Broome Helicopter Services Pty Ltd and Civil Aviation Safety Authority
[2015] AATA 390
•3 June 2015
[2015] AATA 390
Division GENERAL ADMINISTRATIVE DIVISION File Number(s)
2014/1664
Re
Broome Helicopter Services Pty Ltd
APPLICANT
And
Civil Aviation Safety Authority
RESPONDENT
DECISION
Tribunal Egon Fice, Senior Member
Date 3 June 2015 Place Perth The application to vary the stay order made by Deputy President Hotop on 11 April 2014 is refused. The stay order remains operative until the expiry of the Air Operator’s Certificate held by the Applicant.
..................[sgd]......................................................
Egon Fice, Senior Member
Catchwords
AVIATION – Air Operator’s Certificate (AOC) – Cancellation – Order of Tribunal staying cancellation decision until hearing of the application for review – Application to extend term of stay order beyond expiry date of AOC - No power to extend term of AOC – Application to extend stay refused
Legislation
Administrative Appeals Tribunal Act 1975 (Cth) ss 25, 41, 43
Civil Aviation Act 1988 (Cth) ss 27–27AB, 28, 28BA–28BC, 28BF, 31
Civil Aviation Order 82.0 Instrument 2014 (Cth) O 3, app 1 para 6.1
Civil Aviation Safety Regulations 1998 (Cth) regs 67.205–67.215
Civil Aviation Regulations 1988 (Cth) reg 206
Cases
Civil Aviation Safety Authority v Hotop (2005) 145 FCR 232
Cooper Brooks (Wollongong) Pty Ltd v Commissioner of Taxation (1981) 147 CLR 297
Hogan v Civil Aviation Safety Authority (2004) 39 AAR 440
Marshall v Watson (1972) 124 CLR 640
Re Alexander and Migration Agents Registration Board (1995) 40 ALD 99
Shi v Migration Institute of Australia Ltd (2004) 78 ALD 281
Yolbir v Administrative Appeals Tribunal (1994) 48 FCR 246
Secondary Materials
William Little, H W Fowler and Jessie Coulson, The Shorter Oxford English Dictionary (Oxford University Press, 3rd revised ed, 1983) vol 1
D C Pierce and R S Geddes, Statutory Interpretation in Australia (LexisNexis Butterworths, 7th ed, 2011)
REASONS FOR DECISION
Egon Fice, Senior Member
3 June 2015
By this interlocutory application, Broome Helicopter Services Pty Ltd (BHS) effectively seeks a variation of a stay order made by the Tribunal (Deputy President S D Hotop) on 11 April 2014. The stay order was in the following terms:
Pursuant to section 41(2) of the AAT Act, the Tribunal orders that the operation and implementation of the respondent’s decision of 21 March 2014 to:
· cancel Air Operator’s Certificate number 1-477VH-04 held by Broome Helicopter Services Pty Ltd; and
· cancel approval of the appointment of Joseph Calandra as Chief Pilot of Broome Helicopter Services Pty Ltd
be stayed pending the decision of the Tribunal on the application for review.
Liberty to apply is reserved.
BHS seeks a variation of the above stay order for the reason that its Air Operator’s Certificate (AOC) will expire by the effluxion of time on 30 June 2015. It requests that the Tribunal extend the expiry date of BHS’s AOC beyond 30 June 2015 because, it contends, if its AOC were to expire, then its application for review would be rendered nugatory and of no effect. BHS contends that the Tribunal has the power to vary the stay order as requested and it relies on the Federal Court of Australia (Siopis J) decision in Civil Aviation Safety Authority v Hotop (2005) 145 FCR 232 (Hotop).
The Tribunal has the power to vary a stay order in force under s. 41(2) of the Administrative Appeals Tribunal Act 1975 (AAT Act) provided that the person who made the decision to which the relevant proceeding relates and the person who requested the making of the order under subsection (2) have been given a reasonable opportunity to make submissions to the Tribunal in relation to the matter (s. 41(4)(b)).
BRIEF BACKGROUND TO THE APPLICATION
On 21 March 2014 CASA notified BHS that its AOC was cancelled pursuant to
s. 28BA(3) of the Civil Aviation Act 1988 (the Civil Aviation Act) for the reason that BHS had breached a condition of its AOC. (Note: CASA is required under s. 28BA(4) to provide to the holder of the AOC a show cause notice. Presumably, that was issued prior to the cancellation notice).
In addition to cancelling the AOC, CASA notified Mr Joseph Calandra that the Chief Pilot approval held by him was also cancelled pursuant to Civil Aviation Order (CAO) 82.0, paragraph 6.1 of Appendix 1.
Both BHS and Mr Calandra lodged applications with the Tribunal on 2 April 2014 seeking a review of both decisions. The application lodged by BHS was allocated Tribunal number 2014/1664. The application lodged by Mr Calandra was allocated number 2014/3750.
On 11 April 2014 the Tribunal ordered that the operation and implementation of the decision to cancel BHS’s AOC and Mr Calandra’s approval as Chief Pilot be stayed pending the decision of the tribunal on the application for review.
According to Mr Calandra, in about December 2014 BHS entered into negotiations with the Melbourne-based helicopter company, Choppair Helicopter Services Pty Ltd (Choppair) regarding a possible sale of the operation of BHS to Choppair. Although this matter was listed for hearing in the Tribunal on 2 February 2015, that hearing date was adjourned by consent to allow those negotiations to proceed unimpeded. Furthermore, CASA’s consent was conditional on Mr Calandra resigning as Chief Pilot of BHS and withdrawing his application for review of the decision to cancel his Chief Pilot Approval by 29 January 2015.
A Deed of Agreement was entered into on 29 January 2015 by Mr Calandra, BHS and CASA under which, subject to a number of conditions including Mr Calandra’s notification of resignation as Chief Pilot of BHS and withdrawal of his application to the Tribunal, CASA agreed to adjourning the hearing of BHS’s application for review of CASA’s decision to cancel its AOC to allow completion of negotiations between BHS and Choppair for the sale of the business.
On 23 January 2015 Mr Calandra notified CASA that he had resigned as Chief Pilot of BHS and lodged a notice of withdrawal of his application to the Tribunal.
In a letter dated 6 February 2015 CASA informed BHS that it had issued and attached BHS’s new (current) AOC which contained conditions that Mr Calandra not hold any management or operational positions with BHS and that he was not to have any physical presence at BHS’s premises or in any aircraft operated by it.
That certificate was said by CASA to be valid from 29 January 2015. The expiry date on the AOC, which was first issued on 9 June 2011, remained unaltered. CASA also said:
This certificate represents a subsequently issued certificate; please destroy the current or expired certificate, as it no longer has legal force.
The new AOC states that it was issued on 6 February 2015; its effective date is 29 January 2015 and the date of expiry is 30 June 2015.
However, things began to unravel shortly thereafter. That was because CASA became aware that either BHS or Choppair was conducting scenic flights for a client at Broome and that Mr Calandra was the pilot on those flights. BHS was not permitted to conduct any operations under its AOC because it did not have a Chief Pilot, which was one of the conditions for its issue. Choppair did not have approval from CASA to use BHS personnel, including Mr Calandra, to conduct those flights under its AOC as it had not sought and did not have approval under the so-called borrowing provisions in CAO 82.0, Order 3.
In a letter dated 23 April 2015, Maitland Lawyers, who act for BHS, notified CASA that a Mr Bill Watson was to be appointed the new Chief Pilot of BHS subject to formal approval by CASA. In response to that proposed appointment, in a letter dated 4 February (sic – May) 2015, CASA noted that Mr Watson had his Approved Testing Officer (ATO) delegation revoked by CASA in 2014. CASA stated it would require Mr Watson to provide reasons why the facts and circumstances which led to that decision should not prevent CASA from approving him to be the Chief Pilot of BHS. CASA also indicated it needed to review Mr Watson’s resume and logbooks to confirm he had the appropriate qualifications and experience to be approved as Chief Pilot.
CASA wrote to Maitland Lawyers on 6 May 2015 pointing out that in accordance with CAO 82.0, Appendix 1 (para 1.3(a)), the appointment of a Chief Pilot may only be approved when, amongst other things, CASA was of the opinion that the applicant has maintained a satisfactory record in the conduct or management of flying operations. CASA noted the assertion made by Maitland Lawyers that Mr Watson’s ATO delegation was revoked in error. It also noted that Mr Watson had not sought review of CASA’s decision to revoke his ATO delegation and that the revocation remained operative.
It appears that on 14 April 2015 BHS treated CASA as having repudiated the Deed of Agreement dated 29 January 2015. Maitland Lawyers stated that BHS no longer considered itself bound by that Deed and requested that the conditions imposed on the new AOC issued to BHS on 6 February 2015 be removed immediately. In response to that request, CASA said, in a letter dated 5 May 2015, that BHS needed to make a formal application to CASA for variation of the AOC. In fact in written submissions, Mr J Langmead QC, who appeared on behalf of BHS, said that BHS intended to apply for a review of the decision refusing to remove the conditions but that such an application was not presently on foot. He also said that CASA had not removed the conditions. However, on hearing this application, Mr Langmead submitted that whether or not BHS persisted with its request to CASA to remove the conditions on the AOC had no bearing on the application before me in this matter.
On 6 May 2015 Maitland Lawyers sent a letter to the Tribunal requesting an expedited hearing of this matter in light of the fact that the AOC held by BHS will expire on 30 June 2015. Maitland Lawyers had received a letter from CASA dated 5 May 2015 in which it was stated:
The AOC held by your client expires on 30 June 2015. It is unlikely the AAT will hear and determine your client’s application for review before that date. You client also does not have a chief pilot. Accordingly, there is no utility in your client proceeding with its application for review.
In light of this, please advise by 6 May 2015, if your client will maintain its application for review. If so, CASA will make application [sic] that it be dismissed.
On 14 May 2015 Maitland Lawyers wrote to the Tribunal stating:
If the AOC in this proceeding is not extended past its expiry date of 30 June 2015, it will expire and as a result the current application for review will be rendered nugatory and of no effect.
The time for expiry of an air operator’s certificate [’AOC’] can be extended by CASA and, pursuant [to] powers conferred on the Tribunal pursuant to the Administrative Appeals Tribunal Act 1975 [’AAT Act’], the Tribunal is likewise able to extend the time of expiry of an AOC.
As a consequence of the 14 May 2015 letter from Maitland Lawyers, I held a telephone directions hearing on 26 May 2015. Mr Maitland, who appeared on behalf of BHS, requested that the Tribunal hold a further stay application hearing pursuant to s. 41 (2) of the AAT Act and make an order in positive terms permitting BHS to continue operating its business pending the hearing of the application for review. I understood that request to be an application to vary the existing Stay Order made by the Tribunal on 11 April 2014. Mr R Ashton of counsel, who appeared on behalf of CASA with Ms T Canny, requested that the matter simply be set down for hearing prior to 30 June 2015. While I shared Mr Ashton’s view, Mr Maitland nevertheless insisted that a further stay hearing be held. I acceded to his request. The hearing of this interlocutory application was conducted by telephone on 29 May 2015. I had before me written submissions on behalf of BHS and CASA as well as some further materials lodged by both parties. I also had the benefit of oral submissions from Mr Langmead and Mr Ashton. These are the reasons for my decision.
AIR OPERATORS’ CERTIFICATES (AOCS)
Part III, Division 2 of the Civil Aviation Act deals with AOCs. An AOC is required only for the flying or operation of an aircraft for prescribed purposes (s. 27 (9)). Those purposes are set out in the Civil Aviation Regulations 1988 (CAR). CAR 206 (1) relevantly provides:
(1) For the purposes of subsection 27 (9) of the Act, the following commercial purposes are prescribed:
(a)aerial work purposes, being purposes of the following kinds (except when carried out by means of a UAV):
(i) …
(b)charter purposes, being purposes of the following kinds:…
(c)the purpose of transporting persons generally, or transporting cargo for persons generally, for hire or reward in accordance with fixed schedules to and from fixed terminals over specific routes with or without intermediate stopping places between terminals.
Broadly stated, an AOC is required by a person conducting flying operations for commercial purposes. Section 27 of the Civil Aviation Act relevantly provides:
(1) CASA may issue AOCs for the purposes of its functions.
(2) Except as authorised by an AOC, by a New Zealand AOC with ANZA privileges that is in force for Australia (but only so far as it authorises ANZA activities in Australian territory), or by a permission under section 27A:
(a)an aircraft shall not fly into or out of Australian territory; and
(b)an aircraft shall not operate in Australian territory; and
(c)an Australian aircraft shall not operate outside Australian territory.…
(2B) An AOC may be issued only to a natural person or to a body having legal personality.…
(7) The term of an AOC shall be as determined by CASA.
(8) An AOC is not transferable.
(9) Subsection (2) applies only to the flying or operation of an aircraft for such purposes as are prescribed.…
An application for an AOC is dealt with under Subdivision B of the Civil Aviation Act. There are a number of requirements for a valid application including an application in a form approved by CASA (s. 27AA) and the lodgement of manuals (s. 27AB) if such manuals are required under the CARs or CAOs. Section 27AB (4) provides:
If the applicant already holds a current AOC and is applying for a new AOC that:
(a)would authorise the same things as the current AOC; and
(b)would come into force when the term of the current AOC expires;
the applicant is required to comply with the lodgement requirements of this section only to the extent (if any) that CASA, by written notice, requires compliance.
The reason I have referred to s. 27AB(4) is that, in my opinion, it says something significant about the term during which an AOC remains valid. This subsection would be redundant if CASA could simply extend the term of an existing AOC. There is nothing in Division 2, Subdivision D, which permits CASA to extend the term of an AOC once it has been granted. It appears an AOC’s expiry date is determined on the issue of that document. Should an AOC holder wish to continue its operations following the expiry date of its AOC, it appears it must apply for a new AOC. That is so even where the authorisation set out in the expiring AOC is identical to the authorisation in the following AOC. CASA of course has discretion to require the AOC holder to comply with the requirements of the lodgement of manuals provisions or may dispense with that requirement by giving written notice.
CASA may impose and vary AOC conditions either at the time of issuing an AOC or any time after its issue (s. 28BB). It can only do so to ensure that the aircraft’s operation, maintenance and airworthiness are of a standard that CASA considers necessary in the interests of the safety of air navigation (s. 28BC).
The issue of AOCs is dealt with under s. 28 of the Civil Aviation Act. Relevantly, it provides:
(1) If a person applies to CASA for an AOC, CASA must issue the AOC if, and only if:
(a)CASA is satisfied that the applicant has complied with, or is capable of complying with, the safety rules; and
(b)CASA is satisfied about the following matters in relation to the applicant’s organisation;
(i) the organisation is suitable to ensure that the AOC operations can be conducted or carried out safely, having regard to the nature of the AOC operations;
(ii) the organisation’s chain of command is appropriate to ensure that the AOC operations can be conducted or carried out safely;
(iii) the organisation has a sufficient number of suitably qualified and competent employees to conduct or carry out the AOC operations safely;
(iv) key personnel in the organisation have appropriate experience in air operations to conduct or to carry out the AOC operations safely;
(v) the facilities of the organisation are sufficient to enable the AOC operations to be conducted or carried out safely;
(vi) the organisation has suitable procedures and practices to control the organisation and ensure that the AOC operations can be conducted or carried out safely;
(vii) if CASA requires particulars of licences held by flight crew members of the organisation – the authorisations conferred by the licences are appropriate, having regard to the nature of the AOC operations; and…
key personnel means the people (however they are described) that hold, or carry out the duties of, the following positions in the applicant’s organisation:
(a) the chief executive officer;
(b)the head of the flying operations part of the organisation;
(c)the head of the aircraft airworthiness and maintenance control part (if any) of the organisation;
(d)the head of the training and checking part (if any) of the organisation;
(e)any other position prescribed by the regulations.
An AOC is subject to a number of general conditions which are set out in s. 28BA of the Civil Aviation Act. The breach of some of those conditions results in the AOC continuing to authorise flights or operations to which the condition relates while the breach of others does not. Relevantly, s. 28BA provides:
(1) An AOC has effect subject to the following conditions:
(a)the condition that sections 28BD, 28BE, 28BF, 28BG and 28BH are complied with;
(aa)
the conditions subject to which the AOC has effect because of section
28BAA;
(ab)the condition that section 28BI is complied with in relation to each operation, covered by the AOC, to which that section applies;
(b)any conditions specified in the regulations or Civil Aviation Orders;
(c)any conditions imposed by CASA under section 28BB.
(2) If a condition of an AOC referred to in paragraph (1)(a) or (aa) is breached, the AOC continues, despite the breach, to authorise flights or operations to which the condition relates.
(2A) If a condition of an AOC referred to in paragraph (1) (ab), (b) or (c) is breached, the AOC does not authorise any flight or operation to which the condition relates while the breach continues.…
Section 28BAA (1) provides:
An AOC has effect subject to the condition that CASA remains satisfied as mentioned in paragraphs 28 (1) (a) and (b) in relation to the operations that are covered by the AOC.
In other words, those conditions which must be satisfied for the issue of an AOC have effect as continuing or ongoing conditions on the AOC.
Section 28BF provides that 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. In my opinion, s. 28BF, which refers to maintaining an appropriate organisation with a sufficient number of appropriately qualified personnel, is not a reference to key personnel which must be appointed if CASA were to issue an AOC under s. 28. That is because s. 28(1)(b)(iii) refers to a sufficient number of suitably qualified and competent employees while subsection (iv) refers to key personnel in the organisation.
It follows that CASA must not issue an AOC to a person (including a corporation) where that person has not engaged the services of a head of flying operations, usually referred to as the Chief Pilot. If the holder of an AOC does not have a chief pilot, it is in breach of a condition of its AOC and accordingly, s. 28BA(3) applies and CASA may, by written notice given to its holder, suspend or cancel that AOC.
As I have already mentioned above, the term of an AOC is determined by CASA when the AOC is issued. There is no specified limitation on the period for which an AOC may remain operative. However, an applicant for an AOC who is dissatisfied with the term granted by CASA cannot seek review of that determination. Applications may only be made to this Tribunal for review of a reviewable decision (s. 31(2) of the Civil Aviation Act). The expression reviewable decision is relevantly defined in s. 31(1) in the following way (emphasis in original):
(1) In this section:
decision has the same meaning as in the Administrative Appeals Tribunal Act 1975.
reviewable decision means:
(a)a refusal to grant or issue, or a cancellation, suspension or variation of, a certificate, permission, permit or licence granted or issued under this Act or the regulations; or
(b)the imposition or variation of a condition, or the cancellation, suspension or variation of an authorisation, contained in such a certificate, permission, permit or licence; or…
The question regarding whether a person dissatisfied with the term of an AOC as determined by CASA may seek review of the term by this Tribunal was dealt with by President Downes J and Member Gration in Hogan and Civil Aviation Safety Authority (2004) 39 AAR 440.
Mr Hogan applied on behalf of a company referred to as ACTAS Pty Ltd for an AOC. Prior to its issue, he became aware that CASA was about to issue to ACTAS an AOC for one year and he wrote to CASA requesting that it be issued for three years. Subsequently, CASA issued ACTAS with an AOC effective for 12 months. Mr Hogan, on behalf of ACTAS, applied to the Tribunal seeking a review of the decision to issue ACTAS with an AOC effective for a period of 12 months. The Tribunal decided that it did not have jurisdiction to review that decision. After setting out which decisions were reviewable by the Tribunal in accordance with s. 31(1) of the Civil Aviation Act, the Tribunal said, at 443 – 444:
The question before us is whether we can review the decision of CASA to issue a certificate for twelve months rather than three years. We could only have jurisdiction if that decision was a refusal to issue a certificate (namely a three-year certificate) or if the term or length of operation of the certificate was a condition of the certificate. We do not think that either argument is sustainable.
First, CASA did not refuse a Certificate. Even if it could be said that ACTAS applied for a three-year certificate, nothing in the Act authorised it to do so. The Act expressly provides that CASA will determine the term of an air operator’s certificate. There was no refusal to issue an air operator’s certificate.
Secondly, the term or length of operation of a certificate is not a condition of the certificate. A condition is a provision upon which the legal force or effect of an instrument, such as a contract, depends.… The length of operation of an instrument may be affected by a condition. It may be cut short by breach of a condition. However the length of operation of an instrument is not itself a condition.…
These considerations lead to the conclusion that the length of an air operator’s certificate is not a condition. This conclusion is strengthened by the provisions of the Act. Section 27 expressly confers the power to determine the term of an air operator’s certificate on CASA. Nothing in subs 27(7) suggests that the term is a condition. “Condition” is used in s. 28BA and following in a context which does not suggest that the length of an air operator’s certificate is a condition.
It is plain that the legislature intended to confer a right of review when an application for issue of an air operator’s certificate was refused or where unacceptable conditions were imposed, but not when an air operator’s certificate was issued for a period which the applicant considered was too short. At worst such an applicant might be forced to seek review if the certificate was not renewed when it expired.
CAN CASA EXTEND THE TERM OF AN AOC
There is no provision in Division 2 dealing with AOCs which expressly permits CASA to extend the term of an AOC. The term of an AOC is plainly not a condition. If the term of an AOC were able to be extended, it would be reasonable to expect the Civil Aviation Act to contain an express provision allowing the term to be extended. For example, medical certificates issued to pilots remain in force for various periods, depending upon the class of the certificate and possibly the age of the pilot to whom they are issued (Civil Aviation Safety Regulations 1998 (CASR) 67.205). Certificates remain in force for the period set out on the certificate. The period for which the certificate remains in force is at the sole discretion of CASA. It may not necessarily be issued for the maximum period allowable for that particular certificate. If the holder of a medical certificate wishes to have CASA extend the period for which it remains in force, he or she may make an application under CASR 67.210 and CASA may extend the period of time by the powers set out in CASR 67.215.
In addition to the fact that there are no express provisions in the Civil Aviation Act for extending the term of an AOC, the application provisions set out in s. 27AB(4), to which I have referred above strongly imply that on the conclusion of the term of an AOC, if the holder wishes to continue with the same operations using the same aircraft, a new application must be made.
Despite the provisions I have referred to above dealing with AOCs, Mr Langmead submitted that the Tribunal can and should make an order that the AOC held by BHS be extended past its expiry date of 30 June 2015 for the purposes of securing the effectiveness of the hearing and determination of the application for review. He requested that the time of expiry of the BHS AOC be extended for a sufficient period of time to allow the Tribunal to hear and determine its application. Mr Langmead in particular referred to the Federal Court of Australia decision (Siopis J) in Hotop.
Siopis J in Hotop set out the decision made by the Tribunal which was as follows (at 238):
Pursuant to s. 41(2) of the Administrative Appeals Tribunal Act 1975, the Tribunal orders that the decision of a delegate of the respondent, dated 14 January 2005 to cancel the applicant’s Air Operator’s Certificate W073061 (“the AOC”) be stayed and that the AOC be extended until the decision of the Tribunal on the ultimate hearing of the application for review.
The AOC holder in that case was a company called Polar Aviation Pty Ltd (Polar Aviation). Its current AOC was to expire on 31 July 2004. CASA had issued Polar Aviation with a show cause notice as to why it should not refuse its application for an AOC covering the period post 31 July 2004. In a letter dated 20 July 2004 CASA said that while the show cause process was continuing, it was CASA’s policy to allow the company to continue to operate and not to restrict its commercial operations. Effectively, CASA had extended the term of Polar Aviation’s AOC. CASA purported to extend the term of Polar Aviation’s AOC on two further occasions. On extending the term of the AOC, CASA wrote (at 234):
Please destroy the original certificate as it has been superseded and replaced by this new certificate.
Finally, CASA decided to cancel Polar Aviation’s AOC which at that time had been extended until 31 January 2005. CASA said that the consequence of its decision was that Polar Aviation’s AOC would cease to have effect beyond that date [being 31 January 2005].
On the facts as stated by the Court, there was no cancellation of an existing AOC but rather, CASA had determined not to renew or to issue a fresh AOC upon the expiry of the existing AOC on 31 January 2005. Accordingly, on 4 February 2005 Polar Aviation made a second application for review before the Tribunal based on a claim that as at 31 January 2005, it had a reasonable expectation that CASA would renew the AOC but had not done so.
While CASA in its letters to Polar Aviation referred to extending its current AOC, rather than refer to an express power to do so, CASA simply described it as a policy. Although I am uncertain as to why CASA has referred to the extensions granted to Polar Aviation as policy, there is certainly no express term in the Civil Aviation Act empowering CASA to extend the term of an AOC.
Mr Langmead submitted that CASA’s power to determine the term of an AOC as set out in s. 27 (7) of the Civil Aviation Act was sufficient, of itself, to empower CASA to extend the term. Alternatively, Mr Langmead submitted that such a power should nevertheless be implied. With respect to Mr Langmead, I have difficulty with both of those propositions.
Read literally, s. 27 (7) simply provides that CASA must set a date when the AOC comes to an end. The ordinary meaning of the verb determine is: 1. trans. To put an end to; to end. 2. intr.(for refl.) To come to an end; to expire ME.; To end in.(arch.) 3. trans. To set bounds to, limit… (The Shorter Oxford English Dictionary). There is nothing in the express words which suggests that CASA can delay or extend the coming to an end of an AOC.
The second proposition is that it must be implied, presumably, by reason that the expiry date of an AOC is at the sole discretion of CASA. However, implying words into the text of legislation can, as DC Pearce and RS Geddes state in their text Statutory Interpretation in Australia, at [2.32], be controversial. The learned authors refer to the decision of the High Court of Australia in Marshall v Watson (1972) 124 CLR 640 at 649 where Stephen J said:
Granted that there may seem to be lacking in the legislation powers which it might be thought the Legislature would have done well to include, it is no power of the judicial function to fill gaps disclosed in the legislation; as Lord Simonds said in Magor and St Mellons RDC v Newport Corporation [1952] AC 189 at 191, ‘if a gap is disclosed, the remedy lies in an amending Act’ and not in a ‘usurpation of the legislative function under the thin disguise of interpretation’.
I should also refer to the High Court of Australia (Gibbs CJ, Stephen, Mason, Aickin and Wilson JJ) decision in Cooper Brooks (Wollongong) Pty Ltd v The Commissioner of Taxation (1981) 147 CLR 297. Gibbs CJ said, at 304 – 305:
It is an elementary and fundamental principle that the object of the court, in interpreting a statute, “is to see what is the intention expressed by the words used”: River Wear Commissioners v. Adamson (16). It is only by considering the meaning of the words used by the legislature that the court can ascertain its intention. And it is not unduly pedantic to begin with the assumption that words mean what they say: cf. Cody v. J. H. Nelson Pty. Ltd. (17).… However, if the language of a statutory provision is clear and unambiguous, and is consistent and harmonious with the other provisions of the enactment, and can be intelligibly applied to the subject matter with which it deals, it must be given its ordinary and grammatical meaning, even if it leads to a result that may seem inconvenient or unjust. To say this is not to insist on too literal an interpretation, or to deny that the court should seek the real intention of the legislature.
In this case, it is not simply a question of reading in missing words. What is in fact missing is any manifestation of intent to permit CASA to extend the term of an AOC. That is in contrast to the express terms in the CASR dealing with medical certificates. It seems to me that it is logical to conclude that if the legislature intended to permit an extension of time for an authorisation under the Act or Regulations to remain in force, it would be expressly stated.
Furthermore, if one were to search for the intention expressed by the words used, it appears logical to arrive at the conclusion that it was to provide certainty on the grant of an AOC to its holder that, subject to suspension or cancellation for cause, it would continue until its expiry date. Plainly, the grant of an AOC to its holder involves the holder incurring substantial expenditure to establish a commercial air services operation. The holder is required to acquire aircraft specific for the purpose, facilities, persons, documents, key personnel and the like and therefore would have a reasonable expectation of being able to conduct those air services for a specified period of time. When the term of an AOC expires, there is provision in the Civil Aviation Act for what is effectively a renewal of the AOC (s. 27AB). The holder of the current AOC which is about to expire may apply for a new AOC for the same operations which were conducted under the expiring AOC. If the provision in s. 27(7) contemplated a variation of the term of an AOC, one might reasonably question whether that would include a reduction in the length of the term first granted. Given the clear intention of providing a fixed term of operation for an AOC, a reduction of the term without cause could not have been the intention. If that is the case, it cannot be correct to read into s. 27(7) a power to vary the term at CASA’s will.
I must conclude that I am unable to discern any power in the Civil Aviation Act by which CASA can extend the term of operation of an AOC beyond its expiry date. The problem is that Siopis J in Hotop’s case appears to have accepted CASA’s power to extend the term of an AOC. I accept, of course, that I am bound by the decision in Hotop. That is of course, as will become apparent shortly, provided that there is no other decision of the Federal Court which conflicts with the decision in Hotop.
THE APPLICATION OF THE STAY PROVISIONS
Section 41 of the AAT Act deals with the operation and implementation of the decision which is subject to review. Relevantly, it provides (emphasis in original):
(1) Subject to this section, the making of an application to the Tribunal for a review of a decision does not affect the operation of the decision or prevent the taking of action to implement the decision.
(2) The Tribunal may, on request being made, as prescribed, by a party to a proceeding before the Tribunal (in this section referred to as the relevant proceeding), if the Tribunal is of the opinion that it is desirable to do so after taking into account the interests of any persons who may be affected by the review, make such order or orders staying or otherwise affecting the operation or implementation of the decision to which the relevant proceeding relates or a part of that decision as the Tribunal considers appropriate for the purpose of securing the effectiveness of the hearing and determination of the application for review.…
In cases where a licence, registration or some form of approval to conduct a particular activity remains on foot and is not subject to a statutory provision which brings that licence, registration or approval to an end through the effluxion of time, the position of an applicant seeking a stay of a decision to cancel such an authority is largely uncontroversial. Problems however arise where the authority in question is about to expire due to the passage of time or as a result of a statutory provision, and an applicant has applied either for a renewal of that authority or for a new authority.
The problem becomes particularly acute where the application for renewal or issue of a new authority is refused and the applicant seeks review of that decision by the Tribunal where it is unlikely that the review can be concluded prior to the existing authority expiring. The question then faced by the Tribunal on an application under s. 41 (2) of the AAT Act is whether it can exercise its stay power despite the fact that in doing so, it will, by default or expressly, extend the operation of the existing authority. The cases dealing with this problem disclose a serious tension between what appears to be the intention of granting a stay of the operation or implementation of a reviewable decision, which is the preservation of the status quo ante, and the securing of the effectiveness of the hearing and determination of the application on review.
The Tribunal (Deputy President BJ McMahon) in Re Alexander and Migration Agents Registration Board (1995) 40 ALD 99 (Alexander) dealt with a refusal to register the applicant as a migration agent. Prior to the 1992 introduction of amendments to the Migration Act 1958, migration agents were not regulated. Following amendment of the Act, a Migration Agents Registration Board was established which was empowered to, amongst other things, suspend, de-register and to refuse applications for registration. Unregistered persons were prohibited from charging fees for immigration assistance or representations. Unregistered persons acting as migration agents were given a period of three months after the commencement of the new legislation to apply for registration. Such persons could continue to act as migration agents until such time as the board directed that person to cease to hold himself or herself out as available to give immigration assistance (that is refused to register that person) or registration was granted.
The Migration Agents Registration Board refused Mr Alexander’s application for registration and he applied for a review of that decision to the Tribunal. At the same time, he made an application under s. 41 (2) the AAT Act seeking a stay of the operation of the refusal to register decision. Mr Alexander contended, amongst other things, that the Tribunal had power to stay the refusal to register him. Deputy President McMahon found that the Tribunal did not have power to stay or otherwise affect the operation of the decision to refuse registration. He said, at 102 – 103 (emphasis added):
(21) The power is given to enable the tribunal to preserve the status quo, so as to ensure that a continuum which is broken by a reviewable decision may be reinstated in order to secure the ultimate effectiveness of the hearing. Here there is no such continuum.
(22) Prior to the operative decision, the applicant was not registered under Pt 3. After the operative decision, he continued to be unregistered under Pt 3. What the applicant really seeks is to have this tribunal substitute, as a temporary decision, an order granting him registration under Pt 3 without investigation of the merits. In my view this tribunal has no such power.
(23) In those cases, where the s. 41 (2) power has been exercised (either by the tribunal or by a court on appeal) it has been for the purpose of reinstating the applicant to the position he or she was in prior to the making of the operative decision.…
(24) I am not aware of any exercise of the power under s. 41 (2) in relation to an original decision for registration in any professional context.… Section 41 (2) is not positive in its effects but merely negative. The content of the power is limited by its legislative intendment. It is intended to preserve the situation obtaining prior to the reviewable decision. It is not intended to change the situation entirely and put the applicant in a different position from what he would have been in prior to the reviewable decision. It is not intended, in the present circumstances, to enable this tribunal to grant registration, much less to declare that the applicant’s rights under the transitional provisions (which have long since expired) should somehow be revived. If the latter proposition was acceded to, it would mean that the applicant would for the indefinite future be entitled to ignore all the regulatory provisions of the new legislation and to claim an immunity for professional acts which is not available to other unregistered persons.
While the facts in the Federal Court of Australia (Tamberlin J) decision in Shi v Migration Institute of Australia Ltd (2004) 78 ALD 281 (Shi) appear to be essentially on all fours with Alexander, Tamberlin J distinguished it. The distinction, according to his Honour, was that Mr Shi was a registered migration agent who was seeking a renewal of his registration for a further 12 month period. Migration agents were registered for a fixed period of 12 months. Mr Alexander was not previously registered even though he was entitled to practice as a migration agent at least until the Migration Act changed in 1992. Be that as it may, it is not the decision itself which is of interest as far as this matter is concerned but rather the way in which Tamberlin J approached the s. 41(2) issue. Of particular interest is this passage, at 287 (emphasis added):
… After a decision not to renew is made, the direct legal effect of the decision is that the deemed registration is terminated. That is because the deemed registration is taken to continue only until the MARA decides the application for renewal. Accordingly, in substance, and as a direct consequence of the MARA decision, there has been a termination of the rights of the agent enlivened by the deemed registration. This is quite different from ceasing to have effect a statutory expiry as a consequence of the lapse of time. Accordingly, the decision not to renew has an operation which is capable of being stayed pursuant to s. 41 (2) of the AAT Act. It is the cessation of the deemed right to be treated as if he were registered as a consequence of the decision not to renew that is the subject of the stay.
What is important in the Shi decision is that Tamberlin J drew a clear distinction between circumstances where an existing registration was deemed to continue beyond the registration period by reason of a statutory provision (in Shi’s case pursuant to s. 300 (1) of the Migration Act) and only ceased to be valid upon the decision being made not to renew that registration, and where the registration, or for that matter any other authority or licence, ceased to have effect as a consequence of a statutory expiry of that instrument. His Honour agreed with what Deputy President McMahon said in Alexander about a break in the continuum where a decision not to renew is made in circumstances where a person is taken to have been registered. It is the refusal to grant registration which causes the break in the continuum. It should be apparent that such a case is distinguishable from that which is before me in this (the BHS) case.
Siopis J also focused on the fact that the Tribunal could make an order under s. 41 (2) of the AAT Act which was positive in effect (at 240 – 242). I have some difficulty in understanding the significance of making an order which is positive in effect. His Honour referred particularly to the Full Court of the Federal Court of Australia (Davies, Burchett and O’Connor JJ) in Yolbir v Administrative Appeals Tribunal (1994) 48 FCR 246. That case involved the determination of whether a stay could be granted under the then s. 41 (2) of the AAT Act of the operative decision and not merely its affirmation by the Social Security Appeals Tribunal. The operative decision in that case was that Mr Yolbir’s pension be cancelled. The court said, at 250:
It follows that on the application made by Mr Yolbir, the Administrative Appeals Tribunal had power to restore the pension under s. 41 of the AAT Act, if this were appropriate for the purpose of securing the effectiveness of the hearing and the determination of the application for review.
The s. 41 power of “staying or otherwise affecting the operation or implementation of the decision” empowered the making of a stay decision expressed either as a suspension of the operative decision, or in the positive terms used by Bowen CJ in Director-General of Social Services v Cheney (unreported, 4 June 1980), which is referred to in the reasons of Deane J in Director-General of Social Services v Chaney (1980) 47 FLR 80 at 98, those terms being:
“to direct payment of the pension to [the respondent] as from today (a pension day) until the hearing of the appeal or further order.”
It should be apparent that whichever way the decision is expressed, it has a positive and a negative effect. If it were expressed in terms that the pension should be restored, that is, in a positive order, then the negative side of that is that the Department must not cease paying the pension to Mr Yolbir. It is, in effect, the other side of the same coin. If the order stated that the Department must not cease to pay Mr Yolbir the pension, that is, a negative order, then his pension payments would have continued. It is not the expression used in the order which is of any significance but rather its consequences. Any stay order made by the Tribunal will have the effect of maintaining the status quo as it existed prior to the reviewable decision being made and hence, from an applicant’s point of view, will be positive.
Although Siopis J referred to the decision in Shi, he omitted to refer to the very important passage at page 287 where Tamberlin J said that the position in that case differed from the case where the registration ceased to have effect as a result of statutory expiry due to the effluxion of time. It was for that reason that his Honour found his way clear to making a stay order pursuant to s. 41(2) of the AAT Act. The direct consequence of the decision made by MARA not to grant a renewal of Mr Shi’s registration terminated his deemed registration as a migration agent and right to carry on that practice. It was that decision which was reviewable and was properly stayed by his Honour. Therefore, it could be argued that the decision made by Siopis J in Hotop is inconsistent with Tamberlin J’s decision in Shi.
In any event, Siopis J made the stay order in Hotop for the following reasons (page 242 – 243):
This is because, on the evidence before me, although the decision was referred to in the applicant’s letter only as a decision cancelling the AOC, the effect of the decision was also to refuse the second respondent’s [Polar Aviation] application for the issue of a long-term replacement AOC which the second respondent had made in May 2004. The evidence shows that the decision, communicated by the applicant’s letter of 14 January 2005, was made primarily by reference to the “Show Cause” notice of 16 July 2004, which was a show cause notice, not in relation to a proposal to cancel the AOC, but, as set out in the applicant’s letters of 20 July 2004 and 30 September 2004, a notice to show cause why the applicant “should not refuse the Company’s application for an AOC covering the period post 31 July 2004”. Further, the 14 January 2005 decision was made at the end of a process which, according to the applicant’s letters of 20 July 2004 and 30 September 2004, was implemented for the purpose of preserving in tact the second respondent’s application for the issue of a long-term replacement AOC to take effect on the expiry of its current AOC. In my view, the evidence supports the conclusion that the applicant granted a series of short-term extensions of the existing AOC under s. 27 (7) of the CA Act, for the purpose of facilitating the consideration of the second respondent’s application for the issue of a long-term replacement AOC to take effect on the expiry of the current AOC; and that in reaching its decision on 14 January 2005 the applicant relied on a “Show Cause” process that had been commenced for the purpose of considering the second respondent’s application for an issue of a replacement AOC. I am of the view, therefore, that the effect of the decision that the applicant made on 14 January 2005 was not only to cancel the AOC but also to refuse the second respondent’s application made in May 2004 for the issue of a long-term replacement AOC…
Mr Langmead contended that the decision in this matter was on all fours with the decision in Hotop. In fact he referred to a letter dated 19 May 2015 from CASA to Maitland Lawyers in which CASA said:
I am instructed that, CASA would not oppose the making of such an order [purporting to extend the period of operation of the AOC] if your client withdraws its request to have the conditions imposed in accordance with the Deed, removed from its AOC.
I hasten to add that parties to an application before the Tribunal cannot, by consent, confer jurisdiction on the Tribunal in the absence of a statutory provision to that effect (s. 25 of the AAT Act).
BHS did not agree to withdraw its request to have the conditions imposed on its AOC removed because it was of the view that CASA had repudiated the Dead of Agreement. Accordingly, on 20 May 2015 CASA wrote to the Tribunal stating that it opposed BHS’s application to extend the time of expiry of the BHS AOC beyond 30 June 2015.
Although I did not have any evidence of an application made by BHS for renewal of its AOC, Mr Ashton properly informed me in the course of the hearing that CASA had received an email from Mr Calandra on 10 May 2015 seeking renewal of its AOC. CASA had not made an express decision to refuse that application.
I had no notice of a refusal to renew BHS’s AOC as requested in its email of 10 May 2015. Nevertheless, Mr Langmead submitted that CASA’s decision to cancel BHS’s AOC necessarily implied that it refused to renew or extend the period of operation of its AOC.
Mr Ashton submitted that in this case, the application for review which is the subject of the s. 41(2) application for a stay, is the decision made by CASA in March 2014 to cancel BHS’s AOC. However, BHS’s application for a variation of the stay order was not directed at affecting the operation or implementation of that decision, but rather it was directed at the provisions in the AOC, particularly its term. In fact, Mr Ashton submitted that the extension of the AOC was granted by Siopis J to Polar Aviation in Hotop not for the purpose of securing the effectiveness of the hearing and determination of the cancellation decision, but because the decision was also a rejection of an application for the issue of a replacement AOC.
While what Mr Ashton submitted may have been correct prior to 10 May 2015 when BHS made an informal application seeking renewal of its AOC, I believe I now have to take that into consideration as well and as Mr Langmead’s submissions that there has been an implied refusal to grant renewal of the AOC. In fact, the circumstances as they have developed throw another factor into an already awkward equation.
At present, BHS cannot operate under its AOC because it does not have a Chief Pilot. Mr Calandra has resigned and the condition on its current AOC precludes him from acting in that capacity. Mr Watson has been nominated for the position of Chief Pilot but that nomination has not yet been assessed by CASA. As I have stated above,
s. 28(1)(b)(iv) of the Civil Aviation Act, which sets out the conditions which must be satisfied for the issue of an AOC, mandates that an AOC holder must have key personnel in its organisation which have appropriate experience in air operations to conduct or carry out the AOC operations safely. That is an ongoing condition on the AOC
(s. 28BAA(1)). The Chief Pilot is one of those persons properly described as key personnel in s. 28. A breach of that condition will, undoubtedly, result in the suspension or cancellation of the AOC in accordance with s 28BA (3). It is sufficient to say that in those circumstances, continued operations cannot be guaranteed. Therefore, even if I were to agree to a variation of the original stay order on the grounds set out in Hotop’s case, such a decision would be rendered nugatory. In addition, the only application before the Tribunal at this point in time is that regarding the decision to cancel the existing AOC which expires on 30 June 2015.
Therefore, whichever way the decision in question is looked at, the position is significantly different to that of Polar Aviation in Hotop’s case. The absence of a Chief Pilot means that even if I were to grant a stay and extend the term of the current AOC, it would not give effective relief to BHS. Until a Chief Pilot is approved by CASA, BHS cannot conduct operations under its AOC. It could not properly be said that such a decision would secure the effectiveness of the hearing and determination of the application on review, whether that application is the cancellation decision or the refusal to grant a new AOC.
CONCLUSION
For the reasons I have set out above, I refuse to vary the stay order made by Deputy President Hotop on 11 April 2014. I do not disturb that order. The Tribunal is prepared to expedite the hearing of the substantive matters in this case.
I certify that the preceding 70 (seventy) paragraphs are a true copy of the reasons for the decision herein of Egon Fice, Senior Member ...............................[sgd].........................................
Associate
Dated 3 June 2015
Date(s) of hearing 29 May 2015 Counsel for the Applicant Mr J Langmead QC Advocate for the Applicant Mr J Maitland Solicitors for the Applicant Maitland Lawyers Counsel for the Respondent Mr R Ashton Advocate for the Respondent Ms T Canny Solicitors for the Respondent Civil Aviation Safety Authority
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