Civil Aviation Safety Authority v Hotop, Deputy President Administrative Appeals Tribunal

REASONS FOR JUDGMENT 1 This is an application under s 39B of the Judiciary Act 1903 (Cth) to review the decision of the first respondent made on 11 February 2005 staying the applicant's decision of 14 January 2005 cancelling the second respondent's Air Operator's Certificate ('AOC') and extending the operation of that AOC until such time as the Administrative Appeals Tribunal ('the Tribunal') makes its decision on the second respondent's application for review of the applicant's decision of 14 January 2005. The first respondent relied upon s 41(2) of the Administrative Appeals Tribunal Act 1975 (Cth) ('the AAT Act') to make the impugned decision. 2 The jurisdictional error alleged by the applicant is characterised in a number of different ways, but the gravamen is that, the Tribunal did not have the power under s 41(2) of the AAT Act to make an order extending the AOC until the hearing of the application for review because the Tribunal would not be in a position at the hearing of the review application to make an effective order reinstating the AOC. 3 For the reasons published below I am of the view that the application for judicial review should be dismissed. Background 4 The second respondent carries on commercial aviation operations in Western Australia. Its operations include charter operations, aerial photography, aerial stock mustering and flying training. In order to carry on these operations it is necessary for the second respondent to have a current AOC issued by the applicant. The second respondent has continuously held an AOC or its predecessor instrument to the AOC, the charter licence, for the entire 22 years of its operations. 5 The aviation operations business has continued without interruption during that 22 year period. 6 In May 2004, the second respondent applied for an AOC to take effect on the expiry of its then current AOC which was due to expire in July 2004. 7 On 20 July 2004, Mr Peter John, a delegate of the applicant sent a letter to Mr Clark Butson, a director of the second respondent. The letter read as follows: 'Dear Mr Butson, Re: AIR OPERATOR CERTIFICATE No W073061‑11 Enclosed please find Air Operator's Certificate (AOC) Number W073061‑11. The Certificate is valid from 20 July 2004 and will expire on 31 July 2004. The AOC varies the previous AOC by adding an authority to conduct charter operations in Cessna 206 type aircraft. As you are aware CASA has given Polar Aviation Pty Ltd a "Show Cause" notice as to why it should not refuse the Company's application for an AOC covering the period post 31 July 2004. Whilst this "Show Cause" process is continuing it is CASA policy to allow the company to continue to operate and not to restrict its commercial operations. The issue of this AOC in relation to the Cessna 206 authorisation should be seen in this light. CASA is in no way satisfied in relation to the matters set out in the "Show Cause" notice. Those matters culminating in whether CASA will issue an AOC post 31 July 2004 remain to be determined. This Certificate represents a subsequently issued Certificate. Please destroy the current or expired Certificate, as it no longer has legal force. …' 8 On 30 September 2004 Mr John, acting as the delegate of the applicant sent Mr Butson another letter. This letter read: 'Dear Sir, Re: AIR OPERATOR'S CERTIFICATE No W073061‑11 I refer to the above AOC issued and sent to you on 19th July 2004 and the "Show Cause" Notice dated 16 July 2004 which gave you 28 days to provide CASA with the reason why the Company's application for an AOC should not be refused. I wrote to you on 30th July 2004 extending this AOC for a further period of 2 months to enable the "Show Cause" process to run its course. In accordance with advice from Jim Marcolin on 27th September 2004, to enable this "Show Cause" process to be completed without your current AOC lapsing during this period I have decided to extend the term of the above AOC for a further period of 2 months, expiring on 30th November 2004 under section 27(7) of the Civil Aviation Act. A new AOC recording this extended term, but otherwise making no changes is enclosed for your records. Please destroy the original certificate as it has been superseded and replaced by this new certificate.' 9 The 'Show Cause' Notice referred to by Mr John in his letters of 20 July 2004 and 30 September 2004 is not in evidence. 10 On 29 November 2004, Mr John, acting as delegate of the applicant issued a further AOC which extended the term from 29 November 2004 to 31 January 2005. In the applicant's written submissions it is said that the delegate was acting under s 27(7) of the Civil Aviation Act 1988 (Cth) ('the CA Act') in fixing this term. 11 The applicant sent the second respondent a letter, comprising 75 pages, dated 14 January 2005. The letter contained the following passages: 'In a Show Cause Notice ("the Notice") dated 16 July 2004 you were asked to show cause why the Air Operator's Certificate W073061 ("AOC"), issued to Polar Aviation Pty Ltd ("the company") should not be cancelled or suspended. … On the basis of the evidence I have decided to cancel the Air Operator's Certificate W037061 ("the AOC") currently held by Polar Aviation. The AOC has been extended until 31 January 2005. The consequence of this decision is that the AOC shall cease to have effect beyond that date. The facts and circumstances that were alleged in the Notice, my findings on those facts and circumstances, taking into account all the available evidence, and the grounds for my decision are set out below. …' 12 An examination of the grounds for the decision stated in the letter shows that the decision is founded largely upon an assessment of the facts and circumstances which were set out in the 'Show Cause' Notice dated 16 July 2004. 13 On 18 January 2005, the second respondent lodged an application seeking review of the decision of 14 January 2005 in the Tribunal. This application was No W2005/24. The second respondent also sought an order pursuant to s 41(2) of the AAT Act. 14 On 31 January 2005 Mr Farquharson on behalf of the applicant wrote to the solicitors representing the second respondent. He advised that he did not have power to issue an AOC but that he would be prepared to recommend that the delegate of the applicant issue an AOC for 3 years if the second respondent was prepared to enter into an enforceable undertaking and discontinued its application in the Tribunal. The second respondent rejected the offer from the applicant. 15 On 4 February 2005 the second respondent made a second application for review based on a claim that as at 31 January 2005 the second respondent had a reasonable expectation that the applicant would renew the AOC but it had not done so. This was application No W2005/52. The second respondent also sought orders under s 41(2) of the AAT Act in respect of this application. Legislative Background 16 Section 27 of the CA Act relevantly provides as follows: '(1) CASA may issue AOCs for the purposes of its functions. (2) Except as authorised by an AOC, or by a permission under section 27A: (a) an aircraft shall not fly into or out of Australian territory; and (b) an aircraft shall not operate in Australian territory; and (c) an Australian aircraft shall not operate outside Australian territory. … (7) The term of an AOC shall be as determined by CASA.' 17 Section 28(1) of the CA Act relevantly provides: 'If a person applies to CASA for an AOC, CASA must issue the AOC if, and only if: (a) CASA is satisfied that the applicant has complied with, or is capable of complying with, the provisions of this Act, the regulations and the Civil Aviation Orders, that relate to safety, including provisions about the competence of persons to do anything that would be covered by the AOC; and (b) CASA is satisfied about the following matters in relation to the applicant's organisation: (i) the organisation is suitable to ensure that the AOC operations can be conducted or carried out safely, having regard to the nature of the AOC operations; (ii) the organisation's chain of command is appropriate to ensure that the AOC operations can be conducted or carried out safely; (iii) the organisation has a sufficient number of suitably qualified and competent employees to conduct or carry out the AOC operations safely; (iv) key personnel in the organisation have appropriate experience in air operations to conduct or to carry out the AOC operations safely; (v) the facilities of the organisation are sufficient to enable the AOC operations to be conducted or carried out safely; (vi) the organisation has the suitable procedures and practises to control the organisation and ensure that the AOC operations can be conducted or carried out safely; (vii) if CASA requires particulars of licences held by flight crew members of the organisation ‑ the authorisations conferred by the licences are appropriate, having regard to the nature of the AOC operations. …' 18 Section 27AB of the CA Act provides for the requirement for lodgement of manuals by an applicant for an AOC. 19 Section 27AB(4) provides as follows: 'If the applicant already holds a current AOC and is applying for a new AOC that: (a) would authorise the same things as the current AOC; and (b) would come into force when the term of the current AOC expires; the applicant is required to comply with the lodgement requirements of this section only to the extent (if any) that CASA, by written notice, requires compliance.' 20 Section 27AC of the CA Act confers on CASA powers by written notice to require an applicant for an AOC to provide CASA with information in writing or documents that are reasonably required by CASA to properly consider the application. 21 Section 28BA(3) of the CA Act provides that if a condition of an AOC is breached, CASA may by written notice given to its holder suspend or cancel the AOC. 22 Section 28BA(4) of the CA Act provides that before making a decision to suspend or cancel an AOC, CASA must give the holder a notice setting out the reasons why CASA is considering making the decision and allow the holder of the AOC to show cause within a reasonable time specified in the notice why CASA should not make the decision. 23 Section 31(2) of the CA Act provides that an application may be made to the Tribunal for a review of a 'reviewable decision'. 24 Section 31(1) of the CA Act defines a reviewable decision to be: '(a) a refusal to grant or issue, or a cancellation, suspension or variation of, a certificate, permission, permit or licence granted or issued under this Act or the regulations. …' 25 Section 31A(3) of the CA Act provides that the operation of a reviewable decision is stayed by force of that section. Section 31A(4) provides that the stay ceases to have effect at the end of the fifth business day after the day CASA notified the AOC holder of the decision unless, before the end of that business day the holder applies to the Tribunal for review of the decision. 26 Section 31A(5) of the CA Act provides that if the holder applies to the Tribunal in accordance with s 31A(4) of the CA Act, 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'. 27 Section 31A(7) of the CA Act provides: 'At any time before the end of the period mentioned in paragraph (5)(b) the holder may apply to the Tribunal for an order under section 41(2) of the Administrative Appeals Tribunal Act 1975. Any time limit for making such an application does not apply if this subsection applies.' 28 Section 41 of the AAT Act provides: '(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, makes 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.'