerce power. Opinion was dividedas to whether the scheme could also be sustained under the externalaffairs power as a law to give effect to the Chicago Convention. 6s

In so deciding the Court adhered to the principle of the first GoyaHenry Case66 that the constitutional division of power over trade andcommerce had to be observed but considered that the development ofnational and international aviation since 1936 had created an entirelynew and complex situation. Whereas once overseas and interstate air

60 R. 320A.61 R. 320B.62 S. 3.63 (1965) 38 A.L.J.R. 388.64 Barwick C.J., McTiernan, Kitto, Menzies, Windeyer and Owen JJ.; Taylor J.

dissenting.65 McTiernan J. held that the licensing regulations were valid under the external

affairs power; Menzies and Owen JJ. considered them to be within the external affairsand the trade and commerce powers; Kitto and Windeyer JJ. thought the regulationswere authorized by the trade and commerce power but not the external affairs power.Barwick C.J. preferred to rest their validity on the trade and commerce power.

66 (1936) 55 C.L.R. 608.


navigation could be regulated without exercising any significant controlof intrastate operations a licensing law applying to intrastate flightscould now be justified to protect overseas and interstate aviation againstpossible physical danger.

The Court held, however, that it was outside the competence of theFederal Parliament to assume sole authority to initiate air transportoperations purely within a State and, therefore, that regulation 200Bwas invalid as going beyond any form of legal control which could beconnected with the Commonwealth's newly delineated power to controlall the navigational aspects of aviation in Australia. Thus, a State couldprohibit air transport operations of an intrastate character for reasonsother than navigational ones.

Since the positive licensing provisions of regulation 200B were invalidthe only question of conflict between Commonwealth law and the StateAct concerned the licensing provisions of the Air Navigation Regulations, that is to say, regulations 198 and 199. The Court found by majoritythat the two sets of laws were directed to different ends. The Commonwealth licensing regulations were based on matters concerning safety,regularity and efficiency whereas the State law was based on other policyconsiderations, such as public needs. There was therefore, no inconsistency.

The Court unanimously upheld the permit regulations, that is thoseregulations requiring Federal permits to use Commonwealth aerodromesand fly in controlled airspace. 67

In result, therefore, the Commonwealth may now make its navigationallaws applicable to all flying operations in Australia and State supportis unnecessary in order to apply the Federal Air Navigation Regulationsto intrastate aviation. On the other hand, the States may still exerciselicensing control for non-navigational reasons. This means that inNew South Wales an operator wishing to engage in intrastate carriagemust possess both Federal and State licences and if his flights involvemaking use of controlled airspace or a Commonwealth aerodrome hemust also hold covering Federal permits. At the stage of writing, thedispute between New South Wales and the Commonwealth over theSydney to Dubbo air service remains unresolved.

Constitution, section 92Finally, something should be written about the application of section 92

to interstate air navigation. 68 A Commonwealth attempt in 1945 to

67 As mentioned in n. 49, controlled airspace is not confined to airports and areasin their vicinity. Corridors of airspace usually 50-100 or more miles wide extend forthousands of miles over Australia joining all the capital cities.

68 Section 92 reads-' On the imposition of uniform duties of customs, trade, commerce, and intercourse among the States, whether by means of internal carriage orocean navigation, shall be absolutely free.'

260 Federal Law Review [VOLUME I

give a statutory monopoly to T.A.A. was held in the A.N.A. Case toconflict with section 92.69

Under the current interpretation of section 92 a law or executive act,whether State or Commonwealth, which applies directly to interstatetrade and operates so as to impose a burden or restriction on that tradeinfringes section 92.70 Regulation 198, as seen, prohibits an aircraftbeing used in regular public transport operations except under a licenceissued by the Director-General. Where the proposed service is an interstate service, regulation 199 requires the Director-General to issue alicence unless the applicant either has not complied with the Regulationsor has not established that he is capable of complying with them.

Section 92 guarantees the right of the individual to trade freelybetween the States and a refusal to issue a licence for an interstate cargoor passenger service, for example, where the operator can establish thathe is capable of complying with the Regulations, would not only bebeyond the powers conferred on the Director-General under regulation199, but also a restraint on interstate trade contrary to section 92 of theConstitution. In the days when the Commonwealth directed its effortsto maintaining the existence of Australian National Airways (A.N.A.)by an agreement facilitating the Company's purchase of additionalaircraft and attempting rationalization of the competing services ofA.N.A. and T.A.A., Ansett Airways Pty Ltd with the supportingguarantee of section 92, was able to develop interstate operations whichhad a detrimental effect on the Commonwealth arrangements.

The matter is not as simple as it looks, however, because the Commonwealth has, under the trade and commerce power, prohibited theimportation of aircraft unless the Director-General of Civil Aviationgrants permission71 and it may not be possible, therefore, for an erstwhile interstate operator to obtain aircraft to conduct his service. Thishas happened to IPEC-Air Pty Limited a company wishing to operatean interstate air cargo service and the Company not having aircraft tooperate the proposed services the Director-General also refused toissue it a charter licence under regulation 199. The Company has nowbrought proceedings in the High Court raising the question whether theDirector-General's actions involve a contravention of section 92. 71A

Air navigation chargesThe Commonwealth recoups but a small part of its annual expenditure

on air navigation facilities. In 1963/1964 it spent £5.7 million on the

69 Australian National Airways Pty Ltd v. Commonwealth (1945) 71 C.L.R. 29. Thecase is mentioned in Part III of this article.

70 Commonwealth v. Bank of New South Wales (1949) 79 C.L.R. 497, 639-641 (P.C.).71 Customs (Prohibited Imports) Regulations, r. 4 and the Third Schedule.71A The High Court gave its decision on 28 May 1965, holding that there was no

contravention of s. 92.


maintenance and operation alone of airport facilities and navigationalaids whilst the provision of meteorological services cost £1.1 million.Air navigation charges paid in the same year under the Air Navigation(Charges) Act totalled only £1.9 million.

Over the past few years the Commonwealth has gradually increasedair navigation charges in the hope that eventually it will fully recoverthat part of the cost of providing airports and air navigation facilitiesproperly attributable to the air transport industry. As yet it does notseem to be known what the industry's proper share should be. Airportsand navigational aids are, of course, vital to the defence of Australiaas well as for the development of commercial air transport. Under theAirlines Agreement of 1961 the Commonwealth bound itself not toincrease the rate of air navigation charges payable by T.A.A. andAnsettJA.N.A. by more than 10 per cent in any period of twelve months. 72

The Air Navigation (Charges) Act 1963 provided for such an increaseas from 1 January 1964.73

The imposition of air navigation charges in respect of aircraft engagedin interstate commerce invokes consideration whether section 92 appliesas it does in respect of charges made for the use of the roads by interstatecommercial road transport vehicles. In Hughes and Vale Pty Ltd v. NewSouth Wales [No. 2]74 the High Court rejected the contention that aState could impose charges as it wished for the use of the roads on thebasis that it owned them. According to the Court a public highwayhaving come into existence was there for use by subjects of the Crownwithout distinction whatever the nature of their journeys. 75 A chargerequiring interstate road traffic to pay more than a reasonable sum forthe use of the roads would infringe section 92.

There is a strong hint in the joint judgment of Dixon C.J., McTiernanand Webb JJ. in the Hughes and Vale Case76 that charges imposed by aState for the use of a wharf or a government aerodrome indispensableto interstate navigation by sea or air may fall within the scope of section 92so that the charges could be no more than a reasonable recompensefor the use offacilities. In J. Paterson & Co. Pty Ltd v. Melbourne HarbourTrust Con1missioners,77 Adam J. held that section 92 applied to legislativeaction restrictive of the rights of the public to use the port of Melbournein much the same way as it applied to action restrictive of the use ofpublic highways. He was prepared to hold invalid, as amounting toa burden on interstate trade, a regulation of the Melbourne Harbour

72 The Airlines Agreement of 1961 and two previous agreements one in 1952 andthe other in 1957 are discussed in Part III of this article.

73 The current legislation is the Air Navigation (Charges) Act 1952-1964.74 (1955) 93 C.L.R. 127.75 Ibid. per Dixon C.I., McTiernan and Webb II. at 171 and per Fullagar I. at 209.76 Ibid. 177-179.77 [1961] V.R. 343.


Trust Commissioners providing that no person should use any machineryfor the purpose of hoisting or conveying goods on a wharf or otherproperty of the Commissioner without a licence.

On the authorities to date it seems quite probable that section 92applies to air navigation charges and, therefore, that the Commonwealthwould have to show that the charges being in the nature of compulsoryexactions are no more than reasonable charges for the use of the facilitiesit makes available. In these circumstances, the Court could becomeinvolved in the unenviable task of determining what proportion of thetotal charges is properly attributable to interstate commercial aviation.So far, however, there seems little doubt that the Commonwealth has avery comfortable margin in its favour and for the time being, at least,is not in danger of infringing section 92.

Airport legislation

Legal powers

The Commonwealth can rely on several constitutional powers tosupport its ownership, maintenance and control of airports. The interstate and overseas trade and commerce power is sufficient to cover theCommonwealth fully in regard to the airports it owns in State capitalcities and any airport used for purposes of interstate and overseas airtraffic. 78

It is probable, moreover, that the Commonwealth can manage itsairports by virtue of the power vested exclusively in the CommonwealthParliament under section 52 of the Constitution to make laws (amongother things) with respect to ' all places acquired by the Commonwealthfor public purposes'. Nevertheless, doubts exist as to the scope of thepower. 79

The Commonwealth may, at least, place its airports beyond Statejurisdiction by a law passed for the purpose. 80

78 Other available powers are the defence power (Constitution, s. 51 (vL), territoriespower (Constitution, s. 122) and the incidental power (Constitution, s. 51 (xxxix).

79 A relevant dictionary meaning of ' place' is a defined part of the earth's surface.On this meaning, once the Commonwealth acquires a place for a 'public purpose',such as an airport, a State should no longer be able to make a law applicable to thatplace. A contrary view which has some judicial support is, however, that the word4 places' does not refer to lands acquired as property, but to territories acquired in apolitical sense. See for example Commonwealth v. New South Wales (1923) 33 C.L.R.1, 60 per Higgins J. and Kingsford Smith Air Services Ltd v. Garrisson (1938) 55 W.N.(N.S.W.) 122. In this case Betts D.C.J. observed that whether or not the acquisitionof land for Mascot aerodrome was a place for purposes of s. 52 that section did nothave the effect of abrogating State laws already in force and operating. It is submittedthat there is no compelling reason for reading , place ' as if it were ' territory'.

80 The Commonwealth law would be accorded paramountcy under s. 109 of theConstitution over any State law otherwise applicable. Moreover, whether or notairports fall within s. 52 (i) of the Constitution, so far as the Commonwealth itselfis concerned a State law may be constitutionally incapable of binding the Commonwealth-Commonwealth v. Bogle (1953) 89 C.L.R. 229, 259-260 per Fullagar J.


Airports (Business Concessions) Act 1959

In the Airports (Business Concessions) Act 1959, made binding on theCrown of a State, the Minister for Civil Aviation is empowered to grantleases and licences for business purposes in respect of land within anairport on such terms and conditions as he thinks fit. 81 A person maynot trade within an airport without ministerial authority.82 In result,therefore, the Commonwealth may, if it chooses, grant a person a rightto trade within a Commonwealth airport in a State in complete disregardof any State law relating to the particular activity such, for example,as a State liquor licensing law.

Airports (Surface Traffic) Act 1960

To complete the picture relating to air navigation the Airports(Surface Traffic) Act 1960, an Act binding both Commonwealth andState Crowns, empowers the Director-General of Civil Aviation toprovide for the control of surface traffic including parking.

III - THE LAW RELATING TO AUSTRALIAN AIR TRANSPORT POLICY

International arrangements

Qantas Empire Airways Limited, a public company, is the Australianinternational flag carrier. It originated as a company called The Queensland and Northern Territory Aerial Services Limited founded in 1920.The Company began to operate air services in northern Australia in1921 and in 1922 introduced its first regular air service between Charlevilleand Cloncurry. In 1934, by arrangement between the Company andImperial Airways Limited, the predecessor to British Overseas AirwaysCorporation, Qantas Empire Airways was formed to operate on theBrisbane-Darwin stage of the first regular England-Australia route.In the following year Qantas extended its operations to Singapore. In1946 the Commonwealth purchased B.O.A.C.'s half interest in the Company83 and in 1947 it bought the remaining Qantas shares from thefoundation company.84 Qantas is now one of the largest air carriers inthe world.

81 S. 6.82 Ss. 7, 8.83 The Qantas Empire Airways Agreement Act 1946 authorized the agreement

between the Commonwealth and the U.K.84 The Qantas Empire Airways Act 1948 approved the purchase of the Company's

shares. In 1954 Qantas also took over the Trans-Pacific air services which BritishCommonwealth Pacific Airlines operated from Canada and U.S.A. to New Zealandand Australia. B.C.P.A., a company incorporated in N.S.W., was originally ownedjointly by the United Kingdom, New Zealand and Australia under an agreementapproved by the British Commonwealth Pacific Airlines Agreement Act 1947. B.C.P.A.was placed in liquidation in 1954.


Sovereignty of the air

Under article 1 of the Chicago Convention, to which most of theprincipal aviation countries of the world subscribe85, the contractingStates recognize that each State has complete and exclusive sovereigntyover the airspace above its territory. Quite apart from the ChicagoConvention most countries have legislation in some form or other layingclaims expressly or implicitly to exclusive control over the airspaceabove their territories86 and no State seems to have denied the existenceof national sovereignty in the airspace. In these circumstances, international air services can only be operated pursuant to internationalarrangements.

Exchange of rights to fly

(a) Air Transit Agreement

The International Air Services Transit Agreement, drawn up at thesame time as the Chicago Convention in 1944, accords to each contracting party the privilege to fly over the territory of another contractingparty and to land for non-traffic purposes. The two privileges so grantedare known respectively as the first and second freedoms of the air andfor this reason the Transit Agreement is also known as the Two FreedomsAgreement. It has gained wide acceptance.87

(b) Air Transport Agreement

In 1944 there was also an attempt to provide, by multilateral arrangement, for the free exchange of air traffic rights between countries. TheAir Transport Agreement of that year effected the intention by accordingto the contracting parties the privileges of putting down and taking onpassengers, mail and cargo in the territory of another contracting partyand also of taking on and putting down passengers, mail and cargodestined for or coming from a third contracting State.88 None of themembers of the British Commonwealth have ever adhered to the Air

85 As at 4 February 1965 there were 108 member States.86 Article 1 of the Air Code of 1935 of the U.S.S.R., which is not a party to the

Chicago Convention, states-' The U.S.S.R. shall have complete and exclusivesovereignty over the air space of the U.S.S.R.': Strauss, Air Laws and Treaties of theWorld (1961). McNair, Ope cit. 7-8 refers to other national legislation in which theclaim of sovereignty has been asserted.

87 As at 30 June 1964 there were 66 contracting States, including Australia and allother principal aviation States parties to the Chicago Convention.

88 The Transport Agreement provides for the grant of the two freedoms of the AirTransit Agreement plus three' traffic' freedoms and is also known as the Five FreedomsAgreement. Article 1, S. 1 of the Agreement provides for the grant of the five freedomsas follows-' Each contracting State grants to the other contracting States the followingfreedoms of the air in respect of scheduled international air services: (1) The privilegeto fly across its territory without landing; (2) The privilege to land for non-trafficpurposes; (3) The privilege to put down passengers, mail and cargo taken on in theterritory of the State whose nationality the aircraft possesses; (4) The privilege totake on passengers, mail and cargo destined for the territory of the State whosenationality the aircraft possesses; (5) The privilege to take on passengers, mail andcargo destined for the territory of any other contracting State and the privilege to putdown passengers, mail and cargo coming from any such territory.'


Transport Agreement and the United States, which was mainly responsiblefor its framing, denounced it in 1946. Today the Agreement is virtuallya dead letter.

(c) Bilateral exchange of rights

The result is that traffic rights are now usually negotiated by arrangements entered into with other countries on a bilateral basis. As at30 June 1964 Australia had in force bilateral air services arrangementswith twenty-six other countries exchanging traffic rights for scheduledinternational services operated by Qantas. Australia had also concludedprovisional arrangements with five other countries providing for theoverflight of their territories by Qantas scheduled services, but notincluding traffic rights. If a country is not a party to the Transit Agreement it is necessary to secure its approval for a Qantas flight over itsterritory by bilateral arrangement, for example, with the introductionby Qantas in 1964 of a service to London via Manila and Hong Kong theCommonwealth secured approval of the Governments of Burma, Laosand the Republic of Vietnam, none of them parties to the Transit Agreement, for Qantas to overfly their territories.

Most of the bilateral agreements to which Australia is a party arebased on the pattern of an agreement exchanging traffic rights enteredinto at Bermuda in 1946 between the United States and the UnitedKingdom. 89 The major principle of such an agreement is that thedesignated airlines of the two contracting parties are to have a fair andequal opportunity to carry commercial air traffic to and from eachother's territories on routes specified in the agreement. In addition adesignated airline may carry traffic taken on in or destined for a thirdcountry lying either on the route between the two contracting partiesor beyond the territory of the other contracting party. However, theright to carry traffic to and from a third country is subordinate to themajor objective that the capacity of the designated airlines should beestablished having regard to the major purpose of the agreement toarrange for the carriage of traffic to and from the territories of the twocontracting parties.90

89 The original Bermuda Air Transport Agreement is published in [1946] U.S.Av. R. 105-122 and in Shawcross and Beaumont, Air Law (2nd ed. 1951) 1209-1223.

90 The Agreement between Australia and Malaysia dated 19 March 1964, AustralianTreaty Series 1964, No.9, is a typical Australian bilateral arrangement. Our Agreement with the United Kingdom is published in the Australian Treaty Series 1958,No.4. The original Australia-United States bilateral Agreement may be found in theUnited Nations Treaty Series, Vol. 7, 201. This Agreement, entered into in 1946, wasvaried in 1957 by an exchange of notes under which Australia received importantextensions to the traffic rights granted to it in 1946. Under the 1946 Agreement Qantascould carry third and fourth freedom traffic between Australia and San Franciscobut under the 1957 amendment Australia was granted traffic rights beyond to Londonvia New York. In return Australia granted the U.S. comprehensive rights on majorroutes to and from Australia including a route via the Antarctic. The AustralianTreaty Series 1957, No. 14, sets out the notes exchanged between the two countries.The 1957 amendment enabled Qantas to inaugurate the first global air service, sincetraffic rights already existed between London and Australia under various bilateralarrangements including the Agreement with the United Kingdom.


Financial assistance to Qantas

The Commonwealth, concerned that the Qantas fleet should be upto date, has granted extensive financial assistance to the airline. Onecommonly employed device is for the Commonwealth to borrow overseas, usually in the United States where Qantas buys most of its aircraft, and to lend the proceeds of the loan to the Company. In 1957,for example, the Commonwealth borrowed almost 18 million dollarsby the sale of notes in the United States and 9.2 million dollars fromthe International Bank for Reconstruction and Development to enableQantas to buy new aircraft including Boeing 707 jets. The Loan (QantasEmpire Airways Limited) Act 1957 approved the arrangements. In otheragreements the Commonwealth has borrowed directly from privatebanks in the United States. 91 Acts approving various loans are set outin the Appendix to this article.

Domestic aviation until 1957

In the immediate post-war years there were three major air carriers.Foremost was the privately owned Australian National Airways PtyLtd; second was Trans-Australia Airlines operated by the AustralianNational Airlines Commission set up under Federal law, and thirdwas the smaller Ansett Airways Pty Ltd, a subsidiary of Ansett TransportIndustries Limited. In 1957 Ansett Transport acquired all the sharesin A.N.A. and in 1957, under an arrangement with the Commonwealthto be mentioned later, it was agreed that Ansett Airways Pty Ltd shouldcease to operate airline services. Australian National Airways Pty Ltdnow operates AnsettjA.N.A.

In addition to T.A.A. and AnsettjA.N.A. there are seven domesticoperators of any size in Australia. Five of them are Ansett subsidiariesand two are independent companies. One of the two, East-West Airlines Limited operates rural services mainly in New South Wales, andthe other, Connellan Airways Limited operates developmental servicesin remote parts of the Northern Territory. All' but one' receive Federalsubsidies because they are regarded as operating either essential ruralservices or developmental services. 92 Four of the Ansett subsidiarieswill shortly be wound up and become divisions of their parent company. 93

91 E.g. the Commonwealth borrowed 13 million dollars from The Chase ManhattanBank in 1958 to enable Qantas to buy five Lockheed Electra aircraft. More recentlythe Commonwealth has done business with Morgan Guaranty Trust Company ofNew York.

92 The Civil Aviation Report of the Minister for Civil Aviation for 1963/1964 atp. 7, sets out details of federal assistance to developmental and essential rural services.

93 The Ansett subsidiary companies, which will shortly go out of business, areAirlines of New South Wales Pty Ltd; Airlines of South Australia Pty Ltd; Queensland Airlines Pty Ltd; and Ansett Flying Boat Services Pty Ltd (which operatesbetween Sydney and Lord Howe Island). The fifth subsidiary is MacRobertson MillerAirlines Ltd which is not wholly owned by Ansett. An Ansett subsidiary companyalso operates in Papua and New Guinea.


Trans-Australia Airlines

The Australian National Airlines Act 194594 established the AustralianNational Airlines Commission as an independent statutory authority.Section 19 of the Act, as amended, authorizes the Commission to operateairline services for transport, for reward, of passengers and goods byair-

(a) between any place in a State and any place in another State;(b) between any place in any Territory of the Commonwealth

and any place in Australia outside that Territory; and(c) between any place in any Territory of the Commonwealth and

any other place in that Territory, or for the transport of mailsby air between any places in Australia in pursuance of anagreement entered into under section twenty-two of this Act. 9S

(a) The A.N.A. Case in 1945

In 1945 A.N.A. challenged the power of the Commonwealth to createa statutory body to conduct interstate and territorial commercial airservices but the High Court held96 that the Commonwealth couldmaintain airline services between States under the federal trade andcommerce power contained in section 51 (i) of the Constitution. Sofar as the Act provided for the Commission to operate territorial airline services, its provisions were within the power conferred by section 122of the Constitution to make laws for the government of the Territories.As the Act read in 1945 Parliament had provided by a scheme of licensingcontrol for the Commission eventually to obtain a monopoly of interstate airline services, but the Court held that the Act in purporting toconfer a monopoly on the Commission contravened section 92 of theConstitution. 97

(b) Limitations on T.A.A.'s operations

The Commission has no general power to operate intrastate air servicesbut in fact it undertakes some intrastate carriage in the course of itsinterstate and territorial operations, presumably acting on the view thatthis type of carriage can be justified as being incidental to the performanceof the services described in section 19.98

There is room for speculation as to whether if the High Court hadupheld the positive Commonwealth licensing provisions contained inregulation 200B of the Air Navigation Regulations in the recent case

94 The current legislation is the Australian National Airlines Act 1945-1961.9S Section 22 authorizes the Commission to enter into agreements with the Com-

monwealth for the transport of mails by air.96 Australian National Airways Pty Ltd v. Commonwealth (1945) 71 C.L.R. 29.97 Seen. 68.98 E.g., on the Adelaide-Darwin service it carries traffic between Adelaide and

Leigh Creek in South Australia. Wragg v. New South Wales (1953) 88 C.L.R. 353,385-386 per Dixon C.l.


of Airlines of New South Wales v. New South Wales99 it would havedone so on grounds sufficiently wide to have allowed the Commonwealth to engage fully in intrastate air service operations.

Further to the limitations on T.A.A.'s capacity to fly is the decisionof Mr. Justice Jacobs of the Supreme Court of New South Wales inHelicopter Utilities Pty Ltd v. Australian National Airlines Commission1

that the Commission was not authorized by section 19 of its Act to enterinto a contract with the Commonwealth to charter to the Commonwealthhelicopters and crews for use by the Australian Antarctic Expeditionof 1962. According to the decision, the Commission had power onlyto operate ' airline services' and the meaning of that expression in theAct was 'services of a regular succession of aircraft plying betweencertain places'-' services with scheduled stopping places'.2 Whethera charter was within the Commission's powers as incidental to theoperation of an airline service so as to avoid economic waste was, according to the Court, a question of fact and on the facts the charter of thehelicopters was an entirely independent service.

(c) Queensland and Tasmanian services

T.A.A. also operates purely intrastate air services in Queensland andTasmania. Under section 19A of the Act the Commission is authorizedto provide and maintain air services within a State pursuant to anyreference made before 21 April 1959 by that State to the CommonwealthParliament on the matter of air transport.3

In Tasmania the Commonwealth Powers (Air Transport) Act 1952referred the matter of air transport for the period during which theState Act was in force and no longer. Section 3 provided that the Actshould cease to be in force on a date fixed by the Governor-in-Councilby proclamation. For many years there were doubts as to whether areference of a matter to the Commonwealth for a limited time or for anindefinite period terminable as provided by the State Act was a validreference under section 51 (xxxvii) of the Commonwealth Constitution.The question arose for decision in The Queen v. Public Vehicles LicensingAppeal Tribunal of Tasmania; Ex parte Australian National AirwaysPty Ltd,4 an action in which AnsettJA.N.A. applied to the High Court

99 (1965) 38 A.L.J.R. 388.1 [1962] N.S.W.R. 747.2 Australian National Airlines Act 1945-1961, s. 4 defines' air service', ' interstate

airline service' and ' scheduled stopping places '.3 Constitution s. 51 (xxxvii) empowers the Federal Parliament to make laws with

respect to-' Matters referred to the Parliament of the Commonwealth by the Parliament or Parliaments of any State or States, but so that the law shall extend only toStates by whose Parliaments the matter is referred, or which afterwards adopt thelaw: '

4 (1964) 37 A.L.J.R. 503; [1964] Argus L.R. 918. This case is discussed by Mr. P.Buchanan infra.


for writs of mandamus and certiorari against the Tasmanian LicensingAppeal Tribunal which had granted licences to T.A.A. to operate intrastate services within Tasmania.

The High Court held that section 51 (xxxvii) of the Constitution didnot contain any implication as to the period of reference and an Actwhich referred a matter for a specified time or for a period dependenton a future event, as in the instant case, was a valid reference. It alsoheld, following the establishment of the validity of the reference, thatsection 19A of the Airlines Act enabled T.A.A. to operate the Tasmanianintrastate services without having to obtain a State licence at all. 5

A.N.A. and the Airline Agreement 1952

A.N.A. failed to match the services provided by its Government rival.For one thing, the Company did not have T.A.A.'s capital resources andT.A.A. besides being a most efficient enterprise also enjoyed a nearmonopoly of government business. By 1952 it was apparent that A.N.A.could not remain in the airline business unless it received governmentalsupport. Indeed, had the trend of business continued T.A.A. couldwell have achieved a monopoly of interstate services which the Commonwealth had failed to achieve for it in the legislation of 1945.However the Menzies Liberal Government, which had come into officein 1949, had pledged itself to the maintenance of competition in the airand to the continued operation of the Company as well as the Commission.

(a) Civil Aviation Agreement 1952

In 1952 the Commonwealth entered into a civil aviation agreementwith the Company under which it undertook to guarantee the re-paymentof loans to the Company up to a total of £3 million for the purchaseof heavy aircraft. Secondly, the Commonwealth agreed to facilitatethe borrowing of further funds by the Company to purchase additionalheavy aircraft after 1952 as further purchases by T.A.A. were authorized.Also agreed was a settlement of outstanding Commonwealth claimsagainst the Company for air navigation charges, the Commonwealthaccepting one-third of the total originally claimed. 6 Moreover, theCommonwealth undertook to ensure that the Company would receivean equal share of the airmail business and agreed that other governmentbusiness would be available to both airlines without discrimination. Therival operators were, in return, required to collaborate to avoidunnecessary overlapping of services and wasteful competition on existing

5 Unless the Airlines Act should be further amended the Commission would haveno power to operate intrastate air services pursuant to a reference by any of the fourother States of the Commonwealth. This is because s. 19A empowers the Commissionto maintain services only under State references made before 21 April 1959.

6 The Commonwealth accepted £337,717.6.0.


competitive routes. In the event of disagreement the matter in disputewas to be referred to an independent chairman with power to determinethe issue. The agreement, expressed to continue for a period of fifteenyears, received Parliamentary approval in the Civil Aviation Agreement Act 1952.7

(b) Decline of A.N.A. and its acquisition by Ansett

However, A.N.A.'s fortunes continued to decline. The aircraft itpurchased following the 1952 agreement lacked passenger appeal andAnsett Airways Pty Ltd was rapidly expanding its activities makingthe rationalization provisions of the agreement unworkable. 8

In 1957 A.N.A. could not meet its commitments under the guaranteedloans and the Company requested time in which to negotiate for thesale of its enterprise. Subsequently Ansett Transport Industries Limitedpurchased the entire A.N.A. shareholdings for £3.3 million. At thesame time the Government announced that it would continue to adhereto its policy of providing fair and equal conditions of competition forthe two major operators, but that it insisted on the elimination of thewasteful effects of uneconomic competition on traffic routes by strengthening the rationalization provisions of the Civil Aviation Agreement Act1952.

Tripartite air transport

Civil Aviation Agreement 1957The events just described resulted in a second agreement acknowledging

the acquisition of A.N.A. by Ansett and providing for an extension ofrationalization. The agreement established a Rationalization Committeecomprising three members, one being a Co-ordinator nominated by theMinister for Civil Aviation and the other two members being nomineesof the Commission and the Company respectively. In the event ofcontinued disagreement between the two airline representatives theCo-ordinator was empowered to make a final and binding decision.At the same time rationalization was extended to cover all competitiveroutes including routes which would become competitive at a futuredate. In the event of either airline refusing to accept the decision of theCo-ordinator a right of appeal lay to the independent chairman providedfor in the 1952 agreement. 9 The Civil Aviation Agreement Act 1957approved the agreement.

7 The First Schedule to the Airlines Agreements Act 1952-1961 sets out fully the1952 Agreement.

8 Poulton, 'Legal and Policy Aspects of Air Transport in Australia' (1959) 26Journal of Air Law and Commerce 13, provides an excellent account of the crisesinvolving A.N.A.

9 The 1957 Agreement appears in a schedule to the Civil Aviation Agreement Act1957. The Chairman under the 1952 Agreement was the late Sir John Latham, aformer Chief Justice of the High Court of Australia.


Airlines Equipment Act 1958

By 1957 the two major airlines had built up contrasting fleets of aircraft. The Ansett/A.N.A. fleet was a heterogeneous collection of pistonengined aircraft whereas the Commission was already equipped withturbo-prop aircraft. Moreover, in 1957 T.A.A. was contemplating thepurchase of Caravelle jet aircraft whereas Ansett/A.N.A. was moreinterested in buying Electra and Viscount aircraft. The Governmentexpressed its concern at these developments partly because it did notwish to see instability in the air transport industry and also becauseof its heavy expenditure on the provision of airports and internationalfacilities. The development of jet aircraft raised new problems requiringhigh capital expenditure.

Extensive negotiations concluded with the Commonwealth Parliamentpassing the Airlines Equipment Act 1958, a novel statute, authorizingextensive Commonwealth financial support to both the Commissionand the Company on the condition of both parties assuming certaincommon obligations.

Under Part II of the Act the amount the Commission could borrowunder its own Act was increased from £1 million to £3 million in theform of interest bearing Treasury advances or government guaranteedloans. The Commission was also authorized to borrow 3 million U.S.dollars from the proceeds of a loan obtained by the Commonwealth inthe United States to buy a Lockheed Electra aircraft and related spares. 1

0

A further provision allowed the Commission to accept credit fromQantas to purchase a second Lockheed Electra aircraft in the UnitedStates. 11

Part III of the Act authorized the Treasurer to guarantee the repayments of loans to Ansett/A.N.A. to enable the purchase of two Lockheed Electra aircraft and six Fokker Friendship aircraft and relatedspares. These guarantees totalling £5 million were additional to theguarantees to A.N.A. under the 1952 agreement.

The obligations attaching to the assistance which the Act imposedon the Commission and required the Company to accept in return forassistance are set out in Part IV of the Act. The primary objective ofthe Part is to ensure that the two airlines do not provide excess capacityon competitive and non-competitive routes and that any further aircraftacquisitions are permitted only if there is a need demonstrated for theequipment. The Part contemplates that there will be near parity insize, quality and equipment as between the airlines.12

10 Loan (Australian National Airlines Commission) Act 1958.11 Airlines Equipment Act 1958 s. 7.12 Section 12 requires the Minister to estimate total airline traffic on competitive

and non-competitive routes and then to determine the maximum aircraft capacityrequired by the Commission and the Company to carry one-half each of the total


In presenting the Bill to Parliament the Minister for Civil Aviationexplained Part IV in the following terms-13

These obligations all relate to the 'quality' and 'quantity' ofaircraft capacity to be provided by the two major domestic operators.The Government has already taken decisions which set the qualitativepattern of domestic airline services. It will be recalled that, originally,the commission proposed to purchase two Caravelle aircraft andAnsett-A.N.A. four Lockheed Electra aircraft. The Governmentrejected both these requests since it was quite clear that the stagewould be set for a struggle by each airline to out-equip the other,regardless of the capital cost involved.

In the domestic field, where there are only two major operators,the pre-requisite for stability is to achieve adequate and comparablefront-line equipment and then to ensure that such equipment isused for a reasonable period before being replaced, thus reducingto a minimum the heavy capital investment involved in airlineoperations. When these principles were made clear to the operatorsthey finally agreed to purchase two Lockheed Electra aircraft eachand to build the remainder of their fleet around Viscounts andFokker Friendship aircraft, both of which have Rolls-Royce Dartengines.

What I might term the quantitative aspect of aircraft capacityis simply the number of revenue traffic ton miles which the aircraftfleets are capable of providing in a given period at a particularrevenue load factor. In general terms, the load factor is the ratioof aircraft capacity actually used to aircraft capacity provided andavailable for use on a given route during a specified period. If profitable load factors are to be achieved, it is essential that the combinedcapacity of the T.A.A. and Anset-A.N.A. fleets does not exceed thecapacity necessary to perform the aviation task in this country.Both airlines firmly and unreservedly support this proposition.

Part IV of the bill sets up machinery to ensure that the twoairlines do not provide excess capacity. First of all, an estimateis to be made of the traffic on competitive and non-competitiveroutes during a specified period. A determination will then be madeon the basis of an optimum revenue load factor of the aircraft capacitynecessary for the commission and the company respectively to carryone-half of the total traffic on competitive routes and to operate itsnon-competitive services during that period.

In the light of this determination, the two operators will thenbe mutually bound during the period in which any guaranteedloans are not repaid in full by three obligations. First, neither airlinemust provide on competitive routes, during the specified period,more aircraft capacity than is necessary to carry half the estimatedtraffic at the predetermined revenue load factor. Secondly, the

estimated traffic for competitive routes and to operate their services on non-competitiveroutes. Under s. 15 the Minister must not exercise his powers under Pt. IV so as to'unfairly discriminate in favour of the Commission or the Company as against theother'.

13 Parliamentary Debates, 22nd Parliament, 3rd session, 2nd period, 1958, Senate,757.


operators must dispose of any aircraft capacity in excess of thatrequired to operate their competitive and non-competitive servicesafter making due allowances for the need for stand-by aircraft,maintenance and overhaul of aircraft, and crew training and similarmatters.

Finally, there is an obligation on the airlines not to acquire additional aircraft which would result in the capacity limitations beingexceeded, and not to introduce aircraft of a type which, havingregard to the types already in operation, would be detrimentalto the stability of the air transport industry. This latter obligationis, of course, designed to stop a wasteful re-equipment race leadingto a multiplicity of new and expensive aircraft types. These obligations have been discussed in detail with representatives of the twoairlines and they have indicated that not only do they supportcontrol of aircraft capacity along the lines proposed, but regardsome such form of control as essential for the future stability of theAustralian domestic air transport industry.

Nothing in the bill affects existing rationalization machineryestablished under the civil aviation agreements. This machinerywill continue to be used to determine routes, time-tables and faresand freight rates, and related matters, but the task of co-ordinationwill be greatly simplified because aircraft capacity of the airlineshas first been pegged to the amount necessary to perform the domesticair transport task. It is most important to appreciate that thissystem will intensify rather than reduce competition. Althoughthere is a limitation on the aircraft capacity to be provided, thereis no other limitation on the amount of traffic which either airlinecan carry.14

14 As the Minister's statement shows rationalization under Pt. IV rests on workingout an optimum revenue load factor. In s. 11 of the Act the Draftsman evolved analgebraic definition of 'revenue load factor' as follows-

, " revenue load factor", in relation to an aircraft, means, in respect of a period,the percentage that the revenue value of the work performed on the flights madeby the aircraft during that period is of the revenue value of the work that couldhave been performed on those flights, ascertained in accordance with the equation-

A 100 (B + CD)E

where-A is the revenue load factor;B is the number of passenger ton-miles performed by the aircraft in the

period, based on a passenger weight (including free baggage) of two hundredpounds;

C is the non-passenger revenue traffic ton-miles performed by the aircraftin the period;

D is the ratio of the revenue yield per ton-mile of non-passenger traffic tothe revenue yield per ton-mile of passenger traffic; and

E is the total revenue traffic ton-miles for which the aircraft could have beenused on the flights performed in the period; ,

Section 12 authorizes the Minister to make his determinations of overall aircraftcapacity. Determination No. 10 appears in the Civil Aviation Report 1963/1964,Appendix 8, 91-92. The determination operated in relation to the period 1 July 1964to 31 December 1964. Under this determination the revenue load factor for mixedconfiguration aircraft, i.e. aircraft used for the carriage of passenger and non-passengertraffic on competitive routes was 65% and for all cargo aircraft it was 55%. Thepercentages allow the two airlines plenty of scope to seek extra business for theirrespective rationalized air services.


Airlines Agreement 1961

In 1961 the arrangements of 1952 and 1957 were consolidated in theAirlines Agreements Act of that year. 15 The 1961 Act approved a furtheragreement entered into between the Commonwealth and Ansett/A.N.A..16

The new agreement reiterated that the objects of the parties were tosecure the position in which there were two and not more than twooperators of trunk route airline services, one being the Commissionand each capable of effective competition with the other.

The 1961 agreement extends the operation of the 1952 agreementuntil 1977 and the 1961 agreement also operates until 1977. The civilaviation agreement of 1957 ceased to be operative, but its provisionsrelating to rationalization were inserted in the 1961 agreement withgreater precision in relation to the matters which the Commission andthe Company agreed to keep under review.17 Under the agreement,however, an airline dissatisfied with a decision of the Co-ordinator mayrefer a matter to an arbitrator.18

Further, the Commission and the Company continue to be boundby the provisions of Part IV of the Airlines Equipment Act. The Company also agreed not to request the Commonwealth guarantee underthe Airlines Equipment Act 1958 in respect of the purchase of six FokkerFriendship aircraft, the guarantee being no longer required. Otherprovisions of the 1961 agreement relate to the future acquisition ofturbo-jet aircraft. The agreement continues to provide for comparabilityin the fleets of the two operators and the Treasurer was authorized toguarantee the repayment of loans to Ansett Transport Industries notexceeding at anyone time £6 million for the purchase of turbo-jet aircraft

15 The Act amended the Civil Aviation Agreement Act 1952-1957 and that Act asamended in 1961 is now the Airlines Agreements Act 1952-1961.

16 The 1961 Agreement appears in the Second Schedule to the Airlines AgreementsAct.

17 The Airlines Equipment Act attempts to achieve and maintain comparable fleetsand to avoid the two operators setting up excess capacity. The Rationalization Committee established under the 1957 Agreement (cl. 3) and reconstituted in the 1961Agreement (cl. 11) is concerned with the deployment of the rival operators' fleets.The 1961 Agreement (cl. 10) obliges the Commission and Ansett to keep under reviewmatters affecting the rationalization of services such as timetables, frequencies andstopping places; aircraft types and capacity used on air services; and variations inthe level of fare and freight rates. If the parties are unable to agree on a matter thedispute may be referred by either to the Rationalization Committee. If the membersnamed by the two parties are still unable to agree after the Committee has consideredthe matter the Co-ordinator may make a final and binding decision. Three mainproblems find their way to the Committee- (a) the development of route patternsby extending competition or adding new points; (b) changes in fares and freightrates; and (c) rationalization of capacity on competitive routes by fixing profitableload factors and sometimes the respective shares to be provided by each operator.As at 30 June 1964 there had been 48 references to the Committee. Most were disposedof by agreement but a good many were determined by the Co-ordinator.

18 The Arbitrator exercises similar functions to those of the Commissioner under the1952 agreement. The arbitrator is Mr Justice Spicer, Chief Judge of the Commonwealth Industrial Court. Until last year there were no appeals from the Co-ordinatorto the Arbitrator.


comparable with those authorized for purchase by the Commission.Purchases remain subject to compliance with the provisions of Part IVof the Airlines Equipment Act. Both Companies were prohibited inthe agreement from placing jets into service before 1 July 1964 and itwas further agreed that each would introduce their first and secondjets concurrently with the other's first and second jets.19

Taking the equalising process even further the Government obtainedan amendment of the Australian National Airlines Act in 1961 underwhich the Minister for Civil Aviation sets a profit target for T.A.A.before the commencement of each financial year. The Commissionmust direct its policy to making sufficient profits to meet the target andpay its profits to the Treasury. The targets so far set fall well shortof the Commission's earning capacity.20

And so, in this way, the Government claims that it has been able tocreate an atmosphere in which planned competition on the major routescan continue with consequent benefit to the operators, to the travellingpublic and to the nation. Members of the travelling public are possiblymore conscious of the planning than the competition under the Government's current air transport policy but if there is to be a two airlinespolicy there is substance in the Government's claim.21

IV - AUSTRALIAN LEGISLATION AFFECTING THE COMMON LAW

RELATING TO AIRCRAFT AND THEIR OPERATION

Many situations involving aircraft are still governed by the commonlaw, but as seen in the treatment of private property rights in the airspaceand the doctrine of res ipsa loquitur in Part I of this article, there are

19 The Loan (Australian National Airlines Commission) Act 1963 approved a loanagreement between the Commonwealth and Morgan Guaranty Trust Company ofNew York under which 11 million dollars were made available to the Commissionto buy Boeing 727 jet aircraft. A further Act, the Loan (Airlines Equipment) Act1964 approved an additional loan for a similar purpose. The Act also approved afurther loan to enable Qantas to buy additional Boeing 707 aircraft.

20 Australian National Airlines Act 1945-1961, s. 32. The Commission's profittarget for 1964/1965 has been set at 7l% compared with 7% in 1963/1964 and 6%in 1962/1963. It is probably impossible to work out a set of rules which will allowequal competitive conditions for two operators, one government and one private,but the T.A.A. profit target is likely to emerge as a crucial factor in striking an acceptable balance between the two operators. If T.A.A. were in business as an ordinarypublic company shareholders would, in the present state of the Australian economy,expect a dividend of 10~~ rather than 7!%. The profits of the Commission in excessof the target no doubt enable it to obtain indirectly competitive advantages aboutwhich the public hears little. As a public company, T.A.A. would be a wonderfultake-over proposition.

21 So far as the writer can judge, most Australians seem satisfied with the air servicesavailable to them even if rather puzzled how it all came about. One criticism is thatthe tripartite rationalization and equipment schemes offer little inducement to eitherairline to offer' cheap' mass air transport. However, the size of the Australian marketmay not allow the development of mass air transport as it occurs in parts of U.S.A.Australian air fares compare favourably with air fares for like services elsewhere inthe world.


both Federal and State Acts which bear upon the application of common law rules to civil aviation.

The Commonwealth has modified the legal position of operatorsby an extensive legislative programme derived largely, but by no meansentirely, from international private law conventions and there are nowFederal Acts dealing with damage caused by aircraft and the legal liabilityof an operator to his passengers and consignors of goods. Recently,Federal legislation has dealt with the commission of crimes either affectingor on board aircraft. Because of the constitutional limitations of theCommonwealth none of these laws apply to all carriage in Australia,but to defined classes of carriage falling within the ambit of Commonwealth power, extensive though they are.

Generally speaking the States have not displayed much interest inproviding by legislation for specific legal problems arising from the useof aircraft. Part I of this article has described legislation of four Statesdealing with surface damage caused by aircraft. As will be seen, someStates have also amended their criminal law to provide for offencesinvolving aircraft. The States left to themselves have done little else.

ComlTIonwealth policy in recent years has been to confer with theStates to obtain uniformity or consistency on a number of importantlegal matters. There are now, for example, uniform Federal and StateCompanies Acts operating throughout the Commonwealth. In aviationthe Commonwealth has not enjoyed unqualified success in this direction,but five of the six States have passed legislation applying the substanceof the Commonwealth law affecting liability of a carrier for damage orloss to passengers or goods to intrastate operations. There are a goodmany aviation matters which eventually will have to be dealt with uniformly in Australia and it will, no doubt, usually be the responsibilityof the Commonwealth to initiate action because it is the central componentof the federal structure and at the same time dominates the Australianaviation scene and will continue to do so.

Damage by aircraft legislation: Rome Convention 1952

In 1958 the Commonwealth Parliament passed the Civil Aviation(Damage by Aircraft) Act, already mentioned in the course of consideringthe application of the cujus est solum maxim.

Rome Convention 1952

The Act approved the ratification of the Rome Convention on damagecaused by foreign aircraft to parties on the surface. As earlier mentioned,the Convention embodies the principle of strict liability in cases wherea person suffers material damage on the surface directly caused by an


aircraft in flight or by any person or thing falling from the aircraft.22In return the Convention establishes maximum limits of liability basedon the weight of the aircraft causing the damage varying fro m 500,000gold francs (£16,000) for aircraft weighing 1,000 kilogrammes or lessto twenty-one times that amount to an aircraft weighing 50,000 kilogrammes.23 Article 6 allows an operator to avoid liability if he provesthat danlage was caused by the negligence or wrongful act of the plaintiffor his servants. If the damage is contributed to by negligence or wrongful act compensation must be reduced to the extent to which it contributedto the damage. In the event of wilful misconduct the liability of theoperator is unlimited.24

The Convention applies to damage caused in the territory of onecontracting State by an aircraft registered in another contracting State25

and does not apply to damage caused by an aircraft of the home Statein that State. It disposes of jurisdictional questions, which so often vexinternational legal discussions, by adopting a single forum solutionthe plaintiff may only sue in the courts of the country where the damageoccurred.26 There is also provision for reciprocal recognition andenforcement of the judgments.27

Implementation of the Rome ConventionThe Convention has not been widely implemented and as at 30 June

1964 there were only eighteen contracting parties including Australia.With the exception of Canada and Italy none of the countries at presentoperating scheduled international services into and out of Australia areparties.

Legislative action was not necessary in order to apply the Conventionto Australian registered aircraft operating abroad, but Part II of the1958 Act,28 besides approving ratification by Australia, gives the provisions of the Convention the force of law in Australia,29 and dealswith various related matters.30

22 Art. 1. Damage resulting , from the mere fact of passage of the aircraft throughthe airspace in conformity with existing air traffic regulations ' is not actionable.

23 Art. 11. Maximum liability increases at the rate of 100 francs for every kilogramme over 50,000 kilogrammes. Maximum liability for a Viscount is £253,000and £550,000 for a Boeing 707. Maximum liability in respect of each person killedor injured is also limited to £15,000-Edwards, 'Some Aspects of the Liabilities ofAirline Operators in Australia' (1960) 34 Australian Law Journal 142.

24 Art. 12. Only a ' deliberate act or omission' by the operator or his servants oragents creates unlimited liability.

25 Art. 23.26 Art. 20.27 Ibid.28 Part II came into force on 2 March 1959-Commonwealth Gazette No. 16, 2

March 1959, 825.29 S. 8. The text of the Convention is set out in The Schedule to the Act.30 E.g. s. 12 provides that in assessing damages in respect of liability under the

Convention for death or personal injury, the proceeds of insurance policies payablein the event of such a happening are not to be taken into account.


Extension of the principles of the Convention

Part III of the Federal Act extends the operation of the nlain provisionsof the Convention to aircraft registered in Australia in flight in Australiain the course of trade and commerce between Australia and anothercountry and to foreign aircraft of countries not parties to the Conventionin the course of flight in Australia in the course of international carriage.31

The limits of liability specified in the Convention do not, however,apply to the foreign aircraft.

Possible further extensions of the 1952 Rome principles: the State Acts

The Commonwealth has not yet attempted to apply the principlesof the Convention to interstate commercial aviation as it probably could32

nor have any of the States applied them to intrastate aviation.The Acts of four States, New South Wales, Victoria, Western Australia

and Tasmania, dealing with damage by aircraft described in Part I ofthis article, are copied from the Civil Aviation Act, 1949 (U.K.), section 40, itself based on the nearly obsolete Rome Convention of 1933.33

By reason of section 109 of the Constitution34 the State Acts cannotapply to cases of damage within the ambit of the Federal Act but sincethe Federal Act does not cover instances of damage caused by aircraftengaged in interstate flights the four State Acts apply to most aircraftoperations in Australia.

Implementation of the Rome provisions to all domestic aviationgives rise to both policy and legal problems. On the policy side there isnothing novel about the creation of a statutory tort but there is a questionwhether a carrier should be made absolutely liable35 and, if he should,how to strike a proper balance between absolute liability and establishingreasonable upper limits of liability. Under the Rome Convention onecontracting State may require the operator of another contracting Stateto insure in respect of his liability under the Convention or, as an alternative, to lodge a cash deposit or obtain a guarantee from an authorizedbank or his own contracting State.36 These provisions would have to

31 Part III came into operation on 1 July 1959-Commonwealth Gazette No. 32,28 May 1959, p. 1831.

32 Redfern v. Dunlop Rubber Australia Ltd (1963-1964) 110 C.L.R. 194, per Dixon C.J.at 209 and per Menzies J. at 219-221 (1964) 37 A.L.J.R. 413, per Dixon C.J. at 414-415and per Menzies J. at 419-420, [1964] Argus L.R. 618, per Dixon C.J. at 621 and perMenzies J. at 628-630. This case is discussed by Mr. T. J. Higgins infra.

33 A good account of the interpretation of s. 40 appears in McNair, op. cit Ch. 5.34 N. 52 supra.35 Probably act of God or inevitable accident is not a defence. Under art. 5 if damage

is the direct consequence of armed conflict or civil disturbance or if the operator hasbeen deprived of the use of the aircraft by act of public authority he is not liable. Thefour State Acts already provide for absolute liability of the owner except in certaincases of hire, charter or letting to another person, in which instances the other personis liable instead of the owner.

36 Arts 15 and 16.


undergo extensive modification to meet the conditions of Australiandomestic aviation. However, should all States be willing to co-operate,none of the problems of implementing the Rome Convention to intrastate aviation should be too difficult to resolve. In order to obtainuniformity, of course, New South Wales, Victoria, Western Australiaand Tasmania would have to repeal the legislation they now have.

Liability of operators to passengers and consignors of goods: Civil Aviation(Carriers' Liability) Acts

Warsaw Convention 1929

The Warsaw Convention of 1929 regulates the liability of an international operator for the death or injury to passengers and for loss ordamage to goods in the course of ' international carriage '.37 It is themost widely accepted private law convention in the area of internationalaviation, there being, as at 1 August 1964, eighty high contracting parties,including Australia, the United States of America, the United Kingdomand the U.S.S.R.

Article 17 makes the carrier liable for the death or injury of a passengercaused by an accident on board the aircraft or in the course of embarkingor disembarking. Article 18 makes the carrier liable in the event of thedanlage or destruction of registered baggage or cargo if the occurrencecausing the damage took place during the carriage by air. On the faceof it, therefore, it appears that the rule of strict liability applies. But thisis not quite so, because under article 20 the carrier is not liable 'if heproves that he and his servants and agents have taken all necessarymeasures to avoid the damage or that it was impossible for him or themto take such measures .'38

In the carriage of goods and baggage the carrier is not liable if heproves that the damage 'was occasioned by negligent pilotage ornegligence in the handling of the aircraft or in navigation and that, inall other respects, he and his agents have taken all necessary measuresto avoid the damage '.39 It is usually said that the Warsaw Convention

37 The definition of 'international carriage' is in art. 1. Carriage between theterritories of two high contracting parties is international. Carriage between twoplaces in the territory of one high contracting party is not international even thoughone of the places is an overseas territory, e.g. between England and Gibraltar, butif there is an agreed stopping place in another country in the course of the journeythe carriage is international whether that country is a high contracting party or not.Some of the difficulties of the definition were canvassed in Grein v. Imperial AirwaysLtd [1937] 1 K.B. 50.

38 If a carrier took ' all necessary measures' damage would not occur and it appearsthat 'necessary' means 'reasonable'. Grein v. Imperial Airways Ltd [1937] 1 K.B.50, 69 per Greer L.J. See also Chisholm v. B.E.A. [1963] 1 Lloyd's Rep. 626. In a casein the United States a District Court judge placed a more onerous burden on thecarrier observing that it was necessary to prove 'that it and its servants were freefrom all fault'. Pierre v. Eastern Air Lines Inc. [1957] U.S. Av. R. 431, 432 perMeaney, D.J.

39 Art. 20.2.


shifts the onus of proof from the plaintiff to the carrier. In practice itmeans more than that and carriers would rarely find it worth while todispute liability to a passenger. The task is not quite as difficult in thecase of goods and baggage.

Under article 21 the carrier may raise the defence of contributorynegligence and the court hearing the case may, in accordance with theprovisions of its own law, exonerate the carrier wholly or partly from hisliability. In return for the shift in onus of proof the liability of the carrieris limited in the case of passengers to a maximum of 125,000 Poincarefrancs, equivalent to £3,700. If, however, the damage is caused by wilfulmisconduct or such default as, in accordance with the law of the courtseised with the case, is considered to be equivalent to wilful misconductby the carrier and his servants or agents, the carrier is subject to unlimitedliability under article 25.40

In Horabin v. British Overseas Airways Corporation41 Barry J. observed, To be guilty of wilful misconduct the person concerned must appreciatethat he is acting wrongfully, or is wrongfully omitting to act, and yetpersists in so acting or omitting to act regardless of the consequences,or acts or omits to act with reckless indifference as to what the resultsmay be '.42 This view of wilful misconduct was applied by Webb J. inRoyal Victorian Aero Club v. Commonwealth.43

The Convention applies only to international carriage as defined inarticle 1, which broadly requires the place of departure and the placeof destination to be within the territories of two high contracting partiesor within the territory of a single high contracting party if there is anagreed stopping place within the territory of another country whethera party to the Convention or not.44

40 , Wilful misconduct' is the translation of the word ' dol ' used in the French text,the only official text of the Convention.

41 [1952] 2 All E.R. 1016.42 Ibid. 1022.43 (1954) 92 C.L.R. 236-not a case under the Warsaw Convention. In 1953 a

British Commonwealth Pacific Airlines Ltd aircraft crashed near San Francisco ona journey from Australia killing all on board. The executors of the late William Kapell,a passenger on the aircraft, brought an action against the Company in which the issuewas whether the airline or its employees were guilty of misconduct. Eventually in 1961a New York jury returned a verdict for the defendant negativing wilful misconductbut the trial judge entered judgment for the plaintiff and in a subsequent trial limitedto the issue of damages the jury awarded 924, 396 dollars damages. In June this year,more than eleven years after the incident, an appeal against the award of the jury wasupheld by the United States Court of Appeals in Berner & Lesser, Executors of theEstate of William Kapell, dec'd. v. B.C.P.A. Thus £3,700 is now the limit of B.C.P.A.'sliability to the plaintiff. In Feher v. B.C.P.A. (1957) 74 W.N. (N.S.W.) 447 Manning J.dealt with another case arising out of the same accident. The question was not oneof misconduct but the measure of damages to be awarded within the Conventionlimits in an action by a dependant when another dependant had instituted proceedingsin U.S.A.

44 N. 37, p. 279 supra.


Under article 28 the plaintiff may bring an action for damages in theterritory of a high contracting party either before the court havingjurisdiction where the carrier is ordinarily registered or has his principalplace of business or has an establishment by which the contract hasbeen made or before the court having jurisdiction at the place of destination.45 Choice of forum can be important, particularly if a questionof contributory negligence is involved because in some jurisdictionscontributory negligence of the plaintiff may completely exonerate thecarrier whereas in others it may only result in apportionment of damages.The Convention was first made applicable in Australia by the Carriageby Air Act 1935.46

The Hague Protocol of 1955In 1955 international agreement was reached on the form of a protocol

to amend the Warsaw Convention, known as the Hague Protocol. Themajor change to the Convention was a doubling of the limit of liabilityfor death or injury of a passenger. Article 25 was also re-drafted toprovide that the limits of liability should not apply , if it is proved thatthe damage resulted from an act or omission of the carrier, his servantsor agents, done with intent to cause damage or recklessly and withknowledge that damage would probably result; provided that, in thecase of such act or omission of a servant or agent, it is also proved thathe was acting within the scope of his employment.' The clause shouldbe an improvement on the original Warsaw text.

Implementation of the Hague Protocol

In 1959 the Federal Parliament passed the Civil Aviation (Carriers'Liability) Act repealing the Act of 1935 and approving the ratificationby Australia of the Hague Protocol. The Protocol is set out in theSecond Schedule to the Act.

Article XXII of the Hague Protocol provided that the Protocol shouldbecome effective after ratification by thirty signatory States. In 1955,thirty States were two-thirds of the parties to Warsaw but the numberof parties to Warsaw increased rapidly thereafter with the formation ofmany new States in Africa and elsewhere. The Protocol came intoeffect on 1 August 1963. Part II of the Australian Act giving the Protocolthe force of law in Australia came into operation on 1 November 1963.47

Though the number of adherents has increased48 many Warsaw countries,including the United States of America and the United Kingdom, have

45 Article 29 requires an action to be brought within two years from the due dateof arrival of the aircraft.

46 The current Act is the Civil Aviation (Carriers' Liability) Act 1959-1962. TheFirst Schedule to the Act sets out the text of the Convention.

47 Commonwealth Gazette No. 90, 31 October 1963, 3776.48 Forty States as at 1 August 1964.


not become parties and much of the uniformity in conditions of international carriage brought about by the wide adherence to the WarsawConvention is, therefore, lost, at least temporarily.

Part III of the 1959 Act provides for Australian adherence to Warsawuntil a date fixed by proclamation following denunciation of the 1929Convention, but although Australia is now a Warsaw/Hague countryit has not yet denounced the original Warsaw Convention and thereforetwo different sets of rules may apply to international carriage to andfrom Australia. If the contract for carriage is between Australia andNew York the original convention applies because United States is onlya party to the original Warsaw Convention, but the Warsaw/Haguerules would govern a contract for carriage between Australia and NewZealand since both countries are parties to the 1955 amendment.49 Itis to be hoped that eventually all countries will abandon the originalWarsaw Convention in favour of the Warsaw/Hague Convention.

The Civil Aviation (Carriers' Liability) Act 1959 is a commendableexample of the Commonwealth draftsman's skill in dealing with variousmatters which neither the Warsaw Convention or the Hague Protocoladequately cover. For example, section 15 provides that paymentsunder insurance policies, superannuation schemes and the like, are notto be taken into account in assessing damages in respect of liability underthe Convention. The Act also covers the question of contributorynegligence decisively by providing for apportionment having regardto the plaintiff's share in the responsibility for the damage and thendetermining the net amount, if any, which the carrier should pay beforeapplying the limits specified in the Convention.50

Section 9 creates an unusual state of affairs by specifying that if eithertext, as set out in the Schedules to the Act, is inconsistent with theauthentic text in French of the Warsaw Convention or of the HagueProtocol, the authentic French text prevails. The era of law Frenchis apparently not yet over and one may wonder what an Australiancourt would do in an action under the original Warsaw Convention ifcounsel were to argue that the word 'dol' was not accurately translated by the words 'wilful misconduct'.

Extension of the Warsaw/Hague Convention to domestic aviation

Principles of the Warsaw/Hague Convention have now found theirway into Australian domestic aviation under Part IV of the 1959 Act. 51

49 Adherence to both Warsaw and Hague/Warsaw displays good practical judgmentwhich has characterised Australian international aviation policy. The Hague Protocolis an improvement on the original Warsaw Convention. At the same time Qantas canobtain the benefits of the Warsaw limits of liability in respect of contracts of carriageto or from U.S.A. England, apparently fearing difficulties in the course of actionadopted by Australia, has not yet implemented the Hague Protocol. The WarsawConvention art. 39 provides for denunciation.

50 S. 16.51 Part IV was proclaimed to come into operation on 1 July 1959- Commonwealth

Gazette No. 32, 28 May 1959, 1831.


Part IV applies to contracts for interstate and territorial carriage bycommercial airlines, to carriage by T.A.A. whether intrastate or not,and finally to overseas carriage not within the scope of either Warsawor Hague rules. 52

In respect of passengers the carrier is liable for damage sustained bydeath or injury , resulting from an accident which took place on boardthe aircraft or in the course of any of the operations of embarking ordisembarking'. 53 Liability in respect of each passenger is limited to£7,500. 54

Unlike Warsaw carriage, the carrier does not have the defence thathe took all necessary measures to avoid the damage but he can raisethe defence of contributory negligence in order to avoid liability or torestrict the amount of damages otherwise payable. 55 Liability to apassenger under Part IV is expressed to be in substitution for civil liabilityunder any other law. 56 In the absence of any contractual provision tothe contrary the limits of liability apply even if there is wilful misconducton the part of the carrier or his servants.

In regard to passengers' baggage there is ? defence that ' all necessarymeasures' were taken to avoid 10ss.57 Application of the Part to cargois left to be dealt with by regulation. 58

As a result of discussions with State Ministers the CommonwealthParliamentary Draftsman prepared a model Bill extending most of theprinciples of Part IV to intrastate carriage and so far five of the six Stateshave passed Civil Aviation (Carriers' Liability) Acts in terms of themodel so that we are almost to the point where there are uniform rulesgoverning the liability of air carriers throughout the Commonwealth.59

Air Accidents (Commonwealth Liability) Act 1963

Another Federal Act, the Air Accidents (Commonwealth Liability)Act 1963 applies the substance of Part IV of the Federal Carriers' LiabilityAct to the carriage of passsengers in aircraft operated by the Commonwealth or a Commonwealth authority not covered by Part IV.60 TheAct applies principally to Commonwealth employees required to travelby air on duty and persons travelling for purposes of the Commonwealth.

52 S. 27.53 S. 28. The language is almost identical with art. 17 of the Warsaw Convention.54 Cj. maximum liability of £7,400 under the Hague Protocol.55 S. 39. The section is similar to s. 16 which applies to Warsaw/Hague carriage.56 S. 35.57 S. 29.58 S. 41.59 N.S.W. has not yet legislated.60 Although the Australian National Airlines Commission is an authority of the

Commonwealth it is the holder of an airline licence and its position is regulated byPt. IV-Civil Aviation (Carriers' Liability) Act 1959-1962, SSe 26, 27.


The Act does not apply to members of the Defence Force or personscarried to perform duties in the aircraft. 61 The Act also covers personstravelling for purposes of, or in the course of their employment by, theCommonwealth or a Commonwealth authority in aircraft not operatedby the Commonwealth or a Commonwealth authority and to whichPart IV of the Carriers' Liability Act does not apply. Persons so coveredmay receive up to £7,500 damages from the Commonwealth withoutproof of negligence on the part of the operator or his servants.

Guadalajara Convention

Doubts arose whether the Warsaw Convention applied where thewhole or part of the carriage was performed by a carrier other than thecarrier with whom the passenger or the consignor had contracted.

An international conference at Guadalajara in Mexico in 1961 agreedon a Convention to supplement the Warsaw Convention or the Warsaw/Hague Convention by providing in effect that where a contract forinternational carriage by air is made by one carrier but actually performedwholly or partly by another carrier both the actual carrier and the contracting carrier are to be subject to the rules of the Warsaw Conventionor the Warsaw/Hague Convention.

Australia ratified the Convention and in 1962 Parliament amendedthe Civil Aviation (Carriers' Liability) Act 1959 by adding Part IlIAgiving the Convention force of law in Australia either as a supplementto the Warsaw Convention in its original form 62 or to the Warsaw/HagueConvention. 63 The Guadalajara Convention came into effect on 1 May196464 and Part IlIA was proclaimed to come into operation the samedate. 65

So far no action has been taken to clarify rights and obligations underPart IV of the Federal Act and the State Carriers' Liability Acts in thelight of the problems dealt with at Guadalajara.

Crime and aircraftCriminal law is mainly a State matter and consistently with the com

mon law presumption against extra-territoriality the general assumptionin the States is that jurisdiction depends upon the crime being committedin the territory of the State. 66 If a crime is committed on board an aircraft, however, it may be difficult or even impossible to determine over

61 S. 4.62 Continued for the time being by Pt. III of the 1959 Act.63 Applicable to Australia under Pte II of the 1959 Act.64 The Guadalajara text is set out in the Third Schedule to the Civil Aviation (Carriers'

Liability) Act 1959-1962.65 Commonwealth Gazette No. 39, 30 April 1964, 1569.66 MacLeod v. Attorney-General for N.S. W. [1891] A.C. 455; Ex parte Iskra (1962)

63 S.R. (N.S.W.) 538 (1962) 5 F.L.R. 219; (1963) 80 W.N. (N.S.W.), 923.


which State or Territory it was committed. 66A Aircraft have also incitedcriminal minds occasionally to embark on new forms of nefarious activity.One reads of the piracy of aircraft and of the deliberate destruction ofaircraft with all lives on board for the purpose of obtaining payment ofmonies under insurance policies.

Crimes (Aircraft) Act 1963

The Commonwealth has dealt with crimes on board aircraft andaffecting aircraft in the Crimes (Aircraft) Act 1963. Once again, becausethe Commonwealth has no direct legislative power to make laws withrespect to crime the Commonwealth Act does not extend to all Australianaviation.

(a) Crimes on board aircraft

Part II deals with crimes on board aircraft. It applies to any aircraft engaged in interstate and territorial flights or in flights betweenAustralia and a place outside Australia. 67 Part II also applies to registeredAustralian aircraft engaged in a flight wholly out of Australia68

, thatis, registered as to nationality under the Air Navigation Regulations69

and to all flights of Commonwealth aircraft70 and defence aircraft. 71

The Act, though it applies to intrastate flights by Commonwealth and

66A The practical difficulties which arise from the application of State laws only tocriminal acts committed within the jurisdiction are well illustrated by R. v. Hildebrandt[1964] Qd. R. 43, a case involving a charge under The Criminal Code (Qd.) of intentto destroy an aircraft by putting an explosive in it. Following the failure of the Crowncase proceedings were instituted in New South Wales. See R. v. Hildebrandt [1963]81 W.N. N.S.W. 143.

67 S. 6 (1). There may be practical difficulties in applying the Act to foreign aircraftwhilst outside Australia. The Minister for Civil Aviation (Senator Paltridge) said inthe course of his second reading speech in the Senate- 'Australian law applies onboard foreign aircraft, of course, while they are within Australia, but the bill goesfurther and applies Australian law to them while they are outside Australia when theirflights begin or end in Australia. So far as flights beginning in Australia are concerned,it is felt that if there is any doubt as to which law is to be applied-this situation mightwell arise, for instance, over the high seas-if no other law is applicable or if theauthorities administering another applicable law are not willing, or feel themselvesunable, to enforce it, there should be an Australian law ready to be applied. It maywell be, of course, that the efficacy of our law will depend on finding the offenderwithin Australian territory. So far as flights ending in Australia are concerned, aperson who commits an offence while on board the aircraft might very well need tobe dealt with in Australia, in the first instance at any rate, and legal provisions toenable this to be done are needed.' Parliamentary Debates, 24th Parliament, FirstSession, 1963, Senate, 929.

68 The Act adopts the view that Australian laws are in force on board an aircraftregistered in Australia whilst they are outside Australia even if the law of some othercountry also applies because of the aircraft's presence over or in that country.

69 SSe 3 (1), 6 (2).

70 Defined in s. 3 as aircraft possessed or controlled by the Commonwealth or anauthority of the Commonwealth.

71 S. 6 (2).


defence aircraft, does not, however, have a general application to intrastate flights. 72

Part II solves the jurisdictional problem by providing in effect thatany act which would be an offence against specified laws of the AustralianCapital Territory if it took place there is an offence against the Act ifcommitted on board an aircraft to which the Act applies. 73

(b) Crimes affecting aircraft

Part III of the Act deals with crimes affecting aircraft. It applies toAustralian registered aircraft engaged in or used principally for' prescribed flights'. 74 A ' prescribed flight' includes interstate flights, flightswithin or to or from a territory of the Commonwealth and flights to,from or completely outside Australia. 75 It also applies to any foreignaircraft that is in Australia or is outside Australia on a flight that beganin Australia or is intended to end in Australia. 76 Further, it appliesgenerally to Commonwealth and defence aircraft77

, but as in the caseof Part II has no general application to intrastate aviation.

Various offences are specified, such as taking control of an aircraftwithout lawful excuse78, wilful destruction of an aircraft79, destructionof an aircraft with intent to ki1l80, prejudicing the safe operation of anaircraft81 , prejudicing the safe operation of an aircraft with intent to

72 Although in the light of the decision in Airlines of New South Wales v. New SouthWales [No.2] (1965) 38 A.L.J.R. 388, it is probable that the Commonwealth coulddeal with, at least, some crimes involving aircraft engaged in intrastate flights.

73 Section 7 provides that the act or omission must be an offence against-' (a) alaw of the Commonwealth in force in that Territory; (b) the Crimes Act, 1900 of theState of New South Wales, in its application to that Territory, as amended or affectedby Ordinances from time to time in force in that Territory; or (c) the Police OffencesOrdinance 1930-1961 of that Territory, as amended from time to time.' Although theCommonwealth has resolved a major problem it could have hardly chosen a jurisdictionwhere the criminal law is in a more unsatisfactory state than in the Australian CapitalTerritory. The Police Offences Ordinance is much in need of revision. The N.S.W.Crimes Act, 1900, made application to the Territory under the Seat of Government(Administration) Act, is still the basic criminal statute of the Territory and it is bothdefective and archaic. And so one may, whilst travelling on an interstate air journey,render himself liable to penal servitude for fourteen years if he forges or utters anyEast-India bond or any Treasury bill of the Government of New South Wales (CrimesAct, 1900 (N.S.W.), s. 260). Realising the unsatisfactory nature of the criminal lawof the Territory the Attorney-General announced last year that he was taking stepsto have prepared a model criminal code for the Territory which might serve as thebasis for a new criminal law to be adopted by the States. Long suffering residents ofCanberra, including members of the practising legal profession and academic lawyers,were astonished to learn that the code will be drafted not in the A.C.T. or with theassistance of A.C.T. lawyers but as a completely independent exercise in far awayQueensland, presumably because Queensland already has a criminal code.

74 S. 10.7S S. 10 (2).76 S. 10 (1).77 Ibid.78 S. It.79 S. 12.80 S. 13.81 S. 14.


kil182, assaulting crew members on board aircraft83

, and taking or sendingdangerous goods on aircraft. 84 Penalties range from a maximum penaltyof two years imprisonment for making threats and false statements fromwhich it could be inferred that a person intended to take control, destroy,or endanger the safety of an aircraft85 to the death penalty for wilfuldestruction or prejudicing the safe operation of an aircraft with intentto cause the death of a person. 86

(c) Jurisdiction

Both State and Federal courts are vested with jurisdiction under theAct87 but the Act does not exclude any existing State or territorial lawand both State and territorial courts retain their existing criminal jurisdiction88 except that a person cannot be convicted twice for the sameconduct.89

State Acts

Some States have legislation to incorporate specific offences in relationto aircraft. An example is the Crimes (Aircraft) Act 1963 of Victoria. 90

Moves are now afoot to obtain the agreement of each State to introduceuniform legislation to create similar offences in respect of aircraft engagedsolely in intrastate operations.

Recognition of rights in aircraft

Australia's record of ratification and adherence to internationalaviation arrangements is unusually good. One private law conventionwhich Australia has signed but to which it has not so far subscribed isthe Geneva Convention of 1948 on the international recognition ofrights in aircraft.

The object of the Convention is to facilitate the financing of the purchaseof aircraft which as security suffer by reason of their mobility. The

82 S. 15.83 S. 16.84 S. 18.85 S. 19. Bomb hoaxes have been a problem in Australia in recent years and the

first prosecution and conviction under the Act occurred this year following such ahoax by telephone to the airport at Canberra.

86 S. 13, 15.87 S. 22.88 S. 27.89 S. 28.90 In the Victorian Act destruction of an aircraft with intent to kill renders the

offender liable to maximum imprisonment of twenty years compared with the sentenceof death under the Federal Act. The Criminal Code Amendment Act, 1964 of Queensland and an Act of the same title of W.A. also create various offences which may becommitted on board or affecting aircraft such as endangering the safety of an aircraftor lives on board, assaults on members of the crew of an aircraft and the stealing orunauthorized use of an aircraft.


Convention provides that where an aircraft is registered as to nationalityin a contracting State and rights in that aircraft are recorded in thepublic record of that country and are valid in that country other Convention countries will recognize those rights and give priority to them overall other rights apart from salvage claims. This means the interests ofthe holders of recorded rights in the State in which an aircraft is registeredwill be protected when the aircraft is in the territory of another contracting State. 91

As at 1 July 1963, twenty-one States had either ratified or adheredto the Convention, including its principal sponsor the United States.Nevertheless, the United Kingdom, an important aircraft manufacturer,has not yet done so. The arrangements described in Part III of thisarticle for facilitating the purchase of aircraft by Qantas, T.A.A. andAnsett/A.N.A. have ensured the purchase of aircraft in the UnitedStates on fairly satisfactory terms, but the private operators under theagreements of 1952 and 1957 may have been in a stronger position ifAustralia at the relevant time had been a Convention country. TheConvention is not free from some quite substantial legal difficulties ;moreover, it presents some problems of implementation in Australiaby reason of the constitutional division of power and there are no obvioussigns that Australia is about to implement it. 92

New Conventions

Tokyo Convention on Offences and Certain Other Acts Committed onBoard Aircraft

Some of the problems dealt with under the Crimes (Aircraft) Act1963 have international aspects, notably the application of the Act toAustralian aircraft operating abroad and to foreign aircraft flying toor from Australia. Nationals of several countries may be carried in anaircraft of another country which is flying over the territory of yet another

91 Article 17 of the Chicago Convention relating to international aviation providesthat an aircraft has the nationality of the State in which it is registered. Articles 17-20provide for registration.

92 The Convention allows a contracting State to refuse to record a right whichcannot be constituted according to its national law. It is not certain whether theright must be one which is recognized by the national municipal law itself or whethera right may be registered if the national municipal law by application of its conflictof laws rule will recognize it as being validly constituted. If Australia were to become aconvention country it would wish to set up its own register of rights to obtain convention benefits, that is, to gain the protection that the convention offers creditors whoserights are recorded in respect of Australian aircraft which could be, for example, anAnsettjA.N.A. aircraft. Many Australian aircraft are purchased in U.S.A. where theFleet Equipment Trust is a common financing device and it might be desirable to allowfor the registration in Australia of such an interest. However there are doubts whetherthe Commonwealth has power to do this. Further, there would be advantage in havinga single record in Australia for all charges and other proprietary interests over Australian aircraft and to give recorded charges priority over other charges in legal proceedings in Australia. Again, it is by no means clear that the Commonwealth'sconstitutional powers are sufficient to enable it to act independently of the States.


country and an aircraft may cross the borders of two or more Stateswhile a crime is being committed. It is no easy thing at the moment todeal with offences committed on aircraft engaged in international commercial aviation.

Fifty-seven States attended the Tokyo conference in 1963 and fiftyone of them agreed on the terms of the Convention and signed the FinalAct. The Convention applies in respect of ' offences against penal law 'and ' acts which, whether or not they are offences' prejudice the safetyof an aircraft or persons or property on the aircraft or jeopardise goodorder or discipline on board. 93 The Convention adopts the principleof the law of the flag and provides that the State of registration of anaircraft should have primary jurisdiction over offences committed onboard an aircraft in flight wherever it is flying. 94

Senator Paltridge, then the Minister for Civil Aviation, described thesubstance of the Convention as follows-

(a) Recognition that the State of registration of an aircraft hasjurisdiction over crimes committed on the aircraft while over thehigh seas or over the territories of other contracting States, withoutexcluding any criminal jurisdiction exercised in accordance withnational laws.

(b) A State which is not the State of registration will not interferewith aircraft in flight in order to exercise its criminal jurisdictionas to offences committed on board the aircraft except in certainspecified cases.

(c) The aircraft commander is empowered to exercise reasonablemeasures, including restraint, to deal with persons on board committing offences or endangering the safety of the aircraft, and todisembark such persons at the next point of landing, and, in thecase of a serious offence, to deliver them to the local authoritiesthere.

(d) It defines the responsibilities of the State in which such aperson is disembarked or delivered in relation to such matters astaking him into custody, making preliminary inquiries, extraditionand deportation.

(e) Contracting States agree to take all appropriate measures torestore an aircraft to its rightful owner in cases of hi-jacking. 95

The Commonwealth is now considering ratification of the Conventionwhich is to come into force as soon as twelve of the fifteen signatoryStates have deposited their instruments of ratification. 96

93 Art. 1.94 The Crimes (Aircraft) Act 1963 has already adopted a similar principle in regard

to Australian registered aircraft being operated outside Australia. See n. 68 p. 285supra.

95 Parliamentary Debates, 24th Parliament, 1st Session 1963, Senate, 930.96 The United Kingdom and U.S.A. were signatory States but Australia was not.


Possible future conventions

Other subjects will eventually be dealt with by international arrangements, such as the further definition of the status of aircraft and aircraftcommanders, and aerial collisions. Extension of the principles of newconventions to all aspects of Australian aviation will usually dependon the willingness of the Commonwealth and the States to get togetherand pass uniform laws. It is to be hoped that this can be done, but ifit cannot, the case for an express federal power over aviation would beoverwhelming. As it is, the facts should be recognized, in the view ofthis writer, as fully supporting the case for an express Federal power tomake laws with respect to the subject as recommended in the Report ofthe Joint Committee on Constitutional Review in 1959.

APPENDIX

AUSTRALIAN CIVIL AVIATION LEGISLATION

Commonwealth Legislation

Air Accidents (Commonwealth Liability) Act 1963Air Navigation Act 1920-1963Air Navigation (Charges) Act 1952-1964Airlines Agreements Act 1952-1961Airlines Equipment Act 1958Airports (Business Concessions) Act 1959Airports (Surface Traffic) Act 1960Australian National Airlines Act 1945-1961British Commonwealth Pacific Airlines Agreement Act 1947Civil Aviation Agreement Act 1957Civil Aviation (Carriers' Liability) Act 1959-1962Civil Aviation (Damage by Aircraft) Act 1958Crimes (Aircraft) Act 1963Loan (Airlines Equipment) Act 1964Loan (Australian National Airlines Commission) Act 1958Loan (Australian National Airlines Commission) Act 1963Loan (Qantas Empire Airways Limited) Act 1957Loan (Qantas Empire Airways Limited) Act 1958Loan (Qantas Empire Airways Limited) Act 1960Loan (Qantas Empire Airways Limited) Act 1962Loan (Qantas Empire Airways Limited) Act 1963Loan (Qantas Empire Airways Limited) Act 1964Qantas Empire Airways Act 1948Qantas Empire Airways Agreement Act 1946

JUNE 1965] Aviation Law in Australia

State Legislation

291

New South WalesAir Navigation Act, 1938-1964Air Transport Act, 1964Damage by Aircraft Act, 1952

VictoriaAir Navigation Act 1958Civil Aviation (Carriers' Liability) Act 1961Crimes (Aircraft) Act 1963Wrongs Act 1958, Part VI

QueenslandAir Navigation Acts, 1937 to 1947Civil Aviation (Carriers' Liability) Act, 1964Commonwealth Powers (Air Transport) Act, 1950Criminal Code Amendment Act, 1964State Transport Act, 1960

South AustraliaAir Navigation Act, 1937Civil Aviation (Carriers' Liability) Act, 1962

Western AustraliaAir Navigation Act, 1937-1945Civil Aviation (Carriers' Liability) Act, 1961Criminal Code Amendment Act, 1964Damage by Aircraft Act, 1964State Transport (Co-ordination) Act, 1933-1961

TasmaniaAir Navigation Act 1937Civil Aviation (Carriers' Liability) Act 1963Commonwealth Powers (Air Transport) Act 1952Damage by Aircraft Act 1963Traffic Acts 1925 and 1961

Documents

AVIATION LAW IN AUSTRALIAAVIATION LAW IN AUSTRALIA By J. E. RICHARDSON* The primary purpose ofthis article is to discuss the Australian statutory law applying to civil aviation. There