Repacholi Aviation Pty Ltd v Civil Aviation Safety Authority

Federal Court of Australia|2012-11-21|Before: McKerracher J

Within 14 days the respondent file and serve submissions on costs and the formulation of orders giving effect to these reasons.
Thereafter the applicants file and serve responsive submissions on costs and the formulation of orders within 14 days.
The question of costs and settling of orders be determined on the papers unless either party makes an application to the Court.
Delivery of final judgment and determination on costs will be in open court. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011

IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION WAD 51 of 2009

JUDGE: MCKERRACHER J DATE: 21 NOVEMBER 2012 PLACE: PERTH

INTRODUCTION 1 On 3 May 2012, I granted the applicants leave to file and serve a Minute of Further Re-Amended Statement of Claim (MFRSC) after striking out an earlier version of the pleading in Repacholi Aviation Pty Ltd v Civil Aviation Safety Authority (2009) 263 ALR 93 (Repacholi No 1). The Full Court (Gray, Rares and Tracey JJ) dismissed an appeal from that decision (Repacholi Aviation Pty Ltd v Civil Aviation Safety Authority [2011] FCAFC 122) (Repacholi Full Court). 2 The applicants duly filed and served a MFRSC on 17 July 2012. As the respondent points out, this is a sixteenth attempt to present a pleading. The respondent had foreshadowed an application to challenge any minute that the Court permits to be filed and an application for an order for summary dismissal of the proceeding under s 31A of the Federal Court of Australia Act 1976 (Cth) (FCA) which relevantly provides as follows: 31A Summary judgment … (2) The Court may give judgment for one party against another in relation to the whole or any part of a proceeding if: (a) the first party is defending the proceeding or that part of the proceeding; and (b) the Court is satisfied that the other party has no reasonable prospect of successfully prosecuting the proceeding or that part of the proceeding. (3) For the purposes of this section, a defence or a proceeding or part of a proceeding need not be: (a) hopeless; or (b) bound to fail; for it to have no reasonable prospect of success. (4) This section does not limit any powers that the Court has apart from this section. … (emphasis added) 3 Accordingly, this application proceeds on the substantive issue of whether or not the respondent's application to dismiss the proceeding should be granted.

BACKGROUND 4 The applicants allege that the respondent (CASA) owed them a common law duty to take reasonable care in its exercise of statutory powers and functions to avoid causing them loss or damage including economic loss. The applicants rely on several actions said to have been taken or omitted by CASA as constituting breaches by CASA of the Civil Aviation Act 1988 (Cth) (the Act). The applicants argue that the breaches caused them to suffer loss and damage. There are five areas of activity which are attacked by the applicants. They are as follows: 1. suspension of the second applicant's commercial pilot licence from 5 March 2002 to 19 June 2002; 2. the consequence flowing from that suspension by 'grounding' the first applicant's commercial flight operations from 5 March 2002 until 3 April 2002; 3. the cancellation of the second applicant's commercial pilot licence from 19 June 2002 to 18 June 2003; 4. the refusal to appoint the second applicant as Chief Pilot of the first applicant from 18 June 2003 to 19 December 2006; and 5. the removal and continuing denial of charter and other aerial operations from the Air Operators Certificate (AOC) of the first applicant from 9 April 2002.

RELEVANT PRINCIPLES 5 In Spencer v The Commonwealth of Australia (2010) 241 CLR 118, Hayne, Crennan, Kiefel and Bell JJ said (at [60]): … The Federal Court may exercise power under s 31A if, and only if, satisfied that there is "no reasonable prospect" of success. ... At this point in the development of the understanding of the expression and its application, it is sufficient, but important, to emphasise that the evident legislative purpose revealed by the text of the provision will be defeated if its application is read as confined to cases of a kind which fell within earlier, different, procedural regimes. 6 French CJ and Gummow J said (at [22]): … The section authorises summary disposition of proceedings on a variety of bases under its general rubric. It will apply to the case in which the pleadings disclose no reasonable cause of action and their deficiency is incurable. It will include the case in which there is unanswerable or unanswered evidence of a fact fatal to the pleaded case and any case which might be propounded by permissible amendment. It will include the class of case in the longstanding category of cases which are "frivolous or vexatious or an abuse of process". The application of s 31A is not, in terms, limited to those categories. 7 As the respondents submit, in Spencer their Honours emphasised the distinction between the way in which s 31A FCA may be applied in its application to deficient pleadings and the way in which rules such as former Federal Court Rules 1979 (Cth) O 11 r 16 apply in the striking out of pleadings, adopting the following passage in White Industries Australia Ltd v Federal Commissioner of Taxation (2007) 160 FCR 298 per Lindgren J (at [47]): … evidence may disclose that a person has or may have a "reasonable cause of action" or "reasonable prospects of success", yet the person's pleading does not disclose this. In such a case O 11, r 16 empowers the Court to strike out the pleading but … s 31A(2) would not empower the Court to give judgment for the respondent against the applicant. A failure after ample opportunity to plead a reasonable cause of action may suggest that none exists and therefore that the applicant has no reasonable prospects of success, but the existence of a reasonable cause of action and the pleading of a reasonable cause of action remain distinct concepts. 8 In relation to causes of action that may turn on an issue of law, French CJ and Gummow J said in Spencer (at [25]): … where the success of proceedings is critically dependent upon a proposition of law which would contradict a binding decision of this Court, the court hearing the application under s 31A could justifiably conclude that the proceedings had no reasonable prospect of success. 9 The applicants also rely upon Spencer.

THE LEGISLATIVE CONTEXT 10 Some of the following provisions were addressed in Repacholi No 1 and, as there noted, any consideration of the alleged duty owed by CASA to the applicants requires attention to be focussed on the statutory provisions under which CASA is required to exercise its powers and functions. CASA submits, and I accept, that the Act establishes a statutory scheme for maintaining, enhancing and promoting the safety of civil aviation.

Safety 11 Numerous references to 'safety' in the provisions of the Act, the Civil Aviation Regulations 1988 (CAR) and Civil Aviation Orders (CAOs) emphasise the role of CASA in issuing AOCs or making regulatory decisions is one in which considerations of the safety of those affected by air operations are paramount. 12 As is apparent from its long title, the functions of CASA under the Act relate 'in particular' to 'the safety of civil aviation'. That general proposition is evident also from s 3A which describes the main object of the Act as being: 3A Main object of this Act … to establish a regulatory framework for maintaining, enhancing and promoting the safety of civil aviation, with particular emphasis on preventing aviation accidents and incidents. 13 By s 9(1) of the Act CASA is given the function (defined by s 3(1) as the 'regulatory function') of conducting the safety regulation of civil air operations in Australian territory in accordance with the Act and the regulations. 14 Section 9(1) then sets out, in subss (c)-(h), some of the means by which that function may be performed. One means is that referred to in s 9(1)(e), namely, the issue of certificates, licences, registrations and permits. There are various kinds of pilot licences issued under Pt V CAR and various kinds of AOCs issued under Pt III Div 2 of the Act. 15 The emphasis on safety is continued in s 9(2) of the Act (s 9(1) together with s 9(2) sets out the defined 'regulatory function'), and also in s 9(3)(a) and s 9(3)(e). Section 9A(1) then emphatically reinforces the safety issue: 9A Performance of functions (1) In exercising its powers and performing its functions, CASA must regard the safety of air navigation as the most important consideration. 16 Under CAR 5.09, CASA must issue a flight crew licence to an applicant, if and only, if that applicant meets the prescribed criteria, including that the person 'is a fit and proper person to hold the licence'. In determining whether an applicant meets that criterion, CASA must only take into account matters that relate to air safety (CAR 5.09(3)). 17 Under s 27 of the Act, CASA may issue AOCs for the purposes of its functions under the Act. As is apparent from s 27(2) and s 27(9), an AOC is required for an aircraft to fly or operate for prescribed commercial purposes. An air operator engaged in commercial air operations (as prescribed by CAR 206) must have an AOC. An AOC may be issued only to a natural person or to a body having legal personality (s 27(2B)). An AOC is not transferable (s 27(8)). 18 The terms of AOCs are as determined by CASA (s 27(7)). Read with s 9A of the Act, considerations that will inform the determination by CASA of the appropriate term of any AOC must be safety considerations. 19 Section 28 of the Act concerns the issue of AOCs. Under that provision as in force at the relevant times (s 28(1) was amended with effect from 20 March 2009), if a person applies 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: (ii) 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; (iii) the organisation's chain of command is appropriate to ensure that the AOC operations can be conducted or carried out safely; (iv) the organisation has a sufficient number of suitably qualified and competent employees to conduct or carry out the AOC operations safely; (v) key personnel in the organisation have appropriate experience in air operations to conduct or to carry out the AOC operations safely; (vi) the facilities of the organisation are sufficient to enable the AOC operations to be conducted or carried out safely; (vii) the organisation has suitable procedures and practices to control the organisation and ensure that the AOC operations can be conducted or carried out safely; (viii) 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. (added emphasis) 20 Each AOC is subject to the condition that the AOC holder must 'continue to satisfy CASA in relation to the matters specified in section 28 of the Act': CAO 82.0.4.4.

Other provisions arising on the pleading 21 An AOC operates subject to a number of statutory conditions as referred to in s 28BA(1). These include 'any conditions specified in the regulations or Civil Aviation Orders' (s 28BA(1)(b)). For example, the holder of an AOC authorising charter or aerial operations is required to establish a position of Chief Pilot and appoint a person to that position. An AOC holder must comply with the provisions of Appendix 1 to s 82.0 (CAO 82.0.5.1). Under Appendix 1, before a person is appointed as a Chief Pilot by an air operator, the appointment must be approved in writing by CASA 'after application in writing by the operator'. By s 28BB of the Act, CASA may vary the conditions of an AOC 'at any time' (see s 28BB(1) and s 28BB(2)). Pursuant to s 28BA(3), CASA may, by written notice given to the AOC holder, suspend or cancel an AOC if a condition of that AOC is breached. 22 Pursuant to CAR 269(1), CASA may, by notice in writing, vary, suspend or cancel a licence, certificate or authority issued under the civil aviation legislation where CASA is satisfied that one or more of the prescribed grounds exists. Those grounds include that the holder of the licence, certificate or authority has failed 'in his or her duty with respect to any matter affecting the safe navigation or operation of an aircraft' (CAR 269(1)(c)) or that the holder 'is not a fit and proper person' to hold the licence, certificate or authority (CAR 269(1)(d)). Before taking action under CAR 269(1), CASA must issue a notice allowing the holder of the relevant licence, certificate or authority time within which to 'show cause' why the regulatory action foreshadowed should not be taken (CAR 269(3)).

Review of CASA's decisions 23 Along with many other regulatory decisions, a decision to cancel, suspend or vary an AOC (or condition of an AOC) or to cancel, suspend or vary a licence is reviewable, on its merits, upon application to the Administrative Appeals Tribunal (the Tribunal). Each such decision is a 'reviewable decision' (s 31(2) of the Act). 24 It is common ground that the Tribunal conducts any review of a reviewable decision as a full merits review. Upon review of a reviewable decision the Tribunal stands in the shoes of the decision-maker to make the 'correct or preferable' administrative decision upon the evidence before the Tribunal' (Shi v Migration Agents Registration Authority (2008) 235 CLR 286). The rehearing procedure in the Tribunal accords applicants an opportunity to give evidence and present argument and is subject to the more general principles of procedural fairness (Re Minister for Immigration and Multicultural Affairs; Ex parte Miah (2001) 206 CLR 57). 25 The Tribunal also has power pursuant to s 41 of the Administrative Appeals Tribunal Act 1975 (Cth) (the AAT Act) to make a positive order in favour of an applicant (see Civil Aviation Safety Authority v Hotop (2005) 145 FCR 232).

The takeoff and suspension 26 As noted in Repacholi No 1, the central factual allegation giving rise to the initial suspension of the second applicant's pilot licence on 5 March 2002 was the flight in a seaplane conducted by him. All of the other complaints by the applicants turn on this initial event. The event involved a takeoff from a trailer attached to a truck at Jandakot Airport in Western Australia (the truck takeoff). The applicants plead that the truck takeoff was 'conducted safely' but 'involved trivial and technical contraventions of particular regulations'. The applicants assert that in relation to the truck takeoff the duty of care imposed upon CASA required it to: (a) not suspend the second applicant's licence 'unless there was an immediate risk to air safety'; and (b) to investigate the truck takeoff promptly and efficiently and have regard to the results of that investigation. 27 The applicants plead that the suspension of the second applicant's pilot licence without making (or making adequate) inquiries or, alternatively, disregarding the results of the inquiries was a breach of the common law duty described in [11] of the MFRSC in the following terms: [11] In the premises, CASA owes and at all material times owed to [the applicants] a common law duty to take reasonable care in the exercise of its statutory powers and functions in relation to (a) issuing, varying, cancelling, suspending or renewing the Authorisations; and (b) the conduct of any investigation into any alleged contravention of a provision of the Act, the Regulations, the Civil Aviation Orders or the Civil Aviation Safety Regulations to avoid causing [the applicants] loss or damage (including economic loss) other than such loss or damage as was a necessary consequence of CASA's proper exercise of its statutory powers and functions. 28 There is now no doubt from the affidavit material that relevant inquiries were in fact made by CASA of the Federal Aviation Administration (FAA) in the United States of America (USA). CASA has disclosed the inquiries made and the responses given. The affidavit in particular reveals the following exchanges. 29 By email from CASA to the FAA on 22 March 2002, the author wrote: … I've got a bit of an unusual request, which I'm hoping you can point us toward a contact for, perhaps with the U.S floatplane association, or anyone who can verify whether or not the procedure I'm about to detail is in use in the U.S. We have an operator who launched a Cessna 172-XP with floats into the air by lowering it onto a helicopter (long axle) trolley which was connected to a ford utility type vehicle which then towed the whole caboodle down the runway until the speed was sufficient for the aircraft to become airborne. The operator asserts that the launch procedure is in "relatively common usage" in the U.S. We are quite keen to find out if this is the case, and would appreciate any assistance you are able to afford. … (emphasis added) 30 The response from the FAA in the USA was to this effect five days later: I received some information from our HQ indicating that this is NOT a common practice in the US. It's been heard of in the movie business where some weird stunts are called for but again, it is not a common procedure. We think the biggest 'control' for these kind of stunts is the operators (sic) insurance company. We don't believe any normal insurance company would consider this procedure as 'normal' in any sense of the word. … (emphasis added) 31 A few days later a further response was also received from the President of the Seaplane Pilots Association to an enquiry by an Area Manager of CASA: … I received your fax regarding a towed dolly takeoff by a Cessna 172XP, and have done some additional research with some of the experts in the field. Essentially, here's what we came up with: (1) Takeoff from a dolly under the sole power of the airplane is common and universally accepted in the seaplane community, as is landing on a grass runway or other similar surface. The FAA neither approves of nor rejects this procedure. Special care is required to ensure that the dolly is suitable, and a braking system for the dolly is advised to prevent runway light damage after the airplane departs the dolly. (2) Takeoff from a flatbed truck, with power provided by the truck until liftoff speed, is also accepted although less common. Most pilots are not comfortable with this technique. The FAA, again, neither approves nor disapproves of this procedure. (3) Your specific scenario - a dolly towed by a truck - is a variation of the flatbed takeoff. So long as the dolly is suitable and the pilot and truck driver are well prepared, this procedure shouldn't be any more dangerous than a flatbed takeoff. However, we're not confident that a helicopter dolly, designed for low-speed towing, is suitable for or stable at the high speeds necessary for takeoff. Again, these procedures are well known and commonly used in the seaplane industry. The FAA tacitly endorses these procedures, in that the FAA is aware that these procedures are in use and does not prohibit these procedures, but to say that the FAA endorses these procedures is a stretch. … (emphasis added) 32 Although the applicants concede that inquiries were made and responses given, the applicants submit that the inquiry was 'haphazard'. In my view, this submission is untenable. 33 Assuming for the moment that there was a duty to conduct inquiries at all of overseas agencies as to their practices in relation to air safety, it cannot possibly be that CASA would be bound by any response received. CASA's statutory duty is to ensure compliance with standards of civil aviation safety as it determines them to be by reference to Australian standards and expectations, not those of foreign countries. This can be readily tested. If some resounding endorsement for a particular practice was received from some foreign country, even one with a sophisticated regulatory system such as the USA, acceptance of such a response as being determinative would not discharge CASA's obligation to comply with the statutory duties discussed above (from [10] to [22]). There was no duty at all on the part of CASA to make inquiries overseas as suggested. Even then, having done so, there would, in any event, be very little in the responses, particularly from the official government body, the FAA, to support the practice which the applicants contend is entirely appropriate. 34 All aspects of the alleged breach of duty flow from the truck takeoff incident. That is the highpoint of the applicants' complaints. If there was no duty as pleaded, alternatively, no reasonable prospect of proving a breach of any similar duty, the balance of the applicants' case cannot succeed.

The show cause notice and the grounding 35 The next matter on which the applicants rely is that CASA issued a 'show cause' notice on 21 March 2002 to the first applicant. That notice required it to show cause why renewal of its AOC should not be refused (the existing AOC expiring on 31 March 2002). An additional show cause notice was issued to the second applicant seven days later (28 March 2002). That notice required the second applicant to show cause why his licences should not be cancelled, varied or suspended. The applicants appear to contend that this show cause notice was invalid. The issuing of that second show cause notice is alleged to have been a breach of the duty alleged in [11] of the MFRSC although the issue of that second show cause notice does not appear to be linked in any way to the damage pleaded in [55] or elsewhere in the MFRSC.

Cancellation of licence 36 The applicants then go on to allege that CASA purported to cancel the second applicant's pilot licences on 19 June 2002 pursuant to CAR 269 in reliance upon the allegedly 'invalid' show cause notice issued to the second applicant on 28 March 2002. 37 Review of that cancellation decision was sought by the second applicant through the Tribunal on 21 June 2002. The second applicant received a favourable determination from the Tribunal as explained in Repacholi No 1. In the MFRSC, the applicants plead that, having regard to the favourable determination of the Tribunal, it was a requirement of the 'duty of care' owed to the second applicant that he be 'reinstated' as Chief Pilot of the first applicant.

Refusal to approve as Chief Pilot 38 In issuing a notice of refusal to approve the appointment of the second applicant as Chief Pilot on 4 February 2004, CASA allegedly breached its duty of care referred to in [11] of the MFRSC set out above (at [27]). 39 It is contended that the second applicant sought further review by the Tribunal of that decision by an application made to the Tribunal on 10 February 2004. A decision was then given on 30 June 2006 following which the second applicant was approved as Chief Pilot of the first applicant by CASA on 19 December 2006.

Failure to reinstate charter operations 40 It is also alleged that in breach of the duty described in [11] of the MFRSC, CASA failed to reinstate authorisations to conduct certain commercial flying operations (including charter operations) on the first applicant's AOC.

DOES CASA OWE THE APPLICANTS A DUTY OF CARE AT COMMON LAW? 41 At the heart of the entire debate is the question of whether in the pleaded circumstances CASA could have a duty of care as pleaded or substantially similar to the duty pleaded. On this topic the applicants argue that CASA's summary judgment application should be dismissed having regard to the uncertainty concerning the law governing actions in negligence against public authorities. 42 The applicants rely on: (a) the fact that the Full Court approved the decision in Repacholi No 1 in which I had said it was not possible to conclude that a claim in negligence would not be open to be made against CASA based on a duty of care in the exercise of a statutory power; (b) the decision of the Full Court in Polar Aviation Pty Ltd v Civil Aviation Safety Authority (2012) 203 FCR 325 (Polar Full Court) which does not preclude an action for negligence against CASA. Rather, the Full Court upheld the decision of the primary judge (Kenny J) that the duty of care as pleaded in that case did not exist. The applicants argue that distinctions can be drawn between Polar Full Court and the present proceeding. (c) the distinguishing features of the pleading in this proceeding as identified by Kenny J in Polar Aviation Pty Ltd v Civil Aviation Safety Authority (No 4) (2011) 203 FCR 293 (Polar No 4) remaining central to the claim advanced in the applicants' MFRSC. Those distinguishing features are the circumstances surrounding the truck takeoff and the asserted inadequate investigation by the applicants. 43 As identified by the applicants, Kenny J distinguished the claims in Polar Aviation Pty Ltd v Civil Aviation Safety Authority (No 2) (2010) 267 ALR 547 (Polar No 2) from Repacholi No 1 (at [75]) on the basis that 'there was at least some attempt to give content to the alleged duty by reference to an obligation to collect information regarding takeoff procedures'. The applicants refer to what the Full Court said in Polar Full Court (at [85]-[87]): [85] First, on a fair reading of her Honour's reasons, particularly when read in the light of her earlier, closely related judgment in Polar (No 2) (to which her Honour expressly referred), she did not hold that a duty of care in the exercise of CASA's statutory powers was absolutely precluded or that such a duty existed but CASA had immunity. [86] To the contrary, while her Honour's reasons may pose a significant hurdle to the existence of any such duty of care, her Honour held only that the duty of care as pleaded did not exist. So much is evident from her observations at [52] and [53] of the reasons, the heading above [47], the heading above [54] and the clear indication in [54] that her Honour's analysis was "of whether or not the duty as pleaded in this case exists" (emphasis added). [87] That conclusion is also supported by her Honour's discussion of Repacholi (both in Polar (No 2) and in this case) and the distinction she drew between that case and the present, which is inconsistent with the view that the duty could never in any circumstances arise. 44 The applicants argue that the pleaded allegations identified by Kenny J in Polar No 2 as upheld by the Full Court distinguishing it from Repacholi No 1 were the following: (a) CASA's failure to conduct an investigation into the circumstances surrounding the truck takeoff, or to complete the investigation promptly, contrary to its obligations under CAR 286(2); (b) CASA's issue of a show cause notice to the first applicant, based on the false premise that the first applicant was involved in the truck takeoff, and which, at CASA's instigation, led to the second applicant resigning as Chief Pilot of the first applicant; (c) CASA's issue of a show cause notice to the second applicant regarding cancellation of his pilot licences without completing an investigation, contrary to the requirement of CAR 268(2); (d) CASA's negligent cancellation of the second applicant's pilot licences, as demonstrated not only by the inadequate investigation, but also by language of the Tribunal decision; (e) The process of approving a substitute Chief Pilot to the first applicant, which ultimately led to the loss of the first applicant's charter operations; and (f) CASA's negligent failure to assess the second applicant's suitability in accordance with cl 1.3 in App 1 of CAO 82.0 before refusing to reapprove him as Chief Pilot of the first applicant. 45 The applicants stress that those allegations remain and are central to the claims advanced in the MFRSC. In particular, the applicants stress that CASA has failed to take account of the circumstances pleaded, namely, that: (a) in purported exercise of its function CASA has the power to destroy and/or cripple any aviation business; (b) because it has that power, the legislature has placed restraints on it and it owes a duty of care to those subject to its control; (c) the notion that an air operator's business is vulnerable to any action by CASA is self-evident from the Act and the CAR; and (d) the Tribunal's procedure available to air operators does not contain any provision for compensation for any wrongful cancellation of a licence or authorisation. 46 The applicants contend that in circumstances where the vulnerability of licence holders including the second applicant arises from the relationship between the regulator and the regulated, there is no need to plead any particular facts relating to vulnerability save the relationship between the air operator and CASA. Even though CASA was informed beforehand of the proposed truck takeoff, it formed the view some two months later that there was 'an immediate risk to air safety if [the] pilot licence [was] not suspended immediately, pending investigation into these matters'. Prior to making that decision, no inquiries were conducted. The applicants submit that CASA was aware that it was the second applicant's contention that the truck takeoff used by him was commonly used in the USA, without the disapproval of the FAA. However no 'official' inquiry was made of the FAA. Rather, a personal request was made by a CASA officer through a contact in the FAA who gave an informal answer having made some personal inquiries of his own. While that answer supported the approach taken by CASA, the applicants contend that 'it was a very haphazard inquiry and a very casually researched answer'. The only other inquiry made, the applicants say, was a subsequent inquiry of the Seaplane Pilots Association, which resulted in a 'quite different answer'. However, this was too late because CASA had already acted without waiting for the result of that inquiry. 47 The applicants point to the fact that CASA was conscious that it was required to conduct its investigation forthwith. As a result, the Area Manager requested on 1 March 2002 that the investigation be conducted within 28 days even though the officer in charge of the investigation did not meet that time constraint. The applicants complain that no explanation has been given by CASA and, based on the material and exhibited to the affidavits, no explanation is available as to why any investigation did not involve a proper inquiry and why there were apparently no formal processes or procedures for communication by CASA with overseas regulators. 48 It is argued that the lack of reasoning and analysis that went into the first suspension notice is further illustrated by the allegations made which included the fact that the truck takeoff appeared to have been conducted without using any known aircraft performance data. CASA complained that there appeared to be no evidence of the second applicant instigating procedures to prevent the aircraft from moving forward on the truck trailer or preventative measures to stop an inadvertent collision with the vehicle and its occupants. 49 That allegation by CASA was repeated in its show cause notice which the applicants say also 'includes the absurd allegation' that: The truck towing the aircraft during its takeoff run was in very close proximity to the truck [sic] and therefore represented a serious flight safety hazard to the aircraft. With the truck occupying a runway it appears that the runway was unsafe for the purposes taking off [sic] in an aircraft. 50 It is not particularly evident to me why this is an absurd allegation. Although there are some slips in the wording, clearly what is meant is that it was, in CASA's view, unsafe for the aircraft to take off with the truck immediately in front of it.

CONSIDERATION 51 CASA appears to be rehearsing its earlier submissions to which I referred in Repacholi No 1 that there can be no common law duty of care. I am not persuaded that this is so. At no level in the cases cited has it ever been concluded that CASA could never have a duty of care. The real question is whether CASA can satisfy me that on the pleaded facts, taking into account the evidence of inquiries made and responses given, the applicants have 'no reasonable prospect of successfully prosecuting the proceeding'. The proceeding turns directly on the pleaded breaches as now set out in this sixteenth MFRSC. The question whether a duty of care exists and the scope or content of the duty for which the applicants contend is a proper question to be determined on a summary dismissal application: Commonwealth of Australia v Griffiths (2007) 70 NSWLR 268. 52 In Stuart v Kirkland-Veenstra (2009) 237 CLR 215, Gummow, Hayne and Heydon JJ stated (at [112]-[113]) (citations omitted): [112] There can be no duty to act in a particular way unless there is authority to do so. Power is therefore a necessary condition of liability but it is not a sufficient condition. Statutory power to act in a particular way, coupled with the fact that, if action is not taken, it is reasonably foreseeable that harm will ensue, is not sufficient to establish a duty to take that action. Rather, as was pointed out in Graham Barclay Oysters Pty Ltd v Ryan, the existence or otherwise of a common law duty of care owed by a statutory authority (or in this case the holder of statutory power) turns on a close examination of the terms, scope and purpose of the relevant statutory regime'. Does that regime erect or facilitate a relationship between the authority [here the holder of statutory power] and a class of persons that, in all the circumstances, displays sufficient characteristics answering the criteria for intervention by the tort of negligence'? [113] Evaluation of the relationship between the holder of the power and the person or persons to whom it is said that a duty of care is owed will require examination of the degree and nature of control exercised over the risk of harm that has eventuated, the degree of vulnerability of those who depend on the proper exercise of the relevant power, and the consistency or otherwise of the asserted duty of care with the terms, scope and purpose of the relevant statute. Other considerations maybe relevant. 53 In Sullivan v Moody (2001) 207 CLR 562, the High Court held (at [55]-[60]): [55] … A duty of the kind alleged should not be found if that duty would not be compatible with other duties which the respondents owed. [56] How may a duty of the kind for which the appellants contend rationally be related to the functions, powers and responsibilities of the various persons and authorities who are alleged to owe that duty? A similar problem has arisen in other cases. The response to the problem in those cases, although not determinative, is instructive. … [60] The circumstance that a defendant owes a duty of care to a third party, or is subject to statutory obligations which constrain the manner in which powers or discretions may be exercised, does not of itself rule out the possibility that a duty of care is owed to a plaintiff. People may be subject to a number of duties, at least provided they are not irreconcilable. A medical practitioner who examines, and reports upon the condition of, an individual, might owe a duty of care to more than one person. But if a suggested duty of care would give rise to inconsistent obligations, that would ordinarily be a reason for denying that the duty exists. Similarly, when public authorities, or their officers, are charged with the responsibility of conducting investigations, or exercising powers, in the public interest, or in the interests of a specified class of persons, the law would not ordinarily subject them to a duty to have regard to the interests of another class of persons where that would impose upon them conflicting claims or obligations. 54 In Fernando v Commonwealth (2010) 188 FCR 188, Siopis J (at [146]-[147]) cited with approval the following observations by Lord Woolf MR (with whom Thorpe and Waller LJJ agreed) as to the principles to be considered in determining whether a person exercising a statutory duty owed a duty of care in W v Home Office [1997] Imm AR 302 (at 310-312): It is less likely that a duty of care would be imposed on a person exercising his public duty i.e. even where the statutory duty is being implemented, if: (1) a potential conflict could arise between the carrying out of the public duty, and acting defensively for fear of an action in negligence being brought; (2) where the category of public servant is one similar to the police or Crown Prosecution Service as considered in Hill v The Chief Constable of West Yorkshire [1989] 1 AC 53 and Elguzouli-Daf v The Commissioner of the Metropolis [1995] QB 335, and where: (a) the general sense of public duty of such servants is unlikely to be appreciably reinforced by the imposition of liability; (b) the recognition of the existence of a cause of action even in quite limited circumstances would likely to lead to the bringing of a substantial number of cases, and a diversion of the public servants concerned away from their duties contrary to the general public's interests; and (c) where there are other private law remedies available if there is a deliberate abuse of power, and public law remedies available to challenge decisions. It seems to us that the application of each of these principles to the situation under consideration is inconsistent with the existence of a duty of care being owed by the immigration officer to the immigrant who has been detained. … The process whereby the decision-making body gathers information and comes to its decision cannot be the subject of an action in negligence. It suffices to rely on the absence of the required proximity. In gathering information, and taking it into account the defendants are acting pursuant to their statutory powers and within that area of their discretion where only deliberate abuse would provide a private remedy, For them to owe a duty of care to immigrants would be inconsistent with the proper performance of their responsibilities as immigration officers. In conducting their inquiries, and making decisions in relation to immigrants, including whether they should be detained pending those inquiries, they are acting in that capacity of public servant to which the considerations outlined above apply. As Lord Moulton put it in Everett v Griffiths: If a man is required in the discharge of a public duty to make a decision which affects by its legal consequences, the liberty or property of others, and he performs that duty and makes that decision honestly and in good faith, it is, in my opinion, a fundamental principle of our law that he is protected. It is not consonant with the principles of our law to require a man to make such a decision in the discharge of the duty to the public and then leave him in peril by reason of the consequences to others of that decision, provided that he has acted honestly in making that decision. Lord Moulton may in the context of that case have been contemplating immunity from suit for negligence but the sentiment supports the concept of it not being fair or reasonable to impose liability for negligence in the case of an immigration officer performing his public duty. (Footnote omitted.) 55 Like the power to cancel a visa under the Migration Act 1958 (Cth) on character grounds, with which Fernando was concerned, the powers of the respondent to regulate civil aviation under the Act are 'par excellence ... to be exercised in the public interest': Fernando (at [149]). In that case, Siopis J (at [150]) pointed to three further considerations militating against the existence of a duty of care which are also applicable in the present case: First, the Migration Act provides that the affected visa holder is entitled to procedural fairness in relation to the making of a visa cancellation decision under s 501(2). Secondly, administrative law remedies are available in relation to any cancellation decision made under s 501(2). Thirdly, the tortious remedy of misfeasance in public office is available in respect of a deliberate abuse of power in relation to the exercise of s 501(2) power. 56 I accept the submission for CASA that each of these considerations points in the present case to CASA not owing the applicants a duty of care of the kind alleged in [11] of the MFRSC. 57 Importantly, CASA argues, and I accept, that the alleged duty in the present case is entirely analogous to the alleged duty considered and rejected in Polar No 4. It is both general in nature and runs directly counter to CASA's statutory obligations. The relationship is the same as the relationship of the parties in Polar No 4. It is a relationship of regulator with persons who come within its purview. In Polar No 4, which was upheld in Polar Full Court similar statutory provisions were referred to by Kenny J and the duties pleaded in Polar No 4 (at [37]) were said to be as follows: By their Application and FASC, the applicants claim damages for breaches of duties allegedly owed to them. In particular, Polar and Mr Butson claim that CASA owed them: 1. a common law duty to take reasonable care in the exercise of CASA's statutory powers (FASC, paragraph [16(a)]); 2. a statutory duty to exercise CASA's statutory powers lawfully, reasonably and in "good faith" for the purposes for which those powers were given (FASC, paragraph [16(b)]); 3. a common law duty generally to the same effect as 2 above but also involving a common law duty not to exercise CASA's statutory powers "in such a way as unlawfully and intentionally to interfere with the trade or business" of Polar or Mr Butson (FASC, paragraph [16(c)]); 4. a common law duty not to act beyond power, intending to cause harm to either Polar or Mr Butson, or knowing that their acts were beyond power and that harm to Polar or Mr Butson was foreseeable, or recklessly indifferent (a) to whether their acts were beyond power and (b) to the likelihood of harm to Polar and Mr Butson (FASC, paragraph [17]). 58 The breaches of the duty were described (at [41]) as follows: Polar and Mr Butson alleged that the breaches of duty arising from the alleged "pattern of conduct" and constituting "unlawful acts", included (amongst other things): 1. CASA issuing a "unique" request for corrective action ("RCAs") to be taken by Polar in respect of "deficiencies" that CASA had raised with Polar and Mr Butson as a result of the May 2004 audit: FASC, paragraphs [26]-[29] and [32]; 2. CASA ("over the hand" of the second respondent) issuing notices - supplementary notices - to Polar (to show cause why CASA should reissue a fresh AOC to Polar) and to Mr Butson (to show cause why his Chief Pilot's approval and his approval as Chief Flying Instructor should not be cancelled, suspended or revoked) having regard to the deficiencies that CASA had raised in the RCAs: FASC, paragraphs [30]-[37] and [48]-[49]; 3. CASA (by a notice signed by the fifth respondent on the advice and recommendation of the second respondent) cancelling Polar's AOC: FASC, paragraphs [54]-[57]; 4. CASA (by a notice signed by the fifth respondent on the advice and recommendation of the second respondent) cancelling Mr Butson's approval as Chief Pilot of Polar: FASC, paragraphs [58]-[61]; 5. CASA (by a notice signed by the fifth respondent on the advice and recommendation of the second respondent) revoked the approval of Mr Butson as Chief Flying Instructor with Polar: FASC, paragraphs [62]-[65]; 6. CASA (by notice signed by the sixth respondent on the advice and recommendation of the second respondent) refusing to renew Polar's AOC: FASC, paragraphs [94]-[97]; 7. CASA opposing Polar's application to the AAT for a stay of CASA's decisions cancelling Polar's AOC and refusing to re-issue an AOC to Polar: FASC, paragraphs [106]-[107]; 8. CASA (by a notice signed by the sixth respondent on the advice and recommendation of the second respondent) issuing an AOC to Polar containing a number of conditions relating to the conduct of flying training: FASC, paragraphs [117]-[118]; 9. the third respondent (and subsequently the second respondent) writing to the Chief Pilot of Polar and allegedly setting out a false interpretation of a provision of the CAA: FASC, paragraphs [127]-[128], [131]; 10. the fourth respondent (by a letter forwarded to Mr Butson) advising that he had refused to recommend (to the Director of CASA) that Mr Butson be "re-appointed" as an Approved Testing Officer of CASA: FASC, paragraphs [143]-[144]; 11. the first respondent (by a notice signed by the second respondent) proposing to further suspend or cancel Polar's AOC and issuing a further supplementary show cause notice to Polar: FASC, paragraphs [149], [150] and [151]; and 12. the first respondent (by a notice signed by the seventh respondent on the advice and recommendation of the second respondent) issuing a notice of proposed action to Polar: FASC, paragraphs [158]-[160]. 59 As in this case, the applicant contended that it was not an appropriate case for determination of the existence of a duty of care as a preliminary issue as the case was not analogous to other cases in which statutory authorities have been held not to a duty of care. Kenny J traversed the authorities including Pyrenees Shire Council v Day (1998) 192 CLR 330 and proceeded to distinguish Polar No 4 from Repacholi No 1 where I had held that it was not possible at that stage to conclude that a claim in negligence was not open to be made against CASA based on a duty of care in the exercise of statutory powers. Her Honour noted that in Repacholi No 1, unlike in Polar No 4, the challenged pleading made some attempt to give content to the alleged duty by reference to an obligation to collect information regarding takeoff procedure. In addition, I had noted that the 'proposed pleading [was] far from complete'. 60 In Polar No 4, her Honour concluded (at [64]-[68]): [64] There are, however, factors against the imposition of a legal duty of care. The legal relationship between Polar and Mr Butson, on the one hand, and CASA and its officers, on the other, is not straightforward, and is not analogous to any existing relationship in which a similar duty of care has been found to exist. The FASC does not plead a relationship or position of vulnerability of the kind referred to in the authorities where a duty of care to avoid economic loss has been said to have been owed: see, for example, Woolcock Street Investments Pty Ltd v CDG Pty Ltd (2004) 216 CLR 515 at [23] and Precision Products (NSW) Pty Ltd v Hawkesbury City Council (2008) 74 NSWLR 102 (Precision Products) at [103]-[116]. In any event, Polar and Mr Butson were able to protect themselves against the consequences of the respondents' lack of care by making immediate application to the AAT and seeking positive orders for the continuation of any AOC certificate, licence or other approval until the AAT reached its decision on the review: see 35-36 above. See also New South Wales v Paige (2002) 60 NSWLR 371 at [156]-[177] and Precision Products at [110]-[120]. [65] Further, although CASA had statutory power to issue, cancel, suspend or renew the relevant certificates, licences or approvals, CASA did not have unfettered "control" over their issue, cancellation and suspension. Rather, issue, cancellation and suspension were regulated by the CAA. In exercising the relevant statutory powers to issue, cancel or suspend, CASA was subject to the statutory regime established under the CAA, which had as its main aim, "maintaining, enhancing and promoting the safety of civil aviation". As discussed above, the functions of the CAA were all directed to this end - as s 9A(1) made clear. The legislative regime established under the CAA was a regime to maintain, enhance and promote air safety. The regime established by the CAA required CASA to make air navigation safety the paramount concern: see s 9A(1). Thus, CASA was required by its governing statute to treat air navigation safety as the most important consideration in issuing, cancelling, suspending or renewing any AOC, or approval as Chief Pilot or Flying Instructor. [66] With this in mind, it is difficult to avoid the conclusion that the duty for which Polar and Mr Butson contend - to take reasonable care not to harm them and others in the same class as them cannot be reconciled on any practical basis with CASA's overarching obligations to make air navigation safety its most important consideration in performing its functions and exercising its statutory powers. [67] This is not to say that a public authority such a CASA cannot be subject to a number of duties. But in the case of a public authority charged by its governing statute with giving primacy to air navigation safety, one would not anticipate that the law would impose on that public authority a legal duty to have regard to the interests of a particular class - here operators of air services businesses or air pilots - where that would in all likelihood impose on the public authority conflicting obligations. [68] That is, CASA's obligation to place air navigation safety first requires that it be able to do so without the apprehension that it might breach a legal duty to persons in the position of Polar and Mr Butson. The powers conferred on CASA by its governing statute are designed to be exercised in the public interest. The private interests of persons in the position of Polar and Mr Butson may commonly be inconsistent with the statutory imperative to place air navigation safety first. The duty for which Polar and Mr Butson contend is, therefore, inconsistent with CASA's statutory duties and responsibilities, in the public interest, pursuant to the CAA. 61 Similarly, in Polar Full Court, it was made clear that her Honour had not said that a duty of care could never exist. In Repacholi No 1 I was dealing with a circumstance in which there was a pleaded duty to make inquiries about the safety of the truck takeoff. My attention has now been drawn to some evidence (discussed above) which shows that the earlier pleading was incorrect as inquiries were made by CASA. It is now sought to elevate the claim to a complaint that 'formal' inquiries were not made. For the reasons I have already considered, I cannot accept that such a duty exists or was breached. In those circumstances, I can see no difference between the nature of the relationship and the nature of the duty as pleaded in this version of the statement of claim under consideration, on the one hand, and in the pleading addressed by Kenny J in Polar No 4 and by the Full Court in Polar Full Court.

CONCLUSION 62 That a further opportunity to formulate a statement of claim setting out a duty and breach was given in Repacholi No 1 does not mean that the indulgence can continue indefinitely, especially now that the parties have the benefit of the decisions in the Polar cases. There is nothing of real distinction between the duty pleaded in the MFRSC and the duty pleaded in Polar. In the sixteenth attempt by the applicants to advance a claim, it still has no reasonable prospects of success. CASA argues that ultimately the attempts to plead a case against it rise no higher than criticisms of CASA for taking a view different from that of the second applicant about the regulation of aviation safety in the context of the truck takeoff conducted by him at Jandakot Airport on one day in January 2002. The concessions now made by the applicants that there were inquiries (albeit of a 'haphazard' nature made by CASA), reinforces the lack of substance of the allegations said to be advanced in the MFRSC. Those matters relate to discretionary considerations relevant to the exercise of CASA's power in observing the statutory direction to accord paramount consideration to aviation safety under s 9A of the Act. I do not accept that the pleaded duty exists. If there were any duty to make inquiries in the USA as asserted, which I reject, it was adequately discharged. 63 I accept CASA's submissions that the revised form of the duty which is alleged against it to the effect that there is an obligation to make 'formal' inquiries as distinct from those which were in fact made is a not sustainable. The exercise of the power is one within the judgement of the regulatory authority. It is not a power which is exercised for the benefit of either the regulator or the person to be affected by it but for the safety of the public generally. 64 The events to which this proposed form of pleading relates are over ten years old. Many previous attempts to plead a cause of action have been abandoned or struck out. All of the complaints turn upon the ongoing consequences of the initial alleged failure to conduct 'formal' inquiries from foreign jurisdictions as to the acceptability or otherwise of the truck takeoff. No such duty as pleaded exists at law. There have been enough, possibly more than enough, opportunities to attempt to formulate a claim. I am satisfied for the purposes of s 31A FCA that the applicants have no reasonable prospects of successfully prosecuting a cause of action in damages against CASA for its alleged breach of a duty of care to them. CASA's application under s 31A must succeed and the MFRSC disallowed. The applicants' application will be dismissed. I will not formulate final orders until the parties have had an opportunity to make submissions on costs and the wording of orders giving effect to these reasons. CASA should file submissions within 14 days and the applicants within a further 14 days. Delivery of final judgment and determination on costs will be in open court. I certify that the preceding sixty-four (64) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice McKerracher.

Federal Court Rules 1979(Cth)

Civil Aviation Act 1988(Cth)ss 3A, 9A, 28

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