Privy Council reinstates first instance decision in the Bahamas on manufacturer's liability following aircraft accident

Bahamasair Holdings Limited v Messier Dowty Inc.

Appeal from the Court of Appeal of the Commonwealth of the Bahamas

The background to the case was relatively straightforward.On 20 April 2007 a Bahamasair DHC-8 was seriously damaged when the left main landing gear collapsed on landing.Fortunately, no one was injured. The operator – or more probably their insurers – pursued the landing gear manufacturers and prevailed at first instance. However, the Court of Appeal in the Bahamas overturned that decision. The issue for the Privy Council was whether it is was right for Court of Appeal to re-examine the evidence and arrive at fundamentally different findings of fact.

The first instance judge had heard evidence of an accident some nine years before the subject events. An airworthiness directive had been issued the previous year recommending inspections at prescribed intervals and the airline had complied with that requirement, although there was a challenge to the adequacy of the airline's records. There was argument as to whether a change introduced by the manufacturer after the 1996 event supported an allegation of defective design. In any event, the first instance court concluded that the landing gear design was inadequately robust to operate for the time between overhauls; that the supplier knew this to be the case; and that the supplier had failed adequately to warn the operator.

The interesting point, for a pure litigation practitioner, is that the Court of Appeal decided that the first instance judge 'not taken proper advantage of having seen and heard the witnesses'. On that basis, they regarded the first instance findings as being 'at large' and that they could review all findings of fact – something which an appellate court rarely does. The Privy Council took a dim view of this, noting that 'an appellate court should intervene only if it is satisfied that the Judge was 'plainly wrong'. The Privy Council concluded that the findings of fact were ones which the first instance tribunal could properly have reached and reinstated the original decision.

What is perhaps frustrating for the aviation sector and for their legal advisers is that the decisions did not, as a result, cast light on some of the many issues arising between operators and manufacturers that are rarely examined by the courts. There was passing reference to argument as to whether any shortcoming in the landing gear was only a quality defect, in relation to which no duty of care arose in tort. That subject arose in a English Court of Appeal decision involving the same manufacturer some twenty years ago but it is not been the subject of definitive treatment. While well-advised suppliers and customers ensure that these issues are regulated by contract, there was no reference in these judgments as to whether contractual defences arose. That is a subject of increasing importance with the growth of long term aftermarket arrangements between manufacturers and aircraft operators covering all parts of the aircraft. Events – and cases - of this nature continue to highlight the desirability of careful consideration of the losses that may arise in the event of accidents and incidents in service and appropriate risk allocation in contractual arrangements between the parties.

The full text of the judgment can be found here.