Rhoades and Civil Aviation Safety Authority
[2018] AATA 775
•9 April 2018
Rhoades and Civil Aviation Safety Authority [2018] AATA 775 (9 April 2018)
Division:TAXATION & COMMERCIAL DIVISION
File Number(s): 2018/0934
Re:Bruce Rhoades
APPLICANT
AndCivil Aviation Safety Authority
RESPONDENT
DECISION
Tribunal:Deputy President Bernard J McCabe
Date:9 April 2018
Place:Brisbane
The application for a stay order is refused.
...........................[sgd]..........................................
Deputy President Bernard J McCabe
CATCHWORDS
PRACTICE AND PROCEDURE – automatic stay under section 31A of the Civil Aviation Act 1988 (Cth) – whether stay of decision should remain effective for duration of proceedings – identification of proper purpose for stay – exercise of discretion
LEGISLATION
Administrative Appeals Tribunal Act 1975 (Cth) – s 41(2)
Civil Aviation Act 1988 (Cth) – s 31A
REASONS FOR DECISION
Deputy President Bernard J McCabe
9 April 2018
INTRODUCTION
CASA decided to cancel the applicant’s private pilot’s licence and his commercial pilots’ licence in a reviewable decision dated 19 February 2018. The applicant has the benefit of an automatic stay under s 31A of the Civil Aviation Act 1988 (Cth) (the CA Act) because he applied to the Tribunal to review the primary decision and asked for a stay under s 41(2) of the Administrative Appeals Tribunal Act 1975 (Cth) (the AAT Act). I am now required to consider whether the applicant should have a stay under s 41(2) while the review proceeds to its conclusion.
I have decided to decline the application for a stay under s 41(2). The automatic stay under the CA Act now ceases to operate as well. I explain my reasons below.
The power to order a stay under s 41(2) of the AAT Act
The power under s 41(2) to restrain the operation or implementation of the decision under review is only available for the purpose identified in the legislation – namely, to secure the effectiveness of the hearing and the determination of the application for review. It is not a general power available to prevent or contain hardship and loss to the applicant or any other person.
If I am satisfied the power is available because a proper purpose has been identified, I must then turn to consider whether it is desirable to exercise the power having regard to the interests of any person who might be affected by the review. The interests of the applicant are obviously relevant, but the public interest in the safety of air navigation inevitably looms large in my deliberations. The public interest in safety is made clear in the CA Act: for example, s 9A which requires that the Civil Aviation Safety Authority (CASA) (and the Tribunal, when it steps into the shoes of CASA on review) to regard the safety of air navigation as its primary consideration when discharging its regulatory functions under the legislative scheme.
Is the stay being sought for a proper purpose?
Mr Rhoades, the applicant, offered an undertaking during the course of the hearing through his counsel, that he would not seek to exercise the privileges attached to his licences while the review proceeded if a stay were ordered. In other words, he agreed he would not fly if his licences remained on foot while the proceedings continued. He explained his immediate objective was to preserve a commercial opportunity that had arisen in connection with a start-up business called Newscar. I do not need to go into the details of Newscar’s business proposal in detail here; suffice to say there was evidence from Mr Rhoades that he had been providing consultancy services to Newscar and that he had an agreement that he would be offered an option to acquire shares in the new company in recognition of his work to date, and in anticipation of his future work with the company. A letter of engagement dated 20 April 2017 signed by the CEO of Newscar was annexed to exhibit 3 (exhibit 3, statement of Bruce Rhoades dated 22 March 2018).
The letter of engagement is confusing. It refers to an entitlement to a share option “representing 1% of the company’s valuation” but also refers to the shares “represent[ing] 1% of its total capital.” It is not clear how much this opportunity is worth. In any event, the opportunity referred to in the letter of engagement has not yet crystallised, even though it was effectively promised almost a year ago.
The letter of engagement also refers to the applicant being paid a salary. It was unclear whether there was a final agreement on quantum of that salary.
The letter says the offer of a salaried position and equity participation is effectively conditional upon the applicant doing a number of things. Of relevance here is the requirement that he hold ‘a current pilot’s licence’. That requirement lies at the heart of Mr Rhoades’ concern in these proceedings: whatever the value of the option and salary, he risks losing them without hope of recovery if he does not continue to hold a pilot’s licence when the arrangement comes into effect in the not-too-distant future.
The applicant is not suggesting he wants to earn income from exercising the privileges attached to his licences in the short term, although he insists, through his counsel, he plans to resume flying in due course if permitted to do so following the Tribunal’s review.
The evidence surrounding the opportunity with Newscar is in an unsatisfactory state. I was told company officers were reluctant to give clarifying evidence in these proceedings. In those circumstances, there is some doubt about the value of the opportunity that is realistically available to the applicant, and it is unclear whether he will experience irrecoverable loss if he is unable to retain his licences. It is also unclear how Newscar will be impacted if he is unable to perform his obligations under the agreement.
Section 41(2) of the AAT Act requires that I focus on whether a stay would tend to preserve the efficacy of the hearing and review. The applicant says the hearing may be rendered pointless because the commercial opportunity will be lost long before the review is completed in the absence of a stay. But the applicant’s evidence that he planned to resume flying if permitted to do so suggests there is still a point to the review. There is no reason to believe the efficacy of the hearing will be compromised.
I am not persuaded the stay is intended to preserve the efficacy of the hearing and the review. Even if I accepted the evidence tendered by the applicant established a meaningful loss was likely in the absence of a stay, that finding does not inevitably mean the first limb of the statute is satisfied.
Is it desirable to exercise the discretion?
I am not satisfied there is a legitimate purpose for a stay order. But even if I were satisfied there was a legitimate purpose for the exercise of the power to stay the implementation of the decision under review, I am not satisfied it would be desirable to exercise the discretion having regard to the various interests at stake. In reaching that view, I have had regard to the interests of the public in ensuring the safety of air navigation. I have also had regard to the applicant’s interests, and his prospects of success.
The applicant pointed out in his statement that he has suffered hardship and loss as a consequence of the licence cancellations. It is unclear how much of the loss is attributable to a separate but related decision to surrender the AOC held by his company, Wyndham Aviation, following a fatal accident in January 2017. Mr Rhoades said at this stage of his life it is too difficult for him to start a new career. While acknowledging the hardship to the applicant and his family if he is grounded, he pointed out in his statement that he is not conducting flying operations in any event. It seems his real interest at this stage of the proceedings is to secure a stay so he can participate in the commercial opportunity described earlier.
Mr Rhoades laments the (potential) loss of an opportunity to participate in the Newscar venture. But that loss does not arise out of any inability to exercise the privileges attached to his licences. Any loss will arise instead out of his inability to satisfy the terms of his engagement with Newscar which require a license as a formality. I am not sure that is the kind of interest contemplated under s 41(2) of the AAT Act.
The applicant says the prospects of his substantive application before the Tribunal succeeding are good. CASA disagrees. Mr Rhoades was cross-examined at some length about matters that ultimately related to his performance as chief pilot of Wyndham; he was also questioned in detail at the stay hearing about video footage showing him undertake manoeuvres that CASA says were unsafe. I also heard lengthy evidence from Mr Martin, a CASA officer called as an expert witness.
The relevance of the evidence about Mr Rhoades’ performance as chief pilot to the proceedings in relation to his pilots’ licences will need to be explored in more detail at the final hearing. There is also an intriguing divergence in the philosophical approach to safety advocated by Mr Rhoades compared to Mr Martin. Mr Rhoades appeared to be saying that an aircraft was capable of certain things and a skilled and responsible pilot could, within those broad limits, fly the aircraft as he sees fit. Mr Martin appeared to be saying a more conservative approach was appropriate. He said flying is an inherently risky activity and a pilot should not do anything that makes the activity more dangerous even if that activity is well within the boundaries of what the aircraft is capable of doing. Putting it another way, Mr Martin appeared to be saying a responsible pilot should not do something during the course of flight that he or she does not need to do.
These different approaches need to be critically examined and evaluated. I accept there is a substantial issue to be decided at the final hearing. It is difficult to say more about the applicant’s prospects at this point.
The public interest in air safety is decisive in this case. The legislative scheme makes it clear that a concern for air safety lies at the heart of the regulatory regime. Questions have been raised about the applicant’s fitness to fly. I was shown videos which demonstrated him performing manoeuvres that may be unsafe. While acknowledging there is a serious dispute before the Tribunal to be determined, it is appropriate in the meantime to take a conservative approach.
I would reach the same view even if I accepted the applicant’s interests in securing a commercial opportunity were properly regarded as being at stake. Public safety is decisive in the circumstances of this case.
CONCLUSION
The application for a stay order is refused.
I certify that the preceding 20 (twenty) paragraphs are a true copy of the reasons for the decision herein of Deputy President Bernard J McCabe
.............................[sgd]........................................
Associate
Dated: 9 April 2018
Date of hearing: 29 March 2018 Solicitors for the Applicant: Certus Legal Group Counsel for the Respondent: Mr P Ward
0
0