Heavylift Cargo Airlines Limited and Anor and Civil Aviation Safety Authority
[2007] AATA 1005
•11 January 2007
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2007] AATA 1005
ADMINISTRATIVE APPEALS TRIBUNAL )
) No N2006/641
GENERAL ADMINISTRATIVE DIVISION ) Re Heavylift Cargo Airlines
Limited
(a foreign registered company)First Applicant
Heavylift Cargo Airlines
Pty Limited
(ACN 102 571 746)Second Applicant
and
Civil Aviation Safety
Authority
Respondent
DECISION
Tribunal Professor GD Walker, Deputy President
Air Vice-Marshal Franklin Cox AO, Member
Date 11 January 2007
PlaceSydney
Decision The decision under review is affirmed. ..............................................
Professor GD Walker
Deputy President
Catchwords
CIVIL AVIATION SAFETY AUTHORITY – Air Operator’s Certificate (‘AOC’) – foreign aircraft air operator’s certificate for international air transport operations for the purpose of carrying cargo – refusal to issue AOC on grounds the applicants have not complied with aviation legislation – deficiencies in operations manual – breaches in handling of dangerous goods – operation of aircraft with defects – decision affirmed.
Civil Aviation Act 1988 ss 23(1), 28BA(3),
Civil Aviation Safety Regulations 1998 Regs. 92.025, 92.055(3), 92.085, 92.125, 92.125(3), 215, Schedule 9
Civil Aviation Regulations 1988 Reg. 215, Schedule 9
Civil Aviation Orders s 82
Civil Aviation Advisory Circular AC 92-1(0)
Civil Aviation Advisory Circular AC 92-2(0)
International Civil Aviation Organisation Technical Instructions
Convention on International Civil Aviation (‘The Chicago Convention’)
Re Minister for Immigration and Multicultural & Indigenous Affairs; ex parte LAM [2003] 214 CLR 1
Civil Aviation Safety Authority v Allan (2001) 114 FCR 14
REASONS FOR DECISION
January 2007 Professor GD Walker, Deputy President
Air Vice-Marshal Franklin Cox AO, Member
1. The first applicant, Heavylift Cargo Airlines Limited (a foreign registered company) was the holder of an Australian foreign aircraft Air Operator’s Certificate (AOC) number F591527-03 (authorising international air transport operations for the purpose of carrying cargo) which was due to expire at the end of 22 January 2005. After interim renewal it applied for renewal of the certificate on 25 October 2005. The certificate was not renewed but extended until 31 May 2006. For convenience the first applicant may be referred to simply as “the applicant” or “Heavylift” unless the context requires otherwise.
2.
The decision has been organised as follows, and for convenience, the evidence and most of the submissions can be considered (and at the hearing were considered) in relation to the four sub issues in Part D:
Part A............. Summary, issue and brief background [3] – [15]
Part B............. Decision to refuse AOC by CASA [16] – [20]
Part C............. Relevant legislation [21] – [36]
Part D............. Discussion of Evidence [37]-[452](i) Condition of the Aircraft
· The Belfast
· The Boeing 727
(ii) The Applicant’s operating manuals
(iii) Certain other particular concerns and incidents
(iv) Systems and coordination
Part E............. Application of law and decision of the Tribunal [453]-[462]
Part A – Summary, issues & brief background3. On 30 May 2006, a delegate of the respondent refused to issue an AOC to Heavylift on the grounds that it was not satisfied that the existing systems used by Heavylift, particularly with respect to maintenance control and carriage of dangerous goods, fully comply with or enable the applicant to be capable of complying with aviation legislation, and that the applicant company lacks suitable organisation to ensure AOC operations are conducted safely or has the necessary practices and procedures to control the organisation to ensure operations are conducted safely. This is the decision to be reviewed by the tribunal.
Issue
4. The issue for the tribunal is whether the first applicant can satisfy the tribunal that it has complied with, or is capable of complying with, the safety provisions of the Civil Aviation Act 1988 (“CAA”) and the regulations and orders made under it within the meaning of s 28(1)(a) of the Act and whether it can satisfy the tribunal in relation to the matters listed in s 28(1)(b).
Background
5. The first applicant, Heavylift, is a company incorporated in the Republic of Sierra Leone. Heavylift is the operator of two aircraft, a Shorts SC-5 Belfast (“the Belfast”) and a Boeing 727-51C (“the 727” or “Boeing 727”), both of which are registered in Sierra Leone. The Belfast, manufactured by Short Brothers & Harland of Northern Ireland in approximately 1968, is a four-engine turboprop cargo aircraft approximately twice the size of a C130 Hercules. Only 10 Belfasts were manufactured.
6. The second applicant, Heavylift Cargo Airlines Pty Limited (“the company”), is a company incorporated in Australia. The company is the holder of an Australian airline license with traffic rights to the United States, China, the Netherlands, New Zealand, New Caledonia, Vanuatu, Nauru, Papua New Guinea and the Solomon Islands. It contracts for the carriage of cargo between various destinations principally in the South Pacific but in other parts of the world as well. To meet those contracts, the company charters aircraft operated by Heavylift.
7. The two aircraft operated by Heavylift have current Certificates of Airworthiness and Certificates of Registration issued by the Department of Civil Aviation (“DCA”), Republic of Sierra Leone, which is a contracting state to the Chicago Convention (the Convention on International Civil Aviation done at Chicago on 7 December 1944: s 3 CAA). A requirement of those certificates is that Heavylift be subject to twice-yearly audits and airworthiness inspections by the DCA. The crew of both aircraft have licences issued variously in Australia, the United States and the United Kingdom, all licenses being validated by the Sierra Leone DCA. Heavy maintenance on the Shorts Belfast is carried out at the approved maintenance base in Prestwick, Scotland. Maintenance on the Boeing 727 is conducted at repair centres approved by the Federal Aviation Administration to conduct such maintenance, usually in the United States. Delegates of the Sierra Leone DCA audit the Belfast maintenance organisations, both of whom have approval to conduct maintenance on aircraft registered in Sierra Leone.
8. Heavylift is licensed for the carriage of cargo by air on scheduled and charter international routes by Air Operator’s Certificates (AOC) issued by the Director of Civil Aviation of Sierra Leone. These certificates were issued on 24 February 2003 valid until 23 February 2004, 24 February 2004 valid until 23 February 2005, 1 December 2004 valid until 30 November 2005, 11 November 2005 valid until 10 November 2006, and 11 November 2006 to 11 November 2007. On 21 August 2003, an Australian foreign aircraft AOC number F5915267-01 was issued by CASA, valid until 27 February 2004 in respect of the Belfast, as a foreign registered aircraft, to allow it to fly into and out of Australia for the carriage of cargo (T p38). On 16 September 2003, CASA issued a replacement AOC number F591527-02 which added additional ports from which Heavylift could operate, valid until 23 February 2004, the expiry date to coincide with the expiry of Heavylift’s Sierra Leone AOC. On 19 February 2004, CASA issued an AOC number F591527-03 authorising Heavylift to conduct international air transport operations for the carriage of cargo, using both the Belfast and the 727, valid until 22 January 2005, the expiry date of the Sierra Leone Certificate of Airworthiness issued in respect of the 727 (T p49).
9. On 4 January 2005, Heavylift applied to CASA for the issue of an AOC to replace AOC F591527-03 due to expire on 22 January 2005 (T p65). CASA subsequently informed Heavylift that a comprehensive assessment of its operations against the requirements of s 28 of the Civil Aviation Act was to be carried out and issued AOC number F591527-04 dated 4 February 2005 valid until 29 April 2005 to allow that to occur (T p106). Following CASA’s audits in April 2005 and extensive discussions and correspondence between the parties, Heavylift was issued with AOC number F591527-05 issued on 5 May 2005 valid until 30 November 2005, to run concurrently with the Sierra Leone AOC (T p156). By letter dated 5 May 2005 (T pp153-155), the acting executive manager of the Aviation Safety Compliance Division of CASA advised Heavylift that the AOC was issued on the expectation
that the Company will address, to CASA’s complete satisfaction, any matters that are identified and notified to the Company during CASA’s evaluation of the Company’s documents or our inspections of your Company operations …. In this connection, I draw your particular attention to the discrepancies in the content of Part A of your Operations Manual and in your procedures for the handling of Dangerous Goods consigned for carriage by air, which were identified to you directly and through the Company’s representatives during our assessment activities … on 20 and 21 April 2005.
Heavylift was further advised that failure to address “any safety-related matters” might lead to limitations, conditions, or possibly suspension or cancellation of its Australian foreign aircraft AOC and that it was obliged to comply with the requirements of Australia’s civil aviation laws as well as those of Sierra Leone.
10. On 25 October 2005, Heavylift applied to CASA for the renewal of its foreign AOC due to expire on 30 November 2005 in respect of both the Belfast and 727 (T p179). Heavylift also advised that two surveyors from the Sierra Leone DCA were due in Australia on 26 October 2005 to inspect the aircraft for the renewal of the Sierra Leone AOC.
11. During the months October 2005 to April 2006, extensive negotiations were held between representatives of CASA and Heavylift. On 8 May 2006, the group general manager, air transport operations group of CASA advised Heavylift of its proposed intention to cancel or suspend Air Operator’s Certificate F591527-05 and its proposal to refuse to re-issue an AOC to Heavylift in accordance with ss 28 and 28BA(3) of the Civil Aviation Act. This notice of intention, which was some 20 pages long, stated that following CASA’s audit in April 2006, it had detected a number of concerns and breaches of aviation legislation including, inter alia, its Safety Management System Manual was deficient in relation to the actual management structure and management responsibilities, operational information provided to crews, and its dangerous goods manual was deficient, it did not provide dangerous goods training to it handling agents, it did not report incidents involving dangerous goods, on 28 November 2004 it carried dangerous goods, namely 7038 kg of military ammunition, in contravention of the International Civil Aviation Organisation (ICAO) Technical Instructions for the Safe Transport of dangerous Goods by Air, including not packing the ammunition in the required manner according to instructions and not labelling it correctly.
12. The show cause notice further went on to state that an inspection of both aircraft revealed significant defects including on the Belfast both rear fairings (either side of the cargo door) had significant tape repairs and both the main gear and nose gear had significant surface corrosion. Thirty-three defects were identified on the 727, including right hand main landing gear uplock roller seized, APU and tailskid lights on flight panel unserviceable, lower fuselage repair just forward of stn 208 appears to be a “bog patch repair” with no rivets apparent, corrosion was evident at the right hand wing under wing skin and engine fire extinguisher pressure graph is unreadable. Further, the maintenance control arrangements and records were deficient, the audit had revealed improper maintenance practices, the cargo restraint system on the 727 was found to be defective, and there had been a recent landing incident on 26 April 2006 involving the Belfast when the aircraft had allegedly lost directional control and had veered heavily to the right at very high speed causing Brisbane airport ground crew to take evasive action to avoid being hit.
13. CASA advised Heavylift that it was not satisfied it had complied with provisions of the Civil Aviation Act, Regulations and Orders in accordance with ss 28(1)(a) and (b) of the Act. In particular the existing systems of Heavylift, especially with respect to maintenance control and carriage of dangerous goods, did not comply with statutory requirements and the company lacked suitable organisation to ensure the AOC operations were conducted safely and that it had in place the necessary practices and procedures to ensure that the operations authorised by the AOC were conducted safely. Having regard to all the matters stated, CASA stated that it was considering refusing to issue an AOC to Heavylift and allowing the company 10 days to provide CASA with reasons why its AOC should not be suspended or cancelled and re-issue refused (T pp377-396).
14. Mr Nicholas Leach, chief executive of Heavylift responded by letter dated 23 May 2006 (T p397). In his 12 page letter Mr Leach addressed all the issues raised by CASA concluding “The matters raised in the show cause Notice do not support the conclusions which are drawn in paragraphs 45-46 and provide no basis for cancellation of the existing AOC or refusal to reissue that AOC. Heavylift has had insufficient time to address each and every item as fully as it would have done with more time. Elaboration or clarification might be required in relation to some of the items. In the circumstances Heavylift should also be afforded the opportunity to attend a ‘show cause conference’ (T p408). Mr Leach also included a number of expert reports for CASA’s consideration (T pp409-434).
15. On 29 May 2006, Mr Leach on behalf of Heavylift sent a further response to CASA noting that the company was only given 10 days in which to respond as opposed to the usual practice of 28 days (T pp435-438). This letter made further submissions in respect of manuals and documentation, dangerous goods, aircraft, allegedly unsubstantiated allegations regarding the removal of wheels from the Belfast, and the organisation of the company. He again requested a show cause conference to show that the company was committed to safety compliance. Mr Leach wrote “Heavylift is adamant that it does not accept that matters which have been raised could seriously point to any wrong doing or dangerous practices but at the same time recognises that improvement is always possible and indeed essential.” Further expert evidence was also submitted for consideration.
Part b – Decision to refuse aoc by casa
16. On 30 May 2006, the group general manager, Air Transport Operations group of CASA, Mr Patrick Murray, advised Heavylift that having considered Mr Leach’s responses dated 23 May 2006 to the show cause and the reports attached thereto, he had made a decision to refuse to issue an AOC to Heavylift on the grounds of:
·the April 2006 audit which detected concerns and breaches of aviation legislation in relation to the SMS manual, operational information provided to the crews and the company’s route guide (involving breaches of regulation 215 Civil Aviation Regulations (CAR));
·the Boeing 727 Minimum Equipment List (MEL) used by Heavylift was not the current 2005 edition and the company could not provide evidence that it knew of the amendments;
·dangerous goods issues including failure to have available to its staff a dangerous goods manual or cargo and ground handling manual, failure to distribute its dangerous goods manual to ground handling agents of Heavylift, failure to provide staff with the necessary training for the handling of dangerous goods, and failure to make its ground staff aware of dangerous goods incidents reporting procedures (involving breaches of regulations 92.025, 92.055(3), 92.085, 92.125, 92.125(3) of the Civil Aviation Safety Regulations (SASR));
·previous dangerous goods breaches involving an incident on 28 November 2004 when the Belfast landed at Cairns airport carrying 7038kg of ammunition, with deficient labelling, was not packed in accordance with technical instructions (in contravention of s 23(1) CAA and appendix 1 to s 82.0 of Civil Aviation Orders), and further was signed for by Heavylift’s chief pilot, Captain Porter, without checking the accuracy of the shipper’s declaration in breach of his responsibilities as chief pilot and pilot in command of the aircraft;
·aircraft inspections which occurred on 18 August 2005 revealing defects to both the Boeing 727 and the Belfast and further inspections on 4 April 2006 which revealed in respect to the Belfast:
o10 small delaminations in the port direct vision window which were not recorded on the damage chart and window delamination chart;
ofuel stain beneath the left hand wing root;
and the inspection on 7 April 2006 which revealed the following defects to the 727:
o the emergency brake accumulator pressure gauge in the nose wheel well was unreadable;
o the lower nose compartment lights were unserviceable;
o insulation blankets were missing from the lower nose compartment and electronics equipment centre bay;
o paint was bubbling under the aircraft battery;
o right hand main landing gear uplock roller seized;
o oil leak around auxiliary power unit (APU) in right wheel well;
o air stair attachments have worn rivet heads on both sides of pivot points;
o left navigation light unserviceable;
o main ball roller mat adjacent to main cargo door missing one roller;
o APU and tailskid lights on flight engineer panel unserviceable;
o AFM supplements not consistent with STCs fitted to the aircraft;
o Radome (nose of aircraft) badly eroded (damage to the radome may affect operation of the radar);
o screws above right hand cockpit sliding window badly rusted;
o lower fuselage repair just forward of stn 208 appears to be a “bog patch repair” with no rivets apparent;
o panel sealing tape in various parts of the forward cargo compartment is coming adrift from the joints;
o fuel leak evident on right hand wing, just forward of main landing gear at wing plant joint;
o jacking point insert missing from right hand wing;
o several pulled rivets inboard end of number 6 slat;
o number 5 slat on leading edge of wing bent down badly at trailing edge;
o fuelling pressure panel decal missing from fuelling panel;
o corrosion evident at the right hand wing under wing skin, just aft of fuelling panel;
o corrosion evident on the right hand inboard flap fairing at fairing to wing skin connection;
o flight control cables in right hand wheel well just below spoiler mixer appear worn;
o there was a gouge in the fuselage skin, just above rear cargo door;
o APU door missing, no vanes fitted;
o left hand inboard flap fairing appears incorrectly rigged;
o bonding lead broken on the inboard end number 2 leading edge flap;
o standby hydraulic reservoir shows being overfull on both the tank indicator and the cockpit indicator;
o severe corrosion and cracking evident on slanted overhead panel just aft of the rear entry door;
o engine fire extinguisher pressure graph is unreadable;
o hand fire extinguisher inside forward entry door is below charge pressure;
o eroded panel adjacent to number 8 slat;
o the right hand nose wheel serial number was not as per technical records;
·maintenance control arrangements and records are handled by the Maintenance Control Centre in Prestwick, Scotland, the remoteness of this location to Australia resulting in the non-rectification of defects and the lack of maintenance documentation and technical data in Australia; the maintenance records for the Boeing 727 were missing certification records for FAA Airworthiness Directive (known as “dirty thumbprints”); no justification was provided for overhauling the 727’s landing gear assemblies at 28000 instead of 16000 hours as required by Boeing’s MPD; the Corrosion Prevention Control Program (CPCP) is not being properly followed or fully implemented; there was no evidence Heavylift’s engineering procedures manual was approved by Sierra Leone for the 727; and the system of maintenance for the 727 did not include signed check cards or landing gear CPCP cards and no out of service or OSIP (Overhaul and Special Inspection Programme) programme was apparent.
·improper maintenance practices including requesting a licensed aircraft maintenance engineer (LAME) to remove the main wheels from the Belfast to facilitate the replacement of the tyres without any data or manuals on to how to remove the tyres or without an authorised person performing the maintenance; the engineer providing ground handling support was told the ground interphone jack had been unserviceable since the aircraft left the factory; and that during the service in 2004 the pilot ignored all hand signals given by the engineer and initiated an engine start without clearance with the potential to cause damage to the aircraft and injury or death to ground personnel.
·cargo restraint systems on the 727 were inspected during the April 2006 audit when it was found that aircraft equipment in the front forward cargo and in the forward cargo was not secured nor was secured netting in place and that items less than 35 kilograms have the potential to cause damage in a 727.
·a recent landing incident on 26 April 2006 at Brisbane airport when the Belfast lost directional control, veered heavily to the right of runway 01 almost running off it, exiting off a taxiway at very high speed causing ground officials to take evasive action to avoid being hit by the aircraft; it was noted that the number 2 engine of the aircraft did not feather; the aircraft leaked fuel and oil on the runway requiring removal; and that evidence indicates the aircraft was flown from Cairns to Brisbane with a failed nose gear steering cable which caused the aircraft to lose directional control.
17. The delegate informed Heavylift he was satisfied it had not complied with the provisions of the Civil Aviation Act, Regulations and Orders in accordance with s 28(1)(a) and (b) of the Act particularly in relation to maintenance control and carriage of dangerous goods and was also satisfied that Heavylift lacked the organisational structure to ensure the AOC operations were conducted safely following all the necessary practices and procedures and to ensure operations authorised under the AOC are conducted safely in that:
·the deficiencies and inconsistencies in its operational manual and operational documentation indicate they are not considered or used when conducting operations;
·an unapproved dangerous goods manual was being used and no dangerous goods training of ground agents has been provided and no records relating to such training were kept;
·Heavylift has committed breaches of dangerous goods technical instructions, one involving the chief pilot signing a declaration without taking any steps to satisfy himself as to the accuracy of it; and
·Heavylift operates aircraft with defects and many maintenance procedures are not being followed, which may have contributed to the landing incidents referred to in this notice.
18. On 30 May 2006, the first and second applicants lodged an application for a review of this decision by the tribunal.
19. Heavylift’s last Australian AOC was issued on 14 February 2006 and was expressed to be current until 31 May 2006 (T p320). On that day the tribunal varied the AOC by extending it until 7 August 2006 or further order. That period was further extended to 28 August and then to 10 October 2006. On 9 October at the resumed hearing the applicant sought a further extension, which was granted, with effect until a decision is handed down by the Tribunal on the current conditions. The respondent neither consented to nor opposed those extensions.
20. At the hearing of the matter, the applicants were represented by Mark Leeming SC, senior counsel, instructed by Norton White lawyers, and the respondent was represented by Ian Harvey, counsel, instructed by Adam Anastasi, Office of Legal Counsel, CASA. The evidence before the tribunal comprised the documents produced pursuant to s 37 of the Administrative Appeals Tribunal Act 1975 (“the T documents”), together with the evidence tendered by the parties at the hearing. Oral evidence was given for the applicant by Nicholas Leach, Geoffrey Leach (by telephone), Allan Rash (by telephone), Robert Scott, Dafydd Llewellyn, Brian Porter, and David Simons, and for the respondent by David Hendry, Robert Timmins, Michael Rossiter, Hugh Clark, Bruce Forman (by telephone), and David Yeomans.
Part C - Relevant Legislation
21. The principal legislation is the Civil Aviation Act 1988 (CAA). The Act provides:
3A Main object of this Act
The main object of this Act is to establish a regulatory framework for maintaining, enhancing and promoting the safety of civil aviation, with particular emphasis on preventing aviation accidents and incidents.
22. Section 9A provides:
(1) In exercising its powers and performing its functions, CASA must regard the safety of air navigation as the most important consideration.
(2)Subject to subsection (1), CASA must exercise its powers and perform its functions in a manner that ensures that, as far as is practicable, the environment is protected from:
(a) the effects of the operation and use of aircraft; and
(b) the effects associated with the operation and use of aircraft.
23. Section 9(1) provides:
9 CASA’s functions
(1)CASA has the function of conducting the safety regulation of the following, in accordance with this Act and the regulations:
(a) civil air operations in Australian territory;
….
(e)issuing certificates, licences, registrations and permits;
….
24. Section 23 of the CAA deals with the carrying of dangerous goods:
23 Dangerous goods
(1) An aircraft must not carry dangerous goods except:
(a) in accordance with the regulations, including any conditions subject to which the regulations permit the carriage of those goods; or
(b) with the written permission of CASA and in accordance with any conditions specified in the permission.
(2) A person must not carry or consign for carriage any dangerous goods on board an aircraft except:
(a) in accordance with the regulations, including any conditions subject to which the regulations permit the carriage or consignment of those goods; or
(b) with the written permission of CASA and in accordance with any conditions specified in the permission.
Penalty: Imprisonment for 7 years.
25. Sections 27 and 28 of the CAA provide CASA with the authority to issue a Air Operator’s Certificate (AOC), the provisions relevant to this matter being:
27 AOCs
(1) CASA may issue AOCs for the purposes of its functions.
(2) Except as authorised by an AOC, 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.
(2A)An AOC may authorise the flying or operation of an aircraft, other than the operation of a foreign registered aircraft on regulated domestic flights, by authorising the flying or operation of aircraft included in a class of aircraft described in the AOC.
(2B)An AOC may be issued only to a natural person or to a body having legal personality.
(3)If a holder of an AOC makes a request in writing to CASA for the revocation of the AOC, CASA must cancel the AOC.
(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.
27AE Application for foreign aircraft AOC
(1)CASA may give a written notice to an applicant for a foreign aircraft AOC, requiring the applicant to give CASA any or all of the following:
(a)a copy of any air operator’s certificate, or any document having substantially the same effect, issued by the authority responsible for regulating civil aviation in the country in which the aircraft is registered or operating;
(b)a copy of any limitations or conditions imposed by the authority on operations conducted or carried out by the applicant, unless those limitations or conditions are specified in a certificate or document specified in paragraph (a);
(c)copies of any operational authorisations or requirements, however described, issued by the authority in relation to the operations of the applicant, unless those authorisations or requirements are specified in a certificate or document specified in paragraph (a) or (b);
(d)written particulars of all licences held by flight crew members intended to be engaged in carrying out operations under the foreign aircraft AOC.
…
28 CASA must issue AOC if satisfied about certain matters
(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 provisions of this Act, the regulations and the Civil Aviation Orders, that relate to safety, including provisions about the competence of persons to do anything that would be covered by the AOC; 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
(c) …
(3) In this section:
AOC operations means the operations covered by the application.
Applicant’s organisation means the organisation established, or proposed to be established, by the applicant to conduct or carry out the operations covered by the application.
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.
26. Section 28BA(3) of the CAA provides that CASA may, by written notice given to the AOC holder, suspend or cancel an AOC if a condition of the AOC is breached.
27. The provisions of the Civil Aviation Regulations 1988 (CAR) relate to the requirements for international air transport operations including routes and operations manuals. Section 215 CAR provides:
215 Operations manual
(1)An operator shall provide an operations manual for the use and guidance of the operations personnel of the operator.
Penalty: 25 penalty units.
(2)The operator must ensure that the operations manual contains such information, procedures and instructions with respect to the flight operations of all types of aircraft operated by the operator as are necessary to ensure the safe conduct of the flight operations (other than information, procedures or instructions that are set out in other documents required to be carried in the aircraft in pursuance of these Regulations).
28. Part 92 of the Civil Aviation Safety Regulations 1998 (CASR) relates to the consignment and carriage of dangerous goods by air including the loading, handling and carrying of dangerous goods, and the training of ground handling agents in the handling of dangerous goods. The relevant provisions are:
Subpart 92.A General
92.005 Applicability
(1) This Part applies in relation to the operation of:
(a) all Australian aircraft; and
(b) all foreign aircraft (other than state aircraft) operating in Australian territory.
(2) This Part sets out:
(a) for section 23 of the Act — the conditions under which an aircraft may carry dangerous goods and a person may carry dangerous goods, or consign dangerous goods for carriage, on an aircraft; and
(b) for section 23A of the Act — the requirements for the statement to be made in respect of cargo consigned for carriage on an aircraft; and
(c) for section 23B of the Act — the requirements for training of persons involved in handling cargo carried or consigned for carriage on an aircraft.
92.010 Definitions for Part 92
(1) In this Part:
…
dangerous goods incident means an event (other than a dangerous goods accident) involving dangerous goods that occurs in the course of the goods being carried, or consigned for carriage, on an aircraft and that:
(a) results in:
(i) the escape of smoke or flames from the container or package in which the goods are contained; or
(ii) breakage of the container or package in which the goods are contained; or
(iii) any escape of the goods or part of them from the container or package in which they are contained; or
(iv) leakage of fluid or radiation from the container or package in which the goods are contained; or
(b) seriously jeopardises, or is likely to seriously jeopardise, the aircraft or its occupants.
dangerous goods manual means a manual kept by an operator in accordance with regulation 92.045 or 92.050.
…
ground handling agent means a person who performs, on behalf of an operator, the service of accepting, handling, loading, unloading, transferring or otherwise processing cargo, passengers or baggage.
shipment means shipment by air.
…
Technical Instructions means, at a particular time, the edition that is valid at that time of the document entitled Technical Instructions for the Safe Transport of Dangerous Goods by Air, issued by the International Civil Aviation Organization.
Note 1 Each edition of the Technical Instructions states in its Introduction the dates between which it is valid. The edition for 2003–2004 of the Technical Instructions is valid from 1 March 2003 to 31 December 2004 or until the next edition becomes valid. The Technical Instructions are available (as a printed document only) from the ICAO’s Document Sales Unit at:
ICAO, Document Sales Unit
999 University Street, Montreal, Quebec H3C 5H7
Canada
Telephone: (514) 954-8022
Fax: (514) 954-6769E-mail: [email protected]
Note 2 General industry practice is to follow the IATA Dangerous Goods Regulations, which are issued more frequently than the Technical Instructions. The requirements of the IATA Regulations are either the same as, or more stringent than, the requirements of the Technical Instructions. If that is so, compliance with the IATA Regulations will automatically result in compliance with the Technical Instructions.
(2) …
92.015 What are dangerous goods?
For the purposes of subparagraph (b)(ii) of the definition of dangerous goods in subsection 23 (3) of the Act, the things specified in the Dangerous Goods List contained in the Technical Instructions are declared to be dangerous goods.
92.025 Compliance with Technical Instructions — operators
(1)This regulation makes provision, for the purposes of subsections 23 (1), (2) and (2A) of the Act, about the carriage of dangerous goods on an aircraft.
Note Under subsections 23 (1), (2) and (2A) of the Act, an aircraft must not carry dangerous goods except in accordance with these Regulations.
(2)It is a condition of the carriage of dangerous goods on an aircraft that the operator of the aircraft complies with:
(a)the requirements (if any) of the Technical Instructions limiting the quantity of such goods that may be carried on the aircraft; or
(b) the requirements of those Instructions concerning the following matters:
(i) the loading of the goods;
(ii)the separation of the goods from passengers, animals or other cargo on board the aircraft;
(iii) the replacement of lost, damaged or detached labels;
(iv)the labelling of unit load devices (such as containers or pallets) that contain the goods;
(v) segregation of the goods from other dangerous goods;
(vi) acceptance procedures for the goods;
(vii) dealing with undeliverable consignments;
(viii) dealing with damaged packages;
(ix) inspection of the aircraft or the goods;
(x) …
(xi) giving information to the aircraft’s crew;
(xii) …
(xiv) documentation;
(xv) providing notices and information.
92.055 Dangerous goods manual – requirements applicable to all Operators
(1)An operator’s dangerous goods manual may be incorporated in the operator’s operations manual or any other manual maintained by the operator that deals with the handling or carriage of cargo.
(2)Subregulations (3), (4) and (5) set out, for the purposes of subsections 23 (1), (2) and (2A) of the Act, conditions of the carriage of dangerous goods on an aircraft.
…(3)An operator must make a copy of its dangerous goods manual available, in a readily accessible place:
(a)in the case of an Australian operator – to each of the operator’s employees whose duties and responsibilities are related to the handling or carriage of cargo; or
(b) in any other case – to:
(i) any of the operator’s employees in Australia whose duties and responsibilities are related to the handling or carriage of cargo; and
(ii) any employees of its ground handling agent in Australia whose duties and responsibilities are related to the handling or carriage of cargo.
(4)An operator must take all reasonable steps to ensure that the handling and carriage of dangerous goods is in accordance with the procedures and instructions in, or referred to in, its dangerous goods manual.
(5)An operator must take all reasonable steps to ensure that each of the operator’s employees is made aware of the contents of the operator’s dangerous goods manual so far as it is applicable and relevant to the employee’s duties before the employee first performs those duties.
92.085 Definitions for Subpart 92.C
(1) In this Subpart:
…deemed employee means a person who, although not employed by an aircraft operator, ground handling agent, freight forwarder, screening authority or shipper of dangerous goods, performs for the operator, ground handling agent, freight forwarder, screening authority or shipper any of the following services:
(a)accepting cargo consigned for transport on an aircraft, or supervising someone whose duties include accepting such cargo at any time after it leaves the custody of the original consignor;
(b) acting as a member of an aircraft’s flight crew or as a load planner;
(c) acting as a member of an aircraft’s cabin crew;
(d)handling cargo consigned for transport on an aircraft at any time after it leaves the custody of the original consignor, or supervising someone whose duties include handling such cargo;
(e)handling passengers’ checked or carry-on baggage, or supervising someone whose duties include handling such baggage;
(f)packing dangerous goods, or supervising someone whose duties include packing such goods, in the course of the goods’ being consigned for carriage on an aircraft.
…
group A employee means:
(a)an employee whose duties include accepting, or supervising someone whose duties include accepting, cargo known or believed to contain dangerous goods consigned for transport on an aircraft at any time after it leaves the custody of the original consignor; or
(b) a deemed employee whose function includes those duties.
group E employee means:
(a)any employee of an operator, ground handling agent, freight tforwarder or screening authority who is not a group A, B, C or D employee and whose duties involve handling:
(i)cargo consigned for transport on an aircraft at any time after it leaves the custody of the original consignor; or
(ii) passengers’ checked or carry-on baggage; or
(b) a deemed employee whose function includes those duties.
…
92.125 Training – certain employees of non-Australian operators
(1)This regulation applies to a group A, B, C, D or E employee in Australia of an aircraft operator that is not an Australian operator, and has not been granted an exclusion under regulation 92.155.
(2)The operator must ensure that each of its employees to whom this regulation applies undertakes training in accordance with:
(a)the requirements of the law of the place in which the operator’s aircraft are registered; or
(b)if there are no such requirements, or the operator’s aircraft are registered in more than 1 country, the requirements of the Technical Instructions;
before the employee first performs the relevant duties, and as often as that law or the Technical Instructions require while the employee continues to carry out those duties.
Maximum penalty: 30 penalty units.
(3)The operator must ensure that the records about that training required by that law or the Technical Instructions are kept.
Maximum penalty: 30 penalty units.
An offence against subregulation (2) or (3) is an offence of strict liability.
29. The CASR should be read in conjunction with Civil Aviation Advisory Circular AC 92-1(0) dated December 2003 entitled “Dangerous Goods Training” which “provides advice to the aviation industry on the regulatory requirements for: dangerous goods training of employees of operators, cargo handling agents, freight forwarders, shippers of dangerous goods and security screeners”, and also in conjunction with Civil Aviation Advisory Circular AC 92-2(0) dated December 2003 entitled “Dangerous Goods Manuals” which provides advice to commercial operators on the regulatory requirements for a dangerous goods manual, the purpose of the manual, operators required to have a manual, contents of the manual and where it should be maintained.
30. The tribunal is also required in this matter to take into consideration the principles and arrangements for international air transport services contained in the Convention on International Civil Aviation (“the Chicago Convention”) signed in Chicago on 7 December 1944 to which Australia is a Contracting State. The Chicago Convention (pursuant to Article 43) established the International Civil Aviation Organisation (ICAO), of which Australia became a member at its establishment in 1947. The ICAO is recognised as the United Nations specialist agency responsible for the promotion of safety, regulations and efficiency of international civil aviation including developing regulations for the safe transport of dangerous goods (in conjunction with the United Nations Committee of Experts), which it publishes as the ICAO Technical Instructions. The international obligations of the Convention were ratified into Australian law by s 3A of the Air Navigation Act 1920 (the Convention incorporated as Schedule 1).
31. Annex 6 to the Convention deals with the safety of international air navigation by providing criteria for safe operating practices, including contributing to the efficiency and regularity of international air navigation, by encouraging Contracting States to facilitate the passage over their territories of commercial aircraft belonging to other countries and in particular through operating in compliance with a Route Guide (Annex 6 Part I Appendix 2). The purpose of a route guide is to “ensure that the flight crew will have information relating to communication facilities, navigation aids, aerodromes and other information considered necessary for the proper conduct of flight operations” (ICAO Annex 6 Part I Appendix 2 section 2.3.1). This provision has been implemented in Regulation 215 of CAR.
32. Annex 18 to the Convention specifies the broad standards and recommended practices to enable dangerous goods to be carried safely. Annex 18 also makes binding on the Contracting States, the provisions of the Technical Instructions which contain the detailed and numerous instructions for inter alia, the correct handling of dangerous goods (including Class 1 – explosives of all kinds), packing and packaging, documentation of cargo, marking and labelling and training of all persons necessary for the safe transport of dangerous goods.
33. Paragraph 4.8 of Part 7, Chapter 4 of the ICAO Technical Instructions provides:
The operator must ensure that for consignments for which a dangerous goods transport document is required by these instructions, appropriate information is immediately available at all times for use in emergency responses to incidents and accidents involving dangerous goods in air transport. The information must be available to the pilot in command and can be provided by:
(a)the ICAO document Emergency Response Guidance for Aircraft Incidents Involving Dangerous Goods (Doc 9481); or
(b)any other document which provides similar information concerning the dangerous on board.
34. Paragraph 4.9, Part 7, Chapter 4 of the ICAO Technical Instructions provides:
An operator must ensure training is provided in accordance with the detailed requirements of Part 1 Chapter 4 to all relevant employees including those of agencies, employees to act on the operator’s behalf, to enable them to carry out their responsibilities with regard to the transport of dangerous goods.
35. Article 33 of the Chicago Convention provides:
Article 33 – Recognition of certificates and licenses
Certificates of airworthiness and certificates of competency and licenses issued or rendered valid by the contracting State in which the aircraft is registered, shall be recognized as valid by the other contracting States, provided that the requirements under which such certificates were issued or rendered valid are equal to or above the minimum standards which may be established from time to time pursuant to this Convention.
36. This international obligation has been implemented as regulation 5.27 of the CAR which provides:
5.27 Certificate of validation: issue
(1) A person may apply to CASA, in writing, for the issue of a certificate of validation for an overseas authorisation held by the person if:
(a) the person’s overseas authorisation:
(i) is valid; and
(ii) is current; and
(iii) is not suspended or cancelled; and
…
Regulation 2 (Interpretation) of CAR provides:
overseas authorisation means an authorisation (whether called an authority, licence, certificate, rating or endorsement, or some other name) that:
(a) authorises the holder to perform duties essential to the operation of aircraft during flight time; and
(b) is issued by the responsible authority of a Contracting State.
Part D – Discussion of Evidence
(i) Condition of the aircraft
Introduction – Inspections
37. The condition of Heavylift’s aircraft was evaluated by CASA following ramp inspections conducted on 2 December 2003 (T p43), 19 March 2004 (T p51), 25 February 2005 (T p108) and more recently on 18 August 2005 (T p108), 15 September 2005 (T p175), 4 April 2006 (the Belfast) and 7 April 2006 (the Boeing 727).
38. Our examination is confined to the Belfast aircraft registration 9L-LDQ and the Boeing 727 aircraft registration 9L-LEK. The condition of the Boeing 727 aircraft registration 9L-LFJ, which is no longer part of the Heavylift fleet, has no bearing on the outcome of this review.
The Belfast
39. In CASA's Notice of Refusal to Issue an Air Operator’s Certificate dated 30 May 2006 (notice of refusal) (T p4-30), it recorded that at the 18 August 2005 inspection conducted by inspector Edwards the following defects were identified:
·Both rear fairings had significant tape repairs;
·Both main gear and nose gear had significant surface corrosion; and
·There was evidence that there had been a significant fuel leak as there was staining and paint corrosion at the left hand and right hand wing roots.
40. Those matters were referred by CASA in its letter of 10 October 2005 to Heavylift for its attention and response (T p175).
41. Subsequently, during the April 2006 inspection of the Belfast aircraft, the following items were identified by CASA as defects:
·Port direct vision window – 10 small delaminations;
·Damage chart and window delamination chart not updated; and
·Leakage; fuel stain under left hand wing root.
42. A copy of the Belfast inspection report was forwarded to Heavylift under cover of CASA's letter dated 10 April 2006 (T p360). Included in the letter was the comment that the items identified in the report were listed as Class 1 items and that Class 1 items are to be considered minor in nature “and should not affect the immediate safety of the aircraft”.
43. Heavylift was asked to respond to the defects identified in the inspection report for the Belfast and did so, indirectly, in correspondence dated 16 December 2005 to the Sierra Leone Director of Civil Aviation (T p300) and in correspondence to CASA dated 23 May 2006 (T p397). A further input was provided by an undated facsimile from Heavylift to CASA (T pp177-178).
·Rear fairings
44. Heavylift contended that these particular fairings are used solely to guide cargo being loaded through the rear door of the aircraft and that they are made of wood and “are not part of the airframe nor are they relevant to safety” (T p300, para 17).
45. CASA, on the other hand, asserted that:
… the fairings, being incorporated into the aircraft become components of the aircraft and should have been treated in the same manner as the components of the aircraft (T p15, para 36a).
46. We have found it difficult to reach a view on this item, particularly as the undated facsimile from Heavylift indicates that the fairings were repaired in accordance with structure repair (T p178). As the facsimile is undated, we cannot determine whether or not CASA had received Heavylift’s advice before compiling the notice of refusal (T p4) or, indeed, the notice of proposed action to cancel or suspend Air Operator's Certificate F591527-05 dated 8 May 2006 (notice of proposed action) (T p377).
47. We also consider that repairs to the fairings must have been properly completed after Heavylift received CASA’s letter of 10 October 2006 advising of the assessed defect, as no adverse findings are recorded on the condition of the fairings during the April 2006 ramp inspection. We conclude that the respondent’s claim in relation to this item has not been established.
·Main gear and nose gear corrosion
48. In a letter from CASA dated 10 October 2005 (T p175), Heavylift was advised that a CASA inspector had observed corrosion on the main and nose gear during an inspection of the Belfast on 18 August 2005. This defect was noted in an unqualified way in CASA’s notice of proposed action.
49. In response to the CASA notice, Heavylift stated in its letter of 23 May 2006 (T p402):
There was no corrosion on either of the main gear or the nose gear which was in excess of that which is allowed pursuant to the approved maintenance manuals or which will be found on any comparable aircraft operating in Australia or elsewhere.
50. Subsequently, CASA in its notice of refusal, observed:
(b)both main gear and nose gear had significant surface corrosion. Your (Heavylift) response states the corrosion was within acceptable limits without specifying what the limits were and does not specify what if any corrective maintenance was performed.
51. In considering this issue, we have been mindful that the type certificate for the Belfast aircraft is held by Heavylift and therefore Heavylift is responsible for the engineering and maintenance plans for the Belfast, with DCA Sierra Leone approval. While we can understand CASA's position that neither the limits nor what corrective maintenance, if any, was performed, were specified, it is difficult to conclude that the corrosion identified by the CASA inspector would have endangered safe operation of the aircraft.
52. It is also relevant to note that, as CASA did not respond to this issue and the other August 2005 inspection issues following Heavylift's responses, we consider it was not unreasonable for Heavylift to conclude that its responses had been found adequate (T p402).
53. With the foregoing in mind, and noting that corrosion was not an issue in the April 2006 inspection, we have concluded that the corrosion that did exist was of minor significance and was subsequently repaired through Heavylift maintenance.
·Fuel leak
54. During the inspection on 18 August 2005, the CASA inspector noted :
There was evidence that there had been a significant leak (staining and paint erosion) at the left-hand and right-hand wing roots (running down) (T p159).
55. Heavylift staff was informed of that observation at the time of the inspection and on 10 October 2005 CASA sought Heavylift’s advice on what corrective action had been taken.
56. In response, Heavylift advised in its undated facsimile that:
Minor fuel/dust stains from overfill fuel spill cleaned.
57. Later, in the letter of 23 May 2006, Heavylift wrote:
There were no leaks at the left-hand and right-hand wing roots and no damage from any earlier leak that would prevent the aircraft from being released to service in accordance with the approved maintenance manual. The Belfast aircraft incorporates a number of dry tanks (surge tanks) to allow overflow of the fuel tanks in certain circumstances. Those dry tanks vent overboard which can be mistaken for leaks on the side of the airframe. This is a possible explanation for the observation by the inspector.
58. CASA considered Heavylift’s response but in the notice of refusal it opined that:
It is unlikely from the location of the fuel stains that was the case and I am satisfied that there have been fuel leaks from the aircraft that you have not adequately explained.
59. Mr Allan Rash, the Belfast flight engineer, stated in his affidavit (Exhibit A18 paragraph 6):
The Belfast also has a vent system for allowing fuel to vent overboard due to heat expansion. That can sometimes cause a small amount of fuel to drain from the aircraft but this does not constitute a leak. Likewise, a small amount of unburnt fuel is vented overboard when the engines are shut down. The amount of fuel vented overboard since the aircraft has been operated by the First Applicant has not been greater than that which I have previously experienced with this aircraft and these engines.
60. A further reference to fuel stains behind the left-hand wing root emerged during the 4 April 2006 inspection and subsequent report. CASA, in its letter dated 10 April 2006, informed Heavylift (T p360). Those stains were assessed as Class 1 – “Finding with minor influence on safety”. In response Heavylift again attributed the fuel staining to venting from surge tanks.
61. As the respondent did not challenge Mr Nash's affidavit evidence in cross-examination, we conclude that the evidence of fuel leaks reported by CASA was of a minor nature and of little consequence.
·Port direct vision window – delaminations
62. During the inspection on 4 April 2006, the CASA inspector recorded:
oPort direct vision window – 10 small delaminations; and
oDamage chart and window delamination chart not updated since July 2002. Damage chart lists aircraft registration as G-HLFT, not 9L-LDQ.
63. Both of those observations were assessed as class 1.
64. Heavylift’s letter of 23 May 2006 responded to CASA’s observations by stating:
The small delaminations in the port window are within acceptable limits and have been added to the delamination chart.
65. During cross-examination, the respondent asked Mr Geoffrey Leach about the DV window delaminations. In essence, Mr Leach said that the 10 delaminations were of no consequence at all:
You can have 100 delaminations, because the MEL says you can have as many delaminations as long as it does not impair your vision on that window.
66. When questioned about the need to log delaminations, Mr Leach stated:
We inspect those windows before every flight and we know whether it is growing or not because its exactly the same crew that has been flying that aeroplane for 25 years. So the fact that it was not documented does not really matter, because you can see as you are looking through it.
67. Later, Mr Leach agreed with the respondent that Heavylift had not, in fact, recorded the delaminations, but continued to dispute CASA’s assumption.
68.
We are of the view that the issue of the DV window is a minor matter, and not one that would adversely affect safety of flight. Indeed CASA acknowledges that by allocating a class 1 finding to the defect. Nevertheless, technically, Heavylift crew should have entered the delamination state in the appropriate log, despite the fact that only one crew actually flies this aircraft, and therefore monitors the state of the DV window on each flight.
oBelfast – condition of aircraft
69. Having considered the matters raised by CASA inspectors in light of the evidence, we are of the opinion that the Belfast aircraft operated by Heavylift was in generally good condition and serviceable for flight. Despite saying that the aircraft was “tatty” at the time of the April inspection, Mr Clark, the CASA inspector, did not consider the comment warranted inclusion on the formal inspection report issued to Heavylift. Similarly, the inspector did not include in his formal report that there were “a number of creases/dents in the fuselage” as those creases/dents did not require action by the operator (Exhibit R13, paragraph 4(a)).
The Boeing 727
70. In the notice of refusal (T p4-30), CASA recorded that at the 18 August inspection two defects were found in relation to the 727; namely:
·the left hand wheel well had corroded fasteners on the uplock torque tube and corrosion on the uplock control cable; and
·Cadmium plated fasteners were installed on the aileron hinge panel within 36 inches of a decal that stated “No magnetic fasteners within 36” – flux valve”.
71. In CASA’s letter of 10 October 2005 (T p175), Heavylift was informed of the 18 August 2005 inspection findings. In addition to the items listed in the notice of refusal, a further two items were included, namely:
oRegistration markings not displayed as required by ICAO – no underwing markings; and
oLitton Nav unit stored on the floor of the E&E Bay.
72. Following the ramp inspection on 7 April 2006, a further 35 items were identified as defects. Those defects have been noted previously in these reasons at paragraph 16.
73. Turning to the items identified at the 18 August inspection, Heavylift in Mr Crane’s undated fax advised CASA of the action taken in response (T p177) and also in its letter to CASA dated 23 May 2006 (T pp401-402).
74. In the undated fax, Mr Crane wrote:
Registration is displayed IAW department of Civil Aviation requirements. (Note United States carriers also do not carry underwing markings.) And, with respect to the wheel well:
Fastenings, up lock, torque tubes and system serviceable to Heavylift/Boeing Maintenance program.
and,
Aileron hinge panel released and accepted by FAA repair station last “C” check. Heavylift engineers confirm nil factor.
75. With respect to the Litton Nav unit, Mr Crane said that the unit was removed for “TCAS II check now reinstalled”.
76. In a response to CASA’s show cause notice of 8 May 2006 (T 8p377), Heavylift provided a more comprehensive response to the items identified at the 18 August inspection:
The left-hand wheel well does not exhibit corrosion. The wheels and wheel wells operate in wet conditions and in fact rust accumulates. There was nothing in excess of that which is allowable under Heavylift’s approved Boeing maintenance system. It would have been dealt with at the next check.
77. With regard to the aileron hinge panel:
The fastener referred to was installed during the “C” check conducted on the aircraft by an FAA maintenance approved facility. As part of the release to service of the aircraft after that check, tests were conducted on the magnetic compasses and their operation was found to be normal.
78. In its notice of refusal (T p15), CASA acknowledges Heavylift’s response to the 18 August inspection items in the following terms:
Your response states the corrosion was within acceptable limits without specifying what the limits were and does not specify what if any corrective maintenance was performed. It also appears the cadmium plated fasteners were installed on the aircraft contrary to the markings on the aircraft.
79. If, as Heavylift contended, the aileron maintenance conducted on the aircraft was performed within an FAA approved maintenance facility and the alleged corrosion defect was within Boeing approved maintenance standards, we find it difficult to do more than note the exchange between CASA and Heavylift. No further evidence on these matters was adduced during the hearing. We therefore do not think CASA’s claim on this point has been established.
80. Much of the hearing was taken up with evidence regarding the condition of the 727 aircraft. Expert witnesses were called by the applicant and cross-examination was extensive. The views of the CASA inspectors were also examined critically by counsel representing the applicant. Of the 35 items identified in the April inspection, some were more substantial than others. Heavylift in its correspondence of 23 May 2006 responded comprehensively to the inspectors’ findings in reply to CASA’s show cause notice and, in the notice of refusal, some of the inspection matters have been put aside following CASA’s consideration of Heavylift’s position. Those matters were:
oThe lower nose compartment lights were unserviceable;
oLeft navigation light unserviceable;
oAPU [auxiliary power unit] and tailskid lights on flight engineer panel unserviceable;
oLower fuselage repair just forward of Stn 208 appears to be a “bog patch repair”, no rivets are apparent;
oJacking point missing from right hand wing;
oThere was a gouge in the fuselage skin, just above the rear cargo door;
oAPU door missing, no vanes fitted;
oStandby hydraulic reservoir shows being overfull on both the tank indicator and the cockpit indicator;
oHand fire extinguisher inside forward entry door is below charge pressure; and
oThe right hand nose wheel serial number was not as per technical records.
81. While we do not place weight on these matters, we note that the CASA inspectors have been, in a limited number of cases, apparently in error in making their observations, for example regarding the “APU door missing, no vanes fitted” defect. Heavylift pointed out in its response of 23 May 2006:
This item in the show cause notice simply repeats an earlier response. In fact vanes have always been fitted and the inspectors failed to position themselves to be able to see the vanes, which are on top of the wing.
82. With respect to “the right hand nose wheel serial number was not as per technical records” item, CASA elected not to make a finding following Heavylift’s response that:
The right hand nose wheel serial number was in accordance with the technical records. The inspector read the serial number on the outer hub only and not the one on the data plates. The correct serial numbers are installed and the records are correct.
83. When evaluating the evidence before us, it is difficult not to be influenced to some degree by CASA’s apparent errors of observation.
84. We turn now to the remaining 25 matters identified in the April 2006 audit. Of these items, some are less significant than others and attract minimal attention in evidence. We will consider them first. They include:
·Emergency brake accumulator;
·Main ball roller mat adjacent to main cargo door missing one roller;
·Screws above right hand cockpit sliding window badly rusted;
·Panel sealing tape in various parts of the forward cargo compartment is coming adrift from the joints;
·Fuel leak evident on right hand wing, just forward of main landing gear at wing plank joint;
·Fuelling pressure panel decal missing from fuelling panel;
·Bonding lead broken on the inboard end number 2 leading edge flap; and
·Engine fire extinguisher pressure graph is unreadable.
·Emergency brake accumulator
85. Heavylift disputes CASA’s assertion that the emergency brake accumulator pressure gauge was not readable. In its correspondence of 23 May 2006, Heavylift states:
… the emergency brake accumulator pressure gauge in the nose wheel well was readable to the crew and the engineers at the time of the inspection ... In any event, in view of CASA’s remarks, the cover has subsequently been replaced.
86. From the evidence, we are not in a position to agree or disagree with either party. For practical purposes the matter has been resolved by Heavylift by the fitting of a new component. We conclude that the respondent has not made out the allegation.
·Main ball roller mat
87. In response to CASA’s observation Heavylift stated in its 23 May 2006 response:
There is no requirement to record the fact that one roller was missing from the main ball roller mat adjacent to the main cargo door.
88. CASA acknowledged Heavylift’s view was correct (T p18), but it went on to claim that there was no record of this deficiency in the aircraft technical log, which “indicates inappropriate defect recording practices”.
89. Heavylift contracted Mr Robert Scott, an aviation safety consultant with over 50 years’ experience, to examine all of CASA’s claims. Mr Scott’s evidence is contained in his report dated 10 July 2006 (Exhibit A9) and his affidavit of 6 October 2006 (Exhibit A10).
90. At page 9 of Exhibit A9, Mr Scott asserts:
The suggestion that failure to record the fact that a roller ball was missing is an indication of inappropriate defect recording practices is itself totally inappropriate. The roller mat of which this ball is a part is an aid to loading the aircraft. It has absolutely no interaction with the operation or safety of the aeroplane. In listing this item CASA is exceeding their mandate to regulate for safety.
91. We are of the view that CASA has been perhaps unjustifiably critical in finding that Heavylift was remiss in not recording the absence of the ball from the loading mat.
·Screws above cockpit window badly rusted
92. In response to CASA’s claims on this matter, Heavylift in its letter of 23 May 2006 opined that the screws above the right hand sliding window are another item that does not require any immediate action and does not represent a defect in the aircraft. CASA’s comments in the notice of refusal would seem to indicate that Heavylift changed its response from that provided earlier when Heavylift claimed the corrosion was surface rust, which has been removed and the paint touched up.
93. Mr Robert Scott differed from that view when he stated:
Cadmium plating on subject screws has broken down due [to] age and exposure. Evidence was apparent of some screws having been touched up with paint. All screws considered to still be structurally acceptable but should be listed as “B” defects for rectification at the next “C” check (Exhibit A9, p12).
94. Heavylift also employed a further expert witness, Mr Daffyd Llewellyn to examine the 727 aircraft and provide views on the maters raised by CASA. His affidavit dated 19 September is Exhibit A8. Mr Llewellyn, trading as Southdown Engineering Pty Ltd, also provided Heavylift with an engineering report dated 28 June 2006 (Exhibit A7). Appended to Heavylift’s 23 May 2006 letter is an earlier version of that report (T pp409-434).
95. The views of Mr Llewellyn confirm the opinion of Mr Scott. Mr Llewellyn states, “…the sacrificial (ie protective) cadmium plating on the affected screws has been consumed, allowing the underlying steel to start rusting. This has not progressed to the point of being structurally significant … the screws should be replaced at the next “C” check” (Exhibit A7, p4).
96. While guided by the views of Messrs Scott and Llewellyn, we accept CASA’s contention that the screws represent an aircraft defect, although at this stage not one that prejudices flight safety.
·Panel sealing tape
97. CASA is critical of Heavylift on this item on the basis that Heavylift “… did not previous to the audit detect this defect, or if [it] did, did nothing to rectify the matter.”
98. Although Heavylift advised CASA on 27 April 2006 that the tape was replaced, Mr Llewellyn in his report (Exhibit A7, p5) noted that “Some of it is, in the way of adhesive tape, coming adrift in spots.” Mr Llewellyn’s assessment at the time was “Normal wear and tear; replace tired tape at next “C” check. (This is presumably a routine check item.)”
99. Mr Scott in his report commented:
This is an on-going maintenance issue. Virtually all cargo aircraft have this problem from time to time but the fact that tape may be lifting here and there does not in itself constitute a defect that requires rectification. ... When the lack of presence of the tape allows a significant lack of sealing of the compartment it can reduce the fire integrity of the compartment (Exhibit A9, p13).
100. Mr Scott went on to say:
I inspected the forward hold on this aircraft and I consider it to be above average condition in respect of this class of operation.
101. Recognising there is a safety factor involved in maintaining the integrity of the panel and the tape, we are of the view it was a defect that CASA correctly brought to Heavylift’s attention. At what point any deterioration in panel security becomes significant may be uncertain, but operators should be guided by Boeing documentation on this point.
·Fuel leak on right wing
102. We find that the alleged fuel leak on the right hand wing was unsubstantiated. In its notice of refusal, CASA, while acknowledging Heavylift’s view that four licensed engineers could not locate any fuel leak, criticised Heavylift for making no comment as to why a leak was “allowed to be present in the past”.
103. Mr Llewellyn asserts that “No evidence of any fuel leak detectable at 22 May 2006” (T p411). Mr Scott, in his report, commented that:
There is a stain in the gap sealant between wing planks in this area. This is the nearest I could get to identifying a fuel leak. When I inspected it, it was quite dry and clearly wasn’t leaking. The size of the stain was 2-3 inches long laterally and did not extend beyond the wing plank joint. It clearly does not constitute a defect that needs any rectification at this time (Exhibit A9).
We accept his evidence.
·Fuelling pressure panel decal missing
104. CASA asserts that this defect could not wait until the next “B” check, as indicated by Heavylift. CASA’s view is supported by Messrs Llewellyn and Scott.
105. We find that this is a defect.
·Bonding lead broken on the inboard end of number 2 leading edge flap
106. CASA asserts that Heavylift could not ignore a defect in the aircraft simply because Heavylift considers the component redundant by another component.
107. We note that this view is supported by Mr Scott, who commented that the broken bonding lead did need to be replaced. It was a defect.
·Engine fire extinguisher pressure graph unreadable
108. There is conflicting evidence on this point. Mr Patrick Murray, who signed the CASA notice of refusal, records that Heavylift states the fire extinguisher pressure graph is readable, but then stated that he was satisfied that it was not readable “having regard to the observations made by the CASA inspectors”.
109. We find it difficult to determine whether the pressure graph was readable or not, but, the view of Mr Scott is clear. He states, in part:
The graph was readable. I was assured that it was the same decal as CASA inspected. I was able, with the aid only of a torch to read both the pressure in the fire bottle and the maximum and minimum required values for the temperature of the day from the graph mounted adjacent to the rear door. I am concerned that CASA inspectors were unable to read this graph.
110. On balance, we do not think the existence of the defect has been demonstrated.
111. The remaining more substantial items from the April 2006 ramp inspection are:
·Insulation blankets were missing from the lower nose compartment and electronics equipment centre bay;
·Paint was bubbling under the aircraft battery;
·Right hand main landing gear uplock roller seized;
·Oil leak around Auxiliary power unit in right wheel well;
·Air stair attachments had worn rivet heads on both sides of pivot points;
·AFM supplements not consistent with STCs fitted to the aircraft;
·Radome (nose of aircraft) was badly eroded. The radar is situated behind the radome and damage to the radome may affect operation of the radar;
·Several pulled rivets inboard end of number 6 slat;
·Number 5 slat on leading edge of wing bent down badly at trailing edge;
·Corrosion evident at the right hand wing under wing skin, just aft of fuelling panel;
·Corrosion evident on the right hand inboard flap fairing at fairing to wing skin connection;
·Flight control cables in right hand wheel well just below spoiler mixer appear worn;
·Left hand inboard flap fairing appears incorrectly rigged;
·Severe corrosion and cracking evident on slanted overhead panel just aft of the rear entry door; and
·Eroded panel adjacent to number 8 slat;
112. These matters are examined below.
·Insulation blankets missing from the lower nose compartment
113. CASA in its letter dated 18 April 2006 advised Heavylift that one of the items found during the ramp check of 7 April 2006 was “Insulation blankets missing from lower nose compartment and E and E bay”.
114. Heavylift in its letter of 27 April 2006 responded as follows:
There are no blankets required by the parts catalogue for this aircraft. In any event, the TCAS antennae are located where the blanket would otherwise be and it would be unsafe to have the two together. Nil action required.
115. CASA’s notice of refusal (T pp16-17) states:
Your 27 April 2006 letter and response state there are no blankets required by the parts catalogue for the aircraft. However, this does not avoid the requirement for an approval of a modification to the aircraft to have been approved. Your response suggests no such approval was ever obtained. There is no regulatory provision that states if a component is no longer in an IPC that it does not require any approval to remove it.
116. Mr Llewellyn in his report makes this observation about the insulation blankets:
If the Boeing Part catalog for the aircraft does not require blankets to be installed in these parts of the aircraft, that means that blankets in those areas are NOT part of the Type Design. Therefore, in this situation, CASA’s response is incorrect; the lack of blankets does not in fact constitute a modification of the aircraft, and therefore no question of an approval arises (Exhibit A7, p1).
117. Mr Llewellyn’s affidavit dated 19 September 2006 (Exhibit A8) commented on the witness statement of Mr Michael Rossiter, the CASA inspector for the 727. Mr Llewellyn expanded on the observation he had made in his company report but drew the same conclusion. The comments in the affidavit of Mr Michael Rossiter are those that appear in CASA’s notice of refusal.
118. Subsequently, Mr Llewellyn in cross-examination stated that he could not agree one way or the other whether or not insulation blankets should be in the 727 in the locations claimed by CASA, as CASA had not adequately identified the location by reference to fuselage station. This data is necessary to gain information from the illustrated parts catalogue (IPC). He agreed with the respondent, however, that if indeed the IPC showed insulation blankets in a particular location and that they were removed from that location this would constitute a modification requiring approval.
119. Mr Rossiter when responding to a question about the need for cargo planes to be fitted with insulation blankets stated, “cargo planes don’t need them, no. They are removed under a modification.”
120. Having considered the evidence, we conclude that CASA did not adequately identify the location by aircraft station from which the insulation blankets were alleged to have been removed. Without this data, accurate comparisons with the IPC are not possible. We cannot judge whether or not Heavylift was delinquent in removing the insulation blankets without proper modification approval or whether, as Heavylift contends, the blankets are not shown in the IPC and are, therefore, not required. The allegation has thus not been substantiated.
·Paint bubbling under the aircraft battery
121. In CASA’s letter of 18 April 2006, Heavylift was informed that a further finding from the ramp inspection was “paint bubbling under aircraft battery”. In response, Heavylift in its letter of 27 April 2006 stated:
Incorrect. New antennae had been installed during the installation of the TCAS system by an FAA approved repair station. Paint peeled in the immediate vicinity of the antennae installation, but there is no bubbling and the primer is intact. Nil action required.
122. Later, when responding to CASA’s show cause notice, Heavylift referred to Mr Llewellyn’s inspection report (Exhibit A7) and observed that the bubbling under the aircraft battery was not a defect requiring immediate attention but one that needed attention during the next C check, due in about a further 400 hours’ time.
123. Mr Llewellyn’s report concluded:
Yes, the uppermost layer of paint was found to be bubbling under the aircraft battery. However, as far as could be ascertained, there was no corrosion of the metal under the paint (there appeared to be several layers of paint). The bubbled paint did not appear to still be actively acid, by finger test, suggesting that any acid had been neutralized.
124. CASA’s notice of refusal (T p17) refers to the Llewellyn report and observes that on the basis of the report there appeared to be no definitive assessment made as to whether there was active corrosion under the battery. CASA then put the view that this “indicates Heavylift does not have a proper or any corrosion prevention or detection program in place.”
425. Mr Murray thought that the IOSA audit style was designed to evaluate an airline’s ability to conduct code share operations, and was not the same as a regulatory audit. Mr Leach later replied that the IOSA audits were conducted as regulatory audits and the IOSA form was used because that audit is more extensive than the minimum required by ICAO and the forms allow a broader range of results to be recorded. He pointed out that Mr Murray’s predecessor, Mr White, had satisfied himself about those matters. But Mr Murray said he was not concerned with what others had done (T p311).
426. Mr Murray went on to say that since Heavylift’s original AOC had been granted, CASA had been unable to establish positive communications with the Sierra Leone DCA and that failure, along with the “unusual oversight arrangements”, had heightened CASA’s concerns (T p305).
427. Sierra Leone’s oversight arrangements are delegated to IAS, whose officers are former officers of the British Civil Aviation Authority (T p314). The Sierra Leone audits of Heavylift in Australia were conducted by Mr Patrick McKay, IAS’s director of operations, and Mr Fred Fenech, who is based in Malta. In his letter of 20 December 2004, Mr BA Tarawaley of the Sierra Leone DCA offered to arrange a meeting between the IAS auditors and CASA officials, noting that they had previously made a similar offer during an audit of Auto Avia Design but CASA at that time had thought it unnecessary. Mr Tarawaley also said that if CASA representatives wished to be present during any of the Sierra Leone audits of Heavylift, that could also be arranged (T p396). On one occasion Mr McKay did have a meeting with Mr White.
428. Mr Leach pointed out after the 19 December 2005 meeting that in the course of it Mr Murray had indicated that he did not recognise the role of Messrs McKay and Fenech of IAS as inspectors. He also quoted Mr Murray as saying that he did not accept the Sierra Leone DCA, and that while others had renewed Heavylift’s AOC in the past, that did not mean that he would accept it (T p312). Mr Simons of Auto Avia Design had pointed out at the meeting that many civil aviation authorities use contractors as delegates and inspectors, and there were firms in France and Switzerland that he knew of that provided such services (T p312).
429. In his affidavit (Exhibit A17), Mr Simons said that when his company, Auto Avia Design, had been asked to provide technical assistance for Heavylift if it became the holder of the Belfast type certificate, he had travelled to the United Kingdom with another engineer from his firm with a view to assessing the situation and the aircraft. He wanted to develop a feeling for the people he might be dealing with, because at that stage he had not committed himself to the contractual arrangement. He wanted to make sure the people he would be dealing with met his requirements for competence (transcript p407). He had meetings with the company that had provided the technical support for the Belfast, Marshall of Cambridge (Engineering) Limited, and also with Mr Tarawaley, the technical director of the Sierra Leone DCA. He was impressed by Mr Tarawaley, who he regarded as extremely well trained and very competent (transcript p407). As a result he agreed to provide technical assistance to Heavylift as holder of the type certificate. The aircraft was duly registered in Sierra Leone.
430. Since that time his company had been audited twice by delegates of the Sierra Leone DCA. The inspectors are contractors which, he said, is not unusual. A number of regulatory authorities around the world contract out surveillance or inspection functions to outside organisations. “The audits of my firm by the representatives of the Sierra Leone director of civil aviation were as thorough and as competent as audits conducted by CASA” (Exhibit A17, para 15). Mr Geoffrey Leach confirmed that Sierra Leone is in the same position as Switzerland and a number of other countries that do not undertake regulatory surveillance themselves but employ an international company, of which there are quite a number, which perform the task as their delegates (transcript p545). Further, he continued, “the good thing about African countries is they won’t even talk to you about a certificate unless you have been in the industry 20 years – unlike most other countries” (transcript p459).
431. The respondent does not dispute that Sierra Leone audited Heavylift’s operations twice yearly and also conducted a comprehensive audit of Auto Avia Design. Nor is it disputed that the audits were conducted in a professional and thorough manner, although the respondent considered that the use of IOSA forms was inappropriate in a regulatory audit. Heavylift, on the other hand, maintains that the IOSA form is more thorough than the checklists normally used and covers a more extensive range of aspects of the audited company’s operations. It is reasonably clear from Mr Tarawaley’s letter of 20 December 2004 that the Sierra Leone audits are intended to be full regulatory audits and that the formats and standards for the audits are based on IOSA and JAR-OPS requirements (T p294). “These assessments are conducted in accordance with ICAO requirements, the Sierra Leone Air Navigation Regulations 1984 and the approved Heavylift operations and maintenance manuals” (T p294). The respondent did not show that the use of the IOSA and JAR format constituted a breach of applicable legislation.
432. Before March 2006, the respondent’s concerns about Sierra Leone appeared to have rested on three other circumstances. One was a difficulty in communicating with Sierra Leone DCA, especially by mail. Part of the problem may have been due to correspondence not being accessed by the right CASA people at the right time (Exhibit A4, paras 34, 38), but it would not be surprising if there were shortcomings in the postal service of a country recovering from 11 years of civil war. The evidence does not show that any communications difficulties resulted from lack of competency or diligence in the Sierra Leone DCA. Such of the DCA’s correspondence as has been tendered in these proceedings is perfectly conventional and professional in character. Whatever the position with postal mail, the evidence does not show that there is any difficulty in communicating with Sierra Leone by email, fax or telephone. While the communications problems CASA experienced were a matter of concern, it would appear that they were remediable.
433. Another objection was that Sierra Leone contracts out its oversight functions to IAS. At the meeting on 19 December 2005, Mr Bruce Gemmell is quoted by Mr Nicholas Leach as saying that “Patrick McKay is contracted to Sierra Leone DCA. We cannot accept him or their audit reports”. As to that Mr Simons of Auto Avia Design commented, “There is nothing wrong with contracting out your oversight. It happens in France and Switzerland” (Exhibit A4, para 35). The FAA also has contracted inspectors (transcript p58). The respondent did not pursue that objection at the hearing.
434. Finally, the respondent’s acting general counsel in a letter dated 24 December 2004 (T p63) pointed out to the applicant’s solicitors that ICAO had been unable to audit Sierra Leone under the Universal Safety Oversight Audit Program against compliance with Annexes 1, 6 and 8 of the Chicago Convention. The evidence does not show the reason from that inability, but it would certainly be a warning signal from a regulator’s viewpoint.
435. In submissions Mr Harvey also referred to a report of a discussion between airworthiness inspector David Edwards and Mr Geoffrey Leach on 18 August 2005 in which Mr Edwards reported that Mr Leach had told him that Sierra Leone NAA had not performed any surveillance or oversight of Heavylift (T p159). That representation was not put to Mr Leach in cross-examination and is inconsistent with the other evidence above. It may be that he was drawing a distinction between Sierra Leone NAA and DCA or that he was speaking in some particular context or that Mr Edwards misunderstood him. At all events we are unable to place any weight on that passage.
436. At the hearing Mr Leeming pointed out that Sierra Leone oversight of Heavylift had not stood in the way of CASA’s approval for the last three years, and it is plain that Sierra Leone oversight is far from a nullity. Mr Arthur White had become satisfied about it in 2005, notwithstanding his initial concerns about Sierra Leone, and CASA had conspicuously failed to adduce any direct evidence at all about the quality of Sierra Leone oversight aside from the publication by the European Union that refers to the European ban on Sierra Leone operators imposed on 22 March 2006 by Commission Regulation (EC) number 474/2006 establishing an EU list of air carriers that are subject to an operating ban within the community.
437. Paragraph 85 of the Commission Regulation states:
The authorities of Sierra Leone with responsibility for regulatory oversight of the following air carriers have shown a lack of ability to carry out adequate safety oversight on these carriers:
…
Heavylift Cargo
…
438. Heavylift is named in the annex to the regulation as an operator that is banned within the European community for all operations.
439. Even though the facts and circumstances giving rise to the EU’s adverse assessment of the Sierra Leone DCA are not in evidence, we think it would have been most imprudent for the respondent to fail to give substantial weight to that regulation. Subject to whether the respondent has the power to deny recognition to an AOC issued by an ICAO member state, a point to which we turn later, we consider that the EU regulation fully justified the respondent’s action in not accepting the Sierra Leone AOC and, if it saw fit, conducting a thorough audit of Heavylift’s operations.
oSystems and co-ordination generally
440. We have concluded that the respondent’s allegations (i) to (vii) above have been established in whole or in part. Those findings show shortcomings in the clarity of the chain of command, as appeared in relation to the FAID program, and in relation to the integrity and co-ordination of important systems within the organisation. The examples given are not the only ones that could be cited. Another can be found in Mr Timmins’s uncontradicted evidence that while the company had made significant improvements in relation to the procedures for handling and accepting dangerous goods by April 2006, it was not clear how the company’s operations manager had embedded changes in the systems relating to dangerous goods handling, acceptance and training. Heavylift has taken substantial steps to meet the respondent’s criticisms, including by appointing Aviation Compliance Solutions Pty Limited to review its operations and advise in preparation for its audit, but the shortcomings we have identified remain.
441. Mr Harvey in his submissions mentioned other examples, such as the lack of evidence about the contractual arrangements with Mr McCarney to provide maintenance control services to Heavylift, the lack of evidence as to how Boeing maintenance for Heavylift’s aircraft is organised or controlled, the uncertainty about the assessment and analysis of engine trend monitoring data on both aircraft and the failure to produce a written DCA approval for the appointment of Captain Porter as chief pilot. (It should be noted, however, that information about Heavylift’s Boeing maintenance in the United States has now been provided in Exhibit A27.) Captain Porter, he submitted, knew little about the other aspects of the operation, such as the overall pilot fatigue and duty regime. He had little input into FAID, which was controlled by Mr Crane and could not know what was being factored into it.
442. As Mr Yeomans said in his evidence,
Within the scope of the company and the inter-reaction with the personnel, it is important that all of the systems interlink. If they start to show decay and there is no link, [we are] starting to get gaps in the operation where, for example, on a maintenance aspect, something may be logged as being required to be repaired and the system prescription of how that is to be repaired should be documented within the manual suite. If it is not, it quite easily follows that it may not be attended to, it may be deferred to the point where something else happens with a malfunction … So the linkage, if I can draw the example, is that one issue of failure in a document can lead to other issues not being attended to (transcript pp422-423).
443. Mr Yeomans referred to the work of Professor James Reason whose work emphasises accident prevention through the multiplicity of overlapping and mutually supporting defences that makes complex technological systems such as nuclear power plants and modern commercial aircraft, largely proof against single failures, either human or technical. Mr Yeomans said that Professor Reason’s work provides a template for the theoretical framework within which safety regulation of AOC holders is conducted.
444. Professor Reason draws a distinction between the complementary application of “hard defences” (such as design-engineered safety features, including alarms, annunciators, interlocks, non-destructive testing etc) and “soft” defences, the latter relying on “paper and people; legislation, regulatory surveillance, rules and procedures, training, drills and briefings, administrative controls and supervisory oversight (James Reason, Managing the Risks of Organizational Accidents, Ashgate 1997, 7, 9).
445. We do not mean to imply that Heavylift should have erected a large bureaucratic structure in order to create those defences. It is a small operation, and small operators have contributed much to aviation in recent decades because of their low cost structures, which resulted in part from avoiding the creation of the kind of large administrative structures that marked the national flag carriers, especially, of times past. Heavylift employs a small staff in scattered locations. That may be a workable structure given the efficiency of modern communications, but it may also have created the potential for gaps in communication and awareness. Informal and manual procedures may work more reliably when staff are located under one roof.
446. With modern software and other tools, however, the applicant should have been able to institute a system that would maintain proper command, control and communications and that would ensure that no procedures were overlooked or left incomplete.
447. That Heavylift has operated safely and usually reliably in often difficult conditions suggests that it is staffed by experienced people who know their business. Mr Harvey conceded that Messrs Porter, Wilton and Rash “are a good team”. But from a systems viewpoint, the organisational structure seems fragile and lacking in the multiple defensive layers referred to in Mr Yeomans’s evidence and Professor Reason’s work.
448. Mr Leeming pointed out that CASA was satisfied with Heavylift’s systems and coordination in 2005 and that those aspects of its operations have improved since then. While that is true, it does not prevent the decision-maker from later reaching a different conclusion if the facts so warrant. On the evidence before us, we are not satisfied that the applicant has comprehensive mechanisms to ensure that if someone is unavailable or overlooks a necessary step, a warning will be transmitted to someone responsible for remedying the situation. In the absence of such mechanisms there can be pilot overload, omissions, gaps and the kind of improper improvisations and attempted cover-ups that we have identified. As Mr Harvey stressed, the short-notice nature of Heavylift’s business strengthens the need for proper and overlapping defences.
oApplicant’s submissions on process
449. The applicant laid stress on what it considered to be unsatisfactory aspects of the manner in which the respondent arrived at the reviewable decision and on the contrast between the decision reached following the April 2006 audit and the decisions following earlier audits in 2003 and 2005, which had respectively granted and extended the applicant’s AOC.
450. The applicant pointed out that Mr Rossiter admitted that he would not have signed the ramp inspection report identifying 12 items and supplemented it 11 days later with 23 new and additional items, and said Mr Yeomans gave no adequate explanation of why that happened. Although Heavylift responded to all of the 12 items in the official ramp inspection report on the same day, that response was not referred to or apparently taken into account in the audit report or in Mr Yeomans’s recommendation to Mr Murray. Again, the respondent allowed the applicant only 10 days to respond to the show cause notice, and gave no opportunity to attend a show cause conference. Further, the CASA officers who had examined Heavylift’s documentation reportedly told Heavylift at the time that, apart from certain minor issues, the documentation would not stand in the way of the issue of an AOC. Nor had Sierra Leone oversight of Heavylift stood in the way of CASA’s approval for the previous three years.
451. In light of those and similar matters, the applicant asked the tribunal to draw an adverse inference from the fact that the respondent had not provided evidence from the officers who were in the best position to explain how the decision was reached and why, notably Messrs Baskys, Wight and Murray. The applicant relied on the evidence of Mr Scott, who viewed the audit process as an attempt to find something that was not perfect, rather than something that was not safe. “In fact it is a ploy that has been used by the regulator in the past to discredit an organisation on the basis of the number of things you can find wrong even though not any of them are worth the paper they are written on” (transcript p269). Given that the company had been twice reviewed and passed in 2003 and 2005, the applicant asked what had changed between 2005 and 2006 and concluded that the approach had changed as a result of personnel changes at a senior level.
452. It was not disputed that the tribunal’s role in these proceedings is to make the correct and preferable decision and not to review the process that led to the making of the reviewable decision. In that endeavour, the effect of any defects in the process or of personnel changes would be irrelevant unless, for example, it gave the tribunal reason to think that the respondent’s evidence was not in fact as strong as it appeared to be. We have concluded, however, that as regards the matters of systems and co-ordination referred to above, the evidence before the tribunal is insufficient to give rise to the degree of satisfaction required by s.28. That conclusion does not depend on the European Commission regulation banning Sierra Leone-registered aircraft from EU airspace, or on the findings that underlay the issuance of that regulation.
Part E – Decision of the Tribunal
453. The issue for the tribunal to determine is whether, on the evidence and material before it, the first applicant should be refused an Air Operator’s Certificate (AOC) on the grounds that it does not satisfy the requirements of the Act, regulations and orders particularly with regard to the four sub-issues listed in para 2 above.
454. In partial support of its contention that it was not bound to recognise the Sierra Leone AOC the respondent submitted the following extract from the Official Journal of the European Union Volume 84 (23 March 2006):
Commission Regulation (EC) No 474/2006
of 22 March 2006
establishing the Community list of air carriers which are subject to an operating ban within the Community referred to in Chapter II of Regulation (EC) No 2111/2005 of the European Parliament and of the Council
THE COMMISSION OF THE EUROPEAN COMMUNITIES,
Having regard to the Treaty establishing the European Community,
Having regard to Regulation (EC) No 2111/2005 of the European Parliament and the Council of 14 December 2005 on the establishment of a Community list of carriers subject to an operating ban within the Community and on informing air transport passengers of the identity of the operating air carrier, and repealing Article 9 of Directive 2004/36/CE, and in particular Article 3 thereof,
Whereas:
(1)Chapter II of Regulation (EC) No 2111/2005 (hereinafter referred to as ‘the basic Regulation’) lays down procedures for establishing the Community list of air carriers which are subject to an operating ban within the Community as well as procedures allowing the Member States, in certain circumstances, to adopt exceptional measures imposing operating bans within their territory.
(2)in accordance with Article 3(3) of the basic Regulation, each Member State communicated to the Commission the identity of the air carriers that are subject to an operating ban in its territory, together with the reasons which led to the adoption of such bans and any other relevant information.
…
Air carriers from Sierra Leone
…
(83)The authorities with responsibility for regulatory oversight of Sierra Leone have shown an insufficient ability to implement and enforce the relevant safety standards in accordance with their obligations under the Chicago Convention. Sierra Leone lacks an appropriate system in place to oversee its operators or the aircraft, and does not have the technical capacity or resources to undertake such a task. Some holders of Air Operator Certificate (AOC) issued by Sierra Leone did not have their principal place of business in Sierra Leone, contrary to the requirements of Annex 6 to the Chicago Convention.
(84)The corrective action plan presented by Sierra Leone is considered inappropriate (of insufficient) to correct the identified serious deficiencies. The Civil Aviation Authority of Sierra Leone has contracted a private company, International Aviation Surveyors (IAS), to conduct certain oversight activities on its behalf. However, the arrangements entered into between the two parties in a Memorandum of Understanding do not provide an adequate oversight system for aircraft on the Sierra Leone register. …
(85)The authorities of Sierra Leone with responsibility for regulatory oversight of the following air carriers have shown a lack of ability to carry out adequate safety oversight on these carriers: Aerolift Co. Ltd, Afrik Air Links, Air Leone Ltd, Air Rum Ltd, Air Salone Ltd, Air Universal Ltd, Destiny Air Services Ltd, First Line Air (SL) Ltd, Heavylift Cargo, Paramount Airlines Ltd, Star Air Ltd, Teebah Airways, West Coast Airways Ltd.
(86)Therefore, on the basis of the common criteria, it is assessed that all the air carriers certified in Sierra Leone should be subject to an operating ban and included in Annex A.
…
Article 2
Operating bans
1. The air carriers listed in Annex A are subject to a ban within the Community for all their operations.
This Regulation shall be binding in its entirety and directly applicable to all Member States.
Done at Brussels, 22 March 2006.
For the Commission
Jacques BARROT
Vice-President
455. The applicant submitted that the effect of the interaction of Article 33 of the ICAO Convention and s.11 of the Act was to require CASA to recognise the Sierra Leone AOC, and that to subject Heavylift to the same level of scrutiny as a domestic operator constituted an error of law. Section 11 requires CASA to perform its functions in a manner consistent with Australia’s obligations under the Convention, and ordinary principles of statutory construction likewise require legislation to be construed in a manner that furthers Australia’s treaty obligations (Re Minister for Immigration and Multicultural & Indigenous Affairs; ex parte Lam [2003] 214 CLR 1, at [100]). The respondent replied that the obligation to recognise a foreign license or certificate under Article 33 applied only where “the requirements under which certificates were issued or rendered valid are equal to or above the minimum standards which may be established from time to time pursuant to this Convention”.
456. Subject to that proviso, Article 33 requires recognition of “certificates of airworthiness and certificate of competency and licenses issued or rendered valid by the contracting State in which the aircraft is registered”. An AOC could not be described as a certificate of airworthiness or of competency, but in our view it could come within the broader category of a “license” issued by a contracting state.
457. Whatever may have been the position before 22 March 2006, we think the promulgation of the EU Commission regulation of that date provided the respondent with sufficient grounds for refusing or withdrawing recognition of the applicant’s Sierra Leone AOC.
458. For the regulation is not merely a standard piece of legislation. It specifically recites a commission finding that Sierra Leone has not satisfied ICAO safety standards: “The authorities with responsibility for regulatory oversight of Sierra Leone have shown an insufficient ability to implement and enforce the relevant safety standards in accordance with their obligations under the Chicago Convention. Sierra Leone lacks an appropriate system in place to oversee its operators or the aircraft, and does not have the technical capacity or resources to undertake such a task” (at para 83). The regulation then (at para 85) goes on to record a specific finding of fact in relation to the applicant, among other carriers:
The authorities of Sierra Leone with responsibility for regulatory oversight of the following air carriers have shown a lack of ability to carry adequate safety oversight on these carriers:
…
Heavylift Cargo
…
459. While the EU regulation is in no sense binding on the respondent, it provides a strong prima facie factual foundation for the respondent’s refusal to recognise, or renew its recognition, of the applicant’s Sierra Leone AOC. CASA committed no error of law in auditing Heavylift in the manner in which it did.
460. The tribunal has stated its findings on fact of the various sub-issues above. They may be summarised as follows:
·Condition of the aircraft: We find that the applicant’s Belfast and Boeing 727 aircraft are airworthy and reasonably well maintained.
·The manuals: While substantial progress has been made in improving the manuals and they are now on the whole satisfactory, we find that deficiencies remain in four of the applicant’s operating manuals.
·Other particular concerns and incidents: We find that the majority of the incidents and concerns raised by the respondent that are grouped under this heading have not been established.
·Systems and co-ordination: We find that all of the matters raised by the respondent and grouped under this heading have been established in whole or in part. We have, however, expressed reservations about some aspects of the respondent’s case in that regard, and in particular, we do not think that the applicant used Sierra Leone as a “flag of convenience” or as a means of avoiding effective surveillance and regulation.
461. In terms of the legal criteria in relation to which the tribunal must be satisfied if an AOC is to issue pursuant to s 28, we conclude as follows:
·We are not satisfied that the applicant has complied with the provisions of the Act, the regulations and the orders in relation to safety. The dangerous goods incident of 28 November 2006 constituted a breach of s 23(1) of the Act, although there were extenuating circumstances, and the applicant’s use of an out-of-date Emergency Response Guide infringed regulation 92.025(2). For the reasons set out below, we also do not think that the applicant is capable of complying with the legislation.
·We are not satisfied that the applicant’s organisation is suitable to ensure that the AOC operations can be carried out safely within the meaning of s 28(1)(b)(i), or that the organisation’s chain of command is appropriate for so ensuring within s 28(1)(b)(ii) or that the organisation has suitable procedures and practices to control it and ensure that the AOC operations can be conducted safely within the meaning of s 28(1)(b)(vi).
462.
In reviewing a CASA decision not to issue an AOC, or to refuse to issue one, the options open to the tribunal are as set out in Civil Aviation Safety Authority v Allan (2001) 114 FCR 14 at 20. In this case, for the reasons already given, we affirm the decision under review.
I certify that the 462 preceding paragraphs are a true copy of the reasons for the decision herein of Professor GD Walker, Deputy President and Air Vice-Marshal F Cox AO, Member.
[sgd]: BKS (Associate to DP Walker)
Date/s of Hearing 10, 11, 12, 13, 16, 17 & 19 October 2006
Date of Decision 11 January 2007
Counsel for the Applicant Mr M Leeming SC
Solicitor for the Applicant Mr M Mackerall, Norton White solicitors
Counsel for the Respondent Mr I Harvey
Solicitor for the Respondent Mr A Anastasi, Office of Legal Counsel, CASA
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