The arguments on the stay application
47 The Secretary filed a Statement of Issues, Facts and Contentions (SIFC) on 22 January 2024. It conceded that the Tribunal had jurisdiction to grant a stay under s 41(2) of the AAT Act. The SIFC observed that the "key factor informing the refusal" was the "extensive and repeated failure by the Applicant to fulfil its obligations in the handling, examination and clearing of air cargo". It also asserted that, since the refusal decision, the applicant had "continued to breach its obligations in the handling, examination and clearing of air cargo", resulting in what were described as "a further 122 offences under the ATSR between 31 October 2023 and 31 December 2023 at a number of the cargo handling and examination facilities it operated during that time". These "offences" were summarised in the first statement by Ms Pearce.
48 The SIFC referred to the factors listed by Downes J, sitting as President of the Tribunal, in Re Scott and Australian Securities and Investments Commission [2009] AATA 798 at [4] (Scott):
Application having been made for a stay of proceedings under s 41 of the [AAT Act], it is nevertheless incumbent upon me now to consider whether a stay is appropriate. In considering the application, it is appropriate for me to consider a range of matters, including:
1. The prospects of success.
2. The consequence for the applicant of the refusal of a stay.
3. The public interest.
4. The consequences for the respondent in carrying out its functions depending upon whether a stay is granted or not.
5. Whether the application for review would be rendered nugatory if a stay were not granted.
6. Other matters that are relevant, amongst which I would include the length of time that the ban has already been in place and the gap between today and the hearing of the application.
49 In short, the SIFC argued that:
(a) the extensive history of non compliance by the applicant, while not established by findings of fact in the Tribunal, suggested that its substantive review application had low prospects of success;
(b) the public interest weighed very strongly against the grant of a stay, because of the importance of the safety of air transport; and
(c) refusal of a stay would not prevent "re-approval" of the applicant's RACA designation after the expiry of the current term and thus would not render the application for review nugatory.
50 Although no directions had been made for written submissions, the applicant filed written submissions. This was not done until the evening before the hearing, which excited complaints and criticism from counsel for the Secretary (even though the submissions solidified the case against their client and they readily obtained leave to respond in writing).
51 It is necessary to refer to some aspects of the applicant's submissions which are relevant to arguments as to whether the Tribunal misunderstood or ignored submissions that were put. For present purposes, the important propositions in the submissions were as follows.
(a) The legislative context for the making of the primary decision was central to consideration of the "interests of [the] persons who may be affected by the review", which must inform the exercise of the power in s 41(2) (citing Australian Securities and Investments Commission v Administrative Appeals Tribunal [2009] FCAFC 185; 181 FCR 130 at [51]-[53] (Downes and Jagot JJ) (ASIC v AAT)).
(b) Two matters of "central importance" emerged from the legislative context in the present case (at [22] of the applicant's submissions):
a. First, except to the extent that a designation may be revoked under r. 4.44, 4.44A, 4.44B or 4.44C, designation as a RACA is for a period fixed by the designation subject to the period being extended, as of right, until a decision is made to refuse any renewal application. That decision, once rendered, is a reviewable decision in this Tribunal under r.8.04 - the provision under which this review is brought.
b. Secondly, non-conformance with examination requirements is relevant to the possible revocation of an examination notice but is irrelevant to the grant of a RACA designation or its revocation under r. 4.44B. That reflects the practical situation that a freight-forwarder may be designated as a RACA but not hold an examination notice for the full period of its designation. Such a freight forwarder can, for example, receive and handle air cargo which has been cleared by approved "known consignors".
(c) Following on from the first of these central points, the applicant referred to the decision of the Tribunal in Re Nelson and Tax Agents Board (1993) 26 ATR 1213; 30 ALD 317 at [14]-[15] (Nelson). There, the Tribunal regarded it as appropriate to stay the refusal to renew the applicant's registration as a tax agent in a manner that generally reflected a provision analogous to reg 4.43F. Nelson was referred to with apparent approval in Shi v Migration Institute of Australia Ltd [2003] FCA 1304; 134 FCR 326 (Tamberlin J) (Shi).
(d) Regulation 4.43F (which had been invoked in the request for a stay order) was relevant "to the basis upon which the Tribunal will exercise the power under s 41(2) [of the] AAT Act". The legislative scheme "reconciles the various interests in compliance with the regulatory scheme, the ample powers available to the regulator and the sensible conduct of important and substantial businesses by providing that an existing designation continues until a final decision on the application for renewal is made … If the designation is to be ended earlier than that, revocation in accordance with r. 4.44, 4.44A, or 4.44C is the available and appropriate course".
(e) Thus, it was submitted at [35] (albeit point (c) was ultimately not pressed):
In the circumstances the stay must be granted:
a. It is to be granted as of right until the Tribunal makes a decision on the renewal application;
b. The legislation provides ample mechanisms for the management of extant risks even if the stay be granted - as the Respondent recognised by its notice of revocation of the examination notice on 14 November in response to the Application for Review and foreshadowing of the stay;
c. It is an abuse of the Tribunal's processes to resist a stay in that legislative context because the Respondent so badly messed up the processes for the revocation of the examination notice that the Court set it aside within 2 days.
(f) The submissions canvassed the prospects of success of the substantive review application. It was accepted that up to late 2023 the applicant's approach to achieving compliance was marked by "three structural weaknesses". However, the submissions emphasised that the final decision on the review would depend on the circumstances at the time of that decision; and remedial efforts were under way. The submissions also contended that renewal of the designation would be in the interests of safeguarding against unlawful interference with aviation unless the Tribunal was satisfied that unacceptable risks would arise from both the applicant's examination of air cargo and its handling of cargo from known consignors. The submissions also included a critique of the allegations concerning non-compliance by the applicant after the refusal decision.
(g) Submissions were also made on the consequences for the applicant of the refusal of a stay.
52 At the hearing of the stay application, senior counsel for the Secretary began by referring to the late receipt of the applicant's submissions. Leave to file responsive written submissions after the hearing was sought and granted. After the evidence had been received, senior counsel addressed various factual issues. He described the "real meat of our response to the application" as being what had occurred before the refusal decision. The Secretary "withdrew" 81 of the instances of non-compliance in the period after the refusal decision that had been referred to in Ms Pearce's statement, but continued to rely on other instances in that period and suggested that some were more serious than initially assessed.
53 Towards the end of his address, returning to the theme of having been served with submissions the evening before the hearing, senior counsel for the Secretary said:
One further point I'd like to make, and I'll (indistinct words) it's really by way of foreshadowing further submissions that will be made carefully in writing. It's this, that in effect in the written submissions that were filed last night at 6 pm, which we haven't had a chance to respond to in any detail yet, it's effectively submitted by my learned friends that your hands are tied in effect that you must make a decision to stay the effect of the decision that was made on 31 October 2023. That, we submit and we will submit in writing in much clearer detail than I'll deal with now, is fundamentally flawed. It's wrong, we respectfully submit.
(Emphasis added.)
54 The oral address by senior counsel for the applicant began in this way.
SENIOR MEMBER: Thank you (indistinct). Just curious, Mr Brennan, why are my hands tied?
MR BRENNAN: I haven't put it that way, Senior Member. What I say is this, referred in writing to a decision of Justice Downes and Justice Jago on appeal on the stay, who point to the wording of section 41(2), say the discretion is having considered (audio malfunction), and they - - -
SENIOR MEMBER: Well, it's not only the interests of the parties, is it? It's the interest of the travelling public who might fly with cargo.
MR BRENNAN: I accept that. I accept that, absolutely. And I'll come back to that, but what their Honours say is, that phrase in 41(2) is given content by the specific statutory regime, but when you look at the way different and competing interests are balanced - - -
SENIOR MEMBER: Yes.
MR BRENNAN: You look to the specific regime in assessing the interests of the parties. In this case you've got a, and I've set it out in writing in some detail, a quite delicate regime which provides for the designation of a RACA, (indistinct) provides for the revocation of the RACA, separately provides for the issue of an examination notice, and the revocation of the examination notice in separate parts.
(Emphasis added.)
55 A little later, the following submission was put.
MR BRENNAN: And so we say once an application is made to the tribunal, the final decision is going to be made by the tribunal. And so we've got a regulatory regime which says if you applied renewal you continue, has then a whole series of other powers to regulate you while you continue. We say as a matter of law in that context, you'd conclude readily the stay would be granted. If not, as a matter of law your starting point is applying the reasoning of Justice Downes and Jago. The starting point is the interests of the parties are carefully managed here so the public gets protected through the range of regulatory powers. The applicant maintains its designation.
(Emphasis added.)
56 The Secretary filed written submissions on 1 February 2024 and the applicant filed submissions in reply the next day. For present purposes it is not necessary to go into the contents of these submissions.