Ord Air Charter Pty Ltd v Civil Aviation Authority

GROUNDS OF REVIEW 22 In its amended application, the applicant relied upon five grounds of review, but there was, in my view, a substantial overlap between them.

Ground 1 - Natural Justice 23 The applicant contended that a breach of the rules of natural justice occurred in connection with the making of the decision. There were three sub-grounds of this ground, namely: 1.1 The decision was made by reference to a pre-determined rule or policy to reduce the total number of AOCs which were to be issued or to eliminate "marginal operators" from the civil aviation industry. 1.2 The decision was made without giving real or proper consideration to "the merits of the reasons" described in the decision. 1.3 Failure to give the applicant a fair opportunity to consider and to answer the respondent's concerns about the perceived influence of Mrs Reid and the inferred effect of that influence upon Ord Air Chief Pilots and other holders of operational positions.

Sub-grounds 1.1 and 1.2 24 Although sub-grounds 1.1 and 1.2 were pleaded as particulars of a breach of the rules of natural justice, they would, in my opinion, be more accurately characterised as particulars of an alleged improper exercise of power. Save for what is contained in the next two paragraphs of these reasons, I shall so treat them. 25 In its written submissions in relation to sub-grounds 1.1 and 1.2 the applicant contended that it was a breach of the rules of natural justice to make the decision on the basis of an irrelevant consideration citing McPhee v Minister for Immigration and Ethnic Affairs (1986) 16 ALD 77. The applicant submitted that a policy (formal or informal) to eliminate "marginal operators" was not a relevant consideration for the purposes of s 28 of the Act. 26 I do not read the decision in McPhee as supporting the proposition for which the applicant advanced it. That proposition does have some support from the reasons for judgment of Deane J in Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 366. But the authorities suggest that the rules of natural justice are a procedural matter - see for example Mason CJ in Attorney-General (NSW) v Quin (1990) 170 CLR 1 at 22 and the cases there cited. However, I do not need to decide whether taking into account an irrelevant consideration can amount to a breach of the rules of natural justice. That is because I do not think that the evidence establishes that the respondent, in making the decision, did so in accordance with any policy without regard to the merits of the particular case. 27 The applicant submitted that the existence of such a policy and its application without regard to the merits of this particular case, were to be inferred from the history of the respondent's dealings with the applicant, the "changing grounds for possible refusal being advanced by the respondent from time to time", the respondent's reliance on an irrelevant consideration, namely the suspected involvement of Mrs Reid in the operations of the applicant and the lack of evidence to support any inference or conclusion that Mrs Reid's personality or conduct had any bearing on the applicant's air operations. 28 During the hearing I admitted into evidence an affidavit from the applicant's solicitor (Ms L M Hudson) [Exhibit A13] over objection from the respondent. I did so because I thought that that affidavit could rationally affect the assessment of the probability of the existence of the policy. In her affidavit Ms Hudson deposed to some cross-examination by her of one of the respondent's senior air-worthiness inspectors in a totally unrelated matter before the Administrative Appeals Tribunal on 5 April 2000. 29 In my view, that evidence is not sufficient to establish the existence of such a policy. After reading and re-reading the cross-examination concerned, it was not clear to me whether it was directed to the proposition that Mr Watson understood there to be such a policy which influenced the way he reported on matters or dealt with those operating in the civil aviation industry, or whether there in fact existed such a policy. In my view, that piece of evidence was of very little weight in establishing the existence of such a policy. The same applies to the other matters upon which the applicant relied in respect of Grounds 1.1 and 1.2. 30 My review of the evidence of the respondent's dealings with the applicant does not support either the existence of the policy or, as the applicant asserted, that the decision was for the improper purpose alleged. 31 Rather, the evidence shows a history of concerns on the respondent's part with the applicant's non-compliance, on several fronts, with the requirements of the civil aviation legislation (by which I include the Act, the Regulations and Civil Aviation Orders). 32 Furthermore, the documentary evidence shows quite clearly that the respondent was not changing its grounds for possible refusal. At each of the important stages of the decision-making process, it can be seen that the respondent was prepared to grant the AOC providing that it was satisfied that the applicant was capable of complying with the relevant legislation. This can be seen, for example, from the respondent's letter dated 2 February 2000 [Annexure K to Exhibit R1], Mr Riceman's file note of 3 February 2000 [Annexure M], the respondent's letter dated 4 February 2000 to the applicant [Annexure P], its letter dated 11 February 2000 to the applicant [Annexure T], its letter dated 15 February 2000 to the applicant [Annexure Z], its letter dated 18 February 2000 to the applicant [Exhibit CC], its letter dated 25 February 2000 to the applicant [Exhibit GG], Mr Riceman's e-mail dated 6 March 2000 and the report attached to that e-mail, and the respondent's letter dated 14 March 2000 to the applicant [Exhibit MM]. 33 I reject Grounds 1.1 and 1.2. In my view, the applicant has not established that the respondent's decision was made by reference to a pre-determined rule or policy, nor that it was made without giving real or proper consideration to the merits. I also reject the applicant's submissions that there was a breach of natural justice on the applicant's part by taking into account an irrelevant consideration. That is on the assumption, contrary to the views expressed above, that such an error falls within the purview of natural justice. The matters of (a) whether Mrs Reid's suspected involvement in the applicant's air operations was an irrelevant consideration and (b) the alleged lack of evidence to support an inference that her personality or conduct had any bearing on those operations are considered further below.

Sub-ground 1.3 34 Sub-ground 1.3 was the subject of a very late application for leave to amend. Notice of it was given to the respondent on the afternoon before the hearing. The applicant's motion for leave to amend was opposed by the respondent. 35 I allowed the amendment on the basis that the respondent would have the opportunity to consider whether it wished to adduce further evidence and also to file further submissions. No further evidence was adduced, but each party filed further submissions. The point had also been argued quite fully at the hearing. 36 The applicant focussed on paragraph 25 of the decision letter, which was signed by Mr McAlister, the decision-maker. I set out below paragraphs 25 and 26 of that letter: "25. Over many years CASA has witnessed the strength of Mrs Reid's personality affecting several of the company's chief pilots. Indeed, because of her assertive character, her former, long-standing role within Ord Air, and also her relationship with you (she is your mother-in-law) I believe that under these circumstances it is highly likely she would influence you, or would be able to influence you, in the course of your duties. For the same reasons, I also think it is highly likely that she would influence, or would be able to influence, both the only other director of the company who is her father and the secretary of the company who is her son. Furthermore, I believe it is highly likely that she would influence, or would be able to influence, the shareholders of the company, all of whom are directly related to her. 26. Mrs Reid has been assessed by CASA as being primarily responsible for the former, long-standing compliance problems of Ord Air. Therefore, any potential she may now have to influence the directors, the secretary and the shareholders of Ord Air is, in my opinion, sufficient grounds to prevent CASA from being satisfied that Ord Air is capable of complying with the Act, the regulations and the Civil Aviation Orders." 37 The evidence before the Court shows that this portion of Mr McAlister's letter was based on a recommendation by Mr Riceman to him. These observations were expressed in relevantly identical terms in Mr Riceman's recommendation. 38 Mr Riceman had taken part with Mrs Reid in the telephone conference (the informal conference) on 31 January 2000. Mrs Reid played a major part in that conference. 39 Mr L. Roberts-Smith QC, senior counsel for the applicant, contended that there was no evidence that over many years the respondent had witnessed the strength of Mrs Reid's personality affecting several of the applicant's chief pilots. This submission was put in relation to both the natural justice ground and the independent "no evidence" ground (Ground 4). 40 On the respondent's files at the time when Mr Riceman made his recommendation to Mr McAlister there were two relevant documents. One was a letter from a Mr Peter Callil dated 30 April 1998. Mr Callil was at that time the applicant's Chief Pilot. Part of his letter read as follows: "During my time here I have consistently been undermined by Maxine in my attempts to assert some form of control over the pilots or engineers, even the apprentices, in an effort to establish a workable level of discipline. This was necessary since I was finding it difficult to command the level of respect worthy of a Chief Pilot." 41 A Mr Christopher Gallivan took over from Mr Callil as Chief Pilot of the applicant. Paragraph 3.3 of a telephone interview conducted on 4 August 1998 by an investigator from the Adelaide district office of the respondent read as follows: "3.3 Gallivan stated his authority as chief pilot was constantly undermined by the Director Ms Reid who rejected any suggestions of improvement. He sighted (sic) the following as examples of interference by the Company Director and the general conditions and attitudes within the company: …" 42 In my view, this was sufficient evidence, in administrative law terms, that over the years the respondent had witnessed the strength of Mrs Reid's personality affecting several of the applicant's Chief Pilots. Any difference between two Chief Pilots and "several" Chief Pilots in this context is not, in my view, significant. Furthermore, so far as Mr McAlister was concerned, Mr Riceman's assessment that Mrs Reid's personality displayed an assertive strength and that she had an assertive character was also evidence of those matters. Mr McAlister was entitled to rely upon the fact that Mr Riceman had made such an assessment. 43 The applicant contended that, as a matter of natural justice, the respondent should have put these matters i.e. the strength of Mrs Reid's personality affecting several of the company's Chief Pilots and her assertive character, to the applicant and should have given the applicant an opportunity to respond. 44 There are often difficulties in assessing the precise content of procedural fairness required in any particular decision-making process. I acknowledge that there is some weight in the applicant's argument, that is, it is an argument which cannot be dismissed out of hand. 45 However, in this matter the evidence shows that the respondent had put the applicant squarely on notice of its concerns that Mrs Reid was still in a position to influence the applicant's operations, despite the changed arrangements. The respondent raised concerns about the substitution of Mrs Reid's 19 year old son (a third year apprentice mechanic) as Managing Director of the applicant in her place. Then Mrs Reid's son-in-law, Mr Cridland, was substituted. The respondent subsequently raised its concerns about the continuing involvement of Mrs Reid in engaging Mr Carey's services as the applicant's new Maintenance Controller. From the informal conference onwards the applicant was well aware of the respondent's concerns that Mrs Reid was in fact still playing a significant role in the operations of the applicant. The applicant was given ample opportunity to address those concerns. 46 On 14 March 2000 i.e. eleven days before making the decision now under challenge, the respondent wrote to the applicant. The letter was addressed to Mr Cridland as its Managing Director. A most relevant paragraph of the letter read as follows: "I accept that you are now the Managing Director and that Ms Reid has relinquished her former, formal position with the company. Nevertheless, the influence which any person may be able to exert on the directors of a company is a matter which CASA is required to take into account when considering the matters set out in section 28 of the Act and about which it is required to be satisfied before it can lawfully issue an AOC. In order that CASA may properly make a judgment on this issue, I request that you fully explain to me what Ms Reid's current role is, and what her projected future role is likely to be, particularly in the light of the statement (which I referred to above) in your statutory declaration." 47 When one reads the two key paragraphs, namely paragraphs 25 and 26 of the decision letter which I have set out above and which appear relevantly in identical terms in Mr Riceman's recommendation of 22 March 2000, it can be seen that the reference in the first of those two paragraphs to the company's Chief Pilots was an introductory observation to form part of the basis for the assessment that Mrs Reid had a strong assertive personality. The essence of the reasoning process can be seen in the next sentence where there is an observation that because of Mrs Reid's assertive character, her former, long-standing role within the applicant and also her relationship with Mr Cridland (being his mother-in-law) it was highly likely that she would influence Mr Cridland, or would be able to influence him in the course of his duties. Similarly, so the reasoning process shows, it was highly likely that she would influence or would be able to influence the only other director of the company (her father) and the secretary of the company (her son). 48 At the risk of over-zealous scrutiny, I think it can be seen from a comparison of the two paragraphs that the factor personal to Mrs Reid and the applicant was not the matter of her personality having affected several of the company's Chief Pilots over the years, the factor was the likelihood, because of her assertive character and the other matters referred to in the second sentence of paragraph 25, that she would be able to influence the Managing Director of the applicant and the other office bearers referred to above. 49 In my view, it is quite clear that the applicant was put on notice of the respondent's concerns about the influence which Mrs Reid might be able to exert on the directors of the applicant and was given every opportunity to deal with those concerns. It can be seen from paragraph 26 of the decision letter that the potential which Mrs Reid had to influence the directors and office bearers of the applicant was the central basis upon which the respondent's decision was made (see also paragraph 28 of that letter). 50 In oral argument the applicant submitted that the real basis of the decision was that the respondent wanted to get Mrs Reid "out of Ord Air Charter Pty Ltd altogether - [with] no involvement whatsoever with that company in any form". This was said to be "patently clear" from the decision letter. Although this submission was made in the context of addressing ground 1.3, it probably amounts to an assertion of an improper exercise of power. In any event, I do not consider that on the evidence the allegation has been made out. A fair reading of the evidence shows that initially the respondent was concerned (see the informal conference on 31 January 2000) to persuade Mrs Reid that it was up to her to ensure compliance by the applicant with the civil aviation legislation. Then the applicant, on its own initiative, made the proposals to distance Mrs Reid from the management of the applicant and its operations. The applicant went so far as to represent to the respondent that Mrs Reid had left Australia. That was followed by information received by the respondent that Mrs Reid had returned to the employment of the company and was carrying out a relevant and important managerial function, namely, the engagement of a Maintenance Controller based in Perth. A fair examination of the evidence does not show that the respondent was determined to ensure that Mrs Reid would have no involvement whatsoever with the applicant in any form. Its expressed concern was that she would be in a position to influence those who were supposed to control the applicant. From the evidence to which I have referred earlier in these reasons, the respondent can be seen to have been willing to grant the applicant an AOC once it was satisfied (among other things) that those responsible for compliance with the legislation would not be under Mrs Reid's influence. 51 The authorities show that a decision-maker is not under an obligation to inform a party of his or her preliminary or evaluative conclusions on the material upon which the decision-maker proposes to act. A useful collection of the authorities can be found in Merkel J's reasons for judgment in Pilbara Aboriginal Land Council Aboriginal Corporation Inc v Minister for Aboriginal & Torres Strait Islander Affairs [2000] FCA 1113 at paras 63 to 73. 52 The applicant made various efforts, which I have summarised above, to satisfy the respondent that Mrs Reid no longer played any relevant part in its operations. The nature of its efforts does not need to be detailed here. The important factor is that the applicant was made well aware of the concerns which might lead, and did in fact lead, the respondent to refuse to grant the AOC and the applicant was given every opportunity to address those concerns. 53 I do not think that the third sub-ground of Ground 1 has been made out.

Ground 2 - Improper Exercise of Power 2.1 Taking into account matters which were said to be irrelevant 54 The applicant submitted that the respondent took into account the following matters which were said to be irrelevant: · the family relationship between the directors, secretary and shareholders of the applicant and Mrs Reid; · the identity of the shareholders of the applicant; · the "assertive nature" of Mrs Reid; · alleged compliance problems occurring in 1995; · alleged compliance problems not relating to safety or the competence of persons "to do anything that would be covered by the AOC". 55 I think it is reasonably clear that the respondent took the above matters into account. The respondent did not contend otherwise. Were these irrelevant considerations? 56 Mrs Reid had been the Managing Director of the applicant for many years. She was its Managing Director during the period when the respondent raised with the applicant, on many occasions, its concerns about failure to comply with the legislation. That included the events which led up to the cancellation of the approval of the applicant's Maintenance Controller. Failure to comply with the statutory requirements concerning aircraft maintenance is clearly a matter relating to safety. 57 The respondent made it clear, at the informal conference on 31 January 2000, that it was concerned about whether Mrs Reid (as personifying the applicant) was capable of complying with the legislation relating to safety. I do not accept that it is a reasonable inference from what took place at that conference that, as the applicant submitted, the respondent was suggesting that Mrs Reid should cease to have anything at all to do with the applicant's affairs. 58 The evidence shows (see the letter dated 1 February 2000 from the applicant to the respondent) that it was Mrs Reid who took the initiative of resigning from the position of Managing Director of the applicant. That letter was signed by Mr John Cridland (Mrs Reid's son-in-law) on her behalf. The letter states that the position of Managing Director was to be taken over by Mr Alasdair Reid. Mr Alasdair Reid is Mrs Reid's son. At the relevant time he was 19 years of age and was an apprentice mechanic. 59 Not surprisingly, the respondent's response was to seek more information about the directors, organisational structure and chain of command of the applicant and details of the qualifications and experience of the proposed new Managing Director - see its letters dated 2 February 2000 and 4 February 2000. By 8 February 2000, the applicant changed the proposal that Mr Alasdair Reid should be its Managing Director. On that date Mrs Reid wrote to the respondent advising that Mr Cridland was to be Managing Director of the applicant instead. As mentioned above, Mr Cridland is Mrs Reid's son-in-law. Since about July 1999 he had been the applicant's Chief Pilot. In the applicant's letters of 3 February 2000 and 9 February 2000 the applicant saw fit to emphasise that Mrs Reid was not involved in the company's operations. In the former letter the applicant referred to the fact that Mrs Reid was proposing to divest herself of her shares in the applicant, presumably as further evidence of her intention of distancing herself from its operations. The proposed transferees of her shares were (in equal shares) her son-in-law (Mr Cridland) and her two daughters. Given the shareholders' power to appoint the directors of the applicant, I do not consider that the identity of its shareholders was an irrelevant consideration for the respondent when it was assessing whether there had been a real change in the control of the applicant's operations so as to allay its concerns about its future compliance with the civil aviation legislation. 60 On 11 February 2000 the respondent wrote to Mr Cridland a letter that has been described as the "counselling letter". In that letter the respondent detailed its concerns in relation to various matters of non-compliance by the applicant with the legislation. However, the letter shows that the respondent was prepared to accept Mr Cridland as Managing Director. I set out below a passage from paragraph 52 of the letter: "Likewise, given the findings set out in the main content of this letter, the experience you have gained in air operations under the influence of Mrs Reid's regulatory compliance performance as managing director is clearly unsatisfactory. However, at the moment, on balance you are considered to have the appropriate experience because a significant majority of your experience is seen as being with compliant operators." 61 By letter dated 11 February 2000 to the applicant the respondent asked for positive evidence of the change of directors and change of shareholdings which the applicant had foreshadowed. It asked for that information again on 18 February 2000. In response to those requests, the applicant, through Mr Cridland, provided various documentation. That included a statutory declaration made on 22 February 2000 which in part read as follows: "6. On 13 February 2000 I know that Ms Maxine Sinclair Reid left the State of Western Australia and I believe that on 14 February 2000 she left Australia. 7. I have had no contact whatsoever with Ms Reid since she left Wyndham in the said State on 13 February 2000. 8. Since 14 February 2000 I have been acting as the director of the Ord Air (sic) and making the decisions for it (sic). 62 On 9 March 2000 the applicant received an e-mail from a Mr Paul Carey. Mr Carey is a maintenance controller based in Perth. The first paragraph of that e-mail message read as follows: "I have been approached by Maxine from Ord Air Charter, Wyndham, to undertake maintenance control activities for their company." 63 On 14 March 2000 the respondent wrote to the applicant stating that it had received that information from Mr Carey. The letter is, in my view, an important one and I set out below the following extracts from it (the last paragraph below has also been set out above in the course of considering the natural justice ground): "I am concerned to know, now, what Ms Reid's involvement is in the operation of Ord Air Charter. I raise this matter with you because, as you know, CASA has expressed serious concerns about the previous management of the company. On 22 February 2000 in partial response to these concerns, you wrote in a statutory declaration: "On 13 February 2000 I know that Mrs Maxine Reid left the State of Western Australia and I believe that on 14 February 2000 she left Australia." Given that you are aware of CASA's concerns, it appears that that declaration may have been disingenuous if, while writing it, you were aware (but did not say) that Mrs Reid's absence was only temporary and that she would be returning shortly to employment, in whatever capacity with Ord Air Charter. I accept that you are now the Managing Director and that Ms Reid has relinquished her former, formal position with the company. Nevertheless, the influence which any person may be able to exert on the directors of a company is a matter which CASA is required to take into account when considering the matters set out in section 28 of the Act and about which it is required to be satisfied before it can lawfully issue an AOC. In order that CASA may properly make a judgment on this issue, I request that you fully explain to me what Ms Reid's current role is, and what her projected future role is likely to be, particularly in the light of the statement (which I referred to above) in your statutory declaration." 64 On 15 March 2000 the applicant, in a letter signed by Mr Cridland, responded to that letter. In that letter Mr Cridland said that he was not aware of an approach by Ms Reid to a person in Perth on behalf of the applicant. His letter concluded: "CASA's concerns with the previous management of this company to me is just that previous [sic]. The depth of time and energy devoted to this concern by yourself I find staggering and is something that should be taken up appropriately and fairly with previous management, so as to allow this company to evolve. Ms Reid's current and projected role with the company will be as a company employee but not in any key personnel position as specified in section 28 of the Act. Also bearing in mind that the decision-making for Ord Air Charter Pty Ltd is through its Directors and the matter of personnel employed in for example clerical functions is one for the company." 65 On 17 March 2000 Mr Carey sent a further e-mail message to the respondent, which included the following: "My contract has been verbally accepted by Mrs Maxine Reid. I have reviewed the Procedures Manual/Quality Manual/Maintenance Control Manager of the company and, find it unacceptable." 66 A file note dated 20 March 2000 by Mr R Beech, Flying Operations Inspector of the respondent's Darwin district office is in the following terms: "During the previous week or so when contacting Ord Air's office in Wyndham for John Cridland, Mrs Maxine Reid answered the phone." 67 In my view, given the history of non-compliance by the applicant with the civil aviation legislation when it was under the management of Ms Reid, her suspected involvement in the operations of Ord Air and the other matters referred to in the particulars of Ground 2 were certainly not, as the applicant contended, irrelevant considerations. 68 Section 28 of the Act relevantly provides: "28. (1) 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) . . . (vi) . . . (vii) . . . (c) . . . (2) . . . (3) In this section "AOC operations" means the operations covered by the application; "applicant's organisation" means the organisation established, or proposed to be established, by the applicant to conduct or carry out the operations covered by the application; "key personnel" means the people (however they are described) that hold, or carry out the duties of, the following positions in the applicant's organisation: (a) the chief executive officer; (b) the head of the flying operations part of the organisation; (c) the head of the aircraft maintenance part (if any) of the organisation; (d) the head of the training and checking part (if any) of the organisation. (e) . . ." 69 To establish this ground the applicant needed to show that the matters listed in Ground 2.1 were irrelevant to the question whether the applicant was capable of complying with those provisions of the civil aviation legislation which related to safety. In my opinion, the fact that there were compliance problems occurring in and since 1995, to the extent that they related directly to safety, cannot in the statutory context, be regarded as irrelevant. The fact that there may have been concerns over compliance with other legislative requirements not relating to safety would also, in my view, not be an irrelevant matter. If an airline operator exhibits a tendency of failing to comply with civil aviation legislative requirements which are not directly related to safety, it would be open to a decision-maker to take that into account when assessing the risk of such an attitude of non-compliance extending over into the area of safety. 70 The respondent, when considering under s 28(1)(a) of the Act whether it was satisfied that the applicant was capable of complying with the provisions of the legislation relating to safety, was, in my view, entitled to consider whether the management of the applicant had really changed or whether the changes were purely formal. If the latter was the case, then in my opinion, it was open to the respondent to infer that there would be continued instances of non-compliance with those parts of the legislation which were concerned with safety. 71 The question of who in fact was managing the applicant and the extent, if any, of the managerial influence of its former Managing Director were in those circumstances, far from irrelevant considerations. In my opinion none of the matters listed in Ground 2.1 of the application were irrelevant considerations.

Ground 2.2 Failure to take relevant matters into consideration 72 The applicant, in Ground 2.2 of its grounds of application, listed four matters which it alleged that the respondent had failed to take into consideration. My impression is that by this ground the applicant sought to re-visit the merits of its application for an AOC. The four matters in the list were: · That Mrs Reid was no longer a director or shareholder in the applicant and was not part of its management structure. · That the alleged compliance problems occurring in 1995 were largely trivial or unrelated to safety or to the competence of persons employed by the applicant "to do anything that would be covered by the AOC"; · That the alleged compliance problems, so far as they relate to alleged unauthorised regular public transport operations were unrelated to safety or to the competence of persons currently employed by the applicant "to do anything that would be covered by the AOC";

· That the respondent could have issued an AOC to the applicant and imposed conditions thereon pursuant to s 28BB of the Civil Aviation Act so as to curtail such of the applicant's operations as the respondent deemed to be unauthorised;

73 How these matters were to be characterised as matters which, on the usual test, were matters which the respondent was bound to take into account, was not something which the applicant addressed in its submissions. I very much doubt whether they were of such a character. 74 In any event, so far as the first matter is concerned, I am not satisfied, on the evidence before me, that the respondent failed to take it into account. Most of the indications are that it did. The correspondence shows that the respondent sought details about the applicant's directors and shareholders - see its letter dated 2 February 2000 and page 2 of its letter dated 25 February 2000. Furthermore on 21 February 2000 the applicant's accountant in Adelaide faxed to Mr Riceman an extract from the records of the Australian Securities & Investments Commission recording the fact that Mrs Reid ceased to be a director of the applicant on 14 February 2000. I infer from the correspondence that the respondent was aware of and took into account the formal steps taken, but was concerned that Mrs Reid might still be acting as a director and influencing her father and son-in-law who together comprised the applicant's Board.

75 By the next two sub-grounds, I consider that the applicant was seeking to obtain merits review of the decision. They are, largely, the analogues of its submission that the compliance problems were irrelevant matters. Whether a compliance problem was trivial or unrelated to safety or competence of persons were matters for the respondent to assess during the decision-making process. I have held above that these compliance problems were not irrelevant matters. The weight which the respondent gave to these factors was a matter for the decision-maker.

76 The applicant addressed no submissions, whether written or oral in relation to the fourth sub-ground, so I took it to have been abandoned. In any event the evidence does not establish that the respondent failed to consider the application of s 28BB.

Grounds 2.3, 2.4, 2.5 and 2.6 77 There were three other bases upon which the applicant contended, in its application, that the decision was an improper exercise of power. The first (Ground 2.3 and repeated in Ground 2.5) was that the decision had been made in pursuance of a pre-determined policy. I have already dealt with that aspect above. 78 The second (Ground 2.6) was that the decision was so unreasonable that no reasonable person could have made it. 79 The applicant contended that the decision was based on "no more than speculation" about Mrs Reid's personality and suspicion about her current and future involvement with the operations of the applicant. The delegate's conclusions about the involvement of Mrs Reid in the operations of the applicant and the "fact" and effect of what the respondent described as her "assertiveness" were, so it was put, not only irrelevant but based on speculation. The decision was, so the applicant contended, contrary to law as being both unreasonable and arbitrary. 80 I reject the submissions. The observation about Mrs Reid's personality was not based on no more than speculation. There was evidence on the respondent's files which suggested that Mrs Reid had an overbearing personality, though it is unclear whether Mr Riceman or Mr McAlister referred to it at the time when the decision was made. I refer to the complaints of Senior Pilots Callil and Gallivan referred to above. There was also Mr Riceman's own assessment of Mrs Reid based on her more recent dealings with the respondent. Nor is it correct to say that the decision was based on no more than suspicion about Mrs Reid's current and future involvement with the air operations of the applicant. I refer to the evidence of Mrs Reid's negotiations with Mr Carey, Mr Carey's second e‑mail to the effect that Mrs Reid approved his contract, the proposed substitution of Mrs Reid's 19 year old son as Managing Director and the impression which Mr Cridland had previously sought to convey to the respondent, that Mrs Reid had departed indefinitely. In my view, it was open to the respondent to consider that Mrs Reid planned to have an on-going involvement with the management of the applicant's operations. In those circumstances, given the applicant's history of non-compliance when under her management, it was also open to the respondent, in my view, not to be satisfied that the applicant was capable of complying with the legislative provisions that related to safety. In my opinion, the applicant has fallen well short of establishing that the decision was unreasonable in administrative law terms. 81 In Ground 2.4 the applicant complained that the respondent's decision had been made in bad faith. This was particularised by reference to the decision being made · in pursuance of the predetermined policy described in Ground 1.1; · without regard to the relevant considerations; · without any evidentiary basis. 82 In relation to this ground, the applicant simply repeated its submissions concerning irrelevant/relevant considerations. There is thus no need to deal separately with this ground save to say, in fairness to the respondent, that the evidence discloses no basis whatsoever for the assertion that the decision was made in bad faith.

Ground 3 - Error of Law 83 Once again the error of law identified was the application of what was said to be a predetermined policy. 84 This ground has been dealt with above.

Ground 4 - No Evidence 85 The applicant contended that there was no evidence of Mrs Reid's assertive nature or that it had influenced or was likely to influence the management of the applicant or that it had affected several of the company's Chief Pilots. 86 There were other sub-grounds in Ground 4 of the applicant's application, but these were either not pressed at trial or have been dealt with earlier in these reasons. 87 To succeed on this ground, the applicant had first to establish one or other of the matters referred to in s 5(3)(a) and (b) of the ADJR Act: Curragh Mining Limited v Daniel (1992) 34 FCR 212 at 220-224. It was not clear from its submissions, whether written or oral, which of the two sub-paragraphs the applicant relied upon. I have inferred that it was sub-paragraph (b). Assuming, but without deciding, that each of the "facts" set out in particulars or sub-grounds 4.1 to 4.6 (both inclusive) were facts upon which the respondent based its decision, the applicant has not established that those facts did not exist. As to particular or sub-ground 4.7, the evidence before me does not go anywhere near establishing that the respondent based its decision on the applicant's shareholders being in any way involved in its management. 88 Moreover, even if the applicant had satisfied one of the requirements of s 5(3), and attention is then directed to applying s 5(1)(h), there was evidence or material to justify making the decision. I have summarised much of that evidence at paragraphs 56 to 67 and 69 to 71 above. 89 Finally, the applicant contended that the respondent was under a duty to make inquiry. In its written submissions the respondent contended that if reliance was placed on Mrs Reid's alleged effects on Chief Pilots of the applicant, evidence should have been obtained as to that. 90 The applicant tendered the employee's affidavits, on the basis that there was readily available evidence to the effect that Mrs Reid did not detrimentally influence the operations of the applicant. I admitted the employees' affidavits into evidence, over objection from the respondent, only on that basis. 91 The applicant relied on the decisions of Prasad v Minister for Immigration and Ethnic Affairs (1985) 6 FCR 155 at 169-170 and Luu v Renevier (1989) 91 ALR 39. 92 This case differs from those two cases. In the present case the applicant was in as good a position as the respondent to obtain and present this evidence. The applicant was aware of the respondent's concerns that Mrs Reid was, in reality, still influencing the applicant's operations. In terms of air safety, that influence would have had two main aspects, namely, over mechanical matters and procedures and in relation to the flying operations conducted by its pilots. It was not, in my opinion, for the respondent to make the applicant's case for it by instituting further inquiries.

THE RESPONDENT'S MOTION 93 In view of my conclusions above, it is not necessary to consider the application of s 10(2)(b)(ii) of the ADJR Act. However, I shall do so briefly. 94 Section 10(1) of the ADJR Act relevantly provides that the right conferred upon a person to make an application to the Court in respect of a decision is additional to and not in derogation of any other rights that the person has to seek a review by another tribunal, authority or person, of that decision. Section 10(2) relevantly provides: "(2) Notwithstanding subsection (1): (a) … (b) the Federal Court or the Federal Magistrate's Court may, in its discretion, refuse to grant an application under section 5, 6 or 7 that was made to the court in respect of a decision, in respect of conduct engaged in for the purpose of making a decision, or in respect of a failure to make a decision, for the reason: (i) that the applicant has sought review by the court, or by another court, of that decision, conduct or failure otherwise than under this Act; or (ii) that adequate provision is made by any law other than this Act under which the applicant is entitled to seek a review by the court, by another court, or by another tribunal, authority or person, of that decision, conduct or failure." 95 It was common ground that at all material times the applicant was entitled to seek review in the Administrative Appeals Tribunal of the respondent's decision. That would have been, of course, full merits review. In terms of s 10(b)(ii) it is quite clear that adequate provision was made by the Administrative Appeals Tribunal Act for review of the decision under challenge. The question is whether the Court should exercise its discretion to grant an order of review, were it minded to do so. 96 I have, earlier in these reasons, set out the rather dramatic circumstances in which the applicant withdrew its application to the Administrative Appeals Tribunal on the first day of the hearing. The only evidence of the applicant's reason for taking this course is contained in the affidavit of Ms L M Hudson, the applicant's solicitor, sworn on 24 August 2000 (Exhibit A12). 97 At paragraph 18 of her affidavit Ms Hudson says that she formed the view, based on the respondent's conduct of the interlocutory steps leading up to the hearing, the "inability of the AAT to enforce its own Orders or Directions" and the conduct of the respondent in a matter known as "Whyalla Airlines", that there would be no utility in pursuing the matter before the Administrative Appeals Tribunal. At paragraph 19 of her affidavit Ms Hudson swore as follows: "19. I formed the view that the applicant would not be afforded a fair merits review hearing in the AAT and that its extremely limited resources would be completely wasted by proceeding in that jurisdiction." 98 The main focus of the applicant in the proceedings in this Court became the complaint which was added by amendment at the hearing i.e. ground 1.3 - the failure to give the applicant a fair opportunity to consider and answer the respondent's concerns described in that sub-ground. 99 I accept the respondent's submission that that ground would have fallen away or lost most of its importance once the matter was before the Tribunal. The Tribunal's function was to make the decision anew and by that time (if it had not been aware earlier) the applicant was fully aware of the respondent's concerns which formed the subject of sub-ground 1.3. 100 The applicant submitted that it was entitled to obtain, in effect, a ruling from this Court about the irrelevance of Mrs Reid's influence upon the applicant's office bearers to the decision which it had to make under s 28 of the Act. It argued that rather than incur the heavy cost of the Tribunal proceedings, it was quicker and more efficient to come to the Court for such a ruling because otherwise the decision-maker would continue to have regard to such an irrelevant consideration. 101 I doubt whether that submission, at this stage of the history of the matter, has any merit. Ms Hudson appears to have advised the applicant that it would not be afforded a fair merits review hearing in the Administrative Appeals Tribunal. I think that is a reasonable inference (and I make it) from the course which she took on the first day of the hearing before the Tribunal i.e. to inform the Tribunal that the applicant had instructed her to withdraw the application. I infer that the applicant gave those instructions on the basis of advice given in terms of paragraph 19 set out above. That is not, in my opinion, an acceptable reason for the course which the applicant took of withdrawing its application to the Tribunal. The reality is that the Tribunal was bound to afford a full and fair merits review and apply the law correctly. If it did not do so, the matter could be brought to this Court under s 44 of the Administrative Appeals Tribunal Act - see the observations of Northrop J in Edelsten v Minister for Health (1995) 58 FCR 419 at 424-425. 102 At the interlocutory stage, when the respondent filed its motion in effect for the application to be dismissed summarily, the argument put forward by the applicant for judicial review in this Court was that there was a short point of law which could be heard and determined quickly and economically, compared to the expense of a long hearing before the Tribunal. This argument might have caused the Court's discretion to be exercised in its favour. I say "might" because these issues were not fully ventilated. (I note also that at the hearing there was a very substantial change in the focus of the applicant's case - I refer to the new Ground 1.3). 103 But the applicant chose not to deal with that motion. It chose to have it stood over while it proceeded, on an expedited basis, to obtain a full merits review hearing in the Administrative Appeals Tribunal. It then aborted those proceedings on the first day of the hearing. 104 The applicant can be seen, in my view, to have approbated and reprobated in its choice of seeking, initially, relief both in the Tribunal and in this Court, then pursuing its remedy in the Tribunal, abandoning that course and finally seeking to obtain the exercise of this Court's jurisdiction under the ADJR Act. 105 In all of the above circumstances, I consider that the applicant's conduct was such that the appropriate exercise of the Court's discretion (if it had found that the applicant had a case for review of the decision) would have been to refuse the application.

CONCLUSION 106 For the foregoing reasons the application will be dismissed with costs. I certify that the preceding one hundred and six (106) numbered paragraphs are a true copy of the Reasons for Judgment of Justice Carr.

Counsel for the Applicant: L W Roberts-Smith QC

Date of Hearing: 14 September 2000 (further submissions on 20 September 2000 and 9 October 2000)