BBC NEWS
The MoD denies liability, but reached a settlement ahead of a High Court claim for damages due to start next week.
'Life-threatening situation'
The family had taken off on the morning of the accident from Elstree airfield in Hertfordshire and flew to Cornwall where Mr Paton was intending to treat the family to lunch at a Padstow restaurant.
The weather was fine and the visibility good when Mr Paton was given clearance to land at St Mawgan.
However, just as the Cessna was about to touch down, the Sea King, which had just taken off, suddenly loomed into view.
In his written argument to the court, the family's counsel, Mr Charles Haddon-Cave QC, said the helicopter "made as if to cross the runway" directly in the Cessna's path and Mr Paton "had to deal with an immediate and life-threatening situation".
Mr Paton took emergency avoiding action but lost stability after the Cessna passed through a wake vortex from the helicopter's powerful rotas and the light aircraft crashed just beside the runway.