Avtex Air Services Pty Ltd and Civil Aviation Safety Authority
[2011] AATA 61
•4 February 2011
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2011] AATA 61
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2010/3553
GENERAL ADMINISTRATIVE DIVISION ) Re AVTEX AIR SERVICES PTY LTD Applicant
And
CIVIL AVIATION SAFETY AUTHORITY
Respondent
DECISION
Tribunal Mr Egon Fice, Senior Member Date4 February 2011
PlaceSydney
DecisionThe Tribunal affirms the decision made by the Civil Aviation Safety Authority on 20 August 2010
. . . . . . [sgd] Egon Fice . . . . . . .
Senior Member
CIVIL AVIATION – cancellation of AOC – serious and imminent risk to air safety – key personnel – inexact proofs, indefinite testimony or indirect inferences – concurrent hearing of applications – special risk based audits – defective endorsement training – CASA instrument of delegation and approval – asymmetric flight training – training and checking organisation – proficiency checking – amending training and checking manual – in command requirements for charter work – distinction between class and type of aircraft – regulated take-off weights – safety management system – safety culture – defect recording – flight in icing conditions – flight around thunderstorm activity – pilot fatigue and pressure to conduct flight – fatigue management system – airworthiness of aircraft used in AOC operations
Administrative Appeals Tribunal Act 1975 ss 3, 33(1), 41(2), 43(1)
Acts Interpretation Act 1901 s 13
Civil Aviation Act 1988 ss 20AA(3), 27(2A), 28, 28(1)(a), 28(1)(b), 28(3), 28BA, 28BA(3), 28BD, 28BE, 28BE(1), 28BE(2), 28BF, 28BF(1), 28BH, 28BI, 28BAA, 30DB, 30DC, 30DC(1), 30DC(3), 30DD(1), 30DE, 30DE(2), 30DG, 30DH, 30DI, 30DI(2), 31, 31A, 98(4A),
Civil Aviation Regulations 1988 – 2, 5.13, 5.14(2), 5.19(3), 5.20(1), 5.20(2), 5.21(1), 5.23(2), 7(1), 30, 38, 42R, 47, 50, 53, 217, 217(2), 235(2), 238, 249,
Civil Aviation Safety Regulations 1998 – 99.050
Civil Aviation Order – 20.11 (paragraph 12.1), 20.7.1B, 40, 41.1.0, 40.1.5, 40.1.7 (paragraph 9.1, 9.1(a), 9.1.1), 40.2.1, 40.2.2, 48, 82.0, 82.1 (paragraph 4, 6.2)
Briginshaw v Briginshaw (1938) 60 CLR 336
Civil Aviation Safety Authority v Graeme Boatman [2006] FCA 460
Jones v Dunkel (1959) 101 CLR 298
Secretary, Department of Social Security v Hodgson (1992) 108 ALR 322
The Shorter Oxford English Dictionary
Pearce DC and Geddes RS ‘Statutory Interpretation in Australia’ (6th Ed. 2006)
Professor James Reason, Achieving a Safe Culture: Theory and Practice, Journal of Work and Stress, 1998, Vol. 12, No. 3 to 293-306
Professor Patrick Hudson, Safety Culture: The Ultimate Goal, Flight Safety Australia, September – October 2001 29
Glossary of Terms
NOTE: These abbreviations are referred to throughout the Reasons for Decision
AGL Above ground level AAT Act Administrative Appeals Tribunal Act 1975 ACS Aviation Compliance Solutions Pty Ltd AH Artificial Horizon ANA Australian National Aviation Pty Ltd AOC Air Operators Certificate APG Aircraft Performance Group ASR Aircraft Survey Report ATIS Aerodrome Terminal Information Service ATO Approved Testing Officer ATSB Australian Transport Safety Bureau Avtex Avtex Air Services Pty Ltd, trading as Airtex Aviation CA Act Civil Aviation Act 1988 CAO Civil Aviation Order CAR Civil Aviation Regulations 1988 CASA Civil Aviation Safety Authority CASR Civil Aviation Safety Regulations 1998 CEO Chief Executive Officer CIR Command Instrument Rating COA Certificate of Approval DAMP Drug and Alcohol Management Plan EGT Exhaust Gas Temperature ERSA En route Supplement Australia FAID Score Fatigue Audit InterDyne Score FMS Fatigue Management System FOI Flying Operations Inspector FRMS Fatigue Risk Management System GSMS Group Safety Management System HAAMC Head of Aircraft Airworthiness and Maintenance Control Heron Heron Airlines Travel Pty Ltd HOTC Head of Training and Checking ICAO International Civil Aviation Organisation ICC Industry Complaints Commissioner ICUS In command under supervision IFR Instrument Flight Rules ILS Instrument Landing System IMC Instrument Metrological Conditions LAME Licensed Aircraft Maintenance Engineer Metro III Fairchild Metro III NDB Non Directional Beacon NLG Nose Landing Gear NOTAM Notices to Airmen PA-31 PA-31 Navajo Chieftain PA-31P Piper Mojave PA-31P-350 PIC Pilot in Command RCA Request for Corrective Action RFDS Royal Flying Doctor Service RPT Regular Public Transport RTOW Regulated Takeoff Weight SA Safety Alert SAS Stall Avoidance System Skymaster Skymaster Air Services Pty Ltd SMG Safety Management Group SMS Safety Management System TBO Time between overhaul TCM Training and Checking Manual TCO Training and Checking Organisation USA United States of America VFR Visual Flight Rules Wingaway Wingaway Air Pty Ltd REASONS FOR DECISION
4 February 2011 Mr Egon Fice, Senior Member 1. Avtex was the holder of an AOC. The current directors of Avtex are Dieter Siewert and Lieselotte Siewert. They are also shareholders in that company.
2. Mr and Mrs Siewert are also involved in a number of associated companies. Skymaster was also the holder of an AOC prior to its recent cancellation. Mrs Siewert is the sole director and secretary of that company. Its shares are held by Mr and Mrs Siewert.
3. There are two associated companies involved in the aviation businesses but which do not hold AOCs. They are Wingaway and Heron. Mr and Mrs Siewert are both directors of each of those companies and also their shareholders.
4. Mr Siewert is the CEO of Avtex and Skymaster. Mr Graham Newberry is the HAAMC for Skymaster and for Avtex (including the CAR 30 organisation). Skymaster and Avtex share a common facility at Bankstown Airport in New South Wales. Prior to their cancellation, the AOCs of Avtex and Skymaster authorised charter and aerial work operations. Avtex’s AOC authorised its holder to operate piston engine and turbine engine aircraft in its operations. The Skymaster AOC authorised charter and aerial work operations using only specified types of piston engine aircraft. Although Skymaster is not the registered operator of any aircraft, it operates aircraft which are registered to Avtex, Wingaway and Mr Siewert. Also, after June 2008, Skymaster almost exclusively used the piston engine aircraft in its air operations while turbine engine aircraft operations were conducted by Avtex. Most of the pilots used in the operations of both companies were hired on a casual basis, conducting operations for both entities.
5. On 28 May 2010 CASA issued to Avtex a notice of proposed action to vary, suspend or cancel its AOC (the first show cause notice). On 25 June 2010, Avtex’s solicitors, Norton White, provided to CASA a response to its first show cause notice. However, between those two dates, on 15 June 2010, a PA-31P aircraft registration VH-PGW operated by Skymaster crashed on Canley Vale Road near Bankstown Airport when attempting to make an emergency landing. The pilot of the aircraft and a flight nurse were killed in that crash. That accident resulted in CASA conducting a special audit of Skymaster between 22 and 29 June 2010. Following the special audit, CASA concluded that if Skymaster were to continue its operations under its AOC, that would result in a serious and imminent risk to air safety. CASA also formed the view that because of the close relationship between Avtex and Skymaster, and the joint resources shared by those companies, if Avtex continued its operations under its AOC, that would also result in a serious and imminent risk to air safety.
6. On 23 July 2010 CASA suspended the AOCs of Avtex and Skymaster pursuant to s 30DC(1) of the CA Act. Section 30DC of the CA Act provides that:
(1)Where CASA has reason to believe that the holder of a civil aviation authorisation has engaged in, is engaging in, or is likely to engage in, conduct that contravenes section 30DB, CASA may suspend the authorisation by giving written notice to the holder.
Note:CASA is not required to give the holder a show cause notice before making a decision under this subsection.
Section 30DB provides that:
The holder of a civil aviation authorisation must not engage in conduct that constitutes, contributes to or results in a serious and imminent risk to air safety.
7. Unless CASA makes an application to the Federal Court under s 30DE of the CA Act within five business days of notifying the holder of the suspension, the suspension ends (s 30DC(3)). Section 30DD(1) provides that:
(1)CASA may make a decision under section 30DC in relation to a civil aviation authorisation even if CASA has given the holder of the authorisation the show cause notice required before making a decision under another provision of this Act or the regulations.
The Regulations referred to in s 30DD(1) include the CARs and the CASRs. A suspension under s 30DC has effect irrespective of whether there is a Stay Order in place under s31A of the CA Act.
8. On 3 August 2010, Moore J of the Federal Court of Australia made an Order under s 30DE(2) of the CA Act, prohibiting Avtex and Skymaster from doing anything which was authorised by their respective AOCs until 5.00pm on 4 August 2010. Section 30DE(2) provides that:
(2)If the Federal Court is satisfied that there are reasonable grounds to believe that the holder has engaged in, is engaging in, or is likely to engage in, conduct that contravenes section 30DB, the Court must make an order that prohibits the holder from doing anything that is authorised by the authorisation but that, without the authorisation, would be unlawful.
9. Under s 30DG of the CA Act, if the Federal Court has made an Order under s 30DE, CASA is required to complete an investigation into the circumstances that gave rise to CASA’s decision to suspend the authorisation by the end of the period that the Order is in force. After making the investigations required by s 30DG of the CA Act, where CASA has reason to believe that a serious and imminent risk to air safety would exist if the civil aviation authorisation in question was not varied, suspended or cancelled, and the grounds for CASA’s belief are related to the circumstances that gave rise to CASA’s original decision to suspend the authorisation under s 30DC, it may give the holder of the authorisation a show cause notice within five business days after the last day on which the Order is in force.
10. In accordance with s 30DH of the CA Act, CASA gave Avtex and Skymaster a show cause notice. CASA allowed Avtex and Skymaster 28 days from the date of the notice to provide it with reasons why CASA should not recommend that each entity’s AOC be varied, suspended or cancelled.
11. On 12 August 2010 Norton White (solicitors) provided CASA with a written response to the show cause notices issued to Avtex and Skymaster. After considering Norton White’s responses, on 20 August 2010, CASA made a decision in respect of both entities under s 30DI(2) of the CA Act, cancelling both AOCs. Section 30DI of the CA Act provides:
CASA may vary, suspend or cancel an authorisation within 5 days after end of show cause period
(1)This section applies if, after the end of the period specified in a show cause notice given under section 30DH:
(a)CASA is satisfied that a serious and imminent risk to air safety would exist if the civil aviation authorisation were not varied, suspended or cancelled; and
(b)the grounds for CASA’s belief are related to the circumstances that gave rise to CASA’s decision to suspend the authorisation under section 30DC.
(2)CASA may vary, suspend or cancel the authorisation, by written notice given to the holder of the authorisation within 5 business days after the end of the period specified in the show cause notice.
12. Within 28 days of that decision, Avtex lodged an application with the Tribunal for a review of CASA’s decision to cancel its AOC. It also lodged with the Tribunal an application for a Stay pursuant to s 41(2) of the AAT Act. Although Skymaster also lodged an application for review of CASA’s decision to cancel its AOC, that application is not the subject of this review. Mr H.J. Langmead SC, who appeared for Avtex, said that application had only been lodged to enable Skymaster to proceed if it subsequently believed it needed to.
13. I heard Avtex’s stay application on 27 August 2010 and declined to grant a Stay. This matter was given an accelerated path to a concluded hearing which was conducted over some 16 sitting days.
14. Because this application before the Tribunal is only in respect of the cancellation of Avtex’s AOC, Mr Langmead firmly submitted that any issues relating to the cancellation of Skymaster’s AOC were irrelevant for the purposes of this proceeding. CASA disagreed. Mr I. Harvey of counsel, who appeared on behalf of CASA, referred to the fact that prior to the audit conducted by CASA in July 2008 following a fatal accident involving an Avtex operated Metro III aircraft, Avtex operated both the piston engine and turbine engine aircraft. After the audit, piston engine aircraft operations were transferred to Skymaster. Avtex then operated almost exclusively turbine engine aircraft, predominantly the Metro III. This of course was possible due to the controlling interest of the Siewert family in both companies.
15. Mr Harvey submitted that if I were minded to set aside CASA’s decision to cancel Avtex’s AOC, Avtex would again resume the piston engine operations formerly conducted by Skymaster. According to Mr Harvey, and these facts were not disputed, the overlap between the operations of Avtex and Skymaster includes:
(a)operations out of the same hangar;
(b)the same CEO;
(c)the same HAAMC;
(d)the piston engine aircraft serviced by Avtex under a COA held by it, which is also controlled by Mr Siewert;
(e)sharing a common operations department;
(f)ownership and control by the Siewert family; and
(g)access to a common pool of pilots employed on a casual basis so that appropriately qualified pilots within the pool may be tasked to conduct flying operations for either or both companies.
16. Section 28 of the CA Act, which deals with the issue of AOCs, requires CASA to be satisfied that the key personnel in the organisation to which the AOC is granted have appropriate experience in air operations to conduct or to carry out the AOC operations safely. The expression key personnel is defined under s 28(3) of the CA Act and it means the people, however described, that hold, or carry out the duties of the following positions in the AOC holder's organisation:
. . .
(a) the chief executive officer;
(b)the head of the flying operations part of the organisation;
(c)the head of the aircraft airworthiness and maintenance control part (if any) of the organisation;
(d)the head of the training and checking part (if any) of the organisation;
(e)any other position prescribed by the regulations.
. . .
17. As Mr Harvey submitted, the key personnel in both organisations are identical except for the fact that each organisation has its own chief pilot, who is the head of flying operations. Also, because Avtex is required to have a TCO under CAR 217, it also has a HOTC. This is not the case for Skymaster which is not required to have a TCO.
18. Mr Harvey submitted that the rationale for the suspension and ultimate cancellation of the Avtex AOC concurrently with the Skymaster AOC emanated from operational problems experienced by Skymaster which, according to CASA, resulted in the fatal accident of the PA-31P Mojave aircraft on 15 June 2010. Mr Harvey submitted that had the Avtex AOC not been suspended and then subsequently cancelled concurrently with the Skymaster AOC, the operations of Skymaster would have immediately been transferred to Avtex.
19. I did not understand Avtex to dispute the fact that if its AOC were reinstated, it would immediately commence operations using the piston engine aircraft formerly operated by Skymaster. It follows, in my opinion, at least to the extent that the key personnel under Avtex's AOC will remain the same as they were prior to the cancellation of the AOC, that there is some force in CASA's submissions. Although there will be some changes to key personnel if I decide to set aside CASA's decision to cancel Avtex's AOC, I am of the view that I should carefully examine CASA's concerns about the safety of the operations of both AOC holders. At the same time, I should bear in mind the fact that the cancellation of the Avtex AOC was principally motivated by concern with Skymaster's operation following the fatal accident on Canley Vale Road; and that the head of the flying operations of Skymaster and Avtex are not the same person.
20. The real issue, as I see it, is the influence the common key personnel have on the safety of air charter and air work operations of both entities. To only examine the influence of those persons on Avtex would, in my opinion, result in excluding evidence which is likely to be significant in coming to the preferable decision in this matter. In fact, although Mr Langmead strenuously resisted the concurrent hearing of the Avtex and Skymaster applications, he nevertheless relied on evidence from the chief pilot of Skymaster in support of Avtex’s claim.
21. Although CASA applied to have the Skymaster and Avtex's applications heard together, I declined that application. That is because, in my view, the Tribunal does not have the power under the AAT Act to compel an applicant to have multiple applications lodged with the Tribunal heard concurrently.
22. While I appreciate the Tribunal is given broad procedural powers which are set out in s 33(1) of the AAT Act, those powers clearly relate to procedure in a proceeding. Matters are frequently heard concurrently by the Tribunal but that is generally with the consent of the parties. I agree with Mr Langmead's submissions that save for an order made by the Tribunal that the discrete applications be heard together, each applicant and the respondent in each case is entitled to a separate hearing. While Mr Langmead accepted that there is a risk of inconsistent findings in separate proceedings, that may well be unavoidable given the different circumstances in which each entity operates. However, if the dominant influence over the operations comes from the same key personnel, then such inconsistent findings are unlikely.
23. That is not to say that Skymaster is not entitled to an independent adjudication of the cancellation of its AOC based on its merits. However, in this case, it seems inevitable that there will be some overlap of the two operations because of common key personnel. This is despite the fact that both entities had, at the relevant time, different chief pilots. I accept, as is set out in CAO 82.0 Appendix 1 at cl 2.2(a), that it is the responsibility of the chief pilot to ensure that the operator's air operations are conducted in compliance with the CA Act, CARs, CASRs, and CAOs. Nevertheless, it is not impermissible, in my opinion, to examine whether other key personnel may have had some negative influence on the chief pilot. If there is evidence of such influence, then it must necessarily be relevant to take that into account when determining whether CASA's decision to cancel Avtex's AOC was the preferable decision.
BASIS FOR REVIEW
24. CASA's decision to cancel Avtex's AOC was based on s 30DI of the CA Act. After receiving Avtex's response to its show cause notice of 10 August 2010, CASA nevertheless remained satisfied that a serious and imminent risk to air safety would exist if the AOC were not cancelled. That is why it acted on 20 August 2010 to cancel the AOC.
25. There was no dispute about the fact that this Tribunal has jurisdiction to review decisions made by CASA which are described as reviewable decisions. That expression is defined in s 31 of the CA Act. A reviewable decision includes cancellation of a certificate granted or issued under the CA Act. An AOC is issued under s 28 of the CA Act. Therefore, as Mr Harvey submitted, the first question for me to determine is whether Avtex's operations would present a serious and imminent risk to air safety, if they were to continue.
26. Mr Harvey submitted that if the jurisdictional facts, that is, those facts which would support a serious and imminent risk to air safety finding, no longer existed, then I should exercise other powers or discretions open to me and in particular those set out in s 28BA(3) of the CA Act. That section provides:
28BA General conditions
(3)If a condition of an AOC is breached, CASA may, by written notice given to its holder, suspend or cancel:
(a)the AOC; or
(b)any specified authorisation contained in the AOC;
whether or not the breach is continuing.
27. In fact, in the show cause notice issued to Avtex on 28 May 2010, CASA relied on s 28BA(3) of the CA Act when considering whether to vary, suspend or cancel Avtex's AOC. Although Avtex responded to that show cause notice, CASA did not in fact make a decision under s 28BA(3) of the CA Act as subsequent events, namely the Canley Vale Road accident, heightened CASA's concerns to the extent that it proceeded under Division 3A of the CA Act on the grounds of serious and imminent risk to air safety. Regardless, Mr Harvey submitted that if minded to do so, I could nevertheless affirm CASA's decision if I were to find that Avtex's conduct in the course of its air operations was such that s 28BA(3) of the CA Act was enlivened.
28. Mr Harvey relied on the decision of Hill J in Secretary, Department of Social Security v Hodgson (1992) 108 ALR 322. That case involved a decision by the Secretary of the Department of Social Security to recover an overpayment of social security although he had not considered whether recovery of that debt to the Commonwealth should be waived. Although the issue of waiver was first raised before the Tribunal, his Honour did not think that prevented the Tribunal from exercising the power to waive the debt. His Honour specifically relied on the power granted to the Tribunal under s 43(1) of the AAT Act. That section empowers the Tribunal to exercise all the powers and discretions conferred upon the original decision maker provided it does so for the purpose of reviewing a decision. Hill J said, at 330:
Of course there must be an association between the power to be exercised by the tribunal and the decision under review, but that association is to be found in the restriction of the grant of power in s 43(1) to the purpose of the tribunal's review. The test is one of relevance rather than dependence. Where the exercise of a power or discretion is relevant to the making of the decision under review then, if requested, the tribunal may exercise the discretion. . . . Where its jurisdiction is enlivened by an application to review an administrative decision it exists to do again, within the limits of the review, that which the decision-maker was entrusted to do.
29. In my opinion, there clearly is an association between the power which could have been exercised under s 28BA(3) of the CA Act and the decision under review to cancel Avtex's AOC. In fact, until the intervention of the Canley Vale Road accident on 15 June 2010, CASA was proceeding towards a possible cancellation of Avtex's AOC under that section of the CA Act. I am of the view that in exercising all the powers and discretions conferred upon the original decision-maker for the purposes of reviewing the cancellation decision, as an alternative to finding a serious and imminent risk to air safety, I should also examine whether conditions of Avtex's AOC were breached and whether those breaches, if found, should result in a cancellation decision.
30. Unless I have misunderstood the submissions made by Mr Langmead, he did not appear to dispute this alternative proposition made by CASA. In fact, Mr Langmead submitted that Avtex's AOC should be reinstated because it satisfied the criteria set out in s 28 of the CA Act for the issue of an AOC and it has done so for a long time. The criterion set out in s 28(1)(a) is that CASA be satisfied that an applicant has complied with, or is capable of complying with, the provisions of the CA Act, the Regulations and CAOs that relate to safety.
31. Mr Harvey submitted that the statutory conditions which may have been breached include those set out in s 28BD, s 28BE, s 28BF, s 28BH, s 28BI and, importantly, s 28BAA which in effect requires CASA to remain satisfied of the matters set out in s 28(1)(a) and (b).
32. Mr Harvey conceded that the expression serious and imminent risk was not settled in its application to matters such as this before me. He referred to the analysis of that expression by Madgwick J in Civil Aviation Safety Authority v Graeme Boatman [2006] FCA 460 . While his Honour said the expression was difficult to comprehend fully in relation to all possible circumstances in which it might fall for consideration, he nevertheless agreed it was a composite phrase and that it was not appropriate to see serious as only referring to the risk of harm occurring. He said, in the context in which it appears in the CA Act, serious means something like really significant. He also agreed that the level of risk is a product of a number of factors including the probability or likelihood of its occurring, the degree of exposure and the potential consequences. Nevertheless, he suggested that in most cases attention would focus on the degree of likelihood that a risk to air safety would eventuate [45]. While his Honour agreed that flying involves inevitable risks which do not fall within the purview of the expression serious and imminent risk, in his opinion, as far as the matter before him was concerned, the test was:
[55]. . . given appropriate meaning by asking: was there a really significant prospect that such risks of serious considerable harm as actually existed, in relation to the conduct complained of, would materialise?
33. In his opening address, Mr Langmead submitted that the principles stated by Dixon J in Briginshaw v Briginshaw (1938) 60 CLR 336 should guide my consideration of the evidence. Dixon J said, at 362:
But reasonable satisfaction is not a state of mind that is attained or established independently of the nature and consequence of the fact or facts to be proved. The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question whether the issue has been proved to the reasonable satisfaction of the tribunal. In such matters "reasonable satisfaction" should not be produced by inexact proofs, indefinite testimony, or indirect inferences.
34. His Honour explained that where the law required the proof of any fact, the Tribunal must feel an actual persuasion of its occurrence or existence before it can be found. It could not be found as a result of mere mechanical comparison of probabilities independently of any belief in its reality. However, Mansfield J said this in Boatman, at [62], when Briginshaw’s case was referred to him by Mr Langmead:
As to the ease with which the Court should be satisfied of matters adverse to them, the respondents submitted that, given the seriousness of the consequences for their reputation and livelihood of adverse findings, the evidentiary principles in Briginshaw at 361-3 are applicable. I disagree. The proceedings are primarily protective of the public, notwithstanding that fairness to impugned authorisation holders is an important part of the process. Further, any adverse finding that the Court might make is provisional only: it would merely assert that there are reasonable grounds for believing that some conduct had been in contravention of the statutory requirement. It would be inconsistent with the statutory commands to the Court to consider ‘reasonable grounds to believe’ and to give safety the primary emphasis to require that the Court only act on proofs which are not ‘inexact’, testimony which is not ‘indefinite’ and inferences which are not ‘indirect’ (see Briginshaw at 362).
35. Of course I appreciate that Mansfield J was referring to the provisions in s 30DE(2) of the CA Act, where the Federal Court is required to be satisfied that there are reasonable grounds to believe the holder is engaging, or is likely to engage in, conduct that constitutes, contributes or results in serious or imminent risk to air safety. The basis upon which I am required to make my decision is whether I am satisfied that a serious and imminent risk to air safety would exist. Although that is a different consideration, it nevertheless primarily involves the protection of the public. It also appears to me that use of the expression is satisfied might mean something less than reasonable satisfaction, although I consider that I should find all material facts on the balance of probabilities when exercising the discretion of the original decision-maker in accordance with the CA Act, the CARs, the CASRs and the CAOs.
RISKS TO AIR SAFETY
36. Mr Siewert testified that Avtex was established in 1986 and has now been operating for some 25 years. He said that Avtex had held an AOC continuously since 1986 until its cancellation in August 2010. Mr Langmead submitted that prior to the imposition of the conditions placed on Avtex’s AOC in 2008 following the fatal accident involving a Metro III, no adverse administrative action had been taken against Avtex. It had been audited by CASA regularly throughout that period. It operated more than 20 types of aircraft including a Lear Jet. At the time of ceasing its operations in February 2010, Avtex was operating both nationally and internationally.
37. However, as was deposed to by Mr Roger Weeks, the manager of CASA’s Flying Standards Branch based at Bankstown Airport, Avtex came to the attention of CASA in an adverse way in 2006. CASA had received a number of anonymous industry complaints regarding the poor maintenance practices of the maintenance organisation which is a part of Avtex and which holds a COA under CAR 30. In November 2006 CASA issued a maintenance direction to Avtex under CAR 38, directing that it cease conducting engine overhauls. The maintenance direction was required because CASA investigations revealed that Avtex had employed an inappropriately trained engineer. The direction was lifted after Avtex employed a suitably qualified engineer.
38. Up until this time, both the AOC and COA holders were on a three year routine or scheduled audit cycle. However, following that incident, the company was placed under additional risk based surveillance. This was because of the number of incidents and industry intelligence as well as the complaints made to the ICC.
39. In July 2007, CASA issued a further direction under CAR 38 and a direction under CAR 53 requiring the production of maintenance documents and to allow CASA to inspect engines. This action resulted from an anonymous complaint relating to engine failures then experienced by Avtex. CASA discovered that one engine failure was attributed to an incorrectly installed counterweight during maintenance carried out by Avtex personnel. Mr Weeks convened a meeting which was attended by Mr Stephen Donoghue, who was then the General Manager of Avtex, as well as a CASA airworthiness team leader, Mr Paul Simpson, from the Sydney region. As a result of that meeting, Avtex grounded and inspected all affected aircraft. Although Mr Langmead objected to this evidence going in on the basis that it was not relevant to the AOC holder, but rather only reflected on the maintenance organisation or the COA holder, I indicated at the time that there was an overlap between the maintenance of aircraft operated by Avtex and its AOC because Mr Newberry was the HAAMC of both parts of Avtex. In my opinion, where the AOC holder is also at the same time a COA holder under CAR 30, and there is a common HAAMC, it is simply not possible to distinguish the activities because the AOC holder is required to ensure that the aircraft used under its AOC are satisfactorily maintained. Furthermore, although Mr Harvey agreed that CASA took no action against the COA held by Avtex at that stage, he indicated that investigations into the maintenance aspects of Avtex were continuing by CASA.
40. In October 2007 CASA refused to issue an exemption to Avtex from duty time requirements by issuing a FRMS. According to a memorandum prepared by Mr Weeks on 11 April 2008, Avtex had not responded to an audit observation issued in December 2006 to completely update its FRMS. This remained outstanding at the time of CASA’s refusal to re-issue the FRMS exemption. Instead, Mr Weeks issued a standard industry exemption against CAO 48 in lieu of the FRMS.
41. Using the investigation powers contained in Part IIIA of the CA Act, CASA also conducted an investigation into the conduct of a contract pilot used by Avtex, Mr Robert Couch. This investigation occurred after it was reported that Mr Couch, as the pilot in command of a Piper Mojave PA-31P operated by Avtex with seven passengers onboard, taxied the aircraft onto an active runway and then backtracked for departure while another aircraft was on final approach for landing. The approaching aircraft aborted its landing. However the CASA investigators were unable to find sufficient evidence to support an offence and no further action was taken.
42. On the same flight referred to in the preceding paragraph, allegations were made by passengers onboard that flight that Mr Couch was intoxicated when reporting for duty one morning. They refused to fly with Mr Couch on that day because they claimed he looked scruffy and worse for wear. They observed him drinking in the hotel on the prior evening. Although the local police attempted to breathalyse Mr Couch, they were unable to do so because they were without power. Avtex flew another pilot and aeroplane to Bourke to transport the passengers. Because it was not possible to determine whether Mr Couch had breached the regulations, no formal investigation report issued.
43. Avtex also had a number of incidents involving its aircraft in November 2006, July 2007 and between January and March 2008. Two of those incidents involved landing gear problems and three involved aircraft engines, including an engine failure in flight. Three of those incidents were caused by pilots not following correct procedures for the operation of their respective aircraft. No incidents were attributed to maintenance conducted by Avtex under its COA. It is noteworthy that on one occasion, where the pilot experienced a rough running engine during a pre-flight engine run up, the engine was repaired by a LAME but the maintenance release was not signed off. This is contrary to a number of the CARs and is a dangerous practice.
44. On 11 April 2008 Mr Weeks prepared a memorandum for Mr Bruce Byron, the then CEO of CASA, setting out the background of CASA’s dealings with Avtex over the previous couple of years. Mr Weeks concluded with the following statement:
A discernable improvement in management safety attitude and proactive engagement with CASA has been observed over the last 18-24 months. The new management team appear to be making genuine improvements in the operation of the organisation. The communication between the operator and CASA is sound.
45. On 9 April 2008 a Metro III aircraft operated by Avtex crashed into Botany Bay shortly after takeoff killing the pilot. The ATSB has not completed its investigation into that accident and its cause remains unknown. The pilot who died in that accident, Mr John Hamilton, was an experienced pilot with approximately 4,500 hours flying time recorded. He had approximately 500 hours on the Metro III aircraft. He was also the chief pilot of Skymaster at that time.
46. Following the Metro III accident, CASA received anonymous reports through the ICC indicating there were serious deficiencies in the training of Avtex pilots, including Mr Hamilton. As a result of those reports, CASA instituted a special risk based audit of Avtex. This was conducted between 11 and 24 June 2008. According to Mr Weeks’ statement dated 2 September 2010, the audit revealed a large number of safety deficiencies in the systems and work practices within Avtex. He identified the most serious systemic deficiencies as:
(a)inadequate endorsement training by the then chief pilot, Mr Steven Myles, including his failure to conduct any or adequate asymmetric training in the course of many Piper Chieftain aircraft endorsements and conducting pressurisation endorsements without taking the aircraft to flight levels which would be sufficient to ensure adequate exposure to emergency procedures following depressurisation;
(b)inadequate training and checking of pilots engaged in Metro III operations;
(c)permitting a pilot to fly a Metro III aircraft as pilot in command without sufficient experience as pilot in command under supervision;
(d)inadequate emergency procedures proficiency training and assessment of flight crew; and
(e)overweight operations in Metro III aircraft.
47. As a result of the audit, CASA issued two SAs and a number of RCAs. As Mr Weeks explained in his oral evidence, a SA is a request for corrective action which must be addressed immediately. A RCA is the next tier down from a SA and, as is explained in the instructions attached to the aviation safety audit report, RCAs refer to deficiencies involving non-compliance with legislation that must be addressed. Ordinarily, the operator is given some time to comply and must record the remedial and corrective action taken in respect of the RCA by the due date set out on that document. If the operator or recipient of a RCA is unable to carry out the corrective action by the due date, it is required to indicate the date by which the corrective action will be completed. There is also a third tier document referred to as an audit observation. That document is used to draw attention to latent conditions or minor deficiencies in a system which cannot be attributed to breaches of current legislative requirements. Its purpose is to raise awareness with a view to avoiding problems in the future. It is also important to bear in mind the fact that CASA may issue a number of RCAs in relation to a single incident which gave rise to CASA’s concerns. Therefore the number of RCAs issued is not necessarily indicative of the number of problems observed by CASA.
48. The two SAs which CASA issued related to the endorsement training conducted by Mr Myles and the requirement for pilots in command on Metro III aircraft to have the required 50 hours flight time ICUS.
49. Mr Weeks testified that the issue of a SA is a relatively rare event. He said that to have two SAs issued in a single audit was particularly significant. As a result of the audit, Mr Weeks formed the view that CASA should take serious and imminent risk action against Avtex. That is, action pursuant to s 30DC of the CA Act. However, CASA abandoned the idea of taking serious and imminent risk action because, according to Mr Weeks, it had seen some improvement in the company in terms of management structure and the deficiencies identified related essentially to the chief pilot. CASA felt that there was an opportunity to give Avtex a second chance. CASA had discussions with Mr Siewert and Mr Donoghue expressing its serious concerns about the safety of Avtex’s operations. Mr Weeks said he discussed the possibility of attaching conditions to Avtex’s AOC in order to alleviate CASA’s concerns regarding safety. As a consequence of that meeting, Mr Siewert applied to have those conditions attached to Avtex’s AOC. The conditions were as follows:
1.No passengers carrying charter or aerial work operations are to be conducted whilst Steve Myles is the chief pilot. Such operations are only permitted to resume upon CASA approval of a new chief pilot;
2.The company must develop multi-crew procedures for and crew Metro aircraft with two qualified pilots when carrying passengers. These procedures to be in place prior to such operations;
3.Implements, by 25 July 2008, a confidential reporting system to provide the Chief Executive Officer (CEO) with information relating to poor operational standards or hazards and risks within the companies operations;
4.Develops a comprehensive, company wide, safety management system, which is fully supported by the CEO, to be implemented by 30 September 2008;
5.Duplicates, via a secure back-up process, all computerised company records and keeps these back-ups in a secure place, such a system to be in place by 31 July 2008;
6.Implements a system of printing pilot flight and duty time records to ensure a permanent record is kept, such process to be in place by 18 July 2008;
7.Employ an appropriately qualified, independent auditor acceptable to CASA. The auditor must conduct comprehensive quality and aviation safety systems audits on a six monthly schedule, commencing no later than 31 August 2008. The company is to provide CASA with a copy of each audit report within three weeks of completion of the audit; and
8.Reviews and where required, amend the company operations manual with such amendments submitted to CASA for acceptance by 30 September 2008.
50. Shortly thereafter CASA issued a show cause notice to Mr Myles, stating it proposed to suspend or cancel his approval as chief pilot and check pilot of Avtex. CASA also notified Mr Myles of its proposal to cancel, suspend or vary his instructor rating and to revoke the Instrument of Delegation which was issued to him in respect of the endorsement and conversion training of pilots. After considering a response from Mr Myles, CASA cancelled Mr Myles’ chief pilot approval, suspended his instructor rating and revoked the Instrument of Delegation.
51. Following the meeting with CASA in July 2008 regarding the conditions to be placed on Avtex’s AOC, Avtex accepted the conditions and nominated Mr Donoghue to be the chief pilot of Avtex. While Mr Peter Telling had been approved as HOTC in May 2004, after Mr Myles became the chief pilot of Avtex, he indicated that although he was HOTC, he said I haven’t done much lately. Mr Telling was under the impression that Mr Myles had assumed responsibility for the role although it had not been formalised. Also, in a letter dated 8 July 2008, Mr Siewert wrote to Mr Malcolm Campbell of CASA stating that Avtex continued to view Mr Myles as an excellent chief pilot even though there has been some alleged inconsistency in his training methods … . Mr Siewert said that there was a shortage of experienced pilots to meet the requirements of chief pilot and Avtex wished to continue to employ Mr Myles as chief pilot. Also, on 29 August 2008, Mr Couch was approved as HOTC for Avtex.
52. Mr Donoghue’s oral evidence was that he accepted the Avtex chief pilot position on the basis that it operated solely the turbine powered aircraft. He was not prepared to act as chief pilot if Avtex continued to operate piston engine aircraft as well as the turbine engine aircraft. According to Mr Weeks, that resulted in a business decision to transfer the piston engine aircraft operations to Skymaster under its AOC. Of course Mr Hamilton had been the chief pilot of Skymaster and, following his death, Skymaster could not operate under its AOC without a chief pilot. Mr Peter Hanley was duly appointed as its chief pilot.
53. On 23 October 2008, CASA received an application from Avtex to have condition number two (referred to above) removed from its AOC. CASA rejected that application. Mr Weeks expressed surprise that Avtex, some two months after CASA almost cancelled its AOC, sought to have conditions which it agreed should be imposed on its AOC, altered or removed. Mr Weeks agreed that Avtex had met the timelines for implementation where they are set out in the conditions, but he noted that this was in its infancy and the conditions needed to remain to ensure that there was never a repeat of the situation which led to the conditions being imposed.
54. Between the time of the Metro III accident on 9 April 2008 and the Canley Vale Road accident on 15 June 2010, there were a number of significant events which need to be briefly stated.
55. To enable Avtex to continue operations under its AOC, CASA attached eight conditions. One of those conditions required Avtex to engage an independent auditor to conduct quality and aviation safety systems audits on a six monthly schedule. Avtex engaged the services of ACS to satisfy that condition. The first audit by ACS took place between 29 August 2008 and 1 September 2008. Following that audit, ACS provided a very brief, five page audit report. The report is undated.
56. The persons present or contacted during the audit included Mr Siewert, Mr Donoghue, Mr Myles and Mr Couch. The assessment objective was said to be to establish whether Avtex had an organisational structure to satisfy the safe and secure operations defined in lines of authority and responsibility throughout its organisation. The assessor was said to be Mr Ken Lewis. Mr Lewis was not called to give evidence at the hearing of this matter. The significant findings and recommendations were:
(a)the company had produced a new operating manual which was yet to be approved by CASA;
(b)a single copy of a safety policy signed by the CEO was found hanging on an obscure wall;
(c)although some job descriptions were in the proposed operating manual, ACS suggested those should be in a discrete chapter; furthermore, Mr Lewis could not find a job description for the CEO;
(d)communications to aircrew and staff did not appear to be robust as operational requirements were readily accessible and they were taped to computer modules in the pilot’s crew room;
(e)Mr Lewis recommended that a formal management review committee be formed and that it meet not less than once every 12 months with records of the meeting to be kept and held on file;
(f)Avtex needed to put into place a document control system covering all of its manuals including engineering and maintenance and a separate manual needed to be produced which enlarged on the existing material in the proposed company operations manual;
(g)although a chapter dealing with risk management existed in the proposed company operations manual, Mr Lewis did not consider it to be satisfactory and management staff needed to receive training in risk analysis;
(h)Mr Lewis recommended that a formal quality assurance audit program be introduced with selected company personnel receiving auditor training from an approved organisation;
(i)Avtex should appoint a flight safety officer with the proposed operations manual outlining the duties and responsibilities of that position; and
(j)Mr Lewis recommended that Avtex put in place a confidential incident reporting system.
57. ACS completed a second audit between 26‑27 March 2009. It produced another brief report, six pages in length. Avtex personnel who were contacted in the course of the assessment included Mr Donoghue, Mr Couch, Mr Newberry and Mr Steve Morgan, who was the spare parts manager. Unlike a number of statements to the contrary, according to ACS, by examining the documentation, they found Mr Siewert played an active role in the company including chairing the company safety committee. Once again, the report is very sparse on detail. There are six observations noted in the report and they are:
(a)Avtex has a management system which was adequate for its operation;
(b)Avtex satisfied the CASA AOC requirements;
(c)Avtex had the necessary resources to conduct safe operations;
(d)Avtex had appropriately licensed air crew;
(e)Avtex had appropriately licensed maintenance engineers;
(f)Avtex had some documentation which did not comply with industry best practice; and
(g)Avtex needed to review its quality control process.
58. The report then detailed six recommendations arising out of the audit. Those recommendations involved:
(a)the storage of gas cylinder storage trolleys;
(b)relocating oxygen cylinders;
(c)a more robust revision process should be enforced for the distribution and confirmation of the procedures manual revisions (it is unclear what is meant by this);
(d)the stores area should be cleaned out;
(e)Avtex should develop its own comprehensive internal audit checklist for operations and maintenance; and
(f)Avtex should create a stencil to enable expired life jackets to be marked with the caution DEMONSTRATION USE ONLY.
59. On 15 and 16 September 2009 ACS conducted a third audit. The auditors' report recorded that they interviewed Mr Siewert, Mr Donoghue, Mr Couch and Mr Newberry.
60. The audit purported to address the concerns referred to in the conditions attached to Avtex's AOC regarding quality and aviation safety systems audits. However, many of the matters are not addressed in detail in the report and it makes reference to issues in a superficial manner. Also, it focused on documents rather than assessing whether or not there was any positive implementation of procedures which might ensure quality and aviation systems were in fact activated. Nevertheless, the ACS report concluded that Avtex was complying with Australian legislation and the conditions of its AOC. This is despite the fact that there were no personnel within Avtex at that time who had received any training in SMS. Also, despite its previous recommendation that a safety officer be appointed, that also had not been implemented. Regardless, the auditors concluded that in their view, progress had been made in developing the SMS. Again, no details were given.
61. CASA officers conducted another risk based audit of Avtex between 10 and 16 February 2010. The leader of the audit team was Mr Gregory Worthington, a FOI with CASA. He was accompanied by two flying operations inspectors, three senior airworthiness inspectors and two air transport inspectors. The audit scope was stated to be:
· Operational standards;
· Aircraft load control;
· Crew schedule;
· Airworthiness control;
· AOC operations;
· Operational support systems; and
· AOC conditions compliance.
62. The audit report indicated that its purpose was to determine whether the systems Avtex had put in place would enable CASA to remove the conditions on its AOC. Although Avtex had told CASA previously that its operations would involve only the utilisation of the turbine powered aircraft (SA226 and SA227 aircraft) and the audit focussed primarily on those aircraft and their use, it became apparent during the audit that the company continued to use the Piper PA‑31 piston engine aircraft in its operations. The auditors also noted that the majority of scheduled and unscheduled maintenance on the turbine powered aircraft was carried out by ANA and that Avtex, under its COA, only occasionally certified for completion of minor maintenance work.
63. Of considerable concern was a finding by the auditors that many of the issues raised in the June 2008 risk based audit remained. They included:
(a)Metro endorsements not conducted in accordance with CAO 40.1.0;
(b)type endorsement ground school training completed in one day, in contradiction to the operations manual;
(c)CAO 20.11 checks conducted without removing emergency exits;
(d)proficiency checks not conducted in accordance with CAR 217;
(e)aircraft exceeding structural and performance limitation; and
(f)the carrying of passengers during training flights.
64. A number of the CASA findings in the course of this audit were disputed by Avtex. I deal in detail with those issues below. In addition to a number of RCAs being issued, a SA was also issued in respect of Mr Couch, who was then HOTC. CASA found that Mr Couch had not completed a proficiency check as required by CAR 217(2) and that his last proficiency check was on 24 July 2008 by Mr Myles. According to CASA, that invalidated any check and training duty undertaken by Mr Couch after 24 March 2009. This audit resulted in Avtex ceasing its flying operations and that position has remained as at the date of the hearing of this matter.
65. RCA number 322118 indicated that Avtex acknowledged the invalidity of proficiency checks undertaken by Mr Couch from 24 March 2009 and it provided CASA with a list of all flight crew affected. It arranged for Mr Couch to undergo a proficiency check under the supervision of Mr Worthington on 15 February 2010. However, this proficiency check was terminated by Mr Telling, who was to be the second pilot, because Mr Couch could not provide answers to questions or scenarios put to him to ensure his knowledge was adequate to establish competency. Mr Telling assessed the proficiency check as a fail. He reported that the effort by Mr Couch was well below the standard for a HOTC position. The audit report also noted that Mr Couch arrived about one and a half hours late for this check flight and that he appeared to be suffering from the effects of alcohol. He was described as having an aroma of alcohol about him. This, it was said, was noted by FOIs Worthington and Kane Du Bois. CASA's concerns about Mr Couch's condition on that day were relayed to Mr Donoghue, who was then the DAMP supervisor. It was Avtex's responsibility to then conduct alcohol and drug testing in accordance with CASR 99.050. There is no evidence this was undertaken.
66. Also of serious concern to CASA was the implementation of a comprehensive, company-wide SMS. Although the requirement to implement a SMS arose out of the June 2008 audit, CASA noted that a SMS manager was only appointed in November 2009. Furthermore, the SMS manager, Mr Morgan, had not had any formal training nor had any of the senior management of Avtex, including the chief pilot and the HAAMC.
67. In addition to the SA, some 24 RCAs were issued. The airworthiness branch also issued four ASRs. Five RCAs were issued regarding the airworthiness of aircraft used in the AOC operation. According to the auditors, the airworthiness component of the AOC audit identified a disturbing culture and revealed that pilots were not adequately discharging their regulatory responsibilities. In particular, the auditors identified a culture of pilots not always recording defects and there appeared to be a willingness to operate the aircraft past the due date for required inspections. The audit report stated that Avtex had a poor and disorganised approach to the management and control of airworthiness matters which was demonstrated by a system of poor record control. The audit report stated that a particular concern was that Avtex failed to satisfactorily monitor, and ensure compliance with, conditions and requirements associated with the piston engine TBO extension program which was approved by CASA on 7 January 2002. The auditors particularly referred to s 28BD and s 28BE of the CA Act which deal with compliance with civil aviation law and a duty to exercise care and diligence.
68. The findings of the audit team in respect of airworthiness were that Avtex's management failed to ensure that it had adequate personnel and systems in place to effectively discharge its responsibilities for airworthiness control.
69. On 28 May 2010, prior to the Canley Vale Road accident, CASA served on Avtex the first show cause notice referred to above. That show cause notice listed 28 RCAs and 1 SA. It also referred to the audit conducted by ACS on 15 and 16 September 2009. The show cause notice concluded that:
(a)Avtex had not complied with the Regulations and the CAOs applicable to it on numerous occasions and had breached the conditions specified in s 28BD of the CA Act which deals with compliance with civil aviation law;
(b)Avtex's directors had not taken all reasonable steps to ensure that every activity covered by its AOC had been done with a reasonable degree of care and diligence and therefore breached s 28BE of the CA Act;
(c)because of the numerous regulatory breaches referred to in the notice, it appeared Avtex failed to maintain an appropriate organisation with a sound and effective management structure to ensure the safe and lawful conduct of its AOC activities and thereby breached s 28BF(1) of the CA Act; and
(d)Avtex had not properly maintained a reference library and it therefore breached s 28DH of the CA Act.
70. On 15 June 2010 a PA-31P aircraft operated by Skymaster crashed while attempting to make an emergency landing on Canley Vale Road near Bankstown Airport. The pilot had reported an in-flight engine shut down and was attempting to return to Bankstown Airport. The cause of this crash remains unknown as the ATSB has not yet concluded its investigation. It has released a preliminary report into the accident. Following this accident, CASA conducted a special audit of the Skymaster operations between 22 and 29 June 2010.
71. Mr Langmead submitted that any operating problems experienced by Skymaster while operating aircraft under its AOC could not and should not be taken into account in the decision to cancel Avtex's AOC. He referred to the evidence given by Mr Roger Chambers, a CASA officer who is the acting manager of the Sydney Region General Aviation Office. Mr Chambers said that if Skymaster's AOC was cancelled, Avtex’s AOC would also have to be cancelled because it would simply take over the operations previously carried out by Skymaster. In fact, Mr Langmead submitted that although the cause of the Metro III accident in 2008 and the Canley Vale Road accident in 2010 were not known, they were the key reasons why CASA took administrative action against Avtex's AOC which resulted in its cancellation. Mr Langmead submitted that while that may be convenient for CASA's purposes, the merging of the distinct operations is illogical and without foundation.
72. However, given the significant overlap of key personnel in both Skymaster and Avtex's operations, it is my opinion that Mr Langmead's submission overstates the position. While it may be possible to distinguish some aspects of the operations of each entity by reason of decisions taken by the chief pilot of either company, it is nevertheless significant and relevant to examine the influence exerted by those persons whose activities are common to both companies. Those personnel were identified by Mr Harvey and I have referred to them above.
73. A team of CASA specialists, including flying operation inspectors, airworthiness inspectors and specialists from the disciplines of safety management systems, alcohol and other drugs, and fatigue risk management systems, conducted a special audit of Skymaster activities between 22 and 29 June 2010. According to Mr Chambers, who initiated the audit, it revealed a large number of safety deficiencies in the systems and work practices in place within the Skymaster AOC organisation. The audit resulted in three SAs being issued by CASA. A number of RCAs were also issued. CASA issued an audit report on 12 July 2010 together with separate audit reports of the DAMP and the SMS. Mr Chambers identified two systemic deficiencies which he regarded as most serious. They were:
(a)insufficient resources to support the chief pilot leading to poor safety outcomes particularly in the area of pilot training and monitoring flying standards; and
(b)insufficient resources to support the position of HAAMC as Mr Newberry had multiple responsibilities across both Skymaster and Avtex AOCs and the Avtex maintenance organisation.
74. Mr Chambers then summarised those matters which fell within the description of poor safety culture and recent service difficulties. These issues are dealt with in more detail below, including Avtex's response to the allegations levelled against it by CASA.
SIGNIFICANT ISSUES UPON WHICH THE AOC CANCELLATION DECISION WAS MADE
75. In the course of hearing this matter, numerous issues were raised which caused CASA concerns about the safety of the Avtex and Skymaster operations. I do not propose to examine in detail every matter identified by CASA during its audits of both organisations between 2008 and 2010. However, there are a number of crucial issues which go to the heart of the safety of operations under Avtex's AOC and which were vigorously contested by Avtex. My findings in relation to these matters are central to the outcome in this case.
defective endorsement training
76. Mr Myles was appointed chief pilot of Avtex on 21 November 2005. On 26 July 2007 he was approved by CASA as a check pilot. Mr Myles also held a Grade 3 (aeroplane) Flight Instructor rating. On 26 July 2007 CASA made an Instrument (No 252/07) under CAR 7(1), delegating a number of CASA's powers to Mr Myles and also providing to him certain approvals. This Instrument of Delegation and Approval is highly significant and its operation controversial. I have set out in full the relevant parts of that Instrument.
Delegation and approval – Steven Norman Myles
1 Delegation
I delegate to
Steven Norman Myles, Aviation Reference Number (ARN) 165144
CASA's powers and functions:
(a) under subregulation 5.14 (2) of CAR 1988; and
(b)under subregulation 5.19 (3) of CAR 1988 to conduct flight tests applicable to the renewal of command (multi-engine aeroplane) instrument ratings on condition that the delegate holds:
(i)a current command (multi-engine aeroplane) instrument rating; and
(ii)an aircraft endorsement for the aircraft in which the flight test is to be conducted; and
(c)under subregulation 5.23 (2) of CAR 1988;
In relation to applicants who:
(d)are employed by or working under an arrangement with Avtex Air Services Pty Ltd, trading as Airtex Aviation, ARN 408867; and
(e)require the rating or endorsement for their employment or working arrangement.
2. Approval
(1)For subregulation 5.20 (1) of CAR 1988, I approve the delegate to give flying training for the issue of command (multi-engine aeroplane) instrument ratings on condition that the delegate holds:
(a)a current command (multi-engine aeroplane) instrument rating; and
(b)an aircraft endorsement for the aircraft in which the flying training is to be conducted.
(2)For subregulation 5.21 (1) of CAR 1988, I approve the delegate to give aeroplane conversion training on Metro 3/23 type aircraft to commercial (aeroplane) pilots and air transport (aeroplane) pilots:
(a)who are employed by, or are working under an arrangement with, Avtex Air Services Pty Ltd, trading as Airtex Aviation; and
(b)on condition that the delegate holds an aircraft endorsement for the aircraft in which the training is to be conducted.
3 Current rating
For this instrument, a rating is a current rating if:
(a)under the Civil Aviation Orders, the rating is current; and
(b)the rating was issued, or was last renewed, on the basis of a flight test conducted:
(i)by a CASA flying operations inspector; or
(ii)by a person approved by a CASA Team Leader Flying Operations to conduct the flight test.
4 Conditions
The delegate may conduct a flight test relating to use of a navigation aid or procedure with a grade of instrument rating only if:
(a)the delegate currently meets the requirements for use of that navigation aid or procedure; and
(b)the requirements were satisfied on the basis of a flight test conducted:
(i)by a CASA flying operations inspector; or
(ii)by a person approved by a CASA Team Leader Flying Operations to conduct the flight test.
5 Expiry
This instrument stops having effect at the earlier of:
(a)the delegate ceasing to be employed as chief pilot by Avtex Air Services Pty Ltd, trading as Airtex Aviation; or
(b)the end of June 2010.
77. In order to understand the extent of the delegation and approval, it is necessary to set out the relevant CARs referred to in the Instrument. CAR 5.14(2) provides:
(2) Subject to subregulation (3), CASA must issue a flight crew rating, or grade of flight crew rating, to a qualified person, or renew the person’s rating, or grade of rating, by entering the rating, or grade of rating, in the person’s personal log book only if:
(a) the person has passed the necessary flight tests; and
(b) the person satisfies the other requirements; and
(c) any other condition to be met by, or in relation to, the person has been met;
78. The flight crew ratings and grades of flight crew rating are referred to in CAR 5.13.
79. CAR 5.19(3) deals with the flight tests relating to flight crew ratings and grades of flight crew ratings. It provides:
(3)CASA may conduct the flight tests in relation to a flight crew rating, or grade of flight crew rating, that are required by the Civil Aviation Orders.
CAO 40 covers pilot licences and ratings.
80.CAR 5.23(2) deals with aircraft endorsements. It provides:
(2)Subject to subregulation (3), CASA must issue an aircraft endorsement to the holder of a flight crew licence, a special pilot licence or a certificate of validation by entering the endorsement in the holder’s personal log book if, and only if, the holder satisfies the requirements for the issue of the endorsement.
81.CAR 5.20(1) provides:
(1)CASA may approve a person who holds a pilot licence to give flying training for the issue of a flight crew rating, or a grade of flight crew rating.
CAR 5.20(2) provides that CASA may give an approval to give training subject to any condition that is necessary in the interests of the safety of air navigation. The Instrument issued to Mr Myles at cl 2(1) sets out those conditions.
82.CAR 5.21(1) provides:
(1)CASA may approve:
(a)a person who holds an aeroplane pilot licence to give aeroplane conversion training; or
(b)a person who holds a helicopter pilot licence to give helicopter conversion training.
83. Mr Myles first came to the attention of CASA following the Metro III fatal accident on 9 April 2008. The ICC received an anonymous letter regarding poor standards of check and training practices at Avtex. The author of the letter stated that Mr Myles completed Metro III endorsements for Mr Hamilton, Mr John Saad, Mr Sandor Antal, Mr Scott Coakley and possibly others. According to the author, none of those pilots received formal ground school training. Mr Myles' Instrument of Delegation and Approval authorised him to give conversion training on Metro III type aircraft to pilots who were employed by, or were working under an arrangement with Avtex.
84. Following CASA's audit conducted in June 2008, it found that Mr Saad and Mr Antal stated they did not receive the ground school training. CASA noted that Avtex's Operations Manual Part C, which deals with flying training conducted under CAR 217, did not indicate the way in which the ground school training was to be delivered. CASA raised a RCA in respect of this. CASA also noted that written exams completed by pilots undergoing conversion training were not completely corrected. This aspect was also the subject of a RCA by CASA.
85. A more significant aspect of the training conducted by Mr Myles was in respect of the PA‑31 aircraft. At that time, Avtex was operating the piston engine fleet of aircraft as well as the turbine engine aircraft. The first problem recognised by CASA was the fact that Mr Myles was not providing adequate endorsement training for flight in pressurised aircraft. The duration of the flights examined were clearly not sufficient for the aircraft to have climbed to above 10,000 feet and to have conducted a depressurisation followed by an emergency descent. CASA noted that after discussions with Mr Myles, Mr Donoghue and Mr Siewert, Mr Myles and Mr Siewert stated that all pilots not properly endorsed for pressurised aircraft would be re-endorsed as soon as possible.
86. Of more concern to CASA was that it discovered most pilots who had completed a Piper Chieftain endorsement did not conduct any asymmetric training. When questioned about this, Mr Myles emphatically denied conducting endorsements without asymmetric training. CASA contacted 26 pilots endorsed by Mr Myles and asked them a number of questions regarding asymmetric training in the course of endorsement. Eleven of those pilots said they had not received that training. One pilot said he was unsure and four pilots said they had only carried out one engine failure drill. Ten of those pilots said they had conducted one or two drills. CASA also recorded that most of the pilots who said they conducted one or two drills were not definite in their answers. This was discussed with Mr Myles, Mr Donoghue and Mr Siewert.
87. Subsequently, Mr Myles did not deny that many pilots had not received asymmetric training in the course of their endorsement. This resulted in CASA issuing a SA requiring Avtex to rectify the defective endorsements before continuing any further activities under its AOC. Mr Campbell, a team leader in the flying operations Sydney Region General Aviation Office, was present at meetings held following the June 2008 audit. Mr Campbell said in a written statement dated 22 September 2010 that although Mr Siewert did not accept that the PA‑31 endorsements were conducted by Avtex, he nevertheless gave an undertaking to revalidate the training and that none of the affected pilots would be rostered until this had been completed. In fact, Mr Siewert provided Mr Campbell with a letter dated 8 July 2008 to that effect. In that letter, Mr Siewert said:
The training and type endorsement provided by Steve Myles was not provided under the Airtex AOC. As you will be aware, the Airtex CAR 217 Organisation Approval only extends to its Metro III aircraft. Airtex hired aircraft to Steve who was providing the endorsement training using his personal CASA authorisations. Because of this, the ASR in respect to the training and endorsement, provided to pilots not in Airtex employ, may not be applicable to Airtex.
88. In his statement, Mr Campbell said he was not satisfied that those pilots who, when contacted, said that they had completed one or two simulated engine failures in the course of the endorsement, had in fact received an adequate endorsement. In his view, an adequate endorsement would involve the completion of a minimum of five correctly handled engine failures to demonstrate competency. Mr Campbell provided Mr Donoghue with a list of pilots and their contact telephone numbers. These were the pilots CASA was concerned had not received sufficient asymmetric training in the course of their endorsement on multi engine piston aircraft by Mr Myles. This list was sent by email on 1 July 2008. On the following day, Mr Donoghue wrote to Mr Campbell confirming that the remedial action which was discussed on the previous day with Mr Weeks was to:
(a)identify all pilots on the list currently flying for Avtex and who had not received asymmetric training and to cease flying immediately until independent asymmetric or remedial training could be undertaken; and
(b)identify pilots who had been trained by Mr Myles and had yet to complete asymmetric training, as a matter of urgency, arrange further training by an independent instructor.
89. Mr Donoghue also pointed out in his letter that prior to Mr Myles' appointment as chief pilot, he (Mr Myles) conducted endorsement training independently using his instructor rating and twin training approval with the hire of Avtex's aircraft. Mr Donoghue said that the pilots were sourced independently by Mr Myles. He said that Mr Myles continued his practice of endorsing pilots after he became chief pilot because the company took the view that the better candidates would prove a good source of contract pilots for use by Avtex. Mr Donoghue also said:
During the previous afternoon Dieter Siewert previously contacted all pilots to establish the level of training and to make arrangements for retraining and/or stop flying. With the help of your list the following pilots have been stood down pending retraining. . . .
90. In his letter of 8 July 2008, Mr Siewert said that Avtex's compliance with the SA was delayed because the alert addressed only generic issues without initially supplying specific details such as the names of pilots CASA believed were inadequately endorsed. With respect to Mr Siewert, this statement is difficult to reconcile with the fact that the RCA dealing with Mr Myles' endorsements was issued on 1 July 2008 and was responded to by Mr Donoghue on the following day. Mr Siewert also said that without access to Mr Myles' log book, Avtex had to delay action until CASA supplied Avtex with a list of pilots whose endorsements were in question. However, and there seems to be no dispute about this, the email with the attached list of pilots who were the concern of CASA's RCA was sent to Mr Donoghue on 1 July 2008.
91. In his letter of 8 July 2008 Mr Siewert also repeated the statement that Mr Myles provided the endorsement training using his personal CASA authorisations and that as far as the endorsements related to pilots who are not employed by Avtex, this was outside Avtex's control. Mr Siewert said Avtex did not accept legal responsibility for pilots not employed by Avtex but nevertheless, it was prepared to make available a retraining and rectification program to those pilots at no expense to them.
92. In his evidence-in-chief, Mr Siewert said it was his opinion that the RCA should not have been served on Avtex, but rather on Mr Myles, as he was exercising the privileges granted to him personally by CASA. Mr Siewert said that Mr Myles did endorsements on twin engine aircraft on weekends with the permission of Avtex. He said that Mr Myles would pay Avtex for the use of the aircraft. Mr Siewert denied that Mr Myles had ever endorsed a pilot on a PA‑31 aircraft in the course of his employment with Avtex. Although Mr Siewert acknowledged that some of the pilots on the list provided by CASA were working for Skymaster at the time, he did not believe any worked for Avtex. However, subsequently Mr Siewert acknowledged that it may not have been as clear as he suggested because of the changeover to Skymaster taking over the piston engine operations of Avtex. Mr Siewert then suggested he could not distinguish between the two.
93. Mr Langmead submitted that Mr Myles conducted PA‑31 endorsement training in his own time, using aircraft which he hired from Avtex or Wingaway, apparently relying on the authority of his instructor rating. Mr Langmead submitted that Mr Myles was entitled to do this.
94. With respect to Mr Langmead, I cannot accept this submission as being correct. However, Mr Langmead correctly submitted that the delegation and approval instrument, which was described by him as the CAR 217 delegation, did not authorise Mr Myles to conduct endorsement training for pilots outside Avtex. Clause 1 of the Instrument deals with delegation. The only possible relevant delegation is that contained in cl 1(c) which refers to CAR 5.23(2). While that delegation most certainly authorised Mr Myles to issue an aircraft endorsement to the holder of a flight crew licence, which was normally done by the attachment of what is described as a sticky label to the pilot's log book and providing the counterpart to CASA, the delegation only authorised the issue of endorsements where the applicants were employed by or were working under an arrangement with Avtex and they required the endorsement for their employment or working arrangement.
95. Furthermore, the Instrument of Delegation and Approval is clearly intended to be read as a complete document. The delegations in clause 1 plainly relate to the approvals in clause 2. For example, the approval to conduct flying training for the issue or renewal of a CIR is linked to the delegation to issue or renew that rating if the pilot has passed the necessary flight tests and satisfies any other requirements for the issue of that rating. Likewise, the approval to give conversion training on the Metro 3/23 type aircraft is linked to the delegation to issue an aircraft endorsement to the holder of a flight crew licence if the holder satisfies the requirements for the issue of the endorsement for that aircraft. It should also be abundantly clear that all of the delegations and approvals in the Instrument are related to Mr Myles’ approval to act as chief pilot of Avtex. The Instrument plainly did not give approval to Mr Myles to give conversion or endorsement training on the PA-31 aircraft and it must follow that it did not delegate CASA’s power to issue an aircraft endorsement for that aircraft type.
96. It was common ground that when Mr Myles conducted the endorsement training on the 26 pilots in question, they were not employed by or working under an arrangement with Avtex. The endorsement or conversion training preceded their employment arrangements with Avtex. Therefore, as Mr Langmead submitted, the only possible legal means by which Mr Myles conducted endorsement training was as a result of him holding a Grade 3 Instructor rating. However, there are significant difficulties with this submission.
97. A Grade 3 Flying Instructor rating is the most restrictive instructor rating which can issue. As is clear from a reading of CAO 40.1.7, paragraph 9.1, a Grade 3 Flying Instructor may give flying training for the issue of an aircraft endorsement for a multi engine aeroplane provided he can satisfy the requirements in paragraph 9.7. However, as is stated in paragraph 9.1(a), this must be done under the direct supervision of the chief flying instructor or a Grade 1 Flight Instructor. The expression direct supervision is defined in paragraph 9.1.1 which provides:
direct supervision means guidance and supervision provided by an instructor who is on duty for that purpose and:
(a) is on the premises of the flying school; or
(b)is flying in a local flying training area or an associated circuit area used by the flying school and can be contacted by radio.
98. It should be apparent that CAO 40.1.7 only permits a Grade 3 Flying Instructor to give endorsement training at a flying school under the direct supervision of the chief flying instructor or a Grade 1 Flight Instructor. Therefore, if Mr Myles in fact hired aircraft to conduct endorsement training, one might reasonably expect Mr Myles to have hired the aircraft belonging to a flying training school. Undoubtedly, there are many of these situated at Bankstown Aerodrome. Avtex does not conduct a flying training school. I have no doubt that Mr Siewert was aware, or should have been aware given his past experience as a commercial pilot, of the limitations attached to a Grade 3 Flying Instructor rating. If it was the case that none of the flying schools at Bankstown operated PA‑31 aircraft, then it seems logical that Mr Myles would have arranged the hire of an Avtex aircraft by a flying training school for the purpose of allowing Mr Myles to conduct endorsement training. However, there was no evidence that occurred. If, as Mr Siewert said in his evidence-in-chief, Mr Myles was conducting endorsement training on multi engine aircraft prior to becoming the chief pilot of Avtex, then no doubt Mr Myles had access to suitable aircraft which were either owned or hired by the flying training school where such endorsement training took place.
366. Although CASA has also referred to Mr Donoghue’s failure to comply with night recency requirements set out in CAO 82.0 by flying as a supervisory pilot for another pilot, Mr Donoghue accepted that he was in error in considering he could do so. It is a relatively minor point although I accept that it does point to Mr Donoghue’s lack of knowledge of the regulatory material involved in aviation. CASA also pointed to a number of other minor errors made by Mr Donoghue in relation to recording instrument flying time, indicating that as chief pilot, a higher level of awareness and responsibility should have been demonstrated. While I accept that to be the fact, the errors made by Mr Donoghue were relatively minor and no doubt serve as a reminder to Mr Donoghue to take more care in recording flight instrument times.
367. Mr Donoghue’s response to CASA’s finding that Mr Barker was not qualified to conduct an international passenger carrying flight in a Merlin III aircraft because he had not accrued 10 hours experience as pilot in command in that aircraft type prior to undertaking the flight is of greater significance. Although aware of the class endorsement provisions contained in CAO 40.1.0 and the requirement for a pilot to be competent when operating different aircraft models in accordance with CAO 82.1, he overlooked the provisions in paragraph 4 of CAO 82.1. That paragraph requires persons acting as pilot in command in charter operations under the IFR to have 10 hours experience as pilot in command of the aircraft type. This is clearly a safety related provision which, in my opinion, Mr Donoghue should have been aware of. As the chief pilot, it was his responsibility to ensure that charter flights conducted by Avtex pilots were both lawful and safe. I find that he failed to do so.
368. Mr Donoghue expressed the view that pilots on board, but not sitting in either of the seats which provide access to the flying controls of the aircraft, nevertheless constituted operating crew as that expression is defined in the CAR. He denied that passengers were ever carried on training flights, although there were pilots on board for the purpose of taking a turn in operating the aircraft at some stage during the flight. In fact, in his evidence-in-chief, Mr Donoghue insisted that although pilots were on board for the purpose of retraining and should be considered as operating crew, they nevertheless were only ferried to Wagga where one of the pilots got out and then the training continued. After the first pilot had completed his training, presumably the aircraft landed and the second pilot for training got in and completed his training. However, there was also other evidence given by Mr Donoghue that in fact three pilots were onboard on a training flight which went to Richmond and he was onboard the aircraft when Mr Myles was undergoing training by Mr Couch. If Mr Donoghue was genuinely of the view that the expression operating crew included pilots who were waiting their turn to exchange seats with the pilot then undergoing training, there of course would have been no need for the landing at Wagga and the disembarkation of the non-operating pilot or pilots. As I have already indicated above, the note to the definition of the expression operating crew must be read in context. It does not include a pilot who is sitting in the aircraft awaiting his or her turn to undergo proficiency checking or training. Perhaps the most significant aspect of this issue is the fact that until the problems were brought to Mr Donoghue’s attention, he appeared to be unaware of the prohibitions regarding the carriage of passengers on certain flights as set out in CAR 249.
369. Mr Donoghue was responsible for ensuring that Avtex pilots’ did not exceed RTOW in the course of their operations. To do so is to breach CAR 235 and CAO 20.7.1B. Despite being aware that the Aleda data had not been updated since 2008, he allowed pilots to continue to use that information. It had the potential to result in a safety issue. I find that simply attempting to supplement the Aleda charts by using ERSA and NOTAMs was, as CASA submitted, unsatisfactory.
370. CASA was also critical of Mr Donoghue for his lack of familiarity with the 2004 TCM and the subsequent proposed 2009 TCM. Mr Donoghue’s subsequent assumptions regarding acceptance by CASA of the amendments made to the TCM are cause for serious concern. One would reasonably expect the chief pilot of an AOC holder to take significantly greater care to ensure all operations are conducted in accordance with approved documents. This is particularly so with the statutory requirements for proficiency checking.
371. Mr Donoghue said in evidence that he enlisted the help of ACS, Mr Couch and a Mr Arthur White to develop the SMS. Despite that assistance, some 18 months after the condition was placed on Avtex’s AOC to implement the SMS, it remained at an unsatisfactory stage of development. The safety manager, Mr Morgan, did not receive training under the SMS until June 2010 and no other key personnel had attended any SMS training course. Mr Donoghue said that he was involved in the steps and processes in the course of development of the SMS. Overall, the SMS development has been unsatisfactory and there was no evidence of strong support from Mr Donoghue for that. I find that the lack of meetings and action taken in respect of safety reports is evidence of the company simply going through the motions, without being committed to the development of an SMS.
372. I have already mentioned above the extensive problems I have found with the process of defect reporting and the entry of defects on maintenance releases. It seems to me that Mr Donoghue should have actively and strongly supported pilots to endorse maintenance releases with whatever they considered to be defects and, when pilots expressed difficulty with the chief engineer about having maintenance work conducted, he should have actively supported the pilots and reported the conduct of the chief engineer to Mr Siewert. In my view, this aspect of Mr Donoghue’s performance as a chief pilot was wholly unsatisfactory.
373. CASA submitted that Mr Donoghue’s evidence and manner of presentation of evidence left the impression that he was prepared to readily accept the suggestions of others and adopt them as his own. CASA cited a number of examples of this behaviour. I agree with that submission. Furthermore, Mr Donoghue’s conduct as chief pilot strongly suggests that either his views were closely aligned with that of Mr Siewert, or he adopted Mr Siewert’s views in spite of understanding that they might have safety consequences. The chief pilot’s role has often been described as having a foot in both camps. By that I understand that the chief pilot acts as CASA’s observer of the operations of the AOC holder with a view to keeping CASA informed before safety issues arise. On the other hand, he is also an employee of the AOC holder and has duties to that entity. However, the chief pilot’s primary role, in my opinion, is the oversight of the safe operation of the AOC holder and its compliance with all regulatory material. The chief pilot must not be persuaded by any person’s views which might jeopardise the safety of the operation. In my opinion, Mr Donoghue failed to meet this standard.
Mr Newberry
374. Mr Newberry’s role as HAAMC for Avtex and Skymaster and also of the certificate of approval section of Avtex, places him in a pivotal position regarding the airworthiness of aircraft operated by the AOC holder. With respect to Mr Newberry, and I mean no criticism of him at all, that position should be occupied by a LAME. My concern is that a person without engineering qualifications placed in such a position will almost invariably be influenced and possibly controlled by the engineer who heads up the engineering operation of the AOC holder, if it has one. As the legislation currently stands, there is no formal qualification required for a person in this position. In fact, CASA approval for the appointment of the HAAMC is not required, unlike that for the chief pilot. It may be that CASA should examine this issue with a view to making appointments to this position subject to its approval.
375. While there was evidence before me about the resources available to Avtex, particularly in relation to the maintenance of the aircraft, at the conclusion of hearing all of the evidence regarding the maintenance of the aircraft used by the AOC holder, I am seriously concerned about the state of airworthiness of those aircraft. There was ample evidence from former pilots of Avtex and one of CASA’s flying operations inspectors, Mr Campbell, about the serviceability of aircraft used in the operation. In my opinion, the evidence also discloses a significantly large number of serious mechanical failures which cannot be attributed to causes outside the maintenance organisation.
376. With respect to Mr Newberry, his responses regarding the engine life extension program for the PA-31 aircraft were unsatisfactory. His somewhat carefree assessment about receiving verbal approval to add further engines to the program is not the approach one would expect of a competent and conscientious HAAMC.
377. Mr Newberry’s understanding of the legislative provisions regarding airworthiness issues was demonstrably deficient. His explanations for why defects had not been entered on the maintenance release because they had been detected in the course of conducting maintenance were simply unbelievable. Mr Newberry’s evidence about the reasons for certain failures in components cannot carry any weight. He was not qualified to offer those opinions. The person who was qualified, Mr Lynch, was not called to give evidence. That, in my opinion, was very significant.
378. In summary, Mr Newberry is an inappropriately qualified person to hold the position of HAAMC. His performance in this role does not meet the standard required for the position and it has resulted in poor airworthiness control of the aircraft used by the AOC holder.
CONCLUSION
379. The decision which I must make is discretionary. CASA’s decision in this case was made under the serious and imminent risks to air safety provisions contained in Division IIIA of the CA Act. The decision under review was made under s 30DI of the CA Act. Under that section, if CASA is satisfied that a serious imminent risk to air safety would exist if the AOC were not varied, suspended or cancelled; and the grounds for CASA’s belief are related to the circumstances that gave rise to CASA’s decision to suspend the authorisation under s 30DC, then CASA may vary, suspend or cancel the authorisation. While that was in fact the decision taken, CASA submitted that I could nevertheless proceed to affirm CASA’s decision if I were to find that Avtex had breached a condition of its AOC (at s 28BA(3)). For the reasons I have already set out above, I agree with that submission. Nevertheless, whether I proceed under s 28BA or s 30DI of the CA Act, the decision remains discretionary.
380. I have come to the conclusion that CASA’s decision to cancel Avtex’s AOC was correct. It was the correct response to the safety problems it discovered when closely examining the operations of Avtex. In fact, I am of the view that the decision was correct whether it was based on the serious and imminent threat basis or the breach of AOC conditions basis.
381. Although Avtex seemed to operate for a considerable number of years without any serious problems, for reasons that are not entirely clear, by 2006 CASA was becoming aware of safety issues within Avtex. At that time, both the turbine and piston aircraft operations were conducted by Avtex. The original complaints received were regarding poor maintenance practices. While of course it could be said that these only concern the certificate of approval holder, that is not the case here where Avtex is also an AOC holder. It has a duty to ensure the airworthiness of the aircraft used in the AOC operation. While it need not have its own maintenance organisation to support the airworthiness of the aircraft used in its operation, where it does, it would be reasonable to expect a greater degree of control over maintenance practices thereby ensuring the airworthiness of the aircraft. Unfortunately, the evidence before me indicates the opposite.
382. In 2007 CASA refused to issue an exemption to Avtex from duty time requirements by issuing a FRMS. It had failed to update its existing FMS. Shortly after this, one of Avtex’s Metro III aircraft crashed after take off killing the pilot. That prompted CASA to undertake a special risk based audit of Avtex. The audit disclosed numerous safety problems and CASA issued two SAs as well as a number of RCAs. It also identified problems with the chief pilot of Avtex and it resulted in CASA taking steps to cancel Avtex’s AOC. However, in order to give the company a second chance, Avtex agreed to eight conditions being placed on its AOC, including removal of its then chief pilot, Mr Myles. Avtex then separated its piston engine aircraft operations from Avtex, moving those to Skymaster under a new chief pilot, Mr Hanley.
383. As CASA became more involved with Avtex as a result of monitoring compliance with the AOC conditions and responding to requests by Avtex to remove some of those conditions, it discovered further significant safety problems. This culminated in a second risk based audit being conducted in February 2010. To the concern of CASA, it discovered that many of the issues raised in the June 2008 audit remained. This was despite the fact that Avtex now had a new chief pilot, Mr Donoghue, the former general manager of that company. While on the surface it appeared that Avtex was dealing with the issues raised by the audit, closer examination of its operations revealed nothing much had changed.
384. Matters came to a head in May 2010 when CASA served on Avtex a show cause notice referring to some 28 RCA’s and one SA. However, on 15 June 2010 a PA-31P Mojave aircraft crashed while attempting an emergency landing on Canley Vale Road near Bankstown airport. That accident claimed the life of the pilot and a flight nurse. It resulted in a special audit being conducted of the Skymaster operation. Avtex made strenuous efforts throughout the hearing of this matter to quarantine issues involving Skymaster operations. It was apparent from the evidence that while some matters could be excluded, there was a significantly large overlap between the two organisations as a result of common key personnel. Many issues raised in the Skymaster audit became relevant because they involved the same key personnel.
385. The evidence disclosed that the operations of both Skymaster and Avtex were unsafe. While Mr Siewert testified that he was not involved in the day to day operations of Avtex, the evidence disclosed the extent of his influence, particularly over key personnel. That is quite likely why, despite some changes to key personnel following the 2008 audit, nothing changed. I have found that major decisions about the way in which Avtex operated were driven by Mr Siewert. His influence is pervasive in all aspects of Avtex’s operations. While that, from the commercial perspective, comes as no surprise, it does become a problem when commercial imperatives override safety considerations. In my opinion, this is what was happening in Avtex and Skymaster.
386. As Professor Reason explained in his academic paper, it is possible to recognise typical accident (or incident) patterns. The fact that different key personnel are involved in events simply implicates causal factors relating to the workplace and the system at large. Simply changing key personnel without changing the safety culture from the very top of an organisation will not ensure a safe system of working. In my opinion, as CASA submitted, Avtex has a poor safety culture and it cannot change without there being change at the very head of this organisation. There was no evidence before me which might indicate that was likely to happen.
387. I have dealt in some detail with the significant issues which were also highly contentious. Despite close examination, I was unable to find any significant redeeming features about the behaviour of the key personnel in respect of those issues. I preferred the evidence of former pilots of Avtex, because they have no interest in the outcome of this decision whatsoever. The same could not be said of pilots who, until the cancellation of the AOC, continued to fly for Avtex. Also, the former pilots who gave evidence were cross-examined, while those pilots who continue to be associated with Avtex were not. Their statements were also extremely brief and of course, not tested by cross-examination.
388. As for the independent expert evidence given by Mr Quinn, while I have no doubt that Mr Quinn provided a forthright account of his findings when examining Avtex’s operations, it was based on very limited material. He interviewed Mr Siewert, Mr Hanley, Mr Donoghue and Mr Newberry but he did not interview any pilots who were then flying for Avtex. Nor did he attempt to contact any former pilots who had operated either under the Avtex or Skymaster AOC’s. He did not interview Mr Lynch, Mr O’Brien, Mr Couch or Mr Myles. His interviews were with persons who had an interest in putting forward the best possible view of Avtex’s operations. He nevertheless concluded that Avtex’s operation was between reactive and calculative on Professor Hudson’s scale. Despite that, Mr Quinn provided a favourable report regarding Avtex’s safety culture. He arrived at this conclusion even though Professor Hudson explained that safety culture can only be considered seriously in the latter stages of his evolutionary ladder. He said that prior to that, up to and including the calculative stage, the term safety culture should be described as formal and superficial structures, rather than being an integral part of the overall culture. In my view, Mr Quinn’s assessment was correct, but his conclusion is plainly incorrect.
389. In addition to the evidence disclosing the existence of a serious and imminent risk to air safety, it also disclosed many breaches of the conditions of Avtex’s AOC, both those conditions expressly stated on its AOC and those imposed by the operation of Subdivision E of Division II of the CA Act. I find that the directors’ of Avtex did not take all reasonable steps to ensure that every activity covered by the AOC and everything done in connection with those activities was done with a reasonable degree of care and diligence. I also find that Avtex did not at all times maintain an appropriate organisation with a sufficient number of appropriately qualified personnel and a sound effective management structure having regard to the nature of its operations. Therefore, I am also of the view that if CASA were minded, it could have relied on s 28BA(3) of the CA Act for the purposes of coming to its cancellation decision.
390. In my opinion, CASA’s decision to cancel Avtex’s AOC was correct. I affirm that decision.
I certify that the three hundred and ninety [390] preceding paragraphs are a true copy of the reasons for the decision herein of
Mr Egon Fice, Senior MemberSigned:
………[sgd] Elise Montalto….………….…………
Associate
Dates of Hearing 23, 24 September 2010
5, 6, 7, 8, 18, 19, 20, 21, 22 October 2010
15, 16, 17, 18, 19 November 2010
Date of Decision 4 February 2011
Counsel for the Applicant Mr H. J. Langmead SC
Mr T. W. Quinn
Solicitor for the Applicant Norton White Lawyers and Notaries
Counsel for the Respondent Mr I. Harvey
Solicitor for the Respondent Civil Aviation Safety Authority
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