Hodgson and Anor and Civil Aviation Safety Authority
[2009] AATA 632
•25 August 2009
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2009] AATA 632
ADMINISTRATIVE APPEALS TRIBUNAL )
) 2009/2838
) 2009/3054
) 2009/3055
GENERAL ADMINISTRATIVE DIVISION ) Re BRETT HODGSON
(1st Applicant)
HELICOPTERS PTY LTD
(2nd Applicant)And
CIVIL AVIATION SAFETY AUTHORITY
DECISION
Tribunal Mr S. Webb, Presiding Member
Air Vice Marshal F. Cox AO, MemberDate25 August 2009
PlaceCanberra
Decision In each of the applications the Tribunal orders that implementation of the decisions is stayed pursuant to sub 41(2) of the Administrative Appeals Tribunal Act 1975. The stays will remain in force until the determination of the applications or earlier order of the Tribunal. The stays are subject to the condition that the applicants are to fully comply with all the conditions attaching to the Company’s Air Operator’s Certificate and the requirements of the Civil Aviation Act 1988, the Civil Aviation Regulations and the Civil Aviation Orders when conducting operations. Failure to do so will result in vacation of these orders. There is liberty to apply.
.................. [sgd].............................
Mr S. Webb, Presiding Member
CATCHWORDS
PRACTICE AND PROCEDURE - stay of decisions under review - commercial pilot (helicopter) licence - Flight Training Ratings Grade 1 and 2 - Air Operator Certificate - Chief Pilot approval - interests of affected persons - public safety - hardship - prospects of success - effectiveness of hearing to be preserved - desirable and appropriate to exercise discretion - stay granted
Administrative Appeals Tribunal Act 1975 s 41
Civil Aviation Act 1988 ss 27, 28, 28BA, 31, 31A, 31C, 30DB, 30DC, 30DD
Civil Aviation Regulations 269
Civil Aviation Safety Authority v Hotop & Anor (2005) 145 FCR 232
Re AMT Helicopters Pty Ltd and Civil Aviation Safety Authority [2006] AATA 314
Re Griffiths Grif-Air Helicopters Pty Ltd and Civil Aviation Authority (1993) 31 ALD 380
Re Repacholi and Civil Aviation Safety Authority [2002] AATA 573
Shi v Migration Institute of Australia Ltd (2003) 134 FCR 326
Yolbir v Administrative Appeals Tribunal (1994) 48 FCR 246 at 250
REASONS FOR DECISION
25 August 2009 Mr S. Webb, Presiding Member
Air Vice Marshal F. Cox AO, Member1. Brett Hodgson is sole director of Helicopters Pty Ltd (‘the Company’). He holds a commercial pilot (helicopter) licence and, until recently, Grade 1 and 2 Flight Training Ratings. On 17 June 2009 the Civil Aviation Safety Authority (CASA) determined to cancel his commercial pilot’s licence and flight training ratings as well as the Company’s Air Operator’s Certificate (AOC) and Mr Hodgson’s Chief Pilot approval with the Company. Mr Hodgson and the Company have applied for review of these decisions and for orders pursuant to sub 41(2) of the Administrative Appeals Tribunal Act 1975 (‘the AAT Act’) staying the operation of the decisions under review until the applications are determined by the Tribunal.
2. CASA filed written submissions concerning the applications for stay orders on 18 August 2009. We have carefully considered those submissions.
3. We note that the decisions to cancel Mr Hodgson’s commercial pilot’s licence and flight training ratings and to cancel the Company’s AOC were subject to automatic stays pursuant to s 31A of the Civil Aviation Act 1988 (the CAA). Mr Hodgson applied for review of the decision to cancel his commercial pilot’s licence and flight training ratings within the 5 day period. As a result, by operation of subs 31A(5) of the CAA, the stay is presently continuing. The same cannot be said in relation to the decision concerning the Company’s AOC; the automatic stay in relation to that decision came to an end 5 days after the decision was notified to the applicants. Mr Hodgson explained that his solicitor omitted to file applications for review of the decisions concerning the AOC and Chief Pilot approval within the specified period.[1] Thus, there is presently no automatic stay on the operation of those decisions.
[1] Sub 31A(4), CAA
4. We note that there is a question whether the cancellation of Chief Pilot approval, being made under the Civil Aviation Orders, is within the scope of the automatic stay provisions of the CAA. For present purposes it is not necessary for us to decide that question. The principles and powers relating to stay orders under the AAT Act apply equally in each case.
5. We do not accept the proposition put by Mr McKeown, counsel for the applicants, that the introduction of s 31A of the CAA and related amending provisions has the effect of requiring a stay to be granted under the AAT Act unless there are compelling reasons to the contrary. The provisions to which Mr McKeown refers do not have that effect. We are satisfied that these amendments to the CAA do not affect the powers of the Tribunal or the proper approach that should be adopted, on sound authority, when forming opinion about the desirability, or otherwise, of making orders to stay the operation and implementation of the subject decision. That is consistent with the plain language of subs 31C and 31A(2) of the CAA.
6. The proper approach to stay applications has been discussed in many cases. Of course, the applicable legislation and the facts and circumstances of each case must be carefully analysed to discern the correct approach. We will proceed on the following basis. The powers conferred by subs 41(2) of the AAT Act are for the purposes of securing the effective hearing and determination of the application for review.[2] Exercising the power to make stay orders depends on the Tribunal being satisfied that it is desirable to do so to secure the effectiveness of the hearing and the determination of the applications before it. Exercise of the stay power is also conditioned by the Tribunal’s ability to grant effective relief from the decision under review when determining the substantive application.[3] Plainly enough, the effectiveness of the hearing and determination of the application for review may be diminished or rendered nugatory if the applicant succeeds but is deprived effective relief from the date of the operative decision, including the ability to earn his livelihood or to avoid damage or disruption to his business, because the operative decision was not stayed.[4] The subsection must be given a broad interpretation; the Tribunal is not precluded from making orders that have a positive effect.[5] Importantly, the interests of persons affected by the operative decision, including in cases such as this the public interest in civil aviation safety, must be taken into account and for that purpose, at least, consideration should be given to:
(a)the prospect of success of the substantive applications for review;
(b)any hardship to those affected by the decisions under review if stay orders are not made; and
(c)whether public safety is likely to be imperilled if stay orders are made.[6]
[2] Civil Aviation Safety Authority v Hotop & Anor (2005) 145 FCR 232 at 240.
[3] Yolbir v Administrative Appeals Tribunal (1994) 48 FCR 246 at 250.
[4] Shi v Migration Institute of Australia Ltd (2003) 134 FCR 326 at 333.
[5] Civil Aviation Safety Authority v Hotop & Anor (2005) 145 FCR 232 at 240-242.
[6] Re AMT Helicopters Pty Ltd and Civil Aviation Safety Authority [2006] AATA 314 at [12]; Re Griffiths Grif-Air Helicopters Pty Ltd and Civil Aviation Authority (1993) 31 ALD 380 at 385.
7. We will address each of these considerations.
prospects of success
8. CASA says that the applicants’ case, prima facie, is without merit and has no prospect of success.
9. We do not agree.
10. It is plain enough that the applicants dispute aspects of the case raised against them by CASA. Issues of credit are apparent. Mr Hodgson disputes CASA’s assertion that he and the company conducted flight training after the resignation of the Company’s Chief Flying Instructor (CFI), Mr John Anderson, on 31 January 2008.[7] The evidence on this point is conflicted. It appears that Mr Anderson purported to resign in August 2007 in a manner that was conditional on a replacement CFI being approved.[8] Mr Hodgson’s evidence under oath is that he continued on this basis and was not aware of any change until January 2009. Support for that proposition can be found in the proficiency and standards flight check report that Mr Anderson conducted concerning Mr Hodgson on 21 March 2008,[9] and in notations to the 18 July 2008 CASA Safety Trend Indicator report on 18 July 2008, which indicate that “Flying training is still ongoing – 3xppl with Anderson as CFI”.[10] Mr Hodgson asserts that he ceased flight training when he became aware that Mr Anderson had resigned, as required.
[7] Exhibit A.
[8] T7 folio 17.
[9] T47 folio 135.
[10] T52 folio 147.
11. This is not the time to test this evidence or to make factual findings, those are matters for the substantive hearing. CASA asserts that even if the Tribunal accepts Mr Hodgson’s evidence concerning the state of his knowledge at the time, the fact remains that Mr Hodgson and the Company were providing flight training without a CFI in breach of conditions attaching to the AOC and related statutory requirements. This, it is said, compels one to conclude that Mr Hodgson was not diligent in the performance of his responsibilities as Chief Pilot. That assertion, however, does not address the evidence that Mr Anderson was often off-site in relation to his CFI responsibilities with the Company and that CASA was aware of this practice. We are not compelled to conclude on the present evidence that the applicants’ case is fanciful and devoid of any prospect of success.
12. Mr Hodgson does not dispute the fact that maintenance ‘overfly’ breaches occurred in 2006 and 2007, although he maintains that these were very minor and were dealt with promptly at the time.[11] Subsequently, CASA reviewed and renewed the Company’s AOC.[12] Mr Hodgson does not dispute that there was a further maintenance breach in 2008, concerning counter weight rods and exhaust valve guides in aircraft VH-DYS. This, too, he asserts was promptly dealt with; it was minor and did not concern critical safety components. Mr Hodgson asserts that there is no pattern of non-compliance that would justify the decisions under review. These, he says, are excessive and punitive without good reason.
[11] T71 folios 187-190.
[12] T24.
13. Those are matters for the Tribunal to determine at hearing. Presently, we are satisfied that the applicants’ case, although not strong, is not so lacking in merit that it has no prospect of success.
hardship
14. CASA asserts that the applicants have not tendered detailed evidence in support of any purported hardship that may flow if a stay is not granted. In CASA’s submission any financial hardship Mr Hodgson and the Company may experience is the result of the cessation of the flight training business in or about January 2009 and that is not affected if a stay is not granted.
15. Mr Hodgson asserts that he and the company will suffer hardship and the future operation of the business will be placed in jeopardy if a stay is not granted.
16. We acknowledge that the applicants have not adduced probative evidence concerning the financial positions of Mr Hodgson or the Company. That is perhaps unfortunate in the circumstances as one may reasonably expect to consider such evidence when assessing issues of hardship.[13] Nevertheless, Mr Hodgson gave oral evidence concerning these matters and, despite obvious deficiencies with his evidence, we must do the best with the materials that are presently before us.
[13] Re Repacholi and Civil Aviation Safety Authority [2002] AATA 573 at [24].
17. By Mr Hodgson’s own account the business derived 90% of its income from flight training. Those activities involved up to 6 students, of which only 3 were regular students. Nevertheless, the flight training activities ceased in January 2009. Since that time, by Mr Hodgson’s account, he and the Company have derived income from charter and joy flights, the sale of shares in aircraft owned by the Company and the sale of aircraft components. No evidence was adduced in support of this evidence. By Mr Hodgson’s account the income generated has been sufficient to cover business outgoings of $20,000 per month. The outgoings are primarily lease, rates and land tax payments in relation to the business premises at Bankstown Airport.
18. Mr Hodgson’s assertion that the business tenure over the premises may be jeopardised if the stay is not granted was not challenged. It appears that Mr Hodgson and the Company have been involved in protracted litigation concerning the business premises, and those matters have not yet been finalised. We accept that if the stay is not granted the capacity of Mr Hodgson and the Company to cover lease costs and related outgoings is likely to be adversely affected.
19. It is plain enough that if the stay is not granted Mr Hodgson and the Company will not be in a position to generate income from charter flights or other commercial flying activities. Mr Hodgson acknowledged that even if a stay is granted neither he nor the Company will be able to lawfully conduct flight training. But as we have said, flight training has not been a component of the business operations since January 2009 and that activity is not going to be affected by these proceedings. Nevertheless, Mr Hodgson informed us that he aspires to the role of CFI for the Company; he has been unsuccessful in the past and intends to apply in the future. In his submission, he cannot do so if the decisions under review are not stayed. Furthermore, Mr Hodgson informed us that he has settled a commercial arrangement involving him conducting flights and instruction using the Company’s Bell helicopters under the supervision of Mr Peter Holstein, CFI with Aerowasp Pty Ltd, and operating under Aerowasp’s AOC from the Camden Airfield. By Mr Hodgson’s account the arrangement commenced recently and he was in attendance at the Camden Airfield for such purposes “this week”. This evidence was not challenged. Plainly enough if the decisions under review are not stayed, this commercial arrangement will be adversely affected.
20. Thus, in sum, we are very concerned that if a stay were not granted the effectiveness of the hearing may be undermined if the applicants lose the business that lies at the heart of the operative decisions. But that is not the end of the matter.
public safety
21. In CASA’s submission if the decisions under review are stayed, public safety will be placed in jeopardy because Mr Hodgson, being the alter ego of the Company, knowingly and intentionally failed to comply with his statutory obligations and AOC conditions. This, CASA says, raises questions about the suitability and competence of Mr Hodgson to perform the duties of Chief Pilot diligently, ensuring full compliance with the Company’s AOC conditions, during the period of any stay. In CASA’s submission, such risks raise serious safety concerns to the extent that a stay should not be granted.
22. The applicant’s submit that none of the alleged breaches involved serious issues of safety, relating only to administrative matters. Allegations of flight training breaches are vigorously contested. The applicant’s point to Mr Hodgson’s “incident free” flight record and experience, and submit that there are no allegations concerning primary issues of safety or serious risks to public safety.
23. Without testing the evidence, it appears to us that no serious threat to public safety will arise if a stay is granted. The maintenance ‘overfly’ and alleged flight training breaches raise serious questions about the applicant’s administrative arrangements and behaviour concerning full compliance with statutory obligations and operating conditions, but are unlikely to raise present public safety risks. That is especially so in the period of any stay because the applicant’s are not able, lawfully, to conduct flight training without an approved CFI and the level of flight operations is very low – Mr Hodgson’s evidence is that all of the Company’s aircraft are presently grounded and only three aircraft are operational. It appears that CASA inspectors came to a similar opinion in August 2008 – “Although the sum of high risk responses is high in this [Safety Trend Indicator] report, the low to non-existant [sic] flying rate of the operator reduces the safety risk to a tolerable level”.[14]
[14] T52 folio 147.
24. Despite some concerns about the allegations raised against the applicant’s in the show cause letters, we are satisfied that public safety will not be imperilled if the decisions under review are stayed and the applicants are permitted to continue flying operations. We are not persuaded that any immediate risk to public safety will arise during the review period if a stay is granted.
conclusion
25. In conclusion, therefore, it remains to consider whether it is desirable to order a stay in order to secure the effectiveness of the hearing and determination of the applications for review.
26. On balance, we are persuaded that it is. Even though the applicants’ business is at a low ebb, especially in terms of flying operations, we accept that the future operation of the business and the ability of the applicants to progress the business in the manner outlined in evidence is at risk if the operative decisions are not stayed. There will be little utility in the hearing or the determination of the applications, especially if the applicants are successful, if the operative decisions cause the applicant’s business to fail prior to the Tribunal’s determination. Nevertheless, the alleged non-compliance with statutory obligations and licence conditions are sufficient to cause us concern about the applicants’ administrative arrangements and behaviour during the period of the stay. We note the undertaking given that the applicants will fully comply with all obligations and conditional requirements on them in the course of operations. With that in mind, we think that it is prudent to render the stays subject to the condition that the applicants are to fully comply with all statutory requirements and AOC conditions during the period of the stay.
I certify that the 26 preceding paragraphs are a true copy of the reasons for the decision herein of Member S. Webb.
Signed: .................[sgd]........................................
J. Lakin, AssociateDate of Hearing 19 August 2009
Date of Decision 25 August 2009
Counsel for the Applicant Mr C. McKeown
Solicitor for the Respondent Mr J. Rule
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