Civil Aviation Safety Authority v Boatman

3. Costs reserved in relation to the question reserved for the Full Court of the Federal Court pursuant to section 25(6) of the Federal Court of Australia Act 1976.

That order was entered on 18 June 2004. 4 The order made by Stone J was the result of an arrangement between the parties that is substantially recorded in correspondence. The solicitors for the respondents wrote to the legal counsel for CASA on 8 June 2004 as follows: 'We refer to the above matter, which was brought before the Full Federal Court in Canberra yesterday, and to the discussion between our respective Counsel and ourselves. The Full Court cannot advise when it will publish its decision regarding the question whether or not s30DE Civil Aviation Act 1988 is valid. You will be aware that the question of the validity of the section was raised by Gyles J on 31 May 2004 [sic] at the commencement of the application by CASA for orders prohibiting our clients from piloting aircraft pending the completion of the CASA investigation, expected to take some 25 days. Counsel for CASA advised the Court on 31 May 2004 that it could provide all necessary documentation necessary to have the matter dealt with by the Court by 4 June 2004. In the period since the Notices were issued on 13 May 2004, CASA has received detailed affidavit material from our clients and other witnesses sufficient, in our view, to dispose of the allegation that our clients have engaged in or are likely to engage in conduct that constitutes, contributes to or results in a serious and imminent risk to air safety. We understand, however, that CASA wishes to further continue its investigation and that it may take a week or so to complete the investigation. We are concerned that the costs of a contested hearing before the Federal Court regarding the question of whether or not our clients have engaged in conduct such as to attract the provisions of s30DE Civil Aviation Act 1988 will be enormous. We are further concerned that the same facts and circumstances will need to be contested again before the Administrative Appeals Tribunal ['AAT'] in the event that CASA elects to issue "show cause" Notices pursuant to CAR 269; and in addition, that the same facts and circumstances will need to be contested yet again, for a third time, in the event that the CASA elects to refer the matter to the Director of Public Prosecutions and the matter subsequently runs to trial. The writer knows of few, if any, private individuals who could afford the legal costs associated with such a prospect. We could question whether the legislators had this result in mind when they drafted the section subject to these proceedings. A simple solution would be for CASA to make a determination that the conduct of our clients does not attract the provisions of s30DE Civil Aviation Act 1988, but the circumstances might be such as to warrant further investigation and the issue of a "show cause" Notice (or notices) pursuant to CAR 269. In the event of such a determination, our clients would be able to continue to fly and earn a living pending the investigation and determination of the "show cause" notices. Such a determination would eliminate the need for a duplication of at least one of the hearings necessary to try the issues raised by the respective parties. If CASA elects to stand by its position that our clients should remain "grounded" pending the finalisation of its investigation, we would suggest that a pragmatic solution would be for the parties to obtain consent orders to the effect that our clients would undertake not to exercise the privileges of their pilot licences until the expiry of the period required for the CASA to finish its investigation, or by order of the Federal Court, or the expiry of 10 days from today; whichever is the sooner. Please obtain your instructions regarding the above and advise by return.' 5 The reply of 9 June 2004 was as follows: 'I refer to your letter dated 8 June 2004. I am instructed to advise that CASA is agreeable to the suggestion in the penultimate paragraph of your letter, that the Court make a consent order pursuant to section 30DE(2) of the Civil Aviation Act 1988, to be effective until 18 June 2004. I enclose a draft consent order for your signature. Upon receipt of an executed copy, I will execute and forward same to the Judge's associate. In the event that the proceedings are resolved by this method, CASA will not seek an order for costs against your clients.' 6 On 10 June 2004, the solicitors for the respondents wrote to the legal counsel for CASA as follows: 'We refer to the above matter and advise that we received a telephone call from the Associate to Justice Stone this morning, who confirmed that Her Honour has now signed the consent orders We understand that by the consent orders Mr Boatman and Ms Kennedy are now prohibited from exercising the privileges of their respective pilot licences until 18 June 2004, and that the prohibition will end at midnight on 17 June 2004 which will allow them both to fly on 18 June 2004. In the unusual circumstances of this case, which has resulted in the CASA receiving extensive affidavit material in relation to the alleged conduct which gave rise to these proceedings, CASA is now in a position whereby it can make an immediate determination as to whether or not it will issue "show cause" notices to Mr Boatman and/or Ms Kennedy. We write to request CASA makes an election whether or not to issue notices pursuant to CAR 269 by the close of business tomorrow. You will be aware from our letter to you dated 8 June 2004 that we were concerned about the length of time it may take the Full Federal Court to determine the validity of s30DE Civil Aviation Act 1988, and that in order to give certainty to the position of our clients and to lessen the potential for the unnecessary escalation of their costs, our clients agreed to compromise as suggested by their legal counsel and consented to prohibiting them from flying until 18 June 2004. You will agree that it would go against the agreement resulting in the consent orders if the prohibition period was extended beyond 18 June 2004 in the absence of a determination made by the Full Federal Court and subsequent orders made by the Federal Court extending the prohibition period. The consent orders were made as a compromise to the matters in dispute, and were not made pursuant to the Division 3A of the Civil Aviation Act 1988; however, to avoid any potential dispute regarding a perceived furtherance of the agreed suspended period beyond 18 June 2004 pursuant to Division 3A, we request that any notices proposed to be issued by CASA in respect of any action it proposes to make pursuant to CAR 269 be served before the close of business tomorrow, 11 June 2004. We have instructions to accept service of any such notices. We look forward to your response by return.' 7 Following inquiries on behalf of the respondents as to the state of the investigation the legal counsel for CASA advised the solicitors for the respondents as follows by facsimile transmission on 24 June 2004: 'I refer to your facsimile dated 22 June 2004. I am instructed CASA completed its investigation on 18 June 2004. A recommendation will be made to issue show cause notices to your clients. If show cause notices are issued, they will be issued by Bruce Gemmell. I enclose a sealed copy of the order of Justice Stone, entered on 18 June 2004.' 8 Following receipt of that facsimile, the solicitors for the respondents wrote to the legal counsel for CASA as follows: 'We refer to previous correspondence and to our discussions this morning. During our telephone discussions this morning you confirmed unequivocally that the investigation by CASA had not been completed. Later this afternoon, we received a facsimile from you dated 24 June 2004 in which you assert that the investigation was completed on 18 June 2004. We must assume that this facsimile has been sent in error for the reason that you confirmed to me in a conversation between legal practitioners that in fact the CASA investigation had not been completed. We note that your facsimile states that "a recommendation will be made to issue show cause notices to (our) clients". We write to request whether you intend to issue the "show cause" notices pursuant to CAR 269 or pursuant to s30DH Civil Aviation Act. If the "show cause" notices are issued pursuant to s30DH Civil Aviation Act, and the Federal Court has not struck down the relevant provisions of Division 3A, we may challenge the validity of any show cause notice on the basis that the investigation was not, in fact, completed by 18 June 2004. If we adopt this course of action, we put you on Notice that we intend issuing a subpoena for the production of all relevant CASA documents to the Federal Court for further evidence in addition to your confirmation today that the investigation was not completed by 18 June 2004. We await your response.' (Although sent on 24 June 2004 the above letter was dated 23 June 2004.) 9 The reply on the same day was as follows: 'I refer to your facsimile dated 23 June 2004. I did not unequivocally confirm to you by telephone yesterday that CASA had not completed its investigation. What I did say was that I understood that CASA had substantially completed its investigation, but would seek instructions. I subsequently advised you in writing that the investigation was completed on 18 June 2004. This was not an error. An investigation report dated 16 June 2004 was presented by a CASA investigator to various CASA managers, including Mathew Anderson, Rich Green and Bill Riceman at Adelaide on 16 June 2004. A decision was made at that meeting to recommend the issue of show cause notices pursuant to section 30DH of the Civil Aviation Act 1988. Those notices are currently being prepared. I trust this clarifies the matters raised in your letter.' 10 The solicitors for the respondent replied as follows: 'We refer to the above matter and to your facsimile dated 24 June 2004 received this morning. We would respectfully suggest that if an investigation was "substantially completed" it is not completed for the purposes of s30DG Civil Aviation Act 1988. We note your statement that "an investigation report dated 16 June 2004 was presented to various CASA managers…..on 16 June 2004", and that "A decision was made at that meeting to recommend the issue of show cause notices pursuant to s30DH of the Civil Aviation Act 1988." This statement is at odds with your statement in your previous facsimile that "CASA completed its investigation on 18 June 2004". Which is correct? Is it the case, perhaps, that the "various CASA managers" have made a recommendation to issue "show cause" notices on the basis of a report on 16 June 2004 which, by your own statement was incomplete? Is it the case, perhaps, that "the various CASA managers" intended to recommend the issue of "show cause" notices on our clients regardless of the completion or outcome of the investigation? We must assume, of course, that any investigation conducted by CASA would be properly conducted with regard to all of the evidence surrounding the case, in order that a correct decision is made. We are instructed that a third party whom we understand has spoken to relevant senior CASA officers has advised our client that Mr Gemmell had not, as of yesterday, received copies of the affidavit material filed and served by our clients' affidavit material [sic]. If our instructions are correct, it would appear from your statement in today's facsimile that "those notices are currently being prepared", that CASA has already made up its mind to issue "show cause" notices designed to keep our clients grounded for a further period of time notwithstanding the fact that the decision-maker has not yet seen the material provided by our clients in rebuttal of the allegations made against them. An issue of natural justice and procedural fairness appears to arise. You will be aware that the Full Federal Court will publish its determination at 0915 tomorrow, 24 [sic] June 2004. The decision of the Full Court will determine the course of action to be taken by both parties in this matter, and for this reason we will await the decision from the Full Court before seeking our further instructions.' 11 On 25 June 2004 the Full Court handed down its decision and later that day a directions hearing was held before Stone J. The transcript records the following in the early part of the hearing: 'HER HONOUR: I have called these directions because I assume that after this morning's judgments the parties - well, I shouldn't assume but it may well be that the parties want the matter to be dismissed. I understand from observations that have been made to my associate the parties or at least some of them feel that the court is functus officio in this matter; that's not my understanding but I am happy to hear you on it. Is there anything you want to say, Mr Harvey? MR HARVEY: Your Honour, the only thing we would say is not that the court was functus officio but that what had transpired in terms of the preparation and the making of the consent order on 9 June and 18 June effectively disposes of the matter itself; in other words, there is no further need, in our submission, for the court to formally dismiss the matter having regard to the valid operation of the consent order. The consent order was an order --- HER HONOUR: Mr Harvey, let me interrupt you there? MR HARVEY: Yes, your Honour. HER HONOUR: You, I assume, appear to be proceeding on the assumption that the consent orders were orders made under section 30DE? MR HARVEY: Yes, your Honour. HER HONOUR: I have to say that's not my view and it would seem to me nor could I make orders without being satisfied, as that section required, satisfaction it seemed to me in section 30DE is a jurisdictional fact, and however much the parties consent to orders they can't recite the court into jurisdiction, and there's ample authority for that proposition. It seems to me that, and I'm happy to hear the parties if you want to argue the point, that those were not orders made under 30DE, they're interlocutory orders made and exercised by the court's incidental power in dealing with any matter and that until this matter is disposed of it would seem to me that the suspension that continued by virtue of the application having been made under that section continued until the matter is disposed of or the court makes an order under 30DE.' 12 Later, counsel for the respondents said: 'MR CAWTHORNE: We rather thought the consent orders were made under section 30DE and we were provided with correspondence from the Australian Government's Civil Aviation Safety Authority office of legal counsel which indicated to us that they consented on the basis the orders were made under section 30DE. I appreciate what your Honour says that it must be established as a jurisdictional fact that the criteria for 30DE needs to be established but here the parties have, in my respectful submission agreed that, in effect, there be a prohibition until 18 June 2004 and the court is entitled t have regard to that and treat that as an order made under section 30DE. What Mr Harvey appears to be saying is that the applicant who of course is in control of this piece of litigation is now content to have the orders made of 10 June as orders under 30DE. We are content to have them treated in the same way as well and that's why I think Mr Harvey - - -' 13 Although there has been some tactical backing and filling on occasion, it is clear enough that the parties intended that the consent order would finally dispose of the substantive proceeding in the event that the Full Court held the provisions valid. Both the contemporaneous correspondence and the form of the orders make that clear enough. The form of orders, for example, finally disposed of all aspects of costs. If there were any doubt it would be set at rest by what was said by counsel for CASA when the matter came on before Stone J on 25 June 2004. It appears that that intention was not conveyed to Stone J on 10 June 2004 as she saw the consent orders as a holding operation. 14 The only source of power for a final order by the Court is s 30DE(2) of the Act which is in the following terms: 'If the Federal Court is satisfied that there are reasonable grounds to believe that the holder has engaged in, is engaging in, or is likely to engage in, conduct that contravenes section 30DB, the Court must make an order that prohibits the holder from doing anything that is authorised by the authorisation but that, without the authorisation, would be unlawful.'

It appears that Stone J was not invited to turn her mind to that source of power. Counsel for the respondent points out that evidence had been filed on both sides by 25 June 2004 as to the merits of the matter and that a holding operation was not required by reason of the effect of s 30DJ.

15 Before considering the consequences of the course of events, it is necessary to determine a threshold point. Section 30DC is relevantly as follows: '(1) Where CASA has reason to believe that the holder of a civil aviation authorisation has engaged in, is engaging in, or is likely to engage in, conduct that contravenes section 30DB, CASA may suspend the authorisation by giving written notice to the holder. Note: CASA is not required to give the holder a show cause notice before making a decision under this subsection. … (3) The suspension ends at the end of the fifth business day after the day on which the holder was notified of the suspension, unless before that time CASA makes an application to the Federal Court under section 30DE.'

'If CASA suspends a civil aviation authorisation under section 30DC, CASA may, before the end of the fifth business day after the day on which the holder of the authorisation was notified of the suspension, apply to the Federal Court for an order under this section.' 16 It is submitted for the respondents that, when the Division as a whole is considered, the requirement in s 30DC(3) and s 30DE(1) is that the substantive application to the Court must be made within the five day period rather than simply having an application filed within that period. It is submitted that the Division envisages a specified finite maximum time in which the rights of the holder of the Civil Aviation authorisation to exercise the privileges of that authorisation may be suspended and that the Division contains very strict time provisions. It would be incongruous to construe s 30DC(3) and s 30DE(2) to allow for a period of indeterminate length between CASA filing and serving its application to the Court and the Court making its orders. Reference is made to passages from the Second Reading Speech and the Explanatory Memorandum as to the Bill which, it is suggested, support that construction. I do not think that those passages are of any assistance in resolving the question. The respondents also submit that the Court does not determine the underlying facts on the substantive application. It is merely to be satisfied that there are reasonable grounds to believe that the conduct has been engaged in. There is force in the respondents' submissions. 17 Usually, however, the words 'application' and 'apply to a court' would refer to initiating the process rather than obtaining an order. Furthermore, the structure of s 31A in Division 4 is instructive. That section provides for an automatic stay of certain reviewable decisions of CASA and (so far as is relevant) is as follows: '(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 review of the decision.

(5) If the holder applies to the Tribunal in accordance with subsection (4), the stay continues to have effect until the earlier of:

(a) the time when the decision of the Tribunal on the application comes into operation; and

(b) the end of the 90th day after the day CASA notified the holder of the decision.

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

The use of 'applies' and 'application' in those provisions is in a context where it is clear that the hearing and result thereof is to be distinguished from the application.

18 This issue was not addressed expressly by the Full Court and such comments as might bear upon the issue were not directed to the point. In my opinion s 30DE does not contemplate that the application to the Court should be heard and completed by the end of the five day period. However, the legitimate interests of the authorisation holder in having the matter promptly dealt with will need to be recognised by the Court in its administration of this jurisdiction and CASA will need to ensure that it takes all necessary steps to bring the matter on as soon as practicable. 19 The thread of the remaining argument for the respondents is as follows:

(1) The consent orders made by Stone J were made pursuant to s 30DE. If that is the case, then, as no show cause notice was served in time and cannot now be served, there is no room for any further order pursuant to s 30DE.

(2) In the alternative, the agreement of the parties behind the consent orders raises an estoppel precluding the applicant from seeking any further prohibition order pursuant to s 30DE.

(3) There is no basis under Federal Court Rules O 35 r 7 to set aside the consent orders, the orders having been entered.

(4) In any event, the applicant has completed its investigation and therefore there is no present basis for any order pursuant to s 30DE.

20 In my opinion, the last argument is plainly correct and is a proper ground for dismissal of the proceeding. The CASA investigation into the circumstances that gave rise to CASA's decision to suspend the authorisation was complete before the Full Court handed down its decision and before the directions hearing before Stone J. 21 By virtue of s 30DE(4) the period of any order made pursuant to s 30DE is a period (not more than 40 days) 'that the Court considers reasonable to allow CASA to complete an investigation into the circumstances that gave rise to CASA's decision to suspend the authorisation'. Section 30DG, which commences subdivision D of Division 3A, is in the following terms: 'If the Federal Court makes an order under section 30DE in relation to a civil aviation authorisation, CASA must, by the end of the period that the order is in force, complete an investigation into the circumstances that gave rise to CASA's decision to suspend the authorisation under section 30DC.' 22 These provisions make it apparent that the purpose underlying an order pursuant to s 30DE is to confirm suspension during the period that is necessary to enable completion of an investigation into the circumstances that gave rise to the decision to suspend. It is clear enough that the role of the Court is to provide an independent determination as to the decision to suspend pending investigation. This is confirmed by reference to the Second Reading Speech. It is also apparent that that understanding of the legislation lay behind CASA's agreement to the consent orders. It follows that the occasion for an order pursuant to s 30DE has passed and that the substantive application must be dismissed. 23 Counsel for CASA has sought to avoid that result by referring to s 33(1) of the Acts Interpretation Act 1901 (Cth) which provides that where an Act confers a power or imposes a duty, then unless the contrary intention appears, the power may be exercised and the duty shall be performed 'from time to time as occasion arises', and to authorities in which that section has been considered including Minister for Immigration and Multicultural Affairs v Bhardwaj (2002) 209 CLR 597 at 609-610, 630 and 636; Pfeiffer v Stevens (2001) 209 CLR 57 at 72-74, 76; and Minister for Immigration, Local Government and Ethnic Affairs v Kurtovic (1990) 21 FCR 193 at 211-214.

24 The general scheme of Div 3A and the provisions to which I have referred establish the contrary intention required by s 33(1) of the Acts Interpretation Act 1901 (Cth), as discussed in the authorities cited, in a case such as the present where there has been no change to the underlying circumstances that led to the suspension in the first place. That conclusion is also supported by the express terms of ss 30DF(2), 30DF(3), 30DF(4), 30DH(1)(b) and 30DI(1)(b).

25 It is unnecessary to deal with the other arguments advanced on the part of the respondents. I have outlined the facts that are relevant to those arguments. There is no need to deal with the defensive motion of CASA.

26 CASA should pay the costs of the respondents incurred after 25 June 2004. The parties could have brought the proceeding to an end by consent on that day or at any time thereafter. The reservations by Stone J would not have been relevant to that course. That would have enabled the spirit of the agreement to be carried out. In any event the respondents have succeeded upon their motion.

27 The proceeding is dismissed. CASA is to pay the costs of the respondents incurred after 25 June 2004.

I certify that the preceding twenty-seven (27) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gyles.

Associate: Dated: 13 July 2004 Counsel for the Applicant: I Harvey

Counsel for the Respondents: J Langmead SC, RHM Attiwill

Solicitor for the Respondents: Grundy Maitland & Co