Gammadell Pty Ltd (Trading as Midstate Airlines) and Civil Aviation Safety Authority

[2004] AATA 489

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2004] AATA 489

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No Q2004/171

GENERAL ADMINISTRATIVE  DIVISION		)
Re		GAMMADELL PTY LTD (trading as MIDSTATE AIRLINES)

Applicant

And CIVIL AVIATION SAFETY AUTHORITY

Respondent

DECISION

Tribunal Senior Member McCabe

Date17 May 2004

PlaceBrisbane

Decision 1. The stay is granted until the appeal is heard or further order; and
2. On or before 4pm 31 May 2004 the applicant shall file in the Brisbane Registry of the Administrative Appeals Tribunal and serve on the respondent a report on its response to the issues raised in the audit report conducted by the respondent; and
3. Both parties are at liberty to apply for further orders in this matter.

..............................................

Senior Member

CATCHWORDS

AVIATION – Regulation of Air Navigation –  respondent cancelled applicant’s Air Operator’s Certificate – applicant applied to Administrative Appeals Tribunal – cancellation subject to automatic 90 day stay – automatic stay will soon lapse – applicant applied to Tribunal for stay – whether Tribunal should grant stay – applicant has reasonable excuse why appeal has not been prosecuted – applicant has reasonable prospects of success – applicant would suffer hardship if certificate is cancelled – public safety is not likely to be imperilled if order is made – stay order granted

Civil Aviation Act 1988

Griffiths Grif-Air Helicopters Pty Ltd and Civil Aviation Authority (1993) 31 ALD 380.

REASONS FOR DECISION

17 May 2004 Senior Member McCabe    

Introduction

1.      The applicant has asked the Tribunal to stay the respondent’s decision to cancel the applicant’s Air Operator’s Certificate (AOC). Without an AOC, the applicant will be unable to continue operating its aircraft. It wants to retain its AOC until such time as the Tribunal conducts a review of the decision.

The facts

2. The applicant was notified of the Civil Aviation Safety Authority’s (CASA) decision to cancel the AOC on 1 March 2004. The decision was made following an audit of the applicant’s operations by CASA on 29-30 April 2004. The decision was subject to an immediate stay pursuant to s 9A of the Civil Aviation Act 1988. That section provides the licence-holder with a five day stay within which it can appeal the decision to the Tribunal. If it does so, the stay is extended to 90 days from the date on which the licence-holder was notified of the decision. The applicant applied for review by the Tribunal and the 90 day stay commenced.

3.      The 90 day stay is intended to provide an opportunity for the matter to be considered by the Tribunal. Many disputes might be resolved by the Tribunal within that time frame, but it was not possible in this case. The applicant has now asked the Tribunal to order a further stay until a hearing can be scheduled. The applicant says it is anxious to have the matter resolved quickly.

4. Section 31A(7) contemplates an application for a further stay. The Tribunal’s power to order a stay is provided for in s 41(2) of the Administrative Appeals Tribunal Act 1975. Broadly speaking, the Tribunal may order a stay where it believes it is appropriate to do so having regard to the interests of anyone affected by the review. The power is intended to be exercised for “for the purpose of securing the effectiveness of the hearing and determination of the application for review.”

5. The automatic stay contemplated in s 9A of the Civil Aviation Act1988 does not apply in every case. Section 31D says CASA may suspend an AOC with immediate effect if it is satisfied there is a serious and imminent risk. CASA does not say there is a serious and imminent risk in this case.

The factors governing the exercise of the discretion under s 41(2) of the Administrative Appeals Tribunal Act 1975

6.      The Tribunal’s discretion to order a stay in cases like this was considered in Griffiths Grif-Air Helicopters Pty Ltd and Civil Aviation Authority (1993) 31 ALD 380. The Tribunal said (at 385) it should have regard at least to the following matters:

• The prospects of success of the application for review of the decision;
• The hardship to the applicant if the stay orders are not made; and
• Whether public safety is likely to be imperilled if the stay orders are not made.

7. Mr Langmead, counsel for the applicant, directed his submissions to these points. I will turn to them shortly. Before I do that, I need to consider the respondent’s argument about the effect of the introduction of the automatic stay provision in s 9A of the Civil Aviation Act 1988.

8. The respondent says the introduction of the automatic stay has the effect of imposing a more onerous burden on the applicant in applications for a further stay under s 41(2) of the Administrative Appeals Tribunal Act 1988. CASA says the parliament’s decision to provide an automatic stay evinces an intention that the matter should be resolved within that time and that no further stays ought to be granted unless the applicant is able to justify a further stay. If an applicant were able to obtain a further stay relatively easily, there would be no incentive for it to use the 90 day period it has been allowed to resolve the matter.

9.      The applicant did not agree. It said the fact the legislation provided for an automatic stay and a right to apply for a further stay was an acknowledgement that a stay should be readily available.

10. There is some force in the respondent’s contention. As a general proposition, one would expect an applicant seeking a further stay (whether the original stay was granted under s 41(2) or another provision of another Act) to face a more difficult time before the Tribunal than an applicant who approaches the Tribunal for the first time. It follows I must take into account the fact the applicant has already had (or will shortly have had) 90 days to prepare its case, and that 90 days was thought by parliament to be a reasonable time within which most matters could be resolved. (I say ‘most’ matters because parliament clearly envisaged circumstances might arise where a further stay was appropriate. That is why s 9A(7) preserved the ability to apply for a further stay under s 41(2) of the Administrative Appeals Tribunal Act 1988.)

11. While the Tribunal might be expected to scrutinise applications for a further stay more carefully, it is still obliged by s 41(2) to consider whether it is desirable to grant the stay. The matters referred to in the Grif-Air case are still relevant, although the applicant should offer a satisfactory explanation as to why the initial stay was not long enough. 

12.     I will deal firstly with the applicant’s explanation as to why the 90 day stay was inadequate. The applicant says a further stay is necessary in this case for the simple reason that the Tribunal was unable to provide a hearing date within the 90 day time-frame contemplated by s 31A of the Civil Aviation Authority Act 1988. I note the applicant indicated it anticipated a hearing might take two weeks. There was an added complication: it had apparently been suggested to the District Registrar that the hearing should be held in Mackay. The parties now appear to have accepted that a hearing should be held in Brisbane, where it can be brought on more expeditiously – within a month, the applicant says.

13.     I am satisfied with the explanation in the circumstances. There is no evidence the applicant is being dilatory in prosecuting its appeal.

14.     The first of the other matters referred to in the Grif-Air case is the applicant’s prospects of success. It is clear I am not expected to conduct a mini-trial to make an assessment of the prospects: rather, I must determine whether, on the material before me so far, there is an arguable case. The respondent referred to the audit of the applicant’s operations and noted a number of shortcomings. Counsel for the applicant says a number of the matters referred to in the audit have already been addressed and he said the applicant would deal with the other matters as soon as it had the opportunity to examine the audit report in detail. (It seems a copy of the audit report had only been provided to officers of the applicant earlier today.) Mr Langmead went onto say the applicant rejected a number of the factual claims and intended to thrash out those matters at the hearing. Mr Langmead also referred to statements made by two of the respondent’s officers who conducted the audit suggesting there were no serious problems.

15.     I formed the view that the applicant has an arguable case. A number of the respondent’s allegations of fact are in dispute. The case has some merit.

16.     What of the hardship to the applicant? I was provided with an unsworn statement from an officer of the applicant saying the company would almost certainly be forced to cease trading soon after its AOC was cancelled. The respondent suggested that raised questions about the applicant’s financial well-being, and disputed whether that result would necessarily follow from a cancellation decision being enforced in any case.

17.     Mr Langmead said the applicant would provide a signed copy of the affidavit as soon as it could be arranged. He indicated the deponent would also swear to the statements made by the respondent’s officers that I referred to above. On that basis, I am satisfied that the consequences for the applicant of enforcing the stay would be very serious indeed.

18.     The last of the matters raised in Grif-Air was the impact on public safety. Any decision to cancel an AOC is ultimately motivated by concerns about safety. The respondent points to the matters raised in the audit report as evidence of its ongoing safety concerns. But the applicant also noted CASA was not sufficiently alarmed by the applicant’s safety standards to suspend the licence with immediate effect on the basis of a serious and imminent risk. The applicant also referred to an accident-free record to date. Mr Langmead says he is instructed the applicant has already taken steps to address some of the concerns identified in the audit report, and will continue to do so once it is acquainted with the contents of the report.

19.     The respondent expressed concern that the evidence of the applicant’s response to the safety issues was effectively been given second-hand by its counsel. That was properly inevitable given the applicant has only just been acquainted with the contents of the audit report which detail the alleged shortcomings.

Conclusion

20.     I am satisfied in the circumstances that the stay is desirable given the evidence about the serious consequences for the applicant’s business and the totality of the evidence about the safety concerns and the applicant’s response to them. I will therefore order the say until such time as a hearing can be held. But I think the applicant should nonetheless be required to prepare a report to the respondent detailing the steps it is taking to address the safety concerns. That report should provide the respondent (and, if necessary, the Tribunal) with the opportunity to assess the extent of the risk posed by permitting the applicant to continue flying. The respondent is of course at liberty to apply for the stay to be revoked if it concludes the applicant’s response is inadequate or cause for alarm. The respondent is also at liberty to apply if it forms the view the applicant is being dilatory in its prosecution of the appeal.

I certify that the 20 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member McCabe

Signed:         .....................................................................................
  Associate: Thomas Ritchie

Date/s of Hearing: 14 May 2004
Date of Decision: 17 May 2004
The applicant was represented by Ms Warwick and Mr Langmead of counsel.
The respondent was represented by Mr Anastasi and Mr Harvey of counsel.