Brazel Agricultural Services Pty Ltd and Civil Aviation Safety Authority

[2006] AATA 379

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2006] AATA 379

ADMINISTRATIVE APPEALS TRIBUNAL          № V2005/967

GENERAL ADMINISTRATIVE  DIVISION

Re:           BRAZEL AGRICULTURAL SERVICES

PTY LTD

Applicant

And:           CIVIL AVIATION SAFETY

AUTHORITY

Respondent

DECISION

Tribunal:       Mr Egon Fice, Member

Date:1 May 2006

Place:Melbourne

Decision:The Tribunal sets aside the decision under review to cancel the Air Operator's Certificate (AOC) issued to the applicant and in substitution decides that the applicant's AOC should be reinstated on the condition that no flying operations should take place unless the aircraft operating under that AOC are equipped with a serviceable tachometer or a Hobbs Meter to record operating/flying hours.

(sgd) Egon Fice

Member

CIVIL AVIATION – Cancellation of AOC – agricultural operations – recording of total time in service on maintenance release – aircraft periodic maintenance - average spray rates – Air Tractor AT301A aircraft operations – AT301A performance – herbicide and insecticide spraying – swath width – indirect measure of hours flown – statistics – average, mean, mode, median – overflying hours - effect on time-lifed components – corrosion – infringement notice – Satloc diagrams – Avdata records

Administrative Appeals Tribunal Act 1975

Agricultural Chemicals Distribution Control Act 1966 (Qld)

Civil Aviation Act 1988

Civil Aviations Regulations 1988

Briginshaw v Briginshaw (1938) 60 CLR 366

REASONS FOR DECISION

1 May 2006  Mr Egon Fice, Member

1.      By letter dated 3 December 2004, the Civil Aviation Safety Authority (CASA) informed Mr Gregory Bruce Brazel, the director of Brazel Agricultural Services Pty Ltd (BAS), that consideration was being given by CASA to suspend or cancel BAS's Air Operators Certificate (AOC) under s 28BA(3) of the Civil Aviation Act 1988 (CA Act).  CASA also issued a Notice of Proposed Action to cancel, suspend or vary Mr Brazel's commercial and private pilot licences, although that is not the subject of this application.  Mr Brazel's solicitors responded to the “show cause” letters on 7 January 2005, and on 7 February 2005 Mr Brazel attended an optional show cause conference.  Nevertheless, by letter dated 19 April 2005, CASA cancelled BAS's AOC.  Pursuant to s 31 of the CA Act, BAS seeks a review of CASA's decision to cancel its AOC. 

2. CASA's decision to cancel BAS's AOC was stayed by reason of s 31A of the CA Act for a period of 90 days. BAS then applied to the Tribunal for a further stay. The Tribunal granted a further stay until the first day of the hearing of this matter. After five days of hearing, because the matter had not been concluded, BAS applied for a further stay pursuant to s 41(2) of the Administrative Appeals Tribunal Act 1975 (the AAT Act). The Tribunal granted a further stay until such time as this matter is finally decided. As is provided for in s 31C of the CA Act, the automatic stay provisions set out in s 31A do not affect the powers of the Tribunal to grant a stay pursuant to s 41(2) of the AAT Act.

BACKGROUND

3.      BAS, which was known as Burdekin Cropcair Pty Ltd (Burdekin) prior to the sale of the business to a Mr John Spence, was first granted an AOC, number N542168, on 13 August 1996.  The AOC was renewed annually.  It authorised BAS to conduct aerial work operations and in particular aerial agriculture operations. 

4.      Mr Brazel has been the sole director of BAS since November 1999.  He was appointed a director on 27 May 1996 together with Bronwyn Joy Brazel, who ceased to act as a director on 2 November 1999.  Mr Brazel is also the sole shareholder of BAS.

5.      On or about 13 March 2004 Mr Brazel sold the business of Burdekin to Mr John Spence.  The sale included the trading name Burdekin Cropcair and Mr Brazel changed the name of the company to Brazel Agricultural Services Pty Ltd which retained the AOC.  Mr Brazel notified CASA of the sale and that he no longer continued to operate an aerial spraying business.  He indicated that BAS might recommence business at some future date and therefore he sought to retain the AOC.  He requested that the name of the holder of the AOC be changed to Brazel Agricultural Services Pty Ltd.  Mr Brazel was also the chief pilot under that AOC.  Burdekin became BAS on 25 February 2004.  CASA issued a new AOC number N542168‑07 to BAS on 2 June 2004.  BAS's AOC is effective from 2 June 2004 to 30 September 2006.  Aerial work operations under this AOC are limited to aerial agricultural operations.

6.      Mr Brazel's Chief Pilot Approval was first granted on 30 August 1996 in relation to the AOC at that time approved for issue to Burdekin.  Under instrument number TLFO04/117, Mr Brazel's approval as a chief pilot was changed to BAS on 20 August 2004. 

7.      Mr Brazel, who holds a commercial pilot licence endorsed with a Grade 1 aerial agricultural rating, has had some 18 years' experience in commercial aerial agricultural operations.  He has about 8300 hours flight experience, of which about 7900 hours are in aerial agricultural operations.  He has operated his own aerial agricultural business as chief pilot since 1996. 

8.      Concerns about the operations of BAS were brought to the attention of CASA by Mr Spence shortly after he purchased Mr Brazel's business.  Included in the sale of the business was an Air Tractor model AT301A aircraft, registration VH-SNC, which BAS used in its operations.  At the time of purchase, prior to settlement, the AT301A aircraft had logged a total time in service of 5617.4 hours.  The then current maintenance release, № 033737, was issued when the aircraft’s total time in service was 5544.5 hours, indicating that it had flown some 72.9 hours since its issue.  The next periodic maintenance was due on either 23 April 2004 or when the aircraft's total time in service reached 5644.5 hours.  In other words, the aircraft was still some 27.1 hours away from its next scheduled maintenance at the time it was sold to Mr Spence.

9.      When Mr Spence presented aircraft VH‑SNC to North Queensland Aviation Services for its next 100‑hourly inspection on or about 15 April 2004, it required extensive additional work, particularly as a result of corrosion which was discovered on the rudder torque tube; the elevator trim; and particularly on the aileron attachment plates.  There were also some areas of corrosion apparent on external surfaces.  Because of the additional work required to remove the corrosion, Mr Spence received an account for $23,857.38 for that periodic maintenance, rather than the $5000 which he expected would be the cost of that maintenance.

10.     A dispute erupted between Mr Brazel and Mr Spence which resulted in Mr Spence enquiring into the past maintenance records of aircraft VH-SNC and examining aerial spraying records and fuel records which were kept by an employee of BAS, Mr S.A. Gray.  As a result of his enquiries, Mr Spence arrived at the conclusion that there had been a substantial under‑recording of flying hours on the maintenance release for aircraft VH‑SNC.  After examining the spraying records kept by Mr Gray, Mr Spence, who estimated that the AT301A aircraft was capable of spraying on average about 35 hectares per hour, believed that there was a deficiency of at least 66 hours on the maintenance release.  Based on Mr Gray’s records, Mr Spence contacted CASA and explained his findings.

11.     A CASA investigator, Mr J. Jones, was asked to conduct an investigation into the complaint made by Mr Spence.  Mr Jones, a former Australian Federal Police officer for some 27½ years, has been employed by CASA as an investigator for the past 3 years.  Relying principally on information obtained from a fuel book and a chemicals load book kept by Mr Gray as well as statements provided by eight of the farmers for whom BAS had conducted spraying work, Mr Jones compiled a preliminary spreadsheet in which he attempted to reconcile the hours recorded in Mr Brazel’s pilot’s log book and the relevant maintenance releases for aircraft VH‑SNC as well as two other aircraft then operated by BAS, VH-ZAP and VH‑KQC, between 2 January 2002 and 23 March 2004.  BAS sold VH-ZAP in about April 2002 and VH‑KQC in about December 2002.  Mr Jones therefore focussed his attention on the operations of the remaining aircraft, VH‑SNC.  In his original assessment, Mr Jones believed that he had identified some 65 discrepancies between the pilot’s log book and the relevant maintenance releases over a period of 10 months between May 2003 and March 2004.  According to Mr Jones, this amounted to approximately 40‑50 per cent under‑recording of the total time in service of aircraft VH‑SNC.  Mr Jones submitted his initial report in late September or October 2004 and he recommended that infringement notices be issued in relation to six of the discrepancies he had identified.  The infringement notices each cited that Mr Brazel, as pilot in command of VH‑SNC, failed to record on the maintenance release the total time in service of the aircraft at the end of the day contrary to reg 43B of the Civil Aviations Regulations 1988 (CAR).

12.     Mr Brazel admitted liability in respect of each infringement notice issued under Part 17 Division 3 of CAR and he paid the prescribed penalty, $330, in respect of each infringement.

13.     Prior to CASA issuing the notice of cancellation of BAS’s AOC on 19 April 2005, Mr Jones also obtained fuel data records from BP Air in respect of BAS.  After making a comparison of the hours logged on the relevant maintenance release and total fuel usage, he concluded that there was a deficiency of 139.1 hours logged or an under‑recording of 42.9 per cent of hours flown.

14.     By letter dated 3 December 2004 (the show cause letter), CASA informed BAS that consideration was being giving to suspending BAS’s AOC.  In essence, the show cause letter explained that CASA had conducted an investigation into the recording of the hours of operation and flight times by BAS and Mr Brazel and that this examination disclosed substantial under‑recording of total time in service on the maintenance releases relating to aircraft VH‑SNC.  The show cause letter explained that, using a “mean spraying rate of 45 hectares per hour”, Mr Jones had calculated that 56.7 hours of total time in service were unrecorded on the maintenance releases relating to VH‑SNC.  CASA said that it had adopted the so‑called “mean spraying rate” of 45 hectares per hour on the basis that Mr Spence, Mr Brazel and other experienced agricultural pilots engaged in aerial spraying of chemicals had told Mr Jones that experienced agricultural pilots could achieve rates between 35 hectares per hour and 60 hectares per hour, depending on the conditions at the time of application of the chemicals.  In addition, although it is not entirely clear, it appears that, having examined some farm invoices, spray records from Thuringowa City Council and Avdata records, CASA concluded that in fact 64.7 hours were not recorded on the maintenance release of VH‑SNC.

15.     The show cause letter explained to BAS that aircraft VH‑SNC had “time-lifed” components with the time and life limits expressed in hours, cycles of operation or calendar time.  In essence, CASA claimed that Mr Brazel and BAS were required by CAR 43B to record the total time in service in the current maintenance release on the completion of flying operations on each day that the aircraft was flown.  Because the aircraft had a number of time-lifed components, the show cause letter explained that failure to accurately record the time in service of the aircraft placed the airworthiness of that aircraft at serious risk.  Because of the alleged breaches of CAR 43B, CASA claimed that in view of its findings regarding the failure to record flying hours in the maintenance release, BAS had breached the conditions of its AOC.

16.     Mr Brazel was also served with a show cause notice, dated 3 December 2004, which explained that CASA was also considering cancelling his commercial and private pilot licences.  The basis for that proposed action was set out in identical terms to the show cause notice served on BAS. 

17.     Mr Brazel’s solicitors, Bolton Cleary & Kern, responded to CASA’s show cause letters by letter dated 7 January 2005.  On 7 February 2005, Mr Brazel attended an optional show cause conference which was held in Townsville.  Essentially, Mr Brazel admitted that there were errors in the recording of total time in service on the maintenance release but he said that they were due to human error because he was under great pressure during that period of time.  Also, he had commenced a ground spraying operation in conjunction with his aerial spraying in about October 2003 and that operation added to his difficulties and some confusion when recording flight times.

18.     Despite Mr Brazel’s explanation for his failure to record the total time in service of aircraft VH‑SNC on its maintenance release, CASA served on BAS a notice of cancellation of the AOC on 19 April 2005.  In the cancellation notice, CASA made it clear that it relied on information received from Mr Jones, Mr Spence and Mr Brazel that an experienced agricultural pilot engaged in aerial spraying of chemicals would spray between 35 and 60 hectares per hour depending on the conditions at the time of spraying.  CASA then stated that:

…Adopting a mean spraying rate of 45 hectares per hour John Jones has calculated 56.7 hours of total time‑in‑service was unrecorded on maintenance releases of VH‑SNC based on the invoices obtained from the company’s customers.

19.     CASA also stated that:

(xvi)In respect of the 64.3 hours of flight time shown on the monthly totals from Gregory Brazel’s logbook (60.4 hours progressive total) and 58.4 hours recorded time‑in-service monthly (54.6 hours progressive total) the farm invoices Thuringowa City Council records and Avdata records disclose a further 64.7 hours that was not recorded on the maintenance release of VH‑SNC.

20.     The notice of cancellation of the AOC also acknowledged that the six instances of disparity between Mr Brazel’s pilot’s log book and the time recorded on the maintenance releases for VH‑SNC, which were the subject of six infringement notices, had been taken into account and CASA was not limited to utilising those discrepancies solely for the purpose of the infringement notices, but rather it could also rely on those infringements for the purpose of considering whether BAS’s AOC should be cancelled.  Although CASA accepted that Mr Brazel’s records may have been affected to a minor extent by human error by the persons responsible for keeping those records, it was satisfied that they were not so inaccurate as to limit their evidentiary value.  CASA concluded that BAS and Mr Brazel failed to record time in service on the maintenance release of VH‑SNC to such an extent that a significant risk to aviation safety had occurred.

21.     On 9 February 2006, immediately prior to the hearing, CASA filed a witness statement by Mr Jones with the Tribunal.  Attached to that statement were a number of schedules which Mr Jones had prepared after he had received additional documents, being job cards for BAS for the period between January 2003 to March 2004, and also tax invoices provided to various clients during that period.  Mr Jones also received further fuel records from BP Air and he set out a summary of those records in his witness statement.  Mr Jones concluded that his subsequent analysis of the fuel records was generally consistent with and confirmed the results of his first analysis based on what he described as a “mean average fuel burn rate” for an AT301 aircraft of 150 litres per hour.  Mr Brazel denied the accuracy of Mr Jones’ calculations regarding the under‑recording of hours in the maintenance release based on chemical usage and fuel usage rates.

CONSIDERATIONS

Under‑recording of hours on maintenance release

22.     Following Mr Spence’s complaint to CASA after the sale of VH-SNC to him by BAS, Mr Jones attempted to reconcile operating times recorded in the maintenance release of all three of the aircraft operated by BAS between January 2002 and 23 March 2004. Initially, Mr Jones obtained a copy of the relevant maintenance releases, Mr Brazel’s pilot’s log book, the fuel and chemical records kept by Mr Gray, some invoices from clients of BAS, and some flight data from Air Services Australia and Avdata which records aircraft movements.  According to Mr Jones, there were a number of discrepancies when he made his first examination, including four entries in Mr Brazel’s pilot’s log book which had no corresponding entries on maintenance releases for the aircraft operated by BAS, five entries recorded on maintenance releases with no corresponding entries in the pilot’s log book, eight occasions where records from Air Services Australia and Avdata disclosed aircraft movements which were not recorded in either the maintenance releases or Mr Brazel’s pilot’s log book, and 48 occasions where no entries appeared in either Mr Brazel’s pilot’s log book or the maintenance releases.  Although Mr Jones compiled a composite table setting out his findings, he later substantially modified it when he obtained further records and in particular documents described as job cards, which set out the detail of all chemical applications made by BAS between January 2003 and 23 March 2004, and also a copy of the invoices sent to the clients of BAS for those services.  He subsequently restricted his investigation to the operations of the AT301A Aircraft VH‑SNC between January 2003 and 23 March 2004.  Mr Jones initially concluded that some 64.7 hours which had been flown by VH‑SNC had not been recorded on its maintenance release.  This, according to Mr Jones, represented a substantial under-recording of the hours flown by that aircraft.

23.     It is apparent that Mr Jones’ first analysis relied heavily on the fuel and chemical usage figures provided to him by Mr Gray.  When the business of BAS was sold to Mr Spence, Mr Gray, who was previously employed by BAS as a load operator, left the employ of BAS and went to work for Mr and Mrs Spence for about two to three months.  According to a statement provided by Mr Gray, which he made on 23 June 2004, prior to working for BAS he had no experience as a load operator for an agricultural chemical application operation.  To assist in learning the tasks involved in working as a load operator, Mr Gray kept some notes about chemical mixing.  He had found an old book of records in the office of BAS and decided that he would keep records for his own purposes, similar to those that he had seen previously used.  He said that Mr Brazel did not require him to keep a record of the chemicals or fuel used but that if he wished to do so, he could.  When he commenced full‑time employment in May 2003 with BAS, he kept two books, a fuel book and a chemical book.  Mr Gray said that he made entries in the fuel book when he was having a break at the office at Ayr aerodrome.  He also said that the fuel book was largely inaccurate for the reason that:

(a)there was a period of about four months before Mr Spence took over the business where he did not keep any records at all because the fuel meter on the bowser had broken;

(b)there were some days where he simply forgot to enter fuel records in the book and he would either take a guess at how much fuel had been used or he would make no entry at all;

(c)he would sometimes write the details of fuel used on his hand and he would wash his hands or forget to write down that reading in his fuel book;

(d)he sometimes filled a jerry can or a 200 litre drum with fuel and would forget to record it and he also filled the jerry can to use in the motors of mixing tanks and that was not recorded; and

(e)from time to time fuel would be sold privately to other aircraft owners and he did not record that as fuel used.

24.     Mr Gray also said that the chemical book which he kept was inaccurate for the reason that:

(a)there were times when he forgot to make entries in the book;

(b)he would sometimes realise after the event that he had forgotten to make an entry in the book and he would estimate the quantity of chemicals that had been used and would write that in as a rough guide;

(c)he used information contained on job cards before those jobs had been completed in order to record the quantity of chemicals used, although farmers would sometimes change their orders before the work was conducted and those changes would not be recorded in his chemical book; and

(d) on occasions he recorded details from job cards where those jobs did not proceed. 

25. Despite the statement made by Mr Gray, among the documents provided to the Tribunal under s 37 of the Administrative Appeals Tribunal Act 1975 was a letter prepared by Mr Spence which was signed by Mr Gray on 21 April 2004.  The text of that letter is as follows:

To my knowledge the total hectares, litres of chemical and names are true and correct.

According to Mr Spence he presented this letter to Mr Gray to sign on the date indicated in the letter and he asked Mr Gray whether its contents were correct to which Mr Gray answered “yes”.  However, in stark contrast to what Mr Spence said, and what is said in the letter that he prepared for Mr Gray, is the statement made by Mr Gray that while he was working for Mr Spence, Mr Spence came up to him and said “I’ve got something for you to sign.  It’s just a piece of paper, and it’s nothing against you so just sign it”.  Mr Gray said that he was not sure what was on the piece of paper as he suffers from dyslexia and, coupled with the fact that he was in a hurry to load the aircraft, he did not read the letter or comprehend what was actually written.  Mr Gray was not called to give evidence at the hearing and therefore I was not afforded the opportunity of observing Mr Gray under cross‑examination.  Nevertheless, I have no reason to doubt Mr Gray’s explanation set out in his written statement.  I also have some concerns about Mr Spence’s behaviour having observed him give evidence.  Mr Spence did not attempt to conceal the fact that he is extremely bitter towards Mr Brazel and that he intends to pursue him for damages as a result of CASA adding some 285 hours to the total time in service on the maintenance release of aircraft VH‑SNC as a consequence of its investigations.  Because of Mr Spence’s open hostility towards Mr Brazel, I had difficulty in accepting his evidence and prefer what Mr Gray had to say in his written statement. 

26.     The chemical records kept by Mr Gray are not, by themselves, conclusive.  They do indicate the number of hectares sprayed although I have serious doubts about their accuracy.  However, Mr Jones later had access to the job cards created by Mr Brazel in the course of conducting the business of BAS and those job cards state, with some degree of accuracy, the chemicals used and the number of hectares sprayed.  According to Mr Brazel, he was required to maintain records of all chemicals used in order to comply with the Agricultural Chemicals Distribution Control Act 1966 (Qld).  He believed that the job cards were an accurate record of chemical distribution although, on some occasions, the records were incorrect as they disclosed distribution by aerial means when in fact they were distributed via a ground spraying rig referred to as a “coupe”.  The job cards are the only documents which expressly state the date on which the spraying took place.

27.     According to Mr Brazel, the Avdata records do not provide an accurate record of flights and are unreliable.  As Mr Brazel pointed out, CASA accepted that certain Avdata records, which disclosed that the AT301A aircraft VH‑SNC was at Cairns on 16 January 2003 and at Mt Isa at a time when the aircraft was in fact being serviced by North Queensland Air Services and unable to fly, are incorrect.  Mr Brazel explained the errors by stating that other aircraft used the callsign of his aircraft so that they would not be invoiced for a landing at the particular airfield identified.  Mr C.G. Webb, a flying operations inspector employed by CASA and stationed at Townsville, confirmed that errors occurred and said that he had been invoiced for his own aircraft on about six occasions in the last five and a half years for flights which he had not undertaken.  Nevertheless, according to Mr Webb, Avdata records were generally reliable.

28.     Although Mr Jones received some fuel data records from BP Air prior to the cancellation notice being served on BAS, he requested and received further fuel records from BP Air after the notice of cancellation.  Mr Jones admitted that he encountered some difficulties in reconciling the precise periods of purchase, the use of the fuel and the fact that some fuel may have been used for other aircraft or other purposes, but he nevertheless said that the records were sufficient to support his findings that the fuel acquired by BAS between 29 January 2003 and 28 February 2004 would have enabled Mr Brazel to fly VH‑SNC for some 324.1 hours at an average fuel burn rate of 150 litres per hour.  Mr Jones is not a pilot and the basis for concluding that an AT301A aircraft would burn fuel at an average rate of 150 litres per hour was not clear.  He merely said, I understand the mean average (sic) fuel burn rate for an Air Tractor to be 150 litres per hour.  According to Mr Jones, the actual time logged in the maintenance release for VH‑SNC during that period was 193.7 hours.  Therefore, working from the fuel records, Mr Jones concluded that some 130.4 hours or 40.2 per cent of hours flown had not been recorded.  For the reasons set out below, I have considerable difficulty in accepting Mr Jones’ calculation of under-recorded hours based on fuel purchases. 

29.     Mr Brazel’s evidence was that not all fuel that he purchased was used in the operations of BAS.  Some was sold to other aircraft operators and some to drag car racing enthusiasts.  A substantial quantity was also stolen.  Furthermore, Mr Brazel said that the AT301A aircraft VH‑SNC consumed, on average, approximately 160 litres of fuel per hour.  He said that was a rough guide only and that it was never below 160 litres per hour.  However, the aircraft would consume up to 200 litres per hour on take‑off under full power and about 185 litres per hour when operating at full rich mixture. 

30.     Mr B.A. Foster, a commercial pilot with some 33 years experience in the operation of general aviation businesses including charter, flying training, aerial agricultural operations and maintenance, gave evidence on behalf of BAS.  Although CASA objected to Mr Foster being treated as an expert witness, I am satisfied that Mr Foster is a highly qualified commercial pilot with substantial experience in agricultural operations and that his oral evidence was relevant and of value.  He holds a Class 1 agricultural rating and he is a CASA approved test officer for the issue of pilot licences and ratings.  He has in excess of 18,000 flight hours experience.  Furthermore, in January 2006, he operated the AT301A aircraft VH‑SNC for a period of two weeks.  According to Mr Foster, the average fuel burn rate for the aircraft was approximately 170 litres per hour.  He also confirmed that he would, based on his experience, operate the engine using a relatively rich mixture due to higher power settings in hot conditions where a richer mixture would help to keep the engine cooler.  He also indicated that the fuel consumption in the AT301A aircraft could be as high as 200 litres per hour depending on weight and temperature. 

31.     Mr W.G. Pearmine, a commercial pilot who operated an aerial crop spraying business at Ayr until June 2005, and who has in excess of 1,000 hours as a pilot on an AT301 aircraft, gave evidence on behalf of CASA.  He said that he would lean the mixture of the aircraft back to produce a consumption rate of 150 litres per hour.  He also said that he operated the aircraft “on the rich side of lean”.  He agreed that fuel usage would depend on the operation and he accepted that some operators do use between 170 and 180 litres per hour. 

32.     In contrast to the evidence given by Mr Brazel, Mr Foster and Mr Pearmine, is the evidence of Mr Spence and Mr Webb. 

33.     Mr Spence, in his evidence in chief, said that fuel usage on the AT301A aircraft VH‑SNC was approximately 135 litres per hour.  However, in cross‑examination, he was directed to fuel records which he maintained for aircraft VH‑SNC between 15 March 2004 and 15 April 2004.  It was pointed out to Mr Spence that the fuel usage that he had logged in that four‑week period was exactly 160 litres per hour.  At first Mr Spence suggested that the entries had been made by his wife and therefore he could not vouch for their accuracy.  When it was pointed out that from 1 April 2004, the entries appeared to have been made by him, although he accepted that they were his entries, he said that they were not 100 per cent accurate.  Mr Spence insisted that he used the manufacturer’s recommended figures but he agreed that his own fuel records did not support a claim of average fuel usage of 135 litres per hour for that aircraft.  Mr Spence’s refusal to accept his own calculations regarding fuel usage for aircraft VH‑SNC did not give me any confidence in his evidence on this point. 

34.     Mr Webb said that the rate of fuel burn of an AT301 aircraft was 148 litres per hour.  He said that the radial engine which is fitted to an AT301 must be run on a rich fuel mixture at low altitude to assist in cooler engine operating temperatures.  This accords with the evidence given by other operators regarding operations of the AT301A aircraft, although the fuel flows suggested by Mr Webb are substantially lower.  He said in evidence that he had in excess of 400 hours as a pilot on the AT301 aircraft and that he had flown VH‑SNC.  Mr Webb is the holder of a Grade 2 agricultural pilot rating and has held that rating since 1997.  He would not accept Mr Brazel’s assessment of a fuel flow between 170 and 180 litres per hour.  He maintained that in his experience, operating the aircraft at 36 inches manifold pressure with a rich mixture would result in a fuel flow of 148 litres per hour.  Mr Webb would not accept the statements made by Mr Foster, Mr Brazel, Mr Spence or Mr Pearmine.  I was somewhat surprised when Mr Webb told me that he had never seen a pilot’s operating manual for the aircraft.  I therefore asked Mr Lithgow, counsel for BAS, if that document could be provided to the Tribunal.  Subsequently, Mr Lithgow produced to the Tribunal a facsimile transmission from Mr Foster which had attached to it what appeared to be extracts from the pilot’s operating manual, including a table entitled “Suggested Engine Operation Table” which appeared to be from the Grumman company.  According to Mr Foster, the extracts from the pilot’s operating manual came from the aircraft VH‑SNC and the suggested engine operating table, although headed “Grumman”, came from Pratt and Whitney, the manufacturer of the 1340 radial engine fitted to VH‑SNC.  Although Mr Harvey put to Mr Foster that the Grumman figures were not applicable to a Pratt and Whitney engine fitted to an Air Tractor aircraft, I accept Mr Foster’s explanation that the performance data set out in the table are exactly the same as that produced by Pratt and Whitney.  Mr Foster also explained that, working on the figures which relate to 91/96 octane fuel (100 octane in Australia), the maximum continuous power setting on a Pratt and Whitney 1340 radial engine is 33 inches manifold pressure and 2,200 RPM at an altitude below 4500 feet.  According to the Grumman table, that would result in an approximate fuel flow of 56 US gallons per hour which is the equivalent of 201 litres per hour.  Mr Foster also provided some data obtained by one of his pilots, Mr A. Cowan, when operating VH‑SNC on 17 February 2006 at 8:15 a.m.  The data was obtained using a Sadin fuel flow meter and the readings taken on that flight indicated a maximum continuous power setting of 34 inches manifold air pressure (which is the maximum set out in the AT301A Flight Manual) and 2,200 RPM with a fuel flow of 198 litres per hour.  What was described as work power, 32 inches manifold air pressure and 2,100 RPM, produced a fuel flow rate of 182 litres per hour.

35.     Taking into account all of the evidence relating to fuel usage rates of the AT301A aircraft VH‑SNC, I am inclined to accept the figures given by Mr Brazel and Mr Foster.  In other words, I accept that the average fuel consumption rate for VH‑SNC is likely to be significantly higher than that contended by CASA.

36.     Mr Jones’ calculations regarding the number of hours which were not recorded on the maintenance release are predicated on what he described as the “mean average spray rate of 45 hectares per hour”.  Putting aside for the moment the fact that the word “average” is commonly used to refer to the mean, the reason for selecting a mean spray rate of 45 hectares per hour is not clear.  According to the notice of cancellation of BAS’s AOC, advice received from Mr Jones, Mr Spence, Mr Brazel and other experienced agricultural pilots was that a pilot engaged in aerial spraying of chemicals would spray between 35 hectares per hour and 60 hectares per hour depending on the conditions applying at the time.  CASA then stated:

Adopting a mean spraying rate of 45 hectares per hour John Jones has calculated 56.7 hours of total time in service was unrecorded on the maintenance releases of VH‑SNC based on the invoices obtained from the company’s customers.

37.     It should be apparent that 45 is not the mean of the scores 35 and 60.  The mean is of course derived by adding together the scores and dividing by the number of scores which, in this case, results in a mean of 47.5.  Apart from that obvious error, it seems that what Mr Jones has attempted to do is to calculate an average of two figures which themselves are averages; a mathematical exercise which cannot, in any event, produce an average of any kind.  In order to obtain a mean spray rate, if that was intended, one would have to note the hectares sprayed on each job and the time taken for each job, divide the hectares by the time taken for each job (so producing a score), record each score, aggregate the scores and divide the resultant by the total number of scores.  This will produce a mean spray rate.  It is not clear why Mr Jones stated that a mean spraying rate of 45 hectares per hour was used other than the fact that he was told that experienced agricultural pilots could average between 35 and 60 hectares per hour.  However, the figure selected by Mr Jones has no sound basis. 

38.     Also, strictly speaking, the mean is not the average although it does have characteristics that may make it the best to use in many circumstances when attempting to measure central tendency (see How to Think about Statistics, John L Phillips, 6^th edition, 2000 at p 25).  As the author of that publication explains, there are several types of average, the most common being the mean, the median and the mode.  The median is calculated by ranking the scores in order and taking the score half way down the list.  It is the score where half are higher and half lower.  The mode is the score which most members have.  As was pointed out by P. Axelrod in a paper entitled Mathematics, Statistics and Science for AAT Members, dated 24 October 2005, the mean is sensitive to extreme values and therefore if a population has an extreme case at one end or the other of the normal curve, it can throw the average away from what one might consider to be typical.  The median, on the other hand, is insensitive to the extremes and is more representative of what is typical rather than the mean.  If a population is normally distributed, the median, mean and mode are precisely the same.  However, in a distribution skewed one way or the other, they are different.  CASA has completely ignored these fundamental principles of measuring central tendency. 

39.     An examination of the chart attached to Mr Jones’ witness statement discloses that the size of the lots sprayed by Mr Brazel for his clients varied between 2.63 hectares and 720 hectares.  In fact, the entire mosquito spraying operation which was conducted on behalf of Thuringowa City Council involved extremely large tracts of land.  In addition, there are a number of scores in the population which are significantly higher than the others.  In my opinion, this is sufficient to cause a skewed result if one were to use the mean (even if correctly calculated). 

40.     In addition, as Mr Brazel has pointed out, there are many variables which will affect the spray rate of the aircraft.  Those variables include:

(a)the nature of the crop sprayed;

(b)the chemicals to be applied;

(c)the distance required to be flown from loading the aircraft to spraying (ferry time);

(d)the size of the field;

(e)the presence of obstacles; and

(f)the skill of the pilot.

According to Mr Foster, the term “mean spraying rate” is not a term which is defined or used in the aerial agricultural industry.  According to him, there are too many variables which will affect the spray rate of an aircraft including:

(a) variation in crops which require different mixtures of chemicals and application rates;

(b)the size and shape of the area to be sprayed;

(c)the distance from the base or satellite strip to the area to be sprayed;

(d)the type of aircraft to be used and the spray equipment fitted to the aircraft;

(e)the width of the swath (the effective width of the aircraft spray in each pass);

(f)the particular mix of jobs being undertaken;

(e)the obstacles in and around the area to be sprayed;

(g)the weather and in particular wind conditions on the day; and

(h)the skill and experience of the pilot.

According to Mr Foster, it would not be unusual for an experienced agricultural pilot operating an AT301A aircraft in the Burdekin area servicing the farms serviced by Mr Brazel to achieve working rates of 60 to 70 hectares per hour.   Mr Foster also said that in respect of mosquito spraying along extensive waterways, such as those in the Townsville area, he would expect the working rate to exceed 100 hectares per hour using the AT301A aircraft.

41.     Mr Brazel’s evidence was that, in respect of the large mosquito spraying tasks which he conducted for the Thuringowa City Council in the Townsville area, he could achieve significantly higher spray rates than 45 hectares per hour and that was allowing up to 25 minutes transit time from Ayr to Townsville and return.  Three Satloc (Satellite Location) charts were entered into evidence.  They disclosed the areas sprayed near Townsville on 1 October 2003, 25 January 2004 and 23 February 2004.  Each Satloc printout is to scale, with the scale shown in the bottom left hand corner.  Using that scale, it is apparent that, as Mr Brazel contends, the total lengths of the runs are between 10 and 15 kilometres.

42.     However, as Mr Brazel pointed out, he was not spraying continuously on each run, but he was able to maintain a relatively constant speed of about 220 kilometres per hour with a limited number of turns.  Although not spraying for an entire run, it resulted in a very high rate of coverage, much higher than would ordinarily be obtained spraying herbicide over smaller paddocks which require “more time to be spent off the paddock than on it”.  In fact, according to Mr Brazel, he was able to utilise a swath width of 25 metres when spraying insecticide because he did so using what was described as ULV (Ultra Low Volume) where he was spraying approximately three litres to the hectare.  According to Mr Brazel’s calculation, which appears correct, he was covering approximately 9.1 hectares per minute.  If each run took about four minutes, and if there were 15 runs for one particular job, that would take one hour and in that hour he would cover 546 hectares. 

43.     Mr Brazel acknowledged that the calculation did not take into account turning time and the times when he was not spraying.  It is evident from the Satloc diagrams that the actual length of runs during which time the spray was being applied are considerably shorter than 15 kilometres.  Nevertheless, when calculating hectares sprayed per hour, including the additional time taken for turns and the time during which spray was not in fact being applied, and adding transit time as required, the rate of coverage may well exceed 100 hectares per hour.  For example, a mosquito spraying job which involved 300 hectares was completed for Thuringowa City Council on 19 April 2003, in 2.5 hours.  That is the equivalent of 120 hectares per hour.  Similarly, a mosquito spraying job conducted on 23 February 2004 which involved a total area of 302.84 hectares was completed in three hours, which is the equivalent of 100.94 hectares per hour.

44.     At the other end of the spectrum, when spraying herbicides on much smaller areas, the rate of coverage is significantly lower.  This is in accordance with the evidence of both Mr Brazel and Mr Foster regarding smaller lots.  As an example, on 14 January 2003, the job cards indicate that BAS completed three jobs, spraying herbicide on 5 hectares, 20 hectares and 50.47 hectares of sugar cane, respectively.  Those three jobs comprise a total area of 75.47 hectares and the entry in the maintenance release and Mr Brazel’s pilot’s log book indicate that the time to complete those tasks was 1.5 hours.  That is the equivalent of an application rate of 50.31 hectares per hour over those three tasks.  That figure of course is an average for those three jobs as the time for the individual jobs was not logged.  For that reason I am also mindful of the fact that, statistically, where a number of jobs have been “lumped together” and only one time has been logged for those jobs, that may distort the overall central tendency figure, particularly if a mean is used.  In effect, one would be taking an average of an average which, of course, is not permissible. 

45.     If one were to look at a job completed on a single day, for example 27 January 2003, where 185.68 hectares appear to have been sprayed, the time recorded for that work was 2.8 hours which results in a coverage rate of 66.31 hectares per hour.  Again, this figure may be an average, as it is not clear from the documentation whether this job involved a number of paddocks for the same client.  If one were to look at a smaller job, on 26 February 2003, Mr Brazel sprayed 35 hectares and recorded in the maintenance release a time of 1.9 hours.  That is equivalent to a rate of 18.42 hectares per hour. 

46.     To add to the confusion, and this is dealt with in more detail below, it is apparent that Mr Brazel sometimes recorded hours in his pilot’s log book and maintenance release on dates which the job cards do not indicate any work was conducted.  It is quite likely, as Mr Brazel explained, that either the wrong date was entered in the log book and/or maintenance release or that the entries were made some days after the work was completed

47.     The number of hectares sprayed per hour is of course, as was pointed out by CASA, dependent upon the swath width and the ground speed at which the aircraft is flown during operations.  Mr Brazel contended that he used a swath width of 25 metres utilizing ULV spray when spraying mosquitos.  This swath width only applied to the application of insecticide and not to herbicide.  Mr Foster confirmed that he had used a swath width of 25 metres. 

48.     In cross‑examination, Mr Pearmine, although initially not suggesting that it was impossible to spray using a 25 metre swath width, subsequently said that an AT301 aircraft could not cover a 25 metre swath width.  He said that the limits were predicated on the wingspan of the aircraft being used and the way in which the spray nozzles were set.  According to Mr Pearmine, the maximum swath width when spraying insecticide is 22 metres.  Mr P. Larard, a senior airworthiness inspector employed by CASA and based at Townsville, supported Mr Pearmine’s view; although he relied on what was said to him by a Mr Watt.  Mr Watt apparently conducts spraying at Emerald.  However, Mr Larard admitted that he had only asked Mr Watt about spraying herbicide and not insecticide at ULV. 

49.     Mr Foster, who was recalled to the witness box after he had provided to the Tribunal some further documents, disagreed that the AT301A aircraft could only sustain a swath width of 18 to 20 metres spraying ULV insecticide.  He said that swath width was for 30 litres per hectare work and not ULV.  He agreed that the swath width would be between 18 to 20 metres when spraying herbicide; although he maintained his position about a 25 metre swath width when spraying insecticide.  He disagreed that there would be a problem with wing tip vortices when spraying at a swath width of 25 metres. 

50.     At the end of the day, this aspect is probably not significant as it seems to me to be reasonably clear on the evidence that spraying insecticide in reasonably long and uninterrupted runs results in a significantly higher coverage rate than spraying herbicide over relatively smaller paddocks.  Although Mr Brazel said in evidence that he would spray insecticide at approximately 220 kilometres per hour with a 25 metre swath width, resulting in a coverage rate of some 546 hectares per hour, quite clearly such a rate is theoretical.  Nevertheless, when Mr Brazel conducted spraying for Thuringowa City Council on 21 January 2003, he recorded in the maintenance release a time of three hours.  That three hours apparently also included a small lot of 44 hectares which was not insecticide spraying.  Nevertheless, Mr Brazel sprayed a total of 319 hectares in three hours which equates to 106 hectares per hour.  On 19 February 2003 Mr Brazel sprayed 300 hectares for Thuringowa City Council in a time of 3.2 hours, which is a rate of 93.75 hectares per hour.  On 19 April 2003 Mr Brazel sprayed 300 hectares of insecticide for Thuringowa City Council in a time of 2.5 hours, which is equivalent to a rate of 120 hectares per hour.  Although it is difficult to have confidence in any of the figures referred to, it does not seem unreasonable to accept that Mr Brazel achieved a spray rate in excess of 100 hectares per hour when spraying insecticide. 

51.     There was also considerable dispute about the speed at which the aircraft could be flown when engaged in spraying.  Again, there were a range of views about that speed, depending on the source of the evidence.  Mr Brazel in effect said that he would spray at a speed of up to 117 knots.  However, Mr Webb said that the aircraft would not exceed 108 knots with the power setting for spraying.  In his view, Mr Brazel must have been running the engine at 35 inches of manifold pressure and that was pretty much “fire-walling the engine”.  Mr Pearmine said that he always operated the AT301A aircraft at 110 knots.  I understood that to mean indicated air speed. 

52.     An examination of the pilot’s operating manual discloses that at 110 knots indicated airspeed, the calibrated air speed is approximately 112 knots with the flaps up, which would be the aircraft configuration at this speed.  This calculation of course assumes zero instrument error.  At a pressure altitude of 1,000 feet and an outside air temperature of 30 degrees centigrade, that is the equivalent of 115 knots true airspeed.  Therefore, although Mr Pearmine said in evidence that he flew at 110 knots, assuming that he was referring to indicated airspeed, his true airspeed would have been around 115 knots at a pressure altitude of 1000 feet.  That is not so far removed from the speed at which Mr Brazel claims to have flown, although the pressure altitude of the spray area was not stated.  In any event, the pilot’s operating manual also states that spray runs may be made at 130 to 135 miles per hour when the aircraft is heavy for the reason that these speeds will provide good penetration as well as adequate speed for pull‑ups and turns.  That is the equivalent of flying between 113 knots and 117 knots.  Although the pilot’s operating manual also suggests that as the load diminishes power should be reduced to avoid excessive speed over the crop, and that spray speeds of between 104 knots and 109 knots are normal as the hopper nears empty, it does not disprove Mr Brazel’s statement that he flew at about 117 knots in the course of spraying operations in VH-SNC.  I am therefore unable to discount what Mr Brazel says about the coverage rates he was able to obtain in the course of spraying operations. 

53.     The difficulties associated with attempting to use average spray rates are amplified by the summary table prepared by Mr Jones as a consequence of his investigations.  In that summary table, Mr Jones set out, on a month by month basis, the total hectares sprayed by BAS and the time recorded for each month in both the maintenance release and Mr Brazel’s log book.  That summary also sets out the hectares which Mr Jones believes were sprayed by BAS but for which no time has been recorded.  If the unrecorded hectares figure is subtracted from the total hectares figure, and that figure is divided by the hours set out in the maintenance release (rather than the log book as Mr Jones has done), an average hectares per hour figure can be obtained for each month.  Although this in itself is a gross over‑simplification and probably a distortion of the true position, it discloses rates which vary between 31 hectares per hour and 109.91 hectares per hour.  A slightly different average hectares per hour per month figure was obtained by Mr Jones because he used the pilot’s log book figure in order to calculate the average rate per month.  Whether that is more accurate than using the maintenance release is debatable. 

54.     Despite the very “rubbery figures” produced in the course of Mr Jones’ final calculations, the source of Mr Jones’ primary data was the job cards kept by BAS.  Although not all of the jobs referred to on the job cards resulted in aerial spraying, the date on which the chemicals were applied in the course of completing various jobs and the number of hectares involved is probably accurate.  The reason I am so satisfied is that the invoices issued to clients of BAS are based on the hectare figures stated on the job cards and, if there was any doubt about their accuracy, one would ordinarily have expected the clients to say so.  I am therefore satisfied that Mr Jones’ calculation of the total hectares sprayed (both by aircraft and using the coupe) was fairly close to 13,366 hectares between January 2003 and March 2004.  Of that total, some 2,075 hectares is not accounted for or cannot be identified in the maintenance release of aircraft VH‑SNC.  If all of those hectares were in fact sprayed by the aircraft, that would represent an absence of some 15 per cent of the total time that ought to have been recorded in the maintenance release.  However, for the reasons set out below, even this calculation is likely to be inaccurate. 

55.     What is also apparent from Mr Jones’ tabulations is that there are, at times, hours recorded in the maintenance release which do not correspond with the dates on which the application of chemicals is recorded on job cards.  In fact, there is a period between 22 April 2003 and 27 April 2003 where substantial hours were recorded on the maintenance release but there is no corresponding job card indicating that any spraying work was completed during that period.  To add to the confusion, on two dates there are no entries in the pilot’s log book but there are entries in the maintenance release. 

56.     The aircraft log book also indicates that the aircraft was in maintenance on 23 April 2003 even though some 2.8 hours have been entered in the maintenance release.  A figure of 7 hours has been entered in the maintenance release for 25 April 2003 although that does not appear to relate to any particular job.  However, there is a job card which indicates that work was done between 24 April 2003 and 27 April 2003 on behalf of Gale Air Services.  That job comprised some 551 hectares and there is a recording of 4.5 hours on 27 April 2003 and 1.5 hours on 28 April 2003.  Further, on 30 August 2003, there is a 0.7 hours entry in the maintenance release which the job card merely shows as a commission.  There does not appear to have been any flying on that day.  On 11 November 2003 there is no entry in the maintenance release, and Mr Brazel is of the view that this spraying was conducted using the coupe and not the aircraft.  On 28 August 2003, Mr Brazel logged 2.2 hours in the maintenance release and the job cards indicate that he sprayed some 68.37 hectares.  According to Mr Brazel, those jobs would have taken between 1.2 and 1.3 hours and not the 2.2 hours recorded.  However, no times are recorded at all for 15 August 2003 or 20 August 2003.  Mr Brazel did not dispute that flying took place on those days in accordance with the relevant job cards. 

57.     Mr Brazel’s evidence was that on some occasions, when he forgot to make entries for previous flying, he would add those hours on to the total time in service for a subsequent day.  Although Mr Brazel acknowledged that this was not correct, he said that he thought that it was better to do it that way than not to record anything at all. 

58.     On 2 October 2003 the job card indicates that BAS sprayed 4 hectares.  Although the job card indicated that it was sprayed from the air using VH‑SNC, Mr Brazel said that the job card should have stated “coupe” because it was done from the ground.  He said he was 99.9 per cent sure of that.  Mr Jones’ table for 14 October 2003 discloses no time logged in the maintenance release although 10.53 hectares was sprayed.  An examination of the job card for that particular job shows that the date should in fact be 19 October 2003; and, on that date, 0.6 hours was logged in the maintenance release. 

59.     There was some controversy regarding the spraying of 16.1 hectares on 11 November 2003.  The job card for that particular job was not in evidence and the entries immediately preceding that entry were all ground spraying jobs.  In fact, three jobs which were done on 7, 8 and 9 November 2003 for the same client were all ground spraying jobs.  The invoice for the 11 November job described it as aerial spraying.  Nevertheless, Mr Brazel had some doubt about whether that particular job was completed using the coupe or the aircraft.

60.     On 9 December 2003 a client of BAS was invoiced for spraying some 52 hectares.  Mr Brazel, when shown that he did another job on 11 December 2003 for that same client, remembered that the client had a very sensitive farm and that he did not use aircraft when spraying it.  Although a job card corresponding with that particular client indicated a job was completed on 9 December 2003, there was no number on the job card.  After seeing the job card, Mr Brazel recalled doing the two jobs for that client from the ground.  He remembered lighting fires and using smoke to keep the spray away from the row of houses along the northern side of the client’s property.  This is despite the fact that the job card itself indicates that VH‑SNC was used.

61.     On 18 December 2003, there is an entry of 1.3 hours in the maintenance release and only 0.2 hours in Mr Brazel’s log book.  He was unable to say which was correct. 

62.     On 19 December 2003, the job card discloses that there was aerial spraying of 42.5 hectares although there was no entry in Mr Brazel’s log book or in the maintenance release.  According to Mr Brazel, although the job card indicates that the spraying took place using VH‑SNC, it was a ground job and it had been wrongly entered on the job card.  His reason for coming to that conclusion is that the price on the job card was “$36.00 plus GST” which was the ground rig price for spraying.  Mr Brazel said that the aerial spraying was charged out at $30.00 per hectare. 

63.     On 16 January 2004, the maintenance release and Mr Brazel’s pilot’s log book record 2 hours flown.  The total number of hectares sprayed was 80.51.  Mr Brazel said in evidence that it would not have taken that long and that he must have overstated the hours actually flown. 

64.     There is an entry in the maintenance release of 0.4 hours on 9 February 2004 but there is no job card indicating that any spraying was done on that day.  Again, Mr Brazel could only offer the explanation that it related to a previous job which was recorded at a later date. 

65.     On 10 February 2004, Mr Brazel recorded 1.2 hours in his pilot’s log book but there is no entry in the maintenance release for that date.  The job cards disclose only one job on that date, being 7 hectares; and, according to Mr Brazel, it is unlikely that it took 1.2 hours.  In any event, he accepted that there should have been an entry in the maintenance release. 

66.     Again, on 16 February 2004, Mr Brazel recorded 2.8 hours in his pilot’s log book without a corresponding entry in the maintenance release.  There are two job cards which have the same number and which indicate spraying took place on 16 February 2004.  One of the job cards clearly shows that 20.4 hectares was sprayed using the coupe.  The other job, for 160 hectares, indicates that it was sprayed using the aircraft VH‑SNC.  Although it was suggested that there was some confusion as to whether the correct date was 20 or 28 February 2004, that issue was left unresolved. 

67.     Finally, I should briefly mention two flights made on 13 March 2004 which was the day on which Mr Spence settled the purchase transaction.  There were two jobs which had to be done on that day and, according to Mr Brazel, Mr Spence was not yet sufficiently familiar with the AT301A aircraft nor was he all that familiar with the Burdekin area.  He asked Mr Brazel if he would do those two jobs for him.  Mr Brazel said he could not find the maintenance release and he believed that Mr Spence had it.  He nevertheless went and completed the two jobs and when he finished that evening at approximately 4:00 p.m. he telephoned Mr Spence and told him that he could not find the maintenance release.  Mr Spence told him that it was in the office.  Mr Brazel offered to make the entries in the maintenance release but Mr Spence told him not to worry about it, that he would do it.  In cross‑examination, Mr Spence agreed that the two flights were completed by Mr Brazel at a time when he owned the aircraft.  Mr Spence denied that it was his responsibility to ensure that the maintenance release was filled out for the two flights on 13 March 2004.  This is despite the fact that CAR 43B(1) provides that on completion of flying operations on each day that an aircraft is flown, the owner, operator or pilot in command must record on the maintenance release the total time in service of the aircraft on the day.  While it is clear that Mr Brazel had an obligation under the CAR to record the total time in service of the aircraft on 13 March 2004, the same can be said about Mr Spence. 

68.     All of the evidence dealing with the under‑recording of hours in the maintenance release does not permit me to reach a conclusion as to the exact degree of under‑recording of total time in service for aircraft VH‑SNC.  While there can be no question about the fact that Mr Brazel at times failed to make entries which he should have made in the maintenance release, there are other entries which would indicate that hours have been recorded on dates when flying operations did not take place.  Although a significant number of errors were made in recording total time in service, it is simply not possible, on the evidence, to arrive at any firm conclusion as to how many unrecorded hours that might represent. 

69.     Mr Brazel attempted to show that if one were to accept that for mosquito spraying jobs, the rate of spray should be 100 hectares per hour and that for other smaller jobs involving herbicide spraying, a rate of 60 hectares per hour should be used, then, taking into account hours recorded on the maintenance release which appear to be in addition to the flying jobs recorded by BAS, the resultant is a net deficiency of some 12.3 hours.  Although I do not accept that this is necessarily correct, I have little doubt that the actual unrecorded time in the maintenance release of VH‑SNC is considerably less than that claimed by CASA.  In fact, if I were to take  as a starting point the unrecorded hectares sprayed, that would result in a 15 per cent under‑recording of time.  If I were then to accept some of the explanations given by Mr Brazel regarding the additional hours recorded in the maintenance release, it is entirely feasible that   the under‑recording of hours in the maintenance release may be less than 10 per cent of the total hours flown. 

70.     CASA submitted that the use of an average spray rate is not inconsistent with the costing basis used by BAS.  However, as I pointed out in the course of the hearing, there was no evidence before me regarding the manner in which spraying prices were set.  They could simply have been due to the pressures of the market for this particular service and there was certainly no evidence before me regarding the margins which were applied.  Therefore, in my opinion, the charge out rate per hectare for spraying work may not necessarily be a guide to the rate at which agricultural chemicals can be applied from the air.

71.     CASA also submitted that not all of the flying conducted in aircraft VH‑SNC could be accounted for by simply examining the job cards kept by Mr Brazel.  In fact, as Mr Brazel said in evidence, he did spend some time flying over cane fields spotting for vines so that he could notify farmers of their existence and, of course, then seek to conduct spraying to eradicate the problem.  However, the evidence did not disclose whether Mr Brazel in fact undertook vine-spotting operations in the course of his regular spraying work or whether he conducted discrete flights for that purpose.

Corrosion

72.     In addition to the under‑recording of hours on the maintenance release, in support of its decision to cancel BAS’s AOC, CASA relied on the fact that significant corrosion was detected in the aircraft on the first 100-hourly periodic inspection undertaken shortly after Mr Spence purchased aircraft VH‑SNC.

73.     Before Mr Spence purchased the Burdekin business and aircraft VH‑SNC, he visited and stayed with Mr Brazel in December 2003 for a number of days; and then again in March 2003, just prior to settlement, for a few days.  Mr Spence said that he was given a “free run” to look at the books and records and also the plant equipment and in particular the aeroplane.  According to Mr Spence, he inspected the aircraft on a number of occasions and he also flew it.  He agreed that he went over it carefully and, in his opinion, the aircraft was in reasonable condition at that time.  Although the aircraft had about 27 hours to run before it was due for its next 100-hourly periodic inspection, Mr Brazel said that he offered to deliver the aircraft with a “fresh” 100-hourly inspection but Mr Spence declined and was prepared to accept the aircraft without the next 100-hourly inspection being completed. 

74.     However, just prior to settlement of the sale, according to Mr Brazel, Mr Spence told him that he did not want the AOC which had been issued to BAS and that he was not prepared to pay for goodwill as there was no such thing.  Mr Spence then sought a reduction of $20,000.00 in the purchase price.  According to Mr Brazel, he agreed because he believed that he had lost the chance of selling the aircraft to anyone else and he had not received a deposit from Mr Spence as required by the contract.  Mr Brazel then withdrew the offer to do the next 100-hourly inspection for Mr Spence because the price had been reduced by $20,000.00.  He considered that to be a fair trade-off.

75.     When Mr Spence was first asked about whether he was offered the possibility of the 100-hourly maintenance being completed before the sale was settled, he answered “Yes”.  When asked if he declined that offer, Mr Spence said “That’s not quite true”.  When asked again whether he was offered the possibility of the next 100-hourly periodic maintenance being done by Mr Brazel before the sale settled, Mr Spence answered “No”.  He said that there was more to it than that.  He did agree that Mr Brazel offered to have somebody else look at the aircraft before the purchase of the business settled but that he declined that offer.  He said that he was happy with what he saw at that time.

76.     Mr Spence’s evidence then took a somewhat curious turn.  He was asked whether he tried to sell the aircraft VH‑SNC prior to any corrosion issues being raised during the 100-hourly inspection which was completed in April 2004.  He denied that to be the case.  However, when a copy of an advertisement was shown to Mr Spence, he first said that he placed the advertisement after he had maintenance work done on the aircraft.  When it was pointed out to him that the date of the advertisement appeared to be 31 March 2004, prior to the maintenance being completed, Mr Spence said that was incorrect.  After some prompting, in response to a question whether he placed the advertisement to sell the aircraft, Mr Spence somewhat reluctantly said “I could’ve done”.  The advertisement indicated that the aircraft was in “very good condition”.  Mr Spence said that he didn’t know what the condition of the aircraft was on the inside of the wing because it had not had maintenance.  This seemed to be an admission that the advertisement was placed before the maintenance took place; although it was clear that Mr Spence was most uncomfortable about this evidence and, generally, it reflected his attitude towards Mr Brazel.

77.     When it was put to Mr Spence that Mr Brazel offered to pay for a fresh 100‑hourly inspection, he denied that saying that it was only half the story.  According to Mr Spence, the reduction in the purchase price of $20,000.00 was agreed to on the basis that the next 100-hourly inspection would not be paid for by Mr Brazel.  Mr Spence then said that he accepted the risk on the basis that the purchase price was reduced by $20,000.00.  He also said that he was offered a $20,000.00 reduction in the purchase price but without the 100-hourly inspection.  He was not offered both.  When asked about whether the reduction was in respect of goodwill, Mr Spence admitted that he did not believe that there was any goodwill.

78.     On the contract of sale, Mr Spence agreed that goodwill was itemised at a price of $20,000.00.  The aircraft was itemised at $170,000.00.  In his advertisement, Mr Spence was offering to sell the aircraft for $185,000.00.  Mr Spence suggested that he intended to sell the aircraft with a completed 100-hourly inspection.  Mr Spence then admitted that he was prepared to buy the aircraft without a 100 hourly inspection because of the reduced price.  He continued to deny that the $20,000.00 reduction was related to goodwill. 

79.     Mr Brazel’s evidence was that after the dispute broke out with Mr Spence, he offered to buy back the assets he had sold, except for the FT250 motor vehicle which he did not require.  Mr Brazel said he was prepared to pay exactly what Mr Spence had paid to him.  However, he said that Mr Spence added another $120,000 to the price and therefore he declined.  When Mr Spence was asked whether Mr Brazel made him an offer to re‑purchase the assets of Burdekin he first said that he could not recall, and then he said that Mr Brazel may have made him an offer but he could not recall what the figure was.  Overall, the evidence given by Mr Spence was unsatisfactory.  I prefer the evidence given by Mr Brazel about the sale of the aircraft and the subsequent offer to re‑purchase it.

80.     The puzzling issue about the corrosion is that Mr G.S. Brown, a licensed aircraft maintenance engineer, who conducted all of the maintenance work for Mr Brazel on aircraft VH‑SNC while he owned it, and who carried out the first 100-hourly inspection for Mr Spence, described the corrosion in the rudder horn, rudder torque tube and aileron hangers to be structural corrosion and not cosmetic.  He said that the corrosion was evident on the external parts of the aircraft; it was not hidden by the wing assembly and could be easily observed on visual inspection.  He said that the corrosion on the aileron hanger had grown in size and in depth to a point where it started to de‑laminate the aileron hanger itself.  In his opinion, it would have been visible for possibly six or eight months prior to the aircraft undergoing its 100‑hourly periodic inspection in April 2004.  According to Mr Brown, if any corrosion was evident on the previous 100-hourly periodic inspection, because it was in an important structural area of the aeroplane, it would not have been overlooked on that maintenance.

81.     However, both Mr Brazel and Mr Spence denied seeing any corrosion on the aircraft even as late as March 2004, at the time the aircraft was sold to Mr Spence.  There are many possible explanations for this although they would be speculative as the evidence was unhelpful.  The aircraft was not hangared and it was parked at Ayr aerodrome which is relatively close to the ocean.  Nevertheless, Mr Brazel said that he did keep an eye on the possibility of there being corrosion and that he paid particular attention in his daily inspections to that as well as to the spray gear.

82.     Mr Brazel said that in the period that he owned VH‑SNC the aircraft had about four or five 100-hourly periodic inspections and he spent about $46,000.00 on maintenance.  Mr Brazel’s evidence, which I accept, was that the aircraft was inevitably put in for its 100-hourly periodic check well before 100 hours had expired.  This evidence was supported by Mr Brown who said that Mr Brazel was at times 19 or 20 hours early for periodic maintenance and on average he was 5 to 10 hours early.  Over the time that Mr Brazel owned the aircraft he calculated that he had a net of some 50 hours of early presentation of the aircraft for its 100-hourly periodic inspections.  Given that history, it seems unlikely that Mr Brazel would not have identified the corrosion and sought rectification work if it were apparent to him.  I also accept that if Mr Brazel was aware of the corrosion before April 2004, it is unlikely that he would have offered or suggested to Mr Spence that he should have an independent licensed aircraft maintenance engineer inspect the aircraft or that he would pay for the April 2004 100-hourly periodic inspection.  Therefore, as far as corrosion is concerned, I am not prepared to make the findings suggested by CASA that Mr Brazel failed to take all reasonable steps to ensure that every activity covered by the AOC and everything done in connection with such activity was done with a reasonable degree of care and diligence.

83.     In addition, there is insufficient evidence to find that the corrosion issue reflects adversely on Mr Brazel’s suitability to ensure that AOC operations are conducted safely.  I should add that I accept Mr Brown’s evidence that the combination of corrosive chemicals, together with the tropical environment where the aircraft was based, creates a good environment for corrosion.  I also accept that corrosion is a function of time and not flight hours and therefore the corrosion found by Mr Brown was not in any way affected by the number of hours which the aircraft had in fact flown.

84.     Finally, Mr Larard said in a witness statement made on 23 February 2006, in the course of the hearing, that in reviewing the work that was undertaken on VH‑SNC in April 2004 and the extent of the corrosion indicated, he was of the view that the aircraft had been flown some months prior to that time in an unairworthy condition and in circumstances where the strength of critical areas of the airframe may not have met the required airworthiness standard.  However, when I questioned Mr Larard about that statement, he made it clear that he had not reviewed the work but rather a description of the work conducted and recorded in the aircraft logbook.  The description in the aircraft maintenance log refers only to the work done and does not describe the condition of the various components that were replaced other than to mention that there was corrosion present.  Nevertheless, when questioned, Mr Larard referred to “the amount of corrosion that must have been there”.  He agreed that he had never seen the corrosion and that a prudent maintenance engineer would change the aileron attachment brackets if corrosion were detected.  In my opinion, Mr Larard could not determine whether the aircraft was in an unairworthy condition based simply on the description set out in the aircraft maintenance log.  There is insufficient information for him to come to that conclusion as the condition of the existing components is not described other than the fact that they suffered from corrosion.

Engine Operations

85.     CASA also submitted that Mr Brazel's approach to operating the AT301A aircraft was to operate it at or possibly beyond the acceptable limits of its performance parameters.  According to CASA, this submission is supported by the extent of unscheduled maintenance on the aircraft and the number of cylinder and other component replacements that were required to maintain the aircraft in an airworthy state.  However, CASA's airworthiness inspector, Mr Larard, who provided a witness statement dated 23 February 2006, also gave oral evidence on Wednesday, 15 February 2006, the third day of the hearing.  Up to this point in the hearing, Mr Larard had not raised as an area of concern the way in which Mr Brazel operated the AT301A aircraft.  After I requested and received a copy of some pages of the pilot’s operating manual for the aircraft VH‑SNC from Mr Foster, Mr Larard filed a further witness statement in response to that material and attached to his statement a copy of the document sent by Mr Foster as well as the CASA approved aircraft Flight Manual for the AT301A.  I permitted further examination and cross‑examination of Mr Larard in respect of material which he had filed on the last day of the hearing.  Mr Larard pointed out that the pages of the Flight Manual filed by Mr Foster were a mix of pages copied from the Flight Manual for VH‑SNC and other sources; namely, a suggested engine operation table produced by the Grumman company.  Mr Larard pointed out that this was not an approved Flight Manual for aircraft.  Mr Larard's major criticism seems to have been directed at the fact that Mr Brazel said that he operated the aircraft over the crop at 117 knots true airspeed.  According to Mr Larard, if Mr Brazel was achieving an airspeed of 117 knots, then he was likely to be running at either maximum continuous or full power the whole time he was airborne, which was harmful to the engine.  According to Mr Larard, the engine is not certified to operate at full power for more than 5 minutes at a time.  That high power setting should not be used continuously and should be reduced after take‑off or as the load weight reduces.  According to Mr Larard, the maintenance undertaken on the aircraft prior to 2003, which included work such as cylinder changes, shows that the aircraft was being flown aggressively.  Mr Larard concluded that this suggested that the aircraft had been operated in a manner that was outside of its operating limits.

86.     The approved Flight Manual for the AT301A aircraft is quite remarkable as it does not have a section dealing with power settings in flight other than the maximum limitations.  Take‑off power, which is established using 35 inches of manifold pressure and 2250 RPM, is limited to 5 minutes.  Otherwise, at sea level, maximum continuous power is limited to 34 inches of manifold pressure at 2200 RPM.  I have no reason to doubt that maximum continuous power is a reference to power which can be maintained for as long as the aircraft is airborne without causing any damage to the engine.  There is no indication in the approved Flight Manual or the documents produced by Mr Foster of the airspeed that would be achieved at maximum continuous power.  The design manoeuvring speed of the aircraft is 140 miles per hour calibrated airspeed, which is the indicated airspeed corrected for pressure error.  At this speed, pressure error would reduce the indicated airspeed by about 3 miles per hour.  A calibrated airspeed of 140 miles per hour, according to my calculations, is equivalent to 122 knots.  One hundred and thirty‑seven miles per hour is equal to 119 knots.  The document provided by Mr Foster has the airspeed limitation listed in knots and the calibrated airspeed at design manoeuvring speed is said to be 121 knots and the indicated airspeed 119 knots.  That seems to be very close to the calculation which I have made.  Those speeds are obviously in excess of the speeds that Mr Brazel said he achieved when spraying.  The only limitation in the approved Flight Manual provides that the spray pump should not be operated above 135 miles per hour or 117 knots.

87.     Furthermore, both the approved Flight Manual and the extract provided by Mr Foster state that spray runs may be made at 130 to 135 miles per hour when the aircraft is heavy.  This is equivalent to speeds of 113 to 117 knots.  It is unclear whether those are calibrated airspeeds or indicated airspeeds.  In relation to those figures, Mr Larard said in evidence that maximum airspeeds were most unlikely to be achieved in spraying operations in Central Queensland.  He said that those figures are normally obtained by the manufacturer during testing in a controlled environment under ideal conditions of temperature and atmospheric pressure.  However, there was no evidence to support Mr Larard's view.  Whether or not the aircraft would achieve the speeds suggested in the approved Flight Manual for spraying when heavy is not obvious from the approved Flight Manual.  There is nothing to suggest that they could not be achieved at maximum continuous power settings or even at some lesser power setting.  For that matter, the authorised manual also states that any amount of power up to maximum continuous ratings may be used for cruise.

88.     Mr Brown gave evidence which was contrary to Mr Larard's evidence.  According to Mr Brown, Mr Brazel always had a much higher expectation regarding the standard of maintenance to be performed on his aircraft than the majority of his customers.  Mr Brown said in evidence that the aircraft was well‑maintained by BAS and it was not in an unsafe state at any time.  Mr Brown was asked whether, from his work on the aircraft, he could determine whether VH‑SNC had been consistently operated in excess of the hours shown on the maintenance release and he answered, "No".  He did say that one could tell with a piston‑engine aircraft if logged times had been overrun because the spark plug gaps, which increased with the number of hours in service, might be significantly larger than would be expected.  He did not see any evidence of this when servicing VH‑SNC.  Mr Brown said that, although the aircraft log books disclosed that VH-SNC "went through a lot of spark plugs", that was largely due to the fact that when he first fitted new cylinders to the engine, the spark plugs kept freezing in the cylinder head.  The spark plugs were frequently changed because they were broken when attempting to remove them.

89.     Mr Brown also said that in 2001, Mr Brazel had a bad year with cylinders on the engine and that the cylinders were changed three times.  He said that the reason for the cylinder problems was that the cylinders were very old technology and the replacements were not very good.  That resulted in a successful warranty claim.  Despite replacement under warranty, the cylinders had to be repaired again because they were unsatisfactory.  He said that the first problem was a manufacturing issue because of the way the cylinders were made.  The second issue was poorly assembled cylinders in an engine shop in the United States of America.  Mr Brown did not even suggest that there was any evidence of operating the aircraft aggressively as was stated by Mr Larard.

90.     Given that Mr Larard never inspected the aircraft and never saw any of the maintenance work that was conducted on it by Mr Brown, I prefer the evidence of Mr Brown.  I must say that I was somewhat surprised by the conclusions reached by Mr Larard given that he had obviously not so much as inspected any of the maintenance work that was done on VH‑SNC’s radial engine.  I cannot accept the submissions made on behalf of CASA that it is likely that Mr Brazel was operating the engine at full power with potentially damaging effects.

CONCLUSIONS

91.     As CASA submitted, the essential issue in this matter is aviation safety.  Section 9A of the CA Act provides:

9A(1)      In exercising its powers and performing its functions, CASA must regard the safety of air navigation as the most important consideration.

…

92.     CASA must issue an AOC if it is satisfied about the matters set out in s 28 of the CA Act.  An AOC issued under s 28 has effect, subject to the general conditions set out in s 28BA.  In so far as they are relevant, they provide:

28BA(1)   An AOC has effect subject to the following conditions:

(a)the condition that sections 28BD, 28BE, 28BF, 28BG, 28BH and 28BI are complied with;

(aa)the condition subject to which the AOC has effect because of section 28BAA;

(b)any conditions specified in the regulations or Civil Aviation Orders;

(c)any conditions imposed by CASA under section 28BB.

(2)          …

(2A)        …

(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.

…

93.     As far as this matter is concerned, the relevant conditions are as follows:

28BD      The holder of an AOC must comply with all requirements of this Act, the regulations and the Civil Aviation Orders that apply to the holder.

28BE(1)   The holder of an AOC must at all times take all reasonable steps to ensure that every activity covered by the AOC, and everything done in connection with such an activity, is done with a reasonable degree of care and diligence.

(2)          If the holder is a body having legal personality, each of its directors must also take the steps specified in subsection (1).

(3)          It is evidence of a failure by a body and its directors to comply with this section if an act covered by this section is done without a reasonable degree of care and diligence mainly because of:

(a)inadequate corporate management, control or supervision of the conduct of any of the body's directors, servants or agents; or

(b)failure to provide adequate systems for communicating relevant information to relevant people in the body.

…

28BF(1)   The holder of an AOC must at all times maintain an appropriate organisation, with a sufficient number of appropriately qualified personnel and a sound and effective management structure, having regard to the nature of the operations covered by the AOC.

(2)       The holder must establish and maintain any supervisory positions in the organisation, or in any training and checking organisation established as part of it, that CASA directs, having regard to the nature of the operations covered by the AOC.

94.     In essence, CASA was concerned about Mr Brazel's failure, as a director of BAS, to accurately record aircraft total time in service on maintenance releases which is a requirement imposed under reg 43B of the CAR.  That regulation imposes on the owner, operator or pilot‑in‑command of an aircraft to record on the maintenance release the total time in service of the aircraft on the completion of flying operations on each day that the aircraft is flown.  Although CASA also stated in its letter cancelling BAS’s AOC that a breach of the requirement imposed under reg 43B of the CAR causes a maintenance release to cease to be in force by reason of the provisions set out in reg 47(1)(a) of the CAR, I doubt whether that is correct.  Under reg 47(1)(a), a maintenance release which is in force ceases to be in force if the operator of, or a flight crew member of an aircraft to which the maintenance release relates, becomes aware that a requirement or condition imposed under the CAR in respect of the maintenance of the aircraft has not been complied with.  Maintenance is defined under reg 2 of the CAR and it does not include the entry of total time in service of the aircraft at the end of a flying day.  Therefore, in my opinion, it is not correct to say that failure to accurately record aircraft total time in service on a maintenance release grounds the relevant aircraft.

95.     There is no question about the fact that Mr Brazel was in breach of reg 43B(1) on a number of occasions.  He has admitted six of those as a consequence of infringement notices being issued and he admitted a number of omissions and/or errors in making entries of total time in service in the maintenance release.  There is no question that BAS, as holder of the AOC, has failed to comply with all requirements of the CA Act and the CARs, as is required under s 28BD of the CA Act.  Accordingly, it cannot be disputed that a condition of BAS's AOC has been breached and that the discretion vested in CASA to suspend or cancel the AOC has been enlivened.

96.     However, the real question before the Tribunal is whether, on the evidence before it, the preferable decision is that BAS's AOC should be cancelled.  After careful consideration of all of the evidence which was before me, and not without considerable difficulty, I have arrived at the conclusion that BAS's AOC should not be cancelled.

97.     There is no doubt that in Australian law the significance of the matters at stake can and should affect the fact-finding process of a decision maker.  This is borne out by the statement made by Dixon J in Briginshaw v Briginshaw (1938) 60 CLR 366 at 361‑2 and 368 where his Honour said:

… truth is that, when the law requires the proof of any fact, the tribunal must feel an actual persuasion of its occurrence or existence before it can be found.  It cannot be found as a result of a mere mechanical comparison of probabilities independently of any belief in its reality…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.  Everyone must feel that, when, for instance, the issue is on which of two dates an admitted occurrence took place, a satisfactory conclusion may be reached on materials of a kind that would not satisfy any sound and prudent judgment if the question was whether some act had been done involving grave moral delinquency.

…

Upon an issue of adultery in a matrimonial cause the importance and gravity of the question make it impossible to be reasonably satisfied of the truth of the allegation without the exercise of caution and unless the proofs survive a careful scrutiny and appear precise and not loose and inexact. Further, circumstantial evidence cannot satisfy a sound judgment of a state of facts if it is susceptible of some other not improbable explanation.

98.     There are, in my opinion, major problems with CASA's analysis of the extent to which Mr Brazel failed to record the total time in service of aircraft VH‑SNC in its then current maintenance release.  The first problem stems from the fact that CASA has made its calculations based on the premise that it is appropriate to calculate the under‑recording of hours by using a mean spray rate of 45 hectares per hour when using an AT301A aircraft.  There seems to be no sound basis for using that figure.  The fact that other pilots spraying in the area might achieve a spray rate of 45 hectares per hour, as Mr Pearmine said he did when spraying chemicals for weed eradication, has little relevance to the operations conducted by Mr Brazel.  The variables involved in achieving that rate are many and it is unlikely that it can be applied in a meaningful way to BAS’s operations.  This is particularly so because Mr Brazel was also conducting mosquito spraying which involved larger tracts of land with fewer obstacles.  The real difficulty with selecting any figure is that even a small understatement of the spray rate will result in a significantly large number of hours said to have been under‑recorded, particularly over a period of 15 months.  Also, it is apparent from Mr Jones' summary of under‑recorded hours between January 2003 and March 2004 that spray rates vary markedly depending upon the nature of that spraying and the areas to be covered.  Therefore, very high spray rates appear to have been achieved where, as one would expect, substantial mosquito spraying took place in a particular month.

99.     Given that there are substantially different rates of spray coverage achieved when spraying insecticide to suppress the mosquitos as opposed to spraying herbicides on crops, from a statistical viewpoint, to simply use an average or mean across all operations will, without doubt, distort the results significantly.  As J.L. Phillips points out in his book on statistics, using the mean where extreme scores exist in a population will result in those extremes having too great an influence on the mean.  In those circumstances, rather than place all the scores into one category, they should be classified into two or more categories.  It seems to me that in this particular case, a more accurate picture would have been obtained using that methodology.  In fact, when Mr Lithgow attempted to demonstrate that there was a net under‑recording of approximately 12 hours by Mr Brazel, that methodology was employed.  It produced significantly different results to those obtained by Mr Jones.  On top of all of that, Mr Brazel's evidence was that, despite what is stated on some of the job cards, not all of the spraying recorded as aerial spraying was in fact done that way.  His clear recollection, in some instances, was that the ground rig was used on jobs which Mr Jones, understandably, treated as aerial spraying jobs.

100.   The second problem arises out of the attempt by CASA to calculate hours flown by using an average fuel burn rate and the amount of fuel purchased by BAS during the relevant period.  Mr Jones admitted that he had difficulty in reconciling the precise periods of purchase and the use of fuel.  Furthermore, the weight of evidence is against using an average fuel burn rate of 150 litres per hour as being indicative of the average fuel consumption of the AT301A aircraft.

101.   Overall, my impression was that Mr Brazel attempted to give an honest account of the reasons for the errors in recording total time in service.  It is not my view that the errors were deliberate or that he attempted to mislead either CASA or Mr Spence about the total time in service recorded on the maintenance release for aircraft VH‑SNC.  Although I am of the view that the evidence is inconclusive regarding the extent to which hours flown by aircraft VH‑SNC are not recorded on the maintenance release, I believe that the job cards produced in evidence, because they are sequentially numbered, represent a reasonably accurate account of the spraying work conducted by Mr Brazel.  Accepting, as I do, that some of the explanations given by Mr Brazel are more than likely correct, the best that I can do in these circumstances is to find that about 10 per cent or less of the total hours flown in aircraft VH‑SNC between January 2003 and March 2004 were not recorded on the maintenance release.  It is not possible to more accurately calculate the under‑recording by looking at the fuel consumed by BAS during that period or by any other indirect method.

102.   Of course, as was presented in evidence, there are at least two devices which are commonly used to directly record either the operating time of the engine on the aircraft and/or flight time.  They are an hour counter on the tachometer of the aircraft or a "Hobbs Meter" which can be set up to record airborne hours either by using a squat switch on an oleo or an airspeed switch.  The hours so recorded are usually cumulative and cannot be erased from those particular measuring devices.  Although aircraft VH‑SNC was fitted with an hour reader on its tachometer, it was not serviceable.  However, if it were mandatory for all aircraft operating under an AOC to have a serviceable measuring device such as that on the tachometer or a Hobbs Meter, not only would there be a direct and cumulative reading of all hours of engine operation or hours flown, but the readings so obtained could readily be checked against the hours recorded on a maintenance release.  That, in my opinion, is the only way in which a reasonably accurate assessment can be made of the hours of operation of an aircraft.  Reliance upon pilots to accurately record time in the maintenance release may well be satisfactory in an ordinary commercial operation.  However, it is apparent to me after hearing the evidence in this matter, that agricultural pilots, using satellite strips to reload the aircraft for spraying operations, and spraying a number of different chemicals on different size paddocks over the course of operations in a day, will fly numerous sorties thus making it extremely difficult to accurately record flight or operating time in the maintenance release at the end of a day.

103.   CASA's major concern in this case, quite correctly, is the effect that under‑recording of flight hours will have on aircraft components which are time‑lifed or, in other words, components of the aircraft which have a life limited by the total time in service of that component.  This can only be measured if one knows the total time in service of the aircraft and the time at which a component was fitted.  As is set out in CASA's cancellation letter, time‑lifed components are set out in type certificate data sheets, Airworthiness Directives and in the airworthiness limitation sections of manufacturers' maintenance manuals.  As far as the AT301A aircraft is concerned, the major components which are time‑lifed are the engine, the propeller and some airframe components.  The maintenance requirements for aircraft VH‑SNC are set out in the Log Book Statement Part 1.  As far as the engine and propeller are concerned, the log book statement provides:

Maintenance IAW [in accordance with] Civil Aviation Regulation Schedule 5 AD/ENG/4a9 Appendix "A" Inspection @ 100hrs/12mth intervals.  Piston Engine Condition Report Form 728 each 100hrs/12mths.  Engine Overhaul IAW Pratt and Whitney R1340 manual and on condition IAW AD/ENG/4a9 Para 1.2 to a limit of 10% over‑run.  Prop Overhaul IAW Civil Aviation Orders Part 107 AD/PROP1 Amendment 1.

104.   A periodic inspection under Schedule 5 must be carried out on a class B aircraft that is not a private aircraft, within either 1 year from the day on which the most recent general maintenance inspection on the aircraft was completed; or after the aircraft has been in service for 100 hours since the most recent general maintenance inspection on the aircraft was completed, whichever occurs later.  Schedule 5 then sets out in detail the tests which must be conducted on the engine in the course of a periodic inspection.  Airworthiness Directive AD/ENG/4 Amdt9 at paragraph 1.2 provides that in order to ensure the continuing airworthiness of the engine and those components necessary for the operation of the engine, in addition to the requirements of Schedule 5 of the CAR, the maintenance action detailed in Appendix A of the Directive must be completed.  Appendix A essentially requires, at each aircraft periodic inspection, that the engine performance, cylinder leak rates and engine oil and engine oil filter replacements take place.  It is significant that the Log Book Statement permits a 10 per cent overrun limit for completing the engine Airworthiness Directive.  That is also reflected in Appendix A where the cylinder leak rates are to be checked at intervals not to exceed 110 hours time in service.

105.   Given that Mr Brazel generally had the periodic inspection on aircraft VH‑SNC carried out prior to 100 hours being recorded as total time in service on the current maintenance release, even if there had been an under‑recording of hours up to 10 per cent on any maintenance release, it is unlikely that safe operations of the Pratt and Whitney 1340 engine were jeopardised by reason of under‑recording of hours.  That, of course, is not to condone the under‑recording of hours or the failure to accurately record the total time in service on a maintenance release.  However, the safety implications for the engine in this particular case would not appear to be significant.

106.   As for the propeller, the aircraft was fitted with a Hamilton Standard propeller model number 22D40‑505.  Although the Log Book Statement indicates that the propeller must be overhauled in accordance with AD/PROP1 amendment1, that AD was revoked upon amendment 2 becoming effective on 27 November 2003.  In accordance with amendment 2, the propeller must be overhauled in accordance with the propeller manufacturer's published time between overhaul or the CASA time between overhaul period listed in Appendix 1 of the AD.  A model 22D40 propeller is required to be overhauled every 1200 hours and, additionally, at each 500 hours time in service between overhaul and on any other occasion when its removal is necessary, the dome assembly of the propeller hub must be partially dismantled and cleaned of carbon and sludge.  In fact, a de‑sludge and clean out of the propeller hub was conducted on 26 February 2003 (see propeller log book).  The total time in service noted on the maintenance release at that time was 5471.1 hours.  The propeller also had the rear seal and expander replaced on 10 March 2003.  Further periodic inspections were carried out on 23 April 2003 and 30 April 2004 at which time the total time in service for the propeller was 1125.2 hours.  While no doubt any under‑recording of hours in the maintenance release would result in the overhaul time of the propeller being overrun, that overrun would probably not have exceeded 1.6 per cent of time in service and, because the aircraft had been brought in early for its periodic inspection by Mr Brazel, the effect on safety is unlikely to have been serious.

107.   As far as the airframe is concerned, the most significant time‑lifed component appears to be the wing carry through structure.  According to the attachments to Mr Larard's witness statement dealing with this matter, a one‑time inspection of wings with aluminium lower spar caps is required at 6000 hours total time in service.  If certain critical holes are not cracked when the 6000‑hour inspection is conducted, the aircraft can continue in operation until 7000 hours total time is reached when the lower spar caps are required to be replaced.  At that time, a modification, being a steel fail safe plate, must be installed.  Again, while it is important that the inspection and modification are carried out at an accurate total time in service, a relatively small overrun on that time is not likely to have a serious effect on the safety of operations.

108.   The main landing gear spring legs are required to be retired after a certain number of landings.  That of course has nothing at all to do with the total time in service.  Provided that the number of landings recorded is accurate, an under‑recording of total time in service will have no affect whatsoever on the replacement of the landing gear spring legs.

109.   The AOC cancellation letter states that AT300A series aircraft, being built for chemical spraying operations, are affected by corrosion of aluminium spar caps that are subject to a regime of mandatory inspections and component replacements as required by Airworthiness Directives and the manufacturer's service letters.  The letter then stated that inspections and replacement of components under Airworthiness Directive AD/AT/22 are required at certain hours time in service.  There seems to be some confusion about this.  Airworthiness Directive AD/AT/13 deals with wing spar cap corrosion, while AD/AT/22 deals with fatigue cracking.  The Airworthiness Directive which deals with wing spar cap corrosion requires inspection at intervals not exceeding 12 calendar months.  Again, this simply highlights what Mr Brown said in evidence, being that corrosion is a function of calendar time and not total time in service.  As for the Airworthiness Directive dealing with fatigue cracking, it would appear that this Airworthiness Directive does apply to VH‑SNC as it is listed amongst the recurring Airworthiness Directives.  I am uncertain as to whether aircraft VH‑SNC has incorporated the wing spar centre splice joint modification.  If it has, the aircraft is allowed to continue operation to 7000 hours total time in service.  There is an alternative procedure and that involves repetitively inspecting the wing lower spar caps instead of replacement.  I am not certain as to which regime has been adopted in respect of VH-SNC, although quite clearly compliance is dependent upon having an accurate total time in service.  Undetected cracks, as stated in the Airworthiness Directive, can eventually result in in‑flight separation of the wing.  Therefore, although it is critical to comply with this Airworthiness Directive, if the area is regularly inspected, a small overrun of total time in service would not necessarily create a serious aviation hazard.

110.   The fact that a small overrun of total time in service for this aircraft probably does not cause a serious risk to safety seems to be supported by the fact that an infringement notice was issued to Mr Brazel for six instances where there was a failure to record time in the maintenance release, but where that time had been recorded in Mr Brazel's pilot's log book.  An infringement notice is generally issued where an authorised person has reason to believe that an offence has been committed under the CAR (CAR 296B).  According to Part 8 of CASA's enforcement manual, which is available from the Internet, an appropriate situation for the issuing of an infringement notice includes where the breach does not cause a serious risk to safety.  Part 8 also sets out inappropriate situations for the issue of an infringement notice; and they include where the offence is against the CA Act; where there was a serious risk to safety; and where the offence was intentional or formed the pattern of breaches.  I also note that the infringement notice was issued after Mr Jones provided his initial report to CASA in about July or August 2004.  By that time, Mr Jones was of the opinion that there were 4 occasions when Mr Brazel's pilot's log book had no corresponding entries on maintenance releases; 5 occasions where Mr Brazel recorded entries on the maintenance release with no corresponding entries in his pilot's log book; 8 occasions where flight data from Air Services and Avdata disclosed aircraft movements which were not recorded in either the maintenance releases or Mr Brazel's pilot's log book; and 48 occasions when no entries appeared in either Mr Brazel's pilot's log book or the maintenance releases.

111.   Although Mr Brazel complained that he was exposed to double jeopardy as a consequence of paying the prescribed penalty set out in the infringement notices, and then subsequently having the same matters raised in the AOC cancellation process, as a matter of law, that is certainly not correct.  The effect of payment of the prescribed penalty attaching to an infringement notice is that the liability of the person in respect of the offence specified in the notice is taken to be discharged (reg 296F(d)).  Although that regulation states that further proceedings cannot be taken against the person for the offence, that is not of course the same as taking proceedings to cancel an AOC.  Payment of the penalty in relation to an infringement notice is in substitution for being prosecuted for that offence.  Nevertheless, as a matter of practice and policy, CASA should probably not issue infringement notices and show cause notices based on the same breaches.  It tends to send mixed messages to the recipient.

112.   Mr Brazel was criticised for not having taken all reasonable steps to ensure that every activity covered by the AOC and everything done in connection with such activity was done with a reasonable degree of care and diligence.  Mr Brazel was also criticised for failing to maintain an appropriate organisation, with a sufficient number of appropriately qualified personnel and a sound and effective management structure, having regard to the nature of the operations covered by the AOC.  In my view, the criticism relating to a reasonable degree of care and diligence in conducting the operations of the AOC holder is probably well founded as far as it relates to the recording of total time in service of aircraft VH-SNC.  However, the important question which must be answered is whether Mr Brazel will, in the future, exercise the degree of care and diligence required by the CAR.  According to Mr Brazel, he now has a partner who operates the ground spraying operations and that has taken significant pressure off him to enable him to concentrate on the air operations.

113.   Furthermore, in November 2005, CASA undertook a functional surveillance of BAS focussing essentially on maintenance recording, flight and duty records, fuel recording and operations from new facilities.  CASA concluded, following that surveillance exercise, that all records that were checked were found to be adequate for a "one man operation".  CASA also noted that the facilities used by Mr Brazel were tidy and suitable for the air work which he conducted.  His fuel and oil records were in order.  There was a criticism levied at the way in which time was recorded because Mr Brazel had introduced a new time recording, being a time spent over the paddock.  Although this was for the benefit of the growers and had nothing to do with recording flight time for the aircraft, CASA considered that it may cause some confusion.  Some amendments were required to the Operations Manual, but there was nothing of any significance.  CASA also noted there were some minor non‑airworthiness defects that had been cancelled and were ruled‑through without a clearing signature.  In particular, it seems that Mr Brazel has a Hobbs Meter fitted to his new aircraft but it became unserviceable on 5 December 2005 and, although he made that endorsement on the current maintenance release, there was no clearing endorsement.

114.   Mr Webb made it clear that he had maintained a good relationship with Mr Brazel and said that Mr Brazel had "done good work" and that he had a "good record as a pilot".  Mr Webb also indicated that he had no concerns about a safety trend indicator questionnaire which had recently been completed by Mr Brazel.  He was also of the view that Mr Brazel, who had improved his recordkeeping practices, had created a better system to accurately keep records.  Also, because BAS's AOC will be due for renewal this year, Mr Webb indicated that a comprehensive review of its operations will take place prior to renewal.

115.   Considering the difficulties that CASA has had in establishing the under‑recording of flight hours on the maintenance release by using indirect methods, it seems to me that in agricultural operations, it is most important that there be a direct means of ascertaining the hours flown by the aircraft.  In order to do that, it would appear to me to be essential that agricultural operators be required to have a serviceable tachometer or Hobbs Meter fitted for all flying operations under an AOC.  Although I am mindful of the fact that this would impose an additional expense on operators, given that Hobbs Meters are fitted to such relatively inexpensive devices as ride‑on tractor mowers, I do not believe that the expense would be prohibitive.  In my view, CASA could impose such a condition on an AOC holder under s 28BB of the CA Act.  This would go a long way towards alleviating the problems encountered by CASA in monitoring flight time recording, particularly in operations where there are numerous short flights conducted on any one day.

116.   In my opinion, the decision made by CASA to cancel the AOC of BAS should be set aside and BAS's AOC should be reinstated on the condition that no flying operations take place unless the aircraft operating under that AOC are equipped with a serviceable tachometer or a Hobbs Meter to record operating/flying hours.

I certify that the one‑hundred and sixteen [116] preceding paragraphs are a true copy of the reasons for the decision herein of

Mr Egon Fice, Member

(sgd)     Catherine Thomas

Clerk

Dates of Hearing:  13—17 February 2006,

24 February 2006

Date of Decision:  1 May 2006
Counsel for the applicant:            Mr P. Lithgow
Solicitors for the applicant:          Grundy Maitland & Co
Counsel for the respondent:        Mr I. Harvey^

Solicitors for the respondent:       Mallesons Stephen Jacques