Repacholi and Civil Aviation Safety Authority and Transcoast Enterprises Pty Ltd (Joined Party)

[2013] AATA 598

[2013] AATA 598

Division	General Administrative Division
File Number	2013/1433
Re	Gerald Repacholi
APPLICANT
And	Civil Aviation Safety Authority
RESPONDENT
And	Transcoast Enterprises Pty Ltd
JOINED PARTY

ORDER

Tribunal	Deputy President S D Hotop
Date	23 August 2013
Place	Perth

Pursuant to s 41(2) of the Administrative Appeals Tribunal Act 1975 (Cth) the Tribunal orders that the operation of the decision under review, insofar as that decision cancelled the Aircraft Engineer Licence held by Gerald Repacholi and the Certificate of Approval held by Transcoast Enterprises Pty Ltd, be stayed pending the determination by the Tribunal of the application by Gerald Repacholi for review of that decision.

................[sgd]...........................................

S D Hotop

Deputy President

CATCHWORDS

PRACTICE AND PROCEDURE – request for order staying decision under review – prospects of success of application for review – hardship to applicant and joined party if stay order not made – risk to public safety and safety of air navigation if stay order made – desirable to make order staying operation of part of decision under review – such order appropriate for purpose of securing effectiveness of hearing and determination of application for review – partial stay order made

LEGISLATION

Administrative Appeals Tribunal Act 1975 (Cth), s 41

Civil Aviation Act 1988 (Cth), s 31A

Civil Aviation Safety Regulations 1998, reg 66.125, reg 67.010(1) and reg 67.015

REASONS FOR ORDER

Deputy President S D Hotop

23 August 2013

Introduction

1. On 19 March 2013 a delegate of the Civil Aviation Safety Authority (“CASA”) made a decision whereby:

   ·the Student Pilot Licence, the Private Pilot (Aeroplane) Licence, the Commercial Pilot (Aeroplane) Licence, and the Flight Radiotelephone Operator Licence (“the flight crew licences”) held by Gerald Repacholi (“the applicant”) were cancelled on the ground specified in reg 269(1)(d) of the Civil Aviation Regulations 1988 (“CAR”);

   ·the Aircraft Engineer Licence held by the applicant was cancelled on the grounds specified in reg 269(1)(c) and (d) of the CAR;

   ·the Certificate of Approval held by Transcoast Enterprises Pty Ltd (“Transcoast”) was cancelled on the grounds specified in reg 269(1)(b),(c) and (d) of the CAR.

2. On 27 March 2013 the applicant lodged with the Tribunal an application for review of the abovementioned decision of 19 March 2013, together with a request for an order staying that decision under s 41(2) of the Administrative Appeals Tribunal Act 1975 (Cth) (“AAT Act”).

3. On 26 April 2013 Transcoast applied to the Tribunal to be made a party to this proceeding and also requested the Tribunal to make an order staying the abovementioned decision of 19 March 2013 under s 41(2) of the AAT Act.

4. On 29 April 2013 the Tribunal, pursuant to s 30(1A) of the AAT Act, ordered that Transcoast be made a party to this proceeding.

   The Present Issue

5. The issue for the Tribunal’s present determination is whether it should make an order under s 41(2) of the AAT Act in respect of the CASA delegate’s decision of 19 March 2013 referred to in paragraph 1 above (“the decision under review”).

   Relevant Legislation and Principles

6. Section 41 of the AAT Act relevantly provides:

   “        41       Operation and implementation of a decision that is subject to review

   (1)Subject to this section, the making of an application to the Tribunal for a review of a decision does not affect the operation of the decision or prevent the taking of action to implement the decision.

   (2)The Tribunal may, on request being made, as prescribed, by a party to a proceeding before the Tribunal (in this section referred to as the relevant proceeding), if the Tribunal is of the opinion that it is desirable to do so after taking into account the interests of any persons who may be affected by the review, make such order or orders staying or otherwise affecting the operation or implementation of the decision to which the relevant proceeding relates or a part of that decision as the Tribunal considers appropriate for the purpose of securing the effectiveness of the hearing and determination of the application for review.

   …”

7. Section 31A of the Civil Aviation Act 1988 (Cth) provides:

   “        31A     Automatic stay of certain reviewable decisions

   (1) This section applies to a decision under this Act or the regulations that is reviewable by the Administrative Appeals Tribunal if, before making the decision, CASA was required by this Act or the regulations to give a show cause notice to the holder of the civil aviation authorisation concerned.

   (2)This section does not apply to a decision under section 30DI or a decision under the regulations to cancel a licence, certificate or authority on the ground that the holder of that licence, certificate or authority has contravened a provision of this Act or the regulations (including the regulations as in force by virtue of a law of a State).

   (3) If this section applies to a decision, the operation of the decision is stayed by force of this section.

   (4) The stay ceases to have effect at the end of the fifth business day after the day CASA notified the holder of the decision, unless, before the end of that fifth business day, the holder applies to the Tribunal for an order under subsection 41(2) of the Administrative Appeals Tribunal Act 1975.

   (5) If the holder applies to the Tribunal as mentioned in subsection (4), the stay continues to have effect until the Tribunal makes an order under subsection 41(2) of the Administrative Appeals Tribunal Act 1975 or decides that no order should be made.

   (6) If the holder applies to the Tribunal as mentioned in subsection (4), the holder must give a copy of the application to CASA as soon as practicable after lodging it with the Tribunal.”

   It is common ground, and the Tribunal accepts, that s 31A is presently applicable in this case.

8. Section 41(2) of the AAT Act confers on the Tribunal a discretionary power to make such order staying the operation or implementation of the whole or part of the decision under review as it considers “appropriate for the purpose of securing the effectiveness of the hearing and determination of the application for review.” In considering whether to exercise that discretionary power the Tribunal has customarily had regard to the following factors:

   ·the prospects of success of the substantive application for review;

   ·the nature and degree of hardship that would be likely to be suffered by the applicant and/or others if a stay order were not made; and

   ·(in cases like the present) the public interest in the safety of air navigation, and whether public safety would be likely to be imperilled if a stay order were made.

   The Applicant’s Case in Support of the Making of a Stay Order

9. The applicant tendered in evidence an affidavit sworn by him on 9 May 2013 in which he deposed (inter alia) as follows:

   “…

   3.By Notice dated 19 March 2013 the Respondent (‘CASA’) cancelled the Pilot Licences and Aircraft Engineer Licence held by myself, Gerald Keith Repacholi (‘Repacholi’) … , and it also cancelled the Certificate of Approval (‘C of A’) held by a family company owned by Repacholi, Transcoast Enterprises Pty Ltd (‘Transcoast’) t/as West Coast Aviation Maintenance … (‘the Cancellation Notices’).

   4.My son, Denis Repacholi (‘Denis’), and I run a small family business which operates aerial agricultural aircraft (ie ‘crop dusters’) pursuant to an Air Operator’s Certificate (‘AOC’) held by Repacholi Aviation Pty Ltd (‘Repacholi Aviation’), and which carries out maintenance on its aircraft pursuant to C of A held by Transcoast, which is another small family business run by Denis and I.

   5.I am the Chief Engineer (and only LAME [licensed aircraft maintenance engineer]) employed by Transcoast.  Denis is an unlicensed aircraft maintenance engineer.  I am also the Chief Pilot of Repacholi Aviation.  Denis is a commercial pilot, however, he does not have the experience to be the Chief Pilot of Repacholi Aviation.  Both Denis and I rely upon our employment at Transcoast and Repacholi Aviation to earn our livelihood.

   6.The C of A held by Transcoast was issued by CASA pursuant to Regulation 30 of the Civil Aviation Regulations 1988 (‘CAR’), which governs the maintenance activities which are authorised by the C of A. My own commercial pilot licence is endorsed with a Grade 1 Agricultural Rating, which allows me to carry out aerial agricultural (ie ‘crop-dusting’) operations.

   …

   10.The effect of the Cancellation Notices in respect of myself is that my ability to earn my livelihood as either a pilot or as a LAME has been destroyed:

   10.1My authorisation to pilot any aircraft, and as a result, my authority to occupy the position of Chief Pilot of Repacholi Aviation has been withdrawn.  I cannot obtain employment elsewhere as a pilot.

   10.2My authorisation to carry our [sic] aircraft maintenance on any aircraft, and as a result, my authority to be Chief Engineer of Transcoast has been withdrawn.  I cannot obtain employment elsewhere as a LAME.

   11.The effect of the Cancellation Notices in respect of Transcoast is that its authority to carry out maintenance has been withdrawn, which has shut down its business.

   12.A collateral effect of the cancellation of my pilot and engineer licences, and the cancellation of the Transcoast C of A is that the flying operations of Repacholi Aviation have been forced to shut down as it now has no chief pilot or head of aircraft airworthiness and maintenance control (‘HAAMC’).  Denis, who also relies on his employment with Transcoast and Repacholi Aviation for his livelihood, has been deprived of his income, and remains liable for his guarantees for Transcoast.

   13.Both myself and Transcoast rely on the income generated by Transcoast and Repacholi Aviation to pay wages and other overheads of the business, such as rent, power, trade creditors and the repayment of loans which are on-going.  In addition, I rely upon an income to buy food, to pay for light and power, to pay rent, medical expenses and other day to day living expenses.  If the decisions are not stayed, neither myself nor Transcoast will receive any income or profits, but at the same time, our overheads will remain in place, with the dire result that the business of Transcoast will suffer irreparable harm, and I will not have enough money to live on.  Further, I will be liable for my guarantees for Transcoast.

   …

   Financial obligations

   39.I refer to and repeat paragraphs 11 – 14 above and say further:

   39.1The Applicants’ [Repacholi and Transcoast] business is subject to finance agreements made between the Applicants and their bankers in relation to plant and equipment.  The loans are to the order of $200,000.00, and must be repaid.

   39.2The loans made to the Applicants are secured by a charge over the assets of the Applicant [sic] and by mortgages on property owned by myself and other directors and are supported by personal guarantees made by myself and the other directors.  The Applicants’ obligations to repay the loans to the bankers are ongoing.

   39.3In addition, the Applicants have an ongoing obligation to pay the wages and entitlements of employees; and to pay overheads and creditors.

   39.4If the Stay is not granted the Applicants will be denied the cashflow and profits required to enable the service of their loans, to pay employees and creditors.

   39.5In addition, the employees of our family business, which includes myself and Denis, will be forced into redundancy and put out of work.

   39.6The financial drain on the Applicants in repaying loans and other financial commitments in respect of a business which has been deprived of its income will cause extreme hardship.

   39.7If a stay is not granted, the financial strain imposed on myself and Transcoast will be severe, and will result in the Applicants having to sell aircraft and other assets in a hostile market which will inevitably result in a capital loss.  If the sale of assets results in a capital loss such that the Applicants cannot fully meet their financial obligations, Transcoast will be permanently closed and wound up and I will face bankruptcy pursuant to my guarantees and on-going obligations.”  (Exhibit A1)

   [The Tribunal notes that CASA did not seek to cross-examine the applicant and did not object to the tender of the above affidavit.]

10. The applicant also filed and served written submissions in support of his request for a stay order.

    Casa’s Submissions Opposing the Making of a Stay Order

11. CASA filed and served extensive written submissions in the course of which it noted (inter alia) that the applicant’s Class 1 Civil Aviation Medical Certificate and Class 2 Civil Aviation Medical Certificate had expired on 29 September 2012 and that, on 29 April 2013, a delegate of CASA made a decision refusing to issue either such certificate to the applicant.  CASA also tendered in evidence a statement of Dr David Fitzgerald, Senior Medical Officer, Aviation Medical Section, CASA, dated 4 July 2013, confirming that he had made that decision (Exhibit R1).

    The Applicant’s Response

12. The applicant tendered in evidence a further affidavit, sworn by him on 27 June 2013, in which he deposed as to his medical fitness to operate an aircraft and to his expectation that the relevant medical certificates will be re-issued to him “after due process”.  In an accompanying written submission, it was noted that the applicant proposed to make an application to the Tribunal for review of the abovementioned decision of 29 April 2013 refusing to issue either a Class 1 or a Class 2 Medical Certificate to him.

13. The Tribunal notes that, on 28 June 2013, the applicant lodged an application for review of the abovementioned decision of 29 April 2013, and that, on 8 August 2013, he lodged an application for an extension of time until 28 June 2013 for lodging that application for review.  That application for an extension of time was not opposed by CASA and was granted by the Tribunal on 22 August 2013.
    

    Consideration

    The prospects of success of the substantive application for review

14. The formal written notice of the decision under review, which was given by CASA to the applicant, by letter dated 19 March 2013, comprises some 80 (A4 size) pages.  The background facts and circumstances are set out in paras 1–177 (pp 2–69).  The grounds for the cancellation of the Certificate of Approval held by Transcoast are set out in subparas (a)–(q) in para 187 and paras 188–197 (pp 73–77).  The grounds for the cancellation of the flight crew licences and the Aircraft Engineer Licence held by the applicant are set out in paras 199–205 (pp 78–79).  Clearly, the applicant and Transcoast have a very substantial case to meet.

15. The Tribunal notes, however, that, by letter dated 12 December 2012, the applicant’s solicitors provided a detailed response (comprising 21 pages) to the relevant “Show Cause Notices” issued by CASA.  Notwithstanding the magnitude of the case compiled by CASA, on the basis of which the decision under review in this proceeding was made, it seems to the Tribunal that the applicant and Transcoast propose to present to the Tribunal a substantial case by way of refutation of CASA’s case, with a view to satisfying the Tribunal that it should set aside the decision under review and substitute a decision favourable to the applicant and Transcoast.

16. Given that the exercise of the cancellation powers conferred by reg 269(1) of the CAR is ultimately a matter for the decision-maker’s discretion, the Tribunal, notwithstanding the apparently strong prima facie case prepared by CASA, is not in a position, at this early stage of the proceeding, to make an assessment of the prospects of success of the substantive application for review. Whether that application for review will ultimately be successful will, of course, depend not only on whether the Tribunal is satisfied that the relevant grounds for cancellation specified in reg 269(1) of the CAR are made out, but also on whether the Tribunal, in its discretion, regards it as appropriate to exercise the relevant cancellation power.

17. In the Tribunal’s opinion, this factor does not militate against the making of a stay order in this case.

    Hardship likely to be suffered if a stay order is not made

18. The applicant’s evidence regarding the financial and commercial hardship that will be suffered by himself, his son Denis Repacholi, Transcoast and Repacholi Aviation Pty Ltd, and their employees, in the event that a stay order is not made, has been set out in paragraph 9 above.  That evidence has not been disputed by CASA.

19. It was submitted by CASA, however, that, in the absence of documentary and detailed evidence in relation to the financial circumstances of the applicant and Transcoast and the nature and degree of hardship they would be likely to suffer if a stay order is not made, the Tribunal should not be satisfied that the applicant or Transcoast would thereby suffer hardship to such an extent as would be likely to jeopardise the hearing and determination of the substantive application for review.

20. Notwithstanding that there is no objective documentary evidence before the Tribunal corroborating the applicant’s abovementioned evidence regarding financial and commercial hardship (which evidence, the Tribunal reiterates, was not disputed by CASA), the Tribunal is satisfied, on the basis of the applicant’s evidence, that he and Transcoast will, in the absence of an order staying the operation or implementation of the decision under review, suffer substantial and irreparable financial and commercial detriment – in the case of Transcoast, resulting in the cessation of its business operations – by reason of that decision. The Tribunal, furthermore, is satisfied, having regard to those considerations, that the effectiveness of the hearing and determination by the Tribunal of the substantive application for review will be significantly diminished unless an appropriate stay order is made.

21. In the Tribunal’s opinion, this factor militates strongly in favour of the making of a stay order in this case.

    Public safety and the safety of air navigation

22. The Tribunal unreservedly accepts that public safety and the safety of air navigation are very important - indeed, vital - considerations in the regulation of civil aviation.  In certain circumstances – such as where there is a real risk of serious imminent danger to public safety – those considerations will be of overriding importance, outweighing all competing considerations.  In the Tribunal’s opinion, however, the circumstances of the present case do not fall into that category.

23. In the present case, the grounds for the cancellation of the Certificate of Approval held by Transcoast and the Aircraft Engineer Licence held by the applicant largely relate to alleged serious deficiencies in respect of their maintenance of aircraft and anomalies in their aircraft maintenance records.  Although these are serious matters which are concerned with the safety of air navigation, they do not necessarily represent a risk of imminent danger to public safety.  Indeed, CASA’s investigation of these matters was undertaken over a lengthy period of time and included an audit of Transcoast’s maintenance activities in June 2012 resulting in “Show Cause Notices” issued to the applicant and to Transcoast in September and October 2012 and culminating in the decision of 19 March 2013.  The process followed by CASA in this matter is, in the Tribunal’s opinion, indicative of painstaking thoroughness and attention to detail rather than the recognition of the existence of a serious imminent risk to the safety of air navigation requiring urgent remedial action in the interests of public safety.

1. In the Tribunal’s assessment, the considerations of public safety and the safety of air navigation which are reflected in the decision under review are not of such importance and urgency as necessarily to override the considerations of financial and commercial hardship to the applicant and Transcoast (referred to in paragraphs 9, 18 and 20 above) resulting from that decision.  In the Tribunal’s opinion, greater weight should be given to the latter considerations in determining whether a stay order should be made in this case.

   Conclusion

2. Having regard to the evidence before it and to the factors referred to in paragraphs 14–24 above, the Tribunal is of the opinion that it is desirable to make a stay order under s 41(2) of the AAT Act in this case.

3. The question then arises as to the terms of such an order which would be “appropriate for the purpose of securing the effectiveness of the hearing and determination of the application for review” in this case.

4. Having regard to the considerations referred to in paragraph 20 above, the Tribunal considers it appropriate, for the purpose of securing the effectiveness of the hearing and determination of the application for review in this case, that it make an order staying the operation of the decision under review insofar as that decision cancelled the Certificate of Approval held by Transcoast.

5. Having regard to the fact, however, that the applicant does not presently hold a current Class 1 or Class 2 Medical Certificate and is therefore presently unable to exercise the privileges of any of the flight crew licences held by him, the Tribunal does not consider it appropriate, for the purpose of securing the effectiveness of the hearing and determination of the application for review in this case, that it make an order staying the operation or implementation of the decision under review insofar as that decision cancelled each of the flight crew licences held by the applicant.

6. As regards the Aircraft Engineer Licence held by the applicant which was also cancelled by the decision under view, CASA drew the Tribunal’s attention to reg 66.125 of the Civil Aviation Safety Regulations 1998 (“CASR”) which prohibits a licensed aircraft maintenance engineer from exercising a specified privilege of his or her aircraft engineer licence if (inter alia) “he or she knows that he or she has a medically significant condition” and “the condition is safety-relevant”.  The phrase “medically significant condition” is broadly defined in reg 67.010(1) to include (inter alia) “any illness or injury” or “any bodily infirmity, defect or incapacity.”  Pursuant to reg 67.015, “a medically significant condition is safety-relevant if it reduces, or is likely to reduce, the ability of someone who has it to exercise a privilege conferred or to be conferred, or a duty imposed or to be imposed, by a licence that he or she holds or has applied for” (original emphasis).

7. Although it is common ground that the applicant suffers from a “medically significant condition” on the basis of which Dr David Fitzgerald of CASA decided on 29 April 2013 not to issue a Class 1 or a Class 2 Medical Certificate to him (see paragraph 11 above), the Tribunal has not been provided with evidence on the basis of which it could find that that condition reduces, or is likely to reduce, the applicant’s ability to exercise a privilege conferred, or perform a duty imposed, by the Aircraft Engineer Licence held by him. In short, the Tribunal is not presently satisfied that the applicant’s relevant medical condition is “safety-relevant” within the meaning, and for the purposes, of reg 66.125 of the CASR.

8. Accordingly, as presently advised, the Tribunal, having regard to the considerations referred to in paragraph 20 above, considers it appropriate, for the purpose of securing the effectiveness of the hearing and determination of the application for review in this case, that it make an order also staying the operation of the decision under review insofar as that decision cancelled the Aircraft Engineer Licence held by the applicant.

   Order

9. For the above reasons the Tribunal, pursuant to s 41(2) of the AAT Act, orders that the operation of the decision under review, insofar as that decision cancelled the Aircraft Engineer Licence held by the applicant and the Certificate of Approval held by Transcoast, be stayed pending the determination by the Tribunal of the applicant’s application for review of that decision.

I certify that the preceding 32 (thirty -two) paragraphs are a true copy of the reasons for the order herein of Deputy President S D Hotop

.............[sgd D Brodie].......................................................

Administrative Assistant

Dated 23 August 2013

Dates of interlocutory hearing	17 June, 29 July 2013
Counsel for the Applicant and the Joined Party	Mr P Lithgow
Solicitors for the Applicant and the Joined Party	Maitland Lawyers
Representative of the Respondent	Mr A Carter Legal Branch Civil Aviation Safety Authority