McDermott v Robinson Helicopter Company Incorporated: The Australian High Court closes the chapter on Manual Defect Dispute

Jul 2016 |

Since 2014, Carter Newell has followed the progress of the matter of Graham McDermott & Ors -ats- Robinson Helicopter Company Incorporated1 (RHC). Readers will recall in November 2015, RHC were granted special leave by the Australian High Court (High Court) to have the decision of the Queensland Court of Appeal reviewed. The matter was heard in early 2016. In June 2016, the High Court handed down a decision in favour of RHC, setting aside the orders of the Queensland Court of Appeal with costs in favour of RHC.

Claim background

On 30 May 2004, McDermott was a passenger in a RHC R-22 helicopter which crashed during the course of fence line inspections on a cattle station on the Northern Territory/Queensland Border. As a result of the crash, McDermott sustained severe injuries, seeking compensation for same from RHC.

The cause of the crash was determined to be a failure of the helicopter’s forward flex plate which had been removed and reassembled on 17 February 2004, and subject to two ‘100 hourly’ inspections prior to the crash on 27 March 2004 and 12 May 2004.

At trial, it was not disputed that the flex plate failed and the crash occurred because, contrary to instructions given in the RHC Maintenance Manual (Manual), one of the four bolts securing the flex plate was incorrectly assembled and not tightened to the requisite degree.2 There was no assertion that RHC had caused the defect but rather, that the Manual provided insufficient instruction to facilitate detection of the defect at the inspections outlined above.

Relevantly, the 100 hourly inspection procedure set out in the Manual required the LAME3 to ‘verify security’ of the flex plate. The Manual also provided instructions for ‘fastener torque requirements’ with various specifications relevant to the bolts securing the flex plate and the application of a torque seal to critical fasteners such as the flex plate bolts (the purpose being that the torque stripe signifies that a fastener has been correctly torqued and provides a visual indication of the possibility of a loss of torque and resultant bolt rotation).4

The essential question raised by the facts of this matter and at trial, both in the first instance and on appeal, was therefore whether the Manual provided an adequate inspection procedure for the detection of the defect which caused the crash and as an adjunct issue, whether a torque stripe was a sufficient indicator of a loss of torque.

Litigation background

Supreme Court of Queensland decision

In the Supreme Court,5 the primary judge6 dismissed McDermott’s claims in both negligence and pursuant to the Trade Practices Act 1974 (Cth) (TPA) finding that the Manual did in fact provide adequate instructions to enable the identification of the defect.

In regards to the Manual, the primary judge held that the explanation given in the Manual of the function of torque stripes, coupled with the instructions given in the Manual to ‘verify security’ during the 100 hourly inspections, was sufficient to convey to a LAME that it was necessary to look for a torque stripe on each flex plate bolt and, if it were missing, damaged or incomplete, to take steps to determine whether the bolt was correctly torqued, re-torque the bolt and then apply a fresh torque stripe.7

In addition, the primary judge concluded the Manual required a torque stripe to be applied to each of the flex plate bolts, but that it was probable, that in this case, a torque stripe was not applied to Bolt 4 when it was incorrectly assembled.8 The absence of a torque stripe should have been, in the opinion of the judge, sufficient to indicate to a LAME competently carrying out a 100 hourly inspection, that it was necessary to take steps to check if the bolt was correctly torqued.9

Alternative possibilities were considered by the primary judge including:

  • A situation where the torque stripe was applied, would have broken or been misaligned and thus should have alerted a LAME competently carrying out the 100 hourly inspections that it was necessary to take steps to check if the bolt was correctly torqued;10 and
  • The potential for the torque stripe to have been applied incompletely, or deteriorated to such a point it was difficult to see. However, these were not considered materially different from a missing or misaligned torque stripe because these possibilities should have put a LAME on notice to take steps to check the bolt was correctly torqued.11

Queensland Court of Appeal decision

On appeal,12 the majority13 of the court found the Manual did not provide adequate instructions to detect the defect, and in turn, that RHC was liable either in negligence or pursuant to the TPA. Furthermore, the court found the primary judge had erred in finding it was probable that a torque stripe was not applied to Bolt 4 when it was incorrectly assembled.14

As to the latter point, the court considered there was insufficient evidence to support the primary judge’s finding and that it was incorrect for the primary judge to have limited the range of possible causes attributable to a missing or misaligned torque stripe.

In accepting there may have been a broader range of causes attributable to a missing or misaligned torque stripe, the Court of Appeal found the Manual was defective because it failed to ‘make clear to LAMEs that verifying security in the context of a periodic service that a visual inspection of torque stripes may not be sufficient nor accurate indicator of whether critical fasteners were correctly assembled’15 and failed to state that ‘bolt security could only be confirmed by applying a torque wrench or spanner’.16

Appeal to the High Court of Australia

The primary matter of concern to the High Court in RHC’s Appeal was whether the majority of the Court of Appeal erred in overturning the primary judge’s finding of fact noting the primary judge’s decision was as a result of inferences and findings of fact based on lay and expert evidence heard at the trial of the matter in the first instance.

At the hearing of the Appeal, RHC contended the Court of Appeal:

  • Erred in rejecting the primary judge’s finding that it was likely there was no torque stripe on Bolt 4 when the 100 hourly inspections were conducted. RHC argued there was sufficient evidence some of which included uncontested expert opinion, of the usual and expected procedure to be followed upon installation of a bolt such as Bolt 4, and expert opinion evidence that it was inconceivable a competent LAME would put torque stripes on an assembly that was not properly torqued;17
  • Failed to deal with the substantive reasons which the primary judge gave for rejecting alternative possible causes attributable to a missing or misaligned torque stripe (i.e. application to dirty or greasy surfaces such that the bolt could rotate without breaking the stripe);18
  • Failed to take account of:
    • instructions in the Manual which directed LAMEs to ‘verify the security of Bolt 4’;
    • evidence that both the LAMEs who conducted the pre-accident 100 hourly inspections knew Bolt 4 had to be torqued to the specified degree; and
    • evidence both LAMEs knew the way to ascertain whether Bolt 4 was torqued to the specified degree was via the use of a torque wrench;

and as a consequence it was incorrect for the Court of Appeal to have concluded the Manual did not direct LAMEs to apply a torque wrench or spanner to Bolt 4 during 100 hourly inspections;19 and

  • Failed to consider20 why it was reasonable for RHC to not include an instruction to check the security of the bolts with a torque wrench,21 and were wrong to have based their reasons for decision on evidence that another helicopter manufacturer included an instruction in its service manual to check torque with a torque wrench during 100 hourly inspections.22

In response, McDermott’s Counsel submitted the Court of Appeal:

  • Conducted a ‘real review’ of the evidence and of the primary judge’s reasons correctly concluding the evidence did not support the primary judge’s findings;23 and
  • Correctly concluded that:
    • due to the propensity of torque stripes to deteriorate over time, it could not be regarded as a sufficient indicator that a bolt was incorrectly torqued;24
    • RHC were negligent in failing to include an express instruction in the Manual that the security of Bolt 4 be verified with a torque wrench during 100 hourly inspections, and that the failure to do so caused the subject crash.25

Decision of the High Court of Australia

In its analysis of the matter, the High Court expressed the view that:

‘the fact the judge and the majority of the Court of Appeal came to different conclusions is in itself unremarkable. A court of appeal conducting an appeal by way of rehearing is bound to conduct a "real review" of the evidence given at first instance and of the judge’s reasons for judgement to determine whether the judge has erred in fact or law…. But a court of appeal should not interfere with a judge’s findings of fact unless they are demonstrated to be wrong by "inconvertible facts or uncontested testimony," or they are glaringly improbable or "contrary to compelling inferences."26

Adopting that approach, the High Court concluded the primary judge’s findings of fact accorded with the weight of evidence, both expert and lay, as to the range of permissible inferences and were not demonstrated to be wrong by ‘inconvertible facts or uncontested testimony’ nor ‘glaringly improbable or contrary to compelling inferences’.

The High Court observed that the trial lasted for some five weeks, during which close to 20 witnesses gave oral evidence, there was a very large number of exhibits including physical and documentary exhibits together with a viewing of two helicopters. The primary judge alone had the unique benefit of seeing, reading and considering all this evidence in its totality.27 The Court of Appeal had no such opportunity, and should have recognised it was open to the primary judge to conclude as he did in light of the totality of the evidence presented at the trial.28

As a consequence, the High Court found the Court of Appeal should not have over turned the primary judge’s decision citing the following reasons relevant to each key issue:

  • Contrary to the reasoning of the majority of the Court of Appeal, there was evidence sufficient to found the primary judge’s inference that it was likely that the torque stripe was not applied to Bolt 4 when it was incorrectly assembled;29
  • It was open to the primary judge to find, as he did in the alternative, that if a torque stripe were applied when Bolt 4 was incorrectly assembled, the torque stripe would likely have misaligned a relatively short time after misassembly when the bolt (and thus the vertical section of the stripe) began to rotate relative to the horizontal surface; thus it would have been, or should have been, apparent to a LAME conducting a 100 hourly inspection that further investigation was required;30
  • The majority of the Court of Appeal did not refer to the primary judges reasons for rejecting ‘as quite unlikely’ the possibility raised regarding the application of a torque stripe to a greasy or dirty surface; nor did it articulate reasons of its own, for accepting this possibility. To that end, the High Court found the majority of the Court of Appeal ‘did not give the respect and weight to the primary judges analysis of the issue which it deserved’;31 and
  • Despite the submissions of Counsel for McDermott, there was no error or inconsistency in the following findings of the primary judge:
    • firstly, it was probable a torque stripe was not applied when Bolt 4 was incorrectly assembled and hence the LAMEs failed to detect its absence; and
    • secondly, the weight to be attributed to the evidence of the LAMEs was diminished by the fact that, if they had examined Bolt 4, the condition of the torque stripe would have indicated Bolt 4 had rotated.32

For these reasons, the High Court allowed RHC’s appeal with costs and the orders of the Queensland Court of Appeal were set aside.

Lessons

The High Court’s decision in this matter does not upset the fact that each court’s decision in regards to this matter remains confined to its own facts. That said, some valuable learnings ensue:

  • Firstly, it demonstrates the importance of ensuring aircraft maintenance manuals provide clear and complete instructions for the identification of risks which could materialise as a result of the use of the manual; and
  • Secondly, for maintainers it affirms the importance of following the manufacturer’s maintenance instructions and provides an insight into the expectations of the court in regards to the provision of maintenance services by LAMEs.

For litigants, this matter emphasises the importance of obtaining quality evidence to support the facts of the matter, and that a decisive approach to contesting or challenging evidence is critical for fact based appeals (as opposed to appeals on matters of law).

Finally, the decision makes it plain to courts of appeal, the standard by which it is permissible to interfere with a primary judge’s decision in matters based solely on findings of fact, instead of questions of law. Potential litigants would also be wise to take note of the High Court’s comments in this regard when considering appeal options following delivery of a judgement from a court of first instance.

.....

1 Carter Newell Aviation Newsletter May 2014 ‘Robinson’s R-22 Maintenance Manual: No defect, no liability’; Carter Newell Aviation Newsletter March 2015 ‘When a manufacturer’s product manual is not to standard: Robinson Helicopters’; Carter Newell Aviation Newsletter November 2015 ‘Off to the High Court: Robinson Helicopters granted special leave’.
2 Robinson Helicopter Company Incorporated v McDermott [2016] HCA 22 [7].
3 Licenced Aircraft Maintenance Engineer.
4 Robinson Helicopter Company Incorporated v McDermott [2016] HCA 22 [13].
5 McDermott v Robinson Helicopter Company [2014] QSC 34.
6 Peter Lyons J.
7 Robinson Helicopter Company Incorporated v McDermott [2016] HCA 22 [15].
8 Ibid [14].
9 Ibid [116].
10 Ibid [17].
11 Ibid [18].
12 McDermott v Robinson Helicopter Company [2014] QCA 357.
13 McMurdo P and Alan Wilson J (Holmes JA dissented).
14 Robinson Helicopter Company Incorporated v McDermott [2016] HCA 22 [20].
15 Ibid [21].
16 Ibid [25].
17 Ibid [31].
18 Ibid [32].
19 Ibid [33].
20 For the purpose of s 9(1)(c) of the Civil Liability Act 2003 (Qld).
21 Robinson Helicopter Company Incorporated v McDermott [2016] HCA 22 [34].
22 Ibid [35].
23 Ibid [37].
24 Ibid [38].
25 Ibid [39].
26 Ibid [43].
27 Ibid [57].
28 Ibid [60].
29 Ibid [45].
30 Ibid [46].
31 Ibid [56].
32 Ibid [65].

This article may provide CPD/CLE/CIP points through your relevant industry organisation.