Repacholi Aviation Pty Ltd v Civil Aviation Safety Authority
[2013] FCA 576
FEDERAL COURT OF AUSTRALIA
Repacholi Aviation Pty Ltd v Civil Aviation Safety Authority [2013] FCA 576
Citation: Repacholi Aviation Pty Ltd v Civil Aviation Safety Authority [2013] FCA 576 Parties: REPACHOLI AVIATION PTY LTD (ACN 009 054 022) and GERALD KEITH REPACHOLI v CIVIL AVIATION SAFETY AUTHORITY File number(s): WAD 40 of 2013 Judge(s): SIOPIS J Date of judgment: 13 June 2013 Catchwords: NEGLIGENCE – whether Civil Aviation Safety Authority owed to civil aviation operators a duty of care in carrying out its statutory powers – whether applicants had shown that the decision of the primary judge was attended with sufficient doubt to warrant the grant of leave to appeal. Legislation: Federal Court of Australia Act 1976 (Cth) s 31A Cases cited: Polar Aviation Pty Ltd v Civil Aviation Safety Authority (No 4) (2011) 203 FCR 293
Polar Aviation Pty Ltd v Civil Aviation Safety Authority (2012) 205 FCR 325
White Industries Australia Ltd v Assistant Commissioner of Taxation (2007) 160 FCR 298Date of hearing: 8 May 2013 Place: Perth Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 37 Counsel for the First and Second Applicants: Mr J Ribbands
Solicitor for the First and Second Applicants: Maitland Lawyers
Counsel for the Respondent: Mr I Harvey Solicitor for the Respondent: Ashurst Australia
IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
WAD 40 of 2013
BETWEEN: REPACHOLI AVIATION PTY LTD (ACN 009 054 022)
First ApplicantGERALD KEITH REPACHOLI
Second ApplicantAND: CIVIL AVIATION SAFETY AUTHORITY
Respondent
JUDGE:
SIOPIS J
DATE OF ORDER:
13 JUNE 2013
WHERE MADE:
PERTH
THE COURT ORDERS THAT:
1.The applicants’ application for leave to appeal is dismissed.
2.The applicants are to pay the respondent’s costs.
Note:Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
WAD 40 of 2013
BETWEEN: REPACHOLI AVIATION PTY LTD (ACN 009 054 022)
First ApplicantGERALD KEITH REPACHOLI
Second ApplicantAND: CIVIL AVIATION SAFETY AUTHORITY
Respondent
JUDGE:
SIOPIS J
DATE:
13 JUNE 2013
PLACE:
PERTH
REASONS FOR JUDGMENT
This is an application for leave to appeal from the judgment of the primary judge dismissing the applicants’ application for damages, pursuant to s 31A of the Federal Court of Australia Act 1976 (Cth) (the Federal Court Act).
BACKGROUND
In January 2002, the first applicant, Repacholi Aviation Pty Ltd, was the holder of an air operator’s certificate (AOC) issued by the respondent, the Civil Aviation Safety Authority (CASA), which entitled it to conduct charter operations including sea plane operations, agricultural operations, aerial spotting, surveying, photography and trade or water operations. It carried on a commercial flights operation business within Australia. Repacholi Aviation had also appointed, with the approval of CASA, the second applicant, Mr Gerald Repacholi, as its chief pilot. At that time, Mr Repacholi had a private and a commercial pilot’s licence and was also a director of Repacholi Aviation.
CASA is a statutory authority charged by the Civil Aviation Act 1988 (Cth) with the regulation and enforcement of safety standards throughout the commercial aviation industry in Australia.
On 10 January 2002, Mr Repacholi performed an aviation procedure at Jandakot airport in Western Australia which was to have a dramatic impact upon Mr Repacholi and Repacholi Aviation’s business. This was not performed as part of Repacholi Aviation’s business nor pursuant to its AOC. Mr Repacholi caused a trailer upon which a sea plane was loaded to be towed by a truck down the runway at Jandakot airport at sufficient speed to cause the sea plane to become airborne (the “take-off procedure”). The take-off procedure successfully launched the sea plane from the trailer. The take‑off procedure, said Mr Repacholi, was a procedure commonly carried out in the United States of America.
CASA, however, took a dim view of Mr Repacholi’s conduct in engaging in the take‑off procedure, and took a series of measures in relation thereto, which had a damaging effect on Mr Repacholi and Repacholi Aviation.
On 5 March 2002, CASA issued a notice of suspension which suspended Mr Repacholi’s commercial and private pilot’s licences and rendered his approval as chief pilot of Repacholi Aviation ineffective. As a consequence of the suspension, Repacholi Aviation was grounded pending the appointment and approval of a substitute chief pilot.
On 21 March 2001, CASA issued a notice of proposed action which required Repacholi Aviation to show cause by 26 March 2002, why the renewal of Repacholi Aviation’s AOC, which was due to expire on 31 March 2002, should not be refused.
On 28 March 2002, CASA issued a notice which suspended Mr Repacholi’s pilot’s licences for a further 28 days and called on Mr Repacholi to show cause why his pilot’s licences should not be varied, cancelled or suspended.
On 3 April 2002, CASA approved Mr Fred Hampton as chief pilot of Repacholi Aviation. Mr Repacholi resigned as the chief pilot of Repacholi Aviation and as a director of Repacholi Aviation. On 9 April 2002, CASA advised Mr Repacholi that it had determined that Mr Hampton was suitable as a chief pilot in relation to agricultural operations, but not its charter and other aerial operations, and that Repacholi Aviation should make a request to vary its AOC to delete its charter and other aerial operations. This was done.
On 19 June 2002, CASA issued a notice cancelling Mr Repacholi’s pilot’s licences, which included his commercial pilot’s licence.
On 21 August 2002, CASA issued a new AOC to Repacholi Aviation which was limited to aerial agricultural operations and did not include charter operations or the other aerial operations which Repacholi Aviation had previously undertaken.
On 18 June 2003, the Administrative Appeals Tribunal (AAT) set aside the cancellation of Mr Repacholi’s pilot’s licences and found that the take-off procedure involved a “trivial, technical” contravention of the Civil Aviation Regulations 1988 (Cth). The AAT stated that cancellation of Mr Repacholi’s pilot’s licences was “grossly excessive and unreasonable and, therefore highly inappropriate”.
Following the decision of the AAT, Repacholi Aviation requested CASA to reinstate its approval of Mr Repacholi as chief pilot of Repacholi Aviation. On 4 February 2004, CASA advised Repacholi Aviation that its application to approve Mr Repacholi as its chief pilot had been rejected.
On 10 February 2004, Mr Repacholi commenced review proceedings in the AAT in respect of CASA’s refusal to approve his appointment as chief pilot of Repacholi Aviation.
On 30 June 2006, the AAT set aside the refusal decision and remitted the matter to CASA for reconsideration. The AAT directed that Mr Repacholi be assessed and examined by an examiner appointed by CASA who was not based in the Perth General Aviation Field Office.
On 19 December 2006, CASA approved Mr Repacholi’s reappointment as chief pilot of Repacholi Aviation. However, CASA did not, despite requests being made, vary the AOC to reinstate the charter and other aerial operations which had previously been undertaken by Repacholi Aviation.
Repacholi Aviation and Mr Repacholi were aggrieved by the conduct of CASA and commenced a proceeding in the Supreme Court of Western Australia seeking compensation in respect of the economic loss which Repacholi Aviation and Mr Repacholi had allegedly suffered by reason of CASA’s conduct. The proceeding was transferred to this Court in March 2009.
Since the commencement of the proceeding, the applicants have had considerable difficulty in formulating a cause of action sounding in damages against CASA.
THE PROCEEDING BEFORE THE PRIMARY JUDGE
On 3 May 2012, the primary judge granted the applicants leave to file and serve a minute of further re-amended statement of claim after having struck out an earlier version of the pleading.
On 17 July 2012, pursuant to the leave granted by the primary judge, the applicants filed and served a minute of further re-amended statement of claim (the statement of claim). The filing of this document constituted the applicants’ sixteenth attempt to present a pleading which formulated a proper cause of action.
The cause of action relied upon in the statement of claim was based on an allegation that CASA owed each of Repacholi Aviation and Mr Repacholi a duty of care in carrying out of its statutory investigatory and decision-making functions. The statement of claim went on to plead that CASA had breached this duty of care in relation to:
(a)the issuing on 5 March 2002, of the notice of suspension of Mr Repacholi’s pilot’s licences;
(b)the issuing of the show cause notice on 28 March 2002;
(c)the issuing on 19 June 2002, of the notice cancelling Mr Repacholi’s private and commercial pilot’s licences;
(d)the issuing to Repacholi Aviation on 21 August 2002 of an AOC in limited terms;
(e)the refusal to approve the appointment of Mr Repacholi as chief pilot in February 2004; and
(f)the refusal to vary the AOC after 19 December 2006, to include charter and other former aerial operations carried out by Repacholi Aviation.
CASA applied to dismiss the applicants’ proceeding pursuant to s 31A of the Federal Court Act. CASA contended that on the facts pleaded, no duty of care, as pleaded, was owed by CASA to the applicants.
The primary judge held that no duty of care as pleaded existed at law and that the applicants had had more than sufficient opportunity to attempt to formulate a cause of action against CASA. The primary judge stated that he was satisfied for the purposes of s 31A of the Federal Court Act that the applicants had no reasonable prospects of success in prosecuting a claim for damages against CASA for its alleged breach of duty of care to them.
The primary judge examined at some length the authorities dealing with the circumstances in which a duty of care by a public authority would arise. The primary judge applied, in particular, the observations of Kenny J in the case of Polar Aviation Pty Ltd v Civil Aviation Safety Authority (No 4) (2011) 203 FCR 293 (Polar No 4) to the effect that the alleged duty of care owed to a commercial aviation operator pleaded in that case could not be reconciled on any practicable basis with CASA’s over-arching obligations to make air navigation safety its most important consideration in performing its functions and exercising its statutory powers.
The primary judge observed that:
the alleged duty [of care] in the present case is entirely analogous to the alleged duty considered and rejected in Polar No 4. It is both general in nature and runs directly counter to CASA’s statutory obligations. The relationship is the same as the relationship of the parties in Polar No 4. It is a relationship of regulator with persons who come within its purview.
The primary judge went on to observe that the decision of Kenny J in Polar No 4, had been upheld by the Full Court in Polar Aviation Pty Ltd v Civil Aviation Safety Authority (2012) 205 FCR 325 (Polar Full Court).
APPLICATION FOR LEAVE TO APPEAL
The applicants seek leave to appeal from the decision of the primary judge.
An applicant for leave to appeal from an interlocutory decision must demonstrate that the decision of the primary judge is attended by sufficient doubt to warrant the grant of leave to appeal. Also, the applicant must show that he or she would suffer injustice if, assuming the primary judgment to be wrong, leave to appeal was refused. The applicants satisfied the second condition. It was the first of the conditions which was the subject of contention at the hearing.
At the hearing, the applicants argued that the only issue was whether the primary judge had erred in determining that they had no reasonable prospects of success in establishing the duty of care pleaded at para 11(a) of the statement of claim. The relevant pleading is in the following terms:
In the premises, CASA owes and at all material times owed to [Mr Repacholi] and Repacholi Aviation a common law duty to take reasonable care and exercise of its statutory powers and functions in relation to:
[a]issuing, varying, cancelling, suspending or renewing the Authorisations…
to avoid causing [Mr Repacholi] and Repacholi Aviation loss or damage (including economic loss) other than such loss and damage as was a necessary consequence of CASA’s proper exercise of its statutory powers and functions.
The “premises” referred to, were pleaded at paras 4-10 in the statement of claim. They were to the effect that CASA had the statutory power to issue, vary, suspend or cancel the pilot’s licences issued to Mr Repacholi, the AOC issued to Repacholi Aviation, and to approve a person as chief pilot of Repacholi Aviation. Therefore, CASA, to its knowledge, had the power adversely to affect the business activities of Mr Repacholi and Repacholi Aviation, and it was reasonably foreseeable that Mr Repacholi’s and Repacholi Aviation’s business interests would be adversely affected and they would suffer economic loss, if CASA did not exercise its statutory powers reasonably. Accordingly, contended Mr Repacholi and Repacholi Aviation, they were members of a confined class of persons who were vulnerable in that they could not protect themselves from economic loss arising from the negligence of CASA.
The applicants contended that in dismissing their application the primary judge was in error because it could not be concluded that there was no reasonable prospect of the applicants being able to succeed. The applicants said that in both Polar No 4, and Polar Full Court, it was recognised that circumstances may arise in which a duty of care would be imposed by law upon CASA. Accordingly, said the applicants, one could not exclude the prospect that following discovery, they may be in a position to plead a viable cause of action.
In my view, the decision of the primary judge is not attended by sufficient doubt to warrant the grant of leave to appeal.
It is accepted that an application will not usually be summarily dismissed under s 31A of the Federal Court Act when, notwithstanding that the pleading is struck out, the applicant is able to show that he or she is capable of pleading a viable cause of action (White Industries Australia Ltd v Assistant Commissioner of Taxation (2007) 160 FCR 298). However, in my view, it does not, in the circumstances of this case, avail the applicants to say that there may be circumstances in which a duty of care may be imposed upon CASA, and, therefore, they should be allowed to press on. This is now the sixteenth attempt by the applicants to demonstrate a viable cause of action against CASA. One would have expected that had the applicants been capable of pleading such a cause of action, they would have been able to do so by now.
In other words, insofar as they rely on a cause of action for negligence causing economic loss, one would have expected that the applicants would have been able to plead circumstances, other than the general vulnerability of participants in the aviation industry to the statutory powers of CASA, as being the basis upon which to found the imposition of a duty of care on CASA.
However, the applicants have in this statement of claim relied upon those circumstances of vulnerability referred to in [29] and [30] above. The difficulty for the applicants is that, as the primary judge found, Kenny J in Polar No 4 and the Full Court, on appeal, have held that those circumstances are not sufficient to give rise to a duty of care by CASA in the manner in which it exercises its statutory powers, including its statutory powers referred to in para 11(a) of the statement of claim.
The applicants have had more than sufficient opportunity to demonstrate a capability of pleading a viable cause of action. As I have previously said, in my view, the primary judge did not err in concluding that the pleaded duty of care did not exist in law and that, accordingly, the application should be summarily dismissed.
It follows, that the applicants’ application for leave to appeal is dismissed.
I certify that the preceding thirty‑seven (37) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Siopis. Associate:
Dated: 13 June 2013
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